PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6a
Date of Meeting
July 26, 2011
DATE: July 15, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: Kurt Beckett, Chief of Staff
David Soike, Director, Facilities and Capital Program
Kristal Roberts, Manager, Organizational Development
SUBJECT: Process Improvement IDIQ Contract
Amount of This Request: $0 Source of Funds: Current and Future Operating Budgets
Maximum Value of IDIQ Contract: $300,000
ACTION REQUESTED:
Request Commission authorization for the Chief Executive Officer to execute a professional
services indefinite delivery/indefinite quantity (IDIQ) contract to perform continuous process
improvement services with a total value of $300,000 and contract duration of two base years plus
two individual option years for a total of four (4) years. No budget authorization request is
associated with this authorization.
SYNOPSIS:
Continuous process improvement aims at improving an enterprises efficiency and customer
satisfaction by focusing on simplification and elimination of wasted steps and effort within
everyday processes as a tool to help boost organizational success on an ongoing basis. Major
employers in our region, such as Boeing, Paccar, Esterline, Alaska Air Group, Amazon, Virginia
Mason, and Seattle Children’s Hospital have all benefitted from similar successful efforts
targeted at improving the efficiency of internal processes. This kind of activity is commonly
known as ‘lean’ or ‘lean production.’ It is a philosophy that helped Toyota grow from a small
company in the 1930s to one of the largest in the world today. Lean focuses on maximizing
value for the customer by operating efficient production systems that eliminate waste within the
system processes. Finding a new way to procure parts and overhaul a bus engine in a shorter
time frame, or a new way to generate and publish this particular final memorandum document in
fewer steps could each be an example result of a ‘lean’ or continuous process improvement
philosophy.
Port employees utilize standardized work processes each day to generate output for customers
that can be either internal or external. Many of these processes have not benefitted from a
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
July 15, 2011
Page 2 of 5
comprehensive improvement review, analysis, and redesign in many years and, in some cases,
decades. Port employees closest to the work have the greatest knowledge about the processes
that they use day-in and day-out. As such they possess valuable knowledge and skills about how
those processes can be improved. The Port’s continuous process improvement initiative will
leverage their knowledge to improve processes over time at all levels throughout the
organization. The benefits of more efficient internal processes include freeing up staff time to be
able to direct to other work and various opportunities for cost savings, customer service, and
quality improvement.
In accordance with the Port’s strategy to be a high-performance organization, and the Airport
strategy to reduce airline costs without compromising operational needs, staff proposes to
advertise and select one qualified firm to provide services related to improving the Port’s internal
work processes. The IDIQ contract would provide foundational information for senior
executives to gain understanding in continuous process improvement benefits and methodology;
facilitate their leadership in continuous process improvement; advise on the appropriate pace to
make improvements; provide written communication and training plans; and provide
implementation analysis, review, and consultation as necessary. The contract will include
provisions for small business participation as specified by the Port’s Office of Social
Responsibility.
BACKGROUND:
The Port strives to be a high-performance workplace. As such it seeks to continuously improve.
Port staff are embarking on a long-term journey to create a self-sustaining culture that fosters
measurable continuous improvement. This initiative is consistent with, and complementary to,
the development of long-term strategic goals and identification of effectual performance metrics.
The metrics initiative will help steer the direction for certain performance enhancements of the
Port’s various businesses, while over-time the continuous process improvements will provide
support toward the business enhancements.
The culture of continuous process improvement endures and thrives with careful education and
responsive leadership. Education of employees in process improvement techniques allows them
to see inefficiencies better, and leadership support to allow the employees to eliminate those
inefficiencies reinforces a positive culture of continuous improvement. As a result employees’
interest and feeling of ownership over their work grows as the transactional processes, that are in
use in everyday activities, continue to evolve to become more efficient over time.
IDIQ contracts provide the Port with flexibility to meet business requirements as they arise by
issuing individual service directives to accomplish tasks within the general, pre-defined scope of
work on an as-needed basis for a fixed period of time and a maximum contract amount.
Competitively bid IDIQ contracts are a widely used public sector contracting tool, consistent
with the Port’s Resolution No. 3605, as amended, and governed by Central Procurement Office
(CPO)-1 policy.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
July 15, 2011
Page 3 of 5
PROJECT JUSTIFICATION:
This IDIQ contract will enable the Port to initiate a continuous process improvement initiative
that was approved in the 2011 annual Aviation budget. The initiative will commence with
consulting expertise and with an aviation full time equivalent employee that was also approved
within the 2011 budget. Accomplishing process improvements will eliminate inadvertent waste,
provide efficiencies and save various types of costs.
PROJECT SCOPE OF WORK AND DURATION:
Prepare and execute an IDIQ contract for Process Improvement Services that will include:
Gain an understanding of the Port and its initiatives in order to assess the readiness of the
Port to begin the journey of continuous process improvement
Educate senior executives and working team on proven process improvement techniques
Prepare to build in-house capabilities by preparing customized syllabus and training
materials
Prepare communication plan for senior executives, working team, and staff
Conduct improvement workshops as directed by Port staff
Provide periodic progress monitoring and evaluative consulting as directed by Port staff.
The contract will be competitively procured and will have a contract ordering duration of two
years plus two 1-year options for a total of four years from the date of execution. Service
Directives will be executed during the contract ordering duration and the contract period may
extend beyond four years in order to complete work. Service Directives will not be executed
after expiration of the contract ordering duration.
FINANCIAL IMPLICATIONS:
The contract will be written with a not-to-exceed amount of $300,000. The Port will authorize
work under individual Service Directives. The costs for services to be performed under this
IDIQ contract will be included in annual operating or capital budget requests that are subject to
Commission approval.
Individual Service Directives consisting of a scope, fee agreement and schedule will be
negotiated and processed before any work is performed. There are no guarantees that the Port
Commission will approve operating budget items for this work in future years, or that staff will
initiate any Service Directive.
No budget authorization request is associated with this Commission action.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
July 15, 2011
Page 4 of 5
ENVIRONMENT AND SUSTAINABILITY:
The continuous improvement work is not expected to impact the environment, unless
improvements in process, for example, result in less usage of paper, natural gas consumption,
etc. Improvements in the methods of accomplishing the Port’s work will create efficiencies in
terms of freeing up available time for employees to perform other higher value work and may
remove inefficiencies that in turn minimize resource needs, both of which improve the long term
financial sustainability of the Port.
STRATEGIC OBJECTIVES:
This IDIQ agreement supports the Port’s strategy to create a High Performance Organization by
providing a readily available methodology for the Port’s greatest resource, its employees, to
analyze and improve the processes that often dictate the way employees transact their everyday
business. This agreement also supports the Airport’s Strategies to operate a world class airport
and to keep the cost per enplanement as low as possible.
TRIPLE BOTTOM LINE SUMMARY:
Improvement in the Port’s processes would benefit customers who seek efficient interactions and
services from Port staff, benefits the community because more efficient business activities can
only positively benefit the regional economy, and may benefit the environment also as we strive
to be the greenest Port in the world.
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS:
Alternative 1) Do nothing: This alternative would not result in widespread improved processes
across the Port. Under the do nothing alternative, there would not be a focused effort to use the
knowledge of all of our employees to over-time update transactional processes they deal with
each day. This is not the recommended alternative.
Alternative 2) Utilize Port staff rather than retain consulting services to move this long term
initiative forward. To be effective in setting up an enduring initiative, the best information and
education regarding how to most effectively go about this work must be gathered from the
marketplace beyond the Port. All Port staff are already fully engaged in other work. As a result
available staff time and expertise is unavailable in-house. This is not the recommended
alternative.
Alternative 3) Prepare one Category III procurement for these specialized services. This
alternative ensures a competitive process, encourages small business participation, and provides
staff with the tools needed to respond in a timely manner to requests for service. This is the
recommended alternative.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
July 15, 2011
Page 5 of 5
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:
There are no other documents associated with this request.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS:
There are no previous single actions or briefings associated with this request, however the
continuous process improvement initiative was identified in budget documents and presentations
made for the Commission last fall.
