PRODUCT SUPPORT FOR COMMERCIAL ITEMS · 2020-03-13 · •And OTAs don’t require life cycle costing…. So you don’t know what product support costs will be •In supporting Section

© 2019 Collins Aerospace, a United Technologies company. All rights reserved.This document contains no export controlled technical data.

PRODUCT SUPPORT FOR COMMERCIAL ITEMSB O B B Y S T U R G E L L , V P G O V E R N M E N T P R O G R A M SM A Y 2 0 1 9

© 2019 Collins Aerospace, a United Technologies company. All rights reserved.

• Leveraging Commercial technology makes sense for DoD

• Life Cycle performance based partnering benefits everyone

• FAR Part12 = “Speed”

WHY….

This document contains no export controlled technical data. 2


B A C K G R O U N DCOMMERCIAL ITEMS

For over two decades, Congress and the Department of Defense have articulated a policy favoring commercial procurements

• Congress has long recognized that government acquisition of commercial items helps to increase competition, reduce costs and increases access to new technologies, processes and products

Effort began with Section 800 Panel Report of 1993 • The purpose of their commercial item recommendations was to draw new firms to the defense market AND

enable firms to integrate their commercial and military production

Subsequently enacted laws mandated a preference for the acquisition of commercial items under streamlined procedures (FAR Part 12)

• 1994 Federal Acquisition Streamlining Act (FASA)• 1996 Federal Acquisition Reform (Clinger-Cohen) Act• 2004 Services Acquisition Reform Act• NDAAs FY16, FY17, FY18, FY19…


© 2019 Collins Aerospace, a United Technologies company. All rights reserved.4

This document contains no export controlled technical data.

COMPARISON


5

L E V E R A G I N G C O M M E R C I A L T E C H N O L O G Y I N TO M I L I TA RY M A R K E T S

Provides the best value to the warfighter

5This document contains no export controlled technical data.


• Rapid deployment of state-of-the-art technologies

• Saves the government the cost of R&D expenditures• Leverages private investment in commercial technologies • Reduces government risk associated with development

• Utilization of open industry standards• Easier and less expensive to upgrade• Enables future competition

• Integration of defense and commercial industrial bases • Opportunities for increased competition

• Saves the government the cost of obsolescence• Parts obsolescence managed by suppliers• In traditional contracting, DoD pays for and manages obsolescence

BENEFITS OF “COMMERCIAL ITEMS”



• FAR Part 12 was created by 1994 FASA as the solution for acquiring commercial technology and attracting new suppliers to the DoD market

• USG is making it harder and harder to use by commercially-oriented companies• Increased documentation requirements for commercial item justification have caused a reluctance to make

commerciality determinations• Higher level approvals • Flow down clauses expanded from 12 to well over 100• The degree of difficulty to determine whether a product or service meets the commercial items definition has

created separate treatment for “traditional” and “nontraditional” contractors.• Similar “class determinations” have been made for information technology products and services, facilities-

related services, knowledge-based services (except engineering services), construction services, medical services, or transportation services that are not commercial services

PRODUCT SUPPORT FOR COMMERCIAL ITEMSC O M M E R C I A L I T E M S A N D F A R P A R T 1 2



• Commercial technology leverages commercial IR&D funding • DoD must find ways to maintain desired commercial technology over the life of the

aircraft

PRODUCT SUPPORT FOR COMMERCIAL ITEMST H E N E E D F O R S U S T A I N M E N T S O L U T I O N S


Performance Contracting: • Proactive Obsolescence Management• Guaranteed Availability• Consistent Funding Streams

Public Private Partnerships: • IP Access versus Ownership

The Challenge: The need for performance contracting must be driven down to the contracting officer and SPO level

8


P E R F O R M A N C E B A S E D L O G I S T I C SPRODUCT SUPPORT FOR COMMERCIAL ITEMS

• Effective PBLs go beyond your traditional “Break / Fix.” Some elements include:• Repair Chain Management• Material Services• Training Solutions• Obsolescence Management

• Effective PBLs:• Incorporate tailored solutions to maximize long-term supportability of weapon systems

• Availability and performance metrics• Embrace global service and support networks that ensure availability anywhere, anytime • Build trust through proven performance and experience

• Predictable maintenance costs



PERFORMANCE BASED SOLUTIONSL E S S O N S L E A R N E D

• Paid for success; not paid for failure• Why pay the contractor if he only fixes the item once?

• Increase time on wing• Reduced administrative time

• No magic bullet• Support lean staffing

• A true performance based program afford the flexibility of doing more with less and allows staffing to grow the business.

• True savings are possible and measurable• Success is driven by high performance at the lowest level

• Dedicated service center personnel• Accurate reporting of failure information by blue suiters



PERFORMANCE BASED SOLUTIONSL E S S O N S L E A R N E D

• Trust is Essential• Having a successful PBL requires both parties to trust each other

• Communication is Key• Program reviews• ILSMT’s• User’s conferences

• Performance Metrics must be clear• Must match the requirements of the warfighter

• Buy What you Need• Don’t buy 95% availability if you only need 85%

• Needs to allow supplier flexibility to improve the performance of the product• CA is incentivized to keep items on-wing



F - 1 8 P B L A T - A - G L A N C E


• Original award: 15 years; Renewal: 4 years, 90% availability requirement• Scope

• Repair management for all USN/USMC F/A-18 Collins Aerospace displays• 1,200 aircraft supported• 275,000+ flight hours• Engineering & Program Management Support

• Includes FSE coverage at I-level shops• Depot partnership (PPP)

• 2/3 of repairs performed by FRC-SW & FRC-SE

• Performance• Improved availability from 60% at time of award to 99%+ within 2 years• Reduced backorders from 583 items to 0 items within 2 years• Requisition response time from 60+ days to 3 days• Elimination of 3 part numbers from top 10 degrader list

PERFORMANCE BASED SOLUTIONS

12


F I N A L T H O U G H T S O N L I F E C Y C L E M A N A G E M E N TPRODUCT SUPPORT FOR COMMERCIAL ITEMS

• The commercial market moves fast

• Sometimes, companies are no longer making the exact item and the military becomes the last customer

• Just because the military is the only customer, doesn’t mean the item is no longer commercial



• Alternative acquisition pathways, such as Section 804 authorities, are being used to work around the system

• OTAs, for example, are touted as an instrument for their flexibility and speed…

• Most of this flexibility already exists under FAR Part 12• July 2014 DBB report on “Innovation” recommended Part 12 as default acquisition method

for DoD

• And OTAs don’t require life cycle costing….So you don’t know what product support costs will be

• In supporting Section 804, Part 12 offers a great alternative to OTAs for rapid fielding

PRODUCT SUPPORT FOR COMMERCIAL ITEMSA C Q U I R I N G I N N O V A T I O N A N D T H E N E E D T O “ G O F A S T ”

14This document contains no export controlled technical data.


COMMERICAL ITEMS –CONGRESSIONAL INTENT

“The FASA adopted a broad definition of commercial items to ensure that federal agencies would have ready access to products that are available in the commercial marketplace – including new products and modified products that are just becoming available. Such access remains particularly critical in fast moving commercial markets, including the markets for information technology and other advanced products.”

- FY13 NDAA Senate Report 112-173 (sec 841, pg 143)

“The committee is concerned about the DoD’s increasingly narrow interpretation of the definition of commercial items…. The current ‘‘of a type’’ and ‘‘minor modifications’’ language were intended by Congress to be broadly interpreted to expand access to items that were beyond commercial off-the-shelf items.”

- FY17 NDAA Senate Report 114-255 (pgs 234-235)

This document contains no export controlled technical data.15


QUESTIONS


Documents

PRODUCT SUPPORT FOR COMMERCIAL ITEMS · 2020-03-13 · •And OTAs don’t require life cycle costing…. So you don’t know what product support costs will be •In supporting Section