The $400B question: building a common foundation to optimize - PowerPoint PPT Presentation

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

DRAFT for discussion only 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 SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

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

DRAFT for discussion only Overall volume of acquisition work and key areas of spend under management – the $400B question Federal government’s acquisition spend Top 5 areas of spend accounted for declined by ~20% in FY2008-14 ~60% of acquisition spend in FY14 $B $B 26 248 600 250 541 540 540 539 518 35 462 443 51 400 200 63 200 150 0 100 73 FY08 FY09 FY10 FY11 FY12 FY13 FY14 • Contract spending accounts for 50 approximately one of every seven dollars spent by the Federal government. • Notable proportion of spend (~50%) on 0 common goods and services • An average of 15.5M procurement actions recorded each year (incl. modifications) Source: OFPP/OMB/EOP presentation on April 4, 2016 4 SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

DRAFT for discussion only Federal acquisition work aims to advance a range of priorities • Commitment to increasing federal contracting Program Goal* opportunities for small businesses, including Focus on Small business total 23% women-owned, veteran-owned, and small socio- 8(a)* / Small 5% businesses located in Historically Underutilized Disadvantaged economic Business Zones Business outcomes Historically 3% • $550 billion in federal contracting dollars awarded Underutilized Business to small businesses in 2009-14 Zones Veteran-owned small 3% Imperative to • Agile BPA deployment (build code, not paper), business innovate challenges, micro-threshold reverse auctions Women-owned Small 5% Business (WOSB) • Category Management Shift to • Evolution of Shared Services management shared • Formal job series and • Benchmarking: acquisitions, IT, HR, Finance, real approaches career path for program property management managers • Standards-based model for Importance of • Evolving acquisition processes to help achieve program management digital President’s “Smarter IT Delivery” Goal and other consistent throughout the initiatives in the information technology space government federal government. • Senior executive in each Pivot to • Increasing focus on program outcomes, e.g. agency to be responsible for program proposed Program Management Improvement and program management policy Accountability Act management 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 SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

DRAFT for discussion only Complexity of modern gov’t procurements requires holistic approaches to workforce professionalization 1 Regulation • Acts of Congress, Executive 2 3 Management Orders – procurement implications Accountability approach • Federal Acquisition Regulation • Mandatory ethics training (FAR) • Category management • Feedback via agency surveys • Agency acquisition regulations – buying as a single • GAO and IG studies, reviews, enterprise to drive value and audits and generate savings 4 Competency model • Competencies – behaviors encouraged to advance and excel • Job profiles – definition of critical 5 6 jobs, essential experiences, Core training Community-driven learning knowledge • Acquisition core • Sharing of best practices, qualifications curricula acquisition solutions, and certification resources and community programs 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 SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

DRAFT for discussion only 1 Federal Acquisition Regulation continues to evolve balancing predictability and ability to innovate Multiple factors define the need for continuous evolution of Federal Acquisition Federal Acquisition Regulation (FAR) Council Members: Regulation (FAR), including: • Administrator for Federal • Acts of Congress (Statutes) Procurement Policy FAR • Executive Orders • Secretary of Defense Council • OMB memoranda, OFPP Policy letters • Administrator of NASA • Court Decisions • Administrator of GSA • IG, GAO Reports/Recommendations DARC CAAC Defense Acquisition Civilian Agency Regulatory Council Acquisition Council (DARC): Consists of (CAAC): p articipation representatives from rotates and depends on FAR Teams all military services, type of change proposed Strategy, Acquisition Law defense agencies and Acquisition Implementation, NASA Small Business, IT, Finance Agency-specific acquisition regulation (for example, GSA Acquisition Regulation) Source: OFPP/OMB/EOP presentation on April 4, 2016 SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

DRAFT for discussion only 2 Category management represents the most current approach in the area of acquisition management Category • Category management is an approach the Federal Government is applying to management buy smarter and more like a single enterprise. defined • Identify common categories of spend for goods and services • For each identified category: Understand core business objectives relative to improving management o of the category Develop business and market expertise related to the category o Key steps Define acquisition, supply, and demand management policies and o 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 Expected redundancies, increasing efficiency, and delivering more value and savings impact from the government’s acquisition programs. Source: OFPP/OMB/EOP presentation on April 4, 2016 SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

DRAFT for discussion only 2 U.S. Federal government is actively deploying category management approaches Current State of Purchasing: Future State of Purchasing: • Lack of coordination across agencies • Synchronized procurement across government • Duplicated efforts • Industry involvement in developing best category • Many agencies; no leverage buying power strategies • Core competencies leveraged to match customer needs • One common management framework Optimize Category All Goods & Contract Vehicles Develop Services & Manage Management Expertise Implementation of Landscape Category Management & CAP Manage Data Leverage Collection & Supplier Analysis Relationships Maximize Customer Relationships Source: OFPP/OMB/EOP presentation on April 4, 2016 SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION