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Price Fighters Department 1 PRICE FIGHTERS Brief For Future of DoD Contract Cost/Price Analysis Meeting 9-10 January 2007.

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Presentation on theme: "Price Fighters Department 1 PRICE FIGHTERS Brief For Future of DoD Contract Cost/Price Analysis Meeting 9-10 January 2007."— Presentation transcript:

1 Price Fighters Department 1 PRICE FIGHTERS Brief For Future of DoD Contract Cost/Price Analysis Meeting 9-10 January 2007

2 Price Fighters Department 2 SECNAV Secretary of the Navy SECNAV CNO Chief of Naval Operations CNO ASN(RDA) Assistant Secretary of the Navy for Research, Development and Acquisition ASN(RDA) Assistant Secretary of the Navy for Research, Development and Acquisition NAVAIR Naval Air Systems CommandNAVAIR Naval Air Systems CommandNAVSEA Naval Sea Systems CommandNAVSEA Naval Sea Systems CommandSPAWAR Space and Naval Warfare Systems CommandSPAWAR Space and Naval Warfare Systems CommandNAVFAC Naval Facilities Engineering CommandNAVFAC Naval Facilities Engineering CommandNAVSUP Naval Supply Systems CommandNAVSUP Naval Supply Systems Command NAVICP Naval Inventory Control PointNAVICP Where We Fit Price Fighters

3 Price Fighters Department 3 To provide responsive, expert value analysis, technical assistance, and pricing validation support to buyers, managers, and users of equipment, material, services, supplies, spare parts, and weapon systems in an accurate, cost effective, and unbiased manner. Price Fighters Mission Save Program Dollars

4 Price Fighters Department 4 The MDAP Process ConceptRefinement System Development & Demonstration Production & Deployment Operations & Support Analogy Parametric Actuals Engineering MDAP Process Cost Estimating Techniques Negotiation Support Proposal Review Cost Estimating Site Visits Pre & Post Business Clearance Should Cost Business Case Analysis Consulting Services Price Fighters Services Post Production Support Technology Development Concept Decision Design Readiness Review FRP Decision Review ABC FOC IOC

5 Price Fighters Department 5 Business Case Analysis (BCA)Business Case Analysis (BCA) Cost Estimating Relationship (CER) Analysis Cost Analysis / EstimatingCost Analysis / Estimating Cost Modeling Cost Realism Studies ECP EvaluationECP Evaluation In-Process Review (IPR) Litigation Support Negotiation SupportNegotiation Support Obsolescence Study Physical Configuration Audit (PCA) Pre-Award Survey Post-Production Support Price Challenge Hotline Process Improvement Studies Proposal EvaluationProposal Evaluation Repair Analysis Risk Analysis/Management Should Cost Analysis Source Selection Lean / Six Sigma Support Tech Data Package Adequacy Review Supporting Current & Future Readiness Products & Services Providing expert, cost effective value analysis, technical assistance, and pricing validation support.

6 Price Fighters Department 6 Should Cost Support spare parts buyers Bottoms up, engineering based, cost analysis Alternate sources of supply Negotiation support

7 Price Fighters Department 7 Tray, Conveyor Roller NSN Application: Cargo Handling System Quantity 3 units Should Cost Price:Technical review developed Proposed Price:$4, Negotiated Price:$ Savings:$12, (86% reduction) Resolution: Since this was an ESOC procurement, Price Fighters was requested to find an alternate source for this part as quickly as possible. Within two weeks, Price Fighters had found and received a quote from another source that was 86% lower than the original quote. Case referred by: DSCC Should Cost Example

8 Price Fighters Department 8 Piston, Linear Actuator NSN Application: C-130 Aircraft Quantity 62 units Should Cost Price:$2, Proposed Price:$10, Negotiated Price:$3, Savings:$427,924.00(64% reduction) Resolution: Price Fighters developed a unique pricing analysis using the contractor rates and the labor and material from the Should Cost Analysis. The buyer utilized the analysis to negotiate a lower cost. Case referred by: DSCR Should Cost Example

9 Price Fighters Department 9 Price Challenge Hotline Prime venue for customer price challenges Can lead to should costs Over 129,000 inquiries $846M in savings $453K in awards Web Page: click on the Challenge High Priced Parts bulls-eye icon Phone: NAV-CHAL ( ), Fax: (757)

10 Price Fighters Department 10 Good Price Challenge Candidates Appears overpriced Consolidation of identical items New commercial source Price Challenge Hotline

11 Price Fighters Department 11 Price Challenge from Patrol Squadron 64, Naval Air Station, Willow Road, PA Nomenclature: Rigid Tubing Assembly Challenged Price: $4, Concerns: Price too high Results: Found item overpriced, pursued refund Cost Avoidance: $24, Challengers Award: $1, Price Challenge Hotline Example

12 Price Fighters Department 12 IPT member Assist in SOW development BCA development –Analyze and verify data set –Populate BCA Proposal review Negotiations support Total involvement from start to finish PBL Support

13 Price Fighters Department 13 H-60 Tip-To-Tail Phase II BCA Agreement with Maritime Helicopter Systems Company (MHSCo) and Naval Inventory Control Point Philadelphia. Covered 458 individual parts applicable to the SH-60B, SH-60F, HH-60H, MH-60S, and MH- 60R aircraft and focused on integrating 34 suppliers under one prime integrator. The With-out PBL (traditional support ): $258M With PBL program cost were proposed as $241M Potential Savings/Cost Avoidance of $17M over a 33 month period of performance. PBL BCA Example

14 Price Fighters Department 14 Weapon Systems Support Procurement Support / Cost Analysis Supports Program Managers and Contracting Proposal Evaluations ECPs Alpha Contracting Source Selection

15 Price Fighters Department 15 Examples:ProposedSettled Cost Avoidance CostROI E-2C FY04-07 Multi-Year $808M$706M$102M$172K593 CV-22 Block Change $241.5M$208M$33.5M$100K330.5 MH-47G SLEP Program Lot 2 $282M$246M$36M$163K223 F-18 E/F Production $403.2M$360M$43.2M$40K1080 TOTALS$1,734.7M$1,520M$214.7M$475K452 Results Boeing N-G Recent experience with many Primes, on USN, USMC, USAF, USA, Joint projects

16 Price Fighters Department 16 Customer:U. S. Army, Redstone Arsenal Project:Procurement of Patriot Advanced Capability (PAC-3) Missiles Effort:Supplemented Redstone Contracting team in review of contractor and major subcontractors including labor hours, material, and negotiation support Result:$56M savings and 4 additional missiles Patriot (PAC-3) Missile

17 Price Fighters Department 17 Special Projects Berry Amendment –Supporting DCMA on reviewing Corrective Action Plans and drafting Domestic Non-Availability Determinations Bureau of Engraving and Printing –Supporting BEP on a $280M procurement of currency paper Acquisition Quality Assessment Program and Intrinsic Value Analysis –Supporting NAVICP Contracting –Price analysis for active procurements –Sampling awarded procurements

18 Price Fighters Department 18 Summary High-Quality Engineering-Based Cost Analysis Services Customer-Oriented Outstanding ROI (current average 20:1) Effective ISO-Certified QMS Best Value Services Easy To Obtain

19 Price Fighters Department 19 Point of Contact Buster Jones Director, Price Fighters (757) DSN 646


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