National Contract Management Association How to Improve Acquisition Outcomes through the Defense Acquisition Workforce May 18, 2011

2 The only one of its kind: The DOD Defense Acquisition University Practitioner Schoolhouse Inherently Government, can use some commercial training Responsible for implementing FL defined competencies through curriculum design and certification. Executes this responsibility after course certification by: – Training practitioners to teach (COE, excepted service selection of faculty) – Teaching students Online Classroom hours Mission assistance Rapid deployment teams – Implementing Research Responsible for managing capacity against DACM, Requirements (J8), and Comptroller (DCAA, IG, CAPE) requests for training Prioritizes and balances requests against available resources Owner and manager of the defense acquisition knowledge management system Understanding DAU “The Mission” BLUF: The DAU is necessary, but not sufficient to improve acquisition outcomes such as BBP initiatives

3 DAU Locations and Supported Acquisition Workforce RegionLocationFY09FY10 Capital/NortheastFort Belvoir, VA35,23738,928 Mid-AtlanticCalifornia, MD23,78625,782 MidwestKettering, OH19,30420,919 SouthHuntsville, AL28,72932,928 WestSan Diego, CA26,04729,148 Total133,103147,705

4 Global Reach to Support Combatant Commands – FY10 NORTHCOM Foreign Students U.S. Students Classroom Grads 1744,997 CL Grads 1,512594,789 DL Grads ,173 SOUTHCOM Foreign Students U.S. Students Classroom Grads 02 CL Grads DL Grads 2134 CENTCOM Foreign Students U.S. Students Classroom Grads 736 CL Grads 682,686 DL Grads PACOM Foreign Students U.S. Students Classroom Grads CL Grads 1,64914,239 DL Grads 2141,804 EUCOM Foreign Students U.S. Students Classroom Grads CL Grads 1,4177,994 DL Grads AFRICOM Foreign Students U.S. Students Classroom Grads 00 CL Grads 046 DL Grads 4219

5 How Will DAU Improve Acquisition Outcomes? In order to respond to this request, DAU has taken these steps so far: Conducted internal data review (see previous slides) Conducted initial benchmarking with academia, other DoD universities, and commercial best practices Interviewed CAEs, DACMs, FLs, & lead Service functionals (contracting, engineering, testing, logistics, program managers, QA & IT) Interviewed federal civilian acquisition officials (OFPP for example), and prior DoD officials (Ken Krieg, Jacques Gansler, etc) FY11 NDAA, Section 877 required the President, DAU: to work with the relevant professional schools and degree- granting institutions of the Department of Defense and military departments to ensure that best practices are used in curriculum development to support acquisition workforce positions.

6 Initial Results / Conclusions and Actions Taken 1.Training at DAU can be improved Actions: – Established Excellence in Teaching team established (see slide 20) – Aggressively deploy curriculum authoring software to improve speed and cost effectiveness of learning asset development – Improve training course surge capacity by qualifying component adjunct faculty – Ensure right students attend classroom training by systematically enforcing DAWIA experience standards and course prerequisites 2.DACMs and Services need to review acquisition workforce billet designations 3.Must transfer budgetary oversight or management of Acquisition Workforce to DAE 4.Talent management needs to be instituted (see slides 13-14) Action: – Re-employ retiring personnel as rehired annuitants, IPAs and HQEs to mentor junior personnel to accelerate qualification to fill vacant mid-level positions created by 1990s downsizing / hiring freezes 5.On the job training and qualification process must be established within procuring activities

7 6.Inclusion of OSD(C) into acquisition training must occur in order to complete the acquisition TRIAD (cost, schedule, performance = comptroller, AT&L + JROC) DoD IG has met with DAU to request that all auditors receive DAU training – Second meeting held 6 April DCAA has a training institute, DCAI, that has been in existence since DAU and DCAI are setting up to coordinate a joint curriculum review DAWDF funds must be made available to encompass this expanded training requirement 7.DCMA has requested through DPAP that all training of DCMA personnel transition to become accredited and part of the larger DAU team Transition underway Initial Results / Conclusions and Actions Taken (cont’d)

8 Which learning approaches drive the greatest business value in your organization? Leaders Tell Us Learning is Informal 72% of companies believe their most valuable learning approaches are informal, yet only are focused here © Bersin & Associates, High-Impact Learning Practices ® n=1,100, Source: Bersin & Associates, 2008

9 Needs Assessment Linked to workforce strategy Workforce “shaping” needed – ID Acquisition SES requirements – ID MDAPs and KLP needs – Build supporting DAWIA billet pyramid formulation – Identify critical competencies – Assess current education, training, and development for gaps and opportunities

10 Program Design Update DAWIA, Executive, and Leadership curricula to reflect core competency needs – Assess learning and instructional methodologies for effectiveness Provide framework and training for a formal coaching/mentoring program Identify format/framework for personal development plan Identify individual assessment tools (360 survey, leadership instruments, etc), licensing, and administration process Identify advanced education needs and opportunities (DAU, CAEs) Identify developmental assignment rotation opportunities

11 Selection Process Create succession Policy and Guidelines – Participation eligibility criteria Education/training “prerequisites” Mobility agreements Performance/supervisor recommendation Time/payback agreements – Application process – Screening and selection process

12 Five Strategic Thrusts Supporting Current Operations Mandating Affordability Requirements Improving Efficiency in Acquisition Strengthening the Industrial Base Strengthening the Acquisition Workforce Better Buying Power

13 Supporting Current Operations What we’ve done: Moved the AT&L Rapid Fielding Directorate Directly Under USD(AT&L) Prioritized Rapid Reaction Needs and Successfully Reprogrammed over $1 billion in FY 2011 to support the war-fighter Planned for and initiated the transition from DoD to Dept of State in Iraq Fielded critical equipment to the war-fighter (e.g. ISR, biometrics, counter IED, MRAPS) What we are doing: Consolidating DOD Joint Rapid Reaction Activities Under one Senior Integration Group Chaired by USD(AT&L) and the J3 What needs to still be done: Implement the new governance structure for urgent Joint needs Meet urgent war-fighter needs as long as the fight continues Execute the transition in Iraq Institutionalize Contingency Contracting for future operations

14 Mandating Affordability Requirements What we’ve done: Developed Affordability guidance for Milestone Reviews –Long range planning at MS A, Key trade-offs at MS B, enforcement at MS C Imposed affordability constraints on new starts (GCV, SSBNX) What we are doing: Institutionalizing affordability analysis as part of our standard DAB planning processes Introducing affordability requirements into programs further into development or production selectively What needs to still be done: Institutionalize affordability as part of DoD’s standard planning processes at all levels including lower ACAT programs Bring other communities fully on-board (Requirements Community/JROC, Comptroller, CAPE, Services) Discipline the process going forward

15 Improving Efficiency in Acquisition BBP’s Main Focus What we’ve done: Published the Better Buying Power Initiative white paper & implementing memoranda Established the Business Senior Integration Group to guide implementation –This is about continuous improvement – NOT a one time event What we are doing: Demonstrating long term commitment to the BBP goals –USD(AT&L) and PDUSD(AT&L) visits to major buying commands –Meeting with PEOs and Industry to obtain feedback –Issuing updated guidance on specific elements of BBP Adjusting as we obtain feedback and learn from our experience What needs to still be done: Track our performance at the institutional element level so we can make adjustments – PARCA initiative Conduct training sessions to align the OSD staff fully with our intent Get the workforce and industry fully on board at all levels – change is hard

16 Improving Efficiency in Acquisition: Increase Productivity What we’ve done: Published additional guidance on “Should Cost” estimates and their use by the workforce Increased the use of FPI contract vehicles where appropriate Taken advantage of highly productive acquisition strategy opportunities (LCS) Asked Congress for block buy authorization for some programs What we are doing: Working with industry to define win-win arrangements to drive industry productivity gains Developing other opportunities for more efficient acquisition strategies (missile systems) Holding production rates at economic levels (SDB II) Challenging programs that can not be afforded at economic rates What needs to still be done: Develop creative incentives to motivate industry to provide higher productivity Link strong contract incentives to the performance the government REALLY wants –This should usually be lower cost in production and sustainment

17 Improving Efficiency in Acquisition: Promote Real Competition What we’ve done: Provided guidance for the development of Competition Strategies for review Issued Departmental Guidance to conduct negotiations with all single bid offers based on cost or price analysis and using non-certified data Clarified guidance on 30 day re-advertisement on one offer What we are doing: Requiring PEOs and PMs to present their strategy to create and maintain a competitive environment for their contractors at DAB and DAES reviews Disseminating best practices to optimize small business participation across DoD Modifying BBP guidance on 3 year recompetition requirement What needs to still be done: Fully implement open systems architectures Provide more well defined operational guidance for acquisition of data rights Research additional mechanisms for including more "non-traditional" DoD suppliers Put better metrics in place to track the impacts of increased competition

18 Improving Efficiency in Acquisition: Improve Tradecraft in Acquisition of Services What we’ve done: Established senior manager for acquisition of services-- monthly meetings with component senior managers and DPAP Issued Directive detailing specific implementation guidance for the effort to standardize service taxonomy Developed detailed guidance for establishing a taxonomy of preferred contract types in services acquisition Required OSD Office of Small Business Programs to review acquisition plans for services acquisitions exceeding $1B, and to be members of the OSD peer reviews of services acquisitions What we are doing: Encouraging the use of Multiple Award/IDIQ contracts among small businesses, where suitable What needs to still be done: Establish market research teams within the senior manager for services construct at the portfolio manager level Develop tools to assist requirements developers in developing better service contracting requirements

19 What we’ve done: Listened to industry and the workforce Reduced the frequency of OIPT reviews at the OSD level Released new guidance for Acquisition Strategies and System Engineering Plans Approved elimination of 46 internal reports Set page limits on Congressional reports What we are doing: Developing new guidance for other required documents Requesting repeal of requirements for Retroactive ACAT I program certifications Streamlining quantity based Nunn McCurdy reviews and initiating reviews earlier Refocused TRL reviews on technology as opposed to engineering/integration risk and shifted responsibility to the program management chain of command What needs to still be done: Reorient everyone in the system to focus on the quality of the plans and products that the Program Team actually needs and uses to manage their Program Coordinate review of remaining documents not under direct AT&L control – JCIDS, Intel, DT/OT, CAPE Focus the entire workforce on value-added activity oriented on the products and services we are striving to deliver Improving Efficiency in Acquisition: Reduce Non-Productive Processes and Bureaucracy

20 Strengthen the Defense Industrial Base What we’ve done: Met extensively with industry to understand their views Communicated our perspectives on the base publically –USD(AT&L) addresses to Wall Street analysts and to the Heritage Foundation –PDUSD(AT&L) and ASD(IP&M) testimony to the SASC Conducted analysis of specific issues (solid rocket motors, rare earth elements, specific M&A activities, etc.) What we are doing: Conducting Sector by Sector and Tier by Tier (S2T2) industry analysis Being vigilant for specific issues in the base including anti-competitive business deals and (rarely) loss of critical capability Evaluating specific issues brought to our attention by industry and/or the Congress What needs to still be done: Develop a complete understanding of the industrial landscape based on the S2T2 analysis Finalize OCI rule changes with OFPP

21 Strengthen the Acquisition Workforce What we’ve done: With strong SecDef support, sustained the planned DAWDF acquisition workforce size increases despite the budget situation Hired a dedicated Human Capital Initiative manager What we are doing: Refocusing DAU on our workforce’s skill set for dealing with industry Insisting on quality products from our workforce Shifting responsibility and accountability back to the acquisition chain of command What needs to still be done: Adjust Human Capital plans for the reduction in planned in-sourcing Train and develop the new people we have brought on board Develop a strategy to increase the professionalism of our workforce Change our internal incentives to focus on what DoD really needs –Quality products and service delivered on time and to standard at the lowest possible cost –NOT meeting obligation rate benchmarks, but getting the best business deal for DOD –NOT just the next bureaucratic milestone, but the efficient and effective delivery of products and services to the war-fighter

Acquisition Efficiency Guidance Roadmap Target Affordability and Control Cost Growth - Mandate affordability as a requirement - Implement “should cost” based management - Eliminate redundancy within warfighter portfolios - Achieve Stable and economical production rates - Manage program timelines Incentivize Productivity & Innovation in Industry - Reward contractors for successful supply chain and indirect expense management - Increase Use of FPIF contract type - Capitalize on progress payment structures - Institute a superior supplier incentive program - Reinvigorate industry’s independent research and development Promote Real Competition - Emphasize 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 Enforce open system architectures and set rules for acquisition of technical data rights - Increase small business role and opportunities Improve Tradecraft in Acquisition of Services - Assign senior managers for acquisition of services - Adopt uniform services market segmentation (taxonomy) - Address causes of poor tradecraft Define requirements and prevent creep Conduct market research - Increase small business participation Reduce Non-Productive Processes and Bureaucracy - Reduce frequency of OSD level reviews - Work with Congress to eliminate low value added statutory requirements - Reduce the volume and cost of Congressional Reports - Reduce non-value added requirements imposed on industry - Align DCMA and DCAA processes to ensure work is complementary - Increase use of Forward Pricing Rate Recommendations (FPRRs) to reduce administrative costs