1. Naval Inventory Control Point 1  Work with all stakeholders early in the PBL formulation process to develop system support strategy  Develop SOW and determine contractual metrics  Ensure that Core issues are being addressed: Is the system Core? Is there Navy/DoD core logistics capability? What is depot impact? What is Core strategy? Address Core compliance strategy in the J&A  Construct the Business Case Analysis  Initiate Congressional Notification as early as possible Acquisition Process Integrated Process Team

2. Naval Inventory Control Point 2 Business Case Analysis Business Case Analysis Proposal Material: Procure Repair Inventory Control Management OH Warehousing PHS&T Asset Visibility Engineering Other Material Costs Procure Repair Other Costs Inventory Control Management OH Warehousing PHS&T Asset Visibility Engineering Other PBL Proposal Should Target Performance Improvements and Not Cost More Than Tradition Support

3. Naval Inventory Control Point 3 Not more than 50 percent of the funds made available in a fiscal year to a military department or a Defense Agency for depot-level maintenance and repair workload may be used to contract for the performance by non-Federal Government personnel of such workload for the military department or the Defense Agency. Any such funds that are not used for such a contract shall be used for the performance of depot-level maintenance and repair workload by employees of the Department of Defense 10USC § 2466 Statutory Requirements The 50/50 Rule Applied at the Service (DON) level

4. Naval Inventory Control Point 4 Core Logistics Capabilities shall include those capabilities that are necessary to maintain and repair the weapon systems and other military equipment (including mission-essential weapon systems or material not later than four years after achieving initial operational capability, but excluding systems and equipment under special access programs, nuclear aircraft carriers, and commercial items) that are identified by the Secretary, in consultation with the Chairman of the Joint Chiefs of Staff, as necessary to enable the armed forces to fulfill the strategic and contingency plans prepared by the Chairman of the Joint Chiefs of Staff. If system is Core, DoD must have Core logistics capability 10USC § 2464 Statutory Requirements CLC Rule

5. Naval Inventory Control Point 5 Core Determination Statutory Requirements Core Determination  NAVSEA core determination is made at the platform (ship) level  NAVAIR normally takes core determination down to the individual repairable component (DLR) level… however precedence has been set for a platform-level CORE determination on some PBLs  NAVSEA and NAVAIR interpret Core logistics capability differently

6. Naval Inventory Control Point 6 Congress must be notified when: –Under 10 USC 2461 for any work being changed from performance by DoD civilian employees to the private sector –Under 10 USC 2464 the first time an item is determined commercial for the purposes of applying the section 2464 commercial item exception Under 10 USC 2469 can not move more than $3M workload/year from a DoD depot unless merit- based selection procedures/competitive procedures are used ` Statutory Requirements Other Restrictions

7. Naval Inventory Control Point 7 Awarded PBLs Obligations $M The Wave of the Future

8. Naval Inventory Control Point 8 Supports C-2, F/A-18, S-3 and P-3. Public / Private Partnership –Honeywell... Program Management –NADEP Cherry Point... Sub-contractor performing touch labor 10-Yr Performance Based, Firm Fixed Price (5 year base & 5 one-year options) 25% - 45% Reliability Improvement Delivery Guarantees... 2 Days (IPG 1) Obsolescence Management Surge Capability...120% of Annual FH’s Product Support Engineering On-Line Shipping & Inv Mgmt Title 10 Compliant Auxiliary Power Unit Awarded PBLs