Eric Bathras: The Lesson from BTOP is De-risking Vendor Supply Chains

Broadband infrastructure projects need to exemplify innovation in management of procurement processes.

Eric Bathras: The Lesson from BTOP is De-risking Vendor Supply Chains
The author of this Expert Opinion is Eric Bathras, the global broadband leader for AECOM

In 2010, Maryland’s Department of Information Technology was awarded one of the largest NTIA grants nationwide, approximately $160M. As the prime recipient, DoIT was responsible for designing and constructing 1,300 fiber miles and connecting nearly 1,100 community anchor institutions. With an allocation of approximately $4.25B within the NTIA’s BTOP program, it became evident that the One Maryland Broadband Network would face immense competition for resources, contractors, and products.

As NTIA’s broadband allocation now exceeds ten times the size of BTOP, the lessons learned from OMBN become invaluable for de-risking vendor supply chains in today’s competitive environment.

Early Recognition and Strategic Approach: OMBN identified three critical path items early in the process: ensuring timely product supply on a large scale (such as conduit, handholes, and fiber), creating a frictionless competitive public solicitation environment and standardizing products and installations.

Initiated Early Engagement with Product Manufacturers: Proactively meeting with manufacturers, OMBN confirmed product availability and explored project pricing. By establishing clear expectations for the delivery of products and comparing it to the projected installation schedule, OMBN secured an initial subset of the required products. This facilitated a comprehensive assessment of procurement speed, aligning seamlessly with construction procurements and installations.

Implemented Product Standardization: Actively pursuing the standardization of fiber, conduit, and handhole sizes added significant value. This approach fostered predictability and consistency streamlining oversight, installation procedures, learning curves for new personnel, splicing activities, and logistics, contributing to a more cohesive and cost-effective project execution.

Instituted Shared Definitions: Implementing standardized naming and numbering conventions for installations distinguished segments as underground construction or applications for aerial installation. This shared approach held value by promoting a common language and understanding among internal and external project stakeholders. The standardized definitions contributed to enhanced communication, streamlined documentation, and a more efficient workflow. It facilitated smoother collaboration, reducing potential misunderstandings, and led to a more organized and effective project management process.

Streamlined and Simplified Procurements: Initiating RFQ solicitations formed deep construction contractor and product supplier pools. Prior to the start of the BTOP project, DoIT established a Cable & Wire Contract, resulting in a pool of approximately twenty pre-qualified contractors eligible to bid on construction and product supply RFPs. This diverse pool ranged from small, local businesses to national vendors.

For product supply solicitations, OMBN implemented just-in-time delivery specifications in subsequent RFPs for conduit, handholes, and fiber. Aligning with construction RFPs, the creation of a product vendor pool provided the OMBN the necessary depth, diversity, and flexibility between regional and national suppliers. By leveraging this approach, suppliers may be willing to take on upfront storage and logistics risks, enabling the release of products without the burden of a large storage space. Maintaining a diverse supplier pool will afford your organization greater redundancy in addressing supply chain bottlenecks when they arise.

To encourage competitive bidding and cost-effectiveness, installation RFPs were released in reasonable and manageable distances. This allowed local and regional contractors to compete effectively against national counterparts, eliminating burdensome bonding requirements. It also promoted competitive pricing, facilitating a mix of wins between smaller local companies and regional and national contractors, resulting in cost savings that could be reallocated across the project where there may be other budgetary constraints.

OMBN tailored underground construction and fiber installation RFPs for labor only, except for contractors being responsible for consumables such as ground rods, conduit end caps, and muletape. By shifting the risk associated with consumables away from the infrastructure owner, OMBN minimized unnecessary complications or material waste. Additionally, for underground segments, invoice or payment milestones were linked to successful conduit proofing, while for aerial segments, milestones were tied to the successful installation of fiber master reels. This approach facilitated predictable and prompt completion of work and invoicing, preventing unfinished segments or applications and discouraging contractors from delaying handhole completion and restoration.

Efficiently Managed the Supply Chain: OMBN was able to manage the entire product supply chain within a reasonable outdoor secured storage space to help mitigate risks and reduce costs. Ordering fiber, conduit and handholes by the truckload secured the greatest discount and provided predictability in the organization and management of the storage yard. This not only mitigated potential risks but also contributed to a streamlined and efficient supply chain, enabling better cost control and resource utilization throughout the project lifecycle.

Achieved Significant Cost Savings and Project Success: OMBN realized considerable financial savings, surpassing $5M in budgetary efficiency. This fiscal prudence allowed for funds to be allocated towards backbone and CAI expansion. The outcome was an exceptional project completion rate, exceeding 107% on fiber miles and 121% on connected CAIs within the rural counties. This surpassed the initial grant targets, demonstrating not only the project’s financial efficacy but its substantial impact on extending connectivity to un(der)served areas not originally anticipated.

These breakthrough procurement and logistics strategies exemplified innovation in the management of the procurement processes, the cultivation of strategic vendor engagement, and the implementation of efficient supply chain practices. OMBN’s overachievement underscores the significance of well thought out planning for large-scale, complex broadband infrastructure projects. In environments where competition for resources is as relevant and challenging as the completion of the work itself, these demonstrated approaches not only showcased ingenuity but also affirmed the spirit of partnership between the infrastructure owner, the project team members, construction contractors and product vendors.

Eric Bathras is the global broadband leader for AECOM. In 2010, he served as the program manager for OMBN responsible for the planning, design and implementation of the state’s NTIA/BTOP grant in the rural counties. He later went on to serve as the director of network operations for networkMaryland. Today, he has architected the Smartest Street in America, has been an invited speaker at the Wharton School of Business and National League of Cities and advises hyperscalers, public sector entities, broadband authorities and DOTs on best practices to plan and expand their local, regional and global fiber infrastructure. This Expert Opinion is exclusive to Broadband Breakfast.

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