Next our team estimates that it will cost 02 million to implement the sourcing

Next our team estimates that it will cost 02 million

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Next, our team estimates that it will cost $0.2 million to implement the sourcing strategy as follows: $0.11 million in exit fees; and $0.09 million for new stationery. Finally, we subtract the amount of investment ($0.2 million) from the estimated TCO ($2.22 million), we get a net TCO savings of $2.02 million. The following example shows how we might calculate TCO savings for wireless services. 2.2.3 Phase II —Strategy Implementation Having developed the commodity sourcing strategy, it will be important to prepare for its implementation with a detailed acquisition strategy. This is a four-step process. The last two steps are conducted in the same manner as a typical acquisition. Therefore, this lesson addresses the first two steps. 1. Develop the commodity acquisition strategy, in which we define how we will solicit, evaluate, and select suppliers. 2. Develop the implementation/transition plan, in which we define the changes required in terms of people, process, technology, and policy. 3. Prepare and issue the solicitation through an RFP or other appropriate solicitation method. 4. Evaluate, negotiate, and award the contract. 2.2.3.1 Develop the Acquisition Strategy The commodity acquisition strategy defines how we want to structure the relationship with suppliers and approach the market to solicit offers. In cases where the acquisition scope is relatively narrow, a single acquisition strategy may be all you need. However, a broader acquisition scope or more complex CON 200: BUSINESS DECISIONS FOR CONTRACTING 2-18 © Management Concepts. See inside front cover for additional information.
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sourcing strategies may require multiple acquisition strategies, each with its own scope and timing. In addition to the acquisition planning requirements in FAR Part 7, we also want to address four key questions in the commodity acquisition strategy: 1.What kind of supplier relationship do we want to establish?Thecommodity strategy drives the nature of the supplier relationship. Supplierrelationships fall along a continuum ranging from a purely transactionalrelationship to a fully integrated strategic partnership — and allcombinations in between. 2. What type of contract is best suited to this type of relationship? In selecting a contract type, FAR Part 16 provides a number of different options from which to choose, each with its own cost, risk, and supplier relationship implications. FAR 16.104 states that the contracting officer should consider the following factors: price competition, price analysis, and/or cost analysis; type and complexity of the requirement; combining contract types; urgency of the requirement; period of performance; contractor’s technical capability and financial responsibility; adequacy of the contractor’s accounting system; concurrent contracts; extent and nature of proposed subcontracting; and acquisition history.
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