David Glowacki, Col, USAF Chief, Contracting Division HQ Air Combat Command

1. Installation Acquisition Transformation (IAT) “Strategically Sourcing the Enterprise” David Glowacki, Col, USAF Chief, Contracting Division HQ Air Combat Command

2. Outline • Background/Case for Change • Strategic Sourcing • Tenets and Implementation Plan • Organizational Structure • Current and Future

3. Case for Change: Current Structure • 71 buying organizations focused on providing tactical support to installation customers • Additional contracting support provided to numerous FOAs • This current alignment results: • Inconsistent use of skilled contracting resources • Redundant procurement of similar commodities • Inability to leverage the scale of the Air Force to drive efficiencies • Failure to realize strategic sourcing objectives • Strain on buying activities with contingency contracting officers • Challenges are compounded by: • Increase in contracting workload and complexity • On-going mission support commitments The current structure strains the ability of the Installation Contracting community to effectively perform its mission

4. CONUS Installation Contracting(Current Tactical Alignment) 71 Buying Activities 3,322 Personnel 71,000 Contract Actions $13B Installation Spend $2B GPC Spend The current structure strains the ability of the Installation Contracting community to effectively perform its mission FY06 Data

5. Learning From Industry Enterprise-wide procurement Centralized installation support Centrally managed strategic sourcing Cross-functional commodity councils Services and Industry are Centralizing Procurement

6. Strategic Sourcing Summary

7. AF Strategic SourcingSuccesses • Desktops/Laptops: • 4th Qtr FY03 – 1st Qtr FY05: 84,787 units purchased, $72M spent, $17M costs avoided • Reduced desktop/laptop configurations from >1000 to 4 • Configurations updated quarterly to reflect technology changes – OMB adopted as standard • Implemented a repeatable enterprise-wide “bulk buy” approach using quantity price breaks and online “e-buying” • Overall 8.4% awarded to Small Business (as of Apr05) • Enterprise-wide Microsoft agreements (Nov 04) • Consolidated 38 previously decentralized software contracts and nine support contracts into two mandatory agreements • Expected to save more than $100 million during a six-year period • Medical Services CC – Implemented two strategic sourcing spirals – established business arrangements

8. IAT background Aug 2006–Feb 2007 Aug 2005–April 2006 October 2007 May – September 2007 • Thoroughly examined current state AF CONUS Installation Contracting structure • April 2006 Business Case Analysis recommended transformation to: • Take advantage of strategic sourcing • Leverage resources across the AF organization • February 2007 Implementation Plan provides • Detailed Concept of Operations • Phased Deployment Plan • Communications and Change Strategy • Transformation is initially targeted at contracting organizations, but will require collaboration and support of other key acquisition functionals • Stand up PMO • Initiate Implementation • HCA/GCA • PAD Implementation Plan Business Case Analysis IAT Materials and Detailed Implementation Planning

9. Key Tenets • Maintain Customer Relationships: Maintain and improveour ability to support our customers • Socio-Economic Focus: Maintain and strengthen focus on socio-economic program responsibilities • Retain Contracting Experts at Every Installation: Maintain a buying activity responsible for providing business advisory services and performing installation-specific contracting actions • Maintain Robust Contingency Contracting Capability: Ensure continuedability to meet contingency contracting commitments • Ensure Force Development:Preserve leadership and professional development opportunities for military and civilian contracting professionals • Transparency:Provide visibility to Congressional and key stakeholders

10. CONUS Installation ContractingFuture Strategic Alignment

11. Regionalized Organizational Structure AFMC – Lead-MAJCOM Colorado Springs San Antonio Hampton Roads Warner Robins St Louis Contracting contingent remains at Installations to provide agile customer support

12. IAT Implementation Schedule • SecAF Letter – Aug 07 • PAD Coordination Approval – Aug-Nov 07 • IOC – 1 Oct 07 • HCA/GCA transition to Lead-MAJCOM • Stand-up San Antonio Regional Center – Jan 08 • Stand-up 4 additional Regional Centers – Oct 09 Complete In Process Not Started Pathfinder Implementation Phased Implementation Phased Implementation Phased Implementation Phased Implementation

13. IAT Summary • Tactical to Strategic Alignment • 71 local buying activities transforming into 5 Regional Centers • Centers not MAJCOM-aligned – AFMC lead MAJCOM • Regional Centers (RC) • RCs will provide strategic contracting support to bases in region • RCs will have about 350-400 personnel assigned • Many local CONS positions will migrate to RCs over time • Southwest Region IOC 1 Jan 08 – no immediate personnel moves • Installation Acquisition Squadron (IAS) • IASs will report within wing structure (15-18 personnel) • Manage GPC / QAPC programs; provide business advisory support • Limited local purchase capability • IAT Program Management Office (PMO) – established Sep 07 • Working personnel, workload flow / process & e-business issues Implementation period of 3-5 years

14. Questions?