PURCHASING AND MATERIAL MANAGEMENT
This chapter reviews the purchasing and material management functions of the Alamo Community College District (ACCD) in the following sections:
- A. Purchasing
- B. Contract Management
- C. Material Management
- D. Auxiliary Enterprises Organization
- E. Mail Services
- F. Printing and Copying
F. PRINTING AND COPYING
ACCD's Print Services Department is a division of the Acquisitions and Administrative Services Department and consists of the district print shop located at the district office on West Sheridan and campus copy centers located at San Antonio College, St. Philip's College, Southwest St. Philip's College and Palo Alto College. Copiers are placed in each of the campus commons area at Northwest Vista College instead of a copy center. In addition, larger copying jobs are sent to the San Antonio College copy center or the district print shop. ACCD's Print Services Department's purpose is to provide high-quality printing, sorting, collating, binding, desktop publishing and high-volume copying services to faculty, staff and administration at prices comparable to commercial vendors. Print Services can handle the production of publications from concept to finished product. Print Services also acts as both printer and printing consultant to produce documents such as brochures, booklets, pamphlets, forms and posters and as consultant for the production of class schedules and college catalogs.
Print Services is staffed by a district manager who oversees two divisions: the campus copy centers, composed of four supervisors and four support staff, and the district's print shop with five staff members. Exhibit 7-26 shows the departmental organization.
Exhibit 7-26 Source: ACCD, director of Acquisitions and Administrative Services.
Print Services Organization
January 2003In fiscal 2000, Print Services began the migration from analog copiers to digital copiers/printers and replaced all high volume and auxiliary copiers with digital copiers/printers. Print Services is now able to complete copier requests submitted in the traditional "paper" form, as well as via e-mail attachment, disk and digital file transfer. In addition to upgrading printers, the department also recently upgraded its software capability to read files created with virtually any PC or Mac-based software program.
Large print jobs like class schedules and college catalogs are contracted out, thereby eliminating the need to purchase and maintain costly printing equipment such as web presses and additional technical staff. However, Print Services still assists in the pre-press production, including layout, format and typesetting for annual large volume jobs that are outsourced, which include the class schedules and catalogs. Most bindery and folding jobs are completed in-house.
The total amount of ACCD purchase orders for outsourced jobs in fiscal 2002 was approximately $446,600, which was mainly for class schedules, totaling $201,599, and college catalogs, totaling $105,931. Of the jobs contracted out in fiscal 2002, class schedules, college catalogs, ACCD Spectrum and the campus newsletters will also be contracted out in coming years, as they are printed oversized and/or on newsprint or web press. Beginning in fiscal 2003, approximately 35 percent of the jobs outsourced to the University of Texas Health Science Center requiring four-color process printing, a format larger than 14" x 20", special bindery and crash numbering will also continue to be outsourced. Exhibit 7-27 shows a summary of the purchase order amounts for outsourced printing jobs.
Exhibit 7-27 Source: ACCD, Print Services manager and Contracting coordinator.
Outsourced Printing Jobs Purchase Order Amount
Fiscal 2002
Job Outsourced ACCD Department Published By Vendor Purchase Order Amount Outsourced by Print Services (crash numbering, bindery) ** Print Services UTHSC, Crumrine $2,499 Outsourced to UTHSC * UTHSC $30,318 Class Schedules (contract) * Public Relations Office, etc. Liberty Press $201,599 College Catalogs (contract) * Public Relations Office, etc. Phillip's Brothers $105,931 ACCD Spectrum (contract) * Public Relations, etc. Crumrine $29,385 Campus Newspapers/Periodicals: @
The Ranger (SAC), 4th Write (SAC)
The Tiger (SPC), PAC Review (PAC)Journalism, etc. SA Press, Impressive Printing $41,006 Brochures, citations, folders, cards, envelopes, billing statements, P.O.s, drop forms * Various Various $35,862 Total $446,600 Reasons outsourced:
*Four-color process; printed oversized larger than 14"x20"
**Special bindery or crash numbering
@ Printed on newsprintPrint Services maintains three presses and nine printer/copiers-eight black and white and one color-and administers satellite copiers located throughout the district. A satellite copier is a remote copier from the main copy center. There are currently 20 satellite copiers that are rented through state contracts and one owned copier. The Print Services' manager said that rented satellite copiers are monitored constantly for volume and dependability and evaluated annually and either upgraded or modified. Departments that use satellite copiers are charged $.045 per copy.
Print Services operates as an internal service fund that breaks even with all jobs charged to individual departmental accounts. All operating expenses, including salaries, fringe benefits and general expenses, are offset by the chargebacks generated by the jobs requested. The reported net profit for fiscal 2001 was $74,643 and $43,414 for fiscal 2002. The manager said that copy charges for overages run at the end of a fiscal year in July and August are typically billed and paid in September and October of the following year, eliminating most or all of the assumed net profit. General expenses in a given fiscal year cover the cost of paper, ink, staples, office supplies, press room supplies, equipment maintenance and equipment rental, but do not include equipment purchases or depreciation. The Print Services manager said that the $64,500 spent in fiscal 2002 for a 1995 Shinohara press was acquired through funds provided by Fiscal Affairs.
Exhibit 7-28 shows the budget for the Print Services Department for fiscal 2002, including the print shop and college copy centers.
Exhibit 7-28 Source: ACCD, Print Services manager.
Print Services Departmental Adopted Budget
Fiscal 2002
Description Budget Professional salaries $44,891 Classified salaries $268,621 Federal work study $8,632 Special pay $7,965 Employee travel $1,995 Basic telephone service $4,702 General expense $469,492 Fringe benefits $32,193 Charge backs ($839,175) Income(Loss) $684 Print Services staff develops monthly production reports, which include the number of jobs and impressions completed, the costs and chargeback status. Exhibit 7-29 shows the number of impressions, or sheets of copied or printed-paper, produced by Print Services in fiscal 2002.
Exhibit 7-29 Source: ACCD, Print Services manager.
Operating Statistics
District Print Services
Fiscal 2002
Statistics District San Antonio College St. Philip's College Southwest St. Philip's College Palo Alto College Number of press impressions 3,957,794 Number of copier impressions 1,028,405 7,132,460 2,311,687 1,568,658 3,195,017 Number of jobs 1,885 8,592 4,473 984 6,242 Facility square feet 2,603 675 1,286 741 566 FINDING
ACCD's commission rates for coin-operated copiers are not competitive with a peer district. ACCD's contract provisions for coin-operated copiers generated commissions revenues of $2,398 from total sales of $58,489 for fiscal 2002. ACCD awarded the contract effective October 2000 to August 2003, with options for three additional one-year extensions. The Acquisitions and Administrative Services Department manages the contract. The commissions during the initial three-year period of the agreement are calculated by multiplying the number of copiers by 1,500 base calendar month copies to obtain the base monthly aggregate. The commission rate of $0.015 is multiplied times the number of copies exceeding the base monthly aggregate. Exhibit 7-30 shows that Dallas County CCD has a more favorable commissions rate that is based on a percentage of gross income.
Exhibit 7-30 Source: ACCD, Acquisitions and Administrative Services Department and peer surveys.
Comparison of Contracted Copiers for Students
March 2003
College Commissions Revenue Rate Cost to Students Alamo $0.015/black and white copy after base 1,500 copies
$.15/color copy after base 1,000 copies per month$0.10/ black and white copy
$1.00/color copyDallas County 30 percent of gross income $0.10/ black and white copy San Jacinto No response $0.10/ black and white copy North Harris Montgomery No response $0.10/ black and white copy In addition, a competitor bookstore located near the San Antonio College only charges $0.05 per black-and-white copy instead of the $0.10 per copy charged by ACCD and the peer colleges.
Recommendation 85:
Develop specifications and rebid the district's coin operated copier contract.
The district should negotiate with the current vendor of its coin-operated copiers to extend the contract through January 2004. The district should also develop bid specifications for its coin-operated copiers that are more favorable to the district and its students and request competitive bids.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The director of Acquisitions and Administrative Services negotiates with the current coin operated copier vendor to extend the contract through January 2004. September 2003 2. The director of Acquisitions and Administrative Services develops specifications for competitively bidding the district's coin operated copiers. September 2003 3. The director of Acquisitions and Administrative Services and the manager of Print Services analyze the bids received and make a recommendation to the board for contract award. December 2003 4. The board awards the contract and the contracted vendor begins performing under the contract. January 2004 FISCAL IMPACT
This recommendation can be implemented with existing resources.
FINDING
ACCD does not have a documented approval process for the rental or purchase of departmental copiers. The Print Services manager stated that he reviews and makes recommendations for copier rentals and purchases but that departments can overrule the recommendation. As a result, any district or college department can rent or purchase a copier without the Print Services manager's approval and could be spending unnecessary funds on multi-functional copiers that exceed their needs. The manager said that he was not aware of this happening in the last couple of years, but in prior years, recommendations were occasionally overruled.
Guidelines for replacing copiers have been a verbal directive/agreement between the Acquisitions and Administrative Services contracting coordinator and the Print Services' manager. Print Services' 2001 Objectives included the development of written procedures. The contracting coordinator said that all requests for new copier rentals or purchases by a department go through Print Services for the manager's signature before the purchase order is processed. Based on the Print Services manager evaluation, a recommendation is made as to whether the department should rent a copier/printer or if Print Services should place a satellite unit for multiple departments' use. The manager also researches the state contracts for availability of units that will serve the departments' needs.
The Print Services manager said that ACCD owns approximately 81 departmental copiers, rents 132 copiers under state contracts and rents three copiers under other contracts for a total of 135 rented copiers.Twenty of these copiers were acquired in fiscal 2002.Copiers are rented from multiple vendors under state contracts. ACCD did not provide documentation to indicate if lower rental rates may be negotiable by using a fewer number of vendors. Exhibit 7-31 shows a summary of purchase order amounts for copiers.
Exhibit 7-31 Source: ACCD, Print Services manager and Contracting coordinator.
Summary of Authorized Purchase Orders Amount for Copiers
Fiscal 2002
Attribute Print Services Department Satellite Copiers Other
Districtwide CopiersNumber of copiers owned 1 80 Maintenance and repair costs $760 $20,774 Number of copiers rented 9 20 106 Rental costs which includes maintenance and overage limits $154,672 $109,467 $236,661 In addition, two of Print Services' copiers are not rented under state contracts. The contracts expire by August 2003, and the manager said that new copiers would be acquired under state contracts. The manager estimated that this would save the district approximately $17,000 per year.
It is standard practice to assign one central department to be accountable for copier procurement so that the needs of the district can be considered and so that each copier is adequate for the designed task. The policy at North Harris Montgomery Community College District's Tomball College is that the vice president of Administration Services authorizes major equipment purchases, such as copiers, subject to board approval. Large, walk-up copiers are only authorized and maintained by Office Services.
Recommendation 86:
Assign districtwide copier management to Print Services and conduct a comprehensive needs analysis.
Providing copiers to the district's departments and colleges should involve more than just placing the order and receiving the equipment. The district should assign the responsibility and authority to manage copiers districtwide to Print Services. A comprehensive needs analysis should be conducted to document the district's overall copier needs, and a plan should be developed to meet those needs in the most cost-effective manner. The district's copier needs should be reviewed annually to ensure that changes in needs are addressed timely.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The executive vice chancellor assigns the Print Services manager the responsibility and authority to manage the district's copiers. September 2003 2. The Print Services manager conducts a needs analysis and determines the districtwide copier needs. October 2003 - December 2003 3. The Print Services manager develops a plan for meeting the districtwide copier needs and how to manage the copiers and submits to the executive vice chancellor for approval. January 2004 4. The Print Services manager drafts policies and procedures for the management of district copiers and submits them for approval to the executive vice chancellor. February 2004 5. The Print Services manager distributes the policies and procedures districtwide. March 2004 6. The Print Services manager reviews the district's copier needs on an annual basis. June 2004 and Annually Thereafter FISCAL IMPACT
This recommendation can be implemented with existing resources.
FINDING
Print Services does not conduct cost comparisons to ensure that print services are cost effective and analysis is not performed to determine how to improve customer service. The district did not provide documentation comparing Print Services' rates to local competitors to ensure that the department's rates are reasonable. The manager said the rates for offset printing services were compared with local competitors in February 2003 and that copying rates were compared in October 2002, but the records were not provided.
The district has verbal agreements with the University of Texas Health Science Center and Torres Printing (Texas Correctional Facility) to provide printing services for ACCD. The Print Services manager said that because the University of Texas Health Science Center's printing services are classified as interagency services and Torres Printing is classified as a state agency, no bidding process is required when obtaining services from these agencies. Costs are provided for when a particular job is requested, but ACCD did not provide contracts and rates schedules to verify if the vendors' rates are competitive.
Print Services maintains monthly production reports that show the number of press and copier impressions, number of jobs, costs, chargeback status and other information, but the job turnaround performance measure of jobs not completed within the standard time is not included in the reports.
Customers experience some inconvenience when using Print Services. Customers go to the district location for desktop publishing and offset printing projects, as the services are only available at the district print shop. The manager said that more than 95 percent of these jobs come directly to the print shop because consulting provided in these areas by the campus supervisors is minimal. If a job is brought to the copy center for desktop publishing or offset printing, the copy center supervisor will either call the district print shop for specifics or refer the customer directly to the print shop. Since Northwest Vista College does not have a copy center, faculty and staff at Northwest Vista College e-mails files to Print Services when they have large volume copying jobs. The alternatives are to send their jobs to one of the Print Services locations via the district mail services in a hard copy or disk format or personally deliver the job to one of the other copy centers for production.
Educational institutions continually monitor the cost-benefit of maintaining auxiliary and general support services in-house or whether it is beneficial to contract for the services with an outside vendor.
Recommendation 87:
Conduct a cost benefit analysis to determine if print services are competitive and efficient.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The director of Acquisitions and Administrative Services and the Print Services manager develop a process to evaluate the cost of performing in-house print services and to compare the cost to private providers. October 2003 2. The director of Acquisitions and Administrative Services and the Print Services manager compare the cost of in-house print service costs to private venders and determine actions necessary to ensure printing is provided in a cost-effective manner. November - December 2003 3. The director of Acquisitions and Administrative Services presents the results of the comparisons and recommended actions to the executive vice chancellor for approval. January 2004 4. The director of Acquisitions and Administrative Services and the Print Services manager implement the actions necessary to ensure print services are cost effective. February 2004 5. The director of Acquisitions and Administrative Services compares print services costs on an annual basis to determine actions necessary to continue cost-competitive printing. June 2004 and Annually Thereafter FISCAL IMPACT
This recommendation can be implemented with existing resources.
