1. United States Fleet Forces Ready Fleet … Global Reach 1 Surface Ship Maintenance Program brief for Virginia Ship Repair Association CAPT Mike Stanton USFF N431 22 APR 2009 UNCLASS

2. United States Fleet Forces Ready Fleet … Global Reach 2 Overview USFF Fleet Maintenance Directorate Program objectives: –‘Planned Service Life’ view of Maintenance –Areas of responsibility Strategic Maintenance Process: –Requirements & programming –Maintenance execution planning –Maintenance execution Improve process stability; Reduce process variation

3. United States Fleet Forces Ready Fleet … Global Reach 3 USFF N43 Maintenance Directorate N43Fleet Maint OfficerRADM(s) Joe Campbell (prospective) FMORADM(s) Clark Orzalli (May) N43BDeputy FMO Mr. Bob Butler N431Surface Ship Maint Prog MgrCAPT Mike Stanton (prospective)CAPT Stephanie Douglas N432Submarine Maint Prog MgrCDR Greg Burton N433Aviation Maint Prog MgrCAPT Dave Seaton N434Technical & Process Prog MgrMr. Dale Hirschman N435Financial & Industrial MgtMr. Glenn Hottel N436C5I Branch HeadCDR Drew Lambley (IA) N437Maint Information Sys MgtMrs. Maureen Ransom N438CVN Maint Prog MgrCAPT Lloyd Jones

4. United States Fleet Forces Ready Fleet … Global Reach 4 Surface Ship Maintenance Program: Focus on Achieving Service Life Requirement: ensure material condition of ships supports Ao, presence requirements & achieves planned service life. –157 Surface Ships, 11 classes –11 CSG, 10 ESG, various SNGs & surge reqts Support current and future readiness: A o,overall = A o,FRP + A o,Lifecycle Priorities 1.313 ship Navy: must achieve planned service life for ships in inventory 49% of surface force service life has been consumed 2.Stabilizing & refining maintenance requirements 3.Developing & deploying sound maintenance practices, processes & strategies Significant Congressional interest in the readiness of the Surface Force

5. United States Fleet Forces Ready Fleet … Global Reach 5 N431 Areas of Responsibility Current Readiness Availability execution in support of FRP Ships with marginal material condition Hi-interest INSURVs New Construction readiness (LPD 17, LCS) Future Readiness Breadth & technical rigor of lifecycle maint reqts Programming strategies and risk decisions Availability risk assessment and mitigation New Construction readiness Maint Acquisition Mgt MSMO Program –Acqn Strat IPT –AFEBs Maint Contracting Strategies Maintenance execution strategies and policies Industry Relations –JINII, VSRA, JASRA FMBoD “locked-in” on Surface Ship Maintenance Program

6. United States Fleet Forces Ready Fleet … Global Reach 6 Strategic Maintenance Process Requirements Development (TYCOM, FFC) Programming & Budgeting (FFC, OPNAV) Appropriation & Apportionment (Congress, FMB) Planning (RMC & MSMO) Execution (RMC & MSMO) Variation Process stage Savings Potential - Risk decisions toward “PSL+” - Industrial base preservation - MSMO Spiral 2 - SHIPMAIN - Assessments - Level-loading Targeted strategies -Reqts Realism: MRS - ICMP development - MSMO stabilization - Contracts Governance - Depot work integration - RMC standardization

7. United States Fleet Forces Ready Fleet … Global Reach 7 Strategic Maintenance Process Requirements Development (TYCOM, FFC) Programming & Budgeting (FFC, OPNAV) Appropriation & Apportionment (Congress, FMB) Planning (RMC & MSMO) Execution (RMC & MSMO) Variation Process stage Savings Potential - Risk decisions toward “PSL+” - Industrial base preservation - MSMO Spiral 2 - SHIPMAIN - Assessments - Level-loading Targeted strategies -Reqts Realism: MRS - ICMP development - MSMO stabilization - Contracts Governance - Depot work integration - RMC standardization

8. United States Fleet Forces Ready Fleet … Global Reach 8 Requirements Improvement January 2009 Surface Ship Maint Strategic Offsite –Must strengthen requirements determination process for ships –CLASSRON: focus on lifecycle maintenance to feed programming Actions Maintenance Requirements System (MRS) Alliance –Availability notionals “tailoring” projects –Modified docking cycles –“Aged” notionals –Parametric analysis Surface Ship Life Cycle Management Activity (SSLCM) –ICMP improvement –Standardized availability work packages ABS Hull-life Surveys (NAVSEA 05) under review“technical rigor”

9. United States Fleet Forces Ready Fleet … Global Reach 9 Maint Requirements Adjustments “Aged” Notionals Automobile maint concept – older assets require increasing maint –Gradually increase the notionals as the vessel consumes service life –Basis for CVN Maint Op-cycle Mgt & availability resourcing levels –Easily understood by Pentagon programmers DSRA EDSRA -2 DSRA -3 Mdays/ avail PSA SRA-1 SRA-2 SRA-3 SRA-4 Under study

10. United States Fleet Forces Ready Fleet … Global Reach 10 Strategic Maintenance Process Requirements Development (TYCOM, FFC) Programming & Budgeting (FFC, OPNAV) Appropriation & Apportionment (Congress, FMB) Planning (RMC & MSMO) Execution (RMC & MSMO) Variation Process stage Savings Potential - Risk decisions toward “PSL+” - Industrial base preservation - MSMO Spiral 2 - SHIPMAIN - Assessments - Level-loading Targeted strategies -Reqts Realism: MRS - ICMP development - MSMO stabilization - Contracts Governance - Depot work integration - RMC standardization

11. United States Fleet Forces Ready Fleet … Global Reach 11 Programming Considerations Meeting maintenance requirements since 2003 with baseline funding plus supplemental appropriations –How to transition out of supplementals yet still secure needed funding(?) –Fiscal policies of new administration…. How is risk managed against shortfalls –Preserve industrial base vs. service life risk? Phasing with major modernization programs Full funding vs. timing of funding Measurements tricky: –Near term effects and long-term effects

12. United States Fleet Forces Ready Fleet … Global Reach 12 Strategic Maintenance Process Requirements Development (TYCOM, FFC) Programming & Budgeting (FFC, OPNAV) Appropriation & Apportionment (Congress, FMB) Planning (RMC & MSMO) Execution (RMC & MSMO) Variation Process stage Savings Potential - Risk decisions toward “PSL+” - Industrial base preservation - MSMO Spiral 2 - SHIPMAIN - Assessments - Level-loading Targeted strategies -Reqts Realism: MRS - ICMP development - MSMO stabilization - Contracts Governance - Depot work integration - RMC standardization

13. United States Fleet Forces Ready Fleet … Global Reach 13 Execution Planning Incremental improvements in MSMO Spiral 2 MCIT replaces SHIPMAIN –Focused on avail planning & execution performance What of “assessments”? –Re-institute shipboard assessments to facilitate avail planning SSLCM: ICMP deploying BAWPs & AWPs Expanding role of MFOM –Valuating lifecycle maintenance actions Port-loading considerations (source of variation) Technical requirements clarification & stabilization

14. United States Fleet Forces Ready Fleet … Global Reach 14 Strategic Maintenance Process Requirements Development (TYCOM, FFC) Programming & Budgeting (FFC, OPNAV) Appropriation & Apportionment (Congress, FMB) Planning (RMC & MSMO) Execution (RMC & MSMO) Variation Process stage Savings Potential - Risk decisions toward “PSL+” - Industrial base preservation - MSMO Spiral 2 - SHIPMAIN - Assessments - Level-loading Targeted strategies -Reqts Realism: MRS - ICMP development - MSMO stabilization - Contracts Governance - Depot work integration - RMC standardization

15. United States Fleet Forces Ready Fleet … Global Reach 15 Maintenance Execution MSMO –Over-arching objective: stabilize MSMO Permits contractor focus, commitment, repetition, improvement –Incremental improvements for MSMO Spiral 2 Beneficial to Navy and industry Comprehensive Contracting Strategy –Contracts Governance Process –Depot Work Integration

16. United States Fleet Forces Ready Fleet … Global Reach 16 Navy initiates FRP MSMO Results: Readiness vs. Maint Investment Increased steaming at same maint investment levels: MSMO enabling FRP Large increase in steaming days/yr 2004-2008 (HOA, APS, POA, HADR, etc.) Start MSMO CNO Clark: “buy-down maint backlog” (2003) Steaming days/yr/ship

17. United States Fleet Forces Ready Fleet … Global Reach 17 MSMO Results: Contract Performance Cost: rates stable, affordable, and w/i programmed levels –Cumulative cost performance (thru FY08): ~ 4% cost under-run, all contracts, all performance periods Schedule: response to current readiness exceptional – supports FRP –>200 CNO MSMO availabilities – 1 late due to contractor performance –Incorporation of change scope w/o sked impact significant (range 15-30%) Technical performance solid & improving –Govt QA-point reject rate ~ 2% Partnership: All MSMOs productively engaged in many Navy initiatives 1 st -order MSMO program objectives being met QA Reject trends

18. United States Fleet Forces Ready Fleet … Global Reach 18 MSMO Controls, Oversight, Governance MSMO success due to: All contracts issued under proper Navy contract & technical warrants Contract stability: focus, investment, process improvement RMC exercising contractual authorities DCAA periodic cost audits Award fee evaluation boards – frequent feedback & accountability Standing MSMO Acqn IPT providing dynamic review & adjustment Rigorous oversight by ASN(RDA) –Balancing competition, performance incentives, stability –Approved additional contract strengthening in MSMO Spiral 2 (FY10-14) Navy submitting report to Congress in FY10 Budget Request substantiating rationale for executing DDG Modernization w/ MSMO Many pieces contributing to overall program strength

19. United States Fleet Forces Ready Fleet … Global Reach 19 Update: Comprehensive Contracting & Depot Work Integration Policy for Comprehensive Contracting and Depot Work Integration –Approved by ASN(RDA) 27 March 2009 –Enabling instructions & policies implemented JFMM Ch 7A (30 Jun 08) Key elements/enablers –All work coincident to depot availabilities shall be planned, integrated and coordinated through the NSA using the LMA as the planning agent –LMAs shall have first opportunity to execute all depot work for which they have organic capability, capacity and cost reasonableness Programs shall budget for reasonable depot installation costs –AITs shall execute AIT-unique work, and can execute depot installation work if the LMA does not meet the aforementioned requirements –NSAs shall remain the single authoritative voice to equitably resolve availability disputes and disruptions amongst all customers Policy successfully executed on several major CNO availabilities

20. United States Fleet Forces Ready Fleet … Global Reach 20 Comprehensive Contracting & Depot Work Integration Overview Enablers: - SY-AIT SWT 897-04 - 1 June 08 JFMM update - ASN Policy directive Enablers: - 2004 FISC/SUP/Fleet/SEA/MOU - USFF 201411ZJUL06 - USFF 211431ZJUN07 - USFF 271300ZMAR08 - 30 June 2008 JFMM update - NAVSEA SEAPORT-e Policy - ASN Policy directive Comprehensive Contracting & Depot Work Integration Comprehensive Contracting Strategy Maint, Modernization & AIT Integration Inclusive & balanced planning End-to-end avail mgt Single authority for conflict resolution Portfolio of Shipboard Production Contracts Contracts Governance Oversight Process

21. United States Fleet Forces Ready Fleet … Global Reach 21 Questions?