Donna M. Jenkins, Directorwww.fai.gov

Dodging the Fiscal Sharks…….. Thriving in

Today’s Environment

May 8, 2013

Strategic Sourcing – IT Services BPA (ITS)

Agency: Internal Revenue Service

Name of Presenter: Charles (Chuck) K. Yook

Title of Presenter: Program Manager, Strategic Acquisition Initiatives

2

Driving Savings in Information Technology

Services (ITS) Through Strategic Sourcing

What was the problem?

•IRS spends up to $424 million on IT Services annually

•Total Information Processing Support Services (TIPSS) is the primary vehicle used to acquire IT Services, but:

it is not effective when filling short-term needs (long procurement lead times)

it does not provide rate difference by skill area (pay same rate for a java programmer and oracle programmer even though industry rates vary)

It is best suited for large projects and not for short term projects (where

full lifecycle projects are required rather than to fill specific needs)

Driving Savings in Information Technology

Services (ITS) Through Strategic SourcingWhat was the solution?

•Conducted market research to develop small business sources

•Developed Q&A based RFP to capture only relevant technical information (used specific questions to determine vendor capabilities)

•Developed Excel-based pricing sheets and provided them to vendors to standardize the pricing format across all vendors

•Provided very specific feedback to each vendor on their initial pricing (each vendor was provided line item pricing feedback that indicated whether their pricing was in line with our benchmark targets)

Driving Savings in Information Technology

Services (ITS) Through Strategic SourcingITS Savings Summary in $MMWhat were the results?

• Savings of $32.2 million per year over previous rates were achieved

• Project was completed in half the time of similar projects – 12 months from conceptualization to award decision CRB and Legal Reviews were

passed in the first round – no major issues were raised

Only 2 amendments to the solicitation (one was for an extension)

Achieved savings of $32.2MM or 31% over TIPSS rates and project was completed in under 12 months from concept to award

103.480.5 71.2

22.9

9.332.2

Last PricePaid

RFP Savings RFP Price NegotiatedSavings from

PriceDiscussions

AwardAmount

TotalSavings

• Price discussions completed in 14 days (including analysis)• 100% of spend was directed to Hub Zone and SDVOSB businesses