# IG5307.104-93

Informational Guidance

IG5307.104-93
Commodity Council Implementation and Operations

#### June 2006

TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

1. INTRODUCTION 3

2. PURPOSE 5

3. COMMODITY COUNCIL IMPLEMENTATION PROCESS 6

4. COMMODITY COUNCIL ORGANIZATION STRUCTURE 9

5. COMMODITY COUNCIL ROLES AND RESPONSIBILITIES 12

6. COMMODITY COUNCIL OPERATIONS PROCESS 18

Appendix A - Commodity Council Selection Process 28

Appendix B - Commodity Council Governance Structure 30

Appendix C - Commodity Council Charter 32

Appendix D - Commodity Council Kick Off Session Agenda 33

Appendix E - Commodity Council Communication Plan 34

Appendix F - Commodity Acquisition Management Plan 37

Appendix G - Commodity Council Lessons Learned 40

Appendix H - References 41

EXECUTIVE SUMMARY

1. Case for Change

The Air Force must achieve cost savings and performance improvements by leveraging commodity volumes, in order to:

• Improve customer support
• Reduce purchase cost of items
• Increase quality of goods and services
• Accelerate delivery responsiveness

By implementing the 'Commodity Council' concept within the Air Force, we can:

• Eliminate duplication of effort
• Minimize supply chain costs through integration/collaboration
• Demonstrate savings through the power of leveraged purchasing
• Create visibility and accountability of AF spend, demand and supply data
• Leverage technology to simplify the purchasing process at the tactical level

2. Objectives

The objective of a commodity council is to develop and implement an enterprise-wide commodity procurement strategy (see Figure 1). This includes gathering market intelligence, developing a written sourcing strategy, and selecting suppliers based upon that strategy. Once a strategy is developed and managed, execution may be at a decentralized or local unit level. This concept ensures an approach that maximizes the benefits of centralized management while retaining the flexibility and operational risk mitigation of decentralized execution. Commodity Councils are primarily strategy development organizations and provide input into the procurement process.

Knowledgeable commodity experts should be chosen to lead councils, and cross-functional representatives should be appointed to each council, as required, to ensure full-spectrum customer representation from across the AF. In order to ensure correct strategies are developed at the council level, it is critical that those members chosen to serve on the council are the AF's acknowledged experts in that commodity grouping. Beyond the council level, acquisition executive(s) will be designated to approve the sourcing strategy developed by the council to ensure a point of responsibility and authority.

3. Commodity Council Roles & Responsibilities

The primary purpose of the commodity council is to develop an AF-wide strategy for the procurement of a specific commodity group and to ensure this strategy is executed properly at the appropriate levels. The formulation of this strategy is accomplished by maintaining a close watch on industry trends, supplier performance, and customer requirements via market-savvy and versatile cross-functional council members. However, for commodity councils involving the acquisition of services greater than $100M, coordination with PEO/CM is required to determine if the acquisition will be placed within their portfolio.

Other responsibilities of the council may include:

• Creating and maintaining supplier relationships
• Integrating suppliers into business operations
• Driving commonality and standardization of requirements
• Leveraging volume across the enterprise
• Reducing supply chain costs
• Developing guidelines, strategies, and scorecards
• Determining what level of effort is decentralized
• Executing contracts

The council develops strategies that may include:

• Total number of potential suppliers and effort awarded to each supplier
• Potential local and global suppliers
• Supplier development plans
• Supplier relationship methodology (traditional, strategic alliance, etc)
• Contract type, length, and terms/conditions
• Incorporation of socio-economic programs (see FAR 6.2 and/or FAR 19 for additional guidance)

4. Conclusion

Creating a commodity council approach within the AF is the best way to meet AF Contracting’s strategic sourcing objectives. Implementation decreases unit cost of purchases, decrease lead times, and increase AF purchasing flexibility. Commodity councils are already a proven, cost-effective purchasing method used by commercial firms. For AF Contracting to become a ‘best in class’ purchasing organization, implementation of commodity councils is imperative.

Figure 1

1. INTRODUCTION

1.1. ‘Commodity Council’ is a term used to describe a cross-functional sourcing group charged with formulating a centralized purchasing strategy and establishing centralized contracts for enterprise-wide requirements for a selected commodity grouping. Following the council’s strategic sourcing actions, decentralized units then execute tactical ordering against those pre-established business agreements. Air Force Contracting is adopting the commodity council concept to better leverage its spending and improve its customer responsiveness.

1.2. In this definition, ‘commodity’ simply means a defined category of goods or services, and does not imply an expendable or non-complex item. The commodity council concept is predicated upon maximizing the cost-reduction advantages of leveraging enterprise-level spend, utilizing market experts to formulate sourcing strategy, and forming strong relationships with preferred suppliers. The key to the commodity council approach is relying on market experts for the specific commodity being purchased to make well-informed, market-savvy sourcing decisions that fully meet all enterprise-wide requirements for a specific commodity.

1.3. Typically, the AF's current procurement strategy does not leverage overall AF spend. Although the AF has achieved some consolidation of requirements in certain “pockets of excellence,” the AF generally relies upon local strategy and execution to fulfill individual unit requirements. This results in multiple, decentralized sourcing strategies that tend to increase the overall prices that the AF has to pay for goods and services. This decentralized approach also decreases the AF’s ability to influence its suppliers across the enterprise. Creating a commodity council approach at an enterprise level changes this process and allows the AF to better leverage its spend to reduce the unit cost for goods and services and to improve customer responsiveness. Bringing together a group of commodity experts to establish the AF’s sourcing strategy better ensures the best overall performance for the entire AF.

PURPOSE

2.1. The purpose of the Commodity Council Implementation and Operations Guide is to document the processes required to develop and sustain commodity councils. It was developed with the assistance of personnel who established the successful Information Technology Commodity Council (ITCC) at the Standard Systems Group, Maxwell AFB, Gunter Annex, AL. Lessons learned from the ITCC implementation and operational experiences are included throughout this Guide (also see Appendix G - Commodity Council Lessons Learned).

2.2. The Guide provides information regarding commodity council structure and governance (see Appendix B - Commodity Council Governance Structure), roles and responsibilities for all members and a general process flow for Council implementation and operations. Commodity council leadership and members may use the Guide as a tool when implementing a new council and during its subsequent operation. The Guide is meant to provide a roadmap but each council may have unique aspects and each council may tailor this guide to meet their needs.

2.3. The Guide is intended to provide recommendations based on previous experience with commodity councils in both a commercial environment, as well as the Air Force organization. Each commodity council may have specific requirements, depending on the commodity and its market. The commodity council Director, Deputy Director, and Core Team members may review these recommendations, apply those that are relevant to the specific CC and customize the CC process to fit those needs.

2.4. The Guide includes several templates for deliverables and tools that a commodity council may find useful. Again, these documents are not requirements but are examples of tools that have worked well for previous or existing commodity councils.

3. COMMODITY COUNCIL IMPLEMENTATION PROCESS

The Commodity Council Implementation Process is outlined in Figure 2 below. SAF/AQC manages the conduct of an overall spend analysis and commodity council identification process on an ongoing basis (see Appendix A - Commodity Council Selection Process for additional details). When a potential commodity council is identified, SAF/AQC initiates the implementation process by driving the first step (Select CoE). SAF/AQC supports the CoE team throughout the remaining implementation steps.

Figure 2

3.1. Select Center of Excellence (CoE)

3.1.1. SAF/AQC drives this process step.

3.1.2. Identify the location (e.g., base, unit, etc.) for the Center of Excellence, or where the Core Team is physically located. SAF/AQC gathers information and interest from MAJCOMs and provides recommendations.

3.1.3. Identify the CoE Champion, whose assistance may include meetings with appropriate base leaders, identification of CSO/Director/Deputy Director candidates, and identification of other team members and resources.

3.2. Select Commodity Council Director and Commodity Council Deputy Director

3.2.1. SAF/AQC and the CoE team drive this process step.

3.2.2. Identify individuals at appropriate level (previous acquisition experience preferred but not essential) to fill lead positions (see Roles and Responsibilities).

3.2.3. Evaluate experienced personnel in the field of expertise, by CoE nomination, or by SAF/AQC and CoE consensus.

3.2.4. SAF/AQC issues official invitations to proposed individuals.

3.2.5. Conduct discussion with proposed individuals to solicit interest and support.

NOTE: All subsequent references to ‘Director’ and ‘Deputy Director’ refer to the Commodity Council Director and the Commodity Council Deputy Director.

3.3. Select Commodity Strategy Official(s) (CSO)

3.3.1. SAF/AQC, the CoE team, the Director and the Deputy Director drive this process step.

3.3.2. Identify an individual or individuals at the appropriate level (previous acquisition experience preferred but not essential) to sponsor commodity council. Candidates may be recommended by SAF/AQC or from the field, or someone may volunteer for the position.

3.3.3. If the circumstances require (i.e., if previous acquisition or functional experience is limited), appoint a second individual to serve as co-CSO for a specified length of time.

3.3.4. SAF/AQC issues an invitation and conduct discussions with proposed individual and sponsoring organization to solicit interest and support.

3.4. Select Team

3.4.1. CSO provides recommendations; the Director and the Deputy Director select team members.

3.4.2. Ensure cross-functional representation when selecting the team.

3.4.3. Identify Center of Excellence Team Members:

3.4.4. CoE team members may be co-located at the Center of Excellence. This role may be their primary job.

3.5. Identify MAJCOM Representatives:

3.5.1. Select representatives to provide appropriate representation based on the goals for the council. The Director determines how many Headquarters staff experts, operational experts, support personnel, and contingency experts are needed.

3.5.2. Coordinate with MAJCOM, DRU, and FOA headquarters to adequately fill roles. Headquarters may select representatives or a Director may request an individual by name, when a person has the required expertise.

3.5.3. Emphasize the time and effort required for council participation. These efforts require time and often there is a sense of urgency to complete the tasks at hand. An individual’s role on the council may be their primary job until the first strategy is approved.

3.5.4. Identify Advisors. Advisors serve on an ad-hoc (as needed) basis.

NOTE: See Roles and Responsibilities section for detailed descriptions.

3.6. Conduct Training. The Director works with SAF/AQC to define training needs for the individual commodity council. The Director coordinates available resources from SAF/AQC, DAU, AFIT, etc. and the appropriate resources, including commodity council leadership, conduct the necessary training.

3.6.1. Review case for commodity council formation, including results from the high level spend analysis.

3.6.2. Use the Commodity Council Implementation and Operations Guide (this document) as the primary training material to review CC process steps.

3.6.3. Use formal training materials once available.

3.6.4. Review accompanying templates and tools; begin to customize templates as necessary for specific CC.

3.6.4.1. See Appendix E - Commodity Council Communication Plan for template.
3.6.4.2. See Appendix C - Commodity Council Charter for template.

3.6.5. Review the CC’s community of practice on the Air Force Portal and the Portal’s role in the CC.

3.7. Develop Charter (see AFFARS 5307.104.93 for mandatory content)

3.7.1. The Director directs the creation of the charter, with the support of the Deputy Director and the team.

3.7.2. CSO signs the charter.

3.7.3. DAS (Contracting) signs the charter as final approval.

3.7.4. See Appendix C - Commodity Council Charter for template.

3.8. Conduct Kick-off session

3.8.1. Commodity Council leadership team conducts the kick-off session.

3.8.2. Identify a suspense date for the development of the council.

3.8.3. Determine a reasonable deadline for completing the initial strategy, based on the nature and complexity of the item or service involved. The timeframe may also take into consideration the availability of commercial market information, the urgency of the council’s need, the mission impact, etc.

3.8.4. Establish the location and the agenda for the initial council meeting. Attendees include Director, Deputy Director, and all team members. SAF/AQCA may participate and/or facilitate, if requested.

3.8.5. Agenda (see Appendix D - Commodity Council Kick-off Agenda) for the kick-off session may include a Commodity Council Overview (ConOps, Background & History), the CC Organization (Roles/Responsibilities, Process, Governance) and Participation (Tools, Website, Upcoming Events, Next Steps).

3.8.6. The Charter may be reviewed, refined, and signed by the end of this session.

4. COMMODITY COUNCIL ORGANIZATION STRUCTURE

4.1. The following (see Figure 3) is one model for an organization structure for a Commodity Council, with examples of potential team roles, including the Core Team (Center of Excellence members and Advisors) and Stakeholders, represented. This model may be adapted for an individual council, based on the needs of that council. Each council has the flexibility to assign roles and responsibilities as needed.

Figure 3

5. COMMODITY COUNCIL ROLES AND RESPONSIBILITIES

5.1. Cross-functional representatives may be selected to ensure adequate representation from across the Air Force. The council may contain commodity expertise, as well as knowledge in procurement, technology, market analysis, project management, business processes, acquisition strategy, and analysis.

5.2. The exact core team size and composition may vary according to the commodity and workload. The size, complexity and magnitude of the commodity dictates whether or not a particular council warrants full-time or part-time personnel and the number of extended members needed. The councils also need administrative support for scheduling, documenting, and tracking sessions.

5.3. The following section provides guidance for selecting Commodity Council core team members - both for the Center of Excellence (CoE) team and for Advisors. CoE team members are expected to fill full-time positions throughout CC operations, while advisors provide expertise on an ad hoc basis, depending on the stage of the process or the nature of a particular commodity spiral group. The role descriptions are based on a typical Commodity Council but each Director needs to determine what roles are essential for the specific CC. Recommended qualifications are provided as guidelines to assist in identifying and selecting candidates for each position but are not intended to be inclusive. In addition, some roles may be combined if a single individual possesses the adequate qualifications and the responsibilities can be met with that level of effort.

5.4. Overall, each Commodity Council member needs to have a basic understanding of the Air Force Contracting vision, possess basic knowledge of the Commodity Council concept, be committed to the success of the Commodity Council and be available to fulfill the requirements of their position (whether full-time or part-time).

5.5. Core Team - Center of Excellence Team

5.5.1. Commodity Strategy Official

Role Description
- Approves the Commodity Acquisition Management Plan (CAMP) - Addresses organizational barriers - Directs the use of strategic agreements - Ensures adequate representation on the Council - Participates in review sessions
Recommended Qualifications
- Acquisition Level III Certified - Program Executive Officer - Flag Officer equivalent from functional area or Acquisition

5.5.2. Commodity Council Director

Role Description
- Assumes accountability for the Council’s operations - Facilitates selection of Council members - Oversees development of the recommended Commodity Acquisition Management Plan (CAMP) - Ensures execution and compliance of the approved CAMP
Recommended Qualifications
- Contracting Level III Certified - Commodity Council methodology knowledge - Commodity marketplace experience

5.5.3. Commodity Council Deputy Director

Role Description
- Directs the day-to-day activities of the core members - Prioritizes objectives and tracks timelines/deliverables - Facilitates the development of the CAMP - Resolves tactical issues - Identifies Advisor position candidates
Recommended Qualifications
- Acquisition Level III Certified OR Contracting Level III Certified - Commodity Project Management - Commodity Council methodology knowledge - Commodity marketplace experience

5.5.4. Commodity Council Project Manager

Role Description
- Manages strategy development for one or more commodity groups - Enlists commodity experts to advise the core members during strategy development - Manages strategy schedule
Recommended Qualifications
- Acquisition Level III Certified - Commodity Project Manager - Commodity marketplace knowledge

5.5.5. MAJCOM & Functional Representatives

Role Description
- Represent stakeholders during commodity council operations - Survey functional areas to determine what capabilities require the commodity - Primary communication link to other functional stakeholders at MAJCOMs - Primary communication link to base level functionals under the MAJCOM - Could also serve as Project Manager, Commodity Expert, or Business Requirements Analyst
Recommended Qualifications
- Business requirements analysis - Business process analysis - Commodity group knowledge - Technical knowledge - Commodity Project Management - Commodity marketplace experience - Commodity expertise

5.5.6. Commodity Expert

Role Description
- Provides technical expertise and sourcing knowledge for the commodity group - Understands the industry’s economics, technologies, and trends
Recommended Qualifications
- Commodity expertise

5.5.7. Business Requirements Analyst

Role Description
- Collects, coordinates, and analyzes internal commodity requirements from users - Documents, analyzes, redesigns, and implements effective and efficient business processes
Recommended Qualifications
- Commodity group knowledge - Business requirements analysis - Business process analysis

5.5.8. Market Intelligence Analyst/Supply Chain Analyst

Role Description
- Researches and analyzes the industry that produces the commodity, its economics, technologies, and its trends - Analyzes risk in the supply chain from origin to delivery - Analyzes the capacity of supplier to meet probable demand patterns
Recommended Qualifications
- Business operations - Commodity expertise - Market research analysis - Commodity marketplace experience

5.5.9. Small Business Consultant

Role Description
- Provides guidance to the Council on the Small Business procedures and recommended strategies regarding small business suppliers - Develops and coordinates an effective and efficient use of socio-economic programs in the CAMP
Recommended Qualifications
- Acquisition Level III Certified OR Contracting Level II Certified - Small Business Program knowledge

5.5.10. Procurement Analyst/Manager

Role Description
- Documents approvals for competition exceptions - Advises Council regarding centralized vs decentralized buying strategy - Facilitates adoption of the CAMP through appropriate contracting instruments - Monitors new supplier transition - Assists Commodity Project Manager regarding tax exemption, closing out/terminating contracts and orders, root cause analysis - Performs actions related to property administration for specified contracts and/or commodities - Manages Freedom of Information program NOTE: Depending on the needs of the council, contract execution may reside inside or outside of council responsibilities.
Recommended Qualifications
- Contracting Level III Certified - Warrant Authority - Procurement analysis

5.6. Core Team - Advisors

5.6.1. Industry Consultant

Role Description
- Provides technical expertise and sourcing knowledge for a commodity group
Recommended Qualifications
- Industry representative - Commodity expertise

5.6.2. Standards & Architecture Expert

Role Description
- Ensures strategies align with current architectures and standards
Recommended Qualifications
- Commercial standards knowledge - C41SR knowledge - System engineering experience - JTA/ITRM knowledge - EAP knowledge

5.6.3. Business Process Analyst

Role Description
- Collects, coordinates and analyzes internal commodity processes from all MAJCOM and functionals
Recommended Qualifications
- Business requirements analysis - Business process analysis - Commodity group knowledge

5.6.4. Policy Expert

Role Description
- Ensures strategies align with current policies and regulations
Recommended Qualifications
- Acquisition Corps Member - Acquisition Level III Certified - Contracting Level III Certified - Commodity regulatory expertise

5.6.5. Legal Advisor (JAG)

Role Description
- Validates use of regulations and policy in purchase strategy definitions - Inform GCQ of additional support requirements, if necessary
Recommended Qualifications
- Acquisition Attorney

5.6.6. Financial Analyst

Role Description
- Monitors and measures financial savings and performance - Performs business case analysis and calculates ROIs as related to commodity - Obtains data to determine prospective suppliers’ capability - Assists in developing performance metrics and targets for suppliers - Identifies each cost component’s proportion of total commodity cost
Recommended Qualifications
- Cost analysis experience - Financial analysis experience - Data system knowledge

5.6.7. Economic Analyst

Role Description
- Creates demand forecast
Recommended Qualifications
- Data system knowledge - Economic analysis experience - Small Business program knowledge

5.6.8. Organizational Change Manager

Role Description
- Manages the change management process for the Council - Develops and manages the execution of the communication plan for each strategy - Assists with identification of key stakeholders - Facilitates review sessions with major users and suppliers as well as other stakeholder groups, as necessary
Recommended Qualifications
- Public affairs knowledge - Marketing expertise - Change management expertise - Human resource expertise - Organizational design experience

5.6.9. Training Expert

Role Description
- Determines training needs for major users and suppliers as well as other stakeholder groups, as necessary - Selects or develops appropriate training materials - Conducts required training/education sessions
Recommended Qualifications
- Training design and development expertise - Training implementation expertise

5.7. The following matrix (see Figure 4) maps each recommended commodity council position to the commodity council operations process steps:

Figure 4

6. COMMODITY COUNCIL OPERATIONS PROCESS

The Commodity Council process flow is outlined below (see Figure 5). The eight steps are not intended to be sequential but may be performed with some overlap (see figure below). This is specifically true for Review Current Strategy, Evaluate and Assess Current Strategy, and Forecast Future Demand since these three process steps require continuous coordination. Also, the process is a continuous improvement cycle and lessons learned should be adapted on an ongoing basis. If a Commodity Council develops multiple strategies, this process may be followed concurrently for each strategy. See Figure 4 for roles and responsibilities associated with each process step.

Figure 5

6.1. Review Current Strategy

6.1.1. Develop communication and implementation plans

6.1.1.1. Continue to refine the council Communication Plan, based on the template provided. The Communication Plan identifies all relevant stakeholders, what communication messages apply to each stakeholder group, what communication methods may be used for each message to each group as well as a schedule for the messages to be distributed. In addition, a feedback mechanism may be established to collect and evaluate data from stakeholders.

6.1.1.2. Coordinate with the Deputy Assistant Secretary of the Air Force (Contracting). This helps to ensure that lessons learned and best practices from other councils are collectively shared across the enterprise. SAF/AQC also plays a large role in helping the council manage risks within their strategy without overlooking statutory regulations, designated policy, or socio-economic goals.

6.1.1.3. Coordinate with MAJCOMs, DRUs, and FOAs. The council needs enterprise buy-in at every step of the process. The level of buy-in increases council momentum while decreasing obstacles, thus making future steps in the process more efficient.

6.1.1.4. Begin to document action items and schedule constraints that may affect the implementation of the future strategy. Examples include policies that need to be written or revised, processes that need to be reengineered, and system requirements that need to be defined. Working groups may need to be formed to address specific action items as warranted.

6.1.2. Conduct spend analysis

6.1.2.1. Review spend analysis specific to the commodity group. The spend analysis reflects how much money was spent, who spent the money, where the commodities are being used, the number of actions each base/installation made in conjunction with a commodity, and who the major suppliers are.

6.1.2.2. Identify any potential subcategories. Each commodity category may have subcategories. Identify the possible sub-categories and determine which ones may be incorporated into the strategy.

6.1.2.3. Gather additional spend data as required. The data provides factual and relevant information as to the specific commodity’s historical information, commercial and governmental uses, acquisition processes, and other information about the commodity as deemed relevant. This can include, but is not limited to, DD350 and DD1057 data, Government Purchase Card (GPC) spend data, and commercial processes based on end-to-end procurement (order receipt to commodity delivery and ultimate payment). This data could also include government-buy cycles for the commodity, command practices, contingency processes, and operational commodity practices. Determine the time span of pertinent historical information. The time frame determined by the council provides enough baseline data to develop and pursue council goals and objectives.

6.1.3. Identify stakeholders. Include stakeholders from all areas affected by council decisions. This includes, but is not limited to, contracting, finance, engineering, supply, transportation, and program management personnel. All stakeholders should be present throughout the formation and use of the CAMP. For example, key stakeholders for a Fuels commodity council might include transportation, maintenance, operations, contracting and finance/budget personnel. Peripheral stakeholders may include personnel from the safety office, HAZMAT office, base operations, Civil Engineering, etc.

6.1.4. Identify current initiatives/contracts. Review other DoD and federal agency activities to see if the same type of effort has been performed elsewhere. This may result in some quick wins early in the process and eliminate duplication of efforts.

6.1.5. Review current policy and statutory requirements. Policy and statutory requirements should be considered early in the process in order to avoid unnecessary delays when developing a new strategy.

6.1.6. Document current processes

6.1.6.1. Processes to be detailed include: user/customer requirements, acquisition processes, supply steps, transportation functions, vendor functions, and contingency processes.

6.1.6.2. Document current cost of the commodity from inception through disposal (life-cycle cost). Costs associated with the commodity may include:

• Price of item
• Air Force labor hours required from the original request through disposal
• Internal maintenance and upkeep costs
• Warranty costs
• Normal transportation cost associated with the commodity
• Disposal cost, including any special environmental handling and disposal costs

6.1.6.3. Identify challenges associated with commodity, based on commercial demand and availability, changes to military and civilian manning, flexibility, field training requirements, technology demands, effects on readiness, regulatory and legal requirements, etc.

6.1.6.4. Consider impact of contingency operations. Both positive and negative impact is analyzed. Exploit the positive while mitigating the negative through special guidance to the council.

6.1.6.5. Consider the effect on small business participation. The Council’s strategy should continue to meet small business goals. Engage the Air Force Office of Small and Disadvantaged Business Utilization officials at initial stages. Support from that organization provides credibility for the Council’s proposed strategies. See FAR 6.2 for additional guidance.

6.1.6.6. Consider whether local command authority may lose flexibility and funding based on the Council’s objectives.

6.1.6.7. Consider effects of bundling and/or consolidation, if applicable.

6.1.7. Document current metrics. If available, this data may provide insight into the current strategy and may be useful as justification when defining future strategies. If the MAJCOMs don’t currently maintain metrics of the process, have them contact their operational squadrons to determine if metrics are available.

6.1.8. Hold review sessions with major users and suppliers.

6.1.8.1. Communicate with stakeholders at the MAJCOMs, DRUs, and FOAs to gain a staff level perspective of the process.

6.1.8.2. Contact stakeholders at the base/wing level to gain an understanding of the operational process.

6.1.8.3. Contact the AEF headquarters and/or individuals currently/recently deployed within the last 6 months to determine what process is used in the contingency environment.

6.1.8.4. Vendors and industry can provide perspective on the current process. They may offer up alternatives that the council would like to incorporate in their strategy.

6.1.9. Benchmark existing strategies

6.1.9.1. Analyze lessons learned from previous acquisitions. Contingency lessons are also of vital importance, as these lessons may provide the council with ways of improving the contingency environment and increasing mission capability rates.

6.1.9.2. Identify areas of the current process that could be improved for efficiency.

6.1.9.3. Document strategies in use across the Air Force, or at a single location. This information may assist in following commercial industry best practice of a centralized strategy with decentralized execution.

6.1.10. Identify leverage opportunities. Based on the results of the spend analysis, determine strategies that best leverage Air Force resources. Consider ways to lower costs, consolidation of purchasing office activities, and how the number of contracts may affect overall commodity costs.

6.2. Evaluate and Assess Current Market

6.2.1. Determine data sources. Evaluate the current market climate and processes within the market place. Sources of data may include: commerce magazines, trade associations, libraries, government subject matter experts, and through leaders in the commercial industry.

6.2.2. Document market trends, such as:

• Do price fluctuations occur periodically (i.e., each quarter or year)?
• Is the commodity readily available?
• Does the industrial sector forecast any shortages, which could produce price and delivery fluctuations?
• What is the current market share of the federal government and the Air Force?
• What is the normal reporting cycle for quarterly economic status of the leaders in the industry?
• Who are the current commercial market leaders for the commodity?
• What is the availability and number of small business vendors with government experience and commodity expertise?

6.2.3. Analyze market for emerging suppliers and commodities. Evaluate the market to determine what new suppliers and commodities are coming on the market in order to take advantage of potential benefits of new commodities and suppliers. Prepare for requirements that may rise from stakeholders in the future. Assess impacts of obsolete technology products, commodities, etc.

6.2.4. Request information from leading suppliers. The following steps are taken from Johnson & Johnson’s strategic sourcing department when evaluating new suppliers1:

6.2.4.1. Operations includes process operations, process capabilities, and stability of operations. Also includes emergency preparedness—the supplier’s ability to maintain operations in the event of disaster. Does the supplier have dual site manufacturing capability? If not, do they have a joint venture or partnership with another supplier? How is the supplier prepared to deal with catastrophic events?

6.2.4.2. Quality addresses the assurance of quality and conformance to the company’s specifications using process excellence tools such as Six Sigma.

6.2.4.3. Financial vitality considers how dependable the company is financially.

6.2.4.4. Engineering/technical expertise includes the depth of technical support the supplier offers. Also addresses engineering support related to manufacturability and information technology. Is the supplier CMM (Capability Maturity Model) certified?

6.2.4.5. Dependability and conformance to delivery schedule

6.2.4.6. Strategy and leadership involves the top-down management vision, mission, commitment, and support on where the supplier is headed and how it is tracking in relation to those issues.

6.2.5. Analyze supplier capacity and capabilities. Determine the volume of the commodity that can be delivered by individual suppliers. Review their manufacturing capabilities, performance capabilities, understand what they can do, etc. Use information from the supplier and from external sources.

6.2.6. Determine market availability of commodities. Research the availability of the commodity. Is it available commercially? Is it readily available? Is it sole sourced? Does it require exclusive manufacturing? Or, is it available off-the-shelf?

6.2.7. Stratify suppliers by socio-economic status. To ensure compliance with FAR requirements, break out the available suppliers by socio-economic indicators such as: small business, woman owned, minority owned, historically under utilized business zone, disabled veteran owned, large business, and so forth. Provide the types of suppliers available; the list may not include all suppliers across the U.S. but a representative sample.

6.2.8. Identify key industry cost drivers. Drivers calculated in the base cost of the item may include:

6.2.8.1. Costs for the item or services. Do not break out each and every component of an item, but do list the cost for the main components.

6.2.8.2. Labor costs are the main driver of cost in many segments of industry. The labor cost is the total labor cost included in one unit.

6.2.8.3. Transportation costs aid the determination of shipping methods, storage costs, and/or expediting cost.

6.2.8.4. Research and development costs for past and future efforts.

6.2.9. Evaluate current strategy against best practices. Identify best practices within the industry that produce increased efficiency and/or effectiveness in the current market. This may provide the council with some insight as to where industry is headed for the future.

6.3. Forecast Future Demands

6.3.1. Collect requirements from stakeholders. This information can be obtained from MAJCOMs, bases, and contingency units. A lesson learned is to include a “major” user representative on the commodity council. If one or more users participate in the forecasting process, accuracy increases.

6.3.2. Develop customer-approved demand forecast based on the requirements information.

6.3.3. Evaluate the demand forecast against key cost drivers. Calculate cost to satisfy 100% of the demand plan. Identify options to reduce cost impact. Negotiate tradeoffs and standardization, where possible, based on cost considerations.

6.3.4. Establish cost estimate for demand forecast. To estimate cost, multiply the current price by the estimated inflation rate, and then multiply that by the forecasted quantity required. The end result provides the estimated total cost. The estimate total cost provides important information for the development of strategic sourcing decisions. Consider quantity discounts as well as learning curves. These factors may have a significant impact on the average price over time.

6.3.5. Analyze projected funding against demand forecast. Determine the portion of the demand plan that can be satisfied within the funding constraints based on cost estimate and within any supplier capacity constraints.

6.3.6. Determine spend projections. Perform a statistical analysis of three-year projects, based on quarterly reports.

6.3.7. Validate spend plan with stakeholders. Engage the stakeholders in discussions about requirements funding. Can command buys be consolidated once a quarter? Can buys be coordinated with other users to enable spend leveraging?

6.4. Create Future Strategy.

6.4.1. Develop and prioritize commodity goals. Review original goals and determine if they are still valid. If the goals need to be adjusted or reprioritized, modify them at this point. Aligning the strategies to the goals and the overall mission of the council is vital in maintaining momentum.

6.4.2. Analyze gap between existing strategy and goals. Identify the gap between the results of any previous strategies and the new commodity goals.

6.4.3. Develop strategies for meeting specific goals. Develop the council’s initial strategies based on the goals and forecasts. Initial strategies may include uniformity of acquisition; enhance savings, increase quality and/or efficiency. This includes reviewing whether existing contracts can be used, or whether new ones are necessary. Begin to consider how to meet the socio-economic goals.

6.4.4. Analyze spend plan against supply base capabilities. Compare the forecasted spend data and strategies with base support capabilities to ensure support is available. When looking at the support elements, evaluate ability to warehouse commodities, the capabilities for delivery, surge support, financial services, and others.

6.4.5. Obtain approved supplier recommendations. Coordinate with industry consultants and leaders to obtain recommendations for strategic goals and continuous improvement. Recommendations are based on the goals of the CAMP as well as the gap analysis, the demand forecast, and the market analysis. Current acquisition and supply chain processes can be used for reference. Review and analyze recommendations and determine impact on overall strategy.

6.4.6. Synchronize demand forecast and supplier capabilities. Compare the demand forecast to the industry leader’s production timeline. Attempt to synchronize the estimated ordering cycles with the quarterly reporting periods, or when suppliers have historically had a surplus of the commodity or any timeframe found to accomplish the council’s objectives. Doing this may result in extra savings for the Air Force, as well as ensure on-time delivery, and improve customer service. Examine possible problems associated with other ordering cycles. An example of a problematic timeframe might be ordering furniture at the end of the fiscal year; often delivery is delayed up to 120 days because manufacturers are not set-up for the number of orders received within a short amount of time.

6.4.7. Mitigate internal/external threats to supply chain stability.

6.4.7.1. An example of an internal obstacle is a reorganization of support elements causing disruption of the ordering process. This can be mitigated during the strategic process by streamlining the ordering system and eliminating unnecessary layers involved in ordering the commodity.

6.4.7.2. An example of an external obstacle is when a supplier’s labor force goes on strike. A mitigating action might be to have more than one supplier available for service.

6.4.7.3. Chart flow of future supply chain that reflects the entire process from need identification through disposition. This chart reflects strategies developed by the council. At this point, add estimated time frames throughout the process to determine if the amount of labor to order the commodity has changed.

6.4.7.4. Develop the workload responsibilities. Every position throughout the supply chain that is involved in the revised process may be documented. Capture each position’s roles and responsibilities, as this may be used to forecast manning requirements, education levels, special training needs, and workload. This chart, combined with the demand forecast chart, the ordering flow chart and the spend forecast, may be extremely useful while developing the communication plan.

6.4.8. Develop a Commodity Acquisition Management Plan (CAMP). See AFFARS 5307.104-91 for additional guidance.

6.4.8.1. The CAMP describes the acquisition strategy (see Appendix F - CAMP for template and outline).

6.4.8.2. Consider the following questions:

• Will the Council use GSA contracts currently in place, develop contracts, establish blanket purchase agreements, or will the individual contracting offices handle individual contracts?
• How will funding and payments be handled?
• Will funding be forwarded to a central ordering position or will units fund their own respective orders, and can payments be made via GPC or will they be processed through DFAS?
• The CAMP may address shipping processes, transportation, and storage processes, warranty and repair issues, priority ordering, and other administrative contractual matters.

6.4.9. Establish stakeholder consensus.

6.4.9.1. Identify organizational, systemic resistance to strategy. Representatives can probe field units for reaction and then weigh feedback against the intended strategy and process and identify problem areas.

6.4.9.2. Prepare to overcome major resistance. This may include intensive efforts such as creating alternatives to the areas of concern or they could be as simplistic as planning a survey to be conducted after implementation has been completed and the strategy has been utilized for a few months. Further analysis of survey feedback can allow for value added changes to the strategy.

6.4.9.3. Develop messages that sell the strategic process to the lowest levels of the Air Force community. Buy-in from the top is important but buy-in at the operational level is just as important.

6.5. Approve Strategy.

6.5.1. The Commodity Strategy Official (CSO) approves each CAMP (see AFFARS 5307.104-91 for additional guidance).

6.5.2. Approve Commodity Acquisition Management Plan to ensure it accurately reflects the final strategy and provides coverage of all possible acquisition scenarios (see Appendix F - CAMP for template and outline).

6.5.3. Validate the strategy end-to-end to ensure completeness. Consider performing a desktop exercise to walk through the entire end-to-end process as defined by the strategy. Perform an operational test after the contractual instruments are in place, at any installation, in order to visualize performance of each step in the entire process.

6.5.4. Allocate workload to establish required new contracts. Once it has been determined where, how, and who will write the contractual instruments utilized in the strategy and the strategy has been validated and approved by the council, allocate the contractual workload.

6.5.5. Communicate workload responsibilities based on the new strategy to MAJCOMs and career field managers.

6.5.6. Establish review cycles for the strategy. During these review cycles, review feedback from the field, vendors, and the auditors to determine which direction the council needs to take in the future. The review cycles could be every 6 months to once per year.

6.6. Establish Contractual Instruments. Depending on individual council needs and available skills, contract execution responsibilities may reside inside or outside of the commodity council. The following are recommended steps for contract execution.

6.6.1. Issue requests for proposal (RFPs). RFPs are used in negotiated acquisitions to communicate Government requirements to prospective contractors and to solicit proposals. RFPs for competitive acquisitions shall, at a minimum, describe:

• Government’s requirement;
• Anticipated terms and conditions that apply to the contract:
• Information required to be in the offeror’s proposal;
• Factors and significant subfactors that are used to evaluate the proposal and their relative importance; and
• Appropriate ordering provisions to ensure fair opportunity.
• The contracting officer shall issue solicitations to potential sources in accordance with the policies and procedures in FAR 5.102, FAR 19.202-4, and FAR Part 6. Contracting officers may issue RFPs and/or authorize receipt of proposals, modifications, or revisions. For more detailed information on issuing an RFP, see FAR 15.203 -- Requests for Proposals.

6.6.2. Analyze Proposals. The objective of proposal analysis is to ensure that the final agreed-to price is fair and reasonable. The contracting officer is responsible for evaluating the reasonableness of the offered prices. For more detailed information on proposal analysis reference FAR 15.404.

6.6.3. Negotiate with suppliers. Taking into consideration the advisory recommendations, reports of contributing specialists, and the current status of the contractor’s purchasing system, the contracting officer is responsible for exercising the requisite judgment needed to reach a negotiated settlement with the offeror and is solely responsible for the final price agreement. However, when significant audit or other specialist recommendations are not adopted, the contracting officer should provide rationale that supports the negotiation result in the price negotiation documentation.

6.6.4. Select suppliers. Contracting officers must purchase supplies and services from responsible sources at fair and reasonable prices. In establishing the reasonableness of the offered prices, the contracting officer must not obtain more information than is necessary.

6.6.5. Award Contracts. The contracting officer shall award a contract to the successful offeror by furnishing the executed contract or other notice of the award to that offeror.

6.6.5.1. If the award document includes information that is different than the latest signed proposal, as amended by the offeror’s written correspondence, both the offeror and the contracting officer shall sign the contract award. For more detailed information on award of a contract, see FAR 15.504.

Once the strategy has been competed and the contracting issues have been decided, having the contracts advertised and awarded could take anywhere from 60 days to six months. The length of time required for establishing the contractual instruments depends on numerous factors such as commodity complexity, vendor responsiveness, details of the strategy, etc.

6.7. Roll Out Strategy

6.7.1. Communicate implementation strategy to stakeholders. This may include a definition of the requirements, an identification of key suppliers, how contracts may be negotiated and developed, and how suppliers may be managed.

6.7.2. Conduct required training/education. All stakeholders need to understand what the strategy entails. Ensure that users, buyers, customers, and suppliers know what processes will be changed. If the strategy includes more automation, then users will need to be trained on system essentials. If buyers are no longer going to generate contracts at a local level (e.g., transactional purchasing via a enterprise contract), then they need to know how to execute their buys under the new arrangement. If customers are required to consolidate funding with other organizations in order to leverage the Air Force spend, then they need to know how to track their expenditures back to their level in case of a local audit. If suppliers are going to generate cost proposals on a quarterly basis, they need to be given a list of forecasted requirements.

6.7.3. Conduct implementation kick-off meetings. Begin at the MAJCOMs and flow to operational levels. The Director coordinates these meetings with the commands to ensure maximum participation.

6.7.4. Transition from previous suppliers. Establish new supplier and phase out previous supplier in accordance with the CAMP.

6.7.5. Execute against new strategy/contracts. Strategy may initially be executed at a predetermined location and monitored for effectiveness, goal accomplishment, as well as systemic problems. Documenting lessons learned during the initial execution provides data for strategic analysis and can be used for continuous improvement. Careful monitoring determines the ability of other stakeholders to utilize the strategy and determine training deficiencies.

6.7.6. Verify implementation. MAJCOM and field representatives communicate with key stakeholders to identify problems encountered in the field and to verify strategic implementation. Representatives request feedback on the new strategy and processes that can be applied as lessons learned and for continuous improvement purposes.

6.7.7. Ensure compliance. MAJCOMS provide the council with metrics measuring data critical to the strategy improvement cycle. Each command collects data from the field units in their respective chain of command. The metrics chosen may reflect key elements of the goals and processes of the council.

6.8. Monitor and Continuously Improve Strategy

6.8.1. Collect feedback from stakeholders and review to evaluate strategic process progression, savings actually being realized, and changes to customer satisfaction.

6.8.2. Collect industry data to understand whether the strategic purchasing is affecting the market place, to ask vendors whether the process is working, what problems need to be resolved, and what are areas for process improvement.

6.8.3. Analyze strategy performance. Collect data for the two previous steps and analyzing where the process was when the council started vs. where it is now. Consider the following:

• Is the Air Force saving as much as forecasted?
• Has the quality of the commodity increased, decreased, or remained unchanged?
• Have delivery times improved or declined?
• Are lines of communication between vendors and Air Force flowing freely?
• Has the strategy been embraced by operational units?
• Have contingency requirements met or exceeded the needs of our combat troops?

6.8.4. Change operating budgets to reflect optimization once savings are realized. The operating budgets of those affected by the strategy may be reduced or increased to reflect the current expenditures.

6.8.5. Reevaluate current strategy for changes needed by compiling all of the information gathered in this step of the process to determine what changes are needed.

Appendix A - Commodity Council Selection Process

The following (see Figure 6) outlines the evaluation process that AQC conducts on a regular, ongoing basis. Once a commodity group is identified and approved, the Commodity Council implementation process is followed.

Figure 6

1. Collect Air Force spend data from available sources:

• AF contracting databases
• GPC databases
• Suppliers
• Air Force Knowledge System/Contracting Business Intelligence System

2. Segment AF spend into logical buying groups based on % of total Air Force Spend (or by % of Goods and Services spend). These groups may be driven by Federal Supply Classification (FSC) codes but groups may also include all commodities that are related by type of user and/or type of buyer. Also, consider qualitative factors that influence the need for a commodity grouping (user group has expressed an interest, a large contract is expiring, etc.)

Note: The data influence the commodity group definitions (may be dollars, FSC code, geographical location/region, suppliers, or a combination of these factors).

3. Document the following statistics for each commodity group:

• Percent of total AF spending
• Percent of AF Goods and Services spending
• Number of total contract
• Number of purchasing offices
• Number of contractors
• Top 5 suppliers and percent of AF spending and/or AF Goods & Services spending
• Top 3 purchasing locations (Base and Office) and percent of AF spending and/or AF Goods & Services spending

4. Evaluate selection criteria (High, Medium, Low) for each commodity group:

• Ease of spend analysis
• Ease of market analysis
• Level of skilled commodity experts
• Short and Long Term saving opportunities
• Percent Key supplier spending (Low <20%, Med 20 – 60%, High >60%)
• Number of purchasing locations (Base and Office)
• Contracts vs. contractors (Low < 1.5, Med 1.5 – 2, High >2)
• Percent AF Goods & Services Spending (Low <1%, Med 1 – 2%, High >2%)
• Short Term Win

5. Document other relevant information for each commodity group, such as:

• Existing Centers of Excellence (CoE)
• Expertise in the field
• Work already completed
• Regionalization opportunities
• Spiral opportunities
• Small business opportunities
• Political relationships
• MAJCOM spend

6. Submit CC recommendations for review and approval.

• Prepare recommendations for Commodity Council definition based on the evaluation criteria results (i.e., groups with mostly High/Medium ratings unless other information supports it)

7. Implement approved Commodity Councils (see Commodity Council Implementation Process).

Appendix B - Commodity Council Governance Structure

The following (see Figure 7) illustrates the Commodity Council governance structure.

Figure 7

1. Board of Councils

1.1. Purpose: To provide oversight to existing commodity councils; to maintain the commodity council process; and to serve as a forum for communicating cross-commodity council issues.

1.2. Members:

• Deputy Assistant Secretary (Contracting) as Chair
• Contracting Strategy Officials from AF commodity councils
• Chairs from the AFMC Material Governance Board
• Air Force Office of Small and Disadvantaged Business Utilization
• Deputy General Counsel for Acquisition

1.3. Roles & Responsibilities:

1.3.1. Define and implement governing policy
1.3.2. Define standardized processes for commodity council operation
1.3.3. Monitor process control and manage continuous improvement efforts
1.3.4. Manage legal and policy issues as they arise
1.3.5. Resolve cross-commodity council issues
1.3.6. Evaluate and assess need for commodity councils on an ongoing basis
1.3.7. Meets a minimum of two times per year; additional meetings as needed

2. Directors Board

2.1. Purpose: To share lessons learned among existing commodity councils; and, to raise cross-commodity council issues as appropriate to Board of Councils

2.2. Members:

• AQC Designee as Chair
• Directors from AF commodity councils

2.3. Roles & Responsibilities:

2.3.1. Share individual commodity council activities/metrics
2.3.2. Share lessons learned throughout CC implementation and operation
2.3.3. Offer recommendations for process improvements
2.3.4. Share legal and policy issues as well as potential resolutions
2.3.5. Raise issues, as appropriate, to Board of Councils for discussion and resolution
2.3.6. Meets a minimum of two times per year; additional meetings as needed

3. Implementation Support Team

3.1. Purpose: To serve as coach and mentor for each commodity council

3.2. Members: Action Officers assigned from SAF/AQC

3.3. Roles and Responsibilities:

3.3.1. Work closely with their respective council ensuring consistent enterprise execution and knowledge transfer
3.3.2. Facilitate stand-up and day-to-day support activities
3.3.3. Establish and promote structure, methodologies, etc.
3.3.4. Develop framework for commodity council rollouts and implementation
3.3.5. Provide knowledge transfer and “lessons learned”

Appendix C - Commodity Council Charter

Refer to AFFARS 5307.104-93 for mandatory Charter content. The following is a recommended outline for a Commodity Council Charter. The Charter will be developed for each Council according to its specific goals and needs. Once developed by the Director, Deputy Director and Core Team, the Charter will be signed by the Deputy Assistant Secretary (Contracting) and the Commodity Strategy Official.

A. Purpose

B. Definitions

1. Commodity Council
2. Commodity Strategy Official
3. Commodity Acquisition Management Plan

C. Background

D. Anticipated Results

E. Specific Responsibilities for Members

F. References

G. Authority

H. Resources

I. Terms of Understanding

J. Approvals

Appendix D - Commodity Council Kick Off Session Agenda

The following is an outline that can be modified as necessary for a Commodity Council Kick Off Agenda:

A. Welcome/Introductions

B. CC Overview

1. What is a Commodity Council?
2. Background & History
3. Objectives

C. CC Organization

1. Roles & Responsibilities
2. Process
3. Governance

D. MAJCOM Participation

1. Tools and Website
2. Upcoming Events
3. Next Steps/Things to Do

Appendix E - Commodity Council Communication Plan

1. The following is a high level outline for the contents of a CC Communication Plan. A Communication Plan may be developed for each strategy created by a commodity council. Each plan reflects the specific stakeholders relevant for that specific strategy. An initial Communication Plan can be drafted during the commodity council implementation kick off but may be refined as the council creates new commodity strategies.

A. Introduction

1. Purpose
2. Goals

B. Stakeholder Groups and Messages

1. Sponsors
2. Messages
3. Target Audiences
4. External Factors and Variables

C. Communication Mediums

1. Mediums
2. Activities and Materials

D. Implementation

1. Review, Approval, and Dissemination
2. Schedule

E. Evaluation and Revision

1. Feedback Vehicles
2. Evaluation and Implementation

2. The following is an example of a Communication Plan Executive Summary:

A. Introduction

The Air Force Chief Information Officer (AF-CIO) vision for the future management of Information Technology assets is “One Air Force – One Network – One IT Business Strategy”. It applies to all common use and Business & Combat Support (Non-NSS) IT and encompasses all phases of the IT asset/resource life cycle from purchase to disposition. To fulfill this Vision, several initiatives were launched to transform the current Air Force IT Buying, Contracting, and Life-Cycle strategies and shift from a “Tactical” to “Strategic” perspective, thus leveraging the tremendous Air Force buying power. The industry implementation of the “Commodity Council” purchasing concept has proven extremely successful, resulting in significant cost savings and improved customer support. As a result, the AF-CIO and SAF/AQC chartered the Air Force IT Commodity Council to develop and implement the CAMP for an initial category of IT assets – Desktops, Laptops and Servers. A Communication Plan will be published for each additional IT category strategy in the future.

B. Purpose of the Communication Plan

This Communication Plan provides mechanisms to support upward, downward, lateral, internal, and external communications. The Communication Plan has several objectives, including preparing Stakeholders for the changes forthcoming in the acquisition environment, securing their commitment to the changes (buy-in), and establishing reasonable expectations regarding the impacts and benefits of these changes.

This plan serves as a guide for the dissemination of information to all Stakeholders. Thus, the overall goal of the Communication Plan is to provide a roadmap for the strategy implementation that results in minimum impact to current AF operations. It also encourages feedback and provides an avenue for dissemination of guidance and clarification as needed.

This plan is created with general guidelines in order to accommodate the ever-changing communication needs during the transition to the Commodity Council purchasing concept. The success of the communication effort depends on the ability to assess each situation and to adjust the communication product or frequency as dictated by the feedback of the participants. In large part, the success of the initiative hinges on effective communication to both internal (AF) and external (DOD and Industry) audiences.

C. Communication Goals

Effective communication involves the sharing of information, requires an established methodology that educates and informs, and contains built-in mechanisms for feedback and positive interaction. The style, degree of detail, and delivery vehicle (e.g., meetings, website, newsletters, hotlines, etc.) are important considerations before communication begins. Accessible and rapid communication is the key to ensuring cooperation, stability, and continued facilitation of current and future commodity initiatives. Regardless of the message and who is involved in the communication processes, there are recognized, basic attributes of communications that determine the effectiveness of the message. Messages related to the desktop/laptop/server replacement strategy will be:

• Timely: Messages will occur in a logical sequence aligned with the timeline phases of the initiative. Stakeholder questions and issues will be addressed quickly and the message dissemination process streamlined to provide information in a timely manner.

• Accurate: Message content will be reviewed carefully; including checking sources and content to ensure information is accurate. Providing incorrect or outdated information adds additional workload to correct errors, and more significantly, impacts the credibility of the source for future communications.

• Complete: Omitting key information can be just as damaging as providing inaccurate information. It is also important to anticipate Stakeholder follow on questions and concerns resulting from the message.

• Consistent: The basic message will be consistently conveyed with all “messengers” carrying the same core message to all Stakeholders.

• Understandable and Concise: Understanding the Stakeholder target audiences, to include their mission, attitudes, and level of knowledge about the Strategy is critical in developing effective, “tailored” messages. Failure to take this into consideration can lead to unnecessary confusion, rumors, and loss of credibility.

More specifically, the objectives of the Communication Plan are to ensure that the Stakeholders:

• Receive a complete, clear, and accurate explanation of both the Commodity Council concept and the Strategy/Implementation process in a timely and consistent manner.

• Serve as a guide for providing consistent communication as well as describe the messages, target audience, vehicles, and timing of communications.

• Create an environment that encourages information sharing and open dialogue to foster cooperation and understanding while minimizing the dissemination of inaccurate information.

Appendix F - Commodity Acquisition Management Plan

1. Refer to AFFARS 5307.104-91 for additional guidance. The following is an outline for an overarching CC CAMP. Each commodity spiral requires an Annex to the overarching CAMP. The contents of the Annex depend on the individual commodity strategy. CAMP Annexes are subject to the same approval process as the overarching CAMP.

A. Background

1. Statement of Need
2. Market Domain
3. Market Characteristics

B. Governance

1. Structure and Organization
2. Resources and Funding
3. Approval Thresholds
4. CAMP Structure
5. Strategic Planning Review Process

C. CAMP Overarching Strategy

1. Guiding Principles
2. Strategic Objectives
3. Performance Measures
4. Strategy Development Process
5. Strategy Components
6. Risks and Risk Mitigation

D. Recommendation

E. Appendix - ASP (Acquisition Strategy Panel) Minutes

2. The following is an overview of a CAMP:

A. What is a CAMP?

A CAMP is an acquisition planning document that provides the strategic plan to acquire and manage all products under the responsibility of a commodity council. The plan formally documents the approach to fill the need, optimize resources, and satisfy policy requirements for a proposed acquisition. It answers the "who-what-when-where-why-how" of the acquisition strategy planning process.

If a CAMP applies to a range of products, an overarching document outlines the overall council process and addendums are prepared for each acquisition as each acquisition strategy is developed. The plan need not be lengthy, but should be thorough. A concise, clear statement of the facts and rationale supporting the technical and business judgments is all that is necessary. The CAMP and Addendums may be prepared in briefing format.
A CAMP should be general enough to allow some detailed program management flexibility, but be specific enough to give coordinating and approving officials adequate information on the technical and business aspects of the acquisition upon which to base their decisions. Toward this end, the plan clearly demonstrates that those responsible for an acquisition have ensured the following key elements:

The Government gets what it needs, when it is needed, within established cost objectives:
Sufficient and appropriate funds are available/obtainable;
A sound and equitable business arrangement is planned;
Risks due to concurrent development/production are managed;
The national goals of competition and small business utilization are supported, and
The systems/equipment are supportable when fielded.

B. When is a CAMP required?

CAMPs are required to fulfill written acquisition plan requirements for all Commodity Council Acquisitions. A program level CAMP may be written with annexes for each acquisition, or a CAMP may be prepared for each individual acquisition.
C. Who writes the CAMP?

The Director has primary responsibility for preparation of the CAMP. The Director relies on the expertise and input from the various functional activities involved in the acquisition process for assistance in the preparation of the plan. In this regard, close coordination with the assigned contracting officer is particularly important in developing an appropriate contracting strategy and business approach. The council team also seeks input from other key advisors from the Judge Advocate Office (JA), Small and Disadvantaged Business Utilization Office (SADBU), Defense Contract Management Agency (DCMA), and others as appropriate. If the plan proposes other than full and open competition, the Competition Advocate also coordinates.

The most effective plans are the result of a true team-effort process of planning. Poor plans are produced when planning is the by-product of the necessity of having to prepare a written plan. In other words, the key to success is to plan first, then document the plan. The process of planning involves lots of dialogue with the user, the supporter, and the various functional experts assigned to the program management office and center staff organizations. In addition to using the team of specialists within the program office, use the experts assigned to the Acquisition Strategy Panel (ASP), when required, as a forum to discuss and refine all planning issues. The requirement for an ASP is delineated in AFFARS 5307.104-90.

A CAMP serves to generate commitment by all stakeholders to support execution of the plan. The best way to achieve this commitment by all stakeholders is to have them participate actively and early in the planning process. In order for the Government to successfully meet its overall program objectives, everyone involved in planning and executing the program need to feel some ownership.

An Acquisition Strategy Panel (ASP), if appropriate, is held in accordance with AFFARS 5307.104-90. Much of the CAMP can be drafted prior to the ASP. However, it is not possible to finalize the document until after receiving the input of the ASP. If an ASP is held, attach meeting minutes to the CAMP. Ensure the CAMP is consistent with the discussions and recommendations of the ASP. Where appropriate, the plan documents the disposition of ASP recommendations. Differences between the approach recommended by the ASP and the approach described in the plan is explained.

D. Checklist for CAMP Development:

1. Hold a kick off meeting with the Commodity Council Core Team.

2. Plan first, and then document the plan.

• What are the performance, cost, and schedule objectives?
• What are the user’s requirements? Have they been addressed?
• What are the risks of not achieving them?
• What contract type is appropriate given the risks?
• How should the end item be tested and evaluated?
• How will the user maintain the items?
• How will the user/support command keep the items operational?
• What kinds of data do we need?
• Is there a competitive market for the effort?
• Does the market research indicate that this should be set-aside for small business?
• How can we develop/sustain competition through follow-on support efforts?
• Do we need a warranty?
• What does the market place offer?
• Is my requirement overstated in a way that might preclude commercial items?
• What are the customary commercial practices for buying the item?
• Do commercial items meet the requirement?

3. Give a clear overall non-technical description of the program. Expect those who read the plan to be unfamiliar with the program.

4. Ensure the plan is consistent with the strategy discussed at the ASP and explain any differences.

5. Include the disposition of the ASP recommendations in appropriate sections of the plan.

6. Use the team to accomplish regulatory research needed to fully understand the Acquisition Planning issues to be included in the plan.

7. Explain in sufficient detail any program or contract funding deltas.

8. Discuss contract options.

9. Explain acronyms as necessary (Remember: AAMFTWDKWTM, or Acronyms Are Meaningless For Those Who Don't Know What They Mean).

10. Begin the Consultation phase when the team feels the plan is complete.

Appendix G - Commodity Council Lessons Learned

1. Implementation

• Build a detailed standup schedule & use it to track activities & progress
• Air Staff & stakeholder support critical—know them, their interests, & go see them!
• Full-time CoE team necessary for day-to-day workload & “heavy lifting”
• MAJCOM/Functional Reps are the key to AF buy-in and success
• Work CC funding source(s) with representatives upfront

2. Organization/Roles

• Legal advisor: value extends far beyond legal advice—can help team make fact-based decisions when emotion runs rampant
• Don’t forget budget & FM participation—important for many areas
• Find out who CSO uses as an advisory body—consider when soliciting representatives—plan to pre-brief advisory body frequently
• Business Requirements Analyst:
o Primarily focuses inside AF
o Heavily involved with “Review Current Strategy” & “Demand Forecast”
• Market Research Analyst & Core Commodity Expert:
o Primarily focused outside AF—either on market or technology
o Heavily involved with “Review Current Market”

3. Experience/Training

• At startup, experience & functional knowledge less important than:
o Initiative, drive, teamwork & commitment
o Don’t be too cautious—trust your people & just do it!
• Most Important Skills Needed by Core Team:
o Project management
o Planning, scheduling, coordinating, & activity tracking
o Communication (listening, writing, speaking)
o Conducting & organizing market research
o Strategic sourcing with industry

4. Overall

• Not just about contracts; Strategy and execution should be linked
• Strategy handoff to executing organization is difficult and time consuming
• Do not underestimate change management needs
• MAJCOM and Air Staff participation was/is vital
• Brand name loyalty is strong and should be addressed
• Bulk buy worked--shaped what is bought and reduced costs
• Vendor gaming will always happen -- expect it
• Order close out can be difficult with bulk buying
• Balance the goals of strategic purchasing with socio-economic goals.
• AF does not have good disposition process
• AF still working on doing spend analysis as it should be done

Appendix H - References

1 Atkinson, William. “Riding Out Global Challenges, “ Purchasing. Issue 14: (18 Sep 2003).