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> Home / Acquisition Topics / Business, Cost Estimating and Financial Management / CAIV / Cost as an Independent Variable / Reducing Costs for NATO Seasparrow Missile

Reducing Costs for NATO Seasparrow Missile

Reducing Costs for NATO Seasparrow Missile

Organization: NAVSEA, PEO (EXW)

Team Name: NATO Seasparrow Program Office

Related Acquisition Topic(s): Business Process Reengineering (BPR), Commercial Practices, Commercial and Non Developmental Items (CANDI), Cost As an Independent Variable (CAIV), Cycle Time Reduction (CTR), Financial Management, Partnering, Performance Specs and Standards

Description:
NATO Seasparrow wins Vice President Gore's Hammer Award

The NATO Seasparrow Surface Missile System Capability Modernization Team has been awarded Vice President Gore's Hammer Award. The Modernization Team has redesigned the processes by which they program and award contracts for design and construction of improvements to the NATO Seasparrow Surface Missile System or its components. By shifting to the use of requirements and capabilities documents with an accompanying set of goals statements, more companies within the private industry sector are able to compete successfully with defense industry giants. The Team has incorporated cost considerations as part of both performance requirements and program goals. This, in conjunction with rethinking system and component designs to adapt the functional performance to commercially available products, Commercial-off-the-Shelf (COTS), has resulted in savings and cost avoidance totaling over $146 million in four target programs. In especially difficult projects, the Team has worked with industry to identify potential partners and build teaming arrangements so that the financial and technological benefits gained through the use of specialized companies can be realized. By not placing artificial limitations on industry in directing conformance to a preset design, industry has, in all cases, presented a more robust and capable design within the funding profile. Timeframes have been significantly reduced, often by more than 65 percent, resulting in an accelerated delivery of the product to the customer.

The result of this re-engineered business process is that fewer government dollars buy more, the product is of improved quality, and the product gets to the customer faster. The Team's efforts have resulted in significant savings to the government, and ultimately the taxpayers. The customer, the US Navy, will benefit from a reduction in annual maintenance expenditures, on average, of approximately 39 percent across all NATO Seasparrow equipped ships. The equipment purchased is more reliable and easier to maintain, with built-in fault detection and isolation circuitry.

Training sites will be able to reduce course length, by as much as 40 percent, which translates to a more capable sailor reaching the Fleet faster with fewer training dollars spent and less maintenance and associated manpower required. Fewer spare parts will be needed, reducing the dollars spent to inventory and maintain.

Personnel levels required to support the system can be reduced in all areas, from the number of sailors needed to operate and maintain the system, to the number of instructors required to teach them. Lastly, the Team did this by revitalizing an aging system, capitalizing on a large taxpayer investment made almost 30 years ago. The Team has taken once stagnant programs, becoming more and more outdated, and turned them into vibrant, affordable healthy, programs. These programs are providing improved technology and capability to meet the emerging requirements of the 21st century. Through employment of acquisition reform, implementation of cost as an independent variable, and full use of proven commercial business practices, this area of the government has learned to do more with less, making every taxpayer dollar count. The Team's ability to seek new ways of doing business have made a significant contribution to building a government that costs less and works better while supplying their ultimate customer, the sailor, with equipment that has improved technical capabilities.

NAVSEA, PEO (EXW)

NATO Seasparrow Program Office



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