1 The Top Ten Tools Every Subcontract Manager Needs Breakout Session # A15 Name: Jim W. Kirlin Date: July 30, 2012 Time: 11:15 a.m. – 12:30 p.m.

2 Disclaimer - The views in this presentation are those of Jim Kirlin only and are not to be construed as the views of any other person or company Non-attribution - Do not attribute the discussions today to the speakers or those in the audience Disclaimer and Non-attribution

3 The Learning Objectives are: 1. Know the top ten tools a subcontract manager needs 2. Know why these tools must be used 3. Know where they are used in the subcontracting process What are the essential tools that a Subcontract Manager needs to accomplish her job?

4 Efficiency Tools allow predictable outcomes Tools create productivity Accountability Tools ensure compliance Tools prove responsibility Transparency Tools demonstrate we are dealing with responsible parties Tools show we are treating responsible parties fairly Efficiency, Accountability and Transparency

5 1. Screening 2. Qualification 3. Spend Data 4. Requirements 5. T&Cs6. Checklist7. Execution 8. Deliverables 9. Payment10. Files

6 Tool 1 - Screening Why we use this tool Are we dealing with responsible parties? U.S. and international law Due diligence required - know who you are dealing with FAR Part 9 – responsible prospective subcontractor Screens Excluded Parties List System (EPLS)(for U.S.) Corruption Perceptions Index (international) Dun and Bradstreet

7 Tool 2 - Qualification Why we use this tool Does this supplier measure up? Reliable performance at affordable pricing Rationalize the supplier base Preferred suppliers list Fair objective criteria for selection Type of relationships: vendor to strategic

8 Tool 3 - Spend Data Why we use this tool Where is the money going? Database showing spend by who, what, where, types of contractors, delivery, quality, etc. Active and historical information Uses Business intelligence Acquisition strategy Contingency planning Rationalizing the supplier base

9 Tool 4 - Requirements Why we use this tool What should we buy? Technical Requirements Statements of Work Specifications Technical Data Package Non-Technical Requirements (delivery, pricing, payment) What does the subcontractor need to know? Align subcontractor requirements to meet customer requirements

10 Tool 5 - Terms and Conditions Why we use this tool What terms and conditions apply? T&Cs ensure compliance with law Protecting the company – balanced risk Flowdown Variety: small purchase, systems, federal, commercial, international, services, intellectual property, agreements, partnerships Method for adjusting to changes in law and regulation Supplier access to terms and conditions Resolving subcontractor’s request to change T&Cs

11 Tool 6 - Compliance Checklist Why we use this tool Did we do everything right? Prior compliance better than discovering later An ounce of prevention is worth a pound of cure Checklist lists the important considerations Checklist must have flexibility for the variety of situations Checklist is part of compliance folder Checklist “proves” it was addressed Currency of checklist is paramount

12 Tool 7 - Execution Why we use this tool Are we “doing” the subcontract? Series of management functions Monitoring performance Communications Issue identification and resolution Change management Maintaining relationships Focused on goals of the subcontract

13 Tool 8 - Deliverables Why we use this tool Did we get what we paid for on-time? Physical delivery The Paperwork can be as important as the product Shipping documents Export/import documents Customs Records of receipt Inspection and acceptance Flow into material system

14 Tool 9 - Payment Why we use this tool Should we pay the subcontractor? Physical evidence of performance Paperwork evidence of performance Correct invoicing Resolving discrepancies Payment in accordance with the subcontract terms

15 Tool 10 - Files Why we use this tool Are we keeping what is required? Document compliance with law, regulations, company policy Essential for Contractor Purchasing System Review (CPSR) Documents the “say it, do it, prove it” Organization and consistency is important Words of wisdom It’s not worth the paper it’s not written on It takes a lot of paper to prove you don’t have a “paper system”

16 The Learning Objectives are: 1. Know the top ten tools a subcontract manager needs 2. Know why these tools must be used 3. Know where they are used in the subcontracting process What are the essential tools that a Subcontract Manager needs to accomplish her job?

17 1. Screening 2. Qualification 3. Spend Data 4. Requirements 5. T&Cs6. Checklist7. Execution 8. Deliverables 9. Payment10. Files

18 You have comments – please share You have questions – we have answers Audience help in answering is welcome Share the time with others Must conclude formal part on time Be glad to discuss afterwards outside room Questions and Answers