Office of Acquisition and
Logistics Management
1
NIH Community Spend Analysis
Final Report
December 4, 2008
Office of Acquisition and
Logistics Management
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Table of Contents
Section Page
1. Executive Summary 3
2. Introduction 16
3. Availability and Assessment of Evaluation Data (Study Questions 1 and 2) 21
4. Analysis of Purchasing Data (Study Questions 3 and 4) 28
5. Recommendations 73
Appendices
1. Appendix A: Variables Used for Analysis 80
2. Appendix B: Object Classification Codes Included in Analysis 91
3. Appendix C: Methodology for Item Price Comparisons 99
Office of Acquisition and
Logistics Management
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Section 1: Executive Summary
Executive Summary
Office of Acquisition and
Logistics Management
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The NIH is facing increasing pressures that drive the
requirement for improved purchasing processes
Pressure to offset flat budgets to allocate the maximum
dollars to research
The need to effectively manage global supply chains in the
face of natural disasters, medical pandemic, supply
shortages, etc. requires ensuring that the supply chain can
quickly adapt to adverse events and continue operating
without disruption
Government regulation in the area of supply chain and
logistics putting pressure on executives to comply with
mandates (e.g. OMB requirement to implement strategic
sourcing, President’s Management Agenda for energy, etc.)
Expectations of continuous improvements of product
attributes to aid in research performance
Requirement to
Reduce Costs
Requirement to
Reduce Costs
New Regulation
New Regulation
Concerns about
Continuity of
Operation
Concerns about
Continuity of
Operation
Increased
Researcher
Expectations
Increased
Researcher
Expectations
Executive Summary
Office of Acquisition and
Logistics Management
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Multiple data sources were used to provide item level
detail to compare prices and estimate shipping and
handling charges
ICs included
Time frame
of data
Key data elements Data Uses
nVISION
All ICs July 2007 to
July 2008
Order date, IC, buyer,
procurement method, object
classification code, supplier,
and total order price
Analyze spend by key data elements
Estimate shipping and handling savings
GDC Stock
Master
Report
OD Report run
on 10/09/08
Item price, item description, unit
of issue and supplier
Price comparison of similar items between GDC,
NIDDK and NIAID
AMBIS
NIAID Only Oct 2007 to
Aug 2008
Item description, supplier,
supplier catalog number, unit
price, order total, and shipping
charges
Price comparison of similar items within NIAID and
between NIAID, NIDDK, and the GDC
Estimate of shipping and handling charges
POTS
NIDDK Only Mar 2008 to
Sept 2008
Item description, supplier,
supplier catalog number and
unit price
Price comparison of similar items within NIDDK
and between NIAID, NIDDK, and the GDC
Invitrogen
All ICs Sept 2007 to
Sept 2008
SKU number, item description
NSN number, IC, quantity
purchased, order total, channel
Price comparison of same items between ICs
direct purchase price, and GDC purchase price
Used to estimate shipping and handling charges
Executive Summary
Due to the numerous free form text fields in NBS, which made it difficult to collect standardized supplier and item
description data, the spend analysis team tried to identify other data sources to fill these gaps
Office of Acquisition and
Logistics Management
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In a 12 month period, the NIH community spent $228.1
Million on supplies and materials or $209.7 Million
excluding the Clinical Center
Spend by IC
($ Millions)
(1) OD Spend includes spending from Project ICs, OD, OD ORS, and OD ORFDO
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Total $ of Spend = $228.1 Million
Total $ of Spend = $228.1 Million
CC
$18.4
All Other
$39.2
NCI
$36.8
NIAID
$30.4
NIDDK
$12.8
NHLBI
$12.7
OD
$35.6
NIA
$11.8
NHGRI
$11.4
NIEHS
$10.8
NICHD
$8.1
Remainder NIH Spend = $184.9 MM
Remainder NIH Spend = $184.9 MM
GDC accounts for 11% of the total NIH spend
GDC Spend =
$24.8 MM
GDC Spend =
$24.8 MM
The Clinical Center has been
excluded from the remainder of the
spend analysis due to use of the
Prime Vendor Program for
replenishment of supplies
GDC
ALL NIH
(
excluding CC)
Executive Summary
Office of Acquisition and
Logistics Management
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The spend analysis findings focus on three areas
Areas of Study
Examine variance in prices
paid by different NIH
customers for the same
products from the same or
alternate suppliers
Identifying items ordered
through the GDC and
those ordered directly
from vendors allows GDC
to quantify lost sales
opportunities
Procurement Method
Price Variance
1
1
3
3
Identifying opportunities for
consolidating supplier spend
allows for increased
negotiating power and more
streamlined supplier
relationships
Supplier Fragmentation
2
2
Procurement Method
Total Price Variance
1
1
3
3
Supplier Fragmentation
2
2
Spend Analysis Findings
With over 1,600 buyers the NIH
obtains widely different prices
for similar items
Within the same IC, individuals
pay different prices for identical
items
One third of the 120 Invitrogen
items that the ICs buy direct
cost 35-200% more than the
GDC’s price
94% of orders were
placed on PCard
Total value of PCard
orders was $162.4 MM
The NIH buys from 17,000
different suppliers
Top 10
Suppliers
30%
Suppliers
11-20
11%
All Other
Suppliers
59%
Executive Summary
Office of Acquisition and
Logistics Management
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Fully landed costs were calculated to fairly compare
the costs of items purchased direct verses from the
GDC
Administrative Costs
Labor cost of processing orders
PCard assessment charge
GDC surcharge includes buyers,
item managers, and distribution
Components of Fully Landed Costs
Transportation Costs
+
+
Product Price
Total Landed Cost
Inventory Costs
+
+
Cost of paying invoices
Standard shipping charges
Expedited shipping fees
Price of product charged by vendor
Out of scope for this study
IC
GDC
$9.22 per order
+ 32%
surcharge
$36.76 per
order
None2% of product
cost
N/A
Price of product only
Included: Not Accounted For:
Executive Summary
Office of Acquisition and
Logistics Management
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Items price comparisons revealed that some items
cost more and some cost less when ICs purchase
directly rather than buying from the GDC
NIAID
Price
1
Total
(1)
NIAID
Cost 1
NIAID
Price 2
Total
(1)
NIAID
Cost 2
NIDDK
Price
1
Total
(1)
NIDDK
Cost 2
GDC Price
Total
(2)
Cost to IC
% IC Price is
More or (-Less)
than GDC
Low High
AAA
Batteries
(per
battery)
$ .75
(Staples)
$ 14.64 Not
Available
Not
Available
$ .86
(Staples)
$14.75 $ .28
(Frank
Parsons)
$ 3.85 280% 283%
Mini Binder
Clip (12)
$ .89
(Office
Link)
$ 14.78 $ 1.08
(Office
Link)
$14.97 $ 1.09
(Office
Link)
$14.98 $ .57
(Eagle
Business)
$ 4.23 249% 254%
Non-Sterile
Multi-
Channel
Basin
$ 35.98
(A.
Daigger)
$ 50.57 Not
Available
Not
Available
$ 28.85
(A.
Daigger)
$ 43.30 $ 23.48
(A.
Daigger)
$ 34.47 47% 26%
Bio-Rad
Cuvette
$ 124.10
(Bio-Rad)
$ 140.45 Not
Available
Not
Available
$121.55
(Bio-Rad)
$137.85 $ 121.53
(Bio-Rad)
$ 163.90
-14% -16%
S
A
MP
L
E PR
IC
E
C
O
MP
A
R
ISO
N
S
S
A
MP
L
E PR
IC
E
C
O
MP
A
R
ISO
N
S
Executive Summary
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Office of Acquisition and
Logistics Management
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An estimated $24 to $53 Million in savings from
consolidated purchasing can funnel research dollars
back to the NIH community
Executive Summary
Order transaction cost savings
$2 to $3 Million
Shipping and Handling savings
$ 3.7 Million
Other savings
Product cost savings
$18 to $46 Million
Savings of
$24 to $53+ Million
= more dollars for research
Savings of
$24 to $53+ Million
= more dollars for research
Research Dollars
Other savings could include:
Inventory
Accounts payable
Reduction in energy costs
Other savings could include:
Inventory
Accounts payable
Reduction in energy costs
Office of Acquisition and
Logistics Management
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How can the NIH effectively manage its spend?
IMPROVEMENTS
Procurement
Processes
Metrics Based
Performance
Management
Strategic Sourcing
Price comparisons
IC relations
Supplier management
Systems functionality
Accessibility / Usability
Create metrics
Establish baseline
Provide training on
metrics
As the NIH needs to find ways to do more with less,
this three pronged approach can save money and
control costs
Best Practices Vision
Best Practices Vision
Technology
Executive Summary
Office of Acquisition and
Logistics Management
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By simplifying the ordering process and/or
implementing process improvements, the NIH could
realized additional savings on ordering costs
Executive Summary
ID Procurement Processes Recommendations Next Steps
Rationalize the GDC portfolio because initial findings
suggests that the NIH could save significant dollars through
consolidated purchasing, initially focusing on low value,
generic types of products like gloves and office supplies
(currently in progress)
Collect sales data from vendors
Identify specific items as targets for
consolidated purchasing
Negotiate prices with vendors
Advertise GDC offering to the ICs
Perform a more comprehensive analysis of price differences
based on different methods of buying (purchasing channels)
and develop a fulfillment channel strategy that gives the
best values to the NIH
Identify item categories for price
comparison research
Calculate total landed cost for each
item through the various channels
Deliver a purchasing channel strategy
for selected groups of items
Brief Executive Officers on price differences and work with
EOs and AOs to help the ICs change their purchasing
habits and to adopt new methods that save time and money
Present price comparison findings and
purchasing channel strategy to EOs
and AOs
Gain acceptance of new purchasing
strategy
Train buyers on when and how to use
the best purchasing channel for any
given item
P1
P2a
P2b
Office of Acquisition and
Logistics Management
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Expanding iProcurement’s functionality can save time,
direct buyers to specific vendors, and provide needed
data for future procurement/spend analyses
Executive Summary
ID Technology Recommendations Next Steps
Initial research suggests that iProcurement has many more
capabilities than are currently being utilized and NIH could
benefit immensely from a more robust procurement system
– Standardized data including drop down menus of vendor
names and item descriptions
– Reduced time to place an order
– “Punch outs” to direct purchaser to vendors that the NIH
wants used, often automatically linking the purchaser with
the vendor of choice’s web site
– Eliminates the scenario of different ICs paying varying
prices for the same product by directing purchasers to
predetermined vendors and standardizing the more
generic items
Meet with NBS to present technology
findings
Investigate iProcurement’s
functionality
Develop plan for making system
upgrades
After system has been modified, train
all users
T1
Office of Acquisition and
Logistics Management
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Improved metrics allow NIH leadership to make
knowledge based decisions
Executive Summary
ID Metrics Based Performance Management Recommendations Next Steps
Develop and implement comprehensive metrics for NIH
leadership to track the efficiency of the procurement
process and make it easier to track expenditures on
supplies and materials
Identify metrics
Define data collection and calculation
Establish baselines
Roll out metrics program
Facilitate sharing of internal NIH best practices based on
established metrics
Establish a performance management
committee to discuss metrics and
share best practices
Conduct a regularly scheduled spend analysis to report
changes, e.g., purchasing trends, major supplies, supplier
price differentials, purchasing channels
Determine frequency of conducting
spend analyses
Identify and train staff on how to
conduct analysis
Establish a vendor scorecarding process to allow the NIH to
measure supplier performance throughout the lifecycle of
the contract
Identify metrics that will be used to
evaluate vendor performance
Define data collection and calculation
Roll out the vendor scorecarding
program
Establish vendor rewards/penalties
based on performance
M1
M2
M3
M4
Office of Acquisition and
Logistics Management
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To prioritize the recommendations, we ranked them
based on potential impact and ease of implementation
Low
High
Easy
Difficult
Level of Effort
Benefit to NIH
Implementation Assessment of Recommendations
Process
Technology
Performance
Management
Source: Booz Allen team analysis
P2a and P2b have the
best combination of
significant benefit of NIH
and moderate level of
effort
P2a and P2b have the
best combination of
significant benefit of NIH
and moderate level of
effort
Executive Summary
P1
P2a
P2b
M1
M2
M3
M4
T1
Office of Acquisition and
Logistics Management
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Section 2: Introduction
Introduction
– Problem Statement
– Spend Analysis Objectives and Scope
– Study Questions
– Advisory Committee
Office of Acquisition and
Logistics Management
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The NIH is facing increasing pressures that drive the
requirement for improved purchasing processes
Pressure to offset flat budgets to allocate the maximum
dollars to research
The need to effectively manage global supply chains in the
face of natural disasters, medical pandemic, supply
shortages, etc. requires ensuring that the supply chain can
quickly adapt to adverse events and continue operating
without disruption
Government regulation in the area of supply chain and
logistics putting pressure on executives to comply with
mandates (e.g. OMB requirement to implement strategic
sourcing, President’s Management Agenda for energy, etc.)
Expectations of continuous improvements of product
attributes to aid in research performance
Requirement to
Reduce Costs
Requirement to
Reduce Costs
New Regulation
New Regulation
Concerns about
Continuity of
Operation
Concerns about
Continuity of
Operation
Increased
Researcher
Expectations
Increased
Researcher
Expectations
Introduction…Problem Statement
Office of Acquisition and
Logistics Management
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DLS received funds from OPASI to conduct a spend
analysis to gather comprehensive data on IC
purchasing practices
Spend
Analysis
Objectives
Determine the best way to collect and analyze purchasing data from various
institutes and centers
In conjunction with an extensive assessment of the current state, identify next
steps for DLS and the NIH community to fully capture spend data and acquire
materials more strategically and efficiently
Depending on data availability, analyze NIH material spend to identify
opportunities for cost savings, economies of scale and adoption of best practices
Spend
Analysis
Scope
Encompasses materials procured by a diverse sample of ICs
Covers all items that could be reasonably serviced by the GDC
Results will focus on “order of magnitude” to allow for strategic recommendations
and decisions
Evaluates three spend characteristics including: Procurement Method, Supplier
Fragmentation, and Price Variance
Introduction…Objectives and Scope
Office of Acquisition and
Logistics Management
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The spend analysis feasibility study was conducted
with the goal of answering four study questions
Question 1
What is the most appropriate method to gather data associated with the purchasing process?
What requirements can be met through existing data sources (i.e., archival data) and what
new data needs to be collected?
Question 2
What is the best way to collect evaluation data without imposing an excessive burden on
program staff or the public?
Question 3
Does the data provide adequate justification for NIH to change its purchasing process so
institutes acquire material from the GDC program?
Question 4
Is there sufficient information within the NIH community to determine whether a consolidated
strategic sourcing effort can be used to minimize overall NIH community spend on supplies
used to support research?
Introduction…Study Questions
Office of Acquisition and
Logistics Management
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An Advisory Committee with representation across the
Office of Acquisition and Logistics Management
provided assistance with the study
Two formal meetings of the Committee were held, on September 3 and November 3, 2008. In
addition, one-on-one discussions and e-mail exchanges were held with individual committee
members on various topics
Members of the committee are shown below:
NAME POSITION WITHIN THE OFFICE OF THE DIRECTOR (OD)
Diane Frasier Director, Office of Acquisition and Logistics Management
Robert Best Deputy Director, Office of Acquisitions and Logistics Management
Thomas Keith Acting Associate Director, Office of Logistics and Acquisition Operations
Lonnie Winley Acting Director, Division of Logistics Services
Laurie Weker Director, Division of Acquisition Programs
Gregory Holliday Acting Director, Office of Acquisitions
Georgiann Wilson Chief, Purchase Card Program Branch
Richard Trott Acting Chief, Supply and Services Branch
Melissa McKerrow Budget Analyst
Introduction…Advisory Committee
Office of Acquisition and
Logistics Management
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Section 3: Availability and Assessment of Evaluation
Data
Availability and Assessment of Evaluation Data
(Study Questions 1 and 2)
– Data Collection Methodology
– Overview of Data Sources
– Data Issues
– Recommendations
Office of Acquisition and
Logistics Management
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The methodology for data collection followed the
steps set forth in the OPASI submission
One full year of nVision data was analyzed
– Date Range: July 2007–July 2008, based on the date the invoice was posted to the General
Ledger
– August 2007 data was excluded due to limited data. Data from July 2008 was included in the
analysis for a total of 12 months of data
Only fully and partially paid invoices were examined to limit the analysis to actual dollars spent
Data was pulled based on the Object Classification Code
– Only supplies and materials that the GDC could carry were examined (a subset of the Object Class
Codes that begin with 26)
Data on each IC was collected from nVision
Item level detail available though nVision was limited and the team collected a sample of item level
detail from various other sources including:
– NIAID’s AMBIS system
– NIDDK’s POTS system
– Invitrogen’s sales data
Availability and Assessment of Evaluation Data…Methodology
Office of Acquisition and
Logistics Management
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Multiple data sources were needed to provide
sufficient item level detail to compare prices and
estimate shipping and handling charges
ICs included
Time frame
of data
Key data elements Data Uses
nVISION
All ICs July 2007 to
July 2008
Order date, IC, buyer,
procurement method, object
classification code, supplier,
and total order price
Analyze spend by key data elements
Estimate shipping and handling savings
GDC Stock
Master
Report
OD Report run
on 10/09/08
Item price, item description, unit
of issue and supplier
Price comparison of similar items between GDC,
NIDDK and NIAID
AMBIS
NIAID Only Oct 2007 to
Aug 2008
Item description, supplier,
supplier catalog number, unit
price, order total, and shipping
charges
Price comparison of similar items within NIAID and
between NIAID, NIDDK, and the GDC
Estimate of shipping and handling charges
POTS
NIDDK Only Mar 2008 to
Sept 2008
Item description, supplier,
supplier catalog number and
unit price
Price comparison of similar items within NIDDK
and between NIAID, NIDDK, and the GDC
Invitrogen
All ICs Sept 2007 to
Sept 2008
SKU number, item description
NSN number, IC, quantity
purchased, order total, channel
Price comparison of same items between ICs
direct purchase price, and GDC purchase price
Used to estimate shipping and handling charges
Availability and Assessment of Evaluation Data…Data Sources
Office of Acquisition and
Logistics Management
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nVision offers easily accessible purchasing data but
lacks standardization that limited the level of detail
available for the analysis
The current system (NBS and the nVision data warehouse) is a great step forward for data
centralization and allows the NIH to capture data on overall spend by IC, object classification code
and procurement method
As NBS is currently designed, the major data limitations include:
– Inconsistent supplier names
– Non-standard item descriptions
– Inaccurate order quantity
– Lack of individual prices per item
Availability and Assessment of Evaluation Data…Data Issues
Office of Acquisition and
Logistics Management
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The many ways a vendor name is entered into the
system required time consuming data cleaning efforts
PCard Merchant Name and Supplier Name are free form text fields and contain no formatting or
standardization
The ability to aggregate information by vendor is complicated by having a variety of spellings for each
vendor
The spend analysis data originally had over 50,000 unique vendor names
The team standardized the names of the large vendors and reduced the number of unique vendor
names to 17,000
While much progress was made through this data cleansing exercise, time constraints combined with
the large data sample as well as its complexity did not allow for completion of a completely “clean” list
of unique vendor names
Availability and Assessment of Evaluation Data…Data Issues
Office of Acquisition and
Logistics Management
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A. Daigger appears in the data spelled at least 208
different ways
P-Card Merchant Name P-Card Merchant Name P-Card Merchant Name P-Card Merchant Name P-Card Merchant Name P-Card Merchant Name
A DAIGGER & COMPANY A DAIGGER JG16015 A. DAIGGER & COMPANY A. DAIGGER/7151559368 DAIGGER & COMPANY
DAIGGER, MARIENA
MATTSON, 511628
A . DAIGGER & COMPANY A DAIGGER& CO A. DAIGGER & COMPANY, INC A. DAIGGER/7183567867 DAIGGER (800) 621-7193
DAIGGER, MITCHELE
WILLIAMS, 583852
A DAIGGEN A DAIGGER, INC A. DAIGGER & COMPANY, INC. A. DAIGGER/DR. HOWARD DAIGGER (BROOKS)
DAIGGER, MITCHELLE
WILLIAMS, 165289
A DAIGGER A DAIGGER/JB9266 A. DAIGGER (BD BIOSCIENCE) A. DAIGGER/DR. KOTARO DAIGGER (CHEN)
DAIGGER, TEYANA JOSPEH,
137671
A DAIGGER #01524577 A DAIGGER/JWB0267 A. DAIGGER (DLM-7-0005) A. DAIGGER/TS061307K DAIGGER (INTRAMALL)
DAIGGER, TEYANA JOSPEH,
360623
A DAIGGER & CO A DAIGGER/JWB1880/08-32335 A. DAIGGER (HANSEN) A. DAIGGER/TS061307L DAIGGER / 1459087
DAIGGER, TSUYOSHI
YAMAGUICHI, 127189
A DAIGGER & CO. A DAIGGER|847-816-5060|IL A. DAIGGER (NAKAYA) A.DAIGGER DAIGGER / 1461224
DAIGGER, TSUYOSHI
YAMAGUICHI, 135560
A DAIGGER & COMPAN
Y
A DAIGGER-57185 A. DAIGGER (SILVER) A.DAIGGER - KR05-77 DAIGGER / 1463854 DAIGGER/JB9107
A DAIGGER & COMPANY (LIU) A DAIGGER-58105 A. DAIGGER 7170564921 A.DAIGGER - MTK6250 DAIGGER / 1475260 DAIGGER/KIMBLE
A DAIGGER & COMPANY INC A DAIGGER-58813 A. DAIGGER 7191569438 A.DAIGGER & CO DAIGGER / 800-621-7193 DAIGGER-EMW-03-13
A DAIGGER & COMPANY INC. A DAIGGER-58847 A. DAIGGER 7193570363 A.DAIGGER & CO. DAIGGER 1481714 DAIGGER-O'DONOVAN
A DAIGGER (BROOKS) A DAIGGER-59246 A. DAIGGER 7233588559 A.DAIGGER 7203620806 DAIGGER 7306623943 DAIGGER-YOULE
A DAIGGER (DLM-7-0005) A DAIGGER-59389 A. DAIGGER 7234589759 A.DAIGGER 7242595619
DAIGGER 800-621-7193 IL
#1462171 DAIGGOR
A DAIGGER (LIU) A DAIGGER-60423 A. DAIGGER 7239592575 A.DAIGGER 8011688544
DAIGGER 800-621-7193 IL
#1464407
A DAIGGER (MAHDI) A DAIGGER-62362 A. DAIGGER 7240593957 A.DAIGGER 8141762907/01519275
DAIGGER 800-621-7193 IL
#1466536
A DAIGGER (MAMINISHKIS) A DAIGGER-62423 A. DAIGGER 7240594015 A.DAIGGER 8157777256
DAIGGER 800-621-7193 IL
#1467030
A DAIGGER (PETERSON) A DAIGGER-62680 A. DAIGGER 7240594052 A.DAIGGER 8162778404 DAIGGER 8006217193 IL 1457084
A DAIGGER (SILVER) A DAIGGER-63003 A. DAIGGER 7241594964 A.DAIGGER AND CO DAIGGER A
A DAIGGER 7163562731 A DAIGGER-63817 A. DAIGGER 7242595619 ADAIGGER DAIGGER A & CO
A DAIGGER 8052707539 A DAIGGER-64726 A. DAIGGER 7248597464 A-DAIGGER DAIGGER A & CO.
A DAIGGER 847-816-5060 A J DAIGGER - 8074715862 A. DAIGGER 7248597476 ADAIGGER - KR07-49 DAIGGER A & COM
A DAIGGER AND COMPAN
Y
A, DAIGGER A. DAIGGER 7283615431 A-DAIGGER CO. DAIGGER A & COMPANY
A DAIGGER AND COMPANY, INC A. DAIGER A. DAIGGER 7297619023 A-DAIGGER LAB DAIGGER A CO
A DAIGGER CO A. DAIGGER A. DAIGGER 7298619428 IM589-C - DAIGGER DAIGGER A& CO
A DAIGGER CO. A. DAIGGER - 7204574220 A. DAIGGER 7310626487 AMOB: A. DAIGGER DAIGGER A. CO.
A DAIGGER COMPAN
Y
A. DAIGGER - MTK6104 A. DAIGGER 7345661081 CCU PR-834 DAIGGER DAIGGER AND COMPAN
Y
A DAIGGER INC A. DAIGGER - MTK6221 A. DAIGGER 8051706652 CL143463- A. DAIGGER DAIGGER CO.
A DAIGGER JG13066 A. DAIGGER - MTK6268 A. DAIGGER 8059710786 DAI INDUSTRIAL PRODUCTS DAIGGER -EMW-11-19
A DAIGGER JG13167 A. DAIGGER - MTK6379 A. DAIGGER 8073715656 DAIGER DAIGGER IL 800-621-7193
A DAIGGER JG13829 A. DAIGGER - MTK6413 A. DAIGGER 8085720399 DAIGER CO. DAIGGER INC
A DAIGGER JG13858 A. DAIGGER - MTK6492 A. DAIGGER 8105732974 DAIGER LAB SUPPLIES DAIGGER INC.
A DAIGGER JG14037 A. DAIGGER - MTK6846 A. DAIGGER 8129751210 DAIGGER DAIGGER JG 13635
A DAIGGER JG14160 A. DAIGGER - MTK7316 A. DAIGGER AND CO DAIGGER - JBW103 - KANG ZHENG DAIGGER JG 13636
A DAIGGER JG14578 A. DAIGGER - MTK7480 A. DAIGGER AND CO. DAIGGER #021207-3
DAIGGER LAB EQUIPMENT &
SUPPLIES
A DAIGGER JG14702 A. DAIGGER - MTK7581 A. DAIGGER CO. DAIGGER A & CO DAIGGER SCIENTIFIC
A DAIGGER JG15057 A. DAIGGER - MTK7899 A. DAIGGER COMPAN
Y
DAIGGER - IM521-D DAIGGER VIA INTRAMALL
A DAIGGER JG15491 A. DAIGGER - MTK8215 A. DAIGGER JG13298 DAIGGER - IM536-D DAIGGER, #14181, REF #1463738
A DAIGGER JG15629 A. DAIGGER & CO A. DAIGGER TS08907F DAIGGER & CO DAIGGER, #14181, REF #1467894
A DAIGGER JG15744 A. DAIGGER & CO. A. DAIGGER, 1-800-621-7193 DAIGGER & CO, INC. DAIGGER, 316979, LUFEI SHAN
A DAIGGER JG16015 A. DAIGGER & CO., INC. A. DAIGGER, VL11-25 DAIGGER & CO.
DAIGGER, CRISTINA BACKMAN,
421304, 420670
Using initials
and numbers to
differentiate
orders increases
count of unique
vendor names
Different ways of
writing the
company name
increases count of
unique vendor
names
Availability and Assessment of Evaluation Data…Data Issues
Office of Acquisition and
Logistics Management
27
Standardizing data entry requirements will enable
faster, less time consuming, and more robust analysis
Current Data Issue Example Resultant problem
Varying descriptions
of same product
Batteries
AA batteries
AA-batteries
Duracell AA Rechargeable
Battery
Durmn15RT12Z Battery, Alka,
AA, 12
AA 16 Pack Peggable – Batteries
Alkaline Copper
Naming conventions varied widely, making it difficult for
the spend analysis team to identify all purchases made
for AA batteries
No Unit of Issue 074821 battery Size AAA NIEHS
#10299
Batteries AAA – Cornerstone
Not able to determine the price per unit
Cannot compare purchase price of similar products that
may be priced differently based on various units per
package
Multiple products
combined in one
item description field
Printer cartridges for Deb; fan for
Ashok; scissors for Margaret & Me;
facial tissues, AAA batteries; 11X17
Heavy Duty Paper; Copy Paper
Nearly impossible to cull out the specific item price as
the price in the system is for the entire order
Spelling mistakes Duracell AA Recharageable
batteries
Energizer Duble AA Batteries
#524935JBW346 – Cooppertop
Cannot match same product using unique name
Data Issues Example: Batteries
Availability and Assessment of Evaluation Data…Data Issues
Office of Acquisition and
Logistics Management
28
Section 4: Analysis of Purchasing Data
Analysis of Purchasing Data
(Study Questions 3 and 4)
– Overall NIH Spend
– Procurement Method
– Supplier Fragmentation
– Order Transaction Costs
– Price Variance
– Consolidated Purchasing
Office of Acquisition and
Logistics Management
29
The NIH community spent $228.1 Million on supplies
and materials in a 12 month period
Spend by IC
($ Millions)
(1) OD Spend includes spending from Project ICs, OD, OD ORS, and OD ORFDO
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Spend by IC
($ Millions)
Total $ of Spend = $228.1 Million
Total $ of Spend = $228.1 Million
CC
$18.4
All Other
$39.2
NCI
$36.8
NIAID
$30.4
NIDDK
$12.8
NHLBI
$12.7
OD
$35.6
NIA
$11.8
NHGRI
$11.4
NIEHS
$10.8
NICHD
$8.1
Key Insights
Key Insights
Six Institutes and Centers (ICs) account for nearly
2/3 of the NIH community’s spend on supplies and
materials
The top 10 ICs account for 83% of the total spend
Six Institutes and Centers (ICs) account for nearly
2/3 of the NIH community’s spend on supplies and
materials
The top 10 ICs account for 83% of the total spend
Analysis of Purchasing Data…Overall NIH Spend
Office of Acquisition and
Logistics Management
30
The Clinical Center has been excluded from the
remainder of the spend analysis due to use of the
Prime Vendor Program for replenishment of supplies
Use of the Defense Supply Center Philadelphia (DLA Prime Vendor Orders) skews the results since
the Clinical Center’s $37.4 Million spent with this one vendor accounts for 2/3 of all orders placed by
the Clinical Center and 98% of their orders placed on contracts
By using the Prime Vendor program through the DLA, the Clinical Center is able to avoid paying the
GDC’s surcharge and still benefit from daily shipments of supplies at the same price that the GDC is
able to obtain using the same channel
Analysis of Purchasing Data…Overall NIH Spend
Office of Acquisition and
Logistics Management
31
The ICs appear to follow a similar monthly spending
pattern
Analysis of Purchasing Data…Overall NIH Spend
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
July 20
0
7
S
ep
temb
e
r 200
7
October 2007
N
o
v
e
mb
e
r
2
0
0
7
Decem
b
er
2007
Jan
u
ary
2
008
F
e
br
u
ar
y
2008
Mar
ch 2
00
8
A
p
ril
20
0
8
M
a
y
2
00
8
Ju
n
e
2
0
0
8
July 2008
NCI
NHLBI
NIAID
NIDDK
OD
OTHER
Last Line Payment Month
Total Spend
Top 5 IC Spend
(1) This analysis excludes the Clinical Center
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Determine whether this pattern occurs year over year, and then use this information to forecast needs and procure
accordingly to ensure items are available when needed for research
Office of Acquisition and
Logistics Management
32
The spend analysis findings focus on three areas
Areas of Study
Examine variance in
prices paid by different
NIH customers for the
same products from the
same or alternate
suppliers
Identifying items ordered
through the GDC and
those ordered directly
from vendors allows GDC
to quantify lost sales
opportunities
Procurement Method
Price Variance
1
1
3
3
Identifying opportunities
for consolidating supplier
spend allows for
increased negotiating
power and more
streamlined supplier
relationships
Supplier Fragmentation
2
2
Examine variance in total
landed prices paid by
different NIH customers
for the same products
from the same or alternate
suppliers
Identifying items ordered
through the GDC and
those ordered directly from
vendors allows GDC to
quantify lost sales
opportunities
Procurement Method
Total Price Variance
1
1
3
3
Identifying opportunities
for consolidating supplier
spend allows for
increased negotiating
power and more
streamlined supplier
relationships
Supplier Fragmentation
2
2
Analysis of Purchasing Data…Overall NIH Spend
Office of Acquisition and
Logistics Management
33
PCards were the most commonly used method to
purchase supplies and materials and accounted for
94% of all purchases
NIEHS
All Others
NHGRI
NIA
NHLBI
NIDDK
NIAID
OD
NCI
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,000
Method of Purchase $ Value of Contract and PCard Purchases by IC
Total # of Orders = 329,712
Total # of Orders = 329,712
Contract
Purchases
6%
PCard
Purchases
94%
Total NIH Spend =
$209.7 MM
Total NIH Spend =
$209.7 MM
Key Insights
Key Insights
Contract purchases totaled $48.1 Million while PCard purchases totaled $162.6 Million
The large volume of PCard transactions makes it more difficult for NIH to measure compliance with FAR
Guidelines and small business goals
Contract purchases totaled $48.1 Million while PCard purchases totaled $162.6 Million
The large volume of PCard transactions makes it more difficult for NIH to measure compliance with FAR
Guidelines and small business goals
$ value of orders
(1) These charts exclude the Clinical Center
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Key Observation
Key Observation
Contract purchases totaled $47.4 Million while PCard purchases totaled $162.4 Million
The large volume of PCard transactions makes it more difficult for NIH to measure compliance with FAR
Guidelines and small business goals
Contract purchases totaled $47.4 Million while PCard purchases totaled $162.4 Million
The large volume of PCard transactions makes it more difficult for NIH to measure compliance with FAR
Guidelines and small business goals
Total # of Orders Total $ Value of Orders
Total $ Value of Orders = $209.7 MM
Total $ Value of Orders = $209.7 MM
Contract
Purchases
23%
PCard
Purchases
77%
Analysis of Purchasing Data…Procurement Method
Office of Acquisition and
Logistics Management
34
PCards are most often used for relatively small orders
638
2,254
83,560
114,834
109,149
0
20,000
40,000
60,000
80,000
100,000
120,000
< $150 $150 to $500 $501 - $3000 $3001 - $10,000 > $10,000
Dollars per PCard order
Number of orders
PCard Order Size Distribution
Key Insights
Key Insights
99% of PCard orders for Micro Purchases (orders
under $3000)
However, 213 orders from various ICs were
between $20,000-70,000 in cost
99% of PCard orders for Micro Purchases (orders
under $3000)
However, 213 orders from various ICs were
between $20,000-70,000 in cost
(1) This analysis excludes the Clinical Center
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Analysis of Purchasing Data…Procurement Method
Office of Acquisition and
Logistics Management
35
BPA
43%
FSS
12%
PO
34%
Micro
6%
IDC
5%
Total $ of Spend = $47.4 Million
Total $ of Spend = $47.4 Million
ADB
1%
Key Insights
Key Insights
83% of all orders placed on contracts used either a
BPA or PO (including Micro Purchases) as the
contract vehicle
When BPAs and POs over $3,000 require comparing
three price quotes, the order to ship time is increased
83% of all orders placed on contracts used either a
BPA or PO (including Micro Purchases) as the
contract vehicle
When BPAs and POs over $3,000 require comparing
three price quotes, the order to ship time is increased
Blanket Purchase Agreement
Indefinite Delivery Contract
Federal Supply Schedule Delivery Order
Purchase order under $3K
Open Market up to $100K
Order placed through ADB system
BPA =
IDC =
FSS =
Micro =
PO =
ADB =
LEGEND:
(1) This chart excludes the Clinical Center and its largest supplier the Defense Supply Center
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Of the purchases made using contracts, the NIH
community uses primarily Blanket Purchase
Agreements and Purchase Orders
Spend % by Contract Type
Analysis of Purchasing Data…Procurement Method
Office of Acquisition and
Logistics Management
36
The NIH community purchases from approximately
17,000 different suppliers providing much opportunity
for consolidation
Top 10 Suppliers
ILLUMIN
A
GE HEALTHCARE
BD BIOSCIENCES
VWR INTERNATIONA
L
A. DAIGGER
QIAGEN
APPLIED BIOSYSTEM
S
SIGMA-ALDRIC
H
FISHER SCIENTIFIC
INVITROGEN
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
Spend % by Top Suppliers
Total NIH Spend =
$209.7 MM
Total NIH Spend =
$209.7 MM
Top 10
Suppliers
30%
Suppliers
11-20
11%
Key Insights
Key Insights
Relying on a large supplier base with non
consolidated purchasing may hinder opportunities
to develop strategic relationships that could lead
to joint cost improvement initiatives
Cost of quality control is reduced when there are
less suppliers; further quality control costs are
reduced when the supplier relationships are
strategic
Consolidating suppliers does not necessarily
mean restricting or standardizing all products but
in some cases standardization may make sense
for non-critical items e.g. office supplies
Relying on a large supplier base with non
consolidated purchasing may hinder opportunities
to develop strategic relationships that could lead
to joint cost improvement initiatives
Cost of quality control is reduced when there are
less suppliers; further quality control costs are
reduced when the supplier relationships are
strategic
Consolidating suppliers does not necessarily
mean restricting or standardizing all products but
in some cases standardization may make sense
for non-critical items e.g. office supplies
(1) Charts exclude the Clinical Center and its largest supplier the Defense Supply Center
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
All Other
Suppliers
59%
Analysis of Purchasing Data…Supplier Fragmentation
Office of Acquisition and
Logistics Management
37
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
The high volume of direct purchases through PCards
contributes to the NIH’s fragmented supplier base
Key Insights
Key Insights
Some fragmentation is inevitable due to the highly specialized
nature of products critical to research
However, three of the top 20 suppliers were Administrative and
Office Supply companies
– These types of products are not highly specialized and may
provide the greatest opportunity for consolidation
Some fragmentation is inevitable due to the highly specialized
nature of products critical to research
However, three of the top 20 suppliers were Administrative and
Office Supply companies
– These types of products are not highly specialized and may
provide the greatest opportunity for consolidation
Analysis of Purchasing Data…Supplier Fragmentation
(1) Charts exclude the Clinical Center and its largest supplier the Defense Supply Center
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Office of Acquisition and
Logistics Management
38
The 17,000 suppliers are spread over seven object
categories, in which two-thirds of the NIH’s spend is
on Laboratory Supplies and Biological Materials
Spend by Object Category
($ Millions)
Spend by Object Category
(in Rank Order)
Laboratory Supplies $ 67.3 Million
Biological Materials $ 64.3 Million
Chemicals and Gasses $ 23.6 Million
Administrative and Office $ 22.2 Million
Animal Food and Bedding $ 1.9 Million
Medical and Surgical $ 950 Thousand
All Other Categories $ 29.4 Million
Total $ of Spend $ 209.7 Million
Biological
Materials
31%
Chemicals &
Gasses
11%
Admin & Office
Supplies
11%
Laboratory
Supplies
32%
All Other
Categories
14%
Animal Food &
Bedding 1%
Medical &
Surgical <1%
Analysis of Purchasing Data…Supplier Fragmentation
(1) Charts exclude the Clinical Center and its largest supplier the Defense Supply Center
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Office of Acquisition and
Logistics Management
39
Nearly one third of the money spent for Laboratory
Supplies is purchased through 10 suppliers
Laboratory Supplies
Top Supplies $ Value of Orders
Fisher Scientific $ 5,977,763
Invitrogen
$ 3,634,061
VWR International $ 2,665,277
Applied Biosystems $ 1,915,871
Sigma-Aldrich
$ 1,334,232
Government Scientific Source (GSS) $ 1,252,615
GE Healthcare $ 1,247,312
A. Daigger
$ 1,080,890
Tecniplast $ 1,063,256
Qiagen $ 1,034,332
Sum of Top 10 Suppliers $21,205,607
TOTAL NIH SPEND ON
LABORATORY ITEMS
$ 67,263433
(1) This table excludes the Clinical Center
(2) Laboratory Materials include Object Classification Codes 26.51, 26.54, 26.57, 26.5A, 26.5D, and 26.8B
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Key Insights
Key Insights
The remaining $46 Million not spent
with these suppliers is spread among
7,000 other vendors
Of the 7,000 suppliers, half had sales
to the NIH of less than $500 in one
year
The remaining $46 Million not spent
with these suppliers is spread among
7,000 other vendors
Of the 7,000 suppliers, half had sales
to the NIH of less than $500 in one
year
Spend % by Top Suppliers
Top 10
Suppliers
32%
Suppliers
11-20
12%
All Other
Suppliers
56%
Analysis of Purchasing Data…Supplier Fragmentation
Office of Acquisition and
Logistics Management
40
In the second largest item category, the 10 largest
suppliers account for over 40% of the total spend
Biological Materials
Top Supplies $ Value of Orders
Invitrogen $ 9,517,618
Applied Biosystems
$ 3,395,543
Illumina $ 2,291,744
Sigma-Aldrich $ 2,228,323
Affymetrix
$ 2,209,750
BD Biosciences $ 2,014,659
Qiagen $ 1,822,706
Miltenyi Biotech $ 1,401,083
Roche $ 1,228,161
Goldbelt Raven $ 1,223,936
Sum of Top 10 Suppliers $ 27,333,562
TOTAL NIH SPEND ON
BIOLOGICAL MATERIALS
$ 64,343,315
Key Insights
Key Insights
The NIH community purchases
biological materials from nearly 4,000
suppliers
Four of the Top 10 suppliers of
Biological Materials are also among
the Top 10 suppliers of Laboratory
material (Invitrogen, Applied
Biosystems, Sigma-Aldrich, and
Qiagen)
The NIH community purchases
biological materials from nearly 4,000
suppliers
Four of the Top 10 suppliers of
Biological Materials are also among
the Top 10 suppliers of Laboratory
material (Invitrogen, Applied
Biosystems, Sigma-Aldrich, and
Qiagen)
(1) This table excludes the Clinical Center
(2) Biological Material Object Classification Codes Include: 26.16, 26.13 and 26.23
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Spend % by Top Suppliers
Top 10
Suppliers
42%
Suppliers
11-20
15%
All Other
Suppliers
43%
Analysis of Purchasing Data…Supplier Fragmentation
Office of Acquisition and
Logistics Management
41
Over half of the top suppliers of Chemicals and
Gasses are also key suppliers for Laboratory Supplies
and Biological Materials
(1) This table excludes the Clinical Center
(2) Chemicals and Gasses Object Classification Codes Include: 26.13 and 26.23
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Chemicals and Gases
Top Supplies $ Value of Orders
Sigma-Aldrich $ 3,904,931
Invitrogen
$ 3,843,434
Applied Biosystems $ 1,364,321
Qiagen $ 670,106
GE Healthcare
$ 642,005
Roberts Oxygen $ 529,510
Roche $ 468,738
Bio-Rad $ 465,655
Pierce $ 420,863
Fisher Scientific $ 409,778
Sum of Top 10 Suppliers $ 12,719,340
TOTAL NIH SPEND ON
CHEMICALS AND GASSES
$ 23,625,662
Key Insights
Key Insights
This item category has the fewest
number of unique vendors (approx.
1,700) as compared to the other major
item categories
Six of these Top 10 suppliers are also
among the Top 10 suppliers of
Laboratory Supplies and Biological
Materials (Sigma-Aldrich, Invitrogen,
Applied Biosystems, Qiagen, GE
Healthcare, and Fisher Scientific)
This item category has the fewest
number of unique vendors (approx.
1,700) as compared to the other major
item categories
Six of these Top 10 suppliers are also
among the Top 10 suppliers of
Laboratory Supplies and Biological
Materials (Sigma-Aldrich, Invitrogen,
Applied Biosystems, Qiagen, GE
Healthcare, and Fisher Scientific)
Spend % by Top Suppliers
Top 10
Suppliers
42%
Suppliers
11-20
15%
All Other
Suppliers
43%
Analysis of Purchasing Data…Supplier Fragmentation
Office of Acquisition and
Logistics Management
42
Office Supplies may offer the greatest opportunity for
consolidation since many of the suppliers had low
dollar value of sales
(1) This table excludes the Clinical Center
(2) Administrative and Office Supply Object Classification Codes Include: 26.6A, 26.6L, 26.6N, 26.6Z, 26.7A, 26.7L,
26.7Z, 26.81, 26.86, 26.87, 26.91
Source: nVISION data extracted Sep. 2008 (fully or partially paid orders between July 2007 and July 2008)
Administrative and Office Supplies
Top Supplies $ Value of Orders
CDW Government $ 2,237,583
Staples
$ 2,178,124
Office Depot $ 1,416,123
O’Neill Computer Products $ 965,251
World Wide Technology
$ 945,099
Dell $ 712,340
Benjamin Office Supply $ 502,493
GovConnection
$ 446,438
Insight Public Sector
$ 375,311
Office Link $ 306,864
Sum of Top 10 Suppliers $ 10,085,627
TOTAL NIH SPEND ON OFFICE
SUPPLIES
$ 22,248,346
Key Insights
Key Insights
Of the 4,500 different suppliers, nearly
a quarter of the suppliers had sales of
less than $100 and 60% had sales less
than $500
OD has negotiated a BPA with Office
Depot and HHS has negotiated
discounted prices with Staples
–By using existing contracts, the NIH
may be able to negotiate better
prices with these suppliers over the
long term
Of the 4,500 different suppliers, nearly
a quarter of the suppliers had sales of
less than $100 and 60% had sales less
than $500
OD has negotiated a BPA with Office
Depot and HHS has negotiated
discounted prices with Staples
–By using existing contracts, the NIH
may be able to negotiate better
prices with these suppliers over the
long term
Spend % by Top Suppliers
Top 10
Suppliers
42%
Suppliers
11-20
15%
All Other
Suppliers
43%
Analysis of Purchasing Data…Supplier Fragmentation
Office of Acquisition and
Logistics Management
43
Applicable transaction costs needed to be added to
the product price to fairly compare the landed costs of
items purchased direct and from the GDC
Administrative Costs
Analysis of Purchasing Data…Total Price Variance
Components of Fully Landed Costs
Transportation Costs
+
+
Product Price
Total Landed Cost
Inventory Costs
+
Labor cost of processing orders
PCard assessment charge
Cost of paying invoices
Standard shipping charges
Expedited shipping fees
Price of product charged by vendor
Out of scope for this study
Included:
Not Accounted For:
Office of Acquisition and
Logistics Management
44
The total cost of a PCard order is approximately $36.76
per order
Activity Average Time to Complete
Complete form 1861 7 - 8 minutes
Submit form for approval 4 - 5 minutes
Cardholder enter transaction into log 10 - 13 minutes
Cardholder place order with vendor 9 - 10 minutes
Reconcile PCard 8 - 9 minutes
Total Time 38– 45 minutes
The average PCard order
takes an average of 42
minutes
At a fully loaded cost of $46.08
per hour, this equates to
$32.26 per PCard order
PCard Cost Category Cost
Labor Cost $ 32.26
PCard transactional cost $ 4.50
Total Cost $ 36.76
Time to complete a PCard Order
Each PCard order has a transaction
cost with the financial institution
It was $4.50 per transaction, but
currently it is being charged as an
assessment to the ICs; we believe it is
assessed to breakeven
Cost to complete a PCard Order
(1) A fully loaded rate was estimated using the hourly salary for a GS 11, Step 5 in the Washington DC area ($32/hour) with a fully burdened rate of plus 44%
Source: http://www.opm.gov/oca/08tables/indexGS.asp
Analysis of Purchasing Data…Total Price Variance: Administrative Costs
Office of Acquisition and
Logistics Management
45
The total cost of a GDC order is approximately $9.22
per order
Placing a GDC order represents the
process an NIH employee follows to
purchase an item from the GDC
The average GDC order takes an
average of 12 minutes to complete
At a fully loaded cost of $46.08 per hour,
this equates to $9.22 per GDC order
Activity Average Time to Complete
Log on to iProcurement 2 minutes
Search and select items 5 minutes
Approval and checkout process 5 minutes
Total Time 12 minutes
Time to complete a GDC order
(1) A fully loaded rate was estimated using the hourly salary for a GS 11, Step 5 in the Washington DC area ($32/hour) with a fully burdened rate of plus 44%
Source: http://www.opm.gov/oca/08tables/indexGS.asp
Analysis of Purchasing Data…Total Price Variance: Administrative Costs
Office of Acquisition and
Logistics Management
46
NIH could realistically save about $2-3 Million per year
if select supplies were ordered from the GDC
The annual number of PCard orders is 310,435
If all
supplies were ordered from the GDC, this
would save an estimated $8.5 million per year
Realistically, NIH could expect to order 20–35%
of supplies through the GDC, resulting in $1.7-
3.0 million savings to the NIH community
Purchase Method Cost per Order
PCard $ 36.76
GDC $ 9.22
Difference $ 27.54
Order Method Cost Comparison
(1) A fully loaded rate was estimated using the hourly salary for a GS 11, Step 5 in the Washington DC area ($32/hour) with a fully burdened rate of plus 44%
(2) Data excludes the Clinical Center
Source: http://www.opm.gov/oca/08tables/indexGS.asp
Analysis of Purchasing Data…Total Price Variance: Administrative Costs
Office of Acquisition and
Logistics Management
47
2. NIAID’s shipping and handling cost was calculated as a percentage of NIAID’s $30.4 Million total
spend shipping
Shipping and Handling costs are not consistently captured in nVision, therefore, an estimate of
shipping and handling costs was derived from the following methodology
:
NIAID’s Shipping Cost
NIAID’s Total Spend
=
$ 601,000
$ 30,430,587
=
2%
3. Since NIAID shipping and handling costs accounted for 2% of their total spend, the same
percentage was applied to the total NIH spend (excluding the GDC and the Clinical Center)
2% x $185 M =
$3.7 MM
4. The estimated $3.7 Million shipping and handling cost estimated was validated by considering
Invitrogren’s total shipping and handling costs equate to $700,000
5. It was deduced that the $3.7 Million cost was a reasonable estimate considering that Invitrogren,
the NIH’s largest vendor, accounted for 19% of the $3.7 Million shipping and handling cost estimate
An estimated $3.7 M in shipping and handling costs
was calculated using data from Invitrogen and
NIAID’s AMBIS system
1. All item descriptions entitled “shipping and handling” were extracted from AMBIS and totaled
$601,000
Analysis of Purchasing Data…Total Price Variance: Transportation Costs
Office of Acquisition and
Logistics Management
48
The transaction costs were divided by the average
number of items per order to allocate costs to a single
item
Research from NIAID item level detail indicated that there were approximately 2.65 items per order,
so all order costs need to be divided by 2.65 to get the costs on a per item level
PCard additional costs total $13.87 plus transportation costs
– Order costs included the cost of the time it takes to fully complete a PCard order plus the
transaction cost of the PCard
Order administrative cost is $32.26/2.65 = $12.17
PCard transaction cost is $4.5/2.65 = $1.70
– Transportation costs are shown to be an average of 2% of product price
GDC additional costs total $3.48 plus the current surcharge of 32%
– Order costs include the time it takes to order from the GDC, which is $9.22/2.65 = $3.48
– GDC current surcharge is 32%, but with more volume flowing through the warehouse, this
surcharge could be lowered
Analysis of Purchasing Data…Total Price Variance
Office of Acquisition and
Logistics Management
49
NIAID Price
Total
(1)
NIAID Cost
GDC Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
6 Well Plate
$ 119.64
(Fisher Scientific)
$ 135.90
$ 55.42
(Corning)
$ 76.63
77%
24 Well Plate
$ 154.65
(Fisher Scientific)
$ 171.61
$ 67.51
(Corning)
$ 92.59
85%
12 Well Plate
$ 138.42
(Fisher Scientific)
$ 155.06 $ 89.97
(Corning)
$ 122.24
27%
25 ml Pipette
$ 117.08
(Fisher Scientific)
$ 133.29 $ 61.96
(Corning)
$ 85.27
56%
50 ml Pipette
$ 129.43
(Thomas Scientific)
$ 145.89
$ 86.65
(Corning)
$ 117.86
24%
Classic Rainin Pipette
$ 205.13
(Rainin)
$ 223.10
$ 179.49
(Rainin)
$ 240.41
-7%
260 ml Flask
$ 132.75
(Nunc)
$ 149.28
$ 48.52
(A. Daigger)
$ 67.53
121%
500 ml Filter Unit
$ 58.00
(A.Daigger)
$ 73.03
$ 61.09
(A.Daigger)
$ 84.12
-13%
1 L Filter Unit
$ 99.00
(A.Daigger)
$ 114.85
$ 99.00
(A.Daigger)
$ 134.16
-14%
LABORATORY SUPPLIES
A price comparison reveals that Corning items
purchased directly through the manufacturer are less
expensive than identical items from a distributor
Analysis of Purchasing Data…Total Price Variance: Product Price
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Office of Acquisition and
Logistics Management
50
Not all items are less expensive through the GDC
NIAID
Price
1
Total
(1)
NIAID
Cost 1
NIDDK Price
1
Total
(1)
NIDDK
Cost 2
GDC Price
Total
(2)
Cost to IC
% IC Price is More
or (-Less) than GDC
Low High
Bio-Rad Cuvette
$ 121.55
(Bio-Rad)
$137.85 Not
Available
Not Available $ 121.53
(Bio-Rad)
$ 163.90 -16%
Bio-Rad Cuvette
$ 124.10
(Bio-Rad)
$ 140.45 $121.55
(Bio-Rad)
$137.85 $ 121.53
(Bio-Rad)
$ 163.90 -14% -16%
Non-Sterile Multi-
Channel Basin
$ 35.98
(A.
Daigger)
$ 50.57 $ 28.85
(A. Daigger)
$ 43.30 $ 23.48
(A. Daigger)
$ 34.47 47% 26%
Sterile Multi-
Channel Basin
$ 48.40
(A.
Daigger)
$ 63.24 Not
Available
Not Available $ 49.10
(A. Daigger)
$ 68.29 -7%
LABORATORY SUPPLIES
Analysis of Purchasing Data…Total Price Variance: Product Price
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Office of Acquisition and
Logistics Management
51
Gloves are an excellent opportunity for the ICs to
benefit from GDC’s lower prices
MEDICAL AND SURGICAL SUPPLIES
NIAID Price
Total
(1)
NIAID Cost
GDC Prime
Vendor Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
Glove, Esteem Nitrile
Size: SM
$ 22.29
(VWR)
$ 36.60
$ 8.15
(DSCP)
$ 14.24
157%
Glove, Ntr Purple
Size: LG
$ 13.25
(VWR)
$ 27.39
$ 5.52
(DSCP)
$ 10.77
154%
Glove, Safeskin
Silver Nitrile
$ 14.44
(Fisher Scientific)
$ 28.60 $ 7.22
(DSCP)
$ 13.01
120%
Glove, Vinyl Pow,
Size: SM
$ 4.22
(VWR)
$ 18.18 $ 4.14
(DSCP)
$ 8.94
103%
Glove, Latex Ster
Size: 6 ½, 7, 7 ½, 8
$ 26.10
(VWR)
$ 40.50
$ 14.86
(DSCP)
$ 23.09
75%
Glove, Evolution One
Size: XS, S, M, XL
$ 7.81
(VWR)
$ 21.84
$ 7.06
(DSCP)
$ 12.79
71%
Analysis of Purchasing Data…Total Price Variance: Product Price
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Office of Acquisition and
Logistics Management
52
Selected Office Supplies are another lucrative area for
savings when purchased through the GDC
NIAID
Price
1
Total
(1)
NIAID
Cost 1
NIAID
Price 2
Total
(1)
NIAID
Cost 2
NIDDK
Price
1
Total
(1)
NIDDK
Cost 2
GDC Price
Total
(2)
Cost to IC
% IC Price is
More or (-Less)
than GDC
Low High
AAA
Batteries
(per
battery)
$ .75
(Staples)
$ 14.64 Not
Available
Not
Available
$ .86
(Staples)
$14.75 $ .28
(Frank
Parsons)
$ 3.85 280% 283%
AA
Batteries
(per
battery)
$ 1.00
(Staples)
$ 14.89 $ .69
(Staples)
$14.58 $ .83
(Staples)
$14.72 $ .53
(Frank
Parsons)
$ 4.18 249% 256%
Mini Binder
Clip (12)
$ .89
(Office
Link)
$ 14.78 $ 1.08
(Office
Link)
$14.97 $ 1.09
(Office
Link)
$14.98 $ .57
(Eagle
Business)
$ 4.23 249% 254%
Binder Clip
1” (12)
$ 3.91
(Office
Depot)
$ 17.86 Not
Available
Not
Available
Not
Available
Not Available $ 1.79
(Eagle
Business)
$ 5.84 206%
ADMINISTRATIVE AND OFFICE SUPPLIES
Analysis of Purchasing Data…Total Price Variance: Product Price
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Office of Acquisition and
Logistics Management
53
NIAID
Price
1
Total
(1)
NIAID
Cost 1
NIAID
Price 2
Total
(1)
NIAID
Cost 2
NIDDK Price
1
Total
(1)
NIDDK
Cost 2
GDC Price
Total
(2)
Cost to IC
% IC Price is
More or (-Less)
than GDC
Low High
Scientific
Calculator
$ 20.39
(Staples)
$ 34.67 Not
Available
Not
Available
Not
Available
Not
Available
$ 15.25
(Chesney)
$ 23.61 47%
Heavy
Duty
Staples
Not
Available
Not
Available
Not
Available
Not
Available
$ 5.57
(Office Link)
$ 19.55 $ 4.36
(Kops)
$ 9.23 112%
Post-it
3X3
(12)
$ 8.25
(US
Carbon &
Ribbon)
$ 2.29 Not
Available
Not
Available
Not
Available
Not
Available
$ 5.90
(A. Daigger)
$ 11.27 98%
Post-it
4X6
Assorted
$ 9.99
(Staples)
$ 24.06 Not
Available
Not
Available
$ 9.99
(Office
Depot)
$ 24.06 $ 5.41
(George
Allen)
$ 10.62 127%
ADMINISTRATIVE AND OFFICE SUPPLIES
Selected Office Supplies are another lucrative area for
savings when purchased through the GDC (continued)
Analysis of Purchasing Data…Total Price Variance: Product Price
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Office of Acquisition and
Logistics Management
54
A price comparison at NIAID reveals that buyers within
the same IC pay different prices for identical products
NIAID
Price 1
NIAID
Price 2
% Price
Differential
Sharpie Highlighter
$ 13.99
(Staples)
$ 12.99
(Staples)
8%
Sharpie Twin Tip
$ 1.70
(Gerry Smith Office Supplies
$ 2.00
(Office Link)
4%
Sharpie Fine
$ 4.40
(US Carbon & Ribbon)
$ 5.00
(Benjamin Office Supplies)
6%
Post-it Flag
Highlighters
$ 7.76
(O’Neill Computer Products)
$ 8.62
(First Call Office Products)
4%
ADMINISTRATIVE AND OFFICE SUPPLIES
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
55
A price comparison between NIAID and GDC reveals a
clear price differential for Biomax film
NIAID Price
1
Total
(1)
NIAID
cost 1
NIAID Price
2
Total
(1)
NIAID cost
2
GDC Price
Total
(2)
cost to IC
% IC Price is More or
(-Less) than GDC
Low High
Film, Biomax
MR-2
$ 510.15
(Perkin Elmer)
$ 534.22 $ 558.98
(Fisher
Scientific)
$ 584.03 $ 249.00
(Carestream
Health)
$ 332.16 61% 76%
Film, Biomax
XAR
$ 185.00
(Molecular
Imaging
Systems)
$ 202.57 Not
Available
Not
Available
$ 165.00
(Carestream
Health)
$ 221.28 (-11%)
Film, Biomax
LT-2
$ 578.85
(Fisher
Scientific)
$ 604.30 $ 213.53
(Carestream
Health)
$ 231.67 $ 206.00
(Carestream
Health)
$ 275.40 (-16%) 119%
PHOTO PAPER AND SUPPLIES
Analysis of Purchasing Data…Total Price Variance: Product Price
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Office of Acquisition and
Logistics Management
56
When the ICs buy Invitrogen items that are also
carried at the GDC, they pay an average of 19% more
Invitrogen contacted DLS indicating their interest in consolidating supply, and as a result of these
preliminary discussions, they provided DLS with item level detail on quantity ordered and total sales
amounts
The GDC currently sells approximately 120 items that the ICs also purchase direct from Invitrogen
One third of the items that the ICs buy direct cost 35-200% more than the GDC’s price
The following four slides include a price comparison for all items that the ICs and GDC both purchase
from Invitrogen
Office of Acquisition and
Logistics Management
57
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
100 MM DNTP SET $ 159.93 $ 177.00
$
123.75
$ 166.83 6%
OLIGOFECTAMINE REAGENT $ 234.48 $ 253.04
$
179.95
$ 241.01 5%
LIBRARY EFF DH5 $ 136.61 $ 153.21
$
99.91
$ 135.36 13%
NOVEX SHARP PS PROT $ 119.72 $ 135.98
$
97.76
$ 132.52 3%
SEEBLUE PLUS2 500 UL $ 112.56 $ 128.68 $ 95.96 $ 130.14 -1%
ATTACHMENT FACTOR 100ML $ 15.00 $ 29.17 $ 12.35 $ 19.78 47%
GUANIDINE HYDROCHLORIDE 500G $ 122.15 $ 138.47 $ 55.75 $ 77.07 80%
NP TRANSFER BUF(20X) 1 L $ 118.19 $ 134.42 $ 97.25 $ 131.85 2%
NUPAGE 4-12% BT GEL $ 107.57 $ 123.60 $ 94.64 $ 128.40 -4%
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
58
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
DISTILLED WATER (ULTRAPURE) 500ML
$ 21.18
$ 35.48 $ 7.99 $ 14.02 153%
DMEM 500ML, PLASTIC, E-Z HOLD
$ 6.00
$ 20.00 $ 3.95 $ 8.69 130%
LB BROTH 500ML, PLASTIC, E-Z HOLD
$ 9.66
$ 23.72 $ 5.28 $ 10.44 127%
DMEM 500ML, PLASTIC, E-Z HOLD
$ 4.39
$ 18.35 $ 3.57 $ 8.19 124%
DMEM 500ML, PLASTIC, E-Z HOLD
$ 5.39
$ 19.37 $ 3.96 $ 8.70 123%
DMEM 500ML, PLASTIC, E-Z HOLD
$ 4.96
$ 18.93 $ 3.98 $ 8.73 117%
RPMI 1640 500ML, PLASTIC, E-Z HOLD
$ 4.86
$ 18.83 $ 3.96 $ 8.71 116%
PBS, PH 7.4 500ML, PLASTIC, E-Z HOLD
$ 4.10
$ 18.05 $ 4.21 $ 9.04 100%
PBS, PH 7.4 1000ML, PLASTIC, E-Z HOLD
$ 7.94
$ 21.97 $ 7.24 $ 13.03 69%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
59
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
PEN STREP GLUTAMINE, 100ML
$ 18.21
$ 32.45 $ 14.60 $ 22.75 43%
1 KB PLUS DNA LADDER 250 UG
$ 124.57
$ 140.93 $ 73.55 $ 100.57 40%
PCR SUPERMIX 100 REACTIONS
$ 60.82
$ 75.91 $ 41.18 $ 57.83 31%
TRACKIT LAMBDA/HINDIII FRAG. 100
$ 64.71
$ 79.88 $ 45.30 $ 63.28 26%
TRACKIT 1 KB DNA LADDER 100
$ 78.01
$ 93.44 $ 54.60 $ 75.55 24%
TRACKIT PHIX174/HAEIII FRAG. 100
$ 118.50
$ 134.74 $ 85.15 $ 115.88 16%
GENETICIN 5G
$ 238.91
$ 257.56 $ 174.60 $ 233.96 10%
BENCHMARK PRESTAIN PROT LADDER
$ 111.42
$ 127.52 $ 86.51 $ 117.67 8%
PLATINUM PFX DNA POLYMERASE 100
REACTIONS #95
$ 79.25
$ 94.71 $ 64.55 $ 88.69 7%
TRACKIT 1 KB PLUS DNA LADDER 100
$ 83.84
$ 99.39 $ 68.68 $ 94.14 6%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
60
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
PLATINUM TAQ HIGH FIDELITY 100 REACTIONS
$ 115.63
$ 131.82 $ 92.76 $ 125.93 5%
GENETICIN 20ML
$ 65.71
$ 80.90 $ 56.15 $ 77.60 4%
SUPERSCRIPT 1ST STRAND SYSTEM
$ 311.16
$ 331.25 $ 238.70 $ 318.57 4%
PLAT SYBR QPCR 100 100
$ 189.55
$ 207.21 $ 148.50 $ 199.50 4%
DISTILLED WATER 500ML, PLASTIC, E-Z HOLD
$ 7.18
$ 21.19 $ 4.27 $ 9.11 133%
HBSS 500ML, PLASTIC, E-Z HOLD
$ 6.63
$ 20.64 $ 4.10 $ 8.89 132%
DPBS 500ML, PLASTIC, E-Z HOLD
$ 4.98
$ 18.95 $ 4.10 $ 8.89 113%
DPBS 500ML, PLASTIC, E-Z HOLD
$ 4.75
$ 18.72 $ 4.10 $ 8.89 110%
GLYCEROL 500ML
$ 28.40
$ 42.84 $ 13.04 $ 20.70 107%
PENICILLIN STREPTOMYCIN SOL 20ML
$ 6.32
$ 20.31 $ 5.56 $ 10.82 88%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
61
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
SSC, 20X 1000ML, PLASTIC, E-Z HOLD
$ 25.45
$ 39.83 $ 16.15 $ 24.80 61%
GENTAMICIN 10ML
$ 24.02
$ 38.37 $ 16.60 $ 25.39 51%
ADVANCED D-MEM 500ML, PLASTIC, E-Z HOLD
$ 14.36
$ 28.52 $ 11.70 $ 18.92 51%
T4 POLYNUCLEOTIDE KINASE 200 UN
$ 129.42
$ 145.88 $ 71.75 $ 98.19 49%
0.5-10KB RNA LADDER 25 APP
$ 123.98
$ 140.33 $ 72.80 $ 99.58 41%
T4 DNA LIGASE 500 UN
$ 170.85
$ 188.14 $ 99.11 $ 134.31 40%
100 BP DNA LADDER 50 UG
$ 71.90
$ 87.21 $ 52.57 $ 72.87 20%
PLATINUM PCR SUPERMIX HIGH FI 100
REACTIONS
$ 116.73
$ 132.93 $ 93.20 $ 126.50 5%
RECOVERY CELL CULTURE FREEZING 50ML
$ 77.73
$ 93.15 $ 65.10 $ 89.41 4%
TAQ DNA POLYMERASE 500 U
$ 201.06
$ 218.95 $ 158.29 $ 212.42 3%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
62
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More
or (-Less) than GDC
SS ONE STEP RT-PCR WITH PLATINUM TAQ
$ 147.35
$ 164.16 $ 118.22 $ 159.53 3%
PLATINUM PCR SUPERMIX 100 RXN
$ 99.60
$ 115.47 $ 83.20 $ 113.30 2%
PLATINUM TAQ DNA POLYMERASE 250
REACTIONS
$ 167.21
$ 184.42 $ 136.00 $ 183.00 1%
PLATINUM BLUE PCR SUPERMIX 100 RXNS
$ 107.60
$ 123.63 $ 93.11 $ 126.38 -2%
ONE SHOT MEDH5A T1 COMBO
$ 234.22
$ 252.78 $ 205.65 $ 274.94 -8%
PLATINUM TAQ DNA POLYMERASE 500
REACTIONS
$ 248.97
$ 267.82 $ 220.95 $ 295.13 -9%
LIPOFECTAMINE 2000 REAGENT 1.5 ML
$ 307.50
$ 327.52 $ 297.13 $ 395.69 -17%
RPMI 1640 500ML, E-Z HOLD
$ 4.72
$ 18.69 $ 3.93 $ 8.67 115%
TRYPSIN 0.25% EDTA 100ML, E-Z HOLD
$ 5.65
$ 19.64 $ 5.20 $ 10.34 90%
TRYPSIN .05% EDTA 100ML, PLASTIC, E-Z HOLD
$ 5.46
$ 19.44 $ 5.20 $ 10.34 88%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
63
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More
or (-Less) than GDC
PBS, PH 7.4, 10X 500ML, PLASTIC, E-Z HOLD
$ 10.90
$ 24.99 $ 8.68 $ 14.94 67%
L GLUTAMINE, 100X 100ML, PLASTIC, E-Z HOLD
$ 12.58
$ 26.71 $ 12.65 $ 20.18 32%
GLUTAMAX I, 100X 100ML, PLASTIC, E-Z HOLD
$ 17.56
$ 31.79 $ 15.60 $ 24.07 32%
URELINK HIPURE FILTER MAXI 10 REACTIONS
$ 164.63
$ 181.80 $ 102.44 $ 138.70 31%
OPTI MEM I 500ML, PLASTIC, E-Z HOLD
$ 17.77
$ 32.00 $ 16.45 $ 25.19 27%
URELINK PLASMID MAXI 10 REACTIONS
$ 133.56
$ 150.10 $ 93.08 $ 126.34 19%
SBCLNG EFF DH5@ COMP CELLS 2.0ML )
$ 62.14
$ 77.26 $ 47.66 $ 66.39 16%
10 MM DNTP MIX 100 UL
$ 41.95
$ 56.66 $ 36.40 $ 51.53 10%
-GEL DOUBLE COMB 2% 18-PAK
$ 183.36
$ 200.90 $ 149.75 $ 201.15 0%
MEMBR/FILTER PAPER 20/PK
$ 116.12
$ 132.32 $ 98.26 $ 133.19 -1%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
64
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
OP10 ONE SHOT KIT 20 RXN
$ 255.10
$ 274.08 $ 210.57 $ 281.44 -3%
-GELS 1.2% 18/PK
$ 147.99
$ 164.82 $ 127.90 $ 172.31 -4%
-GEL 0.8% 18/PK
$ 147.06
$ 163.88 $ 127.90 $ 172.31 -5%
-GELS 2% 18/PK
$ 143.86
$ 160.61 $ 127.90 $ 172.31 -7%
SUPERSCRIPT III REV TRANSCRIPT 10,000 UN
$ 203.37
$ 221.31 $ 179.61 $ 240.57 -8%
BL21(DE3) OS 20 RXN
$ 205.91
$ 223.90 $ 182.30 $ 244.12 -8%
SUPERSCRIPT II 10000 UN
$ 190.92
$ 208.61 $ 174.72 $ 234.11 -11%
MAX EFF DH5@ 1ML (5 X 0.2ML)
$ 152.42
$ 169.34 $ 146.52 $ 196.89 -14%
RELOCK XCELL EACH
$ 300.00
$ 319.87 $ 286.99 $ 382.31 -16%
URELINK PURIF RACK
$ 73.36
$ 88.70 $ 130.00 $ 175.08 -49%
Analysis of Purchasing Data…Total Price Variance: Product Price
Office of Acquisition and
Logistics Management
65
There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
DF MMBR/FLTR PAPRSNDW 20 EA
$ 117.63
$ 133.85 $ 96.72 $ 131.15 2%
LN MMBR & FLTR PAPRSNDW 20 EA
$ 131.49
$ 147.99 $ 101.01 $ 136.82 8%
ISGLYSDS RUN BUF(10X)500ML
$ 11.42
$ 25.52 $ 7.98 $ 14.01 82%
ISGLY TRANS BUF (25X)500ML
$ 30.10
$ 44.57 $ 22.88 $ 33.68 32%
GICMARK XP WESTERN STD 250 UL
$ 221.08
$ 239.37 $ 189.60 $ 253.75 -6%
RK12 W RANGE MW STD,1ML 1 ML
$ 112.73
$ 128.86 $ 88.40 $ 120.17 7%
MPLYBLUE SAFESTAIN 1 L
$ 100.47
$ 116.35 $ 71.56 $ 97.94 19%
EDIUM 131 500ML EACH
$ 57.24
$ 72.26 $ 53.17 $ 73.66 -2%
MOPS SDS RNBUF 20X 500 ML
$ 49.76
$ 64.62 $ 40.55 $ 57.01 13%
MES SDS RUNBUF 20X 500 ML
$ 50.10
$ 64.97 $ 40.84 $ 57.38 13%
Analysis of Purchasing Data…Total Price Variance: Product Price
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There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More
or (-Less) than GDC
TRANSFER BUF (20X) 125 ML
$ 16.47
$ 30.67 $ 12.65 $ 20.18 52%
LDS SAMPLE BUF (4X) 10 ML
$ 9.64
$ 23.71 $ 7.30 $ 13.12 81%
NUPAGE 10% BT GEL 1.0MM 10W 10 PER BOX
$ 111.82
$ 127.92 $ 94.64 $ 128.40 0%
NUPAGE 10% BT GEL 1.0MM 15W 10 PER BOX
$ 114.76
$ 130.93 $ 94.64 $ 128.40 2%
NUPAGE 10% BT GEL 1.5MM 10W 10 PER BOX
$ 112.64
$ 128.76 $ 94.64 $ 128.40 0%
NUPAGE 4-12% BT GEL 1.0MM12W 10 PER BOX
$ 108.32
$ 124.36 $ 94.64 $ 128.40 -3%
NUPAGE 4-12% BT GEL 1.0MM15W 10 PER BOX
$ 111.05
$ 127.14 $ 94.64 $ 128.40 -1%
NUPAGE 4-12% BT GEL 1.5MM 10W 10 PER BOX
$ 113.93
$ 130.08 $ 95.45 $ 129.47 0%
NUPAGE 12% BT GEL 1.0MM 10W 10 PER BOX
$ 114.75
$ 130.91 $ 94.64 $ 128.40 2%
MEDIA AMP AGAR 20 POUCHES
$ 199.98
$ 217.85 $ 141.82 $ 190.68 14%
RYPSIN/EDTA 100ML 100 ML
$ 17.65
$ 31.87 $ 16.15 $ 24.80 29%
Analysis of Purchasing Data…Total Price Variance: Product Price
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There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
RYPSIN NEUTRALIZER 100ML 100 ML
$ 17.17
$ 31.39 $ 16.15 $ 24.80 27%
NTH-A-FREEZE 50ML 50 ML
$ 52.29
$ 67.21 $ 48.00 $ 66.84 1%
NTAMICIN/AMPHOTERICIN 10PK EACH
$ 44.00
$ 58.75 $ 44.00 $ 61.56 -5%
GS 25ML 25 ML
$ 63.38
$ 78.52 $ 56.05 $ 77.47 1%
UREA, AMMONIA FREE 2KG
$ 104.38
$ 120.34 $ 50.00 $ 69.48 73%
AGAROSE 500G
$ 415.37
$ 437.55 $ 287.13 $ 382.49 14%
BUFFER SATURATED PHENOL 100ML
$ 74.44
$ 89.80 $ 43.92 $ 61.46 46%
S.O.C. MEDIUM 10X10ML
$ 68.02
$ 83.25 $ 26.15 $ 38.00 119%
TRIS-HCL, PH 8.0, 1M 1000ML
$ 33.56
$ 48.11 $ 16.08 $ 24.70 95%
ETHIDIUM BROMIDE 10MG/ML
$ 42.81
$ 57.54 $ 16.10 $ 24.73 133%
SSPE, 20X 1000ML, PLASTIC, E-Z HOLD
$ 47.90
$ 62.73 $ 14.85 $ 23.08 172%
DEOXYRIBONUCLEASE
$ 267.99
$ 287.23 $ 150.50 $ 202.14 42%
Analysis of Purchasing Data…Total Price Variance: Product Price
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There are 122 price comparisons of Invitrogen
products sold direct to the ICs and also sold by the
GDC (continued)
INVITROGEN ITEMS
(1) Includes cost of ordering by PCard of $12.17 and $1.70 PCard transaction cost (assuming 2.65 items per PCard order), and
average NIH shipping cost of 2% of purchase price
(2) Includes cost of ordering by IC from GDC of $3.48 (assuming 2.65 items per order) and GDC current surcharge of 32%
Direct Invitrogen
Price
Total
(1)
Direct Cost
GDC
Price
Total
(2)
Cost to IC
% IC Price is More or
(-Less) than GDC
DNASE I AMP GRADE 100 UN
$ 82.66
$ 98.19 $ 48.77 $ 67.85 45%
PROTEINASE K 100 MG
$ 81.10
$ 96.60 $ 48.00 $ 66.84 45%
PROTEINASE K SOL. RNA 5 ML (100 MG)
$ 101.56
$ 117.47 $ 58.10 $ 80.17 47%
URELINK PLASMID MIDI 25 REACTIONS
$ 173.25
$ 190.59 $ 108.16 $ 146.25 30%
URELINK HIPURE FILTER MIDI 25 REACTIONS
$ 206.96
$ 224.97 $ 122.20 $ 164.78 37%
OPO TA CLON/ TOP10 20 RXN
$ 377.49
$ 398.91 $ 291.20 $ 387.86 3%
SC-TOPO TA KIT, TOP10P10 20 RXN
$ 404.91
$ 426.88 $ 300.00 $ 399.48 7%
OPO TA/DH5A(20) 20 RXN
$ 380.70
$ 402.19 $ 295.20 $ 393.14 2%
OPO TA CLONING KIT SEQU 20 RXN
$ 406.10
$ 428.09 $ 309.10 $ 411.49 4%
SC-TOPO TA SEQ.,TOP10 20 RXN
$ 405.86
$ 427.85 $ 311.64 $ 414.85 3%
OPO TA CLON DUAL TOP10 20 RXN
$ 416.85
$ 439.06 $ 311.40 $ 414.53 6%
Analysis of Purchasing Data…Total Price Variance: Product Price
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Fragmented suppliers, price differences for similar
items, and limited leverage in price negotiations lead
to unnecessary spending by the NIH
NIH Wide
IC level
Laboratory
IC
N
I
A
I
D
OD
N
I
D
D
K
N
H
L
B
I
N
I
A
N
H
GR
I
Consolidated Purchasing Approach for Realized Savings
The current NIH purchase strategy indicates
about 90% of the IC’s purchasing is done
directly with vendors
The current NIH purchase strategy indicates
about 90% of the IC’s purchasing is done
directly with vendors
Utilizing best practices, consolidated
purchasing offers many benefits to NIH,
including greater standardization of
products and pricing, savings in shipping,
improved vendor relationships and many
more
Utilizing best practices, consolidated
purchasing offers many benefits to NIH,
including greater standardization of
products and pricing, savings in shipping,
improved vendor relationships and many
more
N
C
I
E
t
c
.
Analysis of Purchasing Data…Consolidated Purchasing
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Results from this spend analysis provide NIH leadership with a better understanding of the current processes and
costs associated with ordering supplies and materials
Consolidated purchasing can increase the speed and
agility of the acquisition process while improving
product quality and reducing costs
Overall, more than 17,000 unique vendor
names
Top 20 suppliers account for over 40% of the
total spend
Overall, more than 17,000 unique vendor
names
Top 20 suppliers account for over 40% of the
total spend
Number of Suppliers
Consolidation of Sourcing Channels NIH Current State
Optimized supply base determined by
individual commodity strategies
Optimized supply base determined by
individual commodity strategies
Best Practices
Variable Costs
Transaction Costs
Transaction costs included when
calculating total cost of ownership
Transaction costs included when
calculating total cost of ownership
Inventory Costs
Inventory holding costs are not optimized
when safety stock of common items is held at
multiple locations across the ICs
Inventory holding costs are not optimized
when safety stock of common items is held at
multiple locations across the ICs
A multi-echelon inventory strategy based
on demand usage profiles
A multi-echelon inventory strategy based
on demand usage profiles
Product Costs
With over 1,600 individuals purchasing
supplies and materials, the NIH obtains
widely different prices for similar items
With over 1,600 individuals purchasing
supplies and materials, the NIH obtains
widely different prices for similar items
Lower and more standardized prices from
suppliers due to purchasing leverage
Lower and more standardized prices from
suppliers due to purchasing leverage
Different costs are incurred by ICs when
placing orders on PCards as compared with
placing orders through the GDC
Different costs are incurred by ICs when
placing orders on PCards as compared with
placing orders through the GDC
Analysis of Purchasing Data…Consolidated Purchasing
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Consolidated purchasing will lead to less time and
money consumed in transactional costs overall as well
as lower prices on selected items
Administrative Cost
Transportation costs are minimized, as the longest leg (vendor to the NIH) is
maximized by transporting larger volumes less frequently
– Reduces overall transportation costs
– “Green” alternative as this uses less fuel and creates less green house
gases
Transportation costs are minimized, as the longest leg (vendor to the NIH) is
maximized by transporting larger volumes less frequently
– Reduces overall transportation costs
– “Green” alternative as this uses less fuel and creates less green house
gases
Transportation Cost
Administrative time and resources in OFM’s accounts payable department are
reduced when numerous small invoices are consolidated into one large
invoice
Buyer productivity is increased when purchasing is consolidated and the
purchasing costs per dollar spent is reduced with less transactions
Administrative time and resources in OFM’s accounts payable department are
reduced when numerous small invoices are consolidated into one large
invoice
Buyer productivity is increased when purchasing is consolidated and the
purchasing costs per dollar spent is reduced with less transactions
Numerous areas holding stock will inevitably total more inventory than holding
safety stock at one distribution location
A large number of SKUs (from lack of standardization) requires a larger
amount of overall safety stock as safety stock must be held for each item
thereby increasing the total inventory dollars
Numerous areas holding stock will inevitably total more inventory than holding
safety stock at one distribution location
A large number of SKUs (from lack of standardization) requires a larger
amount of overall safety stock as safety stock must be held for each item
thereby increasing the total inventory dollars
Inventory Cost
Purchasing leverage will drive prices lower
Reducing the number of overall suppliers allows for improved vendor
relationships and partnering to create cost savings for both parties
Purchasing leverage will drive prices lower
Reducing the number of overall suppliers allows for improved vendor
relationships and partnering to create cost savings for both parties
Product Price
Consolidated
Purchasing
Analysis of Purchasing Data…Consolidated Purchasing
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Estimated $24 to $53 Million in savings from
consolidated purchasing funnels research dollars
back to the NIH community
Analysis of Purchasing Data…Consolidated Purchasing
Order transaction cost savings
$2 to $3 Million
Shipping and Handling savings
$ 3.7 Million
Other savings
Product cost savings
$18 to $46 Million
Savings of
$24 to $53+ Million
= more dollars for research
Savings of
$24 to $53+ Million
= more dollars for research
Research Dollars
Other savings could include:
Inventory
Accounts payable
Reduction in energy costs
Other savings could include:
Inventory
Accounts payable
Reduction in energy costs
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Section 4: Recommendations
Recommendations
– Best Practices Vision
– Procurement Processes
– Technology
– Performance Management
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How can the NIH effectively manage its spend?
IMPROVEMENTS
Procurement
Processes
Metrics Based
Performance
Management
Strategic Sourcing
Price comparisons
IC relations
Supplier management
Systems functionality
Accessibility / Usability
Create metrics
Establish baseline
Provide training on
metrics
As the NIH needs to find ways to do more with less,
this three pronged approach can save money and
control costs
Best Practices Vision
Best Practices Vision
Technology
Recommendations…Best Practices Vision
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By simplifying the ordering process and/or
implementing process improvements, the NIH could
realized additional savings on ordering costs
Recommendations…Procurement Processes
ID Procurement Processes Recommendations Next Steps
Rationalize the GDC portfolio because initial findings
suggests that the NIH could save significant dollars through
consolidated purchasing, initially focusing on low value,
generic types of products like gloves and office supplies
(currently in progress)
Collect sales data from vendors
Identify specific items as targets for
consolidated purchasing
Negotiate prices with vendors
Advertise GDC offering to the ICs
Perform a more comprehensive analysis of price differences
based on different methods of buying (purchasing channels)
and develop a fulfillment channel strategy that gives the
best values to the NIH
Identify item categories for price
comparison research
Calculate total landed cost for each
item through the various channels
Deliver a purchasing channel strategy
for selected groups of items
Brief Executive Officers on price differences and work with
EOs and AOs to help the ICs change their purchasing
habits and to adopt new methods that save time and money
Present price comparison findings and
purchasing channel strategy to EOs
and AOs
Gain acceptance of new purchasing
strategy
Train buyers on when and how to use
the best purchasing channel for any
given item
P1
P2a
P2b
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Expanding iProcurement’s functionality can save time,
direct buyers to specific vendors, and provide needed
data for future procurement/spend analyses
ID Technology Recommendations Next Steps
Initial research suggests that iProcurement has many more
capabilities than are currently being utilized and NIH could
benefit immensely from a more robust procurement system
– Standardized data including drop down menus of vendor
names and item descriptions
– Reduced time to place an order
– “Punch outs” to direct purchaser to vendors that the NIH
wants used, often automatically linking the purchaser with
the vendor of choice’s web site
– Eliminates the scenario of different ICs paying varying
prices for the same product by directing purchasers to
predetermined vendors and standardizing the more
generic items
Meet with NBS to present technology
findings
Investigate iProcurement’s
functionality
Develop plan for making system
upgrades
After system has been modified, train
all users
T1
Recommendations…Technology
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Improved metrics allow NIH leadership to make
knowledge based decisions
ID Metrics Based Performance Management Recommendations Next Steps
Develop and implement comprehensive metrics for NIH
leadership to track the efficiency of the procurement
process and make it easier to track expenditures on
supplies and materials
Identify metrics
Define data collection and calculation
Establish baselines
Roll out metrics program
Facilitate sharing of internal NIH best practices based on
established metrics
Establish a performance management
committee to discuss metrics and
share best practices
Conduct a regularly scheduled spend analysis to report
changes, e.g., purchasing trends, major supplies, supplier
price differentials, purchasing channels
Determine frequency of conducting
spend analyses
Identify and train staff on how to
conduct analysis
Establish a vendor scorecarding process to allow the NIH to
measure supplier performance throughout the lifecycle of
the contract
Identify metrics that will be used to
evaluate vendor performance
Define data collection and calculation
Roll out the vendor scorecarding
program
Establish vendor rewards/penalties
based on performance
M1
M2
M3
M4
Recommendations…Performance Management
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To prioritize the recommendations, we ranked them
based on potential impact and ease of implementation
Low
High
Easy
Difficult
Level of Effort
Benefit to NIH
Implementation Assessment of Recommendations
Process
Technology
Performance
Management
Source: Booz Allen team analysis
P2a and P2b have the
best combination of
significant benefit of NIH
and moderate level of
effort
P2a and P2b have the
best combination of
significant benefit of NIH
and moderate level of
effort
P1
P2a
P2b
M1
M2
M3
M4
T1
Recommendations
Office of Acquisition and
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Appendices
Appendices
– Appendix A: Variables Used for Analysis
– Appendix B: Object Classes Included in Analysis
– Appendix C: Methodology for Item Price Comparisons
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Variable
Award Created Date
Definition
Date on which the award was created.
Rationale Used to analyze trends in orders over time
Data
Limitations
None Noted
Variable
Award Line Item Description
Definition
Text description of the product or service requested on a specific line of an Award. Up to the first 800
characters will be displayed. For Awards created in PRISM or converted Awards, this will be the line
item description sourced from PRISM. For P-Card Awards, this will be the line item description
sourced from Oracle
Rationale Used to determine supplies and materials purchased
Data
Limitations
Content of free text entry is highly variable and does not allow for easy identification of items
purchase or comparison across multiple order lines
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Variable
Award No.
Definition
Unique identifier for the acquisition document. For awards generated in PRISM, the Award No. will
follow the PIID format. For awards generated in Oracle and P-Card documents, the Award No. will
be a unique numeric sequence
Rationale Used to determine type of award
Data
Limitations
None Noted
Variable
Award Line Item No.
Definition
A unique identifier for a specific line within an Award. For Awards created in PRISM or converted
Awards, this will be the line number sourced from PRISM. For P-Card Awards, this will be the line
number sourced from Oracle
Rationale Used to identify each unique lines on an order
Data
Limitations
None Noted
Appendix A…Variables Used for Analysis
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Variable
Buyer IC
Definition
Standard acronym, based on NBS role-mapping, for the NIH Institute or Center where the individual
authorized to negotiate prices, and create awards for goods and services is assigned
Rationale Used to identify IC for buyer if any additional information or clarification on an order was required
Data
Limitations
None Noted
Variable
Buyer Name
Definition
Name of individual authorized to negotiate prices, and create awards for goods and services
Rationale Used to identify buyer if any additional information or clarification on an order was required
Data
Limitations
None Noted
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
Inventory Organization
Definition Code that identifies the warehouse where the item is stored
Rationale Used to identify items stored at the GDC – Gaithersburg Distribution Center or at the SSS – Self
Service Stores
Data
Limitations
None Noted
Variable
Item
Definition
National Stock Number used to identify materials in the warehouse
Rationale Used to identify items purchased by the GDC in an attempt to compare prices to those paid by other
ICs
Data
Limitations
GDC is the only organization that uses this variable as a unique identifier for items purchased
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
Item Category Code
Definition Two character numerical code used to group items with similar characteristics
Rationale Used to group items purchased by the GDC into item categories aligned with object classifications
used to compare the different types of items purchased by the GDC and the ICs
Data
Limitations
GDC is the only organization that uses this variable as way to categorize items
Variable
Item Category Description
Definition Text that describes the numerical code used to group items with similar characteristics
Rationale Used to group items purchased by the GDC into item categories aligned with object classifications
used to compare the different types of items purchased by the GDC and the ICs
Data
Limitations
GDC is the only organization that uses this variable as way to categorize items
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
Last Line Payment Date
Definition Latest payment date for a specific award line item
Rationale Used to limit the data extraction to orders paid between July 2007 and July 2008
Data
Limitations
None Noted
Variable
Line Payment Status
Definition Status of the payments against a specific award line item number
Rationale Used to limit the data extraction to only “Partially Paid” and “Fully Paid” values
Data
Limitations
None Noted
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
Object Class Code
Definition
A 4 character classification code according to the type or nature of services, articles, or other items
involved. This study included only Object Class 26 (supplies and materials)
Rationale Used to extract data for supplies and materials and to identify larger object categories for analysis
Data
Limitations
Cannot be used to items purchased by the GDC (must use Item Category Code instead)
Variable
Object Class Description
Definition
Text description for an object class code
Rationale Used to extract data for supplies and materials and to identify larger object categories for analysis
Data
Limitations
Cannot be used to items purchased by the GDC (must use Item Category Description instead)
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
Payment Amt
Definition
Amount paid towards a specific award line or a project on the line
Rationale Used to calculate the total payments for other combinations of variables (e.g., by supplier, by IC)
Data
Limitations
This amount may include the amount paid for more than one item, and may include shipping and
handling charges, hazardous material charges, and other charges that are not separately identified
in the item description field
Variable
P-Card Purchase Indicator
Definition
Flag indicating that the requisition or award is being paid for with a purchase card
Rationale Used to determine P-Card orders
Data
Limitations
None Noted
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
P-Card Merchant Name
Definition
Name of the supplier of the goods and services for an award
Rationale Used in creation of New Combined Supplier Name
Data
Limitations
Content of free text entry is highly variable (e.g., misspelled merchant names, multiple abbreviations,
addition of buyer initials) and does not allow for easy comparison across orders. Additionally, data
field is blank for purchases placed on a contract.
Variable
Project IC
Definition Standard Acronym for the NIH Institute or Center that funds the requisition or award
Rationale Used to identify the IC that paid for the supplies and materials purchased
Data
Limitations
None Noted
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
Supplier Name
Definition
Name of the supplier of the goods and services for an award
Rationale Used in creation of New Combined Supplier Name
Data
Limitations
Shows Supplier name only when purchases were made on contract and shows “IMPAC
GOVERNMENT SERVICES” for all P-Card orders.
Variable
Unit Price
Definition
Supplier's price for one unit of the supply or material
Rationale Initially planned to use to identify unit cost of items
Data
Limitations
Data inaccuracies in Quantity Ordered field make it impossible to use this variable to determine unit
price accurately.
Data Dictionary
nVision Variables Extracted for Use in Spend Analysis
Appendix A…Variables Used for Analysis
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Variable
New Combine Supplier
Definition Combines data from P-Card Merchant field for orders placed on P-Cards and from Supplier Name for
orders placed on contracts. Data in this field was cleaned and standardized as much as possible by
the research team.
Rationale Used for all analysis of Suppliers
Data
Limitations
Content of field is based on free text entry and non-standardized results remain as the team was not
able to clean 100% of the data due to time constraints and uncertainty about some data entered by
the original buyers
Variable
Last Line Payment Month & Year
Definition
Shows data from Last Line Payment Date variable as month and year
Rationale Used to analyze trends in orders over time
Data
Limitations
None Noted
Data Dictionary
Variables Created For Use in Spend Analysis
Appendix A…Variables Used for Analysis
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The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.13 Biological materials - direct use
Cost of enzymes, coenzymes, bacteria and cell cultures for biomedical research. Included are
items such as restriction enzymes, lysozyme, albumin, phosphatases, ligases, transfereases,
dehydrogenases, kinases, transcription systems, RNA, DNA, and polymerases. Prior to FY 84
these items were charged to 26.52, Chemicals - Direct Use and 26.3A, Medical and Surgical,
Including X-Ray, Photographic and X-Ray File-Direct Use.
26.16 Media for propagation tissue cultures - direct use
Any liquid, gel, or powder used to maintain and support cell growth. This includes
microbiological media, bacteriological media, tissue culture media plated media, tubed media,
buffered salts, and identification systems. Media is a term which can be used in connection
with the propagation of tissue cultures for the detection and/or identification of a virus.
26.23 Biological materials – inventory
See description of 26.13
26.3A Medical & surgical, including x-ray, photographic and x-ray file - direct use
Medical and veterinary supply and material commodities used in laboratory and clinical
research. This code is to be assigned to supply and material commodities included in FSC's
6510, 6515, 6525, and 6545. Excludes such commodities used for dental related research
included under sub-object class 26.3D.
26.3B Surgical-hospital supplies S&SF
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
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The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.3Z Other medical and dental supplies - direct use
Includes those medical, dental and veterinary supply and material items not otherwise
classified. This code is to be cited by authorized, requisitioning officials only.
26.31 Supplies and materials for additional emergency hospitals
26.33 Supplies and materials for community hospitals
26.36 Supplies and materials that increase hospital capacity
26.38 Supplies and materials for replacement of hospital stocks
26.39 Supplies for repackaging (other than medical/dental supplies)
26.4A Medical & surgical including x-ray photography & x-ray film – inventory
Medical and veterinary supply and material commodities used in laboratory and clinical
research. This code is to be assigned to supply and material commodities included in FSC's
6510, 6515, 6525, and 6545. Excludes such commodities used for dental related research
included under sub-object class 26.3D.
26.4Z Other medical and dental supplies – inventory
Includes those medical, dental and veterinary supply and materials items not otherwise
classified.
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
Office of Acquisition and
Logistics Management
93
The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.5A Laboratory supplies – inventory
All commodities, not identified elsewhere in this group, normally consumed or expended
during laboratory activity. This code is to be assigned to all supply and material commodities
included in Federal Supply Classification group 66, except laboratory glassware (26.54) items
included in FSC 6640. Includes balances, clamps, filters, stopcocks, measures, stoppers,
syringes, thermometers.
26.5B Chemicals – inventory
All chemicals and gases required for clinical, laboratory or plant maintenance use. This code
is to be assigned to all individual non-medicinal chemical elements and compounds included
in FSC group 68, except pest control agents and disinfectants (26.8R) included in FSC 6840.
26.5C Forage including feed for research animals – inventory
All animal food and bedding used in the maintenance of research animals. This code is to be
assigned to all commodities included in FSC 8710, Forage and Feed and to those
commodities included in FSC's 8910 and 8915 when procured for the purpose of research
animal maintenance.
26.5D Glassware (Lab) – inventory
All glassware items required for use in research laboratories. This code is to be assigned to all
disposable and reusable laboratory glassware items included inf FSC 6640. Includes
screwcaps, bottles, graduated cylinders, petri dishes, test tubes, pipets, beakers.
26.5Z All other - inventory
Includes those items of laboratory supplies and chemicals not otherwise classified.
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
Office of Acquisition and
Logistics Management
94
The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.51 Laboratory supplies - direct use
See description of 26.5A
26.52 Chemicals - direct use
See description of 26.5B
26.53 Forage including feed for research animals - direct use
See description of 26.5C
26.54 Glassware (Lab) – direct use
See description of 26.5D
26.57 Laboratory glassware S&SF
26.58 Chemicals S&SF
26.59 All Other - direct use
See description of 26.5Z
26.6A ADPE supplies
Supplies acquired such as magnetic tape, containers, reels, tabulating paper, punched cards
and paper tape.
26.6L Office supplies - direct use
Items of supplies and materials normally intended for administrative or clerical use. Includes
those items of supply and material included in FSC's 7510, 7520, 7530 and 7540.
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
Office of Acquisition and
Logistics Management
95
The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.6N Office supplies S&SF
26.6Z All other administrative supplies - direct use
All administrative supplies not specifically identified in this grouping.
26.7A ADPE Supplies - inventory
See description of 26.6A
26.7L Office supplies - inventory
See description of 26.6L
26.7Z All other administrative supplies - inventory
See description of 26.6Z
26.8A Kitchen & dietetic (excludes subsistence) - direct use
Comprises those supply and material commodities used in food preparation and serving
operations. Includes such items as are included in FSC 7300, Food Preparation and Serving
Equipment and those included in FSC 8540, Toiletry Paper Products.
26.8B Laboratory supplies S&SF
26.8C Forms & envelopes S&SF
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
Office of Acquisition and
Logistics Management
96
The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.8E Uniforms of non-medical personnel - direct use
All wearing apparel and protective clothing acquired for non-medical personnel. Comprises
those items included in FSC 84, Clothing Individual Equipment and Insignia. Excludes those
clothing items for use in medical facilities grouped in FSC 6532.
26.8J Housekeeping and janitorial supplies - direct use
All items utilized in the domestic up-keep of offices and laboratories. Includes those items of
supply and material included in the following FSC's:
7200 Household and commercial furnishing and appliances
7900 Cleaning equipment and supplies
8100 Containers, packaging, and packing supplies
8500 Toiletries
26.8K Housekeeping supplies S&SF
26.8L Dry ice S&SF
26.8N All other maintenance supplies - direct use
All other supplies used for maintenance purposes that are not otherwise classified.
26.8P Animal food & bedding S&SF
26.8X Laundry supplies - direct use
All commodities required to launder and process wearing apparel, bed clothing and drapes.
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
Office of Acquisition and
Logistics Management
97
The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.8Z All other - direct use
26.81 Paper stock-printing & printing supplies - direct use
Items of supplies and materials, procured for use in the processes of printing
duplicating/copying and microform duplicating, are to be assigned this code.
26.82 Photographic paper and supplies - direct use
Paper and supplies used in the developing of film and other photographic processes.
26.83 Microfilm - direct use
Comprises all processed microfilm included in FSC 7670.
26.84 Other unexposed film - direct use
Comprises all processed film included in FSC 6770. Does not include processed microfilm
(26.83) and X-ray film (26.3A) or 26.3D. Includes still picture film and motion picture film.
26.85 Pictures prints negatives etc - visual aids - direct use
Comprises pictures, slides, illustrations, charts and other graphic or pictorial items to be used
as a visual aid.
26.86 Envelopes
26.87 Forms & envelopes - direct use
Includes standard forms, agency forms, envelopes and stationery included in FSC's 7530 and
7540.
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
Office of Acquisition and
Logistics Management
98
The following Object Classifications were included in
the NIH Spend Analysis
Object Classification Code Object Classification Description
26.89 All other printing & photographic supplies - direct use
All other printing and photographic supplies and materials not otherwise classified.
26.9J Housekeeping and janitorial supplies - inventory
All items utilized in the domestic up-keep of offices and laboratories.
26.9Z All other
26.91 Paper stock for printing & printing supplies - inventory
See description of 26.81
26.92 Photographic paper and supplies – inventory
See description of 26.82
26.94 Other unexposed film – inventory
See description of 26.84
26.96 Forms and envelopes – inventory
See description of 26.87
26.99 All other printing & photographic supplies – inventory
All other printing and photographic supplies and materials not otherwise classified.
Object Classification Codes and Descriptions
Appendix B…Object Classes Included in Analysis
Office of Acquisition and
Logistics Management
99
Items for price comparison were identified using this
methodology
Using this methodology, the team identified approximately 50 items for price comparison analysis
1. Data from GDC’s Stock Master Report, NIAID’s AMBIS and NIDDK’s POTS system were imported into
Microsoft Access
2. Item description specific key words like “Biomax” or “Kodak” were used to define the search criteria. For
example, when Biomax film products were searched, 58 unique item descriptions including the word “Biomax”
were displayed
3. Based on the search results, each unique item was compared to the GDC’s item descriptions to find a match
for comparison
4. When identical items descriptions were found, the item’s price and unit of issue was confirmed.
– For GDC items
– The unit of issue was confirmed in NBS
– The price was confirmed using the price of that item on the most current fully received purchase order
– For NIAID and NIDDK items
– Unit of issue was confirmed on the vendor’s website
– Price was difficult to confirm on the vendor’s website since the majority of buyers typically receive an
undisclosed NIH discount on items and the price listed on a vendor’s website today would more than
likely not reflect the price for that item a year to six months ago
Appendix C…Methodology for Item Price Comparison
