1. Product Assurance Revitalization Presented By: John Deas Product Assurance Division Logistics FIPT July 14, 2006

2. 2 Agenda Background Policy & Guidance Tools & Initiatives Program Support/Systemic Analysis Education & Training Initiatives Conclusion

3. 3 Overview Mission – DCMA Provides Customer-Focused Acquisition Life Cycle and Combat Support to Ensure Readiness, Worldwide 24/7 Represents the Military Services, other Federal Agencies and Allied Government Buying Agencies at Defense Contractors Worldwide Prior to contract award After contract award Agency Goals 1.Transform the Agency into a customer- focused organization 2.Embrace a performance-based culture 3.Equip our employees with the competencies needed to provide extraordinary support to our customers 4.Ensure fiscal responsibility Agency Goals 1.Transform the Agency into a customer- focused organization 2.Embrace a performance-based culture 3.Equip our employees with the competencies needed to provide extraordinary support to our customers 4.Ensure fiscal responsibility

4. 4 The Way We Were Total 44 CONUS Major Contract Management Offices (CMO) DCMA West (21) DCMA East (23) CMOs District HQ Agency HQ DCMA HQ DCMAE HQ DCMAW HQ

5. 5 Product Alignment Product Divisions: Aeronautical Systems - BostonAeronautical Systems - Boston Naval Sea Systems - BostonNaval Sea Systems - Boston Space and Missile Systems- CarsonSpace and Missile Systems- Carson Ground Systems and Munitions - CarsonGround Systems and Munitions - Carson Sustainment activities align along product divisions Space & Missile Division Ground Systems & Munitions Division Aeronautical Division Naval Sea Systems Operations Defense Supply Centers: Columbus (Maritime Supply Chain & Ground Supply Chain) & Philadelphia (Troops Support Supply Chain) Defense Supply Center: Richmond (Aviation Supply Chain) Inventory Control Point: Marine Corps Logistics Center, Albany Inventory Control Point: Philadelphia & Mechanicsburg Air Logistics Centers: Ogden, Warner-Robins, & Oklahoma City

6. 6 Key Technical Capabilities Product Assurance (PA) Enterprise process that provides confidence to our customers Used to ensure that program/contract technical requirements are fulfilled Focuses on those supplier requirements that poses the greatest risk – Value added oversight Early adoption of Performance Based Management Supplier Management Prime Contractor Control of Subcontractors Subcontract delegations Earned Value Management (EVM) Ensure contractors use EVM as a management tool instead of a reporting requirement

7. 7 PA Policy & Guidance PA Policy & Guidance approved for Agency use Uses a customer outcome-based approach Outcomes are translated to DCMA performance measures Clearly defined Agency role in different acquisition phases System Development & Demonstration Production & Deployment Sustainment Covers Systems Engineering (to include Software Acquisition Management, Manufacturing & Production), Quality Assurance, etc. Provides an integrated approach to oversight Utilizes all technical personnel to get deeper insight

8. 8 Customer Outcomes Understanding customer outcomes allows us to: Focus on what the customer needs Develop surveillance strategy based on customer priorities Fine tune technical expertise in areas most important for meeting customer requirements In the Program Managed environment: Outcomes are determined through continuing dialog with Program Management Offices Customer outcome Product Assurance support meetings PA personnel are a proactive partner in this dialog by understanding the: Contract/technical requirements/deliverables Supplier’s performance history and capabilities

9. 9 Program Managed PA PA strategy focuses surveillance on: Areas of moderate and high risk to customer outcomes Supplier’s systems – System Audits Supplier’s processes – Process Reviews Product characteristics – Product examination Criteria for Technical Reviews Identify level of oversight/mix of personnel CMMI based Risk Management (CBRM) methodology Determine process capability Based on continuous version of the model Predict programmatic outcomes based on process capability, EV data, Technical Performance Measures (TPMs), Technology Readiness Levels (TRLs) LRIPFRP Production and Deployment System Development & Demonstration System Integration System Demonstration

10. 10 Program Managed PA Formulate PA Surveillance Strategy (Interdisciplinary Teaming Approach) -Systems,Processes,and Characteristics Requiring Monitoring to Ensure customer outcomes are achieved -Frequency and Intensity Dependent Upon Risk to Customer Outcome Program Managed Contract Customer Outcome PA Support Meeting -Customer Outcomes -Outcome Performance Measures -Risk Information Effecting the Outcomes Risk Assessment -Identification & Analysis of System, Process,and Product Characteristic Posing Risks to Achieving Outcomes Process Review -Initial Reviews SDD to FRP -Recurring Surveillance of Product Realization Planning Process and Control of Purchased Products -Other Processes as Risk Warrant -Focused on Process Outputs /Products -Independent Where Possible -Reverse Trail into Systems Audit /Review System Audit -Complete QMS(Formal Audit)During SDD, ~3 Year Intervals,or Customer Request - Recurring Surveillance of System Elements as Risk Warrant - Product Realization Planning Process and Control of Purchased Products - Independent Audits Product Examination -Inspect -Witness -Test -Verification(Using Objective Evidence) -Analysis of Supplier Data/Information -Independent Where Possible -Reverse Trail into Process Review -Document Surveillance Strategy Plan -Perform Surveillance and Document Results -Analyze Surveillance Data -Issue Corrective Action Requests as Necessary -Adjust Strategy based on Analysis of Surveillance Results and Changes to Customer Outcomes PDOS W/G

11. 11 DCMA Use of CMMI Not the “typical” CMMI user Not seeking a benchmark “Maturity Level” Tool to aid program surveillance Risk identification Prioritize activities in support of customer outcomes Helps determine contractor performance strengths and weaknesses Impact on the program and customer outcomes Determine whether the supplier is maintaining processes as stated Integrated surveillance for Engineering, Software & Quality Assurance

12. 12 Contract administration Contracting functions (other than production surveillance) are not diminished by performance-based contracts For system-level PBL contracts, DCMA provides award fee board support by: ensuring management controls are effective Monitoring of performance requirements Verification of compliance with Terms & Conditions cost savings are being realized Payment through WAWF facilitates rapid processing DCMA offers WAWF training and support to contractors Standardized SOW improves PALT and administration DCMA PBL Support

13. 13 Pricing / business case analysis (BCA) DCMA supports by providing input to Cost-benefit analysis Price negotiation Technical evaluation of costs Evaluation of capital investments to increase productivity Risk assessment at contractor facilities DCMA evaluation of cost reasonableness requires specific requirements established by contract or MOA DCMA PBL Support

14. 14 Product Assurance It is essential that PBL contractors have effective quality management systems Enables minimal oversight Allow for alternate release procedures DCMA assures that contractor quality systems meet requirements Normally, DCMA Product Assurance monitors the effectiveness of a contractor’s quality system through independent analysis of data Quality system audits are conducted by specific request Credible third-party certification should be relied upon unless evidence exists indicating that the system is inadequate CM becomes a critical process as responsibility is transferred to the contractor Increased surveillance of contractor CM processes is essential Production surveillance is limited to verification of performance DCMA PBL Support

15. 15 Property administration Essential for PBL contractors to have effective property management systems Ideally, establish a rotable pool of spares in contractor custody Monitoring of GFP Induction for repairs distinct from recording receipt in Government property management system NAVICP CAV system provides data points for reduction in RTAT metrics PHS&T Ensure contractor does not use least cost methods for shipment of high value items DCMA PBL Support

16. 16 CMMI Implementation More prevalent at sites that have a CMMI contract requirement 20 + sites have been trained Training includes: One day of model training One day of CMMI Based Risk Management (CBRM) method with case studies ½ day of tool training Maintain a core group of trained personnel to support SCAMPIs Full voting member of DoD/NDIA CMMI Steering Group

17. 17 Software Intensive Programs New IPT chartered by the Acting Agency Director Final recommendations due on July 20, 2006 Looking very closely how the Agency conducts Program Level Analysis/Program Level Oversight Areas of review include: Integrated Master Plan/Integrated Master Schedule (IMP/IMS) Basis of Estimate (BoE) Contractor’s Latest Revised Estimate (LRE) Independent Estimate At Completion (IEAC) Competencies the Agency needs especially with regard to Software Cost Estimating

18. 18 Education & Training Initiatives Intern and Journeymen Training ISO9001/AS9100 Quality Management Systems Auditing Training Software Professional Development Program (SPDP) Professional Society Certification INCOSE Systems Engineering ASQ Certified Quality Engineer (CQE) ASQ Certified Software Quality Engineer (CSQE) APICS Certified – Production & Inventory Management (CPIM) Tuition Reimbursement Sabbatical Programs Specialized training from outside sources

19. 19 Other Support Activities Support to Program Status Reviews (PSRs) Completed/Scheduled this year - 10 Seven more reviews are being scheduled Areas normally covered include: Earned Value Management Manufacturing & Production Software Acquisition Management Visits to DoD components Understand priorities, concerns and expectations Support to Air Force Acquisition Transformation Advisory Council (ATAC) Probability of Program Success Will be involved in the pilot activities

20. 20 Conclusion Product Assurance encompasses all technical functions in DCMA Product Assurance focus on customer outcomes will improve the quality of service provided Resource realignment towards higher risk requirements Implementation of systems engineering activities continuing across the Agency Professional, mature workforce knowledgeable and embedded in the supplier base Timely acceptance of products and services meeting customer expectations is the key