1. 0217 -1 Total Life Cycle Systems Management 5 February 2002

2. 0217 -2 Current Life Cycle Challenges Estimated weapon system sustainment cost of $62B – Unable to link cost to performance Average CWT Class IX to 0-level maintenance of 18 days – Disconnects across logistics functions Services implementing variety of performance-based strategies – We need to accelerate implementation PMs responsible for life cycle management – Limited sustainment expertise/guidance – No formal oversight mechanisms Requirements process that emphasizes weapon system performance – Limited attention to life cycle sustainment

3. 0217 -3 Total Life Cycle Systems Management Desired End State* Weapon System Managers responsible for the overall management of the weapon system life cycle to include: Timely acquisition of weapon systems meeting warfighter performance requirements Integration of sustainability and maintainability during acquisition process Weapon system sustainment to meet or exceed warfighter performance requirements at best value to DoD (and appropriate visibility) * Desired end state is interrelated with other FLE initiatives: Depot Maintenance Partnering, SMARTT, and Enterprise Integration

4. 0217 -4 30 Pilot Programs DoD 5000 Policy Oversight via DAB/DAES New program implementation Operational Demonstrations Lessons Learned Adjustments Oversight via R-TOC Forum Reengineer Product Support F/A-18 E/F F-22 Quadrennial Defense Review Performance-Based Logistics Legacy Systems FY03 DPG Service Implementation Schedules Performance-Based Logistics AAAV Linking cost to performance

5. 0217 -5 Performance-Based Logistics Support Provider Warfighter(/Force Provider) Weapon System Manager Visibility into cost/risk decisions across life cycle Acquisition Provide continuous, Reliable, affordable Support per PBA Ensure System is Sustained at optimum Level per PBA Disposal PBA Sustainment INDUSTRY/ORGANIC Buys Performance As a Package (Including Surge/Flexibility)

6. 0217 -6 Performance Agreements Warfighter Focused - Systems Level Metrics Documents range of expected/required performance from warfighter (Force Provider) Identifies Roles and Responsibilities of Stakeholders Works for both peacetime and wartime requirements Resource Management Tool Facilitates Performance Measurement Basis for support provider contracts and agreements Agreements executed by customer to document warfighter requirements (within available resources).

7. 0217 -7 Financial Mechanisms (Recent PBL Programs) C-17 F/A-18 E/F Engine Customer Funded Concurrent With Performance Agreement Direct to PM (Planned) Migration to Single Contract (Emerging) Sentinel All programs involve varying degrees of AIT, SMARTT, and government/industry partnering.

8. 0217 -8 C-17 Funding Requirements Flow B u d g e t C y c l e* AMC ORD/MNS R&PC Rqmts AMC Prioritize ALCs Rqmts Comps AFMC AIR STAFF AETC Rqmts SAF/FM AF/ILS AFCA IG SAF/FM AF/ILS AFCA IG Programmed Flying Hours AMC/LG C-17 SPO (WPAFB) AMC/FM Rqmts TRANSCOM Programmed Flying Hours Programmed Flying Hours (PFT) C-17 SPO (WPAFB) C-17 SPO Estimates ANG Rqmts Program 3600 BA RDT&E 3010 BA BP 10 (A/C Procurement) BP 11 (Modifications) BP 16 (Spares) 3010 BA BP 16 (Spares) MS DOA (Spares) 3400 BA AETC (Dir) / TWCF (Reimb) EEIC 578 (CLS) 3400 BA EEIC 609 / 61950 (Supplies) EEIC 644 / 699 (DLRs / A/C Fuel) 3840 BA EEIC 578 (CLS) 3840 BA EEIC 541 / 543 (Depot Maint) EEIC 605 / 609 / 619 (Supplies) EEIC 644 / 699 (DLRs / A/C Fuel) TWCF EEIC 540 (S/W Maint) TWCF EEIC 578 (CLS) TWCF EEIC 392 / 409 (Civ Pay / TDY) EEIC 480 / 492 (Utilities / Comm) EEIC 522 / 529 (Civ Eng) EEIC 531 (Custodial Svcs) EEIC 532 (A&E Design) EEIC 569 / 582 (Cont Maint ADPE) EEIC 592 (Misc Cont) EEIC 609 / 619 / 61950 (Supplies) EEIC 627 / 628-638 (Equip) EEIC 641 / 644 (Veh Fuel / DLRs) EEIC 693 / 699 (A/C Fuel) SAF/AQ AF/IL AETC/ LG/FM ANG/LG OSD

9. 0217 -9 Other Centers ASC/FMSAF/FMB AF/ILS SAF/FMBO AFMC/FM OACProgram 36 SAF/AQ 36 SAF/AQ 47 SAF/AQ 47 AF/IL 64 AETC/LG/ FM 64 AETC/LG/ FM 41 ANG/LG 65 OSD 65 OSD Stock Fund Item Mgrs KTR Charleston AFB McChord AFB KTR ALC/FM Altus Jackson ANG ALC C-17 SPO (WPAFB) SAF/FMB SAF/FMBO TRANSCOM (Expense Auth) TRANSCOM (Expense Auth) TRANSCOM (Expense Auth) AFMC/FMR AFMC/FM AFMC/FMR AETC/FM ANG/FM AMC/FM 3600 BA RDT&E 3010 BA BP 10 (A/c Procurement) BP 11 (Modifications) BP 16 (Spares) 3010 BA BP 16 Spares MSD OA (Spares) 3400 BA AETC (Dir) TWCF (Reimb) EEIC 578 (CLS) 3400 BA EEIC 609/61950 (Supplies) EEIC 644/699 (DLRs/A/C Fuel) 3840 BA EEIC 578 (CLS) 3840 BA EEIC 541/543 (Depot Main) EEIC 605/609/619 (Supplies) EEIC 644/699 (DLRS/A/C Fuel) TWCF EEIC 540 (S/W Maint) TWCF EEIC 578 (CLS) TWCF EEIC 392/409 (Civ Pay/TDY) EEIC 480/492 (Utilities/Comm) EEIC 522/529 (Civ Eng) EEIC 531 (Custodial Svcs) EEIC 532 ( A & E Design) EEIC 569/582 (Con Maint/ADPE) EEIC 592 (Mis Con) EEIC 609/619/61950 (Supplies) EEIC 627/628-638 (Equip) EEIC 641/644 (Veh Fuel/DLRs) EEIC 693/699 (A/C Fuel) System Program Office = Contractor (KTR) = KTR C-17 SPO (WPAFB) C-17 SPO (WPAFB) C-17 SPO (WPAFB) C-17 Funding Execution Flow

10. 0217 -10 Align Financial Mechanisms with TLCSM / PBL PBL financial strategies negotiated within current financial processes USD(C) developing new financial architecture DUSD(L&MR) will engage with USD(C) to ensure “financial architecture” supports how we want to run the business – Consistent with PBL – With appropriate financial controls – With sufficient visibility and accountability

11. 0217 -11 Life Cycle Policy

12. 0217 -12 WSM Sustainment Guidance

13. 0217 -13 Appropriate Sustainment Oversight Revise 5000-series to require Service-level reviews – Focus on performance vs. customer requirements – Tied to WSM tenure/turnover Revise DAES to strengthen performance variance reporting based on Performance Agreements – Performance – Cost – Trade-offs OSD review on an exception basis

14. 0217 -14 Refine WSM Professional Development Program Managers to Weapon System Managers – Revise Advanced PM Course – Expand PM Executive Refresher Course – Influence new PM Capstone Course – Add Executive Acquisition Logistics Course, as mandatory – 1Q, FY 03 Weapon System Managers staffs (FY 03) – Incorporate FLE/TLCSM in new Log Course (Performance-Based Logistics) – Develop DAU-sponsored sustainment curricula NOW!

15. 0217 -15 Proposed Requirements Actions USD(AT&L) request VC/JCS to emphasize sustainment as part of JROC process (CJCSI 3170) Services emphasize RAM and sustainment in their respective requirements processes Incorporate increased emphasis on sustainment in 5000 series Corresponding emphasis by DAE and CAEs/MDAs at Milestone Reviews

16. 0217 -16 JLB Actions Support development and delivery of comprehensive PBL implementation schedules Engage with USD(C) to develop enabling financial mechanisms Support revision of 5000.1/5000.2 to: – Include guidance on performance agreements – Focus on Total Life Cycle Systems Management – Define sustainment phase – Provide WSM sustainment guidance – Incorporate Service and OSD oversight mechanisms Improve DAU curriculum to include total life cycle management through the Functional IPT process Support USD(AT&L) request to improve JROC process Advocate greater consideration of sustainment requirements in SROC