Department of Homeland Security (DHS)
Strategic Sourcing
Presented by:
Al Sligh
Director, Strategic Sourcing and Acquisition Systems (SSAS)
Office of the Chief Procurement Officer
Under Secretary for Management
Department Of Homeland Security
Strategic Sourcing and Acquisition Systems
The Homeland Security Act of 2002:
United 22 previously disparate domestic agencies into one
coordinated department to protect the nation against threats to the
homeland and created 35 new offices including S&T, IAIP, ODP, USVisit & CIO
Effective March 1, 2003
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Strategic Sourcing and Acquisition Systems
September 11, 2001
Department of Homeland
Security (DHS) Mission:
Prevent terrorist attacks within
the United States
A date that will be forever etched in our memory.
Protecting America
Reduce America’s vulnerability
to terrorism
Minimize damage from
potential attacks and natural
disasters
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Strategic Sourcing and Acquisition Systems
FEMA
Emergency Management
DHS FY 05 Planned Obligations
X
(in Millions) (by Acquisition Office)
$2,618
$2,500
$2,500
2,294
$1,904
$2,000
$1,800
$1,555
$1,500
1
2
$1,000
3
5
4
$500
6
7
$87
8
$85
$0
CBP
80
TSA
67
OPO
ICE
62
74
FEMA
55
USCG
303
FLETC
32
DHS TOTAL: $12,843,000,000
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Strategic Sourcing and Acquisition Systems
USSS
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ONBOARD 1102 ACQUISITION WORKFORCE
DHS Acquisition Program Spend
Total DHS Acquisition Program spend = $13 Billion
Spend identified for analysis under the Strategic
Sourcing Program:
 2.5 Billion (non-IT)
DHS Acquisition Program Spend
(in Billions)
 3 Billion (IT)
$3.0
23%
TOTAL =
 5.5 Billion (42%)
$5.5
42%
$2.5
19%
DHS Total Acquisition Program Spend
% identified for analysis under the Strategic Sourcing Initiative Billion
(non-IT)
% identified for analysis under the Strategic Sourcing Initiative Billion (IT)
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Strategic Sourcing and Acquisition Systems
What is Strategic Sourcing?

Strategic Sourcing is the process of leveraging an
organization’s buying power and the managing of
strategic procurement spending in logical categories in
order to emphasize various characteristics.
These characteristics can include:
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performance,
price,
total life cycle management costs,
socio-economic goals,
stakeholder collaboration
Strategic Sourcing and Acquisition Systems
DHS Strategic Sourcing (SS):
Governance Structure
Management
Requirements
Management Council
Management Council
Ensures that management
activities are in alignment with
Chair: DHS Undersecretary for
the DHS vision, mission,
Management
strategies and goals.
Membership: Chief Operating Officers
from each Component, CIO, CFO, CPO
The Strategic Sourcing Group
(SSG):
Provides oversight and facilitation for
the Strategic Sourcing Program (SSP)
and the Commodity Councils (CC)
Implements and monitors DHS’ SSP
Establishes and facilitates CC’s
Refines spend data
Reports to DHS Joint Requirements
Council
Joint Requirement Council
Chair: Chief of Staff for USCG
Membership: Senior Executives from
Components, CIO, CFO, CPO
Strategic Sourcing
Group (SSG)
Chair: Director of SSAS
Membership: Representatives from each of the
Components, SBA, DHS Inspector
General, Legal
DHS MD Number 0730.1
STRATEGIC SOURCING GROUP OPERATIONS
The Commodity Councils:
Formulate and implement Category
Management Plans (CMP) for each
Commodity Council
DHS MD Number 731
STRATEGICALLY SOURCED COMMODITIES
POLICY AND PROCEDURES
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Commodity Councils
Membership:
SSG Representatives,
DHS Program Managers, OE Representative, DHS
Functional Representatives
Strategic Sourcing and Acquisition Systems
Joint Requirements Council
(JRC)Senior requirements review
board
Conducts program reviews
Reviews cross-functional
needs and requirements
Oversee the requirements
generation process
Validate mission needs
statements
DHS MD Number: 1400
INVESTMENT REVIEW
PROCESS
Strategic Sourcing Process:
5 Stages
 Analyze and understand Commodity specific acquisition process
 Collect, analyze, and document Commodity spending
 Review bypass spend
 Collect enterprise-wide requirements
 Identify and understand Components-level requirements and
demand
 Develop process for forecasting demand
 Benchmark against Industry and Federal Best Practices
 Identify and analyze supplier base
CMP Review and Approval
Drive
Continual
Improvement
 Stand Up Council including key Commodity Stakeholders
 Schedule Standing Meetings
1. Organize and
Launch Council
2. Develop
Charter and
Goals
3. Conduct
Analysis
 Conduct opportunity assessment
 Develop Council Charter and Goals
 Confirm Departmental and Components Spend
 Review council responsibilities
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 Implement CMPs
 Drive activities to achieve goals
 Develop Marketing Plan
 Implement Governance Process
4. Develop
Category
Management
Plan (CMP)
5. Implement
and Manage
 Develop Category Management Plan (CMP) for each Category
 Develop individual sourcing strategies for each Category
 Develop specific sourcing methodologies
 Include metrics and performance measures
 Perform SWOT Analysis to understand strengths and weaknesses of Plan
Strategic Sourcing and Acquisition Systems
Category Management Plans (CMP’s)
ELEMENTS OF A CMP
What is a CMP?
 A CMP is an enterprise-wide plan for the analysis and the
development of acquisition strategies (short and long term) for a
category of spend
CMP Approval Process
Joint Requirements
Council
(JRC)
Asset
Management
Board (AMB)
Approval
Chief Acquisition
Officer Council
(CACO)
Strategic Sourcing Group (SSG)
Commodity
Councils
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Commodity
Councils
Review and
Comment
(Buy-in)
Initial Review
and Comment
Develop and
present CMP
Strategic Sourcing and Acquisition Systems
•Commodity Description
•CC Schedule
•Risk Categories
•Council Charter
•Schedule Management Plan
•Information-Gathering Techniques
•CC Planning Methodology
•CC Performance Management Plan
•Diagramming Techniques
•CC Project Plan's)
•CC Interfaces
•Probability/Impact Risk Rating Matrix
•Spend Analysis
•Role & Responsibility Assignments
•List of Prioritized Risks
•SWOT Analysis
•Staffing Management Plan
•Decision Tree Analysis
•Scope Statement
•Communications Requirements
•Risk Response Plan
•Scope Management Plan
•Stakeholder Analysis
•Procurement Options Analysis
•Work Breakdown Structure
•Communications Management Plan
•Procurement Management Plan
•Resource Requirements
•Risk Management Plan
•Statements of Work
Commodity Councils
There are currently 14 Commodity Councils to develop and implement
Enterprise-Wide Acquisition strategies
Copiers
Facilities Security
Energy
Training
Aviation
Weapons and
Ammunition
Mail
Enterprise-Wide
Acquisition Strategies
Uniforms
Facilities
Information
Technology
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Strategic Sourcing and Acquisition Systems
Professional
Services
Fleet Vehicles
Office Supplies
Boats
Strategic Sourcing-Team Lead Portfolios
Strategic
Sourcing
Specialist
Geoff Gauger
Celeste Steele
Jane Hawn
Commodity Councils and Projects
Office Supplies
Professional Services
Facilities
DHS EMALL (Project)
Weapons and Ammunition
Facilities Security
Uniforms
Fleet
Joint Requirements Council (JRC) (Project)
Mail
Training
Energy
Copiers
Strategic Sourcing Group Management (Project)
Donna Jenkins
Boats
Aviation
Information Technology
Transportation
Spend Analysis (Project)
Savings Tracking
IBM Support
Contractors
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EMALL Support
Spend Analysis
Strategic Sourcing and Acquisition Systems
Knowledge Transfer
Council Structure: Roles and Responsibilities
Council Chairs
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Senior Acquisition Representatives
Skilled in Acquisition arena and contracting
Technical or Operations background
Provides strategic sourcing knowledge
Facilitates efforts of Councils
Drives the Council’s agenda
Maintains appropriate mix of Council membership
Contracting Officer(s)
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Responsible & accountable for the specific procurement
Determines requirements
Represents department throughout Acquisition Process
Works collaboratively to achieve successful source
selection
Council Members
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•
Stakeholder representatives (from all Organizational Components)
Works in collaboration with council members to develop a CMP
Develops initiatives defined in the CMP
Subject Matter Experts in commodities/services being procured
Participates in the acquisition process
Participates in contractor performance requirement
Participates in SRM activities
Advisors

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
Supports the Council in an advisory capacity
Represents key areas of the DHS procurement
process.
Individuals from these offices may be designated
as needed to the councils
o
Procurement Policy, OSBDU, Competitive
Sourcing, Legal, CIO, Chief Financial
Office
Strategic Sourcing and Acquisition Systems
(SSAS) Representation
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Leadership role
Provides wise Counsel to the Co Chairs tasked with
leading the overall effort.
Confers with the Council Chairs regarding facilitation
of Council activity
Identifies noteworthy Sourcing activity
Creates agendas, development of Category
Management plans
Creates of Plans of Action and Milestones (POA&M)
Spend analyses
Functions as the Subject Matter Expert (SME) on the
DHS Strategic Sourcing process.
Improvement Team(s)
Extended Council Members
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
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Established by the Primary components representatives
Has more specific perspectives to share with the
Council
Example: A member of a technical evaluation; past
performance or contract evaluation term
Strategic Sourcing and Acquisition Systems
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Established by a Council to accomplish
specific efforts.
Led by a council member
Established for a specific purpose and time.
Examples of efforts:
o
development of a statement of work,
o
an analysis of cost drivers
o
development of alternatives for full
council coordination
DHS Strategic Sourcing Council Participation
DHS Council
Organizational Component
FEMA
TSA
ICE
USCG
USSS
CBP
1. Office Supplies
X
X
X
X
X
X
2. Weapons &
Ammunition
X
X
X
X
X
X
X
3. Copiers
X
X
X
X
X
X
X
4. Energy
X
X
X
X
X
X
X
5. Uniforms
X
X
X
X
X
X
X
X
X
X
X
6. Boats
FLETC
CIS
FPS
S&T
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
8. Fleet Vehicles
X
X
X
X
X
X
X
9. Facilities Security
X
X
X
X
X
X
X
10. Training
X
X
X
X
X
X
X
11. Facilities
X
X
X
X
X
X
X
X
X
12. Mail
X
X
X
X
X
X
X
X
X
13. Professional
Services
X
X
X
X
X
X
14. Information
Technology
X
X
X
X
X
X
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Strategic Sourcing and Acquisition Systems
USM
X
7. Aviation
X
IAIP
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Strategic Sourcing Training
Core Curriculum
Strategic Sourcing
Process Training
Support Contractor
Knowledge
Transfer
Approach
SSAS
Strategic Sourcing Introduction
Conduct Analysis Cont.
Organize and Launch Council
Benchmark against Ind. & Fed. Best Practices
Stand Up Council including key
Commodity Stakeholders
Identify and analyze supplier base
Schedule Standing Meetings
Develop Category Management Plan (CMP)
Develop Charter and Goals
Develop Category Management Plan (CMP) for
each Category
Conduct opportunity assessment
Develop individual sourcing strategies for
each Category
Develop Council Charter and Goals
Develop specific sourcing methodologies
Confirm Departmental and Components
Spend
Prioritize Opportunities
Review council responsibilities
Include metrics and performance measures
Conduct Analysis
Perform SWOT Analysis to understand
strengths and weaknesses of Plan
Analyze and understand Commodity
specific acquisition process
CMP review and approval/Upkeep of CMP
Collect, analyze, and document
Commodity spending
Implement and Manage
Review bypass spend
Acquisition (Pre-Award)
Collect enterprise-wide requirements
Supplier Relationship Management (PostAward)
Identify & understand Components-level
requirements & demand
Supplier Relationship Management (PostAward) Continued
Develop process for forecasting demand
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Strategic Sourcing and Acquisition Systems
Strategic Sourcing Training
Core Curriculum
Strategic Sourcing
Skills Training
Support Contractor
Knowledge
Transfer
Approach
SSAS
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Strategic Sourcing- Skills Training
Strategic Sourcing- Execution and
Implementation (Cont.)
Overview
CC Performance Management
Commodity Council Scope Management
CC Communications Management
Strategic Sourcing- Planning
CC Procurement Management
CC Integration Management
Strategic Sourcing-Control Methodology
CC Scope Management
CC Integration Management
CC Time Management
CC Scope Management
CC Performance Management
CC Time Management
CC Human Resource Management
CC Performance Management
CC Communications Management
CC Communication Management
CC Risk Management
CC Risk Management
CC Procurement Management
Strategic Sourcing- Closing and Archiving
Strategic Sourcing- Execution
and Implementation
CC Communications Management
CC Integration Management
Strategic Sourcing and Acquisition Systems
Enterprise Spend Analysis
Data Management Approach
1) Commodity: (Strategic)
 Analysis to validate existing CC’s, create/identify new
CC’s
 Analysis to support the councils
2) Supplier Relationship Management (SRM): (Strategic)
3) Component's Spend: (Tactical)

Maximizes efficiencies in procurement
DATA SOURCES
Spend
Class
Commodity
Supplier
Relationship
(SRM)
Components
Spend
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Federal
Procurement
Data
DHS InterDHS
Procurement DHS
Agency
General
Credit Cards Suppliers Agreements Ledgers
X
X
X
X
X
X
Strategic Sourcing and Acquisition Systems
X
X
X
X
Advanced
Acquisition
Plan
X
X
Managing the DHS Enterprise Spend
- Validate Existing Commodity Councils
- Establish New Commodity Councils
- ID & Prioritize Savings Opportunities
- Support negotiations
- Track Compliance and Performance
Commodity
Supplier
Relationship
Management
- GSA
Total DHS Spend
Enterprise
Spend Analysis
Federal
Strategic
Alliance
Component
Spend
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- Alignment of DHS Spend by Supplier
- Supplier Segmentation
-Non-strategic
-Niche
-Enterprise Core
- ID Suppliers in Strategic Alignment
Strategic Sourcing and Acquisition Systems
-GSA Advantage
-Contract Support
-Schedule Buys
- DoD
- Preferred EMALL Support
- Component Specific Spend
-Identify Opportunities
-Support Negotiations
-Monitor Compliance and Performance
-Increase Efficiency & Effectiveness
- Support Enterprise Effort
-Contracting Support
Strategic Sourcing Typical Initiative:
For Discussion
Commodity Council: Weapons and Ammunition
Pistols Initiative
$130 K weapons
5Year Opportunity(1 Base, 4 Options)
Department-wide Requirements
Family of Weapons (full, compact, sub-compact)
Activities
Spend Analysis
Rationalized Requirements
Full and open competition
Comprehensive Testing
Best-Value Source Selection
Multiple Award Potential
Results
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35% Price Reductions (Fixed Price)
$1M Cost Avoidance- Testing
2 Contracts Awarded•1 Small Business
•1 Large Business
Doubled Warranty Period
Strategic Sourcing and Acquisition Systems
Strategic Sourcing Typical Initiative:
For Discussion
Commodity Council: Copiers
Copiers Initiative
Department-Wide Requirements
•
•
5 Year Opportunity (1 Base, 4 Options)
5 – Size Band
Activities
Spend Analysis
Rationalized Requirements
Full and Open Competition
Comprehensive Testing
Best-Value Source Selection
Multiple Award Potential
Results
•
•
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38-47% Price Reductions (Fixed
Price)
Contract Price- “Ceiling Price”
4 Contracts Awarded
Strategic Sourcing and Acquisition Systems
Strategic Sourcing Program Results:
 Copiers: 38 - 47% Price Reduction
 Office Supplies:
 DHS EMALL (Office Supplies):
 Energy:
•
• Electricity: 14% - Price Reduction
•
• Natural Gas: 12% - Price Reduction
• Heating Oil: 5%- Price Reduction
•
36.9% - Retail Price
Reductions
57.0% - Transaction Cost
Avoidance
64%- Small Business
Participation
 Ammunition:
 .40 Caliber:
•
 Express Mail / Package Services:
31.25%- Price Reduction
 Pistols: 35% Price Reductions
• $1M- Testing
• Doubled the warranty period
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Strategic Sourcing and Acquisition Systems
•
37%- Price Reduction
DHS Strategic Sourcing
Critical Success Factors
 Strong Governance Structure
 Significant Senior Management Buy-in
 Change Management Strategy
 Reasonable Spend Analysis Approach
 Comprehensive Communication Strategy
 Strategic Sourcing Process and Skills Training
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Strategic Sourcing and Acquisition Systems
OFFICE OF MANAGEMENT AND BUDGET
Memorandum Dated: May 20, 2005
Subject: Implementing Strategic Sourcing
Key Compliance Highlights:
I.
II.
III.
Spend analysis and the identification of commodities
Commodity Councils
Development of an agency-wide strategic sourcing plan:
a. Strategic Sourcing Governance:
b. Strategic Sourcing Goals and Objectives
c. Performance Measures
d. Communications Strategy
e. Training Strategy
EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
Office for Federal Procurement Policy (OFPP), Rob Burton, Associate Administrator, OFPP
“Thank you for submitting the first agency Strategic Sourcing Plan in accordance with the OMB's
memorandum, “Implementing Strategic Sourcing”. The plan is comprehensive and exceeds the
requirements of the memorandum…” (OFPP, Jul 1st 2005).
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Strategic Sourcing and Acquisition Systems
Questions
Al Sligh Jr.
Director, Strategic Sourcing and Acquisition Systems
Office of the Chief Procurement Officer
Department Of Homeland Security
202-401-3515
albert.sligh@dhs.gov
“We cannot solve the problems of today with the same level of thinking that created
the problem” A. Einstein
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Strategic Sourcing and Acquisition Systems
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Strategic Sourcing and Acquisition Systems