NIH Simplified Acquisition Mini Symposium

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• NIH Simplified Acquisition Mini Symposium
• Strategic Sourcing Presentation
• April 27, 2006

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Agenda

• Definition of Strategic Sourcing
• Federal Strategic Sourcing Initiative
• Strategic Sourcing Portfolio Details
• Strategic Sourcing Waiver Process
• Questions and Answers

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Strategic Sourcing is a standard and formal
process that incorporates rigorous analytics,
tools and techniques to reduce total cost of
purchased goods and services.
Strategic Sourcing Defined
Strategic Sourcing includes

• A standardized sourcing and supplier management
  process
• Improved leveraging of customer needs and buying
  power
• Focused compliance and use of contracts
• An enterprise approach to realizing benefits for
  the good of the Federal Government
• Enhanced communication of customer requirements
• Standard key performance metrics
• Standard consistent procurement policies
  procedures

Source Accenture Best Practices
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Strategic Sourcing in the Federal Marketplace
Government Accountability Office (GAO)
The need for a strategic approach to acquisition
was highlighted by GAO in its September 2004
report entitled, BEST PRACTICES Using Spend
Analysis to Help Agencies Take a More Strategic
Approach to Procurement. GAO commented in its
report that, Our prior work has shown that such
an approach could help agencies leverage their
buying power, reduce costs, and better manage
suppliers of goods and services, as leading
private sector companies have discovered on
adopting these activities.

• Report analyzed strategic sourcing practices at
  the following agencies HHS, Veterans Affairs,
  Dept. of Agriculture, Dept. of Justice, and Dept.
  of Transportation
• Commended HHS on use of spend analysis to improve
  the procurement process
• Recommended ways to adopt full range of private
  sector best practices

Office of Management and Budget (OMB)

• Created a Federal Strategic Sourcing Initiative
  (FSSI)
• Governance from CAO Council and OFPP and managed
  by GSA
• Leverage spend across Federal Government and
  share best practices
• Sourcing Cell Phones, Copiers, Domestic Delivery
  Services, Office Supplies, and Printers
• Federal Agencies must strategically source at
  least three commodities in FY 06
• Starting in FY06, Federal Agencies must report
  annually on strategic sourcing programs (results,
  cost savings, process improvements)

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HHS Strategic Sourcing Portfolio
The strategic sourcing contract portfolio
represents 270 million in spend with a potential
to realize 16 in savings
Wave I
Wave II
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Strategic Sourcing Intranet Site
Detailed information (pricing, product lists,
vendor contact information) on the Strategic
Sourcing BPAs can be found on the HHS Intranet at
http//intranet.hhs.gov/ssc/
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General Strategic Sourcing BPA Details

• BPAs were awarded using full and open competition
  (except Events Management and TAPS small
  business set asides)
• BPAs available for use by all HHS OPDIVs
• All BPAs were awarded against GSA Federal Supply
  Schedule contracts (except Cleanwise Open
  Market)
• BPAs provide better than GSA Federal Supply
  Schedule pricing
• Orders can be placed via phone, fax, email and
  online
• Payment methods are purchase card, purchase
  order, or record of call
• OPDIVs should follow existing OPDIV-specific
  approval procedures when using BPAs
• Updated strategic sourcing content will be added
  to the various HHS purchase card and basic
  project officer training programs

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Office Supplies Award Details

• Awarded to Staples (BPA HHSP233200430012B)
• The Staples BPA delivers an average cost
  reduction of 27
• The Staples BPA has a 23 small business
  sub-contracting goal

• BPA Terms
• Period of Performance July 2004 through July
  2006 plus three, 1-year options
• Provides JWOD products, per FAR Part 8
• Scope of Work
• Staples will provide office supplies in
  accordance with their GSA Schedule
• BPA includes General office supplies, toner, and
  copy paper
• BPA does not include Printers, copiers, desks,
  chairs, filing cabinets, IT products
• Prices include desktop delivery (no shipping
  fees) with the exception of Hawaii, Alaska,
  Puerto Rico (shipments greater than 159 lbs. have
  a 25 freight charge)
• Lead time for delivery of in-stock items is next
  business day in most locations (if order is
  placed by 3 pm)
• Performance Measures - On-time Delivery rate of
  98, Order fill rates of 98, Product Return Rate
  of less than 2
• Placing Orders
• Orders can be placed via phone, fax, email and a
  customized website at www.Stapleslink.com
• BPA pricing is not available at Staples physical
  stores
• Website registration is required for online
  ordering (follow registration instructions on HHS
  Intranet site below Do Not Register on the
  Stapleslink Website)
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Office Supplies link

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IT Peripherals Hardware Award Details

• Awarded to Westwood Computer Corporation (BPA
  HHSP233200430003B)
• The Westwood BPA delivers an average cost
  reduction of 12
• Westwood is a small, woman-owned business

• BPA Terms
• Period of Performance May 2004 through May 2006
  plus three, 1-year options
• Scope of Work
• Westwood will provide IT Peripherals in
  accordance with their GSA schedule
• BPA includes Printers, monitors, flash drives,
  data storage, modems, scanners, routers,
  switches, projectors, PDAs, digital cameras,
  power protection, and input devices (e.g.
  keyboards, mice)
• BPA does not include Desktop and laptop
  computers, servers, and software
• Prices include desktop delivery (no shipping
  fees)
• Lead time for delivery of in-stock items is 7
  days or less (7-14 days for Alaska, Hawaii, and
  Puerto Rico).
• Performance Measures - On-time Delivery rate of
  98, Order fill rates of 98, Product Return Rate
  of less than 2
• Placing Orders
• Orders can be placed via email, fax, phone or
  online through a customized website at
  www.westcomp.com/dhhs
• Website registration is required for online
  ordering (Register at www.westcomp.com.dhhs)
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the IT Peripherals link

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Office Equipment Award Details

• Awarded to Konica Minolta (BPA
  HHSP233200430013B) and Ricoh (BPA
  HHSP233200430014B)
• The Konica Minolta and Ricoh BPAs deliver an
  average cost reduction of 38
• The Konica Minolta BPA has a 27 small business
  sub-contracting goal
• The Ricoh BPA has a 17 small business
  sub-contracting goal

• BPA Terms
• Period of Performance August 2004 through August
  2009
• Scope of Work
• Ricoh and Konica Minolta will provide office
  equipment products and services in accordance
  with their GSA schedules
• Konica Minolta BPA includes Copier equipment and
  accessories (lease, purchase and maintenance)
• Ricoh BPA includes Copier equipment and
  accessories (lease, purchase and maintenance),
  and fax machines (purchase only)
• Flat rate prices include delivery, installation
  and disposal of old equipment
• Online fleet maintenance services available
• Lease prices negotiated for terms of 12 months up
  to 60 months
• Performance Measures Uptime average of 96,
  On-time delivery rate of 98, On-site service
  response times for inoperative equipment is 4
  hours (high volume locations) or next business
  day (remaining locations)
• Placing Orders
• Orders can be placed via phone, fax or email
  (online ordering coming soon)
• Competition among Konica Minolta and Ricoh is
  recommended, but not required
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Office Equipment link

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Office Furniture Award Details

• Awarded to Lewis Allen (BPA HHSP233200430011B)
  and SPACE (BPA HHSP233200430012B)
• The SPACE and Lewis Allen BPAs deliver an average
  cost reduction of 7
• SPACE is a small, woman owned business
• Lewis Allen is a small, veteran owned businesses

• BPA Terms
• Period of Performance August 2004 through August
  2006 plus three, 1-year options
• Scope of Work
• SPACE and Lewis Allen will provide office
  furniture, design and installation services in
  accordance with their GSA schedules
• BPAs include Desks, tables, chairs, executive
  office furniture, modular and systems furniture,
  filing and storage cabinets, design and layout,
  project management, installation and disposal
• Furniture Manufacturers Represented Lewis Allen
  Kimball, Steelcase, and Trendway
• SPACE Haworth
• Performance Measures On-time Delivery rate of
  98, Order fill rates of 98, On-time completion
  rates of 98
• All furniture meets or exceeds requirements of
  the American National Standards Institute
• Placing Orders
• Orders can be placed via phone, fax, or email
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Office Furniture link

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Custodial Products Award Details

• Awarded to Cleanwise (BPA HHSP233200430006B)
• The Cleanwise BPA delivers an average cost
  reduction of 54
• Cleanwise is a small business

• BPA Terms
• Period of Performance July 2004 through July
  2005, plus two, 1-year options (first option year
  has been exercised)
• Provides JWOD products, per FAR Part 8
• Open Market BPA
• Scope of Work
• BPA includes Plastic can liners, carpet care,
  floor care, cleaning equipment and accessories,
  industrial supplies, safety supplies, seat
  covers, toilet paper, and towels
• Brand Names include Kimberly-Clark,
  JohnsonDiversey, Georgia-Pacific, Rubbermaid,
  Continental, Stocko, and Tennant
• Provides environmentally friendly (green)
  products
• Prices include desktop delivery (no shipping
  fees)
• Lead time for delivery of in-stock items is next
  business day (most high volume locations), 3
  business days or less (remaining locations) or 5
  days or less to Alaska, Hawaii, and Puerto Rico
• Performance Measures On-time Delivery rate of
  98, Order fill rates of 98, Product Return Rate
  of less than 2
• Placing Orders
• Orders can be placed via phone, fax, email, or
  online through a customized website
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Custodial Products link

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Lab Supplies Award Details

• Awarded to Fisher Scientific (BPA 263-00063333)
• The Fisher BPA delivers an average cost
  reduction of 15
• The Fisher BPA has a 20 small business
  sub-contracting goal
• The Fisher BPA does not include open market
  items, only items on Fishers GSA Schedule

• BPA Terms
• Period of Performance October 2005 through
  October 2007, plus three 1-year options
• Provides JWOD products, per FAR Part 8
• Scope of Work
• Fisher will provide lab supplies in accordance
  with their GSA schedule
• BPA includes Laboratory supplies, chemicals
  (in-organic only), and equipment/instruments with
  a unit price under 10,000
• BPA does not include items for which Fisher does
  not have distribution rights, organic products,
  pharmaceuticals, high-value and complex equipment
  with a unit price over 10,000
• Prices include desktop delivery (no shipping
  fees)
• Lead time for delivery of in-stock items is 3
  days or less (except Alaska and Hawaii)
• Performance Measures On-time delivery rate of
  95, Order fill rates of 95, Product returns
  rate of less than 2
• Placing Orders
• Orders can be placed via phone, fax, email, or
  online through a customized website at
  www.fishersci.com (BPA items labeled DHHS
  Contract Item on website)
• Website registration is required for online
  ordering (follow registration instructions on HHS
  Intranet site below)
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Lab Supplies link

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Events Management Award Details

• Awarded to Planning Professionals Ltd (PPL BPA
  263-00063281), Consolidated Safety Services (CSS
  BPA 263-00063318), B.L.Seamon and Assoc. (BLS
  BPA 263-00063306), and Professional
  Scientific Associates (Team PSA BPA
  263-00063293)
• The EM BPAs deliver an average cost reduction
  of 14
• All EM vendors are small businesses (CSS is 8a)
  

• BPA Terms
• Period of Performance August 2005 through August
  2007, plus three 1-year options
• Firm Fixed Price task orders (travel is cost
  reimbursable)
• Scope of Work
• EM vendors will provide services in accordance
  with their GSA schedules
• BPA services include professional and scientific
  seminars and conferences, facilitation, training,
  pre-event planning, venue and hotel arrangements,
  attendee registration, travel arrangements,
  event-specific training services, fiduciary
  services, project management services, A/V
  services and information systems infrastructure
• For any EM requests involving NO attendee hotel
  lodging or transportation needs in the scope of
  work, PPL, CSS, and PSA can compete
• For any EM requests involving attendee hotel
  lodging or transportation needs in the scope of
  work, PPL, BLS, and PSA can compete
• Performance Measures A comprehensive
  Performance Work Statement has been developed for
  all vendors
• Placing Orders
• Orders can be placed via phone, fax, email or
  online through customized websites
• OPDIVs should follow HHS or OPDIV-specific policy
  procedures when using EM BPAs (e.g. ordering
  food, payment of registration fees, etc.)
• Website registration is required for online
  ordering (follow registration instructions on HHS
  Intranet site below)
• Competition among the EM vendors is recommended,
  but not required
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Events Management link

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Temporary Administrative and Professional
Staffing Award Details

• Awarded to National Associates, Incorporated
  (NAI) (BPA HHSP233200530017B)
• The NAI BPA delivers an average cost reduction of
  DHHS 21
• NAI is a small business

• BPA Terms
• August 2005 through August 2007, plus three
  1-year options
• Resources provided on a temporary basis - no
  longer than 240 work days
• Resources are available to fulfill needs at HHS
  locations in Washington DC, Maryland, Atlanta, GA
  and Philadelphia, PA (additional locations can be
  added to the BPA upon customer request)
• Scope of Work
• BPA includes Various Administrative Support and
  Clerical Occupations, Automatic Data Processing
  Occupations, Information and Arts Occupations,
  and Technical and Professional Occupations
• For any request submitted, a minimum of 3 resumes
  may be reviewed to place the best resource
• Lead time for normal requests is 2 days
• Lead time for urgent requests is usually 4 hours
• Performance Measures Resume Approval rate of
  90 or better, Resource Rejection rate of less
  than 5
• Placing Orders
• Orders can be placed via phone, fax , email or
  online through a customized website at
  http//toolset.naipersonnel.com
• Website registration is required for online
  ordering (follow registration instructions on HHS
  Intranet site below)
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Temporary Administration
  and Professional Staffing link

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Temporary Professional and Medical Staffing Award
Details

• Awarded to JC Nationwide (JCN) (BPA
  HHSP233200530019B) and Medical Staffing Network
  (MSN) (BPA HHSP233200530018B)
• The TPMS BPAs deliver an average cost reduction
  of 6
• JC Nationwide (JCN) and Medical Staffing Network
  (MSN) use a number of small businesses as
  sub-contractors

• BPA Terms
• September 2005 through September 2007, plus three
  1-year options
• Provides personal and non-personal
  services/pricing
• Additional occupations and/or locations can be
  added to the BPAs upon customer request
• Scope of Work
• JCN and MSN will provide Temporary Professional
  Medical Staffing Services in accordance with GSA
  schedule 621
• BPA includes Various physicians, nurses and
  allied health professionals
• For any request submitted, a minimum of 3 resumes
  may be reviewed to place the best resource
• Lead time for normal requests is 2 days
• Lead time for urgent requests is usually within
  24 hours
• Performance Measures Resume Approval rate of
  90 or better, Resource Rejection rate of less
  than 5
• Placing Orders
• Orders can be placed with via phone, fax, email
  or online through customized websites
• Website registration is required for online
  ordering (follow registration instructions on HHS
  Intranet site below)
• For pricing, product list, contact numbers and
  ordering information visit - http//intranet.hhs.
  gov/ssc/ and select the Temporary Administration
  and Professional Staffing link

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Waiver Process

• For FY 2006, HHS OPDIVs must meet an 85 usage
  goal for the Strategic Sourcing BPAs
• Waiver process developed to document valid
  exceptions to using Strategic Sourcing BPAs
• Waivers will contribute to 85 usage goal
• Waivers must be completed and submitted online
• Approval process at the OPDIV level, not the
  Departmental level
• Waiver totals will be reported to OPDIVs on a
  monthly basis
• Formal waiver guidance will be disseminated to
  OPDIVs in April 2006
• Waiver information will be added to the
  Strategic Sourcing Intranet site

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Waiver Process Justification Examples

• The HHS BPA/IDIQ expiration date conflicts with
  the performance period for the proposed
  purchase/requirement The requestor has a
  requirement for events management services and
  all of the events management BPAs expire before
  the desired requirement timeframe.
• The HHS BPA/IDIQ vendor(s) does not have the
  capacity to fulfill the proposed
  purchase/requirement The requestor needs to
  order office supplies that are out of stock with
  the office supplies BPA vendor but are in stock
  with an alternative vendor.
• After completing a Small Business Impact
  Assessment approved by the OPDIV Small Business
  Specialist, a determination was made that the
  placement of an order using the HHS BPA/IDIQ
  would have a negative impact on the proposed
  small business alternative source- The requestor
  must complete a Small Business Impact Assessment,
  obtain approval from the OPDIV Small Business
  Specialist and include the written approval in
  the contract or purchase card file.
• The placement of an order using the HHS BPA/IDIQ
  would conflict with statutory or regulatory
  requirements or standard research protocol The
  requestor plans to purchase lab supplies for a
  research experiment from a vendor other than the
  lab supplies BPA vendor to maintain the
  continuity and integrity of the experiment.
• The Governments obligation to meet minimum
  purchase requirements under an existing contract
  vehicle precludes the use of the HHS BPA/IDIQ
  The requestor plans to purchase contract closeout
  services but cannot use one of the contract
  closeout IDIQ vendors because the OPDIV has an
  existing contract closeout services contract that
  contains a minimum purchase requirement.
• The placement of an order using the HHS BPA/IDIQ
  does not offer a reasonable expectation of best
  value The requestor plans to purchase IT
  Peripherals products but the price quote from the
  IT Peripherals BPA vendor is 50 more than the
  price quote from an alternative vendor and the
  delivery timeframe for the BPA vendor is two days
  longer.

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Waiver Process Purchase Card

• Purchase Card Transactions
• Determine if a waiver is needed
• Waiver form is completed by purchase cardholder
  per applicable purchase
• Waiver form is completed online
• Waiver must be approved by designated Purchase
  Card Approving Official
• Detailed documentation needed for small
  business justification (3)
• Small Business Impact Assessment approved by
  OPDIV Small Business Specialist
• Detailed documentation needed for best value
  justification (6)
• Item level price and service comparisons
• If best value (6) justification is chosen for a
  category with multiple BPAs, price quotes and
  service offerings must be obtained for all
  vendors
• Keep supporting documentation in purchase card
  file for potential verification purposes

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Waiver Process Non-Purchase Card

• Non-Purchase Card Transactions
• Determine if a waiver is needed
• Waiver form is completed by Contracting
  Officer/Specialist per applicable
  purchase/requirement
• Waiver form is completed online
• Waiver must be approved by first level
  supervisor or higher (at OPDIV discretion)
• Detailed documentation needed for small
  business justification (3)
• Small Business Impact Assessment approved by
  OPDIV Small Business Specialist
• Detailed documentation needed for best value
  justification (6)
• Item level price and service comparisons
• If best value (7) justification is chosen for a
  category with multiple BPAs, price quotes and
  service offerings must be obtained for all
  vendors
• Keep supporting documentation in Request for
  Contract/Acquisition Plan (RCA/AP) file for
  potential verification purposes

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Waiver Process - Contacts
Strategic Sourcing Waiver Contacts Kesa
Russell Strategic Sourcing Project Manager (202)
690-7326 Kesa.Russell_at_hhs.gov Cheryl Howe ASAM,
Office of Acquisition Management and Policy
(OAMP) [phone] Cheryl.Howe_at_hhs.gov Tracey
Mock AIM Project Manager [phone] Tracey.Moc
k_at_hhs.gov
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Appendix
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HHS One Department Initiatives
June 6, 2001 Bob Wood, Former Chief of
Staff Committed to creating HHS One Department
December 16, 2002 Ed Sontag, Former Asst.
Secretary for Consolidation of 40 personnel
offices to four Administration and
Management Internal administrative consolidation
and organizational delayering Identify
competitive sourcing opportunities
April 17, 2003 Bob Wood, Former Chief of
Staff Eliminate redundant management
activities Begin planning for HHS-wide
consolidation of procurement activities
June 3, 2003 Kerry Weems, Former Acting Asst.
Sec. for Consolidation of IT resources and
services Budget, Technology and Finance
July 28, 2004 and November 9, 2004 Ed Sontag,
Former Asst. Secretary Introduction of Strategic
Sourcing Contract Portfolio for Administration
and Management
November 3, 2005 Joe Ellis, Asst.
Secretary Addition to Strategic Sourcing Contract
Portfolio for Administration and Management
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Strategic Sourcing Division

• Responsible for HHS-wide initiatives to leverage
  spend on products and services
• Part of the Program Support Centers (PSC)
  Strategic Acquisition Service (SAS)
• Also part of the Acquisition Integration and
  Modernization (AIM) initiative whose mission is
  as follows
• To establish an innovative acquisition
  environment throughout the Department by creating
  a seamless integration of acquisition policies,
  procedures, systems and contract vehicles to
  serve employees, customers and vendors.
• Strategic Sourcing Support team consists of
  acquisition and program staff from each OPDIV
• Support Team provides OPDIV-specific input to
  sourcing process

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Strategic Sourcing Methodology
HHS implemented strategic sourcing to improve
efficiencies and reduce operating costs by
leveraging spend across HHS OPDIVs


Shape
Screen
Profile

Conduct
Negotiate
Implement
Develop
Assess
Suppliers
Internally
Procurement
Agreements
Strategy
Value
Opportunities
Selection
Externally

Propositions
Factors
Wave 1
Prepare Fact
-
High
-
Level
Fast Track to Value
Complete
Wave x
Based
Data
Negotiation
RFP/RFQs
Collection
Build
Packages
Analysis
Build Total
Validate
Supplier
Measure
Cost of
Profile
Selection
Results
Ownership
Segment
Category
Decision
Conduct
Negotiate
Trends
Purchases
Model
Matrix
Auctions
Value
Propositions
Form
Conduct
Develop
Conduct
Cross
-
Develop
Industry
Category
Supplier
Functional
Suppliers
Analysis
Strategy
Analysis
Sourcing Teams
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Change Management Methodology
The change management process is focused on
increasing compliance with and knowledge of
strategic sourcing contracts by educating
internal users and monitoring vendor performance
User Education
Vendor Performance Management
Users Purchase card holders, contracting
staff, program staff Key Messages Benefits of
using contracts Increased cost savings,
enhanced service levels, increased process
efficiencies, reduced duplication Education
Media Web-sites, user guides, group training,
one-on-one training, vendor fairs Training
Components Ordering processes, web-site
usage, returns, warranty information,
etc. Training Work Plan Specific dates and
sessions provided by vendors
Contract Pricing Vendors will be monitored
to provide prices and discounts as indicated in
contracts and focus on total cost
reduction Service and Delivery Metrics
Vendors will be required to meet performance
metrics and assist with marketing benefits as
outlined in the contracts, e.g. office supplies
fill rate, office equipment uptime ,
etc Training Vendors will be required to meet
their training commitments to educate
users Surveys Vendor performance will be
evaluated by users through vendor
surveys Web-site development Nearly all
contracts require the development of custom HHS
web-sites by vendors to reduce process costs