1 Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program Breakout Session #B05 Names: William Weinig Diane Young Date: Monday, July 30, 2012 Time: 2:30 pm – 3:45 pm

2 Agenda Introduction Overview of the Acquisition Background The Acquisition Strategy Procurement Actions Conclusion Questions Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

3 Introduction On May 20, 2005 the Office of Management and Budget (OMB) issued a memorandum requiring agencies to develop and implement strategic sourcing plans and to report on strategic sourcing initiatives. This memo defined strategic sourcing as “the collaborative and structured process of critically analyzing an organization’s spending and using this information to make business decisions about acquiring commodities and services more effectively and efficiently.” The significance of this memo lies in its source and the offices which will be tasked with executing agency strategic sourcing initiatives. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

4 Introduction Continued These requirements originate from OMB rather than from the Office of Federal Procurement Policy (OFPP) and require each Agency’s Chief Acquisition Officer (CAO), the Chief Financial Officer (CFO) and the Chief Information Officer (CIO) to jointly develop and implement these strategic sourcing plans. Strategic Sourcing initiatives are even more critical given the current fiscal and organizational directives of achieving cost savings for the agency while still promoting agency directives (competition, small business etc…) Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

5 Overview The purpose of this acquisition is to provide Security Officer (SO) services to the Federal Aviation Administration (FAA) on a national level. The legacy case: FAA SO contracts were issued on a site-by-site basis; Contract Management was performed regional offices; and Followed the likely methodology used by the majority of federal agencies with geographically dispersed facilities. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

6 Distribution of FAA facilities requiring SO services

7 Overview Continued The scope of this effort includes the consolidation of SO services at approximately 72 facilities which comprise the majority of FAA facilities that require guard services throughout the continental US, Alaska, Hawaii and U.S. Territories. This effort represents the largest single procurement for SO services made by the FAA and would likely be a exceptional effort for most federal agencies. This case study will explain the strategic decisions made when crafting and executing the acquisition strategy. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

8 Background Prompting this acquisition was a 2005 Department of Transportation (DOT) inspector General (IG) report which suggested that the FAA lacked a high-quality, standardized SO service. As a result of individuals being allowed to enter FAA facilities without proper identification, the report noted that access controls at certain DOT and FAA facilities needed to be strengthened. A second observation stated that out of a sample of 116 FAA SOs, only 55 (or 47.6%) were properly certified and eligible to perform the duties required of them. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

9 Background Continued SO costs were rumored to be a significant portion of facility Operations and Maintenance costs; however, agency wide SO costs were unavailable to decision makers. SO costs were often mingled with other facility support efforts – like grounds maintenance. Agency officials determined the best way to improve performance and better manage costs was to consolidate SO acquisitions at a headquarters level with centralized program management and contracting oversight. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

10 Background Continued Initial Market Research focused on establishing a single contract with one vendor to supply SO services on a national scope. The FAA conducted three Requests for Information (RFI) in order to better understand industry capabilities in this field. Analysis resulted in the conclusion that sufficient competition did not exist when sourcing the entire FAA requirements as then defined. Small businesses were especially disadvantaged when contemplating a national scope for a single contract. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

11 Background Continued However, the Department of Homeland Security (DHS), Federal Protective Services (FPS) did present the capability to meet the FAA’s requirements through an Interagency Agreement (IA). The FAA pursued an IA with FPS only for it to be terminated for convenience due to conflicting requirements between the FAA and FPS. An “opportunity to excel” was at hand given the quickly approaching service stop date from FPS (6 months away) and no national acquisition strategy for SO services. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

12 Background Continued Another round of market research produced the following: Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program 20 Respondents

13 Background Continued Analysis of current service providers showed the following: Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

14 Background Continued Market Analysis Results: Large number of small businesses capable of servicing individual facilities Analysis proved that the FAA would not realize significant competition for a single contract with a national scope Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

15 The Acquisition Strategy Goal: to receive SO services following a robust competition with significant and substantive industry involvement. Three competing priorities: 1.Small Business community must actively participate 2.Program and Contract management resources are limited 3.The best quality contractors must be selected for award Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

16 The Acquisition Strategy Continued Elements of the Strategy: 1.Three Service Area (SA) contracts FAA currently operates under a SA architecture Increased opportunities for Small Businesses – given organic growth or subcontracting to meet requirements Reasonable assurance of sufficient competition Contract Specialists and Contracting Officer’s Representative’s available to support each SA contract Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

17 The Acquisition Strategy Continued Elements of the Strategy Continued: 2.Tiered Evaluation: Proceed with evaluation of offerors and award within the lowest tier found to contain adequate competition among technically acceptable offers. I. 8(a) Businesses II. SDVOSB III. Small Businesses IV. Large Businesses Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

18 The Acquisition Strategy Continued Elements of the Strategy Continued: 2.Tiered Evaluation Continued: Benefit: The FAA is able to foster competition, especially at the smallest business size possible and allow the acquisition to continue if insufficient competition occurs at a lower level tier Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

19 The Acquisition Strategy Continued Elements of the Strategy Continued: 3.Ground Rules: Single Prime contractor for each offer. Offerors could submit a proposal serving as the prime for only one SA award. Offerors could submit themselves as subcontractors under any and all SA awards. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

20 The Acquisition Strategy Continued Alternative Considered: Phased Approach. Each SA solicitation would proceed in series rather than in parallel. Offerors could submit proposals on each SA solicitation. Awardees of the prior SA would then be precluded from submitting an offer on the next SA solicitation. Schedule problems and 5 year limit on Service Contract Act procurements detracted from this alternative. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

21 Procurement Actions Bridge contract required Extensive communication with industry Informational briefing at small business conference Draft Solicitation Question & Answer teleconference Allowed course correction change in price evaluation plan Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

22 Procurement Actions Continued Solicitations issued on December 15, 2011 Proposals received on February 16, 2012 Award targeted for June 30, 2012 Service start date of October 1, 2012 Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

23 Conclusion This acquisition ambitiously attempted to consolidate and strategically source a widely disparate service. The FAA realized a streamlined management of all SO services. Although not new to the FAA, the use of tiered evaluations was novel for this program office and this contracting shop. Three service area awards allowed small businesses the opportunity to effectively participate. The acquisition will serve as a major learning opportunity for the FAA. Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program

24 Questions? Strategic Sourcing of Specialized Services Case Study: The FAA National Security Officer Program