The $400B question: building a common foundation to optimize Federal procurement. May 17, 2016

Transcription

1 The $400B question: building a common foundation to optimize Federal procurement May 17, 2016

2 Today s objectives Outline the overall structure and volume of U.S. Federal government acquisition work Introduce a professionalization framework for discussion Provide an overview of elements focusing on key developments: Talent development continuum Category management approach Community-driven learning (Acquisition Gateway example) 2

3 Highlights of U.S. Federal government roles and responsibilities in the area of acquisition management U.S. Congress Provides legislative guidance for acquisition work Defines statutory authorities for key entities Confirms key leaders Government Accountability Office Developed a framework for acquisition function assessment Conducts holistic reviews of acquisition work Makes decisions re protests Inspectors-General (agencyspecific) Engage in reviews of specific actions/contracts or types of acquisition activities President of the United States Office of Management and Budget (OMB) Office of Federal Procurement Policy (OFPP) Overall direction for gov t-wide procurement policies, regulations and procedures Federal Acquisition Institute (FAI) General Services Administration (GSA) Directly manages $34B in purchases Operates ~9,000 buildings Leads gov t-wide technology transformations Courts Court of Federal Claims has exclusive jurisdiction (as of January 2001) to hear pre-award and post-award bid protest suites by unsuccessful bidders on government contracts Note: only identifies key entities for the purposes of today s discussion; not an exhaustive list of stakeholders/offices and respective roles/responsibilities 3

4 Overall volume of acquisition work and key areas of spend under management the $400B question Federal government s acquisition spend declined by ~20% in FY Top 5 areas of spend accounted for ~60% of acquisition spend in FY14 $B $B FY08 FY09 FY10 FY11 FY12 FY13 FY14 Contract spending accounts for approximately one of every seven dollars spent by the Federal government. Notable proportion of spend (~50%) on common goods and services An average of 15.5M procurement actions recorded each year (incl. modifications) Source: OFPP/OMB/EOP presentation on April 4,

5 Federal acquisition work aims to advance a range of priorities Focus on socioeconomic outcomes Imperative to innovate Shift to shared approaches Importance of digital government Pivot to program management Commitment to increasing federal contracting opportunities for small businesses, including women-owned, veteran-owned, and small businesses located in Historically Underutilized Business Zones $550 billion in federal contracting dollars awarded to small businesses in Agile BPA deployment (build code, not paper), challenges, micro-threshold reverse auctions Category Management Evolution of Shared Services management Benchmarking: acquisitions, IT, HR, Finance, real property management Evolving acquisition processes to help achieve President s Smarter IT Delivery Goal and other initiatives in the information technology space Increasing focus on program outcomes, e.g. proposed Program Management Improvement and Accountability Act Program Goal* Small business total 23% 8(a)* / Small 5% Disadvantaged Business Historically 3% Underutilized Business Zones Veteran-owned small 3% business Women-owned Small 5% Business (WOSB) Formal job series and career path for program managers Standards-based model for program management consistent throughout the federal government. Senior executive in each agency to be responsible for program management policy and strategy. *Goals refer to proportion of Federal contracting spend awarded to small businesses of various types Source: OFPP/OMB/EOP presentation on April 4, 2016 for socio-economic outcomes; FAI 2021 for other priority areas 5

6 Complexity of modern gov t procurements requires holistic approaches to workforce professionalization Management approach Category management buying as a single enterprise to drive value and generate savings Regulation 2 Acts of Congress, Executive Orders procurement implications Federal Acquisition Regulation (FAR) Agency acquisition regulations 3 Core training Acquisition core qualifications curricula and certification programs 1 4 Competency model Competencies behaviors encouraged to advance and excel 5 Job profiles definition of critical jobs, essential experiences, 6 knowledge Accountability Mandatory ethics training Feedback via agency surveys GAO and IG studies, reviews, and audits Community-driven learning Sharing of best practices, acquisition solutions, resources and community discussions 7 Systems Define what to measure, when/how to collect information and how to ensure that measurements help make and track acquisition decisions; address challenges as needed

7 Federal Acquisition Regulation continues to evolve balancing predictability and ability to innovate 1 Multiple factors define the need for continuous evolution of Federal Acquisition Regulation (FAR), including: Acts of Congress (Statutes) Executive Orders OMB memoranda, OFPP Policy letters Court Decisions IG, GAO Reports/Recommendations FAR Council Federal Acquisition Regulation (FAR) Council Members: Administrator for Federal Procurement Policy Secretary of Defense Administrator of NASA Administrator of GSA Defense Acquisition Regulatory Council (DARC): Consists of representatives from all military services, defense agencies and NASA DARC CAAC FAR Teams Strategy, Acquisition Law Acquisition Implementation, Small Business, IT, Finance Agency-specific acquisition regulation (for example, GSA Acquisition Regulation) Civilian Agency Acquisition Council (CAAC): participation rotates and depends on type of change proposed Source: OFPP/OMB/EOP presentation on April 4, 2016

8 Category management represents the most current approach in the area of acquisition management 2 Category management defined Key steps Expected impact Category management is an approach the Federal Government is applying to buy smarter and more like a single enterprise. Identify common categories of spend for goods and services For each identified category: o Understand core business objectives relative to improving management of the category o Develop business and market expertise related to the category o Define acquisition, supply, and demand management policies and solutions that aid in improving management of the vast majority of spend (~80%) within the category Broadly share data and best practices so that all agencies can leverage and benefit Category management better utilizes taxpayer dollars by eliminating redundancies, increasing efficiency, and delivering more value and savings from the government s acquisition programs. Source: OFPP/OMB/EOP presentation on April 4, 2016

9 U.S. Federal government is actively deploying category management approaches 2 Current State of Purchasing: Lack of coordination across agencies Duplicated efforts Many agencies; no leverage buying power Future State of Purchasing: Synchronized procurement across government Industry involvement in developing best category strategies Core competencies leveraged to match customer needs One common management framework All Goods & Services Implementation of Category Management & CAP Optimize Contract Vehicles & Manage Landscape Category Management Develop Expertise Manage Data Collection & Analysis Maximize Customer Relationships Leverage Supplier Relationships Source: OFPP/OMB/EOP presentation on April 4, 2016

10 Accountability: evolution of procurement processes requires a balanced approach to managing risks 3 "To achieve efficient operations, the System must shift its focus from risk avoidance to one of risk management. The cost to the taxpayer of attempting to eliminate all risk is prohibitive. The Executive Branch will accept and manage the risk associated with empowering local procurement officials to take independent action based on their professional judgment." ~Managing Risk (FAR (c)(2)) Know the FAR and local codified policies and processes Keep in mind GAO and IG recommendations Question urban legend practices Assess and respect organizational/co readiness for doing something different Make a compelling case with data and facts Let it go if conditions aren t right for change but consider a different approach next time You have more influence to change things than you might think! Source: FAI Innovative Practices that Promote Acquisition Efficiencies

11 Competency model: successful acquisition professionals build on certification and evolve qualifications Development progression Senior Executive Service 4 Workforce progression Talent Development Continuum High potential SES development programs Cohorts, partnerships, interdisciplinary experiences Electives and Justin-Time training for management Core ACQ curricula & certification programs Leadership Competency Development Solutions (Acquisition context) Management Competency Development Solutions (Acquisition context) Examples: Lean Six Sigma, negotiating, managing others FAC-C Internship Program, Fellows Program, Team Workshops, Educational CO-OP, Education w/industry, Mission Service FAC-COR FAC-PPM Acquisition workforce: ~100,000 professionals Transformational Strategic Operational Tactical Assigned Selected Qualified Certified Source: FAI 2021

12 Federal Acquisition Institute (FAI) provides core training across multiple career development programs 10 Core Courses: FAC-C Training Requirements Level I Level II Level III 8 Core Courses: 2 Core Courses Plus 1 Elective: 5 Choose one of the following: Shaping Smart Business Contracting Basics Contract Planning Contract Execution Contract Management Basic Contracting for GSA Schedules Small Business Programs Performance-Based Payment & Value of Cash Flow Introduction to Contract Pricing Fundamentals of Cost and Price Analysis Choose one of the following: FAR Fundamentals (Contract) FAR Fundamentals (Finance) Business Decisions for Contracting Considerations in Contracting Analyzing Contract Costs Intermediate Cost and Price Analysis Management Government Property in the Possession of Contractors Negotiating Source Selection and Administration of Service Contracts Contract Administration & Negotiation Techniques in a Supply Environment Plus all required level I training Contracting for Decision Makers Select a HBS module other than Negotiating Choose one of the following: 32 hours of electives* Mission-Focused Services Acquisition Understanding Industry Acquisition Law Construction Contracting Fundamentals of Cost Accounting Standards Advanced Contract Pricing Plus all required level I and Level II training

13 Community-driven learning plays an important role in professionalization: Acquisition Gateway example 6 Source: Public Access to Gateway Briefing

14 Professionalization requires access to systems/consistent information: Integrated Award Environment (IAE) example Registration and opportunities Performance management Analysis 7 Includes entity and gov t registrants, annual representations, certifications, bio-preferred products reporting Provides information about business opportunities with the federal gov t Single location to obtain wage determinations required for each contract Contains contractor performance information Contains government-wide contract award data for actions that have an estimated value at or above $3,000 USD Full listing of federal assistance programs, projects, services, and activities Provides agencies with access to data on subcontracting performance Collects subcontract award information in compliance with the Federal Funding Accountability and Transparency Act Source: MAS/IAE presentation on 4/42016 Hosts applications used to document contractor and grantee performance information Contains gov t-entered records on past performance evaluations and suspensions and disbarments

15 Appendix: details on Category Management and Acquisition Gateway 15

16 Category management seeks to achieve goals around cost savings, knowledge sharing, efficiency and relationships 2 Increase Cost Savings Increase spend under management Achieve volume savings Achieve administrative savings Foster Knowledge Sharing Share best practices Grow and share expertise Promote Efficiency Reduce contract duplication Enhance transparency Create better contract vehicles Manage data collection and analysis Enable better decisions Improve Relationships Maximize purchasing agency relationships Leverage supplier relationships Optimize buying channels Manage the solution landscape Source: Master Category Management Briefing for Industry CM PMO

17 Category management seeks to achieve goals around cost savings, knowledge sharing, efficiency and relationships 2 Develop Category Strategy Build Category Teams Analyze Agency Performance Management Needs Review Current Spending Analyze Market for Goods Influence Category Outcomes Manage Suppliers Incentivize Demand Control Costs Lower Operational Expenditure Continuous Improvement Benchmarking Performance Tracking Adjustments to Category Strategy Source: Master Category Management Briefing for Industry CM PMO

18 U.S. General Services Administration (GSA) plays an active role in advancing category management 2 General Services Administration/Federal Acquisition Service 10 Gov-wide Category Managers Strategy Management ITS Portfolio TMVCS Portfolio GSS Portfolio 17 FAS category teams staffed in portfolios and business programs IT Professional Services Security and protection Facilities and Construction Industrial Products & Services Office Management Transportation and Logistic Services Travel & Lodging Human Capital Medical Gov-wide CM Intel PMO FAS CM PMO Telecommunications IT Software IT Consulting IT Security IT Outsourcing IT Hardware = GSA selected to serve as five of the government-wide category managers. Motor Vehicles Card Services Travel (Air, Lodging, egov) Employee Relocation Freight Package Delivery Administrative Support Workplace Environment Facilities and Tools Security, Scientific, Hospitality, Prefab Buildings, and Building Materials Professional Services

19 Several examples of effective category management have emerged in professional services and technology spaces 2 Examples Prof. Services Schedules consolidation Human Capital and Training Solutions Desktop / Laptop Policy What? Consolidated several professional services schedules into a single program Developed new tools for Acquisition Gateway GSA and OPM partnership for government-wide strategic sourcing solution Directs agencies to buy standard configurations from preferred contracts; Implements configuration refresh to ensure purchases made within policy guidelines How is this "Category Management? Reduced and simplified contract landscape New model for interacting with industry Community of practice Focused industry engagement; Contract structure aligns supplier offerings with buying requirements; Contract consolidation and governmentwide channel for offerings Reduces contract duplication and price variation; Improves collection and use of purchasing data. Collaboration among agencies / comm. of practice; Improves buying through demand management and supplier relationship Source: Master Category Management Briefing for Industry CM PMO

20 Acquisition Gateway offers a range of resources for government and general public users 6 All 17 hallways represented here preview what has been procured to date Allows users to pull in resources from Gateway apps to build their acquisition Frequently updated events and news related to Federal acquisitions Tool enables acquisition pros to identify most relevant/ effective contracting vehicles Applications, information repositories, community forums & other resources Source: Public access to Acquisition Gateway briefing

21 Solutions Finder enables acquisition professionals to identify most relevant/effective contracting vehicles 6 Features include ability to pin a solution to top of page no matter what filters are set Allows for use of a search function, filtering by Agency, Program & Solution types, and Category Allows users to compare up to four solutions side-by-side, add solutions to an acquisition built in the Project Center, & view solution websites directly Source: Public access to Acquisition Gateway briefing

22 Each category hallway offers contextual information to support acquisition professionals 6 Categorycurated articles & categoryspecific tools are alphabetized here Supportive Category team members are listed here with descriptions of expertise & contact info Link to Solutions Finder tool with pre-loaded hallwayspecific subcategory Events & news are displayed on homepage; a community feed is also available to Federal users. Section leads to solution websites & purchasing options Source: Public access to Acquisition Gateway briefing