MSMO Industry Day Brief
25 August 2008
1
Objective and Agenda
•
Objective: Discuss Navy Acquisition Strategy for Multi-Ship Multiple
Option (MSMO) ship repair contracts and respond to industry concerns.
Outline way ahead for MSMO Spiral II and use of Industry Day to
increase communications with Ship Repair industry.
•
Agenda
• Overview of MSMO Strategy
• Navy Responsiveness
• MSMO Metrics
• MSMO Review
• Spiral II
• Contract Status
• Upcoming Awards
• Q&A
2
Why MSMO
•
Navy operating concept: Fleet Response Plan (FRP)
– Rotational and surgeable
– Improved Ao
– Ops sked uncertainty requires different supporting maintenance concept
•
Old maint business model does not support surge readiness or Ao
– Navy needed a continuous, responsive, accessible, flexible, affordable, 24/7
maintenance delivery process.
• MSMO is that process
– MSMO delivers maintenance more reliably and continuously and reduces the
readiness “bath tub” effect in a rapidly changing and dynamic environment
•
MILPERS Reduction Initiative being instituted in FY08 relies on MS/MO
contractors as a key source for that workload accomplishment
3
MSMO Goals
•
Consolidate requirements into a smaller set of supply chains
•
Responsive to Small Business Administration (SBA) policy
•
Responsive to Fleet operational needs (FRP) & SHIPMAIN
•
Allow for effective and efficient maintenance practices
•
Allow for long-term vendor & supplier relationships
•
Product familiarity
•
Work force stabilization & capital planning
•
“Ktr plan/ktr execute” more efficient than “Navy plan/ktr execute”
•
Reduce Navy infrastructure/oversight
 Advantageous prices, terms & conditions
4
MSMO Strategic plan going forward…
SHIPMAIN
Industry
input &
feedback
MSMO Concept
“expectations”
Acqn Strat/industry day
MSMO Contract
“Spiral 1”
Performance
Outcomes
Strategic results:
Readiness vs cost
MSMO
Summits
Good behavior: bank it
Bad behavior: fix it
Structural
improvements
“Procurement”
Incremental
improvements
“Cont. Admin.”
2003
2004
Industry rec’d improvements:
• MCIT: plng & programming
• Contract Eff. BRT: execution
• JINII: AIT integration
2005
2006-7
MSMO Contract
“Spiral 2”
2008-9
….
5
…progressing through cycles of learning
MSMO Contract
“Spiral 2”
Performance
Outcomes
Strategic results:
Readiness vs cost
MSMO
Summits
Good behavior: bank it
Bad behavior: fix it
Structural
improvements
“Procurement”
Incremental
improvements
“Cont. Admin.”
2009
Industry rec’d improvements:
• MCIT: plng & programming
• Contract Eff. BRT: execution
• JINII: AIT integration
2010
MSMO Contract
“Spiral 3”
2011
2012
2013
….
2014
As MSMO structure stabilizes, focus will shift to tactical efficiencies:
MCIT, Contractor BRT, AIT Integration
6
MSMO Outcomes
•
MSMO demonstrates that it supports Ao and surge readiness
– Nearly all MSMO CNO avails complete on time
• Incorporation of Growth/New Work has been smooth
– CMAVs have reduced material readiness “bath tub” effect
– Emergent response has been very successful:
• KEARSARGE, HALSEY, NORMANDY, SAIPAN…
– Technical performance Outstanding
• No known or documented operational or mission degrading failures due to MSMO
workmanship or material
– Learning Curve performance
• Class familiarity permits production engineering improvements and maintenance
innovations
• Shaft repairs, MV-22, All-electric upgrade, Hab Mods, Scan Eagle, Rapid Cure Coating,
Rudder seal replacement
•
MSMO Cost: Nearly all availabilities perform under the original negotiated
cost
•
More and more partnering evident
– CG Modernization East-West improvement process with BAE
– NNSY-BAE work share on L-decks
– Contractor efficiency Barrier Removal Team formed
7
Navy Responsiveness
• No pre-determined Schedule for Awards
– Navy generated waterfall chart of notional awards based on expiring
contracts
– Navy published notional schedule to industry via FedBizOps.
– Navy held Summits with Industry where notional awards were discussed
(JINII/Industry Days)
– Schedule for Awards impacted by contract workload, including protest work
• Multiple East Coast contract awards are protested
– Offerors have the right to protest.
– Per Aug 28, 2007 Virginia Pilot Article “Shipyards more likely to protest
losing multiship contracts,” an industry leader is quoted as saying, "I
look at it as risk and reward. Is it worth spending $200,000 to get a
contract potentially worth $100 million to $200 million? These protests are
nothing personal. To me, it's good business."
8
Navy Responsiveness
• Navy continues execution on urgent and compelling basis and is not
held accountable
– When timely protest filed at GAO, there is an automatic stay of
performance.
– While protest is pending, COMNAVSEA may override automatic stay where
(1) continued performance is in the best interest of the United States, or
(2) urgent and compelling circumstances will not permit waiting for the
GAO’s decision [due within 100 calendar days of the protest’s filing].
– COMNAVSEA’s override decisions: Demands of a mission-ready fleet in time
of war.
– If GAO sustains protest, NAVSEA will continue contract performance by
awardee when GAO’s written recommendation authorizes the agency to do
so, pending completion of the recommended corrective actions. [For
example: GAO finds that its “recommendation can be implemented and
meaningful relief attained” despite continuation of performance by the
awardee.]
– The Navy is held accountable in sustained protest decisions because we
implement the GAO’s recommended corrective actions in a reasonable
manner and in compliance with the law.
9
Navy Responsiveness
• NAVSEA Contracting practices and processes flawed
– Conducted Extensive Assessment of Contracting
Processes
• Multi-disciplinary (Contracts, Internal Team conducted review)
– Recommendations:
• Increase use of historical data in Notional Work Packages and
Independent Government Estimates
• Expand review of Cost Assessments and supporting
documentation
• Improve documentation quality and consistency
• Membership of BVAC should include senior Contracts and Legal
experts
• Cost Assessment Team should assign risk to cost proposals
• Minor administrative changes
10
Navy Responsiveness
• NAVSEA Contracting practices and processes flawed
(cont)
– Improvements to Existing MSMO Process as a
result of Reviews
• Exploring use of Contractor support for development of
the notional work package and Independent Government
Estimate
• Revising BVAC Guidance to require CAP and TERP to
verify proposal consistency
• Conducted coordination meetings to ensure changes are
properly implemented
11
Navy Responsiveness
• Navy seeks Capital Improvement Investment
– Navy leadership does not require capital investment as part
of MSMO process; however, companies can make business
decisions to invest in capital projects to enhance their
competitive position.
– Navy leadership supports the delivery of best value to the
government from industry partners, but does not dictate the
method of delivery.
12
MSMO Metrics
• Measurements
– No global metrics that correlate force-wide material
condition to MSMO performance exist
• SWE BOD tasked SEA 21 and Fleet Maint Officer
to propose and develop additional metrics.
– Developing process approach to collect data
Industry participation required in collection of
metrics data
13
MSMO Review
and Spiral 2.0
14
Review Recommendations
- Validated MSMO concept and strategy
• Increase use of historical data in Notional Work
Packages and Independent Government Estimates to
improve accuracy
– Improve IGE documentation
– Explore contractor support to supplement process
• Expand review of Cost Assessment and
underlying/supporting processes
– Improve documentation
– Pursue Discussion questions to adequate resolution
– Re-open Discussions, as necessary, to ensure intent of
proposals and compliance with RFP
15
Review
Recommendations II
• Increase focus on cost realism analysis (identified in
GAO decisions) through training, hiring, or
contracting for expertise.
• Increase emphasis on reconciling proposal
differences/inconsistencies in offerors’ technical, cost,
and teaming proposals through early communication
between TERP Chair and CAP Chair
• Ensure trade-offs and judgment calls in the source
selection process (and specifically in the cost realism
analysis) are adequately documented in the record.
16
MSMO SPIRAL 2 (Bottom Line)
• Internal Review
– New NWP/IGE development and Cost evaluation
techniques planned
• Exploring use of contractors to support drafting of NWP
and IGE
– Revised, more detailed debriefs to unsuccessful
offerors
• Very successful briefs for MCM maintenance---will use as
template for future out briefs
• Updated Acquisition Plan
• Continue Cost Plus Award Fee (CPAF)
contracts Awarded by Homeport for a
class/group of ships
17
MSMO SPIRAL 2 (Bottom Line)
• 40% Small Business Percentage Requirement
per contract remains
– Over 40% incentive to be removed
• Provisional AF Payment Included
– Fifty percent of potential Award Fee
– Payment based on demonstrated performance over
two consecutive Award Fee periods
• Contract term/options facilitate long term
procurement process.
– Five year Norm
• Government reserves the right to go to a seven year
period of performance
18
Contract Status
NINETEEN CONTRACTS AWARDED; FOUR PROTESTS SUSTAINED
Homeport/Class
Awarded
Contract Number
Awardee
Norfolk DDG Docking
Norfolk DDG (Non Docking)
Mayport DDG (Non Docking)
Norfolk LHA/LHD
San Diego CG
Ingleside TX (MCM 1 Class)
Puget Sound (FFG/DDG)
San Diego LPD/LSD
Norfolk LPD/LSD Non Docking
Norfolk CG 47
Pearl Harbor DDG/FFG/CG
San Diego LHA/LHD
San Diego DDG
Mayport FFG 7
San Diego FFG 7
Norfolk LSD 41 Midlife
San Diego MCM
San Diego LSD 41 Midlife
Norfolk FFG 7
20 December 2004
15 February 2005
15 February 2005
23 December 2004
24 March 2005
18 July 2005
19 September 2005
5 December 2005
22 December 2005
17 May 2006
13 September 2006
29 January 2007
26 March 2007
12 July 2007
03 August 2007
28 January 2008
14 May 2008
03 July 2008
13 August 2008
N00024-05-C-4404
N00024-05-C-4406
N00024-05-C-4413
N00024-05-C-4403
N00024-05-C-4409
N00024-05-C-2304
N00024-00-C-8514
N00024-06-C-4402
N00024-06-C-4401
N00024-06-C-4415
N00024-06-C-4408
N00024-07-C-4013
N00024-07-C-4407
N00024-07-C-4413
N00024-07-C-4415
N00024-08-C-4406
N00024-08-C-4405
N00024-08-C-4410
N00024-08-C-4415
NORSHIPCO (Now BAE-N)
MHI
MHI
NORSHIPCO (Now BAE-N)
SWM (Now BAE-SD)
ANTEON (Now GDIT)
Todd Pacific Shipyard
NASSCO
Earl Industries (Protested)
BAE Norfolk
BAE Hawaii
NASSCO
BAE
MHI/TECHNICO JV (Protested)
NASSCO
METRO (Protested)
BAE SD
NASSCO
MHI
19
Upcoming Awards
Spiral I
Norfolk LPD 17 Class
- First PMA June 2009
San Diego LPD 17 Class
- First PMA January 2010
Notional Award Date
Dec 2008
Mayport CG47/DDG 51
TBD (Apr 2009)
TBD (Jan 2009)
PROTESTED
LPD/LSD Norfolk
FFG 7 Mayport
LSD 41 ML Norfolk
TBD
TBD
TBD
SPIRAL II
Norfolk DDG 51 Docker (Spiral II)
TBD (Sep 2009)
Norfolk DDG 51 Non-Docker (Spiral II)
TBD (Oct 2009)
20
Questions ?