1. Army Working Capital Fund (AWCF) Investments Process and Opportunities
4 March 2015
Josh Kennedy
AMCOM Logistics Center
U.S. Army Aviation and Missile Command

2. Modernization [Technology Refreshment] is Continuous…
Sustain
Field
Acquire
Dispose
Utility PM Example:
UH-60L-Digital
ITEP
MWO’s
UH-60L
UH-60M
UH-60A
Numerous ways for Industry Partners (of any size) to “get into the game”
APA/OMA – New Models, Major Modifications, Spiral Development…
PEOs /PMs
Performance Based Logistics (PBL), IRAD, Eng Change Proposals (ECPs)
Team Redstone endeavors to maintain a capability and technology overmatch through continuous modernization and technology refreshment.
There are multiple paths for industry to “get into the game”:
Through PM modernization and sustainment efforts
Through PBL contracts, IRAD, and ECPs
And through AWCF investments to resolve obsolescence issues, and tackle RAM, cost, and maintenance labor drivers
3) Understanding the needs, priorities, constraints, and programmatic challenges for each weapon system, at each milestone and throughout each lifecycle phase is imperative for effective Government-Industry partnership which create business opportunities
We’ll present one method employed by Team Redstone to identify those opportunities for weapon systems in the sustainment lifecycle phase, and highlight key points where industry can gain insight into those needs, priorities, and opportunities – specifically the sustainment analysis process through which we prioritize AWCF investment capital
The rest is up to you – our industry partners – to establish, develop, and maintain relationships with key POCs and offices so that your capabilities, your value proposition are aligned to the most critical needs of the Government
Industry
AMC - AMCOM
AWCF Investments in Component Re-Design
$60M/yr 2

3. Public Law Regarding AWCF Investments
Authority: 10 U.S. Code § Working-capital funds
(c) Working-capital funds shall be charged, when appropriate, with the cost of (1) supplies that are procured or otherwise acquired, manufactured, repaired, issued, or used, including the cost of the procurement and qualification of technology-enhanced maintenance capabilities that improve either reliability, maintainability, sustainability, or supportability and have, at a minimum, been demonstrated to be functional in an actual system application or operational environment; and
(2) services or work performed;
Importance: Ability to Influence Sustainment Costs and Readiness
AMCOM has Leveraged AWCF for: - Obsolescence Mitigation - Operating & Support Cost Reduction - Condition-Based Maintenance - Continuous Technology Refreshment - Reliability Improvement Program - Product Improvement Pilot Program
We leverage Title 10 authority to use AWCF for a wide array of product and process improvement projects
Having this authority and maximizing the effective application of funds gives us the ability to influence sustainment costs and readiness drivers
Twice each year, we request project proposals from all aviation and missile project offices
These proposals are vetted and prioritized based on a comprehensive review process which requires PM buy-in
Semi-Annual Process to Determine Where to Invest

4. AWCF Data Call Process:
Purpose:
Solicit and fund project candidates that will provide implementable solutions to mitigate known obsolescence issues, reduce sustainment costs, improve component reliability & usable life, and/or improve readiness. This process strives to vet and prioritize projects based on technical merit and stakeholder priority.
AWCF Data Call Process:
Entry: Candidate Project Packages – Consolidated List
PEO Review / Concurrence
PEO/ALC Consolidated List
Exit: Final List / Project Packets Approved for Funding
AMCOM will Solicit for Solutions to Specific Root Causes Identified in the Sustainment Analysis Process
1) The semi-annual project data call is the culmination of analysis processes to identify issues, down to the root cause, and opportunities with significant return on investment
Opportunity for ROI can be measured in terms of cost avoidance, RAM improvements, obsolescence mitigation, decreased maintenance labor burden, improved safety, or any combination thereof
Key take-away, which will be highlighted again, is PM sponsorship – a well developed proposal which addresses one or more root causes AND has been fully coordinated with, and supported by, a PM
Proposals: Must Focus on Reduced Demands/Cost, or to Mitigate Obsolescence
Industry: Can Submit Project Candidates to AMCOM for Consideration for Any Secondary Item

5. AWCF Project Proposals
Each Project Must be Coordinated with Applicable PM
Project proposals are submitted in a standard format covering what is proposed and what the proposed project will accomplish (in measurable terms), who will provide the solution (Government, industry, large business and/or small business), when the solution will be implemented – and how
Key take-away, again, is PM sponsorship….you may write the best proposal ever written, but without PM sponsorship the likelihood of success is low
Primary message: know what the PM see’s as the primary concerns through close coordination with the appropriate POC and craft proposals that are responsive to those needs
Well written proposals focused on the most critical need, describing solutions to identified and high priority root causes are vetted through a comprehensive review process…
Industry: Can Submit Project Candidates to AMCOM for Consideration for Any Secondary Item

6. Project Evaluation Flow Chart
All project proposals are evaluated thoroughly, scored, and ranked according to technical merit and criticality of the root cause
Scored projects are then rank ordered by the affected PM and prioritized by the respective PEO
If your proposal addresses issues on systems that are deployed to an operational theater you can bet that PM interest will be higher
Once submitted, the project evaluation process takes approximately five months to complete all gates
Once AMC approval is obtained, Government leads are notified and contract actions are initiated
Twice a year during a 5 month duration
April thru August
October thru February

7. How We Are Tackling “Spend” Drivers
Numerous ways for Industry Partners (of any size) to “get into the game”
OEM
PBLs or Efforts
Supporting
PMs
PEOs/PMs
Modernization
Efforts
*Industry Proposals must address:
Reduced Demands & Cost
Mitigate Obsolescence
3) Lower Lifecycle Cost Burden
End-To-End Sustainment Analysis Process
I’ve talked about project proposals, when they are submitted, how they are vetted, and the key aspect of having PM sponsorship, now I’ll focus on how we get there: the analysis process that is used to generate project proposals
The process begins with the Integrated Priority List and follows a detailed, data-driven exploratory analysis process, to get down to root causes
Key take away from this slide is that proposed solutions to root causes should address at least one of the three key areas – best solutions address more than one

8. Integrated Priority List (IPL)
Purpose:
The AMCOM Integrated Priority List (IPL) provides a comprehensive list of metrics for all active AMCOM-managed components to facilitate analysis of historical component performance in the areas of maintenance, supply, demand, operational performance and other related areas.
IPL Process:
Entry: Calendar Trigger – Start Semi- Annual Process on 1 Mar & 1 Sep
Query LMP Data, integrate other data sources keyed to NIINs
Ranked by Cost Burden
Internal & External Validation & Verification
Exit: Published IPL
The IPL is a key document which lists all AMCOM-managed items, about 18,000 of them, in a rank order according to their per unit cost and annual demands
It’s generated twice each year on the 1st of October and the 1st of April and is available to industry through the CASL
Legal, contractual, and security constraints limit the amount of data we can include in the public release version of the IPL; however, you can see from the list where AMCOM spends the majority of our AWCF dollars
IPL Posted to CASL
Information to Industry

9. Integrated Priority List (IPL)
Serves as a Focusing Mechanism for Spending Limited Resources (funding, personnel, time)
Priority: Rack-and-stack of All AMCOM-Managed Items by Annual Cost Burden (Price x Demands)
Integrated: ‘One-Stop Shop’ of Info on a Given NIIN Across a Wide Variety of Sustainment Metrics
LMP/Demand, ASAP/R&M , MCDS/2410, RIMFIRE, & Other Sources as identified
IPL Has Evolved, each Semi-Annual Iteration Has New Features: Visibility on B16-AVN (CECOM- managed) Items, Filter by Platform, Costing Data, and more
26.3%
FOUO
AWCF Cost Burden:
AVN/B17
MSL/B64
Total AWCF AMCOM Cost Burden
$1.373B
$122.6M
Top 200 AMCOM Cost Burden
$1.134B
$102.4M
Percentage
82.5%
83.5%
As indicated on this slide, roughly 83% of the secondary item cost burden occurs on the top 200 items of the IPL. As such, these items are where we’ll focus the majority of our analysis efforts
FOUO
FOR OFFICIAL USE ONLY

10. Component X Purpose: Comp X Process:
Component X (Comp-X) performs exhaustive exploratory analysis on a component to identify where additional effort could lead to large payoff reductions in the sustainment cost burden by extending usable life, reducing demands, reducing Maintenance Man-Hours (MMH), and/or improving readiness. These components are collectively referred to as Values of Opportunity (VoO).
Comp X Process:
Entry: Published IPL & PM Priority List
Data Gathering & Analysis
Identify the Value of Opportunity (VoO)
Exit: Generate Problem Statement for the Final Signed Report
Industry: Any Relevant Findings from the Comp X Process will be Provided as Part of the Solicitation

11. Root Cause Working Group (RCWG)
Purpose:
For a specific component, the Root Cause Working Group (RCWG) determines associated root cause and recommends possible courses of action (COAs) to address problem statements identified by the Component X (Comp X) process.
RCWG Process:
Entry: Signed Comp X Final Report
Steering Committee Unanimous Approval Decision goes to Industry or Government
Prioritize & Identify Root Cause(s) Based on Likelihood
Steering Committee Review
Exit: Root Cause Determination & Develop Project Proposal Packets for AWCF Investment
Industry Opportunity
Industry: Any Relevant Findings from the RCWG Process will be Provided as Part of the Solicitation
Competitive Solicitation

12. AWCF Data Call Process:
Purpose:
Solicit and fund project candidates that will provide implementable solutions to mitigate known obsolescence issues, reduce sustainment costs, improve component reliability & usable life, and/or improve readiness. This process strives to vet and prioritize projects based on technical merit and stakeholder priority.
AWCF Data Call Process:
Entry: Candidate Project Packages – Consolidated List
PEO Review / Concurrence
PEO/ALC Consolidated List
Exit: Final List / Project Packets Approved for Funding
AMCOM will Solicit for Solutions to Specific Root Causes Identified in the Sustainment Analysis Process
1) The semi-annual project data call is the culmination of analysis processes to identify issues, down to the root cause, and opportunities with significant return on investment
Opportunity for ROI can be measured in terms of cost avoidance, RAM improvements, obsolescence mitigation, decreased maintenance labor burden, improved safety, or any combination thereof
Key take-away, which will be highlighted again, is PM sponsorship – a well developed proposal which addresses one or more root causes AND has been fully coordinated with, and supported by, a PM
Proposals: Must Focus on Reduced Demands/Cost, or to Mitigate Obsolescence
Industry: Can Submit Project Candidates to AMCOM for Consideration for Any Secondary Item

13. Project Tracking and Assessments
General Officer
Quarterly Reviews

14. Key Take Aways
AMCOM has Developed a Consolidated Analysis Playbook Process to Focus its Investments for Systems in Sustainment Lifecycle Phase
In Partnership with PEO AVN and PEO MS, AMCOM Invests Approximately $60M/year of AWCF in New Technology and Product or Process Improvements to Lower Ownership Costs and Fight Obsolescence, While Maintaining or Improving Readiness
Numerous Ways for Industry (any size) to “Get Into the Game”
For AMCOM:
Semi-Annual Data Call for Projects
Projects that Mitigate/Eliminate Obsolescence
Projects that Reduce Demands and/or Price (Cost Burden)
Competitive Solicitations for Specific Root Causes via FedBizOpps (as Marketed through CASL)
Relevant Findings from Sustainment Analysis Process will be Part of Solicitations
Review IPL Provided via CASL

15. FY15 Projected/Remaining
Organic
Non-Competitive
Competitive
ALC Opportunities $M $M
Secondary Items
Services
Repairs
$1,184.80
FY15 To Date
FY15 Projected/Remaining
$1,155.10
Competitive Procurement
Goal = 24.5%
11 Awards
$513.69M Total
26 Awards
$1,592.79M Total
Total Services $2,106.48
Procurements
$406.10
Engineering/Technical Support
Logistics Support
Equipment Maintenance Support
IT Support
Management Support
Studies, Analysis, and Evaluations
Other/Publications
$332.30
Secondary Items:
Procurements for FY14 = $519.3M ( FY15 projects a 24% increase, FY16 projects a 8% decrease)
Repairs for FY14 = $ (FY15 projects a 23% increase, FY16 projects a 28% increase)
Total FY15 Services:
Engineering Support Technical Services = 10 Awards / $763.49M / 36.14%
Logistics Support Services = 2 Awards / $654.00M / 30.96%
Equipment Maintenance Support Services = 7 Awards / $618.53M / 29.28%
IT Support Services = 5 Awards / $53.85M / 2.55%
Management Support Services = 4 Awards / $13.44M / 0.64%
Studies, Analysis and Evaluations = 5 Awards /$3.83M / 0.18%
Other Contract Services = 2 Awards / $3.17M / 0.15%
Publications Support Services = 1 /$2.00M /0.09%
FY14
24,532 Items Managed
1,394 Buys Per Year
(30 Sep 14)
420 Competitive Buys
AMCOMs Industry Partners (General Electric, Sikorsky, Honeywell & Boeing)
Project Competitive/Sub Contracting Opportunities of Approximately 24.5%
Information Available in CASL

16. Backup