BETTER BUYING POWER (BBP) 2.0 SUMMARY

Transcription

1 BETTER BUYING POWER (BBP) 2.0 SUMMARY BBP is the cntinuing implementatin f practices and plicies designed t imprve the prductivity f the Department f Defense and f the industrial base that prvides the prducts and services we use t equip and supprt ur Warfighters. It has been tw years since we first intrduced the riginal Better Buying Pwer initiatives and we ve wrked hard t implement and expand n the riginal guidance. BBP 2.0 reflects ur cmmitment t cntinuus imprvement. We have learned frm ur experiences and identified new pprtunities. Sme f the BBP 1.0 initiatives are fully implemented, thers still require emphasis, and a number f new pprtunities have been identified. BBP 2.0 cntains 36 initiatives rganized int seven fcus areas, sme familiar frm BBP 1.0 and sme that are new r mdified. The seven fcus areas are: Achieve affrdable prgrams Cntrl csts thrughut the prduct lifecycle Incentivize prductivity and innvatin in industry and gvernment Eliminate unprductive prcesses and bureaucracy Prmte effective cmpetitin Imprve tradecraft in acquisitin f services Imprve the prfessinalism f the ttal acquisitin wrkfrce BBP guidance applies t everything the Department buys, frm majr prgrams t cmmercial prducts t services f all types. BBP 2.0 prvides guidance that must be applied thughtfully and prfessinally where it makes sense nt as rigid rules that apply in all cases. Better Buying Pwer is nt a ne-time event nr any ne set f initiatives. It is part f a cntinuus learning and imprvement management apprach practiced in a culture that requires a cmmitment t reducing csts and increasing prductivity, dedicatin t supprting the Warfighter, and a strng sense f stewardship f the taxpayers dllars. The basic gal f BBP remains unchanged: Deliver better value t the taxpayer and Warfighter by imprving the way the Department des business. BBP 2.0 is the next phase f that effrt. 1

2 What is Better Buying Pwer? Better Buying Pwer (BBP) is the implementatin f best practices t strengthen the Defense Department s buying pwer, imprve industry prductivity, and prvide an affrdable, value-added military capability t the Warfighter. Launched in 2010, BBP encmpasses a set f fundamental acquisitin principles t achieve greater efficiencies thrugh affrdability, cst cntrl, eliminatin f unprductive prcesses and bureaucracy, and prmtin f cmpetitin. BBP initiatives als incentivize prductivity and innvatin in industry and Gvernment, and imprve tradecraft in the acquisitin f services. What is Better Buying Pwer 2.0? Better Buying Pwer 2.0 reflects the Department f Defense s cmmitment t cntinuus imprvement. Significant prgress has been made since BBP was first intrduced. Affrdability analysis is nw part f the standard Defense Acquisitin Bard (DAB) planning prcess t facilitate investment decisins; Shuld-Cst estimates are being used as standard practice within the military Services; and cmpetitive incentive cntracts, services acquisitins, and small business pprtunities are receiving greater attentin and fcus. Many initiatives that were first intrduced will remain, while a set f new initiatives have been identified and are being added t address current fiscal realities. The basic gal f BBP remains: deliver better value t the taxpayer and Warfighter by imprving the way the Department des business. BBP 2.0 initiatives are rganized int seven fcus areas: Achieve Affrdable Prgrams Cntrl Csts Thrughut the Prduct Lifecycle Incentivize Prductivity and Innvatin in Industry and Gvernment Eliminate Unprductive Prcesses and Bureaucracy Prmte Effective Cmpetitin Imprve Tradecraft in Acquisitin f Services Imprve the Prfessinalism f the Ttal Acquisitin Wrkfrce Each initiative ensures that essential warfighting capabilities are delivered within the cnstraints f a declining defense budget by better managing the csts f acquisitin. What is New? BBP 2.0 intrduces a new fcus area t supprt and recgnize members f the acquisitin wrkfrce. Our acquisitin prfessinals are essential t changing the way we prvide critical capabilities t the Warfighter. Within this area, we are intrducing fur new initiatives: Establish higher standards fr key leadership psitins Establish strnger prfessinal qualificatin requirements fr all acquisitin specialties Increase the recgnitin f excellence in acquisitin management Cntinue t increase the cst cnsciusness f the acquisitin wrkfrce change the culture Additinally, BBP 2.0 includes new initiatives fcused n: enfrcing affrdability caps; cntrlling csts thrugh cst perfrmance measurement, strnger partnerships with the requirements cmmunity, and increasing the incrpratin f defense exprtability features in initial designs; incentivizing industry by aligning prfitability mre tightly with Department gals and emplying apprpriate cntract types; increasing the effective use f perfrmance-based lgistics; reducing cycle times while ensuring sund investment decisins; using the technlgy develpment phase fr true risk reductin; and strengthening cntract management thrugh the expanded use f requirements review bards and tripwires, amng thers. Additinal infrmatin available at:

3 BBP PROGRAM SUCCESSES Stryker The Army generated cnsiderable savings in the Stryker prgram by cmbining FY12 buys f 292 Duble V-Hulls and 100 Nuclear BiChemical Recnnaissance vehicles int a single cntract, gaining ecnmies f scale, and is estimating up t 5 percent savings in its prductin f JTRS Handheld radis thrugh incentives t incrprate cmmercial cmpnents and technlgies. F-22 The F-22 System Prgram Office realized a 15 percent efficiency during Increment 3.2A negtiatins using Shuld Cst analysis. The Air Frce successfully identified and implemented specific cst saving initiatives t address areas in the sftware develpment prcess that were abve industry benchmarks. This effrt resulted in a 15 percent reductin and $32 millin savings in cst fr Increment 3.2A. DDG 51 The Navy utilized a cmpetitive allcatin strategy fr the FY11 and FY12 DDG 51 class ships called Prfit Related t Offers (PRO). This strategy utilizes Fixed Price Incentives Firm Target (FPIF) cntracts with priced ptins t ensure reasnable prices while maintaining the industrial base. The result f the cmpetitive allcatin was a 12 percent reductin in basic cnstructin csts f the three ships at Bath Irn Wrks (BIW) and Huntingtn Ingalls Incrprated (HII) and gvernment savings f $298 millin. This strategy will be repeated fr the FY13-17 DDG 51 Multi-year prcurement. Additinal infrmatin available at:

4 1 Better Buying Pwer 2.0 Mr. Frank Kendall Under Secretary f Defense Acquisitin, Technlgy & Lgistics Nvember 2012

5 Better Buying Pwer (BBP) 2 BBP implements initiatives intended t increase the prductivity f all prviders f DD prducts and services BBP 1.0 annunced in June 2010 Guidance issued in September It includes 23 initiatives rganized int five fcus areas: Target Affrdability and Cntrl Cst Grwth Incentivize Prductivity and Innvatin in Industry Reduce Nn-Prductive Prcesses and Bureaucracy Prmte Real Cmpetitin Imprve Tradecraft in Acquisitin f Services Implementatin verseen by Business Senir Integratin Grup (BSIG), chaired by USD(AT&L) Sme initiatives have been fully implemented, thers are in prgress, sme have been mdified, and thers have been either drpped r delayed Additinal pprtunities identified

6 Better Buying Pwer BBP 2.0 reflects the Department f Defense s cmmitment t cntinuus imprvement in acquisitin perfrmance BBP 2.0 encmpasses 36 initiatives rganized int seven fcus areas: Achieve Affrdable Prgrams Cntrl Csts thrughut the Prduct Lifecycle Incentivize Prductivity & Innvatin in Industry and Gvernment Eliminate Unprductive Prcesses and Bureaucracy Prmte Effective Cmpetitin Imprve Tradecraft in Acquisitin f Services Imprve the Prfessinalism f the Ttal Acquisitin Wrkfrce

7 Better Buying Pwer Achieve Affrdable Prgrams Mandate affrdability as a requirement Institute a system f investment planning t derive affrdability caps Enfrce affrdability caps Cntrl Csts Thrughut the Prduct Lifecycle Implement shuld cst based management Eliminate redundancy within warfighter prtflis Institute a system t measure the cst perfrmance f prgrams and institutins and t assess the effectiveness f acquisitin plicies Build strnger partnerships with the requirements cmmunity t cntrl csts Increase the incrpratin f defense exprtability features in initial designs Incentivize Prductivity & Innvatin in Industry and Gvernment Align prfitability mre tightly with Department gals Emply apprpriate cntract types Increase use f Fixed Price Incentive cntracts in Lw Rate Initial Prductin Better define value in best value cmpetitins When LPTA is used, define Technically Acceptable t ensure needed quality Institute a superir supplier incentive prgram Increase effective use f Perfrmance-Based Lgistics Reduce backlg f DCAA Audits withut cmprmising effectiveness Expand prgrams t leverage industry s IR&D Eliminate Unprductive Prcesses and Bureaucracy Reduce frequency f OSD level reviews Re-emphasize AE, PEO and PM respnsibility and accuntability Eliminate requirements impsed n industry where csts utweigh benefits Reduce cycle times while ensuring sund investment decisins Prmte Effective Cmpetitin Emphasize cmpetitin strategies and creating and maintaining cmpetitive envirnments Enfrce pen system architectures and effectively manage technical data rights Increase small business rles and pprtunities Use the Technlgy Develpment phase fr true risk reductin Imprve Tradecraft in Acquisitin f Services Assign senir managers fr acquisitin f services Adpt unifrm services market segmentatin Imprve requirements definitin/prevent requirements creep Increase use f market research Increase small business participatin Strengthen cntract management utside the nrmal acquisitin chain installatins, etc. Expand use f requirements review bards and tripwires Imprve the Prfessinalism f the Ttal Acquisitin Wrkfrce Establish higher standards fr key leadership psitins Establish strnger prfessinal qualificatin requirements fr all acquisitin specialties Increase the recgnitin f excellence in acquisitin management Cntinue t increase the cst cnsciusness f the acquisitin wrkfrce change the culture

8 Next Steps 5 Prvide stakehlders an pprtunity t prvide cmments and feedback Acquisitin Wrkfrce Industry DD Cmpnents Cngress Draft implementatin guidance Rll ut final set f initiatives and implementatin guidance January 2013

9 6 BBP BBP 2.0

10 BACKUP 7

11 Better Buying Pwer 1.0 Status 8 Target Affrdability and Cntrl Cst Grwth Mandate affrdability as a requirement implemented, cntinue in 2.0 Implement shuld cst based management implemented, cntinue in 2.0 Eliminate redundancy within warfighter prtflis cntinue in 2.0 Achieve Stable and ecnmical prductin rates cntinue in 2.0 Manage prgram timelines cntinue, rephrased in 2.0 Incentivize Prductivity & Innvatin in Industry Reward cntractrs fr successful supply chain and indirect expense management cntinue in 2.0 Increase Use f FPIF cntract type mdified in 2.0 Capitalize n prgress payment structures implemented Institute a superir supplier incentive prgram cntinue in 2.0 Reinvigrate industry s independent research and develpment cntinue in 2.0 Reduce Nn-Prductive Prcesses and Bureaucracy Reduce frequency f OSD level reviews implemented, cntinue in 2.0 Wrk with Cngress t eliminate lw value added statutry requirements implemented, cntinue in 2.0 Reduce the vlume and cst f Cngressinal Reprts implemented, cntinue in 2.0 Reduce nn-value added requirements impsed n industry cntinue in 2.0 Align DCMA and DCAA prcesses t ensure wrk is cmplementary implemented Prmte Real Cmpetitin Emphasize cmpetitive strategy at each prgram milestne cntinue, rephrase fr emphasis in 2.0 Remve bstacles t cmpetitin Allw reasnable time t bid cntinue in 2.0 Require nn-certified cst and pricing data n single ffers implemented Enfrce pen system architectures and set rules fr acquisitin f technical data rights cntinue, rephrase fr emphasis in 2.0 Increase small business rle and pprtunities cntinue in 2.0 Imprve Tradecraft in Acquisitin f Services Assign senir managers fr acquisitin f services implemented, cntinue in 2.0 Adpt unifrm services market segmentatin (taxnmy) implemented, cntinue in 2.0 Address causes f pr tradecraft Define requirements and prevent creep cntinue in 2.0 Cnduct market research cntinue in 2.0 Increase small business participatin cntinue in 2.0