PRICE FIGHTERS Brief For Future of DoD Contract Cost/Price Analysis Meeting

1. PRICE FIGHTERS Brief For Future of DoD Contract Cost/Price Analysis Meeting 9-10 January 2007

2. Where We Fit SECNAV Secretary of the Navy CNO Chief of Naval Operations ASN(RDA) Assistant Secretary of the Navy for Research, Development and Acquisition NAVAIR Naval Air Systems Command NAVSEA Naval Sea Systems Command NAVSUP Naval Supply Systems Command NAVFAC Naval Facilities Engineering Command SPAWAR Space and Naval Warfare Systems Command NAVICP Naval Inventory Control Point Price Fighters

3. Price Fighters Mission To provide responsive, expert value analysis, technical assistance, and pricing validation support to buyers, managers, and users of equipment, material, services, supplies, spare parts, and weapon systems in an accurate, cost effective, and unbiased manner. Save Program Dollars

4. The MDAP Process A B C FOC IOC Operations & Support Concept Refinement MDAP Process Technology Development System Development & Demonstration Production & Deployment Design Readiness Review FRP Decision Review Concept Decision Price Fighters Services Negotiation Support Proposal Review Cost Estimating Site Visits Pre & Post Business Clearance • Should Cost • Business Case Analysis • Consulting Services Post Production Support Cost Estimating Techniques Analogy Parametric Engineering Actuals

5. Products & Services Providing expert, cost effective value analysis, technical assistance, and pricing validation support. Business Case Analysis (BCA) Cost Estimating Relationship (CER) Analysis Cost Analysis / Estimating Cost Modeling Cost Realism Studies ECP Evaluation In-Process Review (IPR) Litigation Support Negotiation Support Obsolescence Study Physical Configuration Audit (PCA) Pre-Award Survey Post-Production Support Price Challenge Hotline Process Improvement Studies Proposal Evaluation Repair Analysis Risk Analysis/Management Should Cost Analysis Source Selection Lean / Six Sigma Support Tech Data Package Adequacy Review Supporting Current & Future Readiness

6. Should Cost • Support spare parts buyers • Bottoms up, engineering based, cost analysis • Alternate sources of supply • Negotiation support

7. Should Cost Example • Tray, Conveyor Roller • NSN 2590-01-359-9278 • Application: Cargo Handling System • Quantity 3 units • Should Cost Price: Technical review developed • Proposed Price: $4,850.25 • Negotiated Price: $702.61 • Savings: $12,442.92 (86% reduction) • Resolution: Since this was an ESOC procurement, Price Fighters was requested to find an alternate source for this part as quickly as possible. Within two weeks, Price Fighters had found and received a quote from another source that was 86% lower than the original quote. • Case referred by: DSCC

8. Should Cost Example • Piston, Linear Actuator • NSN 1650-00-532-1805 • Application: C-130 Aircraft • Quantity 62 units • Should Cost Price: $2,313.47 • Proposed Price: $10,743.00 • Negotiated Price: $3,841.00 • Savings: $427,924.00 (64% reduction) • Resolution: Price Fighters developed a unique pricing analysis using the contractor rates and the labor and material from the Should Cost Analysis. The buyer utilized the analysis to negotiate a lower cost. • Case referred by: DSCR

9. Price Challenge Hotline • Prime venue for customer price challenges • Can lead to should costs • Over 129,000 inquiries • $846M in savings • $453K in awards Web Page: www.navsup.navy.mil, click on the “Challenge High Priced Parts” bulls-eye icon Phone:  1-800 NAV-CHAL (1-800 628-2425), Fax:  (757) 443-2019 Email: price.fighters@navy.mil

10. Price Challenge Hotline • Good Price Challenge Candidates • Appears overpriced • Consolidation of identical items • New commercial source

11. Price Challenge Hotline Example • Price Challenge from Patrol Squadron 64, Naval Air Station, Willow Road, PA • Nomenclature: Rigid Tubing Assembly • Challenged Price: $4,688.12 • Concerns: Price too high • Results: Found item overpriced, pursued refund • Cost Avoidance: $24,278.97 • Challenger’s Award: $1,425.00

12. PBL Support • IPT member • Assist in SOW development • BCA development • Analyze and verify data set • Populate BCA • Proposal review • Negotiations support • Total involvement from start to finish

13. PBL BCA Example • H-60 Tip-To-Tail Phase II BCA • Agreement with Maritime Helicopter Systems Company (MHSCo) and Naval Inventory Control Point Philadelphia. • Covered 458 individual parts applicable to the SH-60B, SH-60F, HH-60H, MH-60S, and MH-60R aircraft and focused on integrating 34 suppliers under one prime integrator. • The With-out PBL (traditional support): $258M • With PBL program cost were proposed as $241M • Potential Savings/Cost Avoidance of $17M over a 33 month period of performance.

14. Weapon Systems Support • Procurement Support / Cost Analysis • Supports Program Managers and Contracting • Proposal Evaluations • ECPs • Alpha Contracting • Source Selection

15. Results N-G Boeing Recent experience with many Primes, onUSN, USMC, USAF, USA, Joint projects

16. Patriot (PAC-3) Missile Customer: U. S. Army, Redstone Arsenal Project: Procurement of Patriot Advanced Capability (PAC-3) Missiles Effort: Supplemented Redstone Contracting team in review of contractor and major subcontractors including labor hours, material, and negotiation support Result: $56M savings and 4 additional missiles

17. Special Projects • Berry Amendment • Supporting DCMA on reviewing Corrective Action Plans and drafting Domestic Non-Availability Determinations • Bureau of Engraving and Printing • Supporting BEP on a $280M procurement of currency paper • Acquisition Quality Assessment Program and Intrinsic Value Analysis • Supporting NAVICP Contracting • Price analysis for active procurements • Sampling awarded procurements

18. Summary • High-Quality Engineering-Based Cost Analysis Services • Customer-Oriented • Outstanding ROI (current average 20:1) • Effective ISO-Certified QMS • Best Value • Services Easy To Obtain

19. Point of Contact Buster Jones Director, Price Fighters (757) 443-2468 DSN 646 willard.b.jones@navy.mil