Federal Strategic Sourcing Initiative

Transcription

1 U.S. General Services Administration Federal Strategic Sourcing Initiative FSSI: Fundamentals of Strategic Sourcing Presentation for SBTDC MarketPlace Bruce Osborne, GSA May 29, 2013

2 Federal Strategic Sourcing Initiative The Federal STRATEGIC SOURCING Initiative (FSSI) Strategic sourcing is the structured and collaborative process of critically analyzing an organization s spending patterns to better leverage its purchasing power, reduce cost and improve overall performance.. FSSI GOALS: Strategically source across federal agencies; Establish mechanisms to increase total cost savings, value, and socioeconomic participation; Collaborate with Industry to develop optimal solutions; Share best practices; and, Create a strategic sourcing community of practice (COP) 2

3 Federal Strategic Sourcing Initiative FSSI Operates through an Established Governance Structure FSSI GOVERNANCE STRUCTURE AS ESTABLISHED MAY

4 Federal Strategic Sourcing Initiative COLLABORATION FSSI solutions are developed collaboratively across government agencies and offer customers a number of potential benefits Realize significant savings with competitive pricing Average Savings from 9%-30% Decrease administrative redundancy Improve business intelligence Achieve socio-economic and sustainability goals Minimizes administrative overhead and duplication of effort All FSSI programs collect detailed business intelligence data Strategy developed to maximize socio-economic participation 4

5 Federal Strategic Sourcing Initiative GSA & FSSI FSSI s cross- government approach has the potential to further the Administration s strategic priorities and improve the Federal supply chain by. >Improving competition for Federal contracts >Greening the Federal government (a GSA Presidential mandate) >Improving transparency and accountability DRIVING STRATEGIC CHANGES IN THE SUPPLY CHAIN REQUIRES CROSS- GOVERNMENT COORDINATION 5

6 Federal Strategic Sourcing Initiative Current FSSI Solutions Office Supplies (OS2) Domestic Delivery Services (DDS2) Print Office Supply purchasing by way of several purchasing channels Pools created to increase small business participation Limited to Federal agencies ( Anyone with a GSA SmartPay card, who works for either the federal government or the Department of Defense, can use the BPAs ) Domestic ground and express small package delivery Incorporates data analyze to drive additional savings (e.g. overnight shipping) No limit on which agencies can use the solution Addresses new purchases and fleet management of in-house printers, copiers, toners Printwise a campaign that addresses changing behavior to achieve greater savings (e.g. printing double sided, B&W, etc.) Limited to Federal agencies ( Any warranted Federal or Department of Defense (DOD) Contracting Officer is permitted to place orders or otherwise make use of this BPA. ) 6

7 Federal Strategic Sourcing Initiative FSSI Lessons Learned Implementing FSSI solutions took an average 18+ months each Active stakeholder engagement and commitment required FSSI is management and acquisition Obtaining business intelligence is laborious GSA is the logical lead for many of the FSSI categories FSSI for mission-specific strategic sourcing categories could be led by other agencies Best-in-class solutions are the result of customer and industry engagement 7

8 Federal Strategic Sourcing Initiative What s next for FSSI GSA is facilitating the development of new FSSI solutions for completion in FY13 and another 2 solutions for FY14 The FY13 categories are: Wireless AWARDED JanSan Supplies soon to be released & RFQ MRO Supplies soon to be released & RFQ Plus 2 additional solutions in development These next generation efforts are expected to.. *leverage the growing FSSI infrastructure and past lessons learned *rapidly establish innovative solutions that capture savings *improve the management of the target categories 8

9 Federal Strategic Sourcing Initiative Join the Conversation We have developed GSA Interact, a collaborative tool for Federal, Military, State & Local acquisition professionals along with GSA partners. To join the conversation register at interact.gsa.gov and join the Multiple Award Schedule Group. Here you can also find an excellent webinar titled : Federal Strategic Sourcing An Overview which provides additional information on the subject from GSA s perspective. 9

10 Federal Strategic Sourcing Initiative THANK YOU! 10

11 MARKETPLACE SEMINAR STRATEGIC SOURCING Thomas Suher FedLinx, Inc. May 29, 2013

12 STARTEGIC SOURCING ALTERNATIVE VANTAGE POINT FIRMS TRYING TO BECOME A SUPPLIER TO USG Commodity oriented Difficulty in obtaining a contract vehicle Schedule contract compliance and audit concerns Price reduction clause FCA risk FIRMS TRYING TO INCREASE USG ACTIVITY High tech commercial technology companies Limited USG contract vehicles Unsatisfactory alternatives sub to higher tier Possible competitor competitive sensitivity Intellectual property and contract risk concerns SUBSTANTIAL PLAYERS TRYING TO HANG IN Impact of BPAs, GWACs and large IDIQ solicitations Substantial proposal cost and resource investment Protest calculation is frequently favorable

13 STRATEGIC SOURCING POSITIVE ATTRIBUTES SPEND ANALYSIS AND DATA AVAILABILITY CENTRALIZE PROCUREMENT KNOWLEDGE DEDICATE RESOURCES AND BUILD EXPERTISE PROCUREMENT METRICS AND GOALS DEVELOP CATEGORY STRATEGIES DEPLOY BEST PRACTICE BUYING TACTICS Leverage buying power and consolidate purchase Standardize requirements Performance benchmarks

14 STRATEGIC SOURCING AREAS OF CONCERN REDUCTION OF SUPPLIER BASE Concerns with use of sole source awards Concerns with unduly restrictive requirements Concern with increasing favorable position of incumbents ONE AND DONE PROCESS/LIMITED CHANCES TO BREAK IN AT LATER TIME LONGER PROCUREMENT CYCLES EMPHASIS ON FIRST COST / REDUCED MARGINS GREATER APPLICABILITY OF FAR CLAUSES BASED ON PROCUREMENT VALUE

15 STRATEGIC SOURCING COMPETITIVE LANDSCAPE CONSOLIDATED PURCHASES LEAD TO HIGHER PROPOSAL INVESTMENT Concern with only having the one shot Concern with unfavorable selection criteria and evaluation LIKELIHOOD OF PROTESTS BPA EXPERIENCE Best value criteria Technical/price trade-off GAO application of Part 15 standard to award decision IMPETUS TO PROTEST Cost/benefit analysis Recent favorable track record on BPA protests

16 STRATEGIC SOURCING CONSIDER CAREFULLY OPPORTUNITY FOR EXPANDED SUPPLIER BASE Pfizer unbundle contracts for greater transparency and to increase suppliers and later leverage purchases Walmart focus on reduction of total cost of ownership PROCESS TO PERIODICALLY REVIEW VENDOR PERFORMANCE TO ALLOW NEW PLAYERS Allow for evolution of supplier base Opportunities for new suppliers IMPORTANCE OF ACQUISITION PLANNING Business cases Independent review of process

17 Compliance is Complex. We Make it Simple. Thomas R. Suher, J.D. Senior Consultant 1401 Sunset Drive, Suite B [email protected]

18 Kelly Loughery Commercial Counsel, Motorola Solutions, Inc.

19 The views presented herein are those of the author and do not represent the official position of Motorola Solutions, Inc. or any of its affiliates.

20 Bottom line: USG will make strategic choices based on COST Small businesses often cannot compete with large multi-nationals efficiencies Small businesses need to create new go-to-market strategies Develop relationships with large prime contractors, add value, thrive

21 Small business status Restricted contracts E.g. GWACs, IDIQs GSA contracts Letters of Supply Cost-effective offering Complementary product/service suites Large corporations stay close to their core business Identify opportunities to complement the large business offering close to the core

22 Contractor Teaming Arrangements (CTAs) vs. traditional teaming agreements CTAs- two or more GSA Schedule contractors work together to meet ordering activity needs Equal footing, both GSA holders, both have privity TA (FAR 9.601)- A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified contract or acquisition program.

23 Prime vs. Sub Prime maintains privity with USG Prime is customer-facing Prime carries risk (and reward if profitable) Exclusive (reciprocal or not) vs. Nonexclusive Good faith negotiations post-award Sub-contract agreement Terms and conditions can be addressed in TA or tabled until sub-contract negotiations

24 Well defined roles prime vs. sub Comprehensive Scope of Work/division of responsibility Firm commitment to work together postaward (binding and exclusive) Strong provisions for intellectual property and proprietary information protection NDA prior to TA strongly recommended

25 Questions?

26 Department of Health and Human Services Strategic Supply Chain Management Marketplace 2013 Presenter: Antoinette Bridges HHS/NIH/NIEHS May 29,

27 Strategic Sourcing Defined To identify opportunities that bring operational efficiencies as well as cost savings and cost avoidances throughout the organization and value chain. Why the Strategic Process Works and the Opportunities: Provides a fresh perspective. Through identifying the friction points of a typically good/service procurement process by utilizing a structured, analytical evidence based, and collaborative methodology. Adds a sense of urgency. By facilitating stakeholder discussion of issues that are often tabled due to other day-to-day priorities. Identifies superstitions within organization. Bringing great people from different sections together to address what the process really is. In May 2005, the Office of Management and Budget (OMB) announced a government-wide Strategic Sourcing directive, requiring all Federal agencies to implement Strategic Sourcing programs by early FY

28 Supply Chain Management Defined To identify opportunities that bring operational efficiencies as well as cost savings and cost avoidances throughout the organization, suppliers, and customers. Strategic Supply Chain Management Focus on: Has the responsibility for the supply chain function, the organization s customers, their customers and their suppliers; thus the term strategic supply chain management. Minimizing costs Minimizing lead times to benefit the final customer Long term supplier relations Commodity planning to take advantage of Cost reductions Technology advancements Supply market trends 3 3

29 Seven Steps to Strategic Supply Chain Management Strategic Sourcing Process 1. Develop Category Profile 2. Generate Supplier Portfolio 3. Develop Sourcing Strategy 4. Select Implementation Path 5. Negotiate and Select Suppliers 6. Operationalize New Agreements Supplier Performance Market Conditions New Technology 7. Sustain the Results 4 4

30 Seven Steps to Strategic Supply Chain Management 1. Develop Category Profile Confirm user requirements Develop category definition Understand industry and supply markets 5

31 Seven Steps to Strategic Supply Chain Management 2. Generate Supplier Portfolio Identify qualified suppliers Determine supplier valueadded capabilities Develop supplier short list 6

32 Seven Steps to Strategic Supply Chain Management 3. Develop Sourcing Strategy Assess bargaining position Evaluate alternative strategies Select appropriate approaches and techniques 7

33 Seven Steps to Strategic Supply Chain Management 4. Select Implementation Path Select competitive or relationship approach Verify and adjust sourcing strategy Develop implementation plan 8

34 Seven Steps to Strategic Supply Chain Management 5. Negotiate and Select Suppliers Evaluate supplier proposals Plan negotiation strategy Conduct negotiations with suppliers 9

35 Seven Steps to Strategic Supply Chain Management 6. Operationalize New Agreements Plan and implement transition to new suppliers Implement new pricing on databases Conduct joint process improvement activities 10

36 Seven Steps to Strategic Supply Chain Management 7. Sustain the Results Monitor market conditions Assess new technology and best practices impact Determine opportunities to reexamine category and trends Strengthen supplier relationships Standardize process and procedures 11

37 Supply Management Key Goals Get more value out of business relationships Provide better response and visibility for stakeholders, including suppliers Monitor and manage compliance and performance Electronic interaction with suppliers Integration into overall supply chain management strategy 12

38 Supply Chain Management Best Practices Create more favorable terms and conditions Ensure Supplier is partnering to drive down cost and create value Create a Contract Management Repository Achieve pricing equivalency with common suppliers used across the industry Leverage ecommerce e-catalogs e-software e-technology Create Payment Tool Purchase Card allows for dynamic discounting Positive cash flow Gaining operational efficiency as cutting down cycle time. Partner in Stockless Programs / Store Fronts with Key Suppliers Low UOM discounts means customers do not have to buy large amounts to achieve discounts Decreases or eliminates freight costs Better product availability for customers Create Partnership Sourcing Teams Sourcing opportunities. Where best to focus efforts to respond to Request for Proposal/Information. Initial point of review for product and alternative products Communicate successful awards throughout community and with partners 13

39 Supply Chain Management Summary Overall improved efficiency and reduced costs through better supply chain management as a result of adopting contract management best practices Assess the needs of the potential buyers Assess the best possible arrangement you may only get one opportunity Track and manage supplier compliance and performance Negotiate, negotiate with your suppliers for the best terms and conditions, pricing & extras Assess suppliers and their capabilities, performance & risk Collaborate with suppliers to ensure clear expectation and understanding of buyers needs Research the needs, often, know the market Know the history (your reputation is on the line as well) 14