SPECIAL NOTICE
99 -- USAMRMC, Activity Based Costing (ABC) Modeling project, Fort Detrick, MD
- Notice Date
- 9/5/2006
- Notice Type
- Special Notice
- Contracting Office
- US Army Medical Research Acquisition Activity, ATTN: MCMR-AAA, 820 Chandler Street, Frederick, MD 21702-5014
- ZIP Code
- 21702-5014
- Solicitation Number
- USA-SNOTE-060905-003
- Archive Date
- 12/4/2006
- Description
- Statement of Work Activity Based Costing And Cost Analysis, Deputy for Resource Management, United States Army Medical Research and Materiel Command General. This Statement of Work, (SOW), comprises all activities and services to manage the United States Army Medical Research and Materiel Command (USAMRMC) Activity Based Costing (ABC) Modeling, Cost Analysis and Lean Six Sigma. Our goals are to improve quality , eliminate waste, reduce cycle time and reduce costs for the Unites States Army Medical Research and Materiel Command (USAMRMC) and its subordinate elements. BACKGROUND. 1. Activity Based-Costing (ABC) is a tool to help the Unites States Army Medical Research and Materiel Command (USAMRMC) effectively manage resources and processes to deliver the best medical solutions, for today and tomorrow, to enhance, protect and trea t the warfigher on point for the nation. USAMRMC will use ABC to decompose and analyze the mission into specific work activities for measuring cost and performance. ABC is a tool to enable USAMRMC to monitor and evaluate performance and cost and improve efficiency and cost effectiveness of the way we do business. 2. A major step in the ABC process is Analyze Costs. This is the culmination of all measurements and calculations that have occurred. The ABC model and other information are reviewed and analyzed in depth to identify opportunities for improvement. The ob ject is to achieve massive savings in time and dollars by changing the basic rules and structure. If a concept or process does not contribute value to the output, with value described as value to the customer, then it may not be necessary. If it is not re quired by law, then it should be eliminated or reduced substantially. The major notion is that nothing in policy or procedures is sacrosanct. 3. Activities and work processes are the objective of reengineering or improvement processes, not the organizational elements. Merely reorganizing departments and branches will not achieve the dramatic results that are sought. The major purpose for so m uch effort in developing the activity model is to allow the reengineering effort to be applied to how the work is actually done, not how the entity is organized to accomplish the work. This model and the identification of the resulting process flows is int ended to strip away the veneer of organizational structure that hides the real functions. 4. There are two basic areas available for review in selecting possible change opportunities. The first is the activity model. The second is the process flow(s) selected for primary review and improvement. The ABC process has collected and stratified s everal bits of information about the activities in the activity model which can now be applied to both. This still only gives a general area at which to look. Merely reviewing data and anomalies will not yield improvement suggestions. 5. To convert the raw indicator data of the activities and process flow to useful information and change scenarios, requires a set of analysis tools that can be applied to the characteristic information. There are a multitude of helpful analysis tools ava ilable. The following partial list is some of the more important and useful tools that routinely yield productive results: A. Pareto Analysis: Pareto analysis is a simple ranking tool to assist in the selection of the largest or smallest component of costs. Based on the theory that eighty percent of the total cost is normally generated by twenty percent of the activity, thi s analysis is used to array activities or elements of cost in various displays using different ranking criteria. B. Benchmarking: Benchmarking is an excellent tool for garnering ideas without the stress of original creative thinking. The major danger is that it will inhibit real improvement. The candidate for comparison and observation should not only be the best in their line of work but the best in the w orld, if possible. When this is not true or sometimes even when it is, the comparison allows the improvement team to observe a major performer and then set their improvement goals too low. This serves to limit what can be accomplished. Benchmarking is fo r gathering ideas, but the application and improvement should springboard from these ideas, not be limited by them. C. Best Practices: Best practices is similar to benchmarking. It differs in that it is not the review of a best process but of isolated best performances of parts of the process. These may also be internal or external. Finding the best tool, procedure or method is still an improvement with a potential productivity increase. This cross-fertilization of good ideas is excellent not only for creating new ideas in process design, but also as a mainstay program for continued excellence. D. Value Added Analysis: Is a tool to determine if elements within a process flow provide value. If an activity step in a process flow does not provide additional value, then it may be unnecessary with the possibility of being eliminated. This would be an immediate process improvement with minimal to no cost. E: Comparative Analysis: Comparative analysis is targeted on similar activities or flows that exist in parallel within the activity model or process flow to ensure that they are being done the same best way. F: Cost Benefit Analysis: Determines if a new element or minor change will in some way be improved over the previous option. G: Economic Analysis: Economic analysis compares alternatives for the best overall solution in terms of dollars and time. H. Functional Economic Analysis: The Functional Economic Analysis is a technique for analyzing and evaluating alternative process improvements, management practices, and new investments in relation to the overall goals and objectives of the organization. This encompasses a vast array of information and policy into one evaluation. The result is a fully considered organizational decision that fulfills as many of the objectives and goals as possible at the most effe ctive cost-benefit ratio. I. Linear Regression Analysis: Linear regression is a statistic method to determine a formula for predicting the relationships of one set of data by determining the slope and y-intercept (the point where the line crosses the y-axis) of the line that best fits the data of a dependent and independent variable. J. Multiple regression: Multiple regression is the analysis of more than one set of data, which often produces a more realistic projection. K. Quality Improvement: Quality Improvement is achieved through an understanding of customers expectations and requirements and employing tools such as quality function deployment. L. Eliminate Waste: Eliminate the seven types of waste: Overproduction, Waiting, Transport, Extra Processing, Inventory, Motion, and defects. M. Reduce Lead Time: Identify wasteful logistical practices both upstream and downstream in the demand/supply chain. 6. The major objective of the ABC Cost Analysis is to objectively determine a better way for USAMRMC to do business. The analysis of ABC costs and models serves to provide the basis from which these decisions can be made and evaluated. SCOPE OF WORK. 1. The contractor shall provide all supervision, personnel, equipment, and other items and services necessary to perform the United States Army Medical Research and Materiel Command (USAMRMC) Activity Based Costing (ABC) Models and Cost Analysis. Tasks i nclude: A. Provide ABC models and cost data on critical activities, processes, outputs/outcomes and customers. B. Provide benchmarks for future improvement efforts and the basis for best practice analyses to assist leadership/management in comparing process performance data including quantity, quality, cost, timeliness, and customer satisfaction between the labora tories and in choosing standar ds of performance, C. Provide information on value added and non-value added activities within processes to support process improvement efforts, and D. Provide the basis to link process costs to customers thereby ensuring a proper customer focus for activities. E. Training: Train all project team members in the basics of problem solving and analysis techniques. Each team member must apply the tools at hand in order to identify current operating conditions and opportunities for improvement. F. Awareness: Make the project team members and key USAMRMC officials fully proficient and knowledgeable of the model, process flow(s) and terminology. 1. Review and understand the activity model and process flow. 2. Identify and document problems and improvement opportunities 3. Collect data on the problems and opportunities 4. Verify the legitimacy of the problems and opportunities 5. Prioritize the problems and opportunities G. Analyze: Analyze the list of problems and opportunities utilizing all appropriate analyses techniques such as but not limited to Pareto Analysis, Failure Analysis, Cause and Effect Analysis, Benchmarking, Best Practices, Comparative Analysis, Value Ad ded Analysis, Cost Benefit Analysis, Economic Analysis, Functional Economic Analysis, etc. H. Formulate: Create and define new process flows, procedures and improvement actions. Review alternatives and select the best solutions and actions. I. Document Final Recommendations: Final documentation and recommendations should be in Army Staff Study format with the following elements in accordance with FM 101-5 and should include elements below OR other USAMRMC prescribed format: 1. Problem. A concise statement of the problem. 2. Recommendation. Recommend a specific course of action (who, what, when, and where). The recommendation must solve the problem. 3. Background. Provide a lead-in to the study, briefly stating why the problem exists. 4. Facts. Facts that influence the problem or its solution. 5. Assumptions. Any assumptions necessary for a logical discussion of the problem. 6. Courses of Action. List all possible suitable, feasible, acceptable, distinguishable, and complete courses of actions. 7. Criteria. List the criteria used to judge Courses of Action. a. Screening Criteria. Define screening criteria that a COA must meet to be suitable, feasible, acceptable, distinguishable, and complete.. b. Evaluation Criteria. This is criteria used to measure, evaluate, and rank-order each COA during analysis and comparison paragraphs. c. Weighting of Criteria. Establish the relative importance of one criterion over the others. 8. Analysis. For each COA, list the advantages and disadvantages that result from testing the COAs against the stated evaluation criteria. 9. Comparison of the COAs. After testing each COA against the stated criteria, compare the COAs to each other. 10. Conclusion. Address the conclusion drawn from analyzing and comparing all the relevant factors. The conclusion must answer the problem statement. If it does not, then either the conclusion or the problem statement is incorrect. 2. The contractor shall provide administration, including financial management, accounting, personnel/payroll, reports procedures, office automation, and general office administration. PERSONNEL. The contractor shall provide fully trained and qualified fully time ABC technician and modeler and cost analysis technician(s) for the tasks describe in the statement of work above. The technician(s) shall be on duty and physically present dur ing USAMRMC normal hours of operation. Normal hours of operation are Monday through Friday 0730 to 1630. PERSONNEL SECURITY REQUIREMENTS. The contractor shall ensure that personnel have a security clearance, as required. CONTRACTOR FURNISHED ITEMS AND SERVICES. The contractor shall furnish all personnel, equipment, and supplies necessary to perfor m and meet the requirements of this contract, except as specified as Government furnished. SPECIFIC TASKS THE CONTRACTOR SHALL: MODELS. Implement, revise and update, as necessary, the USAMRMC standard laboratory model and maintain all USAMRMC ABC model resource, activity and cost object modules with the most current and accurate data. REPORTS. Provide all requested reports using the OROS ACB software or other USAMRMC approved software in a timely manner. BENCHMARKING. Develop cost data on critical lab activities/processes by establishing benchmarks of the costs of activities to help USAMRMC decide the best method to perform activities including in-house or contracting out with another entity as possible f uture improvement efforts. BEST PRACTICE. Provide best practice analyses on critical lab activities/processes to assist USMRMC in comparing process performance data (quantity, quality, cost, timeliness, and customer satisfaction) between the laboratories and in choosing the best pr actice as a standard of performance. REENGINEERING OPERATIONS. Help USAMRMC develop a map of their current business processes to help identify bottlenecks and other work steps that do not add value to the overall process. MEASURING PERFORMANCE. Help USAMRMC use the ABC/M models to enhance organizational performance measurement to set reasonable performance targets based on the acceptable amount of resources needed to perform each activity. TRAINING. Provide basic ABC, Cost Analysis, and OROS software or USAMRMC approved ABC software training and support on-site. COST ANALYSIS. Review the Command-wide USAMRMC ABC model and other information and analyze in depth the processes selected by management to identify opportunities for improvement and massive savings in time and dollars utilizing all appropriate analyses t echniques such as but not limited to Pareto Analysis, Failure Analysis, Cause and Effect Analysis, Benchmarking, Best Practices, Comparative Analysis, Value Added Analysis, Cost Benefit Analysis, Economic Analysis, Functional Economic Analysis, etc.. The s avings yield must exceed the contractor cost to provide the cost analysis. REPORTS. Provide both written and oral in a clear, concise and timely manner in accordance with Field Manual (FM) 101-5, STAFF ORGANIZATION AND OPERATIONS OR other USAMRMC approved format. CUSTOMER FOCUS. Provide the link between process costs and customers to ensure a proper customer focus for activities. ON-SITE EXPERT. Provide an on-site expert to answer ABC and Cost Analysis related questions and provide assistance as necessary during hours of operation. DELIVERY REQUIREMENTS. The Contractor shall meet with the Technical Point of Contact (TPOC) and with the Deputy for Resource Management representatives within five days after notice of award to review and clarify any areas of the Performance Work Statement (PWS). CONTRACTOR PERFORMANCE STANDARDS Performance will be monitored throughout the effective period of the contract using the following criteria: 1. Independent action is exercised in day-to-day work planning and organization, setting priorities, and coordinating work efforts with serviced programs and other Resource Management employees. 2. Arrives on time, prepared for work. 3. Presents a professional demeanor, appearance and manner. 4. Handles heavy workload by setting priorities effectively. 5. Uses initiative in resolving problems. CONTRACTOR QUALIFICATION REQUIREMENTS The position requires the following knowledge and/or ability: 1. Knowledge of basic rules, regulations, and policies related to Activity Based Costing, Cost Analysis, Managerial Cost Accounting Concepts and Standards for the Federal Government, Process improvement, re-engineering and productivity improvement. 2. Practical knowledge of cost analysis, cost reduction, and process and productivity improvement. 3. Skill in Standard Finance Systems (STANFINS), the Standard Procurement System (SPS), Defense Medical Logistics Supply System (DMLSS), Wide-Area Work Flow (WAWF), Computerized Accounts Payable System-Windows (CAPS-W), Electronic Data Access (EDA) and Activity-Based Costing (ABC) models to provide cost dat a on critical activities, processes, support and services to ensure accurate cost analysis for activities necessary to provide the goods and services of USAMRMC. 4. Skill in the use of analysis tools, such as but not limited to Pareto Analysis, Failure Analysis, Cause and Effect Analysis, Benchmarking, Best Practices, Comparative Analysis, Value Added Analysis, Cost Benefit Analysis, Economic Analysis, Functional E conomic Analysis, statistical analysis, etc., that can be applied to identify opportunities for improvement and achieve massive savings in time and dollars. 5. Skill in use of word processing applications to prepare correspondence. Keyboard proficiency of 40 words per minute is required. 6. Skill in written and verbal communications to provide basic Activity Based Costing Cost Analysis training, brief results and prepare written reports. 7. Knowledge of filing system procedures to establish and maintain files, as well as to research, locate, and code documents to be filed. 8. Access to sensitive data may be necessary to perform the work of the position. Therefore, the contractor must obtain appropriate security clearance. APPLICABLE DOCUMENTS. 1. DOD Activity Based-costing Guide 2. FASAB Managerial Cost Accounting Concepts and Standards for the Federal Government 3. Field Manual (FM) 101-5, STAFF ORGANIZATION AND OPERATIONS
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- SN01134157-W 20060907/060905220918 (fbodaily.com)
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