1 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT Foreign Military Sales (FMS) Supply Discrepancy Report (SDR) Quality Deficiency Reporting SDR Focused Topic PRC Meeting 14-1 Defense Logistics Management Standards Office February 11, 2014

2 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 2 Objectives Overview and Background Service/Agency Processing (Current/Future) Way Ahead Discussion Topics

3 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 3 Understand current procedures for communicating and processing of FMS quality deficiency complaints Explore alternatives for improved electronic processing –Interim –Long term Reach consensus Document next steps Objectives

4 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 4 –Security Assistance Management Manual (SAMM) directs use of SDR: “C Supply Discrepancies. The USG makes every effort to provide the correct defense article or service in the quantity and quality shown in the LOA. In the event of a discrepancy, the purchaser submits an SDR using (Standard Form (SF) 364). Instructions for SF 364 completion, DoD processing timeframes, and responsibilities is found in the Defense Logistics Management System (DLMS) Manual, DLM M, Volume 2, Chapter 17.” –DLMS prescribes procedures for submission via SDR and investigation under PQDR procedures C Product Quality Deficiency. A product quality deficiency is a defective or non- conforming condition that limits or prohibits the item from fulfilling its intended purpose. These include deficiencies in design, specification, materiel, manufacturing, and workmanship. These are reportable on an SDR only by a Security Assistance customer. All others follow PQDR policy found in DLAR /AR 702-7/SECNAVINST B, AFR 74-6 Product Quality Deficiency Report Program. Quality deficiencies reported via SDR will be investigated within the ICP/IMM under procedures associated with Product Quality Deficiency Reports. PQDR resolution provided via SDR reply to the submitting ILCO will identify the associated PQDR record control number (RCN) as a cross-reference to the PQDR identification used by the ICP/IMM. Background

5 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 5 –Discrepancy Codes categorize the product quality deficiency: Q1 Product Quality Deficiency Q2 Quality deficiency, contractual noncompliance Q3 Design deficiency, item requires change in design Q4 Contracting deficiency, specification, and/or technical data deficient. Q7 Safety hazard Q8 Latent defect –Narrative instructions provide additional clarification on submission rules: “C Product Quality. Product quality deficiencies relative to Security Assistance shipments are reportable via SDR. If product quality is for latent defect, the Security Assistance customer must provide evidence that a receipt inspection was done and the defect could not be detected at that time and that the defect is present for reasons other than deterioration or damage incurred during storage or handling. Quality deficiencies include deficiencies in design, specifications materiel, manufacture, and/or workmanship. The submitter must identify by discrepancy code any quality deficiencies (including latent defects) that result in a safety hazard. Include the following information in the SDR, as applicable: manufacturer's name; contract/purchase order number; date of manufacture, pack, or expiration; lot/batch number; location of materiel; point of contact information (if other than the preparing official); along with a detailed description of the complaint if needed to supplement encoded information. Include the following information in all product quality SDR packages, as applicable: photographs, test data, and related documentation. When submitting a latent defect discrepancy code on the SDR, the report must include substantiating documentation to validate the latent defect such as the applicable test report used to identify the latent defect. Latent defects must be submitted to the ILCO with substantiating documentation. Following is a list of potentially applicable forms of substantiating documentation: C Receipt tests conducted and test reports (including test equipment model, serial number and software version), or documentation of receipt tests not conducted, and justification for tests not conducted. C Subsequent tests conducted and results including test equipment model, serial number, and software version along with test readings. C Justification that initial receipt inspection and testing could not have detected the deficiency. C Documentation of storage and handling of the item since receipt including type of storage.” Background

6 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 6 –DLMS SDR 842A/W Implementation Convention (IC) defines unique data requirements beyond those associated with supply discrepancies: –Specific remarks text fields comparable to PQDR: Circumstances Prior to Difficulty Description of Difficulty Suspected Cause Action Taken Recommendations –Other data elements: Location of Deficient Material Category I or II Item New or Repaired/Overhauled Item Under Warranty End Item and Next Higher Assembly Date Deficiency Discovered –DLMS SDR Reply (842A/R) IC supports inclusion of the PQDR Report Control Number –WebSDR input screens do not carry comparable fields Background

7 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 7 ADC 1007, October 2012, established a new standard transaction format (DLMS 842P) for exchanging PQDR data between systems –New procedures supports tracking of PQDR exhibits by including the PQDR RCN in multiple DLMS transactions and providing information copies to the PDREP-AIS Addendums issued as data and procedures are refined PQDR RCN applied to prepositioned materiel receipt, receipt, release order, shipment status, and materiel returns shipment status –PDREP coding underway; no specific target implementation date available Background DLMS PQDR Transaction

8 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 8 WebSDR interface with Product Data Reporting and Evaluation Program Automated Information System (PDREP-AIS) for FMS quality deficiency SDRs (based upon discrepancy code) developed in 2008 –Trial run encountered significant problems and turned off for SDRs that would not normally go to PDREP (non- Navy/Marine Corps) PDREP-AIS is set up to convert quality-related SDRs to PQDRs, while maintaining the original SDR –Ensures Quality Assurance has a chance to review and fix any quality issue that may exist with the materiel to prevent recurrence –When PQDR is closed, its investigation results are placed in the original SDR and the reply sent back to the originator Background PDREP Interface

9 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 9 Biggest problem very high volume of SDRs with Q1 were not actually quality issues –Educate FMS customers –Better prescreening at ILCO required – ILCO doesn’t have the expertise to be a screening activity for PQDRs –Processing rules needed for reply with forwarding as SDR to applicable action activity (vice rejection to customer) Reject to ILCO, ILCO adjust discrepancy code and 504 to action activity PDREP SDR reply wasn’t using Reply Codes associated with directed return of materiel (Codes 105, 106 or 107, 108) –PQDR may not support data needed for a systemic conversion from the PQDR response to the SDR reply code Background PDREP Interface – Problems Encountered

10 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 10 Preliminary design didn’t address resubmission/ contested SDR process Credit process concerns Criteria for a Category 1 versus a Category 2 PQDR not fully understood within ILCO/customer country ILCO looses visibility of the complaint when it is passed to different activities/systems as a PQDR Exclusion rules for procurement/repair work by PROS contractor SDRs not established –WebSDR rules can be based upon action activity RICs (FXA, FXB) Attachment functionality required for PQDR processing Background PDREP Interface – Problems Encountered

11 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 11 DLA Army –The current process for the ARMY differs by command Navy Marine Corps Air Force DSCA GSA Service/Agency Processing (Current/Future)

12 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 12 Standardized approach – everyone on the same page for system development and policy guidance –Eliminate process gaps –Ensure customer quality complaints reach the right offices with maximum efficiency, minimum delay –Ensure data content supports investigation and resolution –Ensure resolution is properly communicated to the customer Materiel disposition Credit Goals

13 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 13 Alternatives for consideration: –Fix deficiencies in PDREP interface Form small team to research and document business rules in PDC Additional programming (WebSDR and PDREP) Enhance WebSDR screens for PQDR data –Service/Agency ICP responsibility for conversion Systemic Manual until supported by system –ILCOs input quality complaints via PQDR system –SCES collects PQDR-related data fields, directs complaints to SDR or PQDR system using appropriate transaction format –Update SAMM policy and LOA for customer reporting via PQDR Discussion and consensus –Interim? –Long-term? Determine Way Ahead (NOTE: This was the last presented slide of the brief)

14 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 14 Service and agency briefing slides follow Hidden slide

15 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 15 DLAR (Product Quality Assurance Instruction) excludes submission of a foreign military sale item under the Security Assistance (SA) Program after conveyance of title. Quality deficiency data under the SA Program are properly reported on the Standard Form (SF) 364, Report of Discrepancy. Se DLAR /AR12- 12/SECNAVINST A/AFR67-7, Processing Discrepancy Reports against Foreign Military Sales Shipments. DLA addresses handling of FMS SDRS (Type 7) by the Product and Packaging Specialists in the TQ Deskbook, TQ Job Aides and a TQ Tip DLA PQDR Input

16 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 16 Z7 is the only way for the FMS customer to report a quality deficiency IAW with Security Assistance (SA) procedures. See DLM , Volume 2, Ch. 17 June 13, 2012.” The customer submits a SDR, SF-364 to the respective International Logistics Control Office (ILCO) to notify DLA Distribution of any material discrepancy involving DLA issued material. The ILCO submits the SF-364 via Web SDR. FMS Type 7 quality discrepancies will be processed / investigated in the same manner as a PQDR. Supply Discrepancy Report (SDR) Appendix 43

17 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 17 Product specialist processes SDR as PQDR –Validates PQDR –Determines if other materiel is affected –Issues alerts/stock screenings as appropriate –Conducts Investigation –Take preventive action, if applicable –Sends closing letter/request once investigation is complete TQ Tip and job aids provide guidance on determining if FMS customer is involved, and if so, direction to contact the ILCO and the MSSP. PQDR Deskbook Chapter 35

18 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 18 US Army Security Assistance Command (USASAC) Department of the Army ATTN: AMSAC-OL-LS-CS 54 M Ave, Suite 1 New Cumberland, PA USA POC: Ms Lisa Ricchiazzi, Tel # /DSN: , Air Force Security Assistance Command Directorate (ASACD) Department of the Air Force Air Force Security Cooperation Directorate 1940 Allbrook Drive, Bldg 1, Door 19 Wright-Patterson AFB, OH Send notices to: USAF POC: Ms James Brown, /DSN: , Navy Supply Systems Command (NAVSUP) Weapon System Support (WSS) 700 Robbins Ave Philadelphia, PA Send notices to: USN POC: Ms. Barbara Standke, /DSN: , Return to Service/Agency List FOREIGN MILITARY SALES (US MILITARY INTERNATIONAL LOGISTICS CONTROL OFFICES)

19 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 19 Currently the USASAC does not process QDRs. The USASAC legacy system CISIL does not have the functionality to support QDR management. ALL Quality related discrepancies are submitted on a SF 364 as an SDR, IAW existing regulations/guidance. FMS customer’s may complete and submit SF 368 as additional information, SF 368 is then submitted as an “attachment” into WEBSDR and may be provided offline to requestors. USASAC FMS QDR Process ReturnReturn to Service/Agency ListList

20 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 20 Navy FMS QDR Process Receive QDR –Contract/Commerical Repairable Submit QDR via PDREP to responsible DCMA that administered the contract. NAVSUP WSS is the originator, screening point and action point. DCMA acts as the support point Organic Repairable –Submit QDR via PDREP to Organic Depot. NAVSUP WSS acts as the originator and screening point. Organic Depot is the action point. Navy Stock (NRP Aviation) –Submit QDR as a SDR in PDREP

21 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 21 Navy FMS QDR Process Navy Stock (N35 Surface) –Submit QDR via PDREP to responsible DCMA that administered the contract. NAVSUP WSS is the originator, screening point and action point. DCMA acts as the support point. DLA Stock Submit QDR via WebSDR to SMS ReturnReturn to Service/Agency ListList

22 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 22 FMS customers currently submit all discrepancies, including quality, via an SDR –If customer selects a Q_ discrepancy, required to provide supporting documents, testing results, deficiency details, etc to support claim –AF ILCO does not screen Q_ discrepancies to verify PQDR –PROS and Worldwide Warehouse Q_ SDRs must be exempt For Air Force commercial sales, commercial repairs, or organic repairs… –AF ILCO passes SDR to AF billing source of supply (via WebSDR) –If AF FMS SDR focal point evaluation determines issue is quality related, loads SDR information into JDRS for action –When response received from JDRS, AF FMS SDR focal point inputs response into WebSDR to close SDR Disposition instructions and financial adjustments process thru SDR If no contractor or USG fault, SDR is denied –JDRS is AF electronic entry point into PDREP –Future impact to loading AF quality SDRs directly into PDREP unknown Front end and back end steps currently required by AF prior to loading SDR into JDRS (PDREP) Concern exist as to whether an automatic load into PDREP will produce desired results For DLA supplied assets, SDR is passed to WebSDR for processing –Current SDR-A process passes Q_ discrepancies as 842 A/W SDR transactions –New programming required to pass quality SDRs to DLA as 842P PQDR transactions AF FMS customers continue to use Q_ discrepancy codes liberally AF ILCO may not have expertise to determine if SDR should be PQDR versus condition discrepancy –Need to clarify how to ‘return materiel’ & ‘issue credit if applicable’ via PDREP process Air Force FMS Quality SDR Processing (Current/Future) ReturnReturn to Service/Agency ListList

23 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 23 GSA FMS Quality Deficiency Processing While the National Customer Service Center (NCSC) is the GSA central receiving point for PQDRs, the research and resolution of PQDRs is retained by Supplier Management within Federal Acquisition Service (FAS)/GSA. –The NCSC does issue credit and arrange returns and reshipments, but at the direction of Supplier Management. GSA receives PQDRs from both military and civilian customers. Sources of input include WebSDR, SF368s, , and telephone calls. GSA does accept DLMS 842A/W with quality-related discrepancy codes, however the VISION system does not currently handle any of the quality-specific attributes included in the transaction. GSA has not planned for a PQDR interface, but will consider the possibility of establishing such an interface in the future. ReturnReturn to Service/Agency ListList

24 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP Tentative Replies To The Following Queries for Today’s PQDR Meeting With DLA at 1300: DLMS SDR 842A/W Implementation Convention (IC) defines unique data requirements beyond those associated with supply discrepancies: Does the current SCES 842 A/W SCES design support the inclusion of the following Discrepancy Codes which categorize the product quality deficiency: Q1 Product Quality Deficiency ? (Possibly, will have to confirm) Q2 Quality deficiency, contractual noncompliance ? (Possibly, will have to confirm) Q3 Design deficiency, item requires change in design ? (Possibly, will have to confirm) Q4 Contracting deficiency, specification, and/or technical data deficient ? (Possibly, will have to confirm) Q7 Safety hazard ? (Possibly, will have to confirm) Q8 Latent defect ? Specific remarks text fields comparable to PQDR ? (Possibly, will have to confirm) Does the current SCES 842 A/W SCES design support the inclusion of the following other data elements related to product quality deficiency: Circumstances Prior to Difficulty? (Unlikely, will have to confirm) Description of Difficulty? (Unlikely, will have to confirm) Suspected Cause? (Unlikely, will have to confirm) Action Taken? (Unlikely, will have to confirm) Recommendations? (Unlikely, will have to confirm) Location of Deficient Material ? (Unlikely, will have to confirm) Category I or II ? (Unlikely, will have to confirm) Item New or Repaired/Overhauled? (Unlikely, will have to confirm) Item Under Warranty? (Unlikely, will have to confirm) End Item and Next Higher Assembly? (Unlikely, will have to confirm) DLMS SDR Reply (842A/R) IC defines a unique data element, the PQDR Report Control Number, which is beyond those data elements associated with supply discrepancies: Does the current SCES 842 A/R SCES design support the inclusion of the PQDR Report Control Number? (Unlikely, will have to confirm) Approved DLMS Change (ADC) 1007, October 2012, established a new standard transaction format (DLMS 842P) for exchanging PQDR data between systems…… The current SCES design does not support the implementation of the 842P DLMS Transaction Set for PQDR data exchanges DSCA team will work with our SCES MILDEP reps on requirements and impacts to SCES resulting from these discussions ReturnReturn to Service/Agency ListList

25 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP Back-up Slides

26 WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP DLMS SDR Information Exchange Integrating Component SDR Applications DSCA Security Cooperation Enterprise Solution (SCES) Defense Automatic Addressing System (DAAS) Master Repository Translation Processing DLA Enterprise Business System (EBS) 842 Distribution Standard System (DSS) Incoming Supply Discrepancy Report (ISDR) Automated Discrepancy Reporting System (ADRS) DoD WebSDR Customers PDREP-AIS (Navy/USMC) 842 Air Force Security Assistance Command (AFSAC) (SDR-A) 842 Army UDF (one way) 842 On-Line AF Enterprise Solution-Supply (ES-S) (Retail Level) 842 XML GSA (Vision) 842 Army Web-Based Tool LMP (National Level) 842 XML 842