1

PMA-273PMA-273T45 Contractor Logistics T45 Contractor Logistics

SupportSupportApril 2004

2

ObjectiveObjective

• CLS and PBL (Performance Based Logistics)

• T-45 PBL contract

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Performance-Based LogisticsPerformance-Based Logistics

Support Provider

Warfighter/Force Provider

Weapon SystemManagement

Visibility into cost/risk decisions across life cycle

Acquisition

Provide continuous,Reliable, affordableSupport per PA

Ensure System isSustained at optimumLevel per PA

Disposal

PAPA

Sustainment

INDUSTRY/ORGANIC BuysPerformanceAs a Package

(Including Surge/Flexibility)

PM

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PBL CharacteristicsPBL Characteristics• Customer Focused – High Level Metrics• Documents the negotiated range of support metrics necessary to

meet operational objectives– Expectations

– Range of performance

– Peace and War• Involves and is recognized by all appropriate stakeholders

– Service corporate structure

– Logistics providers

– Customers• Synchronizes allocated resources (corporate decision process)

with service level expectations

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T45 FY00 ContractT45 FY00 ContractWeaknessesWeaknesses

• Actual vs. Projected Flight Hours– Projections/actuals are now significantly lower than forecasted– We pay for the labor for many more FH’s than we are flying.

• RFT is not sufficient as sole availability metric – RFT can be met with insufficient number of available aircraft (based upon %

of A30 aircraft). – RFT Range (65%-75%) is not what CNATRA desires

• No Labor Rates Established– Requires every over and above action to be priced separately

• CDFT/IMP must be re-negotiated every year due changes in scope.• USN pays CLS Contractor estimated $1.2M “pass through” annually

for engine OEM support– Rolls Royce owns the proprietary technical data; performs depot work for CLS

Contractor; provides tech support to CLS Contractor at O/I level; owns & provides parts forecasting model; and provides parts to CLS Contractor

• Although a “PWS,” there is much “how to.”

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T45 CLS SolutionT45 CLS Solution

• Performance Based Logistics (PBL) to maximum extent

• Break support effort into two separate contracts– Competition for Airframe/GBTS CLS– Sole Source Power by the Hour (PbtHTM) contract to Rolls Royce

(OEM) for Engine support

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T45 Airframe/GBTS CLST45 Airframe/GBTS CLS• Performance Based Logistics (PBL) philosophy• Reduced number of CLIN’s (from 32 to 14)• Built around two Performance Based Work Statements

– Aircraft PWS

– Ground Based Training System PWS

• Customer and Industry active in writing both PWS’s• PWS combines Commercial Best Practices and OPNAVINST 4790.2• CLINs Established for O/I and Depot Fixed Labor Rates• Performance Incentives

– Performance Bonus ($5M annually)• Ready For Training (RFT)- 57% • Sortie Completion Rate (SCR)- 98%

– Contractor Performance Factor (CPF) for GBTS

– CPARS/IPARS Grading criteria for material condition of aircraft

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T45 % Ready For TrainingT45 % Ready For Training

253035404550556065707580859095

100

Contract Requirement Kingsville Meridian61.3% 70.7% 64.8% 69.5% 57%

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T45 A/C Ready For TrainingT45 A/C Ready For Training

83.2

106.5

94.7

0102030405060708090

100110

6/6/

2003

6/20

/200

3

7/4/

2003

7/18

/200

3

8/1/

2003

8/15

/200

3

8/29

/200

3

9/12

/200

3

9/26

/200

3

10/1

0/20

03

10/2

4/20

03

11/7

/200

3

11/2

1/20

03

12/5

/200

3

12/1

9/20

03

1/2/

2004

1/16

/200

4

1/30

/200

4

2/13

/200

4

KINGSVILLE MERIDIAN T-45 TOTAL

Co

ntr

act

Sta

rt D

ate

1 O

cto

ber

200

3

10

T45 Sortie Completion RateT45 Sortie Completion Rate

50556065707580859095

100105110115120125130

REQUIREMENT KINGSVILLE MERIDIAN98% 5 mos. avg 106% 5 mos. avg 106%

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F405F405 Engine Support ApproachEngine Support Approach• Break Out Engine support from Airframe/GBTS• Sole Source Power by the HourTM (FAR Part 12)• PBL focused• Single CLIN Contract with fixed price per flight hour• Contractor has total support responsibility

– Intermediate and Depot (all “off-aircraft”) maintenance– Logistics support (parts forecasting, provisioning, LSA, pubs, supplier

management)– Engineering support (RCM, EI’s, obsolescence management)– Support to O level (tech reps, PSE, pack up kits, training)

• PbtHTM Results – Guaranteed engine availability (80% FY04, 85% FY05 & out)– Stable fixed price budgeting– Low Risk– RR incentivized to improve engine performance and reliability

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F405 RFI/NRFI EnginesF405 RFI/NRFI Engines

141 141 143 144 144144147 148 148 147145 145 146 145

150145

143144145143142

29

34323333313030

34343431

333534333536353737

29

35

41

47

53

59

65

71

77

83

89

95

101

107

113

119

125

131

137

143

149

155

161

167

173

179

To

tal

En

gin

es

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Per

cen

tag

e R

FI

En

gin

es

RFI NRFI Available%

October 2003 thru February 2004

176 Engines

177 Engines

178 Engines

179 Engines

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F405 Engine Release Life F405 Engine Release Life ComparisonComparison

FY04 Contract allows 40 Engines released with less than 500 HrsFY04 Contract allows 40 Engines released with less than 500 HrsFY05 Contract allows 25 Engines released with less than 500 HrsFY05 Contract allows 25 Engines released with less than 500 Hrs

Monthly Average

757.9737.2

1178.7

985.3870.7 822.2

916.0

763.3

1164.3

1029.3

1130.11154.7

850.9

1002.9

1292.4

637.0

1287.01324.0

937.5

1420.5

1225.9

1307.0

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Apr-02

May-02

Jun-02

Jul-02

Aug-02

Sep-02

Oct-02

Nov-02

Dec-02

Jan-03

Feb-03

Mar-03

Apr-03

May-03

Jun-03

Jul-03

Aug-03

Sep-03

Oct-03

Nov-03

Dec-03

Jan-04

ENGINES Released under 500 Hrs.

3Q02 10<500 1Q04 3<5004Q03 2<5003Q03 8<5002Q03 6<5001Q03 8<5004Q02 7<500

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T45 CLS Report CardT45 CLS Report Card

• Team formed to review how recent PBL implementation is working– How is the program doing now?– Are there any unresolved issues?– Are there any lessons learned?

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How’s the T-45/F405 Program How’s the T-45/F405 Program doing now?doing now?

• Navy/Vertex relationship off to a good start!• Maintenance backlog at NAS Kingsville is

challenging– However, No significant drop in RFT– Vertex meeting flight ops – However, not meeting contract

incentive requirements

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Are there any Unresolved Issues?Are there any Unresolved Issues?

• CLS Report Card identified some transition issues…

• Transition issues in work - have been added to the weekly “T45 Transition Conference Call”.

• Examples:– Rolls Royce (foreign national) access to Navy websites– Off-site Access to GOLD– Exit Inventories/Surveys

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Are there any Lessons Learned?Are there any Lessons Learned?• Yes! CLS Report Card resulted in some lessons

learned• Lessons learned are being worked into transition PWS

and added to current CLS contract, and shared across platforms

– For example, all parties agree that a period of at least 30 days for “pass-down” between the incumbent and new contract is imperative to a successful transition…”continuity of services”

– Establish “transition phone call” immediately after contract award

– Have Inventories/Surveys complete 2 months prior to contract end

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T45 CLS RecapT45 CLS Recap

• T45TS Performance Based Contractor Logistics Support– Reduced operating costs

• We only pay for the performance we need

• Leverage commercial best practices and systems

• Decreased government infrastructure

– Improved availability/readiness– Increased Contractor accountability