Requisition Channel Industry Meeting (OS, MRO and JanSan) February 19, 2014

Some General Housekeeping Rules for Today’s Seminar Opening Remarks Some General Housekeeping Rules for Today’s Seminar Today’s seminar is being recorded. It will be available for review at a later date, so you can refer to it in case you missed anything. There is no dial-in number for this seminar. You will be listening to the presentation through your computer speakers. Please make sure your computer speakers are not muted Make sure your speaker volume is turned all the way up If you are having any technical issues, please let me know in the chat box on the right of your screen and I will do my best to accommodate you. QUESTIONS for the Presenters: We ask that you hold your questions until the end of the presentation Please type your questions in the chat box at the right of your screen. We will do our best to answer all of your questions during today’s session, but may need to get you an answer at a later date.

Speaker: Mr. Walter Eckbreth Opening Remarks Speaker: Mr. Walter Eckbreth Program Analyst General Services Administration

GSS Supply Transformation -Speaker Introduce yourself and other members of the team on the phone who may be assisting with questions.

Agenda Supply Transformation (ST) Background and Overview Federal Strategic Sourcing Initiative (FSSI) as Key ST Enabler ST Milestones & Key Dates

Supply Transformation Concept ST will utilize commercial vendor supply chains to transform GSS wholesale and retail programs Wholesale Transformation: transition commercially available items from GSA Stock to Strategic Partner Delivery (SPD) Retail Transformation: transition retail operations from GSA-managed inventory solution to the fourth party logistics (4PL) solution

Supply Transformation Background FY07 New Business Models Study and Business Case Analysis FY10 Launch of Central Asia Sourcing Program FY12 Launch of Strategic Partner Delivery (SPD) Pilots FY14 Implementation of Supply Transformation FY09 Launch of 4PL Retail Program FY11 Launch of Direct Vendor Delivery Pilots (FSSI) FY13 Preparation for Supply Transformation

Supply Transformation Impetus and Goals Industry distribution models have become more sophisticated, creating both more competition and greater opportunity for partnership Technology innovations enable greater integration with external partners Goals Overall: Increase value to the customer and to the taxpayer Greater customer responsiveness: more and higher quality products, lower prices, and faster delivery Greater efficiency: upon completion, generate $100 million in annual savings through acquisition and operating efficiencies Promote small business usage Ensure GSS business model is sustainable: competitive and solvent Increased

Federal Strategic Sourcing Initiative (FSSI) as Key Enabler SPD Quality Product, Competitive Pricing, and Fast Delivery Worldwide Delivery FEDSTD and MILSTD Compliant Develop deep insight into markets and lifecycle costs Leverage Government-Wide Spend Foster Usage of Socio-economic Firms Constantly Capture and Refine Best Practices Automated End-to-End Supply Chain Process FSSI

Supply Transformation Milestones and Key Dates FY 2014 FY 2015 Q2 Q3 Q4 Q1 Engage Industry Implement SPD Transform GSS Internal Operations Industry Day Engage Industry Video Presentation Letters to Contractors FSSI RFQs Implement SPD JanSan & MRO Awards OS3 Award Stop ship WDC Transform GSS Internal Operations Stop ship EDC Close WDC Close EDC Convert Stores to 4PL

Appendix: Glossary 4PL Fourth-Party Logistics: GSA manages customer’s logistical operations in partnership with GSA vendors Acquisition The purchase of commodities from an external source Depot Distribution center; GSA has two depots: EDC (Eastern Distribution Center in Burlington, NJ) and WDC (Western Distribution Center in Sharpe/Stockton, CA) DVD Direct Vendor Delivery: direct fulfillment by vendors of orders that would traditionally go to a GSA Depot EDC Eastern Distribution Center: one of two depots currently active for GSS, located in Burlington, NJ FSSI Federal Strategic Sourcing Initiative FY Fiscal Year: for Federal Government, each Fiscal Year runs from Oct. 1 through Sept. 30 GSS The Office of General Supplies & Services JanSan Janitorial/Sanitary: all products that are defined as within this product category MILSTD Military Standard fulfillment procedures MRO Maintenance, Repair, and Operations: all products that are defined as within this product category OS3 Office Products (3rd Generation FSSI): all products that are defined as within this product category Requisition A transfer of property (commodities) from GSA to an approved GSA patron SPD Strategic Partner Delivery: fulfillment of orders that would traditionally go to a GSA depot through a dedicated third-party vendor that is well integrated with GSA systems and operations ST Supply Transformation (GSS initiative to increase strategic use of commercial capabilities, reduce the GSA footprint, and save $100 million annually) WDC Western Distribution Center: one of two depots currently active for GSS, located in Sharpe/Stockton, CA

The Supply Transformation Team will now take any questions, comments or concerns. Please type questions in the chat window.

OS, MRO and JanSan Acquisition Strategies For the Requisition Channel -Speaker please make sure to reinforce that these three acquisitions are for the Requisition Channel!!!! -Please make sure to say what MRO, JanSan and OS stands for……

Customers buy through several unique methods necessitating a multi-channeled sourcing strategy Government Purchase Card Holder or Contracting Officer On-base Military Personnel MILSTRIP / FEDSTRIP User Purchasing Channel Customers purchase products directly from vendor via a vendor- or government-managed internet portal or vendor store front Vendors fulfill orders and invoice customers directly Largest channel, covering 70-80% of addressable spend Requisition Channel Acquire products available through GSA Global Supply Mainly DOD customers 4PL Channel Mainly DOD customers Vendors own and operate network of on-site stores, manage inventory and ensure delivery DOD eMall GSA Advantage Vendor Website Global Supply On-Base 4PL Store Contract Vendor Brick & Mortar Store

GSAs requisition model entails a specific set of unique requirements for Contractors to successfully participate The Requisition Channel covers mainly DoD orders that are fulfilled through GSA Global Supply program Requisition order fulfillment requires advanced e-commerce capabilities and seamless integration with GSA IT systems E-commerce systems must fully align and link to GSA’s Extensive testing is required to ensure that all orders are transmitted and received, and that no data elements are dropped Use of National Stock Numbers (NSNs) is critical to ensure zero manual touch points for order processing Other custom requirements exist, including unique marking, packing, labeling requirements, and many more

Vendors Submit Quotes on Pools Contractor evaluation and category representation uses a market basket approach Market Basket Created Vendors Submit Quotes on Pools Path to Establishment 1 2 3 Designed to represent Federal market purchases in the category Top high-spend products Additional representative items Market basket items are categorized into pools for Contractors to submit quotes Quote sheets are created for the market basket items within each pool Several Technical Go/No Go Factors must be satisfactorily addressed by interested Contractors Contractor’s prices are collected on quote sheets for each pool the Contractors choose Qualifying Contractors for JanSan and MRO are then asked to apply the market basket average discount to all other non-market basket items within each pool For Office Supplies, non-market basket pricing will be reviewed and negotiated individually

FOR ILLUSTRATIVE PURPOSES ONLY Quotes on Market Basket items (to be provided on the quote sheet) are the basis for Contractor evaluation Example: Vendor XYZ, Inc. sells tools and would like to quote on the MRO Tools and Tool Cabinets Pool FOR ILLUSTRATIVE PURPOSES ONLY XYZ, Inc. quotes discounts off of their Schedule pricing for every core item XYZ, Inc. is evaluated based on the prices quoted MRO Tools and Tool Cabinets Product Schedule Price Quote Discount Hammer… $12.41 $11.29 9% Drill… $108.22 $102.81 5% Screwdriver… $21.99 $20.23 8% Tool Cabinet… $23.26 $20.24 13% In this example, XYZ, Inc. offered an average discount of about 9% off of their GSA MAS net prices, calculated based on their quotes for all products within the pool If XYZ, Inc. is selected, the average discount will be applied to the entirety of their non-market basket items that are in scope with the given solution (NOTE: Schedule Price does not apply to OS.)

Planned Administrative Go/No-go Evaluation Factors Must be an AbilityOne reseller and demonstrate authorization to be an authorized distributor Provide 100% core items in category with supply manufacturer’s part number and UPC (if available) Demonstrate ability to provide core Market Basket items vs. Non- Market Basket items per pool Demonstrate TAA compliance Meet environmental sustainability requirements Assure Berry Amendment compliance (MRO only) Provide representation regarding unpaid delinquent Federal tax liability or felony conviction To include but not limited to:

Planned Technical Go/No-go Evaluation Factors (cont) Comply with Item Purchase Descriptions Ability to support a Requisition based environment Meet electronic communication capability Demonstrate the ability to use the DLA’s VSM Ability to provide “Fill or Kill” status Comply with packing, packaging, marking, labeling and documenting requirements (FED STD 123; MIL STD 129) Ability to secure scannable bar codes Provide a subcontracting plan (other than small business concerns only) Recommend having RFQ handy for bullet descriptions.

OS Acquisition Strategy -OS3 is a Multi-Agency Multiple Award Indefinite-Delivery Indefinite Quantity (IDIQ) Contract. -Firm-Fixed Price type contract with an Economic Price Adjustment Provision (EPA).

OS Requisition Channel Acquisition Plan RFP – Open to all vendors (Do not have to have a GSA Schedule) OS encompasses General Office Supplies. Paper Toner/Ink Estimated spend for OS Requisition items is an estimated $200M annually Do we wa

Proposed OS aggregate volume thresholds Aggregate Volume Discounts: Vendors will be asked to provide additional discounts that go into effect upon reaching a cumulative level of spend OS Proposed Aggregate Tiers Cumulative Spend Levels $10M+ $25M+ $50M+ $75M+ $100M+ -Are volume discounts tiers in the requisition channel? (OS)

Key Terms and Conditions for OS Period of Performance 1 Base Year with 4 One-Year Options CONUS – 4 Calendar Days OCONUS – 7 Calendar Days $0.00 FOB Destination Delivery Days Minimum Order Size Delivery Terms

MRO and JanSan Acquisition Strategy

JanSan and MRO Requisition Channel Acquisition Plan JanSan encompasses products ranging from motorized floor buffers to toilet paper, hand soap, and more Estimated spend for JanSan Requisition items is an estimated $92M Annually MRO encompasses products ranging from hardware to hand tools, from portable air conditioners, to pumps and motors Estimated spend for MRO Requisition items is $144M Annually

JanSan and MRO Product Categories MRO Categories Hardware Tools and Tool Cabinets JanSan Categories Brooms, Brushes, Mops, Sponges, Cleaning Cloths, Pails & Wipers Cleaning and Polishing Compounds, Miscellaneous Chemical Specialties & Dispensers Motorized Floor Cleaning Equipment and Accessories, Floor Mats and Coverings Personal Hygiene, Paper Products, Dispensers and Laundry Accessories Trash Receptacles, Plastic and Paper Bags Talk how many BPAs and how many are eligible for Small Business???

Proposed JanSan & MRO aggregate volume thresholds Aggregate Volume Discounts: Vendors will be asked to provide additional discounts that go into effect upon reaching a cumulative level of spend JanSan Proposed Aggregate Tiers Cumulative Spend Levels $6M+ $12M+ $18M+ $24M+ $30M+ -Are volume discounts tiers in the requisition channel? (OS) MRO Proposed Aggregate Tiers Cumulative Spend Levels $12.5M+ $25M+ $37.5M+ $50M+ $62.5M+

Key Terms and Conditions for MRO and JanSan Period of Performance 1 Base Year with 4 One-Year Options CONUS – 4 Calendar Days OCONUS – 7 Calendar Days $0.00 FOB Destination Delivery Days Minimum Order Size Delivery Terms

The OS, MRO and JanSan Teams will now take any questions, comments or concerns. Please type questions in the chat window.