1 WARFIGHTER SUPPORT 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 STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT DLA Aviation Supplier Operations Contract Administration Division April 2015

2 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 2 Scope Of Operations Averaging 120K open contract lines per month 80/20 Interact with 5,000 suppliers Largest Division in Supplier Operations ~140 administrators plus an additional 125 contractor support (GMS-Global Management Services)

3 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 3 Organizational Structure 4 BRANCHES WITHIN THE DIVISION 3 Branches - Airframes, Engines and Commodities Includes Bearings and Life Support Workload assigned by alpha (A-AC) or CAGE code breakout base on volume IMSP ESOC all sites Currently supporting San Diego all post award OEM Branch - Original Equipment Manufacturer Directly supports our 18 Aviation Strategic Supplier Alliance Partners (Boeing, Bell, Sikorsky, GE, etc). Future State 2 Post Award Divisions (OEM/Commodities)

4 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 4 Workload Prioritization/Tracking Historical Focus Delinquencies -> Move to MA Balanced Workloads…One Set of Priorities Created/Implemented Performance Standards 5 day response expectation Created/Implemented Elevation Process Senior Leadership engaged in Post Award issues Administrator briefings to FA leadership The Past Year and Moving Forward

5 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 5 Goal: 50% reduction across all FAW Post Award Metrics *Delinquency Rate excluded Metric Goal Actual FY14 (baseline) FAW Delinquency Rate*8%11.96% Delinquent PO Lines5,00610,013 UFO lines w/ Delinq POs6,42912,858 QNs Avg Age 89 days178 days ZTs Avg Age* 29 days58 days Post Award – FY15 Goals

6 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 6 OEM/SSA Partners Sikorsky Boeing Rolls Royce (UK) BAE Hamilton Sunstrand Non OEM/SSA Partners: AAR Ace Tooling Supply Core H & R Parts GME Manufacturing FAW – Top 5

7 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 7 Bilateral –FAR (a) –Supplemental Agreements –Used when parties agree Unilateral –FAR (b) –Used when the government exerts its rights to change the contract without consultation or agreement with the contractor Types of Modifications

8 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 8 Bilateral Modifications Contract modification that is signed by the contractor and the contracting officer. Bilateral modifications are used for the following: ̶ Make negotiated equitable adjustments resulting from the issuance of a change order; ̶ Definitize letter contracts; and ̶ Reflect other agreements of the parties modifying the terms of contracts

9 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 9 Contract modification that is signed only by the contracting officer. Unilateral modifications are used for the following: –Make administrative changes; –Issue change orders; –Make changes authorized by clauses other than a changes clause (e.g., Property clause, Options clause, Suspension of Work clause, etc.); and –Issue termination notices. Unilateral Modifications

10 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 10 First Article Testing / FAT Data Reports Unrealistic Contract Delivery Date (CDD) and Production Lead Time (PLT) –Bids Without Exception Technical Data Deficiencies Tooling Supply Chain Management (Prime to Sub) Material Availability Poor Production Planning Recurring Root Causes For Modifications and Delinquencies

11 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 11 Overextended Contractors –Bid Despite Capacity Parts for Aging Fleets Past Expected Life-Cycle –Rare or Difficult to Manufacture Administrative Changes and/or Corrections –Buyer Error –Posting and Invoicing Issues Root Causes (Continued)

12 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 12 Contract Accuracy –Communication Between Parties Accurate Proposals Bids Within Supplier Capacity Effective Management of Subcontractors and Suppliers How to Reduce Modification Requests

13 WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP 13 DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY WARFIGHTER SUPPORT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT