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Think Differently…. When Will We Get Serious About BBP and Speed with Discipline? 23 July 2013

AF Life Cycle Management Center. Think Differently…. When Will We Get Serious About BBP and Speed with Discipline? 23 July 2013 . Colonel Cameron Holt Director of Contracting AFLCMC/PK-OL Eglin. “Speed with Discipline”. Agenda. Challenge We Face Assessment of Current Approaches to BBP

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Think Differently…. When Will We Get Serious About BBP and Speed with Discipline? 23 July 2013

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  1. AF Life Cycle Management Center Think Differently….When Will We Get Serious About BBP and Speed with Discipline?23 July 2013 Colonel Cameron Holt Director of Contracting AFLCMC/PK-OL Eglin “Speed with Discipline”

  2. Agenda • Challenge We Face • Assessment of Current Approaches to BBP • Current AFLCMC PK-OL Initiatives Snapshot • Highlighted Opportunities • Speed w/Discipline: Cycle Time Reduction w/BBP • Acquisition Innovations & Strategic Sourcing • Barriers to Acquisition Innovation at Eglin

  3. AF PEO/WP ThoughtsBriefed at RPDS March2012 • Declining Budgets Will Present Significant Opportunities • Rapidly Changing Defense Landscape • Programs That Can’t Keep Up Will Not Survive • The Defense Team Needs to Innovate • Not just on technology, but how we maximize procurement funds Challenges We Face New Environment Demands New Thinking 96ABW-2012-0013

  4. Quantity, Quality, and Price Current Practice • EOQ • Min Quantities • Quantity • Quality • Price Unstable buys cause the closure of production lines and the laying-off of skilled full-time workers. Specialized manufacturing capacity and human capital cannot be regenerated without great cost and significant time. (USA007065-11, pg1)

  5. A-A Enterprise Look AMRAAM NGM Missed opportunity to leverage buying efficiencies 96ABW-2012-0013

  6. Better Buying Power Initiatives • Comprehensive reviews of Indirect Costs with focus to increase buying power • Maximizing efficiencies through competition and business strategies • Identifying cost drivers and developing should costs for production programs • Analyzing benefit/need of weapons warranties B D- B+ C

  7. Current Initiatives Snapshot

  8. AFLCMC...Providing the Warfighter’s Edge! Planned vs Actual Cycle TimesPEO-WP Process Process

  9. AFLCMC...Providing the Warfighter’s Edge! Pricing Risk Assessment ACTIVE AFLCMC PRICING ACTIONS OVER $50M NOTIONAL-Top Level

  10. AFLCMC...Providing the Warfighter’s Edge! BBP* Pricing Inputs Assessment Inputs Quality-AMRAAM Lot 27 * Better Buying Power

  11. AFLCMC...Providing the Warfighter’s Edge! BBP* Pricing Inputs Assessment Inputs Timeliness-AMRAAM Lot 27 * Better Buying Power

  12. Current Big “A” Acquisition ProcessConverts Monopsony to Monopoly CapabilityTrade offs ProgramTrade offs PEs by Program Sole Source No Trade Off Trade Offs Made When Quality of Data is Lowest (Unrealistic Expectations)

  13. Proposed Big “A” Acquisition Process Turning Monopoly back to Monopsony Single Buyer Flexibility Maintained Throughout Integrated Process Requirements Budget Acquisition CapabilityTrade offs ProgramTrade offs Acquisition Trade offs

  14. Portfolio Best Value CompetitionTurning Monopoly back to Monopsony Single Buyer Flexibility Maintained Throughout Integrated Process Requirements Budget Acquisition Capability Trade offs Program Trade offs Acquisition Trade offs

  15. DA Family of Weapons SDB Tailkit LJDAM MK-84 (2000 lb) BLU-109 (2000 lb) MK-83 (1000 lb) MK-82 (500 lb) Affordable, Sustainable, Producible, Universal Design (ASPUD) Benefits • Affordability • Dial down requirements when not needed, change out components based on target set (allows limited use of high $ assets) • Facilitates commonality across systems, decreases unit cost • Quick Reaction for Urgent Needs • Flexible Interface allows for increased technology insertion • Decreases Lead Times for Development of New Components • Encourages Innovation • Aids Ability to Meet Competition & SB Goals • Allows for increased competition at component level • Resets Market Conditions to Monopsony from Monopoly • May Allow for Greater SB Participation • Ex. Proliferation of SB Apple Apps • Changes the Business Model • Potential for Decreased Development Costs Business Model Changes But Still Sustainable “Winner Take All” to “Market Share By Portfolio”

  16. Barriers to Acq Innovation at Eglin • Inertia of C,S,P focus and PM-level incentives • Strong defense contractors wed to “winner take all” • Manning and talent mix off-limits • Gerbil Cage • Fear of failure

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