Home' Army Acquisition Logistics and Technology Magazine : Army ALT April-June 2016 Contents than days or weeks. Finally, the stream-
lined requirements review process placed
all six ERP programs together to create
a collective set of requirements. Together,
they established an enterprise portfolio
of common end-to-end software needs
that combined contract line items for all
six ERP programs versus having mul-
tiple contract line items for various ER P
programs. Ultimately the consolidated
portfolio equates to reduced costs.
“S AP and the ELAs have transformed
Army business processes by leveraging
commercial technology and best business
practices,” said COL William Russell,
GFEBS project manager.
with industry allowed GFEBS to provide
mature capability quicker and with fewer
problems to over 35,000 users while also
moving the Army one step closer to a
fully auditable solution.”
WHAT MAKES THIS
Through ELAs, vendors and government
entities are optimizing spending and
maximizing the support they receive to
get the most of what’s needed, which, in
this case, are SAP licenses and mainte-
nance support. However, this contract
represents so much more than that—it
represents the power of solid relationships.
“The current ELA represents the true value
of strategic sourcing, a collaborative part-
nership among the ERP programs that
are fielding SAP-based solutions across
the Army, and the software procurement
experts with CHESS and ACC-RI,” said
Terry Watson, acting PEO EIS. “The
Army has built relationships with SAP
software suppliers that enable more than
just acquiring sof tware at the lowest price.
Open and transparent communication
with industry partners enables the Army
to remain fully informed on industr y
trends for the next software agreement
while eliminating the overhead that results
from redundant government contracts.”
A good working relationship with indus-
try allowed the Army to leverage its size,
scope and customer history to establish
the current five-year SAP ELA 2 for $279
million, providing significant cost avoid-
ance in deferred maintenance costs and
new procurement price locks, reflecting
pricing and maintenance support at rates
even lower than the original SAP ELA 1.
This contract also provides the Army with
significant discounts from the General
Services Administration Schedule, an
estimated $1.2 billion in cost avoidance,
while securing the best end-user license
agreement terms and conditions and
ensuring additional future savings for the
term of the agreement.
Inability to amply license the ERP user
community would cripple the Army’s abil-
ity to supply, sustain, track and manage
materiel and finances to support today’s
military landscape. With rising tech-
nology costs and falling DOD budgets,
finding ways to streamline requirements,
obtain best value and reduce costs are
essential to the ERP programs’ future.
With future estimates of more than
300,000 Army ERP users worldwide,
being able to buy SAP software licenses
and maintenance support packages in
bulk while capitalizing on best price
break points have put new meaning to
category management for military tech-
nology. As part of the SAP IPT, each
stakeholder used lessons learned from
previous contracts to establish this well-
designed consolidated buy and category
management package, breaking with the
military’s tradition of being unlikely to
buy technology as a group.
The A rmy’s ERP programs support
the Better Buying Power mission: “the
SAP ELA Contract
Before 2011: FY02-FY11
• Separately purchased and
pro gram-managed cont racts.
• License discount and mainte -
nance fee rat es varied.
• Lack of Armywide asset man-
• Prevented reuse and sharing of
licenses with other programs.
SAP ELA 1: FY12-FY15
SAP ELA 1 KEY OUTCOME
• Leveraged Army buying power.
• Significant discount on licenses.
• Fixed maintenance fee.
• Consolidated from 22 con -
tracts to one contract.
• Streamlined procurem ent proc ess.
• Reduced program administra-
tive resources and cost.
• Centralized license trac king and inventor y.
• Allowed transf erring and sharing of
licenses among six ERP programs.
SAP ELA 2: FY16-FY20
SAP ELA 2 KEY OUTCOMES
• $1.2 billion in total cost avoidance
estimated for the life of this contrac t.
• Obtained greater license dis-
counts than ELA 1.
• Better maintenance rate terms
and conditions than ELA 1.
• Accelerated contract award from an aver-
age of 12-18 months to eight months.
• Reduced minimum annual license purchases.
116 Army AL&T Magazine
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