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Better Buying Power for Weapons

Maj Gen Scott W. JanssonAFPEO for Weapons and Director,Armament Directorate (AFLCMC)

6 November 2013For Public Release96ABW-2013-0368

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Overview

Air Force Life Cycle Management Center Overview

Armament Directorate & AFPEO Weapons Overview

PEO Focus Areas

Eglin Armament Enterprise

Better Buying Power in Weapons

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AFMC 5 Center Mission AreasContinue to Strengthen AFMC’s Role in the Nuclear Enterprise

Sustain Air Force Capabilities through World-Class Depot

Maintenance & Supply

Perform World-Class Test and Evaluation

Acquire and SupportWar-Winning Capabilities

“Cradle-to-Grave”

Advance Today’s & Tomorrow’s Combat Capabilities through

Leading-Edge Technology

Recruit, Train, and Retain a High Performing Workforce While Caring for our Airmen and their Families3

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AFLCMC Responsibility

Concept Development

Material Solution Analysis

Technology Development

Engineering & Manufacturing Development

Production & Deployment

A B COperations &

Support

IOC FOCMDD

Pre-Systems Acquisition Systems Acquisition Sustainment

LRIP/IOT&EFRPDecisionPoint

PostCDR A

= Decision Point

Acquisition and Product Support for aircraft, engines, munitions, electronics, and cyber systems; “Cradle to Grave” Best Value Solutions

Development Planning

System Development

Production

Fielding

Product Support & Upgrades

Disposal

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AFLCMC: A Revolution In Acquisition & Product Support

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AFLCMC Guiding Principles Unity of Purpose

One integrated AFLCMC team…all have a role in mission success

Enterprise focus … think and act geo-agnostic

Collaborate with & complement HQ AFMC, SAF/AQ, other Centers

Cross-portfolio, cost-effective solutions

Speed with Discipline Standard, lean, tailorable processes

Predictable workflow

Expanded capacity … “unclog the system”

Trust and Confidence Make & meet commitments

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AF Test Ctr(AFTC)

AF Sustainment Ctr (AFSC)

AF Research Lab (AFRL)

AF Nuc Wpns Ctr (AFNWC)*

AF Life Cycle Mgmt Ctr(AFLCMC)

Reporting StructuresHQ Air Force

Materiel Command

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Tanker Directorate

WPAFB, OH

Battle MgtDirectorate

HanscomAFB, MA

Mobility Directorate

WPAFB, OH

ISR/SOF Directorate

WPAFB, OH

Armament Directorate

Eglin AFB, FL

Strategic Systems

Kirtland AFB, NM

Agile Combat Support

DirectorateWPAFB, OH

Fighter/Bomber

Directorate

WPAFB, OH

C31/Network Directorate

Hanscom AFB, MA

Business Enterprise Systems

Directorate Gunter Annex,

AL

PEOs

Service Acquisition Executive

- Functionals- 66 ABG- 88 ABW- Propulsion Dir- Cost & Fin Analysis Dir- Intelligence Dir- High Pwr Directed Energy Dir- Prg Dev Integration Dir- Tech Engr Svs Dir- Contract Execution Dir- Program Execution Dir- 645th Aero Sys Group

Battle MgtDirectorate

HanscomAFB, MA

Tanker Directorate

WPAFB, OH

Mobility Directorate

WPAFB, OH

ISR/SOF Directorate

WPAFB, OH

Armament Directorate

Eglin AFB, FL

Strategic Systems

Kirtland AFB, NM

Agile Combat Support

DirectorateWPAFB, OH

Fighter/Bomber

Directorate

WPAFB, OH

C31/Network Directorate

Hanscom AFB, MA

Business Enterprise Systems

Directorate Gunter Annex,

AL

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Armament DirectorateMission & Vision

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Mission: The Mission of the Armament Directorate is to Equip Warfighters by Acquiring and Supporting War-Winning Capabilities

Vision: Delivering Affordable World-Dominant Armament Capabilities…On Time, On Target

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Off: 9%

Enlist: 5%

Civilian: 63%

CME: 23% Officer: 146Enlisted: 73Civilian: 1,019CME: 371

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$63B PEO PortfolioACAT I – 6ACAT II – 5

ACAT III – 11Projects – ~40

QRC – 1UON – 1

FMS – 521 Cases, 59 Countries

Hill

JB San Antonio

Eglin

Robins

Rock IslandPicatinny Arsenal

NAS Pax RiverIndian Head

Crystal City

RDT&E:7%

Proc: 38%

O&M:<1%CAM: 1%

FMS: 54%

RDT&E: $1,026M

Procurement: $5,262M

O&M: $2.4M

CAM: $148.3M

FMS: $7,700M

$14.3B Total Active Year 1,609 Total Manpower

Armament Directorate &AFPEO Weapons

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AFPEO Weapons Portfolio

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Sustainment

AC

AT I

AC

AT II

AC

AT II

ISp

ecia

lIn

tere

stJC

TD

IOC

TechnologyDevelopment

Engineering &ManufacturingDevelopment

Production & Deployment

Operations &Support

LRIPDecision

Review IOT&ECDR

MaterielSolutionAnalysis

PDR

• HTM

AoA

• JMM BRU

• SDB II

• HTVSF

• JASSM

• MALD

• HCSM

FOC

• CRIIS

• AFSAT• JPF• MDS HTS• QF-4 FSAT• P5CTS

• SDB I

• QF-16 FSAT

• ARTS II• CEAR

• JASSM-ER

• MALD-J

• JDAM • AMRAAM

• LRTSCM• UMTE

• HSSW• AWL

• APKWS

• NGAAW

• NKCE

• MOP

• JTE

A B C FRP

June 2013

• A2K• A5K

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Long Range Systems

• JASSM• JASSM-ER• MALD• MALD-J

• JASSM• JASSM-ER• MALD• MALD-J

ACAT IACAT IIACAT III / Proj

Strategic Systems

• B61–12 TKA• LRSO• B61–12 TKA• LRSO

Specialized Program Management

Munitions Sustainment

• JDAM• HCSM• Flares

• JDAM• HCSM• Flares

• HARM• CAD/PAD• Small Arms

• HARM• CAD/PAD• Small Arms

Test and Training

• QF-16• AFSAT• P5 CTS

• QF-16• AFSAT• P5 CTS

• QF-4• QF-4

Combat & Mission Support• JTE• UMTE• ARTS• Legacy Threat Sys

• JTE• UMTE• ARTS• Legacy Threat Sys

Nuclear Deterrence Ops

Air Superiority

Space Superiority

Cyberspace Superiority

Global Precision Attack

Rapid Global Mobility

Special Operations

Global Integrated ISR

Command and Control

Personnel Recovery

Building Partnerships

Agile Combat Support

Education and Training

Service Core Function Support

Direct Attack

• HTVSF• JPF• Fuzes

• HTVSF• JPF• Fuzes

• F-35 Spt• F-35 Spt

Miniature Munitions

• SDB II• SBD I• BRU-61

• SDB II• SBD I• BRU-61

Air Dominance

• AMRAAM• AIM-9X (Navy-led)• MDS HTS

• AMRAAM• AIM-9X (Navy-led)• MDS HTS

Advanced Programs

• Med Cal Ammo• Project Hammer• SFSS

• Med Cal Ammo• Project Hammer• SFSS

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PEO Focus Areas

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1. Disciplined program execution2. “Should Cost” 3. Increased competition 4. Reduced sole source costs (prices)5. Increased flexibility in our contracts6. Increased contractor accountability7. Improved relationships 8. Improved Integrated Weapon System Mgmt (IWSM)9. Well-integrated Armament Enterprise10. Improved/streamlined hiring process

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Eglin Armament Enterprise

Service Core Functions

Transition Technology to Weapon Systems & Provide War Winning Capabilities On Time, On Cost

CFMP / Req’t / Gap ID Dev Plan / Roadmap Dev / Test / Field

Science & Tech

• AFRL/RW• DTRA

ConceptMaturity

• AFLCMC/XZW• DARPA

Test &Evaluation

• 96 TW• 53 WG• AFOTEC Det 2

• ACC• AFGSC• AFMC• Et al

ProgramExecution

• PEO (Weapons) • AFLCMC/EB

Deliver Capabilities & Fill Gaps

Nuclear Deterrence Ops

Air Superiority

Space Superiority

Cyberspace Superiority

Global Precision Attack

Rapid Global Mobility

Special Operations

Global Integrated ISR

Command and Control

Personnel Recovery

Building Partnerships

Agile Combat Support

Education and Training

Nuclear Deterrence Ops

Air Superiority

Space Superiority

Cyberspace Superiority

Global Precision Attack

Rapid Global Mobility

Special Operations

Global Integrated ISR

Command and Control

Personnel Recovery

Building Partnerships

Agile Combat Support

Education and Training

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ProgramExecution

• PEO (Weapons) • AFLCMC/EB

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Better Buying Power 2.0

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1. Achieve affordable programs2. Control costs throughout the product life cycle3. Incentivize productivity and innovation in

industry and government4. Eliminate unproductive processes and

bureaucracy5. Promote effective competition6. Improve tradecraft in acquisition of services7. Improve the professionalism of the acquisition

workforce

24 Apr 2013, USD (AT&L)

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Better Buying Power 2.0

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Achieve Greater Efficiency and Productivity in Defense Spending

1. Achieve affordable programs Mandate affordability as a requirement Institute a system of investment analysis to derive affordability Enforce affordability caps

2. Control costs throughout the product life cycle Implement “should cost” based management Eliminate redundancy within Warfighter portfolios Institute a system to measure the cost performance of programs and institutions and to

assess the effectiveness of acquisition policies Build stronger partnerships with the requirements community to control costs Increase the incorporation of defense exportability features in initial designs

3. Incentivize productivity and innovation in industry and government Align profitability more tightly with Department goals Employ appropriate contract types Increase use of FPIF contracts in LRIP Better define value in “best value” competitions When LPTA is used, better define Technically Acceptable to ensure needed quality Institute a superior supplier incentive program Increase effective use of PBLs Reduce backlog of DCAA audits without compromising effectiveness Expand programs to leverage Industry’s IR&D

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Better Buying Power 2.0 cont…4. Eliminate unproductive processes and bureaucracy

- Reduce frequency of higher headquarters level reviews- Re-emphasize AE, PEO, and PM responsibility, authority, and accountability- Reduce cycle times while ensuring sound investment decisions

5. Promote effective competition- Emphasizing competition strategies and creating and maintaining competitive environments- Enforce open system architectures and effectively manage technical data rights- Increase small business roles and opportunities- Use the Technology Development phase for true risk reduction

6. Improve tradecraft in acquisition of services- Assign senior managers for acquisition of services- Measure productivity using the uniform services market segmentation- Improve requirements definition/prevent requirements creep- Increase small business participation, including through more effective use of market research- Strengthen contract management outside the normal acquisition chain–installations, etc.- Expand use of requirements review boards and tripwires

7. Improve the professionalism of the total acquisition workforce- Establish higher standards for key leadership positions- Establish increased professional qualification requirements for all acquisition specialties- Increase the recognition and support of excellence in acquisition management- Continue to increase the cost consciousness of the acq. workforce—change the culture

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Achieve Greater Efficiency and Productivity in Defense Spending

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BBP 2.0: Promote Effective Competition

Creating/maintaining/reintroducing competitive environments Emphasizing competition strategies… at prime, subcontractor, and

lower tier supplier levels Using the TD phase for true risk reduction Increased use of open system architectures Managing tech data rights

Joint Threat Emitter Follow-on (US & FMS) Estimated $7.6M savings on base contract; more in production

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HARM Control Sec. Mod (HCSM)• Competition drove unit price to ~½ of POE• >$24M saved• Procuring additional mods

Paveway Production Competition• Contract completed annually since 2003• Awards 60%/40% split to industry• Subsequent orders awarded 100% to

encourage strong competition

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BBP 2.0: Incentivize Productivity and Innovation in Industry and Government

Employing appropriate contract types Effectively using FPIF contracts in EMD and LRIP

Better defining value in “best value” competitions Better defining “Technically Acceptable” in LPTA competitions to ensure

needed quality Better leverage industry’s IR&D through better communication &

acquisition strategies

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QF-16• Competitively awarded FPIF development

contract with production options• $325M savings from IGE

• Efficiencies in delivering the GFE resulted in an additional savings of $65M

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BBP 2.0: Control Costs Throughout the Product Life Cycle

Leverage quantity buying Other services/agencies, FMS Procurement timing

Improving sole source negotiations Knowledge-based negotiations – actuals Leverage pricers, DCMA, DCAA, other programs/services

Implementing “should cost” based management

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Joint Direct Attack Munition (JDAM)• Worked with Boeing to extend ordering

window to increase order quantities • Joint orders with the USN and FMS

reduced unit price -- USAF savings of ~$10.6M in FY13

Joint Programmable Fuze (JPF)• Bundled FY 11,12,and 13 dollars to garner

savings of $5,000 per unit and 13-17% over the 3-year contract

• Used FMS to capitalize on other efficiencies; Resulted in 19% savings per unit on the base year alone

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“Should Cost”

Change mindset from “What WILL it cost?” to “What SHOULD it cost?” Start with “What could it cost, IF…?” Analyze major cost contributors and how they could be reduced Work with industry, DCMA, DCAA, customers, and other stakeholders Better incentivize contractors to lower prices through cost reduction Lower unit prices expected

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AFPEO Weapons“Should Cost” Program

Monthly reviews w/PEO All phases of the life cycle POAM established & tracked for each initiative Some focus areas:

Increased competition Leverage quantity buying VECPs Lean initiatives for existing production Life extensions

Some examples: Recouping unused warheads from WSEP missiles Harvesting fuse accessories from Condition Code N fuses Maverick exchange credits from FMS sales used to upgrade

missiles/components Extending CAD/PAD service life via surveillance test program

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