WASHINGTON – The Advancing Navy Commodities Cost Reduction (ANCCR, pronounced "anchor") Program has realized its first cost savings for a pilot analysis at Naval Station Rota by using market projections and forward contract prices to recommend a new competitive electricity procurement strategy, resulting in $200,000 in savings over the term of the contract.
The ANCCR team also developed an Internal Government Estimate (IGE) that was within 1 percent of the awarded contractor’s bid price, highlighting the accuracy and sophistication of ANCCR’s analytical capability and validating the procurement strategy.
Within Naval Facilities Engineering Command (NAVFAC) Europe Africa Southwest Asia (EURAFSWA), the ANCCR program has been lauded as setting a new standard in contracting.
"Thanks to the ANCCR teamwork, we can speak of a successful strategy and effort. In addition to the tangible savings, we've also improved the contract language and the overall solicitation process," said Maurizio Caschera, FEC EURAFSWA Public Works Utilities Manager. "Our Acquisition support line was very impressed by the team's market analysis and the IGE."
The ANCCR program serves as a community of expertise for Department of the Navy (DON) utilities procurement that drives cost reduction and process improvement. The goal of the Program is to identify 5 percent savings opportunities on purchased utility commodity costs by December 2019, which establishes a one-time target of $40 million.
"The DON has a big utility bill. If we improve how we purchase utilities, even saving a small percentage results in serious savings," said Rear Adm. Bret J. Muilenburg, commander, NAVFAC. "Those savings enable resource flexibility in support of the DON mission."
NAVFAC established the ANCCR Program as part of the 2016 NAVFAC Strategic Design to reduce the cost of purchased utility commodities and create a hub of expertise for business case analysis and utility procurements.
Within its first year, ANCCR analyzed 17 separate opportunities to reduce costs at NAVFAC regions throughout the world, utilizing three strategies developed to meet the $40 million target: reducing projected utility commodity costs, identifying market and utility revenue opportunities, and optimizing enterprise-wide business processes.
To simplify the complex DON utility commodity landscape, ANCCR developed the Utility Tariff Record Management System (UTRMS), a business intelligence tool designed to analyze and visualize DON utility data, enabling cost-effective purchasing decisions.
ANCCR continues to pursue DON utility commodity cost-saving and revenue-generation opportunities from its pipeline of pilot projects. The Program is positioned to meet the $40 million target by December 2019 following strategies outlined in a comprehensive Execution Roadmap developed by the program in coordination with NAVFACs Atlantic, Pacific, and their respective echelon IV FECs.