1. Depot Maintenance Partnering for PBL Managers
Hollis Hunter
OSD Maintenance Policy
(DSN 225-)

2. The Old Saw:
“Title 10 prevents me from implementing an effective performance based logistics agreement for my system”

3. What do we mean by Title 10? 10 U.S.C. 2464 – Core Logistics
Performance of workloads necessary to maintain a core logistics capability that is Government-owned and Government-operated (including Government personnel and Government-owned and Government operated equipment and facilities)
10 U.S.C – 50 Percent Limitation on Contracting
Not more than 50 percent of the funds made available to a military department in a fiscal year for depot maintenance may be used to contract for performance by non-federal government personnel

4. Remedy?
Depot maintenance partnerships, when used in conjunction with PBL, become an effective strategy to fully implement PBL, yet comply with Title 10
Strategy: When the PBL contractor subcontracts an appropriate portion of the depot maintenance workload to a public sector maintenance depot, this support provides-
Compliance with core logistics and the 50 percent limitation
Single point accountability and responsibility in the PBL contractor

5. Typical Process Steps Service designates core capability requirements
Contracting activity specifies “comply with core”
PBL competitor identifies subcontract segments
Services designate potential depot sources
Contractor negotiates/competes for PBL with depot as partner
Winning contractor negotiates partnership agreement with depot(s)

6. Goals of Partnering
Accomplish DoD depot maintenance workloads efficiently
Sustain robust organic depot maintenance capabilities
Increase use of commercial capabilities for functions at which the private sector excels
Program management
Supply chain
Technology upgrades
Sustainment engineering

7. Current Partnership Environment
Depot Maintenance Public-Private Partnerships started about 10 years ago, but only recently widespread
Congressional enthusiasm has resulted in ample statutory authority
One of six elements of DoD’s Future Logistics Enterprise (FLE) initiative
Interim DM-PPP Guidance recently issued
Anniston Army Depot wrote the first book on depot maintenance partnerships
Continuing congressional interest, complete rewrite of 10 USC 2474 in the 2001 NDAA
6 FLE Initiatives:
Depot Maintenance Partnerships
Condition-Based Maintenance +
Total Life Cycle Systems Management
End-to-End Distribution
Executive Agents
Enterprise Integration (ERP)
OSD policy letter issued January 30, 2002
Consistent with QDR mandate
‘Revitalizing the DoD Establishment’

8. General Themes of Partnering Authorities
Partnerships can exist without legislative authority for workshare arrangements
Legislative authorities have restrictions, conditions
Depot involvement generally supports
Existing DoD contracts or
Goods/services not available in private sector
Generally, government will not compete with private sector
In many cases proceeds reimburse DoD account incurring partnership-related costs
Two cases of partnering without legislative authority
FAR 45.3 government furnished resources
Workshare with contract to private sector provider and work directive to public sector provider

9. Public-Private Partnerships for Depot Maintenance
Range of Possibilities Includes:
Depot provides articles and/or services to industry
Industry leases depot equipment and/or facilities
Performs work for either the public or private sector
Worksharing arrangements
Teaming arrangements where depot and industry jointly contract with a Program Manager
An arrangement between the public and private sectors for one or more of the following:
Use of public depot maintenance activity & employees to provide articles and/or services for the private sector
Private sector use of public depot maintenance activity equipment and/or facilities to perform work for either the public or private sector
Worksharing arrangements, using both public depot maintenance activity and private sector facilities and/or employees
Teaming arrangements whereby a public depot maintenance activity and a private entity enter into a contractual relationship with the DoD in order to accomplish the tasks specified in the contract

10. Expected Benefits from Depot Maintenance Partnering
Organic depots
New investment
Preserve skilled workforce
Enhanced operating efficiency
Access to technical support
Commercial firms
Access to process permits, capabilities
Minimize process flows
Long-term agreements
Avoid investment in duplicative capabilities
Partnerships work to the benefit of everyone involved. If they didn’t, there wouldn’t be any partnership.
Warfighter
Improved logistical support
Improved responsiveness
Technology infusion
Increased reliability

11. Advantages of Depot Maintenance Partnering for the Program Manager
Avoids investment in duplicative capabilities
Permits single-point accountability for product support
Enables compliance with statutory constraints
Core logistics capability
50/50 depot maintenance workload distribution
Improves day-to-day support responsiveness
Provides built-in Surge capability

12. JSTARS Joint Surveillance Target Attack Radar System
Partners
Warner Robins Air Logistics Center
Northrop Grumman
Scope
My next example involves the E-8C Joint Surveillance Target Attack Radar System (JSTARS) aircraft.
START DATE = Dec 2000 END DATE = FY 2007
This is a Government Furnished Supplies and Services arrangement – it’s part of a Total Systems Support Responsibility (TSSR) contract.
Warner Robins performs maintenance and repair of:
Prime mission equipment
Ground support systems
Software
Depot also provides technical services such as chemical analysis and precision measurement equipment calibration.
Northrop Grumman determines depot’s work requirements and provides sustaining engineering.
Benefits of collocated functions include reduced transit times and inventory requirements, and improved system availability.
Repair and maintenance of
Prime mission equipment
Ground support systems
Software

13. Auxiliary Power Units NADEP Cherry Point Honeywell International
Partners
NADEP Cherry Point
Honeywell International
CAT Logistics
Scope
START DATE = June 2000 END DATE = June 2010
Contract period is 10 years, with a 5 year base period with 5 one-year incentive periods
This is a Sale of Services arrangement – it’s part of a performance- based Total Logistics Support contract involving Honeywell, CAT Logistics and NAVICP.
Involves 4 different APUs used on F/A-18, P-3, S-3, and C-2 aircraft.
1st Navy Public private partnership where a NADEP is subcontractor to an OEM.
Repair of APUs and field technical support

14. F/A-18E/F Integrated Readiness Support Teaming (FIRST)
Partners
NADEPs (3)
Boeing Military Aerospace Support
Scope
START DATE = June 2001 END DATE = June 2006
(if all option years exercised)
The FIRST partnership is a sale of services arrangement involving all three Naval aviation depots and Boeing
As items come off ICS and the operating fleet expands, all repair of peculiar E and F components will eventually be accomplished by the NADEPs
FIRST is a Performance Based Logistics (PBL) contract worth $770 million if all three options are exercised for a five-year performance period
Under the PBL arrangement, Boeing is incentivized to improve supportability, readiness, and mission capability, while reducing product support costs and providing life cycle product management
NADEPs provide depot repair for unique components

15. B-2 Composites Ogden Air Logistics Center Northrop Grumman
Partners
Ogden Air Logistics Center
Northrop Grumman
Scope
START DATE = Oct 98 END DATE = Ongoing
This is a workshare arrangement involving a teaming agreement between Air Force Materiel Command and Northrop Grumman to provide the Ogden Air Logistics Center with an advanced composites and low observables manufacturing and repair capability.
As Northrop Grumman completed primary build and mod phases of B-2 program, the large capacity of its Pico Rivera facility was no longer needed
Initial phase of partnership was to:
Transition manufacturing equipment from Pico Rivera, CA to Hill
Construct facilities and install equipment at Hill
Transition computer systems and databases
Train Government manufacturing and support personnel in B-2 composites techniques
Ogden B-2 Composites Repair Facility was culmination of $33M skills and modernization project
Manufacture and repair of
Composites
Low-observable components

16. “Stryker” Vehicle Anniston Army Depot General Dynamics Land Systems
Partners
Anniston Army Depot
General Dynamics Land Systems
Scope
At last count there were 32 partnering programs at Anniston Army Depot. I’d like to highlight two of them. The first involves the Stryker Vehicle, known until a few weeks ago as the Interim Armored Vehicle.
Start Date = FY 2001 End Date = FY 2007
This is a Sale of Services arrangement
Anniston personnel work side-by-side with General Dynamics Land Systems employees to perform Stryker Vehicle assembly using components manufactured elsewhere. Anniston also performs final vehicle paint and some other production services.
GDLS has a facility use agreement for three separate facilities at Anniston and is provided the use of the test track complex in support of this program.
GDLS also purchases utilities, hazardous waste disposal, fire protection, health services, security, etc. from Anniston.
Stryker Vehicle Assembly

17. AGT 1500 Recuperator Anniston Army Depot Honeywell International
Partners
Anniston Army Depot
Honeywell International
Scope
AGT 1500 Engine
START DATE = FY 1998 END DATE = Ongoing
The AGT 1500 engine is used on the M-1 tank. The recuperator is a sophisticated heat exchanger used to warm inlet air for the engine. Manufacturing capabilities were provided by Honeywell at the Strafford, CT government plant. As part of BRAC 95, that plant was identified for closure and Honeywell sought to relocate the operations. Anniston offered them space.
This is a facility use arrangement – Honeywell occupies 30,000 sq ft of former warehouse space for the Recuperator Core Facility. Honeywell also purchases utilities, local transportation, fire protection, health services, security etc. from Anniston.
Anniston also provides production support services as a subcontractor to Honeywell.
Recuperator Manufacturing

18. Resources Depot Maintenance Partnering Web Site:
Partnering Authorities
Attached
Policy Memorandum
DAU On-line Course on Depot Maintenance Partnering
Soon to be available

19. Principal Authorities Cited for Public-Private Partnerships
Authority
Description
10 U.S.C. 2208(j)
Permits depot financed through working capital funds to sell articles or services outside the DoD if the purchaser is fulfilling a DoD contract and the contract is awarded pursuant to a public-private competition.
10 U.S.C. 2474
Requires the Military Departments to designate depot maintenance activities as Centers of Industrial and Technical Excellence (CITEs), authorizes and encourages public-private partnerships, permits performance of work related to core competencies, permits use of facilities and equipment and permits sale proceeds from public-private partnerships to be credited to depot accounts.
10 U.S.C. 2539b
Authorizes the sale of services for testing of materials, equipment, models, computer software, and other items.
10 U.S.C. 2563
(Formerly 10 U.S.C. 2553)
Authorizes sale of articles or services outside the DoD (excluding those authorized 10 U.S.C. 4543), under specified conditions.
10 U.S.C. 2667
Allows leasing of non-excess equipment and facilities.
10 U.S.C. 4543
Authorizes Army industrial facilities that manufacture cannons, gun mounts, etc., to sell articles or services outside the DoD under specified conditions.
10 U.S.C. 7300
Authorizes Naval shipyard sale of articles or services to private shipyards for fulfillment of contracts for nuclear ships.
22 U.S.C. 2754
Allows sale or lease of articles and services to friendly countries and with certain conditions.
22 U.S.C. 2770
Allows sales of articles and services to a U.S. company for incorporation into end items to be sold to a friendly country or international organization under specific conditions.
FAR, Subpart 45.3
Permits provision of government-furnished equipment, material and facilities to contractors.
FAR, Subpart 45.4
Provides for contractor use and rental of government property.