GO Item 3
March 5, 2015
Worksession
MEMORANDUM
TO:
Government Operations and Fiscal Policy Committee
FROM:
Robert H. Drummer, Senior Legislative Attorney
~~
SUBJECT:
Worksession:
Expedited Bill 7-15, Reorganization - Executive Branch ­
Procurement and Reorganization Plan No.1-IS
Expected Attendees:
Fariba Kassiri, Assistant CAO
Pam Jones, Division Chief, Office of Procurement, DGS
Grace Denno, DGS
Expedited Bill 7-15, Reorganization - Executive Branch - Procurement, sponsored by the
Council President at the request ofthe County Executive, was introduced on February 3,2015. A
public hearing was held on February 24.
Background
Bill 7-15 would establish the Office of Procurement as a principal Office of the Executive
Branch and transfer procurement related functions to the Office of Procurement. Prior to July 1,
2008, the Office of Procurement was a principal Office of the Executive Branch. At the request
of the Executive, the Council enacted Bill 4-08, Reorganization Executive Branch, on April 15,
2008, effective July 1, 2008. Part of the reorganization accomplished in Bill 4-08 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-IS establishing the Office of
Procurement as a principal office of the 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.
Issues
1. What is the fiscal and economic impact of the Bill?
OMB estimated that the
13iIl
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 of Procurement would result from
a shift of 32 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 DOS 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 DOS since
its creation in 2008 have made it more difficult for DOS 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 DOS 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.
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 ofChicago,
City of Boston and the City of Atlanta as jurisdictions with an independent office of procurement.
See©19.
2
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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 ofthe Office ofProcurement 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.
1
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 of the process over time.
Council staff recommendation:
approve the Bill as introduced.
This packet contains:
Expedited Bill 7-15
Legislative Request Report
Executive's Transmittal Memorandum
Reorganization Plan No.1-IS
Fiscal and Economic Impact statement
Testimony of Fariba Kassiri
Executive Branch answers
DGS Organization Chart without Procurement
Independent Office ofProcurement Organization Chart
F:\LAW\BILLS\lS07 Reorganization-Executive 8ranch-Procurement\GO Memo.Docx
Circle
#
1
5
7
8
12
17
19
20
21
1
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.
3
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Expedited Bill No.
..!..7.....:-1~5
_ _ _ _ __
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:
~No~n.!l::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 of Procurement 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 1A-201
Chapter 2, Administration
Sections 2-30 and 2-64N
Chapter 11 B, Contracts and Procurement
Section 11B-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 Wlaffected by bill.
The County Councilfor Montgomery County, Mary/and approves thefollowing Act:
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exPEDITED BILL
No.
7-15
1
Sec. 1. Sections 1A-201, 2-30, 2-64N,
lIB-I,
and 19-29A are amended as
follows:
1A-20t. Establishing departments and principal offices.
(a)
Executive Branch.
2
3
4
5
6
7
(1)
These are the departments and principal offices of the Executive
Branch.
*
*
*
*
*
*
8
9
Procurement [Section 2-64NJ
10
Division 5. DEPARTMENT OF GENERAL SERVICES.
2-30. Department of General Services - Functions.
The Department of General Services must:
[(
a)
11
12
13
14
15
16
17
administer, through the Office ofProcurement, the procurement system
under Chapter llB;]
[(b)]
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)]
18
19
®
design and build County buildings, including public parking
20
21
facilities under Chapter 60;
[(d)]
(ill
maintain County vehicles, including heavy and light equipment
22
23
24
and transit equipment;
[(e)]
@
remodel and renovate County buildings, except public parking
facilities under Chapter 60, which remain open during the remodeling
or renovation;
[(f)]
25
26
W
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)]
plan and implement the use of space in County buildings; and
operate mail, printing, duplication, and archiving services.
30
31
32
33
34
35
36
37
38
®
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:
*
lIB-I. Definitions
*
*
*
*
*
39
40
41
42
43
44
Director
means the Director of the Office of Procurement [Department of
General Services] or the Director's designee.
*
*
(b)
*
*
*
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 lIB that is limited to non-profit organizations.
45
46
47
48
*
*
*
49
50
51
52
53
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
Gf:\Iaw\bills\1507
reorganization-executive branch-procurement\bill
1.docx
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ExPEDITED BILL
No. 7-15
54
55
56
57
this Act does not affect any right ofa 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.
58
59
60
61
62
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 COlmcil
Date
65
66
Approved:
Isiah Leggett, County Executive
Date
67
This is a correct copy o/Council action.
68
Linda Lauer, CMC, Clerk of the Council
Date
1.docx
8
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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 Oeneral Services (DOS).
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 FY20 14, DOS 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, DOS 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 DOS since 2007 that increase the
complexity ofkeeping the procurement function within DOS, 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
201
O.
During the same period, DOS 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 DOS. 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 Oeneral Services
Office ofthe 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
independent office of procurement.
III
an
SOURCE OF
INFORMATION:
David
E.
Dise, Director, DGS
Marc P. Hansen, County Attorney
APPLICATION
WITHIN
MUNICIPALITIES:
nla
PENALTIES:
nla
F:\LAw\BILLS\1507 Reorganization-Executive BrandI-Procurement\LEGISLATIVE REQUEST
REPORT
.Doex
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OFFICE OF THE COUNIT EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiab 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 ofProcurement within
County Government
FROM:
SUBJECT:
I am attaching for Council consideration Reorganization Plan No. 1-15 in
accordance with Section 217 ofthe Montgomery County Charter. This Plan will create an Office
of Procurement within County government, separate and apart from the Deparbnent 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
Counci~
wishes to make
changes to the Plan.
The purpose ofthe 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
iri
its consideration of this Plan.
Your assistance is appreciated.
Attachments
.
montgomeryc:ountymd.gov/311
'3"
,.'
240-773-3556 TTY
.
:"~
(j)
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Reorganization Plan No. . . !. 1-. . !1.!:!. 5_ _ __
Conceming:
Office
of Procurement ­
Creation
Submitted to Council: January 22. 2015
Council: _ _ _ _ _ _ _ _ __
Effective:
r : - - - : - : : - - - - - - - ­
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 of Procurement as a principal Office ofthe Executive Branch;
transfer procurement related functions to the Office of Procurement; and
provide for the orderly transfer of procurement related functions to the Office of
Procurement.
By amending
Montgomery County Code
Chapter lA, Structure of County Government
Section lA-201
Chapter 2, Administration
Sections 2-30 and 2-64N
Chapter lIB, Contracts and Procurement
Section llB-l
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 unqlJected by bill
The County Executive for Montgomery County, Maryland approves the following Act:
(1)
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REORGANIZATION PLAN
1-15
1
2
3
Sec. 1. Sections lA-20l, 2-30, 2-64N, lIB-I, and 19-29A are amended as
follows:
lA-20l. Establishing departments and principal offices.
(a)
Executive Branch.
(1)
These are the departments and principal offices of the Executive
Branch.
4
5
6
7
8
9
*
*
*
*
*
*
Procurement [Section 2-64NJ
10
11
12
13
14
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)]
.cru
acquire and dispose of real property, except real property used
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;
18
19
20
21
22
23
[(c)]
[Q)
design
and build
County
buildings, including public parking
facilities under Chapter 60;
[(d)]
W
maintain County vehicles, including heavy and light equipment
and transit equipment;
[(e)]
@
remodel and renovate County buildings, except public parking
24
25
facilities under Chapter 60, which remain open during the remodeling
or renovation;
[(f)]
ill
26
27
repair and maintain County buildings, except public parking
facilities under Chapter 60;
-2­
f:\law\bills\1507 reorganization-executive branch-procurement'lcharter 217-reorg 1.docx
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REORGANIZATION PLAN
1-15
28
29
30
31
32
[(g)]
ill
manage County property and identify and acquire real property
needed for the operation of County government;
[(h)]
(g)
plan and implement the use of space in County buildings; and
operatemail.printing. duplication, and archiving services.
[(i)]
ili}
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:
33
34
35
36
37
38
*
llB-1. Definitions
*
*
*
*
*
39
40
Director
means the Director of the Office of Procurement [Department of
General Services] or the Director's designee.
41
42
43
44
*
*
*
*
*
19-29A. Watershed restoration grants program.
*
(b)
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
45
46
47
48
49
50
under Chapter lIB that is limited to non-profit organizations.
*
*
*
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
-3­
f:\Iaw\bills\1507 reorganization-executive branch-procurement\Charter 217-reorg 1.docx
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REORGANIZATION PLAN
1-15
54
55
56
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:
57
58
59
60
61
62
Isiah Leggett, County Executive
Date
-4­
f:\law\bills\1507 reorganization-executive branch-procurement\charter 217-reorg 1.docx
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ROCKVIllE, MARYLAND
MEMORANDUM
February 10,2015
TO:
FROM:
SUBJECT:
George Leventhal, President County Council
Jennifer
A.
Hughes,
of Managem.ent and Budget
Joseph F. Beach,
Directo;~~ent ~
PElS for Council Bill 7-15E, Reorganization - Executive Branch­
Procurement
Direc~ffice
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, DiIector, Department of Finance
David Platt, Department ofFinance
David Dise, Director, Department ofGeneral Services
Erika Lopez-Finn, Office
of
Management and Budget
Naeem Mia, Office of Management and Budget
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Fiscal Impact Statement
Couneil Bill 7-1SE
&
Creation of the Office of Procurement
1.
Legislative Summary.
The
proposed legislation establishes the Office of Procurement as a principal Office of
the Executive Branch, transfers procurement related fimctions
to
the
Office of
Procurement, and generally amends the law regarding procuremeri.t 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 of creating one
PTE
for _
the Director position for the Office of Procuremeni and $30,000 for associated operating
expenses of
the
Office of Procurement, such as
database
space
on
servers.
The bulk ofthe costs ofcreating the Office ofProcurement are covered through
shifts
of
resources from the Department of General Services. DOS
will
shift
personnel and
operating costs from the Division ofProcurement (26.0 FTEs). the Office ofBusiness
Relations and Compliance (OBRe) (5.0
FTEs),
and a Management and Budget Specialist
ill
(1.0 PTE)
to the Office of Procurement
Shift
from
DGS
to
Office
of
Procurement
FTEs
DivisIon of
Procurement
Office of Business
i
Relations and
Pecasts
Associated OE costs
Total
I
I
26.0
$2,743,301
$140,070 $2,883,371
!
Compliance
Management and
• Budget Specialist
Total
5.0
$531,738
~
I
$285,000
$816,738
$160,987
$160,987
1.0
32.0 $3,436,026
$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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".
5.
An
estimate.of expenditures related
to
County's information technology
(11)
systems,
including Entetprise Resource Planning (ERP) systems.
IT and ERP systems are already in place for the establishment of
the
Office of
Procurement No anticipated increase in expenditures will be associated with the creation
ofthe 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 staffneeded to implement the new Office of Procurement is from OMB,
DGS~
ERP.
and CountySta1.
An
estimate ofthe time to implement the Office ofProcurement is
seventy hours.
8.
An
explanation of how the addition ofnew staffresponsibilities would affect other duties.
The proposed legislation does not mandate new staff responsibilities.
9.
An
estimate ofcosts when an additional appropriation
is
needed.
An
additional appropriation of the total personnel costs of a 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.
NOIl;e.
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
Angela Dizelos, Department ofGeneral Services
Beryl Feinberg, Department of
General
Services
Rose Glavinic, Office ofManagement and Budget
Pam Jones, Department of General Services
Erika
Lopez-Finn, Office of Management and Budget
,
.
~&(~
.fer
ugbes,
Director
ce of Management and Budget
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Economic Impact Statement
Bm
7-15E,
Reorganization -Executive Branch· Procurement
Background:
This legislation would create the Office of Procurement (Office) as a principal office
within the Executive Brartch of the CoWlty. rather than as a division within the
Department of General 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 information: The Department ofGeneral Services (DGS).
The Office will continue to follow standard County procurement laws, policies and
procedures, as well as applicable state and federa1laws.. The Office includes the
procurement function and the compliance programs Wlder the Office ofBusiness
Relations and Compliance.
2. A
deseription of any variable that eould affect the economie impact estimates.
There
are
no variables anticipated
to
affect the economic impact.
3. The Bill's positive or negative effect,
if
any on employment, spending, saving,
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 ofthe COWlty from
an
overall procurement perspective.
As
such,
the separation ofduties will remain intact and eliminate
the
blurred lines of authority
while procurement
was
in the Department of General Services. Therefore, there will
be positive economic benefits for the County with respect to obtaining goods,
construction,
and
services.
4.
If
a Bill
is
likely 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.
J
F. each, Director
Department of Finance
Page
I
ofl
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TESTIMONY ON BEHALF OF COUNTY EXECUTIVE ISIAB 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 N ationa11nstitute c;>f Governmental Purchasing
and a model followed by many large municipalities, including Fairfax County and the City of
Chicago.
'
Since the creation ofthe Department of
General
Services (DGS) in 2008, the obligations placed
on ¢is department have significantly increased, making it more difficult to effectively administer
the procurement
~ctio,ns
assigQ.ed to it. F,()r example, the, COl¥lcil,
en~cted
Bill 3-09 expaI).ding
'the small business reserve program, Bill
21-08
imposingpreVailitlg'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
~gainst
retaliating aga.i:rist whistleblowers.
A~
the same time,
DOS has been tasked with iDiplementing a more complex real property disposition process.
Wbile the existing model created seven years ago in Montgomery County
has
~ed
separation
ofduties and accountability and avoided conflicts of interest, the Executive's proposed
reorganization recognizes the ever-growing complexity and scope of the procurement process,
and the necessity of creating a departmel;lt 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 independei:ice of
this
critical function. For example, ofthe $3.66 billion
that the County government spent in FY 2014, DGS spent $855 million or almost 25%. DGS
engages in some ofthe 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 ofthat department. Being a distinct department also ensures a separation of
duties without risk ofblurred 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 et;ltity, giving direction, guidance and assistance
1
@
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~
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 result ofthis change.
Thimk you for the opportunity
to
testify in support of Bill 7-15.
2
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GO Committee Worksession
Bill 7-15:
Reorganization - Office
of Procurement
March 5, 2015
1. Who plans to attend the GO worksession for the Executive Branch?
Fariba Kassiri, 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 General 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 occurred. 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 of the 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 Depmiment of General Services will shift stafffrom the Division of Procurement
(26.0 FTEs which includes one IT Specialist
JJf);
the Office of Business Relations and
Compliance (OBRC) (5.0 FTEs); and a Management and Budget Specialist 1Il (1.0 FTE),
tor 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 Oftlce of Business Relations and Compliance is responsible for managing
programs and strategies that expand contracting 0ppOlwnities for Minority.
Female and Disabled Owned Businesses (MFD) and Local Small Business
Reserve Program (LSBRP) vendors in Montgomel), 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 government and its residents. Procurement also works with
OBRC in implementing the compliance requirements into the process.
7. Please provide a proposed organization chart for the new Oftlce 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 contlnn: 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 pertt)rmed is to identify opPOltllnities 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
Angela DIZeIoa
Manager II
Richard Jackson
Manager II
Dlvialon Chief
, Facilities,
Management
112
positions
Manager II
DMeion Chief
Central
Service. ,
51
Positions
Division Chief
Fleet Management
Servfces
201
positions
'-'-1
Manager II
"
H_~_~'
Manager II
Offlceof
Special
n-=~
1
i
Ronnie Wamer
Manager II
Offlceof
Eric Coffman
[1
DiviIIlon Chief
;;
BUildlngDealgn!
&
Construction
'
39
positions
:
!
Planning
&
Devalopmant
3
pollitions
-,. I
Officeof
'
Energy
&
'
2 posItion&
Cynthia
Brenneman
Manager III
Office
of
Real
Eatata
7
positions
SiI6tainabllity
, .'
1i1..
4
positions
In
Maintenance
Managemant
Equipment
Management
Administration
Facilities Major
Programa
Project
Management
Facllitiea
Qllallty Control
&
Support
Management
Semen
Property
Management
®
C:\Users\diseda\AppData\Local\Mlcrosoft\Windows\Temporary Internet Files\Content.Outlook\A520YCCO\FY16 DGS Organizatlon Chart w-o PRO OBRC.doc
2/27/2015
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Office of Procurement
(33 Positions)
Information Services
ITSpec.11I
Procurement Division
.Manager II
26 Positions
.Business Relations and Compliance Division
.. Manager
III
. 5
Positions
Procurement Operations Section
Manager
II
Cost&
Price Analyst
. Procurement Specialist
II
.Procurement Services Section
Management & Budget Specialist
IU
Outreach and Marketing
..
Program
1-Program Manager
I
2:
-Office Services .
Coordlnators
..
Operations Team
2
. Lead
Manager III
2: -
Administrative
. Aides.
. Local Small Business
Reserve Program
..
(LSBRP)
1-Proaram ManaQer
I
.Minority, Female, and
Disabled Persons
. (MFD) Program
1-Program Specialist II
• Living Wage
. • Prevailing Wage
. . • Equal Benefits
1-Program Manager II
F:\LAW\BILLS\1507 Reorganization-Executive Branch-Procurement\Reorg - Procurement Org Chart Draft_3 2 2015 update (2).docx
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