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DON Acquisition Governance (Gate Reviews) Establishing a Post-IOC Sustainment Review

DON Acquisition Governance (Gate Reviews) Establishing a Post-IOC Sustainment Review Logistics Functional IPT 30 April 2010.

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DON Acquisition Governance (Gate Reviews) Establishing a Post-IOC Sustainment Review

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  1. DON Acquisition Governance (Gate Reviews) Establishing a Post-IOC Sustainment Review Logistics Functional IPT 30 April 2010 DON has established 10 Gate Reviews, across the span of systems Acquisition. The purpose of each is governance of specification, design, development, and planned systems introduction. Gate Reviews align performance capability requirements to Acquisition execution and improve senior leadership decision-making by providing a comprehensive understanding of risks, program health, and life-cycle cost.

  2. A B 1 3 2 DON Gate Review Alignment Version 2.0 - SECNAVINST 5000.2E Program Initiation at Milestone B C IOC FOC Materiel Solution Analysis Technology Development Engineering & Manufacturing Development Production & Deployment Operations & Support JCIDS Process Operations & Support Life Cycle Sustainment Integrated System Design System Capability & Manufacturing Process Demonstration LRIP Full-Rate Prod & Deployment CBA 4 6 6 6 6 5 6 Pre FRP DR Post IBR Post CDR CPD CDDCONOPS AoA SDS RFP Sustainment ICD Materiel Development Decision FRP Decision Review MS C PDM Post PDR Assessment Post CDR Assessment Disposal TD PDM Technical Reviews SVR / FCA / PRR ASR ITR PDR IBR CDR TRR OTRR PCA ISR SRR SFR PDR WSARA Logistics Reviews ILA ILA ILA ILA Gate Chair: ASN(RDA) Gate Chair: CNO/CMC Legend: Tech Review ILA

  3. CLASSIFICATION (U) GATE 6 SUFFICIENCY REVIEW(SUSTAINMENT) PROGRAM NAME ACAT: ____ Joint Designation: ___ Program Manager Name; PM Code Requirements Officer Name; RS Code Briefer Name; Code Briefer Name; Code Standard template format for all 10 “Gate Reviews” Review Date MM/DD/YYYY Classified by: Reason: Decl on: 3 CLASSIFICATION (U)

  4. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Purpose • Decisions Desired • Assess sustainment effectiveness and affordability at IOC + NLT 4 years • Resolve initial operational command sustainment issues (events and circumstances may trigger timing of Gate) • Address need for program change, to improve systems sustainment and affordability CLASSIFICATION (U)

  5. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED SustainmentGateMembership CLASSIFICATION (U)

  6. Sustainment Gate Entrance/Exit Criteria • Sustainment Gate Entry criteria • 1. Achieved Full Rate Production decision • 2. Achieved System IOC • 3. Completed post-IOC Supportability Assessment (ILA) • 4. Updated Program cost estimates (CAPE protocols) • 5. Updated Program LCSP, LRFS, TOC reduction initiatives • Sustainment Gate Exit criteria • Concur with recommendations to resolve asset and • mission readiness issues or shortfalls • 2. Concur with TOC reduction opportunities and investment • 3. Progress towards CPD capability performance • 4. Concur with Program Health assessment

  7. 1. IOC/FOC Schedule and Definitions 2. Review of LCSP programmatics, costs, and affordability in context of allocated resources (i.e. LCSP/LRFS execution) 3. Results of Independent Logistics Assessment (ILA) 4. CPD Parameter Metric Measurement 5. Technical Health 6. T&E Major Deficiencies and Resolutions 7. Budget and Funding 8. Threat and Capability Review 9. Summary of CONOPS, as being employed 10. Configuration Steering Board (CSB) 11. Evaluation of TOC Reduction, Initiatives, and Investment 12. Extended SCP-related analysis, in accordance with NCCA policy and CAPE protocols 13. Major cost drivers by KPP/KSA impact, to include specific cost reduction strategies 14. Interdependencies 15. Schedule 16. Significant Risks 17. Program Health 18. OSD Sustainment “Quad” Chart CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Briefing Content CLASSIFICATION (U)

  8. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Life Cycle Sustainment Plan Page 1 of 3 • Business Model Details • Supportability Analyses • Level of Repair • Manpower • Analysis and Reporting of Sustainment/Readiness/Cost Performance • Sustainment Contracts • PBL Strategy and evaluation • Other Government • Contractor • Product Data Ownership/Usage • LCSP Integrated Schedule/Milestones Note: The content on this slide will likely require multiple slides to address. CLASSIFICATION (U)

  9. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Life Cycle Sustainment Plan Page 2 of 3 • Manpower, Personnel, and Training • Product and Technical Data • Maintenance Strategy • Levels of Repair • Facilities and Infrastructure • Logistics Footprint • Describe as functions of systems design interface (including diagnostics), maintenance strategy, supply and transportation, manpower and training, etc. • Safety and Environmental Compliance Note: The content on this slide will likely require multiple slides to address. CLASSIFICATION (U)

  10. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Life Cycle Sustainment Plan Page 3 of 3 • Sustainment Program Management • Assimilation within broader logistics infrastructures • LCSP adjusted to “replaced systems” sustainment planning • Supply Management and Transportation • Technology Refreshment, Obsolescence Management, and Corrosion Prevention • Modernization opportunities (investment) Note: The content on this slide will likely require multiple slides to address. CLASSIFICATION (U)

  11. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Results of Supportability Assessment (ILA) Note: Need to provide mitigation plans in backup for all items rated Yellow or Red. CLASSIFICATION (U) Pre-decisional – Not for Release

  12. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED CPD Parameter Metric Measurement Not just Sustainment KPP/KSAs Life Cycle Sustainment Metrics to include KPPs, KSAs, and target goals. Separate slides follow, one per parameter not at threshold value. Basis Legend E = Estimated | C = Calculated T = Test Data |L = Legacy Improving Constant Degrading Pre-decisional – Not for Release CLASSIFICATION (U)

  13. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Program Budget versus Total Ownership Cost Estimate Program Funding & Quantities CLASSIFICATION (U)

  14. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Life Cycle Sustainment Plan (LCSP) Logistics Requirements and Funding Summary (LRFS) Tailor template to program’s actual LRFS categories LRFS is the LCSP’s requirements-to-budget baseline for life-cycle planning/execution of systems Sustainment CLASSIFICATION (U)

  15. CLASSIFICATION (U) FOC A B C IOC PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Updated TOC Profile New “Service Cost Position” Serves as a Baseline for “TOC Objective” Target Line Note any life-cycle assumption changes ## $ ## $ ## $ ## $ ## $ ## $ ## $ LATEST TOC OBJECTIVE LASTEST SCP ESTIMATE $$ M/TY OM INITIAL SCP MP MILCON MPN PROCUREMENT RDT&E FY# FY## FY## FY## FY## FY## Prior Yrs Spent LRIP FRP – Qty/Period $$ FYDP $$ Remaining LC FYs $$ by Year CLASSIFICATION (U)

  16. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Program Planning / Execution TOTAL OWNERSHIP COST ESTIMATING Post-IOC Cost Estimating Notes: Any pertinent information that cannot be readily gathered from the data table above can be included in this text box. It provides an easy method of conveying more details than the data table may allow.

  17. CLASSIFICATION (U) Legend Meets Criteria Partially Meets Criteria Does Not Meet Criteria PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Program Planning / Execution SUSTAINMENT Sustainment and Logistics Activities Page 1 of 2

  18. CLASSIFICATION (U) Legend Meets Criteria Partially Meets Criteria Does Not Meet Criteria PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Program Planning / Execution SUSTAINMENT Sustainment and Logistics Activities Page 2 of 2

  19. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Summary of CONOPS as Employed • Describe concept of employment of the capability, as now employed • Mission area contribution to the Joint force including • Continued alignment with OSD capability guidance/vision and Navy/Marine Corps strategies • Operational unit employment (numbers/organizations) • Types and quantities of assets currently fielded • Overview of logistics and sustainment operations • Fielding • Manning • Maintenance Management and Logistics IT • Supply Management (to include IUID) • Transportation CLASSIFICATION (U)

  20. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Interdependencies Programs, plus major public/private Sustainment infrastructure Interdependencies Program H Program I (upgrades) Program J Program K Program L Program M Program A Program B Program C Program D Program E Program F Program G C S P Program XYZ Program XYZ Solid denotes current system Dash denotes future system Arrow to Program XYZ denotes supports Program XYZ Arrow from Program XYZ denotes Program XYZ supports Indicates program are interdependent No known issues affecting inter-related programs Resolvable interface issues affecting programs Unresolvable interface issues affecting programs CLASSIFICATION (U)

  21. CLASSIFICATION (U) PROGAM HEALTH (PoPS) Program Name 68.55/100 Program Requirements 8.00/8 Program Resources 18.41/25 Program Planning / Execution 34.14/59 External Influencers 8.00/8 Parameter Status 8.00/8 Budget and Planning 8.45/13 Acquisition Management Sustainment 8.02/16 Fit in Vision X Scope Evolution Manning 9.96/12 Industry/Company Assessment Software 4.15/5 Program Advocacy CONOPS Total Ownership Cost Estimating 3.00/10 Contract Planning and Execution 2.88/9 Interdependencies 8.00/8 ◊ ◊ Test and Evaluation 1.66/2 Government Program Office Performance 7.47/9 Legend ◊ Performer Summary X Critical Criteria Technical Maturity 0.96/2 Technology Protection 6.00/6 DRAFT Last Modified March 18, 2010 PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED CLASSIFICATION (U)

  22. PoPS “Green” state for each of 7 criteria under the sustainment metric at the Sustainment Gate

  23. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Evaluation of TOC Reduction, Initiatives, and Investment • Key O&S Phase cost drivers and root causes addressed • Update prior program TOC planning and ongoing execution • Show execution results in terms of reducing cost toward the TOC Objective • Proposed investment/modernization, to target the SCP/TOC Objective delta within any span of the O&S phase that is not yet being addressed by a TOC reduction initiative Note: The content on this slide will likely require multiple slides to address. CLASSIFICATION (U)

  24. Department of the Navy Total Ownership Cost (TOC)Guidebook 28 January 2010 https://acc.dau.mil/CommunityBrowser.aspx?id=350380 “This is the first, limited version of DON's TOC Guidebook.  Its focus is guidance for ACAT programs, as they construct and present their TOC related strategy and execution, during all stages of formal life cycle governance.  For DON, that means the ten Gate Reviews with associated program health assessments (PoPS).”

  25. CLASSIFICATION (U) PROGRAM NAME GATE 6 Sustainment (CORE) DATE UPDATED Decisions Reached Note: Please provide performance against the listed Exit Criteria CLASSIFICATION (U)

  26. Logistics-related TOC Challenges • 2-3% O&M and 1.5% Manpower cost growth/year (DoD) • Navy Logistics expends billions yearly ($31B at OPNAV N4 alone) and must move closer to world-class levels of operational effectiveness, responsiveness, visibility, trust in the supply system, end-to-end IT/communication, and investments, if LCC/TOC is to be substantially reduced. • The majority of the 2020 Battle Force exists today • 222 of today’s 285 ships still required in 2020, so these platforms must all achieve their expected service lives • Need to understand impact of individual ACAT decisions on cumulative TOC, in order to posit the question “What are we willing to pay for new program LCC, given it’s contribution to cumulative future logistics/readiness bill?” • TOC “mitigation” steps during Development phases • TOC “reduction” steps during Sustainment

  27. Navy’s POM 12 Endorsed TOC Investments

  28. Total Ownership Cost (TOC) Affordability Initiatives Program 5000-policy/ACAT governance/SCP/expanded cost analysis all have raised LCC visibility and decision-weight priority for higher TOC-valued alternatives. Time now to revive a yearly program to solicit for and screen affordability investments to boost readiness, lower life cycle cost, and leverage proven- reliable/maintainable commercial technology. SYSCOMs, ACATs, and Providers Proposed Initiatives for POM 12 - 472 TOC initiatives submitted to N4 for rating/ranking - Investment in 15 of $131M are projected to Deliver ~$1.4B savings, over the FYDP - Leadership confident in financial projections and willing to take offset at the bottom line - N4 will now codify TOC investment governance process 29

  29. Total Ownership Cost (TOC) Good question, Bill. “By all means talk about "TOC" in the earliest stages of systems develop with new-start programs. But do so in the context of those "actionable" pre-MSB actions and events that manifest early-phase TOC. In programs where most of the major systems development decisions are made, then "TOC" is increasingly synonymous with effort to lower sustainment related cost.” Actions that "mitigate" TOC prior to MS-B (JCIDS/R3B + AoA + TLCSM rationale + LCSP/LRFP oversight + Gate Reviews). Actions that "reduce" TOC after MS-B (Gate Reviews + Yearly TOC Investment + application of readiness-to-cost analyses). 30

  30. Future Trends/Final Point LCL Work and Workforce Axiom: Strongest variables to eventual total program cost are decisions made during the earliest JCIDS/Acquisition phases +Axiom: Eventual majority of ACAT total program cost is O&S phase sustainment cost +Axiom: LCL is inherently the strongest advocacy for mitigating and reducing majority O&S sustainment cost +Axiom: Parts orders take 4 times longer to receive in services than industry, due less to technology and more to culture and leadership =Paradox: Minority role of LCL, during early JCIDS and Acquisition, is not commensurate with LCL potential impact on the majority of program cost a) Better integrate insular logistics information systems across Service enterprises and b) favor for promotion “cross-functional” LCLs, with the intent that they migrate their sustainment cost-mitigating competency into earliest-phase JCIDS/Acquisition process and program positions. These steps should help c) generate readiness-to- sustainment cost data and analyses, specifically to build cases that ACAT decision processes increasingly find and select optimal life-cycle ownership cost alternatives.

  31. SECNAVINST 5000.2E Final Draft: Acquisition Logistics and TOC Highlights • Sustainment and LCC/TOC are higher priorities throughout • Mutual LCSP/SEP evolution, to ensure JCIDS sustainment capabilities are integral to systems performance. Specifically, a reliability growth program shall be documented in the SEP and LCSP and briefed at Gate Reviews • Evident throughout ACAT governance (Gate Reviews) • Evident in an expanded range of program cost analysis (AoA, SCP, etc.) • Evident in expansion of ILAs to a post-IOC timeframe • The PM shall document a product support strategy, including the RSSP, in the LCSP annex to the AS. The LRFS adjunct to the LCSP (required) relates LCSP execution to programmatic resources. • LCSP briefed at Gates, reviewed by N4 or I&L, approved by MDA (not PM) • AoA Studies to assess sustainment performance (RAM) and LCC of alternatives • PM TLCSM responsibility requires all fundamental program decisions heavily weigh those alternatives that are most conducive to system life-cycle sustainment/affordability • AS and LCSP must set the means to evaluate/use standard parts/equipment • Data Management Strategy (DMS) must integrate with life-cycle sustainment

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