TA_Services_Industry_Day_FINAL.pptx

Integrity Service Excellence

Transient Alert (TA) Services Industry Day

19 Nov 2015

Air Force Installation and Mission Support Center

FBO Solicitation Number: FA8059-16-R-0001

Opening Remarks (Segment 1)

Mr. Dave Creech Program Manager

Purpose

Provide industry partners an opportunity to ask questions, provide feedback, and discuss key elements of the TA Services Draft RFP

Event Agenda

Slide 4

On the left is the allocated start and end time, the segment designation and content, and presenters. You’ll want to pay attention to the Segment designation (number), and I’ll explain why here in a minute.

I’ll go through a few administrative and housekeeping items first.

To give you some context about why the AF is approaching how its buys things differently, including roofing, we’re going to hear a presentation about Strategic Sourcing.

Because SB plays a huge role in roofing in general and in this acquisition, we’ll hear about various teaming arrangements and other related topics that may help you structure effective teams to win this work.

Mid-morning, we’ll take a break and collect your written questions. I’ll explain the procedure for how we’re going to handle that in just minute.

After the break, we’ll review with you the general scope of the acquisition and then get into the details of the strategy.

After the Acquisition Overview, we’ll give you 90 minutes for lunch on your own. We want to give you sufficient time to find your way around. Amongst your handouts should’ve been a list of restaurants both on and off base.

Next slide please.

Agenda Review (cont.)

Slide 5

Here’s what we intend to cover in the afternoon portion of the day.

After we return from lunch, the Team here will respond to a few of the questions we’ve received. We won’t be able to respond to them all, but we’ll tackle the ones we can address here on the spot in 15 minutes time.

Then we get into what you’re really here for – and that’s to breakdown the Draft RFP. We want to make sure you understand what we’re asking for and how we expect to see your responses in your proposal.

After the first part of the Draft RFP review, we’ll take a mid-afternoon break, and then go back into the Draft RFP.

The Team here will again respond to questions we’ve received in the afternoon segments.

Finally, we’ll close the event by briefly talking about what’s coming up next and the timeline associated with that.

If we run ahead of schedule, we’ll just advance to the next segment early or extend your breaks.

As we step through the agenda, for those of you with us online, we’ll highlight the current agenda item in Red in the Note Pod. So if you have to step away for a minute and come back, you’ll be able to see where we are.

DCO Moderator, please open the second Poll of our web guests – “Are the slides for the webinar clearly visible?” Please vote “Yes” or “No”.

I’ll give them a minute to respond and we’ll proceed.

Next slide please.

Administrative/Housekeeping Emergency Evacuation DAU Classroom ROEs Restrooms & Breaks Lunch Post-Event Questions Attendee List

Emergency Evacuation: In the event of an emergency, please exit the building by going down hall and straight down the steps the and gather in parking lot.

Hotel ROEs: Personal or government issued non DAU laptops may not be connected to the DAU network. Food/beverages are permitted in the classroom, please clean up accidents immediately. Smoking outside the building is permitted only in outside the entrance of the cafeteria in the court yard.

Restrooms & Breaks: There are a number of breaks scheduled. Prior to each break, the time we will resume. Please try to return to your seats prior to the Q&A sessions. Restrooms are located just down the hall.

Q&A Periods: Throughout this event, briefings are followed by breaks and Q&A sessions. In order to maximize out time here, we ask that you fill out question cards during the presentations, then drop them off to ???. If you prefer, drop boxes are located near the doors as well. Due to time constraints, we will limit questions to those on cards.

Questions will be consolidated and analyzed during the break, then addressed in the following Q&A session. The most frequently asked and most relevant questions will be answered first. In the event we do not have enough time to address all questions immediately following the presentation, we will try to readdress at the end of the day. If we run out of time entirely, we will answer your questions and post answers on FBO. Regardless, all questions will be answered.

Lunch: DAU cafeteria offers lunch on site. Aside from that, there are a number of local restaurants in the area.

Post-event Questions: Again, all questions/answers will be posted on FBO.

Atendee List: the Attendee List will be posted on FBO as well.

Legend:

Fire Extinguisher Exit Emergency Exit Routes

Building Footprint

Assembly Point

Emergency / Fire Evacuation Plan Pod 3 Defense Acquisition University – Kettering, OH (Pod 3)

Women's RR Men’s RR Pod 3

ALTERNATE ROUTE

Your Location

Q & A Protocol No roaming mics Submit Questions in writing on notecards provided Questions answered here or following event Reference agenda segment # or Draft RFP section/page in top left corner Submit to Ms. Voskuhl/SSgt Lent or place in boxes

At Event Online or Email Email to TA Services Team AFICA.LGCC.TAServices@us.af.mil Reference section # or Draft RFP section/page Questions will be posted in FBO

Slide 8 Here’s the protocol we’ll use to handle Q&A today. There will be no roaming microphone or open Q&A portion.

If you’re here in person, you will write your questions on the front of the notecards we provided during your check-in this morning. You should annotate the Segment that corresponds with your question. For example, if your question is in regard to something said during the Opening Remarks, write the number“1’ in the top left hand corner. This will help give us context for your questions and help us respond. If your question is a general one not pertaining to any particular section today, just leave the top left corner blank. Place your name and company name at the bottom of the notecard, or you can remain anonymous if you wish.

At the end of each segment or at the breaks, place your completed cards in the boxes at the front or back of the room. The cards will be collected, and we’ll try to address those we can during the Q&A Response sections of this conference. All others will be held and answered after the event. All Q&A will be posted online at the FBO website. When we answer questions, we will not indicate who or what company asked.

For those with us online, you may submit questions using the Chat pod at the bottom of your screen. We’ll also aim to try and answer those we can during the Q&A Response session. All others will be held and answered after the event and posted to FBO in the same document.

If you think of questions after the event, you can submit them to our team mailbox. At that time, it will be helpful and more likely to expedite responses if you can reference the Draft RFP section to which your question pertains. All questions received will be logged, and the Team will post all responses to the FBO website. The document will consolidate all questions received from all venues – this event, the webinar, and via email. So you’ll be able to read through not only your questions, but questions posed by all other interested parties. So please consider that before including any potentially proprietary information.

TA Services Team

Maj Michael Laubach, Logistics Commodity Council Director Mr. Dave Creech, Program Manager TSgt Joshua Samples, Contracting Officer Mr. Tedd Shimp, Legal Advisor Mr. Eric Feil, AFICA Small Business Specialist Mr. Nathan Armstrong, AFICA Cost/Price Analyst Capt Amanda Nerg, Strategic Sourcing Analyst Mr. Tracy Stoughton, Contract Specialist TSgt Ryan Garrison, Contract Specialist Ms. Lisa Voskuhl, Program Manager SSgt Christopher Kirby, Contract Specialist SSgt Jason Lent, Contract Specialist SrA Jacob Bankson, Contract Specialist SrA Joseph Coram, Contract Specialist A1C Mutayam Rabadi, Contract Specialist

MAJCOM A4 Action Officers

Maj. Jeffery Westerman, Air Combat Command (ACC) CMSgt Claude Cook, Air Education and Training Command (AETC) CMSgt Sherry Rossi, Air Force Materiel Command (AFMC) Mr. Andrew Robinson, Air Force Global Strike Command (AFGSC) Ms. Oaky Strickland, Air Force Special Operations Command (AFSOC) Maj Thomas Ringlein, Air Force Space Command (AFSPC) Ms. Donna Meadows, Air Mobility Command (AMC) Lt. Col Damon Farnsley, Air National Guard (ANG) Mr. Dan Wright, Air Force Reserve Command (AFRC) Mr. Keith Kenyon, Pacific Air Force (PACAF)

TA Services Background (Segment 2)

Mr. Dave Creech

Background May 2014 ACC/A4 directed the ACC Strategic Sourcing (SS) Cell to do an ACC-wide evaluation of TA Services Early analysis revealed expanding the project across MAJCOM lines could yield the most return on investment AFICA 771 ESS took the lead as the acquisition partner as the scope of the project grew across MAJCOMs AFICA 771 ESS coordinates with the ACC SS Cell who identifies technical advisors and MAJCOM Action Officers for technical and functional support

Background (Cont.)

TA Services Strategic Sourcing is a Logistics Commodity Council (LGCC) effort LGCC is responsible for development of AF-wide sourcing strategies LGCC Director located at the ACC Strategic Sourcing Cell, Langley AFB LGCC Charter approved on 14 July 2014 by:

ACC/A4

HAF/A4L

TA Services Scope Document dated 4 Sept 2014 Coordinated with all MAJCOMs Approved at the A4 Division Chief level

Background (cont.)

LGCC Commodity Management Plan approved 30 Sept 14 by:

HAF/A4L

SAF/AQC

Commodity Sourcing Strategy approved 20 Aug 15 by the Commodity Sourcing Officials:

HAF/A4L

SAF/AQC

Received Acquisition Strategy Panel and Acquisition Plan Approval on 6 Nov 15

AFICA/CC

Historical Spend (FY10-14) – $115.2M Average spend is $23M per year Contract Vehicle Type:

Single Purchase – $83.9M (73%)

IDIQ – $31.3M (27%)

SB represented 76% of total spend SDVOSB held 46% of SB spend 8(a) held 21% of SB spend Other SB concerns held 33% of SB spend NAICS 488190 – Other Support Activities for Air Transportation Most often used NAICS for TA services (68%) / 488119 (29%) Both NAICS have Small Business size standard of $32.5M TA services is a commercial service that resembles Airport Operations Industry (FBO segment) at commercial airports

SDVOSB and 8(a) represent 67% of the total SB spend

Source Selction Information

Savings are expected primarily due to more efficient administration of contracts, as well as standardizing contract requirements, i.e. Standardized Performance Work Statement (PWS)

Strategic Sourcing 101 (Segment 3)

Capt Amanda Nerg Strategic Sourcing Analyst

Good morning, everyone. First of all, thank you for taking the time to attend our Industry Day. I am Capt Amanda Nerg, the strategic sourcing analyst for the Transient Alert services team. My job today is to familiarize you with the Air Force concept of Strategic Sourcing.

While strategic sourcing is certainly not a new concept to private industry, it is relatively new to the government. The 771st Enterprise Sourcing Squadron, under the Air Force Installation Contracting Agency, takes what we have learned from industry and apply those sourcing concepts to the Air Force.

As you are well aware, there are many factors at play right now. The sequestration in 2013 and current budget reductions are proof there is a need for the Air Force to operate more efficiently and effectively at the installation level. What is relatively new however, is the formal approach that we employ to ensure we strategically source goods and services.

(Next slide)

To provide industry an overview of the current Air Force business environment Explain why strategic sourcing is necessary Provide visibility into the AFICA sourcing approach

At the end of this segment, my purpose is to provide you with answers to the following questions:

What is strategic sourcing is to the Air Force?

How does strategic sourcing relate to current and future operations the Air Force?

Why is strategic sourcing necessary for the Air Force?

Finally, how will strategic sourcing affect industry?

(Next slide)

Segment Agenda What is Strategic Sourcing?

Comparison to Traditional Approach Reasons for Change Strategic Sourcing Benefits Partnering with Industry Final Thoughts/Key Takeaways

So today we will cover:

The basics of Strategic Sourcing and how it compares to the traditional government approach because of the challenges the Air Force is facing What are the benefits of Strategic Sourcing Our focus on developing sustainable partnerships And finally some key takeaways about Strategic Sourcing

(Next slide)

USAF Strategic Sourcing Definition

A collaborative and structured process of critically analyzing an organization’s spend and using that information to make business decisions about acquiring commodities and services more efficiently and effectively

Pre-

FY16

Budget

FY16

Actual Budget

Air Force Mission

There are several different definitions of Strategic Sourcing within government and private industry, but they all share three basic traits.

The first trait is that strategic sourcing is a collaborative and structured process This is not a one-time fix to get a better deal on a certain purchase.

The acquisition is actively managed during its entire life cycle in order to achieve improvements

Secondly, Strategic Sourcing is intended to achieve improved results or to make better business decisions, not just cheaper products or services.

The outcome may be increased quality or improved operations where the Air Force places greater priority on a particular objective than another.

For instance, there may be circumstances where we’re willing to trade cost for quality, or service level for supply base impact. Each program is unique.

The Third trait is the emphasis on really understanding the marketplace and the requirements so we can provide commodities and services to the Air Force more efficiently and effectively. We do that through extensive market research & collaboration w/ both stakeholders & potential providers. You recall the Request for Information or RFIs we released a few months ago, to evaluate the market sector.

Combining these traits, we see that Strategic Sourcing represents a shift from buying tactically, on an as-needed basis, to buying collaboratively, with well-planned acquisition that considers spending trends and future requirements.

(Next Slide)

What is Strategic Sourcing?

Total Cost of Ownership Focus Applicable to total spend portfolio Best product/service – Best Value Big picture – best for AF vs. unit Fact Based approaches matched to need and markets Addresses all levers for savings (rate, demand, process) Rigorous and Collaborative Continuous Process Small Business Friendly What it is What it is NOT Focused only on Unit Price Limited to commodity types of spend Buying cheapest product/service Ad-hoc activities of individual bases Exploiting strength over suppliers A contract activity with a predetermined solution One time Project (transactional) Bundling

Moving along, there are many misconceptions about strategic sourcing Strategic Sourcing is not just a contracting solution or just a contract strategy. It is a sourcing strategy, which means it may never result in a contract. It might just be a policy change or standardizing Air Force requirements. When we discuss requirements development in segment 5, you will hear the term mandatory use policy. This is a policy that will mandate certain bases must use the sourcing strategy we have developed. This brings me to the second misconception.

It is also NOT a predetermined solution. Strategic sourcing is only a process the Air Force follows, and does not have a predetermined or specific outcome to be used in an acquisition strategy. As part of the process of strategic sourcing, the best strategies are chosen for each program.

It is NOT just a centralized contract. Sourcing strategies can shape the requirements, demand, and contracting approach.

It is NOT about the eliminating small business. The Air Force does consider Small Business market and capabilities when developing objectives and requirements.

From here, I want to focus more on the Small Business aspect because this is one of the most significant, potential concerns we have heard from previous sourcing efforts. We will discuss more on Small Business in segment 4 but… I want to stress that our teams do NOT and will NOT ignore legislative statutes and specific Air Force goals, regarding small business, as part of strategic sourcing.

During each initiative, the team does looks at the current environment, allowing them to understand what small business is providing today. If anything, our emphasis is on how to grow SB market share Now that you know a little more about Air Force strategic sourcing, I will now move to the question of “how does this compare to our traditional approach of contracting?”

(Next Slide)

Comparison to Traditional Approach Market Intelligence Market Segmentation What suppliers dominate the market?

What customer set dominates the market?

Is AF a major or minor player in the market?

Industry Norms What profit margins/Return on Sales are expected?

Is labor utilization/productivity a key factor in profitability?

How are products and services differentiated?

What drives sales in this market?

A critical part of our process is market intelligence. This is very involved and unlike traditional contracting, is not conducted in an isolated fashion.

In strategic sourcing, our teams reach out directly to industry: visiting sites, attending conferences, and conducting multiple surveys.

Some of the questions that we seek to answer during this encounters are:

What are the socio economic factors at play?

How does the AF compare relative to our peers in the market place?

What are the key cost drivers?

What are the trends in this industry and how is it expected to evolve?

We want to understand who are the market leaders and their approach to understand where we can apply the Air Force strategic sourcing principles.

(Next Slide)

Comparison to Traditional Approach (cont) Requirements Definition and Vetting Work with key stakeholders and multi-functional team Obtain feedback from industry – like today Establish requirements that all stakeholders can Meet Industry Facilitate Competition Be Cost Effective Non-value added requirements:

Increase product costs Unnecessarily limit competitors Poorly defined requirements lead to:

Misinterpretations Increases in costs Delays Understanding requirements, prior to RFP release, allows you to focus on your potential proposal strategy

Another important aspect of Strategic Sourcing is arriving at clear requirements. Not only is it critical to arrive at the right solution, but working with bases is one of the most time consuming steps, since most bases typically define requirements independently. Again, we will discuss in more depth how we developed our requirements for Transient Alert services in segment 5, but to give you an idea of the level of collaboration involved, you saw the level of MAJCOM involvement already with the list of contacts, earlier this morning. Out team has spoken with all of them on a bi-monthly basis to ensure we are in fact developing requirements that meet their mission needs. We have also spoken with industry to get input for your perspective, and you have given us great insight into the program.

So, we certainly do not define requirements alone. The Air Force invests a lot of resources across multi-functional teams to ensure that we arrive at requirements that allow us to meet or exceed the current approach while driving out unnecessary cost. This results in a lower total cost of ownership for the Air Force and a lower delivery cost for industry.

So, understanding the process on how we came to define the requirements, prior to the RFP release, allows you to focus on more your potential proposal strategy.

Now that I have explained how the Air Force defines strategic sourcing and how is compares to the traditional approach, I am going to discuss why it is important for the Air Force to move towards more strategic sourcing initiatives.

(Next Slide)

AF Installation Support Spend Obligations by Air Force Contracting Offices, FY2010 to FY2014

As you can see, the Air Force is a big customer in many markets.

Between FY2010 and FY2014, the Air Force obligated $42.7B for total installation support, roughly 11% of the Air Force contract dollars are in support of installations.

Annually, the Air Force executes more than 80,000 contract transactions with over 1400 categories in supplies and services.

If you are not familiar with how the Air Force is structured, there are ten Major Commands that operate dozens of bases, each with their own authority to purchase what they require. These bases may be buying the same things, even from the same suppliers, but at vastly different prices. In the current and future expected budget environment, this is not sustainable and cannot continue into the future.

(Next Slide)

Fundamental need for enterprise-level Strategic Sourcing for the Air Force On-going mission support is straining buying activities Increasing workload actions and complexity Act like business units rather than a large corporation Installation contracting not optimally aligned Inconsistent use of skilled resources Budget pressures

Business as usual cannot continue! Understanding the cost drivers of a commodity and how to influence them is critical

The Air Force has already absorbed billions of dollars in reductions at the operational level. That money has been removed and it is likely there will be further reductions in the future.

We also have a large portion of civilian contracting & operational workforce that is retirement eligible. It is likely this workforce not be replaced when they retire, due to budget pressures.

Workload on the remaining staff is steadily been increasing. The operations tempo associated with the war efforts has been high, which means so have the number of deployments of military personnel. These increasing & recurring deployments place burden on remaining civilian workforce especially in the civil engineering, contracting, and logistics career fields. For contracting specifically, there are fewer people to cover the workload than there has been in the past.

While the Air Force’s mission remains the same, if not larger, our budget has been significantly reduced. Therefore, Strategic Sourcing has become a critical bridging tool to help the Air Force, through:

optimized performance and minimized price increased achievement of socio-economic acquisition goals evaluating total life cycle management costs improved vendor access to business opportunities And finally… increasing the value of each dollar spent

So, hopefully I have answered why the Air Force needs to change. The next question is “How does the Air Force address these workload, manpower, and fiscal realities?”

(Next Slide)

Strategic Sourcing Benefits Leverage Buying Power Enhanced supplier relationships and market expertise Increased understanding of small business spend and markets Strengthening AF bargaining power Price reductions Discounts/rebates Quality or performance improvements Faster delivery Improve Efficiencies Increased collaboration and communication Standardized business processes Reduced duplication of effort Reduced number of duplicative business arrangements

Manage Consumption Improved holistic views of Defense-wide requirements Maintained workforce balance Demand management Eliminating demand Reducing consumption Changing product mix

Getting Less

Getting More For Less

Getting More With Less

RATE

PROCESS

DEMAND

Rate is short-term… Process and Demand have long-term ROI!

With Strategic Sourcing, we look at three levers to generate improvements. At a very high level: they are Rate, Process, and Demand.

The first is leveraging our buying power or Rate savings. Obviously the Air Force is a big entity and spends a lot of money, much of it spent independently on the same kinds of goods and services. Private industry figured out this centric approach is not a smart business choice. The Air Force is just beginning to adopt this idea. Therefore, simply leveraging collective buying power may allow the Air Force to acquire more for less money. I mentioned earlier that bases may be buying the same thing from the same supplier but at vastly different prices. One example to help understand rate savings is a Pen requirement. One base may purchase pens at $5/case where another base purchases pens at $15/case. What strategic sourcing does is take all those requirements from the individual bases, consolidate the requirement, find a mutually beneficial price for both the Air Force and industry.

The Second area is Process Savings. This focuses more on how the Air Force does things to cut time and workload out of our purchasing and operations. It is an internal savings however, it still affects how we do business with industry. Process savings allows the Air Force to execute more operations and purchasing transactions in less time, particularly in a resource constrained environment. Only example might be an Air Force-wide Indefinite Delivery Indefinitely Quantity or IDIQ type contract. We all know it takes time to go through the acquisition process. With an Air Force-wide IDIQ contract, it may significantly reduce the acquisition lead time of an individual base to procure goods or services, giving them more time to devote on other programs.

The Third lever is Demand Savings. Here, we look at what the Air Force is buying and consuming, and determine if we really need as much or as many variations of something to get our job done. Demand savings has the best potential to drive significant savings. This goes back to my pen example earlier. Every base needs writing utensils, some may use ball point pens, some fountain pens, others may justify the use for a $90 pen made from the wood of a buckeye tree. While each base may have its own unique requirement, the Strategic Sourcing requirement is for a pen. The Air Force as a whole may determine that ball point pens met all the bases’ requirements and develop a strategy to consolidate the acquisition of pens. Because the Air Force is “buying-in-bulk” it is more likely to receive rate savings, especially since the base that wanted that $90 pen made from the wood of a buckeye tree, does not necessarily NEED that type of pen because the Air Force only needs a writing utensil and ball point pens do the same job as that $90 pen. By eliminating the $90 pen made from the wood of a buckeye tree, we reduced the demand of that pen in the Air Force.

Obviously rate savings is a short-term investment to the Air Force however, process and demand do have the best potential to drive significant savings in the long-term.

This brings me to the final question “How does strategic sourcing change the way we interact with industry?”

(Next Slide)

Partnering with Industry Getting the supplier to meet our needs “It’s in the contract, now it’s the supplier’s problem.”

Blame and punish the supplier Unpleasant surprises Finding ways to meet mutual needs Collaborate to achieve performance and compensation goals Communicate the issues, jointly find solutions Integrated planning and communications

BECOMES

BECOMES

BECOMES

BECOMES

Traditional Approach Strategic Sourcing Approach Move from Arms-Length to Relationship-Centered Approach Source: Expense Management Solutions

In strategic sourcing, we are moving away from the traditional “arms-length” approach to one more of a partnership with industry.

Commercial best practices strongly support that a good working relationship is always better than an adversarial one. Our focus is on:

keeping communication channels open and active Setting a tone of mutual benefit and Understanding what drives industry

In the past, the Air Force has even gone as far as to visit supplier plants and jointly conduct Value Stream or Lean-type events to isolate and address manufacturing or delivery issues.

This does not happen in traditional contracting. In Strategic Sourcing, we want you, our suppliers, to identify things we are doing to unnecessarily increase costs or delay delivery or performance objectives. We truly do value your input.

(Next Slide)

Final Thoughts Strategic Sourcing - What’s In It for You?

Industry benefits:

Potential for reduced cost of doing business Coordinated and defined requirements Improved working relationship Increased socio-economic activities The market can innovate & create opportunities beneficial to both the Government and contractors Cultivation of business relationships, resulting in long-term efficiencies

So wrap things up, here are some of the things I hope you will take away from this segment.

Strategic sourcing is a deeper dive from the traditional contracting approach. We really do our homework and we really do value what industry has to say. We are NOT looking for a one time, better deal and to call it a win.

It is a comprehensive solution between the Air Force and industry.

However in the end, strategic sourcing is about reducing total lifecycle costs and providing goods and services with the best value for the Air Force. As I mentioned before, this is NOT a quick fix. It takes a lot of time, but it will have a bigger, potential payoff for the Air Force and industry if we work together and invest our time into a collaborative effort.

Integrity Service Excellence

BREAK

Collect Questions…

Q & A Responses

Small Business Participation

Mr. Dave Boris

AFICA/SB WPAFB (OL)

Director of Small Business Programs

Segment Agenda Small Business Office What We Do Our Customers Why Use Small Businesses Teaming, Affiliation, and Limitations on Subcontracting TA Services Set-aside Strategic Sourcing and Small Business Marketing Your Capabilities Other Support AFICA SBO Points of Contact

Mission: Partner with industry and acquisition community to execute the Air Force Small Business program while supporting the AFICA strategic sourcing mission Maximize small business participation through early and continued involvement with the TA Services acquisition team Market Intelligence Requirements Development Acquisition Strategy Development AFICA Small Business Office (SBO)

What We Do Maximize small business participation Advise/assist acquisition personnel Participate on source selections as evaluator/advisor Evaluate subcontracting plans, if applicable Counsel and provide support to small businesses Liaise with large businesses Maintain an outreach program Develop and conduct education and training Industry Sounding Board

Our Customers AFICA acquisition community Small and large businesses nationwide Small Business Administration Congressional delegations DOD/AF/MAJCOM small business and acquisition leadership

Why use Small Businesses?

Small Business Program Developed by Law… Ensure “fair proportion” of federal acquisitions are placed with small business concerns It’s Not Just About the Law SB sector is vital Maintaining economic growth & development Sustaining industrial base & promoting technology Serves the national interest & strengthens defense Small Business Administration (SBA) & Agency SBO created to carry out policies/directives

Why Use Small Businesses? (cont.)

Because we are required to:

FAR 19.201(a) “It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business……….”

DoD Directive 42051c “It is DoD policy that a fair proportion of DoD total purchases, contracts, subcontracts and other services…..be placed with small business concerns………”

One of the main reasons we should utilize small businesses/programs is that we are required to by law. As most of you probably already know the small business program came into existence as a reaction to large corporate monopolies. Congress recognized the need to protect our national economy, our defense industrial base, and our innovations and technology. It was very clear that small businesses played an integral role in all of these areas, and so Congress passed laws to ensure a “fair proportion” of government contracts were placed with small businesses to broaden the nation's industrial base and strengthen national defense.

The result of Congress mandated policies and directives was the creation of the Small Business Administration (SBA), and small business offices throughout the federal system. And, over the past fifty years successive legislation has been enacted to promote the growth of small businesses.

Why Use Small Businesses? (cont.)

Make up 99.7% of U.S. employer firms Generated 64% of net new private-sector jobs Make up 49.2% percent of private sector employment Pay 42.9% of total U.S. private-sector payroll Created 46% of private-sector output Hire 43% of high tech workers Made up 98% of firms exporting goods and produced 33% of exporting value Responsible for 64% of net new jobs created between 1993 and 2011 (11.8M of 18.5M new jobs) Small businesses produce 16X more patents per employee than large patenting firms

Small Business Administration Office of Advocacy

Why Team?

Expand opportunities Take advantage of SBA affiliation rules Maximize complementary skills, resources, capabilities Minimize risks Develop a direct relationship with DoD Fill gaps in past performance Eliminate barriers (e.g., support geographically dispersed requirements) Increase competitiveness

Selecting Teaming Partners Compatible contractors Assess team chemistry Management styles, corporate cultures, strategic visions Assess team member capabilities Business, financial, other resources Assess team member past performance Assess legal constraints OCI issues, debarments/suspensions, qualification requirements All must understand terms & conditions of agreement

FAR Discussion Teaming FAR 9.603: “The Government will recognize the integrity and validity of contractor team arrangements; provided the arrangements are identified and company relationships are fully disclosed in an offer…” DOD Office of Small Business Programs, “Guidebook for Facilitating Small Business Team Arrangements,” Sep 2007 http://www.acq.osd.mil/osbp/docs/dod_OSBP_Guidebook_for_Facilitating_Small_Business_Team_Arrangements.pdf

Common Teaming Arrangements Subcontracting Privity of Contract is with the prime who has direct contractual relationship with the Government Limitations on Subcontracting Joint Ventures Association of two or more concerns formed to undertake a particular business transaction/project Privity of Contract is with the Joint Venture SBA Mentor Protégé 8(a) form a Joint Venture with a Mentor firm (large or small) Joint Venture is deemed small without regard to size of Mentor Privity of Contract is with the Joint Venture

Ways to Find Teaming Partners Government Resources:

SBA District Offices – Business Development Specialists SubNet via SBA.gov Subcontracting Opportunities Directory on SBA.gov Dynamic Small Business Search Industry Day…Today!

External Resources*:

JobSite123 FedBizOps – “Interested Vendors List” Tab on RFIs

*AFICA makes no endorsements of any external resources listed here, for your reference only.

FAR Discussion Joint Ventures FAR 19.101 defines a Joint Venture as an association of persons or concerns…concerting to engage in and carry out a single specific business venture for joint profit, for which purpose they combine their efforts, property, money, skill, or knowledge, but not on a continuing or permanent basis

Joint Ventures Contract in Joint Venture’s name Contract performance responsibility lies with Joint Venture Agreement must include sharing profits/losses proportionate to each party’s contributions to business operation Certain exclusions for joint venture between SBA approved Mentor-Protégé relationships (13 CFR 121.103)

Affiliation Affiliation deals with business relationships a SB may have with other firms and how those relationships affect the size status of the SB Prime-sub relationship that is not at arms length Formal Joint Venture Business relationship outside particular contract that may cause affiliation Prime-subcontractor relationship is not synonymous with affiliation – i.e. there can be non-affiliated subcontractors

Affiliation Rules Normal Rule: Affiliated business concerns’ receipts are added to determine eligibility under size standards SBA excludes affiliation from joint ventures/teaming arrangements in certain circumstances A joint venture/teaming arrangement of two or more business concerns may submit an offer as a small business, without regard to affiliation, & the size standard is applied to the individual concerns rather than to the combined assets of the team/joint venture as long as all are small under the NAICS used

IF…

Affiliation Rules Set-Aside other than 8(a) The acquisition is bundled at any dollar value The acquisition is not bundled and Contract value (including options) exceeds ½ the applicable revenue-based size standard Contract value (including options) exceeds $10M for employee-based size standard

Affiliation Rules 8(a) Set-Aside Normal affiliation rules apply to All sole source 8(a) acquisitions Competitive 8(a) acquisitions that do not meet the thresholds shown in previous slide 8(a) Affiliation Exclusion A joint venture/teaming arrangement of at least one 8(a) and one or more other business concerns may submit an offer under a competitive 8(a), as an 8(a) concern, without regard to affiliation

IF…

Affiliation Rules 8(a) Set-Aside (cont.)

13 CFR 124.513(c):

Each concern is small At least one 8(a) participant to the joint venture is less than ½ the NAICS size standard 8(a) manages the joint venture Employee of 8(a) managing the joint venture is the project manager of contract 51% of joint venture profits go to 8(a) member(s) Approved by SBA prior to award of the contract When forming a joint venture or affiliation recommend consult legal counsel

Affiliation Rules Other Exceptions SBA Mentor-Protégé Program (13 CFR 124.520) Designated to provide technical/management assistance, financial assistance, subcontract support, contract performance assistance through Joint Ventures Mentor may be large or small Protégé must be 8(a) in development stage, or never have received 8(a) contract, or less than ½ size standard or primary NAICS code MP Agreement will not be approved if used as just a mechanism to enable non-8(a) to receive 8(a) contracts

Affiliation Rules Other Exceptions (cont.)

SBA Mentor-Protégé Program (13 CFR 124.520) For any procurement 8(a) firm is exempt from affiliation rules when it joint ventures as a protégé with a mentor firm (large or small) under the program SBA must approve Joint Venture agreement prior to award of the contract 8(a) must be small under NAICS code Must meet limitations on total sole source dollars (monitored by SBA and firm)

Affiliation Rules Other Exceptions (cont.)

Indian Tribes including Alaska Native Corporations (ANC) and Native Hawaiian Organizations (NHO) Business concerns owned by these groups are not considered affiliates of such entities, or with other concerns owned by these entities solely because of their common ownership (13 CFR 121.103) Many of these business concerns are qualified as 8(a) firms

Affiliation & Limitations on Subcontracting Affiliation and Limitations on Subcontracting are separate issues Affiliation deals with how business relationships can affect the size standing of a SB (13 CFR 121.103) Limitations on Subcontracting deals with how much work a SB can subcontract (FAR 52.219-14) Both issues apply only if a contractor must be small to be eligible for award Full and open contracts awards, regardless of size of business, should not have FAR 52.219-14 in the contract

Limitations on Subcontracting Percentages outlined in FAR 52.219-14 Varies for Services, Supplies, General Construction, and Special Trades If Offeror is exempt from affiliation (i.e. bundled, exceed thresholds, SBA approved JV) & qualifies as a SB, performance of work requirements apply to cooperative effort of the team or JV TA Services At least 50% of the cost of the contract performance incurred for personnel shall be expended for employees of the concern.

Meeting FAR 52.219-14 13 CFR 125.6(h)(i) allows the cooperative efforts of joint ventures (formal or informal) in meeting FAR 52.219-14 An SBA ruling states informal joint venture is not presumed and must be evidenced by an agreement between the business concerns explaining the relationship is an informal joint venture and meets the CFR definition of joint venture (13 CFR 121.103(h))

Total Set-aside (FAR 19.502-2) Acquisitions over $150,000 shall be set-aside when there is a reasonable expectation that:

Offers obtained from at least two responsible SBs offering the products of different SB concerns; and Award will be made at fair market prices Multiple-Award Contracts & SB Set-Asides (FAR 19.502-4) COs may, at their discretion— Issue contracts as a set-aside under one of the socio-economic sub-categories (8(a), HUBZone, SDVOSB, WOSB) Issue contracts as a total small business set-aside Issue contracts as a small business set-aside with embedded set-asides or reserves for any or all of the socio-economic sub-categories Issue contracts as full & open competition, with embedded set-asides or reserves for small businesses to include the socio-economic sub-categories Task orders may also include set-aside procedures in the ordering clauses on contracts

Small Business Set-Asides

Anticipate multiple contracts being awarded SDVOSB set-aside with embedded 8(a) set-aside SDVOSB set-aside will cover locations that are not already in the 8(a) program A firm must be a self-certified SDVOSB to propose against these locations RFP will be specific on which locations are covered under the SDVOSB set-aside 8(a) set-aside will cover locations that are already in the 8(a) program A firm must be an SBA certified 8(a) to propose against these locations A firm does not have to be a SDVOSB to propose against the locations that are set-aside under the 8(a) portion of this contract RFP will be specific on which locations are covered under the 8(a) set-aside If a firm is both SDVOSB and 8(a), they may propose on all locations

TA Set-Asides

Strategic Sourcing & Small Business Increase the percentage of eligible small business spend awarded to small businesses Maximize small business participation via tiered contracts, regionalization, & socioeconomic subcategory reservations/set-asides Strict compliance with non-manufacturing rule on GSA Schedule buys eliminating purchases to SBs who do represent SB manufacturers Gains USAF efficiencies through rationalizing supplier base – fewer awards to SB does not mean fewer $ to SB

Marketing Your Capabilities Do it yourself Capability statements/brochures Dynamic Small Business Search Attend open houses, symposia, vendor demos Become Fed Biz Opps super-user Respond to Requests for Information Do not overlook teaming opportunities Know your customer Visit small business office/program manager Follow-up Do not hesitate to ask questions

Other Support SBA District Offices SBA Procurement Center Representative Procurement Technical Assistance Center (PTAC) Small Business Development Center (SBDC)

If you’ve never contracted with the federal government before, there are many requirements, so I’d encourage you to go to the SBA website or contact the SBA to get started soon.

AFICA SBO Points of Contact TA Services Small Business Specialist Eric Feil, 937-257-1864, eric.feil.1@us.af.mil AFICA Director of Small Business Programs (WPAFB-OL) Dave Boris, 937-257-2822, david.boris@us.af.mil AFICA Website: https://cs1.eis.af.mil/sites/afcc/AFICA/sb/default.aspx SBA Procurement Center Representative Tom Krusemark, 937-255-3333, thomas.krusemark@us.af.mil

TA Services Requirements Development (Segment 5)

TSgt Ryan Garrison Contracting Specialist

To provide industry an overview of the TA Services Requirement Explain the process on how the requirement was developed Discuss the Standardized PWS Clarify the scope of the requirement

Here is the purpose of the Requirements Development section

Segment Agenda Requirements Development Process Customer / Company Interview Focus Areas Standardized PWS Project Scope Locations – Mandatory Use Potential Locations

Here is the agenda for this segment We are going to discuss:

The process of developing the requirement The focus areas that were generated from the customer and TA Service provider interviews The new Standardized PWS The Project Scope Mandatory Use Locations Potential locations that are not currently mandatory use

Requirements Development:

Process MAJCOM A4/Action Officers (AO), Customers, and Industry all played a hand in developing the requirement

The TA team has been developing this requirement since early 2013; the TA Team has done a lot of market research within the TA market over the last 2.5 years.

Analyzed TA industry profile by conducting company interviews and issued 2 RFIs

During these interviews we asked questions like:

Who is your primary customer?

How do you market your business?

How many bases do you support right now? Where are they located? Are the contracts stand alone TA contract or part of other efforts (i.e. Base Ops Support Services) How long have you been providing TA Services? Does your company provide services other than TA?

How many people do you employ? How do you determine the skillsets you need?

What is your TA revenue annually?

What does a standard TA Team look like?

What are you main cost drivers?

If the Air Force doing anything now that causes the contractor assume major risks?

Do you know of any obstacle(s) that might preclude you from conducting business in any of the fifty states and the District of Columbia, or on federal property?

After we conducted interviews with industry the TA Services team conducted current customer/requirement owner interviews (i.e. base CORs)

During these interviews we asked question like:

Who provides your TA service?

How long have your services been provided by a contractor?

Is the contract vehicle for TA Services only or is a portion of a larger contract (i.e. Base Ops Support Services) What are the other services on the contract?

How often are there modifications to the contract due to surge requirements?

How is the contract structured? How is it awarded?

Is there a single contractor providing services? Subcontracting?

What type of information was in your solicitation?

What are the contractor reporting requirements?

What equipment is required? Is there an age requirement? Is it GFE or CFE? Can you provide GFE? Was a cost benefit analysis done?

Are there current AF practices that drive up unnecessary costs?

We then reviewed TA regulations to identify basic TA standards and compared them to existing PWS’s to see if organizations were complying with regs

During our PWS review we noticed the PWS’s at all the locations were not consistent. We determined there was a need for a standardized PWS. We Developed PWS frequency tool document the determine similarities amongst the PWS’s across the AF. We sent the tools final data to functionals for review.

The TA Services team issued a Technical Requirement RFI to industry to determine capability and capacity to perform the requirement. The RFI adressed the following Can you provide all the services required at all locations?

Can you provide these services concurrently?

Can you provide CFE at these locations?

After we determined the technical requirement and the capability and capacity of the TA Services providers we drafted the AF-Level PWS template and sent it to the A4 functional for review and sign off

Cemented standardized requirements & standardized PWS

Forecas…