Presentation on theme: "Army Acquisition: Challenges and Opportunities"— Presentation transcript:
1 Army Acquisition: Challenges and Opportunities General Officer/Senior Executive Service CourseArmy Force Management SchoolLTG Bill PhillipsPrincipal Military Deputy to theAssistant Secretary of the Army(Acquisition, Logistics and Technology)and Director, Acquisition Career Management4 December 2012
2 Agenda ASA(ALT) Mission and Organization Army Contracting Acquisition OverviewGoals:Understanding the Importance of ContractingUnderstanding the Value of AcquisitionUnderstanding Acquisition as a Critical Warfighting Enabler …
3 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
4 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.
6 Providing Soldiers a Decisive Advantage First Lieutenant (1LT) Jason MillerTwo rounds from an AK-47 impacted the front of his helmetA third round traced around the inside and exited the nape protectorInitially knocked down, he quickly regained his composure and dispatched both enemy combatants.1LT Miller’s ACH------Original Message------From: Peter N. BG FullerTo: Peter W. GEN ChiarelliTo: John M Hon CIV USA SECARMY McHughTo: George W. Jr. GEN CaseyTo: Joseph W Hon CIV USA SECARMY WestphalCc: Malcolm O’NeillCc: LTG William N. PhillipsSubject: RE: 1LT Jason T. Miller (UNCLASSIFIED)Sent: Jul 20, :47 AMClassification: UNCLASSIFIEDCaveats: NONEBrick Miller's son, Jason was involved in a scrap yesterday while leading his Platoon against Taliban in support of ANP and ANA forces. He asked his Dad to thank the folks who procure the gear that saved his life. While engaged in a firefight, Jason saw two individuals dressed in military fatigues walking through the area. Thinking they might be ANP, he attempted to hail/intercept them, whereupon they turned and fired on him with their AK47s. Two rounds struck the front of his ACH and deflected away from his head, while a third traced around the inside of his helmet and penetrated out through his Nape Protector. He was somersaulted backwards, but was quickly back in the fight which resulted in two KIA Taliban. After the fight, it became apparent that he was injured, possibly from the fall or the whiplash of the impacting rounds. Brick spoke with him by phone while he was awaiting evacuation from Bagram to Landstuhl for evaluation/treatment.This helmet saved 1LT Jason Miller ‘s life while he was on patrol in Logar Province, Afghanistan on July 19, 2010.
10 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 forAfghanistan”FY12–actions and obligations have inched up on latest reports to 412k actions/$107.5BWith the slight increase in Dollars, the average per day has inched up to $295MActions: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 ServicesNumerous sessions with senior LeadersWay 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
11 Acquisition Will Impact You “Examples”The GOODEAGLE 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 BADKBR: 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 UGLYJorge 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 report, to determine whether DoD personnel performed properOversight, management, and pricing of two task orders for the overhaul of Mi-17 helicopters.Picatinny Cat: April 11th, An errant projectile struck a family cat…..federal lawsuit
12 What Are We Spending?The contracting environment is tough, workload is increasing, requiring adequate resources to execute:FY11 – 470K actions / $124.3BFY12 – 412K actions / $107.5BIn FY12 Army Contracting, on average, purchased $293M per dayIn FY12 the Army executed 21.41% of Federal contracting and % of Defense contractingIn FY12 the Army spent $3.8B on Logistics Civil Augmentation Program (LOGCAP) IV.
13 U.S. Army Financial Ranking 2011 Fortune 500: Top Firms(Source: CNNMoney.com)RankCompanyRevenues ($ billions)1Wal-Mart Stores421.82Exxon Mobil354.63Chevron196.34ConocoPhillips184.95Fannie Mae153.86General Electric151.67Berkshire Hathaway136.18General Motors135.59Bank of America134.110Ford Motor Co.128.911Hewlett-Packard12612AT&T124.613J.P. Morgan Chase & Co115.4$139B (FY11 Army Base Budget)ASA(FM&C)Army Contract Distribution61% Services39% SuppliesAs of 7 JAN 2011All open contracts regardless of funds source
14 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 = $96BAnnual U.S. Pizza Sales = $35BAnnual U.S. Soda Sales = $19B$150BArmy Base Budget in 2012 = $135.4BSources: Beer Statistics: brewersassociation.org (Business Tools)Pizza Statistics:Soda Statistics: Time Business
15 Contractors on the Battlefield Peak 2:1Contractors per SoldierAmerican Revolution 1:6Civil War 1:5World War I 1:20World War II 1:7Korea 1:2.5Vietnam 1:6Gulf War 1:60Balkans 1:1Iraq :1Afghanistan 1.1:1Simple Services > Longer Deployment / Nation Building > Complex ServicesComplexity of ServiceComplexity of ConflictShorter duration of conflict in DS/DS required less contractor support. Numbers do not include HNS from Saudi Arabia.Force caps in Kosovo/Bosnia resulted in higher contractor to Soldier ratios.As conflicts become more complex, Commanders have been requiring more robust services in support of forces.MedicalLaundryFood ServiceShower ServiceSanitationTransportationMaintenanceConstructionIntelligenceSecurityOND: 23,886 contractors*OEF: 113,491 contractorsSource: 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.
17 Actions Commanders Can Take Be familiar with the acquisition / contracting process!Understand “fully” what contracts and contractors are under your responsibility and authority!Integrate operational contract support planning into logistics and operations planningPlan requirements carefully; avoid gold-platingConsider other support options first (organic assets, supply system, DLA)Develop a good relationship with the Contracting Commander!Protect taxpayer funds—eliminate inefficienciesQuality CORs = quality contractor performanceHold contractors accountableAvoid any appearance of improprietyEnsure property is placed on the booksWork closely with your Contracting Activity
18 Operational Contract Support Publications Information for the Warfighter Deployed CORGTADODIOperational ContractSupport andContingencyProgramManagementJP 4-10OperationalContractSupport17 Oct 08ATTP4-10Operational Contract Support: Tactics, Techniques & ProceduresContracting Basicsfor LeadersGTAPOLICYDOCTRINEContracting SupportBrigade10 Feb 2010FM 4-92Publication pendingAR 715-9ApprovedAwaiting G-4 approvalARCERPGTADPAP COR HANDBOOK APR 10CALL # APR 09CALL # APR 08CALL # JUL 09CALL # SEP 09FOOGTAGO OCS “Flashcard”CALL # SEP 08OCS Community of Practice (AKO): https://www.us.army.mil/suite/page/65958918
20 The Power of the Acquisition Corps CM3%FI2%AGMIAD5%FA11%IN12%SF1%AV13%ENSC9%MP4%AR6%LG17%“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
21 NCO Education – Active Component HIGHEST EDUCATION LEVEL ACHIEVEDSGMMSGSFCSSGSGTTOTALAssociate’s Degree49720Bachelor’s Degree25341381Master’s Degree5315Doctorate DegreeTOTAL Number of NCOs50127164360TOTAL with Advanced Degrees14324624116PERCENT with Advanced Degrees93%64%36%15%0%32%As of 31 Jan 12Source: CAPPMISGender Demographics: 219 Males, 114 Females & 27 UnknownWe Need Your Help to Identify the Best and Brightest!
22 FA51 Army Acquisition Corps - Officers Developing a Professional Acquisition Corps:Legacy Officer Career TimelineStrength of the Corps!Acquisition career guidancedirected multi-functionalityRanges from 6-12 YrsCM2%FI1%AGMIAD4%FA11%IN12%SFAV13%EN5%SC9%MP3%ARLG19%Basic Branch Accession Window Acquisition123456789101112131415161718Years of ServiceAverage accession at 10th YOSCareer Timeline ImpactAcquisition career guidance emphasizes technical proficiency prior to broadeningReduced to 4-9 YrsBasic Branch Accession Window Acquisition123456789101112131415161718Years of ServiceAverage accession at 7th YOSRecent 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.COLLTCMAJCPTTOTAL1534256472481742Recent Broadening and “Re-Greening” Initiatives:Robust ACS and TWI partnerships: New for 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 PAMAAC attendance at CGSoC, Fort Leavenworth commencing 2014.Senior COCOM Staff Membership: J4 Operational Contract Support
23 Changing the Acquisition Paradigm “Driving Positive Change” RequirementsResourcesAcquisitionSustainmentInherently Linked!!!!New ParadigmAcquisition Stakeholders can’t be stove-pipedMust Collaborate & Synch through lifecycleInstitute Rigor and Analysis in ProcessChallenge & Shape RequirementsTrade Performance for Cost & ScheduleEmphasize AffordabilityImprove Oversight of ContractorsRequirementsResourcesAcquisitionandSustainmentCollaboration is Absolutely NecessaryBig “A” Acquisition Is: Requirements, S&T, Resources, Acquisition Strategy, Sustainment, & Demilitarization
24 Better Buying Power 2.0 https://dap.dau.mil/leadership/Pages/bbp.aspx Achieve Affordable ProgramsMandate affordability as a requirementInstitute a system of investment planning to derive affordability capsEnforce affordability capsControl Costs Throughout the Product LifecycleImplement “should cost” based managementEliminate redundancy within warfighter portfoliosInstitute a system to measure the cost performance of programs and institutions and to assess the effectiveness of acquisition policiesBuild stronger partnerships with the requirements community tocontrol costsIncrease the incorporation of defense exportability features in initial designsIncentivize Productivity & Innovation in Industry and GovernmentAlign profitability more tightly with Department goalsEmploy appropriate contract typesIncrease use of Fixed Price Incentive contracts in Low Rate Initial ProductionBetter define value in “best value” competitionsWhen LPTA is used, define Technically Acceptable to ensure needed qualityInstitute a superior supplier incentive programIncrease effective use of Performance-Based LogisticsReduce backlog of DCAA Audits without compromising effectivenessExpand programs to leverage industry’s IR&DEliminate Unproductive Processes and BureaucracyReduce frequency of OSD level reviewsRe-emphasize AE, PEO and PM responsibility and accountabilityEliminate requirements imposed on industry where costs outweigh benefitsReduce cycle times while ensuring sound investment decisionsPromote Effective CompetitionEmphasize competition strategies and creating and maintaining competitive environmentsEnforce open system architectures and effectively manage technical data rightsIncrease small business roles and opportunitiesUse the Technology Development phase for true risk reductionImprove Tradecraft in Acquisition of ServicesAssign senior managers for acquisition of servicesAdopt uniform services market segmentationImprove requirements definition/prevent requirements creepIncrease use of market researchIncrease small business participationStrengthen contract management outside the normal acquisition chain – installations, etc.Expand use of requirements review boards and tripwiresImprove the Professionalism of the Total Acquisition WorkforceEstablish higher standards for key leadership positionsEstablish stronger professional qualification requirements for all acquisition specialtiesIncrease the recognition of excellence in acquisition managementContinue to increase the cost consciousness of the acquisition workforce – change the culturehttps://dap.dau.mil/leadership/Pages/bbp.aspx
26 A “Transforming” Challenge to the Army Thinking Outside of the Box
27 Ground Combat Vehicle Requirements / Specifications Approach First Request for ProposalsSecond Request for ProposalsCost: $9M-$10.5 M900+ specifications in first Request for ProposalsMeet/exceed threshold for all specificationsNo prioritization of requirementsFully compliant system has high unit cost estimateCost: $18M136TIER 1Tier 1 – Big 4 Must Haves: Force Protection, Capacity, Full Spectrum, Timing and Selected Safety, Statutory, and Regulatory Requirements589TIER 2Tier 2 – Offeror may propose less than threshold requirement but may not defer the full requirementBand A: Mobility and Lethality specificationsBand B: (Vehicle) Survivability specificationsBand C: All other specificationsBand D: Will be provided as Government Furnished EquipmentPrioritization Scheme20TIER 3Tier 3 – Offeror may defer full requirement to a future increment
28 Joint Light Tactical Vehicle $240K PAYLOAD TON MILES PER GALLONTechnical FeaturesHP Diesel Engine (6 Cyl or 8 Cyl)6-Speed Automatic TransmissionIndependent Four-Corner Suspension (passive or semi-active)Adjustable Height SuspensionAir-activated Hydraulic Anti-lock Disc Brake System with controlled trailer braking and Traction ControlStarter & Alternator powertrain (15 kW On-Board Power Generation)Silent Watch battery (2 hours of silent watch)Curb Weight: lbsGVW: 20,000 lbsGVWR: 21,500 lbsSafety Features18”-24” ground clearanceElectronic Stability ControlAutomatic Fire Extinguishing System [AFES] (engine & crew compartments)Combat-locking DoorsCentral Tire Inflation System (CTIS)Multiple occupant egress pathsExterior provisions to accept EFP and RPG kitsInterior Features3,500 lbs Payload Capacity with 40 cu ft rear stowage space for mission payloadAccommodates 5th-95th percentile combat-equipped occupantsExtreme climate condition HVAC controlsNoise-reducing crew compartmentSpall protectionWired for Easy/integrated C4I InstallsExterior FeaturesTubeless radial tires (365 mm – 395 mm width, with 20”-22.5” rims)30-40 gal fuel tankPintle for towing JLTV trailer or legacy trailers (HMMWV / FMTV)External NATO Slave Cable ReceptaclesLED HeadlightsExterior lighting package (including Blackout Mode)Fording to 30”to106 MPG137 MPGOverOMS/MPBase Vehicle Cost:$240K (AUMC)Armor$21K (Fleet Avg)Base + Armor$261KOther Procurement Cost:$81KPROTECTIONIntegral Small Arms Ballistic protectionIntegral Transparent Armor (small arms ballistic protection)Scalable B Kit: 1x UB; 2x UW; Artillery OverheadRoof Crush protection to 100% GVWWe have discussed our ability to accept risk, smaller, more maintainable fleets and a declining budget. The JLTV is one of the Army’s major new acquisition efforts and cost is paramount. The senior leadership of both the Army and USMC met and capped the cost. They took into account the price and quantities of the vehicle buy Vis a Vis everything else their respective services were buying.. .hence our sticker price of $240K. Please note the fine print…it’s an AMUC or manufacturing price.100 %Assembled inThe USAAdded Capability Options:Efficient Blast Dissipation - $35KISG (20kw/30-40kw)-$10-17KSuspension-$5KDrivers Display-$17KCmd Display-$17KAdditional B-Kit: EFP, RPGA-CabSmall ArmsB-KitArmy - 1XUSMC - .5X
29 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.Talking points:While this is a process improvement, it is also part of the overall modernization strategy to improve the networkIt’s a new way of doing business –a fundamental change in how we deliver capabilities to our Soldiers
30 NIE = Critical Path to Execution Transforming to an Agile Acquisition Process From Candidate to FieldingSelected for inclusion in NIEPotential Solution Selected for evaluationCandidate Evaluated in Lab at APGINPUTSTRADOC Gaps AnalysisSources SoughtRFITechnical EvaluationTechnical MaturityOUTPUTSProduct procured for Specific Capability SetProduct selected for inclusion in Capability PackageDirected Buy(?)Rapid AcquisitionDirected ProcurementCandidate System evaluated in NIEDTLOMPF EvaluationCapabilities and Limitation reviewCapabilities for SoldiersContractingCompetition for additional setsNIE = Critical Path to Execution
31 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-ATVHelicopter Improvements9 Body Armor ImprovementsUAVs (Grey Eagle, Shadow, Raven)Precision MunitionsStryker Double-V HullC-IED (CREW Devices)3 New Sniper RiflesNew Camouflage UniformsM4 ImprovementsWarfighter Information Network-Tactical (WIN-T)Protected medium and heavy truck fleets (Up-Armored)Joint Battlefield Capability-Platform (JBC-P)Light-weight Crew-served WeaponsJoint Capability Release (JCR)Combat Vehicle ImprovementsCounter Rocket, Artillery, and Mortar (CRAM)Acquisition Rigor delivers a Best Value Solution addressing the entire Lifecycle from Womb to Tomb
34 Army Acquisition: Challenges and Opportunities General Officer/Senior Executive Service CourseArmy Force Management SchoolLTG Bill PhillipsPrincipal Military Deputy to theAssistant Secretary of the Army(Acquisition, Logistics and Technology)and Director, Acquisition Career Management4 December 2012