PR-SAM-02 v1.

Supplier Agreement Management Process for SSC Pacific

4/21/09

Process: Supplier Agreement Management (SAM) Phase: Global Process Owner: Space and Naval Warfare (SPAWAR) System Center (SSC) Pacific Procurement Integrated Product Team (IPT) Description: The purpose of this process is to provide guidance for the acquisition of products and services from suppliers1. Entry Criteria: Outputs: The need for and use of this process Project documentation of acquisition strategy, has been verified through applicability planning activities, materials and tools for matrix shown in Table 1 inclusion in the Project Plan or similar. These include: A formal decision to acquire the o List of items to be acquired, licensed, etc., and product(s) has been made any relevant specifications or requirements Inputs: o Methods for obtaining items to be acquired For Projects: Statement of acquisition (simplified acquisition, large contract, etc.) need (e.g., Purchase Request) from project o Description of how the project established planning process or external source agreements with supplier and how project and supplier met requirements o Selected and monitored suppliers o Identification of how the project monitored supplier processes and evaluated products from supplier o Identification of stakeholders and items managed and controlled o Schedule for need dates and acquisition milestones o Identification of resources for acquisition activities (budget, staff, activities, etc.) o Definition of measures associated with acquisition activities An approved and released purchase agreement or contract Exit Criteria: Formal documentation of SAM nonapplicability - or Established, executed, and maintained supplier agreements (i.e., contract, purchase order, task order, etc.) Receipt of product or items being acquired Project acceptance and transition of product or items being acquired

For the purposes of this process a supplier is: (1) an entity delivering products or performing services being acquired and/or (2) an individual, partnership, company, corporation, association, or other DoD organization having an agreement (contract) with an acquirer for the design, development, manufacture, maintenance, modification, or supply of items under the terms of an agreement (contract). 1

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Supplier Agreement Management Process for SSC Pacific

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Roles: Project Manager (PM): Identifies and defines the required services or products to be acquired; and is responsible for project adherence to this process. Contracting Officers Representative (COR): Responsible for adherence to this process and for implementing source selection and contract/supplier management in accordance with the appropriate DoD, Navy and SPAWAR regulations. A nomination and an appointment letter are required. Technical POC (TPOC): Responsible for adherence to this process and for supporting vendor and supplier source selection, product or service acceptance, supplier or vendor monitoring, and product transitioning. Quality Assurance (QA): Oversight and monitoring of processes and required products, and outputs to ensure adherence to contract terms and conditions. Configuration Management (CM): Controls designated work products of the process. Contracting Officer (CO): Executes acquisitions and negotiates with vendors and suppliers in accordance with references listed below. Credit Card Holder (CCH): Performs credit card purchases in accordance with references listed below. Referenced Assets: a. Federal Acquisition Regulations, available at http://www.acquisition.gov/comp/far/index.html b. Defense Federal Acquisition Regulations (DFARS), available at http://www.acq.osd.mil/dpap/dars/dfarspgi/current/index.html c. Navy Marine Corps Acquisition Regulations available at http://acquisition.navy.mil/rda/policy_and_guidance/nmcars d. Risk Management Process, PR-SPP-04, SSC San Diego, http://sepo.spawar.navy.mil e. SSC Pacific Generic Process Institutionalization Guide, DC-OPD-15, SSC Pacific f. SPAWAR Contract Management Process Guide (CMPG), available at http://enterprise.spawar.navy.mil/cmpg/public_cmpg_index.htm g. Space and Naval Warfare (SPAWAR) Contracts Policy and Procedures Manual (SCPPM) available at https://e-commerce.spawar.navy.mil/command/02/acq/navgenint.nsf/policydocs?openview h. DoD Acquisition, Technology, and Logistics Memo regarding Performance - Based Services Acquisition (PBSA) available at https://ecommerce.spawar.navy.mil/command/02/acq/navgenint.nsf/policydocs/3257347CCE49093F88256A 2400772BC0/$file/Acquisition of Services.doc i. Supply and Contracts Department Intranet available at https://supply.spawar.navy.mil/policy/WEBPAGE/d20i-home.htm j. Systems/Software Engineering Management Policy, SSC San Diego Instruction 5234.2, and those tailored by Departments. k. Section 508 of the Rehabilitation Act as amended 7 Aug 1998: http://www.section508.gov/ Referenced Implementation Assets: l. SAM Applicability Worksheet (Draft), TL-SAM-01, SSC Pacific m. Contractor Performance Assessment Reporting System (CPARS) available at https://ecommerce.spawar.navy.mil/command/02/acq/navgenint.nsf/policydocs/B0A6F3740297199588256A2 400772BC4/$file/CPARS.doc n. Past Performance Information Retrieval System (PPIRS) available at https://www.ppirs.gov/

PR-SAM-02 v1.0

Supplier Agreement Management Process for SSC Pacific

4/21/09

Tasks: 1. Define acquisition requirements 6. Monitor supplier agreements 2. Perform acquisition planning 7. Monitor supplier processes and products 3. Execute acquisition plan 8. Accept acquired products 4. Establish supplier agreements 9. Transition acquired products 5. Execute supplier agreements 10. Close-out supplier agreements Verification: At least semi-annual objective verification of processes and products of this process by project QA personnel or equivalent objective verifier Note: For items / services obtained through a commercial vendor, there is a clear requirement that the results of reviews, issues, defects, etc., be promptly documented and reported in writing to the Contracting Officer. Example Measures: Select appropriate measures that are important to the project requirements and organizational objectives. Some examples are listed below: 1. Cost of COTS products delivered compared to the plan 2. Cost and effort to incorporate COTS compared to the plan 3. Number of changes made to supplier agreements 4. Cost and schedule variance per supplier agreement 5. Cost of activities for managing the contract compared to the plan 6. Actual delivery dates for contracted products / services compared to the plan 7. Actual dates of prime contractor deliveries to subcontractor compared to plan 8. Number of on-time deliveries from vendor, compared to contract 9. Number and severity of errors / defects after delivery 10. Number of exceptions to the contract to ensure schedule adherence 11. Number of contract violations by supplier, acquirer or vendor

USE INSTRUCTIONS
Administrative Organizations and Functions: The SAM Process for SSC Pacific serves as a beginning reference point for users. It identifies links and guidance to ensure that the required SSC Pacific activities are performed. The use of this process is required; however, the documentation of the acquisition activities in a project plan is not required. SSC Pacific Projects and those projects managed under the portfolio concepts: This process is intended to address the acquisition of products, product components, and services that are delivered to the projects customer. To minimize risks to the project, this process should also be applied to the acquisition of products that are not delivered to the projects customer but are critical to the success of the project (for example, development tools and test environments). The use of this process as well as the documentation of these activities in a project plan is required. Note: The Federal Acquisition Regulations (FAR), reference (a) and its DoD and Navy Marine Corps Supplements (DFARS, reference (b) and NMCARS, reference (c)), delineate the acquisition activities against which all contract activities must be executed. This process is not intended to replace reference (a) or its supplements, and in any instance of a conflict, the regulatory guidance is to be followed.

DETERMINATION OF SAM APPLICABILITY TO SSC PACIFIC PROJECTS

Use the matrix and criteria in Table 1 to evaluate whether the SAM Process for SSC Pacific is required or to determine the amount of project risk related to product or service acquisition. If the process is deemed

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Supplier Agreement Management Process for SSC Pacific

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not applicable or considered very low risk for the project, then this process requires the reasons be formally documented and submitted to a Department Systems Process Improvement (SPI) Agent for verification using the SAM Applicability Worksheet, reference (l). TABLE 1. SAM APPLICABILITY MATRIX Number Question Is any entity2 outside the project supplying a product or a service that will be integrated into the system to be delivered to the project's customer? (The widest definition of a "system" should be used including the associated logistics and training materials.) Includes: A memorandum of agreement for products and services needed between internal SSC Pacific organizations SAM documentation of acquisition activities in Project Management Plan (PMP) may not apply, but following this process is still required. Double check to ensure there are no significant high risks. See Note Yes No

Q1

Proceed to Q3

Proceed to Q2.

Q2

Is there any product acquired from an external supplier that will not be delivered to the customer, but is critical (high risk) to the success of the project (development environment, test environment, etc.)?

Proceed to Q3

Q3

Is the only product(s) acquired related to a service that is provided by those supplying staffing augmentation (i.e., "in-house" contractors or others) that are integrated into the project team, and use the same Organizational Set of Standard Processes (OSSP) / Department Set of Standard Processes (DSSP) as the project?

Typically, SAM documentation in PMP may not apply, but following this process is still required.

SAM applies and documentation of activities must be documented in PMP

Note: Additionally, verify the assessed risk (Refer to Risk Management Process, reference (d)) and use that assessment to accomplish the items listed below: a. Manage risks for acquisition of significant products, services, and tools (must be documented in a project plan). b. Understand relationships and handoffs between labor for risk mitigation.

TASKS
Use of the applicability matrix identified in Table 1, and implemented in reference (l), is required for evaluating and documenting SAM applicability and acquisition risk exposure to the project. If the process is deemed not applicable or not utilizing the SAM Process would be considered very low risk for the project, then the reasons must be formally documented using reference (l), and submitted to a
2

This would include different Navy organizations and sub-organizations, DoD organizations, or non-DoD organizations, such as commercial vendors or contractors. 4

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Supplier Agreement Management Process for SSC Pacific

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Department SPI Agent for verification. In that case, documentation of the bullets listed below is not required. If the risk exposure is high, or if any entity outside the project is supplying a product or a service that will be integrated into the system to be delivered to the project's customer, then the additional bullets discussed below are required to be addressed in the project plan. If the SAM Process for SCC Pacific is applicable, the project must document the items listed below: a. How the determination of the type of acquisition for each product to be acquired will be made. b. How the project and the supplier will meet the specified requirements and establish selection and acceptance criteria. c. How the project will establish and maintain formal agreements with the supplier. d. How the project will perform activities with the supplier as specified in the supplier agreement. e. How the project will select and monitor the supplier, and how the project will analyze processes used by the supplier. f. How the project will select and evaluate work products. g. How the project will ensure that the supplier agreement is satisfied before accepting the acquired product. h. How the project will transition the acquired products from the supplier to the project. Additionally, this process is related to a set of activities associated with the institutionalization of this and other project processes. Project implementation of the activities and topics listed in Table 2 need to be included in the project plan. For further guidance see the Generic Process Institutionalization Guide, reference (e). TABLE 2. INSTITUTIONALIZING ELEMENTS OF SAM PROCESS -SAM Organizational Policy -Planning the process -Providing resources for the process -Assigning responsibility for process -Training of people -Managing configuration items -Relevant stakeholder involvement o -Monitoring and control -Adherence evaluation -Higher management status reviews -Process definition establishment -Collecting improvement information

1. Define acquisition requirements The PM, TPOC, or the COR, in coordination with the PCO, and/or designee, select and document the acquisition requirements in support of all products and services to be acquired via the commercial vendor/contractor (e.g., list of items to procure, services needed). Refer to the SPAWAR Contracts Management Process Guide (CMPG), reference (f), for additional information. 2. Perform acquisition planning The PM, COR or the TPOC initiate acquisition planning and development of key elements of a source selection plan, which is further developed in conjunction with the PCO, as defined by references (a) (c), (f) and the Space and Naval Warfare (SPAWAR) Contracts Policy and Procedures Manual (SCPPM), reference (g). The plans detail how the project documents and refines specified requirements through acquisition activities, the acquisition strategy that will be utilized and the process for supplier selection. The formality of the planning process is dependent upon the value of the procurement as outlined in references (a) - (c) and (g). The PM must clearly describe the product/service to be procured and develop a supporting independent government cost estimate.

PR-SAM-02 v1.0

Supplier Agreement Management Process for SSC Pacific

4/21/09

For micro-purchases, which are procurements valued at less than $3,000 for supplies and less than $2,500 for services; guidance is contained at the following website: https://supply.spawar.navy.mil/policy/purchcrd/pci-home.htm For simplified acquisition (SA) procurements, which are procurements valued between $2,501 and $100,000 (non-commercial) or up to $5.5M for COTS; guidance is contained at the following website: https://supply.spawar.navy.mil/policy/contracts/sap/sai-home.htm The checklists listed below aid in development of the acquisition requirement and in the acquisition planning process: a. Large Contract Procurement Ready Checklist: Use for service contracts, R&D, or COTS over $100K. The checklist is available from https://supply.spawar.navy.mil/policy/Forms/checklists/NEW%20APPROVED %20CKLISTS/ProcReadyLgContCklstJul08.doc. b. SA Requester's Checklist. Use for actions between $2500 and $100K up to $5.5M for commercial off-the-shelf (COTS). The checklist is available from https://supply.spawar.navy.mil/policy/Forms/checklists/sap/SAPRequester'sChecklistJul2008.doc. c. Cardholder Checklist: Use for actions less than $2,500 for services and less than $3,000 for supplies. The checklist is available from https://supply.spawar.navy.mil/policy/purchcrd/forms/CH PR CHECKLIST.doc. 3. Execute acquisition plan The PM, COR, or TPOC submits the acquisition plan prepared in accordance with references (a) - (c) and (f), (g) and the DoD Acquisition, Technology, and Logistics Memo regarding Performance - Based Services Acquisition (PBSA), reference (h) and applicable checklists cited above in Task 2, and submits the procurement package to the SSC Pacific Supply and Contracts Department via Enterprise Resource Planning (ERP). SSC Pacific Supply and Contracts Department will finalize the acquisition and source selection plans and execute the acquisition in accordance with references (a) - (c) and (f) - (h)). Criteria used in selecting the supplier, must include factors that demonstrate that the supplier has the ability to meet the specified requirements and that weighted consideration is given to factors determined critical by the PM and as required by references (a) - (c). Risk analysis should be performed by the project per reference (d). (Past performance information can be found in implementation assets, references (m) and (n). 4. Establish supplier agreements Contracts are established by the SSC Pacific Supply and Contracts Department as defined by references (a) (c), (f) (g) and the Supply and Contracts Department Intranet, reference (i). For all suppliers, an agreement, typically in the form of a purchase order, task order, or contract is documented on behalf of the project, between SSC Pacific and the vendor. These agreements should specify reviews, monitoring, evaluations and acceptance tests to be performed, as appropriate, to the acquisition type. 5. Execute supplier agreements The PM, or project lead carries out the project responsibilities in support of the supplier agreement in accordance with the terms and conditions of the contract or order established by the SSC Pacific Supply and Contracts Department. Only the contracting officer has the authority to negotiate with the supplier, or alter the terms and conditions of the contract / order. Conflicts, that are contractual in nature between the supplier / vendor and the project, must be referred to the contracting officer for resolution. Remember that the agreement levies requirements upon both the project and the supplier. The project must ensure that it meets its obligations to the supplier.

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Supplier Agreement Management Process for SSC Pacific

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6. Monitor supplier agreements The PM, COR, or TPOC and PCO ensure that the activities outlined in the supplier agreement as defined by references (a) - (c) and (f) - (h) are conducted by both the project and the supplier. This may include, but is not limited to, supplier reviews, progress reports, feedback from the buyer and project, and action item/risk tracking. Supplier performance is tracked and documented in accordance with references (m) through (n) and requires input from the PM, COR or TPOC. Documented supplier performance is utilized in evaluating suppliers for receipt of future agreements (contracts). 7. Monitor supplier processes and products The PM/TPOC and/or designee, select, monitor, and evaluate supplier processes and custom-made, unique, or high-risk products based upon their risk or impact on the SSC Pacific project or the customer, against defined criteria identified in the project plan and incorporated into the contract/order terms and conditions. Criteria should be based upon cost, risk, customization, dependencies, or similar criteria. Various methods of monitoring may be employed, from formal audits, through informal checks, depending on risk and project impact. Monitoring discrepancies are tracked to closure. The project should document the monitoring of supplier processes that are critical to the success of the project in the form of a Quality Assurance Surveillance Plan that is incorporated into the contract/order. 8. Accept acquired products Verification against documented requirements or acceptance testing of acquired products is performed by the COR or TPOC prior to a projects acceptance of the product. These verification methods ensure that products satisfy their requirements and that results are documented. Documentation may range from a signature on a receipt to a formal test report. In most cases, it is prudent to document the criteria used in determining acceptance, i.e., visual inspection per the terms and conditions, or results of acceptance test procedures. 9. Transition acquired products Transitioning of an acquired product for integration into a project, or ultimate delivery to a customer is planned by the COR, TPOC, or the PM, including plans for receiving/storing the product(s), ensuring that staff are trained on the products use, and that distribution of the product is in accordance with vendor agreements. Transitioning evidence may range from CM plans (e.g., a lab move) to a user signature of acceptance on a hand receipt. 10. Close-out supplier agreements The project manager or technical lead, in conjunction with the contracting officer ensures the closeout of the supplier agreement according to SSC Pacific and project procedures, ensuring all documentation and deliverables that are formally expected from the supplier have been received by the project, and reviewing the agreement to verify that all tasks have been completed.