BuyTrain News

July, 2005

Education
  ISM News
Personal Development
  Hotlinks
Sox Again?
Mailing list subscription form 

Education

Pacific Northwest Purchasing Conference.

National Association of Purchasing Management - Western Washington will host the 62nd Pacific Northwest Purchasing Conference in Seattle, October 5-7, 2005. The program schedule is posted. Check out the web site for a list of the great programs and speakers. Reserve space in your schedule to participate. Here is one excellent example:

Featured Session: Doing Business in China

Session 1A - October 5th - 2:30 p.m.

Ni Hau (knee how), Hello!

Is your company buying from China? Are you confused by how to start sourcing from China? Do you suddenly need to be the instant expert on doing business in China? Overwhelmed by the nuances of Chinese business etiquette? Join us at the 62nd Annual Pacific Northwest Purchasing conference, October 5-7th hosted by NAPM-WW and have all your questions answered!

Doing Business In China - Session Presenter: Pamela Lin Benson

Owner, Lin’s International Co.

Working as a Chinese Business Consultant and Chinese Language and Cultural Trainer, Pamela’s career stretches over decades in global sales and purchasing. This experience includes Europe, Japan, Singapore, Hong Kong, Taiwan and China.

Pamela’s company, Lin’s International Co. is dedicated to helping business between the U.S., Taiwan and China. She holds an MBA degree from Chapman

Pamela was twice a recipient of the NAPM “Person of the Year” award when she served two terms as International Committee Chair. She was a speaker on “Country of Origin Marking” at a NAPM’s District Leadership Conference.

Sox; Will it affect Federal Agencies? 

I know you are probably tired of hearing about SOX, but I just wanted to give you a couple of new resources.

Many months ago I was asked if I thought SOX would eventually affect Federal agencies. The short answer was YES! 

So says Davis Walker, Comptroller General, in numerous presentations and interviews.  In December 2004 OMB released the draft change to OMB Circular A-123 which is to become effective in Fiscal Year 2006. Here is a link to the news release:   http://www.whitehouse.gov/omb/pubpress/2005/2005-01.pdf   Here is a link to the revised circular: http://www.whitehouse.gov/omb/circulars/a123/a123_rev.pdf

Here is an excerpt:

4. Actions Required. Agencies and individual Federal managers must take systematic and proactive measures to (i) develop and implement appropriate, cost-effective internal control for results-oriented management; (ii) assess the adequacy of internal control in Federal programs and operations; (iii) separately assess and document internal control over financial reporting consistent with the process defined in Appendix A (iv) identify needed improvements; (v) take corresponding corrective action; and (vi) report annually on internal control through management assurance statements.


The changes will affect over 20 Federal Agencies. They implement additional requirements and audit controls for financial accountability (similar to the way SOX does for corporations). The agency heads must certify that adequate internal financial controls exist, identify weaknesses and explain actions being taken to mitigate any financial irregularities. I know the DOE budget office has already taken  survey of field offices and has been discussing the revised circular in meetings with Chief Financial Officers.

Of course there will be additional audits and reviews.

Links:

DOE OMB "SOX" survey of Field offices and contractors March 2005 http://www.mbe.doe.gov/progliaison/DOEmocSarbanesOxleysurvey.pdf 

DOE OMB Circular A-123 & SOX references (lots of background links) http://www.mbe.doe.gov/progliaison/doeA123.htm 

KPMG presentation about the new rules  http://www.auditforum.org/speaker%20presentations/wiaf/wiaf%2006%2005/Ashby%20A123%20Overview%20WGAv2.pdf 

Opinion: Not being a financial analyst.... I don't believe SOX and/or the new OMB circular impose a plethora of specific new accounting practices. I think identification of system control points and weaknesses remains a function of each accounting system and the controls are going to be unique to that system. What SOX and the new circular do, is place management on notice that they need to be paying attention, doing reviews and in control of their financial accounting. It requires documented evidence of the assessments and audits which demonstrate adequate controls. I do not believe that either defines many (if any) specific new controls. Of course SOX and OMB 123 also put management on notice that failure to exercise control, could lead to penalties..........

Understanding Procurement Contract Law

September 28, 2005,  Spokane. Sponsored by the Washington Chapter of NIGP

More information:

 Contact Gerhild Turner gerhild.turner@commtrans.org  (425) 348-2308

UCC Amendment

We've spoken about the proposed amendment to UCC article 2 from the perspective of E-Commerce (Buytrain news,May ). But keep in mind there are other significant changes also proposed in the amendment. 

A question for all of you C.P.M.s out there. What does FOB or CIF mean? O.K. easy question. Now a harder one. What are you going to do when FOB and CIF are eliminated from the UCC in favor of International Freight term (commonly referred to as Incoterms)? Are you familiar with Incoterms?  

Certainly buyers who are purchasing goods internationally must already be using Incoterms. The UCC amendment recognizes this and proposes deleting sections 2-319 through 2-323  so that buyers and sellers can adopt a commonly used standard consistent with international transactions.

My suggestion is that we incorporate Incoterms into training programs now. Might as well get on the band wagon while it rolling past instead of waiting until you have to play catch up. Note, only two states have started  considering the amendment so far.

From the web site of the United States Council for International Business

Incoterms
http://www.iccwbo.org/incoterms/preambles.asp

Incoterms wall chart
http://www.iccwbo.org/incoterms/wallchart.asp

Explanation of the Incoterms
http://www.iccwbo.org/incoterms/understanding.asp

Article about Incoterms and the UCC change
http://www.uscib.org/index.asp?DocumentID=2954

NOTE CAREFULLY THE CHANGE IN MEANING OF SOME ACRONYMS e.g. FOB

List of Incoterms and link to definition
http://www.uscib.org/index.asp?DocumentID=2213

UCC freight terms 
http://straylight.law.cornell.edu/ucc/2/article2.htm#s2-319

UCC amendment (note strikeouts, section 2-319)
http://www.law.upenn.edu/bll/ulc/ucc2/annual2002.htm

Personal Development

Hotel Safety?

I heard a hotel manager for Marriott presented a fascinating program on hotel safety for travelers. Among other things he provided a lot of tips about guest security. Major hotel chains send their managers and staff to hotel safety conferences on a regular basis. Regardless of property type, it is important to be sure that your hotel considers your safety to be as important as you do.  Read my thoughts on hotel safety

Contract Disputes: An extreme example

http://www.doecaa.org/Docs/pit%209%20decision.pdf 

This document describes the findings of fact, and conclusions of law, surrounding a contract dispute. Of course, it's a complex issue. Sure it contains some government contract law. Obviously both sides used every legal trick they could dredge up. (It's the first time I've seen my favorite legal term used in a case; (promissory estoppel)

Suggest you glance through this document, then consider the following questions:

  1. Did the article remind you of contracting issues and terms that you have learned about? 
  2. Were there contracting or legal terms that intrigued you and/or caused you to investigate further? 
  3. Were there issues or conclusions that you disagreed with? 
  4. Did you come across any items that reminded you of something you have done or been involved with? 
  5. Were you able to follow the gist of the arguments and conclusions? 
  6. Did the article remind you of your responsibilities as a contracting officer? 
  7. Did the article remind you of something you want to add or review in one of your contract files? 
  8. If not now, do you think that someday you will be at an experience level sufficient to manage a contract of this nature? 
  9. Are you making progress in your career towards understanding most of the legal issues surrounding this contracting case? 

O.K., so now what? Did you think your career was going to plateau with the purchase of office supplies? If you are serious about advancing in the field of contracting; here are some suggestions for using articles like this:

  1. Round up a small group of colleagues. 
  2. Use this case as a discussion tool. 
  3. Take a few pages each time you get together and discuss the findings, conclusions and legal terms.
  4. Reach an agreement on what they mean - if necessary have each person pick a term, do some research and report back. 
  5. Discuss; "If I was the contracting officer what would I have done?" "Could I have prevented the problem from taking so long to resolve?" "Could I have prevented the problem by better contracting in the first place?"

BTW: Promissory Estoppel; (here is my non-legal onion about it) A contract that relies on a promise instead of consideration. I told Bob, if he gets that contract to build a house, I will supply all of the paint at $10.00/gal. Relying on my promise, Bob bids on the house contract and wins. Can I make a claim saying we didn't have a contract and I don't have to supply the paint? Even though we didn't exchange consideration, Bob relied on my promise and under the principle of promissory estoppel, the court may decide we did have a contract.

ISM News

Buyers with a common interest band together.

This summer, dedicated volunteers from throughout the country will converge at ISM leadership workshops. They'll be sharing ideas with other leaders about how to make our affiliates better.  I appreciate the time and effort that each of our leaders put into running our association.  I'd like to express my appreciation to each of our volunteer leaders. THANK YOU!

Hotlinks 

Provide Feedback and suggestions for future newsletters at any time. I'll try and use what I can.

I really do appreciate those of you who take the time to write and comment on this newsletter!  

TTFN, 

Mt

Return to the BuyTrain Archive

Return to MLTweb


MLTWEB is assembled and maintained by Michael L. Taylor, C.P.M. 
Materials and articles prepared by Mike may be shared for purchasing education provided that this source is cited and no fee is charged. The rights for any other use are withheld.
Copyright;  Michael L. Taylor, C.P.M.
Last Updated: 05/23/2006