Northeast Regional Council Warwick, RI June 13, 2007

1. Northeast Regional Council Warwick, RI June 13, 2007 AbilityOne/JWOD & Small Business . . . Partnering for Success Sheryl Kennerly Committee for Purchase From People Who Are Blind or Severely Disabled

2. AbilityOne Program Mission • Create Jobs for People Who Are Blind or Have Other Severe Disabilities Through the Delivery of Products and Services to Federal Customers • 17 Million+ Americans Have Severe Disabilities • 70% of this Population is notEmployed • AbilityOne Helps Address this Need • AbilityOne = Single Largest Employer of People with Disabilities in the U.S. • Over 47,000 Employees in FY 2006 AbilityOne /

3. AbilityOne Program History • 1938 – Wagner-O’Day Act: Established the Program for Products Made by People Who are Blind • 1971 – Javits Amendment:Expanded the Program to Include People with other Severe Disabilities, and Added Services • 41 USC 46-48c • Codified at 41 CFR Part 51 • FAR Subpart 8.7 Implements the JWOD Program’s Procurement Rules AbilityOne /

4. Nonprofit Agencies Employing Persons Who Are Blind (71) Nonprofit Agencies Employing Persons with Severe Disabilities (552) AbilityOne ORGANIZATIONAL CHART President of the United States DOCDODAir Force Army Navy DOJ DOL ED GSA USDA VA Citizen Citizen Citizen Citizen Congress Committee for Purchase From People Who Are Blind or Severely Disabled Legal Authority National Industries for the Blind (NIB) NISH AbilityOne /

5. Committee Responsibilities • Establish, publish, maintain Procurement List (PL) Additions and Deletions; informal rulemaking process via Federal Register • Determine Fair Market Prices of PL items • Designate Central Nonprofit Agency(ies) (CNA) to facilitate orders from the PL • Make rules and regulations as necessary to carry out the purposes of the JWOD Act • Conduct continuing study and evaluation of activities under the JWOD Act

6. AbilityOne Regulatory Framework • As a Federal agency, the Committee works within a statutory and regulatory framework • Need for openness and transparency of the Committee’s operations set the tone for business processes and procedures • Every Proposed Addition involves a deliberative decision by the Committee • All decisions are based on suitability judgments; no set formula

7. Committee Suitability Criteria • The Committee’s Decision to Add to the Procurement List is Based on Regulatory Suitability Criteria as Follows: • Employment Potential • Qualified Nonprofit Agency • Capability of Nonprofit Agency • No Severe Adverse Impact • The Committee Must Also Establish an Initial Fair Market Price and Approve the Process for Updating the Price Over Time AbilityOne /

8. Procurement List Background • What is the Procurement List? • Additions and Deletions Go Through a Deliberative, Public Rulemaking Process • The Four Phases of the Additions Process: • Identification • Development • Decision • Production/Performance

9. AbilityOne Comprised Less Than 1% of the FY2005 Federal Contract Spend (FPDS and Program Data) AbilityOne /

10. IMPACT ANALYSIS • Current contractor is contacted by certified letter notifying them of the proposed addition and requesting sales information • Contractor is able to submit comments on the proposed addition to the Procurement List • Cumulative impact is taken into account • If severe adverse impact is shown, the proposed addition is stopped

11. How do I know if I have to buy AbilityOne products or services? AbilityOne services are for a specific type of service at a specific location AbilityOne products coverage in categories • A List=Total Government Requirement • Commonly used commodities that are to be bought by all Government agencies • B List=Broad Government Requirement • Products used by many agencies, not all, as aggregated by GSA • C List=Unique Government Requirements • Products for a special use by one or a group of agencies, not widely available

12. JWOD PRODUCT DISTRIBUTION • You can buy AbilityOne products: • By Phone or Fax • 1-800-Get-JWOD • Via the Internet (DoD E-Mall; GSA Advantage) • From Authorized Commercial Distributors (300+ small businesses) (see www.jwod.gov/distributors) • At Base Supply Centers

13. Partnering With Small Business • The JWOD Program Partners with Members of the Small Business Community, as: • Distributors of JWOD Products • Subcontractors for Portions of Manufacturing or Service Delivery • Suppliers of Raw Materials/Components • NIB’s previous research found its associated agencies did 60% of their purchases of materials from small businesses AbilityOne /

14. New Small Business Utilization Study • In Feb. 2005, NISH commissioned a 3rd party research firm to conduct a survey of its nonprofit agencies to identify • The variety of ways nonprofit agencies work with small businesses • The dollar value of nonprofit agencies’ spend with small businesses • With a 69% response rate, NISH found that its agencies spent $196-$298 M with small businesses in FY 2004.

15. Meeting Small Business Subcontracting Plan Goals • 10 US Code Sec. 2410d. – Subcontracting Plans: Credit for Certain Purchases • Purchases Benefiting Severely Handicapped Persons“In the case of a business concern that has negotiated a small business subcontracting plan with a military department or a Defense Agency, purchases made by that business concern from qualified nonprofit agencies for the blind or other severely handicapped shall count toward meeting the subcontracting goal provided in that plan.”

16. FY 2007 CNA Fee Ceiling Effective October 1, 2006 • Fee paid by the NPAs to finance CNA operations • Inherent in Fair Market Price, not an add-on or pass-through cost to the Government • Included in Overhead of the NPA as cost of doing business in the AbilityOne Program • Changes in Fee Ceiling do not change existing Fair Market Prices • Committee reviews CNA budgets and sets fee ceilings annually

17. Product Pricing Memorandum – PR2 New Product Pricing Memo PR2 • Establishes preference for Market Based pricing • Requires price analysis to establish price • Cost Realism/Cost Analysis only when necessary • Establishes Contracting Officer responsibility to recommend Fair Market Price • Greater consistency with FAR practices • Committee maintains sole authority to establish prices, based on recommendations—CNA & CA • Negotiations required to achieve agreement between NPA and CA on price recommendation • Impasse Process when agreement not possible

18. Service Pricing memorandum – PR3 • Establishes preference for Market Based pricing • Requires price analysis to establish price • Cost Realism/Cost Analysis only when necessary • Establishes Contracting Officer responsibility to recommend Fair Market Price • Greater consistency with FAR practices • Committee maintains sole authority to establish prices, based on recommendations—CNA & CA • Negotiations required to achieve agreement between NPA and CA on price recommendation • Impasse Process when agreement not possible

19. JWOD Name Changing to AbilityOne • More effectively communicate mission in program name • Extensive research conducted on AbilityOne • Transition Plan of 18 months for phase-in • JWOD/AbilityOne will be used during transition to communicate change • “Business as Usual”- no substantive changes to the program or to customers • New Graphics and brands available soon. • Communicate through Acquisition Council

20. QUESTIONS??WWW.AbilityOne.GOV Sheryl KennerlyInformation ManagementCommittee for Purchase From People Who Are Blind or Severely Disabled1421 Jefferson Davis Hwy, Suite 10800Arlington, VA 22202703-603-2134skennerly@jwod.gov