Enterprise Agreement Requirements Management

23 February 2010

DoD ESI Working Group

What is ESI?

DoD ESI is an official DoD initiative sponsored by the DoD Chief Information Officer (CIO) to save time and money on commercial software, IT hardware,

and services. Through its joint team of experts, requirements are consolidated and agreements are established with IT providers resulting in a

unified contracting and vendor management strategy across the entire department. In its first ten years of operation, DoD ESI achieved a cost avoidance of over $3 Billion off prices established on the GSA Federal

Supply Schedule.

DoD ESI is an official DoD initiative sponsored by the DoD Chief Information Officer (CIO) to save time and money on commercial software, IT hardware,

and services. Through its joint team of experts, requirements are consolidated and agreements are established with IT providers resulting in a

unified contracting and vendor management strategy across the entire department. In its first ten years of operation, DoD ESI achieved a cost avoidance of over $3 Billion off prices established on the GSA Federal

Supply Schedule.

Executive sponsor: DoD CIO

Team composition: Joint

Goals:Save time & money on commercial ITIT Asset Management

Operations:Award enterprise software agreementsImplement unified vendor and contract management strategy

Results: Over $3 billion cost avoidance in first ten years

DoD ESI Model

• Optimize DoD relationships with IT vendors having significant DoD market share

– Favorable contract terms & conditions for DoD

– Streamlined buying processes– Visibility into IT acquisitions– Discounted pricing

• Enable DoD IM/IT strategic objectives and public policy

– DoD Net-Centric data and services strategy– Contract provisions for Federal and DoD

mandates– Facilitate strategic IT investments

• Provide IT acquisition expertise

– Contracting best practices– Standard acquisition processes– Position DoD for ever-changing IT market-

place– Regulation and policy– Asset visibility

• Implement agreements with IT vendors having significant DoD install base

– Software publishers– Hardware manufacturers– Integration service providers– Resellers

• Implement agreements and contract terms that promote DoD IT strategy

– Target key vendors– Include terms for standards compliance

• Provide acquisition expertise and services to DoD IT buyers

– Software Product Managers (SPMs)– IT acquisition best practice presentations– Knowledge repositories– Keep current with government and industry

changes• IT licensing models• Periodic BPA template updates• Guides and checklists for buyers, vendors and

ESI team• Regulatory and policy influence

Objectives Tactics

Assign SPM

Approve ESI Acquisition

Strategy

Accept ESI Business Case

Authorize Enterprise Agreement

Complete ESI Acquisition

Strategy

• Award or competition

process• Timeline

Complete Cost/Benefit

Analysis

• Products• Pricing• Ts&Cs

• Benefits• SPM Resources

• Fees

Negotiateor Issue

Solicitation

Award Contract

ESI Requirements Management Framework

Prioritize Target Vendors

• Demand• Funding/Timing

• Alternatives• Strategic Direction

• GSA Schedule (software)

Monitor DoD IT Vendor

Community

Indicates action by ESI Working Group (WG)

Consider Vendors for ESI

Agreements

• Large installed base • Large requirements• ESI/SmartBUY team

recommendations• Strategic direction• Leading the charge

• Vendor contact

Enterprise Agreement

Holders

Approx. 83

Maintain Agreements

Factors for Selection and Award

• Vendor selection

– Is vendor in demand within DoD?• Large existing DoD installed base identified through ESI Working Group or SPMs• Recommended by DoD CIO community through strategic direction• Vendor contact with ESI team

– Is vendor “qualified” for consideration?• Substantial DoD demand• Strategic Direction -- supports strategic policy (e.g., Service Oriented Enterprise, IA, Cloud Computing)• Vendor holds GSA schedule (for software vendors)• Vendor is interested and willing to negotiate pricing, Ts&Cs and EULA

– Are ESI SPM resources available?• Sufficient manpower is available to staff acquisition• No higher priority opportunities exist (e.g., larger funded requirements and/or cost avoidance in the short-term)

• Enterprise agreement award

– Acquisition strategy satisfies underlying drivers• Timeline• Competition/award process meets ESI Working Group requirements• Competition/award process meets Component’s acquisition rules and expectations

– Business case supports pursuing agreement• Near-term funded requirements• Sufficient benefits in product mix, terms and price discounts• Will provide sustained, recognized value to DoD

– DoD and vendor accept contract and licensing terms and conditions

Recent Awarded ESI AgreementsNew vendors only – renewals not included

2007

(*) 11 Data at Rest (DAR)

BDNA

BelManage

BigFix

BMC/Remedy

Opsware

(*) Strategic direction awards

2008

Apple Software

Meridio

(*) Minitab

(*) PowerSteering

Sun Software

2009

Adobe Server

Microsoft Premier Support Services

Planet Associates

VMware

ESI Operating Principles

ESI should operate with a minimum of process and paperwork.

Basic guidelines should be contained in a "mini-policy." (A DRID and ESI Business Case are no longer needed.)

The WG is empowered to act unless there is a disagreement that cannot be resolved. Then the SG will decide. Competition with multiple award per software category should be the norm.

There is no one-size-fits-all solution.

The 80% requirements solution is good enough for ES Agreements.

ESI will not "get it right the first time;" Experimentation is OK

In certain isolated cases, DOD might standardize on one product, particularly when there are no alternatives to meet a DOD standard.

ESI needs a good outreach (marketing and publicity) program.

ESI should use success measures and collect performance data to continuously refine the process.

The Business Case for each agreement, prepared by the Buying Agent, should be brief and focus primarily on requirements and strategy. The WG can concur without the approval of the SG.

The Buying Agent should provide as much flexibility in agreements as possible, consistent with market conditions and pricing implications.

We should all have a sense of urgency; it's better to make agreements earlier than later.

Buying Agent volunteers should begin now.

If priorities are needed, Buying Agents should focus on maintenance agreements first, then new licenses.

Challenges

• Regulatory impediments – Components’ varying interpretations of FAR/DFARS language implemented in 2006 limits

ESI’s ability to award BPAs using the conventional ESI process based on direct negotiations with target publishers and resellers

• Limited access to Defense Working Capital Funds (DWCF) for strategic inventory buys– Only Army has provided WCF for ESI inventory– Army rules for use of WCF have changed – WCF must be repaid within a year

• Operating model – ESI is not line driven– Acquisition targets are demand and consensus driven across the Components– Limited ability to drive strategy and policy decisions– SPMs’ priorities are influenced by their Components’ requirements and priorities

• Resource constraints– Agreements require significant SPM time and effort to create and maintain– ESI SPM organizations are generally fee-reimbursable – can only staff up to fees generated

• Limited asset visibility to support requirements validation