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
VI.
Make
or Buy Process Description
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
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.
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.
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.