Requisition Channel Industry Meeting (OS, MRO and JanSan )

1. Requisition Channel Industry Meeting (OS, MRO and JanSan) February 19, 2014

2. Opening Remarks • Some General Housekeeping Rules for Today’s Seminar • Today’s seminar is being recorded. It will be available for review at a later date, so you can refer to it in case you missed anything. • There is no dial-in number for this seminar. You will be listening to the presentation through your computer speakers. • Please make sure your computer speakers are not muted • Make sure your speaker volume is turned all the way up • If you are having any technical issues, please let me know in the chat box on the right of your screen and I will do my best to accommodate you. • QUESTIONS for the Presenters: • We ask that you hold your questions until the end of the presentation • Please type your questions in the chat box at the right of your screen. We will do our best to answer all of your questions during today’s session, but may need to get you an answer at a later date.

3. Opening Remarks Speaker: Mr. Walter Eckbreth Program AnalystGeneral Services Administration

4. GSS Supply Transformation

5. Agenda • Supply Transformation (ST) Background and Overview • Federal Strategic Sourcing Initiative (FSSI) as Key ST Enabler • ST Milestones & Key Dates

6. Supply Transformation Concept • Wholesale Transformation: transition commercially available items from GSA Stock to Strategic Partner Delivery (SPD) • ST will utilize commercial vendor supply chains to transform GSS wholesale and retail programs • Retail Transformation: transition retail operations from GSA-managed inventory solution to the fourth party logistics (4PL) solution

7. Supply Transformation Background FY07 New Business Models Study and Business Case Analysis FY10 Launch of Central Asia Sourcing Program FY12 Launch of Strategic Partner Delivery (SPD) Pilots FY14 Implementation of Supply Transformation FY09 Launch of 4PL Retail Program FY11 Launch of Direct Vendor Delivery Pilots (FSSI) FY13 Preparation for Supply Transformation

8. Impetus • Industry distribution models have become more sophisticated, creating both more competition and greater opportunity for partnership • Technology innovations enable greater integration with external partners • Goals • Overall: Increase value to the customer and to the taxpayer • Greater customer responsiveness: more and higher quality products, lower prices, and faster delivery • Greater efficiency: upon completion, generate $100 million in annual savings through acquisition and operating efficiencies • Promote small business usage • Ensure GSS business model is sustainable: competitive and solvent Supply Transformation Impetus and Goals

9. SPD Federal Strategic Sourcing Initiative (FSSI) as Key Enabler Quality Product, Competitive Pricing, and Fast Delivery Develop deep insight into markets and lifecycle costs Leverage Government-Wide Spend Foster Usage of Socio-economic Firms Constantly Capture and Refine Best Practices FSSI Worldwide Delivery FEDSTD and MILSTD Compliant Automated End-to-End Supply Chain Process

10. Supply Transformation Milestones and Key Dates Industry Day Engage Industry Video Presentation Letters to Contractors FSSI RFQs Implement SPD JanSan & MRO Awards OS3 Award Stop ship WDC Transform GSS Internal Operations Stop ship EDC Close WDC Close EDC Convert Stores to 4PL

11. Appendix: Glossary

12. The Supply Transformation Team will now take any questions, comments or concerns. Please type questions in the chat window.

13. OS, MRO and JanSan Acquisition Strategies For the Requisition Channel

14. Customers buy through several unique methods necessitating a multi-channeled sourcing strategy Government Purchase Card Holder or Contracting Officer On-base Military Personnel MILSTRIP / FEDSTRIP User • Purchasing Channel • Customers purchase products directly from vendor via a vendor- or government-managed internet portal or vendor store front • Vendors fulfill orders and invoice customers directly • Largest channel, covering 70-80% of addressable spend • Requisition Channel • Acquire products available through GSA Global Supply • Mainly DOD customers • 4PL • Channel • Mainly DOD customers • Vendors own and operate network of on-site stores, manage inventory and ensure delivery DOD eMall GSA Advantage Vendor Website Global Supply On-Base 4PL Store Contract Vendor Brick & Mortar Store

15. GSAs requisition model entails a specific set of unique requirements for Contractors to successfully participate • The Requisition Channel covers mainly DoD orders that are fulfilled through GSA Global Supply program • Requisition order fulfillment requires advanced e-commerce capabilities and seamless integration with GSA IT systems • E-commerce systems must fully align and link to GSA’s • Extensive testing is required to ensure that all orders are transmitted and received, and that no data elements are dropped • Use of National Stock Numbers (NSNs) is critical to ensure zero manual touch points for order processing • Other custom requirements exist, including unique marking, packing, labeling requirements, and many more

16. 2 1 3 Path to Establishment Market Basket Created Vendors Submit Quotes on Pools Contractor evaluation and category representation uses a market basket approach • Designed to represent Federal market purchases in the category • Top high-spend products • Additional representative items • Market basket items are categorized into pools for Contractors to submit quotes • Quote sheets are created for the market basket items within each pool • Several Technical Go/No Go Factors must be satisfactorily addressed by interested Contractors • Contractor’s prices are collected on quote sheets for each pool the Contractors choose • Qualifying Contractors for JanSan and MRO are then asked to apply the market basket average discount to all other non-market basket items within each pool • For Office Supplies, non-market basket pricing will be reviewed and negotiated individually

17. Example: Vendor XYZ, Inc. sells tools and would like to quote on the MRO Tools and Tool Cabinets Pool FOR ILLUSTRATIVE PURPOSES ONLY Quotes on Market Basket items (to be provided on the quote sheet) are the basis for Contractor evaluation XYZ, Inc. quotes discounts off of their Schedule pricing for every core item XYZ, Inc. is evaluated based on the prices quoted • In this example, XYZ, Inc. offered an average discount of about 9% off of their GSA MAS net prices, calculated based on their quotes for all products within the pool • If XYZ, Inc. is selected, the average discount will be applied to the entirety of their non-market basket items that are in scope with the given solution (NOTE: Schedule Price does not apply to OS.)

18. Planned Administrative Go/No-go Evaluation Factors • Must be an AbilityOne reseller and demonstrate authorization to be an authorized distributor • Provide 100% core items in category with supply manufacturer’s part number and UPC (if available) • Demonstrate ability to provide core Market Basket items vs. Non-Market Basket items per pool • Demonstrate TAA compliance • Meet environmental sustainability requirements • Assure Berry Amendment compliance (MRO only) • Provide representation regarding unpaid delinquent Federal tax liability or felony conviction

19. Planned Technical Go/No-go Evaluation Factors (cont) • Comply with Item Purchase Descriptions • Ability to support a Requisition based environment • Meet electronic communication capability • Demonstrate the ability to use the DLA’s VSM • Ability to provide “Fill or Kill” status • Comply with packing, packaging, marking, labeling and documenting requirements (FED STD 123; MIL STD 129) • Ability to secure scannable bar codes • Provide a subcontracting plan (other than small business concerns only)

20. OS Acquisition Strategy

21. RFP – Open to all vendors (Do not have to have a GSA Schedule) • OS encompasses • General Office Supplies. • Paper • Toner/Ink • Estimated spend for OS Requisition items is an estimated $200M annually OS Requisition Channel Acquisition Plan

22. Proposed OS aggregate volume thresholds Aggregate Volume Discounts: Vendors will be asked to provide additional discounts that go into effect upon reaching a cumulative level of spend OS Proposed Aggregate Tiers

23. Key Terms and Conditions for OS Period of Performance • 1 Base Year with4 One-Year Options • CONUS – 4 Calendar Days • OCONUS – 7 Calendar Days • $0.00 • FOB Destination Delivery Days Minimum Order Size Delivery Terms

24. MRO and JanSanAcquisition Strategy

25. JanSan encompasses products ranging from motorized floor buffers to toilet paper, hand soap, and more • Estimated spend for JanSan Requisition items is an estimated $92M Annually • MRO encompasses products ranging from hardware to hand tools, from portable air conditioners, to pumps and motors • Estimated spend for MRO Requisition items is $144M Annually JanSan and MRO Requisition Channel Acquisition Plan

26. JanSan and MRO Product Categories MRO Categories Hardware Tools and Tool Cabinets JanSan Categories Brooms, Brushes, Mops, Sponges, Cleaning Cloths, Pails & Wipers Cleaning and Polishing Compounds, Miscellaneous Chemical Specialties & Dispensers Motorized Floor Cleaning Equipment and Accessories, Floor Mats and Coverings Personal Hygiene, Paper Products, Dispensers and Laundry Accessories Trash Receptacles, Plastic and Paper Bags

27. Proposed JanSan & MRO aggregate volume thresholds Aggregate Volume Discounts: Vendors will be asked to provide additional discounts that go into effect upon reaching a cumulative level of spend JanSan Proposed Aggregate Tiers MRO Proposed Aggregate Tiers

28. Key Terms and Conditions for MRO and JanSan Period of Performance • 1 Base Year with4 One-Year Options • CONUS – 4 Calendar Days • OCONUS – 7 Calendar Days • $0.00 • FOB Destination Delivery Days Minimum Order Size Delivery Terms

29. The OS, MRO and JanSan Teams will now take any questions, comments or concerns. Please type questions in the chat window.