2004 INNOVATIONS AWARDS PROGRAM
(INSTRUCTIONS: Please complete and submit this document electronically if possible, e.g. a Word
document. The application form is available online at our web site, www.csg.org, in the Programs section.
Please determine the appropriate Program Category from the enclosed Program Categories sheet,
and list the category under the Category section below on the right.)
ID #: 04-S-33MD
Category: _Government Operations
1. Program Name: Contract Management and Procurement Improvement Plan
2. Administering Agency: Maryland Department of Health and Mental Hygiene
3. Contact Person (Name and Title): Robert W. Rucker, Jr., Director, OCPMP
4. Address: 201 W. Preston Street, Room 416A, Baltimore, Maryland 21201
5. Telephone Number: 310-767-0974
6. FAX Number: 410-333-5958
7. E-mail Address: firstname.lastname@example.org
8. Web site Address: http://www.dhmh.state.md.us/ocpmp/
9. Please provide a two-sentence description of the program.
Re-engineered Departmental contracting and procurement processes establishing team-based
management as the foundation construct. Re-configured the Departmental procurement structure to
support decentralized governance and oversight, providing increased customer self-sufficiency and
end-to-end process ownership.
10. How long has this program been operational (month and year)? Note: the program
must be between 9 months and 5 years old on May 1, 2004 to be considered.
The program became operational on October 17, 2001.
11. Why was the program created? (What problem[s] or issue[s] was it designed to
In October 2000, under the direction of the Governor’s Council on Management and Productivity, the
Department completed an organizational assessment of the Department’s capability and capacity to get
the best results out of the Department’s $3 Billion + agreements. The assessment recommended, and
the Secretary approved, the development of a full-service contracting unit to support all contracting
efforts throughout the Department including the decentralization and delegation of contract authority
and Department-wide policies for contract management, and contract evaluation.
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The assessment report noted a general absence of any truly defined contracting process, which is
reflected in the lack of a comprehensive set of established policies and procedures. The report further
cited ―compartmentalized‖ functions performing contracting tasks with no integrating interests. The
central contracting unit — the Division of Contracts — controlled the ―process‖ by virtue of having the
only contracting authority and resident knowledge and understanding of contracting requirements.
Programs issuing requests for proposals often viewed the Division of Contracts as the unit responsible
for ―managing‖ the contract. Current contracting processes severely hamper the Department’s ability
to attain acceptable levels of performance.
The prior organization of the central contracting unit (Division of Contracts) was the traditional top-
down model of management, with compartmentalized contracting processes and employees acting in
isolation with only sporadic contact with procuring unit employees (i.e., customers). The prior
contracting process retained multiple layers of bureaucratic approvals. This approval hierarchy
hindered efficient involvement in the process of the procuring units for whom the contracts are
intended. The prior contracting process also inhibited individual ingenuity and responsibility, was
slow, and did not always produce quality contracts.
12. Describe the specific activities and operations of the program in chronological order.
PURPOSE: To develop recommendations for the implementation of team-based approaches to
contract management for more results-oriented:
Contract Award; and
OBJECTIVE: To plan and recommend implementation strategies for procurement and a contracting
process that is efficient and timely, and meets the needs of DHMH and its customers while ensuring
the delivery of high quality services.
CHARGE: Review and examine the organization of the DHMH procurement processes;
Formulate recommendations regarding the procurement and contracting processes;
Implement recommendations regarding procurement and contracting processes;
Recommend the establishment of a mechanism for developing and implementing new
Receive and evaluate recommendations from stakeholders and other key individuals
regarding critical issues affecting the procurement and contracting processes;
Provide information to stakeholders and other key individuals to ensure that maximum
input is received prior to decision-making;
Seek changes to existing statues and regulations, if necessary; and
Re-write polices and procedures, as necessary.
TIME FRAME: March through August, 2001
The plan specified six planned actions that changed the current contracting processes. These changes
incorporated all of the assessment report recommendations and achieved desired results by the end of
the plan period. The six planned actions consisted of four primary actions and two supporting actions.
The four primary actions were:
Reconstituting the functions and accountabilities of the Central Contracting Unit and the procuring
unit; Making teams a required central element of all key contract development and award activities,
capitalizing on the focused attention and combined knowledge of each stakeholder group;
Rebuilding a policy and procedure foundation for governing standardized contracting processes; and
Decentralizing contracting authority, vesting total responsibility and accountability in procuring units.
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The two supporting actions were:
1. Implementing a comprehensive training program that will establish and maintain high-level
contracting skills; and
2. Obtaining a significantly higher Department-level delegation of contracting authority that will
complement the resulting improved contracting process
Communicating the Plan
A concerted effort was be made to communicate the plan throughout the Department. The intent
of the communications program was to ensure that all employees with contracting responsibilities,
and whose jobs are impacted by delivery of services from contracts, were made aware of the
coming changes and are kept apprised of how the implementation is progressing. The new central
contracting unit had be responsibility for administering the communications program.
Agency and Executive Briefings
Briefings were conducted for all key stakeholders. Internally, briefings were held to
orient senior Departmental managers to the new system and to expand the initial basis of
support needed for successful implementation. Outside the Department, the following
entities received executive briefings: Office of the Governor; Office of the Lieutenant
Governor; General Assembly legislative committees; Department of Budget and
Management; and Legislative staff.
The plan was made available to all personnel. Strong consideration was given to
providing this information electronically. A two-month ―feedback period‖ subsequent to
the executive briefings and distribution of the plan gave everyone an opportunity to ask
questions and seek clarification of the plan components.
Establish the Office of Contract Policy, Management and Procurement
The Department must first change its management structure before it can improve its contracting
process and practices. Establishing the Office of Contract Policy, Management and Procurement
(OCPMP) was the first critical step in reforming the Department’s contracting process into an
efficient and effective system that will ensure that quality services are both procured and
The prior organizational structure for contracting at the Department did not support efficient and
timely contracting efforts. There was a lack of clarity regarding the contracting unit’s role and
each individual’s role in that unit. Instead of a broad-based organizational perspective, staff
engaged in activities that were guided by a very limited and narrow view of the organization and
its purpose. The result was that much time and energy was spent on activities and processes that
were not meeting the needs of customers.
The customer focused orientation of the office staff is even more critical than the technical skills
required for the various positions. Staff must realize that the contracting function is in direct
support of the department’s programs, not an end unto itself. The Office is intended to work under
a team-based management construct, working with, and advising programs on how best to procure
and manage contracts, rather than directing the activity. The focus of the office must become one
of facilitation, not control. Staff will be a combination of new positions, existing positions, and
re-tooled positions. To the greatest extent possible, all positions must be cross-functional to
provide maximum coverage for the customer, and a team-based orientation for the Office staff.
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The Department established the OCPMP to meet the needs of all stakeholders and to ensure the
delivery of high quality services. This Office sets Department-wide standards, policies and
procedures for all activities involved in the contracting process. These activities include: (1) using
and institutionalizing team-based approaches to contracting and procurement, (2) establishing a
training program for Departmental personnel, (3) developing a quality assurance system to
monitor the effectiveness of contracting efforts and resulting services, (4) establishing a
contracting resource center with a library and data bank, and (5) providing a full range of technical
assistance that includes providing legal counseling support, technical support and direct
contracting services to departmental units.
The Office will function in a much-expanded advisory and support capacity, responding to
program needs and requirements.
Functions and Responsibilities of the OCPMP
The OCPMP has broad responsibilities for establishing policies, procedures and
standards that govern how the Department procures and manages contracts, and for
ensuring that those policies and procedures are disseminated and adhered to throughout
the Department. The OCPMP serves in an advisory capacity to programs upon request,
and will directly deliver procurement services for programs not certified to process or
approve their own procurements. The Office is also responsible for providing legal
advice on procurement issues and serving as the repository and clearinghouse for
procurement and contract management information within the Department.
The primary functions and responsibilities of the OCPMP are:
Contracting policies and procedures –Developing departmental policies and
procedures to provide a coherent framework for all procurement and contracting
activities and ensure that clear, uniform processes are in place for these activities. In
addition, this will include implementing and maintaining mechanisms to monitor the
productivity of teams and ensure the successful implementation of team-based
Delegation of authority - Developing a process for, and providing training and
support to DHMH programs that choose to obtain their own procurement delegation
Training – Developing, scheduling, and providing training in team-based
procurement and contract management, procurement officer certification, and other
cross-functional and specialized training for personnel involved in procurement and
training. The DHMH Training Services Division will support these training
activities in conjunction with the OCPMP.
Resource Center – Developing, maintaining, and making easily available all
regulations, policies, procedures, and standards applicable to procurement and
contracting; providing forms and templates used in the process; establishing data and
reporting systems; communicating to appropriate staff and other interested parties
information regarding best practices and national trends in procurement/contracting,
training opportunities, relevant legislation, and changes or updates in policies and
procedures; and maintaining a DHMH procurement and contracting database for
tracking and evaluation/analysis purposes. The Resource Center will provide
technical staff and electronic capabilities to meet the varying needs of the programs.
Technical assistance and consultation – Providing assistance as needed to programs
at their request on matters dealing with the complete contracting process (from scope
of work to evaluating the results of the contract).
Procurement and contracting services – Providing services within the team-based
framework to programs at their request.
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Quality Assurance System – Establishing contracting performance quality standards
and a performance tracking system for monitoring and evaluating procuring units’
compliance with standards and performance, and maintaining a continuous quality
Managing for Results – Developing, measuring and evaluating Departmental
Managing for Results (MFR) goals and objectives.
The Office of Contract Policy, Management and Procurement will be staffed by several
new positions, working with the personnel already in the Division of Contracts and with
other procurement positions.
The key new staff and their major responsibilities follow:
Key positions are:
Director, Office of Contract Policy, Management and Procurement
This position is responsible for leadership and strategic direction for
contract related efforts that span the Department’s service delivery
process—within Department divisions and programs and from the
Department to the community and governmental entities—to maximize
the quality of service delivery. The position functions as a Senior Level
Management position with cross-functional areas and indirect
responsibility for programs and administration not directly managed in
regard to the complete contracting process.
Chief of Direct Service Delivery, Chief of Policy, Information and
These two positions work as a team to deliver the full array of services
for the Office. The positions handle two discreet areas that encompass:
1. All direct procurement activities and technical assistance
requests regarding specific procurements under the Chief of
Direct Service Delivery;
2. All functions of developing and running the resource center,
including maintaining and accessing the data banks,
cataloging pertinent information, and offering options to
3. Maintaining and updating static information such as
procedures and policies, and new information provided by
Department units under the Chief of Policy, Information and
4. Training and development;
5. Quality assurance; and
6. The monitoring of results under the Chief of Policy,
Information and Training.
The responsibilities and duties of the Chiefs is divided 60%/40% over
two functional operations of the Office. Although the positions’ primary
skills and training may be different, their secondary skills will be
complimentary in order to ensure the sharing of knowledge and expertise
and a team-based approach to decision making.
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Contract Information Officer
This position is a high-level administration position, key to the success of
the Office. All information regarding Departmental policies, procedures
and standards governing the complete contracting process are
disseminated by this position. The position is responsible for both inter-
departmental communications and intra-departmental communications
including external events that affect the Office operations (legislations,
Board of Public Works actions, etc.)
Contract Policy, Management, and Procurement Specialists
These positions are cross-functionally trained to: (1) provide both direct
procurement services and technical assistance, (2) deliver training on
policy and procedures, and (3) monitor and evaluate adherence to the
Department’s standard by the procuring units.
Assistant Attorney General
This position provides legal advice and guidance to programs on
procurement and contracting issues and will advise the Director and other
personnel within the OCPMP.
Implementation of the new team-based procurement and contracting system took place in
phases over the course of one to two years. Upon full implementation, the OCPMP was
be fully staffed, all necessary policies and procedures were adopted and disseminated, the
resource center was available to all personnel involved in procurement and contracting,
initial essential training was completed, and programs wishing to process their own
procurement actions met standards for certification.
Key steps in the implementation, the responsible personnel or units, and target dates for
(a) Establish the OCPMP. The Deputy Secretary for Operations will established the
OCPMP by October 31, 2001
(b) Recruit and hire key personnel identified above. The Director of OCPMP was hired
by October 31, 2001. All other key positions were hired by December 30, 2001. All
Office positions were filled by May 2002, with appropriate job descriptions and
needs assessments put in place.
(c) New procurement and contracting policies and procedures were developed by
(d) Training in the new system, team-based contracting, and procurement certifications
began December 2001. Training was the responsibility of the OCPMP in
collaboration with the DHMH Training Services Division and was provided as
needed for personnel involved in procurement and contracting.
(e) The set up and design of the resource center began by October 31, 2001 with scope
of work and base line operations developed by March 2002.
(f) Team-based management of procurement and contracting actions were implemented
by January 31, 2002. The new policies and procedures define when and how this
approach is used. Training was necessary to ensure that personnel understand the
relevant principles and processes.
(g) The quality assurance system was implemented. Standards and a system for
measuring and evaluating performance was established and made the responsibility
of the OCPMP. Standards will be related in part to departmental MFR goals and
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(h) All procurement and contracting services began with the establishment of the
OCPMP and will be upgraded and refined as new policies and procedures are
implemented, and training takes place.
(i) The procurement process was decentralized by certifying programs that meet
established standards when processing and approving, within authorized limits, their
own procurements. The Contract Policy and Management unit developed
certification standards and procedures. Procurement authority is delegated to
DHMH programs that meet the Office’s standards and procedures. The OCPMP
developed the standards for full departmental delegation of procurement authority by
June 30, 2002.
Current staff and personnel in several new positions undertook the job of establishing the
OCPMP and implementing the new contracting procurement and management system,
with the assistance of other units and personnel as appropriate and necessary. In addition
to new personnel, resources were required for training and information and data systems.
Existing resources were be used as much as possible and resources were reallocated when
practical. In some cases, it was necessary to request some additional funding to fully
implement the OCPMP.
New and Revised Policies and Procedures
Current policies and procedures were cumbersome, incomplete, or misunderstood, or are
not used by many involved in the contracting process. The efficient use of resources,
process timeliness and contract management accountability suffered as a result. The plan
proposed that new and revised policies and procedures be instituted as a first action. The
new policies and procedures incorporated the needs of those that actually perform the
contracting process and must have Department-wide applicability.
The actions, which the Department took in developing a formal policy and procedure
(a) Reviewed and revised/rewrote existing policy and procedures in conjunction with the
recommended changes in structure and organization;
(b) Formalized policy and specific procedures for contracting operations;
(c) Established timelines for the contracting process;
(d) Clarified contracting responsibility;
(e) Incorporated team-based management in the contracting process;
(f) Provided a major new focus on the monitoring of contracts
(g) Distributed new and revised policies Department-wide, and communicating to all
stakeholders, through training, the Department’s expectations.
Proposed changes in the contract management organizational structure required that a
policy for standardized contracting processes be developed. Development of the new
policy was the primary responsibility of the OCPMP, working in collaboration with other
appropriate personnel within the Department and other agencies. The Department’s
approving authority for the contracting policy is the Deputy Secretary for Operations.
The new contracting policy addresses, but is not limited to, the following areas:
(a) Team-Based Contract Management;
(b) Decentralized Contracting Authority;
(c) Delegation Approval Levels;
(d) Standardized Contracting Procedures;
(e) Personnel Certification & Other Training Requirements;
(f) Performance Standards With Link To Job Descriptions;
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(g) Contract Management/Monitoring; and
(h) Documentation & Data Management.
This policy was written and distributed by January 2002, ensuring that all elements of the
proposed plan were implemented in a timely manner. This policy became an integral part
of the DHMH Contracting Resource Guide (formerly the DHMH Procurement Manual).
Standardized Contract Procedures
Proposed changes in the organizational structure required that standardized contract
procedures be revised or developed. Revision and development of the new procedures
was the primary responsibility of the OCPMP, working in collaboration with other
appropriate personnel within the Department and other agencies. The Department’s
approving authority for the contracting procedures is the Deputy Secretary for
New and revised procedures will be in the form of detailed instructions regarding all
aspects of key contracting activities outlined in the proposed DHMH Contracting
Processes. These standardized contract procedures will address all of the following
areas and will become an integral part of the DHMH Contracting Resource Guide
(formerly the DHMH Procurement Manual).
Competitive Sealed Bidding;
Multiple Step Sealed Bidding;
Sole Source Procurements;
Requests for Proposal;
Unified Grant Awards (HSAM);
Team Formation and Procurement Process Management; and
These procedures were and distributed by January 2002, ensuring that all elements of
the plan were implemented in a timely manner. Training covering the policies and
procedures for the new standardized contracting processes was administered to all
Departmental personnel involved in procurement contracting, MOUs, and unified grant
Team-based Management in the Contracting Process
The prior organization of the central contracting unit (Division of Contracts) was the traditional
top-down model of management, with compartmentalized contracting processes and employees
acting in isolation with only sporadic contact with procuring unit employees (i.e., customers). The
prior contracting process retained multiple layers of bureaucratic approvals. This approval
hierarchy hindered efficient involvement in the process of the procuring units for whom the
contracts are intended. The prior contracting process also inhibited individual ingenuity and
responsibility, was slow, and did not always produce quality contracts.
The plan proposed to correct the dysfunctional aspects of the current contracting process, in part
by implementing and maintaining team-based management in the contracting process. The use of
serial reviews of contracts was be replaced by a team-based process built on concurrent reviews.
Implementing and maintaining team-based management concepts provides an important tool to
bring about the changes in workplace culture. The focus of the new organization and the team-
based process is on providing excellent customer service. Routinely employing contract
development teams results in more efficiently developed and approved solicitations and more
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effective and timely awarded contracts. The use of teams during the contracting process will be as
outlined in the DHMH Contracting Resource Guide.
Positive Changes in Workplace Culture
The effective use of team-based management makes it easier to effect needed changes in
workplace culture and values. Using team-based approaches empowers individuals and
teams conducting contracting activities to frequently communicate and build positive
working relationships beyond current process boundaries. Team-based contract
development readily facilitates problem-solving at the lowest organizational level.
Success becomes more dependent on effective group action and individuals become more
cognizant and appreciative of the need to work cooperatively, productively, reliably, and
Customer Oriented Service
Routine, team-based contacts between procuring unit programmatic experts and OCPMP
employees provides opportunities for:
(a) More efficient and timely communications;
(b) Greater presentation and transfer of programmatic needs into
(c) Broader contracting and programmatic knowledge for all team
(d) Improved understanding and acceptance of what each employee
must do to complete his or her contracting activities and satisfy
Improving Contracting Efficiency and Timeliness
Requiring that solicitation packages be developed as a team process allows development
to proceed with the continuing input and oversight of individuals who previously saw and
approved only successive iterations of a solicitation package. This more timely access to
input by all team members allows potential problems to be identified, and improvements
and edits to be made much earlier than in the current process. This early review and
input using a team approach also streamlines the process by making the prior multiple
levels of review and approval unnecessary. In addition, the team-based approach greatly
reduces both the amount of reworking that a solicitation undergoes and the time required
for drafting and approving a solicitation.
Supporting Individual Initiative and Effecting Group Responsibility
Employing teams with authority makes decisions and give approvals will empower
individual team members and provides them with on-going opportunities to identify
improvements and recommend new ideas for both individual solicitation packages and
the contracting process. In addition, team-based activities provide mechanisms that
facilitate self-taught and peer-based training for individual team members.
Essential Team Concepts
Teams under this plan are designated as ―core‖ teams. Core teams are established in
accordance with standardized contract procedures covering team formation. A core team
consist of employees from both the procuring unit and the authorized procurer of services
(either OCPMP or the delegated procurer of services) who are deemed essential to
efficiently and effectively develop and approve a contract solicitation package, solicit a
contract, evaluate and select a vendor, and/or approve and award a contract. Teams will
be utilized during the contracting process as outlined in the DHMH Contracting Resource
Core Team: Primary Members
Primarily core team members are generally required for all teams. Primary core
team members may consist of the following members:
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(a) The contract monitor/manager, who usually serves as the team
(b) The procuring unit’s programmatic expert(s)
needing/supporting the desired service;
(c) The procuring unit’s procurement officer or contract manager
accountable for all aspects of the contract;
(d) The OCPMP’s service contract expert; and
(e) Important internal/operational and/or Departmental
A single team member may, depending on experience and expertise, fulfill more
than one of the listed roles.
Core Team: Secondary Members
Secondary core team members may consist of the following members:
(a) The procuring unit’s fiscal officer;
(b) The Department of Budget and Management
(c) An assistant attorney general, either from the procuring
unit or the OCPMP, as deemed necessary by the team
leader and in accordance with agreed upon guidelines for
(d) Auditors and other key stakeholders.
A single team member may, depending on experience and expertise, fulfill more
than one of the listed roles.
Core Team Responsibilities and Oversight
The core team leader and team members have duties and responsibilities
pertinent to the planning, development, approval, solicitation, evaluation, and/or
award of a service contract.
Team Leader Responsibilities
The team leader of a core team is an employee of the procuring unit responsible
for carrying out, delegating, and/or overseeing team tasks that include:
(a) Scheduling the initial team meeting and site;
(b) Initiating brainstorming to identify and set team norms (e.g., team etiquette,
starting and ending times of meetings, member substitution, confidentiality,
(c) Preparing and distributing agenda;
(c) Taking and preparing meeting minutes;
(d) Assigning or gaining consensus on work and deadlines;
(e) Collecting, compiling, analyzing, and reporting information; and
(f) Preparing solicitation packages.
Team Member Responsibilities
A primary member of a core team will generally be an employee of the OCPMP
or of the procuring unit appointed to the team and expected to carry out team
tasks that may include:
(a) Complying with agreed upon team norms;
(b) Taking and preparing any meeting minutes;
(c) Working to gain consensus on assigned work and deadlines;
(d) Collecting, compiling, analyzing, and reporting information; and
(e) Preparing solicitation packages.
Managerial and Supervisory Responsibilities
All managers will be responsible for:
(a) Implementing and maintaining formal mechanisms to monitor the
cooperation and productivity of individual team members;
(b) Implementing and maintaining formal mechanisms to monitor the progress
of individual teams and the timeliness of solicitation packages and contract
(c) Soliciting and analyzing feedback from stakeholders on procuring unit and
OCPMP contracting services and the quality of awarded contracts; and
(d) Establishing mechanisms to identify and reward team success and solve
Team-based Supporting Policies
The Department immediately took actions needed to initiate the implementation of team-
based management and the use of teams in the contracting process. These actions were
dependent on Department-wide policies covering operations, personnel, and training
pertinent to team-based contracting and a supportive managerial philosophy.
A Departmental policy requiring team-based management and the use of teams
was developed and implemented that identified or referenced when and how
team-based management and teams will be used in developing and awarding
A personnel policy requiring the updating of the job descriptions and
performance goals of all employees and managers who will have team-related
duties and/or oversight responsibilities was developed and implemented.
Performance Standards for Team Members
The policy required the development and incorporation of a basic set of
performance standards pertinent to team-related duties and
Performance Standards for Managers Overseeing Team-based
The policy required the development and incorporation of a basic set of
performance standards pertinent to contracting and team-related duties
A training policy requiring specialized training in team-based management and
team-based contracting activities was developed and implemented for pertinent
employees and managers.
Managerial Philosophy and Support
The Department developed and implemented a managerial philosophy that
supports individual managers, frontline supervisors, and procurement staff
responsible for implementing the workplace changes defined in this plan.
Among the key changes to be included were changes in workplace values, the
acceptance of new responsibilities, and learning and implementing team-based
contracting activities. In addition, the Department developed a managerial
philosophy in which contracting managers have access to additional expertise
that can help to ensure an efficient initial implementation of the plan, full and
sustained support for the plan, and an effective monitoring of management’s use
of team-based management and contract development teams.
Support for Frontline Managers.
The Department developed and implemented policies that support
frontline managers who implement, support, and maintain team-based
contracting activities in the OCPMP and procuring units. This support
included briefings and seminars related to implementing the plan and
Support for Senior Managers.
A steering committee was established to support senior Department
managers and guide the implementation and effectiveness of team-
Decentralize Contracting Responsibility and Authority
Decentralizing the contracting process and delegating contracting authority to the programs
improves accountability for contract results and supports a more efficient and timely contracting
process. Decentralization, though not a requirement, is strongly encouraged. Contracting and
managing the contracts by the same procuring unit greatly elevates the effectiveness of the overall
process. Programs, depending on their needs, apply for graduated levels of delegated contracting
authority up to full (i.e., Department-level) delegation. Decentralized contracting authority is
granted to procuring units by the OCPMP, based on criteria specified in Departmental policy.
Decentralized contracting authority is partial or full delegation. Programs delegated contracting
authority are required to demonstrate proficiency in processing MOUs, small procurements, and/or
contracts valued under $100,000. Training is provided by both DBM and DHMH, and
representatives of all programs are required to attend at least some of these sessions.
Decentralized Contracting Authority Guidelines
All programs with contract actions (i.e., original contracts, modifications, renewals, and
options) that exceed the average number for DHMH for FY 2000 (base year) were
encouraged to achieve full contracting authority within two years of implementation of
this plan. All other units, at a minimum, are encouraged to seek delegation authority for
small procurements and MOUs. This requires:
(a) Identifying staffing requirements for processing Program’s contracts;
(b) Identifying hardware and software needs;
(c) Completing of required training; and
(d) Demonstrating proficiency during the phase-in process;
A program can apply for decentralization at any time.
Small Procurement Delegation
All programs are encouraged to apply for delegated authority for processing small
procurements. The process will require that:
(a) The program send a letter requesting delegation to the OCPMP;
(b) The OCPMP assist the program in determining hardware and software needs; and
(c) The program selects staff to attend training in the following areas:
2. AS400; and
3. Small Procurement Regulations;
(d) Training be provided as outlined;
(e) After six months, the OCPMP review the work of each program delegated small
procurement authority to determine if delegation will continue. Review is based on
written standards listed in the DHMH Contracting Resource Guide;
(f) Final delegation approval be granted after successful review; and
(g) The programs’ procurement personnel attend future refresher/update training.
Memorandum of Understanding (MOU) Delegation
All Programs are encouraged to apply for delegated authority to process MOU’s. The
process requires that the:
(a) Deputy Secretary for Operations invite Programs to seek MOU delegation
(b) Programs determine if they have sufficient staff for this delegation and respond to Deputy
Secretary’s letter accordingly
(c) OCPMP assists Programs in determining their hardware and software needs
(d) Programs select staff to attend training in the following areas:
FMIS/ADPICS; AS400; MOU Regulations and Procedures
(e) Training be provided as outlined in Section 4.6
(f) Conditional delegation approval is received and Programs begin processing MOU’s
(g) OCPMP provides oversight of the first three MOU’s completed by each Program
(h) OCPMP reviews the work of each Program for compliance with COMAR and Departmental
procedures to determine if delegation will continue. Review will be based on written
standards as listed in the DHMH Contracting Resource Guide.
(i) Final delegation approval is granted upon successful review
(j) OCPMP performs annual reviews to verify each Program’s compliance with COMAR and
Departmental procedures and to determine if the delegation will continue, based on the
written standards listed in the DHMH Contracting Resource Guide
(k) MOU’s $200,000 are signed by the appropriate delegated personnel within Programs;
MOU’s >$200,000 will continue to be signed by each Program’s Deputy Secretary
(l) Programs’ procurement personnel attend all future refresher/update training.
Full Contracting Authority
Each Program with a total number of contract actions exceeding the DHMH average
were encouraged to participate in obtaining full contracting authority. Other Programs
are not precluded from applying for full contracting authority. A Program will be able to
apply for decentralization at any time during. The process requires that the:
(a) Deputy Secretary for Operations notify all Programs when delegation of full
contracting authority is available
(b) Programs may apply for the delegation by sending a request to the Director of
(c) Programs not participating will continue to process their contracting work
through the OCPMP
(d) Participating Programs identify that sufficient procurement staff are available or
determine that additional positions are needed in order to participate at a fully
(e) OCPMP assists Programs in determining their hardware and software needs
(f) Program selects staff to attend training in the following areas:
DHMH Department Contracting Procedures
(g) Training is provided as outlined
(h) Program has at least one Certified Procurement Officer
(i) First three procurements processed by each Program will be under the oversight
of the OCPMP
(j) OCPMP reviews the work of each participating Program after six months for
compliance with COMAR and Department Procedures. Review is based on
written standards listed in the DHMH Contracting Resource Guide
(k) OCPMP delegates in writing full contracting authority to a participating
Program when the Program receives a favorable six-month review
(l) OCPMP performs annual reviews of participating Programs to verify each
Program’s compliance with COMAR and Departmental Procedures and to
determine if delegation will continue, based on the written standards listed in the
DHMH Contracting Resource Guide.
(m) Programs’ procurement personnel attend all future refresher/update training.
Training to Support Planned Actions
A comprehensive training initiative was required to facilitate the various organizational, cultural,
procedural, and behavioral changes needed for the new Departmental contracting system to
function effectively. The key components of this new system – decentralization, team-based
management, personnel certification, and new policies and procedures – was enabled through the
following training programs:
(a) Management Seminars
(b) Contract Team Training
(c) Certification of Unit Procurement Officers, Contract Monitors, and Other Unit
(d) Continuous In-House Technical Training Development of training programs will
begin at the earliest practicable time (see Section 5.0).
The goal of these seminars was to ensure the necessary management and infrastructure
support needed to initiate and sustain the new contracting system. Two-day management
seminars targeted for those Departmental managers in units with significant procurement/
contracting activity. These seminars also served as a catalyst for fostering and sustaining
the necessary organizational and cultural/behavioral changes required for successful
implementation at the unit level. Two primary elements of the management seminars
The Role of Management Seminars
These seminars were initiated in January 2002. They provided basic principles
that focus on the manager’s role in facilitating effective implementation of the
new Departmental contracting system. There were two-day events. At a
minimum, topics covered included:
(a) The DHMH Service Procurement System
(b) Organizational Change & Alignment for System Implementation
(c) Team-Based Management Practices
(d) The Manager’s Role in System Implementation & Maintenance
Procurement Manager’s Forum
The Procurement Manager’s Forum supports managers by providing an on-
going input channel for managers to address implementation issues and concerns
regarding the new service procurement/contracting system. The OCPMP is
responsible for coordinating this Forum. Meetings are be co-facilitated by
OCPMP and the technical training coordinator in DHMH’s Training Services
Contract Team Training
The goal of this training was to facilitate the effective development and functioning of
service procurement teams required under the new procurement system. This team
training included skill-based, application-oriented instruction for contract monitors, who,
in the new system, may serve as team leaders. It also included skill-based, application-
oriented instruction for other departmental employees who will serve as core team
members. Topics addressed at a minimum included:
(a) DHMH Service Procurement System
(b) Team-Based Management Practices
(c) Procurement-Related Team Tasks (including management of time
(d) Team Formation, Development & Roles
(e) Team Dynamics and Communications
(f) Team Leader Skills
(g) Team-Based Decision-Making & Problem-Solving
(h) Recognizing and Managing Team Conflict
This training began in the spring of 2002, shortly after completion of initial management
training. Team training encompassed two consecutive days and was targeted initially at
those units with the most significant volume of procurement/contracting activity.
Certification of Procurement Officers, Contract Monitors, and Other Unit
This certification ensures the acquisition of core competencies necessary for key OCPMP
and procurement unit personnel to participate effectively in a decentralized Departmental
contracting system. It includes the following elements:
Procurement Officer Certification
Participation in and completion of the entire month-long program is mandatory
for unit personnel identified as Unit Procurement Officers. This program began
in January, 2002, and as many DHMH unit procurement officers as possible
were enrolled in the first class. The respective units of those attending covered
related costs. Programs cannot be delegated independent contracting authority
as proposed in the decentralization component of the plan until their Unit
Procurement Officers have successfully completed the DBM program.
Continuing Education Program for Unit Procurement Officers
This program provides further competency development and enhancement
beyond the initial certification program. A Unit Procurement Officer
Continuing Education Program was established by and is administered by the
OCPMP. This program provides opportunities for Unit Procurement Officers to
participate in external professional development courses, seminars, and
Other unit personnel
Other procuring unit employees requiring competency development in specific
areas (e.g., contract monitoring for Contract Monitors) also were urged or
required to participate in and complete select portions of the DBM Procurement
Officer Certification Program.
DHMH Contracting Resource Guide
This publication was newly published in conjunction with (New and Revised
Policies and Procedures) of this plan. It forms the basis for the majority of in-
house technical training programs, and incorporates detailed instructions on
contracting requirements and practices. Access to this guide is through both
electronic and printed ―desk copies.‖ Once completed, the guide was posted as
a downloadable .pdf file at the ―DHMH Service Procurement System‖ website.
Delegation of Authority
The previous contracting process suffered from a highly restrictive level of delegation. Inordinate
delays occurred while contracts awaited centralized or outside review and approval. The Team
identified two key issues. First, the level of delegation for the Department was inappropriate
considering the annual number of contracting actions exceeding $100,000. In addition, the
Department’s failure to delegate to a low enough level within the organization was a major
constraint to timeliness and efficiency. This planned action proposed to raise the Department’s
authorization to $100,000 and delegate that approval authority to procuring Programs when they
implemented qualifying provisions of this plan. The Department initiated immediate steps to
permanently increase its level of delegation to $100,000.
Increase Department Delegation Level
The Deputy Secretary for Operations announced that the Department intended to seek
increased delegation authority to $100,000 in an introductory letter forwarded to DBM.
The letter identified the basic qualifying actions contained in this plan and stated when
the Department would complete the planned actions and be ready to support increased
Following a sequence of briefings and plan reviews beginning in October 2001, we
expected DBM to grant increased delegation approval pending successful implementation
of primary elements of this plan.
The OCPMP initiated a program to delegate current small procurement authority to
Programs and other procuring units. Participation in the program was voluntary, but
encouraged. There was required training for designated personnel in each procuring unit
authorized to complete small procurements. The opportunity to become certified is
Memorandum of Understanding
The OCPMP initiated a program to delegate MOU approval to all Programs.
Participation in the program is voluntary. Participants must have certain minimum
computer systems available. System training and MOU processing training is mandatory
for designated personnel authorized to process Moue’s. Delegated level of signature
authority is established by Departmental policy and the OCPMP reviews annually each
participating Program’s compliance to laws, regulations and policies.
Fully Delegated Contracting Authority
Fully delegated contracting authority is offered to Programs meeting certain
qualifications. Standardized contract training and systems capabilities are required of
participating Programs. Implementing fully delegated contracting authority is a major
element contributing to the goals of contracting efficiency, effectiveness and timeliness.
Adopting this plan has had a significant impact on resources, both systems and personnel.
Creating common, integrated contracting systems that are conveniently accessed and maintained
was essential and involved additional cost or in some cases reallocation of budgeted funds. New
or expanded mandatory contract management processes (e.g., team-based contract development
and contract monitoring) imposed additional personnel requirements and the reassignment of
selected people both to position and organization. Also, at least initially, the plan required
significant amounts of training time and some financial support to meet minimum qualifications
and certification standards.
Procuring Program Responsibilities
Decentralized Contracting Authority
Each Program seeking delegation authority must assess both system and
personnel resources necessary to conduct contracting activities. Certain
minimum requirements apply as stated in Departmental policies and procedures.
OCPMP assists with assessing system needs.
Standard Procurement Contracting Support
The OCPMP provides contracting support for those Programs and procuring units
that do not have contracting authority. However, accountability for contract
management and performance remains with the Programs and procuring units and
they must provide systems and qualified personnel to meet these obligations.
This new office has new responsibilities that demand important resource planning
efforts. In addition to providing traditional contracting support, OCPMP
extensively manages the contracting system, monitors system quality and
performance, provides technical consulting and establishes a full-service
contracting information center.
There were few performance metrics from which to measure the baseline and future
improvements. Existing managing-for-results (MFR) objectives defined current goals but only
addressed a narrow range of contracting activities. Though the Team desired to assign measurable
outcomes, it was not possible to intelligently project levels of performance with so little historic
data. Anecdotal evidence suggested potential for dramatic performance improvement once the
contracting system was transformed. For aggressive monitoring of contracts and the delegation of
authority to program units should result in productivity increases. Overall, the Department
expected enormous benefits of quality, efficiency, timeliness, productivity and effectiveness.
This produced clear responsibility and accountability for the contract. Each Program was
able to establish MFR goals and objectives that contribute to the Department’s standards
supporting a results oriented system.
Team-Based Contracting Practices
These resulted in much greater productivity and reduced the tremendous competitive
demands on the Department’s resources. Relying on teams resulted in much improved
communication throughout the Department.
Operations Based on Standardized Policies and Procedures
These have had a major impact on contract uniformity, quality and the efficient use of the
Department’s skilled resources.
This office sets the tone for the change in attitudes and culture necessary for such a major
Department-wide reform. OCPMP provides central management focus and serves as the
anchor for the procurement and contracting structure and system. It does this by
promulgating clear, coherent guidelines and standards, making the process cooperative
rather than linear and hierarchical, making information and assistance easily available,
ensuring that personnel are properly trained, and setting standards for continually
monitoring and evaluating performance.
Uniform training for all Department Personnel
This supports a more efficient, timely and effective procurement system, provides higher
quality of services received for the funds expended, and improves employee attitudes and
There is a major new focus on contract monitoring, ensuring that the monitoring process
is practiced throughout the Department, that procedures and guidelines are communicated
and implemented, and that the Department is receiving the services and deliverables
intended from its contracts.
13. Why is the program a new and creative approach or method?
The program breaks traditional administration and governance of public contracting and procurement
processes by acknowledging the ―customer‖ as the central point within the entire life cycle and
delivery system. Technology has been utilized to provide services consistent with customer
expectations, at minimum costs. Responsibility and accountability for successful project execution is
evenly spread-out among the principal stakeholders, driven by the customer; improving resource
utilization (human, fiscal, intellectual, and technology), collaboration and knowledge sharing,
information dissemination, monitoring, measurement, reporting, and quality assurance.
Processes are facilitated along a horizontal, cross-functional, joint ownership landscape as opposed to
standard vertical, linear, hierarchies. Cycle times have been reduced on average 45%, workforce
competencies have improved, pre-award productivity savings of $819,000 have been realized,
information sharing is now standard, and the quality of the final product has improved without
degradation of risk management strategies.
14. What were the program’s start-up costs? (Provide details about specific purchases for
this program, staffing needs and other financial expenditures, as well as existing
materials, technology and staff already in place.)
$25,000 was used for consultant services to conduct the Departmental needs assessment, analysis, and
process improvement recommendation report.
Human resources were identified and provided by means of Departmental consolidation of transaction
specific procurement units, i.e., technology, commodities, and human services . Fully staffing the unit’s
human resource compliment added five full-time-equivalent positions at an annual expense of
$230,000. The initial training allocation was $50,000, although only $25,000 was used.
There were no technology enhancements required. Internal resources were used to develop the core
contracting database, at a savings of approximately $500,000.00 for an off-the-shelf system. Migration
of service delivery to on-line, web based channels was accommodated via internal resources on staff.
No specials projects were created or funded. Personnel on regular payroll accomplished all
deliverables. No special PC hardware or software was required. All upgrades were facilitated via
standard Departmental time lines.
15. What are the program’s annual operational costs?
Post-implementation costs of the process improvement plan are incorporated within the operating
budget of the Department’s contracting and procurement unit, Office of Contract Policy, Management
and Procurement. Pre-award costs for team-based contracting and procurement efforts are
approximately $1,820,409.00, associated with processing approximately $1 billion in contracting and
16. How is the program funded?
Funding is provided through annual Departmental budget appropriations.
17. Did this program require the passage of legislation, executive order or regulations? If
YES, please indicate the citation number.
No new legislation, executive order(s), or regulation was required to institute the internal change
18. What equipment, technology and software are used to operate and administer this
The Department’s contracting and procurement unit operates off an existing statewide Financial
Management Information Systems and internal, unit specific databases.
19. To the best of your knowledge, did this program originate in your state? If YES,
please indicate the innovator’s name, present address, telephone number and e-mail
The concept of team-based management has been universally available for some time; however,
successful implementation in public procurement and acquisition had not been achieved prior to the
Maryland Department of Health and Mental Hygiene (DHMH) rollout. The Maryland initiative
resulted from recommendations made by the then Governor’s Council on Management and
Productivity with sponsorship by the DHMH Deputy Secretary of Operations, Jon Seeman (no longer
with the Department).
20. Are you aware of similar programs in other states? If YES, which ones and how does
this program differ?
Inquiry to the National Institutes of Governmental Purchasing, Inc. and other public procurement
bodies has not identified any other public procurement unit successfully utilizing the team-based
management construct similar to that applied by the Maryland Department of Health and Mental
21. Has the program been fully implemented? If NO, what actions remain to be taken?
Yes, the program has been fully implemented as has expanded beyond its original design to encompass
complete end-to-end service fulfillment. The DHMH Office of Contract Policy, Management and
Procurement currents facilitates service delivery via sub-sections devoted to Integration Support,
Project/Contract Management, Direct Service Delivery, Audit/Compliance, Technology and Training,
Solutions Implementation, and Performance Excellence.
22. Briefly evaluate (pro and con) the program’s effectiveness in addressing the defined
problem[s] or issue[s]. Provide tangible examples.
Planned Benefits (11/01/01)
Much benefit will be derived when the plan is fully implemented. Up-front investments in systems
and training are required in order to reap savings in the longer run. Ultimately, the Department will
realize a significantly accelerated contracting process throughput. The efficiency will reduce the
current pressure to add more skilled resources to complete the development and awards cycles in a
timely manner. Dramatically enhanced communications throughout the contracting process will
increase productivity and reduce duplicative effort. Also, inherent in the plan is the potential for
reducing the total outlay for services through attentive contract monitoring and the use of contracting
Properly implemented, the new contracting system will have a unifying effect on the Department,
while the performance improvements that are achieved will be a source of departmental pride and
future strength. Benefits will be derived from the following seven principal outcomes:
1. A central contract management organization responsible for ensuring a high level of
quality in contracting system performance.
2. The standardization of contracting processes across the Department and a requirement for
formal monitoring of contracts;
3. Universal contracting policies and procedures maintained at the departmental level;
4. Contracting processes reliant on team-based work practices;
5. A contracting system designed to vest full contract management and authority with the
6. Ongoing technical training for upgrading and maintaining procurement skills; and,
7. Evaluative measures to gauge performance of contracts and service delivery.
In 2004 the program was awarded Outstanding Agency Accreditation Achievement by the National
Institutes of Governmental Purchasing, Inc., one of only 68 procurement units in the country and the
only non municipal, county, agency, or statewide entity.
The program has successfully transformed the Department’s previously disjointed processes into a
uniform, effective, team-oriented mechanism fostering customer centric focus, process efficiency,
collaboration, knowledge management, workforce competency, information dissemination, compliance
adherence, web based delivery channels, performance based measurement and quality standards,
quantitative workflow analysis for decision making support, and enhanced integrity in transaction
processing (reductions in errors and less rework).
The program has afforded the Department the mechanism to receive increased delegated authority
four-fold its previous level, providing opportunities for increased self-sufficiency and self-
determination in assuring the needs of its customer population are met in the most efficient, timely
manner possible. (DHMH/OCPMP is the only unit in the state to receive its level of delegated
Quantified analysis confirmed (Department Budget Office and Chief Financial Officer) one-year
program productivity savings for pre-award processing of 28,802 hours, equating to $819, 183.00. The
average contract transaction cycle time has been reduced 45%, eliminating 17 steps from the prior
―Customers‖ have been provided key stakeholder status in ensuring service fulfillment, improving
collaboration and partnership, morale, and overall participation in the process. Workforce
competencies have shown quantified improvement leading to a 65% reclassification (promotion) rate
within the unit (an achievement under current statewide fiscal stress). External customers
(vendors/contractors, etc.) have realized expedited payment processing, issue resolution, and improved
quality in solicitation packages, bid evaluations, and the entire award process (vendor claims, protests,
and appeals have shown quantified reductions in all categories).
The program is currently viewed as the state standard and is being evaluated for further
implementation in sister agencies. Documentation on the program has been requested for review by the
Governor’s Office of Minority Affairs, the statewide Procurement Advisory Council (tie to the state
General Assembly for regulatory, statutory, and policy changes), and national procurement governing
entities for assessment and reuse of best practices and lessons learned.
Customer satisfaction surveys, internal and external, reflect the program has met or exceeded the
majority of challenges precipitating its initiation. Ongoing focus is concentrated in:
Quality Assurance Audit/Compliance
Integration Support Project/Contract Administration
Information Dissemination Solutions Implementation/Administration
Technology & Training Workflow Analysis
Direct Service Delivery Performance Excellence
23. How has the program grown and/or changed since its inception?
Success of the program has led to expansion on a statewide basis encompassing dedicated curriculum
development and training for sister agencies (workforce competencies); assurance of audit and
compliance governance; integration support for statewide delivery channels; project/contract
administration for post-award oversight; development and dissemination of end-to-end process
workflow analyses supporting staff and resource utilization; quality assurance and measurement
reporting; database administration; and marketing.
The unit has assumed leadership for contracting and procurement statewide information
dissemination via its Road to Excellence newsletter.
Training initiatives have expanded to include external business partners and outreach.
Unit Audit/Compliance assurance standards are being adopted by the Governor’s Office of
Minority Affairs for statewide application relative to Minority Business Enterprise participation.
The unit’s Project Management office is undertaking statewide leadership for post-award contract
administration processes, creating uniform expectations and resource availability.
The unit’s Workflow Analyses component is being used as the statewide benchmark for
cost/benefit analyses aided executive decision-making for acquisition strategies and life-cycle
The unit’s strategy for migrating service delivery to online, web based channels is being adopting
by sister agencies striving to achieve similar results of the unit’s e-Gov goal of 100%.
The program’s foundation of team-based management is being adopted statewide, phased into
sister agencies as a mid-term strategy for implementing change, establishing the base for statewide
application of technology, collaboration, and partnerships.
In two-years the unit has expanded and grown from departmental ―procurement‖ transaction enabler to
statewide leader of process improvement and change implementation, encompassing service
24. What limitations or obstacles might other states expect to encounter if they attempt to
adopt this program?
Contracting and procurement processing is an established discipline, deep rooted in traditional
philosophy, methodology, and bureaucracy. Stakeholders may be reluctant to readily adopt change,
particularly one supporting transferring elements of control to others in a dependent, and partnership
environment. Commitment must be established at the executive level to ensure the time and resources
are provided and that ample opportunity for success is also provided. This type of change can represent
a long-term commitment that needs to withstand expected and unexpected tests of its charter.
In the broader context of service fulfillment, effecting organization changes of this magnitude and
importance are not without risk. A commitment by leadership and a resolve to ―stay the course‖
against tough obstacles, predictable as well as unpredictable, are vital elements. A clear management
plan must be in place, and there must be a firm belief in the expected outcomes.
Add space as appropriate to this form. When complete, return to:
CSG Innovations Awards 2004
The Council of State Governments
2760 Research Park Drive, P.O. Box 11910
Lexington, KY 40578-1910
DEADLINE: All original applications must be received by April 20, 2004, to be
considered for an Innovations Award for 2004.