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Financial Implications of Contracting for Acquisition Programs

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1 Financial Implications of Contracting for Acquisition Programs
Professor Gerry Land CPA, CDFM-A Defense Acquisition University Capital & Northeast Region Fort Belvoir, VA (703) ; DSN Workshop # PDI – June 2010

2 Workshop Topics Basic Contracting Information
Contract Families and Types in those Families Characteristics of Contract Types Elements of Contract Types Broad Policies of Contracting Budgeting for Acquisition Contracts Special Topics Multi-Year Contracts Planning for Contract Award Unique Contract Provisions and Clauses “Contracting” Through use of MIPRs Management of on-going Acquisition Contracts Summary

3 Two Families of Contracts
Fixed Price Contracts Provides for firm price or, in appropriate cases, an adjustable price Contractor’s profit built into price Use when specific requirements known before award Cost Reimbursement Contracts Provides for payment of allowable incurred costs Contractor’s profit = fee Use when uncertainties in contract performance prevent sufficiently accurate estimate of costs for fixed-price contract

4 Two Families of Contracts Types Within the Families
Fixed Price Family Cost Reimbursement Family Firm Fixed Price (FFP) Fixed Price (EPA) Fixed Price Incentive (FPI) Types Types Cost Plus Fixed Fee (CPFF) Cost Plus Incentive Fee (CPIF) Cost Plus Award Fee (CPAF) Very difficult and developmental work, such as a rocket or spaceship, would likely be contracted for with a cost type contract. A commercial item that is sold on the market, even with some modifications, can be acquired on a fixed price basis.

5 Characteristics of Contract Families
Cost Reimbursement Fixed Price Contractor’s Promise Best Efforts Deliver specifics Financial Risk to Contractor Low High Financial Risk to Government High ? ? ? Cash Flow to Contractor As Cost Incurred On Delivery Progress Payments % Incurred Performance Based Payments Milestones (Preferred) Government Administration High Low Fee or Profit ? Fee Profit H. Types of Contracts. 1. Most important subject area. 2. All levels understand because type of contract determines the financial arrangement - how the $$ flows. 3. Right type of contract will not guarantee success, but wrong type will guarantee problems. Ensure the discussion links Acquisition Strategy, Acquisition Plan and risk management. 4. Two basic families: a. Fixed Price - general rule is deliver the product - or perform the service and then get paid. b. Cost - general rule is provide “best effort” and receive periodic payment during performance c. Discuss differences in FP and CR..

6 Elements of Contract Types
Firm Fixed Price (FFP) Negotiated Price (Includes cost and profit) Fixed Price Economic Price Adjustment (FP-EPA) Price Adjustment (+ or - based on stated economic conditions) Fixed Price Incentive (FPI) Target Cost Target Profit Share Ratio (Government / Contractor) Ceiling Price

7 Elements of Contract Types
(Continued) Cost Plus Fixed Fee (CPFF) Estimated Cost Fixed Fee Cost Plus Award Fee (CPAF) Base Fee (< 3% of estimated cost) Award Fee Pool Cost Plus Incentive Fee (CPIF) Target Cost Target Fee Share Ratio (Government / Contractor) Minimum Fee Maximum Fee

8 Schematics Showing Elements of Contract Types
Cost Profit 0/100 Share FFP (PTA) Ceiling Price Target Profit Fee Adjustment Formula (Ratio) FPIF Target Cost Estimated Cost Fixed Fee 100/0 Share CPFF Target Cost CPIF Target Fee Max Fee Min Fee Fee Adjustment Formula (Ratio) Base Fee (0-3%) Award Fee Pool Estimated Cost CPAF Max Fee Base 5. Approved Types: a. Fixed Price b. Cost c. Miscellaneous 6. Discuss types in terms of the financial risk apportioned to each party on board. 7. Cost plus profit (fee) equals price. A. Basic Fixed Price Types 1. FFP a. Elements - price b. Risk highest to contractor. c. Graph* 2. FP (EPA) a. Elements - price b. Also agree on economic price adjustment clause to take into account some future changed condition. c. Takes the contingencies out of the price (give example). d. Risk not as high as FFP WHY? B. Cost Types 1. CPFF a. Elements: (1) Estimated Cost; (2) Fixed fee b. Risk - relatively low from contractor’s perspective. c. Minimum incentive to control costs. WHY? d. Graph*

9 Broad Policies Relative to Contracts
Contracting Officers have relatively broad discretion in determining best type contract for a particular requirement Contract type selected should be based on appropriate criteria Contract should promote Government’s interests and motivate contractor to achieve objectives Restrictions on contract types: “Cost-Plus-Percentage-of-Cost” contracts are not authorized Fixed Price development contracts > $25M must be approved by USD (AT&L) Limitations on Fees for Cost Reimbursement Contracts CPAF – Base Fee may be “0-3%” of the estimated cost CPFF – Maximum Fixed Fee Percentages R&D Effort: 15% Production: 10% Architectural & Engineering (A&E) : 6%

10 Factors in Selecting Type Contract For Acquisition Programs
Timing on the acquisition continuum Degree of complexity to satisfy requirement Risk of successful performance Shared responsibility of risk involved Cost, schedule, performance and other incentives Fair and reasonable prices through competition Contracting Officer determines “best” contract type for required work effort and “most reasonable” cost to the government

11 Defense Acquisition Management System
With Emphasis on Contract Type Appropriate to Phase User Needs The Materiel Development Decision precedes entry into any phase of the acquisition management system Entrance Criteria met before entering phase Evolutionary Acquisition or Single Step to Full Capability Technology Opportunities & Resources A C B IOC FOC Materiel Solution Analysis Technology Development Engineering and Manufacturing Development Production & Deployment Operations & Support ICD CDD CPD Materiel Development Decision Post PDR Assessment Post CDR Assessment FRP Decision Review AoA PDR PDR CDR Pre-Systems Acquisition Now we will use the structure show here to briefly go thru each decision point and phase to point out key activities. or Systems Acquisition Sustainment CPFF FFP (LOE) CPIF CPAF FPI FFP Generally Preferred Contract Type For Different Phases IOC: Initial Operational Capability FOC: Full Operational Capability PDR: Preliminary Design Review CDR: Critical Design Review FRP: Full Rate Production Based on DoDI ; 8 Dec 08

12 Cost and Pricing Government policy is to pay a “fair and reasonable” price for goods and services for which a contract is awarded One responsibility of the contracting officer is to determine the “fair and reasonable” price Key Question: What is a “fair and reasonable” price and how is it determined?

13 Price Analysis vs. Cost Analysis
Performed by Government Contracting Officer Price Analysis Fast and “cheap” to perform Used to analyze sealed bids, small purchases and competitive proposals Cost Analysis Slow and costly to perform Used to analyze sole source and, occasionally, competitive proposals Standard, off-the-shelf items Repeat buys of other items Purchases < $500,000 Used when Purchasing: Used when Purchasing: Research and Development efforts Unique sole source items Purchases > $500,000

14 Acquisition - Related Contracts
Funding Policies for Acquisition - Related Contracts For Research and Development Efforts RDT&E Appropriation Incremental Funding Policy: Budget on basis of cost expected to be incurred during given fiscal year For Production Procurement Appropriation Full Funding Policy: Budget on basis of all cost for specific quantity of militarily usable end items expected to be put on contract during given fiscal year

15 Relationship Between Budgeting and Contracting
Accomplished well in advance of planned contract award In compliance with funding policies of appropriation to be used Amount based on “most likely price” of planned work effort Funds above budgeted amount may be needed for contract modifications, overruns, requests for equitable adjustments, claims and litigation judgments; request funds when known Contracting Action during execution phase of the acquisition process Upon contract award or modification, must have – and obligate – total amount of funds (budget authority) for “price” of work effort appropriate for contract type (i.e., cost reimbursement vs. fixed price) Contract “price” = contractor’s “cost” plus company profit or fee

16 Budgeting for Different Contract Types
General Rule: Budget to Most Likely Price Contract Type Budgeted Amount FFP Negotiated Price FP – EPA Negotiated Price (not including EPA) FPI Target Cost + Target Profit CPFF Estimated Cost + Fixed Fee CPIF Target Cost + Target Fee CPAF Estimated Cost + Base Fee + Maximum Award Fee

17 Budgeting for a CPFF Contract
Estimated Cost Fixed Fee 100/0 Share CPFF Elements of Contract: Estimated Cost: 2,000 Fixed Fee: Budget Estimate: 2,150 Step One: Determine Estimated Cost Step Two: Determine Fixed Fee Fixed Fee Limitations: R&D - 15% Production - 10% A&E % Step Three: Determine Budget Estimate Budget Estimate = Estimated Cost plus Fixed Fee

18 Budgeting for a CPIF Contract
Elements of Contract: Target Cost: 1,000 Target Fee: Maximum Fee: Minimum Fee: Sharing Arrangement: 80/20 100 60 80 Target Fee 80/20 Slope% CPIF Target Price: 1,080 1000 Step One: Determine Target Cost Target Cost Step Two: Determine Target Fee Step Three: Determine Other Elements Step Four: Determine Target Price Target Price = Target Cost + Target Fee Step Five: Determine Budget Estimate Budget Estimate = Target Price

19 Budgeting for a CPAF Contract
Base Fee (0-3%) Award Fee Pool Estimated Cost CPAF Max Fee Base Elements of Contract: Estimated Cost: 2,000 Base Fee: Maximum Award Fee: Budget Estimate: 2,200 Step One: Determine Estimated Cost Step Two: Determine Base Fee Step Three: Determine Maximum Award Fee Step Four: Determine Budget Estimate Budget Estimate = Estimated Cost; Base Fee; and Maximum Award Fee

20 Budgeting for Severable
Services Contracts DoD may budget for and enter into a contract for severable services that begin one fiscal year and ends during the next fiscal year if the contract period does not exceed one year Funds made available for a given fiscal year may be obligated for the total amount of that contract References: (1) Title 10, U.S. Code, Section 2410a (2) Comptroller General Decision B (22 May 96)

21 Budgeting for Termination Liability
On Incrementally Funded RDT&E Contracts Unliquidated obligation on incrementally funded contract must be sufficient to cover cost of terminating for convenience (if action required) Termination costs can not increase total budget needed If contract terminated, termination costs to be financed from unliquidated obligations without reprogramming Exceptions (expected to be rarely used): Statutory Waivers: When exempted by Public Law (then budgeted on a pay-as-you-go basis) Special Termination Cost Clause: Permitted by DFAR in fixed-price incentive and incrementally funded cost reimbursement contracts; approval requires notification of House and Senate Appropriations Committees

22 Award Fees Background Cost Plus Award Fee (CPAF) contract most suitable when government wants to incentivize contractor in areas other than just cost (e.g., subjective areas such as timeliness and technical performance) Total Award Fee consists of two elements: Base Fee (0 – 3% of estimated cost of contract minus Award Fee) Award Fee Pool (from which contractor earns fee based on superior performance in satisfying criteria stated in Award Fee Plan) Amount of fee actually paid is judgment decision made in accordance with criteria in Award Fee Plan Fee to be paid contractor is a unilateral government decision; generally, decision is not subject to “Disputes” clause Can be contentious topic for both contractor and government Kinds of things to Incentivize: Generally, things not quantifiable (judgmental or subjective areas) - Subcontractor Performance - Program Management - System Effectiveness Areas of evaluation may be changed from one period to the next Award Fees provide great incentive flexibility, but impose a considerable administrative burden on the PM Award fees have traditionally been held to be not subject to disputes, but ASBCA has held a case to be disputable when Ktr can demonstrate that decision was arbitrary.

23 Application of Award Fees
Elements of Award Fee Base Fee (0 - 3%) Periods Award Fee Pool 1 2 3 4 5 Award Fee Base (0 – 3 %) Award Fee Pool Evaluation Periods Evaluation Criteria Total Award Fee must be available at contract award Financial actions re Award Fee Commitment made before start of award period Obligation made after end of award period (but before payment) Payment action may be based on: Specific milestones Time periods Combination of milestones and time periods

24 Determination for Earning Award Fee
Criteria for earning specified in Award Fee Plan Frequency is important to the process Time based periods (usually 6, 9 or 12 month periods) Milestone or event-based periods Both time-based and milestone/event-based periods Unearned Award Fee – How can it be used? FAR prohibits “rollover” of unearned award fee to future evaluation periods or events Unearned award fee may be used by PMO or returned to higher command level for other requirements * Paragraph (e)(4), dated 14 Oct 2009 *

25 Special Topics

26 Multi-Year Service Contracts
Criteria for This Type Service Contract Must be a continuing requirement for the services Furnishing of services will require a substantial initial investment in plant or equipment, or the incurrence of substantial contingent liabilities for the assembly, training, or transportation of a specialized work force Use of such a contract will promote the best interest of the U.S. by encouraging effective competition and promoting economies of operation Chapter 137 of title 10, United States Code, Sec 2306C, Multiyear Services Contracts. (Originated in 2000 Authorization language)

27 Multi-Year Service Contracts
Type Services Appropriate for Such Contracts Operation, maintenance and support of facilities and installations Maintenance or modification of aircraft, ships, vehicles, and other highly complex military equipment Specialized training necessitating high quality instructor skills (e.g., Pilot and aircrew members; foreign language training) Base services (e.g., Ground maintenance; plane refueling; bus transportation; refuse collection and disposal) Chapter 137 of title 10, United States Code, Sec 2306C, Multiyear Services Contracts. (Originated in 2000 Authorization language)

28 Cancellation Ceiling for Multiyear Procurement Contracts
Cancellation Ceiling may cover: Non-recurring Costs Recurring Cost (with approval of Agency Head and USD (C)) Cancellation Ceiling is: Negotiated along with other provisions of the contract A decreasing amount each year Not an additional amount to be budgeted MYP contracts with Cancellation Ceiling > $100M require 30 day written notice to Congressional Defense Committees prior to award

29 Planning for Contract Awards
Consider contract type and award timing early Factor this information into cost and budget estimates Avoid execution issues resulting from planned contract award in first or fourth quarter of fiscal year Initial planning done as part of obligation plan Consult contracting officer when preparing obligation plans Proper planning usually results in better execution

30 Contract Changes Two formal methods to change a contract:
Preferred is the “Supplemental Agreement”: Fully negotiated agreement on specific work, price and schedule. Less preferred is the “Undefinitized Change Order”: Tentative agreement on work and schedule but final agreements not yet negotiated; usually has a “not-to-exceed” price. Constructive change: government action causes contractor to perform work differently than required by written contract Standard changes clause: allows contracting officers to unilaterally direct changes in specification (what), shipping destination (where) and packing (how packaged); contractor may request equitable adjustment in cost and/or schedule

31 Contract Clauses that Provide
Some Control over Unliquidated Obligations Contractor required to notify government 60 days prior to incurring costs equal to 75% of amount obligated Incrementally Funded Cost-Reimbursement Contracts Called “Limitation of Funds Clause (LOF)” Fully Funded Cost-Reimbursement Contracts Called “Limitation of Cost Clause (LOC)” Contractor required to notify government 90 days prior to incurring costs equal to 85% of amount obligated Incrementally Funded Fixed Price Contracts Called “Limitation of Government Obligation Clause (LOGO)” Notification allows termination liability to be covered by unliquidated obligations on that specific contract

32 “Contracting” of Goods and Services through Use of MIPR
Three types of actions by which DoD activities can use Military Interdepartmental Purchase Requests (MIPRs) to obtain goods and services: Project Orders Economy Act Orders Non-Economy Act Orders A MIPR (DD Form 448) is normally used to transfer budget authority from one DoD activity (requesting agency) to another DoD activity (servicing agency) to provide specific goods or services The servicing agency signs and returns DD Form (MIPR Acceptance) to requesting agency to indicate agreement to provide the goods or services

33 Project Order MIPR must specifically state the request for goods or services is a Project Order MIPR is then treated as if it were a contract Funds identified on MIPR considered obligated when servicing agency signs and returns DD Form 448-2 Three tests must be satisfied for action to be considered a Project Order: Request must be for specific, identifiable supply, material, equipment, work or service; Servicing agency must be capable of performing requested action; Requested work must be started within 90 days of acceptance or by first of January of following year. References: US Code, Title 41, Section 23 and DoDI

34 Economy Act Order An Economy Act Order is not treated as if it were a contract but, rather, an interagency acquisition agreement While funds on the MIPR are normally considered obligated when accepted by servicing agency, the servicing agency is simply an extension of requesting agency Funds on the MIPR retain original period of availability for obligation purposes Required criteria for requesting agency to use this type order: Required amount of funding must be available; Head of requesting agency decides the order is in best interest of the government; Servicing agency is capable of filling the order or getting by contract the requested goods or services; Head of requesting agency decides ordered goods or services can not be provided as conveniently or cheaply by contract with a commercial enterprise References: US Code, Title 31, Chapter 15, Section 1535; FMR, Volume 11A, Chapter 3; and FAR at Sub-part 17.5

35 Highly Controversial Method of DoD “Contracting”
Non-Economy Act Order Highly Controversial Method of DoD “Contracting” Non-Economy Act Orders are for intra-governmental support where a DoD activity obtains required goods or services from a Non-DoD agency by sending funds to that servicing agency with understanding it will award a contract on its behalf. There must be specific statutory authority to place an order with a Non-DoD agency for this type action and to pay associated fees (there are limited such statutory authorities) Required criteria for requesting agency to use this type order: Proper funding must be available; The Non-Economy Act Order does not conflict with another agency’s designated responsibilities; Requesting agency determines order is in best interest of DoD; Servicing agency is able and authorized to provide requested goods or services Non-Economy Act Orders are subject to same fiscal limitations as appropriation from which the funds are provided Reference: FMR, Volume 11A, Chapter 18 (new chapter as of Feb 08)

36 Managing On-Going Contracts
From Resource Management Perspective As with other DoD entities, Acquisition Program Offices forecast obligations and expenditures in Obligation and Expenditure Plans Acquisition Program Offices are responsible for managing obligations and expenditures associated with contracts awarded for their programs Better (i.e., more realistic) forecasts usually result in better execution of those plans Deviations from planned obligations and expenditures must be reported and justified to higher headquarters

37 Managing On-Going Contracts
From Contract Management Perspective Vast majority of Program Office funding is obligated against contracts Proper management of fiscal aspect of contracts requires close coordination with contractors Contractors provide status reports on many contracts Government Program Offices receive – and should use – information from contractor–provided reports and other government sources (e.g., DCMA) to help manage fiscal aspects of contracts Poor execution of contracts usually result in loss of funds

38 Information Available to Improve Management of On-Going Contracts
Many acquisition-related contracts require contractors to provide periodic reports reflecting status of contract work effort and costs Earned Value Management IAW DoDI (Enclosure 4, Table 5): cost or incentive contracts valued at or greater than $20M in then-year dollars are required to implement EVMS whenever implementation of EVMS is required on a contract, a Contract Performance Report (CPR) and Integrated Master Schedule (IMS) is a requirement of that contract EVM related reports not required for firm-fixed price, level of effort or time and materials contracts (use must be approved by MDA) CPR compares actual work performed on contract and actual cost incurred to planned work and budgeted cost at same point in time Variances between plans and actuals show potential schedule slips and/or cost overruns Cost overruns usually impact near term budget requirements

39 DoD EVM Application Thresholds (DoDI 5000.02, Enclosure 4, Table 5)
Contracts Thresholds Requirements > $50M Cost or Incentive Equal to or Above Threshold - Compliance with industry EVM standard Formal EVM system validation Contract Performance Report Integrated Master Schedule Integrated Baseline Reviews Ongoing surveillance < $50M but > $20M Cost or Incentive Less Than Upper Threshold but Equal to or Above Lower Threshold Compliance with industry EVM standard No formal EVM system validation Contract Performance Report (tailored) Integrated Master Schedule (tailored) Integrated Baseline Reviews Ongoing surveillance Slide 11 - Revised EVM Policy / Guidance: New Application Thresholds - Earned value management compliance is required on cost or incentive contracts valued at or greater than $20 million. An earned value management system that has been formally validated and accepted by the cognizant contracting officer is required on cost or incentive contracts valued at or greater than $50 million. Although validation is not required below $50 million, the contractor must still comply with ANSI/EIA Once validated, continuing acceptance of a contractor’s earned value management system will be affirmed via ongoing government surveillance. A Contract Performance Report and an Integrated Master Schedule are required whenever earned value management is required. To ensure that contractors and DoD program offices “use earned value data to manage” rather than “manage the earned value data,” the data item descriptions for the Contract Performance Report and the Integrated Master Schedule have been updated to reflect industry best practice and to enable the use of modern software tools. Tailoring of both reports is recommended for contracts valued at less than $50 million. Integrated Baseline Reviews are also required whenever earned value management is required. Integrated Baseline Reviews are good practice for all programs, regardless of size, to assess that the contractor’s baseline for performing the work is achievable and that both the contractor and the government understand the program’s risks. If contract requirements, or the contractor’s approach for complying with contract requirements, change significantly, additional Integrated Baseline Reviews should be conducted. The implementation of earned value management on cost or incentive efforts valued at less than $20 million is a risk-based decision at the discretion of the program manager. A cost-benefit analysis is required before a decision is made to implement earned value management in these situations. Earned value management may not be optional if the product or service being acquired is designated as a major capital acquisition in accordance with Office of Management and Budget Circular A-11, Part 7, entitled Planning, Budgeting, Acquisition, and Management of Capital Assets. End of Narration. < $20M Cost or Incentive Less Than Threshold EVM optional (risk-based decision) Cost-benefit analysis required

40 Information Available to Improve Management of On-Going Contracts
Contract Funds Status Report (CFSR) Applicable for contracts over six months in duration Normally not required for firm fixed price contracts unless circumstances require specific funding visibility Generally required quarterly unless contract states otherwise Contractor-prepared report provides basic fiscal information: Initial and adjusted contract price Funds obligated to date Accrued expenditures Contract work authorized and forecast Projected total price of contracted work Forecast of billings to the government by period Estimated termination costs by period

41 From Contract Management Perspective
Summary From Contract Management Perspective Contracting environment is continually changing Contracting is a team effort in partnership with contractor to meet mission needs Fair and realistic prices under competition Contracting Officers have broad discretion in determining contract type Contracting requires knowledge of policy and regulations plus business judgment Actions of contracting personnel are limited to authority delegated for specific purposes

42 From Resource Management Perspective
Summary From Resource Management Perspective Acquisition program offices must follow provisions of Financial Management Regulation (DoD R) for fiscal matters and FAR/DFAR for contracting matters Vast majority of budget authority provided defense acquisition programs is obligated against contracts Resource management in acquisition program offices requires active management of fiscal aspects of contracts Government requires some contractors – by terms of the contract – to periodically report on status of work actually accomplished and at what cost and projected data Government can and should make maximum use of data contained in those reports to better manage execution of the program, to include management of resources

43 Now for the DAU optional “commercial”
QUESTIONS? Now for the DAU optional “commercial”

44 Briefing for DAU Students
Learn. Perform. Succeed. Our customers, the over 128,000 members of the Defense Acquisition Workforce are currently facing major challenges: Projected loss of experience and knowledge Need to adapt to evolutionary advances in information technologies Necessity of streamlining infrastructure Participating in the fundamental transformation of the Department of Defense To help our customers meet these challenges, we at DAU had to transform acquisition training. We transformed: Our organization Our curriculum content and delivery methods The concept of learning to extend beyond the course itself to include continuous learning, knowledge sharing, performance support, applied research, and strategic partnerships Because of our successful efforts in transforming DAU, we were recognized as The Best Overall Corporate University in 2002 at the Corporate University Best-In-Class awards A Gold Medal winner of Brandon Hall best practices for e-learning Winner of the American Society of Training & Development BEST Award Winner of Corporate University Xchange Excellence Award Member of Training Magazine’s Top 100 Our strategy is to provide you, the members of the Defense Acquisition community, premier career-long learning options to help you add value in your vital support to the warfighter. #1 ’02 ’06 ’05 ’06 ’07 ’04 ’06 ’07 ’09 ’03 ’04 Jan 2010

45 DAU Mission Provide a global learning environment to support a mission-ready Defense Acquisition Workforce that develops, delivers, and sustains effective and affordable warfighting capabilities. Impact acquisition excellence through: Acquisition certification and leadership training Mission assistance to acquisition organizations Online knowledge sharing resources Continuous learning assets Strategic workforce planning DAU is a training organization, not an academic university. It is the corporate university of the Defense Acquisition Workforce. As such, we focus on enabling this workforce to be effective in the workplace and accomplish Defense acquisition strategic goals and business objectives. DAU provides: Certification and Assignment-Specific Training (stress to the students that certification course content is currently geared toward all personnel in the career field and the variety of work that they do. In the future, these courses will be shorter and more job-specific courses will be developed.) Performance Support / Rapid Deployment Training Continuous Learning Knowledge sharing With these learning assets, DAU providing learning opportunities 24 hours a day, 7 days a week. DAU Human Capital Strategic Planning: DAU also champions strategic, integrated workforce management programs and innovations to recruit, develop and retain a highly capable, motivated and agile DoD AT&L workforce. More details will be given in chart # 4 45

46 AT&L Performance Learning Model
Training Courses Classroom & online DAWIA, Core Plus, & Executive Continuous Learning CL Modules - Online, self-paced learning modules Conferences - PEO / SYSCOM, Business Managers, DAU Acquisition Community Symposium Knowledge Sharing DAP - Online portal to Big A & HCI knowledge ACC - DoD's online collaborative communities Virtual Library - Online connection to DAU research collection The Acquisition, Technology, and Logistics (AT&L) Performance Learning Model (PLM) is a visual representation of how the Defense Acquisition University (DAU) fulfills its mission in providing practitioner training, career management, and services to enable the acquisition workforce to make smart business decisions and deliver timely and affordable capabilities to the warfighter. Three Pillars of Workforce Development The PLM’s three pillars identify the primary types of acquisition training and development an acquisition professional receives over the course of his or her career—Defense Acquisition Workforce Improvement Act (DAWIA) core certification, Core Plus development, and executive and leadership support. The pillars represent how acquisition professionals progress through their career, from obtaining certification at level I, II, or III in acquisition career fields; to gaining specialized experience in a career field; to obtaining executive-level capabilities to run acquisition programs. Foundational Structure of Workforce Development Laying the foundation for the three pillars of workforce development are DAU’s services: training courses knowledge sharing continuous learning performance support. As the Defense Acquisition Workforce’s premier learning and development center, DAU aligns its training with the specific career field requirements as outlined by DAWIA. In addition, the university has taken innovative measures to ensure that learning and acquisition support are available beyond DAWIA certification, creating a total learning environment for career-long solutions at the point of need. The PLM depicts this versatile and encompassing learning environment, and what follows is an overview of DAU’s numerous services. Mission Assistance Consulting - Helping organizations solve complex acquisition problems Targeted Training - Tailored organizational training Rapid Deployment Training - On-site & online training on the latest AT&L policies Formal & informal learning at the point of need

47 Located with our Customers
Region Location Workforce Capital/Northeast Fort Belvoir, VA 31,566 Mid-Atlantic California, MD 23,110 Midwest Kettering, OH 18,604 South Huntsville, AL 28,360 West San Diego, CA 25,465 We are part of the community, not just a place to take classes.

48 Practices Clearinghouse
Learning assets at DAU Acker Library Acquisition Best Practices Clearinghouse https://bpch.dau.mil/ https://dap.dau.mil Defense Acquisition Portal DAU Training & CL Courses Acquisition Community Connection https://acc.dau.mil/ Mission Assistance This chart shows the screen captures of key DAU web pages.

49 DAU’s iCatalog Most current resource for information regarding DAU courses and the Certification & Core Plus Development Guides Accessible from the DAU home page (http://dau.mil) or directly at

50 FY10 Training - Financial Management
Level I Certification Level II Certification Level III Certification ACQ 101 Fundamentals of Systems Acquisition Management ACQ 201A Intermediate Systems Acquisition, Part A ACQ 201B Intermediate Systems Acquisition , Part B 25 hrs, online 37 hrs, online 5 days classroom BCF 102 Fundamentals of Earned Value Management BCF 203 Intermediate Earned Value Management BCF 205 Contractor Business Strategies BCF 301 Advanced Financial Management 15 hrs, online 9 days classroom 4 days classroom 9 days classroom BCF 103 Fundamentals of Business Financial Management BCF 106 Fundamentals of Cost Analysis BCF 211 Intermediate Business Acquisition Management 26 hrs, online 40 hrs, online 5 days classroom The DAU’s Learning Capabilities and Integration Center (LCIC) includes Center Directors that are responsible for a portfolio of courses much of which is included in the various career field certification requirements for each level. These recognized experts in their field. They along with their staff look across the entire curricula to ensure appropriate content, sequencing, and delivery. They closely interact with the Acquisition Functional Leaders and their Functional Integrated Process Teams (FIPT). In some cases the Center Director also serves as the Executive Secretary and/or Chair for the Functional Leaders FIPT. The Functional Leader is responsible for establishing and maintaining the career field competencies and determining which one must be included in certification training. The Center Director is responsible for converting those competencies into learning assets, predominately, courseware. They also work closely with the office of the Under Secretary of Defense for Acquisition, Technology and Logistics, other Federal Agencies and industry to capture the latest initiatives and best practices in order to disseminate information to the workforce by a variety of means to include AKSS, various Communities of Practices [COPs] and Special Interest Areas [SIAs]). This chart displays the acquisition and functional training requirements for the __________ career field. The blue represents acquisition, the green functional training and the white CLMs applicable to the functional training requirements. Unique Notes: None CLM 017 Risk Management CLM 024 Contracting Overview CLM 013 Work Breakdown Structure CLM 031 Improve Statement of Work Knowledge Based Case Based Case Based Level I “Core Plus” Courses & CL Module (See DAU iCatalog) Level II “Core Plus” Courses & CL Module (See DAU iCatalog) Level III “Core Plus” Courses & CL Module (See DAU iCatalog) Vers 10

51 FY10 Training - Cost Estimating
Level I Certification Level II Certification Level III Certification ACQ 101 Fundamentals of Systems Acquisition Management ACQ 201A Intermediate Systems Acquisition, Part A ACQ 201B Intermediate Systems Acquisition, Part B 25 hrs, online 37 hrs, online 5 days classroom BCF 102 Fundamentals of Earned Value Management BCF 103 Fundamentals of Business Financial Management BCF 204 Intermediate Cost Analysis BCF 206 Cost Risk Analysis BCF 302 Advanced Concepts in Cost Analysis 15 hrs, online 26 hours, online 10 days classroom 4 days classroom 5 days classroom BCF 106 Fundamentals of Cost Analysis BCF 107 Applied Cost Analysis BCF 211 Acquisition Business Management BCF 215 Operating and Support Cost Analysis 40 hrs, online 5 days classroom 5 days classroom 5 days classroom The DAU’s Learning Capabilities and Integration Center (LCIC) includes Center Directors that are responsible for a portfolio of courses much of which is included in the various career field certification requirements for each level. These recognized experts in their field. They along with their staff look across the entire curricula to ensure appropriate content, sequencing, and delivery. They closely interact with the Acquisition Functional Leaders and their Functional Integrated Process Teams (FIPT). In some cases the Center Director also serves as the Executive Secretary and/or Chair for the Functional Leaders FIPT. The Functional Leader is responsible for establishing and maintaining the career field competencies and determining which one must be included in certification training. The Center Director is responsible for converting those competencies into learning assets, predominately, courseware. They also work closely with the office of the Under Secretary of Defense for Acquisition, Technology and Logistics, other Federal Agencies and industry to capture the latest initiatives and best practices in order to disseminate information to the workforce by a variety of means to include AKSS, various Communities of Practices [COPs] and Special Interest Areas [SIAs]). This chart displays the acquisition and functional training requirements for the __________ career field. The blue represents acquisition, the green functional training and the white CLMs applicable to the functional training requirements. Unique Notes: BCF 302 is expected to be deployed during the 2nd quarter of this year (FY10). CLB 026 Forecasting Techniques CLB 030 Cost Data Sources CLB 029 Rates CLB 023 Software Cost Estimating Knowledge Based Case Based Case Based Level I “Core Plus” Courses & CL Module (See DAU iCatalog) Level II “Core Plus” Courses & CL Module (See DAU iCatalog) Level III “Core Plus” Courses & CL Module (See DAU iCatalog) Vers 10

52 DAU’s Commitment to the Defense Acquisition Workforce
Training - 24 / 7 learning assets: in the classroom and in the workplace Continuous Learning - Helping you learn in the workplace: what you need to know , when you need to know it Mission Assistance - Supporting your organization Knowledge Sharing - Connecting you – the Engaged Learner - with the experts, resources and materials you need to do your job Close the presentation by emphasizing the power of the AT&L Performance Learning Model and the variety of learning assets it makes available to them. Even when they graduate from the course they are currently taking, DAU is just a “click” or phone call away. We are their career-long university. Shaping a culture of engagement and career-long learning 52

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