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Category Management: Professional Services Overview

Geri Haworth Professional Services Category Management - Branch Chief General Services Administration

May 11, 2016

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What is Category Management?

➢Category management is an approach the Federal Government is applying to buy smarter and more like a single enterprise.

➢It involves:

• Identifying core areas of spend • Collectively developing heightened levels of expertise • Leveraging shared best practices • Providing acquisition, supply and demand management

solutions

➢Category management enables us to eliminate redundancies, increase efficiency, and deliver more value and savings from the government’s acquisition programs.

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Why Implement Category Management Now? ➢ In FY 2014, the Federal Government spent over $420

billion in purchases, which accounted for about 20 percent of the entire Federal budget

➢This was done through 500+ separate Federal departments and agencies

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Federal Government Goals for Category Management ➢Federal Government has the following goals for category

management: • Increase spend under management through better interagency

collaboration and understanding of user requirements, market dynamics, and purchasing patterns

• Reduce contract duplication through adoption of shared solutions for common products/services Generate volume savings and administrative savings from leveraged buying power better use of procurement resources

• Enhance data transparency to improve contracts and performance against priorities such as small business goals and sustainability

• Boost innovation through improved interagency and supplier partnership

• Increase efficiency and effectiveness through improved supplier performance, better buying decisions, and supply chain cost savings

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A Proven Solution that is Building Momentum

Text runs here

• This is a level 1 bullet

− This is a level 2 bullet

Category management has long been applied

in procurement organizations within many of

the Fortune 500 companies

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• This is a level 1 bullet

− This is a level 2 bullet

The United Kingdom’s Government

implemented category management

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• This is a level 1 bullet

− This is a level 2 bullet

OFPP released a memo1 on December 4,

2014 outlining the benefits of implementing

category management Government-wide

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• This is a level 1 bullet

− This is a level 2 bullet

GSA is currently implementing category

management internally

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What Does This Mean for Industry Partners?

Improved

Relationships

Constant collaboration between Government and industry will

help develop a continuous process of improvement in Federal

procurement.

Reduced

Complexity

Implementing best practices across each category and sharing

contract information between procurement units in a centralized

location will reduce duplication and complexity.

Improved

Performance Performance metrics, collaboration and simplification lead to

improved overall performance for both Government and industry.

Increased

Innovation

Implementing best practices and enabling them in a central

location will allow the acquisition community to share expertise,

utilize tools, and increase innovation.

Reduced Costs That all adds up to a reduction in costs for Government, industry,

and taxpayers.

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Acquisition Gateway Will Enable Category Management

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What Hallways are Currently Active?

Hallway Currently Launched

Facilities & Construction

Human Capital

Industrial Products & Services

Information Technology

Office Management

Professional Services

Security and Protection

Transportation & Logistics

Travel & Lodging

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Common Questions Around Category Management

How does category

management impact small

business?

Isn’t category

management the same

thing as strategic

sourcing?

How will we begin to achieve

category management?

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GOVERNMENT WIDE CATEGORY MANAGEMENT

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The Government-Wide Category Structure 1. IT –

$50.7B

1.1 IT Software

1.2 IT Hardware

1.3 IT Consulting

1.4 IT Security

1.5 IT Outsourcing

1.6 Telecommunications

2. Professional Services

- $63.4B

2.1 Business Administration

Services

2.2 Legal Services

2.3 Management Advisory

Svcs (excl. R&D)

2.4 Marketing and Distribution

2.5 Public Relations and

Professional

Communications Services

2.6 Real Estate Services

2.7 Trade Policy and Services

2.8 Technical & Engineering

Svcs (non-IT)

2.9 Financial Services

2.10 Social Services

3. Security and

Protection - $5.3B

3.1 Security Animals &

Related Services

3.2 Security Systems

3.3 Security Services

4. Facilities &

Construction -$72.5B

4.1 Construction Related

Materials

4.2 Construction Related

Services

4.3 Facility Related Materials

4.4 Facility Related Services

4.5 Facilities Purchase &

Lease

5. Industrial Products &

Services - $11B

5.1 Machinery & Components

5.2 Fire/Rescue/Safety/Enviro

nmental Protection

Equipment

5.3 Hardware & Tools

5.4 Test & Measurement

Supplies

5.5 Industrial Products

Install/Maintenance/Repair

/Rebuild

5.6 Basic Materials

5.7 Oils, Lubricants, and

Waxes

6. Office Management -

$1.7B

6.1 Office Management

Products

6.2 Office Management

Services

6.3 Furniture

7. Transportation and Logistics

Services - $25.6B

7.1 Package Delivery & Packaging

7.2 Logistics Support Services

7.3 Transportation of Things

7.4 Motor Vehicles (non-combat)

7.5 Transportation Equipment

7.6 Fuels

8. Travel & Lodging –

$2.2B

8.1 Passenger Travel

8.2 Lodging

8.3 Travel Agent & Misc.

Services

9. Human Capital –

$4.7B

9.1 Specialized Educational

Services

9.2 Vocational Training

9.3 Human Resources

Services

10.

Medical –

$35.2B

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.1

Drugs and Pharmaceutical

Products

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.2

Medical Equipment &

Accessories & Supplies

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.3 Healthcare Services

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Category Management Governance Structure

Administrator

of OFPP

CMLC

The governing board for

Category Management

initiatives. Provides

government-wide direction

on CM strategy and

initiatives.

Category

Manager

Category

X

Category

Manager

Category

Y

Category

Manager

Category

Z

Category Managers

Experts in the category

(e.g., IT). They develop the

government-wide strategy to

drive improved performance

and act as change agents

for the category.

Category Manager

Category Lead C

Category

Team (L1)

L1 Category Team

Responsible for the

development and execution

of category strategies for a

specific Tier 1 category

(e.g., IT)

Category Lead

Agency C Rep

Category

Team (L2)

L2 Category Team

Responsible for the

development and execution

of category strategies for a

specific Tier 2 category

(e.g., IT software within the

IT category).

Chair

Agency C Rep

Commodity

Team

Commodity Teams

Traditional strategic

sourcing working group

formed when the

category management

process identifies the

need for a new

acquisition solution.

Category Management PMO Provides overall program management support to the groups and

individuals in the governance structure; facilitates the development

and implementation of business rules and processes.

Common Acquisition Platform (CAP) Develops and executes the IT strategy to support category

management business strategy via the Acquisition Gateway.

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Government Wide Category Managers Category Name Agency

IT Kim Luke OMB

Professional Services Tiffany Hixson GSA

Security and Protection Jaclyn Smyth DHS

Facilities and Construction Mary Ruwwe GSA

Industry Products and Services George Prochaska GSA

Office Management Greg Hammond GSA

Transportation and Logistics

Services Lisa Roberts DOD

Travel and Lodging Tim Burke GSA

Human Capital Robert Briede (Acting) OPM

Medical David J. Shulkin, M.D. VA

Dr. Jonathan Woodson DOD

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A closer look at Professional Services ➢ Largest sub-categories of spend:

• Management advisory services – $108.6B, or 56% of spend – Acquired through 14,000+ contracts and 130,000 transactions – 28.2% small business participation

• Technical and engineering services – $55.9B, or 29% of spend – Acquired through 3,500+ contracts and 40,000 transactions – 27.5% small business participation

➢ Product Service Codes (PSC’s) with the largest portion of spend were: • R499, Other Professional Services, $15.8B • R425, Engineering and Technical Services, $15.3B • R408, Program Management / Support Services, $7.7B • R699, Other Management Support Services, $3.1B

➢DHS and OSD are the leaders in use of existing contracts (overall) and could serve as leaders in the government-wide effort to reduce contract duplication

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Top Agencies of Spend ($B)

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Key Value Proposition to Agencies ➢The key value proposition is to reduce total cost management

for these services as well as “total cost of ownership” for the mission essential programs these services support. In FY16, to begin this work, three actions will be taken:

• A comprehensive analysis of agencies’ buying patterns will be completed including FPDS spend/obligations, transaction analysis, and identification of contract duplication

• Through the Acquisition Gateway and Professional Services Hallway, agencies will immediately improve their individual spend activity by identifying and using existing agency and governmentwide contracts, as well sharing best practices

• The interagency Professional Services Category Team will identify “best in class contracts” to position the government, in FY17, to improve the total cost of management for these contracts as well as competition and small business utilization

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Want to Learn More?

➢To Read Anne Rung’s Memo, visit Transforming the Marketplace: Simplifying Federal Procurement to Improve Performance, Drive Innovation, and Increase Savings.

➢See the power of acting as one by watching the Acting As One Video

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APPENDIX

Information on SUM definition follows (by characteristic)

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Leadership To what degree do individuals & organizations have clear

Category Management responsibilities? Tier Criteria*

Tier 1

• Designated Agency Category Lead with specific category expertise and day-to-day management and oversight responsibility (i.e. Program Manager for IT software contract; this is not agency CIO)

• Clear definitions of Government-wide Category Manager, Agency Category Lead, Category team roles

Tier 2

• Designated Part-Time Government-wide Category Manager (approved by OMB) --AND/OR--

• Designated Agency Category Lead --AND--

• Active participation on Interagency Category teams or Commodity Teams

Tier 3

• Designated Full-Time Government-wide Category Manager (approved by OMB) --AND--

• Government-wide Category Management Council Staffed by Senior Level Agency Staff (endorsed by Government-wide Category Manager)

--AND--

• Active Category Teams --AND--

• Government-wide PMO support

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Strategy To what degree has a clear acquisition strategy been

developed and implemented for the category?

Tier Criteria*

Tier 1

• Existing agency-wide solutions are being used, per mandatory use or consideration policies [For the following categories assessed, credit will not be given for new agency-specific solutions awarded after September 30, 2016 unless approved by the Government-wide Category Manager and meet strategic sourcing principals]

--AND/OR— • Policies are implemented and adopted that drive behavior changes (e.g., double sided

printing)

Tier 2

Meets at least 1 of 3 criteria: 1. Government-wide solutions in use, per mandatory use or consideration policies in place in

accordance with strategic sourcing principles outlined in OMB Memo M-13-02 2. Implements Gov-wide policies that drive behavior changes 3. Agency-wide strategic sourcing solutions in place in accordance with strategic sourcing

principles outlined in OMB Memo M-13-02

Tier 3 • CMLC approved category management strategy that endorses a limited number of “Best In

Class” solutions for the category

*Note: Additional detail on criteria included in draft SUM maturity model

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Tools To what degree are tools in place across the

agency/government to share information and reduce duplication of effort?

*Note: Additional detail on criteria included in draft SUM maturity model

Tier Criteria*

Tier 1 • Tools are in place and shared to capture and share information on the category, such as

contract vehicles, availability, terms/conditions, pricing, etc Examples: DHS Connect or DoD FedMall or GSA Advantage

Tier 2

• Worked with Government-wide Category Manager to populate the Acquisition Gateway with relevant information, including

1. Best In Class Agency Solutions; AND/OR 2. Government-wide strategic sourcing solutions (FSSI), GWAC, MAS, or MAC that are in

place in accordance with strategic sourcing principles outlined in OMB Memo M-13-02; AND/OR

3. Gov-wide Demand Management Policies that drive behavior changes --OR--

• Agency has developed a plan and milestone schedule, in coordination with the Category Manager, for providing data above

Tier 3 • Acquisition Gateway includes only solutions (acquisition vehicles and/or policies) that are

endorsed by Government-wide Category Manager as “Best in Class”

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Metrics

To what degree are metrics being used to track performance Category Management performance over time?

Tier Criteria*

Tier 1 Agency (or serving agency) tracks and has documented methodology for: • Savings • Small Business Participation

Tier 2

Tracks metrics quarterly for “Best In Class” FSSI, GWAC, MAS, or MAC solutions that are in place in accordance with strategic sourcing principles outlined in OMB Memo M-13-02 on: • Duplication reduction • Adoption • Savings and • Small business participation

Tier 3 Agency supports the Govt-wide collection/sharing of any other metrics outlined in an CMLC-approved Category Strategy

*Note: Additional detail on criteria included in draft SUM maturity model

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Government-Wide Category Structure (total FY 2014

spend $428B)