Throughout the life of the Seaport-e Contract, the HumanTouch, LLC team will aim to reduce cost by providing low pass-through burdens, by using our process–driven approach to technical solutions, by optimizing task management, and by improving and expanding our IT tool capabilities available internally and to our partners for easy program integration. Cost savings will be addressed in individual task orders. The collective savings from each TO will be demonstrable when we have enough TOs in place to apply our approach on a larger scale, thereby creating greater economies for our support of the Seaport-e ordering activities and leading to cost reduction; or, when we have a single TO that is significantly large with a longer period of performance. Informed by our current indirect rate structures, and conscientiously working in coordination with an in-house CPA and external accounting firm to review and analyze the daily actions of the company, helps us to monitor the financial aspects of the business. If the company can reduce their indirect rates and still provide quality services, then the result is a cost savings to the client. Our goal for the Seaport-e program is to provide a target 5.25% cost savings annually based on having the volume to support cost reductions. This takes into consideration our commitment to hold to a maximum annual escalation of not greater than 3% and an all-inclusive subcontractor pass-through of not greater than 3.5%.
HumanTouch will also create a significant savings to the Seaport-e program by providing a lean program management office that complies with our CMMI Level 3, ISO 9001:2008, PMI, and ITIL certifications and processes to operate and optimize the program management and administrative support functions. We will leverage our 15 years of operating experience and existing documented processes and procedures to identify incremental approaches to the PMO function, so these functions are not needlessly duplicated on each task nor linearly increased as task order volume increases. Further, over time, we will use process improvement and task optimization techniques to decrease the allocated resource requirement to individual and recurrent program needs.
HumanTouch maintains a CMMI Level 3 and ISO 9001:2008 compliant Quality Management Process, supported by an online knowledge-base for process artifacts, assessment results, and plan templates. Our defined and repeatable processes are combined into a contract specific QA manual that is also provided electronically to all subcontractors. Following this process and with the inclusion of task specific requirements, each Task Order has a detailed quality requirements and management plan. These plans point to repeatable processes, which are embodied in documented procedures, that become a key to cost savings and to achieving best practice solutions throughout Seaport-e ordering and requiring activities.
The goal of our quality control program is producing quality deliverable the first time, every time. We are focused on the processes by which functional quality requirements are applied to tasks, supported by in-process reviews by a management IPT to ensure conformance to requirements prior to delivery. The focus on documented standardized processes for our activities ensures that our successful deliverable are repeated every time and we can integrate changes into our processes in a systematic, pre-trained and uninterrupted mode, producing predictable results. This also translates into an opportunity to support cost savings over time, through the well-documented and clearly understood approach to ensuring quality.
We are monitoring and maximizing quality through a two-pronged approach. We maintain a program-level Quality Assurance Plan that provides primary guidance to our internal and partner team. We are using defined processes as a top-level requirement, and are providing those processes to our subcontractors via our corporate (intranet) portal. We encourage the use of our repeatable process approach, but allow proven subcontractor approaches for specific task orders and in specific work areas.
For example, for a highly technical task or a complex software development task we expect the principal subcontractor to develop and maintain a TO specific QA plan. Such plans would be provided to our Program Manager and QA Manager for concurrence. If a smaller company does not have an adequate approach to QA we will provide them with HumanTouch procedures that they may follow or adapt to their organizational needs. Furthermore, we are providing subcontractors who are not CMMI or ISO certified with training in the HumanTouch procedures.
From a subcontractor management standpoint, we will integrate our team electronically and virtually. Where feasible pro-grammatically and allowable operationally, we will extend our virtual infrastructure to our subcontractors for use in support of Seaport-e based projects. Currently, all HumanTouch subcontractors perform total time accounting directly into HumanTouch’s finance and time accounting system directly. This reduces the time and level of effort required to effectively manage subcontractors and increases the speed while reducing the cost and improving the accuracy of invoice processing. This is both a present-day cost savings and at the same time provides a platform and process to reduce the incremental cost applicable to each task order. As a result, over time, the task-specific allowable cost component for performing this function goes down.
Technology and Innovation
A major reason we are able to provide this capability today, and ensure we continue to provide the benefit and associated cost reduction over time, is because HumanTouch already operates our internal systems via a commercial cloud infrastructure. All internally-facing systems, including finance and time accounting and email, are currently provided via hosted capabilities. As a result, we do not have a future cost (planned or otherwise) associated with visualizing our infrastructure and back-office functions. Over time, the incremental cost to adding to this hosted capability goes down from a unit basis. By extension, as either the number of TO’s increases, or the volume of any one TO significantly increases, the allowable portion of back-office support cost per unit will decrease. We have already seen this occur during our previous growth and expansion to our current business base.
HumanTouch will continue to look for innovations that offer both process enhancements and long term cost reductions. These cost reduction initiatives will add value to our existing customers and Seaport-e ordering and support activities. We are well-versed in seeking both technical and process innovations on an ongoing basis. As an example of this applied in practice, HumanTouch operates an IT Lab environment for the FDA that allows for rapid configuration and testing of new technologies and new combinations of technologies to determine optimal configurations, in many cases using existing assets instead of purchasing new tools. This has shown the FDA ways to reprogram present year dollars while accomplishing new goals and requirements; and, has allowed the customer(s) to lengthen the service life of items previously scheduled for decommissioning and replacement.