Defense National Stockpile CenterDefense Energy Support CenterDLA Enterprise Support Acquisition Wor

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Defense National Stockpile Center/Defense Energy
Support Center/DLA EnterpriseSupport
Acquisition Workforce AddressOctober 23, 2007
Scottie Knott Director, Acquisition
Management Component Acquisition Executive
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Agenda

• Acquisition Overview
• Policy Reminders
• Small Business
• Initiatives
• Questions

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Why is Acquisition Integrity Important?
FY07 Supply Chain Obligations
M Aviation
1,200.1 Land 820.7 Maritime
404.4 CE 1,235.6 CT 717.9 Medical
3,334.2 Subsistence 5,064.1 Energy
13,401.3 DAPS 98.8 DDC
236.7 DNSC
3.5 DRMS 96.8 DES
245.8 Total 26,860.1
FY07 Active Vendors Aviation 4,041
Land 3,746 Maritime
2,445 CE 2,959 CT
309 Medical 678 Subsistence
815 Energy 577
DAPS 257 DDC
795 DNSC
39 DRMS 299
DLA Acquisition Personnel Contracting
2,305 Purchasing 186 Acquisition Logistics
16 System Planning 17 Program
Managers 6 Total 2,530
Status of FY 07 Backlog 81K awards estimated 3B

• Acquisition is Our Mission!

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Defense Logistics Agency Today
Defense Energy Support Center
COMMANDERS DIRECTORS
CORPORATE STAFF
J-3/4 Logistics Ops Readiness
J-1 Human Resources
Special Staff
SERVICE ACTIVITIES
Document Automation ProductionService
Defense National Stockpile
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Acquisition ManagementJ-7
J-7 Acquisition Management Directorate
Scottie Knott, Director CAPT Mike McPeak, Deputy
Director

Acquisition Programs Industrial Capabilities
Div J-74 Mr. Miguel Zayas
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Acquisition Integrity Model

WORKFORCE DEVELOPMENT
PROCESS IMPROVEMENT
OVERSIGHT
POLICY
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Recurring PMR Findings

• Supply Contracts
• Pricing analysis and documentation in simplified
  acquisitions and large acquisitions
• Acquisition Planning acquisition plan not
  documented, complete, or approved
• Options justifications for use, determinations
  to exercise, exercise after contract expiration
• Award procedures of Non-DoD Contracts
• Contract Reporting DD Form 350 not posted in
  system or coded incorrectly
• Service Contracts
• Correct clauses/provisions not included in
  solicitation/contract
• COR file maintenance
• SOW does not include all required elements for a
  Performance Based Service Contract
• SOW does not include measurable performance
  standards
• SOW does not provide for fee or price reductions

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What Can Go Wrong

• Lack of acquisition integrity can result in
• Overpayments/wasted taxpayer dollars
• Reduced competition
• Ineffective customer support
• Noncompliance with contractual terms
• Lack of accountability
• Endangering DLA programs
• Industry Media interest/exposure
• Congressional interest/scrutiny
• Loss of sales

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What Should You Do

• Acquisition Metrics Must Receive Same Level of
  Importance as Sales
• Hold Leaders Accountable for Achieving Results
• Integrity Cannot be Reviewed Into Contracts
• Independence of the Contracting Officer is key to
  Avoid Undue Internal Pressure on Contracting
  Officers
• Avoid the Appearance of Impropriety and Insure
  That Acquisition Integrity is Your Organizations
  Standard

Acquisition Excellence with Integrity
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Policy Reminders
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Competition!

• DPAP Memorandum dated July 26, 2007
• Emphases competition
• Timely and accurate reporting
• Reinvigorate the role of the Competition Advocate
• Four FAR Cases of COMPETITION
• 2007-007 Revise the responsibilities of the
  CompAd
• 2007-008 Limit period of performance for
  Unusual and Compelling Urgency contracts
• 2007-009 Post-award notice in FBO of sole
  source orders under MACs
• 2007-012 Enhancing Competition Requirements for
  MACs
• Originally 3 separate cases
• Includes post-award debriefings

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Acquisition of Services

• Acquisition of services is an area of high
  visibility throughout Government.
• Statute and Departmental policy require DOD
  components to have a structured approach to
  managing service acquisitions.
• Enterprise-wide policy is contained in DLAD Parts
  7, 37, and 90.
• The review and approval (decision) authority for
  each dollar threshold is set forth in 37.590-4,
  and is illustrated in a Table at 7.104-90.

Performance Based Service Contracts

• DOD requires Components to performance-base 50
  of all service contracting

DES was established in late 2006 and did not
report in DCARS.
FY07 Performance Based Service Report is not
currently available in FPDS
Depends on Accurate ID Reporting
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Use of Non-DoD Contracts

• PROCLTR 05-01, Proper Use of Non-DOD Contracts
  (January 12, 2005)
• Implements Departmental policy contained in a
  Memorandum jointly signed by USD(ATL) PDUSD
  Comptroller on October 29, 2004.
• Applies to use of all non-DOD contracts, whether
  entered into as direct orders or as assisted
  acquisitions, when values exceed 100K.
• Requires collaborative effort between contracting
  and financial personnel.
• The Agencys joint signature memorandum, signed
  by the Agency Comptroller and CAE, was released
  on March 25, 2005. It made the OSD policy
  applicable to the entire DLA community.
• PROCLTR 07-19, Proper Use of Non-DOD
  Contracts/Non-Economy Act Orders (August 30,
  2007)
• Extends PROCLTR 05-01 policy to the entire DLA
  Enterprise, not just activities with contracting
  authority.
• Requires that any expenditure of DLA funds
  actively involve a warranted DLA contracting
  officer.
• States that financial management concerns not
  only J-8, but also the acquisition community,
  which must ensure funds are used for proper
  purposes.

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Actions Subject to TINA (Exceeds 650K)

• Award of a negotiated contract, or modification
  of a sealed bid or negotiated contract,
• For item(s) not meeting the commercial item
  definition (FAR 2.101),
• Where the price(s) agreed upon were not based on
  prices set by law or regulation,
• Price(s) not based on adequate price competition,
• Award of a subcontract at any tier, if the
  contractor and each higher-tier subcontractor
  submitted cost or pricing data, and
• TINA requirements not waived.

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TINA Changes for DoD

• Section 817 of Public Law TINA Waiver 107-314 (FY
  2003 NDAA) established stricter requirements for
  DoD--- Waivers now limited to the most
  exceptional cases
• DoD can no longer waive the requirement for cost
  or pricing data solely because the price can be
  determined fair and reasonable without the data
  (FAR 15.403-1(c)(4)).
• The 2003 NDAA requires documenting three HCA
  findings for all exceptional case waivers (added
  to DFARS 215.403-1 in December 2006)
• Property or service cannot reasonably be obtained
  without granting the waiver
• Price(s) can be determined fair and reasonable
  without the submission of cost or pricing data
  and
• There are demonstrated benefits to granting the
  waiver.
• PROCLTR 07-10, Transmitting DPAP March 2003 memo
  will be clarified

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Pending Changes to DLAD

• TINA threshold applies only to what is being
  priced in the contract, including options.
• Exceptional case waivers may still be granted by
  HCA.
• One pass pricing and similar arrangements are
  still valid must be reevaluated periodically.
• TINA waivers should not be granted to contractor
  business segments that normally perform
  Government contracts subject to TINA.
• Spot buys use to maintain customer support
• Clarify steps for escalating TINA waiver issues

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10 U.S.C. 2533b Specialty Metals Compliance

• Clause 252.225-7014 Alternate I, (Deviation)
  Preference for Domestic Specialty Metals
• Flows down to subcontractors at every tier when
  contract is above the SAT, is for a Tier 0, 1, or
  2 item, and is for one of following major
  programs
• Aircraft, Ships, Tank-Automotive, Weapons,
  Ammunition, Missile and Space Systems
• Non-Compliance Issues
• DLA concerns Mission Impact while meeting all
  statutory requirements
• Remedies
• Many suppliers have filed Corrective Action Plans
  with DCMA and are now becoming compliant
• Many suppliers are requesting DNADs or One-Time
  Waivers from DCMA
• Majority of DLA procured parts are Tier 3 or
  below, and procured separately, thus not subject
  to the restriction

• Emphasize Specialty Metals Requirement to
  Suppliers Every Chance Available

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Small Business Issues
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DNSC FY07 Goals
8(a) Subset of SDB 25.0
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DESC FY07 Goals
8(a) Subset of SDB 0.1
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DES FY07 Goals
8(a) Subset of SDB 1.8
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Service-Disabled Veteran-Owned Small Business
(SDVOSB)

• DLA is not meeting goal
• FY04 33.7M 0.2
• FY05 106M 0.5
• FY06 96.7M 0.5
• Increased effort required to increase business
  opportunities for SDVOSB concerns
• Reinvigorate use of the set-aside and sole source
  authorities
• Use Veterans Technology Services (VETS) GWAC when
  appropriate
• Market Research
• Remove from auto processing buys for which only
  one SDVOSB is identified

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Current Initiatives
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Organizational Alignment

• DES Contracting
• General Order in chop chain realigning DES
  Contracting as field org, DLA Contracting Support
  Office, reporting to HQ J-72
• Enterprise Organization Alignment Board approval
  received
• Realignment effective 1 October 07
• DES/J7 working closely to ensure smooth
  transition
• Town Hall with DCSO being rescheduled

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Initial Competency Assessment

• Most significant skills gaps are at the Senior
  level
• There are some skills gaps at the Journey level
• On average, there are fewer skills gaps at the
  Entry level
• Senior level comprised mostly of GS-14s and so
  their proficiency is not fully attained
• Senior level required proficiency levels may be
  too high for some competencies
• DAU has 4.5 for senior in some competencies
• More focused training could close the skill gaps

Link Gaps to IDPs
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Synchronized Predeployment Operational Tracker
(SPOT)

• Provides a standard web based tool for the
  functional management of contractors accompanying
  the force.
• Enables Government and contractors to establish
  and maintain personnel accountability and
  visibility within an area of responsibility
• Governing Directives
• 25 Jan 07 OSD designates Synchronized
  Predeployment Operational Tracker (SPOT) as
  central repository for all contractors deploying
  with the force.
• 19 Mar 07, DPAP Policy Memorandum, Class
  Deviation DFARS Clause 252.225-7040.
• 28 Sep 07, Under Secretary of Defense Interim
  Guidance Memorandum for the implementation of
  SPOT
• 17 Oct 07, DPAP Policy Memorandum, Class
  DeviationImplementation of SPOT
• DLA and OSD implementation guidance being
  developed.
• OSD Guidance Due end of 1st Qtr FY 08
• J7 Data Call issued 19 October

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Enterprise Procurement
PRs gt Award Date Delinquencies
LTC Goals Renewals
Data Source DORRA LTC Reporting
Data Source BW PR Data DORRA Del. Reporting
Commodities On Time Delivery/Fill Rate
Productivity Hardware, CE, CT
Developing
Data Source BW PR Data
Data Source Vendor Reporting ELLIS
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Integrated Support

• DSCC supports Armys High Mobility Multipurpose
  Wheeled Vehicle Recapitalization Program via
  Integrated Logistics Partnership (ILP)
• Service provided to 3 Army sites
• Contractor has achieved a delivery rate of 99.99
• Army customers are very satisfied with the
  results
• Follow-on acquisition in development
• Proposed ILP at Tinker AFB, OK
• DSCR initiative building on success at DSCC
• Customer has identified flight controls as the
  most promising candidate
• Performance Based Agreement to be finalized 31
  Oct 07
• Milestones in development award projected for
  2QFY09
• Chemical Management Services (CMS)
• DLA developing an integrated chemical supply
  chain management solution
• Three-phase implementation strategy
• Phase I (pilot) Tinker AFB
• Phase II Expand CMS to Tinker AFB fenceline
• Phase III (long-term) Expand program via
  regional approach

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DLR Procurement Management Consolidation

• The Decision
• realigns or relocates the procurement management
  and related support functions for the procurement
  of depot-level reparables (DLR) to the Defense
  Logistics Agency....
• Post-BRAC Business Model
• A Single, Integrated new DLR procurement
  management provider supporting all Service
  requirements by FY 11 
• A single face to industry for all new DLR
  procurement
• DoD fully leveraging its DLR buying power
• Reduced inventory
• Commercial partners maintaining a single
  procurement management strategic partnership

Value Added
Saves DOD by leveraging all procurement
buys and managing them within a single agency!
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BRAC Update

• All Business Plans submitted to OSD 19 Sept 07
• Depot Level Reparables (DLRs)
• All Military Service Day One implementation dates
  established except Marine Corps Awaiting
  information on Information Technology solution
• First site is Ogden Air Logistics Center May 08
• Joint Governance process and implementation
  strategy agreed to by all
• Strategic material sourcing information
  technology tool in development
• DLR eProcurement solution teams being formed
• Key Performance Indicators established baselines
  in development
• Site visits and town halls were well received

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Timeline to September 2011
FY08
FY09
FY10
FY11
FY12
FY07
Provisional Detachment Stand-up
AMCOM (CCO/FTEs)
NAVICP Mechanicsburg NAVICP Philadelphia (CCO
Oct 07)
WR-ALC, OC-ALC, OO-ALC - (CCO only Oct-Dec 07)
TACOM (CCO Oct 07)
Procurement Policy
Site Visits
SMSG Business Rules Finalized
SMSG IT Solution
Procurement Policies for Day 1
Information Technology
Service Legacy Systems changes in place
eWorkplace installed tested
Legacy System access available for DLA employees
Performance Measurement
KPI Baseline Monthly Reporting Begins
Savings Model Complete Monthly Reporting Begins
PBAs in place
Detachment Stand-up
USMC - LOGCOM
NAVICP Philadelphia Mechanicsburg
OO-ALC
Task Begins/Complete
AMCOM
OC-ALC
CECOM
Open Task
TACOM
Planned Date
TACOM Rock Island
WR-ALC
Notional Date
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Privatization

• Compressed Gases and Cylinders
• Worldwide supply management through customer
  direct shipments
• Full implementation May 2009
• Awarded to Haas TCM on 30 April. Base period of
  5-years 1 5-year option
• Contract value 1B
• Chemicals and Packaged Petroleum, Oils, and
  Lubricants (POL)
• Worldwide supply management through customer
  direct shipments
• Full implementation May 2009
• Awarded to SAIC on 2 May. Base period of 5-years
  1 5-year option
• Contract value 1.34B.
• Tires
• Worldwide supply management of aircraft and land
  tires
• Contract value Land 1.6B Aircraft 720M
  both for 5 year base period with 5 year option
• Awarded Land - January 25, 2007 Aircraft -
  December 29, 2006
• Full implementation Land - November 6, 2007
  Aircraft October 21, 2007
• Land Prime Michelin North America Aircraft -
  Prime Michelin Aircraft Tire Company

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SAP Public Sector Procurement
Purchase Requisition
Auto Sourcing
MILSTRIP Requisition Receipt
Centralized Contractor Registration
DFAS
RFQ / Offer
Governmental procurement practices driven by
external legislative and regulatory
requirements. Highly collaborative processes
dependent on Inter-Enterprise relationships.
Invoice receipt
Auto Evaluation
Wide Area Workflow
Fed Biz Ops
Electronic Document Access
On-Line Representations and Certifications
Application
Goods receipt
Purchase Order/ Award Contract
Contract Reporting to OMB
Wage Determinations On-Line
FAR/DFARS/Local Clauses
Excluded Parties List System
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eProcurement Application Scope
EBS
EBS after Upgrade eProcurement
SAP Enterprise Portal v7
SAP Enterprise Portal v6
SAP ERP 6 with Enhancement Pack 3
SAP BW
JDA (Manugistics)
SAP Business Intelligence 7.03
SAP R/3 w/Public Sector Add on
JDA (Manugistics)
SAP Business Warehouse
DLA Pre Award Contracting System (DPACS)
SAP SRM 6 with Procurement for Public Sector 2.0
DIBBS or Similar Capability
DLA Internet Bid Board System (DIBBS)
Internet Pricing Configurator
Procurement Automated Contract Evaluation (PACE)
Document Builder 3.0
Records/ Case Mgt
Electronic Contract Folder (ECF)
Adobe Forms
Integrated Composite Application Network (ICAN)
Integrated Data Environment (IDE)
Integrated Composite Application Network (ICAN)
Integrated Data Environment (IDE)
Integrated Composite Application Network (ICAN)
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Enterprise Procurement as of 30 September 07
FY09
FY10
FY11
FY12
FY13
FY08
FY07
FY06
Key Events
O N D J F M A M J J A S O N D J F M A M J J A
S O N D J F M A M J J A S O N D J F M A M J
J A S O N D J F M A M J J A S O N D J F M A
M J J A S O N D J F M A M J J A S O N D J F M
A M J J A S
IOC DLA eProc
Task Order-Strategic Sourcing
Milestones
IOC Strategic Sourcing
FOC DLA eProc
Task Order-eProc
P/A
Requirements Definition/ Gap Analysis
DLR Strategic Sourcing
P/A
System Integration
DLA eProcurement
Requirements Definition/ Gap Analysis
DLR Procurement
P/A
System Engineering
PDRCDR
TRR
SRR
ORR
DLR Strategic Sourcing
DBT
TRR
CDR
PDR
ORR
SRR
DLA eProcurement
Design/Build/Test
TRR
CDR
ORR
SRR
PDR
Design/Build/Test
DLR Procurement
Go Live
Deployment
KTT
Sustainment
Sustainment
Knowledge Transfer
Projected Planning Schedules/Date
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Requirements Gathering Approach
21-Sept
10-April
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Project Start
Solution Framework As-Is Evaluation
New Requirements/ Gap Analysis/SRR
Kickoff
History of eProcurement at DLA, business context,
project objectives, timeline, deliverables, team
structure, project logistics
Workplan/ PMP
Workplan, issue/risk plan, use of EBS Workbench,
etc.
Solution Framework
High level view of future solution (application,
technology, business processes, training, org
alignment required to support)
Collection and Mapping of Existing EBS
Requirements
Current requirements list mapped to business
process model and existing RICEFW objects
High level assessment of procurement-related
requirements, processes, Applications, jobs/roles
DLA, DESC, DAPS, DRMS, DES, DDC)
Requirements Gathering
Evaluation against new SRM solution capabilities
1) keep, 2) modify, 3) delete, or 4) delete and
recreate in SRM, Doc Builder, or Records Mgt.
Disposition of Existing EBS Procurement Dev.
Objects
Project Team Training
Testing Conversion Approach
Testing and Conversion Approach
Design/Build/Test Deployment Approach
D/B/T Deployment Options with implications and
recommendations
RICEFW development required to support new
components (SRM, GP, DB, RM, Portal, BW)
SRM-specific Requirements/Disposition
System Requirements Review (SRR). A formal,
system-level review conducted to ensure that
system requirements have been completely and
properly identified and that a mutual
understanding between the government and
contractor exists.
SRR

• Business Process Flows
• Requirements/Gaps/RICEF list
• App Arch/Tech Arch/IA plan
• Test Approach
• KTT Strategy

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• Questions?

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• Backup Slides

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DLR Procurement Management
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DLR Procurement Management
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SMS GoodnessSMS on LTC v. DLA Total
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LTC Lapse Tracking Report

• Timely LTC renewed within same quarter as final
  expiration
• Lapse Renewal did not occur in quarter of
  final expiration
• Drop NSN will not be renewed for valid reason

Notional numbers
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LTC Lapse Tracking ReportBy Supply Chain
Aviation
Land
Maritime
CE
Notional numbers
Lapse Rate Not Renewed / Anticipated Expirations
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SMS Gross Inventory Savings
Total FY06 Savings 92.8 M (Goal 64M) Total
FY07 Savings to date -61.9M (Goal 64M) Total
Program Savings to date 216.7 M

• Q3 yielded positive savings for the first time in
  FY07 with 6.4 M

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Supply Chains LTC/NSN Review Outcome for 4th
Qtr. FY07(as of August 10, 2007)
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Consumable Item Transfer

• Well established logistics reassignment process
  exists
• Integrated Material Management Committee oversees
  the transfer of consumable items
• Nuclear, SUBSAFE, Special Program and Design
  Unstable consumables excluded from CIT
  consideration
• Anticipate half of the 350,000 consumables
  managed by Services will transfer being
  reviewed by IMMC
• Mission consolidation reduces excess capacity