Naval Inventory Control Point 1 F/A-18E/F Integrated Readiness Support Teaming (FIRST) concept, an alternative support strategy emphasizing Government/Industry partnerships, risk management and shared accountability. Awarded May 01 Features: Guaranteed response time Teaming arrangement with three NADEPs Reliability improvements-targeted at 10% Streamlined configuration control and obsolescence mgmt Industry support for E/F peculiar WRAs, lower assemblies and piece- parts Reduced cycle time Reduced cost of ownership Integrated funding streams F/A-18 E/F FIRST Awarded PBLs

Naval Inventory Control Point 2 Awarded PBLs E-2 Mission Computer $16M obs over 5 years Contractor will manage piece part inventory Guaranteed availability 2 days reliability guarantee of 10,000 hours MTBF (15 year warranty, 5 years priced, 2 other 5 year periods are options loaner spares clause if reliability is not met Aircraft Tires $266M obs over 15 years 23 types...17 platforms Inv mgmt / warehousing transportation Guaranteed availability 95% in 2 days CONUS / 4 days OCONUS First performance review… filled over 8000 reqn… 96.43% availability! Aviation Successes $66M obs over 8 years Inv mgmt/warehousing Obsolescence mgmt Contractor manages wholesale (forward- positioned) ship stock Guaranteed availability 90% in 5 days…ipg1s in 2 days F-14 Night Target System

Naval Inventory Control Point 3 Awarded PBLs 50 Person Life Raft $6.6M Obs over 5 years COTS replacement for MILSPEC item Vendor owned inventory Commercial technology Replacement for MK Person Life Raft (2:1) Over 50% cost avoidance for CV/CVNs 4-year base contract w/ one 4-year option; $33.5M for 4- year base 1600 line items; Transitioned from a Mini Stock Point to Full PBL; minimum fill rate of 87% … Contractor Responsibilities: material requirements determination, requisition support, CONUS transportation and tracking, Class II ECP authority AEGIS Spy 1 Radar ARC-210 Radio $35.9M Obs Over 5 Years Inv Mgmt/warehousing Config/Obsolescence Mgmt...MTBF Guarantees… Growth Incentivized Guaranteed Availability 85%/90% with Incentives… 2 Days Pri Days Pri 4-15

Naval Inventory Control Point 4 PBLs on the Horizon FY03 Outlook - Aviation Good to Go SEEWSE11/02F/A-18Displays12/02H-60Tip-to-Tail 6/03 CommonTCAS11/02EnginesF40412/02H-46APU 6/03 EA-6bTailpipes11/02H-60Dynamic 3/03H-53APU 6/03 H-60FLIR12/02 Components Promising – FY03 P-3EDCEA-6BJax HydraulicsCommon APR-39A v2 SERSTSEnginesT58/64 Fuel CtrlsEA-6B ASW-40/41 H-46Rotor HeadEnginesF Fuel Ctrl Engines F Fuel Ctrl EnginesT400 Fuel CtrlP-3APS-137BAV-8B HISS P-3AIPF/A-18Flight SurfacesF/A-18 LEF Wingfold More to Do Engines F414 GILSV-22Tip-to-TailEA-6B ICAPIII/TJSR EnginesJ52

Naval Inventory Control Point 5 PBL Features –116 NIINs... –400 / -402 series –Availability / reliability incentives –20% surge requirement –5 year base J&A at ASN awaiting approval Next Steps –Finalize BCA –Complete PWS –Alpha contracting... Targeting Dec '02 Award F404 7R Components Next step... Consumables for I-level / whole engine repair PBLs on the Horizon Driving towards Time On Wing (TOW) Metric

Naval Inventory Control Point 6 AvionicsDynamic Components Tip-to-Tail - Lockheed Martin - Sikorsky - MHSCo - 42 Avionics - 14 major dynamic total components componentscomponents - Awarded May 02- Est. award Oct 02 - Est. award Dec 02 - $5M contract- $150M contract - $1.3B contract - Guaranteed- Guaranteed - Guaranteed response time response time response time - Obsolescence - Obsolescence - Obsolescence Management Management Management - Firm-fixed price per flying hour flying hour - Guaranteed reliability improvements PBLs on the Horizon H-60 PBL Evolution

Naval Inventory Control Point 7 PBL Lessons Learned Target new systems – Reduce initial inventory investments Make deals attractive to industry – Long term agreements w/ incentives Streamline the negotiation process – Deals significantly more complex than traditional contracts Strike the right arrangement – Specific response time / reliability goals by system Consider Title 10 upfront – Depot partnerships can be "Win-Win" Tie profit to performance Each deal is handcrafted

Naval Inventory Control Point 8 Take-Aways NAVICP is teaming with Industry, Systems Commands and Fleet customers to develop innovative support alternatives. NAVICP is teaming with Industry, Systems Commands and Fleet customers to develop innovative support alternatives. NAVICP is making significant investments of NWCF and personnel to accomplish this goal. NAVICP is making significant investments of NWCF and personnel to accomplish this goal. PBLs… Procuring the performance end state, not the how to PBLs… Procuring the performance end state, not the how to