ART - Procurement Funding 2009

This document, titled "Administrative Fees for State Procurement Systems," is a publication from the Department of General Services (DGS) Procurement Division Headquarters. It provides valuable insights and lessons learned from the implementation of administrative fees in state procurement systems across various states. The document emphasizes the importance of setting fees at a reasonable level to ensure they are not burdensome for small businesses. It suggests avoiding flat fees and instead considering a percentage-based fee structure. Additionally, the document highlights the need for clear and efficient fee collection processes, such as automatic deduction from vendor payments, to streamline the collection and minimize administrative burdens. One key recommendation is to establish a separate fund to hold the fees collected, rather than reverting them to the general fund. This ensures that the fees can be utilized to support various agency operations, such as training programs, technology upgrades, or process improvements. The document shares valuable lessons learned from different states' experiences in implementing administrative fees. These lessons include the importance of obtaining stakeholder buy-in, providing flexibility in fee collection methods, accurately estimating revenue, dedicating staff resources for fee management, and conducting effective vendor and agency outreach. Challenges encountered during implementation are also discussed in the document. These challenges include dealing with complex rules and regulations, difficulties in matching vendor information with tax records, dissatisfaction among program participants, limited phone support, problems with uploading vendor information, and complications in applying fees to fuel contracts. The document also highlights the preference for vendor-paid fees over state-paid fees and mentions the reluctance of some states to rely solely on administrative fees for funding personnel. It provides insights and recommendations for successful implementation, aiming to help states navigate the complexities and potential pitfalls associated with administrative fees in state procurement systems. Overall, the document serves as a comprehensive guide, offering valuable insights and recommendations to ensure the successful implementation of administrative fees in state procurement systems.