Attachment J.5 – Appendix E

 

 

Fermilab Make or Buy Plan

October 2001

 

I.               Introduction

II.              Make or Buy Process at FNAL

III.            Make or Buy Considerations

IV.            Criteria

V.             Candidate Functions

VI.            Make or Buy Process Description

VII.          Labor Relations Issues

 

 

I.   Introduction

 

FNAL is providing this Make or Buy Plan in an effort to identify the most efficient and cost effective manner for performing work at FNAL.  The purpose of this Plan is to establish and describe the approach used by FNAL for identifying and assessing outsourcing opportunities that satisfy the Laboratory’s requirements for major supplies and services.  The Plan has been prepared as a one-time submission and will be effective for the term of the contract.  The goal of the plan is to ensure goods and services are provided to FNAL on a least-cost basis subject to the make or buy criteria identified below.  FNAL has made make or buy decisions for all activities whose costs exceed $1 million per year in accordance with the guidance detailed in DEAR 970.1504-4-3(b).  Those activities are listed on Appendix A.  Analyses of supplies and services that are below the $1 million threshold will be conducted at the discretion of FNAL when economic conditions exist that may provide cost savings to FNAL.

 

II.  Make or Buy Process at FNAL

 

The approach to make or buy decisions at FNAL consists of the analyses of specific supplies and services to determine if they should be obtained from sources outside the Laboratory or from within the Laboratory.  The decision making process assures that supplies and services are obtained in a best-value/least overall cost manner and meet the specific operational requirements of the Laboratory.  FNAL management has used the make or buy process as part of its operation for many years.  In some areas, services acquired through subcontractors supplement FNAL staff activities, while in other areas, all required supplies and services for a specific function are procured through the subcontracting process.  A listing of many of the subcontracted activities at FNAL is detailed below.  The value of subcontracted goods and services during FY01 totaled $124 million out of a total budget of $300 million and it is anticipated that FY02 will be at the same level. Included in that total is $44 million to small businesses, $5.2 million to small disadvantaged businesses, and $7.1 million to women owned businesses.

 

Subcontracted Activities at FNAL

 

Architect/Engineering & Consulting Engineering Services

Chemical Hazardous & Radioactive Waste Disposal

Computer Hardware Maintenance

Copier and Printer Maintenance

Custodial Services

Domestic Mailing Services

Elevator Maintenance

Employment

Engineering Services

Environmental Legal Services

Fabrication Support (i.e. machine shops)

Food Service

Forklift Maintenance

Graphic Arts Services

Horticultural Services

Housekeeping and Laundry Services

Immigration Legal Services

Industrial X-ray Services

International Mailing Services

Labor Relations Legal Services

Laboratory Equipment Maintenance

Legal Services

Limo Service

Medical Services

Overhead Door Maintenance

Printing

Refuse Collection and Disposal

Rigging Services

Security Services

Software

Software Support Services

System Support Services

Technical Services

Telecommunications

Temporary Clerical Support

Towing Services

Training

Travel Services

Tree Services

Vehicle Repair Services

Veterinarian Services

Web Design

Window Washing Services

 

It is anticipated that these functions will continue to be subcontracted throughout the term of this contract.  In addition, Laboratory management will continue to examine areas for potential subcontracting opportunities that meet the mission objectives while balancing quality and cost considerations.

 

III.  Make or Buy Considerations

 

Key Principles

 

The following key principles will guide the make or buy process at FNAL.  These principles are consistent with DOE’s objectives for quality management, cost-effective operations, and mission critical needs while maintaining FNAL’s commitments to its employees and the local community.  FNAL understands that the aim of the make or buy program is to ensure that its supplies and services are obtained in the best value/least overall cost manner.  It also recognizes that its personnel and procurement practices have a major impact on the regional economy.  Through outsourcing initiatives, FNAL has the opportunity to positively affect local businesses, stimulate employment, increase the tax base of the region, and expand the technological capabilities of the physics community.

 

Routine Services – FNAL is committed to obtaining routine services from the best value/least-cost source consistent with applicable labor laws and procurement regulations.

 

Excellence in Institutional Management and Facilities Operations - FNAL is committed to achieving excellence in the management of the Laboratory and in the planning, design, construction and operation of its programmatic and infrastructure facilities.  All FNAL make or buy decisions will balance cost and quality to ensure excellence in the final product.

 

Core Managerial Competency – FNAL depends on the highest quality scientific, technological, and ES&H competencies of its management to maintain the mission integrity of the Laboratory.  This resource, represented by the technical staff, is viewed as a significant core competency, critical to the Laboratory’s continued superior performance.  These competencies will generally not be considered for outsourcing, since these functions represent the unique qualifications and highest standards for which the DOE has contracted with URA to perform at the Laboratory.  Make or buy decisions will be made for discrete operations below the Directorate/Division level.

 

Critical Business Operations Capabilities – Critical business operations comprise the various non-scientific, non-programmatic policy setting functions, or functions with delegated authority from DOE and/or URA to fulfill the management responsibilities under the Prime Contract.  Those functions that are essential to the legal responsibilities of site operations and are essential to the institutional oversight and management of the Laboratory cannot be outsourced at the policy setting and/or delegated authority level.  Additionally, select activities may also be retained within the Laboratory operations dependent upon the degree to which internal sensitive, proprietary, or privileged information is generated and/or accessed in the conduct of the activities.

 

Quality Considerations – The quality process is dependent upon a healthy relationship between management and employees; an environment of communication and trust, employee involvement at all levels and a commitment on the part of the leaders that people are, indeed, our most valuable resource.

 

Employee Information and Support – One typically hidden cost of a make or buy review is the effect on morale, productivity, and turnover of the staff members whose jobs may be affected by an outsourcing decision.   FNAL will take the necessary actions to ensure all affected employees are notified of the review and kept informed as the process progresses.  To the extent practicable, FNAL will provide limited assistance with outplacement programs to employees who may be displaced as a result of a decision to outsource.  In addition, specific to each outsourcing action, FNAL may offer transition benefits to those employees who are terminated due to an outsourcing action.  DOE must approve those benefits.

 

FNAL Subcontracts – The FNAL approach to the make or buy process will be structured such that any resulting subcontractors will be under contract to FNAL.  To deliver the highest quality expected by DOE and URA, FNAL must retain management control over all functional areas at the Laboratory.

 

Collective Bargaining Agreements – The Laboratory has Collective Bargaining Agreements in place with recognized bargaining units. These Agreements apply to employees performing work in some of the functional areas which are or may be considered part of a make or buy review.  FNAL will inform and involve designated representatives of these bargaining units in the process to the extent they agree to participate.

 

Socioeconomic Obligations – As part of the make or buy process, FNAL will analyze the availability of services provided by small/small disadvantaged businesses.  The scope of the subcontracted activity will consider the competence and availability of such businesses.

 

Diversity – FNAL will consider the potential impacts on the diversity of the in-house workforce that may result from an outsourcing decision.

 

FNAL’s Internal Make or Buy Policy – The Laboratory has an internal policy in place that governs the use of in-house resources when the goods or services desired could be provided with the same quality by the private sector at equal or lower costs.  It is the Laboratory’s policy to rely on the businesses in the private sector for those goods and services and it is not the Laboratory’s intention to be in competition with them.

 

 

IV. Criteria

 

The goal of FNAL’s make or buy program is to ensure that goods and services are obtained in a best value/least overall cost manner.  In order to achieve that goal, and at the same time guarantee the safe and efficient operation of the Laboratory, the following criteria will be used in the make or buy evaluation process.

 

                      

V.  Candidate Functions

 

During the previous contract period, FNAL performed make or buy analyses for the following functions/services.

 

Permanent Magnets 8 GeV Transport Line          1996             Make

Heavy Mobile Equipment Maintenance                1997             Make

Distribution Services                                       1997             Make

Vehicle Fleet Maintenance                                1997             Make

Fire and Emergency Services                            1998             Make

Recycler Magnet Fabrication                             1998             Make

 

VI. Make or Buy Process Description

 

Laboratory management periodically reviews functions which are candidates for outsourcing, utilizing the criteria contained in this plan. Once a function has been identified as a potential outsourcing candidate, the actions listed below are taken in completing the Make or Buy analysis.  The Make or Buy analysis considers operational improvements, costs, personnel issues, and maintaining the continuity of operations.

 

·       Prepare a comprehensive Statement of Work including required quality standards.

 

·       Identify small/small disadvantaged businesses offering the services required.

 

·       Identify other qualified sources for the required services.

 

·       Establish performance/evaluation criteria (as appropriate).

 

·       Issue a Request for Proposal to potential service providers.

 

·       Evaluate contractor submittals and determine the cost benefits of both a make and buy decision.

 

·       Submit a final Make or Buy analysis to the Contracting Officer.

 

·       Award subcontract if cost, quality and other pertinent criteria are met.

 

VII.  Labor Relations Issues

 

 

The Laboratory currently has four collective bargaining agreements in place and is in the early stages of negotiations on a fifth agreement.  All of these contracts recognize the rights and responsibilities of the Laboratory Management to evaluate subcontracting opportunities in these functional areas.  The outsourcing evaluation process for these functions includes steps to advise the bargaining units involved in the pending process.