RIT Instructions

Recovery of Investment Template (RIT) Instructions

Agencies, including the Office of State Publishing (OSP), seeking to acquire new or replacement printing, bindery, or finishing equipment valued at more than $50,000, are required to submit a Printing Equipment Acquisition Request (PEAR) to the Department of General Services (DGS) OSP State Printer for approval, pursuant to State Administrative Manual (SAM) 2876. Internal policy requires OSP to also obtain PEAR approval for mailing equipment purchases.  

Note: All information in this document apply to both OSP and external agencies unless explicitly noted otherwise. The word “requestor” universally refers to both external agencies and the Office of State Publishing.

$50,000 is the per-equipment threshold and includes the base cost of the equipment, hardware upgrades such as an operator light and additional drawers or feeders, inline finishing equipment such as a stacker or booklet maker, and any operating speed licenses. The per-equipment threshold does not include sales tax, training, or software. For example, if the total purchase price of a press comes to $49,999 with $3,999 in sales tax, $7,000 in training, and $2,500 for Fiery software license/installation, the press does not require OSP approval through the PEAR process. The PEAR must utilize the Recovery of Investment Template (RIT) to help demonstrate the requestor’s capacity to operate the printing equipment efficiently and cost effectively.

Section 1 - Starting the Process

Below is a list of items that must be completed prior to an official PEAR submission to the OSP In-Plant Unit:

  • Conduct research to determine what makes, models, and capabilities are available.
    • It is highly recommended that in-plants look at products/solutions from multiple vendors.
    • The OSP In-Plant Unit can help set up meetings with vendors or provide relevant contact information on request. The OSP In-Plant Unit will also attend meetings between vendors and in-plants or OSP programs on request.
  • Obtain a budgetary estimate (not a quote) from the desired vendors
  • Contact the OSP In-Plant Unit at inplantopsmanager@dgs.ca.gov to schedule an initial meeting to discuss the future request. The In-Plant Unit will answer any questions and discuss next steps/requirements.
  • OSP program submissions require review and approval by the OSP Budget Manager prior to an official or unofficial review by the In-Plant Unit.
  • Submit an unofficial but completed version of the PEAR/RIT for In-Plant Unit review to reduce the need for resubmissions.

PEAR approvals require the approval signature of the In-Plant Operations Manager, review approval by OSP Administration Management, and the approval signature of the State Printer. They also require the signature of the submitting department’s Deputy Director over Administration (or equivalent). Therefore, it is in the best interest to begin communications with the OSP In-Plant Unit as early in the process as possible to avoid delays in the actual procurement of the equipment. OSP program submissions also require review and approval by the OSP Budgets Manager prior to submission to the OSP In-Plant Unit.

The requesting department will contact the In-Plant Operations Analyst at inplantopsmanager@dgs.ca.gov for any inquiries, including those listed above. The In-Plant Unit or requesting department/program may request a site visit/walkthrough at any point in the PEAR process to gain additional insight into the request and the current state of the requesting in-plant. Depending on the location of the requestor, travel authorization may be required before the site visit commitment can be made.

 

Section 2 - Filling out the RIT

The Recovery of Investment Summary template is a fiscal analysis tool that details and projects annual cost avoidance/revenue and expenditures. The requestor must complete a five-year fiscal analysis by completing all sections of the RIT. Failure to complete the RIT according to the instructions may result in the State Printer denying the PEAR. Apart from the sections noted below, the RIT automatically calculates the projected five-year Recovery of Investment (ROI) at a 3% increase per year for years two through five.

NOTE: All green cells are automatically calculated and do not require additional input from users. Spreadsheet tabs are secured but have no password so the security can be disabled at any time. Removing the security shouldn’t be necessary, but if it must be disabled, save a copy of the document before removing the security. This will avoid any loss of information and give a backup in case of broken formulas. Reach out to the OSP In-Plant Unit for assistance if necessary.

2.1 - RIT Summary –A one-page summary of the five-year ROI and difference in expenditures. This worksheet is populated automatically as the agency completes each section of the RIT.

2.2 Current Equipment (Replacing) – A summary of information for equipment being replaced and their production output numbers over the last three years

2.3 Proposed Equipment – A summary of equipment requested, including estimated cost information.

2.4 Job Value – There are two sources by which a state agency in-plant printing operation can demonstrate cost avoidance by keeping internal work in- house or revenue by completing jobs for external customers:

  1. Cost avoidance – The savings the agency obtains/would obtain by producing its own print work in comparison to vending out the same print work. To determine this amount, the agency must obtain a set of quotes from OSP. OSP quotes for cost avoidance should be generalized by product type and specifications to limit the number of estimates request and avoid overwhelming the OSP estimators. Cost avoidance is typically used only for internal print work. The agency should detail the print work it expects to produce on the equipment. This should include a general description of the print work, the finished quantity of each product required, the impressions or clicks required to produce each finished piece, the finishing services required to complete the product, estimated cost to the agency to vend out this work, and any notes or comments on the product.
  2. Revenue – The income obtained from producing print work for another state agency as authorized by the State Printer. The requestor should be able to provide their own revenue numbers. With the exception of State Controller’s Office warrant production, an agency may only itemize revenue from work authorized by OSP. This should detail the print work it is authorized to produce for other state agencies by providing a general description of the print work performed, the finished quantity of each product required, the impressions or clicks required to produce each finished piece, the finishing services required to complete the product, and the amount the agency will be paid to perform that work.

2.5 - Labor Expenses–The “benefits percentage” refers to the percentage of an employee’s salary that is budgeted for the cost of the employee’s benefit. The RIT includes a personnel chart for day, swing, and night shifts, with the corresponding shift differential included in each respective chart. The agency should select the number of personnel from the appropriate classification(s) required to operate the requested printing equipment. The worksheet will automatically populate the annual salary, shift differential, total salary, benefits, and total salary with benefits for each section. Lastly, the worksheet will automatically calculate the total number of positions, total salary, total benefits, and total annual personal services cost associated with the requested printing equipment.

2.6 - Operation Expenditures – Detail the estimated overhead and operational expenses attributed to the printing equipment. The worksheet divides the expenditures analysis between those expenses shared by the entire printing operation and those expenses which can be significantly attributed to the equipment. While many state in-plants are budgeted as an administrative service within their agency, to demonstrate cost recovery, the agency must detail the operating costs attributable to the printing operation on the RIT.

Additional instructions can be found on the RIT for each individual tab. Any questions can be directed to the OSP In-Plant Unit

 

Section 3 - Filling out the PEAR

Requestor Information: Identify the following: the agency name, the agency’s Director, the agency’s Head of Printing Operations and their e-mail, and the location of the printing operation at which the equipment will be installed.

3.1 Equipment Information:

  1. Purchase Type - Identify if the equipment requested will be replacing existing equipment (replacement equipment) or if it will be adding to the in-plant’s production footprint (new equipment)
  2. Equipment Condition – Identify whether the equipment will be purchased new, used, or remanufactured
  3. Equipment Description – Identify relevant information about the equipment including additional hardware included with the purchase, such as stackers, extra drawers, feeding trays, booklet makers, etc.
  4. Equipment Manufacturer – I.E. Canon, Ricoh, Xerox, etc.
  5. Equipment Model – I.E. Titan, VarioPrint, Iridesse, etc.
  6. Equipment Capacity Requirements – Identify the specifications of the requested equipment such as:
    • Paper Size Requirements
    • Paper Weight Requirements
    • Monthly Duty Cycle
    • Booklet maker specifications (if applicable)
    • Sheetfed or Rollfed
    • Software Requirements
  7. Projected Operating Speed – Specified speed by the manufacturer in either impressions per minute (IPM) or pieces per minute (PPM)
  8. Number of Shifts – The number of shifts the machine will be running (1, 2, or 3)
  9. Projected Personnel Per Shift -The number of operators required to run the equipment
  10. Projected Annual Number of Impressions – The number of impressions produced by the machine annually. This number can be pulled from the RIT
  11. Additional Hardware Required – Yes or No
  12. Additional Software Required – Yes or No

3.2 Printing Requirements

  1. Description of Print Work to be Performed – Brief description of products to be produced on the requested equipment. It should contain products listed the “Job Value” tab on the RIT
  2. Finishing Services Required – Finishing required for printed products, whether inline, nearline, or offline
  3. Finishing Services Source – Inline, Inhouse, or Outsourced (Choose one)
  4. Desired Installation Date – The desired installation date of the press

3.3 Recovery of Investment Summary – Include all financial information listed on the summary tab in the RIT

3.4 Certification – Signature required by the Deputy Director over Administration or equivalent.

 

Section 4 - Submitting the Completed PEAR and RIT

The completed RIT and any supporting documentation must be submitted with the PEAR to the Statewide In-Plant Operations Manager. These forms must be submitted by the submitting department’s Deputy Director over Admin or equivalent to the inplantopsmanager@dgs.ca.gov inbox. The OSP In-Plant Unit will not review a PEAR without a complete RIT.

If edits are required on the submission, or if the PEAR is incomplete, the document will be sent back to the requestor with further instructions before moving forward. If changes to the RIT result in required changes to the PEAR, a new signature from the department’s Deputy Director over Administration or equivalent will be required.

The OSP In-Plant Unit will perform a final review upon receipt of the official submission. If no additional edits are required, the request is signed and approved by the In-Plant Operations Manager. Upon In-Plant Manager approval, the report is then submitted to OSP Administrative Management for review, followed by the State Printer and then the ISD Deputy Director for review and approval.

Section 5 - Things to Keep in Mind:

  1. Maximum utilization for a piece of printing equipment is 1500 hours per press, per shift, per year.
    • Anything with less than 750 hours of projected production time (50% utilization) is going to be returned to the submitting department and will not be processed.
    • The OSP In-Plant Unit can help in-plants find alternative solutions if they are not able to exceed 750 production hours.
  2. Existing equipment plays a part in the recommendations and approvals/denials provided by OSP.
  3. Information on the RIT should closely match the submitting department’s IPPOR production information.
  4. Supporting documentation such as a justification write-up or additional data spreadsheets are not required as part of the submission, but can be included
  5. Instructions specific to each individual spreadsheet on the RIT are included in the RIT document.
  6. A positive ROI does not guarantee approval, and a negative ROI does not guarantee denial. All the information provided in the PEAR/RIT process is utilized at all levels of approval.
  • In rare circumstances, a Memo of Understanding outlining terms and conditions of the equipment approval may be developed when a department does not demonstrate a proper ROI or the most cost-effective production.

Service Level Agreements

  • Initial meetings between the requestor and the OSP In-Plant Unit should be scheduled within 14 days of the initial request pending requestor availability
  • All OSP unofficial reviews should be completed within 14 days.
  • All information requested by the In-Plant Unit during the unofficial review process should be completed within 14 days.
  • Vendor meetings should be scheduled within 14 days of the request, pending vendor availability.
  • Official review of the PEAR/RIT submission by the In-Plant Unit will be completed within eight business days of receipt.
  • The Administration Management review will be completed within seven days of receipt and sent to the State Printer.
  • The State Printer review will be completed within 14 days of receipt.