Competition Moderator: Greg Macfarlan, CPCM, LMI Presenters: Lyle Eesley, Fellow, Center for Contracting, DAU Ronne Rogin, CPCM, Acquisition Solutions, Inc. NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Into the 21st Century….! Competition What are its characteristics? What works and what doesn’t? What barriers does it face? What forces are impacting competitive environments? NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Competition Overview Trends Strategy The Ultimate Competition NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Guiding Principles (FAR 1.102) (1) Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service by, for example -- (i) Maximize use of commercial products and services; (ii) Use contractors who have a track record of successful past performance (iii) Promote competition; Competition is the power that fuels our economy NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Competition Trends Supply Chain Management Reduce the competitive supplier base Increased reliance on supplier intellectual property and value Performance Benchmarking Walk softly, but carry a big stick NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Define your Competition strategy Successful competition requires you understand three key issues How your customer defines value Nature of the requirement Market place you’re operating in One strategy does not fit all situations Requires sound, thoughtful, planning NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Competition Planning How your key stakeholders define value Cost, timeliness, performance What’s their “trade space” What is the nature of the requirement Commodity item or “value added” supplier Understand the Market Place Who are the leaders, innovators Market practices and the business cycle NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Competition Strategies Price Focus Fosters “low bid” mentality Can drive high quality performers away Does not drive innovation Performance Focus Ability to assess differences Enables creative use of “Trade Space” Managing the outcomes NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

As Supplier “value add” increases, the nature of competition and acquisition approach changes System Development Performance Based Value Added by Supplier Price Based Coal IFB LPTA PPT Technical Tradeoff Acquisition Methodologies NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Leveraging Competition to enhances performance Contractor Scorecard Matrix was used to determine offeror proposed service levels and increased coverage, within the government set minimums and maximums. Government minimums equate to current levels of service or AF standard. Offeror proposed levels become official part of the contract. KPIs = Hurdles in the incentive formula. Increased Coverage = “Bang” we bought. Every offer exceeded the minimum KPIs…some were riskier than others. Most offers exceeded the minimum coverage levels. NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Leveraging Competition to enhances performance Contractor Scorecard Matrix was used to determine offeror proposed service levels and increased coverage, within the government set minimums and maximums. Government minimums equate to current levels of service or AF standard. Offeror proposed levels become official part of the contract. KPIs = Hurdles in the incentive formula. Increased Coverage = “Bang” we bought. Every offer exceeded the minimum KPIs…some were riskier than others. Most offers exceeded the minimum coverage levels. NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Competing for the Future The Ultimate Competition - Your Future Are you “Inherently Governmental” Effective Business Advisor must be: Business Savvy Strategist Aligned with customer’s mission value proposition and mission objectives Continually refreshing you knowledge NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

We’ve got choices! Open Market Agency IDIQ’s GWACs and MACs GSA Schedule Contracts NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

We’ve got competition! Contractors compete with one another Contractors compete with Federal employees Franchise fund activities compete for your business GSA will conduct your IT acquisitions Your agency acquisition shop is there, too Internal competition for resources NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

What happened to “low bid?” Historically, awards were based on low price Competition drove prices down We got what we paid for… Price is less important today – it’s all about value and return on investment And so we measure…..ka-CHING! NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

The Federal Marketplace Mergers and acquisitions Anti-bundling vs. horizontal purchasing Small/disadvantaged business set-asides: GSA’s FAST and DoC’s COMMITS programs, along with subcontracting roles Shrinking budgets across many agencies and programs present fewer opportunities Stategic sourcing NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Should competition be limited? GWACs, MACs, and agency IDIQs provide a smaller com- petitive field FAR Part 15’s “downselect” process can whittle down the number of offerors A vendor’s ‘ticket to the show’ is a GSA Schedule contract – full and open? NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

Remove Barriers to Competition Reduce or eliminate statutes, regulations and/or policies that inhibit competition Take steps to reduce the cost of entry, and reach out to small businesses Increase the ability of players to be innovative and efficient (results-based contracting) Advocate consistent entry rules across the Government Expand the supplier base where possible NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

So is competition a good thing? In theory, we get lower prices and more value In reality, some firms cannot deliver at the prices they proposed – they may request changes to the contract in order to improve their bottom line Good risk assessments and past per-formance reviews (MARKET RESEARCH) help ensure positive results NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value

VOTE HERE Yes, in most instances No, not always General counsel’s reply: “It depends.” NCMA 22nd Annual East Coast Educational Conference Understanding Competition, Enhancing Small Businesses, and Getting Best Value