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Huntsville, AL March 8, 2010 Acquisition Reform: Product Support Initiatives Randy Fowler | Assistant Deputy Under Secretary of Defense Materiel Readiness CLEP/LOGSA Conference 10pm041

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Huntsville, ALMarch 8, 2010

Acquisition Reform:Product Support Initiatives 

Randy Fowler | Assistant Deputy Under Secretary of DefenseMateriel Readiness

CLEP/LOGSA Conference

10pm04‐ 1

Weapon Systems Acquisition Reform Act

(Public Law 111-23, 22 May 2009)

111TH CONGRESS1ST SESSION H. R. 2647AN ACTTo authorize appropriations for fiscal year 2010 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, to provide special pays and allowances to certain members of the Armed Forces, expand concurrent receipt of military retirement and VA disability benefits to disabled military retirees, and for other purposes.

Section 805 Life Cycle ManagementAnd Product Support

(Oct 24, 2009)

Reform…..Again

FY 2010 NDAAPublic Law 111‐84

DoD Product SupportAssessment Report

(Nov 12, 2009)

DoD Quadrennial Defense Review Report

(February 2010)

10pm04‐ 2

10pm04 - 3

DoD Product Support Assessment

Recommends to senior leadership improvement of existing weapon system sustainment strategy

Encompasses operational, acquisition, and sustainment communities

Complements Weapon System Acquisition Reform Act with perspectives attentive to life cycle management and sustainment

Provides recommendations to improve weapon system readiness and control life cycle cost

•3

Assessment Purpose

Senior Steering Group strongly endorsed report and way aheadImplementation planning and actions underwayFinal report signed by USD(AT&L) on November 12, 2009Implementation Teams Underway

10pm04 - 4

Quadrennial Defense Review 2010Reforming How We Buy:

Improving program execution• Employ fixed‐price development contracts more frequently

• Constrain added requirements by employing Configuration Steering Boards

• Demonstrate critical technologies and prove concepts prior to initiating engineering and  manufacturing development

• Certify technology maturity through independent reviews and technology readiness assessments

• Develop more accurate technical baselines 

• Conduct realistic integrated testing as early as possible

• Better align profitability with performance

• “Achieve effective life cycle cost management by employing 

readiness‐based sustainment strategies, facilitated by 

stable and robust government‐industry partnerships.”

Strengthening the Industrial Base

• “…create and/or sustain competition, innovation, and 

essential industrial capabilities.”

10pm04 - 5

IP

PEO

Policy

CAPE

PA&E

Life Cycle Sustainment AdvocacyEnterprise View

PS

MPP

TP

SCI

MR

L&MR

OSDAT&L Other

DPAPDLA

DCMANII

Int’l

SEPSA

ARA

CompDPAP

P&R

BTA

DOT&E

ASA(ALT)

Army G4 AMC PEOASN

(RDA)Navy N4

NAVSUP

MDAI&L LOG COM

SYS COM

SAF/AQSAF/IELA4

AFMC PEO

Army Navy

USAFUSMC

TRANSCOM

JFCOM

COCOMs

Industry / Assn Academia Other

Joint Staff

J4

J8

AIANDIA

Primes Sub-Tiers

DAUNDU

UT MCLEP

NDIA

LOG TECH

CongressGAO

DODIG Media

10pm04 - 6

Product Support Journey

DoD QDRmandates“PBL” – First

official Useof Term

20011998 2003 2004 2006

Section 912, 1998 NDAA: DoD to report to Congress on 

Product Support 

Reengineering

Product Support 

ReengineeringReport to Congress

Program ManagersGuidebookpublished

1999

30 RTOCPilot 

Programs

DAU PBL Course 

Launched

2008 2009 >

Revised DoDI 5000.2 Issued

ProductSupport

AssessmentTeam

LaunchedF‐117, APU 

PBLs

DoD 5000policy 

updated:PBL is 

“preferred”Support Strategy

ACAT 1 & 2 

to use PBL or justifynon‐use

Over 200 current or planned

PBL Programs

OSD PBLPolicy  memos: 

BCA’s usedto evaluatetransition to

PBL

ContractorsPBL Course Launched

DoD Weapon System

Acquisition ReformProduct Support 

Assessment

DoD WSPSAImplementation

10pm04 - 7

2009 DoD Weapon System Acquisition ReformProduct Support Assessment

Product Support Business Model:Provide Program Managers a model template for a weapon system support strategy that drives cost‐

effective performance and capability for the Warfighter across the weapon system life cycle and enables most advantageous use of an integrated defense industrial base

Supply Chain Operational Strategy:Connect platform product support strategies to enterprise supply chain approaches that 

produces best value across the DoD components

Industrial Integration Strategy:Align and expand the collaboration 

between Government & Industry that produces best value partnering practices 

Weapons System Data:Define, collect, report, and manage the data we need to drive effective Life Cycle Product Support 

Metrics:Use existing metrics to catalyze 

sustainment strategies and trigger continuous 

supportability analysis

O&S Costs:Improve O&S cost visibility and influence

Analytical Tools:Build a toolbox of analytical approaches (including  BCA)

Human Capital:Integrate Product Support competencies across the Logistics and Acquisition workforce domain to 

institutionalize successful traits of an outcome‐

based culture 

Governance:Strengthen and develop 

organization and mgmt processes to deliver the right sustainment information to decision‐makers

10pm04 - 8

Product Support Business Model

Product Support Integrators

Warfighter

Program Manager (PM)

Product Support Manager (PSM)

Product Support Providers

Performance Based Agreement

PBA/Partnering Agreement

Inherently Governmental

Integrated Industrial Base: Commercial and

Government

Depots ICPs Tier X

PSI PSI PSI

DLA OEMs DPO

Responsibility/Authority

Accountability

Defined Performance Outcomes

Responsible“Oversight &Management”

Accountable“Establish ProductSupport Strategy”

Bound Agents“Achieve documented

outcomes withinterms of agreements”

Outcomes

KPP/KSA

09pm23 - 9

PBL “Label” Issue

• Strategic readiness enabler

• Warfighter driven sustainment strategy 

• Game‐changer to transactional logistics

• Incentivizes logistics demand reduction

• Facilitates public‐private partnering

• Integrates management of support infrastructure

• PBL works; delivers  performance improvements with lower operating costs

• Contracting out logistics

• Degrades organic workforce capability

• Contractor’s savings not passed to government

• Business case analysis not consistently conducted with undeterminable cost benefits (GAO)

• Limited cost visibility

• Stifles competition

• Long contract periods limit government flexibility and off‐ramps

Advocates Viewpoint Critics Viewpoint

To Re‐brand PBL or Not: Incremental vs Paradigm‐shift10pm04- 9

UAS PBL Summary by Platform

Warrior

Hunter

Shadow

Raven

• Not a Program of Record and Not a PBL Candidate• Contract has OR as a Performance Goal

• Full PBL Implementation at System Level• Contractual Performance Metrics• The PM to OEM Performance Agreement is the

Contract• The PM to Warfighter Performance Agreement is our

published Supportability Strategy

• System in SSD Phase of Development• Potential PBL Candidate• Planned completion of Formal Business Case Analysis

(BCA) 4th QTR FY10

• Potential PBL Candidate• Completed Type I Business Case Analysis (BCA) 2nd

QTR FY09, LORA, CDA, and BCA being updated

• Deployed via GWOT ONS• Contract has OR Performance Goal

gMAV10pm04- 10

Improving Sustainment Governance at DABs

10pm04- 11

6

Life Cycle Sustainment Plan

Budget and Funding

Total Ownership Costs

Metrics Performance

Reliability Growth

Governance – Post IOC ReviewsNavy example

10pm04- 12

13

Managing DoDTotal Ownership Cost (TOC)

Need to formulate OUSD(AT&L) strategy (within the DoD strategy)for TOC influence and management

Source: CAPE, June 2009 Data

RDT&E Procurement O&S

National Interest:

WSARA – May ’09

CAPE Report to Congress

GAO Study ‐ ongoing

WSAR PSA – Nov ’09

Service Initiatives/BCAs

QDR 

Budget Pressures

10pm04- 13

09pm29 - 14

Property Mgt

Program Mgt

Contracting

BCEFM

SPRDE - SE

T&E

Supply Management

Maintenance Support

Deployment/ Distribution/

TransportationLife Cycle Logistics

DoD Logistics Community ~615K personnel

AT&L (Acquisition) Community

LCL Community14,852 personnel

Competency Management of    Acquisition and Logistics Professionals

Purchasing

Audit

PQM

FE

SPRDE – S&T

IT Mgt

10pm04- 14

Implementation Overview

Improved Readiness

Better Cost Control

Outreach

Industrial Integration

Product Support Business Model

Supply Chain Operational StrategyPSBM PM Guide Revised Policy Log Cost Memo

Criteria & Baseline Partnering Guidance Title 10 Changes

JSCA Op Strat Enterprise Architecture SCM BOK

Metrics

O&S

Analytic Tools

GovernanceAnalysis “Toolbox” Analytical Tools Guidance

Sustainment Chart & Implementation Guide

ILA Guide

Post-IOC Review

Automated RAM Metrics

Enterprise Dashboards

O&S Cost Definition & Granularity Memo

Legacy System Reporting

Affordability Language

FIPT Guidance Training

Human Capital

Congressional Briefings

Magazine Articles

SSG & PSEC

AIA, NDIA, & Logistics

Conferences

Industry Meeting

s

Office Calls

Competencies Identified Career Fields Targeted

10pm04- 15

Attachment 2 – Definitions

FY 2010 NDAA Sec. 805, Life Cycle Management and Product Support 

Attachment 1 - Guidance on LCM and Product Support Strategies

• Outcome-based (readiness-based) strategies at best-value costs

• Balanced use of DoD and industry resources via stable and robust partnerships

• Maximize competition, or the option of competition for long-term effectiveness

• Assist PMs in LCM responsibilities via establishment of mandatory product support manager (PSM) positions

• Assign properly qualified military or DoD employee to PSM positions

• Specifies PSM duties

On track for April 30 guidance issuance10pm04- 16

Sec 805 – What’s Different?

• Explicitly establishes a PM help-mate• Strengthens PM authority (funding)• Builds a better Life Cycle Logistics

human capital asset • More respect for an integral program

management position (front-line)• Potential for many key roles and

responsibilities to be performed better

10pm04- 17

10pm04 - 18

Rapid Acquisition Sustainment Strategies

Up-front sustainability criteria are increasingly

necessary to avoid potential schedule slips and control

O&S cost burdens.

10pm04 - 19

GUIDANCE• Defense Acquisition Guide (DAG)• Defense Acquisition Program

Support Methodology• System Engineering Plan (SEP)

Prep Guide• RAM-C Manual• MIL-HDBK 217 Update

REVIEWS/ASSESSMENTS• Program Support Reviews (PSR)• Assessment for Operational Test Readiness (AOTR)• SEP Reviews• Nunn-McCurdy Reviews

REPORTING• DAES• DAMIR• Sustainment

Quad Chart

Life Cycle Management PartnershipSystems Engineering ‐ Logistics

ACQUISITION REFORM INITIATIVES

• Public Law 111-23 (DTM 09-027)• Public Law 111-24 (DTM 10-xxx)• Countering Counterfeits T2• WSAR PSA Report• DT&E/SE Annual Rpt to Congress• Next Steps to Improve Reliability • Human Capital Management

DAE REVIEWS• Defense Acquisition Boards

(DABs)• IPRs

POLICY• CJCSI 3170• DoD 5000 update

METRICS

O&S COST MANAGEMENT

• R-TOC• NDIA SE Committee

09pm12 - 20

OPERATIONS &SUPPORT

Analytical/Experimental

CriticalFunction/

CharacteristicProof ofConcept

ComponentAnd/or

BreadboardValidation

In aLaboratory

Environment

SystemPrototype

DemonstratedIn an

OperationalEnvironment

ActualSystem

CompletedQualifiedThroughTest and

Demonstration

ActualSystem“MissionProven”Through

SuccessfulOperations

Capability to ProduceSystems, SubsystemsOr Components in a

Production Representative

Environment

Full RateProduction

Demonstrated.Lean Production

Practices In Place

Low RateProduction

Demonstrated.Capability InPlace for FRP

Pilot LineCapability

Demonstrated.Ready for LRIP

Cost Model UpdatedTo System Level

Unit Cost ReductionEfforts Underway

Engineering Cost Model

Validated

FRP UnitCost Goals

Met

LRIP CostGoals Met

Learning CurveValidated

Technology Readiness

LevelsDefense Acquisition

Guidebookpara. 10.5.2

Manufacturing Readiness

Levels

2009 Draft MRA Deskbook ver 7.1

Capability to produceTechnology In Lab

Environment.

ManufacturingCost Drivers

Identified

ManufacturingImplications Assessed.ConceptsIdentified/Developed

TRLs 1-3

MRL 4 MRL 7 MRL 8 MRL 9 MRL 10MRLs 1-3

TRL 4 TRL 7 TRL 8 TRL 9

ComponentAnd/or

BreadboardValidation

In aRelevant

Environment

Cost ModelConstructed

System/SubsystemModel orPrototype

DemonstratedIn a RelevantEnvironment

Capability To Produce The

System, Component Or

Item in a Production-

Representative Environment.

Detailed Cost AnalysisComplete

Capability toProduce

PrototypeComponents in a

Production Relevant

Environment

MRL 5 MRL 6

TRL 5 TRL 6

Supportability features embedded in design.

Supportability and Maintenance Task Analysis complete.

(CDR)

Full RateProduction

Demonstrated.Lean Production

Practices In Place

Initial Product Support Package

demonstrated in operational environment

(IOT&E)

Product Support

capabilities demonstrated &

supply chain management

approach validated

Supportability objectives & KPP/KSA

requirements defined. New or better technology

required for system or supply chain

identified

(ASR)

Requirements understood. Sustainment

options identified,

defined, and documented.

(AoA)

SRL 4 SRL 7 SRL 8 SRL 9SRLs 1-3

Maintenance concepts and sustainment

strategy complete. Life

Cycle Sustainment

Plan approved.

(PDR)

Supportability design features

required to achieve

KPP/KSA incorporated in

Design Requirements

(SRR)

SRL 5 SRL 6

MATERIEL SOLUTION ANALYSIS

ENGINEERING & MANUFACTURING

DEVELOPMENT

PRODUCTION &DEPLOYMENT

B C

OPERATIONS &SUPPORT

TECHNOLOGYDEVELOPMENT

IOC FOCA

SRL 10Product Support Package fielded at operational

sites. Performance

measured against

availability, reliability & cost

metrics.(IOC)

SRL 11 Sustainment performance

measured against

operational needs. Product support

improved thru continual process

improvement.

NOTE: This figure is not meant to imply the various functional area readiness levels are reached at the same time. It only shows the analogies between TRL, MRL and SRL concepts. 10-19-09

Product Support Package

fully in place including

depot repair capability.

(FOC)

SRL 12

DAG Lays out what should be done by phase SRL Descriptors provide criteria for assessing and conveying risk

Can show maturity with SRLs

Sustainment Readiness Levels 

Provides discipline, structure & rigor for assessing sustainment planning & implementation

Time

SRLImplemented

Plan

Actual

IOT&ECapability

IOCCapability

IOC + 4Capability

12

4

CDRPDR

User Needs

Concept Refinement

Technology Development

System Development & Demonstration

Production & Deployment

Operations & Support

System Design System Demonstration LRIP/IOT&E/Full Rate Production & Deployment

Sustainment

DisposalConcept Decision FRP Decision Review

Reviews ITR ASR

SRR

IBR

SFR PDR

TRRCDR FRR OTRR PCA ISR

Technical Baseline

System Specification

System Functional

BaselineAllocated Baseline

Product Baseline

Product Baseline

Preferred System

Concept

SVR/FCA/ PRR

Evaluate Technology’s Ability to Implement

Supportability Objectives &

Sustainment Strategy

Define Initial Supportability Objectives &

Sustainment Strategy

Refine Sustainment Objectives and Requirements

Set Sustainment Metrics & Requirements

Design Product Support Package

Develop Product Support Package & Demonstrate

Critical Capabilities

Implement Product Support Strategy

and Package

Monitor Performance and Adjust Product

Support

Systems Engineering Technical Review Timing

IOC FOC

Demonstrate Feasibility &

Mature Technology

Design-in Sustainment Features & Establish Product Support

Package Requirements

A

Production & Deployment Operations & Support

Engineering Manufacturing & Development

Technology DevelopmentMateriel Solution Analysis

B C

Materiel Development Decision

Initial

IBR IBRReviews That May Occur Before or After Milestone B

LogisticsAnd

SustainmentThread

10pm04- 20

09pm23 - 21

Sustainment TruthsFront End Emphasis 

1. Operational perspectives    are paramount. 

2. Life cycle management is easier said than done.

3. ILS is foundational.4. Requirements/metrics are 

essential. 5. RAM is common language. 6. System engineering is your 

best friend.7. O&S cost drives right 

decisions.8. PBL is integrative.9. SCM facilitates joint action.10. Culture is driven by money 

and leadership.10pm04- 21

Thank you

10pm04- 22