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RECENT TRENDS IN US PROCUREMENT

RECENT TRENDS IN US PROCUREMENT. Federal Acquisition Streamlining Act (FASA) of 1994 Electronic Commerce/Electronic Data Interchange (EC/EDI) Federal Acquisition Computer Network (FACNET) Virtual Enterprises Computer Multimedia and CD-ROM Oral Proposals. 1. CANADIAN PROCUREMENT TRENDS.

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RECENT TRENDS IN US PROCUREMENT

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  1. RECENT TRENDS IN US PROCUREMENT • Federal Acquisition Streamlining Act (FASA) of 1994 • Electronic Commerce/Electronic Data Interchange (EC/EDI) • Federal Acquisition Computer Network (FACNET) • Virtual Enterprises • Computer Multimedia and CD-ROM • Oral Proposals • 1

  2. CANADIAN PROCUREMENT TRENDS • Common Purpose Procurement (CPP) • 2

  3. FEDERAL ACQUISITION STREAMLINING ACT OF 1994 • Simplifies and streamlines Federal procurement process to • reduce paperwork burdens • facilitate acquisition of commercial products • simplify procedures for small purchases • transform acquisition to Electronic Commerce, • improve the efficiency of the laws governing the procurement of goods and services • 3

  4. FEDERAL ACQUISITION STREAMLINING ACT OF 1994 • “Our project to increase the use of past performance as an evaluation factor in the source selection process promises not only to secure for the Government better value for its dollar, but also to streamline the evaluation process by reducing the amount of technical requirements that need to be evaluated.” • Steven Kelman, Administrator of the Office of Federal Procurement Policy to Congress • 4

  5. STREAMLINING APPROACHES INCLUDE: • Reduced number of evaluation factors • Identify only the essential evaluation factors that will have an impact on the source selection decision. • Greater emphasis on “Best Value” and “Past Performance” • Fewer evaluators & small source selection teams • 5

  6. SIGNIFICANT PROVISIONS OF THE NEW LAW • Emphasize acquisition of commercial items (COTS) • Streamline acquisition procedures under an elevated small purchase threshold • Implement a Government-wide Federal Acquisition Computer Network • Establish uniformity in the procurement system • Improve protest and oversight processes • 6

  7. FEDERAL ACQUISITION REGULATION REWRITE • Define “discussions” to communications after establishment of the competitive range • Retaining only the offerors with the greatest likelihood of award and allow the contracting officer to further limit the competitive range in the interest of efficiency • 7

  8. FEDERAL ACQUISITION REGULATION REWRITE (Cont’d) • Encourage communication with industry throughout the solicitation process to ensure competitive range determinations are informed decisions. • Eliminate “minor clarifications” except for use in award without discussions. • Revise rules governing late proposals. • 8

  9. ADDITIONAL CHANGES • A new definition of “best value” • A description of the two most common source selection processes—award to the low price technically acceptable offeror, and tradeoffs among cost and other factors • Authorization to use techniques such as multiphase proposals or oral presentations. • A new Model Contract Format (MCF). • 9

  10. ELECTRONIC COMMERCE/ELECTRONIC DATA INTERCHANGE • DoD and the entire Federal Government are beginning to use EC/EDI to remove the paper, reduce the cost, and increase the efficiency of the Government’s procurement process. • The Federal Acquisition Streamlining Act of 1994 requires the entire Government to begin using EC/EDI. • 10

  11. WHAT IS ELECTRONIC COMMERCE? • Electronic Commerce (EC) is the paperless exchange of business information using Electronic Data Interchange (EDI), Electronic Mail (E-Mail), computer bulletin boards, FAX, Electronic Funds Transfer (EFT), and other similar technologies. • 11

  12. WHAT IS ELECTRONIC DATA INTERCHANGE? • Electronic Data Interchange (EDI) is the computer-to-computer exchange of business information using a public standard. • EDI is key to Electronic Commerce because it enables businesses to exchange business information electronically, much faster, cheaper and more accurately than is possible using paper-based systems. • 12

  13. WHO CAN BE A TRADING PARTNER? • A Trading Partner is “a (registered) business that has agreed to exchange business information with the U.S. Government electronically.” • As the U.S. Government implements EC/EDI, these Trading Partners will receive the bulk of U.S. Government procurements. • 13

  14. WHAT DOES THIS MEAN TO YOU? • If you want to sell commodities and, later, services valued at under $100K (“simplified acquisitions”) to the DoD and civil agencies, you will have to become EC/EDI capable. • If you are not EC/EDI-capable, it will become increasingly difficult for you to compete with contractors who are EC/EDI capable and sell to the U.S. Government. • 14

  15. FEDERAL ACQUISITION COMPUTER NETWORK (FACNET) • Requires government to evolve its acquisition process from one driven by paperwork to an expedited process based on Electronic Data Interchange (EDI) • Provides a “single face” to industry • 15

  16. THE GOVERNMENT-WIDE FACNET IS DESIGNED TO: • Inform the public about Federal contracting opportunities • Outline details of government solicitations • Permit electronic bid and proposal submission • Facilitate responses to questions about solicitations • Be accessible to anyone with access to a personal computer (PC) and a modem • 16

  17. THESE REFORMS ARE WORKING! • 17

  18. CASE STUDY #1: Air Force • Problem: Time between request and award of $1 billion contract for bomb retrofit was too long. • Reform: Make speed and cost savings drive the procurement process. • Strategy: Replace government specifications in RFP with performance requirements. Reduce the number of employees working on the contract from about 100 to 20. Collaborate with contractor on improving the system. • Result: Procurement lead time decreased from three years to one year. • Estimated savings: Procurement costs projected to decrease by $400 million, a 40 percent decrease. • 18

  19. CASE STUDY # 2: Federal Law Enforcement Training Center, Brunswick, Ga. • Problem: The need to lower procurement costs and increase quality. • Reform: Institute performance-based contracting. • Strategy: Form teams of procurement and program personnel to set measurable performance standards for contractors and offer fixed-price contracts. • Result: Quality of work increased. • Estimated savings: 20 percent to 40 percent of costs. • 19

  20. CASE STUDY # 3: • Problem: Contractors' proposals were incomplete, and delivery times for large procurements were late by months. • Reform: Test draft RFPs and oral proposals. • Strategy: Convince procurement, program and legal personnel to allow contractors to comment on RFPs and, in some instances, to present videotaped proposals. • Result: Dozens of pages were eliminated in RFPs, and procurement lead time decreased by more than half in some cases. The quality of proposals increased. • 20

  21. CASE STUDY # 4: Marshall Space Flight Center, NASA • Problem: Lead times for mid-range purchases ($25,000 to $500,000) took more than four times as long as small purchases. • Reform: Streamline the process for midrange purchases. • Strategy: Form teams to review procedures and documents and delete any not required by the Federal Acquisition Regulation. Automate procurement requests. Emphasize brief proposals. • Result: Lead times cut by months. Solicitation documents cut from 70 pages to 10. • 21

  22. VIRTUAL ENTERPRISES • Last year the $31B defense contractor Lockheed Martin captured nearly 70% of all competitions it entered, including such large awards as NASA’s X-33 technology demonstrator, Joint Strike Fighter and Joint Attack Standoff Strike Munition (JASSM). • Altogether, they were equivalent to 63% of the potential dollar value of the programs targeted. • 22

  23. THEY DID IT USING VIRTUAL ENTERPRISES • 23

  24. WHAT IS A “VIRTUAL ENTERPRISE”? • An innovative organizational structure that overcomes problems associated with large companies. • Virtual enterprises eschew the makeup of the traditional company. • 24

  25. Lockheed Martin forms a virtual organization on an ad hoc basis as part of its strategy for pursuing “must-win” business. • Complementary skills tailored to a project’s specific requirements are assembled from throughout the entire organization. • A sector president is empowered with full decision-making authority. • 25

  26. ADVANTAGES OF EMPLOYING VIRTUAL ENTERPRISES • Virtual corporations allow large technology companies to respond like a small, highly flexible entrepreneurial business unit. • Team is dedicated to winning and executing a particular piece of business unencumbered by formal layers of management. • Reduces decision-making by 50%. • 26

  27. COMPUTER MULTIMEDIA • Uses video and sound in a presentation or document • May be video stills or full motion video • May use film clips or computer-generated clips, or both • 27

  28. HYPERTEXT • Associated with multimedia • By clicking with a mouse on highlighted text or an icon, that document is visited or program application is run • 28

  29. MULTIMEDIA IS THE PERFECT MEDIUM FOR PROPOSALS • Multimedia is powerful and engaging: it commands attention • Most often used in a hypertext document, making its use interactive • Reader can view in detail information of interest to him instantly • 29

  30. MULTIMEDIA MAKES PROPOSALS COME ALIVE • Tedious cross-referencing is eliminated • Proposal is both an impressive presentation and a self-referencing database • 30

  31. MULTIMEDIA PROPOSALS WILL SOON BE THE STANDARD • Now, multimedia is often considered an “unfair advantage” • IN THE FUTURE, EVALUATORS WILL EXPECT—IF NOT MANDATE—MULTIMEDIA PROPOSALS • 31

  32. CD ROM • CD ROM stands for Compact Disk Read Only Memory • CD ROM is an indelible medium large enough to hold large multimedia proposals (app. 650MB, 5.25 inches) • 32

  33. CD ROMS ARE THE PERFECT MEDIUM FOR PROPOSALS You can • Create dynamic, powerful, hypertext-enabled multi-media documents • Use hypertext for extensive cross-referencing. A COMPLIANCE MATRIX BECOMES AN ACTIVE OBJECT • 33

  34. USE MULTIMEDIA TO DRAMATICALLY SELL YOUR PRODUCT • Executive Summaries can contain a professionally developed, full motion video of your product or service • Technical sections can contain instructional video • Key features can be explained in an interview format, or as an animated simulation • 34

  35. ORAL PROPOSALS • Represents the offeror’s commitment to perform if awarded the contract • Replace part or all of what is normally the written technical or management proposal • Are scored and are contractually binding • The scoring of orals is often no different than the scoring for the written sections. • 35

  36. From the Government’s perspectiveORAL PROPOSALS • Streamline the proposal evaluation and source selection processes • Eliminate or greatly reduce the need for written material • Allow for convenience and efficiency • Give the government a “real” view of an offeror’s capabilities versus a written view • 36

  37. From the Government’s perspectiveORAL PROPOSALS • Save time & money over procurement life cycle • Improve communication between government and industry • Give the government opportunity to go beyond the written proposal • Encourage active participation in award • Serve as an “interview” for the key personnel who will perform the work • 37

  38. From Industry’s perspectiveORAL PROPOSALS • Have a shorter acquisition process • Provide a better opportunity to convince evaluators to choose us • Can provide increased clarity and retention of the solution • 38

  39. ORAL PROPOSALS PUT YOU IN CONTROL • You have the undivided attention of the evaluators • Studies show people retain only 10% of what they hear How are you going to hold their attention? How are you going to impress them? • 39

  40. ORAL PROPOSALS ARE HERE TO STAY! “The benefits of oral proposals are legion. They will allow the contracting community to award the contracts in half the time or better than traditional methods, to reduce contractor bid and proposal costs by better than half, and to select better contractors during the source selection process.” Dr. Steve Kelman, Office of Procurement Policy Contract Management, November 1995 • 40

  41. ORAL PROPOSALS REQUIRE A DIFFERENT APPROACH • Oral proposals are not written proposals read out loud! • Oral proposals are revolutionizing how every one in every company produces proposals • Oral proposals need to be crafted just as carefully—if not more so—as written proposals • 41

  42. THE PRESENTERS MUST BE PROJECT TEAM MEMBERS! • Each Project Team Member must be coached in presentation skills • Writing a script is very different from writing a proposal • Team dynamics will be closely watched • 42

  43. ALWAYS REMEMBER — YOU ARE THE PROPOSAL! • Do not underestimate or undervalue the powerful role that the human factor plays • 43

  44. YOU CAN USE THE ORAL PROPOSAL FORMAT TO YOUR ADVANTAGE • ORAL PROPOSALS ARE AN OPPORTUNITY TO BUILD TRUST AND CONFIDENCE • 44

  45. QUALITIES OF A WINNING ORAL PROPOSAL • Compliance with RFP requirements • Flawless script • Smooth and polished delivery • Superior graphics • Professional use of media (slides, flipcharts, multimedia, etc...) • Strong individual speakers • Strong team presence • 45

  46. ENGINEERING ORAL PROPOSALS • Oral proposals take just as much planning and resources as written proposals Perhaps even more! • 46

  47. A FEW CAVEATS • Oral proposals are as costly as written ones • Time and slide limitations are restrictive • Most presenters need professional help in scripting and presentation skills • Might be a “beauty contest”: the best project managers are not always the best public speakers! • 47

  48. SUCCESSFUL ORAL PROPOSALS REQUIRE NEW SKILLS AND EXPERTISE • Oral proposal planning and logistics • Adaptation of storyboarding methodology • Writing a script is different from writing a proposal • Extensive use of design and graphics • Multimedia and other live presentation considerations must be made • Practice, practice, practice • 48

  49. BE PREPARED! • You only have one chance to make a first impression • 49

  50. TO ENGINEER A WINNING ORAL PROPOSAL YOUR TEAM NEEDS TO • Comply—creatively—with all requirements unique to oral proposals • Develop strong themes and win strategies • Create oral proposal storyboards • Write persuasive and informative scripts • Role play and rehearse the speakers into a strong sales team presentation • Create effective visual aids, graphics and multi media • 50

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