SCHEDULE & DELIVERY MANAGEMENT

1. Corrective Actions SCHEDULE & DELIVERY MANAGEMENT Prepared by: Bonita Dunham and Bert Santiago

2. OBJECTIVES: • Define Corrective Action (C/A) and Root Cause • Identify when to issue CARs • Define levels of Corrective Action • Identify contractual requirements impacting Schedule & Delivery Management in support of Corrective Action Request issuance • Provide examples C/A issuance

3. CAR Definition: A request for root cause remedy of a contractual noncompliance

4. Root Cause Definition: That condition, action, or lack of action that led to the problem occurring. Note: Root cause has been identified when effective corrective action will prevent problem recurrence

5. WHAT? • Actions taken to eliminate conditions that resulted in a contractual noncompliance • Root cause of noncompliance should be identified • Efforts are to the extent of precludingrecurrence of non-compliant condition

6. WHY (DCMC requirements) • Directly impacts contractor delivery performance • CARs identified as Output of surveillance effort • Tool to facilitate timely delivery • Rationale that supports surveillance activity

7. WHY (DCMC requirements) • Supports “Right Time” metrics 1.1.2 Improve on Time Deliveries 1.1.3 Reduce Outstanding Deliveries 1.1.8 Improve ratio Alerts/Delinquencies

8. WHEN • On time delivery rate is < 90% • Data analysis indicates contractual noncompliance trend • Do not issue CAR for EACH delinquency • Root cause analysis identifies processes contributing to poor delivery rates • Contractor is non-responsive to previous CARs (escalation…)

9. HOW DLAD 5000.4 PROCAS • Any employee can initiate a CAR • Maintain a record of all CARs issued, follow-up and close-out actions • C/A implementation and effectiveness of contractor actions shall be verified • Four Levels of Corrective Action

10. LEVEL I • contractual noncompliance • requires no special attention • directed to working level personnel • may be verbal or written

11. LEVEL II • written request • systemic non-compliances • directed to contractor mgmt responsible for the process • Inform CAT of issuance

12. LEVEL III • serious non-compliances to contractor top mgmt. • Gov’t may pursue contractual remedies • coordination w/ ACO & Cmdr prior to issuance • issued by Team Leader or above • copy buying activity & cognizant Gov’t ofc at prime as applicable • Contractor immediately placed on the CAL until C/A is verified and CAR closed out

13. LEVEL IV • involve contractual remedies • must be issued by ACO, countersigned by Team Chief or above • copy of CAR and all correspondence to buying activities. • proper coordination between CAOs, Districts, HQ, customers and other affected Gov’t activities before issuance

14. LEVEL IV(cont’d) • assure all resolution efforts are in concert • contractor immediately placed on the Contractor Alert List (CAL) until C/A verification and CAR close-out

15. DLAM 8000.5, PROCAS • CAO management maintain visibility of all LEVEL II and above CARs • Escalation, due to non-responsiveness to lower level CARs, as determined by the Contract Administration Team

16. Contractual Requirements • Although schedule violation is basic area of Production related C/A, manufacturing processes, (such as Manufacturing planning, MRP II, work measurement, material handling, integrated product development and facility management) are likely to be found as the root cause areas.

17. Contractual Requirements • Contractor’s requirement relative to many floor level manufacturing processes are covered in Contract requirements referencing Quality.

18. Contractual Requirements • BOTTOMLINE: Do not limit applicability of “contract requirements” based on functional area (i.e. quality or production)... compliance to contract requirements includes compliance to the delivery schedule.

19. Contractual Requirements • Complete contract review must be done -to identify contractor obligations under the contract -to identify contractual noncompliances -reference applicable contractual requirements in CARs

20. Contractual Requirements • FAR 9.103 Policy “…contracts shall be awarded to responsible…contractors only.”

21. Contractual Requirements • FAR 9.104.1 General Standards “To be determined responsible, a …contractor must…be able to comply with the required or proposed delivery or performance schedule…”

22. Contractual Requirements • FAR 46.105 Contractor Responsibilities “The contractor is responsible for carrying out its obligation under the contract by…”

23. Contractual Requirements • FAR 46.105 Contractor Responsibilities “Tendering to the Government… supplies or services that conform to contract requirements…”

24. Contractual Requirements • FAR 46.105 Contractor Responsibilities “The contractor may be required to provide and maintain an inspection system or program for the control of quality that is acceptable to theGovernment...”

25. Contractual Requirements • FAR 46.105 Contractor Responsibilities “The control of quality by the contractor may relate to, but is not limited to...” “Manufacturing processes, to ensure that the product is produced to and meets the contract’s technical requirements;…”

26. Contractual Requirements • FAR 46.105 Contractor Responsibilities “…Procedures and processes for services to ensure that services meet contract performance requirements…”

27. Defense Priorities Allocation System (DPAS) Requirements 15 CFR 700.13(d)(2) states in part, “….shipment or performance will be delayed, the person must notify the customer immediately, give the reasons for the delay, and advise of a new shipment or performance date.

28. Contractual Requirements MIL-Q-9858A Quality System Requirements Para 1.3 Summary “The program shall assure adequate quality throughout all areas of contract performance…”

29. Contractual Requirements • MIL-Q-9858A Quality System Requirements • Para 1.3 Summary “All supplies and services under contract, whether manufactured or performed within the contractors plant or at any other source shall be controlled at all points necessary to assure conformance to contractual requirements…”

30. Contractual Requirements • MIL-Q-9858A Quality System Requirements • Para 1.4 Relation to Other Contract Requirements • “The contractor is responsible for compliance with all provisions of the contract and for furnishing specified supplies and services which meet all the requirements of the contract.”

31. CRITERIA CONDITIONS AND SITUATIONAL EXAMPLES

32. Verbal or Level I - Situation A • While reviewing a random sample of purchase orders, the functional specialist notices DPAS not being flowed down to sub-vendors from prime contractor • The functional specialist discusses the requirement with the contractor’s purchasing agent, who acknowledges omission and immediately issues P.O. modification to correct the error. • Corrective action is furthered by the contractor amending his work instructions/procedures, requiring flow-down of DPAS requirements

33. Level II - Situation A • Functional Specialist notices a negative trend in Ontime delivery performance • Further analysis reveals consistent problem with (sub)vendor material having to be reworked after Gov’t rejection in receiving inspection. • Reworked material comes from same sub-vendor, and is routinely received weeks after the planned in-house receipt date.

34. Level II - Situation A (con’t) • Production functional specialist coordinates with the Quality specialist and issues a written CAR based on the negative delivery performance trend and the consistently late receipt of deficient sub-vendor product. • The Production functional specialist’s root cause analysis identifies concern in the area of purchase issuance i.e. are P.O.s being issued with adequate lead time…how is the prime contractor controlling his subcontractor

35. Level II - Situation A (con’t) • Intensity of functional surveillance is increased until an acceptable corrective action response is received, implemented and validated.

36. Level III - Situation A • Contractor is non-responsive to previously issued Level II CARs, as evidenced in Gov’t documentation • Continued missed internal milestones, due to late receipt of sub-vendor product

37. Level III - Situation A • Situation is coordinated with CAT members • CAR is escalated by written issuance to head of contractor organization, noting that continued inaction may lead to more severe measures

38. Verbal or Level I - Situation B • Contractor processing/working hardware not identified in daily schedule/bucket. Conflict to internal procedures. • Currently not impacting overall delivery status however trend of working around/outside daily schedule could have negative impact on contract delivery schedule.

39. Level II - Situation B • Contractor continuing to process work outside daily schedules/buckets. Still not impacting contract delivery schedule, however in violation of internal procedures and production plan. Internal tracking of hardware becoming difficult to manage, monitor and identify.

40. Level II Situation B (con’t) • Prior to issuance, coordinate action/activity with CAO team. Explain impact. • CAR issued to Production/Manufacturing Manager with copy to production line supervisor. (Good idea to copy the contractor’s Quality Assurance department)

41. Level III - Situation B • Contractor’s lack of action relative to previous activity have now caused a delinquent posture to delivery schedule. Identifying and tracking hardware most difficult. The problem extends beyond main production line to spare part activity, retrofit effort, and impacting inventory accuracy.

42. Level III Situation B (con’t) • Unsure of contractor’s ability to ship end items due to the lack of identification and tracking ability. Build up/cushion of assets no longer available. • Contractor not able to provide a valid “get well” date.

43. Level IV - Situation B • Contractor’s lack of action now impacts delivery posture (contract delinquency) • Lack of action adversely impacting associated systems (inventory management, BOM accuracy, release quality, financial inaccuracies, etc.)

44. Points to Remember • Corrective action cannot be accomplished without understanding contractual requirements • Corrective action efforts will be ineffective without ROOT CAUSE ANALYSIS Reference Root Cause Analysis Guide - Definitions - Process Focus - Methods

45. Points to Remember • CAR = request for root cause remedy of contractual noncompliance • Adequacy of stated C/A determined via follow-up verification of implementation and objective evidence of compliant condition. • Root Cause identification is Government and contractorconcern.

46. Points to Remember • Root cause analysis will uncover Manufacturing process areas contributing to the nonconformance • promotes modified surveillance efforts by the Industrial Specialist • promotes increased process understanding by the Industrial Specialist • promotes evaluation of process efficiencies and effectiveness by the Industrial Specialist or Industrial Engineer

47. Examples Workshop: • CAR written formats (Levels II thru IV) • CAR documentation (all levels) • Root cause analysis Methods • PROCAS opportunities

48. “Give me a lever long enough….. And single-handedly, I’ll move the world” Archimedes

49. Schedule & Delivery Management CORRECTIVE ACTION REQUESTS