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Bert Hovermale

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Navy Medicine FY11 Enterprise Spend Analysis & Strategic Sourcing Presented by: Bert Hovermale Lead Contracting Executive (LCE) BUMED / Director Acquisition ... – PowerPoint PPT presentation

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Title: Bert Hovermale


1
Navy Medicine FY11 Enterprise Spend Analysis
Strategic Sourcing
  • Presented by
  • Bert Hovermale
  • Lead Contracting Executive (LCE) BUMED /
  • Director Acquisition Management, NAVMEDLOGCOM
  • Jeremy Toton (CTR)
  • ReefPoint Group
  • Senior Acquisition and Logistics Analyst
  • NAVMEDLOGCOM

2
Navy Medicine FY11 Enterprise Spend Analysis
3
Bottom-Line Up-Front (BLUF)
  • NMLC has been conducting an annual spend analysis
    for four (4) consecutive years.
  • This compilation of data is pulled from two (2)
    disparate systems
  • Federal Procurement Data System (FPDS)
  • Data feed from Standard Procurement System (SPS)
  • Defense Medical Logistics Standard Support
    (DMLSS)
  • Overall we want to see a continued movement of
    doing more inside DMLSS thru E-Commerce and less
    inside SPS (which we call direct contracting).
  • E-commerce Prime Vendor Pharmacy Prime Vendor
    Med Surg ECAT
  • We want more of an emphasis placed on better
    commodity management and less fragmentationmeanin
    g limiting multiple contracting offices
    purchasing the same

4
BSO-18 Total Funding for Equipment/Supplies/Servic
es Spending Trend FY09-11
  • Comment
  • E-Commerce and Sourcing Optimization are critical
    to Navy Medicine Success!
  • Success E-Commerce 40-45 / Direct
    Contracting 50-55 / P-Card 5
  • As the overall spend grew by a net of 42M from
    FY10 to FY11
  • 119M (25 growth) came in the form of
    E-CommerceGreat!!!
  • Direct Contracting saw a 5.3 decrease

Total FY09 Spend 2.27B
Total FY10 Spend 2.29B
Total FY11 Spend 2.33B
5
Navy Medicine Region Spend Trend FY10 -FY11
FY10
FY11
NCA
Total by 86M
Decrease linked to shift from Navy UIC to JTF
UIC
NME
Total by 70M
NMW
6
BSO-18 Total Funded vs Contracted
The pace of growth for the APF is outpacing that
of our investment in material and
servicesindicating a growth in things such as
CIVPERS (in-sourcing), Travel, Training, Support
Agreements, etc.
With continued focus on sourcing optimization and
E-commerce this gap will closeallowing Navy
Medicine to manage more of their own workload
APF data source SMART Inclusive of DMLSS
Spend
7
Navy Medicine Commodity Direct Contracting Spend
Significant decrease in Healthcare providers in
NMW
Support Services (Medical and Non-Medical)
continue to rise each year
8
Breakdown of Direct Contracting Support FOR Navy
Medicine All Commodities
  • Continues to be a strong reliance on FLC and
    Army for contracting support
  • Want to continue to see FLC support decrease
    and NAVMEDLOGCOM / MEDCEN/MTF/CLINICs of
    support continue to increase

9
Breakdown of Direct Contracting Support FOR Navy
Medicine Med vs Non-Med
Non-Medical Commodities
Medical Commodities
NAVMEDLOGCOM on left axisMEDCEN/MTF/Clinics,
Army, FLCs on right axis
10
Medical Commodities Direct Contracting Support
FY11
Too Fragmented lack of consistency lack of
control
All of FLC support for Med Maintenance should
shift to Navy Medicine
Goal is to shift more of this to NAVMEDLOGCOM
11
Non-Medical Commodities Direct Contracting
Support FY11
Great examples of commodity management
Too Fragmented lack of consistency lack of
control
Air Force supported a 5M ADP requirement for
Bethesda in FY11
12
Breakdown of Navy Medicine Total DMLSS Spend FY09
FY11
  • E-Commerce and Sourcing Optimization initiatives
    are working!!!
  • GPC increased by 8Mmost notably in NME

13
Total Navy Medicine De-Obligations
FY08 FY09 FY10 FY11
De-Obs 56,079,153 83,834,797 107,236,310 126,133,099
Total Direct Spend 1,208,720,780 1,600,220,493 1,674,994,196 1,584,839,612
De-Obs 4.6 5.2 6.4 8.0
Actions De-Obs 1,720 2,927 3,672 4,494
Actions Total Direct Actions 20,302 23,184 24,451 23,914
Actions De-Obs 8.5 12.6 15.0 18.8
De-Obligations have increased exponentially over
the last four (4) yearsthey represent an
indicator for improved contract administration!!!
14
Navy Medicine Spend through Non-DOD Contracting Offices Navy Medicine Spend through Non-DOD Contracting Offices Navy Medicine Spend through Non-DOD Contracting Offices Navy Medicine Spend through Non-DOD Contracting Offices Navy Medicine Spend through Non-DOD Contracting Offices
  FY08 FY09 FY10 FY11
BSO-18 Totals 3,920,064 3,998,170 6,970,189 13,351,910
We are trending in the wrong direction!
Product / Service Type FY08 FY09 FY10 FY11
BIOMEDICAL RESEARCH STUDIES TRIALS 38,930 0 0 9,769,996
FACILITY OPERATIONS MANAGEMENT SUPPORT 3,666,526 3,618,913 5,042,006 2,939,177
MANAGEMENT TECHNICAL SUPPORT SERVICES 49,195 229,821 630,159 642,736
TELECOMM SERVICES AND COMPONENTS 165,414 149,436 1,298,024 0
  • This data represents real risk to Navy Medicine!
  • There are very specific approvals and processes
    that must be documented in order to utilize
    Non-DOD contracting Offices
  • Contact Navy Medicines POC at FLC Norfolk Det.
    Philadelphia (Ms Leanne Hanger (leanne.hanger_at_navy
    .mil) to develop a transition plan for these type
    requirements

15
Take Aways
  • Strategic Sourcing, E-Commerce, and Sourcing
    Optimization initiatives are workingas they
    continue to develop, we should see a consistent
    decrease in the of unique Contracting Offices
    used within each commodity.
  • i.e., less fragmentation and more process control
  • Commands must continue to focus on shifting their
    GCPC and open market procurements into the
    E-Commerce mechanisms within DMLSS
    (Prime Vendor Pharm / Prime Vendor Med Surg /
    ECAT)
  • In effort to reinforce supply chain efficiencies,
    OSD has decremented each of the Services Medical
    Commands budget by over 250M spread across the
    next five (5) years (Navy Medicines portion of
    that decrement is 25M).
  • De-Obligations are a measure of successful
    contract administrationbetter planning and
    contract administration will allow for Navy
    Medicine to make better use of de-obligated funds
    still available for use in the future!
  • Sending our Non-Medical requirements to our
    Non-Navy Medicine partners is a good thingbut
    sending our requirements outside of DoD is
    against regulations (example Department of
    Interiors GovWorks)unless those requirements
    have been properly vetted and documented by the
    appropriate authorities.
  • Violating these regulations puts Navy Medicine at
    risk of losing procurement authority. In
    addition, these actions illustrate Navy
    Medicines lack of control over regulated
    processesagain, placing us at risk of failing
    our clean audit assessment in 2013!

16
Navy Medicine Strategic Sourcing Initiatives
17
SOURCING SEMANTICS
  • Sourcing Optimization
  • Obtaining maximum value from DLA eCommerce
    solutions like Prime Vendor and ECAT by
    decreasing inappropriate utilization of the
    Government Purchase Card and eliminating
    unnecessary direct contracting
  • Strategic Sourcing
  • Replacing fragmented buying with centralized
    commodity management through demand aggregation
    and vendor consolidation in order to achieve
    savings, purchasing efficiencies, and
    standardization

18
MEDICAL EQUIPMENT MAINTENANCE
  • Commodity Statistics
  • The most highly fragmented commodity in Navy
    Medicine contracting
  • gt95 of the spend for medical equipment
    maintenance occurs at the local MTF leveldespite
    the fact that the most maintenance intensive
    medical equipment in our MTFs are procured by
    NMLC
  • Initial high-level analysis indicates Navy
    Medicine could save gt8M annually and streamline
    over 1,600 individual purchase orders.
  • Where we are going
  • Limited commodity management success so far
  • Some OEM-specific requirements being processed
    through DLA Troop Support
  • Need to balance interests
  • Support to the BMET community
  • Current contracting realities

19
ORTHOPEDIC IMPLANTS A HYBRID STORY
  • Strategic sourcing initiative led by M81 with a
    strategic optimization execution plan
  • Multiple awards with primary and secondary
    vendors in each of five major categories
    Hips/Knees, Spine, Ortho Trauma, Instruments,
    Sports Medicine
  • Surgeons identified for each major category with
    Specialty Leader involvement
  • Plan of action
  • Issue single solicitation but award by major
    category
  • Turn negotiated contracts over to DLA-Troop
    Support to become ECAT-enabled
  • Leverage these contracts to get additional
    vendors and additional discounts in ECAT

20
STRATEGIC SOURCING OF SERVICES
  • Medical support services buying is highly
    fragmented
  • Appointment clerks, records clerks in particular
  • FLC Norfolk/Philadelphia office will test
    SEAPORT-O Global Business Solutions (GBS)
    contracts as a possible vehicle to consolidate
    vendors
  • Effort is in need of a sponsor to facilitate
    requirements definition/development and demand
    management

21
  • BACK-UP

22
NME Activity Funding Trend FY08-11
  • 51M of the 87M increase was linked to
    increases in Healthcare Providers
  • E-Commerce grew by near 20M(Great Job)
  • Remaining growth came from Non-Medical
    Commodities (Facilities / IT Equip Maintenance
    / Logistics Support)
  • NH CL saw a decrease in Healthcare Providers by
    12Mbut also an increase in E-Commerce by 6M
  • NH Jaxs growth is linked to significant
    increases in IT support and Facilitiesoverall
    decrease of ECAT by 16
  • Each activitys minimal increases in spend are
    attributed to
  • Minor decreases in Healthcare Providers
  • Increases in Facilities
  • Minimal (if any in some cases) increases in
    E-Commerce
  • NH Beaufort did double their ECAT spendbut also
    increased their P-Card spend from 670K to 3M

Pretty Stable and Predictablemakes for easier
Acq Planning!
23
NME Region Commodity Spend
  • Noteworthy Comments
  • The net 20M increase in Healthcare Providers
    doesnt tell the story
  • NMC Portsmouth increased from 96M to 147M
  • Nurses went up by 20M / Radiologists rose 7M /
    Dentists up 11M
  • NH Camp Lejeune decreased from 58M to 45M
  • All other NME MTF Healthcare Provider
    requirements shrunk 4-6M
  • The 16M decrease in Medical Equip Supplies
    was tied mostly to NME Region HQ spend shrinking
    from 12M to 1.5M
  • There were significant funding increases from
    FY10 to FY11 in Facility Construction
    Maintenance at every NME MTFmost notable
  • Portsmouth went up by 8M / Beaufort rose 5M /
    Jax up 4M
  • The non-med support services spike is linked to
    IT/ADP/Telcom services
  • The 10M decrease in Non-Medical Equip
    Supplies was tied mostly to NME Region spend
    shrinking from 8M to 980K
  • Despite increases at every MTF for
    facilitiesthere were decreases in Logistics
    Support Services at almost every MTFmostly minor
    (gt1M)
  • Medical Equipment Maintenance declined
    significantly at Portsmouth, Jax, Pensacola and
    Camp Lejeune

24
NME DMLSS Spend Comparison FY09-FY11
GCPC
ECAT
FY09 FY10 FY11 Change
NMC PORTSMOUTH 22,102,039 17,355,729 18,580,158 7.1
USNH JACKSONVILLE 5,027,669 4,960,852 5,348,025 7.8
USNH PENSACOLA 5,569,379 4,080,964 4,216,102 3.3
USNH CAMP LEJEUNE 10,139,494 8,113,658 8,539,114 5.2
NHC NEW ENGLAND 1,324,353 2,665,003 2,855,727 7.2
USNH BEAUFORT 2,077,833 671,184 2,883,453 329.6
USNH CHERRY POINT 1,194,757 1,157,126 1,054,775 -8.8
USNH CORPUS CHRISTI 557,766 581,171 547,074 -5.9
USNH CHARLESTON 794,511 701,321 681,862 -2.8
USNH NAPLES 3,724,446 1,755,977 2,903,367 65.3
USNH SIGONELLA 1,809,632 1,535,522 1,732,718 12.8
USNH GUANTANAMO BAY 2,400,070 1,340,197 1,926,846 43.8
USNH ROTA 858,788 609,818 787,634 29.2
NME Total GCPC Spend 57,580,738 45,528,522 52,056,855 14.3
FY09 FY10 FY11 Change
NMC PORTSMOUTH 2,501,589 2,486,863 3,245,689 31
USNH JACKSONVILLE 449,307 451,472 380,900 -16
USNH PENSACOLA 954,826 732,866 742,404 1
USNH CAMP LEJEUNE 1,595,038 1,346,901 1,598,530 19
NHC NEW ENGLAND 304,527 393,045 582,054 48
USNH BEAUFORT 836,458 696,398 1,142,039 64
USNH CHERRY POINT 57,775 50,611 41,175 -19
USNH CORPUS CHRISTI 153,794 113,849 138,174 21
USNH CHARLESTON 127,261 120,723 123,589 2
USNH NAPLES 95,998 66,070 86,928 32
USNH SIGONELLA 40,331 10,435 17,156 64
USNH GUANTANAMO BAY 28,497 3,890 56,376 1349
USNH ROTA 3,427 17 77 357
NME Total GCPC Spend 7,148,828 6,473,141 8,155,091 26
PRIME VENDOR MedSurg
PRIME VENDOR Pharmacy
FY09 FY10 FY11 Change
NMC PORTSMOUTH 13,567,111 12,603,853 17,112,959 36
USNH JACKSONVILLE 3,586,014 3,609,530 4,397,326 22
USNH PENSACOLA 3,576,596 3,115,271 3,518,954 13
USNH CAMP LEJEUNE 4,103,770 4,217,231 5,292,190 25
NHC NEW ENGLAND 289,220 315,085 406,827 29
USNH BEAUFORT 2,363,497 1,594,886 1,671,912 5
USNH CHERRY POINT 455,020 559,952 732,297 31
USNH CORPUS CHRISTI 943,620 338,136 250,806 -26
USNH CHARLESTON 181,747 206,379 171,303 -17
USNH NAPLES 60,680 106,526 116,779 10
USNH SIGONELLA 14,595 22,741 16,482 -28
USNH GUANTANAMO BAY 592,209 343,044 381,553 11
USNH ROTA No Recorded PVM sales in DMLSS No Recorded PVM sales in DMLSS No Recorded PVM sales in DMLSS No Recorded PVM sales in DMLSS
NME Total GCPC Spend 29,734,079 27,032,634 34,069,390 26
FY09 FY10 FY11 Change
NMC PORTSMOUTH 81,851,996 77,624,243 92,278,589 -5
USNH JACKSONVILLE 32,776,639 30,483,578 36,990,714 -7
USNH PENSACOLA 30,799,399 30,750,315 34,345,369 0
USNH CAMP LEJEUNE 20,119,753 19,436,910 23,717,558 -3
NHC NEW ENGLAND 14,046,913 13,412,124 14,760,249 -5
USNH BEAUFORT 9,367,338 8,366,550 11,179,137 -11
USNH CHERRY POINT 5,819,562 6,809,693 7,065,111 17
USNH CORPUS CHRISTI 9,043,908 7,151,140 12,961,060 -21
USNH CHARLESTON 9,064,616 6,760,662 7,453,073 -25
USNH NAPLES 100,128 174,610 714,578 74
USNH SIGONELLA 268,761 429,115 643,229 60
USNH GUANTANAMO BAY 1,185,874 1,396,798 1,130,721 18
USNH ROTA 1,231,659 1,600,672 1,324,052 30
NME Total GCPC Spend 215,676,546 204,396,410 244,563,440 -5
25
NMW Activity Funding Trend FY08-11
Saw a decrease of 20M in Healthcare Providers
Pretty Stable and Predictablemakes for easier
Acq Planning!
26
NMW Region Commodity Direct Contracting Spend
  • Noteworthy Comments
  • The net 11M decrease in Healthcare Providers
    doesnt tell the story
  • Camp Pendleton decreased from 39.5M to 17.5M
  • NHC Hawaii increased from 10.8M to 15M
  • NH Bremerton increased from 9.8M to 14M
  • All other FY11 NMW Healthcare Provider
    requirements were the same as FY10 (within /-
    1)
  • NMW investment in Med Equip Supplies have
    been consistent
  • Facility projects at NMC San Diego, NH
    Bremerton, and NH Yokosuka caused the 22M
    increase from FY10 to FY11
  • Non-Med Equip and Non-Med Support Services
    remain consistent
  • Logistics Support Services continue to shift
    pretty drastically year to year
  • FY10-11 6M increase was at NMC San Diego
  • Near 15M spike in FY09 was linked to one
    requirement for custodial janitorial services
    awarded by NAVFAC Northwest for NH Bremerton
  • 2.4M increase for Med Support Services was due
    to new investment for Naval Center For Combat and
    Operational Stress Control (NCCOSC)

27
Breakdown of Direct Contracting Support FOR NMW
All Commodities
  • Continues to be a strong reliance on NAVFAC, FLC
    and Army for NMW contracting support
  • Navy Medicine (NMW MTFs and NMLC) account for
    over 70 (on Avg) of total contracting support
    for region

28
NMNCA Region Spend Trend FY09-11
NMNCA Activity FY08 FY09 FY10 FY11
NNMC BETHESDA 298,541,038 461,475,925 478,522,177 393,749,983
NHC QUANTICO, VA 8,130,517 6,021,873 11,256,385 8,470,902
NHC PAX RIVER, MD 3,300,211 1,826,674 6,125,551 7,275,656
NHC ANNAPOLIS, MD 1,644,020 3,892,059 3,394,832 3,700,057
JTF CAPMED 1,021,335 1,142,038 6,625,041 9,070,911
Bethesda on left axisQuantico/Pax
River/Annapolis/JTF CAPMED on right axis
- NNMC Bethesdas totals include the DMLSS
spend for Quantico, Pax River, and Annapolis
29
NMNCA Region Commodity Spend
Nursing Services alone dropped from 47M to 9M
Investment in ADP/Telcom Services more than
doubled
  • 3M increase in Comms Installation
  • 2M increase in Office Machine maintenance
  • 1.5M increase for elevator maintenance

Investment in ADP/Telcom equipment went from
800k to 8M
30
Breakdown of Direct Contracting Support FOR NMNCA
Medical Commodities
Based on current guidance, the Armys of
supporting NMNCA should continue to rise and
NMLCs should continue to shrink