Office of Management Office of Procurement and Assistance Management Department of Energy DOE Strategic Business Initiatives Briefing to Joint Procurement

Office of ManagementOffice of Procurement and Assistance Management

Department of Energy

DOE Strategic Business

InitiativesBriefing to Joint Procurement Meeting

February 7-8, 2012


Agenda

• 1st Session– Process Flow– Promote Efficiency– Office of Management and Budget (OMB) Requirements – DOE Implementation– Government Accountability Office (GAO) Oversight

• 2nd Session– Policy and Guidance– Reporting– FY 12 Goals and Objectives– Expectations

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3

“Growing federal deficits and increasingly uncertain future federal budgets have necessitated that M&O contractors evaluate areas that could be streamlined or provide cost savings in support costs at these sites, thereby maximizing funds available for the sites’ national security, research, and energy development missions”

GAO Conclusion


Process Flow

Reduce Spend

White House

Efficiency GoalsOMB Cost SavingsDOE

Strategic Tactical

Strategic Sourcing

PolicyOPAM

Strategic Sourcing Guidance

Prog. eSourcing ActivitySites

AcqStat & MOP

Charts

Report Template

Capture Cost

Savings

USA Spend

Website

MAX Database

Mgmt & Opn

Goals

Policy/Guidance/Direction

Implementation/Execution

GAO Oversight and Audit of Entire Process4


Promote Efficiency

• Executive Order - Promote Efficient Spending – Agency Reduction Target 20% below FY10 Spending

• Federal Employee Travel• Employee Mobile IT Devices• Printing Costs• Executive Fleet Efficiencies• Extraneous Promotional Items

– Campaign to Cut Waste also includes:• Fleet Reductions• Advisory contracts• Disposition of Excess Real Property• Subscriptions• Strategic Sourcing includes additional 10% in “Supplies”!

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OMB Requirements

• OMB Initiatives – Federal and Support Acquisition Status (AcqStat) - Annual report on DOE progress GSA SmartPay – Annual report on program Internal Controls Strategic Sourcing – Expanding government-wide activities including

FSSI and EWA Service Contracts – Goal of reducing certain PSCs– Multi-Sector Workforce (MSWF) – Understanding how contracted

services support mission and operations– Service Contract Inventory – Priority established for Special Interest

Functions and Inherently Governmental designation– FAIR Act Inventory – Improve Human Capital distribution

These OMB Initiatives must have M&Os participation to be successful!

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DOE Implementation

• Acquisition Status Report (AcqStat)– Reducing the cost of management support services– Buying smarter (government and agency-wide strategic sourcing)– Managing high risk contracts– Strengthening the acquisition workforce – Total - $967 million, about 4 percent relative to our $25 billion FY

2011 appropriations

Total Obligations minus M&O 7,013,707,092$ - real property leases, international agreements, purchase of real property, and other site and facilities mgmt contracts (non-M&O) (3,977,199,253)$ Subtotal Baseline 3,036,507,839$ - required by statute (411,327,893)$ + M&O Subs 8,329,783,754$ New Savings Baseline 10,954,963,700$ FY 2010 Target 3.5% 383,423,730$ 674,114,611$ 6.2%FY 2011 Target 7% 766,847,459$ 967,000,000$ 8.8%

Actual

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DOE Implementation continued

• GSA Purchase Card Program (SmartPay)– Primary method used to acquire goods/services below the micro-

purchase threshold– Also used to place orders under existing contracts and make

payments. – Seen a significantly increased use of P-Cards to streamline

purchasing/improve cash management

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

2003 2004 2005 2006 2007 2008 2009 2010 2011

2003 2004 2005 2006 2007 2008 2009 2010 2011Rebates $1,114,744 $993,572 $800,030 $740,821 $619,753 $721,774 $906,255 $1,091,958 $1,111,577

PCard Rebates

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• Strategic Sourcing Implementation– Federal

• Federal Strategic Sourcing Initiative (FSSI)• General Services Administration Schedules (GSA)• Enterprise Wide Agreements (EWA)

– Contractor • Contractor Supply Chain Council (CSCC)• Integrated Contractor Purchasing Team (ICPT)• Supply Chain Management Center (SCMC)• Procurement Evaluation & Re-Engineering Team

(PERT)

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• FSSI – Federal Strategic Sourcing Initiative– Allows government to aggregate requirements, streamline processes and

leverage its buying power– Primary goals:

• Strategically source across federal agencies • Establish mechanisms to increase total cost savings, value, socioeconomic participation

and sustainability goals• Collaborate with industry to develop optimal solutions • Share best practices • Create strategic sourcing communities of practice

– Current FSSI Solutions• Wireless Telecommunications Expense Management Services • Print Management Services• Office Supplies • Express and Ground Domestic Delivery Services • Multifunction Devices (MFDs)

• Website: www.gsa.gov/fssi10


GSAOffice Supplies

• Agency Implementation Activities:

• Sales & Performance Metrics:

Agency Use Policy Issued

OS2 Champion Named

Progress Reports for Agency Leadership

Conducted Employee Communications

Agency Updates to Commodity Team

SS Champion Patrick Ferraro

OS2 Senior Champion Scott Clemons

Rep. to GSA OS2 TeamTom McAllister and Rosemary (Rose) Johnson

Sales Targets $2.0 M

Training None

• Agency Ownership:

FSSI SPEND TO DATE QUARTERLY TARGETS FOR OS2 LEVEL OF OS2 USAGE

Through 9/30/11

Quarterly OS2 Spend*

Quarterly OS2 Goal

Progress to Goal

Medium. We classify DOE’s usage of OS2 in FY11 as Medium based on its use compared to its overall office supplies spending (estimated to be $3.6M by GSA in FY09) and controlling for the fact that not all off ice supplies spending is eligible for OS2. GSA plans to work with DOE to develop an accurate baseline of eligible OS2 spending so that GSA can provide specific percentages in the future

Total Spend $0.64 M FY12 Q1 $0.0 M $0.25 M +$0.0 M

Total Savings $0.02 M FY12 Q2 $0.0 M $0.50 M +$0.0 M

Est. % Savings 3.1% FY12 Q3 $0.0 M $0.50 M -$0.0 M

Total Small Business $0.58 M FY12 Q4 $0.0 M $0.75 M -$0.0 M

% Small Business 90.5%FY12 to date $0.0 M $2.00 M +$0.0 M

Accomplishments and Notes:• GSA is available to conduct OS2 training for employees if desired.• Agency Use Policy Memorandum entitled “Sources for Office Supplies was signed by Acting SPE on 9/9/11. • Associated Policy Flash was signed by the Office of Policy Director on 9/27/11. • Agency expects to see a significant increase in usage for FY 2012.



• EWA – Enterprise Wide Agreements– Collection of optional-use, strategic sourcing contracts for common-use

software, hardware, and services used within IT organizations across the DOE

– Open to the entire DOE complex, including National Labs and Power Administrations, and all DOE contractors, including M&O contractors

– Applies a centralized, cross-functional, strategic enterprise software solutions approach that leverages opportunities to create efficiencies and enhances the value of IT acquisition

– Benefits of the program include:• Reducing duplicative enterprise-wide IT components• Promoting technical standardization• Increasing IT contract administration efficiencies• Improving knowledge-sharing of IT acquisition best practices

• Website: http://energy.gov/cio/guidance/it-acquisition/enterprise-wide-agreements

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http://energy.gov/cio/guidance/it-acquisition/enterprise-wide-agreements


• CSCC – Contractor Supply Chain Council (Formerly CPC)

– Provides focused communication between DOE SPE and the Department's major contractors' Purchasing Managers

– Represents complex-wide views, concerns and interests of the contractor community

• ICPT – Integrated Contractor Purchasing Team– Aggressively pursue strategic sourcing opportunities that represent

procurement leveraged spend that results in a lower total cost of ownership for DOE Complex Wide Site and Facility Contractors

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• SCMC – NNSA/EM Supply Chain Management Center

– Implement an enterprise-wide, integrated procurement software/hardware platform utilizing : Spend Analysis, eSourcing (electronic sealed-bidding and Reverse Auctions); eStore (electronic Catalogs); and strategic sourcing (site-wide commodity pricing agreements)

• PERT – Procurement Evaluation Re-engineering Team

– The contractor purchasing system reviews (CPSR) are accomplished by experienced professionals from outside of the organization being reviewed

– The program provides for the use of established criteria, and provides for the qualifications and primary responsibilities of team members

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GAO Oversight

• 3 Recent Audits:

GAO #120956 – OMB’s Acquisition Savings had Some Results, but Improvements Needed

- Audit Complete – Findings focused on OMB/OFPP Guidance

GAO #361245 – DOE Contractor Support Costs at NNSA and Office of Science Sites

- Audit Complete – Findings focused on DOE GuidanceOne recommendation was to “clarify guidance on estimating cost savings from streamlining efforts.”

GAO #120999 – Strategic Sourcing in the Federal Government, DOE, DOD, DHS, VA and GSA

- Audit Underway – Findings will build on strengthening guidance,

Just received a new data call

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Department of Energy

Session # 2


DOE Policy and Guidance

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Reporting Template

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1st Qtr Savings

19Not sure how to handle ICPT savings??

Strategic Sourcing

Acquistion Cost

Improvements Total

Projected FY12

SavingsNNSA $15,606,019 $15,944,590 $31,550,609 TBDEM *** $0 $0 $0 TBDSC $21,332,001 $23,152,441 $44,484,442 TBDOthers ** $7,144,431 $13,795,184 $20,939,615 TBD

DOE Totals $44,082,451 $52,892,214 $96,974,666 TBD* Based upon savings plan numbers provided by Programs.

** Others includes Federal Strategic Sourcing Initiative (FSSI), OCIO Enterprise Wide Agreements (EWA), NETL, NREL, INL, etc.

*** EM data will be updated Feb 8th and will not include CBC strategic sourcing data, which will not be available until the end of Feb.


1st Qtr FY 12 Strategic Sourcing MOP

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Performance:

FY 10 FY 11FY 12 Target 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total

NNSA $110.0 $115.0 TBD $15.6 $0.0 $0.0 $0.0 $15.6EM* $37.0 $1.9 TBD $0.0 $0.0 $0.0 $0.0 $0.0SC* $145.0 $108.0 TBD $21.3 $0.0 $0.0 $0.0 $21.3Other** $32.5 $25.4 TBD $7.1 $0.0 $0.0 $0.0 $7.1

Total $324.5 $250.3 $286.0 $44.1 $0.0 $0.0 $0.0 $44.1

($ Millions)Goal FY 12 Actual

* Based upon savings plan numbers provided by Programs.

** Other includes Federal Strategic Sourcing Initiative (FSSI), OCIO Enterprise Wide Agreements (EWA), NETL, NREL, INL, SWPA, etc.

Action Items Scheduled Completed

Finalize FY12 goals with Programs Feb 2012

Refine cost savings methodology Mar 2012

Collect cost savings/avoidance from Pgms

Quarterly Ongoing

Establish FY 13 goals Aug 2012

Complete FY 12 spend analysis Sep 2012

Action Plan: Status:

WINS

SC has achieved $44.5 M in cost savings 1st quarter.

NNSA thru Supply Chain Management Center (SCMC) achieved $31.6 M in cost savings 1st quarter.

OCIO EWA program has achieved $1.8 M in cost savings 1st quarter.

Other activities such as SWPA, NREL, INL, and NETL have achieved $18.5 M in cost savings 1st quarter.

Q1 Q2 Q3 Q4 -

50

100

150

200

250

300

350

Plan

Actual

Baseline

Target

Cos

t Sav

ings

/Avo

idan

ce

($ M

illio

ns)


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FY 12 Goals and Objectives

DOE FY 2012 Budget by Program

Option #2: DOE Goal of $286M Allocated

by Program

Option #1: DOE Goal of $286M Allocated

by Budget Share

NNSA $88,000

31%

Other $198,000

69%

Strategic Sourcing Goal(Amounts in Thousands)


FY 12 Goals and ObjectiveExpanding Beyond Strategic Sourcing

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Expectations

• All of our success depends greatly upon:

– Getting in front of the curve on Goal Development– Identifying Department-wide Opportunities– Communication Among and Between Programs– Communication Both Up and Down the Chain– Organizing Collecting and Reporting Mechanisms

• More opportunities exist for collaboration between M&O contractors, we must find them through Spend Analysis!

• Opportunities may exist with collaboration between agencies (e.g. EPA, Corps of Engineers, AFCEE, etc.)

• Contractors are doing many things well but we’re not capturing all of it – Tell the Story!

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DOE Goals Summary

• Strategic Sourcing Savings $286 M– NNSA $– EM $– SC $– Other $

• Other Cost Savings/Avoidance $XXX M– NNSA $– EM $– SC $– Other $

• Spend Analytics Plan– NNSA: In place– EM: Pilot in place by Sep 2012, rest of sites in 2013– SC:– Other:

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Documents

Office of Management Office of Procurement and Assistance Management Department of Energy DOE Strategic Business Initiatives Briefing to Joint Procurement