1. Installation Acquisition Transformation Strategically Sourcing The Enterprise Orientation & Status Brief July 08

2. Strategically Sourcing The Enterprise 2 Outline AF Priorities & Case For Change IAT Background SecAF Direction Key Tenets Old & New Structure Future Organization Schedule

3. Strategically Sourcing The Enterprise 3 Air Force Priorities 4  Win Today’s Fight  Take Care of Our People  Prepare for Tomorrow’s Challenges

4. Strategically Sourcing The Enterprise 4 The Case for Change: Current Installation Contracting Structure 71 buying organizations focused on providing tactical support to installation customers Additional contracting support provided to numerous Field Operating Agencies This current alignment results:  Inconsistent use of skilled contracting resources  Redundant procurement of similar commodities  Inability to leverage the scale of the Air Force to drive efficiencies  Failure to realize strategic sourcing objectives  Strain on buying activities with contingency contracting officers Challenges are compounded by:  Increase in contracting workload and complexity  On-going mission support commitments The current structure strains the ability of the Installation Contracting community to effectively perform its mission

5. Strategically Sourcing The Enterprise 5 Business Case Analysis Implementation Plan Aug 2005–April 2006 Aug 2006–Feb 2007 Aug 2007 IAT Background May 05 – OMB Mandates Strategic Sourcing Aug 05-Apr 06 – SAF/AQC Initiates/Completes BCA – Strategic Sourcing Aug 07 – SecAF Approves IAT Initiative Sep 07 – IAT Program Management Office Established Jan 08 – CSAF Approves IAT Via C2 Enabling PAD, 07-13, Annex G Feb 08 – 1st Meeting of IAT Governance Board Apr 08 – AF Group approved FY 09 & 10 funding May 08 – AF Special Order GA-8 Designated and activates Provisional Units – AFMC/CC signed memo establishing the Provisional Director of the Installation Acquisition Center and a regional Provisional Director at each of the five Installation Acquisition Groups SECAF Approves Transition Planning continues to full transformation Sep 2007-Sep 2009 Full Implementation of IAT Oct 2009-Sep 2012

6. Strategically Sourcing The Enterprise 6 SECAF Direction - 20 Aug 07 “… apply innovative best business practices to improve Air Force processes”; “…along with the strategic sourcing work” “…we identified the need for a fundamental shift in how we accomplish Air Force contracting and acquisition in support of our installations” “…introduction of five geographic-based Regional Centers” (Now known as Installation Acquisition Groups) “The implementation of the transformed installation acquisition organization will follow an aggressive timeline.”

7. Strategically Sourcing The Enterprise 7 Key Tenets  Maintain Customer Relationships : Maintain and improve our ability to support our customers  Socio-Economic Focus: Maintain and strengthen focus on socio-economic program responsibilities  Retain Contracting Experts at Every Installation : Maintain a buying activity responsible for providing business advisory services and performing installation-specific contracting actions  Maintain Robust Contingency Contracting Capability : Ensure continued ability to meet contingency contracting commitments  Ensure Force Development : Preserve leadership and professional development opportunities for military and civilian contracting professionals  Transparency : Provide visibility to Congressional and key stakeholders

8. Strategically Sourcing The Enterprise 8 Old: CONUS Installation Contracting Current as of October 2007 AF Inspection Agency AF Safety Center AF Nuclear Weapons and Counterproliferation Agency AF Security Forces Ctr AF News Agency AF Manpower Agency AF Personnel Center AF Services Agency AF Center for Environmental Excellence AF Technical Applications Ctr AF Agency for Modeling and Simulation Orlando AF CE Support Agency AF Historical Research Agency AF Logistics Management Agency AFC2ISRC AF Global C4ISR Integration Ctr* AF Communications Agency Bolling AF Legal Services Agency AF Medical Support Agency AF Medical Operations Agency AF Pentagon Communications Agency AF Weather Agency Andrews AF Flight Standards Agency AF Review Boards Agency ANG Readiness Center Office of Special Investigations Pentagon AF Personnel Ops Agency AF Ops Group 71 Buying Activities3,322 Personnel 71,000 Contract Actions $13B Installation Spend $2B GPC Spend

9. Strategically Sourcing The Enterprise 9 Future Organization Current as of May 2008 IAGs 786 th IAG 787 th IAG 789 th IAG 790 th IAG 788 th IAG 5 Geographic Based Groups Contracting Presence at Each Installation Enables Realization of Strategic Sourcing IAC HQ

10. Strategically Sourcing The Enterprise 10 Lead-MAJCOM: Management/oversight of entire AF contracting organization, training, policy Installation Acquisition Group: Conducting strategic sourcing activities Providing contracting support Installation Contracting Squadron: Emergency buying and selected buying as delegated by the IAG Government Purchase Card and Quality Assurance Administration Future Organization Installation Acquisition Center: Responsible for CONUS installation acquisition/contracting execution Enterprise Sourcing Squadron: Lifecycle acquisition of defined commodities/services AF-wide focus ESSs St Louis, MOSan Antonio, TX Peterson AFB, CO Robins AFB, GA Hampton Roads, VA

11. Strategically Sourcing The Enterprise 11 Future Organization Installation Acquisition Center (IAC) IAC/CC SA 790 th IAG Peterson AFB, CO Supported MAJCOMs Support Staff SAC Clearance & Program Support Division SAL Labor Advisor Division SAR Resource Management Division SAT Sourcing Division 786 th IAG Hampton Roads, VA 787 th IAG Robins AFB, GA 789 th AIG San Antonio, TX 788 th IAG St. Louis, MO

12. Strategically Sourcing The Enterprise 12 Lifecycle Acquisition of Defined Commodities Enterprise Sourcing Squadron (ESS) Future Organization Installation Acquisition Group (IAG) Program Support Squadron (PSS) Resource Mgt Support Flight (SABR) Business Support Squadron (BSS) Acquisition Flight A (SAAA) Acquisition Flight B (SAAB) Requirement Evaluation & Sourcing Flight (SAAR) Technology Support Flight (SABT) Acquisition Flight C (SAAC) Sourcing Acquisition Squadron (SAS) General Contracting Support Functions Demand Planning Spend Analysis Opportunity Assessment Receipt, Review of Installation Requirement Assignment of Valid Requirements Multifunctional Customer-focused Procurement Source Selections Performance Management (Post Award) Contract Review Policy Compliance & Interpretation Program Management Pricing Functions IAG Command Section Co-Located Allied Support LegalLabor Advisors Small Business ACE Sourcing Support Flight (SAPS) GPC Flight (SAPC) Policy & Review Flight (SAPR) Price Analysis Flight (SAPP)

13. Strategically Sourcing The Enterprise 13 Plans & Programs GPC/QA Mgmt Support/IT Admin/Training Contingency Acq Spt Flt A* Business Advisory Limited Buying Contract Admin Acq Spt Flt B* Business Advisory Limited Buying Contract Admin Command Section Future Organization Installation Contracting Squadrons Limited Buying remains at the ICS Emergency Buying w/limited warrants for short term natural disasters and local emergency response Selected buying delegated by the IAG  Limited Delivery Orders/Task Orders GPC Buying will continue * Flight A&B segmentation depends on unit size

14. Strategically Sourcing The Enterprise 14 Future Organization Installation Contracting Squadrons  Business Advisory Services  Provide support during requirement development process and throughout contracting life cycle  Interface with installation customers and leadership, small business/local industry, and IAG  Perform Contract Administration  Acceptance of Services  Performance Measurement  Corrective Action  Other Functions at the ICS  Implement AF/AFMC policy  GPC monitoring and surveillance  Quality Assurance  Systems Admin/Management Support  Conduct Training (QA, GPC, Contingency, and Other)  Contingency Support

15. Strategically Sourcing The Enterprise 15 Future Organization Enterprise Sourcing Squadrons (ESS) Conduct Lifecycle Acquisition of Defined Commodities including Services Provide Multi-functional Skills to Develop Acquisition Strategy Coordinate with FOAs and existing Air Force and DoD Commodity Councils Execute Strategic Sourcing Activities Maintain Air Force-wide Focus on Defined Commodity Groups

16. Strategically Sourcing The Enterprise 16 Future Organization Small Business Involvement  A Small Business expert will remain at each base to: Understand local businesses’ capabilities and advise them of opportunities Communicate those capabilities to contracting officers at IAGs Help articulate performance-based installation requirements Help local small businesses with teaming approaches (joint ventures, etc.)  A full-time SB expert will be a member of every strategic sourcing analysis and strategic contracting strategy at the IAG  The AF Small Business office has established the “Air Force Small Business Solutions Center” to assist with strategic sourcing To assist with Strategic Sourcing, people and processes will remain at the base level to ensure local small businesses continue to get timely market intelligence of incoming requirements and make their capabilities known.

17. Strategically Sourcing The Enterprise 17 Future Organization Strategic Sourcing  Strategic Sourcing recognized as industry best practice:  Leading companies typically achieve more than 15% savings and cost avoidance  Honda achieved 17%  American Airlines achieved 20%  IBM achieved 24%  Kettering Hospital: saved $1.3M on $8M spend  AF Examples:  Installation Domain Commodity Council generated $80M savings on $484M spend

18. Strategically Sourcing The Enterprise 18 Strategic Sourcing IS NOT Just… Strategic Sourcing IS… A PROCESS for systematically analyzing and developing optimal strategies for buying goods and services DATA DRIVEN – fact-based analysis to drive decision making rather than just “hunches” A HOLISTIC process that addresses customer needs, market conditions, organizational goals and objectives, and other environmental factors Based on MARKET INTELLIGENCE and takes into account small business capabilities A COLLABORATIVE, CROSS-FUNCTIONAL approach About SUPPORTING AN ORGANIZATION’S MISSION through procured goods and services A PROCESS for systematically analyzing and developing optimal strategies for buying goods and services DATA DRIVEN – fact-based analysis to drive decision making rather than just “hunches” A HOLISTIC process that addresses customer needs, market conditions, organizational goals and objectives, and other environmental factors Based on MARKET INTELLIGENCE and takes into account small business capabilities A COLLABORATIVE, CROSS-FUNCTIONAL approach About SUPPORTING AN ORGANIZATION’S MISSION through procured goods and services The resulting contract Leveraged buying Contract consolidation/bundling Contracting and procurement About saving money The resulting contract Leveraged buying Contract consolidation/bundling Contracting and procurement About saving money Future Organization Strategic Sourcing

19. Strategically Sourcing The Enterprise 19 Strategic Sourcing Teams Strategic Communication / Engagement / Change Management Transition Planning / Implementation AFPC Transfer of Work/Function Decision PPlan Process FY 2012FY 2011FY 2010FY 2009FY 2008FY 2007 Major Milestone IAT Completion Standup IAGs Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3 CONOPS EXECUTION: OCR Approval PAD Approval Provisional Standup POM Submission (FY10) (Timeline (Phased Approach 3-5 Years) Implementation: Infrastructure IT Personnel Continuous / Consistent / On-going / Strategic / Stakeholder involvement Gradual Strategic Sourcing Build-up Transition PlanningImplementation Complete In Process Not Started Transition: Provisional CCs Transition Team Lead Focus Area Leads Limited Strategic Sourcing IAT Implementation Schedule

20. Strategically Sourcing The Enterprise 20