Hillsborough County Public Schools Business
Action Item

DATE: Tuesday, November 21, 2006
TO: School Board Members
FROM: MaryEllen Elia, Superintendent

SUBJECT / RECOMMENDATIONS

Approve the Purchase Card Service Agreement with AmSouth Bank (Business Division)

EXECUTIVE SUMMARY

The District and other state and local government procurement departments have traditionally created and submitted paper-based purchase orders for products and services. However, in recent years there has been a shift to more efficient, less costly, automated solutions. Agencies have adopted the Purchasing Card as a tool for simplifying components of the Procure-To-Pay process. The term "Procure-To-Pay" is a commonly used term for describing the process associated with procurement and payment activities. Steps in the process include sourcing, order placement, payment and settlement, control and audit, and reporting.

While efficient and convenient, Purchasing Cards are vulnerable to misuse or fraud, if adequate controls are not in place. As we expand the District's use of Purchasing Cards, we will be mindful of the need to develop strategies to ensure compliance with procurement policies and guidelines. Recognizing that utilization of Purchasing Cards is a more efficient means of acquiring and paying for certain commodities, it is prudent that we expand the District's use of credit cards. As we expand the use of Purchasing Cards, we will be mindful of the need to develop strategies to ensure compliance with procurement policies and guidelines. The District's Purchasing Card policy will include controls designed to protect against fraudulent, or abusive transactions and to ensure that purchases are necessary, appropriate, and of reasonable cost. To maximize rebates the District will receive for utilizing Purchasing Cards, staff recommends approval of the attached contract with AmSouth Bank which offers a 1% rebate on Purchasing Card usage. This is a .6% increase over previous district rebates for Purchasing Card usage.

The agreement with AmSouth was competitively bid by another governmental entity. The effective date will be November 22, 2006 through the date of expiration by the lead agency, or until termination by our district, whichever comes first.

ANNUAL DISTRICT GOAL(S) AND CRITICAL SUCCESS FACTOR(S)

Contract administration or evaluation is performed by the Project Manager (end user) and Purchasing Agent, who function as a team. Reviews are conducted face to face, typically quarterly, or by utilizing an online vendor performance report. Prior to soliciting a new contract, the Contract Administration team must first give consideration to the specifications and supporting data of the expiring contract.

FINANCIAL IMPACT (Budgeted: Yes)

The use of Purchasing Cards provides significant savings in two ways. First, the process is more efficient; and second, the District receives a rebate for Purchasing Card use. Quantifying the savings is not clear because personnel are not necessarily eliminated, but they are available to contribute time to other work assignments. We estimate Purchasing Card expenditures to be at least $1 million dollars in the first year, generating $10,000 in savings for rebates paid to the District by the bank. Over the next several years we expect Purchasing Card usage to exceed $10 million dollars, generating $100,000 in rebates.

EVALUATION

SUBMITTED BY: Verna Hurley, Assistant Department Manager

Willie T. Campbell, CPPO, CPPB
General Manager of Procurement
(813) 272-4374 		Gretchen Saunders
Chief Business Officer
(813) 272-4270
5.09
Hillsborough County Public Schools (Florida) * Mtg.#20061121_188 * Section E Item# 5.09