Agenda Item 11 A
March 17,2015
Action
MEMORANDUM
TO:
FROM:
~
County Council
Robert H. Drummer, Senior Legislative Attorney
{'1M
l
SUBJECT:
Action:
Expedited Bill 7-15, Reorganization - Executive Branch - Procurement
and Reorganization Plan No. 1-15
Government Operations and Fiscal Policy Committee recommendation:
approve the Bill as
introduced and disapprove Reorganization Plan No. 1-15.
Expedited Bill 7-15, Reorganization - Executive Branch - Procurement, sponsored by the
Council President at the request of the County Executive, was introduced on February 3,2015. A
public hearing was held on February 24 and a Government Operations and Fiscal Policy
Committee worksession was held on March 9.
Background
Bill 7-15 would establish the Office of Procurement as a principal Office ofthe Executive
Branch and transfer procurement related functions to the Office of Procurement. Prior to July I,
2008, the Office of Procurement was a principal Office of the Executive Branch. At the request
of the Executive, the Council enacted Bil14-08, Reorganization Executive Branch, on April 15,
2008, effective July 1,2008. Part of the reorganization accomplished in Bi1l4-08 was to create a
new Department of General Services (DGS) and transfer certain functions to the new Department,
including Procurement. The Executive is now requesting to pull the Office of Procurement out of
DGS and re-establish
it
as a principal Office of the Executive Branch. The Office would include
the procurement function as well as the duties that have been handled by the Office of Business
Relations and Compliance, which ensures that contractors meet the wage and minority-owned
business provisions of the procurement law. The Executive explained why he requested this
reorganization in his transmittal memorandum at ©7.
County Charter §217 provides that the Council "may prescribe by law the organization of
the Executive Branch of County government." Charter §217 also authorizes the Executive to
submit a reorganization plan to the Council for approval. If the Council does not disapprove the
plan within 90 days after it is presented to the Council, it becomes law. In addition to requesting
Bill 7-15, the Executive submitted Reorganization Plan No. 1-15 establishing the Office of
Procurement as a principal office ofthe Executive Branch under Charter §217 on January 22. See
©8-11. The Council does not have the authority to amend the reorganization plan. The Council
must approve it, disapprove it, or let it become law without taking action. However, the Council
can amend Bill 7-15 and disapprove the reorganization plan.
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Public Hearing
Assistant Chief Administrative Officer Fariba Kassiri, representing the Executive,
supported the Bill as requested by the Executive. (© 17-18) Ms. Kassiri argued that the increased
responsibility for both DGS and Procurement since 2008 make it more desirable for the Office of
Procurement to become, once again, an independent principal office with a single focus. There
were no other speakers.
GO Committee Worksession
Assistant CAO Fariba Kassiri, Assistant CAO Bonnie Kirkland, Pam Jones, DGS, and
Grace Denno, DGS, represented the Executive Branch. The Committee discussed the reasons the
Office of Procurement was reorganized into the Department of General Services in 2008 and the
reasons the Executive requested to reverse this decision. The Executive requested the Council to
approve the Bill and disapprove the Reorganization Plan in order to make the change effective as
soon as the Executive signs the Expedited Bill into law. The Committee recommended (3-0) to
approve the Bill as introduced and disapprove the Reorganization Plan.
Issues
1. What is the fiscal and economic impact of the Bill?
OMB estimated that the Bill would require a recurring expense for the creation of 1 cabinet
level position for the Director of the Office of Procurement, salary and benefits are estimated at
$220,000 to $250,000, and an additional $30,000 in associated operating expenses, such as
database space on servers. The additional staffing for the Office ofProcurement would result from
a shift of32 existing positions from DGS to the Office of Procurement.
Finance was unable to estimate the economic impact of the Bill, but opined that an
independent Office of Procurement with a single focus would create positive impacts for the
County in its procurement of goods and services.
2. Why create an independent Office of Procurement?
The Executive, in his transmittal memorandum, stated that an independent Office of
Procurement would be "less susceptible to pressures to defer to other priorities within DGS and
will be able to focus on the best interests of the County from an overall procurement perspective."
See ©7. Ms. Kassiri added in her testimony (©17-18) that the obligations placed upon pGS since
its creation in 2008 have made
it
more difficult for DGS to effectively administer the procurement
functions. Ms. Kassiri highlighted several recent bills adding to or amending the procurement
system as well as the additional requirements placed on DGS
in
the real property disposition
process. Ms. Kassiri stated that DGS spent $855 million or almost 25% of the $3.66 billion of
County government spending on contracts in FY2014. While there have been no complaints about
the independence of the Office of Procurement since it became part of DGS, the Executive is
concerned that a "separation of duties" is the best practice. See Executive Branch answers to
questions from Council staff at ©19.
2
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3. Which Maryland Counties (and other similar jurisdictions outside of Maryland) have an
independent office of procurement?
The Executive identified Howard County, Wicomico County, Fairfax County, City of Chicago,
City of Boston and the City of Atlanta as jurisdictions with an independent office of procurement.
See ©19.
4. What would the new organization charts look like?
The Executive provided a proposed organization chart for DGS without Procurement at
©20 and a proposed organization chart for an independent Office of Procurement at ©21.
5. Should the Office of Procurement be an independent principal office of the Executive
Branch?
There have been no complaints about the independence of the Office of Procurement since
it became part of the new Department of General Services. There have been complaints about the
procurement process.
In
fact, the Council recently appointed a citizen task force to review the
procurement process and make recommendations for improvement, and the Executive is in the
process of hiring a consultant to do the same.
I
This reorganization would not change the
procurement process or affect the work of the task force or the Executive's consultant. The
reorganization would add one high level position to the Executive Branch. The ongoing fiscal
impact is estimated to be $250,000 to $280,000 each year.
Yet, an independent Office ofProcurement with a cabinet-level director makes sense. The
Office of Procurement provides support for all County departments and offices.
It
is a critical
function to the success of County government similar to the Office of Finance and the Office of
Management and Budget. While this reorganization would not streamline the government,
increase efficiency, or save money, a cabinet level director with a single focus on procurement
may result in a better administration ofthe process over time. The Executive requested the Council
to enact the expedited Bill and disapprove the reorganization plan to make the change effective as
soon
as
the
Bill
is signed into law by the Executive.
Committee recommendation (3-0):
approve
the Bill as introduced and disapprove Reorganization Plan No. 1-15.
This packet contains:
Expedited
Bill
7-15
Legislative Request Report
Executive's Transmittal Memorandum
Reorganization Plan No. 1-15
Fiscal and Economic Impact statement
Testimony of Fariba Kassiri
Executive Branch answers
DGS
Organization Chart without Procurement
Independent Office of Procurement Organization Chart
F:\LAW\BILLS\lS07 Reorganization-Executive Branch-Procurement\Action Memo.Docx
Circle
#
1
5
7
8
12
17
19
20
21
The duplication of effort between the Council's task force and the Executive's consultant raises questions that are
beyond the scope of this packet.
1
3
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Expedited Bill No....... -1:.:::5_ _ _ _--:-_
7--'
Concerning: Reorganization - Executive
Branch - Procurement
Revised: January 23. 2015 Draft No.
L
Introduced:
February 3.2015
Expires:
August 3.2016
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: !...!N=on=e:...-_..,..--_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
establish the Office ofProcurement as a principal Office of the Executive Branch;
(2)
Transfer procurement related functions to the Office of Procurement; and
(3)
generally amend the law regarding procurement and related functions.
By amending
Montgomery County Code
Chapter lA, Structure of County Government
Section lA-201
Chapter 2, Administration
Sections 2-30 and 2-64N
Chapter 11B, Contracts and Procurement
Section
IIB~
1
Chapter 19, Erosion, Sediment Control and Stormwater Management
Section 19-29A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves thefollowing Act:
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ExPEDITED BILL
No.
7-15
1
2
Sec. 1. Sections IA-201, 2-30, 2-64N, lIB-I, and 19-29A are amended as
follows:
IA-201. Establishhig departments and principal offices.
(a)
Executive Branch.
3
4
5
(1)
These are the departments and principal offices of the Executive
Branch.
6
7
*
*
*
*
*
*
8
9
Procurement [Section 2-64NJ
10
11
12
13
Division 5. DEPARTMENT OF GENERAL SERVICES.
2-30. Department of General Services - Functions.
The Department of General Services must:
[(a)
administer, through the Office ofProcurement, the procurement system
under Chapter lIB;]
[(b)]
14
15
16
17
18
19
W
acquire and dispose of real property, except real property used
(or intended to be used) for right-of-way governed under Chapter 49,
including roads, streets, highways, bridges, culverts, storm drainage
systems, pedestrian and bicycle pathways and walkway systems;
[(c)]
(hl
design and build County buildings, including public parking
20
21
22
23
facilities under Chapter 60;
[(d)]
(£)
maintain County vehicles, including heavy and light equipment
and transit equipment;
[(
e)]
@
remodel and renovate County buildings, except public parking
24
25
26
facilities under Chapter 60, which remain open during the remodeling
or renovation;
[(f)]
UD
repair and maintain County buildings, except public parking
27
facilities under Chapter 60;
1.docx
o
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ExPEDITED BILL
No.
7-15
28
29
[(g)]
ill
manage County property and identify and acquire real property
needed for the operation of County government;
[(h)]
(g)
[(i)]
(h)
plan and implement the use of space in County buildings; and
operate mail, printing, duplication, and archiving services.
Division 20. OFFICE OF PROCUREMENT.
2-64N. Functions.
[The Office of Procurement is part of the Department of General Services.]
The Office of Procurement must:
30
31
32
33
34
35
36
37
*
liB-I.
Definitions
*
*
*
*
38
*
39
40
41
Director
means the Director of the Office of Procurement [Department of
General Services] or the Director's designee.
*
*
(b)
*
*
*
42
43
44
45
19-29A. Watershed restoration grants program.
*
To identify non-profit organizations to perform water quality protection
or improvement activities, the Director of the [Department of General
Services] Office of Procurement may issue a competitive solicitation
under Chapter 11 B that is limited to non-profit organizations.
46
47
48
49
50
*
*
*
Sec. 2. Transition. Any regulation in effect when this Act takes effect that
implements a function transferred to the Office ofProcurement by this Act continues
in effect, but any reference in any regulation to the Department of General Services,
from which the function was transferred, must be treated as referring to the Office
ofProcurement, to which the function is transferred. The transfer ofa function under
51
52
53
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1.docx
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ExPEDITED BILL
No. 7-15
54
55
56
57
58
59
60
61
62
this Act does not affect any right of a party to any legal proceeding begun before this
Act took effect.
Any responsibility or right granted by law, ordinance, regulation, delegation
of authority, contract, or other document to the Department General Services in
connection with the Procurement Law and Regulations is transferred to the Office
of Procurement.
Sec. 3. Expedited Effective Date.
The Council declares that this legislation
is necessary for the immediate protection ofthe public interest. This Act takes effect
on the date it becomes law.
Approved:
63
64
George Leventhal, President, County Council
65
Approved:
Date
66
Isiah Leggett, County Executive
67
This is a correct copy ofCouncil action.
Date
68
Linda Lauer, CMC, Clerk ofthe Council
Date
8f:\law\bills\1501 reorganization-executive branch-procurement\bill
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LEGISLATIVE REQUEST REPORT
Expedited Bill 7-15
Reorganization
-
Executive Branch
-
Procurement
DESCRIPTION:
Bill 7-15 would create the Office of Procurement as a principal office
within the Executive Branch of the County, rather than as a division
within the Department of General Services (DGS).
The inclusion of the procurement function within a department that itself
procures major goods, services, and construction has raised perceived
issues regarding the independence of the procurement function. For
example, in FY2014, DGS spent $855 million on procurement matters of
the County's total $3.66 billion, which amounts
to
25% of the County's
procurement expenditures. Moreover, DGS engages in some of the
County's most complex and sophisticated procurements that involve
construction of buildings and fleet management.
In
addition, several
obligations have been placed on DGS since 2007 that increase the
complexity of keeping the procurement function within DGS, namely, the
expansion of the small business reserve program in 2009, the expansion
of the prevailing wage law in 2009, and the whistleblowers statute in
2010. During the same period, DGS acquired responsibility for a more
complex real property disposition process in 2012.
PROBLEM:
GOALS AND
OBJECTIVES:
As an independent principal office, the Office of Procurement will be less
susceptible to pressures
to
defer
to
other priorities within the department,
and can focus on the best interests of the County from an overall
procurement perspective. By having the status of a cabinet level
department, the separation of duties would remain intact without the
blurred lines of authority that have occurred during the tenure of
procurement as a division within DGS. The Office would include the
procurement function as well as the duties that have been handled by the
Office of Business Relations and Compliance, which ensures that
contractors meet the wage and minority-owned business provisions of the
procurement law.
Department of General Services
Office of the County Attorney
To be provided
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
To be provided
®
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EVALUATION:
EXPERIENCE
ELSEWHERE:
nla
Other large municipalities house their procurement functions in an
independent office of procurement.
SOURCE OF
INFORMATION:
David
E.
Dise, Director, DGS
Marc P. Hansen, County Attorney
APPLICATION
WITIDN
MUNICIPALITIES: nla
PENALTIES:
nla
F:\LAw\BILLS\1507 Reorganization-Executive Branch-Procurement\LEGISLATIVE REQUEST REPORT.Docx
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE. MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
January 22, 2015
TO:
George Leventhal, President
County Council
Isiah Leggett, County Executive
Reorganization Plan and Expedited Bill Creating an Office of Procurement within
County Government
FROM:
SUBJECT:
I am attaching for Council consideration Reorganization Plan No. 1-15 in
accordance with Section 217 of the Montgomery County Charter. This Plan will create an Office
of Procurement within County government, separate and apart from the Department of General
Services (DGS). Because Section 217 contemplates an up or down vote on the Plan as submitted,
I am also attaching an Expedited Bill to do the same in the event that Council wishes to make
changes to the Plan.
The purpose of the Reorganization Plan is to establish as an independent principal
office the Office of Procurement As such, the Office will be less susceptible to pressures to
defer to other priorities within DGS and will be able to focus on the best interests of the County
from an overall procurement perspective. The Office will be able to focus on the various
contracting needs generated across County government, and ensure compliance of all
departments
with
best practices and laws,
re~ations
and policies related to contracting.
Executive staff is available to assist the Council in its consideration of this Plan.
Your assistance is appreciated.
Attachments
·'3'
montgomerycountymcl.gov/311
,\.'
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.
::.~:;..
240-773-3556 TTY
(jJ
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Reorganization Plan No.
-,:-1-...:.1~5
_ _ __
Concerning: Office of Procurement ­
Creation
Submitted to Council: January 22, 2015
Council: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: :...:N=on.:,.::e'--_ _ _ _ __
Ch. _ _•
Laws
of Mont Co. _ __
COUNTY EXECUTIVE
FOR MONTGOMERY COUNTY, MARYLAND
Charter Section 217 Plan of Reorganization
AN
ACT to:
(1)
(2)
(3)
establish the Office ofProcurement as a principal Office ofthe Executive Branch;
transfer procurement related fimctions to the Office of Procurement; and
provide for the orderly transfer of procurement related fimctions to the Office of
Procurement.
By amending
Montgomery County Code
Chapter lA, Structure ofCounty Government
Section 1A-201
Chapter 2, Administration
Sections 2-30 and 2-64N
Chapter lIB, Contracts and Procurement
Section 11 B-1
Chapter 19, Erosion, Sediment Control and Stormwater Management
Section 19-29A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
'* '* '*
Heading or defined term.
Addedto existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill
The County Executive for Montgomery County, Maryland approves thefollowing Act:
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REORGANIZATION PLAN
1-15
1
Sec. 1. Sections IA-201, 2-30, 2-64N, lIB-I, and 19-29A are amended as
follows:
IA-201. Establishing departments and principal offices.
(a)
Executive Branch.
2
3
4
5
(1)
These are the departments and principal offices of the Executive
Branch.
6
7
8
9
*
*
*
*
*
Procurement [Section 2-64N]
*
10
11
Division 5. DEPARTMENT OF GENERAL SERVICES.
2-30. Department of General Services - Functions.
The Department of General Services must:
[(a)
administer, through the Office ofProcurement, the procurement system
under Chapter l1B;]
[(b)]
ill
acquire and dispose of real property, except real property used
12
13
14
15
16
17
(or intended to be used) for right-of-way governed under Chapter 49,
including roads, streets, highways, bridges, culverts, storm drainage
systems, pedestrian and bicycle pathways and walkway systems;
[(c)]
ill
design and build County buildings, including public parking
18
19
20
facilities under Chapter 60;
[(d)]
21
22
W
maintain County vehicles, including heavy and light equipment
and transit equipment;
[(e)]
@
remodel and renovate County buildings, except public parking
23
24
25
facilities under Chapter 60, which remain open during the remodeling
or renovation;
26
27
[(f)]
@
repair and maintain County buildings, except public parking
facilities under Chapter 60;
-2­
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REORGANIZATION PLAN
1-15
28
29
30
[(g)]
ill
manage County property and identify and acquire real property
needed for the operation of County government;
[(h)]
(g)
[(i)]
plan and implement the use of space in County buildings; and
operate mail, printing, duplication, and archiving services.
31
32
33
34
35
®
Division 20. OFFICE OF PROCUREMENT.
2-64N. Functions.
[The Office of Procurement is part of the Department of General Services.]
The Office of Procurement must:
36
37
38
39
40
41
*
llB-I. Definitions
*
*
*
*
*
Director
means the Director of the Office of Procurement [Department of
General Services] or the Director's designee.
*
*
(b)
*
*
42
43
44
19-29A. Watershed restoration grants program.
*
*
To identify non-profit organizations to perform water quality protection
or improvement activities, the Director of the [Department of General
Services] Office of Procurement may issue a competitive solicitation
under Chapter 11 B that is limited to non-profit organizations.
45
46
47
48
49
50
51
*
*
*
Sec. 2. Transition.
Any regulation in effect when this Act takes effect that
implements a function transferred to the Office ofProcurement by this Act continues
in effect, but any reference
in
any regulation to the Department of General Services,
from which the function was transferred, must be treated as referring to the Office
ofProcurement, to which the function is transferred. The transfer ofa function under
52
53
-3­
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REORGANIZATION PLAN
1-1S
54
55
56
57
this Act does not affect any right of a party to any legal proceeding begun before this
Act took effect.
Any responsibility or right granted by law, ordinance, regulation, delegation
of authority, contract, or other document to the Department General Services in
connection with the Procurement Law and Regulations is transferred to the Office
of Procurement.
Approved:
58
59
60
61
62
Isiah Leggett, County Executive
Date
-4­
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ROCKVIllE, MARYLAND
MEMORANDUM
February 10,2015
TO:
FROM:
George Leventhal, Presiden:t County Council
Jennifer
A.
Hughes. Dir-
of Management and Budget
Joseph F. Beach,
Direct:~ent ~
-~ce
SUBJECT: FEIS for Council Bill 7-15E. Reorganization - Executive Branch­
Procurement
Please find attached the fiscal and economic impact statements for the above­
referenced legislation.
JAH:fz
00:
Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices ofthe County Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield. Director, ·Public Information Office
Joseph F. Beach, Director. Department ofFinance
David Platt, Department ofFinance
David Dise, Director, Department ofGeneral Services
.Erika Lopez-Finn, Office ofManagement and Budget
Naeem Mia, Office
or
Management and Budget
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Fiseal Impact Statement
Council Bill 7-1SE
&
Creation of the Office of Procurement
1. Legislative
Summary.
The proposed legislation establishes
the
Office ofProcurement as a principal Office of
the Executive Branch,
transfers
procurement related fimctions
to
the
Office of
Procurement,
and
generally amends the law regarding procurement and related functions.
2.
An
estimate ofchanges
in
County revenues and expenditures regardless of whether the
revenues or expenditures are assumed
in
the recommended or approved budget Includes
source of information, assumptions, and methodologies used.
The proposed legislation does not affect County revenues. The
proposed
legislation
would
increase County expenditures
by
the total personnel cost ofcreating one FTE for.
the Director position for the Office of Procurement and $30,000 for associated operating
expenses ofthe Office ofProcurement, such as database
space
on servers.
The bulk of
the
costs ofcreating the Office ofProcurement are covered through
shifts
of
resources from the Department of General Services. OOS
will
shift
personnel and
operating costs from the Division ofProcurem.ent (26.0
FTEs),
the Office ofBusiness
Relations and Compliance (OBRC) (5.0 FTEs), and a Management and Budget Specialist
ill
(1.0
FfE)
to the Office of Procurement
Shift
from
DGS
to
Office
of
Procurement
FTEs
Division of
Procurement
I
Office of Business
PC costs
$2,743,301
Associated OE costs
Total
26.0
$140,070
$2,883,371
Relations and
• Compliance
Management and
I
5.0
$531,738
$285,000
I
$816,738
Budget Specialist
Total
1.0
$160,987
32.0 $3,436,026
$160,987
$425,070 $3,861,096
3. Revenue and expenditure estimates covering
at
least the next 6
fiscal
years.
Revenues are not impacted. Expenditures for the next six fiscal years are assumed
to
be
flat.
4.
An
actuarial analysis through
the
entire amortization
period
for each bill
that
would affect
retiree
pension or group insurance costs.
The
proposed legislation does not affect retiree pension or group insurance costs.
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S.
An
estimate of expenditures related to County's information technology
(IT)
systems,
including Enterprise Resource Planning (ERP) systems.
IT and ERP systems are already in place for the establishment ofthe Office of
Procurement No anticipated increase in expenditures will
be
associated with the creation
of the new Office. Any
staff
work involved is to be absorbed
within
the cost of current
year budgets.
6. Later actions that may affect future revenue and expenditures
if
the
bill authorizes future
spending.
The proposed legislation does not authorize future spending.
7.
An
estimate ofthe
staff
time needed to implement
the
bill.
The
staff
needed to implement the new Office of Procurement is from OMB, DGS, ERP,
and CountyStat. An estimate of the time to implement the Office ofProcurement is
seventy hours.
8.
An
explanation of how the addition of new staff responsibilities would affect other duties.
The proposed legislation does not mandate new staff responsibilities.
9.
An
estimate of costs when an additional appropriation
is
needed.
An
additional appropriation of the total personnel costs ofa Director's position and
administrative operating expenses such as server costs for
databases
($30,000).
10. A description of any variable that could affect revenue and cost estimates.
None.
11. Ranges ofrevenue or expenditures that are uncertain or difficult to project.
Not applicable.
12.
If
a bill is likely to have no
fiscal
impact, why that is the case.
Not applicable.
13. Other fiscal impacts or comments.
None.
14. The following contributed to and concurred with this analysis:
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Michele Crane, Department of General Services
Grace Denno, Department of General Services
AngeJa Dizelos. Department of General Services
Beryl Feinberg. Department of General Services
Rose Glavinic, Office of Management and Budget
Pam Jones, Department of General Services
Erika Lopez-Finn, Office of Management and Budget
,
:
~f4~
.fer
ughes, Director
ffice of Management and Budget
Date
2.~O
,
""r
,
(
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Economic
Impa~t
Statement
Bill 7-19:, Reorganization - Executive Branch - Procurement
Background:
This legislation would create the Office of Procurement (Office) as a principal office
within the Executive Branch of the County, rather
than
as a division within the
Department ofGeneral Services (DGS).
The
office will have the
status
of a cabinet level
department within the Executive Branch.
1.
The sources of information, assumptions, and methodologies used.
Sources of infonnation: The D'epartment ofGeneral Services (DGS).
The Office will continue
to
follow standard County procurement laws, policies and
procedures, as well as applicable
state
and federal laws.. The Office includes the
procurement function and the compliance programs
under
the Office of Business
Relations and Compliance.
2. A
description of any variable that could
atTect
the eeonomic impact estimates.
There
are
no variables anticipated
to
affect
the
economic impacL
3.
The Bill's positive or negative effect,
if
any on employment, spending, saying,
investment, incomes, and property values in the County.
The Office will be elevated
to
a cabinet level department making it more independent
with a direct line to the Executive.
An
independent office makes it less susceptible
to
pressures
to
defer to other priorities within a larger department, and allows focus on
the best interests of the County from an overall procurement perspective. As such,
the separation of duties
will
remain intact and eliminate the blurred lines ofauthority
while procurement was in the Department ofGeneral Services. Therefore, there will
be positive economic benefits for
the
County with respect to obtaining goods,
construction,
and
services.
4.
If
a Bill
is
likeJy to have no economic impact, why
is
that the case?
The positive economic impact cannot be estimated with any degree ofspecificity at
this
time
5. The following contributed to or concurred with this analysis: David Platt, Mary
Casciotti, and Rob Hagedoom, Finance; Beryl Feinberg, Pam Jones, and Grace
Denno, Department ofGeneral Services.
Department of Finance
J~Drrlr~
-
Page
lofl
Dat~
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TESTIM:ONY ON BEHALF OF COUNTY EXECUTIVE ISIAH LEGGETT
BILL 7-15;
Reorganization - Executive Branch - Procurement
February 24, 2015
GoOd afternoon Council President Leventhal and Councilmembers. I am Fariba, Kassiri,
Assistant Chief Administrative Officer and I am here
to
testify on behalf of County Executive
Isiah Leggett
in
support of Bill 7-15, which would elevate our Office of Procurement
in
County
Government to a separate department County procurement of goods and services is a major and
important function
in
serving our residents. effectively and efficiently.
In
such a large
organization like Montgomery County, procurement is a high risk function that benefits from
having a single focus. Having procurement function as an Executive-level Principal COunty
Department is a best practice recognized by the National Institute of Governmental Purchasing
and a model followed by many large municipalities, including Fairfax County and the City of
Chicago.
Since the creation of the Department of General Services (DGS) in 2008, the obligations placed
on this depaltment have significantly increased, making it more difficult to effectively administer
the procurement fu,nctiQns assigQ.ed to it F:or example, the. q:nfTIcil,eru;tCted Bill 3-09 expaI+ding
'the small busmess reserve program, Bill
21-08
imposmg prevailing 'wage
r~uirements
in
construction Contracts, Bill 45-09 expanding the prevailing' wage law, and Bill
2-1
0 imposing on
County contractors a prohibition a,gainst retaliating against whistleblowers. At the same time,
DaS
has been tasked
with
iniplementing a more complex real property disposition process.
.
, .
"
While the existing model created seven years ago in Montgomery County has ,ensured separation
of duties and accountability and avoided conflicts of interest, the Executive's proposed
reorganization recognizes the evez:-growing complexity and scope of the procurement process,
and the necessity of creating a department with a single focus. Having the procurement function
in a department that is itself a major procurer of goods arid services raises perceived and real
questions regarding the independeiice ofthis critical function. For example, of the $3.66 billion
that the County government spent in FY 2014, DGS spent $855 million or almost 25%. DGS
engages in some of the County's most complex and sophisticated procurements, involving
building and construction and
fleet
management.
As a direct, cabinet-level function, procurement will cease
to
be just one ofmany other functions
of a larger department. As an independent principal office with a single focus, it
will
have a clear
mission and be less susceptible
to
placing the larger department's needs ahead of a smaller
internal division of that department. Being a distinct department also ensures a separation of
duties without risk of blurred lines of authority.
As a cabinet-level department, the Office of Procurement
will
be able to perform a key role,
ensuring compliance by all departments with procurement-related laws, regulations, policies
and
recognized best practices.
It
will be able to deal on an
equal
footing with all county departments
and outside agencies conducting public contracting. As an independent department, the Office
ofProcurement
will
be able to focus on the varying contracting needs generated across the
government. Its new strategic role in County government
will
mean that internally, other
departments
will
see it as a policy implementing entity, giving direction, guidance and assistance
1
@
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to departments in achieving Executive-contracting goals. Externally, businesses and other
organizations
will
observe the priority placed on this function for both accountability and
accessibility to government contracting.
Finally, as the Fiscal Impact Statement indicates,
the
County
will
incur minimal increase in staff
and costs as -a
r~t
of this change.
'Thank
you for the opportunity to testify in support of Bill 7-15.
2
-@
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GO Committee Worksession
BiIJ 7-15: Reorganization - Office
of Procurement
March 5, 2015
1.
Who plans to attend the GO worksession for the Executive Branch?
Fariba Kassin, Pam Jones and Grace Denno.
2. What was the rationale for moving the Office of Procurement into DGS in 2008?
The issue of a separate department or departmental division was discussed seven years
ago. At the time, the Executive elected to follow the Geneml Services model employed
by some states (including the State of Maryland) and counties under which Procurement
is a division of General Services.
3. What changes have occurred since 2008 that make the Executive believe that Procurement should
be made an independent office again?
After seven years it is the Executive's view that while controls set in place have been
effective and no breach of these controls has occulTed. administering this effort has been
challenging and that a "separation of duties" best practice warrants the revisiting of the
2008 decision.
4. Have there been any complaints about the independence ofthe Office since it became part of
DGS?
If
so, what were the complaints?
To the best of my knowledge there have been no such complaints.
5. How many employees would
be
moved from DGS to the new Office of Procurement?
The Depal1ment of General Services
will
shift stafffi'om the Division of Procurement
(26.0 FTEs which includes one IT Specialist
fIJ);
the Office of Business Relations and
Compliance (OBRe) (5.0 FTEs); and a Management and Budget Specialist
J1f
(1.0 FTE),
for a total of 32FTEs to the Office of Procurement.
6. What functions would the new Office of Procurement
be
responsible for?
All
those detailed on the Procurement and OBRC websites:
The Office of Business Relations and Compliance is responsible for managing
programs and strategies that expand contracting opportunities for Minority.
Female and Disabled Owned Businesses (MFD) and Local Small Business
Reserve Program (LSBRP) vendors in Montgomery County. The OBRC
administers the County's Equal Benefits Law, Wage Requirements (Living
Wage) Law and Prevailing Wage Law to ensure that the County's contractors
provide equitable benefits and a livable wage for contracted workers.
The Office of Procurement is responsible for the efficient and effective
procurement of goods, services, and construction in accordance with federal.
state and county regulations and identified best
practices~
resulting in the highest
value for County govemment and its residents. Procurement also works with
OBRC in implementing the compliance requirements into the IJrocess.
7. Please provide a proposed organization chart for the new Office of Procurement and the
remaining Department of General Services?
See attached.
8. Which Maryland Counties (and other similar jurisdictions outside of Maryland) have an
independent office of procurement?
The following public entities have an independent Office of Procurement that we were
able to contil1n: Howard County, Wicomico County, Fairfax County, City of Chicago,
City of Boston and City of Atlanta.
9. We understand that the Executive is in the process of hiring a consultant to review the
procurement process and recommend changes? Do you expect the consultant to recommend
organizational changes for the new Office?
The focus of the services to be performed is to identify opportunities for process
efficiencies that can result in reduced lead times, increased accessibility, and
improved compliance and accountability by County departments.
@
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FY16 DEPARTMENT OF GENERAL SERVICES
FY16 Proposed
424 positions
.,~-~
Manager
II
1
,
Rk:hard Jackson
Manager II
Manager II
Division Chief
Fleet Management
Services
201.
positi~ns
DIvl6ton Chief!
Central Servk:es _
j
r
OMaron Chief
Facilities
Management
112
positions
'-"-)
ManagerH
Division Chief
Building Oealgn
&
Construction
Hamid Omldvar -
Manager II
OffIce of
Special
Ronnie Warner
Manager
II
Eric:. Coffman
Manager III
~
'
,
Pro.fects
4posi~on.
Office
of
Planning
&
__ Oewlopment
3 positions
Office
of
Energy
&
Sustall1abillty
Cynthia
Brenneman
Manager III
OffIce of Real
Eetate
7 poslUons
51 Po8i;:..
"",J
ADA
Compliance
Administration
&
Budget
Facilities -
Malnwnance
Maintenance
Management
Adminlatratlon
"
Facilities Major
-Programs
~r
Equlpmel1t
Managemel1t
Proj8l'lt
Management
Materials
- Management
Facilities
Management
®
C:\Users\diseda\AppData\LocaI\Microsoft\Windows\Temporary Intemet Files\Content.Outlook\A520YCCo\FY16 DGS Organization Chart woo PRO OBRC.doc
2/27/2015
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Office of Procurement
(33 Positions)
Information Services.
IT Spec. III
Procurement Division
Manager II·
Business Relations and Compliance Division
.. Manager
III·
···5
Positions
. 26
Positions
Procurement Operations Section
Manager II
Cost& Price Analyst
Procurement Specialist
II
Procurement Services Section
Management
&
Budget Specialist
III
Outreach and Marketing
Program
1-Program Manager
I
!----l
·2 -
Office Services·
Coordinators
Operations Team 1
.. lead
Manager III
.
. 2 ..., Administrative
Aides
I .
Local Small Business
i .
Reserve Program
I-I···· .
(LSBRP)
i
1:"Program Manager I
i
I
;1'
I
,
Minorily,
Female,
and
Disabled Persons
. (MFD) Program
1-Program Specialist II
..
I
I
L
• Equal Benefits
1-Program·Manager.II
•., •
Living Wage
.Prevailing Wage
\LAW\BILLS\1507 Reorganization-Executive Branch-Procurement\Reorg - Procurement Org Chart Draft_3 2 2015 update (2).docx
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