Transcript Army Acquisition: Challenges and Opportunities General Officer/Senior Executive Service Course Army Force Management School LTG Bill Phillips Principal Military Deputy to the Assistant Secretary of the.

Army Acquisition:
Challenges and Opportunities
General Officer/Senior Executive Service Course
Army Force Management School
LTG Bill Phillips
Principal Military Deputy to the
Assistant Secretary of the Army
(Acquisition, Logistics and Technology)
and Director, Acquisition Career Management
4 December 2012
Agenda
• ASA(ALT) Mission and Organization
• Army Contracting
• Acquisition Overview
Goals:
• Understanding the Importance of Contracting
• Understanding the Value of Acquisition
• Understanding Acquisition as a Critical Warfighting Enabler …
2
Intense Firefight
at Paktika Province, Afghanistan
U.S. Soldiers from 4th Brigade Combat Team, 101st Airborne Cbt operations in the Paktika Province,
Afghanistan, 20 May, 2011
3
ASA(ALT)
Vision: A highly innovative organization of dedicated
professionals transforming the Army with integrated
Acquisition, Logistics, and Technology capabilities to provide
Soldiers a decisive advantage and win our nation’s wars!
Mission: Provide our Soldiers a decisive advantage in any
mission by developing, acquiring, fielding, and sustaining the
world’s best equipment and services and leveraging technologies
and capabilities to meet current and future Army needs.
The advantage is achieved by combining and leveraging the Design,
Develop, Deliver, Dominate – principles.
4
Soldier Protection
• Stryker Double-V Hull
• Mine-resistant Ambush-Protected AllTerrain Vehicle (M-ATV) Underbody
Improvement Kit
• Body Armor
Bottom View
Stryker Double-V Hull
M-ATV Underbody
Improvement Kit
• Caiman Explosively Formed Penetrators
Enhancements
Body Armor
• Squad Lethality – machine guns, mortars,
sensors, Unmanned Aerial Vehicles
(UAVs), uniforms
Caiman MRAP Vehicle
• Pelvic Protection
Pelvic Protection
First Look, First Strike Advantage
5
Providing Soldiers a Decisive Advantage
First Lieutenant (1LT) Jason Miller
• Two rounds from an AK-47 impacted the
front of his helmet
• A third round traced around the inside and
exited the nape protector
1LT Miller’s ACH
• Initially knocked down, he quickly regained
his composure and dispatched both enemy
combatants.
This helmet saved 1LT Jason Miller ‘s life while
he was on patrol in Logar Province, Afghanistan
on July 19, 2010.
6
ASA(ALT) Organizational Structure
7
Program Executive Office Locations
8
Army
Contracting
9
Acquisition will impact you
“Palantir”
Intro: Issues arose concerning units in OEF desiring Palantir v/s DCGS-A.
Current: Recently the Army discovered 3rd ID had received training services and equipment without a proper contract in place.
Working with 3ID to complete the required business procedures in an expedited manner to insure a contract was in place.
The News:
• Army Times “3ID’s acquisition of intel software probed”
• The Washington Times “In anit-IED software case, Army’s buying rules trump troops’ safety”
• Defense News “Army orders Intelligence servers shut down, threatens Palantir, continues 3ID probe”
• Defense Systems “Army investigates improper acquisition of intel software by Infantry unit bound for
Afghanistan”
• FY12–actions and obligations have inched up on latest reports to 412k actions/$107.5B
• With the slight increase in Dollars, the average per day has inched up to $295M
Actions:
• Mr. Kim Denver (DASA-P) sent a memo to Army Contracting Command (ACC) requesting ACC serve notice to
Palantir to stop approaching deploying units (dated 12 September 2012)
• HON Heidi Shyu (ASA ALT) sent a memo to Commander, US Army Forces Command requesting ratification and
training (dated 14 September 2012)
• ASA ALT assigned Program Executive Officer, Intelligence, Electronic Warfare and Sensors (PEO IEW&S) as the
Army Office of Primary Responsibility (OPR) for Link Analysis Tools and Services
• Numerous sessions with senior Leaders
Way Ahead:
• 3rd ID Headquarters has deployed to a location where Palantir equipment and services are already in use and
corrective actions do not affect the use of this capability in theater.
• Existing rapid acquisition processes and procedures remain in place to respond to urgent operational needs.
Bottomline: Pay attention to proper Contracting Procedures
10
Acquisition Will Impact You
“Examples”
The GOOD
EAGLE Contract: Enhanced Army Global Logistics Enterprise: A $23.5B five year contract that
supports DOLs, Army Prepositioned Stocks, Theater Provided Equipment, Direct Theater Support,
Left Behind Equipment, New Equipment Training, New Equipment Fielding, RESET.
The BAD
KBR: KBR Connected to Alleged Fraud, Pentagon Auditor Says Washington Post article, May 5, 2009:
KBR, the Army's largest contractor in Iraq and Afghanistan, is linked to "the vast majority" of
suspected combat-zone fraud cases that have been referred to investigators, as well as a majority of
the $13 billion in "questioned" or "unsupported" costs, the Pentagon's top auditor said yesterday.
The UGLY
Jorge Scientific: ABC news, Brian Ross, video from Nov 2011 to Feb 2012 depicts some Jorge
Scientific civilian contractors living at a house in Kabul and were engaged in illicit drinking and there
was at least one case where an employee threw live small arms ammo into a fire pit.
Mi-17: DODIG-2012-135 report, to determine whether DoD personnel performed proper
Oversight, management, and pricing of two task orders for the overhaul of Mi-17 helicopters.
Picatinny Cat: April 11th, 2008. An errant projectile struck a family cat…..federal lawsuit
11
What Are We Spending?
• The contracting environment is tough, workload is increasing,
requiring adequate resources to execute:
o FY11 – 470K actions / $124.3B
o FY12 – 412K actions / $107.5B
• In FY12 Army Contracting, on average, purchased $293M per day
• In FY12 the Army executed 21.41% of Federal contracting and
30.27% of Defense contracting
• In FY12 the Army spent $3.8B on Logistics Civil Augmentation
Program (LOGCAP) IV.
12
U.S. Army Financial Ranking
2011 Fortune 500: Top Firms
(Source: CNNMoney.com)
Rank Company
Revenues
($ billions)
1
Wal-Mart Stores
421.8
2
Exxon Mobil
354.6
3
Chevron
196.3
4
ConocoPhillips
184.9
5
Fannie Mae
153.8
6
General Electric
151.6
7
Berkshire Hathaway
136.1
8
General Motors
135.5
9
Bank of America
134.1
10
Ford Motor Co.
128.9
11
Hewlett-Packard
126
12
AT&T
124.6
13
J.P. Morgan Chase & Co
115.4
$139B (FY11 Army Base Budget)
ASA(FM&C)
Army Contract
Distribution
61%
Services
39%
Supplies
13
Where America is Spending
Annually, America spends, on average, more
on a pizza party than we do on the Army.
Annual U.S. Beer Sales = $96B
Annual U.S. Pizza Sales = $35B
Annual U.S. Soda Sales = $19B
$150B
Army Base Budget in 2012 = $135.4B
Sources: Beer Statistics: brewersassociation.org (Business Tools)
Pizza Statistics: http://pmq.com/digital/201109/files/52.html
Soda Statistics: Time Business
14
Contractors on the Battlefield
Contractors per Soldier
Complexity of Conflict
Afghanistan 1.1:1
Iraq 1.13:1
Gulf War
Vietnam 1:6
Korea 1:2.5
World War II 1:7
World War I 1:20
OND: 23,886 contractors*
OEF: 113,491 contractors
Civil War 1:5
American Revolution 1:6
Simple Services
Complexity of Service
Force caps in
Kosovo/Bosnia
1:60
resulted in higher
contractor to
Soldier ratios.
Shorter duration of
conflict in DS/DS required
less contractor support.
Numbers do not include
HNS from Saudi Arabia.
Balkans 1:1
Medical
Laundry
> Longer Deployment / Nation Building
> Complex Services
As conflicts become more complex, Commanders have
been requiring more robust services in support of forces.
Food Service
Shower Service
Transportation
Sanitation
Source: DASD(PS) Contractor Support in USCENTCOM AOR
* These numbers are as of December 9, 2011 and do not reflect the continued
contractor drawdown in anticipation of the end of military operations in Iraq.
Maintenance
Construction
Intelligence
Security
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Contracting Friction Points!
Procurement Involves Multiple Stakeholders
FP 1
Requirements
Generation
Friction Pt 1:
Incomplete SOW/PWS
Limited time
Lack of automation
cASM
FP 2
Contract
Award
FP 3
Contract
Admin
Contract
Closeout
Friction Pt 2:
Appointment of CORs
Maintaining CORs
Effective oversight
Friction Pt 3:
Invoice certification
Property accountability
COR EXORD
RCC & RM Partnerships
Unauthorized Commitments; Anti-Deficiency Act violations;
ineffective mission support; operational impacts
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Actions Commanders Can Take
1.
Be familiar with the acquisition / contracting process!
2.
Understand “fully” what contracts and contractors are under your responsibility
and authority!
3.
Integrate operational contract support planning into logistics and operations
planning
4.
Plan requirements carefully; avoid gold-plating
5.
Consider other support options first (organic assets, supply system, DLA)
6.
Develop a good relationship with the Contracting Commander!
7.
Protect taxpayer funds—eliminate inefficiencies
8.
Quality CORs = quality contractor performance
9.
Hold contractors accountable
10. Avoid any appearance of impropriety
11. Ensure property is placed on the books
Work closely with your Contracting Activity
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Operational Contract Support Publications
Information for the Warfighter
DODI 3020.41
JP 4-10
Operational
Contract
Support and
Contingency
Program
Management
Operational
Contract
Support
ATTP
4-10
Operational
Contract
Support:
Tactics,
Techniques &
Procedures
17 Oct 08
POLICY
Deployed COR
GTA 90-01-016
DOCTRINE
Contracting Basics
for Leaders
GTA 70-01-001
FM 4-92
Contracting
Support
Brigade
CERP
GTA 90-01-017
10 Feb 2010
FOO
GTA 14-01-001
GO OCS “Flashcard”
DPAP COR
HANDBOOK APR 10
CALL # 09-27 APR 09
CALL # 08-12 APR 08
CALL # 08-47 SEP 08 CALL # 09-16 JUL 09 CALL # 09-48 SEP 09
OCS Community of Practice (AKO): https://www.us.army.mil/suite/page/659589
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Acquisition
Overview
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The Power of the Acquisition Corps
AR
9%
FA
11%
LG
17%
AD
5%
IN
12%
AV
13%
EN
5%
SF
1%
CM
3%
SC
9%
FI
2%
AG
4%
MI
6%
MP
2%
“The Army Acquisition Corps will enhance and sustain the acquisition skills of a select group of officers with a solid foundation of
operational experience…” GEN Vuono, CSA 11 Jan 1990
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NCO Education – Active Component
HIGHEST EDUCATION LEVEL
ACHIEVED
SGM
MSG
SFC
SSG
4
9
7
20
Associate’s Degree
SGT
TOTAL
Bachelor’s Degree
9
25
34
13
81
Master’s Degree
5
3
3
4
15
TOTAL Number of NCOs
15
50
127
164
4
360
TOTAL with Advanced Degrees
14
32
46
24
0
116
93%
64%
36%
15%
0%
32%
Doctorate Degree
PERCENT with Advanced
Degrees
Gender Demographics: 219 Males, 114 Females & 27 Unknown
As of 31 Jan 12
Source: CAPPMIS
We Need Your Help to Identify the Best and Brightest!
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FA51 Army Acquisition Corps - Officers
Developing a Professional Acquisition Corps:
Legacy Officer Career Timeline
Ranges from 6-12 Yrs
Basic Branch
0
1
2
3
Years of Service
Accession Window
4
5
6
7
8
9
10
Strength of the Corps!
Acquisition career guidance
directed multi-functionality
Acquisition
11
12
13
14 15
16
Average accession at 10th YOS
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AR
9%
18
FA
11%
LG
19%
AD
4%
IN
12%
AV
13%
Career Timeline Impact
Reduced to 4-9 Yrs
EN
5%
Acquisition career guidance emphasizes
technical proficiency prior to broadening
SF
1%
CM
2%
Basic Branch
0
1
2
3
Years of Service
Accession Window
4
5
6
Acquisition
7
8
9 10
11
12
Average accession at 7th YOS
13
14
15
16
17
SC
9%
FI
1%
18
AG
3%
MI
5%
MP
1%
Recent Officer VTIP metrics:
•
•
•
Reduced time in service from 10 to 6.9 years.
OERs: All reflect potential for promotion to O4.
Reduced transition from 2.2 yrs to 1.3 yrs after accession.
COL
153
LTC
425
MAJ
647
CPT
248
TOTAL
1742
Recent Broadening and “Re-Greening” Initiatives:
• Robust ACS and TWI partnerships: New for 2012 - Cisco, Coca-Cola, Google, Intel, and Microsoft!
• Transitioned 3 UT-Austin SSC Fellowships to MIT, Georgetown, and Carnegie Mellon.
• Piloting an Aerospace and Defense Executive MBA program with the University of Tennessee.
• Strong SSC Fellows Mentorship Program.
• Completely revised Chapter 42, DA PAM 600-3.
• AAC
attendance at CGSoC, Fort Leavenworth commencing 2014.
• Senior COCOM Staff Membership: J4 Operational Contract Support
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Changing the Acquisition Paradigm
“Driving Positive Change”
Requirements
Resources
Acquisition
Sustainment
Inherently Linked!!!!
New Paradigm
• Acquisition Stakeholders can’t be stove-piped
Requirements
Resources
• Must Collaborate & Synch through lifecycle
• Institute Rigor and Analysis in Process
• Challenge & Shape Requirements
Acquisition
and
Sustainment
• Trade Performance for Cost & Schedule
• Emphasize Affordability
• Improve Oversight of Contractors
Collaboration is Absolutely Necessary
Big “A” Acquisition Is: Requirements, S&T, Resources, Acquisition Strategy, Sustainment, & Demilitarization
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Better Buying Power 2.0
Achieve Affordable Programs
• Mandate affordability as a requirement
• Institute a system of investment planning to derive affordability caps
• Enforce affordability caps
Control Costs Throughout the Product Lifecycle
• Implement “should cost” based management
• Eliminate redundancy within warfighter portfolios
• Institute a system to measure the cost performance of programs and
institutions and to assess the effectiveness of acquisition policies
• Build stronger partnerships with the requirements community to
control costs
• Increase the incorporation of defense exportability features in initial designs
Incentivize Productivity & Innovation in Industry and Government
• Align profitability more tightly with Department goals
• Employ appropriate contract types
• Increase use of Fixed Price Incentive contracts in Low Rate Initial Production
• Better define value in “best value” competitions
• When LPTA is used, define Technically Acceptable to ensure needed quality
• Institute a superior supplier incentive program
• Increase effective use of Performance-Based Logistics
• Reduce backlog of DCAA Audits without compromising effectiveness
• Expand programs to leverage industry’s IR&D
Eliminate Unproductive Processes and Bureaucracy
• Reduce frequency of OSD level reviews
• Re-emphasize AE, PEO and PM responsibility and accountability
• Eliminate requirements imposed on industry where costs outweigh benefits
• Reduce cycle times while ensuring sound investment decisions
Promote Effective Competition
• Emphasize competition strategies and creating and maintaining
competitive environments
• Enforce open system architectures and effectively manage
technical data rights
• Increase small business roles and opportunities
• Use the Technology Development phase for true risk reduction
Improve Tradecraft in Acquisition of Services
• Assign senior managers for acquisition of services
• Adopt uniform services market segmentation
• Improve requirements definition/prevent requirements creep
• Increase use of market research
• Increase small business participation
• Strengthen contract management outside the normal acquisition
chain – installations, etc.
• Expand use of requirements review boards and tripwires
Improve the Professionalism of the Total Acquisition
Workforce
• Establish higher standards for key leadership positions
• Establish stronger professional qualification requirements for all
acquisition specialties
• Increase the recognition of excellence in acquisition
management
• Continue to increase the cost consciousness of the acquisition
workforce – change the culture
https://dap.dau.mil/leadership/Pages/bbp.aspx
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Acquisition Increasing Complexity
25
A “Transforming” Challenge to the Army
Thinking Outside of the Box
26
Ground Combat Vehicle
Requirements / Specifications Approach
First Request for Proposals
Second Request for Proposals
• 900+ specifications in first Request
for Proposals
• Meet/exceed threshold for all
specifications
• No prioritization of requirements
• Fully compliant system has high unit
cost estimate
Cost: $18M
Cost: $9M-$10.5 M
136
TIER 1
Tier 1 – Big 4 Must Haves: Force Protection, Capacity, Full Spectrum, Timing and Selected
Safety, Statutory, and Regulatory Requirements
589
TIER 2
Tier 2 – Offeror may propose less than threshold requirement but may not
defer the full requirement
•
•
•
•
20
TIER 3
Band A:
Band B:
Band C:
Band D:
Mobility and Lethality specifications
(Vehicle) Survivability specifications
All other specifications
Will be provided as Government Furnished Equipment
Prioritization Scheme
Tier 3 – Offeror may defer full requirement to a future increment
27
Joint Light Tactical Vehicle $240K
PAYLOAD TON MILES PER GALLON
Technical Features
•275-340 HP Diesel Engine (6 Cyl or 8 Cyl)
•6-Speed Automatic Transmission
•Independent Four-Corner Suspension (passive or semiactive)
•Adjustable Height Suspension
•Air-activated Hydraulic Anti-lock Disc Brake System with
controlled trailer braking and Traction Control
•Starter & Alternator powertrain (15 kW On-Board
Power Generation)
•Silent Watch battery (2 hours of silent watch)
•Curb Weight: 14000 lbs
•GVW: 20,000 lbs
•GVWR: 21,500 lbs
Safety Features
•18”-24” ground clearance
•Electronic Stability Control
•Automatic Fire Extinguishing System [AFES] (engine &
crew compartments)
•Combat-locking Doors
•Central Tire Inflation System (CTIS)
•Multiple occupant egress paths
•Exterior provisions to accept EFP and RPG kits
Interior Features
•3,500 lbs Payload Capacity with 40 cu ft rear stowage
space for mission payload
•Accommodates 5th-95th percentile combat-equipped
occupants
•Extreme climate condition HVAC controls
•Noise-reducing crew compartment
•Spall protection
•Wired for Easy/integrated C4I Installs
Exterior Features
•Tubeless radial tires (365 mm – 395
mm width, with 20”-22.5” rims)
•30-40 gal fuel tank
• Pintle for towing JLTV trailer or legacy
trailers (HMMWV / FMTV)
•External NATO Slave Cable Receptacles
•LED Headlights
•Exterior lighting package (including
Blackout Mode)
•Fording to 30”
10
6 MPG
Base Vehicle Cost:
$240K (AUMC)
Armor
$21K (Fleet Avg)
Base + Armor
Added Capability Options:
• Efficient Blast Dissipation - $35K
• ISG (20kw/30-40kw)-$10-17K
• Suspension-$5K
• Drivers Display-$17K
• Cmd Display-$17K
• Additional B-Kit: EFP, RPG
Over
OMS/MP
13
7 MPG
PROTECTION
$261K
Other Procurement Cost:
$81K
to
100 %
Assembled in
The USA
• Integral Small Arms Ballistic
protection
• Integral Transparent Armor (small
arms ballistic protection)
• Scalable B Kit: 1x UB; 2x UW;
Artillery Overhead
• Roof Crush protection to 100%
GVW
A-Cab
Small Arms
B-Kit
Army - 1X
USMC - .5X
28
Network Integration Evaluation (NIE)
What is the NIE?
… a series of semi-annual evaluations designed to
integrate and mature the Army’s tactical network by placing
a large number of emerging systems with Soldiers in
operational scenarios.
What will NIE allow us to do?
… develop a single battlefield network able to push
information to our Soldiers and link them to command
posts, vehicles on-the-move and higher headquarters.
It’s a new way of doing business –
a fundamental change in how we deliver capabilities to our Soldiers
29
Transforming to an Agile Acquisition Process
From Candidate to Fielding
INPUTS
Potential Solution
Selected for
evaluation
Candidate Evaluated
in Lab at APG
TRADOC
Gaps
Analysis
• Sources Sought
• RFI
• Technical Evaluation
• Technical Maturity
OUTPUTS
Product procured
for Specific
Capability Set
Product selected for
inclusion in Capability
Package
Capabilities
for Soldiers
• Contracting
• Competition for
additional sets
• Directed Buy(?)
• Rapid Acquisition
• Directed Procurement
Selected
for
inclusion
in NIE
Candidate System
evaluated in NIE
• DTLOMPF
Evaluation
• Capabilities and
Limitation review
NIE = Critical Path to Execution
30
Army Acquisition – Myths and Truths
• The Army always buys the cheapest solution without regard to quality.
• The Army seeks to award contracts that provide the best value and
meet the needs of the Warfighter while still examining cost, schedule,
performance, risk and other factors.
• Army Acquisition is “broke” and can’t acquire anything, why invest?
• Army Acquisition successes:
• MRAP and MRAP-ATV
• Helicopter Improvements
• 9 Body Armor Improvements
• UAVs (Grey Eagle, Shadow, Raven)
• Precision Munitions
• Stryker Double-V Hull
• C-IED (CREW Devices)
• 3 New Sniper Rifles
• New Camouflage Uniforms
• M4 Improvements
• Warfighter Information Network-Tactical (WIN-T)
• Protected medium and heavy truck fleets (Up-Armored)
• Joint Battlefield Capability-Platform (JBC-P)
• Light-weight Crew-served Weapons
• Joint Capability Release (JCR)
• Combat Vehicle Improvements
• Counter Rocket, Artillery, and Mortar (CRAM)
Acquisition Rigor delivers a Best Value Solution
addressing the entire Lifecycle from Womb to Tomb
31
THANK YOU!
for Supporting our
Acquisition Warriors
32
Seeking Innovation – An Example
33
Army Acquisition:
Challenges and Opportunities
General Officer/Senior Executive Service Course
Army Force Management School
LTG Bill Phillips
Principal Military Deputy to the
Assistant Secretary of the Army
(Acquisition, Logistics and Technology)
and Director, Acquisition Career Management
4 December 2012