DOE Strategic Business Initiatives Briefing to Joint Procurement Meeting February 7-8, 2012

Agenda 1st Session 2nd Session Process Flow Promote Efficiency Office of Management and Budget (OMB) Requirements DOE Implementation Government Accountability Office (GAO) Oversight 2nd Session Policy and Guidance Reporting FY 12 Goals and Objectives Expectations

GAO Conclusion “Growing federal deficits and increasingly uncertain future federal budgets have necessitated that M&O contractors evaluate areas that could be streamlined or provide cost savings in support costs at these sites, thereby maximizing funds available for the sites’ national security, research, and energy development missions”

Process Flow Strategic Tactical Policy/Guidance/Direction Reduce Spend White House Efficiency Goals OMB Cost Savings DOE Policy/Guidance/Direction Strategic Sourcing Policy OPAM Strategic Sourcing Guidance Prog. eSourcing Activity Sites Implementation/Execution USA Spend Website MAX Database Mgmt & Opn Goals AcqStat & MOP Charts Report Template Capture Cost Savings GAO Oversight and Audit of Entire Process

Promote Efficiency Executive Order - Promote Efficient Spending Agency Reduction Target 20% below FY10 Spending Federal Employee Travel Employee Mobile IT Devices Printing Costs Executive Fleet Efficiencies Extraneous Promotional Items Campaign to Cut Waste also includes: Fleet Reductions Advisory contracts Disposition of Excess Real Property Subscriptions Strategic Sourcing includes additional 10% in “Supplies”!

OMB Requirements OMB Initiatives – Federal and Support Acquisition Status (AcqStat) - Annual report on DOE progress GSA SmartPay – Annual report on program Internal Controls Strategic Sourcing – Expanding government-wide activities including FSSI and EWA Service Contracts – Goal of reducing certain PSCs Multi-Sector Workforce (MSWF) – Understanding how contracted services support mission and operations Service Contract Inventory – Priority established for Special Interest Functions and Inherently Governmental designation FAIR Act Inventory – Improve Human Capital distribution These OMB Initiatives must have M&Os participation to be successful!

DOE Implementation Acquisition Status Report (AcqStat) Reducing the cost of management support services Buying smarter (government and agency-wide strategic sourcing) Managing high risk contracts Strengthening the acquisition workforce Total - $967 million, about 4 percent relative to our $25 billion FY 2011 appropriations Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

DOE Implementation continued GSA Purchase Card Program (SmartPay) Primary method used to acquire goods/services below the micro-purchase threshold Also used to place orders under existing contracts and make payments. Seen a significantly increased use of P-Cards to streamline purchasing/improve cash management Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

DOE Implementation continued Strategic Sourcing Implementation Federal Federal Strategic Sourcing Initiative (FSSI) General Services Administration Schedules (GSA) Enterprise Wide Agreements (EWA) Contractor Contractor Supply Chain Council (CSCC) Integrated Contractor Purchasing Team (ICPT) Supply Chain Management Center (SCMC) Procurement Evaluation & Re-Engineering Team (PERT)

DOE Implementation continued FSSI – Federal Strategic Sourcing Initiative Allows government to aggregate requirements, streamline processes and leverage its buying power Primary goals: Strategically source across federal agencies Establish mechanisms to increase total cost savings, value, socioeconomic participation and sustainability goals Collaborate with industry to develop optimal solutions Share best practices Create strategic sourcing communities of practice Current FSSI Solutions Wireless Telecommunications Expense Management Services Print Management Services Office Supplies Express and Ground Domestic Delivery Services Multifunction Devices (MFDs) Website: www.gsa.gov/fssi Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

GSA Office Supplies Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

DOE Implementation continued EWA – Enterprise Wide Agreements Collection of optional-use, strategic sourcing contracts for common-use software, hardware, and services used within IT organizations across the DOE Open to the entire DOE complex, including National Labs and Power Administrations, and all DOE contractors, including M&O contractors Applies a centralized, cross-functional, strategic enterprise software solutions approach that leverages opportunities to create efficiencies and enhances the value of IT acquisition  Benefits of the program include: Reducing duplicative enterprise-wide IT components Promoting technical standardization Increasing  IT contract administration efficiencies Improving  knowledge-sharing of IT acquisition best practices Website: http://energy.gov/cio/guidance/it-acquisition/enterprise-wide-agreements Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

DOE Implementation continued CSCC – Contractor Supply Chain Council (Formerly CPC) Provides focused communication between DOE SPE and the Department's major contractors' Purchasing Managers Represents complex-wide views, concerns and interests of the contractor community ICPT – Integrated Contractor Purchasing Team Aggressively pursue strategic sourcing opportunities that represent procurement leveraged spend that results in a lower total cost of ownership for DOE Complex Wide Site and Facility Contractors Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

DOE Implementation continued SCMC – NNSA/EM Supply Chain Management Center Implement an enterprise-wide, integrated procurement software/hardware platform utilizing : Spend Analysis, eSourcing (electronic sealed-bidding and Reverse Auctions); eStore (electronic Catalogs); and strategic sourcing (site-wide commodity pricing agreements) PERT – Procurement Evaluation Re-engineering Team The contractor purchasing system reviews (CPSR) are accomplished by experienced professionals from outside of the organization being reviewed The program provides for the use of established criteria, and provides for the qualifications and primary responsibilities of team members Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

GAO Oversight 3 Recent Audits: GAO #120956 – OMB’s Acquisition Savings had Some Results, but Improvements Needed Audit Complete – Findings focused on OMB/OFPP Guidance GAO #361245 – DOE Contractor Support Costs at NNSA and Office of Science Sites - Audit Complete – Findings focused on DOE Guidance One recommendation was to “clarify guidance on estimating cost savings from streamlining efforts.” GAO #120999 – Strategic Sourcing in the Federal Government, DOE, DOD, DHS, VA and GSA - Audit Underway – Findings will build on strengthening guidance, Just received a new data call Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

Session # 2

DOE Policy and Guidance

Reporting Template

1st Qtr Savings Not sure how to handle ICPT savings??

1st Qtr FY 12 Strategic Sourcing MOP

FY 12 Goals and Objectives DOE FY 2012 Budget by Program Option #1: DOE Goal of $286M Allocated by Budget Share Option #2: DOE Goal of $286M Allocated by Program

FY 12 Goals and Objective Expanding Beyond Strategic Sourcing

Expectations All of our success depends greatly upon: Getting in front of the curve on Goal Development Identifying Department-wide Opportunities Communication Among and Between Programs Communication Both Up and Down the Chain Organizing Collecting and Reporting Mechanisms More opportunities exist for collaboration between M&O contractors, we must find them through Spend Analysis! Opportunities may exist with collaboration between agencies (e.g. EPA, Corps of Engineers, AFCEE, etc.) Contractors are doing many things well but we’re not capturing all of it – Tell the Story! Huge savings opportunities exist at DOE The need to implement strategic sourcing throughout DOE is paramount Possible solutions require cross-departmental cooperation and executive involvement Strategic sourcing initiatives will require additional resources Agency Spend Analysis is key

DOE Goals Summary Strategic Sourcing Savings $286 M NNSA $ EM $ SC $ Other $ Other Cost Savings/Avoidance $XXX M Spend Analytics Plan NNSA: In place EM: Pilot in place by Sep 2012, rest of sites in 2013 SC: Other: