The State of Oklahoma Case Study

21 Mar The State of Oklahoma Case Study

Date of Work: 2009 – 2016

Background:

The State of Oklahoma started implementing PIPS/PIRMS in 2009. The State was introduced to it at a NIGP meeting, where the State’s architect, John Morrison, heard Dr. Kashiwagi. The State’s construction and properties (CAP) division, a part of the Department of Centralized Services (DCS), became a research client to PBSRG at Arizona State University. CAP then introduced the process to the Purchasing division of the DCS, in charge of procuring all of the non-construction services in the State, who then started implementing PIPS/PIRMS on projects the same year. The State of Oklahoma is the only state organization to have successfully implemented the PIPS/PIRMS on both construction and non-construction services.

The State of Oklahoma has the following objectives:

1. Train all purchasing and construction project managers in the best value method.
2. Use the best value method as the primary procurement process on all projects with risk.
3. Procure all construction and consulting projects through the best value method.
4. Educate all agencies on using the best value approach to minimize waste.
5. Investigate using the BV approach in improving the efficiency of organizations.

Lessons Learned:

1. Bid price has no documented relationship with vendor’s pricing or project estimates.
2. PIPS process does not take longer than normal procurements.  
3. Pre-planning is perceived as increasing the procurement time, but in each case, it would have increased project time if the preplanning period was not conducted.
4. The BV PIPS process made it possible to identify high performers without a technical understanding of the service.
5. PIPS process minimized vendors’ ability to protest.
6. BV process minimized legal activity.
7. PIPS value process allows smaller vendors the opportunity to perform work.

PIPS Performance:

In the five years the State of Oklahoma has been using the PIPS and changing their buying paradigm, they have achieved the following:

1. Convinced the State Legislature to pass a law allowing them to run BV PIPS on construction projects.
2. Convinced major government organizations to use PIPS in the purchasing of services (dep of health care services, tax commission, dep of commerce, dep of corrections)
3. Obtained performance lines for all State registered consultants.
4. Created a weekly risk reporting system.
5. Created a best value industry group.
6. Ran over 19 best value projects on 13 different types of services.

The following are some of other results of the best value effort:

1. The fear and occurrences of protests went away.  The transparency of the BV PIPS approach made the protests a thing of the past.
2. Vendors competing on best value projects had valid, doable plans. 
3. State saved millions of dollars in the purchasing of services.
4. All Best Value projects have complete documentation.
5. All vendors on Best Value project have performance lines that identify how well they are performing on their contract.
6. Agencies exposed to the BV PIPS approach love the process, regardless of their relationship with the State procurement office and personnel.
7. Best Value provides the State clear and dominant information to justify selection and the value of the selection.
8. Vendor community is excited, in support of, and wants to be involved with the State of Oklahoma and their move to Best Value.

The following is a list of different services the State of Oklahoma has implemented PIPS/PIRMS:

1. Commercial Off the Shelf (COTS) Tax Software
2. Enhancement of Workforce Job Website
3. Electronic Document Management for Construction Documents.
4. Computer to Plate Printer
5. State wide light bulb and lighting fixture contract
6. Emergency hazardous Waste Removal contract
7. State Mental Health Services
8. Performance Measurement of Federal Grants
9. Juvenile Center and Services (cancelled)
10. New construction and renovation projects
11. Design Services
12. Construction Management Services
13. Commissioning Services

The following Table 15.34 shows a summary of the results of the PIPS/PIRMS implementations.

State of Oklahoma Central Purchasing Best Value Project Results
Total  # of Best-Value Procurements	30
# of projects in process	7
# of completed projects	23
# of different services procured	12
% Where identified Best-Value was lowest cost	92%
Estimated $ of BV projects procured	$ 141.1M
Estimated $ cost avoidance	$ 71.8M
Average customer satisfaction	9.4

Table 15.34 Oklahoma State’s Best Value Results