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Coaching Users to Develop Great Specifications

Author(s):

Donald L. Woods, J.D., C.P.M.
Donald L. Woods, J.D., C.P.M., Purchasing & Contract Manager, Clark County, Las Vegas, NV 89155-1732, 702/455-4427

81st Annual International Conference Proceedings - 1996 - Chicago, IL

Your First Hand Out Should Provide Basic Purchasing Philosophy. To make any training absolutely successful, especially for non-sophisticated attendees, the instructor needs a very brief document that explains the policies that the purchasing department is required to support. Preferably, it should be limited to one page of easily read material, logically organized, that can be kept on a clipboard or on a desk for quick referencing. I have attached a sample of the one I use for Clark County, and all attendees are invited to modify it accordingly. You are going to be surprised as to the number of employees who tell you how important it is and how often they refer to it.

It is a fairly self explanatory document, but you might want to know that "NRS" is an acronym for the applicable governing law (Nevada Revised Statutes) while "BCC" stands for the Board of County Commissioners (my board of directors). Items 1 through 4 are law or directives, while 5 through 10 are policies and concepts that we want to impart to all users at our training classes. It was developed by and is constantly updated by the purchasing staff. Make sure that every item on this sheet is accurate, will be supported by your management, and everyone in the purchasing operation. Doubters and negative believers can deal destructive blows to a new program.

Items 5 through 9 are further described during the user training class and are covered below.

Lecture Outline and Notes for the User Training Meeting. It is absolutely necessary to provide a concise outline for the attendee to use at the meeting and to keep for future reference, even though many will never look at it again. Students who are writing may not be listening, so my outlines are double spaced to provide a place for a quick note. I also utilize catchy wording or phrases that will trigger memories in the future. I have attached a copy of my copyrighted lecture hand out. Because you have attended the 1996 NAPM conference, I will grant you a limited right to use and modify the material for your in-house classes for your fellow employees and employer as long as attendees are not paying a fee to attend and/or you or any one connected with the lecture or employer are not receiving any type of consideration for conducting the classes or meeting. This is not a license or authorization for any for-profit or non-profit organization or company to reap any type of remuneration or credit by utilizing documents I authored. If you have a questionable use or want authorization, please contact me through the information provided on this document.

One of the first hurdles to overcome is the user's fear of large documents or large quantities of paperwork. Let them know that items IB1, 2, and maybe 3 are the only parts of any document they will need to help purchasing develop. Then accent the word "help"! and quickly cover all of section I, explaining why specifications must be in writing to be enforceable in a court of law while emphasizing the UCC and contract law. Remember that mandatory walk throughs and mandatory pre-bid information will not be placed into evidence at court unless someone painstakingly commits the information learned thereat into a written document. Then, of course, there is no reason to make them "mandatory"! Next, convince the users that purchasing has access to Specification sources but could use their assistance VIA items II E, F, G, H, and J. Carefully explain the difference and answer all questions they have on items in IIE. Make sure you or your co-trainer have a very good working knowledge of these items and those contained in section IV.

I normally skip section V and cover it with the third hand out (Specification Writing Check List, see next section). But I use section VI to open a dialogue or round table discussion between the attendees while I act as a facilitator making sure that everyone fully understands their role in the items with a star (asterisk). Don't short change this portion because if it is done correctly with the right questions, the users and purchasing staff may start forming cross-functional teams and become interested in working together to iron out age old problems. This normally becomes a good place to take a break and let all attendees network even though you have not completed the summary in section VII. Between 1 and 1¸ hours you would lose the audience anyway so just break (do not announce the amount of time) and get back together in about 20-30 minutes depending on the value of the networking that is going on around the room. Upon regrouping recap what you were hearing, reopen the dialogue then complete the summary in section VII.

Specification Writing Checklist. This is probably the most useful hand out of the day but requires the most discussion because we must address it from two directions.

It must be provided to the attendees with the hope that it will be retained and used whenever they are going to write specifications. They first get it at the time of the training meeting. But also every time thereafter when there is a discussion of the thoroughness of a specification, when the memorandum goes to the user about renewals or expiring bids/contracts, attached to requested product information, or just about any other time anyone in the purchasing department thinks someone might be developing a specification or statement of work (SOW). Buyers must be seen using the checklist and must refer to it when talking to users. Users are like the rest of us - if they can rely on someone else to "catch" the inadequacies of a specification, they will slop something together and send it up the ladder. But if they know they are going to be cross-checked against a very useful check list, available to themselves and be held accountable, they are more apt to do it right the first time. And this goes double for the person who wants to make sure they get exactly what they order. Give them a list that makes them thorough and then get out of the way. You must provide the tools before you can reap the desired assistance proficiency from the user.

Now let's discuss the checklist itself. It is not intended to be an all encompassing, inclusive, menu of every possible concept that could be included in a technical specification. It is intended to be an idea jogger for the user. Buyers can review any exceptionally detailed micro list and add that information, once the user submits a comprehensive specification for attachment to the purchasing boiler plate. If the buyer does a good job of reviewing the user's document, it should draw attention to items for the buyer to request additional information by working with the user, vendor, engineers or other appropriate resource. You should add to and delete items to this list, as necessary, to make a checklist that fits your particular industry or need. It is better to keep the questions very general as the rewards are very high when the user misinterprets and gives the buyer information that would not have been learned with a yes/no response.

This checklist intentionally goes beyond the description of the "thing" and includes some items that are normally in the buyer's purview. We do this because the users like to know that they can make recommendations about other terms and conditions of the final bid/contract. A well thought out purpose, intent or performance specification will not only go a long way in organizing both the user and the buyer but it also places a heavy burden on the vendor/supplier to make sure they provide the correct item to accomplish the result described therein. Users should be encouraged to provide excessive information, attach brochures or other information that clarify their document. Buyers should work with users on a one-on-one basis to help both parties understand what is required to write a great specification.

Summary.
The ability to publish an excellent bid or contract document, SOW, Request For Proposal, or Technical Specification is the attribute of a purchasing professional. We cannot set in our ivory towers and do it in a vacuum. We need a lot of information from others, and the better trained they are in providing the information in the detail and manner we need to accomplish our job, the better we can do our job and the more satisfied the users will be with the product or service they receive. In about 3¸ hours you can provide that training, but you will need to revisit the list and the ideas at least every time the subject of specifications comes up. You will experience success and may be required to provide more or regular training sessions. But you can rest assured that as those users learn how to develop great specifications, you will experience fewer protests, less complaints about goods and services delivered to user departments, and disputes between users and suppliers will disappear.

IN HOUSE TRAINING PROGRAM BID SPECIFICATION DEVELOPMENT NOTES
1. 3 WAYS TO DETERMINE THE NRS 332 LIMITS OF $10,000 & $25,000

  1. Paid to any one vendor in any one year
  2. Paid for any one commodity in any one year
  3. Spent on any one project

2. BETWEEN $10,000 AND $25,000 NRS 332 REQUIRES 2 WRITTEN BIDS

  1. BCC policy requires one quotation to be from a M/WBE
  2. Purchasing is always happy to obtain written quotes

3. ESTIMATED QUANTITIES MUST BE WITHIN 10%

  1. District Attorney interprets estimated quantities to be an accurate reflection of needs and will require re-bidding when actual usage exceeds 10%.
  2. Suppliers complain when buyers estimates are higher than actual usage because they have provided better discount based upon the larger usage.

4. CONSTRUCTION CONTRACTS PURSUANT TO NRS 338

  1. Projects over $100,000 must be formally bid and advertised
  2. Projects over $35,000 must have A/E stamped drawings
  3. Projects over $25,000 must be awarded by the BCC.
  4. Projects over $20,000 must have bonds
  5. All projects should utilize a printed proposal form
  6. Projects over $25,000 should have Purchasing involved
  7. All construction projects should have a written contract (owner provided specifications) and insurance.

5. ADDENDUM'S AND EXPLANATIONS MUST BE COMMUNICATED TO PROPONENTS

  1. Document contacts and phone calls from potential proponents
  2. No mandatory pre-bids or walk through's
  3. Have a Dept representative at pre-spec and pre-bid meetings
  4. Everything must be communicated in writing - nothing oral

6. "OR EQUAL" CLAUSES MUST HAVE 3 EQUALS LISTED

  1. Avoid using the "or equal" phrase - design technical specs
  2. Determine when and who will determine the item is "equal"
  3. If there is only 1 source, say so and justify it in writing

7. KEEP A SPECIFICATION FILE FOR EACH ITEM PURCHASED

  1. All technical specs for that item should be in this file
  2. Keep all updates and modifications

8. MAINTAIN A CONTRACT/BID FILE FOLDER ON EACH AGREEMENT

  1. Keep a copy of the current agreement
  2. Keep a record of all calls and mail from supplier & user

9. UTILIZE SPECIFICATION WRITING CHECK LIST WHEN PREPARING SPECS

  1. A generic check list is available from purchasing
  2. Also start a new spec with items from #7 & #8 above

10. CONTACT YOUR PURCHASING AND CONTRACTS STAFF REPRESENTATIVE SPECIFICATION WRITING CHECK LIST

  1. Purpose/intent (Performance spec = what do you want [it] to do)?
  2. Quantity - UCC (estimated quantities)
  3. Size (large, small, etc.)
  4. Color
  5. Maximum and minimum dimensions (inches, feet, metric)
  6. Quality (difficult, but not impossible to define)
  7. Warranties, guarantees and operating manuals
  8. Location or method of delivery (FOB), call first
  9. Methods of acceptance, testing, inspection
  10. Limits of liability - insurance - taxes
  11. Methods of invoicing and payment
  12. Maintenance, parts, supplies
    1. New/used parts and substitutions
    2. Storage of materials, equipment or spare parts
    3. Logs of visits and repairs
    4. Response times (to arrive, to complete)
    5. Regular preventative maintenance schedules
    6. Wasted supplies - paper, oil, toner, etc.
    7. Guaranteed up-time
    8. Retrofit or bring up to standards (mfg. or ours)
  13. Length of contract and renewal options (When to start or end)
  14. Extensions at our option (normally 90 days)
  15. Liquidated damages, bonds & other remedies (be reasonable)
  16. Training of in house staff (especially subsequently assigned employees)
  17. Labor and material outside of contract not the responsibility of contractor (i.e. owner negligence, vandalism or other intentional acts)
  18. Utilities, especially electricity
  19. Work security
  20. Cleaning up work site, equipment and dispose of wrapping and boxes
  21. Trade-ins and disposal of old equipment
  22. Recycle items or efforts
  23. Dispute clause or procedure for handling complaints or errors
  24. Schedule for installation/de-installation of equipment (Who installs or assembles? Are there particular procedures?)
  25. Method of escalating prices for long term agreements
  26. New versus used parts or equipment
  27. Is site inspection necessary; and how is it to be accomplished?
  28. Will you need literature or operating manuals?
  29. Will pricing be based upon a price list manual; and if so, which one?
  30. Do we need computer hookup with successful vendor?
  31. What exhibits or vendor brochures do you want to attach? How will they be referenced?
  32. GG. What documents or drawings are available to incorporate by reference? Do you need to eliminate or take exception to any item therein?

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