Presented By: Marie Greening Leona Fitzpatrick

1. DCMA’s Strategic Plan - Achieving Contracting Performance Expectations & Partnering with Industry to Achieve Performance Goals Presented By: Marie Greening Leona Fitzpatrick Chief Operations Officer Operations Contracts Director October 29, 2013

2. Overview • DCMA Mission • DCMA Strategic Plan Highlights • Contracting Performance Measures • Why it’s important • Select DCMA Contracting Performance Indicator Achievements and Current State • Partnering for Success

3. Overview DCMA Mission We provide Contract Administration Services to the Department of Defense Acquisition Enterprise and its partners to ensure the delivery of quality procedures and service to the warfighter on time and on cost

4. Strategic Plan/Balanced Scorecard STRATEGIC ENDSTATES Acquisition Enterprise: DCMA’s acquisition customers receive excellent CAS and the management information needed to make sound business decisions. Policies and Processes: Effective policies and process standards are in place to support delivery of consistent and cost-effective CAS. Human Capital: A diverse, agile, high-performing workforce equipped with the competencies needed to execute current and future missions. Stewardship: An ethical organization with well-defined roles, responsibilities, infrastructure and management controls fully aligned to effectively and efficiently manage public resources.

5. Strategic Plan Implementation • Performance Management: • Integral component of DCMA’s strategic planning and management philosophy • Provides ability to track strategic initiatives, assess operations capability • Performance indicators are the foundation to assessing organization performance for DCMA processes and supplier performance

6. Contracting Performance Measures • Eighteen Performance Indicators in Eight Main Areas • Contract Closeout • Final Overhead Rates • Canceling Funds • Undefinitized Contract Actions • Forward Pricing Rate Agreements/Recommendations • Proposal Pricing • Contract Audit Follow Up • On Time Delivery

7. Why It’s Important • Each area represents financial interest to both government and contractor teams • $1.8B in Canceling Funds in FY 2013 • 55,000 overage contracts for closeout • Resolution of questioned costs on DCAA audits • Undefinitized Contracts Actions

8. Operations DirectorateContract Closeout: Timeliness Contract Closeout: Close 90% of Contracts within FAR Timeline P.I. #46 Data as of Sep 2013 Operations Directorate POC: Eugenia Vinson 8

9. Operations DirectorateContract Closeout: Timeliness FY 2010-FY 2013 Performance Indicator 46

10. Operations DirectorateContract Closeout: Overage OPERATIONS PERFORMANCE GRAPH Reduce the Number of Overage Contracts by 10% P.I. #47 Data as of Sep 2013 Operations Directorate POC: Marc Rabinowitz/Kerri Roberts 10

11. Operations DirectorateContract Closeout: Overage FY 2010-FY 2013 Performance Indicator 47

12. Current State • Contract Closeout • Approximately 48,000 overage contracts for closeout are coded as awaiting settlement of final overhead rates • Backlog has steadily grown over the last 4 years • DCAA is using a multipronged approach to address incurred cost backlog • DCMA is focused on ensuring contracts awaiting settlement of final overhead rates have all other action completed • Will expedite closeout when audits/rates are received • Partnering with AbilityOne to work closeout actions • DCMA Initiated Contract Closeout Blitz to focus on closing contracts within DCMA’s control • Fixed Price Contracts • Contracts coded as having a paid final voucher • “Reopened” contracts

13. Current State • Final Overhead Rates • Performance Indicator “reporting” has been suspended due to system interface issues between DCAA and DCMA • Information still flows over to DCMA, just not necessarily aligned to correct office for PI reporting purposes • DCMA system indicates over 20,000 open overhead years • DCAA increased the number of closed audits in FY 12 and FY 13 • DCMA systems tracks status/closure of ACO determined rates and DCAA audit determined rates • DCMA and DCAA are ensuring both agencies data is congruent to ensure all DCAA closed overhead years are accounted for by DCMA • Facilitates maximum number of closeouts • DCMA is partnering with DCAA to identify audits needed to close the most overage contracts

14. Operations DirectorateUCAs Definitized On-Time AQ – UCAs: Definitize 80% of UCAs within 180 days of order issuance or induction of asset P.I. #50 Operations Directorate POC: April Johnson Data as of September 2013 14

15. Operations UCAs Definitized (On Time) FY 2010-FY 2013 Performance Indicator 50 Percent • Definitize 80% of UCAs within 180 days of order issuance or induction of asset

16. Operations DirectorateUCAs Overage AQ – UCAs: Reduce Number of Overage UCAs by 10% P.I. #51 Operations Directorate POC: April Johnson Data as of September 2013 16

17. Operations UCAs (Overage) FY 2010-FY 2013 Performance Indicator 51 Number • Reduce Number of Overage UCAs by 10%

18. Current State • Undefinitzed Contract Actions (UCA) • Navy is largest customer delegating UCAs for issuance or definitization • In FY 13, there was an average of 1,435 UCAs on hand • 744 was typically overage • Main factors for exceeding the 180 days for definitization are • Non-Receipt of asset • Late receipt of proposal • Awaiting additional funds • Partnering with NAVSUP WSS to develop strategies to reduce overage backlog and improve timeliness • Establishment of priced long term agreements has been the most impactful

19. Operations DirectorateProposal Pricing AQ – Proposal Pricing: Ensure 90% of Pricing Reports Completed within 45 days or Other Mutually Agreed Upon Due Date P.I. #54 Operations Directorate POC: Erik Mims Alternate POC: Rosalind Lanham Data as of September 2013 19

20. Operations Proposal Pricing FY 2010-FY 2013 Performance Indicator 54 Percent • Ensure 90% of pricing reports completed within 45 days or other mutually agreed upon due date

21. Current State • Proposal Pricing • Over 300 Cost/Price Analysts have been added over the past 3-4 years • Cost Monitoring Program has been reinvigorated • Corporate Administrative Contracting Officers (ACO) and Divisional ACOs aligned into a Cost & Price Center • Integrated Cost Analysis Teams have been established at largest contractor facilities based on government sales • Combined Business and Technical focus on contractor pricing • Knowledge of cost models, cost estimating relationships, etc.

22. Current State • Forward Pricing Rate Agreements (FPRA)/Forward Pricing Rate Recommendation (FPRR) • Performance Indicator “reporting” has been suspended due to system issues • Majority of FRPA/FPRRs issued from DCMA Cost and Pricing Center • CACOs and DACOs reside in the Center • DCMA Operations Directorate has responsibility for remainder of FPRA/FPRRs • In FY 13, about 40% of all contractor divisions had FPRA coverage at one time or another • Majority had FPRR coverage at a minimum • Based on cost monitoring efforts, FPRAs have been pursued in advance of DCAA audit

23. Current State • On-time Delivery and Delinquency Reduction • Surveillance planning and contractor engagement at facilities (CAGEs) represents greatest potential to influence and provide positive results • DCMA Top 500 • Seeking total reduction in the volume of delinquent schedules across the board • Affects ability to process contracts 180 days past final delivery date • Focus on delinquent supply schedules greater than 1 year 23

24. On-Time Delivery Facilities (CAGEs) in the Top 500 Base of Influence Causal Factors: Actual delinquency Data discrepancy Unrealistic contract requirement 24

25. Past Due DelinquencyAll CAGEs 25

26. Partnering for Success • Submit adequate and timely incurred cost proposals • Pursue all contract closeout actions while awaiting final overhead rates • Submit final vouchers in a timely manner • Submit adequate and timely UCA proposals • Pursue long term agreements on repetitive repairs • Submit adequate and timely FPRA proposals • Know what DCMA says your on time delivery rate is