August 12, 2010

• Sandia's Suppliers and Their Profitability
• Determining How Sandia and Suppliers Can Lower Costs
• Identify Processes that will Allow the Supplier to Provide Best Value

Sandia's Suppliers and Their Profitability - Session 1 Documentation

Meeting Agenda

1. Welcome and introductions.
2. What types of processes or reviews are in place, to consider suppliers’ profitability?
3. What do other organizations/companies you deal with do that makes you believe they are concerned about your profitability?
4. Close.

A. What Types of Processes or Reviews are in Place, to Consider Suppliers’ Profitability?

• Payment terms (cash liquidity).
• Stewards of taxpayers’ money.
• It is mutually beneficial for our suppliers to remain profitable and to remain in business.

B. What do other Organizations/Companies you deal with do makes you believe they are concerned about your profitability?

• Abandon Reverse Auctions.
• Reverse auctions: Don’t set lower starting limit.
• Don’t re-negotiate after a reverse auction is won.
• Has Sandia benchmarked other organizations on reverse auctions?
• Do not ask for breakdown of costs on competitive Firm Fixed Price contracts. Doesn’t seem right.
• Contracts awarded on Multiplier only or Labor Rate only.  No discussion of Profit. No discussion of Salaries. Award is on Low Bid.
• Have not been asked for a negotiated cost or profit for many years. Negotiate cost rates.
• Past experience: Periodic reviews of cost drivers with the purpose of mutual actions to improve business metrics for both parties.
• Leakage on contracts (TRUST).
• Four quotes at four different times, all with the same delivery date. Affects ability to schedule and also affects profits.
• Sandia is the only organization that asks for salary information.
• Concerned with being locked into T&M rates versus CPFF.
• Our company recommended a re-organization of management that saved NASA tons of bucks.
• Partner with vendors to get the most from relationships. Don’t just look to price.
• Discussion platform specific to products/services to focus on more strategic (economy of scale) purchases.
• Enable vendors to better support products -> badges, organization charts, sharing of funded projects.
• Establish set outreach/education series (e.g., L3 Utah supports/hosts monthly lunch and learn seminars).
• Better communication – respond to us!
• Back up personnel for SCRs and SDRs.
• Improve relationships between buyer and supplier. Respond quickly.
  

C. Parking Lot

• Define “Best Value”.
• Have more Service Disabled Veteran Owned Small Business Set Asides.
• Define/Utilize “Sealed Bid by Rank”.
• Provide contractors with a government card for receiving government rates at hotels when on official Sandia directed travel.

• The team evaluated the session and identified what went well, as well as what could be improved in another session.

• First time in 20 years, as a supplier to Sandia, that anyone has asked for this type of feedback.

Improvements

• Would like more time to discuss topics.

Determining How Sandia and Suppliers Can Lower Costs -- Session 2 Documentation

Meeting Agenda

1. Welcome and introductions.
   1. Participant Expectations.
2. What are some of the hindrances or barriers you feel you are encountering when you are trying to lower cost? (Current State)
3. What can SNL do and what can you do to help lower costs? (Future State)
4. Close.

A. Participants Expectations of the Break-out Session

• Building a bridge for better communication with small businesses. Especially in rural areas.
• Building relationships with mutual benefit.
• What does Sandia expect from suppliers?
• Clarification of expectations.

B. What are some of the hindrances or barriers you feel you are encountering when you are trying to lower cost? (Current State)

• This session is in response to statements received from the survey.

C. What can SNL do and what can you do to help lower costs? (Future State)

• Increase flexibility for companies to manage their employees.
• Reduce RFP requirements for benefits, etc.
• Has the process of selecting a supplier been streamlined?
• Electronic ordering.
• Electronic invoicing.
• Product promotion event.
• Reduce ES&H requirements.
• Need to give high visibility to what Sandia is buying so suppliers will know if they can provide service.
• Benefits requirements.
• Slow/resist technology ideas.
• Look at life cycle of cost of ownership.
• Same information verified over and over.
• Specialized equipment only used at Sandia.
• Need to know full requirements of audits. What can we do to be ready to save Sandia time?
• Level the playing field in answering RFP’s that we aren’t just filling the slots and the intention is to give the award to a specific company.
• Reverse auctions. Didn’t feel it was fair. And afterwards there were still negotiations.
• Decision is spread out over numerous organizations. Becomes a battle at year end when money is released. Not Strategic.
• Changing SCRs means having to re-learn contract. Adjust training for this.
• Use modern technology to facilitate correspondence, i.e., e-mail.
• Make attempts at more personal contact. This will improve customer relations.
• Convert website to a Portal, “Vendor Portal.”
• On-line list of all SCRs and SDRs by location and responsible products.
• Companies that supply Sandia should work together with others to learn how to service Sandia.
• Set up a Help Desk.
• Staffing – relax the benefits requirement.
• Send survey to supplier company so other key employees can be asked their opinions, as was asked at this meeting.
• What is the impact of rising costs on the sub?
• Lack of face-to-face debrief opportunity.
• Improve communications.
• Utilize off-site face-to-face debrief (IPOC).
• Physical walk-through of SOW wall all. Better idea of exactly what is needed.
• Need supplier orientation classes.
• Allow equipment subs.
• On-line resources – requirements; list of contacts.

Identify Processes that will Allow the Supplier to Provide Best Value -- Session 3 Documentation

Meeting Agenda

1. Welcome and introductions.
2. What does Sandia do to describe “Best Value”?
3. What processes can Sandia create or enhance to assist suppliers in providing “Best Value”?
4. Close.

A. What Does Sandia Do to describe “Best Value?”

• Brief definition of “Best Value”: Defined simply as the best bang for the buck.
• Problems seen by Sandia: 75% of received proposals do not make it past the first reading.   50% of proposals received are non compliant.  25% are compliant but not competitive.
• Discussion of the sample evaluation quotation instructions (handout).
• The sample criteria were distributed for participant comment.
• Collection of supplier input.

B. What Processes can Sandia create or enhance to assist suppliers in providing “Best Value?”

• Define criteria and how best value is defined.
• Consistent approach across buyers.
• Eliminate redundant or repetitive requirements.
• To help with Supplier Development, inform discarded proposal submittals of why they were discarded.
• Use clear, declarative sentences in RFQs.
• Break down evaluation of Price Proposals so that it is understood exactly how you will be scored if you not come in with the lowest bid.
• Provide objective criteria on how a better technical proposal can overcome a lower bid.
• Small business set asides, SDVOSB, 8(a), etc.
• Describe Quality Management System.
• How is Quality Measured?
• Ensure RFP is not a cut and Paste. Too often RFP has conflicting criteria or placement/layout of proposal information is duplicated.
• Allow suppliers to host a seminar/presentation to supplement their submitted proposal.
• Start with current/proven suppliers and extend capability.
• Have a place for questions/responses to solicitation.
• Breaking down proposal criteria into different categories based on type of service/materials that are provided!
• Have contractor complete a database of information to facilitate procurement.  Oracle doesn’t cut it.
• Select pre-qualified companies for proposals.
• Follow the NASA Best Value approach
• Allow contractor to provide consistent pricing across all areas at Sandia, i.e., GSA pricing, published rates.
• Allow suppliers to submit electronically.
• Make smaller (price) value proposals simpler (or shorter).
• More RFQs.
• Provide more diversity for past experience. Small/young companies might be very capable, but are eliminated solely on lack of experience.
• Make it clear as to what you want. Price? Quality? Both?
• Are your requirements unreasonable? Eliminates small businesses?
• Clearly define requirements in the Request for Proposal.
• Clarify evaluation criteria and how it is weighted.
• Graded value for each criterion.
• Quantify relative weight between technical and price.
• Define Best Value NOW vs. what Best Value used to mean.
• Help suppliers truly understand Best Value.
  • Provide True Clarity on Best Values, e.g., evaluation criteria spelled out clearly (weighting, etc.).
  • Meaning of RFQ to missions.
  • Related business value to Sandia.
• Define (in general) how value will be compared to cost.
• Weight criteria by importance.
• Define “Quality”.
• Sandia should figure out how to better partner with contractors to increase value on contracts.
• Dictate less specific terms (e.g., benefits) to suppliers – Then, let us respond to those that offer creativity and value – add solutions. Invite ideas. Mandate less.
• Better communicate w.r.t. status of evaluation/award.
• Provide an example with each request to show how it should be submitted.
• Industry Knowledge Buyers of solicited services.
• Buyer’s knowledge of contracts and timely responses.
• Talk to Top Two Bidders.
• Create a consistent approach to best value across all buyers.
• Check solicitation requirements for repetition.