What is Purchasing 's Responsibility? page 12 Savings made simple. Campus-wide.

Do you see things you need? Or just a better way 10 bltt them? We've already completed the bids. Educational & secured the best prices, and signed the contracts lor everyIhlfll you can nnagJrle. In lact, the Instltullonal Cooper III in members of the National AssocIation of Edocallonal Procurement (NAEP) have turned to E&I since Purchulng 193410 increase buyins 1X)Wef. slreCImhne purchasing. and satrsfy the needs d therr inslrtutions and IJI students. See what ~ can 00 for you. Call 8)).283·26,34 ext 228, e-mail [email protected], or visit ...... eandl.org today. - TECHNOlOGY . SCIENTIfiC . FURNITURE OFfiCE SUPPLIES MJ,INTENANCE FINANCIAL SERVICES TAB LE OF PUBLISHING OFFICES Pe nton Medin, Inc. 1300 E. Ninth Sl,reet Clcvelnnd. Ohio 44 11 4· 1503 NAEP Phone: (216) 696·7000 Fax: (216) 696·7668 National Association of Educational ProctJremefrt Ac(:(m1lts Dlreclor Eileen CaI,lahan Letter from the CEO Prodm:tw n MUlluger Chris l'tlPcAdam 4 You Can Get There From Here Art Director Doreen Mllrller, CEO, NAEP Andrew Meeke r With nulumn flllJLnllProaching, nlollg with the Ilel.l8On of regionnl meeLinp. remember NAEP na your OIle-stop aouroe for professionnlassisUlnce nnd development. Features 8 Ethical Behavior in Purchasing Craig Passey, C.P.M. In our business, ethica is n subject that never seems to grow ADVERTISING OFFICES l tale. ernig Pru!.sey shnres Il perspective that he hns dC\'eloped over hi! .nallY yenrs of experience. CO/CT/DElDC/ltY/ME/MOiJIIA/liH/NJ/ NYMC/OIIIPAIRINT/VANT/WV(WY/ Easl.m CaMII . 10 How to Access Consortium ""(2'6) .....93 ' ·94 69 Purchasing Agreements Under Your _.~cncom State's Small-Purchase Exemptions IMNIMI/MOJM NlSo .·ll Eric Denby, C.P.M. .. CO- (248) 6O$-09!M Ifyou're n IIUblic institution, no mntter which st.'lte you may be rONIe COIIyOpelllOII.((IIII answering to, the ~ smn ll dollar purchase~ exemption probably represents IIll excellent way to access oonllOrtium oontract.s. ....Al/MS wJ)l_E/N M,lOK/SC/TX (972) n,.gn 12 Is There a Time Bomb in Your Lab? *"'-...~'*" Cory Harms a nd Bill Dicsslin M/AlICAlHlJIOJ1\.JMT/NY/N OJOFVS O/ No purchase is too benign that fundnmentol considerations TMJWA/Wl/Wutem Cau •• CUll be ignored. Me nlnbomtory refrigerator for example. An -innocent" lapse in purchnsing IIttenlion helped oonditiOll1l build (2'5)931.9662 .. to an expl(l;lliol"l, J'INIa- ~1OIlc:am 14 Let's Talk About the Time Value of Money (TYM) LIST OF ADVERTISERS Burr Millsap, CPA, M.BA Tune Vnluc of Money tcchniquC1i can be great tools for the Amertcan Sealing ...... 3 purchasing 1 ) l'()f~io nnl. Here is the first of n series of articles ConiQan Movil1Q Syslems ...... l0 that hopefully relllO\"et! much oCthe nI)'1tery lurrounding E& I...... IFC this subject. GE cap Solutions ...... 11 Hasler...... 21 Departments Hertz ...... BC HGAC ...... 16 6 Heard on the Streets Unle Giant laddtrs ...... 5 Cory Harms NJPA ...... 17 Busineu ctl5ual. In one way it's great., but ill it really whnt ProVista ...... 13 we want to be? Perhops nppenrance does help define the S

EDUCATIONAL PROCUREMENT JOURNAL 1 OF EVENTS NAEP ~,···'( For more information on any of our programs or to register, National Association of Educational Procurement go 10 www.NAEPnel.org. BUSINESS NAEP Proudly Presenls A FFILlATES Women·s leadership Institute 2008 NAEP Thanks to our Business Affiliates for ~~ December 7- 10, 2008 their continuing support. Ritz Carnon, Amelia Island, Aorida FACt-TO-F"a: NAEP Business Affiliates Lt:AA.,'1XG Produced in cooperation with ACUI. NACUBO. NASPA. ACPA, APPA. and ACRl PLATINUM BUSINESS MEMBER U.S, Comlll u iliH WWNliscommUlIlIleS.org 88 t~ Annual Meeting ApriI1!-22., 2009 GOLD BUSINESS MEMBER nutSourctl, lnc. Providence. Rhode Island WWW.nlXtsouICI.com 88"'A,."NUAL (. i\'\fxro:c SILVER BUSINESS MEMBERS Un iM. ... et WWNUlllmarkeLtom 8e sure 10 check our Web sile al www.NAEPnel.org 'requenlly 'or Vi.. U5A _IIS1 YlU CO,",IIOVlmment! new webcasls, podcas/s, and other on-demand learning options! W.W. Gllinoer, Inc." _1I"lIIgllcom Now Available! An NAEP Webcasl: NAEprm BUSINESS AFFILIATES Calculating Procurement's Value All ied Ven Unes" WMNallled,com =-~ ~ from the NAEP Annual Meeting AIIIe riein Pri," Managemut" \VF.8- U A.~1'.D Only S99 for Members! _.·lyrwI.com B & H Plloto Video Pro Audio Lf.AR."'SG _ bhphalovldlo,com Cillidoe Produeb & Equipment, Inc. Watch the Web site for the announcement o( dales for these WMN,clallCllI'Plodllt'l$,Com Colle,e Pla an ing & Manl,lment academies as well! www,p.terkcam/cpm Foundation: Second oHering - TBO Dl ubenspeck I nd Associates, ltd WWNdaubenspeck.com Professional: Ohio Reg ional Meeting, October 2008 Fistful _Iastenll,com Sr. Professional: TBO Gali Sarritt Indusuies. Inc, WWNoahsarvtel.com Hawoi1ll Regional Meeling Schedule _ haworth_com REGION MEETING DATE CITYISTATE HON Companv WMN,hon.com Carolinas November 3O-0ecember 3 Asheville. NC Horiron "ISOUICI Group WNWhonzonrg.com Ronda TBO HUla. Cou ultinll GrOllp DC/MONA WMNhuronconsultlnllllroup_com Milithon Tllnl" OfJPANN October 12- 15 Vernon. NJ WNW,m.fllhontlivel.com Metro NV/NJ Mllcllants Len i_, Kentucky September 28-0ctober I (tentative) Buric:esville. KY 'WWI/'Imelcl!aotsleas'lIg.com Offi ce O.pat IWAG &: October 15-17 . IN WMNofficedepoLCom Oly"pus B. ildilll S.Mc", IIC. Michigan October 22 Grand Rapids. MI WMNolympusbulld,ooservlces.com MINK MNIOK Seplember 14-17 Ames. IA P.... ln EI. II life & Analyliul Science WKWperkintlmer.com New England October 21 - 24 Nonh Conway. NH PillllY Bawes NonhwesI WMNp,tll'Ybow.S.Com Pre mier .. Inc. Pacific October 5--8 Colorado Springs. CO www.pl.mlll.mc_com Rocky Mountain Prolristl WMNpro .... S!JICo_com Ohio October 15-17 Indianapolis. IN R, ntACr. t," TAGM November 16--19 Biloxi.MS WMN.rent.crlte.com 501' EllCllonics. llII;. TOAl September 28-0ctober 1 Rogers. AR _,sony,com/educatlon $tollroom 50llllion" Inc. Upslate NY October 14-17 Alexandria Bay. NY WKW.SlOr"OOInsoiullOns,cam Teknio. _te.moncom

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First, Go to 2007·2008 Editorial Board Doreen Murner CEO, NAEP CtH:h"irs wwwNAEPnet.org. Cory Hl rIItI lowl S,l ,. 1.1 0111. 1111'/ tlh.rmsCilmt'.edu Mieh ... A. C..u.,ewslti. C.P." , Law School AdmlUiOn Counc~ can't beJiC\'C it's al ready fall. I reached It We have launched a new Web sitcdesigned mchm.lewskIOIuc.org

big milestone this summer, shillping my to make it ellSl' for you to find thc L'uC8t Auod.r. EdilfH Ie ldest olT to begin her college career. It's research, l)rofessional dcvelollment, and Bun Mililip. CPA. M.S..... the beginning of a new reality for both of sel'\;CCS like University Surplusjrom NAEP. UlIMrllTy 01Okl ahoma us - bittersweet (well, for me at least) but Co nnect with a colleague that has worked burr-rnillupOouhsc.l'du also exciting, invi gorating. We both gel his or her way th ro ugh a chall enge similar Membfffl to experience new realities. My identity to one you may be faci ng. NAEP can Unci. Colli ... ft UIIIVfiIIl'/ 01t.lifOflll l as her Wmother still exists, but is it is hel» you discover solutions, focus your lcollinsOucsd .•d u changing 8h811C. My energies, or even re­ .10M Klopp daughter is stepping Ught your professional UI\IVeIJIIy of low. tohn·tlopp4u,owl.ldu ~ moj o " up to meet her future " .. 1like a state of (we all slump a Marth, [M,nyl NeWlUn. CP1'8 with that combination little bit e\'e ry now and UIIIWUIty 01 M ltyI . n d -Col~. ' .rt of fi erce independence continual becoming, then) with new ideas ml_nOumd.edu trail ' .IHY and shaky uncertainty with a goal in front and a fresh outlook. 8ngham Young UnIVersity so common with col­ NAEP understands cr,igplmlvObyu.edu lege-bound freshmen. that C\'CI)'tIne's road­ V. ll rM 1111011"-50",11., M.P.A.. C.P.M. A.P.P. and not behind." GII Ild Valley Stare Un.versny Should she declare he r mall is unique. That's George Bernard Shaw rllodHYCgnu.edu mlijor? What if an.cr a why we designed our Victorie R. Windley year or SO of following site so that you can Unweu4y 01 Del.wlre 10ryOudeLedu that Ilath, she decides it isn't. (or her? 1C\'erage the association and its resources Dick Wonkn What. are her options? Gee, it wo uld be so your way. It's what you need, whell you New York CIHrOpl'.tlJC Collage much easier if the unh'crse would just need it, all ill one place, and available any­ dwordenG!I'(I:c.edu Il rovi de a road mal), where you have a \\eb connection. E&lliaison It's the sa llie with our careers. The best As we mo\'e in to what isour Fall Regional $Ib1, Sellt!! way to make sure your future is in your own meeting season, I hope that all of you can E&I CooP.,.t.... Purchl$r"" ,sc:heIlOnndr.OfIl hands is to connect with the resources Ltt'll attend your region's or district's meeting. help l'OU to innovate, that make l'our con­ The education and networking will pilLl 'oU NAEP Staff tributions \'aluable and visible. Surround further down the road on your C\'er-(l\'Qlving DllfHn Mumer I Chrlf Eutut..... Officer yo urself wiL h the best. mi nds in the busi­ career. Please log in to l4v.w,NAE PneLorg dl'nurMlrOttiapneLOrg l.eun 8i"nki / fln.nc,.l Se!VICI$ AdrrnmstnlOf ness, and learn fro m their successes and to find out where yo ur meeti ng is - and reg­ lblal,KtOnllpnat.c.lI faitures. And that's exactly what you r iSler for it today! \\lhether it's online or .leeqaal'''' H. rill/ M,n:.etmg 8; Yolunteer Coor d i~to r Membershi p in NAEP delh'ers. race-to-face, your Memoorshi]) in NAEP jhl rgetOn ..pnoatorg can be yo ur career GPS. MI~ Kenclil /Web 8; Electronoe CommumutlOl'l Specl"ist mkendigOn"pIlClLorg N.il D. M.rIi"/PlUch""'g l.mIt. Edito,-In·Chllll Ml,rketOnllpntt.org Pl ul tta. .... nKroll l Olr.ctor. Fin.nc. 8; Admlll. pI' ....n'c foltOn ..p n.tora Sh.IlnI,· SheIlOll I M.mbar"',p Adllllfllw.ror n ll.lIonOnI8PllCll O.g TOIl; V. I.nti I O"tctor, -'a Educating Higher Education Membel Communic,tion.,nd Milteung Help us to tell vour story, and give vourself and Procurement deserved recognition. Send us lValent4nupntt.o

4 EDUCATIONAL PROCUREMENT JOURNAL Schedule Lillie GS~.{II6GT Call Government Sales Giani' 800.453.1192 x383 Ladder Systems www.littlegiantiadders.com/government.asp ON TH E STRE ETS I Know I Am Comfortable ... But Do I Look Professional

by Cory H arms Iowa Slate University IO\'e casual Friday... si lting at my desk in A lot of the lalk around NAEP lately has my jeans and university I-shirt, tennis been about raising the standard of the litO­ Ishoes, all comfortable and relaxed ... until fession, beeo mi ng more visible on campus, the VI' of Business comes o\'er in his suit dealing with Ihe shrinking population of ou r and tie, and , feet like crawling in a hole. profession, Bud retaining membership in (h'er the last 10 years, business casual has our organization. Doesn't dressing the pa rt become the norm on many campuses, and help us to be seen as more professional and casual Friday is casual to the extreme in necessary? Could we be doing ourseh·es a so me cases. 1frequent ly recall the Dither' .... dissenice by dressing down? car1 00n in wh ich people are in bathrobes II I\"e made rou think a bit llbout this, I Rnd lul us, and [ \\"O nder if we're \'cry far at hope it's a good th ing, As for me, I wonder all from Ihal. what it would cost to ulKlate and maintain Some of ),ou lIay wond er if I'm gelling . No mywardrobe, kno\ling thllt it is far easier to ready to go 01T of Ihe deep end, crusadi ng go casual. Bu t then again, perhaps you \\ill against your casua l work wear. Far from it. I see me at the next llrofessionai conference can't be the first one to cast a slone as I sit in my new suit and wonde r, ;,Who is that comfonably in my Dockers'" and short· professional-looki ng guy?" slt.'e\'ed shirt, But so rnetinl(.'S when I get Ihe urge todress more formally (oram forced by circumstance), I wonder if 1>OOpie regant me professionalism 11)' succumbing to t he casual more seriously when I am in a suil. and tie. work re\ulution? We dress up for church, Co ry Harms is th, associ­ I know I actually feel more professio nal funerals, parties, but when we meet ",i th ate director 01 Purchasing on those occasions. I wonder if I acl more those \\ith whom we are tl)i~ to negot.i3te, allowa Slate University. professionally 100. In any case, ifpe<>ple per­ helll, or in ll uence, we rlress dO\\l1? He is President of Ille ce ive me as more professional, it's not a I was genuinely worried when I started 10 MINK (Missouri, Iowa, bad thing. examine Ihis topic, as I feared nail)' of you Nebraska, and Kansas) The trouble with dressing "II for SjleCific wou ld brand me II radi cal. But a recent nash Region and serves on the NAEP Editorial meet ings is that, in Purchasing, we can't poll on the NAEP homepage asking aboul Board. He has Pfesen led al both regional always predict who will co me to meet "'it h causal attire (see inset) seemed 10 relie\"C and national NAfP meetings, and has us on a gi\-en day: II professor, a \'(' ndor rep, nlY fear&. (h·e r 5U: of the respondents indio spoken for the Missouri Association 01 a dean, II. chance llor? It is hard to be pre­ cated that ther bcliC\"C our lirofessionalism Public Purchasil"lO (MAPP). pared clothing-wise for these meet ings. on cam llUS is diminished by causal attire. e-Mail: [email protected] When we are dressed casually, howdo others Might it also be diminished off·campus as Ilerceive us? Are we shortchanging our­ we ll , with our co mmuni ty, vendors, other selves b)' dressing down? 00 we dilute our age ncies, and colleagues?

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na recent sun'eY conducted by ~'ast Company, \;silors to So whether it is helping yourselflo office SUllj)lieSj taking their Web site were asked: -/I/we YOII et'€r I(lkell qffice personal time you don 't rel)(lrt; claiming meals wi lh family, ISIII,p{il'S flomer 69% said yes. Woul d thecllncl id response friends, or co-worken as business meals; padding eXlK!1lSe of our NAE1' Membership show greater integrity? lIeadlines reports; acceilling 1K!l'5Onal favun from suppliers; or worse exposing corruption or scandal could ntWeT happen to )'00, - some mtiooalizations may fvllow these si milar themes:

right? You main tain professional "alues and mornls "'hich • ~ lYilll /L'hol t/lis ills/iluliolv'atlmillis/ro/iOll Il'tIsles, insulate you from such indiscretions. Convin<:oo of your (figure .. ,. immunity? Can you then aru;wcr the followi ng questions? • ~For Id'OII could 114' IIIIIkillg oll ihe O/dside , ... " • 113\'c )'011 C\'er lold an assistant to tell so meone else • ~N1er II'/IIIII'LVI dOIl~/o r lI,e Ullh'1!rsil1l,." ~ you were in II. meeting because )'011 didn't want In be bothered? • ~ro r Ifle 1111/1)11111 oi/!- /llaiis I Ullswn after "Ollrs, ... " • ~For 11'11111 III is t'1!lIlIor IIl/1kn qffo llr ofXOlIlIl , •• , ~ • 11 3\'6 rou e\icr graJlt4..>d perks to )'Ol1rseltlhal you "'ouldll" want l'1l\'ealed IllIbliely? Perhaps Ihe real reason th:tt countless seminars, articles, and books Oil business ethics have failed todeli\'er results of • Ihwc )'OU t\'er placed a personal expense on your travel reimbursement or purchasing card , or inflated (:hanged business behavior is that we still think this mailer actual costs? of"elhics· is abou l someone else and nOI us. So met imes I'o'e !Cnd 10 judge othen by their actions and ourselves by our • lI a\"e )'OU I!\'cr embellished your profe5Sional experience intentions. Yet we continue to loo k elsewhere for remedies. or credentials? I)eople who are appalled b~' embezzlement and theR do If you haven't sailed through personal introspection not see their smaller decisions, which gradu:ll ly dull their unscathed, into which of the follO\\ing categories does your ~nse of righ t and I'onmg, as enabli ng greater infractions. beha,

8 EDUCAT ION AL PROCUREMENT JOURNAL F" II 2008 Cansidtr this wisdom: ": .. II'lum f€(Jdmf-per$Ons in 1}f)lI'er - iYllOru fllics in 1101 attl!pliN y IlItJ CONSl!f{IIi!lttu qfllirir (lc/jOllA, IIIf!1J CONI n'bllie W Iht1 l"Yll icislll Q/rJ«Jple It'II0 lI'illj lldge l/udr/ie/iON$. II ~ PIlau 1I011Jie tllt1 SlfwellleCollrt, blll lt'e (l1'fJ melllber~ oj 'he COIl 1" Q{lmbiic U})in jon, A boss, booN/, or OryUNi.·"Clliot/ I!lIIbarr(lS$l!(l by QUI' /le/ jolls JJQler1lialfu 11(1$ grm/er ]JOltV QIV U$ fll(lII fI COll rt. q/'f(1 w - !JfIniishllll!n/ h(/$ iegll llilllits Ot'" 0 11' it/come. Reillg fired does /lolr t.... ,Joe booIc (.,.,.,,,,,1"11 ~' IiQlQt.. nd 1'oMer. pub. 2OOl. You ms.:.' nt\'cr faoo being tentl imHed o\'er your unethical be ha\ior. If you are leading by example and are trulydcdicated to beinga l:>U rehasing 1)1"0- re s.~ i ona l , you m u.~t rosler and nurture the habit of eth ical beha\ior, j!\'cn in small things, , \)U n 'lrillg Illy 15 yearsal Stlllltey, must ha\'e a oo n s i s u~ n t , method of making deci­ 1111/ bOSSttl, La rry G«ffaglier sions that goes beyond state and fI..'jore ing lhe righ t dedsion - c\'C n in those Ihere 11.'(1$ II jormol eth ics potil"IJ. sometime-grey areas. 1111ellel-er I eIICOlw/l'rf!(1 /1/1 ellli· Mike Zaramba, In his rece nt blog article cal dj/eltlllw) IlId r Ol/ idana: I /'/1S enlitled ·Corpordle eth ics - a culture, nO( «/tWUs - ~ I Vhllt$ (1/6 rig/lt lhillg to {lor just a policy.- makes an excellent I)() in l when 1.'01fil e riglll lhillgjor file shllTehofders, mt, Slmllell, he sa id: or tlleciifJ1l l - si mply, lI'hllt lcaS Ihe RIG/lTlhing to ~f.:xeclil im 111IIs/lood by I".mmple It'hen it {Io. OnCt! you redllce fill istlll! to IIlis core consider, OOllles to dhicol behar-jar. For me, 11101 is (lIt! heflrl qf Ol ioll, Ille allSII 'er becomes slroighljorwarrl,· llie iSslie - pllbfic Imsl Clluf II rt!$JX)tlsibilily 10 (lIe U.s. IlLlJXIlJt!r i$ II dilly u(m:e allli beYOIllII/lefi(lliciary respoN ' A Model for Ethical Declsion.Maklng $ibililies qf most COrpQrtlle officers. I II sharI, Ollr Imslllm Michael Suhaka ane! Nanet te Sorensen of the l'urchaslng tleerls to embract! the spin't ojllll!S6 rutes Gild 1101 uWfOOcli m...i sion of The Church of Jesus Christ of Latler-d:\y Saints grn. 'hem as simply a ~ch ec""h~ bar ~ colllpliance isslle. ciollsly gll'.e lhe author pentlission to use a (\e(:ision model that they dt.... ~Iopt>d. In the aclj1lC(!nlIll Otk!~ ethicality I'C(luircs.: • Personal integri ty • l)cdication to being a Purchasi ng profession."d • Unco mpro mised loyalty to your emp loyer Cut the acljace nt model OUl and refer to it on.en so that you wi ll be knowll by )'OUf peers ane! clients as /J,e eth ical Proc urement professional.

I Cra ig Passey, C,P.M.• has enjoyed a ~ ---- 3O-year career in Purchasing & TraV(!1 for Brigham Young University. Provo. Utah, • and I()( the lOS Church in Sail lake ~'t City. His writing and leachIng draw 'rom diverse experience and assignments in both international and domestic procurement. He has a BS In Financial Planning and Counselino, with a minOf in lnlernatlonal Relations from BYU. e·Ma,i!: craig_passey@byu,edu

www.n,..p ...t ,o 'g EDUC ATIONAL PROC UREMENT JOURNAL 9 How to Access Consortium Purchasing Agreements Under Your State's Small-Purchase Exemptions

by Eric Denby, C .P.M. University of Virginia, Director of Procurement SeNices

ll public institlltion membe rs can access cooperntl\'e Small·purchase t.xemptions also alleviate Ihe burden and IlUrchasing agtl.>emcnlS by relying on small'llUrchase prohibitn-e costs of conducting rormal bids or solicitations for Aexemlltions. And the truth is, it's easier than you think. relatn-eb' low purchase amoont.s. With lhal said, it is imllOrtant Here's how it works. ~:ach state's procurement regulations to keell in mind that each illSlitution, depending UllOn size, ]IMide some measure of latitude for purchases made under may have V'.tlying thresholds under which Iheran purchase. \1tiious dollar thresholds. KnOl\1l as small -purchase exemp­ At the Unn'ersit)' of Virginia, for examllte, the small·dollar tions, these thresholds can be as low as $500 or a.~ high as threshold is $5,000. Up 10 I h L~ dollar le\l~ I , depanmenl'i may $50,000. Ofte nt im~ these threshold amounlS are subject 10 make l)Urchases \\ithoul competition. This accounts for more atijustment on an annual basis 10 aceoont for inflation or 1.0 than 85,000 transactions and about $40,000,000 worth ofpur. provide increased discretion ror public agencies. chases per )'ear. Based on th€!sc slatistics, the small-dollar Member! who know their institution's smalHlUrchase purchases 3CCOtInI, for apllro.ximately 9iX of all transact ion ~ at e..~ mptions can take ad\~,uu;age of the fl exibility prmided the University. This type of l)Urchase opponunitYlll'Q\ides the u.. kr their state regulations 10 util ize COOpen!.Ir.'f: agree.. Hexibilil)' to purchase from establishl..od Uni\'t!rsity conlracts mt':nlS, C\'etl ir ll ~y are O(hcmise pl'C(:luried from doing so for or rrom thooe cooperatil'e contracts orthe end·users choice. larger IlUrchases. This Iln)\ides Ii significant benefit in the To take advantage or small·purchase e;(el1lptions, public ronn of cost savings 3milahle through consor1ium purchas­ institutions should: ing, which cou ld not othernise be realized beeause of the 1. llefer to their respecLn-e Codes of Procurement 10 deter· smatl.nol lar\'oIume of the purchase. mine the dollar thresholds apJllicable to them. 2. Determine if these amounts are indexed 10 inllation or some additional melric b), consulting slate bulielil'lS or speaking \\ilh officials from lhe state dcll,U1l11enl of IlUrchasin&' Your Relocation administr.l.lion 10 see what these new thresholds are. :I, Rescarch consor1ium purchasing agreements i!.\'llitable for Homework is Done ..•. SpecirlC commodities and/or scn;ces. , . ~~nsure trult their aggregate IlUrchases rrom any given eo n· l1ousehold Goods Moves sortium contract are not in excess of the dollar thresholds Laboratory Moves thaI woold necessitate bidding or CO nl l)etilil'e solicitation. Ubrary Relocations llemember that stales llrohibit the splining of purchases rmitory Renovations for the purpose of meeting the small· purchase thresholds. 8)' follo\\ing these simple steps, any member Institution a n begin to take ad"amageorconsortium IlUrchasing unde r the sma ll·purchase exemptions found in each state. To team Local -Long Distance more :tbout small.purchase exemptions, please contact Service Providers throughout the U.S. OOIllIN ia [email protected]. Corrigan Moving Systems Eric Denby, C.P.M., is the dIrector of r,.~ Cali John Silvernail Procurement Services at tile UniVtlrsity of Viroinia and has been in the Procurement 800-333-0763 profe~on for 30 years. www.corriganmoving.com

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Is There a Time Bomb in Your Lab? by Cory Harms a nd Bill Diesslin fowa Stare University

hen the tXJ110SiQIl rocked one of our comparison. The problem hen! was thal Clearly, Purc hasing shou ld be It It!arler in C3m liUS labs late on It Satu rday someone used it to store tetrahydrofuran this area, work ing hand·in-hand wit h em;­ Wnight in Seillember 200 1, it was It (TlIF), a volatile chemical. 1\\'0 conrlil ions mn mental safety folks, researchers, lab miracle l1 obody \\1lS in it. ~\'e l)'ce i l i ng panel then comhil\(.-d to cause the explos ion. First, managers, and students. Th is can incl ude was lifted from iUl frame , the \\i ndows in the as II domestic appliance, the !Teezer was educational programs, labeling and signage, lab were pushed out almost an inch, and the sealed, which resulted in the co nce nt nlling the mandating of la!)..grnde equillment, or door of the jusl-elCilloded freezer destroyed uf the r lU"s olT-gassing. Setond, and more perhaps even lobbying for legislation. This part of the clndl! r hloc k wall on the other crit ical, was Ihal Ihe thennostat and ligh l and similar areas lire where l>Urch asing can side of the room. The co ncussive force W",IS swi tch in this grdde of unit often pr(l(luce add signiflcanl \':tiue, align ing its mission enough to injure or kill. A fire folloYt"ed the sparks. In this case, the thennostat was the ",;th th at of other areas. explosion, triggeri ng the sprinkler system, like \)' culpri t. ISome unn'el"lI1e5 lin! bfginn lll3 10 mandate IIIaI only which nooded lab and office Sjlttce below. Many labs buy consunlcr model refrigern. bb . pplbnceJ . rt used Gr lhal .. n 1\etI' Ilbs '"lISt The damage closed the lab and offices for tors anti freezers for fairly mundane needs pure. tab nfrI~t"" .nd tM"'rs. So:tn.t ~ I es ...., ,, .Isurc has ing) got and national NAfP metltings. and has model) was bought through Purchasing, and iO\'ol\'ed, .....o rking close ly "i th our el\\i ron­ spoken lor the Missouri Association of the lab was inspectL-d by our emironmel1lal mental health and safety department. Public PUichasing (MAPP). healt h and safety depllrtmenl. The lab man· There are two types of refriger.ators for .-Mail: clnarmsittastate.edu ager Instru cted the workers not to I)ut chemica.l storage. One Is the volatile-storage \'OllIlile chemicak in this grade of freezer. L'Ib refrigerator, RIKII OO IXoor is looexplosion­ This. accident should Ile\'er have happened, prooftype. In most cases, the \'U latile·5torage )'et none of us truly pe rceh'ed the risk. unit is what is ~cd because il eli minat es Bill Diesslin is the Luckily no one wu hu rt, bUI the stigma su r· the source of spark and is specifical ly assistant director 01 rounding the lab lind t he researc her IlCrsists. designed for chemicals. Although more Envilonmental Healt h Indeed, the researcher lamented that this CXllC11Snll than a CO llSOmer mode l, it is well and Salety ilt lowa Stale type of incident. ~e m barnsse s you enough YI'Urth the a\'Oida nce of the cost lISSOCiated University and helps that )'ou wa nt to end your career." "ith 0. serious aceidenl Without a doubt, lhe "'--'--'''''''' coordinate malOr envi ro n- mental contracts with PurchaSing. In this case, a house hold freez.er was researcher in the case aoo.'C now ~ thal in\·otved ... nOI unco mmon in ma ny labs I1(l ne..... labs on campus should be al lowed to e-Mail: wmdiessOiastate.edu since co nsumer lIlodels are incXJlC nsi\'c b)' house consumL>r- IJ.1)pliances.

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by Burr Millsap, CPA, M.B.A. University of Oklahoma (17lis is tllf!Jlrst qf/. series qfarlicit!& 011 /Jle 'nll/e Iu/lie oj MOTlf!J/ alld its imporlllllCf1 IQtil e PWrt has;"g projessioll.)

OW many of us ha\'e act ually used WM in our profes­ only facing the cost oflhe e(luillment but also the cost oflhe sional careers? I hope many, bul I ~ perhaJIS few. interest I'm not earning any longer. The lost interest repre· HntM techniques can be extremely beneficial to us, and sents the decision's OlllJOr1unity cost, Therefore , TVWs job altbough they are so mewhat of a challenge to understand is to make sure"'e correctly cou nt th ose costs as we weigh and usc, they're NOT inscrutable, Ifyou\'e been scared away the pros Ilnd cons, In our examill e, let's sa)' thut our justjfi· from them so far, )'O U just hal'en't had the right teacher. I calion for purchasing the equipment is that it will make us mean to take tare orthat In this and rolloYting articles. money, \\ell, if thaI's the case, not. only should it make Why does monl'Y have a ~t im e ntlue-? Not 1lei!aU5e of enough to pay back the Si ,OOO, but it should also CO\'er the inHati on! Forget Ihat. The time l'alue arises from the fact interest we're not making since the SI,OOO was wi thdrnwn. Ihat money, like other things, can be re nted, When you put As long as the C(luipment can earn us both, then we're no money in a sal'ings aceoUJlt, you rent it out (to the bank). As worse orr - at the "ery least, and hopefully much better orr long as)'ou leave it there, you get paid interest (the rent). - than if \\'e'd len. the money In our account. (It is th is fea ' When you borro", money, someone else is renting il 01.1110 lUre of nrM, this taking inlo account the oJll)onunity cost, )'ou, As long as an amoun t is oulSlandi ng, you ha,'c to Imy that is often re ferred to as -stressing the problem ,ft because inl~resl (the rent) on iI, This. and not inHalion, is I',hy it forces the choice to face an extra and essential hurdle,) money has time '~tlu e . The ba,~ i c structure of any TVM problem is that it CXl m· M I situations (problems) mainly ~k imlll'O\'Cment. If prises four Ilieces of information, If we know any three of we find ourselves in Siluation A, is there a better Situation the pieces, I'o'e can always soh-c for the fourth. So metimes, 8 that we could achiC\'e? For example, let's say \\'c are cur· though , we may not know, but ha\'C to estimate, one or more rel.ly obligated under a lease agreement to pay Sf)()() per of the three pieces, whi ch is OK as long as our assumpHons month for the next 24 momhs (Situation A). Is there a dif· are reasonable and have good support. The important IlOint ferf nl arrangement i could de\'elop (Situation B) - such as here is that 'JVM problems are structu rally easy. settling Ihe ent ire amount no", - so thaI I would be better What are the pieces then? lIere is the list, ofT (in this case, wTinging out better Yal ue for illY institu· • l'resent Value tion)? i}C\'Cloping the information to help answer this kind • future Value of qUl'Slion is what lVM is all aboUl , • '>arment So, lVM techniques help us eYl!.luate alternatives, They he ll) us attain the co nHden ce we'd like to hll.\'e in makIng • Rate de<:isions that tum out li ke we plan, • I'eriods MI techniques do their job by correeliy making us take But wail! There are live pieces here, not four! Ttue, but any into account opportunity costs. If I \\ithdraw $1,000 from It gil'en MI Ilroblem will onb' deal \\;th four, To help a lillIe sa\ings accoun t to purchase a piece of equipment, I'm not further, the table below shows lhe differe nt possibilities.

Know, Allsume, Know, Aslume, Know, A.sume, or Estimate or Estimate or Estimate Sol"" Payment Rate Periods Present Value Present Value Rate PeriOds Present Value PaymenT of Annuity Problems PE!fiods PresenT value Paymenl Rate Present Value Payment Aate Periocls Payment Periods FUMe Value Future Value Rate Periods""" Future Value Payment of Annuity Problems PmiOds Future Value Paymenl Rate Future Value Payment Rate Periods Present Value Rate PeriOds Future Value Present or Future Aate PerIOds FUTure Value Present Value Val ue of A Single Deposit Problems Periods Future Value Present vaJue Rate FUlute Value Presem Value Rate Periods Tablet.

14 EDUC ATIONAL PROCUREMENT JOURNAL TVM

or the three categorics of problems liSled in Tab le I doesn't necess;lriiy Jur.'e 10 be fixed, and It doesn'llI\lOeSSalily ( I ~ nt Value of Annui ty, f'uture Value of Annu ity, Present have 10 be momMy. It could be daily, quanerly, semiannually, or Future Value of a Single l)eposll), the Presen t Value of annually, or any ·5 hade ~ in between or be)'Ond. Annuity problems gr.'e newcomers the mOllt trouble. So Graphically, a Start ing·Ou I Amoun t oran Annully flroblem that's the one we'Ulltart I'oi lh, beell!Se as Mom says, "Eat looks like t'igure J. )'OUr\'cgetl4bles first, 54) )"OUc an took rOnl'anl lo the resl . ~ So if \\'e imagine a savi~ account., for exarnille, the Pir.sl, for the lime being, let', set aside the label "P'resent Starting-out Amount is the number of dollars I'I'e wooJd need \'al ue.~ Wht! Because It 15 often possible to have a 'lYM prob. - swting out - to fund a series of Ih'e payments, I'Iith each !em in whk h the "prestn," \'a1ue )'l)U 're 50hing for is actually payment being made on the period's last day. The diagonal in the future. For eWIIIlIe, if you want to ~, how much lines, slanting up"-aM to the right, represent the interest mone')' )1),"'11 need to Iut\ll \~ on the dale )'OU retire, the earned each period. The n~ rtkaJ lines represent the pay­ n'M problem)'ou'd rwed 10 do todaywoold be in the category ments (I'Iithdraw:lls). The pattern coold be described, o r ~ J"resent Value or Allnwty Problems. ~ In the arcane lingo of perhaps. as ·one Sltp up and three steps down-, if)-.:ltJ catch lUI J)I'OlMems, that amoun! is called ~ I"resenl \\l.lue" a't'.n Rl)' drift. though it is an amount 10 be achial!d well ofrim o the futUft'. To conclude this portkm o! thediscussion, the trickinessoC So instead of using thatiingo.1eI:' re- Iabel it as the "SI:arting· calculating the Slart.lng,Out Amount ill ob\iou~ l'lTapped up OUiAmoom," in the facltiuu the interest earned In each subsequent period Next, leI's deal I'Iith the word "Annuity," This is another is less and less as the balance d the account declines. The \ictlm oIWM's l1ll'Sl.erious \'ert\aC\dar. An IUlnuity is simply It actual math formula has been ck.... -elolled and is k l ~1lb l e .. . periodic 1 ~'fIle n t. That's it. So, by that tiefinilion, )'oor house for )-.:ltJ strong· hearted souls. f'or the rest of us, there are ~'ltlt!nt is an annuity, )'oor car ~ment ill an annuil)" your filUlncial calculators (suc h as the Texas Instruments SA II Ulilit)' blll payments are an n uiU~ and on and on. Gosh, en.! n Plus) and Excel spreadsheets that greatly sim plify the effort. your IIaYChe<:k Is an an nuil), (since the word doesn't care Usingthese tools, in the taseofthe examille lloo.-e, I'I'e'd need \\hetller we're talking Kbout monl')' coming in or going out). 10 know or lISSume: ( I) the In tcrest r.ue, (2) the Mmount or Instelld of gi\ing),oo a differenl label 10 Illay \\ilh, leCs just the annuity (the periodic iX\yme nt ), and (3) the number or lea\'e it at -Annuity.- You get the )dea. For most 'IVM prob­ periods. lJ)' "plugging" these three values into our too l, it I'Iill lems, )'00'11 find (or assume) that the :mnuit)' is a fixed compute ror us the 4th V'.tlue - the Staning·Out Amount - or amount. One hundred dollars per month, for example. But it in the lingo, the i'menl Value o! Annuity. In the next artkle, we'll learn how to use these lools to hel p us sohoe Pn.-sent Value of Annuity problems.

Startlng-Out lurr Millup. CPA, M.B.A., Is aSSOQate Amount vice president lor Administration and finance at the University of Oklahoma. He earned In Bachelor of Science in Acc:oun\Jng Irom!he Uriversityof Central ""'.UL_ Oklahoma in 1972 and his Master 01 Business Admmlstration Irom the Urwef'SIty 01 adahoma in 1985. lie is the 2002 reapienl of the NAEP Nail O. Markee CommunicatClf of the Year Award and the 2004 reaplent of the NAEP Protesslonal Perspecbye Award. He VOlunl3nty serves as preSIdent 01 the board 01 directors 01E&I CooperatiVe and as associate editor 01 the NAEP Journal. Peood t f'CI'lOd 2 f>efiOd 3 P1KiOd 4 F'efiOd S e-Mail: bmiIJsapOou.edu.

~' igllre I.

EDUCATIONAL PROCUREMENT JOURNAL 15 WITH YEOMAN

Some Words of CAUTION

by Brian Yeoman Green verau. Sustainable For those wanting to create a sustainable NAEP future, the best label we have currently Is Those using the term ~s u s t!linable " 10 "geen ~ (rromlight green todarkgreen). Calling have a recurrent conversati on with a \'CrY describe their program, product, senice, or such efforts ~s u staina bl e" is not legitimate. old and dear friend. I tell him the prog· organization are creating confusion. Think So how can you tell whal's truly green? Iress we are maldng on greening the about it. lIow can anyone claim sustainabil· campus, and he throws cold water on me by it)' when nonrenewable fossil fuels underpin Or what shade it really is? You can do )'our the buckets. The American College and a product or senice throughout ils lifetime? own homework or you C".1n turn to third Uni\'ersily I'residents Ca mpus Climate This is true with travel, heating. ai r condi­ parties such as the Pores! Stewanlship Com mitment (ACUI'CCC) now has more tioning, and many ot her thi ngs. /low can Council (FSC), GreenGuard ~ Green Seal"; than 500 signatories., I tell him. BUI he is these be ca lled "susta in able~? and/or 8uildingGreen. The t:nvironmenlal convinced that the only thing happening isa Many claim their products io be U·:EJ) ...• Protection Agency (E PA) and the nepart. bunch o r~ green\.l'8S h ing. · certified. There are more l'iho claim their menl of Energy (DOE) jointly operate the This got me thinking. One Ilre'o'llient fhing llroducts will get )·o u LE~:n '" poin ts (Note: ENI.;HOY STA lt- program, whi ch can also I enc

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16 EDUCATIONAL PROCUREMENT JOURNAL F" II 2008 Raging Inexorable Thunderlizard for Change

these issues. Co ntact, the local office of the rarely a co nsideration. That a device spouse or child re n? El'CT think about how American Institute of Arc hitects (AlA) and required liquid nilrogen was not a factor. ntllny eggs a female salm on laid for ),ou to ask for information about the Commillee on Thal the item had to be shilllied 11 ,000 get Ihal choice fillet! Oh well , enough for lhe Envi ro nment ( con~ ) , miles \ia lruck, shi ll, rail, and truek again now, I will \isil this again, Uemember that was of little concern. If 100 dC\; <:e was you, 100, call do great things, and I'll bet the Price versus Cost assembled using the labor of l6-)'Car-olds best ),ou\'C eve r done was not effi cient but It re mains intriguing how ollen the working for $2 a da)' in Shanghai, it didn't certainly elTective, oonrusion belween price and cost arises, maUer, So it is willi. greal joy thaI we now F.xamining lhe entirely of a product's or openly embrace Ihe nOliOIl of be>! \'31 00 senice's finand al impact on the ca mp us and comllrehensive lifecyc!e analysis, Br ian K, Yeoman, was vi ewed as \'00000 economi es. director 01 Education and Procurement has historically concerned Efficiency versus Effectiveness Development at NAEP, Is itself with the financial imlil kations of El'er not ice hOW' in vogue ~e ffi c ie ncy" Is the reti red associate vice the price on the fate of t.he I"e(luisition; and how)'ou rarely hear about ~c lTec live­ presidentlOf Faeilities freight, Ilaym ent tenns, cash disco unts, ness"? I want 10 explore this confusion of Planni ng aoo Campus insurance, etc. Myriad additi onal price· term s but guess "'hllt ? I can't. \\1ly? Drvelopment at the Uniwrsity of Texas rel ated oonsiderations I"... rely came into EfficicIK.'y! This column is limited 10 000 Health Science Center at Houston. focus. In the llrea ofsc.ientific instruments· words. That is efficiency at work. t.\'Cr try 10 a·Mail: [email protected] lion, for example, power consumption was have an efficient con\'ers.'1tion y,ith yo ur

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EDUCATIONAL PROCUREMENT JOURNAL 17 stainable

f the walls of our nation's great stakeholders know where they need environmcnt is heavily influenci ng institutions cou ld wlk, they would to buy to get the best price." purchasing decisions. Ihave to agree Ihal something has "Every single print contractor I mect changed over the past few years. With the rise of online technology came the abi lity with has to have an environmental Universi ties and colleges have been to collapse old certification. This wasn't the case involved in large·scale purchasing models and reach onc year ago," says Hardaway. contracts for decades. The beyond the region. "Certification is driving spending. purchasing professionals at these Wood has also Today, 99 per cent of presentations institutions arc no ticing that the noticed that along arc environmentally-focused. way they buy is changing. What is with accessibil ity. Nobody a few years ago was asking ca using Ihi s change? Sustainability. '-___....I the biggest change about Volatile Organic Compounds Bob Wood has been the rise or (VOCs)," The Tides are Changing awareness around Cooperati ve purchasi ng has been the need to buy green. In an eITon Why be Cooperative? around for a long time and is not to meet these new pol icies, agencies Un iversitics and colleges are we ll necessarily a new idea. What is new sueh as U.S. omrnunitics have aware of the need to incorporate in the past 10 years is the growth of created on line searc h func tions sustainabi lity into their practices. numerous cooperative purchasing to assist purchasers in isolating Emory Un ivers ity in Atlanta, opportunities on the Internet. environmental product infonnation. Georgia. and North Carolina State according to Bob Wood, Director of U.S. Communities is fu nher University in Raleigh have even Procurement at North Carolina State maximizing the web in a partnership gone so far as to hire a Sustainability University. Wood has spcn llhe past with SciQuest, Inc., to integrate all 20 years in educationa l purchasing of a participating agency's contracts for onh Carolina Stale University onto one system. and he works to get the best deal for the taxpayer 's dollar. Rex Hardaway is Director of Contracts at Emory University, "The internet made cooperative where he has devoted the last 20 purchasing blossom," says Wood . years, and has more than 35 years "lnstilUtions arc now able to shop of experience in hi gher education for the best coop dea ls, letting their procurement. He notes how the

C Copynght2008 US CommUnltJes Advertonal Director to Purchasing Program iden tifies item s create plans in its contracts that meet third­ and strategies party environmental certification to success fully standards to help public agenc ies navigate this new meet the ir responsible procurement environment. needs. U.S. Communities also provides access to volume pricing, H ardaway no matter what size the agency is, Rex Hardaway believes that and delivers the product to their cooperative desk. purchasing has helped 10 drive the cost out of green purchasi ng. With From office supplies to school limited budgets, time constraints, furniture, and technology products! lack of professional expertise solut ions 10 lab suppl ies, the and staff limitations, cooperative availability of green contracts is purchasing makes it easier to meet growing. Cooperative purchasing policy requirements. agencies are looking at new contracts with a green lens. Whether for different levels of recognition. "The most compe lling reason it is renewable energy, hybrid This is a way for institutions to to purchase cooperatively is the fleets (buses, cars, etc.), biofuels, make distinctions for themselves. abi lity to leverage spending," says renewable energy credi ts, reduced For example. North Carolina Slate Hardaway. means of garbage collection, University is set to be one of the fi rst water use management, or energy Wood agrees that the most universi ties to have LED lighting important benefit cooperati ve efficiency evaluations, many placed in a parking deck. Th is is just purchasing oilers purchasers is thc categories will be available to another example of green buying. abi lity to receive the best overall universities and colleges in the near future. Universities and colleges are urged value for their dollar. Cooperative to review their contracts, investigate purchasing also allows agenc ies to their institution 's policies, work acquire goods and services at pre· with the ir stakeholders and contact established prices, they have access vendors to find which one will work to online catalogs, administrative for them. As Hardaway points out, lime is reduced and partnerships institutions that do the ir homework are promoted. The benefits are and al ign their purchasing with clear, but do the homework. Some suslainable programs such as cooperatives charge fees for thei r AAS HE wi ll better position servIces. themse lves in thi s changing A Green Purchasing environment. The bottom line is, Program Sustainability is here to cooperative purchasing is keeping stay institutions in the green and working In an elTort 10 adapt to this changing environment, cooperative As Wood and Hardaway make toward a more sustainable future. purchasers are ramping up their evident, sustainability is not a fad offerings to include green contracts. and wil l only be increasing over time. The Assoc iation for Advancement of At U.S. Communities, the Green Sustainability in Higher Education, Green Program, Purchasing Program gives public an MBA from st. Rex points OU I, has developed the agencies access to a broad line of , College and has led environmentally certified products Susta inabi Iit y Track ing,A sscssmen t, . Communities' Green Initiative since its inception and services. From Energy Star to and Rating System (STARS), which allows institutions to measure their in 2006. She can be reached at EcoLogo to Green Seal, the Green [email protected]. campus' sustainability and qual ify

Advertoflal AND FINAL

This One Needs to Be Rushed, Please!

by Cntig W. Passey Brigham Young University

ne of the first books reco mmendCfllo I'd nC\"eI" seen him so serious, so naturall)' me shortly aft er beginni ng 1\ C3retr in had 10 push il II little farther like an OPurchasing was The Ropes /oSkr-,1all d Olympic chamllion in \'erbal gymnastics. tIle Ropes 10 Kllott\ by R. ICichard Rilli and ~ Let me elqllain how Ihis works. 1:,\'el)'One Slc\'c n I.e\.)'. aGoog lin g~ it (or the auth Of" reJ. wants their order 'rushed,' so that's ihe low­ erence, [ was shocked to learn it is now in est prioritY, Before we do those, we do the its 7th edition - Ilrobably in multiple lan­ 'urgent ones.' But berore we can work on the guages. i read It in theorigi nBI hieroglyphics 'urgent ones', we do 'life or death! Right on JlltPyrii. (See tille page below.) now, though, I'm working on the 'kcclljohl l.\-e n after all these years, I still recall II lose job' categol)'. Then - I'll do the 'life or principle taught by the wise old professor. death' ones.- The sage was boasting thaI he could wri le We both laughed, and I pro mised 10 get it cClnsulling reporu without l!\1! r setting foot placed right away for my dear rri end - and I inside the company oc'Cause ~ all companies did. With the crisis solved, I called lind have the sa me two problems: hick of leader· teased him about the ASAP instructi on he ship and lack of oo mmunicati on .~ The lalter lQ\'ed to "Tite on his purthase requests. I pro l.l lem has ham pered efficient:)' in (l\'ery suggested he change to a scale from I to 10. org

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