DoD ESI's successful new approach for enterprise resource planning

CHIPS, Fall, 2004 by Chris Panaro

As with all acquisition efforts, the work done early in the life cycle is crucial to an effective contract. The program team must clearly articulate the business case or financial justification for the investment being made. This gets defined in greater detail in the requirements gathering process so that a formal requirements document can be attached to the final contract. This process ensures that the contractor will provide services that satisfy the requirements or objectives set by the business sponsors.

Competition

As with all major acquisitions, it is to the buyer's advantage to solicit bids from multiple vendors. You will find that pricing can be reduced and team qualifications enhanced with the proper level of competition.

In a performance-based payment scenario, the percentage of payment that is tied to performance should be a variable that bidders compete until the highest percentage of risk is appropriately borne by the contractor.

The Enterprise Agreements were solicited using the GSA Federal Supply Service and eBuy, a component of GSA Advantage. eBuy is an electronic Request for Quote (RFQ) system designed for federal buyers to prepare RFQs, directly online for a wide-range of services and products offered through the GSA Multiple Award Schedule (MAS) program. e-Buy allows RFQs and quotes to be exchanged electronically between federal buyers and Schedule contractors.

We used e-Buy to satisfy the requirements of Section 803 of the National Defense Authorization Act of 2002. These agreements were established on a competitive best-value basis as GSA Schedule Blanket Purchase Agreements (BPAs) and are available for ordering by all DoD components. Task orders must be competed among the five BPA holders in accordance with the fair opportunity provisions unless a regulatory exception applies.

Conclusion

The Enterprise Agreements are much more than negotiated discounts. They provide an in-depth knowledge base for any program about to embark on a COTS implementation. Following a disciplined methodology reduces risk, and tying payment to desired results transfers risk to a vendor that has proven technical expertise.

The Enterprise Agreements are excellent examples of government and industry working together to bring best practices to DoD programs that will be investing billions of dollars on business systems during the next five to 10 years.

The Enterprise Agreements can be accessed through the ESI Web site at the following link: http://www.don-imit.navy.mil/esi/.>

Figure 2. Fixed Price Table Example

Services to be       Deliverable(s)       Duration
performed by
contractor

Establish project    Project              2 weeks
documentation        documentation
standards            standards

Determine project    Documented team      3 weeks
team training        training plan
requirements

Perform process      Detailed gap         4 weeks
and functional gap   analysis report
analysis and         including proposed
document proposed    resolutions
resolutions

Services to be       Acceptance                    Payment
performed by         Criteria                      upon
contractor                                         Acceptance

Establish project    The documented deliverable    $17,200
documentation        shall conform to the format
standards            and structure of the sample
                     attached as Attachment D-4

Determine project    The documented deliverable    $15,500
team training        shall conform to the format
requirements         and structure of the sample
                     attached as Attachment D-5

Perform process      The documented deliverable    $42,500
and functional gap   shall conform to the format
analysis and         and structure of the sample
document proposed    attached as Attachment D-6
resolutions

Figure 4. Commoditized RICE Software Object Pricing
Table

R.I.C.E. Pricing Table

                              Complexity

                     Low        Medium        High

Reports & Forms   $3,592.52    $6,286.91    $8,083.17
Interfaces        $3,592.52   $10,777.56   $21,555.13
Conversions       $7,668.88   $23,006.63   $46,013.27
Extensions and    $9,580.06   $29,937.68   $80,232.98
  Workflows

Price includes creation of technical specifications,
coding, documentation and unit testing.