DLA Troop Support C&E Tailored Vendor Relationship Process Improvements 4 March 2015 Elaine Applegate

DLA’s Audit Issues, Concerns and Goals Military Interdepartmental Purchase Requests (MIPRs) Issue: Reliance on the manual MIPR process allows for errors and may effect order placement time Goal: Reduce customer use of MIPRs to the maximum extent possible Material Receipt Acknowledgements (MRAs) Issue: Insufficient information for TVR customers to post MRAs Goal: Provide customers with line-by-line order data to facilitate MRA posting; improve C&E TVR MRA rate from approx. 13% to 100% Accountability Issue: Delayed billing to customers, high unliquidated obligations (ULOs), little oversight or documentation of material ordered at the detail level Goal: Streamline billing by moving from IPAC to Interfund; provide evidential matter to Customers’ Finance and Supply POCs on material ordered with line-by-line detail

Current Bidwiser Order Process Flow Order Request Customer submits order on spreadsheet to C&E C&E Loads and Evaluates All Offers C&E Selects Winning Offers Vendor Submits Quote to C&E via email to a predetermined email address C&E Receives/Loads the Customer Order Request Winning Vendor(s) Are Notified via Email with a Spreadsheet of Order Items 3 day response Vendor Researches Item(s), Establishes Pricing C&E Approves the Order Request Lines 2 days to submit Vendor Submits EDI-855 to DAASC for Final Processing and Award Vendor Receives RFQ Spreadsheet via email C&E Sends RFQ via Email to Vendors

C&E Modified BidWiser Order Process Flow to Address Audit Readiness Concerns 1. FOPOC receives KO selected offers and pricing, requests approval. 2. FOPOC is notified when C&E notifies vendor to initiate 855 process. (MILS AE) 3. FOPOC is notified when PO Obligation occurs within EBS. (MILS BV) 4. FOPOC is notified when shipments are observed against the PO. (MILS SS) 1. Customer Registration must include Finance Office POC (FOPOC) 2. Customer/FOPOC receives ordering template/guidance 3. Customer submits order request (unfunded) 4. DLA reviews order request; coordinates with customer on any issues and notifies customer of scope approvals and/or denials. 5. DLA competes order, makes best value decision and notifies Customer and FOPOC of pricing on Price Acknowledgement Spreadsheet. Email notification goes to Customer and FOPOC. 1 6. Customer updates Price Acknowledgement Spreadsheet and FOPOC emails approval for DLA to order with required funding information (MILS-like format, i.e. requisition number and fund code, or MIPR) 7. DLA receives funding information and processes accordingly (3 methods: Customer Provided Requisition, Requisition Generated by DLA System using Customer Provided LOA, or MIPR); KO processes order and generates award notice with line-by-line detail to Customer and FOPOC. 2 This process only impacts MIPRs to C&E Special Operations Profit Center at present. No impact to other Troop Support Supply Chains or DLA ICPs at present. During this presentation we will be covering a number of topics including: Read Slide Now let’s discuss the bottom line up front regarding Audit Readiness and Employee Impact Next Slide 8. DLA EBS obligates funds; Customer and FOPOC receive email notification to acknowledge that order has been obligated by DLA and order has been placed with vendor with final prices and delivery dates provided 3 9. Customer receives email notification that material ordered has been shipped by vendor with instruction to post MRA in DOD EMALL upon receipt 4 = New Process = Modified Process 10. Customer submits MRA in EMALL, which generates Goods Receipt in DLA system. Vendor submits invoice, DLA pays the vendor, DLA records a bill to the customer and DFAS collects via Interfund billing (or IPAC for MIPR).

IMPROVED CUSTOMER SERVICE Benefits to Customers Provided by C&E Modified Bidwiser Order Process Flow Improved Financials Decrease in Unliquidated Obligations (ULOs) Increased Accuracy in Trial Balance for DoD Improved Accountability of Orders Improved Evidential Matter (Audit Readiness) Improved Communication from DLA on Order Acknowledgement, Placement, and Shipment Improved DLMS Compliance for MRAs IMPROVED CUSTOMER SERVICE

Scheduled Rollout Currently Undergoing Programming Changes and Testing Enhancements Made for Modified Order Process Modified Order Process will be Implemented Pending Successful Completion of Testing Estimated Dates for Implementation: Phase I & II: Multiple-Award Worldwide Contracts Phase I: Special Operational Equipment - 30 March 2015 Phase II: Fire & Emergency Services Equipment -15 May 2015 Phase III: Single-Award Regional Contracts Metals Prime Vendor -TBD Maintenance, Repair, and Operations (MRO) – TBD Note: Applies to MRO Non-CENTCOM only

POCs Troop Support – C&E Customer Operations Frank Madeja, Customer Operations Division Chief francisco.madeja@dla.mil, 215-737-7982, DSN 444-7982 Branch Chief – SOE & F&ESE Support: Ed McCauley, 215-737-5509, DSN 444-5509 Branch Chief – MRO & Metals Support: Kyle McCarthy, 215-737-2386, DSN 444-2386 * All inquiries regarding Phase I Rollout for Special Operational Equipment TLS Program shall be sent via email to: SOECustomerInfo@dla.mil Finance Cheryl Haines Cheryl.haines@dla.mil, 215-737-2701, DSN 444-2701 Troop Support – Audit Readiness Denise Unruh Denise.unruh@dla.mil, 215-737-4854, DSN 444-4854

DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT

BACKUP CHARTS

BidWiser Overview Customer ordering process for part numbered items Customer places order directly with DLA Troop Support Pre Award Process Allows DLA Troop Support to scope check requested items When order is for part-numbered items Communications channel for soliciting and receiving vendor offers Decision support tool for analyzing offers Communications channel back to successful offeror

BidWiser Overview Standardized Excel templates and email enable the processing of customer order requests request for quotes from vendors processing vendor offers making vendor selections Once a vendor offer is accepted for an order, the selected vendor submits the order information to DLA Troop Support via an EDI-855 transaction.

C&E BidWiser Modifications to increase MILS like ordering vice MIPRs Spec Ops is the first program to be implemented based on largest volume of MIPRS and will be followed by Fire and Emergency Services and MRO CENTCOM. Method for single award programs (MRO and Metals) must be developed. Long-term Enterprise solution is key to linking-in customer systems and for audit readiness. Block 1: Financial POC must register before ordering activity can submit order to TS. This is a hard stop to customer ordering process. Block 5: Notification 1 – email notifies Ordering Customer and FOPOC of the items and dollar amount of the potential order. Block 6: FOPOC submits funding information on BidWiser “Price Acknowledgement Spreadsheet” to Troop Support. This is an area here we will continue our communication efforts with FOPOC so they understand funding options other than MIPRS. Block 7: Notification 2 – email notifies Ordering Customer and FOPOC that Troop Support has received their funding information (mimics MILS AE status). ITCR = Information Technology Change Request Block 8: Notification 3 – email notifies Ordering Customer and FOPOC that the order has been placed (mimics MILS BV – on order). Block 9: Notification 4 – email notifies Ordering Customer and FOPOC that the order has shipped (mimics MILS SS – shipped status) and to go into EMALL and receipt.

New Bidwiser Ordering Process Customer Registration Changes (Step 1): Specify Customer Finance Office POC (FOPOC)/Contact Info Advise whether Document Number/Requisition will be provided by customer or generated by DLA System on behalf of the customer; customer may also use MIPR as a last resort Select Document Serial Number Range if DLA system generated Customer Welcome Package Changes (Step 2): Include FOPOC Price Acknowledgment Spreadsheet (Steps 5 & 6): New Hard Stop to obtain FOPOC approval and: Document Number, Fund Code, Signal Code, Supplemental Address, Approved Item Quantity Customer Notification Changes (Steps 7, 8, & 9): Email upon Order Acceptance (MILS AE)- Initial status w/MILS data Email upon Order Placement (MILS BV)- Award w/MILS data Email upon Vendor Shipment (MILS AS)- Improve MRA success

Current Process (SOE/F&ESE) Customer registers and receives a welcome package with an order spreadsheet, a unique account number and the Customer Guidelines Document (detailed instructions) Customer submits a spreadsheet with an "R" in the first position requesting for an actual order. The order spreadsheet can be accompanied by a MILS-Like Document (requisition number and fund code) or a MIPR may also contain estimated pricing obtained from a vendor or independent source as a result of the customer’s market research efforts prior to sending an order request to DLA TVLS reviews the order spreadsheet for errors and loads the order spreadsheet in Bidwiser KO / buyer reviews the order for scope approval TVLS send the MIPR to the Finance Office (FO) for acceptance after the scope is approved FO reviews the MIPR and send a 448-2 MIPR Acceptance document to the customer KO / buyer solicits the vendors

Current Process (SOE/F&ESE) KO / buyer reviews the quotes and makes a best value award decision TVLS sends a notification to the customer with the award information Vendor submits an EDI 855 acknowledging receipt of the Purchase Order and creating a sales order and delivery order in SAP Vendor ships the material Customer submits an MRA (Material Receipt Acknowledgment) verifying receipt of the material --- or --- in most cases the TVLSs post the receipts based on valid POD (Proof of Delivery) provided by the vendor Vendor submits an EDI 810 Invoice requesting payment DFAS pays the vendor 15) DFAS records a bill to the customer and uses the funds against the MIPR to clear the bill