Strategic Sourcing and Acquisition Systems Department of Homeland Security (DHS) Strategic Sourcing Presented by: Al Sligh Director, Strategic Sourcing

Strategic Sourcing and Acquisition Systems

Department of Homeland Security (DHS) Strategic Sourcing

Presented by: Al Sligh Director, Strategic Sourcing and Acquisition Systems (SSAS)Office of the Chief Procurement OfficerUnder Secretary for ManagementDepartment Of Homeland Security

2 Strategic Sourcing and Acquisition Systems

United 22 previously disparate domestic agencies into one coordinated department to protect the nation against threats to the homeland and created 35 new offices including S&T, IAIP, ODP, US-Visit & CIO

Effective March 1, 2003Effective March 1, 2003

The Homeland Security Act of 2002:


Prevent terrorist attacks within the United States

Reduce America’s vulnerability to terrorism

Minimize damage from potential attacks and natural disasters

FEMA

Protecting America

September 11, 2001 A date that will be forever etched in our memory.

Emergency Management

Department of Homeland Security (DHS) Mission:


DHS FY 05 Planned Obligations (in Millions) (by Acquisition Office)

$2,618$2,500

2,294

$1,904$1,800

$1,555

$87$85

$0

$500

$1,000

$1,500

$2,000

$2,500

CBP TSA OPO ICE FEMA USCG FLETC USSS

1

23

45

6 7 8

X

80 67 74 3255 2030362

ONBOARD 1102 ACQUISITION WORKFORCEDHS TOTAL: $12,843,000,000


DHS Acquisition Program Spend

Total DHS Acquisition Program spend = $13 Billion

Spend identified for analysis under the Strategic Sourcing Program: 2.5 Billion (non-IT)3 Billion (IT)

TOTAL = 5.5 Billion (42%)

DHS Acquisition Program Spend (in Billions)

$2.519%

$3.023%

$5.542%

DHS Total Acquisition Program Spend

% identified for analysis under the Strategic Sourcing Initiative Billion(non-IT)% identified for analysis under the Strategic Sourcing Initiative Billion (IT)


What is Strategic Sourcing?

Strategic Sourcing is the process of leveraging an organization’s buying power and the managing of strategic procurement spending in logical categories in order to emphasize various characteristics.

These characteristics can include:

performance, price, total life cycle management costs, socio-economic goals, stakeholder collaboration


Management Council

Chair: DHS Undersecretary for Management Membership: Chief Operating Officers from each Component, CIO, CFO, CPO

Strategic Sourcing Group (SSG)

Chair: Director of SSASMembership: Representatives from each of the Components, SBA, DHS Inspector General, Legal

Commodity Councils

Membership: SSG Representatives, DHS Program Managers, OE Representative, DHS Functional Representatives

DHS Strategic Sourcing (SS): Governance Structure

Joint Requirement Council

Chair: Chief of Staff for USCG Membership: Senior Executives from Components, CIO, CFO, CPO

Management Requirements

The Strategic Sourcing Group(SSG):Provides oversight and facilitation for the Strategic Sourcing Program (SSP) and the Commodity Councils (CC)Implements and monitors DHS’ SSPEstablishes and facilitates CC’sRefines spend dataReports to DHS Joint Requirements Council

The Commodity Councils:Formulate and implement Category Management Plans (CMP) for each Commodity Council

Joint Requirements Council (JRC)- Senior requirements review boardConducts program reviewsReviews cross-functional needs and requirements Oversee the requirements generation processValidate mission needsstatements

Management Council

Ensures that management activities are in alignment with the DHS vision, mission, strategies and goals.

DHS MD Number: 1400INVESTMENT REVIEW PROCESS

DHS MD Number 731STRATEGICALLY SOURCED COMMODITIES POLICY AND PROCEDURES

DHS MD Number 0730.1STRATEGIC SOURCING GROUP OPERATIONS


Strategic Sourcing Process: 5 Stages

Drive Continual Improvement

1. Organize and Launch Council

2. Develop Charter and

Goals

3. Conduct Analysis

4. DevelopCategory

Management Plan (CMP)

5. Implement and Manage

Analyze and understand Commodity specific acquisition process Collect, analyze, and document Commodity spending Review bypass spend Collect enterprise-wide requirements Identify and understand Components-level requirements and demand Develop process for forecasting demand Benchmark against Industry and Federal Best Practices Identify and analyze supplier base

Implement CMPs Drive activities to achieve goals Develop Marketing Plan Implement Governance Process

Stand Up Council including key Commodity Stakeholders Schedule Standing Meetings

Develop Category Management Plan (CMP) for each Category Develop individual sourcing strategies for each Category Develop specific sourcing methodologies Include metrics and performance measures Perform SWOT Analysis to understand strengths and weaknesses of Plan

Conduct opportunity assessment Develop Council Charter and Goals Confirm Departmental and Components Spend Review council responsibilities

CMP Review and Approval


Category Management Plans (CMP’s)

What is a CMP? A CMP is an enterprise-wide plan for the analysis and the development of acquisition strategies (short and long term) for a category of spend

ELEMENTS OF A CMP

•Commodity Description•CC Schedule•Risk Categories•Council Charter•Schedule Management Plan•Information-Gathering Techniques•CC Planning Methodology•CC Performance Management Plan•Diagramming Techniques•CC Project Plan's)•CC Interfaces•Probability/Impact Risk Rating Matrix•Spend Analysis•Role & Responsibility Assignments•List of Prioritized Risks•SWOT Analysis•Staffing Management Plan•Decision Tree Analysis•Scope Statement•Communications Requirements•Risk Response Plan•Scope Management Plan•Stakeholder Analysis•Procurement Options Analysis•Work Breakdown Structure•Communications Management Plan•Procurement Management Plan•Resource Requirements•Risk Management Plan•Statements of Work

Joint Requirements Council (JRC)

Chief Acquisition Officer Council

(CACO)

AssetManagement Board (AMB)

Strategic Sourcing Group (SSG)

Commodity Councils

Commodity Councils

Approval

Review and Comment (Buy-in)

Initial Review and Comment

Develop and present CMP

CMP Approval Process


Commodity Councils

Facilities SecurityTraining

Aviation

Weapons and Ammunition

Professional Services

Fleet Vehicles

Office SuppliesBoats

Information Technology

Facilities

Uniforms

Mail

Energy

Copiers

Enterprise-Wide Acquisition Strategies

There are currently 14 Commodity Councils to develop and implement Enterprise-Wide Acquisition strategies


Strategic Sourcing Specialist Commodity Councils and Projects

Geoff Gauger

Office Supplies Professional Services

Facilities DHS EMALL (Project)

Celeste Steele

Weapons and Ammunition Facilities Security

Uniforms Fleet

Joint Requirements Council (JRC) (Project)

Jane Hawn

Mail Training

Energy Copiers

Strategic Sourcing Group Management (Project)

Donna Jenkins

Boats Aviation

Information Technology Transportation

Spend Analysis (Project)

IBM Support Contractors

Savings Tracking EMALL Support

Spend AnalysisKnowledge Transfer

Strategic Sourcing-Team Lead Portfolios


Council Structure: Roles and ResponsibilitiesCouncil Chairs Senior Acquisition Representatives Skilled in Acquisition arena and contracting Technical or Operations background Provides strategic sourcing knowledge Facilitates efforts of Councils Drives the Council’s agenda Maintains appropriate mix of Council membership

Contracting Officer(s) Responsible & accountable for the specific procurement Determines requirements Represents department throughout Acquisition Process Works collaboratively to achieve successful source

selection

Council Members Stakeholder representatives (from all Organizational Components) Works in collaboration with council members to develop a CMP Develops initiatives defined in the CMP Subject Matter Experts in commodities/services being procured Participates in the acquisition process Participates in contractor performance requirement• Participates in SRM activities

Extended Council Members Established by the Primary components representatives Has more specific perspectives to share with the

CouncilExample: A member of a technical evaluation; past performance or contract evaluation term

Advisors Supports the Council in an advisory capacity Represents key areas of the DHS procurement

process. Individuals from these offices may be designated

as needed to the councilso Procurement Policy, OSBDU, Competitive

Sourcing, Legal, CIO, Chief Financial Office

Strategic Sourcing and Acquisition Systems (SSAS) Representation

Leadership role Provides wise Counsel to the Co Chairs tasked with

leading the overall effort. Confers with the Council Chairs regarding facilitation

of Council activity Identifies noteworthy Sourcing activity Creates agendas, development of Category

Management plans Creates of Plans of Action and Milestones (POA&M) Spend analyses Functions as the Subject Matter Expert (SME) on the

DHS Strategic Sourcing process.

Improvement Team(s) Established by a Council to accomplish

specific efforts. Led by a council member Established for a specific purpose and time. Examples of efforts:

o development of a statement of work,o an analysis of cost driverso development of alternatives for full

council coordination


DHS Council Organizational Component

FEMA TSA ICE USCG USSS CBP FLETC CIS FPS S&T IAIP USM

1. Office Supplies X X X X X X X

2. Weapons & Ammunition X X X X X X X X

3. Copiers X X X X X X X X X X

4. Energy X X X X X X X X

5. Uniforms X X X X X X X X X X

6. Boats X X X X X

7. Aviation X X X X X X X

8. Fleet Vehicles X X X X X X X X X X

9. Facilities Security X X X X X X X X X

10. Training X X X X X X X X

11. Facilities X X X X X X X X X X X

12. Mail X X X X X X X X X X

13. Professional Services X X X X X X X

14. Information Technology X X X X X X X X X X X X

DHS Strategic Sourcing Council Participation


Core Curriculum

Strategic Sourcing Introduction Conduct Analysis Cont.

Organize and Launch Council Benchmark against Ind. & Fed. Best Practices

Stand Up Council including key Commodity Stakeholders Identify and analyze supplier base

Schedule Standing Meetings Develop Category Management Plan (CMP)

Develop Charter and GoalsDevelop Category Management Plan (CMP) for each Category

Conduct opportunity assessmentDevelop individual sourcing strategies for each Category

Develop Council Charter and Goals Develop specific sourcing methodologies

Confirm Departmental and Components Spend Prioritize Opportunities

Review council responsibilities Include metrics and performance measures

Conduct AnalysisPerform SWOT Analysis to understand strengths and weaknesses of Plan

Analyze and understand Commodity specific acquisition process CMP review and approval/Upkeep of CMP

Collect, analyze, and document Commodity spending Implement and Manage

Review bypass spend Acquisition (Pre-Award)

Collect enterprise-wide requirementsSupplier Relationship Management (Post-Award)

Identify & understand Components-level requirements & demand

Supplier Relationship Management (Post-Award) Continued

Develop process for forecasting demand

Strategic Sourcing Process TrainingProcess Training

Knowledge Transfer Approach

SSAS

Support Contractor

Strategic Sourcing Training


Core Curriculum

Strategic Sourcing- Skills Training Strategic Sourcing- Execution and Implementation (Cont.)

Overview CC Performance Management

Commodity Council Scope Management CC Communications Management

Strategic Sourcing- Planning CC Procurement Management

CC Integration Management Strategic Sourcing-Control Methodology

CC Scope Management CC Integration Management

CC Time Management CC Scope Management

CC Performance Management CC Time Management

CC Human Resource Management CC Performance Management

CC Communications Management CC Communication Management

CC Risk Management CC Risk Management

CC Procurement Management Strategic Sourcing- Closing and Archiving

Strategic Sourcing- Execution and Implementation CC Communications Management

CC Integration Management

Strategic Sourcing Training

Strategic Sourcing Skills TrainingSkills Training

Support Contractor

Knowledge Transfer Approach

SSAS


Enterprise Spend Analysis

1) Commodity: (Strategic) Analysis to validate existing CC’s,

create/identify new CC’s Analysis to support the councils

2) Supplier Relationship Management (SRM): (Strategic)3) Component's Spend: (Tactical)

Maximizes efficiencies in procurement

Data Management Approach

Federal Procurement Data

Procurement Credit Cards

DHS Suppliers

DHS Inter-Agency Agreements

DHS General Ledgers

Advanced Acquisition Plan

Commodity X X X X XSupplier Relationship (SRM) X XComponents Spend X X X X X

DATA SOURCES

Spend Class


Managing the DHS Enterprise Spend

Enterprise Spend Analysis

Total DHS Spend

Commodity

Supplier Relationship Management

Federal Strategic Alliance

Component Spend

- Validate Existing Commodity Councils- Establish New Commodity Councils- ID & Prioritize Savings Opportunities- Support negotiations- Track Compliance and Performance

- Alignment of DHS Spend by Supplier- Supplier Segmentation

-Non-strategic-Niche-Enterprise Core

- ID Suppliers in Strategic Alignment

- GSA-GSA Advantage-Contract Support-Schedule Buys

- DoD- Preferred EMALL Support

- Component Specific Spend-Identify Opportunities-Support Negotiations-Monitor Compliance and Performance-Increase Efficiency & Effectiveness

- Support Enterprise Effort-Contracting Support


Pistols Initiative

$130 K weapons 5Year Opportunity(1 Base, 4 Options)

Department-wide Requirements Family of Weapons (full, compact, sub-compact)

Activities

Spend Analysis Rationalized Requirements

Full and open competition Comprehensive Testing

Best-Value Source Selection Multiple Award Potential

Results

35% Price Reductions (Fixed Price) $1M Cost Avoidance- Testing

2 Contracts Awarded- •1 Small Business •1 Large Business Doubled Warranty Period

Strategic Sourcing Typical Initiative: For Discussion

Commodity Council: Weapons and Ammunition


Copiers Initiative

Department-Wide Requirements

• 5 Year Opportunity (1 Base, 4 Options) • 5 – Size Band

Activities

Spend Analysis Rationalized Requirements

Full and Open Competition Comprehensive Testing

Best-Value Source Selection Multiple Award Potential

Results

• 38-47% Price Reductions (Fixed Price)

• Contract Price- “Ceiling Price” 4 Contracts Awarded

Strategic Sourcing Typical Initiative: For Discussion

Commodity Council: Copiers


Strategic Sourcing Program Results:

Copiers: 38 - 47% Price Reduction

Energy:

• Electricity: 14% - Price Reduction

• Natural Gas: 12% - Price Reduction

• Heating Oil: 5%- Price Reduction

Ammunition:

.40 Caliber:

• 31.25%- Price Reduction

Pistols: 35% Price Reductions

• $1M- Testing

• Doubled the warranty period

Office Supplies:

DHS EMALL (Office Supplies):

• 36.9% - Retail Price Reductions

• 57.0% - Transaction Cost Avoidance

• 64%- Small Business Participation

Express Mail / Package Services:

• 37%- Price Reduction


DHS Strategic Sourcing

Strong Governance Structure

Significant Senior Management Buy-in

Change Management Strategy

Reasonable Spend Analysis Approach

Comprehensive Communication Strategy

Strategic Sourcing Process and Skills Training

Critical Success Factors


OFFICE OF MANAGEMENT AND BUDGETMemorandum Dated: May 20, 2005Subject: Implementing Strategic Sourcing

I. Spend analysis and the identification of commoditiesII. Commodity CouncilsIII. Development of an agency-wide strategic sourcing plan:

a. Strategic Sourcing Governance:b. Strategic Sourcing Goals and Objectives c. Performance Measures d. Communications Strategy e. Training Strategy

Key Compliance Highlights:

EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503Office for Federal Procurement Policy (OFPP), Rob Burton, Associate Administrator, OFPP

“Thank you for submitting the first agency Strategic Sourcing Plan in accordance with the OMB's memorandum, “Implementing Strategic Sourcing”. The plan is comprehensive and exceeds the requirements of the memorandum…” (OFPP, Jul 1st 2005).


Questions

Al Sligh Jr.Director, Strategic Sourcing and Acquisition SystemsOffice of the Chief Procurement OfficerDepartment Of Homeland [email protected]

“We cannot solve the problems of today with the same level of thinking that created the problem” A.

Einstein

mailto:[email protected]


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Documents

Strategic Sourcing and Acquisition Systems Department of Homeland Security (DHS) Strategic Sourcing Presented by: Al Sligh Director, Strategic Sourcing