Connecticut
Innovations: Aligning Purchasing
Policies
with Consumer Choice
Tuesday
August 8, 2000 – 10:45 AM – 12:15 PM
·
1996
Robert Wood Johnson Foundation
-
Nationwide
Survey
-
Design
and implement in-state strategies
(thought it might be some form of vouchers, consumer managed funds, or electronic benefits transfer)
·
1997
– Resubmitted much the same concept to RSA for a 3 year Choice Grant – with
Uconn
-
Conduct
a nationwide survey
-
Use
the data to look at in-state strategies and practices to pilot
-
We know from the CSAVR/RSA Streamlining efforts it had become
very apparent that with regard to purchasing issues, the issues are in the
states
-
Not
in the Rehabilitation Act
-
Not
in Federal Regulations
-
Not
RSA
·
We
Got the Grant effective October 1, 1997
-
We
hired a purchasing consultant to work with us to conduct research, analyze
options, and develop pilots.
-
The
nationwide study was published about 15 months ago.
Copies were disseminated to all participating states.
Anyone who would like and unbound copy can leave his/her name and address
with us and we will see to it that you get one.
-
Learned
from the survey that practices and political climates vary widely among the
states.
·
Very
generally, what we found was
-
No
use of vouchers
-
No
direct cash other than the mechanisms in place for maintenance and
transportation
-
Some
limited check writing
-
Predominantly
purchase authorizations to vendors
-
A
very wide range of state purchasing procedures that govern such things as
bidding, contracts, and dollar thresholds for Direct Purchase Authority
-
There
was a great deal of concern for accountability and audit issues.
Somewhat curiously we also found that consumers are interested in
flexible and timely procurement services at least as much as they are in
consumer managed funds. Naomi will
be elaborating on that a little later.
·
We
decided to look at 4 Specific things to pilot or implement in Connecticut
-
Direct
Purchase Authority
-
Electronic
Benefits Transfer for Maintenance and Cash Disbursement
-
Credit
Card Purchasing
-
Milestone
Payment Structures for Consumer Services
-
One we looked at and walked away from
-
One
is a successful pilot and is now being implemented
statewide
-
One
is a large work in progress. Naomi will be elaborating on that
-
One
has been a home run
II.
Direct Purchase Authority
·
Definition:
The Designated State Unit has the authority to independently
initiate purchase activity without going through other central state agencies.
·
In
Connecticut, purchasing is governed by the DAS.
State legislation specifies that all purchases over $10,000 had to go
through them
·
Historically,
many of VR’s purchases had to go through them for bidding and purchase award.
This added layers, players, and considerable time.
·
We
had to go through an elaborate “standardization transaction” process to gain
approval for such things as sole source approval –
example: vendor choice
for proximity, service or professional relationship
This took
additional time to assemble the committee
·
We
did have a good relationship with that department.
They gave us very good service. We
had established a credible track record with them.
-
We
invited their participation in the selection process when we hired our
purchasing consultant.
·
Through
Naomi’s research and knowledge, she assisted me in developing a proposal to
take to the DAS to seek their delegation of DPA to the Bureau
-
Point
of customized, individualized consumer purchases about which they have little or
no expertise vs. large scale purchases of goods used to run government offices
(fleet vehicles, snow plows, office furniture)
-
we
committed to adhere to the same principles of competitive bidding, and honoring
existing purchasing contracts
-
we
took total responsibility for answering for exceptions
-
we
agreed to be subject to audit at any time and to submit an annual report
- The DPA
1/4/99
- The first
annual report 1/24/00
·
In
the first year of operation we made 20 individual purchases, each over $10,000
under this authority and spent about $400,000.
Items included home modification, vehicle modifications, prosthetics,
wheelchairs, and small business start-up equipment
·
This
was the home run!
Credit goes to
the Department of Administrative Services who supported this effort and who are
committed to streamlining government and getting out of the way of program
activities to which they add no value.
·
Story
of Armand
-
50-year-old
tax audit supervisor with Muscular Dystrophy.
Long history with VR in Connecticut going back to the late 60’s.
Has had multiple vehicle modifications, breaking ground with us as we
moved into advancing technology. Most
recently he anticipated the usual months and months of procurement delays.
-Applied for
services in 3/5/99
-Sole Source
Authorization for a Drop Floor minivan
with
DigiDrive and DigiVoice was issued on 5/20/99
-Vehicle was
delivered to him in November 1999
-He is a
delighted customer and he continues to work and live independently
·
Story
of Jeffrey
-
20 Year old with learning disability
-
Applied
for services on March 12, 1999
-
Self
employment plan developed and approved for a Lawn Care and Snow Removal business
-
On
May 28, 1999 we processed an authorization for a John Deere tractor.
He had delivery in time for the 1999 lawn-mowing season.
- Our consultant who interviewed Jeffrey for a story in our annual report wound up hiring him do her lawn and snow removal.
·
Our
DSU is in the State DSS that provides a variety of cash and medical benefits to
thousands of needy consumers. They
have developed a debit card system to electronically disburse food stamps. They deposit regular amounts into client accounts and clients
then withdraw from ATM machines. VR
was interested in looking at this mechanism as a means to deliver cash
maintenance payments to our consumers. As
a small sup-unit in this giant state umbrella we wanted to see if we could merge
our system with this debit card system or replicating it.
·
This
is the one we decided to walk away from
-
Scale:
we have a relatively small number of cases and dollars at any given time
receiving cash maintenance, compared with the larger department programs.
-
Cost:
to set up individual bank accounts for each consumer would be prohibitive
-
We
were very reluctant to merge with the systems of our larger department. (Loss of integrity of our files, loss of control)
-
The
current merits of our cash disbursement system didn’t look too bad in
comparison. We use cash, paid on a
bi-weekly basis for not only maintenance and transportation but also for some
other recurrent expenses such as tutors, PAS services, or one time purchases.
The biggest impediment to the current system is the lead-time required
setting it up.
This is the one
we walked away from!
IV.
Credit
Card
·
Naomi,
as part of her national and in-state survey, discovered that the Connecticut DAS
and the Office of the State Comptroller were piloting a credit card with
selected state agencies, for the procurement of specified goods used in the
course of running their respective agencies
·
It
was a MasterCard issued by BankOne in Chicago.
A third party called ProValue provides administrative support through and
internet application that allows each participant to track and monitor all
purchasing and payment transactions
·
We
went to an Overview Meeting at DAS and developed a proposal for Vocational Rehab
to pilot the first credit card application for the purchase of goods for agency
consumers
·
The
biggest sales job was internal to our Umbrella state agency.
It was never an issue with either the Office of the State Comptroller or
the DAS. We finally convinced them
that we could manage this responsibly and our department launched a project
issuing cards to four individual employees, two of who are in VR.
(the other two are in department operations and use the cards for such
things as travel, dues, and subscriptions)
·
For
VR it works as follows:
-
There
are 2 card holders – the district director and the FAA in the pilot district
-
They
can purchase goods, but not services, needed by clients who are in and
Employment Plan
-
Typical
types of purchases include work apparel, footwear, books, equipment and supplies
related to enter or retain employment for self-employment, furnishings for
home-based employment, software, and assistive technology devices
·
The
FAA handles the purchase as follows:
-
Identify,
with the counselor, appropriate purchases
-
Phone
call to vendor to place the credit card order and arrange for consumer pick-up.
·
Benefits
-
Vendor
Choice for consumer
-
Speed
-
Vendor
Satisfaction because of prompt payment
·
Limits
-
$300/month
per card
-
20
transactions/month/card
-
5
transactions/card/day
-
Single
purchase limit of $1,000
·
We
began one year ago. In the first 8
months we had purchased about $3,000 worth of goods in all of the above
categories
-
In
one case we were able we learned that a consumer needed a pair of size 13
lady’s work boots to start a job the next day.
Through the credit card we were able to find a vendor who carried them
and got delivery on the same day.
-
In
another case we used the card to buy some start-up stock for an individual who
was in a self-employment plan. The
vendor, a sole source in California, would not have accepted a purchase order
from any state agency.
·
Based
on the pilot experience we project statewide utilization of up to $30,000 per
year for qualifying purchases. We
also expect that this will expand appreciably as the range of qualifying
merchandise expands and as services are added to qualified purchases, as
is planned.
·
At
this point we have successfully negotiated with our Department to increase the
assignment to cover all of our districts. I
just learned that eight additional cards have been issued and we will be working
over the next few weeks to arrange for user training and implementation.
Cardholder Work
Rules
Pilot Program May 2000
APPENDIX
A: Credit Card Procedures for the Department of Social Services,
Bureau
of Rehabilitation Services