General Officer/Senior Executive Service CourseArmy Force Management School

Army Acquisition:Challenges and Opportunities

LTG Bill PhillipsPrincipal Military Deputy to the Assistant Secretary of the Army(Acquisition, Logistics and Technology)and Director, Acquisition Career Management4 December 2012

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Agenda

• ASA(ALT) Mission and Organization

• Army Contracting

• Acquisition Overview

Goals:•Understanding the Importance of Contracting•Understanding the Value of Acquisition•Understanding Acquisition as a Critical Warfighting Enabler …

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Intense Firefightat Paktika Province, Afghanistan

U.S. Soldiers from 4th Brigade Combat Team, 101st Airborne Cbt operations in the Paktika Province, Afghanistan, 20 May, 2011

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Mission:  Provide our Soldiers a decisive advantage in any mission by developing, acquiring, fielding, and sustaining the

world’s best equipment and services and leveraging technologies and capabilities to meet current and future Army needs.

ASA(ALT)

The advantage is achieved by combining and leveraging the Design, Develop, Deliver, Dominate – principles.

Vision: A highly innovative organization of dedicated professionals transforming the Army with integrated

Acquisition, Logistics, and Technology capabilities to provide Soldiers a decisive advantage and win our nation’s wars!

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Soldier Protection

• Stryker Double-V Hull

• Mine-resistant Ambush-Protected All-Terrain Vehicle (M-ATV) Underbody Improvement Kit

• Body Armor

• Caiman Explosively Formed Penetrators Enhancements

• Squad Lethality – machine guns, mortars, sensors, Unmanned Aerial Vehicles (UAVs), uniforms

• Pelvic Protection

First Look, First Strike Advantage

Bottom ViewStryker Double-V Hull

M-ATV Underbody Improvement Kit

Body Armor

Caiman MRAP Vehicle

Pelvic Protection

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Providing Soldiers a Decisive Advantage

1LT Miller’s ACH

First Lieutenant (1LT) Jason Miller• Two rounds from an AK-47 impacted the

front of his helmet

• A third round traced around the inside and exited the nape protector

• Initially knocked down, he quickly regained his composure and dispatched both enemy combatants.

This helmet saved 1LT Jason Miller ‘s life while he was on patrol in Logar Province, Afghanistan on July 19, 2010.

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ASA(ALT) Organizational Structure

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Program Executive Office Locations

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Army Contracting

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Bottomline: Pay attention to proper Contracting Procedures

Acquisition will impact you“Palantir”

Intro: Issues arose concerning units in OEF desiring Palantir v/s DCGS-A.

Current: Recently the Army discovered 3rd ID had received training services and equipment without a proper contract in place. Working with 3ID to complete the required business procedures in an expedited manner to insure a contract was in place.

The News: • Army Times “3ID’s acquisition of intel software probed”• The Washington Times “In anit-IED software case, Army’s buying rules trump troops’ safety”• Defense News “Army orders Intelligence servers shut down, threatens Palantir, continues 3ID probe”• Defense Systems “Army investigates improper acquisition of intel software by Infantry unit bound for

Afghanistan”• FY12–actions and obligations have inched up on latest reports to 412k actions/$107.5B• With the slight increase in Dollars, the average per day has inched up to $295M

Actions:• Mr. Kim Denver (DASA-P) sent a memo to Army Contracting Command (ACC) requesting ACC serve notice to

Palantir to stop approaching deploying units (dated 12 September 2012)• HON Heidi Shyu (ASA ALT) sent a memo to Commander, US Army Forces Command requesting ratification and

training (dated 14 September 2012)• ASA ALT assigned Program Executive Officer, Intelligence, Electronic Warfare and Sensors (PEO IEW&S) as the

Army Office of Primary Responsibility (OPR) for Link Analysis Tools and Services • Numerous sessions with senior Leaders

Way Ahead:• 3rd ID Headquarters has deployed to a location where Palantir equipment and services are already in use and

corrective actions do not affect the use of this capability in theater. • Existing rapid acquisition processes and procedures remain in place to respond to urgent operational needs.

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Acquisition Will Impact You“Examples”

The GOODEAGLE Contract: Enhanced Army Global Logistics Enterprise: A $23.5B five year contract that supports DOLs, Army Prepositioned Stocks, Theater Provided Equipment, Direct Theater Support, Left Behind Equipment, New Equipment Training, New Equipment Fielding, RESET.

The BADKBR: KBR Connected to Alleged Fraud, Pentagon Auditor Says Washington Post article, May 5, 2009: KBR, the Army's largest contractor in Iraq and Afghanistan, is linked to "the vast majority" of suspected combat-zone fraud cases that have been referred to investigators, as well as a majority of the $13 billion in "questioned" or "unsupported" costs, the Pentagon's top auditor said yesterday.

The UGLYJorge Scientific: ABC news, Brian Ross, video from Nov 2011 to Feb 2012 depicts some Jorge Scientific civilian contractors living at a house in Kabul and were engaged in illicit drinking and there was at least one case where an employee threw live small arms ammo into a fire pit.

Mi-17: DODIG-2012-135 report, to determine whether DoD personnel performed proper Oversight, management, and pricing of two task orders for the overhaul of Mi-17 helicopters.

Picatinny Cat: April 11th, 2008. An errant projectile struck a family cat…..federal lawsuit

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What Are We Spending?

• In FY12 Army Contracting, on average, purchased $293M per day

• The contracting environment is tough, workload is increasing, requiring adequate resources to execute:o FY11 – 470K actions / $124.3B

o FY12 – 412K actions / $107.5B

• In FY12 the Army executed 21.41% of Federal contracting and 30.27% of Defense contracting

• In FY12 the Army spent $3.8B on Logistics Civil Augmentation Program (LOGCAP) IV.

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Rank CompanyRevenues($ billions)

1 Wal-Mart Stores 421.8

2 Exxon Mobil 354.6

3 Chevron 196.3

4 ConocoPhillips 184.9

5 Fannie Mae 153.8

6 General Electric 151.6

7 Berkshire Hathaway 136.1

8 General Motors 135.5

9 Bank of America 134.1

10 Ford Motor Co. 128.9

11 Hewlett-Packard 126

12 AT&T 124.6

13 J.P. Morgan Chase & Co 115.4

2011 Fortune 500: Top Firms(Source: CNNMoney.com)

U.S. Army Financial Ranking

61% Services

39% Supplies

Army Contract Distribution

$139B (FY11 Army Base Budget)ASA(FM&C)

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Where America is Spending

Annually, America spends, on average, more on a pizza party than we do on the Army.

Army Base Budget in 2012 = $135.4B

Annual U.S. Beer Sales = $96BAnnual U.S. Pizza Sales = $35BAnnual U.S. Soda Sales = $19B

$150B

Sources: Beer Statistics: brewersassociation.org (Business Tools)Pizza Statistics: http://pmq.com/digital/201109/files/52.htmlSoda Statistics: Time Business

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American Revolution 1:6

Civil War 1:5

World War I 1:20

World War II 1:7

Korea 1:2.5

Vietnam 1:6

Gulf War 1:60

Balkans 1:1

Iraq 1.13:1

Afghanistan 1.1:1

Simple Services > Longer Deployment / Nation Building > Complex Services

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Shorter duration of conflict in DS/DS required less contractor support. Numbers do not include HNS from Saudi Arabia.

Force caps in Kosovo/Bosnia resulted in higher contractor to Soldier ratios.

As conflicts become more complex, Commanders have been requiring more robust services in support of forces.

MedicalLaundry

Food ServiceShower Service

Sanitation

Transportation

MaintenanceConstruction

IntelligenceSecurity

Contractors per Soldier

Contractors on the BattlefieldPeak

2:1

OND: 23,886 contractors*OEF: 113,491 contractors

Source: DASD(PS) Contractor Support in USCENTCOM AOR * These numbers are as of December 9, 2011 and do not reflect the continued contractor drawdown in anticipation of the end of military operations in Iraq.

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Contracting Friction Points!Procurement Involves Multiple Stakeholders

Friction Pt 1:Incomplete SOW/PWS

Limited timeLack of automation

cASM

Friction Pt 2:Appointment of CORs

Maintaining CORsEffective oversight

COR EXORD

Friction Pt 3:Invoice certification

Property accountability

RCC & RM Partnerships

Unauthorized Commitments; Anti-Deficiency Act violations;ineffective mission support; operational impacts

RequirementsGeneration

Contract Award

ContractAdmin

ContractCloseout

FP 1 FP 2 FP 3

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Actions Commanders Can Take

1. Be familiar with the acquisition / contracting process!

2. Understand “fully” what contracts and contractors are under your responsibility and authority!

3. Integrate operational contract support planning into logistics and operations planning

4. Plan requirements carefully; avoid gold-plating

5. Consider other support options first (organic assets, supply system, DLA)

6. Develop a good relationship with the Contracting Commander!

7. Protect taxpayer funds—eliminate inefficiencies

8. Quality CORs = quality contractor performance

9. Hold contractors accountable

10. Avoid any appearance of impropriety

11. Ensure property is placed on the books

Work closely with your Contracting Activity

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Contracting Basics for Leaders

GTA 70-01-001

CERP GTA 90-01-017

FOO GTA 14-01-001

CALL # 09-27 APR 09 CALL # 08-12 APR 08

Operational Contract Support PublicationsInformation for the Warfighter

CALL # 08-47 SEP 08 CALL # 09-16 JUL 09 CALL # 09-48 SEP 09DPAP COR

HANDBOOK APR 10

Deployed COR GTA 90-01-016

ContractingSupportBrigade

10 Feb 2010

FM 4-92

JP 4-10

Operational Contract Support

17 Oct 08

GO OCS “Flashcard”

DODI 3020.41

Operational Contract Support and Contingency ProgramManagement

DOCTRINEPOLICY

AR 715-9

Approved

Publicatio

n pending

AR 700

-137

Awaiting

G-4

app

rova

l

ATTP4-10

Operational Contract Support: Tactics, Techniques & Procedures

OCS Community of Practice (AKO): https://www.us.army.mil/suite/page/659589

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AcquisitionOverview

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The Power of the Acquisition Corps

CM3%

FI2%

AG MI

AD5%

FA11%

IN 12%

SF 1%

AV13%

EN5%

SC9%

MP2%4%

AR9%

6%

LG17%

“The Army Acquisition Corps will enhance and sustain the acquisition skills of a select group of officers with a solid foundation of operational experience…” GEN Vuono, CSA 11 Jan 1990

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NCO Education – Active Component

As of 31 Jan 12Source: CAPPMIS

HIGHEST EDUCATION LEVEL ACHIEVED

SGM MSG SFC SSG SGT TOTAL

Associate’s Degree 4 9 7 20

Bachelor’s Degree 9 25 34 13 81

Master’s Degree 5 3 3 4 15

Doctorate Degree

TOTAL Number of NCOs 15 50 127 164 4 360

TOTAL with Advanced Degrees 14 32 46 24 0 116

PERCENT with Advanced Degrees

93% 64% 36% 15% 0% 32%

Gender Demographics: 219 Males, 114 Females & 27 Unknown

We Need Your Help to Identify the Best and Brightest!

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FA51 Army Acquisition Corps - Officers

• Robust ACS and TWI partnerships: New for 2012 - Cisco, Coca-Cola, Google, Intel, and Microsoft!

• Transitioned 3 UT-Austin SSC Fellowships to MIT, Georgetown, and Carnegie Mellon.

• Piloting an Aerospace and Defense Executive MBA program with the University of Tennessee.

• Strong SSC Fellows Mentorship Program.

• Completely revised Chapter 42, DA PAM 600-3.

• AAC attendance at CGSoC, Fort Leavenworth commencing 2014.

• Senior COCOM Staff Membership: J4 Operational Contract Support

CM2%

FI1%

AG

MI

AD4%

FA11%

IN 12%

SF 1%

AV13%

EN5%

SC9%

MP1%3%

AR9%

5%

LG19%

0 10 155 6 7 8 91 2 3 4 11 12 13 14 16 17 18Basic Branch Accession Window Acquisition

Legacy Officer Career Timeline

Years of Service

Ranges from 6-12 Yrs

Career Timeline Impact

0 10 155 6 7 8 91 2 3 4 11 12 13 14 16 17 18Basic Branch Accession Window Acquisition

Years of Service

Reduced to 4-9 Yrs

Average accession at 10th YOS

Average accession at 7th YOS

Recent Officer VTIP metrics:

• Reduced time in service from 10 to 6.9 years.

• OERs: All reflect potential for promotion to O4.

• Reduced transition from 2.2 yrs to 1.3 yrs after accession.

Acquisition career guidancedirected multi-functionality

Acquisition career guidance emphasizes technical proficiency prior to broadening

Recent Broadening and “Re-Greening” Initiatives:

COL LTC MAJ CPT TOTAL153 425 647 248 1742

Developing a Professional Acquisition Corps:

Strength of the Corps!

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Inherently Linked!!!!

Requirements Resources Acquisition Sustainment

Requirements Resources

Acquisitionand

Sustainment

Changing the Acquisition Paradigm“Driving Positive Change”

New Paradigm

• Acquisition Stakeholders can’t be stove-piped

• Must Collaborate & Synch through lifecycle

• Institute Rigor and Analysis in Process

• Challenge & Shape Requirements

• Trade Performance for Cost & Schedule

• Emphasize Affordability

• Improve Oversight of Contractors

Collaboration is Absolutely NecessaryBig “A” Acquisition Is: Requirements, S&T, Resources, Acquisition Strategy, Sustainment, & Demilitarization

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Better Buying Power 2.0

Achieve Affordable Programs • Mandate affordability as a requirement • Institute a system of investment planning to derive affordability caps • Enforce affordability caps

Control Costs Throughout the Product Lifecycle • Implement “should cost” based management • Eliminate redundancy within warfighter portfolios • Institute a system to measure the cost performance of programs and

institutions and to assess the effectiveness of acquisition policies • Build stronger partnerships with the requirements community to

control costs • Increase the incorporation of defense exportability features in initial designs

Incentivize Productivity & Innovation in Industry and Government • Align profitability more tightly with Department goals • Employ appropriate contract types • Increase use of Fixed Price Incentive contracts in Low Rate Initial Production • Better define value in “best value” competitions • When LPTA is used, define Technically Acceptable to ensure needed quality • Institute a superior supplier incentive program • Increase effective use of Performance-Based Logistics • Reduce backlog of DCAA Audits without compromising effectiveness • Expand programs to leverage industry’s IR&D

Eliminate Unproductive Processes and Bureaucracy • Reduce frequency of OSD level reviews • Re-emphasize AE, PEO and PM responsibility and accountability • Eliminate requirements imposed on industry where costs outweigh benefits • Reduce cycle times while ensuring sound investment decisions

Promote Effective Competition • Emphasize competition strategies and creating and maintaining

competitive environments • Enforce open system architectures and effectively manage

technical data rights • Increase small business roles and opportunities • Use the Technology Development phase for true risk reduction

Improve Tradecraft in Acquisition of Services • Assign senior managers for acquisition of services • Adopt uniform services market segmentation • Improve requirements definition/prevent requirements creep • Increase use of market research • Increase small business participation • Strengthen contract management outside the normal acquisition

chain – installations, etc. • Expand use of requirements review boards and tripwires

Improve the Professionalism of the Total Acquisition Workforce

• Establish higher standards for key leadership positions • Establish stronger professional qualification requirements for all

acquisition specialties • Increase the recognition of excellence in acquisition

management • Continue to increase the cost consciousness of the acquisition

workforce – change the culture

https://dap.dau.mil/leadership/Pages/bbp.aspx

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Acquisition Increasing Complexity

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Thinking Outside of the Box

A “Transforming” Challenge to the Army

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Ground Combat VehicleRequirements / Specifications Approach

Cost: $9M-$10.5 M

136

589

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Tier 1 – Big 4 Must Haves: Force Protection, Capacity, Full Spectrum, Timing and Selected Safety, Statutory, and Regulatory Requirements

Tier 2 – Offeror may propose less than threshold requirement but may not defer the full requirement

Tier 3 – Offeror may defer full requirement to a future increment

TIER 1

TIER 2

TIER 3

• Band A: Mobility and Lethality specifications • Band B: (Vehicle) Survivability specifications• Band C: All other specifications• Band D: Will be provided as Government Furnished Equipment

Prioritization Scheme

• 900+ specifications in first Request for Proposals

• Meet/exceed threshold for all specifications

• No prioritization of requirements

• Fully compliant system has high unit cost estimate

Cost: $18M

First Request for Proposals Second Request for Proposals

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Added Capability Options:• Efficient Blast Dissipation - $35K• ISG (20kw/30-40kw)-$10-17K• Suspension-$5K• Drivers Display-$17K• Cmd Display-$17K• Additional B-Kit: EFP, RPG

Base Vehicle Cost: $240K (AUMC)Armor$21K (Fleet Avg) Base + Armor$261KOther Procurement Cost:$81K

Technical Features• 275-340 HP Diesel Engine (6 Cyl or 8 Cyl)• 6-Speed Automatic Transmission• Independent Four-Corner Suspension (passive or

semi-active)• Adjustable Height Suspension• Air-activated Hydraulic Anti-lock Disc Brake System

with controlled trailer braking and Traction Control• Starter & Alternator powertrain (15 kW On-Board

Power Generation)• Silent Watch battery (2 hours of silent watch)• Curb Weight: 14000 lbs• GVW: 20,000 lbs• GVWR: 21,500 lbs

Safety Features• 18”-24” ground clearance• Electronic Stability Control• Automatic Fire Extinguishing System [AFES] (engine

& crew compartments)• Combat-locking Doors• Central Tire Inflation System (CTIS)• Multiple occupant egress paths• Exterior provisions to accept EFP and RPG kits

Interior Features• 3,500 lbs Payload Capacity with 40 cu ft rear

stowage space for mission payload• Accommodates 5th-95th percentile combat-equipped

occupants• Extreme climate condition HVAC controls• Noise-reducing crew compartment• Spall protection• Wired for Easy/integrated C4I Installs

Exterior Features• Tubeless radial tires (365 mm – 395

mm width, with 20”-22.5” rims)• 30-40 gal fuel tank• Pintle for towing JLTV trailer or

legacy trailers (HMMWV / FMTV)• External NATO Slave Cable

Receptacles• LED Headlights• Exterior lighting package (including

Blackout Mode)• Fording to 30”

PAYLOAD TON MILES PER GALLON

10 6 MPG

13 7 MPG

PROTECTION

• Integral Small Arms Ballistic protection

• Integral Transparent Armor (small arms ballistic protection)

• Scalable B Kit: 1x UB; 2x UW; Artillery Overhead

• Roof Crush protection to 100% GVW

A-CabSmall Arms

B-KitArmy - 1X

USMC - .5X

100 % Assembled in

The USA

to

Joint Light Tactical Vehicle $240K

OverOMS/MP

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Network Integration Evaluation (NIE)

What is the NIE?

… a series of semi-annual evaluations designed to integrate and mature the Army’s tactical network by placing a large number of emerging systems with Soldiers in operational scenarios.

What will NIE allow us to do?

… develop a single battlefield network able to push information to our Soldiers and link them to command posts, vehicles on-the-move and higher headquarters.

It’s a new way of doing business – a fundamental change in how we deliver capabilities to our Soldiers

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Transforming to an Agile Acquisition ProcessFrom Candidate to Fielding

Potential Solution Selected for evaluation

• Sources Sought• RFI

Candidate Evaluated in Lab at APG

• Technical Evaluation• Technical Maturity

Product procured for Specific

Capability Set

• Contracting• Competition for

additional sets

Product selected for inclusion in Capability

Package

• Directed Buy(?)• Rapid Acquisition• Directed Procurement

Candidate System evaluated in NIE

• DTLOMPF Evaluation

• Capabilities and Limitation review

Selected for

inclusion in NIE

INPUTS

OUTPUTS

Capabilities for Soldiers

TRADOC Gaps

Analysis

NIE = Critical Path to Execution

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Army Acquisition – Myths and Truths

• Army Acquisition successes:• MRAP and MRAP-ATV • Helicopter Improvements

• 9 Body Armor Improvements • UAVs (Grey Eagle, Shadow, Raven)

• Precision Munitions • Stryker Double-V Hull

• C-IED (CREW Devices) • 3 New Sniper Rifles

• New Camouflage Uniforms • M4 Improvements

• Warfighter Information Network-Tactical (WIN-T) • Protected medium and heavy truck fleets (Up-Armored)

• Joint Battlefield Capability-Platform (JBC-P) • Light-weight Crew-served Weapons

• Joint Capability Release (JCR) • Combat Vehicle Improvements

• Counter Rocket, Artillery, and Mortar (CRAM)

• The Army always buys the cheapest solution without regard to quality.

• Army Acquisition is “broke” and can’t acquire anything, why invest?

• The Army seeks to award contracts that provide the best value and meet the needs of the Warfighter while still examining cost, schedule, performance, risk and other factors.

Acquisition Rigor delivers a Best Value Solution addressing the entire Lifecycle from Womb to Tomb

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THANK YOU!

for Supporting our Acquisition Warriors

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Seeking Innovation – An Example

General Officer/Senior Executive Service CourseArmy Force Management School

Army Acquisition:Challenges and Opportunities

LTG Bill PhillipsPrincipal Military Deputy to the Assistant Secretary of the Army(Acquisition, Logistics and Technology)and Director, Acquisition Career Management4 December 2012