Enterprise Agreement Requirements Management 23 February 2010 DoD ESI Working Group

What is ESI? DoD ESI is an official DoD initiative sponsored by the DoD Chief Information Officer (CIO) to save time and money on commercial software, IT hardware, and services. Through its joint team of experts, requirements are consolidated and agreements are established with IT providers resulting in a unified contracting and vendor management strategy across the entire department. In its first ten years of operation, DoD ESI achieved a cost avoidance of over $3 Billion off prices established on the GSA Federal Supply Schedule. Executive sponsor: DoD CIO Team composition: Joint Goals:  Save time & money on commercial IT  IT Asset Management Operations:  Award enterprise software agreements  Implement unified vendor and contract management strategy Results: Over $3 billion cost avoidance in first ten years

DoD ESI Model Optimize DoD relationships with IT vendors having significant DoD market share –Favorable contract terms & conditions for DoD –Streamlined buying processes –Visibility into IT acquisitions –Discounted pricing Enable DoD IM/IT strategic objectives and public policy –DoD Net-Centric data and services strategy –Contract provisions for Federal and DoD mandates –Facilitate strategic IT investments Provide IT acquisition expertise –Contracting best practices –Standard acquisition processes –Position DoD for ever-changing IT market- place –Regulation and policy –Asset visibility Implement agreements with IT vendors having significant DoD install base –Software publishers –Hardware manufacturers –Integration service providers –Resellers Implement agreements and contract terms that promote DoD IT strategy –Target key vendors –Include terms for standards compliance Provide acquisition expertise and services to DoD IT buyers –Software Product Managers (SPMs) –IT acquisition best practice presentations –Knowledge repositories –Keep current with government and industry changes IT licensing models Periodic BPA template updates Guides and checklists for buyers, vendors and ESI team Regulatory and policy influence ObjectivesTactics

Assign SPM Approve ESI Acquisition Strategy Accept ESI Business Case Authorize Enterprise Agreement Complete ESI Acquisition Strategy Award or competition process Timeline Complete Cost/Benefit Analysis Products Pricing Ts&Cs Benefits SPM Resources Fees Negotiate or Issue Solicitation Award Contract ESI Requirements Management Framework Prioritize Target Vendors Demand Funding/Timing Alternatives Strategic Direction GSA Schedule (software) Monitor DoD IT Vendor Community Indicates action by ESI Working Group (WG) Consider Vendors for ESI Agreements Large installed base Large requirements ESI/SmartBUY team recommendations Strategic direction Leading the charge Vendor contact Enterprise Agreement Holders Approx. 83 Maintain Agreements

Factors for Selection and Award Vendor selection –Is vendor in demand within DoD? Large existing DoD installed base identified through ESI Working Group or SPMs Recommended by DoD CIO community through strategic direction Vendor contact with ESI team –Is vendor “qualified” for consideration? Substantial DoD demand Strategic Direction -- supports strategic policy (e.g., Service Oriented Enterprise, IA, Cloud Computing) Vendor holds GSA schedule (for software vendors) Vendor is interested and willing to negotiate pricing, Ts&Cs and EULA –Are ESI SPM resources available? Sufficient manpower is available to staff acquisition No higher priority opportunities exist (e.g., larger funded requirements and/or cost avoidance in the short-term) Enterprise agreement award –Acquisition strategy satisfies underlying drivers Timeline Competition/award process meets ESI Working Group requirements Competition/award process meets Component’s acquisition rules and expectations –Business case supports pursuing agreement Near-term funded requirements Sufficient benefits in product mix, terms and price discounts Will provide sustained, recognized value to DoD –DoD and vendor accept contract and licensing terms and conditions

Recent Awarded ESI Agreements New vendors only – renewals not included 2007 (*) 11 Data at Rest (DAR) BDNA BelManage BigFix BMC/Remedy Opsware (*) Strategic direction awards 2008 Apple Software Meridio (*) Minitab (*) PowerSteering Sun Software 2009 Adobe Server Microsoft Premier Support Services Planet Associates VMware

ESI Operating Principles  ESI should operate with a minimum of process and paperwork.  Basic guidelines should be contained in a "mini-policy." (A DRID and ESI Business Case are no longer needed.)  The WG is empowered to act unless there is a disagreement that cannot be resolved. Then the SG will decide. Competition with multiple award per software category should be the norm.  There is no one-size-fits-all solution.  The 80% requirements solution is good enough for ES Agreements.  ESI will not "get it right the first time;" Experimentation is OK  In certain isolated cases, DOD might standardize on one product, particularly when there are no alternatives to meet a DOD standard.  ESI needs a good outreach (marketing and publicity) program.  ESI should use success measures and collect performance data to continuously refine the process.  The Business Case for each agreement, prepared by the Buying Agent, should be brief and focus primarily on requirements and strategy. The WG can concur without the approval of the SG.  The Buying Agent should provide as much flexibility in agreements as possible, consistent with market conditions and pricing implications.  We should all have a sense of urgency; it's better to make agreements earlier than later.  Buying Agent volunteers should begin now.  If priorities are needed, Buying Agents should focus on maintenance agreements first, then new licenses.

Challenges Regulatory impediments –Components’ varying interpretations of FAR/DFARS language implemented in 2006 limits ESI’s ability to award BPAs using the conventional ESI process based on direct negotiations with target publishers and resellers Limited access to Defense Working Capital Funds (DWCF) for strategic inventory buys –Only Army has provided WCF for ESI inventory –Army rules for use of WCF have changed – WCF must be repaid within a year Operating model – ESI is not line driven –Acquisition targets are demand and consensus driven across the Components –Limited ability to drive strategy and policy decisions –SPMs’ priorities are influenced by their Components’ requirements and priorities Resource constraints –Agreements require significant SPM time and effort to create and maintain –ESI SPM organizations are generally fee-reimbursable – can only staff up to fees generated Limited asset visibility to support requirements validation