Public private partnerships: final report and recommendations

              1- External Review Committee
Arizona Board of Regents
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ARIZONA BOARD OF REGENTS
2020 NORTH CENTRAL, SUITE 230
PHOENIX, ARIZONA 85004-4593
(602) 229-2500
FAX (602) 229-2555
July 22, 1999
Ms. Tami Stowe
Joint Legislative Audit Committee
Arizona House of Representatives
1700 West Washington
Phoenix, Arizona 85007
Dear Ms. Stowe:
As promised, and in fulfillment of the requirement to follow up to the Auditor General's audit on
universities' auxiliary enterprises, the Public Private Partnership External Review Committee has
completed its work. The Committee issued a report to the Board at its June 25, 1999 meeting
and the report was adopted at that time. It is enclosed for your information.
Please call me at 229-25 15 if I can answer any questions.
Sincerely,
\
Assistant Piecutive Director
for Public Affairs
enclosure
THE UNIVERSITY OF ARIZONA
TUCSON, ARIZONA 85721
ARIZONA STATE UNIVERSITY
TEMPE, ARIZONA 85287
NORTHERN ARIZONA UNIVERSITY
FLAGSTAFF, ARIZONA 86011
1- External Review Committee
Arizona Board of Regents
"Providing guidance and direction to the Board for
privatization and partnership opportunities that
transform and optimize the operations of Arizona '3
public universities. "
mendati ons
L ~xtern.1 Review Committee
Adzoaa Board of Regents
Table of Contents
Introduction Page 1
Overview of Process Page 4
Legal & Regulatory Impediments Page 5
New Opportunities Page 10
Bench Marking Page 12
Evaluation & Accountability Page 15
The New Model Page 17
Uses of Funds-Arizona Universities Appendix A
Survey of Outsourcing/Privatization Appendix B
in Universities
Outsourcing in the Private Sector Appendix C
Sample Partnerships at Arizona Appendix D
Universities
Risk Opportunity Management
Process Appendix E
Committee Charge, Objectives, Appendix F
Agendas and Roster
The External Review Committee of
Public Private Partnerships
Final Report and Recommendations
To the Arizona Board of Regents
June 1999
FINALR EPORTA ND RECOMMENDATIOONF ST HE EXTERNARLE VIEWC OMMITTEE
FOR PUBLICPR IVATPEA RTNERSHIPS
The Arizona Board of Regents
June 1999
"Providing guidance and direction to the Board for privatization and partnership
opportunities that transform and optimize the operations
of Arizona's public universities."
Chair of the Committee: Warren Rustand, CEO Rural Metro Corp. (retired). Members of the Committee: Dave
Areghini, Salt River Project; Wayne Benesch, Byme, Benesch & Walsma, P.C.; John Bouma, Snell & Wilmer; Pat
Cantelme, United Phoenix Firefighters Assn.; Leslie Carpenter, Marriott Residence Inn; Durrell Hillis, Motorola; Bill
Hochgraef, Motorola (retired); Olden Lee, Pepsico (retired); Jan Lesher, Lesher Communications; Robin Parke, Robin
E. Parke Engineers (retired); Bill Pope, Sunchase Holdings; Jennifer Reichelt, Student Regent.
Advisory Members of the Committee: Tom Browning, Greater Phoenix Leadership; Paul Frost, Student, ASU; Steve
Grunig, Joint Legislative Budget Committee; Memoy Harrison, ASU; Dave Lorenz, NAU; Tony Seese-Bieda, ABOR;
Tara Taylor, Student, UA; Joel Valdez, UA; Kim Van Pelt, Office of the Auditor General; and Jeff Young, Office of
Strategic Planning and Budgeting.
During more than seven months of examining and evaluating the climate for enhanced partnerships
between Arizona's university system and the private sector, the External Review Committee
developed a foundation of understanding for the challenges and risks facing the institutions as they
explore new ways to operate and serve their primary missions. Numerous interviews with the
leadership and top administrators from all three universities helped to bring into focus the political
and resource issues that must factor in to any discussion of privatization, outsourcing and
partnerships with private companies.
Based on those interviews and deliberations, the External Review Committee believes a prescribed
set of assumptions must be attached to the planning and development of public private partnerships
involving Arizona State University, the University of Arizona and Northern Arizona University.
Those general assumptions are:
That the emerging marketplace for higher education is competitive and will become
progressively more competitive. In order for the Arizona public universities to succeed in
that environment, they may need to embrace, with urgency, a plan to accomplish full
transformation and change.
rn That a strong economic climate and population growth will continue driving Arizona's
higher education marketplace. That assumption has profound implications in terms of
demographc trends, enrollment demand, customer expectations and the conditions with
which funding and resources are provided by public and private entities.
0 It is in the best interest of the universities to identifl and develop tri-university initiatives
that fully leverage the critical mass and economies of scale of the entire university
system. Whenever possible and appropriate, a tri-university approach will attract
different and potentially more capable private sector partners than any single university
can attract on its own.
* Overall, the university system must consider and embrace partnership opportunities
because of their potential to produce positive outcomes for the institutions, including
optimizing operations and transforming the way resources are utilized by the institutions.
In addition to those general assumptions, the ERC on public private partnershps observed
recurring themes and messages that resonated through various discussions, debates and
presentations. Those observations are conveyed in specific and contextual terms in the
subcommittee recommendations that follow this section. However, as broad elements of the
committee's work, they are offered as follows:
The University system should consider becoming more pro-active in shaping a legal and
regulatory climate that lowers the legal and regulatory barriers inhibiting university
system creativity and flexibility, particularly as it relates to the formation of partnerships
with private sector entities.
The Board should consider requiring an incentive system for efficient management of the
university system, including individual incentives for leadership and top administrators.
Furthermore, the Board should review and seek means to avoid situations that lead to
disincentives.
Notwithstanding the need for the universities to retain autonomy of mission and purpose,
they should revisit the notion of developing a common selection, evaluation and decision
process for reviewing and deciding public private partnershp opportunities.
The ERC on public private partnerships applauds the progressive and capable leadership of the
universities and acknowledges the efforts made to date in making outsourcing, privatization and
partnershps with the private sector integral to the institutions' operations and planning initiatives.
Some of that progress has been encouraged through political pressure. Much has occurred because
of a recognition that privatization can be valuable for operational reasons.
In general, the committee believes the university system should continue exploring opportunities
to create partnerships with each other and the private sector for the following reasons:
Improving access to capital and other strategic resources. Many private sector partners
bring tremendous financial resources to the table, including the ability to invest in capital
assets and a capacity to make operating grants, provide gifts and engage in contracts that
produce incremental revenue.
Enhancing the ability of the universities to develop new sources of revenue. Partnerships
with private sector entities are necessary if the universities are to realize the full potential
of marketing some elements of their identity. When appropriate, those partnerships can
enable the universities to diversifl their base of resources.
Spreading risk over a broader base. Marketing initiatives can be risky and are generally
subject to extreme competitive pressures. Partnerships with private entities enables some of
that risk to be shared with partners who are adept at managing risk and anticipating
competitive obstacles.
Gaining knowledge and information from the private sector. Beyond financial resources,
the private sector has significant resources to offer in terms of management expertise,
information resources development, organizational science and other disciplines that are
common to all large technology-linked institutions.
Facilitating improvement in the transfer of science and technology to the commercial
sector. The private sector has an interest in gaining access to innovation and leading-edge
technology in order to enhance competitive advantage and to serve customers and clients
more effectively. To the degree university research produces commercially applicable
innovations, it should be recognized and encouraged as fundamental to effective
partnerships.
Creating joint marketing and public relations efforts that enhance the perception of
quality. By association in marketing and public relations initiatives, the reputation and
profile of the universities can be enhanced when they form effective partnershps with
private sector entities that stand for quality, strong performance and competitive operations.
The assumptions, themes and benefits of public private partnerships enumerated above flow through
the specific recommendations of the subcommittees, which tackled specific issues and situations
in greater detail. The five subcommittees - Legal & Regulatory Impediments, New Opportunities,
Bench marking, Evaluation & Accountability, and The New Model for Public Private Partnerships
- engaged university officials, techcal experts, members of the Board's Central Office Staff and
the Auditor General's Staff in discussions of how to address the issues facing the universities.
Information and data was collected from the institutions, from national comparative data sources,
from institutional documents and reports and from direct observation and dialogue.
The following represents the careful deliberations and evaluation of those subcommittees over a
period of several months. The recommendations and observations are intended to be thought-provoking,
fresh, and hopefully "outside of the box." They represent a sincere desire by the ERC
on public private partnerships that they provide the Arizona university system with options and
rationale to more fully pursue the potential benefits associated with fully developed private sector
partnerships.
'A number of legal impediments affect the ability of the state's universities to conduct business in
an eficient and effective manner. This subcommittee was formed to explore the alleged legal
impediments as they may relate to the universities engaging in outsourcing, privatizing and
partnering with private enterprise. '
A number of legal impediments affect the ability of the state's universities to conduct business in
an efficient and effective manner. This subcommittee was formed to explore the alleged legal
impediments as they may relate to the universities engaging in outsourcing, privatizing and
partnering with private enterprise.
Four (4) areas of concern were identified and have been addressed by the sub-committee as follows:
Prohibition Against Stock Ownershp; Inability to Use Design-Build in Construction Projects;
Competition with Private Enterprise; and Inability to Grant Indemnity.
Prohibition Against Stock Ownership
The Arizona Constitution, Article 9, Section 7, prohbits state ownership of stock or participation
in partnerships. A narrow interpretation of ths provision prevents universities from negotiating
development arrangements in which promising, although unproven, university technology would
be developed and marketed by a non-state party. There may be instances in which a private
developer wishes to engage in an equity arrangement for development of the technology. Because
the constitutional prohibition is so broad, the universities are generally prohibited from these types
of transactions.
Ths narrow approach in the interpretation of the Constitutional Provision significantly inhibits the
ability of the universities to engage in effective partnering, thereby losing the possibility of
generating substantial revenue. Many other state university systems are able to engage in this type
of revenue generating activity in the absence of such constitutional or statutory proscriptions. For
example, the University of California system has adopted policies and guidelines permitting the
transfer of technology for equity ownershp in start-up companies, thereby generating large amounts
of revenue for the universities. California does not have constitutional or statutory provisions such
as Arizona.
Recommendation:
1. A carellly drawn statute that would prohibit the use of State general fund dollars for these
types of investments but would permit the exchange of the university technology or
intellectual property for equity interest in a corporation, would not run afoul of the intent of
the constitutional prohibition and would likely be upheld by the courts. The statute could
be drafted either describing the types of transactions that are to be permitted, or by
describing the types of transactions that are to be prohibited. The latter method would
probably be better for the universities, but either method would suffice. Agreements
between universities and private equity partners should be structured to best protect the
university's technology or intellectual property rights in the event of bankruptcy or financial
failure of the partnership.
Inability to Use Design-Build Concept in Construction Projects:
The Board of Regents Procurement Code for the universities, which substantially reflects the
Procurement Code, does not make clear whether the universities can engage in design-build
construction, a method of construction that is less cumbersome and costly than current methods used
for procuring construction projects. A pilot project authorized by the Legislature is under way
enabling various departments within the state to engage in design build projects. Most notably the
Department of Transportation has successMly completed one or more projects at significant savings
to the taxpayers. The universities have not been explicitly included in the list of departments
authorized to engage in the pilot program, but the Board of Regents ("ABOR) has authorized a
pilot design-build project at the University of Arizona whch is currently underway. The design-build
concept appears to be beneficial from a financial point of view, and enhances the ability of
the universities to engage in partnering to do capital projects.
Recommendations:
2. Suggest to the Legislature that the universities and ABOR be explicitly included in the
legrslatively authorized pilot project currently under way.
3. Suggest the Board of Regents encourage the universities to explore and where appropriate,
engage in design-build projects.
4. Suggest the Board of Regents and the universities explore the appropriate use of the
construction manager at risk concept for construction projects.
Competition with private enterprise statute - A.RS. 41-2753.
This statute limits the ability of universities to engage in business activities which would compete
with local businesses in the community. The statute is being interpreted to severely limit the type
of items whtch may be sold in university book stores. The universities believe that this statute does
not prohtbit them fiom outsourcing the book store function, presumably on university property. The
statute could come to bear on a hypothetical situation that is not anticipated to occur. Specifically,
if and when the universities have excess capacity of physical facilities, and wish to lease some of
that capacity to private firms, the lease could lead to lawsuits claiming violations of the statute.
Both the statute and the manner in whch it is interpreted significantly limit the ability of the
universities to generate additional revenues.
Whrle the statute creates an impediment to the universities in operating their own businesses, it is
not an impediment to outsourcing. In fact, it would appear to serve as a good reason for the
universities to outsource through a bidding process enabling all to compete.
Initial review suggests that the universities may be interpreting the statute too narrowly. This
narrow interpretation seems to reflect concerns for socio-economic factors whch are presently given
greater weight than the need for universities to generate additional revenues. Given this concern
for socio-economic factors, and the resulting narrow interpretation of the statute, it appears that the
statute almost compels outsourcing in order to maximize the ability of the universities to generate
revenues. This would result in a bidding process to enable private contractors to operate in on-campus
facilities, and those private businesses would not be inhibited by the statute, as are the
universities.
Recommendations:
5. The universities should adopt more liberal interpretations of the statute. By broadening the
ability to compete somewhat, the universities could generate additional revenues while not
seriously impacting the neighboring business community. The universities would then be
better able to make individual, informed decisions about whether to retain functions and
compete with private enterprise, or to outsource.
6. Contract to outsource the services. This would be the result of a bidding process which
would generate the highest revenues for the universities, and the best protection for the
students. This would likely have a negative impact on surrounding businesses who were not
successfd in the bidding process. Perhaps if businesses (and Chambers of Commerce) were
more aware of the outsourcing option, and its potential consequences, they might not be so
critical of competition by the universities. It may be appropriate to revisit the entire subject
in light of changes in circumstances since the statute was originally adopted.
7. Suggest to the Legislature the statute be amended to specifically authorize universities to
lease excess and unused capacity of facilities, if an when such excess exists, by the private
sector for fair market value, under guidelines to be established by the Board of Regents.
Inability of Universities to Grant Indemnity
A 1967 Attorney General Opinion interpreting A.R. S. 35- 154 construes that statute to prohibit
indemnity agreements. Additionally, the Arizona Department of Administration Risk Management
Division construes the State Risk Management Statute (A.R. S. 4 1-62 1) to exclude from potential
coverage under the State Risk Management Insurance Statute, any non-state persons or entities.
In private industry, indemnity agreements from one company to another are commonplace. For
example, one business may agree to provide equipment or services to another on a favorable basis
provided that the recipient agrees to defend and indemnifL against any claims that may arise as a
result of the use of equipment or services. The State is not able to do this. l h s results in substantial
problems in two areas:
A. Gifts of Equipment - Both the federal government and private industry occasionally
make valuable equipment available to the universities on a gift basis. However, the
donor usually wants a promise from the university that if a lawsuit arises as a result
of the universities use of the donated equipment, the university will defend both
itself and the donor. The universities are currently unable to give ths type of
assurance.
B. Collaborative efforts - The university and another institution of hrgher education (or
private corporation) may agree to collaborate in the construction and operation of a
highly technical instrument that neither party by itself could afford to own or
operate. Each party contributes funds, expertise and specially manufactured
equipment. The most economical method of insuring is for the piece of equipment
and its operation to be covered by a single insurer, which makes irrelevant who
contributed the equipment or who happens to be operating it at the time the loss
occurs. However, State Risk Management's position has been that it will only cover
State university interests and the collaborator must insure itself at additional
expense.
Recommendations:
8. Under no circumstances should the universities agree to indemnifj another party for a defect
in equipment that is gifted to the university. However, a university should be able to
indemnifl on an active/passive basis. Even with the current statute in place, revisiting the
issue might enable the state to permit indemnification against everything except the gifting
or collaborative party's sole negligence. Addtionally, State Risk Management could review
its interpretation of the statute and take a broader view (although within legally permissible
limits) so that activities or property necessary to the "business of the state" can be covered
by State Risk Management even though not state owned or performed by state employees.
'This subcommittee focused on developing andproposing a list of new opportunities for potential
partners for privatization and increased access to capital that the Arizona public universities should
consider '
Arizona's universities have explored a variety of auxiliary enterprises and non-core functions as
canddates for expanding public private partnerships, outsourcing and privatization. Some of those
functions are large in scope and intense in terms of resources; others are small and of little
significance in terms of fiscal impact. A review by the ERC indicates that more can be done to
explore partnerships to perform functions that entail substantial capital, operating and managerial
resources. The universities are encouraged to spend more time and attention "fishing where the fish
are" . . . exploring private partnershps for functions that, if successful, may create significant costs
savings for the universities, enhanced operational effectiveness, or both.
The "new opportunities" fall into the following categories: physical plants, technology transfer, and
university support systems, including information technology, fleet maintenance, student housing
and health care.
Recommendations
9. The universities should consider expanding the involvement of the private sector in the
management and maintenance of their buildings, grounds, facilities and infrastructure. FOP
example, full consideration should be given to the possibility of contracting with private
sector vendors for buildings to be brought to minimum health, safety and operational
requirements, and to maintain the structures on an ongoing basis
10. The university system might explore selling existing structures in its portfolio and leasing
back the facilities in order to free up capital, operating resources and managerial expertise.
The system should explore selling buildings to a pension fund or other yield-oriented entity;
the lease back would be negotiated at a reasonable cap rate with a ground lease to building
purchaser.
11. The universities should explore "build to suit7' for new construction on university-owned
land and structure bids so that a "turnkey" outcome is achieved for new buildings, where
the equipment, furniture and amenities of the structure are part of the proposal.
12. Regarding the development and transfer of technology, the universities should standardize
and monitor royalty dnven research and joint development ventures with private
organizations in order to maximize the potential for revenue. An initiative that would enable
such standardization is the creation of a common system for managing technology transfer,
thereby spreading patent development costs, administrative costs and marketing costs over
a broader base.
13. The universities may want to explore creating a joint venture capital company with
university system participation in order to facilitate the public sale of securities to raise
capital. Access to venture capital continues to be a significant inhibitor for the effective
transfer of technology to entrepreneurs and spin-off companies in the Southwest.
14. Information technologies are an area of great potential for private partnerships. Private
entities bring substantial capital, operational expertise and a bias for innovation to the
planning and deployment of computer systems in large organizations. The university system
needs to more fully explore how partnersbps with information technology companies can
help the institutions transcend the incremental way they currently adopt and deploy new
technology for delivery of education, management of resources, and as a key component of
managerial decision-malung processes.
'This subcommittee focused on developing and analyzing data for the purpose of bench marking the
Arizona universities' eforts to privatize, outsource and engage in efectivepartnerships with private
sector entities. '
As input into a determination of the status of publiclprivate partnershps and outsourcing at the three
public Arizona universities, Arizona State University, Northern Arizona University and the
University of Arizona, the Public Private Partnership-External review Committee of the Arizona
Board of Regents (PPP-ERC) created a sub-committee to develop and evaluate data available for
the purpose of bench marking the Arizona universities' efforts.
Financial Data
Total expenhtures by the universities exceed $1.8 billion. Approximately 70% of those funds are
expended on instruction, research and community service activities which are core functions for the
universities, and scholarships for students. The University Presidents have concluded, and the PPP-ERC
has agreed, that these functions should not be considered for outsourcing. Indeed, after
considering the range of university activity and the functions which either should or should not be
outsourced, it is the consensus of the subcommittee that the majority of effort should be used to
explore publiclprivate partnershp opportunities and ways to facilitate them.
Appendix A presents the distribution of financial expenditures.
Outsourcin~D ata
The results of the Wertz Survey for Higher Education, a quantitative outsourcing bench marking
effort among 156 colleges and universities with over 10,000 students, was reviewed by the
subcommittee. The report covered 70 functions and services that have created opportunities for
outsourcing, from admissions to workers7 compensation programs. The outsourcing efforts of ASU,
U of A and NAU were compared with the results from this survey. In addition, a survey was
conducted of the universities represented by the Rocky Mountain Business Office.' It was
determined that the three Arizona universities outsource fully or partially over 50 of the 70 functions
or services identified in the Wertz survey. Appendix B represents the results of the surveys.
Information on outsourcing by private corporations was obtained from the Outsourcing Institute.
The most frequently outsourced areas by corporate executives and the areas being considered are
listed in Appendix C.
1 Rocky Mountain Business Off~cersm embership includes the following universities: ASU, UofA, NAU, University of
Colorado-Boulder, University of Utah, Utah State University, Weber State University, University of New Mexico, New Mexico
State University, University o Idaho, Idaho State University, University of North Dakota, Washington State University, University
of Oregon, Oregon State University, University of Montana, Montana State University, University of Texas-El Paso, Portland State
University, Arkansas State University, University of Nevada-Reno, Portland State University and Boise State University.
It was also observed by the subcommittee that the three universities have in place adequate
processes and expertise to evaluate outsourcing opportunities. It is the consensus of the
subcommittee that, in fact, the universities have made substantial progress in outsourcing.
It should be noted, however, that there is no data that the subcommittee could access that
qualitatively bench marks outsourcing efforts.
Data was collected from the universities about their current partnerships. These partnerships range
from collaborations with other universities in the delivery of degree programs to agreements for the
development and use of new technologies. In order to narrow the range of investigation to
something manageable, the subcommittee defined a partnership as follows:
A partnership is a relationship between a university and a private sector
organization developed and sustained to leverage the resources of one or
both to increase the overall impact of one or both organizations.
The subcommittee spent a significant portion of its time brainstorming about forms of partnerships
with the potential for greater financial impact. Three of the most significant and unique university
public private partnershps and outsourcing activities are described in Appendix D. Also provided
is a listing of some representative partnerships between private organizations and the Arizona
universities.
A visit was made to a private university similar in many respects to ASU and U of A. This visit was
made to investigate approaches that the private university might be using that would benefit the
Arizona universities. In summary, the visit revealed that the private university used a formal RFP
process to seek out strategic partnershps to accomplish particular institutional goals. One example
is the use of a partnership with a major health care provider to build and operate a medical care
facility needed by the university to take advantage of faculty expertise and to facilitate research in
the area of expertise.
A significant part of the research performed by the Arizona universities is done in partnerships with
private corporations. Of the total research expenditures of $191 million, $36 million is funded by
private corporations.
Develouing; PublicRrivate Partnerships
The Risk and Opportunity Management: A Value Based Management Approach, developed by
David Gledhill of Motorola's Systems Solutions Group, and Dan Brooks, of Applied Decision
Analysis, Inc., is a way of evaluating the universities' partnership alternatives. The process would
be a way of identifying the upsides and downsides of collaborations and the results could be the
basis of recommendations for legislative and procedural enhancements.
The subcommittee concluded that a key component to a successful partnership is a careful
delineation of commitments and expected outcomes, parameters for measuring its success and
reporting the performance of the partnerships
The recommendations of the subcommittee on bench marking are as follows:
15. The universities should focus their energies on the development of partnershp opportunities,
since all university resources can be impacted. A focus on outsourcing will impact at most
30% of university resources.
16. In developing partnerships, the universities should carefully delineate commitments,
expected outcomes, parameters for measuring success and then report on the performance
of the partnerships.
17. The rationale for outsourcing and partnering should be to leverage the resources of the
university to increase the overall impact of one or both organizations.
List of References
In developing the data for bench mwlung, the subcommittee identified a number of easily accessible
information sources to assist in outsourcing and partnering efforts. These include:
ASU Web Page - www.asu.edu
Outsourcing Institute Web Page - www.outsourcing.com
Everest Outsourcing Web Page - http://www.outsourcing-mgrnt.com/
s Outsourcing Search Web Page - http://www.outsourcing-search.com/
Outsourcing Center Web page - http://www.outsourcing-center.com/
Outsourcing Experts Web Page - http://www.outsourcing-experts.com/
REPORTO N EVALUATIOANN D ACCOUNTABILITY
'Each of the three universities has a documentedprocess for assessing the merits of outsourcing,
privatizing and partnering to reduce costs or increase value. The primary focus of this
subcommittee has been on outsourcing with some consideration ofpartnering andprivatizing. The
efforts to date should be considered work-in-progress as each university is in the early stages of
doing things dzferently. '
It is apparent that the three universities have the ability to research alternatives that can reduce
costs andlor improve service. It does not appear that the incentives exist for university officials to
pursue alternatives in outsourcing, partnering and privatizing. The fear is that any money saved will
be taken away in a subsequent budget. The processes for making the right decisions exist. External
concerns and a lack of incentives are obstacles to tho& decisions being made.
The following recommendations are made regarding the processes the three universities7 use for
assessing and implementing outsourcing, partnering and privatizing. The recommendations are
made regarding an initial process and ongoing process.
18. For purposes of evaluation and accountability, all activities performed by the universities
should be identified. This includes auxiliary enterprises and non-core functions, but it
includes functions specific to the delivery of education, including instruction, research and
public service. Activities that are core competencies should not be considered for
outsourcing, privatizing or partnering, although some aspect of an activity may be. For
example, instruction may be identified as a core competency, but adjunct faculty could
continue to be utilized.
19. A threshold level of savings should be established. If the preliminary economic assessment
does not indicate the threshold can be achieved, a change in the method of providing the
service or product should not be pursued.
20. The process for pursuing privatization opportunities and accountability should include
incentives fort the universities to pursue outsourcing, privatizing and partnering.
21. To be effective and productive, only a few items that meet the threshold level should be
evaluated by the universities, rather than pursuing numerous alternatives. Those selected
should have bench mark data that can serve as a baseline.
22. Although the universities appear to have the capability to implement the processes described
here, it may be beneficial to employ consultants from outside the university to more fully
develop the options and explore creative implementation alternatives.
23. An evaluation team should be created to administer the process and should include, among
others, a financial expert, the manager responsible for providing the product or service, a
customer member, a community member and a senior staff university member. This team
should be accountable to the president of the university.
24. An evaluation period of at least one year should be established. At the end of this period,
performance should be compared to bench mark data. The data should include economical
data as well as customer assessment.
25. Before embarking on a change in method of providing a service or product, a detailed
economic analysis should be completed. Care must be taken to ensure that all costs are
considered. For example, if a contractor is utilized, the cost of monitoring the contractor
should be considered.
26. The universities should continue monitoring what other colleges are doing and collect data
on the effective privatization of functions and operations.
27. Legal concerns must be considered. Relaxation of legal and regulatory obstacles should be
pursued if doing so could result in significant benefits.
'The subcommittee on the new model for public private partnershlps considered the full range of
issues and options explored by the institutions and the subcommittees. The result is a foundation
fiom which innovation and creativity may spring. '
Embracing partnerships with the private sector in order to transform the operations of the
universities is an important opportunity, one that involves risks and rewards and that exposes the
institutions' strengths and weaknesses. The ultimate challenge is for the universities and the Board
to be able to visualize how the transformation of the institutions might look, feel and behave,
assuming that such a transformation can be accomplished.
The following is a list of characteristics that the ERC believes represent a "new model" for
privatization and outsourcing at Arizona's universities. They are meant to be preliminary and
general, not all-inclusive or ultimate. However, they represent the h g sth e leadershp of the system
should be looking for as they encourage the universities to transform their operations through the
effective use of public private partnerships.
Characteristic of the New Model:
Pro-active, deliberate and methodical. The universities should demonstrate through their
initiative that publicprivate partnerships are topof-mind options to solve operational
issues, rather than obligatory responses to mandates.
Entrepreneurial, creative, engaging and inclusive. The potential for adding value to
university operations through public-private partnerships is best realized by engaging the
creativity and imaginations of the institutions best and brightest. These initiatives should
be viewed as an occasion for recreating the university, rather than malung marginal
adjustments.
Reflects and demonstrates commitment to create a great university system. Outcomes
and processes of the new model should be well grounded in a broad commitment to
accomplish a quantum leap improvement in the quality and effectiveness of the
university system. Champions of specific initiatives should be prepared to defend their
initiatives on the basis of how they advance the cause of quality and greatness.
• Accountability measures will become systematic, fully developed and refined and will be
triggered according to specific time lines and reporting cycles. The annual report on
competitive government activities, for example, will be supplanted by more robust,
periodic information that more fully defines the depth and scope of university
privatization and partnershlps.
Will contain acute communications component to give the initiative profile and support.
The New Model deserves high-profile support and reinforcement, through a variety of
internal and external communication vehicles and events. The New Model of public
private partnerships should not attain the status of a well-kept secret.
Will reflect alignment with mission statement and strategic goals of the university system
and the tri-university community. The operating processes and goals of the universities'
various departments will include reference to privatization and partnerships as ways to
achieve success and transform cost structure, operating outcomes and effectiveness.
APPENDIX A
USES OF FUNDS
ARIZONA UNIVERSITIES
3 1 (In Millions)
;Arizona University System -- Uses of Funds FY99: Major Campus Entitiesg
ASU i Totals: i % ofTotal
Instruction $340.00 $83.10 $167.50 $590.60 37.52%
Organized Research $24.40 $12.10 $154.60 $191.10 12.14%
Public Service $9.70 $1 1 .OO $10.10 $30.80: 1.96%
Academic Support $59.10 $16.00 $48.80' $1 23.90 7.87%
Student Services $28.80 $15.40 $2 1.50 $65.70 4.17%
d~cholarshipsf,e llowships
1 2 /~uxiliarEyn terprises
*ExcludesSierra Vista, Agriculture College, Arizona International College, Health SclencesCenter
APPENDIX B
SURVEY OF
OUTSOURCING/PRIVATIZATION
IN UNIVERSITIES
% PRIVATIZED
* Retail Center Managed by ASU. Tenants from Private Sector.
Identified with "X"
0
*
a
e
0
e
a
0
*
0
e *
0
*
0
0
*0
0
0
0 e n c l o s u r e 2 (page 1)
a
Colleges and Universities
Privatized Services
1,000 to
5,000
f: Yo
21414 .005
306!338 90
3351356 94
57/27? 26
ih9!409 41
255'328 75
16176 44
341412 8
153141 1 37
1031405 25
51398 . 1
1;57 2
231401 6
Si131 6
171414 1
11'235 5
18/25? 3
178:306 68
131,'309 33
5,00 1 to
10,000
# Yo
139 0
1001131 76
1161126 92
40!95 42
34i136 25
9511 17 81
9114 64
91136 7
611135 45
361134 27
133 0
2.'30 7
11:135 8
1/52 4
61139. 3
5/70 7
5/80 6
93'137 67
50i138 36 I 3'135
r
Admissions
Architectural & Engineering
Asbestos Removal Projects
Athletic Concessions
Auditing & Accounting
Banking
Beauty SalontBarber
Benefits Administration1
Operations
Bookstore
Campus Future Planning
Career Services
Cinemaflheaters
Classification/Compensation
ColiseurdArena Management
Computer Operations
Conference Centers
Conference ServiceIMgt.
Construction Projects
Copier Machines
Counseling Centers
Over 10,000 .
# %
156 0
881149 59
1191149 80
641134 48
241154 16
103!138 75
30135 86
131153 8
611110 55
32153 21
2/15 1 1
5i59 8
71 154 5
71 106 7
21 56 1
61109 5
711 16 6
941155 39
531155 33
--- - - -- - -
11153 .006
Under 1,000
# Yo
1!2W .005
1231139 88
139'143 97
15103 I5
Xh 204 42
96 149 63
I !7 14
14'198 7
52.'196 26
36;186 19
3:177 2
1 1 1 5
91185 5
2/36 5
12."02 6
5.'93 5
7193 8
1201175 69
77'205 38
l3 1
enclosure 2 (page 2 )
e
a
**e e
0
0
*
@ enclosure 2 ( p g e 3)
a
5,001 to
10,000
# " :/0
271125 22
51153 96
10125 40
401132 30
131136 10
133 0
139 0
9189 10
79 0
a 621132 47
Recycling Programs
Research Waste Removal
Retail Store/Shopping Area
Retirement Programs
Security
Student Activities
Student Financial Aid
Student Health Centers
Student Housing StaWPrograms
Student Loan Collections
1.000 to
5.000
# Yo
851356 24
13011 31 97
20149 41
1611404 40
651410 16
11409 .002
11414 .002
411280 15
5/29? 1
1891382 49
Over 10,000
# 'Yo
341149 23
68/73 93
29/53 55
451152 30
131155 8
156 0
157 0
51132 4
411 10 4
521150 35
Student Unions/Operations
Textbook Publishing
TrademarksLicensing
Travel Agencies
Tuition Plans
Unemployment Compensation
Vending Operations
Video Game Machines
Waste Removal
. Workers' Comp Programs
Under 1,000
# Yo
331143 23
38/51 94
9/22 4 1
821180 46
401192 2 1
11195 .005
5/203 2
25i124 20
2/165 1
901183 19
41138 3
,
31142 2
41/59 70
3911 19 33
85/95 89
311103 30
441141 3 1
1261156 81
901125 72
99fI54 64
441154 29
21122 2 71336 2
24/78 86
26/75 35
60168 88
28!99 29
7584 80
46/12? 38
1551 161 96
14213 18 15
414 1 90
22/39 56
55!58 95
141175 32
52 155 34
1521195 78
74;9? 80
162/189 86
951194 49
461 129 36 1 147'374 39
1141137 83
8611 13 76
111/135 82
551139 40
33Ri412 82
2301290 79
3361400 84
2001403 49
APPENDIX C
OUTSOURCING IN THE
PRIVATE SECTOR
Information Technology
This is the fastest growing area for outsourcing today.
Executives are currently outsourcing:
maintenancelrepair
training
applications development
consulting and reengineering
mainframe data centers
Executives are considering outsourcing:
clientlserver
networks
desktop systems
end-user support
full LIT outsourcing
Operations
Administration
Executives are currently outsourcing:
printing and reprographics
mailroom
consulting and training
Executives are considering outsourcing:
records management
administrative information systems
supply/inventory
printing and reprographics
Customer Service
Executives are currently outsourcing:
field service
field service dispatch
telephone customer support
Executives are considering outsourcing:
customer service information systems
field service dispatch
telephone customer support
Finance
Executives are currently outsourcing:
payroll processing
purchasing
transaction processing
general accounting
Executives are considering outsourcing:
payroll processing
taxes
Human Resources
Executives are currently outsourcing:
relocation
workers' compensation
recruitinglstaffing
Executives are considering outsourcing:
consulting and training
human resource information systems
Real Estate & Physical Plants
Executives are currently outsourcing:
Food and cafeteria services
facilities maintenance
security
Executives are considering outsourcing:
facilities management
facilities maintenance
facilities information systems
Sales and Marketing Executives are currently outsourcing:
direct mail
advertising
telemarketing
Executives are considering outsourcing:
reservation and sales operations
field sales
APPENDIX D
SAMPLE PARTNERSHIPS
AT ARIZONA UNIVERSITIES
SIGNIFICANT AND UNIQUE UNIVERSITY PUBLIC-PRIVATE PARTNERSHIPS
AND OUTSOURCING ACTIVITIES
,
ARIZONA STATE UNIVERSITY
Partnership with E & Y Kenneth Leventhal Real Estate Group (EYKL)
On November 1, 1998, ASU entered into a three-year contract with E & Y Kenneth Leventhal
Real Estate Services Company for development/management services pertaining to several ASU
properties with development potential. EYKL's services include expertise in market and
financial analysis, planning, contract negotiations, and other real estate disciplines.
The agreement for services is based upon a reduced up-front fee paid by the University in
exchange for an incentive compensation to EYKL, that is, their participation in a percentage of
future revenues that they negotiate on behalf of the University as a result of a long-term lease or
sale. Projects include ASU properties with a high potential for new development.
For example, ASU owns approximately 40 acres of vacant land located within the City of
Tempe's Rio Salado Project along the Tempe Town Lake. Several development projects are
likely to be negotiated. Planning, market studies, financial analyses, geo-technical,
environmental, and traffic studies, and other complex steps must be completed prior to
successfully negotiating terms for development. EYKL handles all tasks associated with the
development process, makes recommendations to the University, and negotiates terms with
potential developers. A fixed fee is paid to EYKL monthly along with any out-of-pocket
reimbursable fees. The discounted fixed fee covers unlimited monthly hours required from the
EYKL staff. EYKL, will realize a long-term benefit by their future participation in revenues
generated from agreements that they successfully negotiate.
EYKL will provide services to ASU East and ASU West at their election. A discounted fixed-fee
arrangement with participation in future revenues would apply at these campuses as well.
A; this time, in addition to work in progress on RIO Salado, EYKL is assisting ASU with the
potential disposition and development of 47 acres at First Street and Price Road, Tempe, and
with ASU7s potential acquisition of The Mercado, located in downtown Phoenix. The Mercado
currently houses ASU's College of Extended Education and the ASU Downtown Center under a
lease agreement. The acquisition will be more cost-effective for the University and will provide
opportunities for expansion, development, and other partnerships.
Ultimately, the EYKL partnership provides ASU with the opportunity to maximize use of
underutilized and/or non-academic properties to the benefit of the University and the community
NORTHERN ARIZONA UNIVERSITY
Partnership with SodexhoMarriott Food Service Corporation
In June of 1997, Northern Arizona University entered into a partnership with SodexhoMarriott
Food Service Corporation to provide a full-service dining experience for its student population.
For more than a year leading up to the contract SodexhoMarriott looked, listened and evaluated
NAU's existing program. They understood NAU was looking for a partner that was willing to
take the necessary risks in making its program a Premier Residential Dining Program.
In the SodexhoIMarriott bid proposal, which was far and above any of their competitors, they
offered a total program that dealt with display cooking, the latest in collegiate menus, extended
operations and new concepts. In addition, they offered a $1 million investment to be used to
enhance the program. In exchange, NAU agreed to remodel three dining rooms and the
Mountain Jacks Starbucks area of the University Union. This investment cost the University
(Campus Unions Department) almost $750,000 dollars in capital and labor. Both the
SodexhoMarriott and NAU investments proved successful in that sales and participation have
increased since the partnership was formed.
The partnership has been successful because both parties understood each other's needs.
SodexhoIManiott is a for-profit company that is held accountable by their stockholders, who
need to see the potential return of their investment. NAU wanted to be on the cutting edge of
college food service programs and was willing to invest its financial resources to get there.
The partnership has an equal amount of risk and rewards. If the partnership continues to be
successhl, SodexhoMarriott will gain new business by showcasing the NAU account and NAU
will gain the notoriety of being one of the largest all-voluntary food service programs in the
nation.
UNIVERSITY OF ARIZONA
Partnership with The University of Arizona Foundation
The University of Arizona Foundation will construct an approximately $3 million, 15,000 gross
square foot (gsf) facility to house the staff and operations of The University of Arizona Police
Department (UAPD). The UAPD needs to be relocated from its current location in order to clear
the site for a parking structure. The UA will ground lease the site to the Foundation and lease
back 100% of the building. At the end of twenty years (2020), title to the building and all
improvements will revert to the UA upon expiration of the ground lease. The project will be
financed through Certificates of Participation issued by the Foundation.
Page 2
ARIZONA STATE UNIVERSITY
PUBLIC PRIVATE PARTNERSHIPS
GENERAL
AT&T Campus-Wide - Under an agreement initiated in 1997, AT&T is providing hardware,
software, card stock, back-up equipment and marketing support for ASU's Suncard program.
ASU provides AT&T a site for demonstrations to potential customers and their own employees.
The parties will identi@ and seek to develop new applications.
CIC Corp - Under a Tri-University RFP, ASU has entered into a contract with CIC Corp. to
provide Equipment Maintenance Management Services to the university. CIC will establish
contracts and agreements with service providers and offer similar services for equipment that
was previously under maintenance agreements. They will do that at a significantly lower fee and
ASU with a broader range of service options.
Collegiate Stores Company - For an annual service fee of $3600, the ASU Bookstore gains
access to various CSC programs. These programs include cooperatively bid vendor contracts
and shipping programs. During FY 1998 CSC participation saved the ASU Bookstore over
$75,000.
E&Y Kenneth Leventhal Real Estate Group (EYKL) - ASU entered into a three year contract
with EYKL on November 1, 1998 for development management services. EYKI, will provide
expertise in planning, analyzing, financing, and negotiating real estate transactions that will bring
commercial development to certain ASU-owned properties, most notably Rio Salado. ASU will
receive long-term revenue streams from various development projects. EYKL will provide their
expertise at a reduced up-front fee to the University in exchange for participation in a percentage
of the revenues they negotiate for the University.
IKON - IKON Office Solutions has been a valued partner in providing analog and high-speed
copiers to the ASU campus for nearly ten years. Under the current agreements, IKON supplies
and supports all copier purchases under the University's standardization agreement including
supplying dedicated operators for high-speed copiers in the University Copy Centers.
MBS Textbook Exchange, Inc. - Under a partnership agreement initiated in 1997 between MBS
and the ASU Bookstore, MBS, in exchange for having first access to ASU used textbook want
lists and for conducting all ASU semester end buybacks, pays ASU a higher commission rate on
used textbooks purchased by MBS at ASU. Additionally, MBS provides enhanced operational
and system support and discounts on systems hardware and software. This support includes pre-labeled
& presorted shipments of merchandise, onsite system reviews, and a designated support
liaison.
The partnership enhances our used book procurement acquisition by not only increasing our
supply of books to our student customers but by increasing our revenue and reducing our
expenses.
Quick International - Mail Services has a contract initiated in 1997 (renewal up to 4 years) to
pick up and remail all international letter and flat size mail, postmarlung in foreign countries
speeding delivery of the mail. The postage savings supports the funding of the mail operations.
People's Choice TV Corp - ASU has an FCC license to operate an eight channel Instructional
Television Fixed Service. In July, 1994, ASU leased its excess capacity in these channels to
People's Choice TV in return for a significant investment in the broadcast equipment, a doubling
of the fixed sites that receive ASU instructional television signals, an increase in the number of
residences that can receive our signal, and a small royalty fee. People's Choice TV gained
access to the Phoenix entertainment wireless TV market.
Purchase Pro - In 1998, ASU began a pilot project with Purchase Pro. Purchase Pro provides
electronic bidding and sourcing software free of charge to three of our buying teams. ASU gains
by having access to an electronic bidding system that is fast and that reaches potential suppliers
that are not part of our vendor database. Purchase Pro gains by using the University's reputation
for progressive purchasing practices to add both buyers and suppliers to their system.
SAP Public Sector and Education, Inc. (SAP) - ASU is in the process of contracting with SAP
for the development of a Student Information System. SAP will provide all the technical
resources to develop the software. ASU will provide program information and will serve as a
beta site for implementation. Cost to ASU is approximately $70,000 for a software program that
will be marketed to higher education for $2 million to $3 million.
Subia Corporation - ASU is about to renew for the third and four years of a design services and
supplementary printing services contract with Subia Corporation. Subia Corp currently provides
personnel and expertise for on-site graphic design and printing services to the ASU Creative
Communications Group. Subia has been instrumental in bringing industry practices and
processes to CCG to increase responsiveness to the University.
TC21, LLC - ASU entered into a Disposition and Development Agreement (DDA) with TC21,
LLC for 5 acres of property located at the southeast comer of Mill and University, Tempe. ASU
will provide the land to TC2 1 under a ground lease and TC2 1 will develop the property with
mixed-use commercial space to include retail, restaurant, and offices. ASU will receive a
percentage of gross rents from the project. Additionally, ASU will occupy 15,000 square feet of
office space in Phase I of the development and a minimum of 4,000 square feet of space in Phase
11. TC2 1 will build a pedestrian gateway entry at the comer of Mill and University to identify the
University and welcome visitors into the campus. ASU and TC21 will jointly participate in
developing and managing parking to serve the commercial development and to serve the needs
of the University for the west side of the Main Campus.
Valley of the Sun School and Habilitation Center - Under an agreement initiated in 1993,
Purchasing and Business Services sponsors a training program in conjunction with Valley of the
Sun School and Habilitation Center. We provide in-house training for developmentally disabled
persons in areas that are normally unavailable to them. ASU receives the benefit of labor cost
subsidies. The State of Arizona benefits by moving some disabled people to self-sufficiency.
Northern Arizona University Industry and Private Funding FY 1999
through 511 3/99
Award Date (OGC Date (OGCS) Title Abstract Dircct Cost Indirect Cost Total Agcncy Description
July 1998
7/15/98 Oracle Academic I~~itiative This project wil develop support $20,000.00 $5,000.00 $25,000.00 Oracle Corporation
Development material for the Oncle
Corporation in promoting tlleir
academic initiative program to
other universities.
Summary for 'Award Date (OUCS)' = 7/15/98 (1 detail record)
Sun1
8/19/98 The TOEFL 2000 Spoken and This project will construct and $68,407.00 $0.00 $68,407.00 Educational Testing Services
Writtcn Acntlemic Language gratnmatically annotate a corpus
C o r l ~ ~ s that is reprcscntativc or thc range
of acdemic language that students
must listen to or read. Texts will
be collected at five academic
sites, and sampled across content
areas. (1.e. The academic
disciplines) and registers
(discourse types).
8/21/98 Grand Canyon Railroad Visitor A visitor satisfaction survey will $6,218.00 $1,532.00 $7,750.00 Grand Canyon Railway
Satisfaction Survey be designed to provide
information for marketing.
Current customers will be
interviewed via an intercept
method. Monthly, quarterly and
an annual report will be prepared.
8/25/08 Ancient Mystic Likc Slo1tg11 This research is part of ongoing $2 1,776.00 $5.603.00 $27.379.00 Applied Earthworks, Inc.
efforts to characterize the
palcocnvironn~entso f tl~cre gion,
particularly with respect to tllc
I~al)ilatso f early ;~l~origit~al
i~~linl)il;~onfts s oull~crnC ;~lifor~~in.
University of Arizona
Active Projects funded by Industry
Incamion lo Oolo
Sponsor Title 1 Budget
Abbott Laboratories I
AN OPEN-LABEL EXTENSION STUDY OF TlAGABlNE HCI IN THE TREATMENT OF
PATIENTS WITH
EVALUATION OF RENAL FUNCTION FOLLOWING LOW-FLOW ANESTHESIA WITH
SEVOFLURANE IN H
..SEVOFLURANE VS. ISOFLURANE WHEN ADMINISTERED IN A LOW-FLOW,
ANESTHETIC DELIVER
CLINICAL EVALUATION OF FENTANYL ORALET PREMEDICATION IN PEDIATRIC
OUTPATIENT PRO
THE SAFETY OF DEPAKOTE IN HEADACHE PROPHYLAXIS: AN OPEN LABEL LONG
TERM STUDY (
SEVOFLURANE ANESTHESIA, METABOLISM AND TOXICITY
KNEE SURGERY: DEXMEDETOMIDINE WHEN USED AS AN ANESTHETIC
ADJUNCT
Abgenix, Inc
PHASE II ... MULTIPLE INTRAVENOUS INFUSIONS OF FOUR DOSES OF ABX-CBL,
MONOCLONAL A
Aculight Corporation
COLLABORATION ON DESIGN AND CONTROL OF ACONTINUOUS-WAVE,
MONOLITHIC, DOUBLY RES
Advanced Cancer Technologies
FUNCTIONALJ'R AND PATIENT ACCEPTANCE OF A MEDICATION COMPLIANCE
RECORDING DEVICE
Advanced Ceramics Research Incorporated
FREEFOAM FABRICATION OF SILICON NITRIDE BLISKS AND OTHER SILICON
NITRIDE PARTS -
SHAPE DEPOSITION MANUFACTURING OF HIGH PERFORMANCE AND QUALITY
CERAMIC MICROMOTO
Advanced Tissue Science, Incorporated
A 48 HOUR STUDY EVALUATING THE ADVANCED TISSUE SCIENCES, INC.
VASCULAR GRAFT IN
EX VlVO SHUNT MODEL TO EVALUATE ADVANCEDTISSUE SCIENCE INC MATRIX
VASCULAR GRAFT
Agouron Pharmaceuticals, Inc.
PHASE Ill STUDY OF THE MATRIX METALLOPROTEINASE INHIBITOR AG3340 IN
COMBINATION
PHASE Ill STUDY OF THE MATRIX METALLOPROTEINASE 006
Albemarle Corporation
NEW METHODS FOR THIOALKYLATION
Allergan
EVALUATION OF REFRESH TEARS ON TEAR FILMBREAK-UP TIME
Page 1 of 51
Sponsor Title
EVALUATION OF ALPHAGAN VS TRUSOPT IN THETREATMENT OF GLAUCOMA OR
OCULAR HYPERTEN
EVALUATION OF ACULAR PRESERVATIVE-FREE FOR THE PREVENTION OF
PHOTOPHOBIA
EVALUATION OF IRRITATION WITH TROPICAL NSAID'S STUDY
STUDY OF ANTI-PROLIFERATIVE EFFECTS OF DICLOFENAC & KETOROLAC ON
HUMAN LENS EPI
..BOTOX (BOTULINUM TOXIN TYPE A) PURIFIED NEUROTOXIN COMPLEX IN
PATIENTS WICHRON
MOLECULAR PHARMACOLOGY OF ADRENERGIC ANDPROSTAGLANDIN
RECEPTOR SUPTYPES
MOLECULAR PHARMACOLOGY OF ADRENERGIC ANDPROSTAGLANDIN
RECEPTOR SUBTYPES
ASSESSMNT OF INCREASED IRIS PIGMENTATIONTHROUGH VlDO
MONITORING
Alliance Pharmaceutical Corporation
PERFLUBRON EMULSION TO UMlT INFLAMMATORY RESPONSE ASSOC'D
WITHEXTRACORPOREAL BL
AlliedSignal, Inc.
LARGE SCALE ANNULAR CASCADE RADIAL PROFILE AND HOTSTREAK
EXPERIMENT
Allos Therapeutics, Inc
PHASE II ... RSRl3 ADMINISTERED TO PATIENTS RECEIVING STANDARD CRANIAL
RADIATION T
PHASE II ... REPETITIVE DAILY IV DOSES OF RSR13 ADMINISTERED TO PATIENTS
RECEIVING
Alpha-Beta Technology, Incorporated
PHASE Ill ... INTRAVENOUS BETAFECTIN PGG-GLUCAN FOR THE PREVENTION
OFSERIOUS INFEC
Alza Corporation
AMlFOSTlNE PLUS FRACTIONATED RADIOTHERAPY FOR PRIMARY PROSTATE
ADENOCARCINOMA TO
AMC Cancer Research Center
ARRESTING SMOKING UPTAKE USING INTERACTIVE MULTIMEDIA
American Alpine Club (The)
EFFECTS OF CLIMBING ON OUTCOME OF PREGNANCY
American Biosystems, Incorporated
COMPARISON OF CONVENTIONAL CHEST PHYSICATHERAPY & HIGH-FREQUENCY
CHEST WALL OSCl
American Bureau of Shipping
CORROSION RELIABILITY AND MAINTAINABILITY ANALYSIS
RELIABILITY OF DEGRADING SHIP STRUCTURE:APPLICATION OF THE TIME
DEPENDENT FIRS
American College Of Laboratory Animal
IncepUon to m e
Sponsor Tale Budget
DEVELOPMENT AND EVALUATION OF DIAGNOSTICASSAYS FOR NEWLY 7,500.00
RECOGNIZED RODENT PARV
American College of Obstetricians And
1
USE OF A STATEWIDE ADMlN DISCHARGE DATA FOR EVALUATION OF ECONOMIC 15,000.00
8 CLINICAL OU
American College of Radiology
RADIATION THERAPY ONCOLOGY GROUP
American Cyanamid Company
PLANT EXTFiACTS 240,000.00
PLANT CHEMICAL RESOURCES FOR PEST AND DISEASE CONTROL 100,000.00
PHARMACEUTICALS
STUDY ON THE EFFECTS OF INSECTICIDES ON INSECT NERVOUS SYSTEMS 6,000.00
USING UNIVERSITY
American Egg Board
MAINTENANCE OF A COMPREHENSIVE DATABASE OF STUDIES EVALUATING THE 63,000.00
EFFECTS OF DIE
American Industrial Hygiene
INDUSTRIAL HYGIENE TECHNICAL SERVICES; SUPPORT FROM AMERICAN 6,800.00
INDUSTRIAL HYGIENE
American Ornithologist Union
BIRD COLLECTION SUPPORT FROM THE LAWRENCE HUBER MEMORIAL
FUND
American Petroleum Institute
ANALYSIS OF LOW MELT POINT PARAFFIN WAX IN KUPFFER CELL
SUPERNATANTS AND GAS CHR
PILOT PHARMACOKINETIC STUDIES ON MINERALHYDROCARBONS
American Pharmaceutical Association
PHARMACY STUDNTS HELP OTHERS HELP THEM- SELVES THRU
INTERCOLLEGIATS PEER COUNSEL
American Protective Senrices, Incorporated
--
COMPARISON OF ECONOMIC DEVELOPMENT AND FIRM LOCATION 39,711.00
CRITERIA
American Society of Civil Engineers
CLIMATE CHANGE-CONSEQUENCES AND ADAPTIVERESPONSES 843.47
American Society of Consuttant Pharmacies
PHARMACOECONOMIC ANALYSIS OF IMPACT OF CONSULTANT PHARMACISTS ON 41,395.00
DRUG RELATED
American Society of Heatth-system Pharmacists
THERAPEUTIC GUIDELINES ON STRESS ULCER PROPHYLAXIS 31,086.00
American Telephone and Telegraph
DESIGN & IMPLEMENTATION OF A HIERARCHICAL CONTROL SYSTEMS 58,000.00
Amgen
EX VlVO EXPANSION OF UMBILICAL CORD BLOOD PROGENITOR CELLS
Page 3 of 51
Sponsor Title Budget
THE AMGEN POST-DOCTORAL FELLOWSHIP IN OUTCOMES RESEARCH IN RENAL ~,O00.00
PATIENT CARE
..STUDY OF IV NOVEL ERYTHROPOIESIS STIMULf\TING PROTEIN (NESP)
COMPARED TO IV REC i
AMGENIUNIVERSIIY OF ARIZONA FELLOWSHIP IP 74,652.00
PRECURSOR CELLS IN UMBILICAL CORD BLOOD 4,000.00
RANDOMIZED TRIAL RECOMBINANT METHIONYL HUMAN STEM CELL ... 18,500.00
CONSULTING SERVICES 62,400.00
ENHANCING THE ROLE OF PHARMACISTS IN THECARE OF CHRONIC DIALYSIS 2,046,658.00
PATIENTS
STUDY OF FILGRASTIM (r-metHuG-CSF) IN THE TREATMENT OF LATE-ONSET 20,650.00
NEONATAL
STUDY OF FlLGRASTlM (R METHUG CSF) IN THE TREATMENT OF LATE ONSET 17,700.00
NEONATAL
Amoco Chemicals Company
CANCER PREVENTION
Amoco Fabrics and Fiber Company
SEISMIC STABILITY OF GEOTEXTILE REINFORCED WALLS 20,000.00
Anergen, Incorporated
IMMUNOGENICITY OF PRIMARY INTRAMUSCULAR VACCINATION WIALUM
ADJUVANT & UP TO 4
Angiotech Pharmaceuticals, Incorporated
A RANDOMIZED, CONTROLLED, DOUBLE-BLIND, SAFETY STUDY USING MICELLAR 24,530.40
PACLITAXEL l
Arizona Advisory Council On Environmental
V BAR V RANCH
Arizona Crop Improvement Association, Inc.
OIL QUALITY IN VERNONIA
CROP IMPROVEMENT 5020-4 156-07 EXPENSES
OPERATIONS
COlTON SEED QUALITY IMPROVEMENT ,
HEAT TOLERANCE MECHANISMS IN COmON
Arizona Elks
NEURAL TRANSPLANTAION OF IMMORTALIZED PRECURSOR CELLS
HUMAN ENDOTHELlAL CELL MONOLAYER FORMATION ON BIOPROSTHETIC
HEART VALVES (VIA UA
GENETICS OF ANGIOGENSIS (VIA UAF)
Arizona Mexico Commission
REGIONAL ECONOMIC DEVELOPMENT INDICATORSSTUDY 10,000.00
ARIZONA COMPETITIVENESS IN NAFTA MARKETS 15,000.00
AMC REGIONAL INDICATOR AND SUSTAINABILTr/ INITIATIVE 15,000.00
REGIONAL ECONOMIC DEVELOPMENT INDICATORSIN ARIZONA-SONORA REGION 15.000.00
PHASE ll
-
h-P
Sponsor Tile I
THE MAQUILA ECONOMIC IMPACT PROJECT 8
ARIZONASONORA ECONOMIC IMPACT STUDIES VISION IMPLEMENTATION: 10
RESEARCH ASSOCIATE \
ARIZONA - SONORA HEALTH SERVICES CONFERENCE 10
Arizona Public Service
REUSE OF SITE WATER FOR HALOPHYTE LANDSCAPING AT OCOTILLO POWER
PLANT: PROPOSAL
REUSE OF SITE WATER FOR HALOPHYTE LANDSCAPING AT OCOTILLO POWER
PLANT: PROPOSAL
Association of American Colleges and
WOMEN AND SCIENTIFIC LITERACY: BUILDING TWO-WAY STREETS
WOMEN AND SCIENTIFIC LKERACY: BUILDING TWO-WAY STREET
WOMEN AND SCIENTIFIC LITERACY: BUILDING TWO-WAY STREET
LEADERSHIP COLLABORATION ON HIV EDUCATION AT THE UNlVERSllY OF
ARIZONA - SUPPLEM
Astra Merck Inc
REMACEMIDE HYDROCHLORIDE AS MONOTHERAPY IN SUBJECTS WITH PARTIAL-ONSET
SEIZURES
EVALUATION OF THE EFFICACY AND SAFRY OFCANDESARTAN CILEXETIL IN THE
TREATMENT
Astra Pharmaceutical Products, Inc
PULMICORT (BUDESONIDE) TURBUHALER, 400 .UG ADMINISTERED ONCE DAILY
FOR 12 WEEKS,
METOPROLOL CWXL RANDOMIZED INTERVENTIONTRIAL IN CONGESTIVE HEART
FAILURE - MER
ASTRA PAIN CONTROL
Astra USA lncorporated
LIGAND-SELECTIVE STIMULATION OF GLUCOCORTICOID RECEPTOR
FUNCTIONS
LIGAND-SELECTIVE STIMULATION OF GLUCOCORTICOID RECEPTOR
FUNCTIONS
SCREENING OF THE GLUCOCORTICOSTEROID RECEPTOR GENE FOR
POLYMORPHISM
Athena Neurosciences, Inc.
SAFETY & EFFICACY OF ADMINISTRATION OF INTRAVENOUS ANTEGREN IN
PATIENTS WNS DU
STUDY OF THE EFFACACY & SAFETY OF ZANAFLEX (TlZANlDlNE HCL) AS
ADJUNCTIVE THERAP
Atrium Medical Corporation
ATRIUM HYBRID PTFE CLINICAL STUDY
Atrix Laharatories, Incorporated
DEVELOPMENT OF TREATMENTS FOR SOLID TUMOR CANCER IN HUMANS USING
THE ATRIX ATRlG
DEVELOPMENT OF TREATMENTS FOR SOLID TUMOR CANCER IN HUMANS USING
THE ATRIX ATRIG
lnwption lo CuU
Budget
17,982.05
Sponsor Tile
DEVELOPMENT OF TREATMENTS FOR SOLID TUMOR CANCER IN HUMANS USING
THE ATRIX ATRIG
Ayerst Laboratories \
ETODOLAC STUDY 502031 3491
B.W. Jorden and Company
FIELD TESTING OF VARIOUS SPRAY DRIFT SENSORS
FIELD EVALUATION OF A REAL TIME PARTICULATE SENSOR
Barrow Neurological Institute
MOLECULAR BASIS FOR NICOTINE DEPENDENCE *SUB AZ DIS CONT RSCH
COMM"
Baxter Healthcare Corp
IMMUNOMODULATORY ANTIBODIES IN INTRAVENOUS
IMMUNOGLOBULINS
Bayer
RECOMBINANT EXPRESSION OF NEUTRALIZING-SENSITIVE PROTEINS OF
L.INTRACELLULARIS
LONG-TERM TREATMENT WhIETRIFONATE (BAY A9826) FOR PATIENTS
2/PROBABLE ALZHEIMERS
COMPARASION OF THE SAFETY & EFFICACY OF BUTOCONAZOLE NITRATE 1-DAY
REGIMEN 2%
PURIFICATION OF U AND M-CALPAIN
BAY 2-9566 AS COMPARED TO PLACEBO, IN THE TREATMENT OF PATIENTS WlTH
MILD TO MOD
TOOLS AND PRODUCTS FOR IMMUNOPROPHYLAXlSOF CLOSTRlDlUM
PERFRINGENS ENTEROTOXEMI
METRIFONATE (BAY A 9826) IN PATIENTS WITH PROBABLE ALZHEIMER'S DISEASE
PROTOCOL
FIXED DOSE METRIFONATE (BAY A 9826) TABLET IN PATIENTS WITH PROBABLE
ALZHEIMER'S
METRIFONATE IN PATIENTS WlTH PROBABLE ALZHEIMER'S DISEASE
EVALUATE THE SAFElY AND TOLERABILIW OF METRIFONATE (BAY A 9826) IN
PATIENTS WIT
Bayer Corporation
METRIFONATE STUDY (BAY A 9826)
METRIFONATE (BAY A 9826) IN PATIENTS WITH PROBABLE ALZHEIMER'S
DISEASE
Bechtel Corporation
EXTERIOR CLIMATIC AND ENVIRONMENTAL MITIGATION SERVICES AND
TECHNICAL ASSISTANCE
OUTDOOR COMFORT AND BUILDING ENERGY EFFICIENCY TECHNICAL
ASSISTANCE MAGIC WORLD
Beiersdofr-Jobst, Incorporated
LYMPHODYNAMICS AND EFFECTS OF OCTERNAL CCOMPRESSION IN DISORDERS
OF LYMPH FLOW
Bell Communications Research
lncoptbn to OW
Sponsor Title Budg- et
INTEROFFICE NETWORK PLANNING 126,578.00
Bell Laboratories
BELL LABORATORIES COOPERATIVE RESEARCH' FELLOWSHIP PROGRAM I,SOO.OO
(ASENETH LOPEZ)
Belmac Corporation
BlOLlD VERSUS EES IN THE TREATMENT OF GROUP A BETA-HEMOLMIC
STREPTOCOCCAL PHARY
Berlex Laboratories, Inc.
MODULATION OF FLUDARA TOXICITY USING AMIFOSTINE 20,000.00
BETASERON IN PATIENTS WITH SECONDARY - PROGRESSlVE MULTIPLE 1,646,094.00
SCLEROSIS
BHP Copper, Incorporated
FLORENCE SOLUTION MINING STUDY. SUPPORT FROM BHP COPPER
INC.
(NSF) INDUSTRYAINIVERSW COPPERATIVE RESEARCH CENTER ON WATER 62,355.00
QUALITY - INDUSTR
BHP-Utah Minerals International
TECTONICS, GEOCHEMISTRY, & PETROLOGY OF THE VULCANOGENIC MASSIVE 40,000.00
SULFIDES OF NOR
Blo-Pharm Clinical Services, Inc
MULTICENTER, DOUBLE-BLIND, RANDOMIZED, PLACEBO-CONTROLLEDSTUDY TO 65,962.41
ASSESS THE EFF
Bio-Products, lncorporated
TEST BlOCOMPATlBlLITY OF PROD 1,320,518.20
Biocyte Corporation
STUDY OF PRECURSOR CELLS IN UMBILICAL CORD BLOOD
Biomedical Research Group, Inc.
THE EFFICACY AND SAFETY OF APROTlNlN IN REDUCING BLOOD LOSS AND
TRANSFUSION REQU
Biosphere 2 Center, Incorporated .-
BIOSPHERE 2 SMALL GRANTS PROGRAM
USING BISPHEE 2's OCEAN TO TEST
ISOTOPIC INDICATORS OF C02 AND H20 FLUXEIN SEMI-ARID
ECOSYSTEMS
Blackwell Publishers Ltd.
LINGUISTICS ABSTRACTS AND CURRENT LINGUISTICS 57,500.00
Boehringer Ingelheim Ltd.
EFFECTS OF A PRECONDITIONING PROGRAM ON MORBIDITY, MORTALITY AND 1,000.00
PRODUCTIVITY OF
... EFFICACY & SAFETY OF MELOXICAM 7.5MG VS. USUAL CARE ADMINISTRATION 5,635.50
OF Rx NSAl
WHEEZING INFANTS ALUPENT STUDY 46,666.00
Sponsor Tale Budget
DOUBLE-BLIND, PLACEBO-CONTROLLED, PARALLEL GROUP COMPARISON TO 37,OOO.OO
ASSESS THE SAFETY
PARALLEL GROUP COMPARISON TO ASSESS TYE SAFW, TOLERANCE AND 28,068.55
EFFICACY OF PRAMlP 1
IPRATROPIUM BROMIDE HFA-134a AND IPRATROPIUM BROMIDE CFC 70,312.50
A MULTIPLE DOSE COMPARISON OF 18 MCG OF TlOTROPlUM INHALATION 138,997.00
CAPSULES AND PLACE
Boehringer Mannheim Pharmaceuticals
PLAN OF ACTION TO OPTIMIZE LIBERASE AS APREFERRED ENDOTHELIAL CELL 32,618.00
ISOLATION AG
Boeing Aemspace Company
EVALUATING COELOSTAT MIRRORS FOR R.T.S. SUPPORT FROM ROCKETDYNE 91,659.00
TECHNICAL SERVl
DISTURBED STATE MODEL FOR COMPUTER CODESTOWARD DURABILITY 30,000.00
ANALYSIS
ATMOSPHERIC SENSING AND CORRECTION STUDY- ENABLING INVERSION OF 32.1 10.00
REMOTELY SENSED
TESTING AND CONSTITUTIVE MODELING OF JOINING MATERIALS FOR DESIGN 20,000.00
AND RELIABlLrr
ALIGN AND TEST 24" CASSEGRAIN TELESCOPE. 29,087.00
ALIGN AND TEST 24" CASSEGRAIN TELESCOPE. 33,905.53
Boots Pharrnaceutlcal, Inc
FLOSEQUINAN ON THE SURVIVAL OF PATIENTS WITH CHRONIC CONGESTIVE 16,606.00
HEART FAILURE
Bowater Great Northern Paper, Incorporated
HYDROLOGICAL ANALYSIS IN THE REGION OF MAINE 10,043.55
Boyle Engineering Corporation
RIO GRANDE CONVEYANCE SYSTEM AND SURFACEWATER TREATMENT PUNT - 63,000.00
PHASE I FINAL E
Bristol Laboratories
PHASE Ill STUDY OF GATIFLOXICAN VERSUS LEVOFLOXACIN IN THE TREATMENT 3,500.00
OF COMMUNIT
Bristo I-Myers Company
HEMODYNAMIC EFFECTS AND SAFW OF THE DUAL METALLOPROTEASE 82,451.20
INHIBITOR (DMP-I) BMX
LONG-TERM TREATMENT WITH THE DMP INHIBITOR BMS-186716 OR LlSlNOPRlL IN 5,200.00
SUBJECTS
PHASE Ill STUDY OF GATIFLOXACIN VS. CEFTRIAXONE IN THE TREATMENT OF 5,725.00
COMMUNITY-AC
PHASE V11 STUDY OF HIGH-DOSE MELPHALAN IN COMBINATION WITH HIGH-DOSE 5,000.00
ETOPOSIDE
DNA ADDUCT FORMATION AND HPRT MUTAGENESIS TO PREDICT DISEASE 71,397.54
RESPONSE IN PREVIOU
A PHASE I DOSE ESCALATION TRIAL OF TAXOL(PACILITAXEL) AND ETOPOPHOS 45,789.76
(ETOPOSIDE
BMS DEPR #I81 101-CL 91,980.00
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APPENDIX E
RISK OPPORTUNITY
MANAGEMENT PROCESS
Risk and Opportunity Management:
A Value Based Management Approach
By: David Gledhill & Dan Brooks
ABSTRACT
Most risks and opportunities impact multiple organizational values, effect more than a single
stakeholder and often have significant uncertainty associated with them. This complexity makes
it dificult for managers to address them in a consistent manner, taking into consideration these
multidimensional aspects. This paper points out how to avoid missing dimensions of risk and
opportunity impact, and how to use aggregate benefit and cost measures to make pragmatic
tradeoffs when deciding which risks or opportunities to address first. By using value-based
benefit and cost estimates to prioritize activities that address both risks and opportunities, the
project manager and technical staff can reduce the most risk (or capture the most opportunity)
for the fewest number of dollars. This prioritization process provides managers with a much
more consistent method for selecting risk mitigation and opportunity capture actions with the
most benefit for the cost because the decision process is based on a model that quantifies value
using a sound methodological foundation rather than ad hoc 'rules of thumb.' Finally, this risk
and opportunity management process aids project managers in tracking activities so that after
implementation they are subsequently measured for performance and effectiveness.
1. Executive Overview
With corporate emphases being placed simultaneously on delighting customers and, at the same
time, improving cycle times and meeting challenging business performance goals, it is more
important - and more difficult - than ever to manage risk mitigation and opportunity capture
well. Risk management has traditionally been driven by risk assessment. That is, formal and
rigorous methods of risk assessment are followed in identifying risks. The risks are typically
defined in terms of the technical domain of the project, and the process of risk definition and
identification is carried out by technical staff using procedures developed independently of
corporate strategies or objectives. Once the risk assessment is completed, the way in which the
results are used to manage risks is neither formal nor rigorous. A wide range of ad hoc, informal
methods for "ranking" risks are used to identify those risks (or projects) that should be attended
to first. These ranking processes are usually developed and conducted by individual project
management teams and, as a result, are rarely coordinated across the corporation or serve
prioritization purposes much beyond the individual project level.
As a result, the bases upon which priorities are set vary considerably from program to program,
and often vary within a single program or large project. The approach to prioritizing risk-reducing
activities often depends on the source of the risk, rather than the risk itself and the value
of averting that risk. These more traditional approaches to risk and opportunity management
have been around for a number of years, and the base processes are familiar but vary
considerably within corporations. The use of value-based management methodologies and tools,
as proposed in this paper, for both risk assessment and risk management are relatively new in
their application within most companies. Instead of using ad hoc and qualitative processes
("low," "medium," "high" rankings, for example, where these words are often single-dimension
and qualitative guidelines for prioritizing), a more rigorous methodology base for prioritization is
employed. This is an aid both to the consistency of the process and to clarity of communication.
This can improve the defensibility of decisions in a number of ways. Few major projects, for
example, may have similar opinions about what is meant by high versus what is low; as a result,
there can be widely varying viewpoints when it comes to evaluating tradeoffs for allocating
resources to risk mitigation and opportunity capture strategies. In addition, many risks and
opportunities impact more than one company objective. Few organizations today address these
multiple dimensions of risk and opportunity adequately, and therefore miss important aspects
that should influence decisions.
This paper presents an overview of the use of decision analysis and, in particular, multi-attribute
preference theory as a sound methodology for incorporating risk management into routine
business planning in a way that is consistent with an organization's overall pursuit of its strategic
objectives. The process is defensible, adaptable to a wide range of business activities, and
provides an "audit trail" so that management decision makers can document the basis upon
which they allocate resources to mitigate risks and what this means to the overall attractiveness
of various business operations.
Since opportunities and risks are like two sides of the same coin, the methodology is as
appropriate for addressing opportunities as it is risks. While the process is the same, the way we
think of them and the tools that we use to assess them have a slightly different focus. The
activities associated with new business opportunities, for example, should be focused externally
upon the market and customer needs. Managing project risks, on the other hand, is focused
internally upon things that will inhibit the project from meeting its goals. In fact, many risk
management strategies will need to address both internal and external goals to be successful.
The Risk and Opportunity Management Process (ROMP) can help you develop a risk mitigation
plan and set of actions that, if done early enough and is managed well through a set of well
understood metrics, will minimize the costs associated with risk, and add profit to the bottom
line. Using the process to select opportunities that will generate the most return for capture
investment will grow the top line. With your program on track and risks under control, you can
enhance profitability and sleep well at night.
For more information contact:
David Gledhill480-441-0577 or 602-721-3269 or email David.Gledhill@motorola.com
Dan Brooks 480-497-2624 or email dan@adainc.com
APPENDIX F
COMMITTEE CHARGE, OBJECTIVES
AGENDAS AND ROSTER
Warren Rustand
Committee Chairman
Voting Members:
Dave Areghini
Salt River Project
Wayne Benesch
Attorney
John Bourna
Snell & Wilmer
Pat Cantelme
United Phoenix Firefighters
Assoc.
Leslie Carpenter
Maniott
Durrell Hillis
Motorola
Bill Hochgraef
Retired, Motorola
Olden Lee
Retired, Pepsico
Jan Lesher
Lesher Communications
Robin Parke
Retired, Robin E. Parke
Engineers, lnc.
Bill Pope
Sunchase Holdings, Inc.
Jennifer Reichelt
Student Regent
Advisory Members:
Tom Browning
Greater Phoenix Leadership
Paul Frost, Student
Arizona State University
Steve Grunig
Joint Legislative Budget
Committee
Mernoy Harrison
Arizona State University
Dave Lorenz
Northern Arizona University
Tony Seese-Bieda
Board of Regents
Tara Taylor, Student
University of Arizona
Joel Valdez
University of Arizona
Kim Van Pelt
Office of the Auditor General
Jeff Young
Office of Strategic Planning and
Budgeting
-1 ~xternaRl eview Committee
Arizona Board of Regentr
Committee Charge
To engage in a comprehensive review and
evaluation of existing public private
partnerships, privatization, and outsourcing.
To develop an assessment of opportunities
and challenges for additional initiatives which
will result in greater value being generated for
all Arizonians.
Warren Rustand
Committee Chairman
Voting Members:
Dave Areghini
Salt River Project
Wayne Benesch
Attorney
John Bouma
Snell & Wilmer
Pat Cantelme
United Phoenix Firefighters
Assoc.
Leslie Carpenter
Mamott
Durrell Hillis
Motorola
Bill Hochgraef
Retired, Motorola
Olden Lee
Retired, Pepsico
Jan Lesher
Lesher Communications
Robin Parke
Retired, Robin E. Parke
Engineers, Inc.
Bill Pope
Sunchase Holdings, Inc.
Jennifer Reichelt
Student Regent
Advisory Members:
Tom Browning
Greater Phoenix Leadership
Paul Frost, Student
Arizona State University
Steve Grunig
Joint Legislative Budget
Committee
Mernoy Harrison
Arizona State University
Dave Lorenz
Northem Arizona University
Tony Seese-Bieda
Board of Regents
Tara Taylor, Student
University of Arizona
Joel Valdez
University of Arizona
Kim Van Pelt
Office of the Auditor General
Jeff Young
Office of Strategic Planning and
Budgeting
I_ External Review Committee
Arizona Board of Regent.
Committee Objectives
Review existing national bench marks or guidelines used
by the university in privatization and outsourcing. Assess
the applicability of these standards to the Arizona setting
and how they might be made more relevant to Arizona.
Examine the national experience and outsourcing in
higher education - where and why it has been used and
where it does not appear to function well.
Assess the Arizona universities' efforts against this
national backdrop. Do Arizona universities appear to be
pursuing privatization consistent with the national
experience, recognizing the universities' different
missions, management capabilities present in auxiliary
enterprise and other local conditions?
Review the universities' processes and criteria being used
to evaluate and undertake privatization and outsourcing
opportunities. Suggest revisions as desirable. Are there
activities or functions that should be given priority in
evaluating candidates for privatization? What are the
opportunities for tri-university outsourcing?
Identify any ABOR policies or external mandates that may
impede privatization initiatives or impact entities providing
services under contracts with the universities. Analyze
the financial model presented in the State of Arizona
Competitive Government Handbook.
Make recommendations on effective partnering with the
firms providing the outsourced goods or services.
Review the universities' processes being used to evaluate
their privatization experience.
Make such additional observations or recommendations
it wishes for the use of the Board and the universities.
AGENDA
Meeting of the Public Private Partnership External Review Committee
Thursday, October 2Td, 1998
Offices of the Arizona Board of Regents
Phoenix, Arizona
9 a.m. Welcome & Introductions
9: 1 5 a.m. Opening Remarks
9:30 a.m. Background Remarks
9:45 a.m. Review of Committee Charge & Objectives
B R E A K
10:30 a.m. Review of Committee Structure & Roles
I I a.m. President's Perspective
University Privatization Experiences
I 1 :30 a.m. What kinds of information for next meeting?
- Statutory considerations
- Other information requests
- Review schedule, locations
- Other action items
I p.m. Adjourn
Regent Don Ulrich
Frank Besnette
Warren Rustand
Warren Rustand
(To occur at
subsequent
meeting)
Joel Valdez UA
Mernoy Harrison
ASU
Dave Lorenz NAU
Warren Rustand
Warren Rustand
Committee Chairman I
Voting Members:
Dave Areghini
Salt River Project
Wayne Benesch
Attorney
John Bouma
Snell & Wiirner
Pat Cantelme
United Phoenix Firefighters
Assoc.
Leslie Carpenter
Maniott
Durrell Hillis
Motorola
Bill Hochgraef
Retired, Motorola
Olden Lee
Retired, Pepsico
Jan Lesher
Lesher Communications
Robin Parke
External Review Committee
Arizona Board of Regents
Public Private Partnerships - External Review Committee
Agenda
Friday, December 4, 1998
ABOR Plaza Conference Room
9:00 a.m. Welcome, Introductions* Warren Rustand
9:15 a.m. Review of Minutes & Committee Charge Warren Rustand
9:30 a.m. UA's Perspective and Insights Peter Likins
10:15 a.m. Break
10:30 a.m. Budget Development Process Dick Roberts
Retired, Robin E. Parke I 1 1 : 15 a.m. Legal and Policy Parameters
Engineers, Inc.
Bill Pope
Sunchase Holdings, Inc.
Jennifer Reichelt
Student Regent
Advisory Members:
Tom Browning
Greater Phoenix Leadership
Paul Frost, Student
Arizona State University
Steve Grunig
Joint Legislative Budget
Committee
Mernoy Harrison
Arizona State University
Dave Lorenz
Northern Arizona University
Tony Seese-Bieda
Board of Regents
Tara Taylor, Student
University of Arizona
Joel Valdez
University of Arizona
Kim Van Pelt
Office of the Auditor General
Jeff Young
Office of Strategic Planning and
Budgeting
Ray Jensen
11:30 a.m. Discussion and Next Steps Warren Rustand
Housekeeping: Final Dates for Next Four
Meetings (Scheduling Matrix)
Lunch Sponsors
12:00 Noon Lunch (served in the conference room)
* New Members: Wayne Benesch, Leslie Carpenter
First Time Attendees: Jan Lescher
Warren Rustand
Committee Chairman
Voting Members:
Dave Areghini
Salt River Project
Wayne Benesch
Attorney
John Bouma
Snell & Wilmer
Pat Cantelme
United Phoenix Firefighters
Assoc.
Leslie Carpenter
Marriott
Durrell Hillis
Motorola
Bill Hochgraef
Retired, Motorola
Olden Lee
Retired, Pepsico
Jan Lesher
Lesher Communications
Robin Parke
Retired, Robin E. Parke
Engineers, Inc.
Bill Pope
Sunchase Holdings, lnc.
Jennifer Reichelt
Student Regent
Advisory Members:
Tom Browning
Greater Phoenix Leadership
Paul Frost, Student
Arizona State University
Steve Grunig
Joint Legislative Budget
Committee
Mernoy Harrison
Arizona State University
Dave Lorenz
NoFthem Arizona University
Tony Seese-Bieda
Board of Regents
Tara Taylor, Student
University of Arizona
Joel Valdez
University of Arizona
Kim Van Pelt
Office of the Auditor General
Jeff Young
Office of Strategic planning and
Budgeting
External Review Committee
Arizona Board of Regents
Public Private Partnerships - External Review Committee
Agenda
Friday, January 8, 1999
ABOR Plaza Conference Room
Welcome Warren Rustand
Review of 12-4-98 Minutes Warren Rustand
Review of Auditor General Performance Kim Van Pelt
Audit
Review of Budget Expenditure Categories ABOR Staff
Break
Presentations by University Presidents
Dr. Lovett, NAU
Dr. Coor, ASU
Discussion session
Break
Facilitated Discussion Warren
Rustand
Summary of what we know
Major themes
Additional information we need to obtain
What are our deliverables and what
process will we use to produce them
Box Lunch Provided
Warren Rustand
Committee Chairman
Voting Members:
Dave Areghini
Salt River Project
Wayne Benesch
Attomey
John Bouma
Snell & Wilmer
Pat Cantelme
United Phoenix Firefighters
Assoc.
Leslie Carpenter
Maniott
Durrell Hillis
Motorola
Bill Hochgraef
Retired, Motorola
Olden Lee
Retired, Pepsico
Jan Lesher
Lesher Communications
Robin Parke
Retired, Robin E. Parke
Engineers, Inc.
Bill Pope
Sunchase Holdings, Inc.
Jennifer Reichelt
Student Regent
Advisory Members:
Tom Browning
Greater Phoenix Leadership
Paul Frost, Student
Arizona State University
Steve Grunig
Joint Legislative Budget
Committee
Mernoy Harrison
Arizona State University
Dave Lorenz
Northem Arizona University
Tony Seese-Bieda
Board of Regents
Tara Taylor, Student
University of Arizona
Joel Valdez
University of Arizona
Kim Van Pelt
Office of the Auditor General
Jeff Young
Office of Strategic pinning and
Budgeting
External Review Committee
Arizona Board of Regents
AGENDA
Public Private Partnerships - External Review Committee
Friday, February 19, 1999
Room 208, McClelland Hall, University of Arizona
9:00 a.m.
9: 15 a.m.
930 a.m.
Break
10:15 a.m.
1 1:45 a.m.
12:30 p.m.
Welcome and Introductions
Review of Committees
- Scope of Work, Time Line,
Reporting Out
Warren Rustand
Warren Rustand
Warren Rustand
- Breaking the Paradigm
- The New Process and Outcomes
Committee Beakout
- Legal & Regulatory Barriers Wayne Benesch
- Data for Benchmarking Cathy McKee
- The Evaluation Process/Accountability Dave Areghini
- Targets of Opportunity Bill Hochgraef
- New Models for the Future Pat Cantelme
Discussion
Next Steps Warren Rustand
March Meeting (DateILunch Sponsor)
Lunch
Warren Rustand
Committee Chairman
Voting Members:
Dave Areghini
Salt River Project
Wayne Benesch
Attorney
John Bouma
Snell & Wilmer
Pat Cantelme
United Phoenix Firefighters
Assoc.
Leslie Carpenter
Marriott
Durrell Hillis
Motorola
Bill Hochgraef
Retired, Motorola
Olden Lee
Retired, Pepsico
Jan Lesher
Lesher Communications
Robin Parke
Retired, Robin E. Parke
Engineers, Inc.
Bill Pope
Sunchase Holdings, Inc.
Jennifer Reichelt
Student Regent
Advisory Members:
Tom Browning
Greater Phoenix Leadership
Paul Frost, Student
Arizona State University
Steve Grunig
Joint Legislative Budget
Committee
Mernoy Harrison
Arizona State University
Dave Lorenz
Northern Arizona University
Tony Seese-Bieda
Board of Regents
Tara Taylor, Student
University of Arizona
Joel Valdez
University of Arizona
Kim Van Pelt
Office of the Auditor General
Jeff Young
Office of Strategic Planning and
Budgeting
I_ External Review Committee
Arizona Board of Regents
Agenda
Public Private Partnerships-External Review Committee
April 7, 1999
ABOR Office
2020 North Central, Suite 230
9:00 a.m. Welcome and Overview Warren Rustand
9:15 a.m. Breakout Sessions for
Subcommittees
10:OO a.m. Break
10: 15 a.m. Reports from Subcommittees
Legal and Regulatory Barriers
Benchmarking
Evaluation and Accountability
Targets of Opportunity
New Models for Future
1 1 :00 a.m. Roundtable Discussions: Critique and
Debate
1 1:30 a.m. Lunch
Next Steps: Developing Recommendations
Discussion: Next Meeting (to be held in
Flagstaff, possibly during week of May 10-14)
1.00 p.m. Adjourn
Warren Rustand
Committee Chairman
Voting Members:
Dave Areghini
Salt River Project
Wayne Benesch
Attorney
John Bouma
Snell & Wilmer
Pat Cantelme
United Phoenix Firefighters
Assoc.
Leslie Carpenter
Mamott
Durrell Hillis
Motorola
Bill Hochgraef
Retired, Motorola
Olden Lee
Retired, Pepsico
Jan Lesher
Lesher Communications
Robin Parke
Retired, Robin E. Parke
Engineers, lnc.
Bill Pope
Sunchase Holdings, Inc.
Jennifer Reichelt
Student Regent
Advisory Members:
Tom Browning
Greater Phoenix Leadership
Paul Frost, Student
Arizona State University
Steve Grunig
Joint Legislative Budget
Committee
Mernoy Harrison
Arizona State University
Dave Lorenz
Northern Arizona University
Tony Seese-Bieda
Board of Regents
Tara Taylor, Student
University of Arizona
Joel Vaidez
University of Arizona
Kim Van Pelt
Office of the Auditor General
Jeff Young
Iffice of Strategic Planning and
Budgeting
External Review Committee
Arizona Board of Regents
Public Private Partnership-External Review Committee
Friday, May 14, 1999
Northem Arizona University, Flagstaff
Administrative Center (Bldg. 5 11, Room 206
Agenda
9:00 a.m. Introduction
Welcome
9: 15 a.m. Breakout by Subcommittee to
Discuss Reports and
Prepare to Present
9:45 a.m. Evaluation & Accountability
New Opportunities
Bench marking
Legal & Regulatory Barriers
"New Model"
Warren Rustand
Dr. Clara Lovett
Team
Team
Team
Team
Team
Noon Lunch
b next steps
b time line
w final report: June 24, FlagstaffIABOR
(Due to ABOR June 9; mailed
To Board Members June 15)
Biographical Profiles
Members of the Public Private Partnership External Review Committee
David G. Areghini - Mr. Areghini is Associate General Manager of Power,
Construction and Engineering Services at Salt River Project in Phoenix, a post he has
held since 1991. A registered engineer, he is responsible for the engineering,
construction, operation and maintenance of SRP1s electric system. He has served as a
community member on boards at UA and ASU, as well as the Children's Cancer Center,
The Phoenix Theater and the Phoenix Children's Hospital. He earned a B.S. in civil
engineering from UA, and an MBA from UCLA. He was born in Cottonwood, Arizona.
Wayne C. Benesch - Mr. Benesch is an attorney and shareholder in the law firm of
Byrne, Benesch & Walsma, P.C. of Yuma. He has practiced law in Arizona since 1967.
He has served on a variety of community organizations, including Arizona Town Hall,
Salvation Army Advisory Board, UA Alumni Association, and the State Bar of Arizona.
Mr. Benesch attended Mesa High School, and received undergraduate and law degrees
from the University of Arizona. He is a native of Mesa.
John J. Bouma - Mr. Bouma is chairman of Snell & Willmer L.L.P., a law firm with
offices in Arizona, California and Utah. His practice is concentrated in business litigation,
antitrust, financial institutions and professional liability defense. His community service
includes board membership on state, regional and national bar associations, as well as
the Phoenix Art Museum, Arizona Opera Company and the Phoenix Community
Alliance. He has been recognized for his contributions to the community and the legal
profession by Community Legal Services, ASU College of Law, the Arizona Bar
Foundation and the National Law Journal.
Patrick E. Cantelme - Mr. Cantelme is president of the United Phoenix Firefighters'
Association, a post he has served in since 1978. Prior to that he was a firefighter and
fire captain for the city of Phoenix since 1968. His community service includes
involvement in the Phoenix Aviation Advisory Board, Chamber of Commerce, and
Labor's Community Service Agency. He has also served on the Phoenix Planning and
Zoning Commission, Greater Phoenix Economic Council and Valley of the Sun United
Way. A graduate of St. Mary's High School, Mr. Cantelme is a graduate of Arizona State
University and the Harvard Trade Union Program.
Leslie Carpenter - Ms. Carpenter is general manager of the Residence Inn by Marriott
in Flagstaff, a position she has held since 1994. Prior to that she managed a property for
Marriott in Tucson, and has more than 20 years experience in the hotel industry. She
serves on the executive committee of the Flagstaff Chamber of Commerce, as well as
the Tourism Commission and the Board of the Flagstaff Innkeepers Association.
Durrell W. Hillis - Mr. Hillis is senior vice president and general manager of Motorola's
Systems Solutions Group, responsible for advanced communication and electronic
systems for commercial users, NASA, and the Department of Defense. His previous
responsibility included the development of the new Iridium(R) global satellite
telecommunications system. His community involvement includes Greater Phoenix
Leadership, United Way, Boys and Girls Clubs, and the UA and ASU engineering
advisory councils. Mr. Hillis earned a B.S.E.E. from UA and an MBA and MSE from
ASU. He has been awarded three patents: two in semiconductor memory design and
one in cellular communications.
William W. Hochgraef - Mr. Hochgraef is retired from Motorola where he served for
33 years, most recently as Technology Asset Manager for Motorola's System Solution
Group in Scottsdale. His community service includes the ASU Engineering & Applied
Sciences advisory council, ASU Alumni Association, the Desert Samaritan Medical
Center Auxiliary. A graduate of Williams High School in
Williams, Arizona, he earned B.S. degrees from NAU and ASU, and a master's degree
in engineering from ASU.
Olden C. Lee - Mr. Lee has retired from Pepsico after 28 years of service. Most
recently he served as senior vice president for human resources for the Taco Bell
Corporation, responsible for recruiting, employee relations, compensation and benefits,
management development and public affairs. His service to community has included the
advisory board of the UA school of business, UA alumni involvement committee, the
Louisville Opera, Texas Christian University's International Board of Advisors, and the
100 Black Men organization. He earned a B.A. from the UA, where he also played
varsity football.
Jan Lesher - Ms. Lesher is owner and operator of Lesher Communications Inc., a
Tucson based firm offering public relations and public affairs services. She has served
in management positions in the fields of economic development, public relations,
advertising and cable television. Her community service includes the Community Food
Bank, La Frontera Center, the UA Alumni Association, Tucson 30 and Women at the
Top. She has won the Governor's Award for the Arizona Women's Partnership. A
graduate of Tucson High School, she earned
a B.A. from UA.
Robin E. Parke - Mr. Parke has retired as CEO of Parke Associates Structural
Engineers, which he founded. As CEO he had responsibility for more than 5,000
projects across the U.S. and several foreign countries, including some of the largest
electronics plants in the world. He has served the community through involvement with
ASU, John C. Lincoln Hospital, the Arizona Kidney Foundation and the National Bank of
Arizona. He also served on the Arizona State Board of Registration for Architects and
Engineers. Mr. Parke received degrees from the University of Washington, the
University of North Dakota and the University of Southern California.
William A. Pope - Mr. Pope is President and CEO of SunChase Holdings Inc., an
international diversified holding company with residential housing, commercial real
estate, wood products, fiber optics and software operations. He serves his
community through involvement with Phoenix Memorial Hospital, the New Mexico and
Arizona Land Company and Boys and Girls Clubs of Metro Phoenix.
Jennifer Reichelt - Ms. Reichelt is a student member of the Arizona Board of
Regents, a post to which she was appointed by Gov. Jane Hull in 1998. Prior to that,
she served as president of student body at NAU, vice president for academic affairs,
and a member of the student senate. Her work experience includes assignments for the
City of Yuma Human Resources Department and the Yuma School District. She has
served the community through involvement with Adopt-A-Block, Mortar Board, and Delta
Delta Delta. Ms. Reichelt earned a B.A. from NAU and is pursuing a masters degree in
public administration from NAU.
Warren Rustand - Mr. Rustand is the former chairman and CEO of RurallMetro
Corporation in Scottsdale, a health and safety solutions company. He also served as
chairman and CEO of Cambridge Company, Ltd., a merchant and investment banking
firm; chairman of Health Partners of Arizona; chairman of 20120 Laser Centers, and
board member of Lucas Varity Corporation. Mr. Rustand has served as a White House
Fellow, special assistant to the Secretary of Commerce, special assistant to the Vice
President of the United States, and Appointments Secretary to President Gerald Ford.
His community service includes involvement with the World Presidents Organization,
Greater Phoenix Leadership, the Arizona Chamber of Commerce and more than 50
community boards and organizations. He earned bachelors and masters degrees from
UA, where he was student body president, Academic All-American of the basketball
team, and member of the U.S. gold medal-winning basketball team at the World
Basketball Championships.