The Kansas City Plant is one of the first NNSA sites to submit a productivity savings event under a share-in-savings program that offers NNSA contractors a share of the savings as an incentive on top of an annual award fee pool.
The Kansas City Site Office approved Honeywell FM&T’s first share-in-savings proposal in November for the purchase of used office furniture instead of new furniture, resulting in a savings of about $85,000. The estimate for new furniture was about $352,000. The used furniture cost $267,000. In addition, the used furniture is similar to that planned for the new facility being built eight miles south of the current Kansas City Plant and can be moved there later. The used furniture was also available from six to 10 weeks sooner.
The cost reduction clause also allows the contractors to reward their employees who generate the cost savings ideas. This use of share-in-savings was added to M&O contracts as a savings tool made available by the NNSA-wide Business Management Advisory Council, chartered specifically to implement enterprise-level business and operational efficiencies.
Under the program, the contractor may share in the net savings under the following formula: 50 percent of the net savings is the government’s share; 10 percent is a savings fee to the contractor; and 40 percent of the savings remains at the NNSA site.
The program is a great example of how KCP is working as one NNSA to operate more efficiently and effectively. KCP is constantly trying to work smarter and improve the way KCP does business at every level. Even small things, like buying used office furniture, can help KCP do its part to save money when budgets are tight.