JANUARY
2008| NEW
YEAR APPRECIATIONS AND PLANS Personally and professionally, I find each new year to be energizing. I also find the new year to be an opportune time for appreciation and planning. Personally, the new year means I’ve added another year to life’s journey. While some people dread aging, I find it exciting. Aging means I have more opportunities to enjoy family and friends. It means I get to see more sunrises, sunsets and the other amazing things nature has to offer. Aging also means I have another opportunity to accomplish the projects and dreams that were not completed in the prior year. And, it provides me with a chance to plan more projects and dream a little more. Professionally, the new year reminds me to reflect upon the successes and challenges of the prior year. It is also time to plan for the future. As we leave 2007 and begin 2008, I want to share some of my appreciations and plans. I appreciate the support of Mohave’s members and vendors. This past year was a time of planning and development for a significant change in our cooperative purchasing program. Members and vendors not only supported the change, but helped us prepare for successful implementation. Even with the major process change on the horizon, vendors continued to provide quality goods and services, while members used our contracts at record levels to satisfy their requirements. I appreciate Mohave’s staff. It was not easy to develop the processes and programs required by the process change. It was not easy to adjust to new job duties and new procedures. However, our staff did this and maintained the high level of service that members and vendors have come to expect from Mohave. My appreciation of staff is not limited to the Kingman office. From its Tucson location, ASPIN’s staff provided quality service to a growing membership. In Phoenix, the new Director of Outreach and Education started his Mohave tenure at full speed with many plans to improve the manner in which we share information. I appreciate the partnerships and successes of the past year. I also realize that there is no time to rest on our laurels. The new year brings requirements and opportunities that will not wait for a celebration of past success. Following are some of our key plans for 2008. Successful implementation of the member order process change is our top priority. With your help, we believe we designed a quality program. However, we know that a major change will not be implemented without bumps in the road. We are prepared to identify and smooth those bumps as soon as they surface. Be patient with us, and we will refine the new order process to work effectively for members, vendors and Mohave. As we did with planning and development, we will use member and vendor input to help with this refinement. We are looking for new contracts and services to better meet the needs of members. Both Mohave and ASPIN will be meeting with members to determine if there is something else we can do to help members achieve greater success.We are looking at better ways to communicate. We need to know what members want from Mohave and how well we are meeting their expectations. We need to know if Mohave contracts work for the vendors, and what can be done to address vendor concerns. We are looking at developing more effective education and training programs. A training page for our website, new member and vendor orientation, contract awareness, and in-person and web-based training are all on the agenda. Regardless of where we are in the year, three principles hold true at Mohave. First, Mohave is not a thing. It is a team of people dedicated to providing a quality cooperative purchasing program for all members. Whether located in Kingman, Tucson or Phoenix, our staff is friendly, well qualified and dedicated to the success of our cooperative purchasing program. Next, the only thing Mohave sells is service. We do not market on behalf of any vendor. We place our efforts into providing the highest level of service required by all members and vendors. We understand and accept that the key elements of that service are opportunity, respect, fairness, economy, efficiency, and effectiveness. Finally, we understand and accept that members use our contracts, and vendors contract with us, by choice. The Mohave team is committed to providing the high quality contracts, supported by equally high quality service, that are needed to supply members with the goods and services they require for their operations. Thank you for a tremendous 2007. We look forward to partnering with you in 2008. None of us knows everything the year has in store, but I’m anxious to begin the journey to find out. Thank you for supporting Mohave Educational Services Cooperative, Inc. 1/8/08, JTP
NOVEMBER 2007 | IT'S ALMOST HERE The Mohave order process change. After eleven months of discussions, planning, design and development, it’s almost here. First, we want to thank our members and vendors for helping us prepare for this major change. You attended meetings, responded to questions, reviewed plans, provided ideas, and offered support. You also approved new Cooperative Purchase Agreements, amended contracts and provided sample reports. We would not be prepared without your assistance. Next, I want to remind you that new CPAs for members and contract amendments for vendors must be in place prior to January 1, 2008. If you have not yet completed the documents, please do so promptly in order to avoid delays in processing orders at the beginning of the new year. Additionally, I want to let you know that we continue to plan and develop. Another update will soon be released to members and vendors. Others may follow before January. Purchase order reports will be provided with the actions required for open orders after January 1. (The Procurement Team addresses open PO transition in this edition of the eNewsletter.) Finally, I want to request your patience. Despite the above efforts, there will be stumbling points. Please give us an opportunity to address each issue that arises. We are committed to prompt and appropriate resolution. Earlier this year, I was asked what I think about the process change. At that time, I responded with the following three thoughts:
In addition, I stated that members and vendors would be an essential part of a successful new program. I believed our members and vendors wanted the change and would work to make it successful. I believed our members and vendors valued Mohave’s cooperative purchasing program, and would help limit the risk. I believed Mohave’s commitment to quality contracts and service, plus the support of our members and vendors, would result in a successful new program that allows us to remain a premier statewide cooperative purchasing program. You have not let us down. Mohave staff deserves recognition because the change has implications for them. Our staff has been heavily involved with planning and development. They have learned new processes and planned for new duties. They have continued to provide the excellent service that everyone has come to expect. This is an accomplishment that should not be overlooked. It’s almost here and we believe we are ready for the order process change. We know we are committed to success, and will partner with you to achieve that goal. Thank you for your support of Mohave Educational Services Cooperative, Inc. 11/6/07, JTP
OCTOBER
2007 | WHAT'S
A MOHAVE? The question often brings a smile to our faces. However, it is valid and I thought you might enjoy my answer. Mohave is a vision. The vision started almost twenty years ago when Executive Director Dave Wasson accepted the challenge of establishing a statewide contract for Apple computers. His goal was to provide an effective contract that schools could use with efficiency and economy. While Dave was inexperienced with school purchasing, he did the research necessary to establish a contract that guaranteed all schools the lowest price offered by Apple. The vision did not end with Apple computers. Based upon the success of the Apple contract, Dave and Mohave began adding other technology contracts. Through member requests, Mohave’s cooperative purchasing program expanded beyond technology to the variety of materials, services and construction available today. Mohave’s vision is not limited to contracts. We have identified and implemented a number of initiatives to improve our services. Examples include our website resources, including the admin fee in contract prices, and the upcoming order and payment process change. Mohave’s vision has resulted in a valuable cooperative purchasing program for agencies throughout Arizona. However, we’re not finished. We continually look at new contracting opportunities, new programs, and revised processes and procedures. All of this is done with the vision of being the cooperative purchasing program of choice for our members. Mohave is a commitment to quality and fairness. Our commitment to quality is applied to our contracts and services. Our commitment to fairness is applied to Mohave members, vendors and staff. Mohave does one thing – cooperative purchasing. We are committed to offering an exemplary cooperative purchasing program. To achieve this, we constantly review changes in public purchasing rules, regulations and procedures. Our solicitations are revised as necessary to produce quality contracts. Our contracts are administered to maintain quality from the date of award until final expiration. Mohave sells one thing – service. We do not market or sell materials, services or construction. That is left to Mohave vendors. Instead, we solicit, award and administer quality contracts. We process and manage member purchases. We assist with resolution of contract controversies. Our commitment to service extends beyond doing what needs to be done. It includes doing so at the highest level of quality. We may stumble every once in a while, but we never abandon our commitment to service. To
provide the quality cooperative purchasing program we
desire, Mohave must be fair. Being fair to members means
we treat them all with respect and provide them all with
quality service. Size and purchase volume are immaterial.
What matters are equal access to contracts and quality
service and support. Being fair to staff means that we recognize their value and take care of the people who make Mohave work. Our staff is committed to quality and fairness. We are committed to the well being of our staff. That commitment includes providing staff with a quality work environment, quality pay and benefits, professional development, and recognition. There would be no Mohave without our exemplary staff. Mohave is people. Organizations are often viewed as being “entities” or “things.” I prefer to view our organization as a collection of twenty-five people who have joined for a common purpose – administering a quality cooperative purchasing program. The people of Mohave include mothers and fathers, grandmothers and grandfathers, sons and daughters, and brothers and sisters. We have backgrounds in accounting, school business management, public procurement, marketing, printing and publications, communications, food service, and other fields. Several of us are veterans of America’s armed forces. We come from all parts of the country and have spent time in foreign countries. Our hobbies include sports, pets, kayaking, hiking, racing and other interests. We have known triumph and tragedy. We are involved with various forms of community service, professional development and charity. It doesn’t matter if we are in Kingman, Phoenix or Tucson, our people are dedicated to Mohave and ASPIN being successful. Our success is an essential component of our cooperative purchasing program’s success. We trust that our program’s success contributes to your success. What’s a Mohave? It’s simple. Mohave is vision, commitment and people. Bringing those items together results in the successful cooperative purchasing program with which you are so familiar. Thank you for your continued support of Mohave Educational Services Cooperative, Inc. Tom Peeler, Executive Director Rev. 9/28/07, JTP
JULY
2007 | THE THINGS
WE DO...ARE THEY WORTH THE EFFORT? Mohave is planning and implementing a number of changes. These are key changes to effectively and efficiently continue providing members and vendors with exemplary service. However, as with any substantial change, things have not gone exactly according to plan. Because of that, I have found myself wondering if it is all worth the effort. Following are two of the changes and my analysis of whether the results justify the effort. The direct order program was established for five key contracts. Under the program, Mohave is allowing both the purchase order and payment to be directly between member and vendor. Four of the direct order program contracts are high volume, low dollar contracts. Changing the contracts to direct order was necessary because of the high cost of administering those contracts. We realize that contracts for classroom supplies, office supplies, technology supplies and janitorial supplies are important to our school members. However, they are also very expensive to administer. Not only is the admin fee insufficient to support the contracts, but also the thousands of purchases orders, invoices and payments take staff away from other important purchases. A solution was needed. One of our library book companies recently established nexus in Arizona. As a result, the company started collecting Arizona Transaction Privilege Tax (TPT). However, media purchases for school and public libraries are exempt from TPT. In order for members to receive the statutory exemption from TPT, the vendor wanted Mohave to sign an exemption certificate. We cannot sign the certificate because we are not the purchaser of the books. Follett would not accept member certificates because Mohave issued the purchase order. Based upon FY2007 purchases, this would have impact on members of approximately $40,000 annually. A solution was needed. Our solution for both problems was the direct order program. The program eliminates most of Mohave’s direct role in the order and payment processes. It provides members with access to the majority of contract pricing via the Internet. The program also provides members with multiple ways to submit their orders to the vendors. It reduces the level of resources required for the contracts, and provides more time to effectively administer other important contracts. In my analysis, was the direct order program worth the effort? I believe it was. For the high volume, low dollar contracts, the program reduces Mohave’s administration cost to an acceptable level and enables members to continue effectively and efficiently purchasing required supplies. For the library book contract, the program simplifies the members’ ability to obtain the statutory exemption from TPT on media purchases. For all of the direct order contracts, Mohave will continue to monitor purchases on a test basis to help ensure contract compliance. The order process change is the most significant change ever to Mohave’s cooperative program. For years, we resisted requests from members and vendors to remove Mohave from the order and payment process. Our experience demonstrated that Mohave’s involvement was a key part of the effectiveness and efficiency of the contracts. It was also a key factor in ensuring that purchases complied with the contracts. In spite of the benefits, Mohave’s involvement in the order and payment processes remained the most often cited concern of members and vendors. As contract use grew, it became increasingly difficult to maintain the prompt processing required by our members and vendors. To provide acceptable processing time, an increase in staff was required. An increase in staff required additional revenue, most likely through an increase in the admin fee. A solution was needed. Our solution is the process change to be implemented on January 1, 2008. With the process change, Mohave will continue to review member orders before forwarding those orders to vendors. Mohave will not be part of the payment process. However, we will continue to provide a reconciliation and audit service on a sampling basis. Additionally, the need to increase staff size is eliminated for the foreseeable future. In my analysis, is the process change worth the effort? Again, I believe it is. The change incorporates the member and vendor desire to remove Mohave from the order and payment processes, and Mohave’s desire to maintain effective and efficient contracts and contract compliance for all orders. It enables Mohave to continue providing exemplary service without an increase in admin fee. In fact, the process change eliminates the minimum admin fee, a savings to members on small orders. Unfortunately, both changes have had their problems. The direct order program took longer than anticipated to get everything in order to mitigate any negative impact on members. This resulted in confusion, the need to twice issue some purchase orders and some delayed processing and delivery. There is a still uncertainty to be resolved with the process change, and some vendors jumped the gun and on July 1 began requesting that orders be sent directly to them. The result is anxiety and confusion. We regret and apologize for the problems and anxiety encountered as a result of these two major changes. We took every known precaution to prevent them. Unfortunately, we were not completely successful. Addressing the known problems and preventing others is a priority. We have prepared updates for both programs and included them in the July issue of our eNewsletter. We will send a News to Use to inform members of specific problems with some direct order program contracts. We are updating our databases in an effort to get information to all the right people. We are looking at the best means to promptly display additional resources on our website. We are reviewing our plans to determine where and when adjustments are required. We are involving members, vendors and staff. The buck stops here and any frustration or disappointment associated with these two programs should be directed to me. I take responsibility for the problems and oversights. I also take responsibility for correcting them. I reaffirm Mohave’s commitment to exemplary service. Every member of our staff is committed to this standard, and they are doing an excellent job. While we are designing and implementing necessary and major changes, we are also considering the impact they have on Mohave members and vendors. Our goal is to continue providing the cooperative purchasing program of choice. If you give us a chance, assist us and have some patience, I am confident we will reach that goal. In closing, I want to thank you for your continued support of Mohave Educational Services Cooperative, Inc. FY2007 was a very successful year. We look forward to building upon our many successful partnerships in FY2008. Tom Peeler, Executive Director Rev. 7/14/07, JTP
MAY 2007 | PLAYING FAIR Playing fair. It’s a value with which we are all familiar. From the sandboxes of childhood, to the competitive sports of youth, to the business transactions of adulthood, we have been told how important it is to play fair. In contracting, playing fair is both the legal and ethical thing to do. Playing fair is an essential part of contracting. In fact, contract law prevents one from getting something for nothing. In contracting terms, “consideration” is given by one party in exchange for something given by the other party to the contract. Consideration comes in a variety of forms including money, goods and services. Clearly, we would not agree to consideration that we did not believe was equal in value to what we were to receive in return. Additionally, it would be unethical to seek a deal where we received more than that to which we were entitled, or, the deal too good to be true. An equal exchange is playing fair. Contracts are generally designed to ensure fair play. They contain terms and conditions that govern the “who, what, when, and where” of contract performance. Specifications and scopes of work define what is to be delivered and how it is to be prepared. Again, the goal is that each party is treated fairly by the terms and conditions and specifications and scope of work. Contracts generally contain provisions that penalize parties that do not play fair. Failure to deliver the product or service to the correct place, at the correct time, in the correct quantity, with the correct quality, and at the correct price, may put the seller in default of the contract. Conversely, the buyer has a duty to accept, inspect, pay for, and use the products or services in accordance with the terms of the contract. Failure of either party to comply with applicable contractual requirements can result in costly delays, rework, controversies, claims, litigation, and settlements. We avoid such consequences by playing fair and fulfilling our obligations. The importance of playing fair has been on my mind lately. While it is a simple concept, playing fair can easily get lost in the stress and strain of busy days. With that in mind, I offer a few ideas to help ensure that we all play fair. Understanding the contract is a key starting point. This enables the parties to prepare themselves for the rights and obligations associated with a purchase. Neither the buyer nor seller has the right to expect more than that to which is authorized in the contract. Complying with the terms and conditions limits contract controversies and claims. The contract is not just a means to make a purchase. It governs that purchase. Once a contract is used as the basis for a purchase, each party must be willing to fulfill its obligations, in addition to reaping its benefits. Whenever a dispute arises, the contract is the first source of guidance for resolution. Clearly defining and understanding the requirements is a crucial element of success. Much too often, little time is devoted to ensuring that the parties have a clear understanding of, and are in agreement with, the requirements of the purchase. The unfortunate result is controversy that must be addressed after the fact. Investing time before the purchase often saves time and money in the long run. Buyers need to clearly explain their requirements and expectations. Sellers must thoroughly identify what they are offering, and any contingencies, unknowns or risks associated with that offer. Allowing sufficient time generates satisfactory results. It takes time to prepare quotes, generate purchase orders, obtain materials and equipment, mobilize the workforce, perform the work, and process the payment. Last minute purchases are a fact of life. However, they can be problematic. Preparing accurate quotations takes time, particularly for large or complex purchases. The buyer and seller must clearly communicate the both the preparation and performance time requirements, and then determine if sufficient time remains for the purchase to be accomplished. Promptly receiving and inspecting goods is necessary to confirm proper performance and to facilitate replacement of damaged or shorted goods. This task often competes with many other requirements in the workday. However, failure to receive and inspect goods in accordance with the contract, the terms of the shipment or industry standards, may result in difficulty resolving claims. Nobody wants to pay for a shortage, or be stuck with damaged goods. The best way to avoid these situations is prompt receipt and inspection of goods, and prompt reporting of problems. Completing and forwarding the paperwork is required for prompt payment of invoices. Government entities must confirm receipt of goods or services before the vendor is paid. This is one means of protecting public funds. However, failure of the receiving department to promptly forward the receiving documents to accounts payable is a primary reason for delayed payment. Involving multiple people to obtain the receiving documents is a time-consuming and expensive endeavor. It is also an endeavor that is reasonably avoided. On time payment of invoices helps ensure vendor health and control prices. A vendor’s contract performance results in financial obligations. Those obligations must be satisfied regardless of when the buyer pays for the goods or services. If the buyer pays late, the vendor must find to money to pay its suppliers and employees. This can have a devastating impact on the business. Buyers can eliminate this by paying undisputed invoices in accordance with the terms of the contract. Disputed invoices should be promptly reported to the vendor. The buyer and vendor should promptly work in a joint effort to resolve the dispute in an appropriate manner. Once the dispute is resolved and corrected, the invoice should be promptly paid. Effective communication facilitates success. Despite our best efforts, things sometimes go wrong. Promptly reporting and addressing the issues enables resolution to begin while the facts are clear and emotions are under control. Buyers should immediately notify the seller of any changes in the requirements for a purchase. Additionally, the buyer should promptly issue the appropriate change order document to properly authorize the change. Leaving the vendor hanging with verbal instructions is not playing fair. Sellers should immediately notify buyers of any issues arising affecting performance of the purchase. Examples include delayed shipment, discontinued products or features, substitutions, unforeseen conditions that alter the purchase, etc. It is not fair or contractually sound to inform the buyer after the fact. Calm, prompt and factual consideration of issues facilitates resolution that is fair to all parties. Playing fair. It was important when we were children. It’s equally important today. I trust you will help us ensure that fair play is the standard associated with the use of Mohave contracts. I also trust that you will call us any time we can help coordinate fair play between our members and vendors. Thank you for your support of Mohave Educational Services Cooperative, Inc. Rev. 5/15/07, JTP
MARCH
2007 | TIME
FOR A CHANGE On January 1, 2008, Mohave will implement a major change in the manner in which orders and payments are processed under our contracts. In a nutshell, Mohave will turn direct administration of orders and payments over to members and vendors. As a result, we will no longer issue purchase orders or invoices, and will no longer receive and process payments. Purchase orders, invoices and payments will be directly between member and vendor. Members and vendors have requested this change for about as long as the cooperative purchasing program has existed. Historically, Mohave has refused those requests because we believed that our direct oversight of the order and payment processes provided value to members and vendors. We believe that value still exists. However, a number of considerations have convinced us that that value is no longer efficient or economical. As a result, we are now agreeing to relinquish the majority of our direct oversight of the order and payment processes. A copy of the proposed process is attached. A review of that process will show that Mohave’s only “up-front” involvement is a review of the member’s purchase order. We believe this review is essential to help ensure that Mohave purchases comply with applicable contracts. After Mohave forwards the member’s purchase order to the vendor, we switch to an audit and reconciliation, rather than processing, role. This provides us with an opportunity to review sample invoices, payments, credits, returns, etc. for contract compliance. A primary consideration in making the decision to change the order and payment processes was our ability to maintain the high level of quality service Mohave members and vendors have come to expect. We believe our plan provides that service in the following ways:
The process change is a major project. We will be working throughout 2007 to define, design, and test new procedures in order to prepare for successful implementation on January 1, 2008. Recently, an employee of the Yuma Elementary School District asked me what I think about the process change. I responded with the following three thoughts:
Members
and vendors are an essential part of a successful new
program. I believe our members and vendors value the Mohave cooperative purchasing program. Because of that, I believe you will help us limit the risk. I believe that Mohave’s commitment to quality contracts and service, plus the support of our members and vendors, will result in a successful new program that allows us to remain a premier statewide cooperative purchasing program. We want you to be aware of our progress in implementing the new program. To facilitate this, we have established a “Time for a Change” page on our website. It is easily accessed through the Time for a Change link on our home page. A picture of that link is provided below. Please feel free to visit that page for updates and FAQs regarding the new program. We also want to know your questions, concerns or suggestions. A dedicated email address, processchange@mesc.org, has been established for this purpose. Feel free to contact us at any time. Change is inevitable. Change is essential. At Mohave, it is time for a change. Thank you for your support of Mohave Educational Services, Inc. 3/6/07, JTP
JANUARY 2007 | HAPPY NEW YEAR! Happy New Year! We trust you all returned safely from an enjoyable holiday season. For many, this is a time of reflection on both the year just ended and the one to come. As I look back on 2006, I am grateful for the support of our members, vendors and staff. As I look ahead to 2007, I see opportunities for Mohave to become an even better cooperative purchasing program. For Mohave, 2006 was a year of great success. We enjoyed tremendous member and vendor confidence. Contract use was at an all-time high. Our organization is solid. There is no secret as to why we enjoyed such a successful year. It centers on the three groups that determine the outcome of our efforts. First, our staff remained committed to providing the excellent customer service that has grown to be expected from Mohave. They worked as a team to provide quality contracts, prompt and accurate processing, timely member and vendor support, and all of the other functions required of an organization. During 2006, we encountered illness, retirement, transfer, and turnover. Despite all of this, the staff remained focused and committed to doing an excellent job. Through their dedication and teamwork, our quality of service and customer satisfaction remained at an extremely high level. Next, our members remained confident in Mohave’s contracts, programs and services. This was demonstrated by the large number of members making purchases from our contracts, the record number of purchase orders and invoices, and the highest purchase volume in our history. We do not take such confidence for granted. We understand that our members have choices for meeting their procurement requirements. Because of that, our staff is committed to the quality service briefly addressed above. Finally, our vendors remained committed to their contracts and Mohave’s members. During recent uncertain times, Mohave’s vendors could have sought other avenues to sell to Arizona’s government entities. Instead, they realized to value of our contracts and stayed the course by continuing to offer materials, services and construction through Mohave. The result was quality contracts for the members and strong opportunity for the vendors. I am thankful for the staff, members and vendors who make it possible for Mohave to be a premier cooperative purchasing program. I am humbled by their commitment, effort and trust. I promise that it will never be taken for granted. While 2006 was a great year, 2007 holds even more promise. With our staff, members and vendors behind us, we have the potential to define and develop new programs to build upon past success. Here are just a few of our ideas. We want more member and vendor involvement. We plan to accomplish this through effective use of focus groups and market segment meetings, increased member participation in bid and proposal evaluation, and improved surveying of member interest in new contract ideas and satisfaction with vendor performance. We want to identify new contracting opportunities to meet ever-changing member requirements. We know the need is there. Our goal is to identify and address the requirements. We want to streamline processes and procedures. The direct order program for one of our catalog contracts is just the beginning. We have other significant ideas under consideration. Change is in the air for 2007. However, one thing at Mohave remains constant. That is our commitment to quality service. No change will be implemented unless and until we are confident we can continue providing the service you have come to expect from us. We are thankful for the success of the past. We look forward to the opportunities of the future. We are grateful that you are joining us on the journey. Thank you for your support of Mohave Educational Services Cooperative, Inc. Tom Peeler, Executive Director 1/8/07, JTP
NOVEMBER 2006 | DUE DILIGENCE REMINDER Due diligence is a term that burst on the Arizona cooperative purchasing scene in 2004. It is particularly applicable to school district use of cooperative contracts. Unfortunately, some school districts failed to perform due diligence, or failed to document their due diligence efforts, and received audit findings. The purpose of this article is to remind members that due diligence is here to stay and that it can be reasonably performed and documented. In a nutshell, due diligence is reviewing procurement documentation for purchases made through a purchasing cooperative to ensure that the cooperative’s contracts were bid following the procurement rules applicable to the buying entity. In 2004, it was a new term that left many of us scrambling to determine the requirements for performing due diligence. Due diligence must be part of the cooperative purchasing process for school districts. In fact, the USFR Compliance Questionnaire contains the following item for school district audits:
Due diligence is now familiar to most members and the furor has subsided. However, for those members, particularly school districts, that have yet to develop processes for performing due diligence, it can seem a daunting task. Fortunately, the Arizona Auditor General provided guidance via email on September 13, 2005. Following is a summary of that guidance:
Mohave recognizes that due diligence is an added responsibility for extremely busy personnel. Additionally, the requirement for due diligence may seem to reduce the efficiency that is one of the benefits of cooperative purchasing. To reduce the burden of that responsibility, we have placed the following resources on our website:
An important part of due diligence is substantiation. It is imperative that members document the process used and the documentation reviewed. We trust that our downloadable files will lessen the burden of preparing and maintaining such documentation. Due diligence is the member’s responsibility. While Mohave cannot perform due diligence on the member’s behalf, we can help. Thus, we developed the materials referenced above to reduce the time and effort required to perform due diligence reviews of our contracts. We recommend that you put our due diligence materials to work in order to be prepared for your next audit. Doing so, we believe you will find the following:
Much of this article was devoted to school districts. However, the materials on our website can be used by other members to perform due diligence on behalf of their agencies. Thank you for your support of Mohave Educational Services Cooperative, Inc. We appreciate your consideration, and stand ready to make your Mohave experience successful. Please call on us any time we can be of assistance. Tom Peeler, Executive Director 11/20/06,
JTP SEPTEMBER 2006 | SUCCESS IS IN THE SATISFACTION Success! Everyone strives for it. At home, at work or at play, we seek some measure of success to show that our efforts are worthwhile. A promotion to a higher position, a most valuable player award, or a simple “thank you” from a co-worker all provide the feedback we seek to reinforce our hard work. For Mohave, SUCCESS IS IN THE SATISFACTION. This seems simple enough. Provide people with what they want, when they want it, in the quality and quantity required, and everyone is satisfied. However, we know that the job is not that simple. As a service provider to a broad range of members, and working in a highly regulated profession, Mohave knows that there are a number of external influences that will play a role in each and every decision. We must consider the external influences and answer, in some manner, to their demands for satisfaction. Mohave’s response to the most common of those external influences is outlined below. MEMBERS must be satisfied that their requirements will be met in a legal, effective, efficient, and economical manner. Members expect Mohave contracts to provide the materials, equipment, services, and construction they require when needed, in the required quantity, with acceptable quality, and with good value. They also expect every Mohave contract to comply with their competitive procurement mandates. Mohave is sensitive to our members’ expectations. We exist to support their efforts to provide valuable services. It is incumbent upon us to contract for materials, services, equipment, and construction in an effective, efficient and economical manner, while never compromising the rules and regulations that govern our procurement. Involving members in the procurement process and taking the time to understand their requirements is a valuable investment in Mohave’s success. It is also one of our continual improvement goals. VENDORS must be satisfied that they are given a fair opportunity to present their goods and services, and to compete for Mohave contracts. Vendors are in business to make money. Their representatives call on Mohave’s members to sell goods and services to earn a living. They often believe that there is something special or exclusive about the goods or services they sell, and see no reason for Mohave not to contract with them. Some vendors express that the competitive procurement process will be a waste of time, will result in lessor quality or higher prices, or will give another vendor an unfair advantage. Mohave provides vendors with opportunity. In addition to being mandated, it is competitively and ethically prudent to remove as many barriers as possible to a vendor’s opportunity to compete for Mohave contracts. However, in addition to providing opportunity, Mohave must protect itself and its members. At no time can we compromise the well being of Mohave and our members to address the concerns of a vendor. Our solicitations must provide vendors with a clear picture of the requirements for a contract and provide Mohave with the means to select a competent and reliable supplier. While we recognize good service and value, we will not allow a vendor’s interest to take precedence over the well being of Mohave and our members. The PUBLIC must be satisfied that its tax dollars are spent wisely and prudently. Our members are supported with tax dollars, which may be given grudgingly by individuals and businesses that believe they pay more than their fair share. Because they have little, if any, say in how their tax money is spent, many taxpayers are suspicious of waste. Mohave and its members must be sensitive to taxpayers’ suspicions. Founded or not, these suspicions can lead taxpayers to be highly vocal critics of the expenditures made by public entities. Mohave works hard to develop competitive solicitations and award contracts that will withstand the test of public scrutiny. The LEGAL and ETHICAL requirements governing Mohave’s cooperative purchasing program must be satisfied. Public purchasing is a closely regulated profession demanding competitive procurement and the highest level of integrity. The rules and regulations are set in place to protect the public funds used to support public entities. Mohave must not compromise those legal and ethical requirements. Maintaining the highest legal and ethical standards is a priority at Mohave. We have worked hard to put appropriate policies, processes and procedures in place. We stress the importance of an organization that embraces and practices the highest ethical principles. We never stop looking for areas of improvement. MOHAVE must be satisfied that all of the external demands and influences have been balanced to provide a viable cooperative purchasing program that members can use with confidence. To have members, vendors and the public look to us with confidence, Mohave must demonstrate through its actions that we are capable of being their purchasing cooperative of choice, and that we possess the skills necessary to successfully meet their needs. We will not satisfy everyone all the time. Even with the best effort, claims, controversies, and concerns arise that require resolution. However, Mohave can be satisfied that we have served our members well, supported the principles governing public purchasing, and awarded fair contracts that will withstand any challenge. Is this balancing act known as Mohave worth the effort? The answer is an emphatic “YES.” Knowing that the materials, equipment, services, and construction purchased under our contracts help schools, cities, counties, libraries, and other public entities provide essential services allows us to measure success in the satisfaction that comes from knowing we made an important contribution. Thank you for your support of Mohave Educational Services Cooperative, Inc. Tom Peeler, Executive Director 9/15/06, JTP
JULY 2006 | WE'RE HERE TO HELP I received a phone call from a member who first apologized for bothering me and then asked a valid question. The apology was offered because the member felt he was bothering me, but didn’t have any other contacts at Mohave. The question pertained to the status of a purchase order. Mohave’s staff is capable and willing to answer questions. After completing the call in the paragraph above, I decided it might be helpful to provide readers with an overview of Mohave’s organizational structure and the support services provided by each area. The goal is to better prepare members, vendors and the public to find assistance effectively and conveniently. After all, as a service organization, we’re here to help.
Knowing our structure and support service functions is important. However, it’s useful only if you know how to contact the appropriate person. We have developed a number of resources to help you contact the Mohave staff member best able to provide assistance. Our website, www.mesc.org, is our primary resource. The website contains the following resources for obtaining contact information. Contact Us is a link on the website’s homepage. Clicking this link will take you to a complete list of Mohave’s staff. Next to each staff member’s name, is that person’s job title, telephone extension and email address. This page also provides the address, telephone number and fax number for each office. Product/Vendor Finder, in the Purchasing Services area of the website, not only provides useful contract information, it also indicates the Mohave staff assigned to each contract. Each listing contains the name of the “Mohave Contact” (procurement specialist) who handles the purchase orders for that contract, and the “Contract Specialist” who is responsible for any contractual issues. Purchase Order Status, also in the Purchasing Services area of the website, provides useful information about each purchase processed by Mohave. Just as importantly, it provides the name of the “Mohave Contact” who can answer questions about that purchase order. If the website does not conveniently provide the information you need, call us. Our staff, regardless of job title, is ready to help. No call is a bother. If the person answering the phone cannot address the issue, he or she will direct the caller to the proper individual. After all, we’re here to help. Thank you for supporting Mohave. Tom Peeler, Executive Director 7/13/06, JTP
JULY 2006 | WHERE DO WE GO FROM HERE? Mohave has a history of success in Arizona. From our career education days in Mohave County, to our current statewide cooperative purchasing program, members have found our services to meet a variety of their needs. Mohave’s program is recognized as a leader in cooperative purchasing. Getting to this point has not been easy, and there have been bumps in the road. However, we faced each challenge head-on and made the changes we believed necessary to correct our deficiencies and improve our services. Because we believe in continual improvement, our process of review, analysis and renewal is an on-going effort. We strongly believe that process enables us to remain true to our vision, mission and guiding principles, while allowing us to change our service offerings to meet the requirements of a dynamic membership. With that in mind, where do we go from here? First, we will remain a cooperative purchasing program. Cooperative purchasing is what we do and why our current organization was created. Next, we will consider services to support, improve or supplement our statewide term contracts. Examples include: Allowing members to place orders directly with vendors for certain contracts with a large number of low dollar orders. The contracts most likely to be affected are catalog contracts with percent of discount pricing. Developing regional contracts to meet the requirements of members in a common geographical area. Such contracts may benefit regions with a large number of small member agencies by pooling their requirements and using Mohave’s contracting capabilities. Developing requirements contracts to meet specific one-time needs. Under these contracts, members would commit to a purchase, and Mohave would pool their requirements to generate economies of scale for a single procurement to meet the group’s requirements. Automatic Electronic Defibrillators (AEDs) may be a candidate for such a contract. Developing contracts for required services, which we have historically avoided. Therapist and consultant contracts might fall within this area. Third, we will endeavor to forge partnerships with other agencies to address the requirements of common customers. Our work with the Arizona Government Information Technology Agency (GITA) and Arizona Department of Education to establish contracts for erate internal connections is an example of such a partnership. Our work with the Association of Educational Purchasing Agencies (AEPA), a 23-state consortium of purchasing cooperatives is another example. We believe similar opportunities may exist. Fourth, we want to improve member and vendor outreach. We have developed a number of tools to help members and vendors have a successful Mohave experience. However, we have not achieved the level of effectiveness we desire for those tools. Webcasts, webinars, downloadable training materials, and video conferencing are a few of the things we are looking at to address this concern. I trust this brief article demonstrates our commitment to meeting tomorrow’s needs, as well as today’s. We are proud of where we are. However, we realize that static organizations do not survive in a dynamic environment. Our goal is to be a dynamic organization in a dynamic environment. That is the only way members will continue to find that Mohave’s services meet a variety of member needs. Thank you for supporting Mohave Educational Services Cooperative, Inc. It is our privilege to work with you. Feel free to share your comments, suggestions or concerns by contacting me at tom@mesc.org. Tom Peeler, Executive Director 4/28/06, JTP
MARCH 2006 | MEMBERS HELP DETERMINE MOHAVE'S COURSE By vote of the membership, Bill Brannen and Ramona Reid have been elected to three-year terms on Mohave’s Board of Trustees. This is the first time that members selected the people to fill positions on the Board. With this giant step forward, members are helping determine the course Mohave takes as an organization. Bill has been the Director of Purchasing for Flagstaff Unified School District since January 2001. Prior to that, he served as the Director for Purchasing and Auxiliary Services at Coconino Community College. With more than 25 years of experience in both the public and private sectors, Bill brings a breadth of purchasing and materials management knowledge to the MESC Board of Trustees. Ramona has been the Purchasing Manager for the Deer Valley Unified School District since 1994. Prior to that, Ramona worked in a variety of positions including accounts payable clerk, buyer and administrative assistant for the Support Services Department. Ramona brings the knowledge gained from 23 years of experience with the ever-growing Deer Valley Unified School District to the Board of Trustees. Joan Clem, Business Manager for Douglas Unified School District, was also a candidate in this election. We appreciate Joan’s interest in serving on our Board of Trustees. We also want to recognize three members of the Board of Trustees who have ended their time of service: Dr. Mike Ford, Mike Aylstock and LaVerne Schimpf. Each of these individuals served on the initial Board of Trustees for Mohave Educational Services Cooperative, Inc. Their support of the organization and its mission helped achieve a smooth transition from a government entity to nonprofit corporation. We appreciate the manner each of them contributed to our success. Electing the Board of Trustees is not the only way members can help determine Mohave’s course. Listed below are several other opportunities. Member Focus Group: The member focus group meets quarterly to discuss issues of interest, including quality of service, new contracts, vendor performance, and changes in processes and procedures. We want this group to be comprised of 12-15 member representatives from around the state. Meetings can be attended in person or electronically. Contact Gary Bowen, Director of Marketing and Outreach, gary@mesc.org, if you are interested in being a member of the focus group. New Contract Requests: Member requests are a primary consideration when Mohave determines which new products and services to add to our contract offering. Requesting a new contract is a simple online process. From the Purchasing Services section of our website (www.mesc.org), click on the “Member Contract Request” link. That link will take you to a brief electronic form that takes less than five minutes to complete. Vendor Performance Reporting: Members are our best source of information for monitoring vendor performance. Again, this is a simple online process. From the Purchasing Services section of our website, click on the “Performance Report” link. That link will take you to a brief electronic form that takes less than five minutes to complete. Please be fair. This report is for positive, as well as negative reporting. We encourage active member participation. Listed above are a few of the ways members can help set the right course for our organization. It may not be a complete list. Feel free to contact me with your ideas. I may be reached by phone at 928-718-3205, or by email at tom@mesc.org. Thank you for being a part of Mohave Educational Services Cooperative, Inc. Tom Peeler, Executive Director 3/6/06, JTP
JANUARY 2006 | A PROUD PAST AND A LEGACY TO UPHOLD In September 2006, Mohave will celebrate 35 years of service in Arizona. A milestone such as this often causes one to reflect on the past and anticipate the future. Mohave was created in 1971 to provide career education to the students in Mohave County schools. This service was provided through a variety of programs, including a mobile resource unit that offered training through educational media and hands-on projects. We still possess a number of sheet metal toolboxes manufactured by students in the mobile resource unit. In 1975, the media services program was created to provide educational videos to Mohave County schools. The program began with 16mm films, and then added laser discs, VHS cassette tapes and DVDs. Through this program, Mohave provided an educational film library to schools and nonprofit entities for 30 years. During the summer of 1983, Mohave became a licensed distributor of the MECC software for any Arizona school district wishing to participate. Mohave used its distributorship to obtain the legal right to make copies of MECC software and manuals for member schools throughout the state. This program resulted in Arizona schools being able to legally use the latest educational software at a cost much lower than if the school had purchased directly from MECC. This was Mohave’s first step towards procurement. In 1988, Mohave awarded its first statewide cooperative purchasing contract to Apple Computer. This contract filled an important need for Arizona’s schools, and resulted in member requests for additional contracts. For the first years of the statewide cooperative purchasing program, Mohave’s contracts were devoted exclusively to technology contracts. However, members began requesting contracts for a variety of needs. As a result, Mohave now offers more than 160 competitively procured contracts for a variety of materials, services, equipment and construction. ASPIN was created in 1995 to provide a statewide food service cooperative purchasing program. It has grown from a start-up program to more than 120 members throughout Arizona. ASPIN provides its members with quality contracts for purchasing food, dairy products, bakery products, and food service program commodities. Throughout its history, Mohave has been guided by the principles of opportunity and service. Opportunity for education was provided through the career education and media services programs. Opportunity for effective, efficient and economic contracting has been, and continues to be, provided through the cooperative purchasing program. Service comes from our efforts to treat everyone with respect and to make every reasonable effort to answer any question or resolve any issue. Mohave’s past is filled with vision, innovation, change, opportunity, and service. There have been many successes and a few challenges. We celebrated our successes and used the challenges to identify and implement changes to make us a better organization. This is quite a legacy to uphold, and we are ready for the opportunity. Mohave is a collection of 25 people who are dedicated to building upon the firm foundation of our past. We will continue the successes, identify weaknesses and develop plans for improvement, and use the same vision and innovation that enabled us to grow and thrive over the past 35 years. I am proud of Mohave’s staff and the quality service they provide. We are pleased to work with the Mohave contractors that assist us in offering materials, services, equipment, and construction. We are especially proud to be of service to our many member agencies throughout Arizona. Thank you for being part of Mohave’s past and for helping to uphold the legacy. Tom Peeler, Executive Director 1/18/06, JTP
NOVEMBER
2005
| MAKING
TOUGH DECISIONS As a statewide purchasing cooperative, Mohave is subject to tough decisions. Making those decisions in a prompt, professional, proper, and responsible manner is a priority for us. I thought you might be interested in Mohave’s point of view on several issues that require tough decisions. Defining contract requirements can be a particularly challenging task for statewide term contracts designed to meet the needs of a diverse membership. While the majority of our members use common products and services, their needs, standards and expectations can be quite different. Mohave’s goal in addressing this issue is to seek complete product and service lines, establish standards for quality and performance, and set requirements that do not unreasonably limit competition. Providing members with choice requires a delicate balance between satisfying the members’ requirements and awarding contracts in accordance with applicable rules, regulations and statutes. |