federal strategic sourcing initiative

Compliance is Complex. We Make it Simple.

Thomas R. Suher, J.D. Senior Consultant

1401 Sunset Drive, Suite B 336.379.0442

[email protected]

Kelly Loughery

Commercial Counsel, Motorola Solutions, Inc.

The views presented herein are those of the

author and do not represent the official

position of Motorola Solutions, Inc. or any of

its affiliates.

Bottom line: USG will make strategic choices based on COST

Small businesses often cannot compete with large multi-nationals’ efficiencies

Small businesses need to create new

go-to-market strategies

Develop relationships with large prime contractors, add value, thrive

Small business status

Restricted contracts ◦ E.g. GWACs, IDIQs

GSA contracts ◦ Letters of Supply

Cost-effective offering

Complementary product/service suites ◦ Large corporations stay close to their core business

◦ Identify opportunities to complement the large business offering close to the core

Contractor Teaming Arrangements (CTAs) vs. traditional teaming agreements

CTAs- two or more GSA Schedule contractors work together to meet ordering activity needs ◦ Equal footing, both GSA holders, both have privity

TA (FAR 9.601)- “A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified contract or acquisition program.”

Prime vs. Sub ◦ Prime maintains privity with USG

◦ Prime is customer-facing

◦ Prime carries risk (and reward if profitable)

Exclusive (reciprocal or not) vs. Non-exclusive

Good faith negotiations post-award ◦ Sub-contract agreement

◦ Terms and conditions can be addressed in TA or tabled until sub-contract negotiations

Well defined roles – prime vs. sub

Comprehensive Scope of Work/division of responsibility

Firm commitment to work together post-award (binding and exclusive)

Strong provisions for intellectual property and proprietary information protection ◦ NDA prior to TA strongly recommended

Questions?

Department of Health and Human Services

Strategic Supply Chain

Management

Marketplace 2013

Presenter: Antoinette Bridges

HHS/NIH/NIEHS

May 29, 2013

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Strategic Sourcing Defined

Why the Strategic Process Works and the Opportunities:

•Provides a fresh perspective. Through identifying the friction points of a typically

good/service procurement process by utilizing a structured, analytical – evidence based,

and collaborative methodology.

•Adds a sense of urgency. By facilitating stakeholder discussion of issues that are often

tabled due to other day-to-day priorities.

•Identifies superstitions within organization. Bringing great people from different

sections together to address what the process really is.

To identify opportunities that bring operational efficiencies as well as cost savings

and cost avoidances throughout the organization and value chain.

In May 2005, the Office of Management and Budget (OMB) announced a government-wide Strategic

Sourcing directive, requiring all Federal agencies to implement Strategic Sourcing programs by

early FY06.

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Supply Chain Management Defined

Strategic Supply Chain Management

Focus on:

• Has the responsibility for the supply chain function, the organization’s customers, their customers and their suppliers; thus the term strategic supply chain management.

• Minimizing costs

• Minimizing lead times to benefit the final customer

• Long term supplier relations

• Commodity planning to take advantage of

• Cost reductions

• Technology advancements

• Supply market trends

To identify opportunities that bring operational efficiencies as well as cost savings

and cost avoidances throughout the organization, suppliers, and customers.

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Seven Steps to Strategic Supply

Chain Management

2. Generate

Supplier Portfolio

3. Develop Sourcing

Strategy

4. Select

Implementation

Path

5. Negotiate and

Select Suppliers

6. Operationalize

New Agreements

1. Develop Category

Profile

Strategic Sourcing Process

7. Sustain the

Results

•Supplier Performance

•Market Conditions

•New Technology


Chain Management

1. Develop Category Profile

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•Confirm user requirements •Develop category definition

•Understand industry and supply markets


Chain Management

2. Generate Supplier Portfolio

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•Identify qualified suppliers •Determine supplier value-

added capabilities •Develop supplier “short list”


Chain Management

3. Develop Sourcing Strategy

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•Assess bargaining position •Evaluate alternative strategies •Select appropriate approaches

and techniques


Chain Management

4. Select Implementation

Path

• Select competitive or relationship approach

• Verify and adjust sourcing strategy

• Develop implementation plan

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Chain Management

5. Negotiate and Select Suppliers

• Evaluate supplier proposals

• Plan negotiation strategy

• Conduct negotiations with suppliers

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Chain Management

6. Operationalize New Agreements

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•Plan and implement transition to new suppliers

•Implement new pricing on databases

•Conduct joint process improvement activities


Chain Management

7. Sustain the Results

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•Monitor market conditions •Assess new technology and best

practices impact •Determine opportunities to

reexamine category and trends •Strengthen supplier relationships

•Standardize process and procedures

Supply Management – Key Goals

Get more value out of business relationships

Provide better response and visibility for stakeholders,

including suppliers

Monitor and manage compliance and performance

Electronic interaction with suppliers

Integration into overall supply chain management strategy

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Create more favorable terms and conditions

Ensure Supplier is partnering to drive

down cost and create value

Create a Contract Management Repository

Achieve pricing equivalency with

common suppliers used across the

industry

Leverage eCommerce

e-Catalogs e-Software e-Technology

Create Payment Tool

Purchase Card – allows for dynamic

discounting Positive cash flow

Gaining operational efficiency as cutting

down cycle time.

Partner in Stockless

Programs / Store Fronts with Key

Suppliers

Low UOM discounts – means customers do not have to buy large amounts to achieve

discounts

Decreases or eliminates freight

costs

Better product availability for

customers

Create Partnership

Sourcing Teams

Sourcing opportunities. Where

best to focus efforts to respond to Request

for Proposal/Information.

Initial point of review for product and

alternative products

Communicate successful awards

throughout community and with partners

Supply Chain Management

Best Practices

Supply Chain Management Summary

Assess the needs of the potential buyers

Assess suppliers and their capabilities, performance &

risk

Collaborate with suppliers to ensure clear expectation

and understanding of buyers needs

Know the history (your reputation is on

the line as well)

Research the needs, often, know the

market

Negotiate, negotiate with your suppliers for the best terms and

conditions, pricing & extras

Assess the best possible

arrangement – you may only get one

opportunity

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Overall improved efficiency and reduced costs through better supply chain management as a result of adopting contract

management best practices

Track and manage supplier compliance and performance

federal strategic sourcing initiative

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