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General Officer/Senior Executive Service CourseArmy Force Management School
Army Acquisition:Challenges and Opportunities
LTG Bill PhillipsPrincipal Military Deputy to the Assistant Secretary of the Army(Acquisition, Logistics and Technology)and Director, Acquisition Career Management4 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 Firefightat Paktika Province, Afghanistan
U.S. Soldiers from 4th Brigade Combat Team, 101st Airborne Cbt operations in the Paktika Province, Afghanistan, 20 May, 2011
4
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.
ASA(ALT)
The advantage is achieved by combining and leveraging the Design, Develop, Deliver, Dominate – principles.
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!
5
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
First Look, First Strike Advantage
Bottom ViewStryker Double-V Hull
M-ATV Underbody Improvement Kit
Body Armor
Caiman MRAP Vehicle
Pelvic Protection
6
Providing Soldiers a Decisive Advantage
1LT Miller’s ACH
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.
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
Bottomline: Pay attention to proper Contracting Procedures
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.
11
Acquisition Will Impact You“Examples”
The GOODEAGLE 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 BADKBR: 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 UGLYJorge 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-2012-135 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, 2008. An errant projectile struck a family cat…..federal lawsuit
12
What Are We Spending?
• In FY12 Army Contracting, on average, purchased $293M per day
• The contracting environment is tough, workload is increasing, requiring adequate resources to execute:o FY11 – 470K actions / $124.3B
o FY12 – 412K actions / $107.5B
• In FY12 the Army executed 21.41% of Federal contracting and 30.27% of Defense contracting
• In FY12 the Army spent $3.8B on Logistics Civil Augmentation Program (LOGCAP) IV.
13
Rank CompanyRevenues($ 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
2011 Fortune 500: Top Firms(Source: CNNMoney.com)
U.S. Army Financial Ranking
61% Services
39% Supplies
Army Contract Distribution
$139B (FY11 Army Base Budget)ASA(FM&C)
14
Where America is Spending
Annually, America spends, on average, more on a pizza party than we do on the Army.
Army Base Budget in 2012 = $135.4B
Annual U.S. Beer Sales = $96BAnnual U.S. Pizza Sales = $35BAnnual U.S. Soda Sales = $19B
$150B
Sources: Beer Statistics: brewersassociation.org (Business Tools)Pizza Statistics: http://pmq.com/digital/201109/files/52.htmlSoda Statistics: Time Business
15
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 1.13:1
Afghanistan 1.1:1
Simple Services > Longer Deployment / Nation Building > Complex Services
Co
mp
lexi
ty o
f S
ervi
ceC
om
ple
xity
of
Co
nfl
ict
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.
MedicalLaundry
Food ServiceShower Service
Sanitation
Transportation
MaintenanceConstruction
IntelligenceSecurity
Contractors per Soldier
Contractors on the BattlefieldPeak
2:1
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
Friction Pt 1:Incomplete SOW/PWS
Limited timeLack of automation
cASM
Friction Pt 2:Appointment of CORs
Maintaining CORsEffective oversight
COR EXORD
Friction Pt 3:Invoice certification
Property accountability
RCC & RM Partnerships
Unauthorized Commitments; Anti-Deficiency Act violations;ineffective mission support; operational impacts
RequirementsGeneration
Contract Award
ContractAdmin
ContractCloseout
FP 1 FP 2 FP 3
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Actions Commanders Can Take
1. Be familiar with the acquisition / contracting process!
2. Understand “fully” what contracts and contractors are under your responsibility and authority!
3. Integrate operational contract support planning into logistics and operations planning
4. Plan requirements carefully; avoid gold-plating
5. Consider other support options first (organic assets, supply system, DLA)
6. Develop a good relationship with the Contracting Commander!
7. Protect taxpayer funds—eliminate inefficiencies
8. Quality CORs = quality contractor performance
9. Hold contractors accountable
10. Avoid any appearance of impropriety
11. Ensure property is placed on the books
Work closely with your Contracting Activity
1818
Contracting Basics for Leaders
GTA 70-01-001
CERP GTA 90-01-017
FOO GTA 14-01-001
CALL # 09-27 APR 09 CALL # 08-12 APR 08
Operational Contract Support PublicationsInformation for the Warfighter
CALL # 08-47 SEP 08 CALL # 09-16 JUL 09 CALL # 09-48 SEP 09DPAP COR
HANDBOOK APR 10
Deployed COR GTA 90-01-016
ContractingSupportBrigade
10 Feb 2010
FM 4-92
JP 4-10
Operational Contract Support
17 Oct 08
GO OCS “Flashcard”
DODI 3020.41
Operational Contract Support and Contingency ProgramManagement
DOCTRINEPOLICY
AR 715-9
Approved
Publicatio
n pending
AR 700
-137
Awaiting
G-4
app
rova
l
ATTP4-10
Operational Contract Support: Tactics, Techniques & Procedures
OCS Community of Practice (AKO): https://www.us.army.mil/suite/page/659589
19
AcquisitionOverview
20
The Power of the Acquisition Corps
CM3%
FI2%
AG MI
AD5%
FA11%
IN 12%
SF 1%
AV13%
EN5%
SC9%
MP2%4%
AR9%
6%
LG17%
“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
As of 31 Jan 12Source: CAPPMIS
HIGHEST EDUCATION LEVEL ACHIEVED
SGM MSG SFC SSG SGT TOTAL
Associate’s Degree 4 9 7 20
Bachelor’s Degree 9 25 34 13 81
Master’s Degree 5 3 3 4 15
Doctorate Degree
TOTAL Number of NCOs 15 50 127 164 4 360
TOTAL with Advanced Degrees 14 32 46 24 0 116
PERCENT with Advanced Degrees
93% 64% 36% 15% 0% 32%
Gender Demographics: 219 Males, 114 Females & 27 Unknown
We Need Your Help to Identify the Best and Brightest!
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FA51 Army Acquisition Corps - Officers
• Robust ACS and TWI partnerships: New for 2012 - 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 600-3.
• AAC attendance at CGSoC, Fort Leavenworth commencing 2014.
• Senior COCOM Staff Membership: J4 Operational Contract Support
CM2%
FI1%
AG
MI
AD4%
FA11%
IN 12%
SF 1%
AV13%
EN5%
SC9%
MP1%3%
AR9%
5%
LG19%
0 10 155 6 7 8 91 2 3 4 11 12 13 14 16 17 18Basic Branch Accession Window Acquisition
Legacy Officer Career Timeline
Years of Service
Ranges from 6-12 Yrs
Career Timeline Impact
0 10 155 6 7 8 91 2 3 4 11 12 13 14 16 17 18Basic Branch Accession Window Acquisition
Years of Service
Reduced to 4-9 Yrs
Average accession at 10th YOS
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.
Acquisition career guidancedirected multi-functionality
Acquisition career guidance emphasizes technical proficiency prior to broadening
Recent Broadening and “Re-Greening” Initiatives:
COL LTC MAJ CPT TOTAL153 425 647 248 1742
Developing a Professional Acquisition Corps:
Strength of the Corps!
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Inherently Linked!!!!
Requirements Resources Acquisition Sustainment
Requirements Resources
Acquisitionand
Sustainment
Changing the Acquisition Paradigm“Driving Positive Change”
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
Collaboration is Absolutely NecessaryBig “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
https://dap.dau.mil/leadership/Pages/bbp.aspx
25
Acquisition Increasing Complexity
26
Thinking Outside of the Box
A “Transforming” Challenge to the Army
27
Ground Combat VehicleRequirements / Specifications Approach
Cost: $9M-$10.5 M
136
589
20
Tier 1 – Big 4 Must Haves: Force Protection, Capacity, Full Spectrum, Timing and Selected Safety, Statutory, and Regulatory Requirements
Tier 2 – Offeror may propose less than threshold requirement but may not defer the full requirement
Tier 3 – Offeror may defer full requirement to a future increment
TIER 1
TIER 2
TIER 3
• 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
• 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
First Request for Proposals Second Request for Proposals
28
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
Base Vehicle Cost: $240K (AUMC)Armor$21K (Fleet Avg) Base + Armor$261KOther Procurement Cost:$81K
Technical Features• 275-340 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: 14000 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”
PAYLOAD TON MILES PER GALLON
10 6 MPG
13 7 MPG
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
A-CabSmall Arms
B-KitArmy - 1X
USMC - .5X
100 % Assembled in
The USA
to
Joint Light Tactical Vehicle $240K
OverOMS/MP
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.
It’s a new way of doing business – a fundamental change in how we deliver capabilities to our Soldiers
30
Transforming to an Agile Acquisition ProcessFrom Candidate to Fielding
Potential Solution Selected for evaluation
• Sources Sought• RFI
Candidate Evaluated in Lab at APG
• Technical Evaluation• Technical Maturity
Product procured for Specific
Capability Set
• Contracting• Competition for
additional sets
Product selected for inclusion in Capability
Package
• Directed Buy(?)• Rapid Acquisition• Directed Procurement
Candidate System evaluated in NIE
• DTLOMPF Evaluation
• Capabilities and Limitation review
Selected for
inclusion in NIE
INPUTS
OUTPUTS
Capabilities for Soldiers
TRADOC Gaps
Analysis
NIE = Critical Path to Execution
31
Army Acquisition – Myths and Truths
• 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)
• The Army always buys the cheapest solution without regard to quality.
• Army Acquisition is “broke” and can’t acquire anything, why invest?
• 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.
Acquisition Rigor delivers a Best Value Solution addressing the entire Lifecycle from Womb to Tomb
32
THANK YOU!
for Supporting our Acquisition Warriors
33
Seeking Innovation – An Example
General Officer/Senior Executive Service CourseArmy Force Management School
Army Acquisition:Challenges and Opportunities
LTG Bill PhillipsPrincipal Military Deputy to the Assistant Secretary of the Army(Acquisition, Logistics and Technology)and Director, Acquisition Career Management4 December 2012