Defense Logistics Agency Competitive Sourcing Program Overview

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Defense Logistics AgencyCompetitive Sourcing
Program Overview

• November 15, 2006

Mr. Ken McLain A-76 Program Manager
(Acting) [phone] Kenneth.Mclain_at_dla.mil
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Purpose of Briefing

• Review of DLA A-76 Program
• Mission Responsibilities
• Organization
• Executive Steering Group
• Working Integrated Product Team
• Program Status
• A-76 Competition Process at DLA
• Process Flow
• Competition Officials
• Centralized Approach
• Source Selection Evaluation
• A-76 Tools
• Information Resources
• Training

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A Way to Achieve Savings
Competitive Sourcing Continues to be a Key
Enabler for the Agency to Meet Commitments to the
Office of Secretary of Defense and to the
Warfighter

• Our Program Goals
• Achieve Savings While Maintaining Service,
• Ensuring Integrity Fairness In the A-76
  Process,
• Focus On People
• Avoid Mission Disruption

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Competitive Sourcing, J-A5 Ken McLain, Acting
Chief [phone]
Mission Responsible for program management
oversight of the Defense Logistics Agencys
Commercial Activities Strategic and Competitive
Sourcing program, which entails competitive
sourcing (A-76), privatization, business process
reengineering, regionalization, elimination,
streamlining, and inter-service support
agreements.
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Competitive Sourcing, J-A5Responsibilities

• Strategic Competitive Sourcing Program
  Management Oversight under OMB Circular A-76
• Agency Sourcing Plan / Program Budget Review
• Agency Policy / Guidebook / Internet Library
  Directory
• Agency Government Commercial Activities (IGCA)
  Inventory Program Management (FAIR Act of 1998)
• A-76 Program Executive Steering Group (ESG)
  Principal Advisor
• A-76 Program Working Integrated Product Team
  (WIPT) Chair
• Competition Support
• Analyst assigned to each competition
• Principle Advisor to Source Selection Advisory
  Council (SSAC) Chair
• Plan of Action and Milestones (POAM)
• Liaison with OSD, Defense Agencies, Military
  Services

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Competitive Sourcing, J-A5 Organization
A-76 Program Manager / Chief
Ken McLain (Acting)
Program Coordinators Ken McLain Jim
Nagy
Administrative Assistant Susan Deike
Consultant (Booz Allen
Hamilton) Jason Pates Steven
Kimmell
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A-76 Program Management Executive Oversight
Structure
DLA Competitive Sourcing Official (CSO) (DLA
Director)
Corporate Board

• Executive Steering Group (ESG)

Chair, J-A Component Acquisition Executive
Principals
Advisors
Working Integrated Product Team (WIPT)
Chair, A-76 Program Manager, J-A5
Consultant Support
Principals
Advisors
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Executive Steering Group Roles
Responsibilities

• Principals
• DDC, Deputy
• DES, Director
• DESC, Deputy
• DRMS, Exec. Director
• DSCC, Deputy
• DSCP, Deputy
• DSCR, Deputy
• J-A, Comp. Acq. Ex. (Chair)
• J-1, Director
• J-6, Deputy Director
• J-8, Deputy Comptroller

• Advisors
• General Counsel, DG
• Customer Support Office, New Cumberland, DHRC-N
• Legislative Affairs, DL
• A-76 Contracting Officer, DSCC-DR
• Chief, Supplier Operations, J-A2
• A-76 Program Manager, J-A5
• Chief, Resources Requirements Division, J-3/4
• Staff Director, Strategic Support Office, J-3/4

To advise provide solutions to the Corporate
Board on enterprise-wide commercial activities
initiatives to achieve agency strategic goals
Supported by the A-76 Program Working
Integrated Product Team
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Working Integrated Product Team
Roles Responsibilities

• Principals
• DDC-A
• DES-DA
• DESC-DS
• DRMS-J
• DSCC-DOE
• DSCP-RS
• DSCR-RP
• J-A2
• J-A5, A-76 Program Manager (Chair)
• J-16
• J-65
• J-87

• Advisors
• General Counsel, DG
• DORRA
• A-76 Contracting Officer, DSCC-DR
• A-76 BRAC Liaison FAIR Act Program Manager,
  J-A5
• Resources Rqmts Division, J-3/4
• Strategic Support Office, J-3/4

• Consultant Support
• Booz Allen Hamilton

• Assists ESG by providing analyses
  recommendations on
• IGCA Inventory Guidance Submission
• A-76 Program Budget Review Guidance and,
• A-76 Program from Enterprise-Wide Perspective

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A-76 Program Status
OSD-Mandated GoalProgram Budget Decision
729December 2003

• Complete competitions on 9,212 positions based on
  DLA FAIR Act 2000 inventory by end of FY 2009.

Federal Activities Inventory Reform Act of 1998
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A-76 Competitive SourcingProgress to Date

• Competitive Sourcing
• Distribution, Disposal Sites, Document
  Automation, Base Ops
• 16 Reviews Completed
• 2 Competitions In Progress
• DDRV DDSP

• Review Results To-Date
• 8 Most Efficient Organizations (MEOs)
• DDCO, DAPS, DDRV, DDAG, DDPW, DDTP, DDCT, DRMS
• 8 Private Sector
• DDBC, DDWG, 10 NE DRMOs, DDJF, DDCN, DDHU, DDDC,
  DDJC
• 5,019 FTEs Studied
• 2,952 FTEs Saved
• 389 FTEs HPO
• 45 FTEs Alt. to A-76

Net Savings Over Five-Year Performance 472 M
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Service/Agency A-76 Comparison(Completed
Competitions vs Workforce Target)
As of March 2006
59
59
56
43
41
49
54
36
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10
9
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Approved Program Budget Review 2008
A-76
As of September 2006

• PBD 729 set 9,212 FTEs target for DLA by FY 09
• Confirmed End of FY 09
• Re-competitions Count!
• PBR 08 A-76
• Base Realignment Closure 2005 Enacted in
  November 9, 2005
• ESG/WIPT formed in October 2005
• Briefed Corporate Board in January 2006
• Enterprise-wide Solution to Complete 6,756 FTEs
  by FY 09
• PBR 07 Submit to Complete 9,196 FTEs by FY 09
• DHRC Designated as High Performing Organization
  by OSD
• 389 FTEs Additional Credit towards PBD 729
• FY 06 13 Savings ? 1,053 M
• PBR 08 ? PBR 09 Baseline

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A-76 PBR 2008
Meets OMB Goals / Falls Short on PBD 729

• PBD 729 Target
• 9,212 FTEs by FY 2009
• OMB/DOD Goals
• FY 02 ? 5
• FY 03 ? 15
• FY 09 ? 50
• Completed Cumulative

Actual
Projected
?
?
Projected Net Savings FY 06 13 1,053M
To Date 5,019 Studied
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A-76 Competitions Current Planned

• 2 Competitions
• Underway
• Distribution Functions
• DDRV Re-compete
• Installation Support
• Functions (BASOPs)
• DDSP

• Future Competitions
• Thru FY 2013
• BASOPs
• IT
• Accounting Operations
• Distribution Reutilization
• Test Evaluation
• Procurement Support
• Document Automation Production

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A-76 Standard Competition Process Flow
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DLA Competitive Sourcing Roles
(As Defined by Revised OMB Circular A-76)

• Competitive Sourcing Official ? DLA Director
  (???)
• Appoints Competition Officials
• Competition Officials
• Source Selection Authority (SSA) ? J-3/4 Director
  (??) / Other
• Appoints Source Selection Advisory Council (SSAC)
  Makes Performance Decision
• Contracting Officer
• Center of Excellence A-76 Contracting Office
  (DSCC-DR)
• Agency Tender Official
• Appoints MEO Team
• Develops Agency Tender ? Most Efficient
  Organization (MEO)
• Performance Work Statement (PWS) Team Lead
• Appoints PWS Team
• Develops PWS Quality Surveillance Assurance
  Plan (QASP)
• Human Resources Advisor
• Advises MEO Team

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Centralized Approach
3.

• CSO, SSA, SSAC Chair, A-76 Agency Program Office
• Requiring Activities SSA, Program Offices
• Activities Under Competition

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Source Selection OrganizationCentralized
Approach
Source Selection Authority (SSA) ?? /
Source Selection Advisory Council (SSAC)
DLA A-76 Contracting Officer
Price Evaluation Board (PEB)
Past Performance Evaluation Board (PPEB)
Contract Specialist
Source Selection Evaluation Board (SSEB)
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DLA Approach to
Source Selection Evaluation
(OMB Circular A-76, Revised May 29,
2003)

• Source Selection Advisory Council (SSAC)
• Appoints SSEB Teams
• Receives Evaluation Briefings
• Makes Recommendations to the SSA
• Source Selection Evaluation Board (SSEB)
• Conducts Past Performance Risk Evaluation of
  Offers
• Conducts Technical Evaluation of Offers
• Contracting Officer (KO)
• Oversees Evaluation Process Advises SSAC
• Appoints Price Evaluation Board (PEB)
• Conducts Cost Evaluation of Industry Bids
  Agency Tender

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Information Resources

• DLA A-76 Competitive Sourcing Library
  Directory
• http//www.dla.mil/j-3/A-76/A-76Main.html
• Links to the KOs website with schedules
• http//www.supply.dla.mil/a76/
• A-76 policy documents Guidebook
• Hyperlinked
• Samples
• Plans of Actions Milestones
• Performance Work Statements
• Quality Assurance Surveillance Plans
• Directory Upgrade ? January 2007
• Standard DLA Web Design Compliance / Searchable
  Directory
• Lessons Learned Database
• Training Module

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DLAs Centralized Training

• Required by all DLA A-76 Participants
• In addition to or in lieu of additional outside
  A-76 training
• Mandatory training listed in CA Guidebook
• Provides a cost efficient way to convey material
• Scheduled courses are centrally funded
• Ensures course info is consistent to all
  participants
• Structured as a forum for participants
• To interact with expert instructor
• Be fully engaged with DLA peers
• Learn the DLA way

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DLA Courses in Competitive Sourcing DLA Learning
Management System

• Ready Now
• Executive Overview
• A-76 Overview
• Preliminary Planning
• Source Selection Evaluation Board
• Continuing Government Activity
• Pending A-76 Program WIPT Review
• Agency Tender Overview
• PWS Development
• MEO Tools and Techniques Development
• A-76 Course Schedule to be posted

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DLA A-76 Program Budget Review (PBR) Process
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A-76 Program Funding - Formulation

• Who J-A5 formulates Program Budget Costs
  Savings via A-76 Program WIPT ESG
• How
• Annual IGCA Inventory Data ? Number of FTEs to
  Compete
• WIPT develops Competition Schedule with
  respect to other
  DLA initiatives
• Base Realignment Closure
• DLA Transformation Initiatives
• Packageable business units for competition
• ESG reviews proposed Competition Schedule
• Corporate Board approves Competition Schedule
• J-A5 incorporates Approved Schedule into the A-76
  PBR Guidance
• Prepares Costs Savings Scorecards based on
  Approved Schedule
• Guidance becomes part of Annual PBR Data Call
  published by J-8

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A-76 Program Funding - Formulation(Cont.)

• When
• WIPT/ESG Develop Schedule ? 1st Quarter
• Corporate Board Approval ? 2nd Quarter (January)
• J-8 Publish PBR Data Call ? 2nd Quarter (Early
  February)
• Corporate Submit ? 2nd Quarter (Late February)
• Field Activities Submit ? 2nd Quarter (March)
• What
• Affected Activities include A-76 Scorecard Costs
  Savings from A-76 PBR Guidance in their PBR
  submissions.

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A-76 Funding - Execution

• Who J-8 identifies Funds to be Budgeted for
  A-76 in Annual Operating Budgets based on PBR
  A-76 scorecards
• In Activity Budgets or,
• As Memo Entries for Transformed Budgets
• DES, J-6, J-8
• How Affected Activities conduct their
  respective A-76 Preliminary
  Planning Competitions
• Based on A-76 PBR Guidance Competition Schedule

Funds are not fenced rather, they are
identified in the Activity Budget as intended for
planning conducting A-76 competitions.
CAUTION Each competition
may require more or less than budgeted
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A-76 Funding Key Points

• Two-Way Communication
• Activitys Commercial Activity Program Office
• Activitys J-8
• Affected Activities should add or reduce funding
  to coincide with their A-76 plans
• Prior to Execution Year
• Affected Activities are responsible to the CSO
  for executing their A-76 competitions as planned

Insufficient funds are no reason for failing to
complete an A-76 competition on time
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PBR 09 A-76 GuidanceAssumptions

• Period ? FY 2007 2013
• Gross FTE Savings ? 20
• Distribution Depots ? 40
• MEO Re-competitions ? 10
• Preliminary Planning Costs ? 1,500 per FTE
• MEO Re-Competitions Streamline Competitions
  w/10 or fewer FTEs ? 750 per FTE
• After Decision, Study Costs Become Fully Burdened
  to Determine Actual Savings
• Cost per FTE Applies to Contracted Services,
  Training, Travel
• Fully Burdened Includes Gov. Salaries Benefits
  Used in Study

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PBR 09 A-76 GuidanceAssumptions

• Study Costs ? 2,500 per FTE
• MEO Re-Competitions Streamline Competitions
  w/10 or fewer FTEs ? 1,250 per FTE
• After Decision, Study Costs Become Fully Burdened
  to Determine Actual Savings
• Cost per FTE Applies to Contracted Services,
  Training, Travel
• Fully Burdened Includes Gov. Salaries Benefits
  Used in Study
• Transition Costs ? 1,000 per FTE
• As Required One-Time Costs

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PBR 09 A-76 GuidanceAssumptions (Cont.)

• Continuing Government Activity (CGA) Costs
• Contract Administration, etc.
• 2.5 of MEO FTEs Times Annual Average Rate (AAR)
• Separation Costs ? 28,000 per FTE
• One-Time Costs at Startup
• End Strength to be Separated
• Gross FTE Savings Minus CGA FTEs

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PBR 09 A-76 GuidanceAssumptions (Cont.)

• A-76 Gross Savings
• FTE Savings Times AAR
• A-76 Net Savings
• Gross Savings Minus Preliminary Planning, Study,
  Transition, CGA, Separation Costs
• Inflation on Costs Savings
• Inflate If Competed FTEs Are Primarily Exempt
  Department of Labor (DOL) Positions
• Dont Inflate If Competed FTEs Are Primarily
  Non-Exempt DOL Positions

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PBR 09 A-76 GuidanceTimeline

• October 2006 Draft PBR 09 A-76 Guidance
• February 2007 Finalize PBR 09 A-76 Guidance
• March/April 2007 PBR Review Negotiations
• May/June 2007 Brief PBR Update to Corporate
  Board
• July 2007 Brief Agency PBR Update to ATL
• August 2007 Submit Agency PBR Update to OSD
  Comptroller

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DLA A-76 Program
Questions?
Mr. Ken McLain A-76 Program Coordinator (703)
767-3631 Kenneth.Mclain_at_dla.mil