Headquarters U.S. Air Force
Integrity - Service - Excellence
Services Acquisition…
Going the Last Mile
Mr Randall Culpepper
Deputy Program Executive Officer
for Combat & Mission Support
11 Mar 2011
Overview

Debt Clock

What’s new
 PEO/CM Mission, Organization and Processes
 In Washington – Dr Carter’s Initiatives
 In Services Tools and Techniques

Observations

What’s Still Important

Lessons Learned/Success Stories
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What’s New?
PEO/CM MISSION, ORGANIZATION
AND PROCESSES
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PEO/CM Mission
Manage and oversee the acquisition and delivery of Air
Force operational and mission support services for
today’s warfighter.
•Services $100M to $1B and A-76 actions >300 FTE
•SAF/AQ delegations > $1B
•Service Requirements Validation
•Acquisition: Plan, Select, Execute
Pre and Post Award Programs (as of 7 June 10)
187 Acquisitions Valued at $184 BILLION
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Proposed New PEO/CM Mission
Provide executive management and oversight for the
acquisition and delivery of Air Force operational and
mission support services for today’s warfighter.
• Set Air Force Services Acquisition Governance/Policy
• Provide AF Services Acquisition Strategic Messaging
• Plan for/Select/Execute Service Acq efforts >$100M (or $250M)
• Require Service Acquisition Reporting and Conduct Analysis
• Facilitate Service Requirements Validation Coordination
183 Acquisitions Valued at $185.8 BILLION
As of 5 Jan 11
Integrity - Service - Excellence
Service Acquisition
Universe
Expanded
focus FY11
and beyond
Service Acq
<$100M
PEO Sustainment
Programs
PEO A&AS
ALC
Sustainment
Programs
Non-AFMC
MAJCOMs
and AF-Wide
Programs
Integrity - Service - Excellence
AFPEO/CM
focus through
FY10
PEO/CM Organization
Program Executive Officer
Combat and Mission Support
Legal
Brig Gen Wendy Masiello – PEO
Mr Randall Culpepper – Deputy
Ms Bachman
Ms Mailman
Ms Bernstein
Adding –
Capt Burton – Executive Officer
Ms. Ramirez – Exec Admin Assistant
Action Group,
Operations, Policy & Process Team
Market Intelligence
Training & Certification
Operations Analysis
AFMC Weapons
Sustainment & Support
Acquisition Team
Lt Col Lomelin
Mr Champlin (inbound)
Mr Braden
Ms Desaussure
Admin
TSgt Holland
Vacant
Lt Col Cameron
Mr. Pickham
Ms Santens (ktr)
Vacant
Mr Smith (ktr)
Vacant (ktr)
AETC, AMC, PACAF, AFGSC
Acquisition Team
Mr Brittenham
Ms Rose
Vacant
HAF/DRU, AFOTEC, ACC,
AFSPC, USAFE Acquisition
Team
Mr Clarke
Ms Tweed
Ms Preisinger (inbound)
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MAJCOM Delegations
Delegation Scheme




Basic

Authority: <= $100M

Responsibility: Total – ASP through Admin

Qualification: Statutory/Regulatory
MAJCOM
Desg
Rep
EMA
Silver
(P)
ACC
Silver

Authority: <= $500M

Responsibility: ASP with status reporting beginning with Requirements Document
AETC
(OSD-like notification process)

Qualification: Immediate probationary based on regular PEO/CM oversight and realtime, joint definition of success
AFMC
Status
Silver
Gold

Authority: <= $1B

Responsibility: SSA, AF Plan and FDO (ASP and Acq Plan at PEO)

Qualification: 1-2 years demonstrated success with programs under $500M
AFSPC
Basic
AMC
Platinum

Authority: Designated Official

Qualification: Pro-active full-spectrum Services management and oversight for
everything < $1B
PACAF
Basic
USAFE
LEGEND:
No Contact
Integrity - Service - Excellence
In Work
In Place
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AF Services Spend by Portfolio Group
(FY07, FY09 & * FY10)
Total AF Spend
FY07
$70.5 Billion
Official -AF Spend
R&D
$12.4B
Goods
$31B
Services
$27.1 B
FY09
$67.3 Billion
Official -AF Spend
Goods
$25B
R&D
$13.7B
Services
$28.6 B
* FY10
$64.9 Billion
AF Spend
FPDS-NG
as of
19 January 2011
Goods
$24.8B
R&D
$14.3B
Services
$25.7B
Billions
CMEs ~ 69,000 = 12% of Air Force Workforce
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Assessment Battle
Rhythm
FY Annual Execution
Reviews
(Due 31 Dec)
SAE PMR
(45 days from
MAJCOM ASR)
MAJCOM AER Briefs
and Self
Assessments
(Dec-Mar)
PEO/CM Final
Assessment
Apr (or 30 days after
last Visit)
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OSD Peer
Reviews
10
Management Controls
Above $100M
So…what are you doing below $100M?
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EFFECTIVE Competition
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Training Strategy
Different Courses Aligned to Needs
Course/
Workshop
Mission –
Resource
Alignment
Training
(Univ of TN)
PBSA
Service
Acquisition
Workshop
Purpose
Target
Audience
Develop overall
understanding of
strategic sourcing
and services
acquisition life
cycle process
MAJCOM and
Center/Wing
Senior
Leaders
Train established
teams in sourcing
& LCM of services
Crossfunctional
teams
Duration
2 Hr Training
4 days
Focus
High level training to
provide senior leaders
what they need to oversee
and manage acquisitions
of goods and/or services
Smaller acquisitions of
services, usually for a
single location
(DAU)
Train established
Just in Time
teams in strategic
Team Training sourcing and life
cycle mgmt of
(Univ of TN)
services and/or
commodities
Crossfunctional
teams for
large projects
11 Days
(3-5 “JIT”
Modules)
Large scale acquisitions of
services and/or
commodities across
multiple locations and/or
functions
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What’s New in Washington?
DR. CARTER’S INITIATIVES
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Dr Carter’s Directives
1 - Target Affordability and Control Cost Growth
-
Mandate affordability as a requirement


At Milestone A set affordability target as a Key Performance Parameter
At Milestone B establish engineering trades showing how each key design feature affects
the target cost
-
Drive productivity growth through Will Cost/Should Cost management
-
Eliminate redundancy within warfighter portfolios
-
Make production rates economical and hold them stable
-
Set shorter program timelines and manage to them
Initiative Not Applicable to Services Acquisition; however, AFPEO/CM can
continue to explore strategic sourcing opportunities across communities
where synergies exist between the supported entities (i.e. CAAS IV) thereby
reducing corporate AF O/H
Also, encourage development of program incentives to drive improved
efficiencies across entire period of performance
Sept 14, 2010
Integrity - Service - Excellence
Dr Carter’s Directives
2 - Incentivize Productivity & Innovation in Industry
-
Reward contractors for successful supply chain and indirect expense
management
-
Increase the use of FPIF contract type where appropriate using a 50/50 share
line and 120 percent ceiling as a point of departure
-
Adjust progress payments to incentivize performance
-
Extend the Navy’s Preferred Supplier Program to a DoD-wide pilot
-
Reinvigorate industry’s independent research and development and protect the
defense technology base
Initiative Not Directly Applicable to Services Acquisition; however,
AFPEO/CM can encourage use of FPIF contract types where appropriate
and adjust progress/milestone payments to incentivize performance (i.e.
structure milestone payment commensurate with completion of successful
transition utilizing defined success criteria)
Sept 14, 2010
Integrity - Service - Excellence
Dr Carter’s Directives
3 - Promote Real Competition
-
Present a competitive strategy at each program milestone
-
Remove obstacles to competition



-
Allow reasonable time to bid
Require non-certified cost and pricing data on single offers
Require open system architectures and set rules for acquisition of technical data rights
Increase dynamic small business role in defense marketplace competition
Initiative Directly Applicable to Services Acquisition; build reasonable
task order proposal timelines to allow for competition
Obtain data necessary to determine price fair and reasonable when a single offer is
received - data does not have to be certified under certain circumstances but should be
data sufficient to give PCO reasonable assurance that business deal is good
 Each Competition Advocate must develop plans aimed at improving competition by 2% a
year and improving effective competition by 10% a year
 Emphasize Small Business utilization via past performance assessment criteria and in
fee constructs

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Dr Carter’s Directives
4 - Improve Tradecraft in Services Acquisition
-
Create a senior manager for acquisition of services in each component, following the
Air Force’s example where they serve as Decision Authority for all Acquisitions greater
than $250M
-
-
Adopt uniform taxonomy for different types of services
-
-
KBS, Electronics and Comm Services, Equipment Related Services, Medical
Services, Facility Related Services, and Transportation Services
Address causes of poor tradecraft in services acquisition

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-
Done - AFPEO/CM for USAF ($100M for AF with ability to delegate greater authority)
Assist users of services to define requirements and prevent creep via requirements templates
Assist users of services to conduct market research to support competition and pricing
Enhance competition by requiring more frequent re-compete of knowledge-based services
Limit the use of time and materials and award fee contracts for services
Require that services contracts exceeding $1B contain cost efficiency objectives
Increase small business participation in providing services – Examples
-
Off-Ramp entities that fail to achieve their SB Utilization Goals
-
Eliminate contracts with LBs that are essentially pass through instruments to SB
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Dr Carter’s Directives
5 - Reduce Non-Productive Processes and Bureaucracy
-
Reduce the number of OSD-level reviews to those necessary to support major
investment decisions or to uncover and respond to significant program execution
issues
-
Eliminate low-value-added statutory processes
-
Reduce by half the volume and cost of internal and congressional reports
-
Reduce non-value-added overhead imposed on industry
-
Align DCMA and DCAA processes to ensure work is complementary
-
Increase use of Forward Pricing Rate Recommendations to reduce administrative
costs
Initiative Not Specifically Applicable to Services Acquisition; however,
AFPEO/CM can explore opportunities to eliminate non-value added
activities and explore where we can improve our internal efficiency (i.e.
utilize VTC/telecon capabilities more extensively versus travel)
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What’s New?
SERVICES ACQUISITION
TOOLS AND TECHNIQUES
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New Tools and Techniques
21

Small Business Graduate Transition

On-Ramps

Pricing Models vs Sample Tasks

Ordering Periods vs Period of Performances

Minimum Solicitation Times for Task Orders

CDRL for annual CME reporting

Reserve vs Companion Small Business arrangements

“Page of Promises” (aka Status of Proposal Commitments)

OCI
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Observations

In general
 Increasing awareness of distinction between Service
segments (ie., A&AS vs ADPE/Comm vs Weapon
sustainment)
 PSC Coding accuracy is crucial (OSD’s new taxonomy)
 Increasing number of $98M efforts
 Increasing number of $100M efforts sent to outside AF
 Still doing everyone else’s work – Must Stop
 Exception:
Host-tenant—use AF rules
 Exception:
Command MOUs with Outside Orgs
 BUT – don’t need AF-coord/approval of requirement
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More Observations 1

Acquisition planning
 Still working to get Senior leaders “all in”
 Take greater advantage of training opportunities
 Current budget challenges support discrete decision making
 Requirements approval required…even if NOT in PEO/CM
portfolio
 What does your customer really need….can’t have everything
 ESIS – NOT an Acquisition Strategy
 Don’t pitch me what you want to do….it’s your opportunity
to ask questions
 Price matters
 Transition planning needs work
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More Observations 2

Contracts
 T&M—going down
 Field Still fighting for CPAF
 Challenged by incentive contracts
 Contract length
 3-5 years - Primarily A&AS
 5-8 years
 Improved performance
 Large/complex investment/requirement
 More for same or less price

Post-award
 Technical/functional support needs improving
 AER – watch task orders!
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What’s Still
Important?
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In-Sourcing and CMEs

Dollars are declining, we must find more efficient approaches
 Must reduce AO-like KBS efforts by 10%/yr plus

In-Sourcing is not dead
 Review each requirement to find best opportunities
 Use model appropriately

CME counts have heavy Congressional emphasis
 Accountability: numbers are key to assessing in-sourcing
successes and opportunities
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Communication

Quarterly e-mail to MAJCOM Service Advocates
 24-month out “Warning Order” on program end dates

Acquisition Sustainment Reviews with AQ and AFMC

Annual Execution Reviews of Each Program

Annual Services Workshop

MAJCOM Teams talk regularly

Developing stand alone Services Instruction

Service Alerts from field to PEO/CM on issues

SA  PEO quick updates

Health of Services Reviews signed out by SAF/AQ

Peer Reviews
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Elements of Success

Right Requirements
 Properly defined up front
 Focus on needs vs desires

Decision Process
 Seek effective competition
 Simple, serial source selection decision process
 Clear evaluation and decision criteria
 Consider budget realities when determining relative
weight of cost/price

People Involvement
 Engaged MAJCOM and/or functional requirements owner
 Leadership (GO/SES) involvement
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Elements of Success
Contract Type
FFP CPFF Labor
Hour
Army,
Navy, etc
ESIS
Expectations
Dr Carter
Memo
T&M
Labor Hour
Traditional vs
Non-Trad Acq
Workforce
Future
2011
Focus
A&AS
On-Ramps &
Off-Ramps
In-Sourcing
& CMEs
Congressional
Interest
Relative Weight
of Evaluation
Factors
Contracts under
$100M
Long view for
PEO/CM & Services
Acquisition
Host Tenant
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PEER
Reviews
Closing Thoughts

YOU have led the DoD in improving oversight and
quality of Services Acquisition

Dr Carter’s Initiatives, coming budgets require more

WE must be open to improving what we do and how
we do it as TOGETHER WE improve
Services Acquisition…
Going the Last Mile!
Integrity - Service - Excellence