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Volume II Cost Proposal
Guaranteed Savings and Cost Approach 1.0 Price Reductions and Volume Discounts – The SLA Team members have a proven history of providing cost savings to our customers while ensuring high quality, responsive support. We constantly look for ways to consolidate, streamline, and automate our supplies and services enabling us to pass these savings onto the customer. Our team recognizes the importance of implementing Quality Management procedures which start with understanding the requirements and the customer, using sound and mature program management principles, developing firm cost savings strategies, and execute as planned. This is followed by recruiting and retaining professionals who will continuously provide the right solution the first time to the customer. The diverse breadth and depth of experience the SLA team brings to the table enables our team to rapidly respond to the customers changing needs. Our commitment to the customers savings is practical and genuine. Successful examples from past contracts include software license consolidation, task consolidation, multi-skilling, matrixing high-cost skills, personnel consolidation, and more. The below paragraphs describes our approach to meet or exceed your requirements and our amounts listed in Section H Guaranteed Savings Clause. 1.1 Price Reductions and Discounts – We outsource our payroll and benefits package management activities to TriNet (a Professional Employer Organization – PEO). By doing so, we obtain significant reductions to our operating overhead. We determine the benefit package options and TriNet merely keeps it working. We generate cost savings through negotiated volume discounts allowing greater savings, with increased headcount. This allows us to minimize functional staff and pass additional savings to the customer Using current technologies and personnel management programs enables us to accomplish more with less while keeping our employees needs first. As we grow, we'll incorporate lessons learned from our large business team partners for choosing improved methods to drive continuous high quality support. With our cost savings directly attached to growth we, in turn, can offer greater savings to the customer with increasing volume and long term support. These approaches are what allows us to offer a 5% discount in overhead once the task order exceeds $10M. 1.2 Pass Through – The Pass-through rate at Sea, Land, and Air Professional Services is set at 3%. This is the rate we currently use on other contracts and have found this to be a fair, realistic and manageable amount and much less than what you will normally encounter with other companies. 1.3 Cost Savings as a way of doing business – SLA continually focuses continuous cost savings as proven by our excellent track record on past contracts. We were previously government program managers for systems within the DoD and have extensive experience looking for ways to make our funds stretch further by working closely with our contractors to cut costs. With our government experienced personnel now on the contractor side, we haven't lost our cost saving perspective or the skills to make it happen. As a team, we've made a conscious decision to keep our costs low, to provide an attractive alternative. In fact, large businesses we team with are pleased to see our mature processes and quality practices that enable us to respond with high quality, cutting edge solutions and allowing them to remain competitive. 2.0 Additional Cost Savings Efforts 2.1 Consolidation 2.1.2 Software Consolidation – The easiest way to save money is simple consolidation. We start with software licenses. SLA consolidates all the licenses the team uses allowing us to make a larger purchase, which usually yields lower prices. Our mature management processes include constant, complete oversight of our configuration and data management including software licenses, usage and compliance requirements. Many times a person may need a piece of software, but only occasionally uses that software. In these instances the software is usually unique and high-priced. We buy fewer licenses and have them centrally located for when the individual needs to use it. We've done this on previous contracts and it yields almost immediate results. This is the easiest of the “low hanging fruit” in cost savings. Result – lower overall costs. 2.1.3 Travel – We consolidate required travel tasks to ensure the JTR is followed. These tasks involve travel order preparation (or equivalent), reservations, changes to reservations, tracking of costs, etc. We make sure we get the lowest possible price for the conveyance (airplane, etc.). We can also work to have our personnel drive if the distance is reasonable. This way, we don't pay for an airline ticket and a rental car, where if they drove we would only pay for the rental car. We know travel pay is a cost reimbursable, but it still is a cost to the customer. We are committed to saving everyones money in any way possible. Result – lower travel costs. 2.1.4 Personnel Consolidation – Sometimes, the customer asks for a certain level of support, because that is the number they've always had. However, the actual work doesn't need that number of people. We work with our customers to identify those instances and reduce the support to the level it should be. This can be done immediately, or transitioned. Either way, the savings are real. For example, a contract may call for four Software Engineers. That is what the office always had, so that is what they think they need. However, upon close examination, we find out all the engineers aren't fully utilized. They must be there “in case something happens and they're needed.” This may not be an effective use of resources. We'd then work with the customer to jointly design a plan for better utilization. This folds into the multi-skilling we discuss later. Result – lower overall costs. 2.1.5 Bundling Management and Administrative Tasks – Our rates are built to enable us to perform required administrative and management activities with minimal hours charged to the government. Our streamlined processes and diversified functional staffs enable us to keep overhead low and responsiveness to the customer and the employee high. 2.2 Multi-Skilling. Using an individual in more than one category. 2.2.1 Continuity – Many similar tasks are effectively and efficiently be accomplished through task sharing instead of scoping individual man years for each direct task. Diversification and bundling requirements enables us to accomplish tasks in less time and with greater results. Continuity is increased through bundled tasks because more employees can support any given job eliminating single-point-failures with a single person having the only capability and knowledge. This drives additional customer savings and increased efficiency. 2.2.2 Training – At times a specific skill is required, but only occasionally used. We train other personnel to provide these same skills. This allows us to consolidate the number of personnel assigned to a contract. To do this, we work closely with the customer to make sure we all understand the potential results and the potential savings. The result is lower costs and lower individual rates. 2.2.3 Work Cycles – Many jobs are cyclic, where the individual is at peak capacity for periods of time and then at lower capacity. We level the workload by having those support other areas during the lulls. This also results in greater flexibility, by allowing work to continue, even when the counterpart is out for some reason. Result – efficient resource use, project synergy, and lower cost. 2.2.4 Matrix high demand (high cost) skills – Often, a contract calls for someone with an advanced degree and many years’ experience. When in actuality, the majority of the work can be done by someone with a lower degree or with less experience. However, the customer needs to have access to someone with the stated qualifications to make dispositions. Having a full-time person with the lower qualifications, with part-time support from the person with higher qualifications, allows the customer to spend less and actually get more effective support. Since highly-qualified people tend to stay where they have a variety of work, this allows us to keep those people with us. Result – lower overall rate costs and lower program risk and efficient resource utilization. 2.3 Cross-training – This is not only a cost savings method, but is also an effective support tool. When the requirements for support change, other companies may resort to a wholesale replacement of personnel. This change can be supported another way. Why move an individual, who usually has quite a lot of experience in the program, when the change comes? If the requirement can be supported by providing additional training to the experienced individual, the customer is usually better served by providing the training. No ramp up time, no large amount of paperwork, no loss of corporate knowledge, etc. This action is always cost effective, in that the person who receives the additional training doesn’t need relocation, indoctrination, etc. (no burden to overhead). This increases customer support and value and yields at a more stable work force and mitigates risk. Result – lower overall costs. 2.4 Centralized Technical Order Support – Effective technical order writers are in a specialty which is inherently cyclic. We have found that they can be at a central location supporting numerous programs. We work with the customer, as a team, to ensure they are comfortable with this and then ensure that the centralized tech team provides the desired support in a timely and accurate manner. The result is a lower cost burden to any specific contract, since each task only pays for the actual time it takes to write the technical orders for that task. Result – lower costs due to matrixed support. 2.5 Fewer Managers – Every task doesn’t need a dedicated full-time manager and support staff. For many contractors, this is exactly what they do. Yes, every contract needs someone who is in charge, but most of the time, an onsite person is best suited to handle the day to day tasks, anyway. This is someone who is with the customer every day to keep up with the activities. For most contracts, we appoint one of the senior workers to be an onsite manager. They may receive slightly higher pay, but it is still more cost effective than appointing (and charging for) a full-time person to run the contract out of an office somewhere. We have that onsite manager supervised by a program manager that may manage several contracts or tasks. The supervisor is available when the customer requests, but is not charging (directly nor indirectly) full-time to the contract. In addition, when the need arises, this provides a more direct route to the upper management. Result - lower management costs. 2.6 Technology Infusion – Evolving technology changes how we work. What today requires a dedicated person, may only require monitoring in the future. Technology Infusion can be something simple like providing a faster workstation to facilitate tech order publishing. It can also be as complex as total task automation. Take for instance remote maintenance. Just a few years ago, it was a gleam in someones eye. Today, we are finding more ways we can include it in our support. Of course, there are security and bandwidth constraints, but it is a viable solution in some cases. The technology that enables remote maintenance also enables video teleconferencing, remote diagnoses, remote operations, etc. The secret to any technology advance is to not only look at the direct applications, but to also look at what else that advance may enable. As a leading edge company, we constantly search for ways to leverage emerging technology to lower our overall costs. Result – lower cost and faster, more accurate service. 2.7 Pragmatic Approach – Each contract/task will have its own idiosyncrasies and tailored to maximize cost savings. There are no blanket magic formulas that work everywhere, but as a company dedicated to best value, we strive to top our competition with high quality service at the lowest cost and transfer those savings back to the customer. 3.0 Passing cost savings to/from subcontractors – We have all seen prime contractors who push their subs for lower prices, only to keep the increased profits for themselves. When we team with other companies, our commitment is to the entire team – government as well as contractor. Because of this, any savings from our subcontractors will be passed on to the government. Likewise, any savings resulting in actions from the government (i.e. GFE, decreased requirements, etc.) will be shared with our subcontractors. Result – fair cost and savings environment. 4.0 This cost savings approach was written and endorsed by our team. No outside consultant was used in preparing this proposal. 5.0 The accounting tool to be used on this contract has been approved by DCAA, however, DCAA has not audited the company. |