By Daniel P. Elkins, Mission and Installation Contracting Command Public Affairs OfficeAugust 29, 2013
JOINT BASE SAN ANTONIO-FORT SAM HOUSTON, Texas (Aug. 29, 2013) -- Officials at the Mission and Installation Contracting Command have surpassed a goal of saving the Army $750 million in acquisitions more than two months ahead of schedule.
The more than $762 million in savings have been achieved through contract negotiations, reverse auctioning of supplies and services, and rebates generated by the timely payment of Government Purchase Card Program accounts.
Brig. Gen. Kirk Vollmecke, the Mission and Installation Contracting Command ,or MICC, commanding general, set the $750 million fiscal year goal as a measure for the command to establish itself as first to be recognized by Army leaders for the power of savings that contracting professionals bring to the table not only in a challenging fiscal environment but every day.
"In spite of the current fiscal situation, one of our top priorities as a valued mission partner is the support of the warfighter without interruption," Vollmecke said. "We've worked closely with our warfighters and supported activities to prioritize requirements and have leveraged substantial savings to accomplish the work that must be done to meet mission needs. The Army is relying on acquisition professionals' critical thinking, business acumen and negotiation skills to achieve savings."
The vast majority of savings have come through negotiations. Contracting officers and specialists across the command's 35 offices throughout the nation and Puerto Rico have worked meticulously with customers and contractors to negotiate the government savings.
"Negotiated savings is calculated based on the initial purchase request and final obligation amounts by capturing all contracting actions to include new awards and contract modifications," said Len Ambrosio, a procurement analyst with the MICC Knowledge Management Branch here. "The purchase request amount is based primarily on historical data from previous buys, market research or the independent government cost estimate."
Current policy requires government estimates to be accomplished for every procurement action that exceeds the simplified acquisition threshold of $150,000.
Contracting efforts by MICC personnel impact Soldiers across the globe. The top contract actions by the MICC are for facilities support, minor building construction, food services, human resources consulting, professional and technical services, wired telecommunications, engineering services, advertising and electric power distribution.
The Installation Management Command, known as IMCOM, is among the MICC's top customers. In fiscal year 2012, MICC contracts in support of IMCOM were valued at more than $2.7 billion, according to Derek Dansby, a procurement analyst with the MICC Knowledge Management Branch. Through mid-August this fiscal year, contracts valued at more than $1.3 billion have supported the IMCOM mission.
"The MICC is the key IMCOM partner in providing decisive and efficient contracting solutions," said David Williams, the deputy director for IMCOM Resource Management. "Their focus on the flexible and cost effective delivery of IMCOM's contracted garrison support services is key in our mission to sustain services in a resource-constrained environment."
Dansby said the MICC also has provided more than $1 billion in contract support to the U.S. Army Training and Doctrine Command, known as TRADOC, in fiscal year 2012, and $683 million in support this fiscal year.
"Contracted services are a vital element of the TRADOC mission," said Maj. Gen. Mark MacCarley, the TRADOC deputy chief of staff. "From clothing and equipping young men and women who enter the service through the Army Recruiting Command to providing instructors at many of the 32 Army schools organized under eight centers of excellence, contractors play an essential role in helping ensure the readiness of the more than 500,000 Soldiers and service members trained each year by TRADOC."
Almost $8 million of the savings have come through the implementation of reverse auctions. Reverse auctioning allows requirements such as supplies, equipment and parts to be solicited online through a fully automated process.
The process yields efficiencies in the speed of the solicitation by minimizing the need to contact individual vendors for quotes and reduces the acquisition timeline to five days or fewer. Requirements met through reverse auctions also typically achieve greater savings as the bidding process generates increased competition among vendors and often drives a lower, competitive price for the customer. The auction process incorporates an added benefit of documentation for audit integrity.
Additionally, $8.3 million in savings have been achieved through the first three quarters of this fiscal year with the diligent administration of the MICC Government Purchase Card, or GPC, Program -- the largest in the Army. This fiscal year, installation GPC cardholders managed by the MICC have made more than 713,000 transactions totaling more than $784 million.
Paid quarterly, GPC rebates are based on the volume of transactions for that quarter and timely payment, according to Guy Hunneyman, a business manager with the MICC Oversight and Assessment Branch here.
In fiscal year 2012, $15 million was returned in GPC rebates following more than 1.2 million transactions; however, reduced budgets and operational funding due to sequestration have consequently impacted the amount of rebates this year.
The GPC program allows individuals at the lowest level of government organizations and agencies greater efficiency in the procurement of commercial goods and services from merchants. With a single purchase limit of less than $3,000, Hunneyman said accounts typically generate rebates of 1 to 1.3 percent.
The MICC is responsible for providing contracting support for the warfighter throughout Army commands, installations and activities located throughout the continental United States and Puerto Rico. Through mid-August, the command executed more than 30,000 contract actions worth more than $3.7 billion across the Army, including more than $1.4 billion to small businesses.