U.S. Department of Commerce The Big “A” Acquisition Conference Alexandria, Virginia May 5, 2011 U.S. Department of Veterans Affairs Office of Acquisition & Logistics Jan R. Frye Deputy Assistant Secretary for Acquisition & Logistics

Agenda VA organizational overview and history VA’s 16 greatest challenges VA supply chain transformation VA Supplier Relationship Transformation Initiative VA Secretary’s Acquisition Transformation Strategy VA Acquisition customer service roadblocks and action taken 2

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4 History  1930 – Congress established the Veterans Administration  1989 – Department of Veterans Affairs established as a Cabinet-level position  Eric K. Shinseki, Secretary, Veterans Affairs  W. Scott Gould, Deputy Secretary, Veterans Affairs We serve an estimated 23 million Veterans

5 The Department of Veterans Affairs  FY 2010 Procurement Spend: $16 billion  FY 2011 Projected Budget Outlays: $143 billion  FY 2012 Budget Estimate: $132 billion  FY 2011 Discretionary Budget Authority: $60 billion  Warranted Contracting Officers in VA – 1,059 (May 2011)  Targeted 2,000 staff for PM training in FY 2011  VA Employees: 313,502  Veterans Integrated Service Networks: 21  VA Hospitals: 152  VA Community Based Outpatient Clinics: 956  VA Community Living Centers: 134  VA Domiciliary: 90  VA Veterans Centers: 232  VBA Regional Benefits Offices: 57  VA National Cemeteries: 131

6 VA's 16 Greatest Challenges 1.Eliminate Veteran Homelessness 2.Human Capital Improvement Plan 3.Automate GI Bill Benefits 4.Virtual Lifetime Electronic Records (VLER) 5.Improve Veterans’ Mental Health 6.Veterans Relationship Management (VRM) 7.Veterans’ Benefit Management System (VBMS) 8.New Health Care Model 9.Expand Health Care Access 10.Systems to Drive Performance (Enterprise-wide Cost Accounting) 11.Health Care Value 12.Integrated Operating Model 13.Research and Development 14.Ensure Preparedness 15.Health Informatics 16.Strategic Capital Investment Planning Process

7 VA Supply Chain Transformation  Customer Satisfaction KPI  Internal Acquisition Customers  VA Supplier Outreach  VA/VHA Logistics Transformation  Strategic Sourcing/Acquisition  Acquisition Realignment  VA SCOR Model POF: Providing the right item/service  At the right place  At the right (or needed) time  To meet the Veteran need  Functioning properly  At the “right” cost

8 VA Supplier Relationship Transformation  Aug 2009 Supplier Relationship Transformation Forum  December 2009 Supplier Relationship Web-Cast  Michigan State University “Supplier Perception Survey”  2010 & 2011 VA Outreach Events  Advanced Program Briefings to Industry (APBI)  Regional Supplier Forums Conducted (NJ, CA, IL, FL)  Additional Supplier Forums Planned (CA and IL)  Increased number of pre-proposal conferences  Increased use of draft RFPs  Webinar (February 2011) and 4 th Quarter FY 2011

VA Secretary’s Acquisition Transformation Strategy Gain control over acquisition management information Effectively manage the acquisition life cycle Improve the acquisition management workforce Leverage technology to ensure an enterprise management approach Pursue standardization and strategic sourcing Achieve $2 billion in procurement savings Achieve clear ownership and accountability of VA contracting mission 9

VA Acquisition Customer Satisfaction Roadblocks Roadblock Customer service never measured— deemed unimportant Unclear lines of authority—over 30 HCAs Fragmented acquisition structure, e.g., decentralized contracting system Immature contract writing system Very limited contract oversight Action Taken 360° customer satisfaction now measured HCAs reduced to six “Integrated” structure – execution underway Stood up enterprise office to develop & manage enterprise procurement systems SPE authorized to conduct A-123 acquisition reviews—”Dirty Dozen” 10

VA Acquisition Customer Satisfaction Roadblocks Roadblock Immature or nonexistent training programs No senior procurement governance council Inability to award and administer information technology contracts No program management doctrine policy Lack of Professional Acquisition Workforce Action Taken VA Acquisition Academy stood up Award winning Senior Procurement Council formed in 2009 & operational Stood up Technology Acquisition Center ADAS for Acquisition Policy Office authorized with SES VA Acquisition Corps being implemented 11

VA Acquisition Customer Satisfaction Roadblocks Roadblock Miniscule PM training and culture Vastly undersized procurement policy office No acquisition forecasting process Failed contracting intern program Action Taken PM School stood up at VA Acquisition Academy 1,386 PMs trained in FY 2010; 2,000 scheduled for FY 2011 Benchmarked against HHS & DHS Standing up strategic policy office Requiring activities must meet with contracting officers 1 st Qtr in FY Stood up 3-year resident intern program (90 interns) Standing up non-resident intern program 12

VA Acquisition Customer Satisfaction Roadblocks Roadblock Inability to hire and retain quality 1102 personnel Lack of Strategic Sourcing CAO responsibility extra duty for Assistant Secretary FAC-C Certified 1102 Workforce lacks necessary competencies Action Taken Using direct-hire authority Moved procurement functions outside of Washington, DC Spend Analysis Office stood up and providing business cases Secretary requested Congress to authorize 8 th Assistant Secretary Office of Acquisition, Logistics, and Construction stood up Applied Learning Center developed to measure 1102 competencies 13