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1. AGENCY USE ONLY (Leave blank) 2. REPORT DATE

July 1998

3. REPORT TYPE AND DATES COVERED

Guidebook

4. TITLE AND SUBTITLE

DSMC Program Managers Took Kit

Eighth Edition

5. FUNDING NUMBERS

6. AUTHOR(S)

Bill Bahnmaier, FD-PM

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)

Defense Systems Management College

Attn DSMC Press

9820 Belvoir Road

Ft. Belvoir VA 22060-5565

8. PERFORMING ORGANIZATION REPORT NUMBER

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES)

Defense Systems Management College

Attn DSMC Press 9820 Belvoir Road Ft. Belvoir VA 22060-5565

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11. SUPPLEMENTARY NOTES

12a. DISTRIBUTION/AVAILABILITY STATEMENT

Approved for public release; distribution unlimited.

12b. DISTRIBUTION CODE

13. ABSTRACT (Maximum 200 words)

The 8th Edition of the "Tool Kit" contains a graphic summary of acquisition policies and managerial skills frequently required by DoD program managers.

14. SUBJECT TERMS „ ^ „ ^ Acquisition Management; Managerial Skills; Time Management Contracting;

Software Management;Reprogramming.

17. SECURITY CLASSIFICATION OF REPORT

Unclassified

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Unclassified

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100 16. PRICE CODE

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NSN 7540-01-280-5500 Standard Form 298 (Rev. 2-89) Prescribed by ANSI Std. Z39-18 298-102

# - *

DSMC PROGRAM MANAGERS TOOL KIT Eighth Edition July 1998

DTIC QUALITY INSPECTED 2

DSMC PROGRAM MANAGERS TOOL KIT


PREFACE

This 8th Edition of the "Tool Kit" contains a graphic summary of acquisition policies and managerial skills frequently required by DoD program managers. It is an updated version of a "Tool Box" that was first developed by Mr. Charles F. Schied of PMC 92-1. For convenience, it is sized for insertion into a 3-hole, 5-1/2" x 8-1/2" "Day Runner." The information was extracted from material presented by the Defense Systems Management College (DSMC) in the Intermediate Systems Acquisition Course (ISAC) and Advanced Program Management Course (APMC). It reflects Change 3 to DoD 5000.2-R. Material from the DSMC Learning Resource Center was also used.

Users of the "Tool Kit" are reminded that this summary is a guide only and should not be used as a substitute for official policy guidance. Periodic review of official policy guidance is recommended.


ACKNOWLEDGMENTS

As Sponsor of this "Tool Kit" Project, I wish to recognize the following members of the DSMC faculty and staff for their input to this 8th Edi- tion: Mr. Bill Bahnmaier, who coordinated the input and editing of material from various departments; Ms. Johnnie Kennedy of the Prin- ciples of Program Management Department for typing, formatting and editing support; Mr. Chuck Cochrane of the Acquisition Policy Depart- ment for his significant input and editing support; Mr. Eduard Boyd of the Visual Arts Department for his support in preparing and editing drafts for Lionheart printing; Mr. Frank Scavotto, Mr. Mike King, and LI1 Andy Stowell, USN, of the Defense Automated Printing Service (DAPS) for their excellent "Lionheart" printing support. Other significant contributors were Dr. Don Fujii, MD Department; Mr. Frank Meneely, CM Department; Mr. Paul Alfieri, TE Department; Dr. John Snoderly and Mr. Randy Zittle, SE Department; Dr. Ben Rush, CF Department; Mr. Walt Weedman, formerly of the EV Department; Mr. John Riffee, LS Department; Mr. Gerry Land and Ms. Siobhan Tack, FM Department; Lt Col Russ Barbero, MM Department; and Mr. Rich- ard Kwatnoski of the Executive and International Course Department. I also want to thank Mr. Richard Reed, Provost, who provided both encouragement and command support for the project.

/'John T. Shannon Dean Faculty Division

IV


TABLE OF CONTENTS

I. Acquisition Management 1 Program Manager's Bill of Rights 2 Acquisition Milestones/Phases 3 Acquisition Categories (ACATs) 4 Acquisition Strategy Elements 5 Acquisition Reform Initiatives 6 Planning to Support Acquisition Process 7 DAB Review Timeline 8 Information for MS Reviews 9-10 Science & Technology Linkage 11 ACTD Initiation Process 12 Acquisition Program vs ATD & ACTD 13 Planning Relationships 14-16 Program Structure/Schedule (Example) 17 International Armaments Cooperation 18-20 Resource Allocation Process 21-24 Appropriations 25-29 Reprogramming 29 Life Cycle Cost Composition 30 Contracting 31-34 Contractor Finance 35-37 Supportability Analyses 38-39 Acquisition Logistics 40 Organizational Structure 41-43 Manufacturing Management 44-48 Test & Evaluation 49 Modeling and Simulation 50-52 Planning and Control 53-59 Risk & Trade-Off Analysis 60-61 Cost Estimating 62 Performance Measurement 63-64 Systems Engineering Process 65-69 Tech Reviews, Audits, Specs 70-73 Software Management 74 Working Groups 75-76

II. Managerial Skills 77 Delegation 78-79 Effective Meetings 80 Total Quality Management 81

v


Personal Communications 82-83 Problem Solving 84-85 Time Management 86-87 Brainstorming 88-89 Decision Briefing 90

VI


/

ACQUISITION MANAGEMENT

1 Things that make you go "Hmmm?..."

'The only thing most auditors fix is the blame."

"Experience is something you got just after you needed it."

"People are smarter than they look; listen to them."

"The last 10 percent of the performance sought generates one-third of the cost and two-thirds of the problems."

"Never open a can of worms unless you want to go fishing."

"Those who believe it cannot be done will please get out of the way of those who are busy doing it."

' Things we should always remember.

"Be honest in everything you say, write and do."

"Be good to your people, and they will be good to you."

"Forgiveness is easier to obtain than permission."

"Keep everyone informed; when in doubt, coordinate."

"Be the first to deliver bad news."

"If you are sitting at your desk, you are not managing your program."


THE PROGRAM MANAGER'S BILL OF RIGHTS AND RESPONSIBILITIES

RIGHTS:

Program Managers have the RIGHT to: • A single, clear line of authority from the Defense Acquisition

Executive. • Authority commensurate with their responsibilities. • Timely decisions by senior leadership. • Be candid and forthcoming without fear of personal conse-

quences. • Speak for their program and have their judgments respected. • The best available training and experience for the job. • Adequate financial and personnel resources.

RESPONSIBILITIES:

Program Managers have the RESPONSIBILITY to: • Accept program direction from acquisition executives and

implement it expeditiously and conscientiously. • Manage their programs to the best of their abilities within

approved resources. • Be customer focused and provide the user with the best, most

cost-effective systems or capabilities. • Innovate, strive for optimal solutions, seek better ways to manage,

and provide lessons-learned to those who follow. • Be candid about program status, including risks and problems as

well as potential solutions and likely outcomes. • Prepare thorough estimates of financial and personnel resources that will be required to manage the program.

• Identify weaknesses in the acquisition process and propose solutions.


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ACQUISITION CATEGORIES (ACAT) ACAT1D:

Major Defense Acq Pgms

ACAT IC:

DAB Review Designated by DAE Decision by DAE

Component Review Designated by DAE Decision by Svc Sec/CAE

$355M RDT&E or $2.135B Procurement (FY96 Constants)

Major AIS Acq Pgms

ACAT IAM:

ACAT IAC:

MAISRC Review Designated by ASD(C3I) Decision by ASD(C3I)

Component Review Designated by ASD(C3I) Decision made by Comp. Chief Information Officer

$360M Life Cycle Cost or $120M Total Prog. Cost or $30M Prog. Cost in any single year (FY96 Constant $)

Major ACAT II:*

Systems Does Not Meet ACAT I Criteria Designated by Svc Sec/CAE Decision by Svc Sec/CAE

$140M RDT&E or $645M Procurement (FY96 Constant!)

all others ACAT III: (except for Army

Navy, USMC)

Does Not Meet ACAT I, IA or II Criteria Designated I AW Component policy Decision at lowest appropriate Level

No Fiscal Criteria

Army Navy

USMC

ACAT IV: Not otherwise designated ACAT I, I A, Designated IAW Component Policy Navy/USMCACATIVT/IVM Decision at lowest appropriate level

See AR 70-1 (Army) &SECNAVINST5000.2B (Navy and Marine Corps)

"Army has an ACAT MA category for AIS reviewed at Army CIO level


ACQUISITION STRATEGY ELEMENTS (ACAT I & IA PROGRAMS)

• Open Systems Objectives • Sources

Commercial & NDI Dual Use Technologies & Use of Commercial Plants Critical Product & Technology Competition Industrial Capability Leasing (10 USC 2401a)

• Cost, Schedule, and Performance Risk Management • Cost As an Independent Variable

Cost Performance Trade-offs Cost Management Incentives

• Contract Approach Competition CALS Integrated Data Environment Best Practices Advance Procurement * Integrated Baseline Reviews

• Management Approach Streamlining Information Sharing & Oversight International Cooperation (10 USC 2350) * Assignment of PEO Use of DCMC Tech. Support Joint Program Management

• Environmental, Safety, & Health Evaluation (42 USC 4321-47) • Source of Support • Warranties *

• normally not applicable to AIS programs


ACQUISITION REFORM INITIATIVES

• Integrated Product and Process Development and Integrated Product Teams

• Movement from Detailed Design Specifications and Process Standards to Performance and/or Commercial Specifications

• Single Process Initiative

• DoD Cost/Schedule Control System Criteria Replaced by Industry Standard Guidelines for Earned Value Management System (EVMS)

• Commercial and Non-Developmental Item Acquisition and Practices

• Cost As an Independent Variable (CAIV) • Open Systems Design and Interoperability • Rewrite of DoDD 5000.1 and DoD 5000.2-R to streamline policies

and procedures • Defense Acquisition Deskbook • Defense Acquisition Pilot Programs

• Implementation of Federal Acquisition Streamlining Act (FASA), Federal Acquisition Reform Act (FARA) and Information Technol- ogy Management Reform Act (ITMRA); (latter two are now known as Clinger-Cohen Act)

• Electronic Commerce/Electronic Data Interchange • Collection and Use of Past Performance Information • Advanced Concept Technology Demonstrations (ACTD) • Acquisition Reform Benchmarking Initiative • Acquisition Workforce Personnel Demonstration Program • Contract Administration Reform • Procurement Process Reform • Performance Based Service Contracting • Defense Reinvention Impact Center (RIC) - Goals by Year 2000 • Total Ownership Costs (TOC)


PLANNING TO SUPPORT ACQUISITION PROCESS

• Planning to support the acquisition process is accomplished within the Integrated Product and Process Development (IPPD) environment.

- Program plans are for use by the PM and the integrated product teams (IPTs) that support the PM and are discretionary.

•There are three exceptions where specific plans are required: The Acquisition Plan required by the FAR/DFARS; the Command, Control Communications, Computers and Intelligence, (C4I) Support Plan and the TEMP -- the latter two are both required by DoD 5000.2-R.

• Typically, the following areas will require some level of program office planning:

- Acquisition Strategy (see page 5) - Risk Management - Systems Engineering - Computer/Software Devel/PDSS - Logistics Support/Post Prod Spt - Human Systems Integration - Program Protection - Deployment/Fielding - Training Development - Manufacturing - Technology Assessment & Control - Integrated Testing


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Information for Milestone Reviews ACAT I and ACAT IA Programs

Information NOTE: MDA may waive non-statutory requirements

Milestone Reference 0 I II III DoD 5000.2-R Other

Acquisition Proqram Baseline (APB)1 X X X Part 3.2.2 10 USC 2435

Acquisition Strateqv (9 elements - see next chart) X X X Part 3.3

Analysis of Alternatives (AOA)2 X X 2 2 Part 2.4

Acquisition Decision Memorandum (ADM) X X X X Part 5.2.1

Affordability Assessment X X X Part 2.5.2 DoDD 5000.1

Beyond Low Rate Initial Production (LRIP) Report3 X Part 6.3.3 10 USC 2399

Component Cost Analysis (CCA) X X X Part 5.6 DoDD 5000.4

Consideration of Technoloqical Issues X X X X Part 1.4

Cost Analysis Requirements Description (CARD) X X X Part 3.5.1 DoDD 5000.4

Exit Criteria X X X X Part 3.2.3

Full Funding of Dab & MAISRC Programs X X X Part 2.5.1

Independent Estimate of Life Cycle Cost X X X Part 3.5.1 10 USC 2434

Interoperability Certification (C3I Systems) X DoDI 4630.8

Live Fire Test & Evaluation Waiver Certification3 X Part 3.4.9 10 USC 2366

Live Fire Test & Evaluation (LFT&E) Report3 X Part 6.3.2 10 USC 2366

Legality of Weapons Under International Law X X DoDD 5000.1

Leqality of Weapons Under International Law X Part 1.4.4. 10 USC 2400

Manpower Estimate3 X X Part 3.5.2 10 USC 2434

Mission Need Statement (MNS) X Part 2.3 CJCSI 3170.01

Operational Requirements Document (ORD) X X X Part 2.3 CJCSI 3170.01

Overarching IPT (OIPT) Leader's Report4 X X X X Part 5.4.1

OIPT Staff Assessments" X X X X Part 5.4.1 Program Office Estimate (POE) (life cycle costs) X X X Part 3.5.1 DoDD 5000.4

Provisions for Evaluation of Post Deployment Support X X X Part 1.5.4 Requirement for Program Under DoD Strategic Plan X X X X Part 1.5

Test & Evaluation Master Plan (TEMP) X X X Part 2.2

Test Results (DT&E, OT&E, LFT&E, etc..) X X X Part 3.4.11 10 USC 2399

System Threat Assessment3 X X Part 6.3.1 10 USC 139

11ncluding CAIV based objectives. 2 MS 0 for ACAT IA; MS I for ACAT I. May be useful if updated for MS II; unlikely to be

required at Milestone III). 3 Normally not applicable to ACAT IA. 4 ACAT ID and ACAT IAM programs only.


Information For Milestone Reviews ACAT II and III* Programs

Information Element NOTE: MDA may waive non-statutory

requirements

Milestone Reference

0 1 II III Primary Other/Related

Acquisition Program Baseline (APB)1

X X X DoDD5000.1,D.3.g DoD 5000.2-R, 3.2.2

Acquisition Strategy X X X DoD5000.2-R,3.3

Affordability X X X DoDD5000.1,D,1.a DoD 5000.2-R, 2.

Environmental Safety & Health (ESH) Assessment2

X X X DoD 5000.2-R, 3. 3.7 42 USC 4321-47

Interoperability Certification (C3I Systems)

X DoDI 4630.8

Legality of Weapons Under International Law

X X DoDD5000.1.D.2.J

Life Cycle Cost Estimate X X X DODD5000.1,D. 1.g DoD 5000.2-R, 3.5.1

Live Fire Test & Evaluation Waiver Certification34

X DoD 5000.2-R, 3.4.9 10 USC 2366

Live Fire Test & Evaluation Report3'1

X DoD 5000.2-R, 6.3.2 10 USC 2366

Low Rate Initial Production (LRIP) Quantities2-3-5

X DoD 5000.2-R, 1.4.4.1

Mission Need Statement (MNS) X CJCSI3170.01 DoD 5000.2-R, 2.3

Operational Requirements Document JORD)

X X X CJCSI3170.01 DoD 5000.2-R, 2.3

Risk Assessment2 X X X DoDD5000.1,D.1.d

Staff Assessments X X X X DoDD5000.1,D.2.g

Test & Evaluation Master Plan JTEMP)6

X X X DoD 5000.2-R, 3.4.11 10 USC 2399

Test Results (DT/OT/LFT&E)6 X X DoD 5000.2-R, 6.3.1 10 USC 139

MDA's for ACAT II & III* programs have wide latitude and broad authority over the content and format of many (but not all) of these information elements

Notes: 1. Including Cost as An Independent Variable (CAIV) based objectives. 2. May be included in PM's acquisition strategy. 3. Normally not required for AIS programs. 4. Programs subject to live fire T&E legislation. 5. ACAT II only; how ever, it is DoD Policy to limit LRIP quantities for all ACATs. 6. Programs on OSD T&E Oversight List.

'Army, Navy and Marine Corps also have an ACAT IV category. The information on this chart may also be talored for those programs.

10


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DoD INTERNATIONAL ARMAMENTS COOPERATION POLICY

SECDEF Memorandum 23 March 1997

"It is DoD policy that we utilize International Armaments Coop- eration to the maximum extent feasible, consistent with sound business practice and with overall political, economic, techno- logical, and national security goals of the United States."

DEFENSE SALES VS. COOPERATIVE ACQUISITION

They are Different

Defense Sales • Any nation • U.S. Contracts (FMS) • U.S. Manages • Production & Support • DoS or DoC

+ DoD - USD (Policy) • Foreign Initiated • Foreign Funds (or U.S.

Credit/Grants)

Cooperative Acquisition • Allied or Friendly • U.S., Ally or NATO • Jointly Managed • All Acquisition • DoD - USD (A&T)

+ DoS and DoC • U.S. and/or Foreign • U.S. + Foreign Funds

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PROCUREMENT APPROPRIATIONS (ACCOUNT NUMBERS AND BUDGET ACTIVITIES)

Budget Activity Appropriation Army (21-) Aircraft

Missile

Weapons

Ammo

Other

Navy (17-) Aircraft

Weapons

Shipbuilding & Conversion

Other

- 2031 1 - Aircraft 2. Modification of Aircraft 3. Spare & Repair Parts 4. Support Equipment & Facilities

- 2032 1. Other Missiles 2. Modification of Missiles 3. Spare & Repair Parts 4. Support Equipment & Facilities

- 2033 1 ■ Track Combat Vehicle 2. Weapons & Other Combat Vehicles

- 2034 1. Ammo 2. Ammo Production Base Support

- 2035 1. Tactical & Support Vehicle 2. Common & Electronic Equipment 3. Other Support Equipment

-1506 1. Combat Aircraft 2. Airlift Aircraft 3. Trainer Aircraft 4. Other Aircraft 5. Modification of Aircraft 6. Aircraft Spare & Repair Parts 7. Aircraft Support Equipment & Facilities

-1507 1. Ballistic Missiles 2. Other Missiles 3. Torpedoes & Related Equipment 4. Other Weapons 5. Other Ordnance 6. Spare & Repair Parts

-1611 1. Not Applicable 2. Other Warship 3. Amphibious Ships 4. Mine Warfare & Patr ol Ships 5. Auxiliary, Crafts Prior Year

-1810 1. Ship Support Equipment 2. Common & Electronic Equipment 3. Aviation Support Equipment 4. Ordnance Support Equipment 5. Civil Engineer Support Equipment 6. Supply Support Equipment 7. Personal & Command Support Equipment 8. Spare & Repair Parts

Marine Corps (17 -) •1109 LAmmo 2. Weapons & Combat Vehicles 3. Guided

Missiles & Equipment 4. Common & Electronic Equipment 5. Support Vehicles 6. Engineering & Other Equipment 7. Spare & Repair Parts

25


PROCUREMENT APPROPRIATIONS (ACCOUNT NUMBERS AND BUDGET ACTIVITIES)

(Continued)

Appropriation Budget Activity

Air Force (57 -) Aircraft

Missile

Other

Defense (97-) Defense-Wide

National Guard & Reserve Equipment

Defense Production - 0360 Activity Purchase

-3101 1. Combat Aircraft 2. Airlift Aircraft 3. Trainer Aircraft 4. Other Aircraft 5. Modification of In-Service Aircraft 6. Aircraft Spare & Repair Parts 7. Aircraft Support Equipment Facilities

- 3020 1. Ballistic Missiles 2. Other Missiles 3. Modification of In-Service Missile 4. Spare & Repair Parts

5. Other Support 6. Ammo

- 3080 1. Munitions & Associated Equipment 2. Vehicle Equipment 3. Electronic & Telecommunications Equipment 4. Other Base Maintenance & Support Equipment

- 0300 1. Major Equipment 2. Special Operations Command 3. Chemical/Biological Defense

- 0350 1. Reserve Equipment 2. National Guard Equipment

1. Defense Production Activity Purchases

Chemical Agents - 0390 1. Chemical Agents & Munitions Destruction-R D T&E & Munitions 2. Chemical Agents & Munitions Destruction- Destruction Procurement 3. Chemical Agents & Munitions

Destruction-O&M

26


RDT&E APPROPRIATIONS (ACCOUNT NUMBERS)

Appropriation Account Number RDT&E, Army 21 - 2040 RDT&E, Navy 17 -1319 RDT&E, Air Force 57 - 3600 RDT&E, Defense Wide 97 - 0400 Development T&E 97 - 0450 Operational, T&E 97 - 0460

RDT&E APPROPRIATIONS (RELATIONSHIP BETWEEN BUDGET ACIVITIES AND

RESEARCH CATEGORIES)

Budget Research Category Program Activity Category Nomenclature Element #s r 1 6.1 Basic Research 0 6 0 1 xxx

J2 6.2 Applied Research 0602xxx

Is 6.3a Advanced Technology Devel 0603xxx

4 6.3b Dem/ Val 0 6 03xxx

5 6.4 Engineer and Mfg Devel (EMD) 0 6 04xxx

6 6.5 RDT&E Management Support 0 6 0 5 xxx

7 6.6 Operational System Devel 0 1 0 x x x ; 020xxx; 0 3 0 x x x ; etc

NOTES: 1 .The relationships among Budget Activities; Research Categories; and Categorie

Nomenclatures were effective with the President's FY 97 Budget.

2. While the title of the Acquisition Life Cycle phase preceding EMD is now called Program Definition and Risk Reduction (PDRR) in Acquisition direct ives, Resource Management Directives still refer to Research Category associated with this acquisition phase as Dem Val.

* POM + $s OVERSIGHT BY DDR&E

27


SAMPLE NAVY APPROPRIATIONS AND BUDGET ACTIVITIES

APPRN/ BELOW THRESHOLD YEARS AVAIL BUDGET RESEARCH CATEGORY REPROGRAM RULES * FOR OBLIG FUNDING ACTIVITY NUMBER / NOMENCLATURE Max In Max Out PURPOSES POLICY

RDT&E, N [At Program Element Level] 1 6.1 Basic Research $4M Greater 2 Incremental 2 6.2 Applied Research of 3 6.3a Advanced Tech. Devel. $4M 4 6.3b Dem/ Val or 5 6.4 EMD 20% 6 6.5 RDTSE Mgmt Supp

(T&E Ranges) (Civilian Salaries) I

7 6.6 Oper. Systems Deve • i 1 i '. i r (Post-Production) T 1 1

APPRN/ BELOW THRESHOLD YEARS AVAIL BUDGET BUDGET ACTIVITY REPROGRAM RULES FOR OBLIG FUNDING ACTIVITY DESCRIPTION Max In Max Out PURPOSES POLICY

PROCUREMENT [At Line Item Level]

SCN-1 Ship Conv - FBM Ships $10M Greater 5 Full SCN-2 Ship Conv - Other Warships of SCN-3 Ship Conv - Aphib Ships $10M SCN-4 Ship Conv - Mine S Pat Ships or SCN-5 Ship Conv - Aux, Craft & 20%

PY Costs

T 3 WPN-1 Weapons Proc. - Bal. Msl

WPN-2 Weapons Proc. - Other Msl WPN-3 Weapons Proc. - Torp & Eq. WPN-4 Weapons Proc. - Other Wpn WPN-5 Weapons Proc. - Other Ord. WPN-6 Weapons Proc. - Spares &

Repair Parts

OPN-1 Other Proc. - Ship SE OPN-2 Other Proc. - Comm/Elec Eq OPN-3 Other Proc. - Aviation SE OPN-4 Other Proc. - Ordnance SE OPN-5 Other Proc. - Civil Engr SE OPN-6 Other Proc. - Supply SE OPN-7 Other Proc. - Pers & Com SE OPN-8 Other Proc. - Spares & Rep Parts

APN-1 Aircraft Proc. - Combat APN-2 Aircraft Proc. - Airlift APN-3 Aircraft Proc. - Trainer APN-4 Aircraft Proc. - Other APN-5 Aircraft Proc. - Mods APN-6 Aircraft Proc. - Spares APR-7 Aircraft Proc. - SE & Fac. 1 ' y ' y ' 1 ' O&M.N Operations S Maintenance $20M No Restriction 1 Annual

UILPER, N Military Personnel $10M No Restriction 1 Annual

MILCON, N Military Construction Lesser of No Restriction 5 Full +$1Mor25%

* Below Threshold Reprogramming for RDT&E (for PEs) allowed for each year funds avail for obligation.

28


APPROPRIATIONS (Continued)

DECISION CHART FOR FUNDING PRODUCT IMPROVEMENTS

IF Mod

Increases NO System

In Performance? Production?

1 THEN

FUND DEV

I YES 1 YES NO

ANDTEST RDT&E $ PROC$ 0&M$ OF MODS WITH ....

AND .... \ PROC$

ACQUIRE AND INSTALL MOD KITS WITH

BELOW THRESHOLD REPROGRAMMING LEVELS

APPN MAX INTO MAX OUT LEVEL OF CONTROL OBL AVAIL

RDT&E + $4M GREATER OF $4M OR 20 % OF PROGRAM

ELEMENT PROGRAM ELEMENT 2 YEARS

PROC (IncI SCN)

+ $10M GREATER OF $10M

OR 20% OF LINE ITEM

LINE ITEM 3 YEARS (SCN: 5 YEARS)

O&M + $20M NO

CONGRESSIONAL RESTRICTION

BUDGET ACTIVITY SOME BA 1 SUB- ACTIVITY

LIMITATIONS ON DECREASES 1 YEAR

MILPERS + $10Mv NO

CONGRESSIONAL RESTRICTION

BUDGET ACTIVITY 1YEAR

M1LCON LESSOR OF

+ $2.0MOR25% OF PROJECT

NO CONGRESSIONAL

RESTRICTION PROJECT 5 YEARS

Notes: Reprogramming thresholds apply to each appropriation during entire "active" life of that appropriation. Reference Source: Memo Change (30 Oct 96) to DoD Financial Management Regulation, Volume 3.

29


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30


CONTRACTING

COMPONENTS OF CONTRACT PRICE Contract Price = Cost + Product/Fee

I Direct Cost

r i Direct Labor | Direct Material

Other Direct Cost

(ODC)

1 Indirect Cost

I 1 ' Overhead FCCM G&A

r r Engrg Mfg Raw Purchased Labor Labor Material Parts

Std Comm Items

Subcontracts

T

Engrg Mfg Mat'l Spt Spt Handling

Inter-divisional Transfers

TYPICAL CONTRACT TYPE BY PHASE

CE PDRR EMD PROD

CPFEFFP CPFF. CPIF CPIF, CPAF FPKF), FFP

TYPES OF CONTRACTS

Cost Type: Product not well defined; high risk; buy Best Effort; Government pays all allowable costs.

Cost Plus Fixed Fee (CPFF) - Fee same regardless of actual cost.

Cost Plus Incentive Fee (CPIF) - Fee adjusted based on actual cost (share ratio). Limit to min/max fee.

Fixed Price Type: Product well defined, low risk; buy defined deliverable.

Firm Fixed Price (FFP) - Price fixed regardless of actual cost.

Fixed Price Incentive Firm (FPI)(F)) - Price adjusted based on actual cost and share ratio.

Award Fee (AF) - Can be stand alone Cost Plus Award Fee (CPAF) or combined with other cost or fixed price types. AF unilaterally determined by government based on sub- jective evaluation of performance.

Profit/Fee Limits: Cost type - Fee limited to 15% for R&D; 10% for Prod. Fixed price type - No statutory limitation on profit.

31


CONTRACT TYPE FEATURES

Promise Contract or Risk

Cash Flow Progress Payments %

Administration Profit/Fee Limit %

FIXED COST PRICE REIMBURSEMENT Delivery Best Efforts High Low Delivery As Incurred 75/90/95 N/A Low High None 15/10/6

FEE

FIXED FEE

CPFF

(SHARE 100/0)

CO

PF

Ris Ob

ST ESTIMATED COST

IICE = COST + FIXED FEE

k Highest To The Government tains Fee Regardless of Cost

CPIF FEE

MAX

\. Share N. Ratio

TARGET

"~~ i\ MIN

I I

COST TARGET COST

(Target) PRICE = (Target) COST + (Target) FEE

All Reasonable Cost Paid Shared Risk Between Min/Max Fee

32


CONTRACT TYPE FEATURES (Continued)

FPI(F)

PROFIT

Target Profit

CEILING PRICE

COST TARGET COST

(Target) PRICE = (Target) COST + (Target) Profil

Sal °f (PTA) = CEILING PRICE-TARGET PRICE + T t Cost

Assumption GOVERNMENT SHARE

PROFIT FFP

\ 0/100 SHARE

l\ I \ I \

COST \

PRICE = COST + PROFIT

33


PRE-SOLICITATION PROCESS

ACQUISITION SOURCES SOUGHT

SYNOPSIS

ACQUISITION STRATEGY

PANEL

PLAN RQMT

SOURCE SELECTION

PLAN

DRAFT REQUEST FOR

PROPOSAL 1

**■

CBD Draft & RFP RELEASE

- READING ROOM

^ FINALIZE ^" RFP

RFP RELEASE BRIEFING TOSSA

CBD RFP

RELEASE

RFP RELEASE TO INDUSTRY

POST-SOLICITATION PROCESS

RECEIPT OF PROPOSALS

INITIAL EVALUATION

DETERMINE COMPETITIVE

RANGE

DISCUSSIONS

I RECEIVE AND

ANALYZE FIELD SURVEYS

AND AUDITS

NOTIFY ELIMINATED OFFERORS

ISSUE DEFICIENCY REPORTS AND CLARIFICATION REQUESTS

TO REMAINING OFFERORS

REQUEST BEST AND FINAL

OFFERS (BAFOs)

RECEIVE AND ANALYZE BAFOs

BRIEFING TO SSAC

BRIEFING TOSSA

DEBRIEF UNSUCCESSFUL OFFERORS

CONTRACT AWARD AND

DISTRIBUTION

I SSA

DECISION

34


CONTRACTOR PROFITABILITY RATIOS

The basic concept of profitability ratios is to measure income against revenue or against the investment required to produce it. There are three principal profitability ratios with which you should be familiar. They are: Net Income

Return on Sales = — Sales

1. Return on Sales which shows what percentage of dollars are left after the company has paid for all costs, interest, and taxes. It is expressed as:

RQA_ Net Income Total Assets

2. Return on Total Assets which looks at the efficiency with which management has used its resources, the company's assets, to generate income. It is computed as:

R0A_ Net Income Sales Sales Total Assets

As noted, ROA addresses how well management utilizes the assets of the firm in generating income. The ROA formula reflects the combined result of Return on Sales and the total asset turnover ratio (sales/ total assets), broken down as follows:

DQC_ Net Income - Preferred Dividends Common Stockholders' Equity

3. Return on Common Stockholder's Equity measures the rate of return on the owners' investment—their equity in the company. This is also known as Return on Equity (ROE).

R0E _ Net Inc. - Pref. Div. x Total Assets Total Assets Common Stockholder's Equity

ROE can also be broken into two components: these being return on assets adjusted for preferred dividends and financial leverage (a ratio reflecting the relationship of creditor to owner financing—expressed as total assets/ common stockholders equity). This is shown by:

Net Income Minus Preferred Dividends Earnings Per Share; Number of Shares of Common Stock Outstanding

These profitability ratios give three different viewpoints concerning the "bottom line" on the income statement—how much net profit is being made on each sale, how much is being made for the assets that are employed, and how much is being made for the company owners. From an owner's perspective, another profitability ratio you may be aware of is Earnings Per Share (EPS):

35


FINANCIAL ANALYSIS SHEET (EXAMPLE)

MCDONNELL DOUGLAS CORP MD SC: 3721 AIRCRAFT Fiscal Year Bid: 12

DUPONT ANALYSIS

Sate-(ml)

Y91

Y92

Y93

Y94

Y95

%chg-1stto 5(h

Retun

OnSaks X

Asset

Tuncver = RM ROA I

Financial

Leverage ROE

BookVatie

ROE X Per Share = EPS

18432 1.93 1.24 2.39 2.39 3.83 9.16 9.16 16.84 1.54

17373 4.02 1.26 5.06 5.06 4.56 23.10 23.10 12.97 2.99

14474 2.48 1.20 2.99 2.99 3.52 10.52 10.52 14.49 1.53

13162 4.54 1.08 4.90 4.90 3.15 15.44 15.44 16.35 2.52

14300 ■2.91 1.37 -3.97 •3.97 3.44 -13.68 -13.68 13.38 •1.83

-22% •251% 10% -266% -266% -10% -249% -249% -21% ■219%

ROS(%) (NISäes)

ROA(%|

Y9? YS3 YH V»

ZS0O 2000

R0E(%)

1500 lot? 5.M

Y9S

-500 -10 »0 •16«

Y91 Y9J YS3 Y94

AssetTumover(sales/TA)

Rnancial Leverage (TA/SE)

Y92 Y93 Y94 ¥95

Book Value Per Share (SE/#of sharesof common stock)

¥92 Y9J Y9< Y95

ROA(%) (NfTA)

Y9i m m

2500 ROE (%) (N1SE) 2095 isoe 1000 600

■500

B H B

-15. vn Y91 Y92 Y93 Y9< Y95

EPS (M#ot shares of common stick)

Y92 Y93 YH Y9i

36


CASH CYCLE Contract award

Cash received

t Accounts receivable

\

Raw material inventory

\ Work in process inventory

Sale (DD 250)

J Finished goods inventory

Accounts !SS payable *

Wages \ payable 1

J Cash

disbursed

Cash disbursed

CONTRACTOR FINANCING AND PAYMENTS

FINANCING (External*) PAYMENTS

Commercial Non-Commercial

■ Govt specified ■ Offer or

proposed ■ Interim - Advance

Commercial Non-Commercial

Private I- Delivery • Trade Credit • Bank Credit

— Revolving Credit — Term Loan

Government • For Non-Commercial

— Progress Payments • Performance Based • Cost Incurred Based • % Complete

— Unusual Progress Payments — Assignment of Claims — Guaranteed Loans — Advance Payments

Periodic Partial

* Internal Contractor Financing — Retained Earnings

37


SUPPORTABILITY ANALYSES

Anything analytical that has something to do with logistics

• SUPPORTABILITY ANALYSIS (SA) The tailored application of engineering efforts during acquisition, to identify/ solve logistics issues through an iterative SE process of definition, synthesis, tradeoff, T&E.

• LOGISTICS MANAGEMENT INFORMATION (LMI):

The documentation associated with SA.

BEST PRACTICE: Supportability Analyses

• Tailored! ' Part of iterative SE process ■ Assists in Defining support Influencing design Uses (not duplicates) other data & analyses Documented and communicated

38


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39


ACQUISITION LOGISTICS

1. Maintenance Planning - establishes maintenance concepts and requirements.

2. Manpower & Personnel - identification of personnel skills and grades required to support operation and maintenance of system.

3. Supply Support- determine requirements to acquire and manage spare and repair parts.

4. Technical Data - scientific and technical information used to support systems acquisition.

5. Training & Training Support - determine requirements to acquire training devices and conduct training of operators and maintenance personnel.

6. Computer Resources Support - identification of facilities, hardware, software and support tools to operate and support embedded computer systems.

7. Facilities - identify real property required to support system.

8. Packaging, Handling, Storage and Transportation - identify designs and methods to ensure the system is preserved, packed, stored, handled and transported properly.

9. Support Equipment - identify all equipment required to support operation and maintenance of the system.

10. Design Interface - relationships of logistics related design parameters to readiness and support resource requirements; influence design for supportability.

40


PROGRAM OFFICE ORGANIZATION STRUCTURES

Functional Structure

1 ENGRNG

PM

STAFF

BUSINESS PRODUCTION LOGISTICS

Product Structure

PM

PM SYSTEM A

PM SYSTEM B

PM SYSTEM C

STAFF STAFF STAFF

FUNCTIONAL DIVISIONS



41


42


PROGRAM OFFICE ORGANIZATION STRUCTURE (Continued)

INTEGRATED PRODUCT TEAMS

SYSTEM PROGRAM DIRECTOR

J: DIR OF

LOG

I DIR OF

ENG DIR OF TEST

PIT

DIR OF CONTRACTS

I DIR OF

FIN MGT DIR OF

PROJECTS

IPT = Integrated Product Team PIT = Program Integration Team

Note 1: IPTs mirrorWork Breakdown Structure

43


ROLE OF MANUFACTURING MANAGEMENT WITHIN THE INTEGRATED PRODUCT TEAM

DEVELOPMENT

• INFLUENCETHE DESIGN PROCESS

• PREPARE FOR PRODUCTION

PRODUCTION

• EXECUTE THE MANUFACTURING PLAN

• REFLECT DESIGN INTENT

• REPEATABLE PROCESSES

• PROCESS IMPROVEMENT

80% — — 20%

N/ UNIFORM, DEFECT-FREE PRODUCT

• CONSISTENT PERFORMANCE

• LOWER COST

44


VARIABILITY CONTROL

• GOAL: Minimize and control manufacturing variation on key product characteristics

• WHY: Direct correlation between deviation from nominal value on key characteristics and product quality and functionality

• TOOLS: QFD, DOE, Process control chart (Statistical Process Control, see below)

X (Control Chart)

R (Control Chart)* 1 2

.30

.20 ,

.10

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

■40 ^t T-i

m

i i

4—t-

±-±

i

*:

'Note: No lower control limit for R Chart for sample size below 7.

45


MANUFACTURING PROCESS ELEMENTS

THE FIVE M's

MANPOWER MEASUREMENT

RELEASED DESIGN PROCESS TRANSFORMATION PRODUCED

PRODUCT

METHOD MACHINERY MATERIALS

ENVIRONMENTAL CONSIDERATIONS

46


KEY MANUFACTURING QUESTIONS TO ASK Ktr REGARDING QUALITY

1. What engineering design tools are being used during development to integrate manufacturingprocesses and affordability into the design?

Answer should include: • Integrated Product Teams

• Quality Function Deployment (QFD) - Disciplined process employing multifunctional processes.

(What? and How to do it?) -- IPTs to get voice of customer into design -- Matches customer desires with technical solutions ~ Technical solutions rated

• Design for Manufacturing and Assembly (DFMA) -- Focuses on defining product design options for ease of

fabrication and assembly

• Design of Experiments (DOE) -- Identifies process factors most likely to impact quality of the

end item

2. How will management determine that equitable requirements tradeoffs are made between design and manufacturing processes during development?

Answer should include: • Perform producibility analysis during design of developement

hardware --Tradeoff design requirements against manufacturing risk, cost,

production volume and existing process capability/availability

3. Of those manufacturing processes which do not exist or are unproved, what is plan to prove them out?

Answer should include: • Compare program needs to work being done under DoDs

Manufacturing Science and Technology Programs or individual service laboratory technology measurement program ~ Avoid "reinventing the wheel" syndrome

47


KEY MANUFACTURING QUESTIONS TO ASK Ktr REGARDING QUALITY

(Continued)

• Milestone driven process development schedule which yields demonstrated process capability in factory representation environment before rate production begins

-- Alternatives for key process considered as risk reduction if affordable

4. How does the contractor plan to insure I receive a quality product? Answer should include:

• ISO 9000 or equivalent quality system (basic quality system) in place and consistently followed

• Advanced Quality System (AQS) encouraged -- Key product characteristic identification -- Process/product variability control (SPC) -- Process capability assessment (Cp, Cpk) -- AQS flowdown to suppliers -- Integrated product development -- Process fool proofing (Poka-Yoke) -- Closed loop root cause corrective action (five whys)

5. What is your cost of quality (% if gross unit price spent on failure, appraisal, prevention)?

World Class Company = 5-10% (Further breakout of 10% shown below)

48


TEST & EVALUATION DT&E/OT&E COMPARISONS:

DT&E • Tech. pert, measurment • Dev. agency rsp. (PM) • Technical Personnel • Ltd. test articles/each test • Controlled environment • All types of Test Articles • Contract or involved

OT&E • Operational effective/suitable • Operational Test Agency (OTA) resp . • 'Typical' User Personnel • Many test articles/each test • 'Combat' environment • 'Production Rep'Test Articles • Contractor may not be allowed

T&E Required before going Beyond Low Rate Initial Production Production Qualification T&E -Verify Production Article meets Spec/PM responsible/ Performed by Contractor &/or Government/DPRO assistance valuable.

Live Fire T&E (LFT&E) -Vulnerability and Lethality/Dev'l Agency fund and execute . DOTE oversight, approval and congressional reporting for selected programs.

Initial Operational T&E - Operational Effectiveness and Suitability/Independent Svc OTA plan and manage. DOTE oversight, approval, and Congressional reporting for selected systems.

T&E TASKS & EVENTS Models and Simulations used throughout the Acq Process

• Test Rqmts • Test Interfaces • Test Strategy

• Sys. Engineering P* • Design for Test • S/W Human T&E

REQUIREMENTS DEVELOPMENT

ENGINEERING DESIGN

To Support T&E during: RQMTs Definition T&E Planning

Engr Design

• Subsystem T&E • Software Only T&E

System DT&E • CSCI T&E • R. A. M. • Supportability • Survivability • Interoperability • Production Qual • Live Fire T&E • Cert of Readiness for IOT&E

/

FABRICATION & TEST (BENCH, L AB)

INTEGRATIONS TEST (H/W IN THE L OOP)

DT&E (EOA, OT-I, OT-II,) IOT&E (OP EVAL)

A OT&E DT-I, DT-II (LFT&E)

System OT&E • Effectiveness • Suitability

PRODUCTION (PAT&E, FOT&E)

I DEPLOY & OPERATIONAL SUPPORT

Fabrication Integration Sys DT&E OT&E

Training Ops

TECH EVAL

• Acceptance Test > Manf. Test

i • Data Collection > Reporting

Use Combined DT/OT - single integrated DT and OTTeam; combined testing; independent data analysis & reporting.

ACATI & II Programs = require an independent, dedicated IOT&E to proceed beyond Low Rate Initial Production.

AGONIZE OVER THRESHOLDS!

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PLANNING AND CONTROL

TYPICAL TIMES FOR PROGRAM ACTIVITIES Time

Event (months) Procurement Request Development Time 6 - 9 Contract Lead-time 9-12 DAB Lead-time 6 - 8 PDRR Design, Fab and Test 24 - 30 EMD Design, Fab and Qual 30 - 36 Test Readiness Review Lead-time 2 - 3 DT&E 9-12 OT Readiness Review Lead-time 2 - 3 OT&E 6-12 OT Report Preparation 3 Production Lead-time 18-30

TYPES OF PLANING CHARTS

MILESTONE CHART (Gantt) Time Period

JFMAMJJASONDJFMAM Activity:

Design

Fab

Integrate

Gnd. Test

Qual

Fit. Test

Produce

• Advantages: Simple

• Disadvantages: Difficult to show dependencies between activities unless computer constructed chart.

(ADD'L TYPES OF PLANNING CHARTS ON NEXT 5 PAGES)

53


PLANNING AND CONTROL (Continued)

NETWORK CHART

(z^KD (T M^^^M = CRITICAL PATH

ACCELERATE TASK TASK# TIME COST COST TIME Brief 1-2 5 2,200 - 5 Transport 2-3 4 15,000 500 3 Ship GFE 2-6 7 2,500 600 4 Ship system 2-4 4 4,600 750 2 Inspect 4-6 5 0 - 5 Train maint. 3-6 21 28,000 800 14 Train oper. 3-5 17 23,000 800 12 Integ. sys. 6-7 6 13,500 - 6 Dry Run 7-8 7 9,000 400 5

> Advantages: Shows dependencies; computes critical path ■ Disadvantages: Complex; computerized support required to maintain

Does not provide any chronology

SWAN CHART

1-2

2-3 3-6

3-5

2-6

2-4 I 4-6 I

• USE TASKS & TIMES FROM CHART ABOVE

6-7 7-8

91214 26 30 36 43 DAYS

> Advantages: Shows chronology and dependencies > Disadvantages: Complex; computerized support required to maintain

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58


ACQUISITION PROGRAM BASELINE (Performance) - An Example

Baseline Goals

MS I _ _ , . MSII Prog Dein/

Risk Reduction Engineering & Manufacturing

Development

MSIII

This chart Illustrates the concept of threshhold, objective, exit criteria, and a breach based on PM's current estimate.

* Here the current estimate falls below the threshold. If probability of survivability is a KPP in the APB, this would be a performance threshold breach.

59


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RISK & TRADE-OFF ANALYSIS Risk Management Risk Assessment

Risk Planning Risk Mgmt Plan (The Process)

/ \ Risk ID Technical Cost Schedule Lessons learned WBS

Risk Analysis Networks Simulation Watch lists Templates

Risk Handling Avoidance Control Assumption Transfer Research

PLAN RISK MGT PROCESS

ASSESS RISK HANDLE RISK

RISK MANAGEMENT

1. Develop program plans to the work package level.

2. Assess risk at the lowest work package/WBS level.

3. Manage the highest risk work packages; most others will work out

TRADE-OFF ANALYSIS

1. Identify alternative solutions

2. Select evaluation criteria/factors & MOEs; i.e. cost, schedule, performance criteria

3. Weight evaluation criteria

4. Develop utility functions for each factor

5. Conduct evaluation (weighted utility summary table where weight is multiplied by utility function value)

6. Perform sensitivity check

7. Select highest scored alternative

'With Cost As an Independent Variable (CAIV), aggressive cost objectives are established as a result of trading performance and schedule for cost.

61


Types of Estimates

Analogy -

Parametric

Engineering or- Bottoms-Up

Extrapolation -

Guidelines

COST ESTIMATING

Comparison to existing system Little or no data available; judgmental Quick, easy, flexible Used early in CE phase

Analogy based on historical data Similar parameters are compared Used in CE and PDRR phases

Sums very detailed analogy and parametric estimates Uses WBS structure Used mid-to-late EMD

Applies learning curve theory Based on prior actuals Used for follow-on production

1. Make sure cost data is relevant and homogeneous. Caution: Watch out for historical data in times of change. Prior actuals may include uncompensated overtime or were priced as a "buy-in."

2. Focus on cost drivers. 3. Test sensitivities and data relationships.

Cost Estimating Relationships (CER) - (Parametric)

Est. Cost

+ Sigma

Most Likely Cost

- Sigma

+j5igma MEAN

Sigma

= Similar Systems

New Parameter

Parameter (Size, Wt.)

62


PERFORMANCE MEASUREMENT COST & SCHEDULE PERFORMANCE MEASUREMENT

1. Define the work (WBS) 2. Schedule the work ■. 3. Allocate budgets /

Defining, Planning and Budgeting

Cost Account Level

WBS I j I I I

I I I I I I

I I I I Element/Cost Account - 300

u Task A r

TaskB

TaskC

$10

$3

r _£4_ 1

Tasks D-X p $45

Work Packages ^_ (6 month coverage)

_^. Planning Packages (remainder of effort)

4. Prepare and monitor performance profiles

COST

CBB

Now

ACWPN

BCWS

BCWP

SCHVAR

TIME

TERMINOLOGY BCWS - Budgeted Cost of Work Scheduled BCWP ■ Budgeted Cost of Work Performed ACWP - Actual Cost of Work Performed MR - Management Reserve EAC - Estimate at Completion (Govt) LRE - Latest Revised Estimate (Contractor) BAC - Budget at Completion CBB - Contract Budget Base(CTC+AUW) CTC - Contract Target Cost PMB - Performance Measurement Baseline AUW- Auth Unpriced Work

VARIANCES Cost Variance Schedule Variance

Cost Variance %

Schedule Variance %

Variance at Completion

EAC/LRE CTC

MR BAC

PMB

CV = BCWP - ACWP SV= BCWP-BCWS

CV% = BCWP - ACWP BCWP

= BCWP-BCWS BCWS

VAC = BAC - EAC

63


PERFORMANCE MEASUREMENT (Continued)

PERFORMANCE INDICES

Cost Performance Index CPI = BCWP ACWP

Schedule Performance Index SPI = i^iE BCWS

Percent Complete = BCV^CUm)

Percent Spent = ACWP (cum) BAC

ESTIMATE AT COMPLETION

BAC EAC (Lowest Est CPI(cum)

EAC= ACWP(cUm)+ BAC:-BCWP(cUm) (Highest Est.) {CPI(cum) *SPI(cum)}

TO COMP PERFORMANCE INDICES

TCPI(EAC) = BAC-BCWP(cum) v BAC - ACWP(cum)

TECHNICAL PERFORMANCE MEASUREMENT THE CONCEPT

TECHNICAL PARAMETER

VALUES e.g. MTBF

Tolerance Band OBJECTIVE

TIME

64


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REQUIREMENTS ANALYSIS QUESTIONS

• What are the reasons behind the system development? • What are the customer expectations? • Who are the users and how do they intend to use the

product? • What do the users expect of the product? • What are their level of expertise? • What environmental characteristics does the system

have to comply with?

(System Engineer)

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70

•


SPECIFICATIONS AND STANDARDS A New Way of Doing Business (Acquisition Reform)

(Sec Def Memo of 29 June 1994)

1. Use Performance-Based Specifications

2. Cancel/Convert Manufacturing and Management Standards to Performance or Nongovernment Standards (NGSs)

3. Encourage Contractors to Submit Alternative Solutions to Military Standards/Specifications

4. Prohibit Use of Military or commercial Specifications/Standards in Contract Except when Authorized by SAE or Designee

71


SPECS, REVIEWS, AUDITS & CM

SPECIFICATIONS

TYPE WHEN APPR BASELINE System PDRR SFR Functional Item Perf PDRR PDR (HW)

SSR (S/W) Allocated

Item Detail EMD PCA Product Process EMD PCA Product Material EMD PCA Product

•

REVIEWS, SPECS, BASELINES AND AUDITS MS-0 MS-I MS-II

CE PDRR EMD

MS-III

RQMTS PREL DESIGN DETAIL DESIGN FAB/INTEG TEST PROD

REVIEWS

PROTO/TEST

t ASRSRR SFR

DRAFT FINAL

SPECS s*s SVS Perf

Perf Spec Spec DRAFT

Item Pert Spec

BASELINES

7\

SSR PDR CDR

TRRs (Subsystem

Reviews) ,

FCAs (Subsystem

Reviews) ,

SVR PCA

I I FINAL DRAFT Item Item Pert Detail Spec Spec

FINAL Item

Detail Spec

FUNCTIONAL ALLOCATED f PRODUCT

SYSTEM REVIEW DEFINITIONS (Based on El A Interim Std (IS) 632)

ASR - Alternative Systems Review - Preferred System Solution meets needs

SRR - Systems Requirements Review - Preliminary functional requirements

SFR - Systems Functional Review - Approve functional requirements - Preliminary allocated requirements

reviewed

SSR - Software Specification Review - Approve S/W allocated requirements - Establish S/W allocated baseline

Note: EIA Interim Std (IS) 632 deletes use of "A", "B", "C", "D", and "E" designators

72


SPECS, REVIEWS, AUDITS & CM (Continued)

DEFINITIONS (Continued)

PDR - Preliminary Design Review - Approve H/W allocated requirements - Establish H/W allocated baselines

CDR - Critical Design Review - Preliminary product requirements - Ready for fabrication

PRR - Production Readiness Review - Assess producibility/manuf. readiness - Assess test readiness

TRR - Test Readiness Reviews - Approve test plans

FCA - Functional Configuration Audits - Verify CIs perform to spec

SVR - System Verification Review - Verify CIs perform as "system"

PCA - Physical Configuration Audit - Verify CIs "as built" documentation

CONFIGURATION MANAGEMENT

Four functions:

1. Configuration Identification - family of specs and drawings that describes the system or configuration item (Cl)

2. Configuration Control - managment of changes to a Cl via the configuration control board (CCB)

3. Configuration Status Accounting - managment information system that provides traceability of configuration ID and changes thereto

4. Configuration Audits - validate development requirements are achieved and tech documentation is complete and accurate

Engineering change - alteration in the approved configuration ID of a Cl

Two types - Class I: proposed change affecting established Cl baselines, supportability, interoperability or contractual factors.

- Class II: All other engineering changes

73


SOFTWARE MANAGEMENT

• Nine Principle Best Practices to Improve Software Development, Reduce Costs, and Increase User Satisfaction*

- Formal Risk Management - Agreement Interfaces - Peer Reviews/lnspections/Walk-throughs - Metric-Based Scheduling and Management - Binary Quality Gate, at Inch-Pebble Level - Program-wide Visibility of Project Progress vs. Plan - Defect Tracking Against Quality Targets - Configuration Management - People-Aware Management Accountability

• Nine Project "Breathalyzer" Questions to provide "Quick Look" at Software Project Health**

- Do you have a current, credible activity network supported by a work breakdown structure (WBS)?

- Do you have a current, credible schedule and budget? - Do you know what software you are responsible for delivering?

- Can you list the current top 10 project risks? - Do you know your schedule compression percentage? - What is the estimated size of your software deliverable?

How was it derived? - Do you know the percentage of external interfaces that are

not under your control? - Does your staff have sufficient expertise in the project

domains? - Have you identified adequate staff to allocate to the

scheduled tasks at the right time?

"Little Yellow Book of Software Management Questions" (Software Program Managers Network) ""Project Breathalizer Questionnaire Software Health"; Software Program Managers Council

74


10

WORKING GROUPS

TEAM DEVELOPMENT WHEEL

0

11 y^ *"V. 1 / Performina Forming >. / Creative Milling \ / Trusting Confusion \ / Effective Polite \ / Confident Purposeless \

1 Norming Stormina 1 \ Cohesion Conflict / \ Purpose Frustration / \ Feedback Resistance / ^^ Relevancy Cliques /

7^s^^ ^^y^s

RECOGNIZE WHICH PHASE OF TEAM DEVELOPMENT YOU ARE IN AND TAKE POSITIVE ACTION TO WORK THROUGH

TYPICAL WORKING GROUPS

• Logistics Support Management Team (LSMT)

• Test & Evaluation Working Group (TEWG) • Computer Resources Working Group (CRWG)

• Requirement Interface Working Group • Interface Control Working Group (ICWG)

• Technology Assessment Working Group

• "Tiger" Team • Process Action Team

• Integrated Product & Process Teams

75


WORKING GROUPS (Continued)

Group Consensus - all group members must accept a solution and flB live with the consequences. Until you have this agreement, you don't have consensus. Guidelines for achieving:

1. Avoid arguing for your own opinion.

2. Go for "win-win" solutions.

3. Do not change mind to avoid conflict.

4. Avoid majority vote, coin-flipping, horse-trading.

5. Expect differences of opinion.

MANAGEMENT TRADE-OFFS FOR WORKING GROUPS

Advantages • More ideas & solutions • Consensus positions • Strong commitments

Disadvantages 1 Takes more time ■ Hard to terminate ■ Paralysis by analysis

76


MANAGERIAL SKILLS

More things that make you go "Hmmm?..."

"An authority is a person who just happens to know the source."

"A conservative is a person who believes nothing should be done the first time."

"Diplomacy is the art of hearing all parties arguing in a dispute and nodding to all of them without ever agreeing with any of them."

'The meeting raised our confidence that the contractor can actu- ally accomplish the task and that it will occur in our lifetime."

'This is the earliest I've been late."

'The world would be a much better place if people weren't allowed to have children until they've proven they can successfully manage a DoD program."

77


DELEGATION

REASONS FOR DELEGATING

1. Improve manager's time management a. Increase manager's span of control b. Increase time allocated to long range planning c. Increased management efficiency

2. Assure tasks performed by most qualified 3. Build organizational depth 4. Improve employee motivation 5. Increased teamwork (IPTs/TQM) 6. Maximize resources 7. Appropriate organizational responsibility

12 STEPS FOR DELEGATING

1. Set clear objectives and task statements 2. Select "Delegate"; check qualifications 3. Provide training, if necessary 4. Solicit input from Delegate 5. Assign task and deadline 6. Provide any relevant guidance

a. Critical information required to do tasks right b. Potential approaches - only as suggestions! c. Describe results desired

7. Makes a delegation "contract" (see next page) 8. Establish controls 9. Maintain controls

10. Provide feedback 11. Identify lessons learned 12. Evaluate performance

DELEGATION STATUS FILE

3 File Sections to hold all delegation records

I. Current Month - Sectioned for 31 calendar days - File delegation records by suspense month

II. Remaining 11 months - Section for each month - File delegation records by suspense month

III. Completed Records - File alphabetically by Delegate name - Use data for performance evaluations

78


DELEGATION (Continued)

DELEGATION RECORD Description of Action: Date:

Person Assigned:

Authority Level (specify): 1 - Take action; do not report

back 2 - Take action; report back

(see Frequency) 3 - Prepare plan; proceed

upon approval 4 - Do only as directed below

Frequency of Contact (specify): 1 - daily 2 - weekly 3 - monthly 4 - other

Delegation Guidance/Agreements:

Suspense Action: Suspense Date:

Performance Assessment:

79


EFFECTIVE MEETINGS

PRE-MEETING A. Establish type of meeting

1. Information (quick, crisp) 2. Planning/Strategizing (slow, deliberate) 3. Problem solving (divergent/convergent) 4. Decision (deliberate) 5. Staff/Conference (repetitive, short) 6. Feedback/Evaluation (slow, contemplative) 7. Training (smooth, flowing) 8. Social (rambling)

B. Select participants 1. Based on purpose; relevant; decision auth. 2. Size: 4-7 ideal; 10-12 tolerable; >13 unsat.

C. Circulate agenda (3-5 days in advance) 1. Type, purpose, date, place, start/finish times 2. Topics, time allocated (minutes), speakers 3. Assign recorder

CONDUCTING MEETING A. Opening

1. Start on time 2. Repeat type and purpose of meeting

B. During 1. Facilitate the meeting 2. Encourage openness and communication 3. Develop cohesion 4. Use active listening 5. Stick to agenda

C. Closing 1. Set time and date of next meeting 2. Summarize agreements, actions, decisions 3. Close on time or before

AFTER MEETING A. Review minutes with recorder B. Publish minutes

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TOTAL QUALITY MANAGEMENT

Quality: consistent conformance to customer expectations

Seven Elements of Total Quality 1. Customer Focus - who they are and what they expect 2. Systems Perspective - the org. is a system with technical and

social aspects 3. Process Management - understand processes to provide needs

of the customer 4. Continuous Improvement - if it ain't perfect yet, improve it! 5. Individual Involvement - people who do and understand work

must be involved 6. Teamwork - coordination of effort to produce timely, quality

product 7. Leadership Commitment - leaders at all levels focused on total

quality

Deming's Fourteen Obligations of Top Management 1. Create constancy of purpose for improvement of product and

service. 2. Adopt the new philosophy. 3. Cease dependence on inspection to achieve quality. 4. End the practice of awarding business on the basis of price tag

alone. Instead, minimize total cost by working with a single supplier. 5. Improve constantly and forever every process for planning,

production, and service. 6. Institute training on the job. 7. Adopt and institute leadership. 8. Drive out fear. 9. Break down barriers between staff areas.

10. Eliminate slogans, exhortations, and targets for the work force. 11. Eliminate numerical quotas for the work force and numerical

goals of management. 12. Remover barriers that rob people of pride of workmanship.

Eliminate the annual rating or merit system. 13. Institute a vigorous program of education and self-improvement

for everyone. 14. Put everybody in the company to work to accomplish the trans-

formation.

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PERSONAL COMMUNICATIONS

COUNSELING

DIRECTIVE • Give advice • Evaluate • Motivate • Explain • Reassure

Advantages • Effective with inexperienced

personnel • Quick • Take charge attitude

Disadvantages • Perceived insulting • Does not support delegation • Manager keeps responsibility

NON-DIRECTIVE • Don't display authority • Listen carefully • Don't advise • Facts only; no opinions • Employee find solution

Advantages • Develops commitment • Good training • Employee responsible • Supports delegation

Disadvantages • Takes time • Skill/patience required • Ineffective with

inexperienced personnel

COUNSELING PROCESS

1. Set up interview - private, confidential, unhurried

2. Encourage discussion - open questions, active listening

3. Help employee think it through - deal with facts, no opinions or own views

4. Let them find the solution - their solution to their problem

82


PERSONAL COMMUNICATIONS (Continued)

WIN-WIN NEGOTIATIONS

FOCUS: Defeat the problem; not the person

APPROACH: Resolve conflict Reach agreement Normalize relationships Combine efforts

GOAL: Acceptable gains by both parties

INTER-PERSONAL NEGOTIATIONS

1. Separate people and emotions from the problem

2. Focus on interests, not positions

3. Generate options for mutual gain

4. Insist on objective criteria

83


PROBLEM SOLVING

CREATIVE PROBLEM SOLVING 1. List perceived problems 2. Gather relevant data 3. Define actual problem 4. Determine alternative solutions 5. Analyst and evaluate alternatives 6. Select solution 7. Validate solution

DIVERGENT THINKING* 1. Accept all ideas and alternatives 2. Defer judgement or evaluation 3. Discuss, combine, hitchhike, improve ideas 4. When exhausted, move to converge

CONVERGENT THINKING* A 1. Establish categories of alternatives 2. Develop evaluation criteria 3. Avoid premature closure 4. Keep eye on objective 5. List strengths and weaknesses 6. Select best alternative or idea

*Used sequentially during all problem-solving steps

84


PROBLEM SOLVING (Continued)

QUALITATIVE PROBLEM SOLVING (Kepner - Tregoe)!/

Deviation Statement: (Describe the actual performance vs should performance)

Specifying Question

Is Is Not What is distinctive about

"Is" vs "Is Not"? Does the distinction suggest a change?

What? (Identify)

Where? (Location)

When? (Timing)

Extent? (Magnitude)

Possible Causes:

Most Likely Cause:

1. Define deviation. 2. Describe what deviation IS and IS NOT. 3. List distinctions between what deviation IS and IS NOT. 4. Do distinctions indicate or suggest a change? 5. Determine possible causes based on distinctions and changes.

1/ Copyright Kepner Tregoe, Inc. (1981). All rights reserved. Reprinted with permission. (Kepner-Tregoe, Inc., Research Road, P.O. Box 704, Princeton, N.J. 08542)

85


TIME MANAGEMENT

TIME ROBBERS AND AVOIDANCE TECHNIQUES

/

1. Incoming telephone calls

2. Outgoing telephone calls

3. Unscheduled visitors

4. Improper delegation

5. Poorly conducted meetings

\

- screen for importance - limit to 2 minutes

- do all at one time - itemize topics before calling - don't socialize

- screen for importance - do not invite into office - remain standing

- re-delegate

- stay focused on subject area and on schedule

86


TIME MANAGEMENT (Continued)

HIGH IMPORTANCE -► LOW

HIGH

URGENCY

LOW

DOIT VERIFY

&

RE-ASSIGN NOW

1 3

2 4

MID-TO-LO NG BUSY RANGE WORK

PLANNING

1. List all tasks. 2. Categorize tasks using matrix. 3. Review quadrant 3 items; re-assign as 1, 2, or 4 as appropriate. 4. Do quadrant 1 tasks first; consider delegating! 5. Strive to maximize time for quadrant 2 tasks (be proactive!). 6. When all 1 and 2 tasks are complete, do quadrant 4 tasks.

KEEP A "TO DO" LIST

1. List all goals and tasks. 2. Categorize as A - High value

B - Medium value C - Low value

3. Prioritize within each category (e.g. A-1, A-2, etc.). 4. Accomplish all A tasks, then all B. Do C if time permits. 5. Review list and priorities daily.

87


BRAINSTORMING

PURPOSE: To stimulate the free flow of ideas.

METHOD: Group members take turns generating ideas. One idea stimulates another and then another. Freewheeling of ideas is encouraged. Brainstorming stops when all group members run out of ideas. See the back of this page for questions that may suggest new ideas for you.

GROUND RULES:

Put judgment aside. Remember, all ideas can be thought of as starters.

No criticism allowed. This is not the time to judge an idea. Don't criticize other ideas no matter how ridiculous they may seem. The ideas can be discussed in detail later; now, the objective is to generate more ideas.

Welcome free-wheeling or blue-skying. Let those wild ideas come out—otherwise you may conceal your creative process. The im- practical ideas may trigger other ideas that are possible to use.

Strive for quantity, not quality. The more ideas brought out, the better the chance of a great solution.

Combine and rearrange ideas. Single ideas aren't the only way to make a suggestion. You can make additions or combinations of previously suggested ideas to create still better ideas.

Record all ideas exactly as expressed. This keeps the mind free of remembering what was said and allows you to build on previ- ous ideas.

88

r DSMC PROGRAM MANAGERS TOOL KIT

BRAINSTORMING (Continued)

Why does it work?

Some of the reasons why brainstorming enhances a group's creativity are that it:

- Increases involvement and participation.

- Produces the most ideas in the shortest time.

- Reduces the need to give the "right" answer.

- Frees up the group; allows the members to have fun and is interesting.

- Reduces the possibility of negative thinking.

QUESTIONS TO STIMULATE YOUR BRAIN CELLS:

1. Can we use this idea elsewhere? As is? With changes? 2. If we change it,; Is there anything else like it? Any related

issues? 3. Modify? Change? Rearrange? Meaning, color, motion,

sound, odor, taste, form, shape, layout, etc.? 4. Magnify? Add what? More, stronger, larger, new? 5. Minimize? Subtract what? Eliminate, smaller, lighter, slower,

split? 6. Substitute? Who, what, when, where? 7. Reverse? Opposite, backwards, upside down, inside out?

89


DECISION BRIEFING

Elements of a Decision Briefing

• Purpose - Issues • Outline - Agenda • Background • Assumptions • Alternatives Identified • Evaluation Criteria • Analysis of Alternatives • Recommendation • Implementation Plan

Things to Expect (from Briefee)

• Challenges to assumptions, definitions, methodology • Does it comply with or change policy? • Is the situation sensitive to change? • Issues with analysis, tradeoffs, recommendations, implementation • Open/closed questions

1 *

90

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