AFMC Business Integration Office

Public-Private Partnering (PPP)

Key Points and Frequently Asked Questions

Mr. Greg Dierker AFMC/A8R Business Integration Office 3 September 09

1

PPP Foot-stomps and FAQs

     

What is the Common Characteristic of all PPPs?

What is the Primary PPP Statute used to Authorize PPPs?

What are the Objectives of PPPs?

When should a Program Partner?

What New Policy Exists on PPPs?

Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail?

  Who Is the Final Authority to Approve Partnerships?

How Many Active Partnerships does the Air Force have and what is the Future Direction?

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Common Characteristic of all PPPs 16 Jan 09 AFMC PPP Policy, states:

Existing Air Force PPPs typically take the form of public sector repair, overhaul, modification or production of goods and services for a DoD contractor or where private industry leases public sector equipment and/or facilities. The government also takes advantage of PPPs by bringing in contractor workers to perform repair, modernization, refurbishment and testing of government systems, using government equipment in government facilities. A key element in each of these arrangements is the utilization of some aspect of organic depot maintenance capability to support the partnership.

3

PPP Foot-stomps and FAQs

      What is the Common Characteristic of all PPPs?

What is the Primary PPP Statute used to Authorize PPPs?

What are the Objectives of PPPs?

When should a Program Partner?

What New Policy Exists on PPPs?

Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail?

  Who Is the Final Authority to Approve Partnerships?

How Many Partnerships does the Air Force have and what is the Future Direction?

4

PPP Statutes

Authority

USC Title 10 Section 2208(j)

USC Title 10 Section 2474

USC Title 10 Section 2539b USC Title 10 Section 2563 USC Title 10 Section 2667 USC Title 22 Section 2754 USC Title 22 Section 2770 FAR Subpart 45.3

FAR Subpart 45.4

USC Title 10 Section 2464 USC Title 10 Section 2466

Thumbnail Description – Not Exhaustive

Permits depot financed through working capital funds to

sell articles and services

outside DoD if the purchaser is fulfilling a DoD contract and the contract is awarded pursuant to a public-private competition.

Requires the Military Departments to designate depot-level maintenance activities as Centers of Industrial and Technical Excellence (CITEs), authorizes and encourages public-private partnerships ,

permits performance of work related to depot-level maintenance core competencies, permits use of facilities and equipment, and permits

sales proceeds

from public-private partnerships to be credited to depot accounts.

Authorizes the

sale of services

for testing of materials, equipment, models, computer software, and other items.

Authorizes

sale of articles or services

outside DoD (excluding those authorized under 10 U.S.C. 4543) under specified conditions.

Allows

leasing

of non-excess facilities and equipment.

Allows

sales or lease of articles or services to friendly countries

under specified conditions.

Allows

sales of articles and services

to a U.S. company for incorporation into end items to be sold to a friendly foreign country or international organization under specific conditions.

Permits provision of

government-furnished material, facilities and equipment

to contractors.

Provides for contractor

use and rental of government property.

Requires the DoD

maintain a core logistics capability that is Government-owned and Government-operated (personnel, equipment and facilities)

to ensure a ready and controlled source of technical competence Provides 50/50 percentage limitation

not more than 50 percent of funds made available for depot level maintenance for performance by non-Federal Government personnel

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PPP Foot-stomps and FAQs

      What is the Common Characteristic of all PPPs?

What is the Primary PPP Statute used to Authorize PPPs?

What are the Objectives of PPPs?

When should a Program Partner?

What New Policy Exists on PPPs?

Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail?

  Who Is the Final Authority to Approve Partnerships?

How Many Partnerships does the Air Force have and what is the Future Direction?

6

Objectives and Goals of Partnering

30 Jan 2002 PPP for Depot Maintenance Memo and USC Title 10 Section 2474

   Reduce cost of DoD parts and services (produced or maintained at a Center) Reduce DoD cost of ownership, in operations and maintenance, and environmental remediation Improve use of available organic capability    Leverage private sector investments to re-capitalize depot mx activities (facilities and equip) More responsive, timely, reliable support to warfighter Sustain parts availability, reduce repair cycle times, enhance readiness (improved supportability and reliability)    Sustain Core capabilities (economically) Enhance industrial base to improve and sustain manuf. & repair capabilities (org and private) Introduce improved business practices & updated technology to DoD maintenance operations and products.

Draft AFI 63-101 (2008)

 Improve facility utilization  Improve Air Force 50-50/Core posture

PPP Foot-stomps and FAQs

      What is the Common Characteristic of all PPPs?

What is the Primary PPP Statute used to Authorize PPPs?

What are the Objectives of PPPs?

When should a Program Partner?

What New Policy Exists on PPPs?

Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail?

  Who Is the Final Authority to Approve Partnerships?

How Many Partnerships does the Air Force have and what is the Future Direction?

8

When to Partner

• • • • • • • •

No data or limited data for repair —

Partner

No data or limited data for parts —

Partner

Expensive depot activation —

Partner

Prime wants to stay engaged —

Partner

Expensive contractor repair rates —

Partner

Obsolete parts/processes —

Partner

Prime & govt do different things better —

Partner

Truly COTS / truly supportable solely in private sector for the long-term —

Contract

Most Programs are “Ripe” for Partnering.

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PPP Foot-stomps and FAQs

      What is the Common Characteristic of all PPPs?

What is the Primary PPP Statute used to Authorize PPPs?

What are the Objectives of PPPs?

When should a Program Partner?

What New Policy Exists on PPPs?

Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail?



Who Is the Final Authority to Approve Partnerships?

 How Many Partnerships does the Air Force have and what is the Future Direction?

10

AFMC PPP Guidance for Depot Maintenance (16 Jan 09)

• AFMC/CC directed standup of AFMC/A8R Business Integration Office - Jan 08 – A8R charter for shaping AFMC best business practices approved Feb 08 • AFMC/A8R conducted data call, reviewed PPPs and revised policy during 2008 • • 16 Jan 09 - AFMC/CC Memo issued to provide PPP guidance for depot maintenance – – Replaced 29 Mar 06 AFMC PPP guidance for Depot Maintenance Memo PPP Approval Authorities (aggregate annual values, anticipated or actual):  ALC/CC – Less Than $25M  AFMC/CC – Greater Than or Equal to $25M OR lesser valued PPPs deemed to be of significant interest All PPPs are sent to AFMC/A8R for review – PPPs over $25M threshold are coordinated at AFMC Group prior to AFMC/CC approval • PPP reviews for approval may be comprised from some or all of the following: – Partnering Agreements (PAs) – – Implementation Agreements (IAs) Business Case Analyses (BCAs) 11

AFMC PPP Guidance for Depot Maintenance (16 Jan 09)

• • • 16 Jan 09 - AFMC/CC Memo issued to provide PPP guidance for depot maintenance – – – Established PPP goals, approval authorities, procedures for approvals Requires BCAs at the IA level for all PAs Requires quarterly metrics tracking the achievement of the stated objectives or the partnership – Established SPA, PA and IA templates to expedite the drafting of agreements Center Business Offices (CBOs) established at each Air Logistics Center to “secure the right workload” and manage partnership agreements – – 2 CBO Summits held to date with another planned for Oct 09 CBOs have established a Business Development (BD) team at each Center and are charged to develop BD Plans and Strategies – A BD workshop was held with all CBOs to develop a BD concept for the Command in April 09 AFMC/A8R and the CBOs supported a booth at the Jul 09 United States Air, Trade, and Technology (USATT) Expo and InfoTech Conferences • USC Title 10 Section 2474 “Foot-stomp” (broad and simplifies) 12

PPP Foot-stomps and FAQs

      What is the Common Characteristic of all PPPs?

What is the Primary PPP Statute used to Authorize PPPs?

What are the Objectives of PPPs?

When should a Program Partner?

What New Policy Exists on PPPs?

Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail?

  Who Is the Final Authority to Approve Partnerships?

How Many Partnerships does the Air Force have and what is the Future Direction?

13

# of Active PPP and Future Direction

OO-ALC PPPs OC-ALC PPPs WR-ALC PPPs 14 11 17 • • All three ALCs have created a Center Business Office and are chartered to “Secure the Right Workload” at their respective Center AFMC is working with each CBO to provide oversight and procedures to ensure an Enterprise Perspective 14

Summary

• 16 Jan 09 - AFMC/CC Memo issued to provide PPP guidance for depot maintenance – New processes and emphasis being placed on PPP Management – Additional focus on performance management to ensure PPPs achieve their stated objectives • Center Business Offices (CBOs) established at each Air Logistics Center to “secure the right workload” and manage partnership agreements • USC Title 10 Section 2474 – Broad range of applications – Allows approval at a lower level in many cases • A key element in each of these arrangements is the utilization of some aspect of organic depot maintenance capability to support the partnership (facilities, manpower, equipment) 15