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Army Acquisition: Challenges and Opportunities

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1 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

2 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 …

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.

5 First Look, First Strike Advantage
Soldier Protection Stryker Double-V Hull Mine-resistant Ambush-Protected All- Terrain Vehicle (M-ATV) Underbody Improvement Kit Body Armor Caiman Explosively Formed Penetrators Enhancements Squad Lethality – machine guns, mortars, sensors, Unmanned Aerial Vehicles (UAVs), uniforms Pelvic Protection Bottom View Stryker Double-V Hull M-ATV Underbody Improvement Kit Body Armor Caiman MRAP Vehicle Pelvic Protection First Look, First Strike Advantage

6 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 Initially knocked down, he quickly regained his composure and dispatched both enemy combatants. 1LT Miller’s ACH ------Original Message------ From: Peter N. BG Fuller To: Peter W. GEN Chiarelli To: John M Hon CIV USA SECARMY McHugh To: George W. Jr. GEN Casey To: Joseph W Hon CIV USA SECARMY Westphal Cc: Malcolm O’Neill Cc: LTG William N. Phillips Subject: RE: 1LT Jason T. Miller (UNCLASSIFIED) Sent: Jul 20, :47 AM Classification: UNCLASSIFIED Caveats: NONE Brick 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.

7 ASA(ALT) Organizational Structure

8 Program Executive Office Locations

9 Army Contracting

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 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

11 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 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, 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 / $124.3B 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 % of Defense contracting In 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: 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 As of 7 JAN 2011 All 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 = $96B Annual U.S. Pizza Sales = $35B Annual U.S. Soda Sales = $19B $150B Army Base Budget in 2012 = $135.4B Sources: Beer Statistics: (Business Tools) Pizza Statistics: Soda Statistics: Time Business

15 Contractors on the Battlefield
Peak 2:1 Contractors per Soldier American Revolution 1:6 Civil War 1:5 World War I 1:20 World War II 1:7 Korea 1:2.5 Vietnam 1:6 Gulf War 1:60 Balkans 1:1 Iraq :1 Afghanistan 1.1:1 Simple Services > Longer Deployment / Nation Building > Complex Services Complexity of Service Complexity of Conflict Shorter 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. Medical Laundry Food Service Shower Service Sanitation Transportation Maintenance Construction Intelligence Security OND: 23,886 contractors* OEF: 113,491 contractors 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.

16 Contracting Friction Points! Procurement Involves Multiple Stakeholders
FP 1 FP 2 FP 3 Requirements Generation Contract Award Contract Admin Contract Closeout Friction Pt 1: Incomplete SOW/PWS Limited time Lack of automation cASM Friction Pt 2: Appointment of CORs Maintaining CORs Effective oversight COR EXORD Friction Pt 3: Invoice certification Property accountability RCC & RM Partnerships Unauthorized Commitments; Anti-Deficiency Act violations; ineffective mission support; operational impacts

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 planning Plan requirements carefully; avoid gold-plating Consider other support options first (organic assets, supply system, DLA) Develop a good relationship with the Contracting Commander! Protect taxpayer funds—eliminate inefficiencies Quality CORs = quality contractor performance Hold contractors accountable Avoid any appearance of impropriety Ensure property is placed on the books Work closely with your Contracting Activity

18 Operational Contract Support Publications Information for the Warfighter
Deployed COR GTA DODI Operational Contract Support and Contingency Program Management JP 4-10 Operational Contract Support 17 Oct 08 ATTP 4-10 Operational Contract Support: Tactics, Techniques & Procedures Contracting Basics for Leaders GTA POLICY DOCTRINE Contracting Support Brigade 10 Feb 2010 FM 4-92 Publication pending AR 715-9 Approved Awaiting G-4 approval AR CERP GTA DPAP COR HANDBOOK APR 10 CALL # APR 09 CALL # APR 08 CALL # JUL 09 CALL # SEP 09 FOO GTA GO OCS “Flashcard” CALL # SEP 08 OCS Community of Practice (AKO): 18

19 Acquisition Overview

20 The Power of the Acquisition Corps
CM 3% FI 2% AG MI AD 5% FA 11% IN 12% SF 1% AV 13% EN SC 9% MP 4% AR 6% LG 17% “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 ACHIEVED SGM MSG SFC SSG SGT TOTAL Associate’s Degree 4 9 7 20 Bachelor’s Degree 25 34 13 81 Master’s Degree 5 3 15 Doctorate Degree TOTAL Number of NCOs 50 127 164 360 TOTAL with Advanced Degrees 14 32 46 24 116 PERCENT with Advanced Degrees 93% 64% 36% 15% 0% 32% As of 31 Jan 12 Source: CAPPMIS Gender Demographics: 219 Males, 114 Females & 27 Unknown We Need Your Help to Identify the Best and Brightest!

22 FA51 Army Acquisition Corps - Officers
Developing a Professional Acquisition Corps: Legacy Officer Career Timeline Strength of the Corps! Acquisition career guidance directed multi-functionality Ranges from 6-12 Yrs CM 2% FI 1% AG MI AD 4% FA 11% IN 12% SF AV 13% EN 5% SC 9% MP 3% AR LG 19% Basic Branch Accession Window Acquisition 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Years of Service Average accession at 10th YOS Career Timeline Impact Acquisition career guidance emphasizes technical proficiency prior to broadening Reduced to 4-9 Yrs Basic Branch Accession Window Acquisition 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Years of Service Average accession at 7th YOS 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 LTC MAJ CPT TOTAL 153 425 647 248 1742 Recent 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 PAM AAC attendance at CGSoC, Fort Leavenworth commencing 2014. Senior COCOM Staff Membership: J4 Operational Contract Support

23 Changing the Acquisition Paradigm “Driving Positive Change”
Requirements Resources Acquisition Sustainment Inherently Linked!!!! New Paradigm Acquisition Stakeholders can’t be stove-piped Must Collaborate & Synch through lifecycle Institute Rigor and Analysis in Process Challenge & Shape Requirements Trade Performance for Cost & Schedule Emphasize Affordability Improve Oversight of Contractors Requirements Resources Acquisition and Sustainment Collaboration is Absolutely Necessary Big “A” Acquisition Is: Requirements, S&T, Resources, Acquisition Strategy, Sustainment, & Demilitarization

24 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

25 Acquisition Increasing Complexity

26 A “Transforming” Challenge to the Army
Thinking Outside of the Box

27 Ground Combat Vehicle Requirements / Specifications Approach
First Request for Proposals Second Request for Proposals Cost: $9M-$10.5 M 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 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 Band A: Mobility and Lethality specifications Band B: (Vehicle) Survivability specifications Band C: All other specifications Band D: Will be provided as Government Furnished Equipment Prioritization Scheme 20 TIER 3 Tier 3 – Offeror may defer full requirement to a future increment

28 Joint Light Tactical Vehicle $240K
PAYLOAD TON MILES PER GALLON Technical Features HP Diesel Engine (6 Cyl or 8 Cyl) 6-Speed Automatic Transmission Independent Four-Corner Suspension (passive or semi-active) 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: 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” to 10 6 MPG 13 7 MPG Over OMS/MP Base Vehicle Cost: $240K (AUMC) Armor $21K (Fleet Avg) Base + Armor $261K Other Procurement Cost: $81K PROTECTION 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 We 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 in The USA 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 A-Cab Small Arms B-Kit Army - 1X USMC - .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 network It’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 Fielding Selected for inclusion in NIE Potential Solution Selected for evaluation Candidate Evaluated in Lab at APG INPUTS TRADOC Gaps Analysis Sources Sought RFI Technical Evaluation Technical Maturity OUTPUTS Product procured for Specific Capability Set Product selected for inclusion in Capability Package Directed Buy(?) Rapid Acquisition Directed Procurement Candidate System evaluated in NIE DTLOMPF Evaluation Capabilities and Limitation review Capabilities for Soldiers Contracting Competition for additional sets NIE = 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-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

32 for Supporting our Acquisition Warriors
THANK YOU! for Supporting our Acquisition Warriors

33 Seeking Innovation – An Example

34 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

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