MSMO Industry Day Brief 25 August 2008. Objective and Agenda.
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MSMO Industry Day Brief 25 August 2008
Objective and Agenda • Objective: Discuss Navy Acquisition Strategy for Multi-Ship Multiple Option (MSMO) ship repair contracts and respond to industry concerns. Outline way ahead for MSMO Spiral II and use of Industry Day to increase communications with Ship Repair industry. • Agenda • Overview of MSMO Strategy • Navy Responsiveness • MSMO Metrics • MSMO Review • Spiral II • Contract Status • Upcoming Awards • Q&A
Why MSMO • Navy operating concept: Fleet Response Plan (FRP) • Rotational and surgeable • Improved Ao • Ops sked uncertainty requires different supporting maintenance concept • Old maint business model does not support surge readiness or Ao • Navy needed a continuous, responsive, accessible, flexible, affordable, 24/7 maintenance delivery process. • MSMO is that process • MSMO delivers maintenance more reliably and continuously and reduces the readiness “bath tub” effect in a rapidly changing and dynamic environment • MILPERS Reduction Initiative being instituted in FY08 relies on MS/MO contractors as a key source for that workload accomplishment
MSMO Goals • Consolidate requirements into a smaller set of supply chains • Responsive to Small Business Administration (SBA) policy • Responsive to Fleet operational needs (FRP) & SHIPMAIN • Allow for effective and efficient maintenance practices • Allow for long-term vendor & supplier relationships • Advantageous prices, terms & conditions • Product familiarity • Work force stabilization & capital planning • “Ktr plan/ktr execute” more efficient than “Navy plan/ktr execute” • Reduce Navy infrastructure/oversight
MSMO Strategic plan going forward… SHIPMAIN Industry input & feedback MSMO Concept “expectations” Acqn Strat/industry day MSMO Contract “Spiral 1” • Industry rec’d improvements: • MCIT: plng & programming • Contract Eff. BRT: execution • JINII: AIT integration Performance Outcomes Strategic results: Readiness vs cost MSMO Summits Good behavior: bank it Bad behavior: fix it Structural improvements “Procurement” Incremental improvements “Cont. Admin.” MSMO Contract “Spiral 2” …. 2003 2004 2005 2006-7 2008-9
MSMO Contract “Spiral 2” • Industry rec’d improvements: • MCIT: plng & programming • Contract Eff. BRT: execution • JINII: AIT integration Performance Outcomes Strategic results: Readiness vs cost MSMO Summits Good behavior: bank it Bad behavior: fix it Structural improvements “Procurement” Incremental improvements “Cont. Admin.” MSMO Contract “Spiral 3” …progressing through cycles of learning …. 2009 2010 2011 2012 2013 2014 As MSMO structure stabilizes, focus will shift to tactical efficiencies: MCIT, Contractor BRT, AIT Integration
MSMO Outcomes • MSMO demonstrates that it supports Ao and surge readiness • Nearly all MSMO CNO avails complete on time • Incorporation of Growth/New Work has been smooth • CMAVs have reduced material readiness “bath tub” effect • Emergent response has been very successful: • KEARSARGE, HALSEY, NORMANDY, SAIPAN… • Technical performance Outstanding • No known or documented operational or mission degrading failures due to MSMO workmanship or material • Learning Curve performance • Class familiarity permits production engineering improvements and maintenance innovations • Shaft repairs, MV-22, All-electric upgrade, Hab Mods, Scan Eagle, Rapid Cure Coating, Rudder seal replacement • MSMO Cost: Nearly all availabilities perform under the original negotiated cost • More and more partnering evident • CG Modernization East-West improvement process with BAE • NNSY-BAE work share on L-decks • Contractor efficiency Barrier Removal Team formed
Navy Responsiveness • No pre-determined Schedule for Awards • Navy generated waterfall chart of notional awards based on expiring contracts • Navy published notional schedule to industry via FedBizOps. • Navy held Summits with Industry where notional awards were discussed (JINII/Industry Days) • Schedule for Awards impacted by contract workload, including protest work • Multiple East Coast contract awards are protested • Offerors have the right to protest. • Per Aug 28, 2007 Virginia Pilot Article “Shipyards more likely to protest losing multiship contracts,” an industry leader is quoted as saying, "I look at it as risk and reward. Is it worth spending $200,000 to get a contract potentially worth $100 million to $200 million? These protests are nothing personal. To me, it's good business."
Navy Responsiveness • Navy continues execution on urgent and compelling basis and is not held accountable • When timely protest filed at GAO, there is an automatic stay of performance. • While protest is pending, COMNAVSEA may override automatic stay where (1) continued performance is in the best interest of the United States, or (2) urgent and compelling circumstances will not permit waiting for the GAO’s decision [due within 100 calendar days of the protest’s filing]. • COMNAVSEA’s override decisions: Demands of a mission-ready fleet in time of war. • If GAO sustains protest, NAVSEA will continue contract performance by awardee when GAO’s written recommendation authorizes the agency to do so, pending completion of the recommended corrective actions. [For example: GAO finds that its “recommendation can be implemented and meaningful relief attained” despite continuation of performance by the awardee.] • The Navy is held accountable in sustained protest decisions because we implement the GAO’s recommended corrective actions in a reasonable manner and in compliance with the law.
Navy Responsiveness • NAVSEA Contracting practices and processes flawed • Conducted Extensive Assessment of Contracting Processes • Multi-disciplinary (Contracts, Internal Team conducted review) • Recommendations: • Increase use of historical data in Notional Work Packages and Independent Government Estimates • Expand review of Cost Assessments and supporting documentation • Improve documentation quality and consistency • Membership of BVAC should include senior Contracts and Legal experts • Cost Assessment Team should assign risk to cost proposals • Minor administrative changes
Navy Responsiveness • NAVSEA Contracting practices and processes flawed (cont) • Improvements to Existing MSMO Process as a result of Reviews • Exploring use of Contractor support for development of the notional work package and Independent Government Estimate • Revising BVAC Guidance to require CAP and TERP to verify proposal consistency • Conducted coordination meetings to ensure changes are properly implemented
Navy Responsiveness • Navy seeks Capital Improvement Investment • Navy leadership does not require capital investment as part of MSMO process; however, companies can make business decisions to invest in capital projects to enhance their competitive position. • Navy leadership supports the delivery of best value to the government from industry partners, but does not dictate the method of delivery.
MSMO Metrics • Measurements • No global metrics that correlate force-wide material condition to MSMO performance exist • SWE BOD tasked SEA 21 and Fleet Maint Officer to propose and develop additional metrics. • Developing process approach to collect data Industry participation required in collection of metrics data
MSMO Review and Spiral 2.0
Review Recommendations - Validated MSMO concept and strategy • Increase use of historical data in Notional Work Packages and Independent Government Estimates to improve accuracy • Improve IGE documentation • Explore contractor support to supplement process • Expand review of Cost Assessment and underlying/supporting processes • Improve documentation • Pursue Discussion questions to adequate resolution • Re-open Discussions, as necessary, to ensure intent of proposals and compliance with RFP
ReviewRecommendations II • Increase focus on cost realism analysis (identified in GAO decisions) through training, hiring, or contracting for expertise. • Increase emphasis on reconciling proposal differences/inconsistencies in offerors’ technical, cost, and teaming proposals through early communication between TERP Chair and CAP Chair • Ensure trade-offs and judgment calls in the source selection process (and specifically in the cost realism analysis) are adequately documented in the record.
MSMO SPIRAL 2 (Bottom Line) • Internal Review • New NWP/IGE development and Cost evaluation techniques planned • Exploring use of contractors to support drafting of NWP and IGE • Revised, more detailed debriefs to unsuccessful offerors • Very successful briefs for MCM maintenance---will use as template for future out briefs • Updated Acquisition Plan • Continue Cost Plus Award Fee (CPAF) contracts Awarded by Homeport for a class/group of ships
MSMO SPIRAL 2(Bottom Line) • 40% Small Business Percentage Requirement per contract remains • Over 40% incentive to be removed • Provisional AF Payment Included • Fifty percent of potential Award Fee • Payment based on demonstrated performance over two consecutive Award Fee periods • Contract term/options facilitate long term procurement process. • Five year Norm • Government reserves the right to go to a seven year period of performance
Contract Status NINETEEN CONTRACTS AWARDED; FOUR PROTESTS SUSTAINED Homeport/ClassAwardedContract NumberAwardee Norfolk DDG Docking 20 December 2004 N00024-05-C-4404 NORSHIPCO (Now BAE-N) Norfolk DDG (Non Docking) 15 February 2005 N00024-05-C-4406 MHI Mayport DDG (Non Docking) 15 February 2005 N00024-05-C-4413 MHI Norfolk LHA/LHD 23 December 2004 N00024-05-C-4403 NORSHIPCO (Now BAE-N) San Diego CG 24 March 2005 N00024-05-C-4409 SWM (Now BAE-SD) Ingleside TX (MCM 1 Class) 18 July 2005 N00024-05-C-2304 ANTEON (Now GDIT) Puget Sound (FFG/DDG) 19 September 2005 N00024-00-C-8514 Todd Pacific Shipyard San Diego LPD/LSD 5 December 2005 N00024-06-C-4402 NASSCO Norfolk LPD/LSD Non Docking 22 December 2005 N00024-06-C-4401 Earl Industries(Protested) Norfolk CG 47 17 May 2006 N00024-06-C-4415 BAE Norfolk Pearl Harbor DDG/FFG/CG 13 September 2006 N00024-06-C-4408 BAE Hawaii San Diego LHA/LHD 29 January 2007 N00024-07-C-4013 NASSCO San Diego DDG 26 March 2007 N00024-07-C-4407 BAE Mayport FFG 7 12 July 2007 N00024-07-C-4413 MHI/TECHNICO JV (Protested) San Diego FFG 7 03 August 2007 N00024-07-C-4415 NASSCO Norfolk LSD 41 Midlife 28 January 2008 N00024-08-C-4406 METRO(Protested) San Diego MCM 14 May 2008 N00024-08-C-4405 BAE SD San Diego LSD 41 Midlife 03 July 2008 N00024-08-C-4410 NASSCO Norfolk FFG 7 13 August 2008 N00024-08-C-4415 MHI
Upcoming Awards Spiral INotional Award Date Norfolk LPD 17 Class Dec 2008 - First PMA June 2009 San Diego LPD 17 Class TBD (Jan 2009) - First PMA January 2010 Mayport CG47/DDG 51 TBD (Apr 2009) PROTESTED LPD/LSD Norfolk TBD FFG 7 Mayport TBD LSD 41 ML Norfolk TBD SPIRAL II Norfolk DDG 51 Docker (Spiral II) TBD (Sep 2009) Norfolk DDG 51 Non-Docker (Spiral II) TBD (Oct 2009)