1Price Fighters Department

PRICE FIGHTERSBrief For

Future of DoD ContractCost/Price Analysis Meeting

9-10 January 2007

2Price Fighters Department

SECNAVSECNAVSecretary of the NavySecretary of the Navy

SECNAVSECNAVSecretary of the NavySecretary of the Navy

CNOCNOChief of Naval OperationsChief of Naval Operations

CNOCNOChief of Naval OperationsChief of Naval Operations

ASN(RDA)ASN(RDA)Assistant Secretary of the NavyAssistant Secretary of the Navy

for Research, Development and Acquisitionfor Research, Development and Acquisition

ASN(RDA)ASN(RDA)Assistant Secretary of the NavyAssistant Secretary of the Navy

for Research, Development and Acquisitionfor Research, Development and Acquisition

NAVAIRNAVAIRNaval Air

Systems Command

NAVAIRNAVAIRNaval Air

Systems Command

NAVSEANAVSEANaval Sea

Systems Command

NAVSEANAVSEANaval Sea

Systems Command

SPAWARSPAWARSpace and Naval Warfare

Systems Command

SPAWARSPAWARSpace and Naval Warfare

Systems Command

NAVFACNAVFACNaval Facilities

Engineering Command

NAVFACNAVFACNaval Facilities

Engineering Command

NAVSUPNAVSUPNaval Supply

Systems Command

NAVSUPNAVSUPNaval Supply

Systems Command

NAVICPNAVICPNaval Inventory Control Point

NAVICPNAVICPNaval Inventory Control Point

Where We Fit

Price FightersPrice FightersPrice FightersPrice Fighters

3Price Fighters Department

To provide responsive, expert value analysis, technical assistance, and

pricing validation support to buyers, managers, and users of equipment,

material, services, supplies, spare parts, and weapon systems in an accurate, cost

effective, and unbiased manner.

Price Fighters Mission

Save Program Dollars

4Price Fighters Department

The MDAP Process

ConceptConceptRefinementRefinement

System Development System Development & Demonstration& Demonstration

Production & Production & DeploymentDeployment

Operations & Operations & SupportSupport

AnalogyAnalogyParametricParametric

ActualsActualsEngineeringEngineering

MDAP Process

Cost Estimating Techniques

Negotiation SupportProposal ReviewCost EstimatingSite VisitsPre & Post Business Clearance

•Should Cost•Business Case Analysis

•Consulting Services

Price Fighters Services

Post Production Support

Technology Technology DevelopmentDevelopment

Concept Decision

Design Readiness

Review

FRP Decision Review

A B C FOCIOC

5Price Fighters Department

• Business Case Analysis (BCA)Business Case Analysis (BCA)• Cost Estimating Relationship (CER)

Analysis

• Cost Analysis / EstimatingCost Analysis / Estimating

• Cost Modeling

• Cost Realism Studies

• ECP EvaluationECP Evaluation• In-Process Review (IPR)

• Litigation Support

• Negotiation SupportNegotiation Support

• Obsolescence Study

• Physical Configuration Audit (PCA)

• Pre-Award Survey

• Post-Production Support

• Price Challenge Hotline

• Process Improvement Studies

• Proposal EvaluationProposal Evaluation

• Repair Analysis

• Risk Analysis/Management

• Should Cost Analysis

• Source Selection

• Lean / Six Sigma Support

• Tech Data Package Adequacy

Review

Supporting Current & Future Readiness

Products & Services

Providing expert, cost effective value analysis, technical assistance, and pricing validation support.

6Price Fighters Department

Should Cost

• Support spare parts buyers

• Bottoms up, engineering

based, cost analysis

• Alternate sources of supply

• Negotiation support

7Price Fighters Department

Tray, Conveyor Roller NSN 2590-01-359-9278Application: Cargo Handling SystemQuantity 3 units Should Cost Price: Technical review developedProposed Price: $4,850.25Negotiated Price: $702.61Savings: $12,442.92 (86% reduction)Resolution: Since this was an ESOC procurement, Price

Fighters was requested to find an alternate source for this part as quickly as possible. Within two weeks, Price Fighters had found and received a quote from another source that was 86% lower than the original quote.

Case referred by: DSCC

Should Cost Example

8Price Fighters Department

Piston, Linear ActuatorNSN 1650-00-532-1805Application: C-130 Aircraft Quantity 62 units Should Cost Price: $2,313.47Proposed Price: $10,743.00Negotiated Price: $3,841.00 Savings: $427,924.00 (64% reduction)Resolution: Price Fighters developed a unique pricing

analysis using the contractor rates and the labor and material from the Should Cost Analysis. The buyer utilized the analysis to negotiate a lower cost.

Case referred by: DSCR

Should Cost Example

9Price Fighters Department

Price Challenge Hotline

• Prime venue for customer price challenges

• Can lead to should costs

• Over 129,000 inquiries

• $846M in savings

• $453K in awards

Web Page: www.navsup.navy.mil, click on the “Challenge High Priced Parts” bulls-eye iconPhone:  1-800 NAV-CHAL (1-800 628-2425), Fax:  (757) 443-2019

Email: price.fighters@navy.mil

10Price Fighters Department

Good Price Challenge Candidates • Appears overpriced • Consolidation of identical items • New commercial source

Price Challenge Hotline

11Price Fighters Department

Price Challenge from Patrol Squadron 64, Naval Air Station, Willow Road, PANomenclature: Rigid Tubing AssemblyChallenged Price: $4,688.12Concerns: Price too highResults: Found item overpriced, pursued

refundCost Avoidance: $24,278.97Challenger’s Award: $1,425.00

Price Challenge Hotline Example

12Price Fighters Department

• IPT member• Assist in SOW development• BCA development

– Analyze and verify data set– Populate BCA

• Proposal review• Negotiations support• Total involvement from start to finish

PBL Support

13Price Fighters Department

H-60 Tip-To-Tail Phase II BCA

Agreement with Maritime Helicopter Systems Company (MHSCo) and Naval Inventory Control Point Philadelphia.

Covered 458 individual parts applicable to the SH-60B, SH-60F, HH-60H, MH-60S, and MH-60R aircraft and focused on integrating 34 suppliers under one prime integrator.

The With-out PBL (traditional support ): $258M With PBL program cost were proposed as

$241M Potential Savings/Cost Avoidance of $17M over

a 33 month period of performance.

PBL BCA Example

14Price Fighters Department

Weapon Systems Support

• Procurement Support / Cost Analysis

• Supports Program Managers and Contracting

• Proposal Evaluations

• ECPs

• Alpha Contracting

• Source Selection

15Price Fighters Department

Examples: Proposed SettledCost

AvoidanceCost ROI

E-2C FY04-07

Multi-Year$808M $706M $102M $172K 593

CV-22 Block Change

$241.5M $208M $33.5M $100K 330.5

MH-47G SLEP Program Lot 2

$282M $246M $36M $163K 223

F-18 E/F

Production$403.2M $360M $43.2M $40K 1080

TOTALS $1,734.7M $1,520M $214.7M $475K 452

Results

Boeing

N-G

Recent experience with many Primes, onUSN, USMC, USAF, USA, Joint projects

16Price Fighters Department

Customer: U. S. Army, Redstone Arsenal

Project: Procurement of Patriot Advanced Capability (PAC-3) Missiles

Effort: Supplemented Redstone Contracting team in review of contractor and

major subcontractors including labor hours, material, and negotiation supportResult: $56M savings and 4 additional missiles

Patriot (PAC-3) Missile

17Price Fighters Department

Special Projects

• Berry Amendment– Supporting DCMA on reviewing Corrective Action Plans and drafting Domestic

Non-Availability Determinations

• Bureau of Engraving and Printing– Supporting BEP on a $280M procurement of currency paper

• Acquisition Quality Assessment Program and Intrinsic Value

Analysis– Supporting NAVICP Contracting

– Price analysis for active procurements

– Sampling awarded procurements

18Price Fighters Department

Summary

• High-Quality Engineering-Based Cost Analysis Services

• Customer-Oriented

• Outstanding ROI (current average 20:1)

• Effective ISO-Certified QMS

• Best Value

• Services Easy To Obtain

19Price Fighters Department

Point of Contact

Buster JonesDirector, Price Fighters(757) 443-2468 DSN 646willard.b.jones@navy.mil