1. Performance Based Logistics DAU LOG 304
Presented to the
DAU LOG 304
19 April 2007
Jeff Heron
PBL Policy Director
Logistics and Industrial Operations
Naval Air Systems Command

2. Outline
Recent PBL Policy
DoN PBL Status, Model
PBL Characteristics
What We Have Learned
Commercial PBL Application
New Policy Details
Current Issues/Concerns
PBL Examples

3. Performance Based Logistics (PBL) Policy
PBL is STILL the DoD’s and DoN’s Preferred Product Support Strategy
DoD Directive , “The Defense Acquisition System,” 12 May 2003
PMs Shall Develop and Implement PBL Strategies That Optimize Total System Availability While Minimizing Cost and Logistics Footprint
SECNAVINST C, 19 Nov 2004, “PBL Is The Preferred Support Strategy And Method Of Providing Weapon System Logistics Support”
NAVAIR 00 Memo, PBL Guidance and Best Practices, 13 Feb 2007
Sets Forth PBL Best Practices That Have Been Used And Proven And Should Be Employed As Much As Practical For Weapon Systems Under The NAVAIR PMA Direction And Control (Including Joint Programs)
DUSD L&MR Memo 10 Mar 2007, Life Cycle Sustainment Outcome Metrics
SECDEF Memo 30 Oct 02 Cancels DOD From Interim “The Defense Acquisition System”:
PMs Shall Develop and Implement Performance Based Logistics Strategies that Optimize Total System Availability While Minimizing Cost and Logistics Footprint.
Contractual Requirements Shall Be Stated in Performance Terms, Limiting the Use of Military Specifications and Standards

4. DUSD L&MR PBL Policy DUSD L&MR Responsible for PBL Policy
Goal is to Link PBL and CPI to Achieve “Performance Driven Outcomes (PDO)”, and Integrate Life Cycle Management (LCM) Principles Into Acquisition and Sustainment Processes/Decisions
Per USD AT&L Memo 21 Nov 2006, Integrating LCM Into Acquisition, Task Force Formed To:
Review Existing Acquisition Process And Recommend Enabling Changes To Fully Integrate LCM Outcomes (Materiel Readiness/Availability, Materiel Reliability, Mean Down Time, Ownership Cost)
Identify Additional Changes Needed To Extend The Focus On LCM Outcomes Into Sustainment
Currently Conducting An Independent Assessment Of PDO In Industry And The Services, Including F/A-18 and T-45 Sustainment Strategies

5. A Reengineering Tool to Improve Readiness/Sustainment
USN PBL Status Overall
NAVAIR Aviation PBLs
Three Power by the Hour (V-22, T-45, KC-130J)
T-45 Airframe & GBTS
F-16 F100
Awarded PBLs $M
NAVICP PBL Profile
$995
$919
$739
$712
$525
$486
$331
$245
Aviation PBLs
$85
$35
# of Contracts Awarded
Awarded PPPs
A Reengineering Tool to Improve Readiness/Sustainment

6. DoN PBL Product Support Model for Weapons Systems
From DoN PBL Guidance Document
Warfighter
Performance Based Agreement
Program Manager/APML
(PSM)
MOU/Agreement with other Government Entity
Product Support
Integrator(s)
Service Level Agreements
DLA
NAVICP
Navy Depot
ABC company
Direct Vendor Delivery
PBL Component contract
Public Private Partnership
PBL for Sub-System

7. PBL Characteristics
Each PBL Unique, Tailored to the Program or Situation
Win/Win for USN/Contractor- Other Services, FMS May Benefit
Aligns Industry Profit Incentive with Fleet Support Requirements
Availability and Reliability Commitments/Guarantees
Long Term Contracts Lower Risk and Encourage Investment
Most Contracted by Naval Inventory Control Point-Philadelphia (NAVICP) Using Navy Working Capital Fund (NWCF)
Some NAVAIR Contracted Using O&M
Fixed Price Contracts With Inherent Incentive to Improve Reliability…. Results in More Profit (Fewer Repairs)
Business Case Analysis Must Show Savings/Cost Avoidances or Break Even with Benefits
FFP PBL Provides Cost Predictability (e.g. Power by the HourTM)
“We Need To Recognize That Predictability Of Cost And Schedule In And Of Itself Has Value.“ - SECNAV Dr. Donald C. Winter
73 Awarded Aviation PBLs With Significant Successes

8. Notional PBL Vs. Traditional Engine Repair
Parts Cost: $300,000
Labor & Admin Costs: $34,000
Total Cost: $334,000
Average Life: 2,000 hours
Cost per hour: $167
Traditional Repair
Parts Cost: $120,000
Labor & Admin Costs: $34,000
Total Cost: $154,000
Average Life: 375 hours
Cost per hour: $411

9. PBL- What We Have Learned
Why They Work:
We Buy a Comprehensive Performance Package… Not Individual Parts, Repairs, ECPs, etc.
This Approach Changes the Provider Incentive Paradigm
Fixed Price “Pay for Performance” Contract Now Motivates Provider to Reduce Failures / Consumption
Long Term (5-15 years) Commitment Enables Provider to Balance Risk Vs. Investment
Improves Parts Support … Material Availability Increases + Logistics Response Time (LRT) Decreases Resulting in Improved Readiness
Optimizes Depot Efficiency … Build Specs, Repair Turn Around Time (RTAT), Awaiting Parts (AWP), & Work in Process (WIP) Decrease
Invests in Reliability … Mean Time Between Failures (MTBF) Improves
Proactive in DMSMS Management … Must Resolve DMSMS and Obsolescence Issues to Achieve Outcome Based Performance Metrics
Provider
Actions

10. PBL- What We Have Learned
Government Relationships Are Closer With Industry
Contractors Understand Benefits of PBL Relationships
Alignment of Shared PBL Objective Requires Trust and Development of Mutually Beneficial Arrangement… “Partner Vice Adversary” Relationship
Industry Has Better Understanding of PBL Process…OSD, NAVICP, NAVAIR and AIA, etc, PBL Training, Meetings and Working Groups
Positive Relationship Affects All Business…Traditional USN and FMS Support Improves As Well

11. Commercial PBL Programs
Like the DoD, Today’s Successful Low Cost Carriers (LCCs) Airlines are Utilizing PBL Contracts as a Critical Component of Their Product Support Strategy
Extremely Competitive Industry with High Pressure to Drive Down Costs While Maintaining High Dispatch Rates
Best In Class- Southwest Airlines
After First Year, Never Lost Money
Profitable Through 9/11 Downturn and Recent Surge in Fuel Prices
Airlines Are Looking for Predictability As Well As Cost Control
Engine Maintenance Cost Per Hour (MCPH) or “Power by the Hour™” Contracts at a Flat Rate Per Flying Hour Help Airlines Forecast Expenses and Manage Costs
Like Naval Aviation Policy, Which Supports All Types of PBLs, the LCCs Do Not Employ a Single Product Support Strategy Solution

12. Public-Private Partnerships
Achieving the Optimum Mix and Balance of Best Business Practices
Depot Involvement
Industry Involvement
OEM Expertise
Supply Chain Management
Tech Data
Configuration Management
Process Improvement Tools
Subcontractor Management
Existing Infrastructure
Environmental Permits
Product Knowledge
Strike Proof Skilled Labor
Knowledge of Fleet Customers
ISO Registered
Industry
Depot

13. NAVAIR- 00 PBL Memo
In Order To Ensure That Program Managers Use Best Practices, Guidance in the Following Areas Is Provided For Establishing Weapon System PBLs:
Sustainment Funding
Contract Type
Justification and Approval (J&A)
Performance Based Agreement (PBA)
Virtual Program Office (VPO)
Integrated PBL Strategy
Business Case Analysis (BCA)
Cost and Software Data Reports (CSDRs)/Cost and Maintenance Data Reporting
DLA
Transparent to the Warfighter
This Document Will Continue To Be Updated And Revised As New PBL Best Practices Are Developed.

14. F/A-18 Sustainment Strategy- Basis For PBL Memo
PBA
VPO
Signed by CNAF
Signed by Commodores
Signed by PM
RFT is single metric
Drives PBL Discussion
Resource Sponsors
Required by ASN-RDA
PMA
NAVICP
Communicate
One Team
Integrating Multiple OEM Centric PBLs
FIRST J&A covers All Sustainment Activity & TMS
Single 5 year FFP Contract with a 5 year option
Utilizes 20 plus Fleet Driven Performance Metrics
J & A $2.9B; Contract < $1B; Built-in growth
Addition of CLINs, tasks, and efforts continuous:
0001 PBL
0002 Pre MSD
0006 AESA
0001AA NWCF
0003 DLA
0017 Oceana
0001AC APN
0004 SE
1xxx ECPs

15. DUSD AT&L Metrics Evolution
Life Cycle Sustainment Outcome Metrics (Mar 07)
TLCSM Metrics (Aug 04)
Operational Availability (Ao)
Materiel Availability
Key Performance Parameter (KPP) (per Aug 06 JROC Memo)
Total Life Cycle System Cost per Unit of Usage
Cost Per Unit of Usage
Ownership Cost
New Key System Attribute (KSA) (per Aug 06 JROC Memo)
Logistics Footprint
Mean Down Time (MDT)
Mission Reliability
Logistics Response Time (LRT)
Materiel Reliability
No Corresponding New Metric

16. Which Availability Metric?
Operational Availability is Percent Of Time That A Weapon System Is Available For A Mission Or Ability To Sustain Operations Tempo:
Ao = System Up Time / Total Time (Up Time + Down Time)
Materiel Availability Measures the Percentage of the Entire Population That is Operational (e.g. T-45 F405 PbtH)
JSF Aircraft Availability (AA) Rate Utilized To Ensure The Fleet Is Capable Of Meeting Its Mission Requirements. AA Is Based Upon The Air Vehicle Being Mission Capable (For At Least One Tasked Mission) And Available For Use (i.e. In A Possessed Status).
Supply Material Availability (“Off the Shelf”)
Customer Wait Time
Logistics Response Time (LRT)
SRT (Supply Response Time) Is The Portion of LRT That The PBL Vendor Can Be Held Responsible
Time Definite Delivery (TDD) (i.e. 90% in 5 days, 100% in 10 days)

17. Current Issues
System Level Type PBLs vs. Sub-System PBL Directly with OEMs (i.e. APUs, Engines, Radars, etc)
Aircraft “Tip to Tail” Type and Engine PBLs May Require Funding From Multiple Appropriations, Each With Constraints, to Fund Single Line of Accounting “No Color of Money”, Multi-Year PBL
No Appropriation Specifically for Funding PBL
Multiple Year Contracts Using One Year Appropriations (e.g. 1A/5A Depot Repair O&M)
Joint PBL Efforts, Air Force TSSR Approach with Contractor ICP vs. Navy NWCF Funded PBLs (e.g. V-22, JHMCS), FMS Participation
Supply Vs. Services Contracts
Lack of PBL Understanding by Contracting, Budgeting and Legal Communities
PBL BCA Policy and Guidance
Developing Life Cycle PBL Strategy, Key Activities in Each Phase
FAR Part 12 (Commercial) Contracts, Cost Reporting

18. Current Issue- System vs. Sub-System Level PBLs
If A Total Coverage System Level PBL Is To Be Pursued, Considerations Include Analysis Of Prime Contractor Management “Pass Through” Fees, Flow Down of PBL Contracts To Subs, And Overall Value Provided By The Prime
Bottom Line is that Alternatives to Total/Complete System Level PBL Should Be Considered and the Product Support Decision(s) Must Be The Most Cost Effective Approach
Before RTTS, Mesa Would Investigate 80 or 90 Different Vendors in the Marketplace, Balancing Prices With Schedules and the Quality and Performance Track Records of Vendors
LHT Will Operate a Component and Material Pool at Spirit's Two Home Bases, Providing Spirit's Line Maintenance Stations With 1,700 Part Types, Ranging From LRUs to Expendables and Consumables
Spirit Decided to Outsource Its Component Management Function in Parallel With Converting to an All-Airbus Fleet. .

19. NAVAIR PBL Financial Strategy
After 10 Years of Effort on Single Line of Accounting (SLA) With Numerous Failed NAVAIR SLA Legislative Proposals, Current Plans Include:
SLA Effort Shifted to OSD and Industry (AIA), ADUSD MR&MP is (Was?) SLA Champion
Continue to Work With DASN(A&LM), OSD, DAU, Other Services, and Industry
OSD Ruling on Use of Non-Severable Deliverable Clause For PBL
ADUSD MR&MP (LMI) Studying Successful PBL Programs to Identify Barriers to Implementation and Areas for Improvement to Accomplish Vision for “Performance Driven Outcomes”
Reviewed F/A-18 “Sustainment Strategy”
T-45 “Power by the Hour” Next USN Program for Evaluation

20. Team JSF / Propulsion System Contractors / Government
JSF Global Sustainment Strategy/PBL Approach F-35 ALGS Enterprise Strategy JSFPO – Team JSF/Propulsion
“Steady State” PBL Contract
Long-Term Incentivized
Fixed-Price, Based On $/FH
Accounts For Operational Tempo Variation
Resource Prioritization Approach
Annual PBA Updates
Ease Of Administration
Off Ramp
Team JSF / Propulsion System Contractors / Government
GE Rolls-Royce
Fighter Engine Team 2
“Nirvana” PBL Contract
20-Year Contract Length
Multiple-year Contract Award Term (5 Yr Base)
TO/DO Contract Structure
Rolling Pricing Architecture (PIC w/Incentives?)
Performance Incentives (Formula vs Award Fee)?
Source: Capt Rowell LRIP/PBL Section of Strategy Brief
JSF Program Office

21. Starting Earlier Starting PBL Process Earlier- Milestone A
ICD
CDD
CPD
Key Logistics criteria for consideration during Concept Refinement and Technology Development should include:
·        Forecast the physical and operational maintenance environment of the proposed system.
·        Given the forecasted environment, assess the functional characteristics of the proposed system, its complexity, and the obstacles and enablers to effective sustainment in that environment.
·        Assess the impact of the proposed system on the maintenance capabilities planned for the period in which the system will be introduced.
·        Assess preliminary manpower and personnel requirements and constraints in both quantity and skill levels, and use of contractor support.
·        Begin compilation of information and requirements for logistics footprint reductions, deployment requirements, and other factors affecting the in-theater operational concept.
·        Initiate the development of operating and support reliability objectives and their corresponding benefits and resource requirements. Consider the performance histories of prior systems or systems of similar capability where feasible.
·        Assess the concept and technology with regard to their ability to facilitate the use of embedded diagnostics, prognostics, and similar maintenance enablers.
·        Initiate the compilation and assessment of data on the projected sustainment demand, standardization of platforms, and required support equipment.
·        Develop Rough Order of Magnitude (ROM) Life Cycle Cost estimates.
Key Logistics Information compiled during Concept Refinement and Technology Development:
·        Analysis of Alternatives to include alternative operating and system support concepts, with specific consideration of performance-based options.
·        Identification of key performance and related support parameters for inclusion in the Capabilities Development Document (CDD) and their basis as design requirements for subsequent phases to affect availability, reliability, maintainability, interoperability, manpower, and deployment footprint – the overall capability of the system to perform and endure in the required mission operational environment.
·        Market analysis for system and product support capabilities (public and private) to define extent and scope of opportunities for achieving support objectives through design and viable product support strategies. Analysis should include:
o       Elements of support currently provided (for legacy system to be replaced).
o       Current measures used to evaluate support effectiveness.
o       Current efficacy of required support.
o       All existing support data across the logistics support elements.
o       Assessment of existing technologies and associated support that impact the new system under development.
·        Initial identification of support related risk and risk mitigation planning.
o       Design and technology (e.g. low-observables, non-COTS, etc).
o       Future projections of domestic and foreign facilitation and logistics infrastructure.
o       Cost drivers.
·        Where applicable, the requirements for providing sustainment during Advanced Concept Technology Demonstrations (ACTDs), Advanced Technology Demonstrations (ATDs), and other technology oriented demonstrations.
Key Logistics activities that must be completed before MS B:
·        Preparation and/or assessment of sustainment planning and parameters in the Capabilities Development Document (CDD)
·        Description of the product support strategy as documented in the Acquisition Strategy (ASR)
·        Description of the appropriate logistics metrics, criteria, and funding requirements in the Acquisition Program Baseline (APB).
·        Description of the appropriate logistics considerations and test points in the Test and Evaluation Master Plan (TEMP)
PBL Start Up
Use PBL to Incentivize and Drive High Reliability During Technology Development and SDD
Design For Life Cycle Supportability
OEMs Held Accountable For System Performance
Integrate Production and Support into Same Contract

22. FIRST FY06 to FY10 Contract Overview (System Level)
Awarded 23 Dec 2005
$995M Firm Fixed Price Contract with Performance Requirements
5 Yr Base Contract with a 5 Yr Option
Combines Previously Separate Supply and ILS FIRST Contracts, Covering 73% of the Super Hornet
NAVICP Awarded; NAVAIR to MIPR Funds to NAVICP
Fleet Driven Incentive Metrics: Increase Readiness at a Reduced Cost
Expanded J & A with Built-In Flexibility to Support all F/A-18 T/M/S
Joint BCAs that supports Contract Award and PM Life Cycle Decision
2005 Admiral Stan Arthur Award
For Logistics Excellence

23. FIRST vs Traditional Sustainment
Under A Traditional (Non-PBL) Support Scenario, The Cost Of F/A-18 E/F Spares & Repairs Was Projected To Increase At An Annual Rate Of 7% (Based On F/A-18 C/D Historical Spares And Repairs Costs)
FIRST Stabilizes The Cost Of F/A-18 E/F Spares & Repairs
We are always asked to compare FIRST verses traditional support. Since the E/F Super Hornet began under a PBL contract, we can only make the comparisons and predictions using historical data from the F/A-18 C/D aircraft.
The blue line depicts the predicted support cost for the E/F under a non PBL environment based on C/D historical data.
The orange line is our costs to date.
And the green line projects the future costs based on the value of the FY 06 – FY 10 contract.
As you can see – there is a significant savings using the PBL approach.
243 E/Fs
490 E/F & Gs

24. T-45 F405 PbtHTM Contract
FAR Part 12 Contract Awarded Oct 03; 1 Year Base Plus 4 One Year Options (FY04 – FY08)
Performance Standards (i.e., Quality, Quantity, Availability, Timeliness) tied to Performance Requirements; All-Inclusive: Engineering, ILS, RCM
Original BCA Projected $26M O&M Cost Savings
Updated BCA Projects $61M O&M Cost Savings
Government & Contractor Goals Aligned
Increased Time on Wing
Increased Reliability
Engine Availability Contractual Requirements
FY04 = 80% of Engine Inventory
FY05 – FY08 = 85% of Engine Inventory
MTBF Contract Metric is Hours MTBF; Currently Over 900 Hours MTBF With Plans to Approach 2000 Hours; Availability Over 85%
T-45 Engine Costs
PBtH vs Original
$12
$11 $5
$18
$15 $0
$10
$20
$30
$40
$50
$60
$70
$80
$90
FY04
FY05
FY06
FY07
FY08
TY$ Millions
Original CLS Costs
PbTH PBL Costs
Actual Savings
Projected Savings
$61M savings
I and D level and Total CLS
O-level Support is provided for scheduled inspections and troubleshooting
Very Large Internal Advantage of steady Budgeting in out years.
Adverse affects from budget cuts can be easily explained, “no money no flying.”
Contractor achieves Increased TOW by matching module times. Large Reliability increases through design upgrades are currently still funded through Government
Current Average Release Life of Engines exceeds 1260 hours. Previously under 1000 hours.
Contract includes 5 FODs and 2 Overtemperatures events in a year. Any events over this will be paid for under a separate “over and above” contract.
Interesting Note: RR has flowed down the “by-the hour” agreement to their vendors, ie Goodrich provides Fuel System Repair and Overhaul support on a “by-the-hour” basis, where they provide all the procurement support as well, alleviating RRDSI from those responsibilities.

25. Exceeding Expectations!
F404 PBL (F/A-18A-D, Sub-System Level)
Four and 1/2 Year Firm-Fixed Price Contract Base Period; Five One Year Additional Ordering Periods
$510M, Second Largest Aviation Fixed Price PBL Contract…BCA Projects $79M in Cost Avoidances
Includes 36 F404 Major Sub-Assemblies Covering 1895 Engines
Covers the Overhaul of the Major Sub-assemblies Regardless of Quantity Repaired/Replaced
Provides Flying Hour and War Time Surge Flexibility
Measurable Performance Metrics (LRT, SMA and Durability)
85% Availability; Disincentives for Lower Than 75%, Incentives Up to 3% for 90% Availability
Public Private Partnership With NADEP Jacksonville- Leverages OEM “Best Practices” Efficiencies (i.e. Six Sigma, Lean)
NADEP Jacksonville is a Key Partner with GEAE
Commercial Service Agreements between GEAE and NADEPs will be in place for contract execution.
NADEP Workload Distribution Remains the Same No CORE Issues
Systemic Scheduling, Workload Allocation, Funding, “G” Condition Issues at NADEPs Resolved
Government retains transportation (NRFI Retrograde to CDF and RFI to Fleet), packaging and configuration management responsibility
GEAE responsible for depot TAT, repair parts, inventory management and control, workscoping, attrition replacement, current Backorder reduction program Four and 1/2 Year Firm-Fixed Price Contract Base Period; Five One Year Additional Ordering Periods (Not Yet Priced)
85% Availability; Disincentives for Lower than 75%, incentives for SMA >86%
Repair Process Improvement Incentive - Obsolescence Management
Electronic Data Interchange/CAV Reporting Wholesale Inventory Management and Storage
Exit Clause (Reconstitute organic program) - Backorder burn down plan
Program Change Flexibility
Renegotiation/Equitable Adjustment if Actual Flying Hours Significantly Deviate from Profile (+ or – 10% vice OP20 (BAR))
Two quarter demand growth greater than 10%…unilateral adjustment using fixed u/p per demand
Biannual Program Reviews
To Evaluate Performance
To Provide Actual Fleet Operations Data To Assess Program
DIP ACTIV, NORMAL ECP PROCESS WITH GOV OVERSIGHT – INFO FMS – COULD EXTED SIMILAR PROVISON TO FMS – HAS FMS CLSSA CITED
OTHER F18 IMPACT PBLS INC SMS, TIRES, ARC210, FIRST
Exceeding Expectations!
100% Total Backorder Reduction Contract-to-Date
Availability 96% (Historical, 43%)
TAT Reduced by 25%; Backlog Reduced 50%
Improving F404 Availability While Reducing $/EFH Cost

26. SECDEF Winner

27. Honeywell Total Logistics Support (Component Level)
Based on Commercial “Maintenance Service Agreement”
“Corporate Contract” Awarded June 2000 to Provide Support for APUs Used on the C-2, F/A-18, S-3, and P-3 Aircraft
Navy’s First Public / Private Partnership
NADEP Cherry Point... Touch Labor
Honeywell... Program Management
10 Year Performance Based Contract, Firm Fixed Price (5 Year Base & 5 One-Year Incentive Terms)
Availability, Reliability Increases Guaranteed
Delivery Guarantees... 2 Days (IPG 1)
Priced by the Flight Hour
TAV- Requisitions/Data Via EDI and Web
Obsolescence Management
Product Support Engineering
Surge Capability % of Annual Flight Hours
Added C-130 APU in FY02, P-3 EDC in FY03 and F404 MFC in FY04
All Inclusive “No Excuses” Performance

28. .…Unsurpassed Service to the Fleet, Relentless Focus on Quality
TLS PBL Results….
SECDEF Winner
Asset Management Pre TLS FY-05 Target
Back Orders
Availability 65% 91% 90%
Logistics Response Time 35 days 4.3 days 5 days
G Condition
Additional Benefits:
$50M+ savings/cost avoidances to Navy
79 configuration changes implemented to address reliability (18) and correct drawing errors, improve maintainability, or address obsolescence (61)
110 APUs ($14M) removed from inventory due to improved asset management
Depot TAT reduced from 98 to 67 days (25%)
Commercial Best Practices (Six Sigma, Lean) standardized at NADEPs and Honeywell
Corporate contract enabled adding KC-130 APU, P-3 engine driven compressor and F/A-18 main engine fuel control and allows Joint Services efforts
All F404 MFC Backorders eliminated Nov 05; 12 F conversions completed in 05
.…Unsurpassed Service to the Fleet, Relentless Focus on Quality

29. ALR-67(v)3 PBL Results
ALR-67(v)3 Radar Warning Receiver
Reliability
2001 Today
Availability
100%
67%
Historical Today
600+ Hours
(v)3
300 Hrs
(v)2
Obsolescence Management and Technology Insertion
100 Hrs
MTBF
V(3), Included in PBL
V(2), Over $200M in ECPs
V(3), e.g. Analog Encoder Replaced With Digital Encoder (Lowers Cost, Far More Reliable, Less Prone to Obsolescence, Reduces Heat Signature)
V(3), Ser # Configuration Status Accounting (As Built/As Repaired)
Obsolescence Management and Technology Insertion vs. High ECP $ i.e. Analog Encoder Replaced With Digital Encoder (Lowers Cost, Far More Reliable, Less Prone to Obsolescence, Reduces Heat Signature of WRA Contributing to Reduced Failure Mode for Other WRA Components
Allowances Being Reviewed for Reduction, No High ECP Costs Being Driven, Reduced Fleet Cannibalizations, Reduced Logistics Footprint
Predecessor ALR-67(v)2 MTBF 100 Hours, $200M+ in ECP Costs, Traditional 3 Level Maintenance
State of the Art, More Complex, More Capable
Initial Plan for 125 Hours MTBF, 3 Level Maintenance Plan
Change MP to O-D With Reliability Commitment of 300 Hours, Growing to 600 Hours in 11 Years; Achieved 600+ Hours After 4 Years
Availability 90% in 5 Days; Achieving 100% in 3 Days
Bottom Line: Better Product, Better Support, Lower Total Ownership Costs!

30. H-60 PBLs H-60 FLIR H-60 Tip-to-Tail Raytheon Awarded Sep ‘03
SECDEF Winner
H-60 FLIR
H-60 Tip-to-Tail
Raytheon
Awarded Sep ‘03
$123M Contract W/ 5-yr Base & Five 1-yr Options
Partnership W/ NADEP Jacksonville
Covers 3 FLIR Components … Turret, Electronic Unit, Hand Control
100% (IPG 1) & 90% (IPG 2-3) Availability
Reliability Growth (up 40%)
Obsolescence Mgmt
Inventory Mgmt … Rqmts Determination
MHSCO (Lockheed/Sikorsky)
Awarded Dec ‘03
$417M Contract W/5 Yr Base, No Options
Partnership With NADEPs JAX/CHPT/NORIS,CCAD and Tobyhanna
Covers 540 Components
Guaranteed Availability (currently 95%)
Reliability Sustainment
Obsolescence Mgmt
Firm-Fixed Price Per Flying Hour
Engineering/tech Support
Inventory and Configuration Mgmt
The H-60 FLIR was awarded to Raytheon in September 2003; $123M contract for 10 years. PBL is a partnership with NADEP Jacksonville. Contract covers three major components; turret, electronic unit, hand control. The contract is a firm-fixed price with guaranteed reliability improvement and availability. The contract also covers obsolescence management and product engineering support.
 The F/A-18E/F FIRST PBL (partnership) was awarded to Boeing in May 2001 – Est $750M for five years. The contract covers all E/F unique components on the newly introduced aircraft. The contract emphasizes government/industry partnerships, risk management, and shared responsibility. The contract includes guaranteed availability, integrated funding streams, teaming arrangements with three NADEPs, obsolescence management, and streamlined configuration management.
DDG REEFER… Mech pays about $1M per year NWCF; PMS 400 pays the rest
OEM is York International Integrator is Bath Iron Works.:

31. Questions/Discussion
Contact Information: (301) DSN
Dinnette Briscoe
Chris Tamayo (619)
Knowledge Management System PBL Community of Practice