Transcript BAE Systems PowerPoint Toolkit

National 8(a) Association 2015 Winter Conference
Subcontracting
Navigating through the new Landscape
02 FEB 2015
Presenter:
Susan King
Director, Small Business Operations
Electronic Systems, Nashua, NH
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Today’s Topic’s
 Introduction to BAE SYSTEMS
Global Company – Core Values
 Global Pressures on Defense Spending
 Five Year Outlook for Defense Budgets
Declining DoD Budgets in US
 Increased Regulation on Defense Contractors
New Normal Pressures Small Business Opportunities
 Good News! - US Government DoD CSP extended
 What Can Small Businesses Do?
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GLOBAL COMPANY
Core Values to Small Business
BAE Systems, Plc – Global Defense Contractor - ~84,000 Employees
Home Markets - United Kingdom, United States, Australia, India, Saudi Arabia
Core Values to Market Strategy:
Build significant indigenous capability and footprint
Mutually beneficial partnerships with investment in local businesses
Sharing of skills and technologies
Provide sustainable employment for local people
Core Commitment in Small Business Mission Statement:
“BAE Systems is committed to partnering with and providing opportunities to qualified
small businesses. We believe small businesses are an essential component of the BAE
Systems team. Together we can drive innovative solutions and make the technology
leaps necessary to be leaders in the industry. We recognize that supporting and
strengthening our small businesses not only benefits the economy, but delivers BAE
Systems a stronger and more diverse supply base.”
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Global Pressures on Defense Spending
1. The recovery in global Defence expenditure will stall
With further cuts required to government spending in the West and declining
growth in the Middle East, Defence expenditure may contract marginally in 2015.
oil revenues
dampening
2. Defence budgets will continue to fall in the West
NATO accounting for more than half of global Defence spend; largest portion of NATO funding comes from the US.
US Budget Control Act of 2011 set caps on Defence spending through FY21.
3. Rapid growth in Middle East & North Africa will end as oil revenues slump
With Defence spending having grown at an average annual rate of almost 9 per cent in real terms over the past three
years, declining returns from the oil sector will temper short term growth in MENA.
4. Asia-Pacific will solidify role as key driving force for future growth
Growth in Asian Defence expenditure is expected to accelerate from 3.3 per cent in 2014 to 4.8 per cent in 2015
.
5. Ukraine & Islamic State continue as cause of uncertainty
*Source: IHS Jane's Defence Budgets 2014 End of Year Report
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Five Year Defense Spending Trends:
Five Year Defense Spending Trends:
1.
2.
3.
Slow rate of decline of ~7% over 5 years in North America
Slowing rate of increase of ~20% over 5 years in Asia Pacific
Stagnant rate of increase of ~5% over 5 years in ROW
(-1.25% per Year)
(+4% per Year)
(~1% per Year)
*Source: IHS Jane's Defence Budgets End of Year Report
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The “New Normal”
•
Government Spending Budget Uncertainties
•
•
Affordability Focus
•
•
•
Increased competition for Fewer Programs
Low Cost and Technical Acceptable vs. Best Value
Agility / Responsiveness
•
•
•
Shifting Priorities
“Award Stagnation” - Longer Award Cycle Times
Shorter Delivery Cycle Times
Execution is a given
•
Quality / Delivery / Technical performance
Changed Landscape for New Defense Markets……
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“New Normal” - Customer Directives
Special Operators Want Lighter, User-Friendly Equipment – And Fast
National Defense Magazine
By Grace V. Jean
August 2010
The U.S. Special Operations Command doesn’t care whether industry has the latest and greatest
technology if it can’t put it quickly into the hands of troops.
“Innovation and responsiveness are keys to our success. Agility is essential,” said Navy Adm.
Eric T. Olson, head of U.S. Special Operations Command, in a speech to the 2010 Special
Operations Industry Conference, in Tampa, Fla.
If the speed of acquisition is throttle that determines the speed of war, then fielding new technologies “as
rapidly as possible is a primary method of shortening conflicts and saving lives,” Olson said.
Target affordability and
controlling cost growth
Since 9/11, SOCOM’s equipment budget has more than doubled from $900 million to $2 billion in
2010 — $1.5 billion in procurement and about $500 million in research and development.
Next year, however, R&D funding will drop by 26 percent, which means that SOCOM will be doing less of
its own development and will be searching for new technology in the private sector, said James Cluck,
SOCOM’s acquisition executive.
The U.S. Special Operations Command
doesn’t care whether industry has the
latest and greatest technology if it can’t
put it quickly into the hands of troops.
“Innovation and responsiveness are keys
to our success. Agility is essential,” said
Navy Adm. Eric T. Olson, head of U.S.
Special Operations Command, in a speech
to the 2010 Special Operations Industry
Conference, in Tampa, Fla.
“We would never have enough money to pay for it all ourselves,” said Cluck in an interview with National
Defense. Another challenge is the slow pace of the military acquisition process. “We try to do it as rapidly
as we can, but it’s tough to match up science and technology with the way we do budgeting and
programming in the department,” he said.
“We have to wring every bit of capability out of the technologies that are available,” said Cluck.
“Sometimes we just need to figure out how to use current technologies better.”
You will establish an
affordability target to be
treated by the program
manager (PM) like a Key
Performance Parameter (KPP).
... you will provide a quantitative analysis of the
program’s portfolio or mission area across the life
cycle of all products in the portfolio or mission area ...
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DoD Directives
 Affordability
 Responsiveness
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“New Normal” - Affordability
“When I talk about
affordability, I’m really
not talking about costcontrol, per se…I’m
talking about not
starting programs that
we can’t afford”
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“New Normal” - Better Buying Power (BBP) 2.0
NO MENTION – “COST OF INCREASED REGULATION”
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“NEW NORMAL” INCREASING REGULATION
Enforcement:
DCAA adds
3,000
Auditors
Cooperation & Communication is essential for efficient & effective
Compliance.
COUNTER
FEIT
PARTS
Non-Compliance = We’re out of the game
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document number 10
Good News! – CSP Extension
Comprehensive Subcontracting Plan (CSP)
What Happened?
•
Department of Defense announced the extension of the CSP until December 31,
2017. New requirements set forth in the NDAA FY15
Why is this Good for Small Businesses?
•
•
•
Drives efficiency, long-range planning and strategic Small Business partnerships
Allows increased small business spend and Outreach rather than cost of reporting
Enables consistent streamlined structure and reporting across the enterprise
• Capitalizes policy effort for small business utilization
• Two reports twice a year instead of 600+ government reports twice a year
• Maximizes small business supplier selection and Outreach efforts
• Understanding and high visibility of small business efforts by senior executives
•
•
•
CSP participants are subject to annual DCMA reviews and performance rating
New small business initiatives required each year and must be achieved
BAE Systems CSP spend performance exceeds statutory requirements
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What can Small Businesses Do?
1. Develop Supply Chain Strategy – Your Core Skill
Prime Contractor
who presents many
opportunities
Supplier
Focus on one target opportunity
for a product or service. Find
your niche and exceed the
customers expectation.
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What can Small Businesses Do?
2. Gain Competitive Advantage
Strategy Focus
• Know the Market
• Set yourself apart
from competition
• Create a strong
business plan in
niche environment
• Find a Mentor;
whether a Small
Business Subject
Matter Expert or a
fellow business
owner. Reach Out!
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Reliable, Trusted,
Performance
• Build / Maintain
Valued Relations
• Create Belief
• Build the Trust
• Master Open
Communication
• Consistent
Accomplished
Performance
• Adaptable
• Flexible
Challenges
• Meeting
Customer
Expectations
• Understanding
Big Company
Culture
• Credit /Cash Flow
• Employees;
Locating, Hiring,
and Training
• Networking
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What can Small Businesses Do?
3. Understand Prime Contractor Challenges
Security – Classified information
Understanding FAR / DFARS compliance
ITAR- Export Control / US Citizens
DMS- Diminishing material / Obsolescence
Communications- Public Releases
Gifts/Gratuities/Business Courtesies
Counterfeit Parts Prevention
Specialty Metals DFARS 252.225-7014 Preference
for Domestic Specialty Metals
Matching Technology to requirements
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What can Small Businesses Do?
4. Deliver Successful Results – to Customer NEED
1)
2)
3)
4)
5)
6)
7)
8)
Focus on “Core Competency”
Provide “First Rate” Customer Service
Create Loyalty & Enthusiasm in Customer Base
Understand & Manage Customer:
Needs / Requirements / Expectations
Manage Your Business (Cash Flow / People)
Look for Mentor-Protégé Opportunity’s
(Both formal, informal, and w/ other business owners)
Create Lasting Partnering Relationships
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What can Small Businesses Do?
5. Understand your Customer 1st – Info and POC’s
Visit our BAE Systems
website……http://www.baesystems.com/supplierdiversity
• Sector Structure
Electronic Systems
Intelligence & Security
Platforms & Services
Enterprise Shared Services
Welcome to the US Supplier Website. Supplier information on each of
the following businesses is available. Click the module links below for
supplier information specific to your sector of choice, or navigate this
page for information on BAE Systems, Inc. as a whole.
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Questions?
Thank you
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