AFLCMC… Providing the Warfighter’s Edge Think Differently…. When Will We Get Serious About BBP...

AFLCMC… Providing the Warfighter’s Edge

Think Differently….When Will We Get Serious About BBP and Speed with

Discipline?

23 July 2013

AF Life Cycle Management Center

Colonel Cameron HoltDirector of ContractingAFLCMC/PK-OL Eglin

“Speed with Discipline”


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Agenda

• Challenge We Face• Assessment of Current Approaches to BBP• Current AFLCMC PK-OL Initiatives Snapshot• Highlighted Opportunities

– Speed w/Discipline: Cycle Time Reduction w/BBP– Acquisition Innovations & Strategic Sourcing

• Barriers to Acquisition Innovation at Eglin

AFLCMC… Providing the Warfighter’s EdgeAFLCMC… Providing the Warfighter’s Edge

AF PEO/WP ThoughtsBriefed at RPDS March2012

• Declining Budgets Will Present Significant Opportunities• Rapidly Changing Defense Landscape• Programs That Can’t Keep Up Will Not Survive• The Defense Team Needs to Innovate

– Not just on technology, but how we maximize procurement funds

396ABW-2012-0013

New Environment Demands New Thinking

Challenges We Face


Unstable buys cause the closure of production lines and the laying-off of skilled full-time workers. Specialized manufacturing capacity and human capital cannot be regenerated without great cost and significant time. (USA007065-11, pg1)

Quantity, Quality, and Price

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Quantity

Quality

Price

EOQ Min Quantities Current Practice


A-A Enterprise Look

5

Missed opportunity to leverage buying efficiencies

AMRAAM NGM

96ABW-2012-0013


6

• Comprehensive reviews of Indirect Costs with focus to increase buying power

• Maximizing efficiencies through competition and business strategies

• Identifying cost drivers and developing should costs for production programs

• Analyzing benefit/need of weapons warranties

Better Buying Power Initiatives

D-B

C

B+


Current Initiatives Snapshot

BusinessLeadership

ContractingExcellence

OrganizationalCredibility

Support to AFLCMC Objective 1 Team-Deliver Cost Effective Acq Solutions

Analyze/Improve Cycle Time--Current data source inaccurate

Manning Risk Mitigation-Focus on hiring-Intern graduations-Rotate critical skills vs. needs

Support to AFLCMC Objective 3 Team-Launch High Confidence Sustainable Programs

Cycle Time Reduction Initiatives:-Audit Timeliness/“Intelligent

Requestors of Data”-Improve Contractor Proposal

Process/Coordination

Re-imagine Battle Rhythm and Reporting Processes-Revamp suspense/workflow-Support LCMC 100-Day TF look-Compliance with AFMCI 64-116

Mature Rapid Acquisition-Fast and Right-Develop RA procedures-Evaluate “Big Safari” approach

Enhance Source Selections-New SSAC roles/training

-Implement course w/DAU-Standardize low dollar process

Formalize CRB Process Across Centers

Divestiture: Offloading rocks from the rucksack

(Dreamworkz)

Reexamine Service Contracting Processes-Implement CORT Tool-Enable COR Checklists

Recommend, Implement New Metrics for AFLCMC, AFTC and local BL, CE interest items

Pursue Acquisition Innovations:-Portfolio Best Value Competition-ASPUD

Implement AFTC/PK Purchase Request Tracking Database Tool - Examine for usefulness to All Centers PR tracking

Automate Whatever Possible-Complete C&A Certification-Evaluate Automation Opportunity

Actual

Planned

0 50 100 150 200 250 300 350 400 450 500

AMRAAM Lot 27

Req Dev/RFPProposalAudit/Tech EvalPricingNegotiationsKt Award

Days

Actual

Planned

0 50 100 150 200 250 300 350 400 450

JASSM Lot 11

Req Dev/RFPProposalAudit/Tech EvalPricingNegotiationsKt Award

Days

Planned vs Actual Cycle TimesPEO-WP

AFLCMC...Providing the Warfighter’s Edge!

Process

Process

PEO/WPPricing Action Quality Schedule Award Date

AMRAAM Lot 27 30 March 13

JASSM Lot 11 30 March 13

SDB II Modification 30 April 12

PEO/WLProgram Name Quality Schedule Award Date

Program 1 30 April 13

Program 2 30 May 13

Program 3 30 January 13

Pricing Risk AssessmentACTIVE AFLCMC PRICING ACTIONS OVER $50M


NOTIONAL-Top Level

AMRAAM Lot 27 EVENT Quality Comments

Proposal Rec’d inadequate proposal. All PCAs not included in proposal. PCAs rec’d 2 weeks after proposal due date.

Rates FPRA in place

Actuals - Prime Rec’d 100% of actuals. Data was useable. Note: Prime cost represents only 20% of buy.

Actuals - Subs Rec’d 20% of actuals on major subs. 10% not useable.

Audit Audit utilized tech-eval for 80% of the exceptions

Tech - Eval Evaluation of IWAs overlooked. Revised technical eval submitted 2 weeks later.

BBP* Pricing Inputs AssessmentInputs Quality-AMRAAM Lot 27

* Better Buying Power


AMRAAM Lot 27EVENT Schedule Comments

Proposal Rec’d inadequate proposal. All PCAs not included in proposal. PCAs rec’d 2 weeks after proposal due date.

Rates FPRA in place

Actuals - Prime Rec’d 100% of actuals on time.

Actuals - Subs Rec’d 20% of actuals on major subs. 10% not useable. Rec’d timely response to all requests.

Audit Rec’d audit 2 weeks late.

Tech - Eval Rec’d 2 months late due to late audit and revisions. Took the team 2.5 weeks to fold in audit recommendations. Evaluation of IWAs overlooked. Revised technical eval submitted 2 weeks later

BBP* Pricing Inputs AssessmentInputs Timeliness-AMRAAM Lot 27

* Better Buying Power



Current Big “A” Acquisition ProcessConverts Monopsony to Monopoly

Requirements Process

1. Assess Gaps

2. Assess Capabilities

3. Identify Requirement

4. Prioritize Needs in POM process

Budget Process

1. Set priorities for POM/APOM

2. Develop POM/APOM submission

3. Submit POM/APOM

Acquisition Process

1. Receive Requirement & Budget

2. Determine Acquisition Strategy

3. Negotiate Procurement (sole source or competitive) or

exercise options

4. Award contract

ProgramTrade offs

CapabilityTrade offs

PEs by ProgramSole SourceNo Trade Off

Trade Offs Made When Quality of Data is Lowest (Unrealistic Expectations)


Proposed Big “A” Acquisition Process Turning Monopoly back to Monopsony

1. Assess Gaps


3. Establish Capability Mix Required

4. Set MPQs by Program

Set Amount for Single

Weapons PE

ACC/AQP/PEO make final portfolio buy

decision from Executable Proposals

CapabilityTrade offs

ProgramTrade offs

Acquisition Trade offs

Requirements Budget Acquisition

Single Buyer Flexibility Maintained Throughout Integrated Process


Portfolio Best Value CompetitionTurning Monopoly back to Monopsony

1. Assess Gaps


3. Establish Capability Mix Required

4. Set MPQs by Program

Set Amount for Single

Weapons PE

ACC/AQP/PEO make final portfolio buy

decision from Executable Proposals

Capability Trade offs

Program Trade offs

Acquisition Trade offs

Requirements Budget Acquisition

Single Buyer Flexibility Maintained Throughout Integrated Process


Affordable, Sustainable, Producible, Universal Design (ASPUD) Benefits

– Affordability• Dial down requirements when not needed, change out components

based on target set (allows limited use of high $ assets)• Facilitates commonality across systems, decreases unit cost

– Quick Reaction for Urgent Needs• Flexible Interface allows for increased technology insertion• Decreases Lead Times for Development of New Components• Encourages Innovation

– Aids Ability to Meet Competition & SB Goals• Allows for increased competition at component level• Resets Market Conditions to Monopsony from Monopoly• May Allow for Greater SB Participation

– Ex. Proliferation of SB Apple Apps

– Changes the Business Model• Potential for Decreased Development Costs

DA Family of Weapons

MK-84(2000 lb)

BLU-109(2000 lb) MK-83

(1000 lb)MK-82(500 lb)

Tailkit

SDB

LJDAM

MSG06-085185-033.ppt

Range Extension Kit

GBU-38 500 lbWarhead

Alternate Sensor124 cubic inches

DSU-33Proximity Fuze

Data Link Volume36 cubic inches

GBU-38Tail Kit

Wire Harnessand Cover

Laser Sensor

Data Link Antenna (2x)

Business Model Changes But Still Sustainable “Winner Take All” to “Market Share By Portfolio”


Barriers to Acq Innovation at Eglin

• Inertia of C,S,P focus and PM-level incentives• Strong defense contractors wed to “winner take all”• Manning and talent mix off-limits• Gerbil Cage• Fear of failure

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