PERT Overview Federal Perspective

1. PERT OverviewFederal Perspective Annual PERT Workshop February 7-9, 2012 Nevada Site Office Evelyn Landini, Contracting Officer Brookhaven Site Office

2. PERT Overview Federal Perspective • Requirements • Implementation • Shared Benefits • Keeps Improving • Summary

3. Requirements • Contract • Statement of Work: The Contractor shall have a DOE-approved purchasing system to provide purchasing support and subcontract administration. • Contractor Purchasing System Clause, DEAR 970.5244-1: The Contractor’s purchasing system and methods shall be fully documented, consistently applied, and acceptable to the DOE in accordance with DEAR 970.4401-1. • Performance Evaluation and Measurement Plan (PEMP): Provide an Efficient, Effective, and Responsive Acquisition Management System.

4. Requirements • Guidance • 2004 DOE/NNSA Independent Peer Review Program Memorandum: • The use of the Independent PEER Review Program to meet Federal regulatory requirements is mandatory, however the site CO may recommend to the respective Procurement Executive an alternative approach that meets the basic system certification requirements. • NNSA Senior Procurement Executive memo 2010: • For NNSA M&O contractor’s purchasing activities, each contractor will continue, in coordination with their CO, their transition from the Objective Matrix model with the supporting performance measurement plans and reporting methodologies to LOCAS. • DOE Senior Procurement Executive Memo 2011: • The BSC performance management methodology continues to provide the OPAM with valuable insight into the health of the procurement function • In order to maintain relevancy and strategic alignment of BSC focus area, the FY 2012 slates have been revised. On the Contractor Slate, the measure “Financial Contributions of Procurement via Cost Savings” has been added.

5. Requirements • Department of Energy Acquisition Regulations • DEAR 970.4401-1 General • Contracting officers are responsible for the management and operating contractors’ conformance with this subpart and the applicable terms and conditions of their contracts, and for determining whether those purchasing activities provide timely and effective support to DOE programs. • DEAR 970.4402-2 General Requirements • The contractor purchasing system shall provide for: • Acquisition of quality products and services at fair and reasonable prices; • Use of capable and reliable subcontractors; • Minimization of acquisition lead-time and administrative costs of purchasing; • Use of effective competitive techniques; • Reduction of performance risks associated with subcontractors • Use of self-assessment and benchmarking techniques to support continuous improvements • Maintenance of the highest professional and ethical standards; • Maintenance of file documentation appropriate to the value of the purchase; • Maximization of opportunities for small business, HUBZone small business, et al

6. Implementation • Various Oversight Models • Contractor Assurance System (CAS) • Line Oversight and CAS (LOCAS) • CO utilizes the model that best serves the needs of their organization • Performance Measurements • Balanced Scorecard • Objective Matrix • CO verifies and analyzes trends to determine the health of the system • Independent Peer Review (AKA PERT Review) • This review assists both the COs and Contractor Purchasing Managers in assessing the adequacy of the contractor’s purchasing system • Bottom Line: • The objective of a M&O contractor’s purchasing system is to deliver to its customers on a timely basis those best value products and service necessary to accomplish the purposes of the Government's contract (DEAR 970.4402-2) • The PERT review provides the CO with an independent assessment of the purchasing system

7. Shared Benefits • PERT Review: • Comprehensive format of contractor self-assessment • Criteria can be used at any time to facilitate system improvement • Report provides a structured, consistent review of the system • Equally beneficial to new or seasoned CO/Procurement Manager • Team/contractor preparation is good refresher training • Provides the opportunity for mentoring and refocusing the workforce • Many benefits take place prior to the arrival of the Team • Tailored approach : • CO can identify specific criteria to emphasize or eliminate • Saves time/effort for areas of low risk or little relevance • Allows the Team to focus on high risk and relevant areas • Participation: • Excellent learning experience for participants • Provides for the calibration of your own system • Will develop invaluable relationships and sources of information

8. Keeps Improving • PERT Program: • Monthly meetings • Address emerging issues in a joint forum • Discover innovative solutions (not the Federal norm) • Yearly conference • Means of communicating important initiatives • Cost savings stressed this year (validation?) • Jumpstart solutions by learning of effective processes • Face the challenges • Dwindling travel dollars • Loss of experienced personnel

9. Summary • From the Procurement Executives (2004): • Contractors are continually challenged to redesign their purchasing cultures, systems and processes to achieve significant improvements in the critical measures of performance, cost, quality, speed, and service. • The Independent Peer Review program is the primary method for performing the independent verification of contractors’ purchasing systems. • The program needs continued SPE support to meet the future challenges.