PROGRESS REPORT- Central Governments Training & Seminar Contracts

UPR INTERAGENCY ALLIANCE/EXECUTIVE ORDER 2017-021

Rafael A . Torrech San Inocencio, Advisor to the UPR President, May 9, 2017

In March 2017, in compliance with the Governors Executive Order 2017-012 and with the
valuable support of the Public Affairs Secretarys senior staff, the University of Puerto Rico
(UPR) began a reciprocal dialogue with 18 public agencies to identify service and training
contract procurement opportunities.
Based on an Interagency Alliance model designed by the UPR (Appendix 1) the 18 agencies
shared their most pressing service needs, and the UPR (President, Vice-Presidents,
Chancellors and other senior officials) answered with numerous highly pertinent potential
services consistent with the strengths and particular expertise of each academic unit. The
government agencies were impressed with UPRs resources and the potential for the
provision of services through mutually beneficial contracts. As a result, each agreed to sign
a Memorandum of Understanding (MOU) with the UPR President in the specific context of
Executive Order 2017-021. The MOUs will include each agencys needs and the overall
terms and conditions that will guide the UPR Interagency Alliance service contracts.
On April 17, the Acting UPR President disseminated the Alliance and its purposes to the
University Community. UPR staff assembled a comprehensive inventory of more than 280
specific contract needs and priorities for the 18 agencies. The inventory was disseminated
and UPR units are currently using it to design and articulate preliminary concepts for each
pertinent agency. A form was designed for these purposes and the UPR Central
Administration has developed a new mechanism to expedite service contracts (Appendix
2) and to stimulate faculty participation and to attract to the Alliance faculty members who
already have independent contracts with the government. Each campus designated a
collaborative liaison to work with the Central Administration senior staff to channel these
concepts and ideas to the corresponding agency. The response has been enthusiastic and
effervescent, and many excellent ideas and proposals have been brought forth. However,
this process must wait for the Alliances MOUs to be officially formalized.
Simultaneously, the Office of the UPR President developed 18 MOU drafts which were sent
to the Agriculture, Economic Development and Commerce, Education, Family Affairs,
Health, Housing, Justice, and Labor and Human Resources Department, and the
Government Development Bank (April 3); the Correction and Rehabilitation, and
Transportation and Public Works Departments, the Tourism Company and the
Governments Ethics Office (April 19); the Socioeconomic and Community Development
Office (April 21); the Ports Authority, the Public-Private Alliances Authority, and the Youth
Development Office at the Economic Development Department (May 2); and finally the
Governors Federal Affairs Office (May 3). As of May 9th, only the Government Development
Bank has returned the revised drafts, with a commitment from the Labor and Human
STATUS AND PROGRESS REPORT - UPR INTERAGENCY ALLIANCE/EXECUTIVE ORDER 2017-021 2

Resources Department that their revised draft will be forthcoming this week. The
Governors Public Affairs Secretariat senior staff has been giving follow-up to the MOUs,
which are crucial in getting the Alliance in traction.
To comply with the Executive Orders expressed purpose to bring additional resources and
increase UPR funding, the UPR Alliance MOU agreements provide for a 10 to 20 percent
management fee or indirect cost. This is the income that will be assigned to offset the
projected UPR budget reductions. As established by local and federal laws and regulations
and by generally accepted fund management principles, most (80% to 90%) of the funds
will be used to cover the costs associated with the provision of the services contracted. For
instance, in order to generate $50 million annually to neutralize budget reductions, the
UPR Interagency Alliance has to procure between $250 and $500 million in government
contracts in 2017-2018, which is an attainable goal. The UPR will also seek a kick-off or
progressive management fee disbursement to expedite the availability of these funds.
Currently, there are several contract offers in the pipeline that could be formalized soon.
Some are active contracts whose managers want to be part of the Alliance, as well as new
ventures under discussion, primarily in the PR Department of Education. There are also
interesting contract prospects with the Departments of Agriculture, Family Affairs,
Corrections and Rehabilitation, Justice and Labor and Human Resources, just to name the
most promising; even with some agencies such as the Sports and Recreation Department
that did not participate in the initial inter-government dialogues. Additional agency
dialogues are expected. Some agencies have expressed their interest in expanding current
service agreements with specific campuses, such as UPR-Mayagez and UPR Medical
Sciences. The signing of the pending MOUs will set all of these initiatives in motion.
A $50 million (after services) Alliance income is viable, through an annual service contract
load between $250-$500 million. Multi-year agreements and increasing confidence in UPR
performance and cost effectiveness will lead to increased contract income in the next three
years. The less optimistic of several scenarios to ascertain UPR Interagency Alliances
potential income using data available from 2014-2015 suggests a $55 million return in
management fees for UPR Alliance contracts.
CONTRACT AREA ALL CONTRACTS* % TO UPR TOTAL
Education, Training and Orientation $485,979,344 60% $291,587,606
Advertising, Representation and Artistic $219,362,656 10% 21,936,265
Consulting $111,512,235 40% 44,604,894
Technical Services $250,129,574 20% 50,025,914
TOTAL $1,066,983,809 $408,154,679
At 15% $61,223,201
PROJECTED UPR MANAGEMENT FEE At 10% $48,815,467
Average $55,019,334
* 2014-2015
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APENDIX 2