Description
Organization: NAVSUP
Team Name: Contracting Consolidation Team
Related Acquisition Topic(s): Acquisition Practices Streamlining, Business Process Reengineering (BPR), Commercial Practices, Strategic Sourcing
Description:
In 1998, the Chief of Naval Operations and the Assistant Secretary of the Navy for Research, Development and Acquisition set forth initiatives to consolidate and regionalize shore infrastructure support functions, including contracting, in order to free resources for Navy recapitalization. Consistant with these initiatives, the Commander, Naval Supply Systems Command (NAVSUP) pioneered a plan to consolidate contracting within the Navy Field Contracting System (NFCS), for which NAVSUP is Head of the Contracting Activity (HCA). NAVSUP awards the largest number of contract actions for the Navy and is third largest in award dollars.
The goal was to significantly reduce, by 1 October 1999, the number of separate NFCS activities exercising procurement authority other than for Government purchase card transactions or delivery orders under existing contract vehicles. Creatively leveraging acquisition reform initiatives allowed NAVSUP to aggressively restructure the NFCS along regional lines without degrading contracting support to fleet and ashore customers.
This effort was made possible through the vigorous implementation of the following key acquisition reform initiatives:
The Government Purchase Card
Increase in the Simplified Acquisition Procedures (SAP) Threshold ($25,000 to $100,000)
Liberalization and expansion of General Services Administration (GSA) Federal Supply Schedules
Expansion of Government-Wide Agency Contracts
Internet-based access to contracting vehicles (GSA Advantage, Defense Logistics Agency electronic mall, Navy's Information Technology Electronic Commerce Direct)
The result of the consolidation efforts provided fleet and ashore customers a more responsive and efficient means to meet their mission needs. These initiatives allowed activities to continue to support themselves for the majority of their requirements - quick turnaround, low dollar value actions.
NAVSUP's contracting consolidation initiative focused on restructuring the NFCS to reflect the new contracting environment. As shown on the accompanying chart, NAVSUP reduced the number of NFCS contracting activities from 476 in FY97 to 74 by 1 Oct 99. We are also continuing this effort with a further goal of reducing to 27 activities by FY05.
Initial efforts focused on activities with minimal levels of procurement authority. In April 1997, the NFCS consisted of 476 activities with some level of procurement authority. By 1 October 1997, we had converted 259 activities to purchase card as their primary acquisition method supplemented by delivery order authority.
Subsequent efforts focused on regionalization between the Fleet and Industrial Supply Centers (FISCs), the Naval Regional Contracting Centers (NRCCs) and their regional customers, which included activities exercising authority up to the SAP threshold of $100,000. These activities are not in the NAVSUP chain of command although they derive their procurement authority from NAVSUP. As HCA for the NFCS, NAVSUP has delegated varying levels of procurement authority to claimants such as CINCLANTFLT, CINCPACFLT, CNET, CHNAVRES, CINCUSNAVEUR, BUMED, and BUPERS. Accordingly, this initiative required close coordination at the major claimant level as well as at the activity level. NAVSUP managed these efforts along with the regional Procurement Management Review divisions in San Diego, Norfolk, Naples, Italy and Singapore, which delegated authority and provided oversight on behalf of NAVSUP to the NFCS activities worldwide with limited authority.
On 20 May 1998, Commander, NAVSUP notified claimants of NAVSUP's plans to consolidate the NFCS on a regional basis during FY98 and FY99. By 1 October 1998 we had reduced the 217 remaining NFCS contracting activities to 150, with reduction to 74 by 1 October 1999. As examples of how these reductions were effected on a regional basis, the number of contracting activities in the San Diego region were reduced from 35 in April 1998 to 7 by 1 October 1999. During the same period, contracting activities in the Hampton Roads region were reduced from 20 to 4.
This immense undertaking is paying dividends in opportunities to leverage buying power in the region. Not only does this translate into lower prices, but it also allows the regional provider to compile requirement statistics, thereby, allowing acquisitions to be tailored to the customer's anticipated need. The end product is a proactive streamlined acquisition system that provides faster, better, cheaper products to the warfighter.
Our unprecedented efforts have created significant savings opportunity not just in the price of goods and services, but also in terms of resources to support the purchasing infrastructure. While NAVSUP may delegate or rescind procurement authority, the personnel at affected activities are not NAVSUP resources. Nevertheless, the restructuring of contracting authority has provided the claimants of affected activities the opportunity to achieve workforce savings through restructuring or attrition on behalf of the entire Navy. Between May 1998 and October 1999, we estimate there are over 200 fewer civilian employees in the GS-1102 and GS-1105 series exercising NAVSUP contracting authority as the result of our consolidation efforts. Assuming each FTE equates to a cost of approximately $50,000, the potential savings exceeds $10 million.
