NATO UNCLASSIFIED

NATONATOConsultation, Command and Control Consultation, Command and Control

AgencyAgency

How to Do Business with NATOHow to Do Business with NATO

Mr. Tom HerwayMr. Tom HerwayChief of ContractsChief of Contracts

15 June 200615 June 2006

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NC3A Acquisition RolesNC3A Acquisition Roles

Host Nation for Assigned NATO Common Host Nation for Assigned NATO Common Funded ProjectsFunded Projects

Procurement Agent for other NATO BodiesProcurement Agent for other NATO Bodies

Procurement Agent for other NATO NationsProcurement Agent for other NATO Nations

Host Nation/Procurement Agent for NATOHost Nation/Procurement Agent for NATO projects with non-NATO nationsprojects with non-NATO nations

Third Party Procurements

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NC3A Procurement PrinciplesNC3A Procurement Principles

Business has to be open to all NATO nationsBusiness has to be open to all NATO nations

Have to establish fair and reasonable pricesHave to establish fair and reasonable prices

Ensure the integrity of the procurement process by:Ensure the integrity of the procurement process by: Following NATO and NC3A procurement proceduresFollowing NATO and NC3A procurement procedures Documenting and reporting on work performedDocumenting and reporting on work performed

Expect scrutiny of NATO Committees and IBANExpect scrutiny of NATO Committees and IBAN

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NATO Procurement ProceduresNATO Procurement Procedures

Depend on funding - IC(NSIP) or MBCDepend on funding - IC(NSIP) or MBC

Infrastructure CommitteeInfrastructure Committee (NATO Security (NATO Security Investment Programme)Investment Programme) fundedfunded - - International Competitive Bidding Procedures, International Competitive Bidding Procedures,

AC/4-D/2261, are the standard (1996)AC/4-D/2261, are the standard (1996) Basic Ordering Agreement Procedures (2002)Basic Ordering Agreement Procedures (2002) Best Value Procedures (Jan 2004)Best Value Procedures (Jan 2004) NC3A Procurement Directives (P.D. 1& 2)NC3A Procurement Directives (P.D. 1& 2)

Military Budget Committee funded - Military Budget Committee funded - NATO Financial Regulations - Method depends on NATO Financial Regulations - Method depends on

value of procurement value of procurement NC3A implementing procedures - P.M 1-4NC3A implementing procedures - P.M 1-4

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Summary of Procurement Summary of Procurement ApproachesApproaches

Procurement ApproachesProcurement Approaches International Competitive Bidding International Competitive Bidding (ICB) (ICB) Basic Ordering Agreements (BOAs)Basic Ordering Agreements (BOAs) Standing Ordering AgreementsStanding Ordering Agreements

Selection CriteriaSelection Criteria Lowest Price Compliant BidLowest Price Compliant Bid Best ValueBest Value Sole SourceSole Source

Implementation StrategiesImplementation Strategies Spiral DevelopmentSpiral Development Single packageSingle package

Match Match Approach Approach to Project to Project

NeedNeed

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Evolution of NATO Procurement PracticesEvolution of NATO Procurement Practices

Quality

and T

ime

to C

ontract

2 – 5 Months2 – 5 Months

Basic Ordering AgreementCompetitions

1970- 1995- 2005-

International Competitive Bidding

Notice of Intent

Extensions

Clarifications

Appeals

Lowest CostBidder

ExtensiveProcedures

6 – 30 Months6 – 30 Months

BidderQuestions

1-2 Month1-2 Month

Standing OrderingAgreements

Best Valueand Spiral

Development

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International Competitive Bidding(ICB)International Competitive Bidding(ICB)(AC/4-D/2261)(AC/4-D/2261)

Nations responsible for finding, screening, certifying Nations responsible for finding, screening, certifying and nominating companiesand nominating companies

Evaluation criteria - Lowest, compliant bid Evaluation criteria - Lowest, compliant bid

Evaluation process - NC3A proceduresEvaluation process - NC3A procedures Organisation - PEB, CAB, SSAOrganisation - PEB, CAB, SSA Documentation - SSP, Evaluators Workbook, CRs, PEB Documentation - SSP, Evaluators Workbook, CRs, PEB

and CAB Reports, SSA Decisionand CAB Reports, SSA Decision

Advantages and DisadvantagesAdvantages and Disadvantages

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Basic Ordering Agreements Basic Ordering Agreements (BOAs)(BOAs)

Quick and efficient method for procurement of Quick and efficient method for procurement of

commercially available CIS products and servicescommercially available CIS products and services Delegations nominate companies Delegations nominate companies NC3A negotiates standardised ordering agreements NC3A negotiates standardised ordering agreements

with major suppliers with major suppliers Currently 397 vendors from 22 nationsCurrently 397 vendors from 22 nations ““Most Favoured Customer” (MFC) terms and prices with Most Favoured Customer” (MFC) terms and prices with

suppliers = “Strategic Agreements”suppliers = “Strategic Agreements” Have flexibility to: (1) take advantage of MFC prices, (2) Have flexibility to: (1) take advantage of MFC prices, (2)

compete between the BOAscompete between the BOAs Access via www.boa.nc3a.nato.int. Free use by NATO Access via www.boa.nc3a.nato.int. Free use by NATO

activities, nations. Prices password protected.activities, nations. Prices password protected.

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Number of Basic Ordering Number of Basic Ordering Agreements (May 2006)Agreements (May 2006)

BEL

BUL

CAN

CZE

DNK

FRA

DEU

GRC

HUN

ICE

ITA

LVA

LUX

NLD

NOR

POL

PRT

ROM

ESP

TUR

GBR

USA

84

56

501

9

5

5

2332

77

1

16

1

348

9

23

33

7

4

Total: 397

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NC3A Buyline NC3A Buyline

NC3A Buyline is the automated tool developed to efficiently NC3A Buyline is the automated tool developed to efficiently process and report on BOA procurementsprocess and report on BOA procurements

Current CapabilityCurrent Capability – – (1) Automated search tool. List of potential bidders(1) Automated search tool. List of potential bidders(2) Automated data storage and retrieval system(2) Automated data storage and retrieval system(3) Reporting system- IC requires Quarterly BOA Reports, (3) Reporting system- IC requires Quarterly BOA Reports,

Contract Notifications on each actionContract Notifications on each action(4) Procurement module for NC3A IMIS(4) Procurement module for NC3A IMIS

(5) Deployment of Buyline (NC3A NL)(5) Deployment of Buyline (NC3A NL)ExpansionExpansion – –

(1) Full E Procurement tool including Electronic Bulletin Board(1) Full E Procurement tool including Electronic Bulletin Board(2) Deployment of Buyline NATO-wide, nations (2) Deployment of Buyline NATO-wide, nations

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Create Bidders list

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export addre

sses

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Standing Ordering Agreements (SOAs)Standing Ordering Agreements (SOAs)

Two options:Two options:

Add new requirements to existing competitively Add new requirements to existing competitively awarded contractsawarded contracts

Include anticipated requirements in evaluation of bids. Include anticipated requirements in evaluation of bids. Set up options in contracts for future orders not yet Set up options in contracts for future orders not yet authorised.authorised.

AdvantagesAdvantages Saves time – Don’t have to re-compete procurements Saves time – Don’t have to re-compete procurements

for similar requirementsfor similar requirements Saves money – Quantity discounts on prices. Less Saves money – Quantity discounts on prices. Less

internal processing costs.internal processing costs.

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Best ValueBest Value

Needed an alternative to “lowest price, technically Needed an alternative to “lowest price, technically compliant” ICB award criteria compliant” ICB award criteria Emphasis on price meant couldn’t select best overall bidEmphasis on price meant couldn’t select best overall bid

Best Value Definition - Best Value Definition - Award is made to bid offering best Award is made to bid offering best overall value, taking all factors into consideration (project overall value, taking all factors into consideration (project management, technical, supportability, and price). management, technical, supportability, and price).

NC3A had successful cases of Best Value on fairly large NC3A had successful cases of Best Value on fairly large projects (TMD (5), NAFS, KFOR Outsourcing, SSC)projects (TMD (5), NAFS, KFOR Outsourcing, SSC)

Three year trial period for NSIP projects started 1/1/04Three year trial period for NSIP projects started 1/1/04

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Spiral Development Spiral Development

Definition – The required capability is fielded in increments, Definition – The required capability is fielded in increments, each building toward the final operational capability, instead each building toward the final operational capability, instead of a single package.of a single package.

Process is summarised in NC3A procedures :Process is summarised in NC3A procedures :

Core Increment is first increment, where risk is lowest Core Increment is first increment, where risk is lowest Higher risk requirements ( the evolution of the requirement) Higher risk requirements ( the evolution of the requirement)

are addressed through studies, prototypes are addressed through studies, prototypes

Requirements for each follow-on increments based upon:Requirements for each follow-on increments based upon: user feedback user feedback technology updatestechnology updates results of studies and prototypesresults of studies and prototypes

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How to Do Business with NATOHow to Do Business with NATO

Main Financial Committees: Main Financial Committees: Infrastructure Committee (IC) – NATO Security Investment Infrastructure Committee (IC) – NATO Security Investment

Programme (NSIP) Programme (NSIP) Military Budget Committee (MBC) – Admin., supportMilitary Budget Committee (MBC) – Admin., support

NATO works through these CommitteesNATO works through these Committees NATO National Delegations staff CommitteesNATO National Delegations staff Committees Committees make decisions, authorise projectsCommittees make decisions, authorise projects Committees procure through Agencies (NC3A) Committees procure through Agencies (NC3A) NATO Delegations must nominate companies for them to be NATO Delegations must nominate companies for them to be

eligible to bideligible to bid ICBs – Case by case nominationICBs – Case by case nomination BOAs – One blanket nomination BOAs – One blanket nomination

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How to Do Business with the How to Do Business with the NC3ANC3A

IndustryIndustry Contact National Delegation to be:Contact National Delegation to be:

Made aware of upcoming business opportunitiesMade aware of upcoming business opportunities Placed on Bidders Lists for ICBsPlaced on Bidders Lists for ICBs Nominated for a BOA with NC3ANominated for a BOA with NC3A

Government Government Procurement point of contact: Agata Szydelko Procurement point of contact: Agata Szydelko

Phone: 32-02-707-8241 Phone: 32-02-707-8241

agata.szydelko@nc3a.nato.intagata.szydelko@nc3a.nato.int