Public-Private Partnering (PPP) Key Points and Frequently Asked Questions Mr. Greg Dierker AFMC/A8R Business Integration Office 3 September 09

PPP Foot-stomps and FAQs What is the Common Characteristic of all PPPs? What is the Primary PPP Statute used to Authorize PPPs? What are the Objectives of PPPs? When should a Program Partner? What New Policy Exists on PPPs? Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail? Who Is the Final Authority to Approve Partnerships? How Many Active Partnerships does the Air Force have and what is the Future Direction? Program Managers play a significant role in development of partnership relationships. It is their responsibility to champion establishment of partnerships early in the acquisition process for programs within their control. Partnerships between the depot and private contractors are strongly endorsed to preserve maintenance core competencies and achieve the best value repair or manufacturing capability for the warfighter. Program managers should include partnering costs for core and best value organic capabilities when developing program requirements and investment appropriations’ budgets.

Common Characteristic of all PPPs 16 Jan 09 AFMC PPP Policy, states: Existing Air Force PPPs typically take the form of public sector repair, overhaul, modification or production of goods and services for a DoD contractor or where private industry leases public sector equipment and/or facilities. The government also takes advantage of PPPs by bringing in contractor workers to perform repair, modernization, refurbishment and testing of government systems, using government equipment in government facilities. A key element in each of these arrangements is the utilization of some aspect of organic depot maintenance capability to support the partnership. Program Managers play a significant role in development of partnership relationships. It is their responsibility to champion establishment of partnerships early in the acquisition process for programs within their control. Partnerships between the depot and private contractors are strongly endorsed to preserve maintenance core competencies and achieve the best value repair or manufacturing capability for the warfighter. Program managers should include partnering costs for core and best value organic capabilities when developing program requirements and investment appropriations’ budgets.

PPP Foot-stomps and FAQs What is the Common Characteristic of all PPPs? What is the Primary PPP Statute used to Authorize PPPs? What are the Objectives of PPPs? When should a Program Partner? What New Policy Exists on PPPs? Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail? Who Is the Final Authority to Approve Partnerships? How Many Partnerships does the Air Force have and what is the Future Direction? Program Managers play a significant role in development of partnership relationships. It is their responsibility to champion establishment of partnerships early in the acquisition process for programs within their control. Partnerships between the depot and private contractors are strongly endorsed to preserve maintenance core competencies and achieve the best value repair or manufacturing capability for the warfighter. Program managers should include partnering costs for core and best value organic capabilities when developing program requirements and investment appropriations’ budgets.

Thumbnail Description – Not Exhaustive PPP Statutes Authority Thumbnail Description – Not Exhaustive USC Title 10 Section 2208(j) Permits depot financed through working capital funds to sell articles and services outside DoD if the purchaser is fulfilling a DoD contract and the contract is awarded pursuant to a public-private competition. USC Title 10 Section 2474 Requires the Military Departments to designate depot-level maintenance activities as Centers of Industrial and Technical Excellence (CITEs), authorizes and encourages public-private partnerships, permits performance of work related to depot-level maintenance core competencies, permits use of facilities and equipment, and permits sales proceeds from public-private partnerships to be credited to depot accounts. USC Title 10 Section 2539b Authorizes the sale of services for testing of materials, equipment, models, computer software, and other items. USC Title 10 Section 2563 Authorizes sale of articles or services outside DoD (excluding those authorized under 10 U.S.C. 4543) under specified conditions. USC Title 10 Section 2667 Allows leasing of non-excess facilities and equipment. USC Title 22 Section 2754 Allows sales or lease of articles or services to friendly countries under specified conditions. USC Title 22 Section 2770 Allows sales of articles and services to a U.S. company for incorporation into end items to be sold to a friendly foreign country or international organization under specific conditions. FAR Subpart 45.3 Permits provision of government-furnished material, facilities and equipment to contractors. FAR Subpart 45.4 Provides for contractor use and rental of government property. USC Title 10 Section 2464 Requires the DoD maintain a core logistics capability that is Government-owned and Government-operated (personnel, equipment and facilities) to ensure a ready and controlled source of technical competence USC Title 10 Section 2466 Provides 50/50 percentage limitation not more than 50 percent of funds made available for depot level maintenance for performance by non-Federal Government personnel

PPP Foot-stomps and FAQs What is the Common Characteristic of all PPPs? What is the Primary PPP Statute used to Authorize PPPs? What are the Objectives of PPPs? When should a Program Partner? What New Policy Exists on PPPs? Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail? Who Is the Final Authority to Approve Partnerships? How Many Partnerships does the Air Force have and what is the Future Direction? Program Managers play a significant role in development of partnership relationships. It is their responsibility to champion establishment of partnerships early in the acquisition process for programs within their control. Partnerships between the depot and private contractors are strongly endorsed to preserve maintenance core competencies and achieve the best value repair or manufacturing capability for the warfighter. Program managers should include partnering costs for core and best value organic capabilities when developing program requirements and investment appropriations’ budgets.

Objectives and Goals of Partnering 30 Jan 2002 PPP for Depot Maintenance Memo and USC Title 10 Section 2474 Reduce cost of DoD parts and services (produced or maintained at a Center) Reduce DoD cost of ownership, in operations and maintenance, and environmental remediation Improve use of available organic capability Leverage private sector investments to re-capitalize depot mx activities (facilities and equip) More responsive, timely, reliable support to warfighter Sustain parts availability, reduce repair cycle times, enhance readiness (improved supportability and reliability) Sustain Core capabilities (economically) Enhance industrial base to improve and sustain manuf. & repair capabilities (org and private) Introduce improved business practices & updated technology to DoD maintenance operations and products. Draft AFI 63-101 (2008) Improve facility utilization Improve Air Force 50-50/Core posture

PPP Foot-stomps and FAQs What is the Common Characteristic of all PPPs? What is the Primary PPP Statute used to Authorize PPPs? What are the Objectives of PPPs? When should a Program Partner? What New Policy Exists on PPPs? Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail? Who Is the Final Authority to Approve Partnerships? How Many Partnerships does the Air Force have and what is the Future Direction? Program Managers play a significant role in development of partnership relationships. It is their responsibility to champion establishment of partnerships early in the acquisition process for programs within their control. Partnerships between the depot and private contractors are strongly endorsed to preserve maintenance core competencies and achieve the best value repair or manufacturing capability for the warfighter. Program managers should include partnering costs for core and best value organic capabilities when developing program requirements and investment appropriations’ budgets.

Most Programs are “Ripe” for Partnering. When to Partner No data or limited data for repair—Partner No data or limited data for parts—Partner Expensive depot activation—Partner Prime wants to stay engaged—Partner Expensive contractor repair rates—Partner Obsolete parts/processes—Partner Prime & govt do different things better—Partner Truly COTS / truly supportable solely in private sector for the long-term—Contract Most Programs are “Ripe” for Partnering.

PPP Foot-stomps and FAQs What is the Common Characteristic of all PPPs? What is the Primary PPP Statute used to Authorize PPPs? What are the Objectives of PPPs? When should a Program Partner? What New Policy Exists on PPPs? Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail? Who Is the Final Authority to Approve Partnerships? How Many Partnerships does the Air Force have and what is the Future Direction? Program Managers play a significant role in development of partnership relationships. It is their responsibility to champion establishment of partnerships early in the acquisition process for programs within their control. Partnerships between the depot and private contractors are strongly endorsed to preserve maintenance core competencies and achieve the best value repair or manufacturing capability for the warfighter. Program managers should include partnering costs for core and best value organic capabilities when developing program requirements and investment appropriations’ budgets.

AFMC PPP Guidance for Depot Maintenance (16 Jan 09) AFMC/CC directed standup of AFMC/A8R Business Integration Office - Jan 08 A8R charter for shaping AFMC best business practices approved Feb 08 AFMC/A8R conducted data call, reviewed PPPs and revised policy during 2008 16 Jan 09 - AFMC/CC Memo issued to provide PPP guidance for depot maintenance Replaced 29 Mar 06 AFMC PPP guidance for Depot Maintenance Memo PPP Approval Authorities (aggregate annual values, anticipated or actual): ALC/CC – Less Than $25M AFMC/CC – Greater Than or Equal to $25M OR lesser valued PPPs deemed to be of significant interest All PPPs are sent to AFMC/A8R for review PPPs over $25M threshold are coordinated at AFMC Group prior to AFMC/CC approval PPP reviews for approval may be comprised from some or all of the following: Partnering Agreements (PAs) Implementation Agreements (IAs) Business Case Analyses (BCAs)

AFMC PPP Guidance for Depot Maintenance (16 Jan 09) 16 Jan 09 - AFMC/CC Memo issued to provide PPP guidance for depot maintenance Established PPP goals, approval authorities, procedures for approvals Requires BCAs at the IA level for all PAs Requires quarterly metrics tracking the achievement of the stated objectives or the partnership Established SPA, PA and IA templates to expedite the drafting of agreements Center Business Offices (CBOs) established at each Air Logistics Center to “secure the right workload” and manage partnership agreements 2 CBO Summits held to date with another planned for Oct 09 CBOs have established a Business Development (BD) team at each Center and are charged to develop BD Plans and Strategies A BD workshop was held with all CBOs to develop a BD concept for the Command in April 09 AFMC/A8R and the CBOs supported a booth at the Jul 09 United States Air, Trade, and Technology (USATT) Expo and InfoTech Conferences USC Title 10 Section 2474 “Foot-stomp” (broad and simplifies)

PPP Foot-stomps and FAQs What is the Common Characteristic of all PPPs? What is the Primary PPP Statute used to Authorize PPPs? What are the Objectives of PPPs? When should a Program Partner? What New Policy Exists on PPPs? Do I Have to Complete a Business Case Analysis (BCA) for a PPP and what does it Entail? Who Is the Final Authority to Approve Partnerships? How Many Partnerships does the Air Force have and what is the Future Direction? Program Managers play a significant role in development of partnership relationships. It is their responsibility to champion establishment of partnerships early in the acquisition process for programs within their control. Partnerships between the depot and private contractors are strongly endorsed to preserve maintenance core competencies and achieve the best value repair or manufacturing capability for the warfighter. Program managers should include partnering costs for core and best value organic capabilities when developing program requirements and investment appropriations’ budgets.

# of Active PPP and Future Direction OO-ALC PPPs 14 OC-ALC PPPs 11 WR-ALC PPPs 17 All three ALCs have created a Center Business Office and are chartered to “Secure the Right Workload” at their respective Center AFMC is working with each CBO to provide oversight and procedures to ensure an Enterprise Perspective

Summary 16 Jan 09 - AFMC/CC Memo issued to provide PPP guidance for depot maintenance New processes and emphasis being placed on PPP Management Additional focus on performance management to ensure PPPs achieve their stated objectives Center Business Offices (CBOs) established at each Air Logistics Center to “secure the right workload” and manage partnership agreements USC Title 10 Section 2474 Broad range of applications Allows approval at a lower level in many cases A key element in each of these arrangements is the utilization of some aspect of organic depot maintenance capability to support the partnership (facilities, manpower, equipment)