AF Life Cycle Management Center
AFLCMC… Providing the Warfighter’s Edge
Think Differently….
When Will We Get Serious
About BBP and Speed with
Discipline?
23 July 2013
Colonel Cameron Holt
Director of Contracting
AFLCMC/PK-OL Eglin
“Speed with Discipline”
Agenda
AFLCMC… Providing the Warfighter’s Edge
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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
2
AF PEO/WP Thoughts
Briefed at RPDS March2012
AFLCMC… Providing the Warfighter’s Edge
Challenges We Face
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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
New Environment Demands New Thinking
96ABW-2012-0013
3
Quantity, Quality, and Price
AFLCMC… Providing the Warfighter’s Edge
EOQ
Min Quantities
Current Practice
Quantity
Quality
Price
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)
4
A-A Enterprise Look
AFLCMC… Providing the Warfighter’s Edge
AMRAAM
NGM
Missed opportunity to leverage buying efficiencies
96ABW-2012-0013
5
Better Buying Power Initiatives
AFLCMC… Providing the Warfighter’s Edge
• 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
6
Current Initiatives Snapshot
AFLCMC… Providing the Warfighter’s Edge
Business
Leadership
Contracting
Excellence
Organizational
Credibility
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
Planned vs Actual Cycle Times
PEO-WP
AFLCMC...Providing the Warfighter’s Edge!
AMRAAM Lot 27
Process
Req Dev/RFP
Planned
Proposal
Audit/Tech Eval
Actual
Pricing
0
100
200
300
400
500
Negotiations
Kt Award
Days
JASSM Lot 11
Process
Req Dev/RFP
Planned
Proposal
Audit/Tech Eval
Actual
Pricing
0
100
200
300
Days
400
500
Negotiations
Kt Award
Pricing Risk Assessment
ACTIVE AFLCMC PRICING ACTIONS OVER $50M
AFLCMC...Providing the Warfighter’s Edge!
PEO/WP
Pricing Action
Quality
Schedule
Award Date
AMRAAM Lot 27
30 March 13
JASSM Lot 11
30 March 13
SDB II Modification
30 April 12
PEO/WL
Program Name
Quality
Schedule
Award Date
Program 1
30 April 13
Program 2
30 May 13
Program 3
30 January 13
BBP* Pricing Inputs Assessment
Inputs Quality-AMRAAM Lot 27
AFLCMC...Providing the Warfighter’s Edge!
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.
* Better Buying Power
BBP* Pricing Inputs Assessment
Inputs Timeliness-AMRAAM Lot 27
AFLCMC...Providing the Warfighter’s Edge!
AMRAAM Lot 27
EVENT
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
* Better Buying Power
Current Big “A” Acquisition Process
Converts Monopsony to Monopoly
AFLCMC… Providing the Warfighter’s Edge
Requirements
Process
Budget
Process
Acquisition
Process
1. Assess Gaps
2. Assess Capabilities
3. Identify Requirement
4. Prioritize Needs in POM
process
1. Set priorities for POM/APOM
2. Develop POM/APOM
submission
3. Submit POM/APOM
1. Receive Requirement &
Budget
2. Determine Acquisition
Strategy
3. Negotiate Procurement (sole
source or competitive) or
exercise options
4. Award contract
Capability
Trade offs
Program
Trade
offs
PEs by Program
Sole Source
No Trade Off
Trade Offs Made When Quality of Data is Lowest (Unrealistic
Proposed Big “A” Acquisition Process
Turning Monopoly back to Monopsony
AFLCMC… Providing the Warfighter’s Edge
Single Buyer Flexibility Maintained Throughout Integrated Process
Requirements
1. Assess Gaps
2. Assess Capabilities
3. Establish Capability Mix
Required
4. Set MPQs by Program
Capability
Trade offs
Budget
Set Amount for Single
Weapons PE
Program
Trade
offs
Acquisition
ACC/AQP/PEO make
final portfolio buy
decision from
Executable Proposals
Acquisition
Trade offs
Portfolio Best Value Competition
Turning Monopoly back to Monopsony
AFLCMC… Providing the Warfighter’s Edge
Single Buyer Flexibility Maintained Throughout Integrated Process
Requirements
1. Assess Gaps
2. Assess Capabilities
3. Establish Capability Mix
Required
4. Set MPQs by Program
Capability
Trade offs
Budget
Set Amount for Single
Weapons PE
Program
Trade
offs
Acquisition
ACC/AQP/PEO make
final portfolio buy
decision from
Executable Proposals
Acquisition
Trade offs
Affordable, Sustainable, Producible,
Universal Design (ASPUD) Benefits
AFLCMC… Providing the Warfighter’s Edge
– Affordability
D ata Link A ntenna (2x)
• 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
W ire H arness
and C over
G B U -38
T ail K it
D ata Link V olum e
36 cubic inches
Laser S ensor
G B U -38 500 lb
W arhead
D S U -33
P roxim ity F uze
A lternate S ensor
124 cubic inches
R ange E xtension K it
M S G 0 6 -0 8 5 1 8 5 -0 3 3 .p p t
– 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
DA Family of Weapons
• Potential for Decreased Development Costs
SDB
LJDAM
Business Model Changes But Still Sustainable
“Winner Take All” to “Market Share By Portfolio”
MK-84
(2000 lb)
BLU-109
(2000 lb) MK-83
(1000 lb)
Tailkit
MK-82
(500 lb)
Barriers to Acq Innovation at Eglin
AFLCMC… Providing the Warfighter’s Edge
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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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