Transcript: Strategic Sourcing

Karen Pica (KP): For those of you online, if you're looking at your screen, I believe to the right of your screen there is a submit question button. All you have to do is click on that button to submit your questions. We will be following a fluid format for today's conversation. For those of you here in the room, if you have a question, just raise your hand. There can be a microphone that comes to you, or, or... If you shout loud enough, then maybe I can hear the question, and I will repeat the question. So we would really like to make sure that today you get as much as you can out of this particular workshop. My name is Karen Pica. I am with the Office of Management and Budget. And I am going to my colleagues here who will be leading the discussion for their introduction and then we'll kick right off.

 

Cynthia Schell (CS): My name is Cynthia Schell and I work for the Department of the Treasury, and I'm the lead for strategic sourcing for Treasury-wide programs.

 

Mike Smith (MS): My name is Mike Smith.  I'm the Director of strategic sourcing for the Department of Homeland Security.

 

Nitasha Singh (NS): Hi, my name is Nitasha Singh, and I work at GSA and I run the FSSI government-wide PMO.

 

Seth Rogier (SR): Hey, Seth Rogier here, with the Department of Commerce, Director of Strategic Sourcing over there at the departments. Definitely glad to be here.  I think I speak for everyone ... I think we always welcome the opportunity to talk about not just this topic...but also just engage with this larger community. So please, let's have a discussion here today. I think we're always excited to talk to folks, and I do not want to have us sitting up here, lecturing for an hour and a half.

 

KP: I do not want that either. I am with the Office of Management and Budget, the Office of Federal Procurement Policy, so in my capacity I have the opportunity to deal with policy and get expert advice. The reason that this panel is here is because they are experts actually in doing the work that needs to be done. To get to the bottom line for making sure that we are avoiding duplication and also savings. What we will be going through today on slide 3 -- we're going to talk very briefly about the policy in place. We're going to talk about - Nitasha is going to talk about the Federal Strategic Sourcing Initiative that is being managed by the General Services Administration. We are going to then dive into the meat of the conversation, which is around the strategic sourcing process, and then also some tools and resources that are available to you. So there are a couple of things we would like you to remember out of today, and one of my primary things I always like to ask people, as part of our efforts for strategic sourcing, as I mentioned there was a memo published by the Office of Management and Budget in December that created a new Strategic Sourcing Leadership Council that provides some top-level support for initiatives being handled across the government, and that body is in place to advise and make recommendations to the Office of Management and Budget for what agencies should and/or could look at.

What I like to do every day in my life, as a federal employee, I have families that live in different places around the country, and like me, they all pay taxes, they actually pay the taxes that pay my salary.  And so for those that do not know, according to IRS documents, the average tax bill per  return for 2010 was $11,000, so in your life, every day, if you can find -- ah, there we go... If you can find a way to make sure that you're saving $11,000, that is one of the things that we'd really like. I cannot handle this. I still have a 13-inch TV at home. Um, thank you... I will admit it.

 

So $11,000 a day is what we'd really like, I try every day when I go to work at least that. Alot of times, particularly where I work, people speak in billions, if not more, and sometimes people will say it is not worth going after that because it is only $100 million in savings. So for me, $100 million is a lot of money. It's more money than I will ever see in my lifetime. And I have to tell you, if I was managing a project in my personal life that was worth $11,000, I would be watching every penny.  I always look at the phone bill when it comes in and all these little surcharges that are 4 cents or 6 cents or 8 cents. I have no idea what they are for, and I end up calling the phone company because I don't like people charging me for things that I don't know what they are.  So we'd like to apply that same rigor to what we do in our daily lives as federal employees.

So I mentioned briefly the memo that the Office of Management and Budget sent out in December. It essentially talks about some of the key principles for strategic sourcing. The memo and information is listed on page four of the overhead.  Page five essentially lists out what the prime principles are, or what strategic sourcing is defined as, and you'll be able to find that in the memo. Also, on the next slide, the core characteristics - those are things that are listed in the memorandum.  And essentially we are going to try to group our conversation around the application of those core characteristics in what you do as a project manager, a contract specialist, a contracting officer, a requiring official, somebody in your agency who is responsible for influencing a purchase or someone that has good ideas and wants to go to somebody and say "why are we doing this"? So I think in our professional lives, we could probably all point to one or two things that we'd be doing differently if we ran the agency and/or the world.  And so this will hopefully give you an opportunity to find the resources to pick up one of those ideas and run it to ground.  And on that note, I would like to turn it over to Nitasha to talk in general about the Federal Strategic Sourcing Initiative.

 

NS: Hello everyone.  So FSSI is a host of solutions of commonly acquired goods and services that the large federal agencies have thought makes sense to look at together. So, there are about four active solutions right now. There's office supplies, domestic delivery, wireless, and print, and we will go into that in the next slide. And a host of upcoming solutions which is referenced in the December memo that Karen was talking about, and numerous other solutions in consideration. Some of these are led by GSA. Others are not.  So the FSSI PMO works with these solutions to ensure that core strategic sourcing principles are being followed.  So these principles ... are they being... are terms and conditions being looked at on a government-wide basis?  So these solutions are built in conjunction with commodity teams that have representatives from each of these agencies along with other 24 CFO act agencies.  Other considerations are the total cost of ownership -- how do we drive down costs in respect to total cost of ownership. How do we improve demand management, how do we leverage government volume, and how do we take supply chain considerations into account, for example, small business and different socioeconomic groups?

 

So on the next slide, which I believe is slide eight, it went into office supplies. Now office supplies is moving into its third generation, and what I want to highlight about office supplies is that we have taken an approach of crawl, walk, run with these FSSI solutions and we've taken best practices and lessons learned from previous generations, and are applying them now into future generations. What office supplies has been able to do is to take a look at part number standardization and pricing variability between each one of these part numbers in order to drive additional savings of about 5%.  So, in total, today, office supplies has been able to save the government 17% in savings. Domestic delivery services, which is your small package delivery, has managed to achieve savings of over 25%, and they've also saved the government money by driving consumer behavior away from express delivery if not needed, towards ground delivery. So, a few years back, there was 80% express and they've shifted it down to about 45% express. Print management is proof that you can take a look at complex solutions to achieve savings and it is a good example of total cost of ownership. The different functional areas that look at fleet assessment, new devices, operations and repair. We also have wireless, which is one of our newest solutions, and over there they look at monitoring zero-use devices.  This shows how data and reporting can be useful. If you are not using a device and your agency is paying for it, then the solution can help find that and save your agency some money. And then there is also SmartBUY, which looks at IT software.

 

There are a few other solutions that are coming up.  One is maintenance, repair, and operations, in which there is a RFQ out, as well as janitorial and sanitation supplies, and Library of Congress will be awarding subscription services very soon. That's taking a look at legal and science, technology, engineering and mathematics information services. As stated earlier, there is a host of other solutions under consideration, and the FSSI PMO works to disseminate best practices between these solutions, as well as working with strategic sourcing officials in agencies across the board. And on top of that we do basic PMO-related work. For example, data reporting, reporting out the savings, and just being a conduit of information. So if industry has questions, vendors have questions, customer agencies have questions, we try to point you in the right direction. And with that I will pass it on.

 

KP: I think what we will do now to get to the meat of the conversation, is the strategic sourcing process, and if I could, I'd like to ask Cynthia, Mike, and Seth, if they can each tell us a little bit about for them, in their agencies in the work that they have done -- what they have found to be some of the most important aspects of the strategic sourcing process in achieving their goals. So Cynthia, if you want to go ahead and start?

 

CS: Sure. I guess the biggest thing that I wanted to say about strategic sourcing is that it doesn't necessarily include a procurement event, right? I mean when you look at classic definitions of strategic sourcing, and you look at the cycle, you come together and get your requirements, and then you go through some kind of procurement, and then you have your award and monitor it. That's wonderful. That's great. It happens. But sometimes, when you look at what you are doing, you may already have a good solution in place, or you may have something in place that for whatever reason you do not want to consolidate. So, when I think of strategic sourcing, what I really think of is spending under management-- what are you buying, how are you buying it, and are you doing it the best way?  And you can look at it and if you look at, and you see that you're doing it a good way, then that's great. Keep doing it that way. For example, we looked at one of the categories of spend. We had seven major -- seven large -- 7 contracts, but they were all with small, disadvantaged businesses, so there was no incentive to consolidate that kind of procurement, and we wanted to keep it that way, but then we wanted to make sure to revisit it, to make sure in the future that it was still a well-sourced commodity. [ LAUGHTER ] I am looking to my panel.  I can keep going.

 

MS: I think I can follow up with what Cynthia is saying here. Strategic sourcing is a collaborative and deliberate process. So we go through a lot of the spend analysis, we try to identify duplicative spend throughout the agency to try to make sure we bring together that spend where appropriate. But there is an element of demand management where we try to find opportunities to save money without going through another procurement process.  The example that was given earlier with the cell phones, doing a call down on your cell phones and identifying how many phones are in use and how many are not in use. That is a factor of demand management. You can actually reduce the number of cell phones in use that you're now paying for through that particular process. So I think that is pretty critical to the strategic sourcing process. In our agency, in DHS, we have been doing strategic sourcing for a long time. We were one of the early adopters back in 2005 of strategic sourcing, and over the period of time we've generated a lot of strategic sourcing initiatives. We currently have 55 different strategic sourcing initiatives and over 450 contracts included in those, and some of those are also federal initiatives, such as the office of supplies, print management, direct delivery, and some of those that Nitasha was speaking about earlier. So in putting those things together, we like to think of this collaboration as being the key piece. We have subject matter experts, we have acquisition professionals, we have general counsel, we also have finance folks involved, and that ability to collaborate, come together, and find the right solution is critical.

 

SR: Yes, this is Seth. I would definitely echo all the thoughts that were just said. A couple of things that I always think of when trying to explain strategic sourcing, and talk about what is important and  the value associated with it.  And I kind of like to think of it as taking -- whether it's purchasing, whether it's managing, pulling paper off a shelf to utilize it. Taking it from a transactional type of model and method to something really strategic, and the real value that a lot of us have gotten out of this is getting a lot more detailed information around a particular area.  I'll just take computers as an example since it is something that we have spent a good bit of time and effort on. By really taking a deep dive and understanding what are the drivers, what are the costs associated with it, you're going to reveal a lot of information. So I will throw our bad laundry on the table, since we've cleaned it up now, but by going through a deeper analysis, we were able to find for the exact same computer, not something completely different, not slight variations, the exact same computer from the exact same manufacturer with the exact same specs, we found a three times price difference, $700, all the way up to $2300, that we were buying, and we were actually really paying that amount of money for those items. Why was someone paying $2300?  I do not know.  I am sure there are many drivers and reasons that led to that, but by doing these detailed informations, by doing this analysis and really collaborating with all the right stakeholders, you are able to get a lot more information that is out there, and then you can put something strategic in place that works and really makes your lives, you know, easier, cheaper, and better for everyone overall. So I am sure there is some stuff we are going to go through about how you do that, because it sounds good as a concept, but obviously, the devil can get into the details. But those are some of the things that I think of -- and really getting that information so you can utilize it to achieve whatever is important for your agency is something that works out quite a bit.

 

CS: I just want to echo the prices paid comment, because it really is a big deal. The CO can negotiate a great deal, but if the vendor then decides to charge something different, and you are not catching it, that's a problem. Or, again, if you have 10 deals across the agency and they are at 10 different prices, if you're not looking at what you are actually paying, then you might not realize that you are doing that. And the phone bill, which I have discovered now -- I have learned a lot about a lot of different commodities through this. But with the wireless phone bill, when you get your phone bill there's pages and pages, and you look at it and say I did not order that movie, I did not have that service, and you call and complain.  Well, the carriers do that to government agencies, too, and so if you're not actually looking at your bills, you could find that they're doing surcharges. I'm not saying it's willful -- it's just a mistake -- but if you're not able to check it then you don't know what you're actually paying for.

 

KP: In the next slide, what we're going to do, as Seth had mentioned, we're going to talk about the cycle, the strategic sourcing cycle, and information and I have a follow-on question that I have for each of you as you talk a little bit about that. Cynthia, you'd mentioned that you look at what you currently have, and if it is working well, you leave it alone. So as you go through the cycle and talk to folks about the process you use in your agency, how do you assess if something is working well and whether to leave it alone? Mike, you had mentioned that you go through spend analysis. Can you talk a bit more about what you look at, where you find the data? There is general data, but are there other sources you should look at? Seth, something similar for you.  You talked about moving from a transaction base to more of a strategic base. What does that look like, or what has it looked like for you? As we go through the process -- please feel free if there were other questions.  Those were just 3 that came to mind as you guys were talking. Cynthia, if we could turn it back over to you for the strategic sourcing cycle. Your thoughts on that as well as how you assess if something is working well enough that you don't have to touch it.

 

CS: Right. So let's talk about what we are looking at when we are looking at a category of spend. And one of the questions that always comes up is where do you get your information and your information isn't perfect. And you're right, it's not perfect.  The best information we can get, or the best information that we have, absent a specific initiative, is from our contract data. There are limitations to that. But we're able to get a measure of where we are, and then further refine it if necessary. So one of the things that we look for is how much money are we spending on it, how many vendors are we using, how many contract actions, how many transactions are involved? So that kind of looks at efficiency -- meaning are you using one vendor, or 1000? How much churn -- do you have thousands of transactions for something where that does not make sense? And then of course, we look at the important things, what are the small business characteristics of it? And risk -- what kind of contracts are they?  Fixed price, cost contract, was it competed or not? So those are the kind of things we look at to see... And they all balance against each other. And you're not going to have something that is perfect in every category.  You want to look at as a whole to see whether it is an opportunity.

 

MS: So, you asked about how we analyze the data. A few different points -- first of all, we use FPDS data, which will give us a broad picture. We use data that comes from our contract writing system, which gives us a little bit more narrow picture of what we are doing. But then, when we identify potential opportunity we do this thing -- an initial assessment, or Quick Look. It's based on the data and some quick analysis --  is this something that's worth our time and energy to develop a full-fledged working group, an IPP, doing a business case and that type of thing. When we find that it is advantageous, then we're able to pull in additional data and give some additional forecasting from the working group members. Our working groups that we formed for each of our strategic sourcing initiatives include both acquisition professionals and subject matter experts that are working with that commodity of service day to day. They have more information about how it is being utilized, how much they have utilized in the past, what their plans are moving forward. One of the things we've realized is that past spend does not always dictate future opportunities, because technology changes, strategies change, the way a particular product is used in the department may change drastically between the time we do the analysis and the time we execute a contract. We have to make sure that whatever we're building is appropriate and logical for where we are going. The last point I want to make on that is the data is not perfect.  So don't let the perfect be the enemy of good. You have enough data to work with.  Dig a little deeper at that point. When you have enough data to make a business decision, make the business decision, move forward, and the best you can ever hope to get is an 80% solution. That extra 20% -- it is not worth the time and effort to get to that point.

 

SR: Sure and I'll echo some of those things, and I will answer  your question, I promise Karen. I think even a little bit down on the implementation, that'd be a good spot to go through this. But as Cynthia and Mike said, there is a lot of information that is out there. You guys live and breathe this stuff every day. You have to put stuff in FPDS, you have to put it in your financial system. One part of your department financial system is probably different than the other -- how to get your arms around it. Well there are larger data systems that are out there.  We are really trying to look at those types of things as a beginning and a starting point, and saying “does it make sense”, is it worth the extra time and effort, and then from there really diving a little bit deeper to make sure this is how we are going to select this commodity. One thing I would add is engagement with the vendor community is obviously pretty critical in this as well. They have a lot of good information. If you can partner with them correctly and have the right types of relationships, you can really use information they have to supplement what you have to further and strengthen your strategies going forward.

 

KP: I think we have a question online --

 

Moderator (M): Yes, one of the online viewers has submitted a question, and has asked how do you push the existing strategic sourcing initiatives like DDS2 or OS2 within your workforce? Do you have any best practices for educating an agency workforce?

 

CS: Well, we have made them part of our regular quarterly reporting, and that means that our bureau heads need to speak to their success with use of the strategic sourcing vehicles, and domestic delivery and office supplies are mandatory at Treasury. We have found that -- we work both from the bottom, educating the purchase card holders -- I will back up one more time and say each thing that you are sourcing is unique, right? Everything has a different characteristic for the end user, the buyer, and the spend. So the first one out of the gate for Treasury was probably one of the most difficult. When you are talking to a contracting officer and you say this is a mandatory source of supply, they say “OK”. And if you say, this is on schedule, and this is open market, they say "gotcha”. If you're talking to a purchase card holder, they say "Huh? I like Joe, I've been using Joe's supplies forever. I got a good deal with them.  What are you doing? You're making my life miserable." So that's been a much different process. And we worked through the purchase card holder community, via the AOPCs who really took it on, and we did a lot of education and training to tell them “yes, you may have negotiated -- one of your prices may be better than the schedule, but if you look at it overall, and across treasury, we are getting a better deal for the government.” So that was one of the ways that we got it for there. When there are other contracting vehicles, that's kind of an easier way to push.

 

I have to tell my domestic delivery story though, because Treasury is very successful with the domestic delivery, and that is all due -- well, largely, due to IRS, because IRS adopted the domestic delivery solution and they are 80% of our domestic delivery spend, so that meant that we are really good. All we had to do was get the other ones online. So then we went to the second step. The first step is getting everybody on your vehicle, and then the second step is improving behavior, so the step to improve behavior was to try to move more from express to ground delivery, to reduce the amount of dollars that we were actually spending on the vehicle now that we were on the vehicle with the good prices. We had just a wonderful deputy secretary who thought this was really important, that we not only use the vehicle but change our behavior. And when you get a bureau head talking to, and the deputy secretary is asking them,”how come your percentage of ground usage is so low?”, you find that you change behavior really quickly.

 

MS: I cannot express how important leadership is to the strategic sourcing process. At DHS, we have this program called the “efficiency review”, and when our former secretary came to DHS, he brought this efficiency review process, and essentially it was to find commonsense ways to save money and we saw an immediate connection between the efficiency review and the strategic sourcing program, so we partnered with them right off to help with that program, and it has helped us get visibility of our programs. And so as you're saying if you have the secretary talking about the strategic sourcing initiatives at her leadership meeting, it's going to get the attention of the senior leaders in the agency. Another thing we tried to do is get the awareness out there, and get the word out about the vehicles that we have. We have an internal DHS website that is available to anyone in DHS that has all of our DHS strategic sourcing vehicles. It has information about those vehicles, ordering guides, templates, and anything you need to know -- pricing tables -- anything you need to know about those vehicles. But then, we have to do a better job of getting out to the individual components and the individual contracting offices, to let them know about the vehicles, getting out to the program offices to let them know about the vehicles as well, because they are generating the requirements, and they need to know about them as well.

 

SR: So again I will definitely echo the leadership comment, but I'll try to address it in a slightly different way because if anyone's got a direct path to the secretary of your department, raise your hand. I don't see any hands, and it's challenging. So I'll just maybe go to the other one... which you can do. So I'll just use the domestic delivery, small package shipping one, I can guarantee you, whether you know it or not, there is a mail manager within your department. There's a mail manager in each of your little different operational units, and that person is really important when it comes to this particular commodity area.  So I think the first thing when talking about implementing a strategic sourcing initiatives, how do you align and get the communication lines out there, and you really have to get communication out there and figure out who are the important people you need to have as part of your working group or whatever the case may be. Turns out for this one we found out that the mail managers were really the people that drive these types of things on the day-to-day basis. Not the strategic high level, but where the "rubber meets the road", how do you do that kind of work. So, getting the right people out there and doing that. Assuredly, there is going to have to be, for any of these things to work, some kind of policy, probably, associated with this, whether it makes the contract mandatory use, first consideration, or things like that.  And with that, you're going to have to have communications associated with that afterwards, and the other component of it is great. You've got something in place; you're putting people towards it. So what are you actually doing with it?  How are you actually making your lives better? Cynthia talked about having that ongoing management and really assessing how you're changing behavior and how to utilize that. So those are the types of things we think about when getting a strategic sourcing vehicle solution in place, how do you get it out there? How do you do it? And then doing the management -- Communications, communications, communications.  You really can't do it too much. So hopefully that addressed the question.

 

KP: Do we have another question as well?

 

M: Yes. This viewer's question is twofold. So the first part is "on average, how often do your agencies decide to use another agency vehicle in order to satisfy a requirement?” And the follow-up to that is “does leadership emphasize the importance to find the best vehicles out there regardless of which agency executes the contracts?"

 

CS: I should make Seth start, but I will start anyways. [ LAUGHTER ] When we started our program, we did what I will call “opportunist” strategic sourcing, meaning we looked at what vehicles are there and what we could take advantage of. We wanted -- we had a mandate to realize procurement saving so we needed to get started soon.  If we went through a whole sourcing event, we would have taken a year before we actually started to realize savings. So we looked in-house to see what we had and we looked to the FSSI solutions but we also looked at other agency-wide solutions. And one of them was body armor - that's the one that comes to mind. I knew from my friend Mike that DHS had a great body armor solution, so I came back proselytizing about body armor. As it turns out, Treasury buys body armor and we had a number of different contracts and we moved to use the DHS vehicle. So I think that is something.  Sometimes, there can be a little bit of -- you know, it is professional pride that a CO thinks "I can negotiate a best contract and I can get the best deal and I am the smartest person." So one of the things that I think that I try to say in my education is, yes, you are and I would rather that you use those talents on things that are more mission-specific -- things that only Treasury buys. Everybody buys office supplies, so why don't you let somebody else do that kind of contract monitoring? And there is more fun stuff that you can do that is more unique to Treasury missions.

 

SR: I'll change the order there for you Mike, there. If there is a wheel that exists, there is no reason to reinvent it... I think that's always been our philosophy. Of course you definitely need to look at things to make sure it works for you, but it's the same thing that Cynthia said there. The only other thing is you have to make sure the contract is structured correctly, mechanically, so you can utilize it. Just because you have a friend or a person you know who has a really great contract....If it is not structured properly, that can be a barrier.  But generally speaking, if it is there and it is available and it works, there's no reason to do something just to be specific to yourself.

 

MS: I want to harp a little bit on what Seth just said. Just because a vehicle exists in another agency doesn't mean that you are obliged to take advantage of that vehicle.  It has to be scoped accordingly and allow that particular servicing agency to include the other agency as a customer. So the important part of that is getting in the planning process so we can include those agencies in that particular process. The other thing is, the first thing you want to do is take a look at these government-wide initiatives that we are putting on through the Strategic Sourcing Leadership Council or through FSSI, and take advantage of those vehicles already.  It is an immediate way to either jump-start on your strategic sourcing program, immediately start generating savings, and showing some benefits. The other piece of that is that we have a process for when these strategic sourcing vehicles are developed within the agencies of posting them through the OMB Max so that the other agencies can take a look across.  So during the planning process, there is an opportunity for us to communicate back and forth if we need -- if you think we want to use those vehicles.

 

NS: I want to send out a reminder that these SSI vehicles are done in collaboration with government-wide agencies that have a set of best practices and those best practices are supposed to come to the forefront.  So that it's not exactly looked at as an agency-specific solution but as truly meeting the needs of the government-wide community.

 

Audience Participant (P): So I think you already answered my question -- my question was about collaborating with other agencies who buy the same things that we need to buy and how you go about that? For example, how did you know that DHS had a body armor contract that would be beneficial to you? And how did you go about setting that up? Because as I understand it, you need special authority to award a contract to support agencies outside of your own. Is that correct?

 

MS: We need to do that upfront collaboration, and we have this Strategic Sourcing Leadership Council. We have the FSSI. We had the strategic working group in the past. So a lot of folks who work in the strategic sourcing environment, we do collaborate on a lot of initiatives and planning going forward with a lot of the things that we are doing. So that is the collaboration piece. The idea to be able to add additional customers to a contract, as long as we have that identified in the solicitation up front, we can do that.

 

KP: One thing I would like to add -- and I'm not sure how many are aware of this -- for those of you that have your computer handy, you can look it up.  If you go to contractdirectory.gov, this jumps ahead to the resource page, but what has happened is within the Federal Procurement Data System, there is what used to be called the Interagency Contract Directory. It was in the pilot phase for many years and now it has gone live and we made enhancements to last year. So you can go to contractdirectory.gov and you can search on contracts that are available for multiagency use. Now to Cynthia's point, it probably wasn't something that had been designed or maybe it had been for multiagency use, but she also knew Mike. But she also knew it was available because she had been talking with him. Now for those of you in different locations in the country, you may say, look, I don't have the benefit of having somebody down the street that I can talk to. So you can go to strategicsourcing.gov which lists the existing FSSI vehicles. You can go to contractdirectory.gov and look at any government-wide agency, any government-wide contract, and multiagency contracts. You can see who can order off of it and how much of the ceiling is still left, who to contact, and there's more enhancements that we're trying to make to those tools. Where I still think we have some improvements to make and Mike has brought this up, we do have the Strategic Sourcing Leadership Council. There are 7 agencies that are on it - that's it. It is an executive board. It provides advice and has multiple working groups under that. It is one of the things in the DC area here. We share information because we have regular phone calls and maybe we talk to each other more frequently. But what we haven't yet really filled out is the gap between what exists in the public realm and those things that are being developed.  So for example, there are multiple teams underway right now. We have teams working in training and education, teams working on laptops, teams working on -- I forget. There are 20 different initiatives.

 

SR: So many that you can't remember. [LAUGHTER ] 

 

KP: Because it's not on my little piece of paper here.  So we have 20 different initiatives and one of the things that I'm struggling with from an OMB perspective is how to get that information available to you guys so you can see what else is already being developed  without, if you will, tipping the cards too much?  Because not all of these initiatives may end up in the space where we need a new contract. But for those that do, are there things that would have to do before that information can go public? For those in the room, how many people in here are familiar with the OMB max system and know how to use it? OK, a handful. OMB Max is a tool available primarily developed to do budget work, but it has become, if you will, a collaboration space.  For a lot of agencies, it's behind a firewall. For those of you who don't know what it is, that is telling to me because I wanted to try to put communities up on MAX where people could go and find out what was happening so that you could maybe avoid duplication in your agency but not make it public it yet because there is still some analysis that has to happen. So let me ask you guys a question. And for people online, please submit the information online and we can collect it later. For those of you who are in the room, where do you go to find information? If you're trying to find out if someone else is already working on something or if something else already exists, where do you go?

 

P: I'm Bob Franks from the U.S. Department of State and I work in the IT department primarily. But I also get involved very heavily with strategic sourcing, especially for contracts and purchase card purchases. I am somewhat familiar with OMB Max but I always thought that it was a budgetary type tool because we use it in our comptroller's office. That being said, we were also told that we had to have a client piece of software installed in order to make that operate. That it just wasn't web-enabled completely. So I am seeing some differences now but that wasn't the case when we were first introduced to the software. So I think we can make that available to people in our office, in our particular division. I did have a question concerning the sources that are used in this whole strategic sourcing initiative. So the State Department started this a number of years ago and they started small and they began to grow with it. Adding various vendors to this initiative seemed like it was very problematic. Of course if you have been dealing with a vendor for a long time, you want to reach out to that vendor and say, hey, are you a part of this strategic sourcing initiative? So my question really stems around how do you get vendors and contractors and others involved in this program, especially -- many times, these programs happen on the inside and contractors or vendors on the outside don't necessarily know about it. So how do you get them involved?  How do you reach out to them? Or is there a particular group that handles that process?

 

SR: So I will jump in to add a little bit, but obviously I can't speak to the particulars of your agency. But the same broad things apply.  First thing about OMB Max, it's a webpage, right? That's all it really is. The client that you need? Internet Explorer works pretty well. So does Chrome, and those things. That's it. You have to have a .GOV or .MIL -- that is a requirement.  You have to have one of those email addresses. You go in, register, get a password and it is behind that firewall.  A lot of great collaboration things are there. A lot of good stuff and it's not just a budget thing. So I'll just answer that just so that everyone is clear. If you can go to ESPN.com, you can utilize OMB Max. But I think your question ... was it Bob? And I'm going to paraphrase here and probably interject my own words, so just yell at me if I am saying anything incorrectly. You are doing a strategic sourcing initiative; maybe you've got a long relationship with a vendor and now you're talking about potentially changing it. How do ensure that you get the word out so that the vendor community and those types of things can get the right solution in place? The first thing -- I just want to say that a lot of the strategic sourcing initiatives we are working on are not about a vendor. It is about a capability. You say, hey, we are going to pursue and it makes sense for reasons 1,2,3, .. X, Y, and Z to do a strategic sourcing initiative around this area, whether that is computers or wireless devices, shipping, etc., etc.  That begins a process. It probably iterates a little differently in each agency, but it begins a process where you start really taking a deeper dive.  And one of the components is doing the market research aspect of it and really trying to get a holistic understanding of not only yourself and what your agency's practices and drivers and strategic trust areas, but what are the things that work for the market, who are the players for technology changing and all those different types of things? And if it results in a procurement action that you are wanting to do, all your normal procurement rules, regulations and laws will apply in terms of advertising and posting different things out there. But I am not saying that we get this perfect. But I think this is something that we --  that a lot of strategic sourcing initiatives do well is getting that engagement with the vendor community so we can get that word out there. And I know for us that is something that is particularly important and that's some of the areas that we are really trying to do to ensure that we get the right vendor or solution in place for us. Hopefully that addressed it a little bit, but I see some questions coming already.

 

MS: We do extensive market research. We issue our advice.  We do request for information. We have industry days around a particular initiative focused particularly on that initiative. We post all that information on FedBizOpps.gov so that all the industry sees it. We are out talking to industry and engaging with industry on industry days and other public forums such as this. So we are out getting the word out, both about the strategic sourcing program in general and about specific initiatives that we are undertaking as well. So getting the amount of participation from industry has never been a problem in our agency.

 

CS: We have a great group at IRS, and they are called vendor management. And one of the things they do is go out and do an exhaustive market research. And one of the things they're looking at is how to buy. This is something that I learned as a member of the wireless team, because there were a lot of people who are now feds who used to work in the wireless community.  And so they knew -- how do they make their money? These are important things that -- the government always tries to say, “Here, we will give you our requirements and you give us your bid”. But if you know what is motivating them, then you can get a better deal.  So it is a win- win.  Every different product is a little bit different but that is an important thing to learn. And that is why, just to echo Mike's point, the subject matter experts, getting the people, getting the IT people in who know what software they are buying and how the vendors work and who's at play is such an important part.  If you don't have that participation, then you're not going to do a good job.

 

NS:  For us, we host industry days, we have blogs, and the blogging format we use is called Interact. This is especially important because there is a requirement that, if one vendor has a question, everyone needs the same response. We are also using that same platform for the first time to host the industry day in order to get out to a larger audience. That dialogue is very important to us because, as we put out strategies, or potential strategies to the vendor community, we need to understand what they think about it. They are an equally important part of this entire process. So we have had dialogues around shipping days in terms of order limits.  And we have actually increased some of the order limits and it is the back and forth with the customer base and the vendor base as to what makes sense and what gets the community what they need in addition to saving everyone money.

 

KP: And to echo a little bit what Mike said and what Natasha mentioned, because we are now in an  era of wonderful information technology, there are a lot of different ways to engage with vendors now.  So traditionally as we talked about is you have vendor days, people come in, they ask questions, they submit questions....  As Natasha mentioned, there are a lot of things you can do online and virtual now. So I think about two or three years ago, we went through an exercise with OMB & GSA where we engaged ACT IAC and a host of other groups and said “How can we better communicate”? What we came up with was an acquisition collaboration toolkit that is essentially based on the functionality of almost social media. As long as you are capturing the information so that others can see it, then you can get those ideas out there.  And what it turned out was, the first few times they did this, there were ideas that came in from the vendor community that changed with the government was doing for requirements. For example, one of the things that was brought up, there was a particular capability that was being bought for information technology. I don't remember what it was.  It's not important. But one of the vendors said how will this work on an iPhone or some other version of smartphone? And the folks that had been building the capability  never thought of that. Yeah, you're looking back on that and saying “why couldn't they think of that”? But I don't know that that would have been the first thing that would have come into my mind. But maybe for some people, it would. So that shifted what they were doing in some of the design phases so you could have this work in that type of environment. The other feedback we got was that it was a great way to reach small businesses around the country where they didn't have to pay travel to come to Washington, D.C. to attend a vendor day.

 

So not only did they save the money from the travel, but they were able to take those hours that they would have spent traveling and do something else with them. So that's one of the tools that we are trying to make available through the MAX portal, to be able to put up information, this acquisition collaboration toolkit. It was sent out to the chief information officers and the chief acquisition officers about two years ago. And I imagine nobody in this room has seen it because I don't know where that information flows. So we will make that available as well. The things you can do on a daily basis that meet all the rules, regulations and requirements, and you post that, you have an opportunity that you post in a blog that we even created a feature in FedBizOpps where you can use a certain language and it will pop up all those things. So if you've got companies out there that are interesting that kind of communication, that kind of feature, you just do that search, and they will find it. So I think we had a question in the back as well.

 

P: Yes, hi.  I wanted to address your question about OMB Max and where we can get information about other agencies who are using contracts and how do we participate in those. I am with a micro agency and my agency does use MAX and I'm a member of two different areas in the MAX portal and it's very helpful to us.  The information that you just mentioned about the blogs and the watch feature or just going online to see what dialogue is occurring, and I am a member of the Small Agency Council CIO community as well as the procurement contracts community, and also going to those meetings my agency uses a shared service provider to do our contracting because there are only 30 employees where I work. And I find, with very specific IT procurements, they don't have an adequate technical background to understand our requirements. So I still put out a data call to the other small agencies to see what kind of multiagency contracts are available because I am more interested in trying something like that than putting us out there by ourselves for a procurement on a specific area.

 

SR: Thank you. These are all great questions. I was just looking at the slides and without even realizing it, we are going through them. A lot of these questions are around the phase one of that strategy development. So you have decided to do something and then really what are you going to do? And I think we went through it pretty well.  You get a good understanding of the commodity for yourself and then really focus on the supplier market analysis. So I think that was the component of Bob's original question. That is where a lot of these phases come from, and then ultimately that's the strategy that we go through.

 

M: An online viewer has asked “Could GSA's interact sites be used to push information to all government user communities?”

 

NS: That is one I will have to look into.

 

CS: You sign up for Interact. You as a government user; you can sign up to get information on those.

 

KP: So actually let me go back if I can to the viewer - whichever viewer you are.  I would like to ask a clarifying question on that one. Are you looking for information -- because there are other venues. For example the federal acquisition Institute has a venue for communicating with members of the acquisition workforce. So are you looking particularly for information on what activities are coming up, what vehicles are in place, what things you can use?  What kind of information would be most useful? Because that would be important for both Nitasha and I to hear as well as the rest of the team. We are in the process of trying to pull together a toolkit at OMB.  So let me clarify the question. What would be the most useful information for you so that we can then figure out the best way to get that to you? So, as they are typing, and I know they will come back.

 

P: Thank you very much. I'm in work life at Federal Emergency Management Agency under DHS. What would be helpful basically, is if we would know what is already out there so that we wouldn't duplicate it.  There is a situation wherein we got our contractors to do an online telework system.  The reason we did that was due to the fact that CBP had done one. But if we could've borrowed the person who created CBP, it would probably have been a better output from what we got because what occurred was that the other contractor was trying to duplicate what CBP had done and we didn't come up to sufficiency.

 

KP: Better yet, if you could have owned that code -- [ LAUGHTER ] So there is another effort right now at OMB called the digital strategy and also open government. And so what we are trying to do, this is still very much in the planning stages, but there's something called Uncle Sam's list, that's been created.  It's trying to be a Craigslist for stuff. So if you have property, you don't need to rent more property. If you're a government agency, you can go to that government agency and see what's there. If there is server space for example that an agency has excess capacity, for servers you could maybe go there instead of buying your own servers.  So one of the ideas there is also saying, if you have code that's been developed, and again this is all still very much in the notional phase, but if there is code and a lot of times we are paying multiple times for the same code from the same people for the same thing.  So is there a way to share that information just exactly like you talked about? So-and-so has this system.  They developed it and maybe it's COTS, or maybe they did some small modifications or maybe this person over here developed their own system. How can others use that? So the information gap is something we're trying to address. And I think Uncle Sam's list is actually built on MAX but I think it's got a different type of interface. So thank you for that. That was very good, and I am furiously jotting notes on those.  Those are things I know I need to take back, and I'm sure my colleagues too. Go back to the online viewer and see if they had -- no, they clicked off.

 

SR: Or their response is so long they are still typing --  [LAUGHTER ]    

 

KP: That's OK. We can come back and if there's other questions ...I think it's important that even if you can't think of something right now, whether you are online viewing or in the room, if you can follow up with our FAI colleagues to let them know.  Look, if I only had a three pieces of information, because for you who are viewing, if you could only have one or two pieces of information, what would be the most important for you to leave with? And I think I would like to ask each of my colleagues on the panel, if people are going to remember one or two things about strategic sourcing that would allow them to go back to their agency tomorrow or this afternoon and begin to make a change, what would be the one or two things that are within their control that they might be able to do?

 

MS: Let me start out for this one. So in strategic sourcing, we have a lot of different ways you can get involved. You can propose ideas to your strategic sourcing office. I'll tell you that in our agency, we've gotten all the low hanging fruit.  So all the easy ones are done. So now the ideas are a little bit more complex and things are not quite as obvious. So those ideas and suggestions are beneficial. You can participate in working groups -- we have a strategic sourcing working group within DHS which is both a community of practice as well as a community of interest. You don't have to be directly involved in the strategic sourcing initiative to be a part of that group. And you can call in from anywhere in the country to participate in those calls. You could ask to be on an IPT or on a project, you actually go on a detail or just be assigned to work on a particular project if you have your leadership's support for that. The President's Save Award -- a lot of the ideas that we use in DHS as strategic sourcing initiatives were nominations for the President's Save Award that may or may not have gone forward for that particular program. So you can find a way to get engaged from wherever you are.

 

SR: I'll just say so I think one of the first things is you can see there's awareness of the things that are out there. Maybe some of you were not aware that there was a solution in place for small package or office supplies or wireless or just any of these other items. Hopefully from today, you got at least some awareness and you can help go to some places to know those are out there and communicate those types of things to people you work with every single day. The other thing -- so there's larger, bigger initiatives that are out there. But what can you do to apply some of these same types of principles to your day-to-day work? And some of the things that I always talk to when the people I'm talking to aren't contracting officers throughout the department is you guys are doing this stuff every single day. You see areas where you are purchasing the same types of things off of different contracts. You see one program office not talking to another program office. So where can you build or help foster that collaboration and get some of that commonality amongst your operating unit, your bureau, all those different types of things. And another component is those prices paid associated with that.  So you paid this much this time. How much are you paying the next time? How can you shape and share that information a little bit better? And the last component I will leave with is around demand management.  It is a term we like to use. So I'm going to say this -- I know this is not the easiest thing in the world to do but how often do we think,  you know -- and no one has to answer this one -- how often do you see requirements come across where you are “buying a Porsche” here, but you really just need a Chevy.  I would just encourage everyone to kind of adopt that mindset and think of ways that you can kind of challenge and interject to say “This is really more than what the requirement is” and do some pushback. I know it is not the easiest thing in the world and it's a healthy balance to strike there, but I would just encourage you to try to buy the Chevy if you need the Chevy.

 

CS: So I guess my three things would be, pretty much to echo, but the first one would be don't reinvent the wheel. You just have to assume that somebody's done this before. So depending on what you are buying, look around in your own agency, in your own department, across agencies. There are different ways to ask.  You can ask within your own community or you could certainly ask one of us.  And when I say one of us, I mean somebody in your sourcing department or somebody in your procurement executive's office -- to see what is available. Google it. There are a lot of government agencies that offer government-wide vehicles, and you can see what they do. It might not be exactly what you need, but it might help you. A lot of times, I have looked at those vehicles to see who is out there. What kind of vendors are in the marketplace, what kinds of things are on this vehicle and on that vehicle, just to see what people are buying. If you've got a good idea, which I'm sure you do, then propose it.  Don't keep it in.  I don't even want to be hierarchical about it. There are people out there who are dying to do it.  So it may be the subject matter people, may be your program office, may be your contracting office. It may be your sourcing lead. Everybody nowadays is looking to do something more efficiently or to save money or both. So no good idea will be punished.

 

Finally, look for incremental improvement. Everybody wants to save the hundred billion dollars with one vehicle that will meet all our needs.  That's great and I think we all should try to do that. But let's look at perhaps getting better requirements, getting better reports from the vendor or leveraging an existing vehicle. You don't have to fix everything. If you kind of move stuff to get it where you have more information about what you're buying and you're buying a little bit smarter, then the next time you will do it even better. And the office supply group is a classic example.  I might have had a few issues with the initial rollout and complained all the time.  And they looked at it, they looked at what the vendors were doing and I thought the vendors were actually very frank with them. Sometimes saying, “yes, we can do that, no problem”.  That won't cost you a thing. That is information that we have. Then other time's saying, “absolutely not, we are not going to do that”. So they kind of felt each other out and learned. Then the team got really smart and leveraged the information that they had and started to have a lot of information about what they had bought, who was buying what and how much they were paying for it and they got a much better deal for the government.  They expanded the amount of items on the BPA and they got better prices for it.

 

KP: On that note, I think one of the things that you can do - if you go to strategicsourcing.gov - everyone here has mentioned the prices.  And that is really important, and one of the harder things to do is to compare prices across the government. So as Seth had mentioned, within his agency there's the same computer that was... what was the price difference? Used to be before Seth came along, people were paying the difference.  I can tell you today that as part of the efforts that I am working through my office, we are trying to look at gathering data from across the government for prices. And I can tell you there is an office down in -- the program is run out of Huntsville -- and there's one in Atlanta, and I'll bring that one up too.  So, one -- they have the price of a basic model laptop which is designed a certain way down to around $486 a unit.  The same unit being bought by a different agency is upwards of $1800. So if I do 10 of those, I am at my $11,000 roughly. But you can get to your $11,000 in savings rather quickly simply because you know somebody else has a vehicle that has that price on it. There was another situation where there was the same office that was in the Atlanta area, the exact same agency, the exact same office, the cell phone plan, the exact same cell phone plan.  One was paying $39 a month and the other was $129 a month.  Exactly the same thing. 

 

So the variation...So now you're saying that is all well and good, but how can I get my hands on those data? So if you go to strategicsourcing.gov, there is a portal there that has right now some information from the domestic delivery solution that GSA has as well as the office-supply solution.  I have to tell you what they are doing in the office supplies arena, they've dropped the price of a box of pens down from $12 to five.  And a USB drive -- I think they dropped from $300 something down to $60. Anybody here pay $300 for USB in your personal life? Raise your hand because I'm going to come getcha. So the point there is that I personally would never -- I have no idea what kind of USB you would have to pay $300 for that I would be using on a computer.  But just knowing that now all of a sudden that we were not having the best information-- so go to strategicsoursing.gov and start looking at that Prices Paid Portal.  That is the first step in a broader initiative. We have through our office and through our collaboration with the General Services Administration, a presidential innovation fellow that was brought onboard.  Basically it's a developer that came from the private sector for a six months stint with the government to develop the Prices Paid Portal. We did a beta launch in October and we're going to do an expanded launch here in the next few months.

 

It's going to have data in there on software, training, lab supplies, office supplies, and all kinds of things. It's not going to be perfect.  I'm here to say right now -- and this goes to your point Mike, don't let the perfect be the enemy of the good.  Because getting those data, and if we can't make the tools work the way we want to, then I'm going to put the data in MAX because they'll be there. These are data that are not going to be available to folks outside of government because of some legal issues. But they will be available to you. So you can find out who is paying $36 for the USB and go to that contract and not the $300 contract. And if all it takes is us sharing a little bit of information to achieve that kind of savings, it takes those things off the plate of your contracting officers and allows them and you as requiring officials, COTRs, and program officers to focus on those things that are unique and germane and essential to your agency's mission that you do in service of your friends and neighbors.  So I think that's where we'd really like to get to. And I recognize from the role that I have that we may not have the right data standards; we may not have the right data, but we are collecting a lot of information from vendors. Now how do we analyze that?  What do we do with it? We are aware of some of those questions.  One of my priorities, because of all the feedback that I have gotten from my colleagues, is you have to make information available and quickly so that I can use it.  Go to strategicsourcing.gov and at least see what is up there now. And then as we progress with the development of this Prices Paid portal, I will work with the FAI team.  If anyone that is registered for this seminar and that would like to be part of a future testing of that portal, I would be happy to add you to the list.  So, yes -- another question?

 

P: Yes, really quickly.  Your comment about sharing is a good segue to my question. And this may already be on the strategic sourcing website.  But one of the things you mentioned, in addition to the FSSI lists, is that there are there are various agencies who have, for their agency, implemented strategic sourcing contracts.  I'd be interested in seeing that list because there may be some opportunities for our agency until the other action items go through the SSL seed process, that maybe we should consider until the time comes when there is a government-wide initiative available for that particular item.  I'm not sure what --because I think you said that, for DHS, you have 55 strategic sourcing vehicles in place? I'd really be interested in knowing what they are, not necessarily so that I can use them but so that I can get some ideas of some things that may be strategically sourced within my agency until it is part of FSSI.

 

MS: Well, what I do know is that we are working on developing an external version of our strategic sourcing portal, or website rather.  So we can share that both with other agencies as well as with industry.  It won't quite have the detailed pricing and some of the other things that we have on our internal site, but that would help, I think, do what you are asking for.

 

KP: And I will take an action to add that to the list, if you could also do something for me. If you can go to contractdirectory.gov and kind of noodle around with it and see if you can readily identify contracts there that are open for other agencies to use. I probably know how to do it simply because I've had to noodle with it before but if it's not that easy we could do some user interface.  The point you're talking about with, you know, Mike's creating an external site, Seth may have an external site, GSA may have an external site.  Then that raises the question of how am I supposed to know where they all are and how to find them? So I'm taking for action from that -- as part of this toolkit, guidebook, site thing that we are developing in collaboration with GSA and their strategic sourcing site, we would like to have that be the one portal from which you can just kind of go everywhere.  So that's one of the pieces of vision we have, but if you can give me the feedback on the contractdirectory.gov and if you have any questions or feedback that you weren't able at least to give me, let me give you an e-mail address right now since I asked for that.  It's kpica@omb.eop.gov. And then Seth, I'm sorry, you had something.

 

SR: Yes, so the only thing I had to say that goes along with all these things is that alright, great -- there's another contract that's out there.  It looks like it's perfect, but I can't utilize it for any number of reasons. And we can all imagine why you may or may not be able to utilize someone else's contract. It doesn't mean that it ends there and you can't figure out some information, and it doesn't mean that you can't improve your own contract.  They are paying $35 for something and you are paying $70 for the exact same thing, you do have opportunities to renegotiate your own contract and use that bit of information as well. So some of the solutions could be improving your own that you have in place as well, and just getting all that information that's out there.

 

NS: I have one thing to add as well. When you see the slides and you see the strategic sourcing process, it looks overwhelming. I would like to state that this is what we go through for the FSSI solutions.  But in house, if you are GSA strategically sourced,  you don't have to go through every single element of this.  You have to have some key components, but not all.  And I wanted to highlight that because I wanted to reiterate the point about you don't have to be perfect. You don't have to go through every single step. Just find those areas that make sense for you and approach those.  And we also like to look at strategic sourcing as a data- driven process, so we do tend to start with baselining and understanding the user profile but also understanding the spend profile so we know where we want to take a given solution or commodity.

 

KP: Is there another question online?

 

M: Yes, we have a question for Mike from an online viewer.  “Within DHS, are there any success stories from the FSSI BPA on print management services that was released in 2011?”

 

MS: Particular success stories? Nothing I can think of right off hand.  I know we do use the print management vehicle. There are a lot of components within DHS that are streamlining their print management solutions by putting them on their particular vehicle, so they have co-termination of the individual requirements. They don't have multiple smaller print, MFD, or those types of devices, having those lease terms ending at different times, managing multiple accounts, pulling them all together.  That's been very beneficial.

 

KP: I think I have one last question for you guys. And this goes along with the theme of maybe workforce, leadership, and how do you make this work? When you encounter, because sometimes we do, we encounter people that say that's all well and good, I really want to help that but I can't for my needs. I have to have this thing; I have to have it now. I don't even know what strategic sourcing is and you will never sell me on it.  So what would be your 30 second version of, “hey, look, this is why this is important”.  How do you explain to someone who may be reluctant to accept this type of way forward  or solution?  How do you help them start to see that there are benefits here?

 

SR: Well you start by just smacking them right upside the head. [ LAUGHTER ]

 

KP: You are done.

 

SR: That's why I went first. So understand that.. I guess I'll take more than 30 seconds but I'll make it really brief.  There's not always going to be a one-size-fits-all solution. And that's not necessarily what strategic sourcing is about.  It's not just about coming up with the exact same requirement and applying it unilaterally across the board to get the best price.  That's a nonstarter; that's not what it is. It may be for one or two select items, but not in general.  What strategic sourcing really is about-- it's a data-driven analytical process that really looks at a particular area holistically. And utilizing that process to put in place a solution that meets the goals and needs of the agency.  Make no mistake about it. We are in economic times that we are -- one of these goals is going to be reducing cost, almost assuredly. But there's plenty of other things that strategic sourcing can help accomplish.  It can help achieve some levels of standardization across an area.  We can have a supply-chain component that's particularly important that you need to address. It can address some of those socio-economic type of things. So I think people often have the misnomer of saying that strategic sourcing is leveraged buying and standardization.  It is not. It is really trying to take an area that is important then look at it and understand how can you purchase, manage and align with different vendors to achieve the goals that are important to you in an agency. And hopefully, everyone can agree that that is something that they want to do.

 

NS: I like to give examples of success stories. I like to explain how, when you are buying a desktop printer, you might be getting the best price.  But if you are not considering the cost of the toner, you may not be getting the best solution for your office, department, or agency. I like to explain that, if you need to understand the cost of a pencil, are you are looking across the board or are you looking at a snapshot or the past year or the future in terms of where costs are going?  Do you truly understand that? So for example, when I go to Staples and I have a printout of everything I've bought, it is clear to me. And if I put that all together, I understand my purchasing behavior.  Can that be done for your given agency or department or office? So I would like to go back to what strategic sourcing is supposed to do.  It is supposed to be a proactive approach toward purchasing, not a reactive approach. It is very easy for someone to come up to me and say, “Hey, I need to buy a pencil” and I direct them to 10 different vendors.  It's different if I want to be proactive and say “OK, well, do you need this? Is it being gold plated? How many people need it? Have you consolidated those purchases? Are there certain socio-economic groups that we should be considering? Have we had those discussions with the vendor community?” Obviously, bringing it down to a pencil, but that goes across the board for commodity groups and services.  It is bringing those concepts and applying them across the board.

 

MS: So I would say that strategic sourcing is a proven industry best practice that we are adapting to government needs.  And in private industry, if you look at the companies that are using strategic sourcing, they are using it to the 80% of their spend -- 90% of their spend. We are not trying to do that in government, but the point I am trying to make is they understand its value and industry is bottom-line driven. They understand the value of doing the strategic sourcing.  There is a lot of effort that goes into putting these strategic sourcing vehicles together.  It takes a lot of detailed analysis, the type of thing Nitasha was talking about, and understanding the different elements of the cost of the particular product or service.  And the collaboration going across multiple components and multiple organizations within an agency to come up with what is the sweet spot for that particular commodity or service. And then negotiating the right deal, volume, purchases, and volume discounting and that type of thing. So what I am saying is that it takes a lot of effort, but there is a lot of benefit there that you can readily take advantage of. And the other thing is that it is quick. It is easy to use.  So why not use it? The last point I'd like to make is there is a lot of controversy about strategic sourcing and its impact on small businesses. I will tell you that the way we have been executing strategic sourcing at both the federal level and specifically within DHS, it has been an asset to the small business community. In DHS alone, last year, 34% of the strategic sourcing dollars went to small business primes. Now if you add in small-business subs, I don't know what that number is -- but small business primes. That's well above the 23% goal for the government-wide agency.  So that has helped DHS meet achieve another "A" from small business in meeting our small business goals.

 

CS: I have worked on a lot of projects and in a lot of different industries. But I find that strategic sourcing is something that people understand because, as individuals, we do strategic sourcing for ourselves every day.  So strategic sourcing is just buying smarter and however we can do that. I think all of us have an interest in serving the taxpayer in the most efficient way possible.  And we all want to buy more for less.

 

KP: And we all don't want to have to explain why we are spending $300 for a USB drive.  [LAUGHTER ]  And it is an important point to not gloss over.  As much as I like 7-Eleven I'm not shopping for apples and all kinds of things there, because one I'd have to go 15 times and two it's a different price than I'd be willing to pay. So I think that is the kind of philosophy that you are articulating as well.  There are a lot of other benefits. I don't think anyone can argue with anything that you've just said.  So I think we have time for just one more question.

 

P: Yes, I think that the strategic sourcing process in the cycle was dealt with.  So my question is how often is the process revisited? Because what I've noticed in the IT world is that IT tends to drive policies. So the community comes up with a plan and the plan is put in place and somebody says well, we need a system in order to do this. The system is developed and everybody starts going down that road. So how often is the process refined so that we can make sure that we are leveraging what we should be leveraging and getting the biggest bang for the buck?

 

SR: So the typical government contract runs five years usually with option years and things like that. Technology -- I don't think the iPhone really even existed five years ago. Well it really did, but for how many people?  There wasn't much. So your point is -- you put in place a solution that you probably worked on for a year or year and a half and now you're six or seven years down the road and technology has changed quite a bit. How do you do that?  How do you revisit the process? One thing we really didn't talk a lot about is how strategic sourcing is a dynamic process that continues as opposed to a static one -  you put in place a solution and you let it go. Of course, everyone is managing the vendors that you are working with. But at least for us, one of the key components that we do is really focusing on that post-award implementation, these working groups that we put in place to develop a solution and a strategy. We keep those in place to manage them afterwards so we can monitor how things are going and make the appropriate changes. So the short answer is, it is a continuous evaluation of the process and part of the process is to look at that and continue to do that. Hopefully that answered it for you.

 

P: Is there an estimate of time that we put on revisiting that cycle?

 

MS: I think what he is saying is that we continuously revisit the solution that was put in place.  We are continuously monitoring the prices and validating it against a marketplace to make sure those prices are still accurate. Continuing to look at the technology that was implemented and taking advantage of tech refresh clauses that we put in our contracts to make sure that we have the current technology that we are executing against the contract vs. the older technology that existed in year one and now we are in year three.  So we are doing that constantly, continuous and on an ongoing basis, and since we had some many different initiatives being developed and executed throughout the year, we are always revisiting the process and tailoring that process to the specific commodity and/or service that we are buying.  Does that answer your question?

 

P: That pretty much answers my question, so my last question is -- so I am the customer.  So I have a product.  I have solution. I have a service that came about because of a strategic sourcing plan that's in place. I've had that product for over a year, so now my quality starts to change.  So how do I get that input back into the process?

 

MS: You would go back to the contracting officer, the contracting officer representative, or whoever the program manager is for that strategic sourcing initiative and provide that feedback. There are a lot of contract remedies that the contracting officer can take to encourage better performance, to make sure that they realign expectations and that type of thing.

 

CS: Yes, I'd say that the process almost begins at award, because that is where the “rubber meets the road”.  Then you look at your solution. You're looking to see at whether it really meets your needs.  And when we look at it, we also look at it within the broader category. Is as much money going to this vehicle as we thought or is there money going somewhere else? And if it is going somewhere else, why? Well, we find out the vendor is not doing it or we didn't include a requirement we needed to.  So you want to be looking at that and fixing it to the extent possible all the time. So it's not like make the award and run away.

 

NS: With FSSI solutions, they regularly meet with the commodity teams, the equivalent to working groups and they continuously meet with the vendor base as well. And at any given time, there can be contract mods based on new requirements or new needs.

 

KP: Just to kind of recap, we mentioned that we would be talking about policy, initiative, the process, tools and resources. I think we hit briefly on those as much as we could in the timeframe that we had.  Thank you for your questions. I would like to thank our discussion leaders. I think it was a very fluid presentation. And as always, if there are additional questions after that you would like to have answered, then please pass those along to the FAI team. We'll make sure that those get answered and good luck. Look for resources on strategicsourcing.gov.  We will try to get some more out to the workforce through FAI and maybe other venues.  If you're interested in the Prices Paid portal pass it to FAI, and we can get you on the testing list. And on that note, are there any last parting words of wisdom?

 

MS: Just try. Just do it. Just go out and try it.   It works.

 

SR: As Karen said in the beginning, $11,000 annual tax bill for individuals. That matters to people every single day.  So don't think you have to have a billion dollar solution.  Little things can add up.

 

NS: Reach out to any one of us if you have questions. Some of our contact information is on strategicsourcing.gov. You have Karen's and  I'm sure we can get you other email addresses if needed.

 

Karen, we would like to remind everyone to complete the survey so we can get feedback for the workshop. So you should have received an email giving you the link to the survey.  Thank you.