The National Defense Authorization Act for Fiscal Year 2017 (Public Law 114-328) was signed into law in late December. There are numerous sections of interest to our community. A few of these, taken from the summary of and/or language from S.2943 (pending future DoD implementation policy/guidance, of course), include:
· (Sec. 806) Revises requirements for the detection and avoidance of counterfeit electronic parts to require contractors and DOD to meet certain requirements using "suppliers that meet anti-counterfeiting requirements" rather than "trusted suppliers."
· (Sec. 812) Specifies that the Office of Cost Assessment and Program Evaluation (CAPE) conducts or approves independent cost estimates (ICEs) for all major defense acquisition programs and major automated information systems. Authorizes CAPE to approve ICEs conducted by the military departments. Requires CAPE to develop policies, procedures, guidance, and a collection method to ensure that acquisition cost data are collected in a standardized format that facilitates cost estimation and comparison across acquisition programs. Requires assessments of risk and potential consequences in ICEs, instead of the current reporting of confidence intervals
· (Sec. 814) Requires DOD to review the extent to which sustainment matters are considered in decisions related to the requirements, acquisition, cost estimating, and programming and budgeting processes for major defense acquisition programs.
· (Sec. 821) Expands the types of non-developmental items that may be considered commercial items to include items that the procuring agency determines were developed at private expense and sold in substantial quantities on a competitive basis to foreign governments.
· (Sec. 822) Requires DOD procurement officials to conduct or obtain market research when determining price reasonableness for commercial items.
· (Sec. 823) Permits contractors to submit information or analysis pertaining to the value of a commercial item when responding to solicitations. Permits contracting officers to consider value analysis, in addition to historic pricing data, when determining price reasonableness for commercial items.
· (Sec. 824) Expands DOD centralized records relating to commercial item determinations to include market research and price reasonableness analysis. Eliminates the requirement that the records be publicly accessible.
· (Sec. 825) Permits DOD to carry out a commercial solutions opening pilot program, under which innovative commercial items may be acquired through a competitive selection of proposals resulting from a general solicitation and the peer review of the proposals.
· (Sec. 834) Requires the Under Secretary of Defense for Acquisition, Technology, and Logistics to review the policy, guidance, regulations, and training related to specifications included in information technology acquisitions to ensure that current policies eliminate the unjustified use of potentially anti-competitive specifications.
· (Sec. 847) Specifies that it is DOD policy to avoid using lowest price technically acceptable source selection criteria in inappropriate circumstances that potentially deny DOD the benefits of cost and technical tradeoffs in the source selection process. Limits the use of lowest price technically acceptable source selection criteria to specified situations. Also requires DOD, to the maximum extent practicable, to avoid using lowest price technically acceptable source selection criteria when the procurement is predominately for the acquisition of information technology services, systems engineering and technical assistance services, audit or audit readiness services, or other knowledge-based professional services.
· (Sec. 875.) Use of commercial or non-Government standards in lieu of military specifications and standards, stating that “the Secretary of Defense shall ensure that the Department of Defense uses commercial or non-Government specifications and standards in lieu of military specifications and standards, including for procuring new systems, major modifications, upgrades to current systems, non-developmental and commercial items, and programs in all acquisition categories, unless no practical alternative exists to meet user needs. If it is not practicable to use a commercial or non-Government standard, a Government unique specification may be used.” In addition, subparagraph (f) states that “the Under Secretary of Defense for Acquisition, Technology, and Logistics shall negotiate licenses for standards to be used across the Department of Defense and shall maintain an inventory of such licenses that is accessible to other Department of Defense organizations.” (Note: See DFARS Case 2017-D014 for status of implementation of this section)
· (Sec. 883) Pilot Program for Distribution Support and Services. For Weapon Systems Contractors. The Secretary of Defense may carry out a six-year pilot program under which the Secretary may make available storage and distribution services support to a contractor in support of the performance by the contractor of a contract for the production, modification, maintenance, or repair of a weapon system that is entered into by the Department of Defense.
· (Sec. 901) Organization of the Office of the Secretary of Defense. Establishes new Under Secretary of Defense for Research and Engineering and Under Secretary of Defense for Acquisition and Sustainment positions.
· (Sec. 849) Improved Life-Cycle Cost Control. Among other provisions, creates new ‘section of 10 U.S.C. § 2441 entitled “Sustainment reviews.” Because of links to the existing 10 USC § 2337 Life Cycle Management & Product Support, one provision in particular to note is language that states:
‘‘(a) IN GENERAL.—The Secretary of each military department shall conduct a sustainment review of each major weapon system not later than five years after declaration of initial operational capability of a major defense acquisition program and throughout the life cycle of the weapon system to assess the product support strategy, performance, and operation and support costs of the weapon system. For any review after the first one, the Secretary concerned shall use availability and reliability thresholds and cost estimates as the basis for the circumstances that prompt such a review. The results of the sustainment review shall be documented in a memorandum by the relevant decision authority.
‘‘(b) ELEMENTS.—At a minimum, the review required under subsection (a) shall include the following elements:
‘‘(1) An independent cost estimate for the remainder of the life cycle of the program.
‘‘(2) A comparison of actual costs to the amount of funds budgeted and appropriated in the previous five years, and if funding shortfalls exist, an explanation of the implications on equipment availability.
‘‘(3) A comparison between the assumed and achieved system reliabilities.
‘‘(4) An analysis of the most cost-effective source of repairs and maintenance.
‘‘(5) An evaluation of the cost of consumables and depot level repairables.
‘‘(6) An evaluation of the costs of information technology, networks, computer hardware, and software maintenance and upgrades.
‘‘(7) As applicable, an assessment of the actual fuel efficiencies compared to the projected fuel efficiencies as demonstrated in tests or operations.
‘‘(8) As applicable, a comparison of actual manpower requirements to previous estimates.
‘‘(9) An analysis of whether accurate and complete data are being reported in the cost systems of the military department concerned, and if deficiencies exist, a plan to update the data and ensure accurate and complete data are submitted in the future.”
For those of you who are interested in better understanding the capabilities and areas of expertise of each of your organic DoD depots – or are perhaps interested in implementing, participating in, or leveraging public-private partnerships (PPP) – as a public service, encourage you to take a look at the current Service Designation of Centers of Industrial and Technical Excellence (CITE) memorandums on the Office of the Deputy Assistant Secretary of Defense for Maintenance Policy & Programs (MPP) website.
In direct support of 10 U.S. Code §2474. Centers of Industrial and Technical Excellence: designation; public-private partnerships statutory requirements, the individual Service memos can also be directly accessed at:
· Air Force Designation of Centers of Industrial and Technical Excellence (8 Jan 15)
· Army Designation of Centers of Industrial and Technical Excellence (11 Aug 14)
· Navy Designation of Centers of Industrial and Technical Excellence (1 May 14)
In a February 3, 2017 memo entitled “2017 Product Support Manager Workshop”, the Acting Assistant Secretary of Defense for Logistics and Materiel Readiness (L&MR) announced the 2017 Office of the Secretary of Defense Product Support Manager (PSM) Workshop, which is scheduled for June 6-8, 2017.
The 2017 PSM Workshop theme is “Product Support for the Capabilities of the Future” and will feature a range of government and industry presentations on Product Support as an Enabler of Capability Investment (Day 1), Product Support for New Capabilities (Day 2), and Product Support for Dual-Use, Rapidly Acquired Technology (Day 3). This Acquisition, Technology and Logistics (AT&L) approved Workshop will provide an opportunity to develop the workforce’s Life Cycle Logistics competency, share best practices, and strengthen collaboration between industry and government leaders. This year’s workshop will be the fifth Product Support Manager (PSM) Workshop conducted by the department since 2011.
Scheduled for three days, the 2017 PSM Workshop will be held at the General Jacob E. Smart Conference Center at Joint Base Andrews, Maryland beginning Tuesday, June 6, 2017, with check in starting at 7:30 am, and concluding at 11:45 am on Thursday, June 8, 2017. Service break-out sessions will be held immediately following the Workshop at 11:45 on Thursday, June 8, 2017.
Food options and light refreshments during the Workshop will be available for purchase with personal funds in advance on the registration website. For those outside the local area who cannot attend the Workshop, Video Teleconference Capability (VTC) will be available. Dial-in details and locations will be provided on the registration website.
Online registration for the 2017 PSM Workshop will be available beginning later this month through Friday, May 26, 2017. The agenda, directions, and other administrative information will be located on the same website. Briefing charts will be posted no later than Friday, June 2, 2017. Workshop attire is business causal and uniform of the day. For out-of-town attendees, on-site lodging within walking distance of the conference center is also available, including 75 rooms specifically reserved for this event.
Mark your calendars now. Further details, including the announcement memo and registration information will be available on the ODASD (Materiel Readiness) website and the DAU Logistics Community of Practice (LOG CoP) PSM Reference Repository. And of course, periodically check this LOG Blog for the latet information.
The U.S. Government Accountability Office (GAO) released a new report today of interest to our community entitled “GAO-17-82R Depot Maintenance: Executed Workload and Maintenance Operations at DOD Depots”.
In this report, the GAO indicated “from fiscal year 2012 through 2015, the workload executed across the military services’ depots fluctuated. For all four military services, the greatest decrease in depot maintenance workload occurred in fiscal year 2013, which officials attributed to sequestration. Specifically, in response to reduced funding levels, some military services deferred depot maintenance that had been planned for fiscal year 2013 to future years. The number of workload hours executed at Army and Marine Corps depots has generally declined over this time period as a result of a decrease in ground combat operations for the Army and Marine Corps, and is expected to decrease in the future, according to Army and Marine Corps officials. Workload hours executed at Air Force depots, according to Air Force officials, has fluctuated over this time period and is expected to increase in the future, as depots begin repairs on new systems, such as the F-35 and KC-46. Additionally, workload hours executed at Navy depots has generally increased over this time period and is expected to continue to rise, which the Navy attributed to reducing maintenance backlogs that have accumulated from over a decade of increased operations tempo.”
A new Change 2 to DoD Instruction 5000.02 Operation of the Defense Acquisition System issued today. Dated February 2, 2017, the primary change was the cancellation of Enclosure 12 “Acquisition of Defense Business Systems (DBS) to the instruction.
Concurrently, a new DoD Instruction 5000.75 Business Systems Requirements and Acquisition was also issued that “supersedes DoD Instruction (DoDI) 5000.02 for all business system acquisition programs that are not designated as a Major Defense Acquisition Program (MDAP) according to DoDI 5000.02”.
Additionally, DoD Chief Information Officer (DoD CIO) Memorandum, “Use of Enterprise Information Technology Standard Business Case Analysis,” October 23, 2014, for business systems was also cancelled by the February 2, 2017 issuance of the new DoDI 5000.75.
Details on the previous Change 1 to DOD Instruction 5000.02 are available in my January 30, 2017 blog post earlier this week entitled “Updated DoD Instruction 5000.02 Operation of the Defense Acquisition System.”
Just wanted to let the DoD life cycle logistics community, including our DoD Product Support Mangers (PSM), know that our Business, Cost Estimating and Financial Management colleagues here at DAU have recently launched a series of new training courses (BCF 131 Applied Cost Analysis and BCF 250 Applied Software Cost Estimating), and continuous learning modules (CLB 038 Comparative Analysis, CLB 039 Cost Estimation Terminology, and CLB 040 Should-cost Management). For those looking to broaden your understanding of the business, cost estimating or financial management arenas, as well those who are (or seeking to become) certified in multiple career fields, encourage you to check out these new DAU learning assets.
DOD issued an updated Change 1 to DoD Instruction 5000.02 Operation of the Defense Acquisition System on January 26, 2017.
IMPORTANT NOTE: DoD subsequently issued a Change 2 to DoD Instruction 5000.02 on February 2, 2017. See subsequent blog post entitled "New DoD Instruction 5000.02 (Change 2) and New DoD Instruction 5000.75 Business Systems Requirements and Acquisition" for additional details.
Change 1 updates are highlighted in red in the updated document. Key changes of potential interest to our community include:
· Page 1, under "Purpose", para 1.c. added and reads: "Assigns, reinforces, and prescribes procedures for acquisition responsibilities related to cybersecurity in the Defense Acquisition System” and para 1.d. which reads “Incorporates and cancels Directive-type Memorandum 17-001.”
· Page 2, under "Responsibilities," paragraphs 4(d), Secretaries of the Military Departments, and 4(e), Chiefs of the Military Services, have been added.
· Page 3, new Para 5.a.(2)(c) is added which reads “In accordance with Section 806 of Public Law 114-92, the Secretary of Defense may waive acquisition law or regulation to acquire a capability that would not otherwise be available to the DoD Components. This waiver authority may not be delegated.”
· Page 4, under "Program Decision Reviews and Milestones," para 4(g), is modified: "DAB review preparation will be streamlined and efficient...."
· Beginning on page 47, numerous modifications to the Tables in Enclosure 1, "Acquisition Program Categories and Compliance Requirements," to include Table 6, "Exceptions, Waivers, and Alternative Management and Reporting Requirements" beginning on page 71 and Table 8, "EVM Application Requirements" beginning on page 79. Table 9, "EVM Reporting Requirements," has been added on page 81.
· Page 60, Table 2 deletes the requirement for a Manpower Estimate (see updated information in Enclosure 7, Para 3.d. on page 132)
· Enclosure 2, Program Management, has many adds under Para 4, "Assignment of Program Managers," beginning on page 84.
· MOSA paragraph added in Enclosure 2 on page 88 (see also page 98-99 in Enclosure 3), and risk management section has been updated on page 89. Note “Open Systems Architectures” terminology is now “Modular Open Systems Approach (MOSA)”
· Enclosure 7, Para 3.d. on page 132 removes the requirement to report “the mix of military, DoD civilian, and contract support necessary to operate, maintain, and support (to include providing training) the system will be determined based on the manpower mix criteria” in a Manpower Estimate, stating “Manpower mix data will be reported to cost analysts and factored into the preparation of independent cost estimates and DoD Component cost estimates.” Additionally, the update deletes the former requirement that “The Manpower Estimate is approved by the DoD Component manpower authority and serves as the authoritative source for reporting manpower in other program documentation.”
· Enclosure 10, Para 6.a. on Page 145, majority of paragraph on “Multi-Year Procurement – Cost Analysis Requirements” has been updated and now reads “In accordance with 10 U.S.C. 2306b a multi-year procurement contract is a contract for the purchase of property for more than 1, but not more than 5, program years. Multi-year contracts in an amount equal to or greater than $500 million may not be entered into unless the contract is specifically authorized by law in an Act other than an appropriations Act. In accordance with 10 U.S.C. 2306b, when submitting a request for authorization for a multi-year contract, the Secretary of Defense must include in the request a report containing the preliminary findings of the DoD Component head regarding the following:…"
· Beginning on Page 152, Enclosure on Acquisition of Defense Business Systems (DBS) (Enclosure 12), has been completely rewritten
· Beginning on Page 160, Rapid Fielding of Capabilities now called Urgent Capability Acquisition (Enclosure 13)
· Beginning on Page 170, new “Cybersecurity in the Defense Acquisition System” enclosure (Enclosure 14)
Life Cycle Sustainment and Product Support
· Enclosure 6, Para 2.a.(2) (page 126) Added “…as part of the program’s plan to prevent the acquisition of counterfeit material in the DoD supply chain as required by DoD Instruction 4140.67” to existing paragraph “Ensure identification of obsolete parts in specifications and develop plans for suitable replacements in accordance with P.L. 113-66, section 803…”
· Enclosure 6, Para 2.b.(4) (page 127) Added “Ensure Program Managers responsible for renewal of sustainment contracts that include public-private partnerships with DoD maintenance depots will include the use of Defense Logistics Agency (DLA) storage and distribution capacity in the terms of renewal public-private partnership arrangements and negotiate the transfer of government-owned inventory from commercial to DLA facilities, as specified in the arrangement.”
· Enclosure 6, Para 3.d.(2) (page 129) Added “Program plans will include the use of DLA-operated storage and distribution facilities where collocated with the DoD Component’s selection of organic depot maintenance.”
To better convey the purpose and capabilities of an existing DAU learning asset, we have redeployed what was previously designated the “Product Support Manager (PSM) Toolkit” as the more appropriately named “Product Support Strategy Development Tool.”
This updated job support tool provides detailed, step-by-step information related to the time-tested 12-Step DoD Product Support Strategy Process Model outlined in both the DoD Product Support Manager (PSM) Guidebook, and the DoD Performance Based Logistics (PBL) Guidebook. The tool also directly supports the Product Support Management Business Model (PSBM), as well as the processes and desired outcomes outlined in both the DoD Product Support Business Case Analysis (BCA) Guidebook and the DoD O&S Cost Management Guidebook.
The 12-step DoD Product Support Strategy Process Model is also extensively used in both our LOG 235 Performance Based Logistics distance learning and LOG 340 Life Cycle Product Support classroom courses.
Earlier this month, the Undersecretary of Defense for Acquisition, Technology and Logistics (AT&L) signed out an updated January 2017 version of the “Department of Defense Risk, Issue, and Opportunity Management Guide for Defense Acquisition Programs.” According to the Undersecretary in his cover memo, “the guide provides practical advice to programs as they work to identify, analyze, and manage risks, issues, and opportunities.”
Additionally, the document goes on to say “this guide seeks to advance the ability of DoD programs to plan for and manage risks, issues, and opportunities. The quality of thinking and judgment applied to these areas often will determine whether a program meets its objectives throughout the life cycle. Managing these areas requires strategic thinking and begins with early decisions on program structure that take into account the program’s unique uncertainties and risks. The analysis and informed judgment needed to identify and control risk are fundamental to effective program planning and management.”
To clarify the meaning of the three key terms, “for the purposes of this guide, the terms risk, issue, and opportunity are defined as follows:
· Risks are potential future events or conditions that may have a negative effect on achieving program objectives for cost, schedule, and performance. Risks are defined by (1) the probability (greater than 0, less than 1) of an undesired event or condition and (2) the consequences, impact, or severity of the undesired event, were it to occur.
· Issues are events or conditions with negative effect that have occurred (such as realized risks) or are certain to occur (probability of 1) that should be addressed.
· Opportunities have potential future benefits to the program’s cost, schedule, and/or performance baseline.”
Wanted to let the life cycle logistics community know that the DAU Performance Learning Team this week launched an important new DAU Knowledge Repository (KR) capability for the Defense Acquisition Workforce (DAW).
Several years in the making, this new site provides a central repository of pertinent and valuable information/resources that directly support the DAW. In addition to free, unlimited access to a wide range of databases, publications and resources like the Harvard Business Review and ProQuest Dissertations & Theses Global, the site provides access to company profiles, market research reports and even unique tools such as Major Defense Acquisition Program (MDAP) guides that provide timely information on 155 MDAP programs. The new website also includes archives, articles, book summaries, data, dissertations, eBooks, news, papers, profiles, reports, speeches, theses, videos, and more. These assets have been specifically selected for their value to the defense acquisition workforce – both in accomplishing your job and helping you expand your “situational awareness” of today’s complex acquisition environment.
Intended to augment, support, and reinforce the extensive resources already available from existing Acquisition Community Connection (ACC) Communities of Practice, the Defense Acquisition Portal (DAP), and ACQuipedia, this new DAU KR website provides workforce members with access to 33 separate databases that capture important features of the defense acquisition domain -- both inside and outside of .mil -- including licensed subscriptions from EBSCOhost, ProQuest, Defense Daily, and GALE. The website also offers a federated searching capability through ProQuest “Summon” that enables the user to conduct a “one-stop” search of all these resources.
In addition, three of KR’s own products are also featured on this website:
· MDAP Guides – providing concise and comprehensive information on each of 155 major programs
· DoD Agencies/Cyber Agencies Visualizers – providing deep situational awareness across a multitude of sources
· Additional KR-produced products scheduled to be rolled out later this year.
Moreover, several additional “assets of note” include:
· Over 310,000 eBooks on a wide variety of professional topics
· The Harvard Business Publishing products suite, including the Harvard Business Review and Harvard Business Videos
· ProQuest Dissertations & Theses Global
· EBSCOhost’s Company Profiles / Company Information ProQuest’s Hoover’s Company Records / Market Research Reports
The DAU KR team is confident that the DAW will find what they need to know (and also, what they didn’t know they needed) in the new website. In addition to the website’s embedded resources, the expertise of the DAU Knowledge Repository librarians can be reached via a simple query using a readily available Ask-a-Librarian request form.
Access for authorized government (civilian and military) members of the Defense Acquisition Workforce (DAW) is available by logging in to the DAU Knowledge Repository (KR) with a DoD CAC or Single Sign On (SSO) username and password.
Did you know that the US Government Accountability Office (GAO) maintains a “Key Issues” website, and that it contains a section entitled “Best Practices and Leading Practices in Acquisition Management”?
According to the GAO, “with hundreds of billions of tax dollars spent each year on goods and services, it is essential that federal acquisition be managed in an efficient and effective manner. Our work has shown that four interrelated elements promote an efficient and accountable acquisition environment and process: 1) Organizational Alignment and Leadership, 2) Policies and Processes, 3) Human Capital's Acquisition Workforce and 4) Knowledge and Information Management.” For additional details, check out the GAO Best Practices and Leading Practices in Acquisition Management website.
The U.S. Government Accountability Office (GAO) issued a new Report to Congress this week entitled “The Nation's Fiscal Health: Action is Needed to Address the Federal Government's Fiscal Future (GAO-17-237SP)”. The report summary is as sobering as it is concise: "The federal government is on an unsustainable fiscal path.” The report from the independent, nonpartisan agency goes on to state that “federal spending continues to outpace revenue—by $587 billion in 2016—and, absent policy changes, the structural gap between revenues and spending puts the federal government on an unsustainable long-term fiscal path. Federal policymakers face economic, security, and social challenges requiring difficult policy choices, but a long-term fiscal plan is also needed to preserve flexibility to address unforeseen events."
The DAU Life Cycle Logistics team this past week launched our 114th and 115th ACQuipedia articles bringing the total number of articles across all functional areas to 393. The first new article, entitled “U.S. Transportation Command (USTRANSCOM)", in addition to providing a brief overview of USTRANSCOM, provides links to key policy, guidance, references, and related websites. The second new article, entitled "Government-Industry Data Exchange Program (GIDEP)", provides an overview of GIDEP, its purpose, and how it plays a key role in DoD Diminishing Manufacturing Sources and Material Shortages (DMSMS) mitigation and Counterfeit Parts prevention, among many other capabilities.
Encourage you to check out both of these new ACQuipedia articles!
In a recently-released January 2017 report entitled “The Government We Need: How Proven Technology Solutions Can Save Taxpayers More Than $1 Trillion Over A Decade While Enabling More Effective Government”, the private-sector Technology CEO Council (TCC) identified, among a range of recommendations, federal supply chain, acquisition, and energy use as three process areas which could potentially deliver substantial cost reductions over the next decade.
Stating, “…supply chain management presents a particularly impactful cost reduction opportunity. Smarter spending, network optimization, transportation analytics, inventory optimization and demand-reduction efforts have proven to be effective means to reduce supplier spending, improve mission outcomes and minimize operational costs in large commercial entities and, to a smaller degree, within the federal government…,” the report goes on to recommend “(optimization) of the federal supply chain and federal procurement processes, which has the potential to unlock substantial savings across the federal government, while enabling better, more reliable and more timely delivery of goods and services.”
Note that linking to this report does not necessarily imply endorsement, but rather serves as an opportunity to share ideas related to potential product and process improvements. So what do you think? Do the authors lay out a compelling case for recommendations outlined in this report?
During his tenure as Undersecretary of Defense for Acquisition, Technology and Logistics (AT&L), the Honorable Frank Kendall made a point of authoring an article for each issue of the Defense AT&L Magazine “…on some aspect of the work we do”. In so doing, his stated “goal was to communicate to the total acquisition work force more clearly, directly, and personally than official documents, my intentions on acquisition policy, or my thoughts and guidance on the events we were experiencing.”
Recognizing “…there might be some utility in organizing this body of work into a single product…” the Undersecretary continues “… I developed what I hoped would be a logical organization for the articles and started to write some of the connecting prose that would tie them together and offer some context. In doing this I realized that there were some other written communications I had used that would add to the completeness of the picture I was trying to paint, so these items were added as well….I have dedicated this book to you, the people who work tirelessly and professionally to make our military the most capable in the world every single day. You do a great job, and it has been a true honor to be a member of this team again for the past seven years.”
Entitled “Getting Defense Acquisition Right” the Undersecretary's acquisition insights and perspectives are hosted on both the Defense Acquisition Portal and the Acquisition Professional Reading Program websites.
The Undersecretary will also share thoughts and perspectives at a Center for Strategic & International Studies (CSIS) Getting Acquisition Right: Remarks from Under Secretary of Defense Frank Kendall forum Tuesday January 17, 2017 from 3:00-5:00 pm EST.
DAU is pleased to announce the upcoming “DAU South Annual Acquisition Update" at our Huntsville campus (with select online attendance options) on Thursday, Feb. 23, 2017.
Defeating a determined and adaptive enemy requires the ability to innovatively overcome challenges, think critically and work with diverse teams across the globe. During this year's event, DAU subject matter experts and acquisitions professionals from the government and industry will present training seminars and special presentations to help you develop skills in problem solving, critical thinking and leadership. Participants will receive 1.5 Continuous Learning Points for each session completed.
Prospective attendees can register at the 2017 DAU South Acquisition Update website; however keep in mind that space at the event is limited and last year's event "sold out." The registration website has all of the information you need to plan for and attend this no-cost event.
The Undersecretary of Defense for Acquisition, Technology and Logistics (AT&L) yesterday issued an important new Directive Type Memorandum (DTM) 17-001 "Cybersecurity in the Defense Acquisition System".
Important Note: This DTM was subsequently cancelled and replaced by the January 26, 2017 Change 1 update to DoD Instruction 5000.02, which includes a new Enclosure 14 "Cybersecurity in the Defense Acquisition System".
All defense acquisition workforce members should take the time to read through and understand the requirements outlined in this important new document. From a product support and sustainment perspective, there are numerous requirements that address logistics, maintenance, and training systems, as well as Diminishing Manufacturing Sources and Materiel Shortages (DMSMS), Supply Chain Risk Management (SCRM), and counterfeits of critical components. Several key provisions (among others) for both life cycle logistics workforce members and DoD Product Support Managers (PSM) to take note of:
· Para 3.b.(1) “Program Managers (PM) will…derive cybersecurity and other system requirements into system performance specifications and product support needs (emphasis added)…”
· Para 3.e.(2) "Plan, define, and document roles and responsibilities in the appropriate logistics documentation, (e.g., software support plan, operational technical manuals, planned maintenance support), for monitoring, maintaining, and reassessing cybersecurity and related program security risks as it relates to in-service usage, problem reports, configuration management, patch management, plan for Diminishing Manufacturing Sources and Materiel Shortages, and SCRM, to include counterfeits of critical components….”
· Para 4.b.(2) “After the full rate production or full deployment decision, the Program Protection Plan (PPP) will transition to the PM responsible for system sustainment and disposal.
· Para 4.f. f. Operations and Support Phase. During the operations and support phase, PMs will:
(1) Request cyber threat information on threats targeting program information and systems in operation from DIA or DoD Component intelligence and counterintelligence activities and make use of updated threat assessments to inform impact to operational systems, technology refresh and disposal plans.
(2) Protect digitized program and system information, Critical Program Information (CPI), and system from adversary targeting during fielding and sustainment activities such as maintenance, training and operational exercises.
(3) Protect support systems and system spares from impairing cyber threats mission critical system functions.
(4) Respond to vulnerability alerts and apply security patches promptly.
(5) Periodically assess cybersecurity and other program security risks during system upgrades (e.g., technology refresh, modifications, engineering changes or future increments).
(6) Update all aspects of program protection planning for the program and the system as cyber threats and systems evolve.
(7) Before system disposal, remove all CPI and system data.
In a December 15, 2016 memo entitled “Terms of Reference – Survivable Logistics”, the Undersecretary of Defense for Acquisition Technology and Logistics (AT&L) tasked the Defense Science Board (DSB) to conduct a study to “evaluate the implications of the current threats to the DOD Logistics enterprise, develop concepts to mitigate these threats, and make prioritized actionable recommendations for steps that will reduce the most significant vulnerabilities.”
The memo reiterates that “logistics is an area of critical importance to the Department of Defense (DoD)” and that “logistics operations have several potential challenges and vulnerabilities”, including: lack of secure rear areas to provide logistics support, reliance on forward logistics support from contractors, threat of cyberattacks against key Logistics Information Systems, potential vulnerability of mobility assets, forwarded-deployed stock, ports, assembly areas and lines of communication, and limitations on interoperability and capability of joint logistics information systems.
If you have a moment, might suggest checking out last week's January 5, 2017 Chief Learning Officer® article entitled “New Year Learning & Development (L&D) Resolution? Align L&D with the Business” which profiles award-winning initiatives the Defense Acquisition University (DAU) has undertaken in “strengthening alignment of learning content with the Department of Defense’s strategic goals.”
Another excellent resource for the life cycle logistics and product support community -- not to mention the systems/sustaining engineering and test & evaluation (T&E) communities -- is the US Army Materiel Systems Analysis Activity (AMSAA) Center for Reliability Growth (CRG). According to their website, "the Center for Reliability Growth (CRG) is a joint AMSAA-AEC partnership that works towards improving reliability by providing policy, guidance, standards, methods, tools, and training. In doing so, reliability, materiel/operational availability, and initial operational testing success rates can be increased while support costs and logistics footprint are decreased."
Additionally, “the CRG maintains a collection of key reliability tools, models, and documents. By capturing and archiving actual test metrics/data, the models and tools are validated and improved. The CRG also applies resources to perform reliability or physics-of-failure analyses for select high-impact projects. Additionally, the CRG develops contract language, methodology, policy, and military handbooks & standards. The CRG allows for return on investment, reduced test time, and reduced O&S cost through the use of design-for-reliability activities.”
As a side-note, the AMSAA Center for Reliability Growth (CRG) is also directly accessible from the Army’s excellent Acquisition Lessons Learned Portal (ALLP). The ALLP does require CAC card for access. If you are not already a registered user, encourage you to consider signing up. While the ALLP is an Army site, as you might expect, many of the acquisition lessons learned discussed on the site have implications or potential benefits to acquisition professionals across the DoD.
Hot off the press, the new January-February 2017 edition of Defense AT&L Magazine is now available!
Following on the heels of our special November-December 2016 issue (which had focused on the topic of Additive Manufacturing (3D Printing)), this new issue tackles a wide range of topics with articles that include:
· From the Under Secretary of Defense for Acquisition, Technology, and Logistics: Adventures in Defense Acquisition
· Stakeholder and Process Alignment – In Navy Installation Technology Transitions – Technology Transition Programs (TTPs_ are important tools for facilitating technology transfer from science and technology development to DoD operational adoption.
· Bridging the “Valley of Death” - The U.S. Special Operations Command has developed a new methodology to facilitate technology transition that other acquisition organizations might consider using.
· EVM System’s High Cost —Fact or Fiction? - It has been suggested that the government can do away with EVMS in favor of more efficient and affordable management techniques. Is there a basis for this?
· A Practical PM Guide to Requests for Equitable Adjustment - A Request for Equitable Adjustment resulted from a technical disagreement between the contractor and the government about how much in-scope testing was required to properly resolve a spacecraft test fault. The contractor persistently brought up the issue.
· Getting the Capabilities Right —The Next Generation of Air Force CBRN Protection - Bulky and thermally burdensome chemical, biological, radiological and nuclear protective garments have become the norm, along with protective masks that greatly restrict vision and head mobility.
· The Seven Lethal Acquisition Diseases - Poor team behaviors that should be avoided are one of the seven lethal acquisition diseases. High-performing teams provide potential remedies.
· Requirements Management —The Need to Overhaul JCIDS - Two pieces of the “big ‘A’ ” acquisition process—the requirements and the financial systems—have received less congressional attention than the Defense Acquisition System. Yet these processes have contributed to continuing poor acquisition results in various areas.
· Take a Deep Dive with DAU - The Kind We Offer Is Safe and Sure to Keep You Dry - As part of its Mission Assistance program, DAU has conducted deep dives for more than a decade. These in-depth analyses of our customers’ organizations facilitate understanding the inherent challenges (and the root causes thereof).
· Redefining the “Can Do” Attitude —The Language of a Critical Thinking Culture - Sticking with existing procedures, come what may, a reluctance to question authority, and buying into “group mentality” are all contributors to potential disasters. Critical thinking and risk management require taking a fresh look at habitual patterns and developing an openness to new approaches.
· Auditing Organizational Security - Commands that cannot carry out their operations in a self-imposed and self-monitored secure environment may, at best, cease to be effective or, at worst, cease to exist. The same, certain fate befalls private enterprises that cannot maintain operational effectiveness, profitability or product superiority—except it happens faster.
· OSD Logistics Fellowship—A View From Above - The OSD Logistics Fellows Program is open to field grade officer (04-05) and DoD civilian equivalent (GS 13-14) logisticians. Fellows have the unique opportunity to participate in policy formulation and DoD-wide oversight responsibilities. Selection for the 2017-2018 Fellowship Program begins in January.
Encourage you to check it out – wide range of interesting, applicable, and thought-provoking artiucles from a range of authors and functional backgrounds. Of particular interest is the last article on the list entitled “OSD Logistics Fellowship—A View From Above”, which not only applies specifically to our life cycle logistics functional community, but also ties back to a recent blog post entitled “Office of the Secretary of Defense 2017-2018 Logistics Fellows Program." And there’s still time to apply for those who might be interested!
Wanted to let the life cycle logistics, product support and sustainment communities know that our contracting colleagues here at DAU have deployed a new continuous learning mode entitled CLC 135 Understanding Incentive and Other Contract Types. According to the DAU iCatalog overview, this new module “provides acquisition professionals with the information necessary to align contract type and incentives with acquisition outcomes.”
Details from the module developer here at DAU provide some additional background and perspectives: “Defense Procurement and Acquisition Policy (DPAP) issued a guide entitled “Guidance on Using Incentive and Other Contract Types” to the acquisition workforce on 1 April 2016. This guidance was developed as an element of the Under Secretary of Defense, Acquisition, Technology and Logistics (USD AT&L) Better Buying Power (BBP) 3.0 – Achieving Dominant Capabilities through Technical Excellence and Innovation initiative. The analysis behind the 2014 and 2015 Annual Report on the Performance of the Defense Acquisition System demonstrated that the use of Cost-Plus Incentive Fee (CPIF) and Fixed Price Incentive Firm Target (FPIF) contracts was highly correlated with programs that achieved better cost and schedule performance outcomes. Therefore, the preference is to employ these contract types when they are appropriate.
CLC 135 provides information, illustrations, and examples of the appropriate use of contract types to incentivize contractors. CLC 135 is the first of two contracting continuous learning modules that will address this topic (the other will be a new CLC 137 “Advanced Issues in Incentive Contracting” (currently in development and slated to deploy later this spring. CLC 135 covers basic concepts contained in the guide (pp. 4-29 and 40-42), including:
· Describe conditions for use of the different contract types
· Differentiate between pre-determined formula-type incentives and award fee incentives
· Differentiate between incentives placed on fixed price and cost reimbursement type contracts
· Describe the three types of incentives: cost, delivery and technical
· Describe conditions for use of the different fixed price contract types, emphasizing the geometry and enforceability of the Fixed Price Incentive Firm (FPIF) Target contract type.
· Describe conditions for use of the different cost reimbursement contract types.
See also a subsequent Contracting Blog post entitled “CLC 135 Understanding Incentive and Other Contract Types” on this subject. Additionally, check out two related ACQuipedia articles, namely the
Looking for a handy overview of DoD maintenance-related information? If so, look no further than the excellent DoD Maintenance 2016 Fact Book available from the Office of the Deputy Assistant Secretary of Defense for Maintenance Policy & Programs (MPP).
According to the OSD website, “this FY2016 DoD Maintenance Fact Book outlines the cost and scope of maintenance as well as the people, organizations, and locations performing maintenance. It also contains information about DoD maintenance capabilities and programs across major depots and shipyards, as well as intermediate and organizational level maintenance units throughout the world. This 2016 Fact Book identifies current and past winners of the Phoenix Award, the Secretary of Defense Award for Field-Level Maintenance, the Robert T. Mason Award for Depot Maintenance Excellence, and the Excellence in Maintenance Training, Advice, and Assistance of Foreign Security Forces.”
If you were not already aware of the Assistant Secretary of the Air Force for Acquisition (SAF/AQ) “Transformational Innovation” website, encourage you to check it out. The site contains insights and information on a range of innovation initiatives and projects, as well as links to a range of related transformational strategies including Bending the Cost Curve (BTCC).
As the year winds down, permit me to offer a few thoughts.
Today’s blog will be the final post of the year. Looking forward to re-engaging with you in 2017.
Thank you for all you do. It matters.
Thank you to our Soldiers, Sailors, Airmen, Marines and Coastguardsmen. They matter.
Thank you for your professionalism, expertise, commitment, and service to this great nation of ours.
Wishing you each a healthy, safe, and joyous holiday season.
For those of you engaged in DoD Supply Chain Management (SCM) in general and Supply Chain Risk Management (SCRM) in particular, you might be interested in knowing about an upcoming no-cost Supply Chain Workshop sponsored by the National Defense Industrial Association (NDIA). The workshop is scheduled for February 28, 2017 in Washington, D.C.
The Department of Defense is currently soliciting nominations for the Office of the Secretary of Defense (OSD) 2017-18 Logistics Fellows Program, which will commence in July 2017. The Logistics Fellows Program is a year-long, hands-on leadership and management development program under the direction of the Assistant Secretary of Defense for Logistics & Materiel Readiness. It is designed to enhance the career development of selected mid-level logistics professionals in military grades 0-4 to 0-5 and civilian grades GS-13/-14 and equivalent who have demonstrated significant potential for advancement in the logistics career field. Nominations are due by January 30, 2017 and must be accompanied by a letter of endorsement from the nominating Service 4 at the GO/FO/SES level. This year, in addition to competing for Logistics Fellows positions in the Offices of the Deputy Assistant Secretary of Defense for Supply Chain Integration (SCI), Maintenance Policy (MP) and Transportation Policy (TP), the Office of the Depot Assistant Secretary of Defense for Materiel Readiness (MR) has also been added.
Details about the program are available on the ODASD Transportation Policy website. We have also posted a copy of the new Assistant Secretary of Defense for Logistics and Materiel Readiness memo announcing the Office of the Secretary of Defense (OSD) 2017-18 Logistics Fellows Program on the DAU Logistics Community of Practice (LOG CoP) Professional Development site.
See also a September 2016 article entitled “The Office of the Secretary of Defense (OSD) Logistics Fellows Program” for additional perspectives from a previous graduate of the program.
In addition to recent announcement for the annual DoD Product Support Manager’s (PSM) Workshop (scheduled for June 6-8, 2017), here's another opportunity mark your calendars with another “save the date”. DAU will be hosting the DAU Acquisition Training Symposium on Tuesday, April 4, 2017 at our DAU Fort Belvoir Campus. The theme of this year's annual training and learning event (hosted and sponsored by the DAU, and presented to Government and industry acquisition professionals with the co-sponsorship and support of the DAU Alumni Association), is “The Future of Defense Acquisition – Improvement from Within!’
Appendix A of the DoD Performance Based Logistics (PBL) Guidebook provides defense acquisition workforce members a concise laydown of the key tenets of successful PBL product support arrangements. Among these primary characteristics intended to drive optimal outcomes, tenet #3 is to “provide significant incentives to the support provider that are tied to the achievement of outcomes (for aspects of performance that are within their control).”
The PBL Guidebook goes on to state that “an incentive is anything that encourages or motivates somebody to do something. With respect to PBL arrangements, it is any term or condition that encourages the desired product support integrator and/or provider behavior to deliver the relevant Warfighter outcome (for aspects of performance that are within their control). The incentive may be related to contract type, contract length, or incentive fees (or penalties). A FFP contract provides the strongest incentive for the provider to control costs. However, FFP contracts do not share these savings with the Government, and without additional mechanisms (e.g., Contract Data Requirements Lists (CDRLs)), they do not provide the information needed by the Government to understand actual costs for negotiations on future PBL contracts. Another powerful incentive is the ability to receive extensions to the duration of the contract (award term) with good performance. This provides stability to the provider’s order book and adds shareholder value. Incentives that focus on profit may not be applicable for public facilities, but increased percentage of available workload, promotions, bonuses, and spot awards are all possible incentives along with the desire to positively impact Warfighter outcomes. Whatever form the incentive takes, it should be sufficient to ensure the desired behavior and outcome over a range of conditions.”
The principles outlined here for the use of “significant incentives” or incentivizing performance in general is a subject that we expanded on in an ACQuipedia article deployed earlier this year entitled “Incentives - Motivating Achievement of Desired Product Support Outcomes.” Clearly this topic is of interest to the defense acquisition workforce, as the article has seen over 2,000 page views in its first ten months since publication.
Speaking of incentives, I recently observed an interesting non-DoD idea to motivate desired behaviors. This "win-win" approach illustrates use of positive incentives designed to facilitate desired outcomes on the part of two parties who might otherwise risk being forced into a less than satisfying win-lose outcome. For those who may have traveled recently and participate in an unnamed lodging chain’s rewards program, you may have been offered the option of foregoing housekeeping services for one or more days during your stay in return for earning reward points for each day you do not receive those services.
Why is this intriguing? The customer has the ability to chose whether to participate -- and for how long. Both parties have the option to opt out. There is no undue pressure, or sense something they once provided has been lost. The hotel chain seeks to incentivize guests to help them reduce their labor and utility costs. The guest (only if they choose to accept the opportunity) assumes responsibility for reusing their towels, not having their rooms cleaned for one or more days. This means the hotel does not have to have housekeepers make beds, change sheets, vacuum the floors, or take the trash out. Either the guest takes care of these things -- or these tasks are simply not done. The responsibility, the decision, and any potential inconvenience is shifted to the guest. The guest in turn is rewarded for each day they opt not to avail themselves of housekeeping services.
The hotel benefits by reducing their costs and housekeeping requirements. The guest benefits (if they choose to accept it) by earning points that can be redeemed for future rewards. Akin to self-service checkout aisles in a grocery store, pumping your own gasoline, or making a withdrawal from an ATM machine, the onus is shifted to the customer to do for themselves what the store, gasoline station, bank, or in this case, hotel, once did for them – while retaining a full service option if they so desire.
Interestingly enough, rather than live in a 'pigsty', the guest may actually be motivated to take care of these tasks as if they were at home (illustrating “ if you wouldn’t do something like leaving trash or towels on the floor at home, why would you do it on travel?). This provides an interesting counterpoint to the old expression most frequently attributed to Tom Peters and Air Force General Wilbur “Bill” Creech) that “nobody ever washes a rental car”. Desired behaviors are incentivized. Both parties are encouraged to work together. Both parties have the potential to benefit. Both parties have a stake in the transaction. Both parties take ownership and responsibility. Both parties have the ability to choose to participate. Both parties seek a positive outcome.
Flip side would be the win-lose model, where instead of a positive incentive or a reward (e.g., carrots), the hotel leverages negative incentives (e.g., sticks) such as imposing a “housekeeping fee” – in essence charging guests an additional fee to clean their room (for some reason, airline baggage fees come to mind). While his scenario might facilitate desired behaviors, the penalty approach also risks transforming what had been a win-win approach into win-lose arrangement. Longer-term, the provider (hotel) risks their customer viewing the transaction (and the organization itself) in a negative light, not to mention potential for decreased customer satisfaction, adverse impact on past performance assessment, and gradual erosion of their customer base.
What do you think? Which approach delivers better results? Which is more effective? Achieves desired outcomes? Delivers enhanced performance? Reduced costs? Satisfied customers? Satisfied providers? Potential for repeat customers? Long-term relationships? Positive feedback? Are there potential unintended consequences or second and third order effects? Are there third parties (such as the housekeeping staff) affected by such incentives?
And just as importantly, are there lessons here that could be applied to performance-based DoD product support arrangements? What conclusions could we in the life cycle logistics and defense product support arena draw from this simple, yet potentially powerful illustration of incentives in action?
Entirely coincidental to the recent issuance of a new DoD Instruction 4151.21 Public-Private Partnerships for Product Support or the updated The DoD Public-Private Partnerships for Sustainment Guidebook, the International Organization for Standards (ISO) is preparing to issue a new ISO 44001 International Standard for Collaborative Business Relationships in February 2017. Details in an Insight into ISO 44001. Although there is not currently an official DoD adoption notice on the ASSIST Quick Search website, cognizance of this new standard may potentially prove useful to organizations engaging in these types of collaborative partnering arrangements in the future.