# Presentation: 273050

## NASA Office of Procurement

- NASA Procurement Tenets
- April 15, 2008 SMC Brief

- Bill McNally
- Assistant Administrator
-   for Procurement

## Procurement Tenets“Purpose”

-  85% of NASA’s budget is obligated for procurements so*  *NASA must maximize its Return on Investment (ROI) and increase our buying power
-  The Procurement Tenets are a set of principles for a NASA way of doing business with the objective of increasing NASA’s ROI when contracting out for supplies and services
-  The Procurement Tenets are ancillary to the other Federal and Agency regulations, policies and core values
-  Each Tenet shall be addressed by HQ, Program, Project and Contract Managers in their acquisition and procurement strategies, processes and procedures

## Procurement Tenets

_*Maximize Competition:*_  establish and take advantage of a competitive environment to meet NASA requirements _* *_
- Early market research and continual communication with Industry
- Focus on getting Industry’s best solution, commitment and lower cost through a competitive environment
- Evaluate performance as a factor in exercising options
- Plan re-competes, shorter term contracts, component breakouts, have the right data and data rights on our contracts
- Competition process will be thorough but not complicated
_*Integrated Strategies:*_* * involve all functional authorities early and throughout the planning process
- Establish an Integrated Product Team environment
- Inform and seek Industry input throughout the acquisition
- Serves as road map for program execution and success

## Procurement Tenets

_*Requirements:*_  clearly specify what is to be acquired
***Zero-based*** approach in developing requirements
- Requirements Need to Earn Their Way into Contracts: # of data deliverables, reviews and **only applicable** requirements
- May need to modify institutional standards and processes
- Get Industry’s input as requirements are developed!
- Clearly specify what NASA will do and what Industry will do
- Focus on Performance Outcomes and allow Industry to determine Best Way to achieve desired outcome
- Follow through in Project and Program execution
- Look at Commonality: technical requirements and reporting
_*Streamline:*_  remove non-value added steps and requirements that do not support the desired outcome
- Do not compromise on safety, good business decisions or successful completion
- Seek Industry input on non-value processes and requirements
- Seek process improvements and efficiencies

## Procurement Tenets

_*Performance Incentives*_: use to enhance desired outcomes
- Milestone-based
- Pay for level of performance: metrics and standards
- Focused on successful outcomes for technical, cost and schedule performance, small business
- Shared Savings, Cost Management and Lower Life Cycle Cost
_*Merge NASA’s and Industry’s Core Expertise*_
- Define NASA and Industry’s role with Research, Design, Development and Integration for Projects
- Requires a tight NASA and Industry Team with appropriate “arms length” relationship
_*Common NASA Contracts and Strategies*_
- Common face to Industry
- NASA Contract:  Not a Center or Mission Directorate Contract
- Not “zip code” dependent

## Procurement Tenets

_*Contract Cost:*_  reduce the Cost and Cost Risk for procurements
- Move towards firm-fixed-price contracts after development and on repetitive service contracts
- Use award fee contracts on high risk development contracts
- Perform work load analysis
- Eliminate “pass through” contracts
_*Turn Contract Upside-Down: *_understand the supply chain of a requirement
- Insight of Prime Contractor’s supply chain management
- Aggressive Pursuit of Socio-Economic Goals with Prime Contractors that are realistic, efficient and effective
- Personnel, teams, subcontractors and suppliers share in objectives and rewards
***Purpose of the Tenets is to Maximize Return on Investment (ROI) for Industry and NASA!***

## Planned Implementation

- Accomplished:
- Initially presented to Procurement Leadership in Sept.
- Center Procurement Officers have briefed Tenets to Center leadership
- Town hall forums held at MSFC, ARC, JSC and GSFC
- AA for Procurement has briefed Tenets to all NASA HQ key leadership
- Tenets briefed to various Industry forums
- Forward actions:
- Incorporate Tenets into appropriate NASA acquisition regulations and training
**Administrator to issue memo endorsing Tenets**
- Continue communication: town halls, SMC, OMC, speeches, conferences and interactions with industry

## 		Industry Input to Tenets

- Some suggestions that will be incorporated
- Define more clearly the meaning of Return on Investment
- Incorporate investment factor with contract length
- Clarify the “pass through” restriction
- Some of the comments look like they stemmed from lost competitions
- I plan to discuss some of these comments with these companies
- A majority bring up the challenge with NASA’s “Culture” in implementing the Tenets