2. 2 Managing Partnerships The CBP National Uniform Program A Performance Based Solution!! Breakout Session # 1609 Mark Weinstein & Brenda Gallion, CBP Walter Thomas, VF Imagewear April 25 2006 1:30 PM

3. 3 The Question?????? Industry: HOW DO YOU CONDUCT BUSINESS WITH YOUR BEST COMMERCIAL CUSTOMERS?

4. 4 Step 1: Teaming CBP & Business Partner VF Imagewear IT’S A MARRIAGE!!!! GOAL: Manage Mission Using Performance Measures

5. 5 Step 7: Manage Performance KEEP TEAM TOGETHER ACCOUNTABILITY PROGRAM MANAGEMENT

6. 6 Step 7: Manage Performance RECOGNITION ASK RIGHT QUESTIONS PERFORMANCE REVIEWS

7. 7 Purpose/Desired Outcome To Obtain a Business Partner to Provide Full Program Management To Support the U.S. Customs Service IAW Commercial Business Practices

8. 8 Program Objectives Inventory Management E-Commerce Solution Establishing Allowance Accounts “Use of Statement of Objectives (The SOO!)”

9. 9 Business Objectives Performance Based Business Solution/Arrangement with Incentives & Disincentives Designed to Reward Superior Performance

10. 10 Business Objectives Innovative & Creative Approach to Managing Uniform Program per Business Partner’s Standard Commercial Practices

11. 11 Business Objectives Determining a Contract Type per Standard Commercial Practices Determining a Contract Period of Performance per Standard Commercial Practices

12. 12 Uniform Contract Award $46 Million(Now > $75 Million) ? Business Partner VF Solutions/Imagewear Multiyear Firm Fixed Price Award Term Structure 4 Year Base with 6 One Year Options 75% of Incentive Pool Annually =Option Years

13. 13 Uniform Contract Performance Metrics Order Shipping Timeliness Report Delivery Backorder Shipping Order Accuracy

14. 14 Uniform Contract Performance Metrics Defect Rate Orders Shipped Complete Customer Satisfaction Product Development Subcontracting Plan

15. 15 Before and After-Incentives Work! ! Contract Tc-01-001 (FY 2001) “Before PBSA” VERSUS Contract Tc-01-050 (FY 2002 to FY 2006) “After PBSA”

16. 16 Uniform Performance Measures: Glossary @ Average I Incentive D Disincentive N Neutral Q Quarter

17. 17 Metric: Order Shipping Timeliness Minimum: 4.5 Days Desired: 3.0 Days FY 2001@ FY 2002 FY 2006 2 Q 4.1 Days 3 Days I 2.6 Days I 3 Q 4.1 Days 2.5 Days I 2.9 Days I 4 Q 3.8 Days 6.5 Days D 4.1 Days N

18. 18 Metric: Order Shipping Timeliness Minimum: 4.5 Days Desired: 3.0 Days FY 02 4 Q 6.5 Days DISINCENTIVE FY 03 1 Q 7.3 Days DISINCENTIVE FY 03 4 Q 3.13 Days NEUTRAL FY 04 1 Q METRIC SUSPENDED

19. 19 Metric: Order Shipping Timeliness Minimum: 4.5 Days Desired: 3.0 Days FY 04 4 Q 2.78 Days INCENTIVE FY 05 1 Q 4 Days INCENTIVE FY 05 4 Q 2.5 Days INCENTIVE FY 06 1 Q 3.6 Days NEUTRAL FY 06 4 Q 4.1 Days NEUTRAL

20. 20 Metric: Backorder Shipping Minimum: 25 Days Desired: 15 Days FY 2001@ FY 2002 FY 2006 2 Q 28 Days 28 Days I 21 Days N 3 Q 39 Days 23 Days I 33 Days D 4 Q 17 Days 15 Days I 23 Days N

21. 21 Metric: Backorder Shipping Minimum: 25 Days Desired: 15 Days FY 02 4 Q 15 Days INCENTIVE FY 03 1 Q 14 Days INCENTIVE FY 03 4 Q 18 Days NEUTRAL FY 04 1 Q METRIC SUSPENDED FY 04 4 Q 15 Days NEUTRAL

22. 22 Metric: Backorder Shipping Minimum: 25 Days Desired: 15 Days FY 05 1 Q 16 Days NEUTRAL FY 05 4 Q 13 Days INCENTIVE FY 06 1 Q 11 Days INCENTIVE FY 06 4 Q 23 Days NEUTRAL

23. 23 Metric: Orders Shipped Complete Minimum: 85% Desired: 92.5% FY 02 4 Q 87% NEUTRAL FY 03 1 Q 83% DISINCENTIVE FY 03 4 Q 91.76% NEUTRAL FY 04 1 Q METRIC SUSPENDED

24. 24 Metric: Orders Shipped Complete Minimum: 85% Desired: 92.5% FY 04 4 Q 74.0% DISINCENTIVE FY 05 1 Q 77.8% DISINCENTIVE FY 05 4 Q 89.4% NEUTRAL FY 06 1 Q 90.9% NEUTRAL FY 06 4 Q 92.3% NEUTRAL

25. 25 Metric: Customer Satisfaction Comment Card ?: –Overall, How Satisfied are you with the service you received on this order? Responses: 5= Very Satisfied 1 = Not at all Satisfied

26. 26 Management of Metrics (Step 7) FY 04: Border Patrol Uniform Rollout/Consolidation As of 1 Oct 04 for First 3 Q’s of FY 04, Following Metrics Suspended: –Order Shipping Timeliness –Back Order Shipping –Orders Shipped Complete –Customer Satisfaction

27. 27 Management of Metrics (Step 7) Following Metrics Added: –Returns –Complete Orders Per Phase $100K bonus

28. 28 Net Incentive Payments FY 2002: $66,000 or 33.3% of Pool FY 2003: $177,236 or 53.1% of Pool FY 2004: $511,817 or 88.5% of Pool FY 2005: $320,000 or 77.1% of Pool FY 2006: $350,000 or 75% of Pool FY 2004 $500K Incentive Cap Negotiated

29. 29 Postaward Activities of Partnership Quarterly Assessments Web Site/E-Commerce Solution Salt Lake City Olympics TSA “Spinoff” – Sharing Best Practices Katrina Relief Efforts Valued Partner Migration of Other DHS Components

30. 30 The Coda!! PBSA Results in Cultural Change/Transformation Use SOO In Lieu of Statement of Work Contracting Officer/Business Advisor & Cohesive Team!!

31. 31 The Coda!! PBSA is a Tool to Use to Manage & Measure Contract Performance Manage Outcome of Contract Performance- Monitor Results Not Contract Compliance We Are Managing Partnerships & Business Processes Rather Than Managing Contracts!

32. 32 Contracts That Work A Partnership Between CBP & VF Imagewear/Solutions Walter Thomas, VF Imagewear

33. 33 Desired Outcome – Win the Contract! Create a Performance Based Contract Use Best Practices of Commercial Accounts Develop a “Business Partnership” Relationship Launch an Interactive Web Site

34. 34 E-Commerce Solution Resolved! Orders Placed Through Web Site: –FY 02 3 Q 1,881 28% –FY 02 4 Q 4,386 52% –FY 02 1 Q 6,537 66% –FY 05 3 Q 16,986 83% –FY 05 4 Q 23,142 84% –FY 06 1 Q 25,073 87%

35. 35 Best Practices of Commercial Accounts Long Term Contract Product Development/Product Fair Forecasting

36. 36 Performance Based Contract Objective – Measurable Minimum vs. Desired Levels of Performance Tied to Contract Extensions

37. 37 Business Partner Relationship Reveal More Information Educate CBP About our Business Build Trust

38. 38 Customs National Uniform Program – Program Management Brenda Gallion, COTR/Program Management Chief, CBP Uniform Management Branch

39. 39 Uniform Team Partnerships Chief, Uniforms Management Branch Uniform Branch Program Coordinators –Contracting Officer –Uniform Liaisons CBP Air Office of Border Patrol Office of Field Operations Office of Training and Development

40. 40 Uniform Team Partnerships Uniform Field Coordinators Customs Primary Uniform Vendor: VF Imagewear/Solutions, Inc.

41. 41 National Uniform Program Scope Pre- DHS 12,000 Customers Currently 33,000 Customers Number of Uniformed Positions –CBP Air and Marine –CBP Officers, CBP Agriculture Specialists & Technicians –Border Patrol Agents –Customs Patrol Officers –Explorers

42. 42 National Uniform Program Scope –Academies: Artesia, New Mexico Glynco, Georgia Frederick, Maryland –Harpers Ferry Academy

43. 43 New Program Management Partnership Things We Do Differently Performance Based Contract Quarterly Performance Evaluations Weekly Project Log Success Stories

44. 44 CBP Uniform Program Best Practices Uniform Team Weekly Meetings Liaisons Headquarters (Stakeholders) Field Coordinators Clearly Defined Objectives & Reporting Structure

45. 45 CBP Uniform Program Best Practices Team Consensus & Sign Off on Projects Clear Roles & Responsibilities Customer Service Cards, Web Comment Uniform Mailboxes each Stakeholder Liaison

46. 46 Best Practices Detailed Procedural Handbook Team Field Visits Quarterly Assessments/Entire Team Participation

47. 47 Questions???? We Welcome any Questions from the Audience at this Time!!!