Board Brief Operational Report Neal J. Couture, CPCM Executive Director Board of Directors Meeting...

Board BriefOperational Report

Neal J. Couture, CPCM

Executive Director

Board of Directors Meeting

December 3, 2006

Tysons Corner, Virginia

Finance

EAC BUDGET ACTUAL ACTUAL ACTUAL ACTUAL

FY 07 FY 07 FY 06 FY 05 FY 04 FY 03

Revenue 5,591,666 5,518,336 5,033,102 4,806,466 4,271,639 3,807,322

Expenses 5,563,613 5,427,489 4,960,765 4,568,991 4,091,717 4,103,691

Net gain from operations 28,053 90,848 72,337 237,475 179,921 (296,369)

Net Investment Revenue 132,176 106,635 85,554 129,389 143,003 126,962

IT Investment 49,692 49,692 0 0 0 0

UBI Tax 90,000 90,000 108,000 134,930 35,755 16,516

Net Gain (loss) after Taxes 20,536 57,790 49,891 231,934 287,169 *531,455

•Annual growth is averaging ~10% since FY 03.

•Major investments in IT and Leadership Development Program beginning in FY 06.

Revenue

$3,000,000

$4,000,000

$5,000,000

$6,000,000

Revenue 3,807,322 4,271,639 4,806,466 5,033,102 5,591,666

FY 03 FY 04 FY 05 FY 06 FY 07

MembershipYear-to-Date Through October 2006

Revenues EAC Actual Variance

Membership Dues 380,955 363,045 (17,911) -5%

Initiation Fees 13,680 14,040 360 3%

Associate Dues 8,079 8,150 71 1%

Retired Dues 8,211 8,450 239 3%

Group Memberships 158,592 142,990 (15,602) -10%

Affinity Programs 2,795 2,662 (133) -5%

Merchandise Resales 3 0 (3)

Total Membership Revenues 572,314 539,336 (32,978) -6%

Expenses

Salaries and Benefits 60,081 63,634 (3,553) -6%

General and Administrative 4,485 2,749 1,736 39%

Membership Services 19,758 18,342 1,416 7%

Communities of Interest 0 0 0

Total Membership Expenses 84,323 84,724 (401) 0%

Membership

• In FY06, we had $1,588,522 in membership revenue.

• We increased goal for FY07 to $1,634,850., based on plans to increase membership sales connected to conferences.

• Membership revenue was slightly higher than planned, so we increased the revenue forecast to $1,653,263 in the 10/06 EAC.

• Actuals 11/06 YTD $686,505 are running ahead of EAC $681,515.

• 17,802 members on 10/31/2006 vs. 17,642 10/31/2005.

EducationYear-to-Date Through October 2006


NES 33,841 25,181 (8,660) -26%

Audio Seminars 134,879 141,296 6,417 5%

Book Sales 42,470 40,064 (2,406) -6%

E-Learning 15,535 15,865 330 2%

Total Education Revenues 226,725 222,406 (4,319) -2%

Expenses

Salaries and Benefits 61,116 61,400 (285) 0%

General & Administrative 1,726 2,350 (624) -36%

NES 21,248 11,740 9,508 45%

Audio Seminars 62,567 64,463 (1,896) -3%

Book Sales 29,726 29,573 153 1%

E-Learning 9,711 9,545 166 2%

Total Education Expenses 186,094 179,072 7,022 4%

National Education Seminar (NES) Program• In FY06, we had 63 seminars with $361,607 revenue.• We increased goals for FY07 to 70 seminars and $446,005. revenue,

based on a small price increase and a plan to increase number of seminars.

• We received fewer chapter commitments than planned, and we offered chapters discounts to generate more commitments, so we revised the revenue forecast to $380,465 in the 10/06 EAC.

• Actual revenues 11/06 YTD $43,614 are running behind of EAC $46,407.• Significantly lower expenses so far this year due in part to less travel

needed to support the NES’s we have performed.• FY07 seminar is Leadership: Building High-Performance Buying & Selling

Teams, available now.• Continue to offer Best Contracting Practices for Business, Contract

Negotiations, Performance Based Acquisition, Service Contracting: An Integrated Approach, Project Management in the Contracting Process, and The Contracting Professional as Risk Manager.

• FAR 45 Government Property Management seminar planned for when the final rule is released, probably in February.

• Earned Value Management (EVM) seminar developed, plan to release next fiscal year.

Audio-seminars Program• In FY06, we had 10 seminars with $201,627 revenue.• We increased goals for FY07 to 19 seminars and

$217,350. revenue, based on plans to launch a contracting basics series.

• Seminar attendance has been significantly higher than planned, so we increased the revenue forecast to $342,479 in the 10/06 EAC.

• Actuals 11/06 YTD $156,709 are running ahead of EAC $152,579.

• December 13: GAO Sustained Protests - 2006 Year in Review.

• Basics series:– December 14: Acquisition Planning– January 11: Contract Structure and Content– February 15: Contract Formation Policies and Procedures– March 15: Contract Administration Policies and Processes

Book Sales• In FY06, we had $118,974 in revenue.• We reduced goal for FY07 to $102,269. revenue, because

of concerns of market saturation of certification preparation manuals – particularly the GBK volume.

• Guide to Basic Contract Terms launch is earlier than plan, so we increased revenue forecast to $112,791 in the 10/06 EAC.

• Actuals 11/06 YTD $48,997 are running slightly behind EAC $50,707.

• Three new books are scheduled for publication in December 2006: – Leadership: Building High Performance Buying and Selling Teams

– the NES manual, – Guide to Basic Contract Terms – the 3rd edition, and – Annotated Guide to the Contract Management Body of Knowledge

– the full text version of the CMBOK.

E-Learning

• In FY06, we had 6 course titles with 247 registrants, and $56,059 revenue.

• Goals for FY07 were kept similar to FY06 because of no plans to launch new courses, due to concerns of VCampus.

• Course registrations have exceeded forecasts; however, average price paid is lower than plan due to product mix, so we decreased the revenue forecast to $49,335 in the 10/06 EAC.

• Actuals 11/06 YTD $15,865 are running marginally higher than EAC $15,535.

CertificationYear-to-Date Through October 2006


CPCM 8,149 7,161 (988) -12%

CFCM 9,791 8,451 (1,340) -14%

CCCM 1,950 2,350 400 21%

Miscellaneous 0 0 0

Total Certification Revenues 19,890 17,962 (1,928) -10%

Expenses EAC Actual Variance

Salaries and Benefits 41,253 41,006 247 1%

General Program Expenses 1,235 2,022 (788) -64%

Certification Board 2,829 2,829 0 0%

CPCM 30 0 30 100%

CFCM 225 0 225 100%

CCCM 60 0 60 100%

Total Certification Expenses 45,631 45,857 (226) 0%

FY 06 Total FY 07 YTD

CCCM applications 45 15

CFCM applications 167 59

CPCM applications 9 5

Total Cert Applications 221 79

Re-certifications 454 136

Federal ExamAttemptPassPass Rate

9855

56%

158

53%

Commercial ExamAttemptPassPass Rate

4329

47%

168

50%

General ExamAttemptPassPass Rate

10728

26%

258

32%

New CPCMs 9 4

New CFCMs 12 3

New CCCMs 13 6

Total new Certificants 34 13

Certification• Numbers of certification applicants, recertifications, and new certificants are running

consistent with or ahead of FY 06 pace for the first four months of FY 07.• Pass rates for Federal and Commercial Module Exams YTD are in the ballpark. ‘Target’

is 60%.• General Business Module pass rate remains well below ‘target’, but is continuing to trend

upward. • NCMA reduced certification application fees effective July 1st, 2006 to bring mandatory

program costs in line with that of the Certified Purchasing Manager (CPM) program offered by the Institute for Supply Management (ISM).

• CKO and Certification Program Administrator attended training on ANSI / ISO accreditation standards in mid-September. Requirements are quite formidable. CKO building business case and roadmap to accreditation weighing costs, benefits, and time required.

• A contract was signed in late October 2006 to convert to a new testing service provider (Kryterion). Go-live date is targeted for March 1, 2007. Current provider, Prometrics, has been the subject of numerous, valid customer complaints.

• A second contract with Kryterion was signed in late October 2006 for complete psychometric analysis of all versions of all three examinations (Federal, General Business, Commercial) and candidate results from new program inception to date. Results of this analysis are expected in January 2007. This analysis on a periodic basis is a requirement of ‘good practice’ consistent with pursuit of accreditation. It will provide a sound basis for changes to examination content to align future candidate results with program goals.

MeetingsYear-to-Date Through October 2006


ADC (July) 140,180 140,180

GCMC (December) 0 0

Executive (February) 0 0

World Congress (April) 0 0

Total Education Revenues 140,180 140,180 0 0%

Expenses


General & Administrative 2,648 2,908 (259) -10%

ADC (July) 79,325 79,325

GCMC (December)

Executive (February)

World Congress (April)

Total Education Expenses 124,046 125,362 (1,316) -1%

Meetings

• The FY 07 plan dropped the Commercial Contracting Conference (October) and added the Executive Contract Management Conference (February).

• The Aerospace and Defense Contracting Conference held in Garden Grove, CA in July 2006 exceeded revenue budgets ($140,180 vs. $120,175).

• The Government Contract Management Conference will exceed revenue goals.

• No changes to forecasts for the remaining conferences.

Conference Portfolio Performance HistoryFY2007 FY2006 FY2005 FY2004 FY2003

Aerospace and Defense Contracting Conference

Revenue: $139,880Expense:$78,721

Net: $61, 159

Revenue $104,804Expense $58,499

Net $46,305

Revenue $161,250 Expense $69,342

Net $91,908


Net $96,779

Not held in this fiscal period.

Commercial Contracting Conference

Not Held Revenue $87,775Expense $59,356

Net $28,419


Net $29,450

Not held in this fiscal period.


Net $21,833

Executive Conference

ForecastRevenue: $210,450Expense: $156,238

Net: $54,212

Not Held Not Held Not Held Not Held

Government Contracting Conference

ForecastRevenue: $276,225Expense: $138,194

Net: $138,030

Revenues $238,525Expenses $114,644

Net $123,881

Revenues $248,490

Expenses $110,203Net $138,287


Net $85,267


Net $160,685

World Congress Forecast:Revenue: $1,096,775

Expense: $617,863Net: $478,912

Revenue $ 927,805Expense $ 515,907

Net $411,898


Net $ 501,816


Net $277,902


Net $195,914

Total Conferences ForecastNet $ 732,313

Net $610,503 Net $ 675,352 Net $459,948 Net $378,432

CommunicationsYear-to-Date Through October 2006


Buyers Guide 42,000 42,000 0 0%

Career Programs 151,189 157,050 5,861 4%

CM Magazine 144,600 144,274 (326) 0%

Website 16,450 10,700 (5,750) -35%

Corporate Sponsorships 10,000 16,000 6,000 60%

Educational Partners 18,160 18,160 0

Reprints 500 374 (126) -25%

Total Communication Revenues 382,898 388,558 5,659 1%

CommunicationsYear-to-Date Through October 2006

Expenses EAC Actual Variance


General and Administrative 16,830 16,830 0

Board of Advisors Directory 3,500 0 3,500 100%

Buyers Guide 36,050 36,064 (14) 0%

Career Programs 16,120 16,000 120 1%

Contract Management 155,489 155,812 (323) 0%

BPA Audit 2,919 2,919 0 0%

Journal 10,694 10,694 0 -3%

Website 6,973 4,969 2,004 29%

Corporate Sponsorships 2,750 2,750 0 0%

Educational Partners 5,138 5,137 1

Reprints 0 0 0


Total Communication Expenses 355,508 351,337 4,171 1%

Communication

• In FY06, we had $1,291,451 in communication revenue.

• We decreased goal for FY07 to $1,273,387., based on education partner risks and hedging against drops in CMJobs.com ads.

• CM Magazine ads revenue was slightly lower than planned, so we decreased the revenue forecast to $1,264,402 in the 10/06 EAC.

CommunicationsContract Management Magazine• Article submissions remain steady for the next several months…we

are holding steady with ad revenue and anticipate ending the year at EAC of $534,800.

• The 2007 Resource Guide was polybagged with the November 2006 issue of Contract Management.

• A new NES brochure with dates and locations was polybagged with the December 2006 issue of Contract Management.

• A revised Knowledge Catalog will be polybagged with the January 2007 issue of Contract Management.

Books• The new NES book by Gregory A. Garrett, Leadership: Building High-

Performance Buying and Selling Teams, is in the office. We are working on the companion workbook for the seminar…it will be ready for the December GCMC06 conference. This Leadership book as well as the newly revised Desktop Guide to Basic Contracting Terms and the CMBOK (annotated and revised) will be ready by to sell at the GCMC06.

Governance and Component RelationsYear-to-Date Through October 2006

Governance EAC Actual Variance

Board of Directors 33,913 32,483 1,430 4%

Committees 2,743 2,249 494 18%

Annual Report 0 0 0

Total Governance 36,656 34,732 1,923 5%

Component Relations EAC Actual Variance

Chapter Support 33,237 31,254 1,983 6%

Awards 974 0 974 100%

Board of Advisors 252 252 0 0%

Council of Fellows 3,147 3,147 0 0%

Leadership Development 23,352 23,696 (344) 0%

Total Component Relations 60,961 58,349 2,613 4%

AdministrationYear-to-Date Through October 2006

Administration EAC Actual Variance

Salaries and Benefits 197,947 197,854 94 0%

Administration 154,044 150,667 3,377 2%

Building 50,863 50,455 408 1%

Finance 55,750 57,306 (1,556) -3%

Marketing 132,767 129,355 3,412 3%

Total Administration 591,372 585,637 5,735 1%

Special Projects

• Relocation– Sublease executed 10/15/06.– Purchase contract executed 11/29/06.– Move-in scheduled 2/15/07.

• IT systems– LAN management in-house effective 11/1/06.– Microsoft CRM go-live 12/22/06.– ResultsDirect CMS and EducationDirector kick-

off 3/07.

Board Brief Operational Report Neal J. Couture, CPCM Executive Director Board of Directors Meeting...

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