Item No. 4 supp 
Meeting Date: July 26, 2016 
Procurement Excellence 

Nora Huey 
Director, CPO

Procurement Excellence 
Transform Central Procurement Office (CPO) & other procurement
stakeholders 
Building capabilities 
Changing the way we work 
To better support 
Century Agenda goals 
Ease of doing business with the Port 
Business growth and results 
Commenced Phase 2 with Boston Consulting Group in April 
Purpose of today is to share an update on progress 
1

Where we are today 
What they impact 
7  Century Agenda Goals 
11 Business Partner / Speed 
35  Active initiatives 
11 Cost Efficiency 
As of June 30 
6  Port Capabilities / Tools 
Reflects primary impact only  some initiatives have
multiple impacts 

Broad Port-wide engagement in place to deliver 
2

Port-wide procurement strategy 
1  Support our values and drive Century Agenda goals 
2  Make the Port a better partner to do business with 
3  Plan ahead and work collaboratively 
4  Drive rigorous and transparent decision-making 

Following pages highlight examples of these in practice 
3

1  Values 
Port-wide small business (SBE) goals 
% total SBE utilization 
Target 
50

40%        40% 
40                              38% 
35%        36% 
33% 
30

20

10

0
2015       2016       2017       2018       2019       2020
Goal of 40% total SBE utilization by 2020 
4

1  Values 
Port-wide small business (SBE) goals 
% total SBE utilization 
Target 
50

40%        40% 
40                              38% 
35%        36% 
33% 
30                    26%                             27% 
30%                  24%        25% 

20
Forecast assumes:                   Forecast based on 
17% for IAF                        current trends 
10    16% for NSAT 
13% for Baggage Optimization 
0
2015       2016       2017       2018       2019       2020
We need to change course to hit our goal 
5

1  Values 
Port-wide women and minority-owned
business (WMBE) goal 
Target 
% total WMBE utilization 
10% 
10

8

6

4
3% 

2

0
2015                       2020                       2025

Must increase total WMBE target by 2025 
6

1  Values 
Port-wide women and minority-owned
business (WMBE) goal 
Target 
% total WMBE utilization 
10% 
10

8

6

4
3% 
3%            2%    3%    3% 
3%                                  Forecast based on 
2
current trends 
0
2015                       2020                       2025

We need to change course to hit our goal 
7

1  Values 
Improve utilization of SBE/WMBE 
Plan         Do        Check        Act 
Procurement    Supplier      Monthly      Develop
calendar      outreach &     SBE/WMBE      mitigating
development     utilization     actions if off
Supplier                               track 
database     Expanded Port    Supplier
Gen training     performance
Earlier                   versus target 
acquisition       Apply
planning     appropriate bid
& contract levers 

Port staff collaborating on these actions 
8

1  Values 
Decision framework will drive focus 
Century Agenda goals are considered
in each procurement 
Goal is to facilitate discussion 
SBE Levers 
Strategic Procurement Levers 
Contracting Method 
Supplier Outreach 
Environmental Strategy 

See next page for detail 
9

1  Values 
Decision framework detail 
Illustrative questions to address 
What is target SBE utilization for this work? 
Which bid levers will you apply? 
Preferential Scoring 
Price Advantage 
Target Requirements 
Set-Asides 
Carve Outs 
Coordinated Purchasing 
If you did not apply any levers, please explain why not 
Framework to be used on each procurement 
10

1  Values 
Potential tradeoffs 
Contracting more with small    We are willing to accept this
business might lead to:              risk if: 
Less competition 
Cost is within 10% of
Higher Cost  More fixed overhead    comparative estimate 
per employee 

Less resource depth 
Slower                Product, service or project is
Speed   Learning curve       less time-sensitive 
working with Port 
Some risk will be required to hit our goals 
11

2  Business partner 
Improving ease of business 
What we want to accomplish 
Empower Port to address process challenges 
Instill a continuous improvement mindset 
Improve business partnerships (internal and external) 

Small Works            Service Agreements 
Examples  -Insurance requirements     -Selection process 
-Contract terms           -Scope of work 

Easier to work with the Port  particularly for small business 
12

3/4 Planning & Rigor 
Planning & rigorous analysis in action 
Collaboration     Planning       Analysis 
Aviation         Not reactive      Best practices 
Airport   Strategic      Contract design   Benchmarks 
Initiatives / CPO    Small business
Janitorial 
plan 
Impact: Return on Investment, Customer Experience 
Aviation         Not reactive      Total cost (incl.
Baggage  Strategic     Contract design   energy use) 
System   Initiatives / CPO   Data sharing 
Parts    Legal 
Impact: Lifetime Cost, Environmental
All key procurements should have similar rigor 
13

Financial savings on track 
Projection exceeds        Long-term savings
12 month target         significantly higher 
$M 6                             Identified $12M NPV 
Target        Identified $4M+ annual 
4
$4M 
Significantly more
2                              savings enabled by
capability building and
0
culture change 
Jul  Oct  Jan  Apr  Jul 
'16 '17 '17 
Developing Port capabilities is key to long-term impact 
14

Port building capabilities, 
owning effort 
Trainings and workshops on: 
Procurement strategies 
Process improvement 
Project management 
Century Agenda bid levers 
Total Cost of Ownership (upcoming) 
Negotiation (upcoming) 
Increasingly applied in day-to-day work 
Port identifying, driving new opportunities based on trainings 
15

Thank you! 
Questions? 
16