LSJ Price Benchmarking_SB Analytics Refresh_Amend 001_Redacted.pdf

DLA Benchmarking Playbook – A comprehensive process guide and set of data-source templates that documented key data sources and standardized models so DLA could repeat and expand the analysis in the future.

The second was the Defense Industrial Base (DIB) Small Business (SB) root-cause and vendor-churn assessment performed under the Air Force Strategic Transformation Support (AFSTS) effort (FA7014- 22-F-0374, incorporated by modification P00003). DLA conducted the study to understand structural drivers of declining SB participation in its supply chains. The work answered three specific questions:

(1) which other DoW or federal organizations were making decisions affecting the size of the vendor base and the relative impact of those decisions; (2) the impact of bundling and consolidation on SB funding and prime awards; and (3) broader market factors affecting DB participation beyond DLA/DoW control. Understanding SB attrition is key to improving supply chain resiliency. The principal deliverable was:

DIB SB Study – An analysis that quantified vendor attrition, identified potential root causes of supplier decrease across DLA supply chains, and produced senior leader communications materials focused on SB participation.

Why a Refresh Is Required As part of its Strategic Plan for 2025-2030, DLA has a requirement to create individual supply chain strategies which address each of its unique supply chains, as well as an overarching Agency strategy.

DLA requires an updated view of its material pricing performance against actual FY26 prices and an updated assessment of SB participation and structural root causes of supplier decline. These refreshed analyses are needed to inform integrated, risk-informed class of supply strategies and the DLA Finance

Cost Summit with the Services in October 2026. Both products contain data from over 24 months ago. Pricing data, supplier participation patterns, and external data sources have changed. DLA requires an updated view of material pricing performance against actual FY26 prices and an updated assessment of SB participation and structural root causes so that class of supply strategies are developed based on current information. The refresh also allows the existing Benchmarking Playbook to be updated with current data sources and re-validation workflows.

Current Requirement The current requirement supports the on-going requirement to create individual supply chain strategies that address each of its unique supply chains, as well as an overarching Agency strategy, as part of the DLA Strategic Plan for 2025-2030. To ensure DLA continues to deliver maximum buying power while maintaining robust operational readiness, the agency requires a targeted re-validation of the prior benchmarking conclusions against actual Fiscal Year 2026 pricing. In tandem, the DLA Benchmarking Playbook must be updated to integrate these new activities and adjust recommended commercial and public reference sources. Additionally, DLA requires a formal refresh of its prior SB DIB analytics study. FY26 procurement data will be used to refresh the root cause assessment of SB supplier reduction since the last time this analysis was conducted ~24 months ago. This refresh will answer critical questions surrounding federal decision-making impacts, contract bundling and consolidation, and broader macroeconomic factors influencing small business participation at DLA.

The deliverables for the current requirement are:

Material Cost Benchmarking Refresh and Playbook Update o Re-select a representative sample of NIINs across the six classes of supply.

o Re-execute the three established benchmarking methodologies against actual FY26 prices.

o Produce a validity assessment of prior conclusions, a strategic readiness review, and a senior-leader briefing.

(4) Authority and supporting rational and, if applicable, a demonstration of the proposed contractor's unique qualifications to provide the required supply or service:

The acquisition is conducted on a limited source basis pursuant to one or more of the following authorities:

GSA Ordering Procedures 538.7104-3(b)(1)(iii), The order should be issued on a sole source basis in the interest of economy and efficiency because it is a logical follow-on to an Federal Supply Schedule (FSS) order already issued on a competitive basis.

GSA Ordering Procedures 538.7104-3(b)(1)(iii) applies because the requirement is a logical follow-on to an FSS order already issued on a competitive basis under the Strategic Transformation and Enterprise Project Support (STEPS) blanket purchase agreements (BPAs).

The Material Cost Benchmarking methodology, sampling framework, three approaches, and initial Playbook were initially developed under SP4704-25-F-0024-P00001. The current requirement is a refresh of those work products taking into account DLA spend for FY26.

The concurrent SB/DIB analytics refresh builds on the prior vendor-churn and root-cause framework (originally developed under AFSTS indefinite delivery/indefinite quantity (IDIQ) contract vehicle FA7014-22-F-0374-P00003). Although the earlier SB work was performed under a different vehicle, executing both refreshes together under a single order makes continuity with the same contractor essential. Only the incumbent holds the integrated methodological knowledge, data structures, and prior-year artifacts for both efforts. Awarding elsewhere would force reconstruction of both foundations, increasing cost, schedule risk, and inconsistency.

Issuing the order to the incumbent is therefore in the best interest of the government.

Addendum:

The justification for this limited source action is on the basis of economy, efficiency, and the mitigation of unacceptable risk to a time-sensitive, high-visibility agency priority. The expanded scope, which now includes Cost Driver Analysis, is an integrated aspect of the support McKinsey is currently providing under task order SP4704-26-F-0064. Attempting to carry out these tasks for a separate competition would be illogical and inefficient, creating an artificial division of labor that would inevitably lead to coordination challenges, potential conflicts between contractors, duplicative costs, and not being able to meet the October 16, 2026 timeline. Maintaining a single, accountable partner in McKinsey is the most efficient and effective way to ensure the continued success of this critical program during the specified performance period.

Institutional Knowledge and Embedded Expertise: McKinsey spent time in FY25 developing and facilitating Material Cost Benchmarking under task order SP4704-25-F-0024. This has given them institutional knowledge that is not merely technical but also encompasses a nuanced understanding of DLA’s culture, stakeholder dynamics, and mission imperatives for this