Stop chasing personality-driven solutions: Category management instills a think-bigger approach to buying for enterprise-level efficiencies.
by Brig. Gen. Christine A. Beeler
Leveraging the disciplined buying power of the Army enterprise in lieu of fractured or decentralized one-off solutions offers a smarter, more creative approach to delivering strategic readiness and results in higher-value outcomes for Soldiers and more resources for Army priorities such as infrastructure, barracks and support services.
Legislation outlined in the National Defense Authorization Act (NDAA) for Fiscal Year 2016 launched far-reaching measures to streamline requirements development, acquisition and budget processes. Follow-on legislation from 2016 to 2019, along with the President’s Management Agenda, sought to make smarter use of common contract solutions and drive a transition from incohesive practices by the government to a disciplined managed approach. Category management entails the business practice of buying common goods and services at an enterprise level to eliminate redundancies, use industry standards, increase efficiency and deliver more value and savings to government.
One of the 11 cross-agency priority goals of the President’s Management Agenda calls for the use of category management as a means for making better buying decisions, developing common levels of support and reducing the number of contracts, resulting in savings, both in terms of resources and costs. Agencies across the federal government award contracts for similar requirements in a fragmented manner. Buying common goods and services in an enterprise approach allows those agencies to leverage common contracts and quality standards at the best value for the taxpayer while reducing redundancies and personality-based performance requirements.
The Department of the Army directed the implementation of category management in April 2019 to improve its services contracting processes and supporting data analytics, and to enable the Army to save time, money and manpower for higher priorities.
The Army directive names the commanding general of the U.S. Army Materiel Command (AMC) as the co-category manager for logistics and facilities. The commander, Gen. Gustave F. Perna, has designated his G-8 as the lead for category management responsibilities. The AMC G-8 is working closely with the subordinate U.S. Army Contracting Command and its Category Management and Strategic Sources cell to manage data analysis, provide visualization and track the milestones associated with the initiative.
PORTFOLIO APPROACH
Efforts over the last 18 months place the Contracting Operations Directorate of the U.S. Army Mission and Installation Contracting Command (MICC), a subordinate command to Army Contracting Command, on the frontlines of category management. Team MICC, in lockstep with Army Contracting Command and AMC, is analyzing the buying environment, the totality of common services and the delivery methods to reduce cost drivers, highlight redundancies, and provide commanders with options to implement this critical initiative. Contract standardization efforts by MICC and its mission partners to buy services as a portfolio were developed in concert with the 2016 NDAA, ahead of category management initiatives announced by the Army. The command’s efforts to standardize similar contracts at an enterprise level using a portfolio concept parallel category management efforts at the local level. Rather than awarding similar, recurring services as one-of–a-kind efforts at the local installation, the portfolio approach pulls a whole portfolio to an enterprise buying center with standardized quality levels of performance, pricing and contract award execution processes to foster efficiencies in the acquisition process, meet performance expectations and drive contract savings.
Among Army commands with whom MICC has partnered on category management initiatives are the U.S. Army Installation Management Command and U.S. Army Sustainment Command. They represent two of MICC’s largest supported mission partners for contract dollars awarded. Of the $5.4 billion in contracts executed by MICC across the Army in fiscal year 2019, more than $2.4 billion was in support of these two commands.
MICC contracts are responsible for feeding more than 200,000 Soldiers every day. The command took steps in 2017 to standardize full food service contracts following a pilot for Fort Lee, Virginia, that yielded increased competition from industry and government savings of approximately $16 million over five years. Historically, MICC received two proposals on average for full food services contracts. Including the Fort Lee pilot, proposals received for similar contracts average five proposals, according to MICC data. This process involved standardizing performance work statements, contract type, contract line item number structure necessary for reporting and billing purposes, source selection approach, and quality assurance. In addition to the standardizing processes, MICC established a functional center at Joint Base San Antonio-Fort Sam Houston, Texas, to execute all pre-award actions for food services. Following award, JBSA-Fort Sam Houston transfers administration of the requirement to one of MICC’s 30 field offices for the duration of the contract’s period of performance. Not including the Fort Lee pilot, MICC has awarded eight contracts to date, saving the government 16.8 percent or $5.8 million annually.
MICC took steps to standardize food service contracts after a successful pilot program in Virginia that led to savings for the government and increased competition from industry. (U.S. Army Photo by Scott T. Sturkol, Public Affairs Office, Fort McCoy)
WAY AHEAD
Leveraging these successes, MICC developed a similar approach for base operations contracts, one of the command’s largest categories of spending. Base operations contracts support many of the Army’s installation services, and include facilities and grounds maintenance, pavement clearance, heating and cooling services, and unaccompanied furnishings management. The base operations requirements for Fort Belvoir, Virginia, were selected as the pilot test. In September 2018, MICC acquisition members at the headquarters and Fort Belvoir teamed with the Installation Management Command and industry representatives to award the contract. The standardized enterprise approach was first used for base operations at Fort Bliss, Texas, with award anticipated in November 2019. Together, the pilot at Fort Belvoir and imminent award of the Fort Bliss base operations requirements are projected to save the Army 19.2 percent or $15.2 million annually.
This pilot realized additional savings for the government by reducing the time it takes to execute a contract from initial planning to award. The standardized approach greatly reduced the procurement action lead time, a critical element in the delivery of mission-essential requirements, from 250 days to approximately 130 days for the Fort Belvoir pilot contract award.
Analysis underway seeks to expand the food service functional center to include base operations requirements and evolve the organization into the premier installation acquisition readiness center. The analysis process is considering a similar standardization approach with contracts in support of Soldier and Family readiness and institutional training in support of Army major commands.
CONCLUSION
Changing the way we do business to deliver better performance outcomes, gain efficiencies in the acquisition process and maximize the value of every dollar entrusted to us is the principle underlying the Army’s acquisition transformation and reform efforts. Actions in support of these efforts are well underway, from the service’s highest echelons to contracting organizations working hand-in-hand with mission partners at the installation level to develop and deliver essential requirements.
We need to evolve our industrial age local acquisition processes to harness the power of the information age and the collaborative virtual work space. As MICC continues to implement comprehensive category management initiatives and synchronize its efforts with AMC, it will continue to develop its process and research further opportunities across common services and supply requirements to maximize savings for the Army.
For more information, go to www.army.mil/micc.
BRIG. GEN. CHRISTINE A. BEELER is the commanding general of MICC, headquartered at Joint Base San Antonio-Fort Sam Houston, Texas. She graduated from the Army ROTC program at Boston University as a distinguished military graduate and was commissioned in the Ordnance Corps in 1991. She holds an M.S. in strategic studies from the U.S. Army War College, an MBA from Webster University, a Master of Public Administration in environmental management from Jacksonville State University, an M.A. in administration and management from Bowie State University and a B.S. in business administration and management from Boston University. She is also a graduate of the U.S. Army Command and General Staff College. Beeler entered the Army Acquisition Corps in 1998 and is Level III certified in contracting and in program management.
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