Description
Organization: NAVSUP, Fitting Out and Supply Support Assistance Center
Team Name: Price Fighters Team
Related Acquisition Topic(s): Alpha Contracting, Business Process Reengineering (BPR), Cycle Time Reduction (CTR), Financial Management, Knowledge Management, Partnering
Description:
The highly-successful PRICE FIGHTERS team adds significant value to the acquisition process and is a major player in ensuring the best possible defense structure for the least cost. Through innovative pricing practices and an unwavering commitment to excellence, this team has achieved actual, documented savings to the Department of Defense of $1.69 billion since 1983.
PRICE FIGHTERS provides a range of technical analyses and procurement support, from piece part items through weapon systems, in addition to handling end-user (Fleet) inquiries questioning the prices paid for military-procured material and equipment through the Price Challenge Hotline. Since taking over the Navy Price Challenge Hotline Program in April 1994:
program manpower requirements have been reduced by almost 60 percent
total response output per man-year effort has increased 56 percent
total response turnaround time has decreased 54 percent
return on investment has increased more than 1,000 percent
customer satisfaction has increased substantially based on documented customer feedback.
In addition to supporting the Department of the Navy acquisition workforce, PRICE FIGHTERS also support the Defense Logistics Agency, the U.S. Marine Corps, the U.S. Air Force, the U.S. Army and the U.S. Coast Guard on a reimbursable basis. PRICE FIGHTERS' calendar year 1997 return on investment is almost 39 to 1, making it an extremely cost-effective program and a prudent expenditure of taxpayer dollars.
Program Acquisition Innovation Highlights:
In an innovative and precedent setting effort, PRICE FIGHTERS developed and executed a process to price repair of spares and weapons systems. With the customers' needs foremost, an "Average Repair Should Cost Analysis" was developed, which included "single unit costing." To determine the single unit cost, PRICE FIGHTERS employed material usage factors to estimate the expected cost of an item or system. This estimate gave consideration to the extent of repair required, parts requiring replacement and unit price of materials. Because repairable items have many possible repair situations, they developed a model with multiple repair scenarios which fits most repair situations encountered. This precedent setting methodology was used in an Average Repair Cost Analysis to successfully refute a vendor's stated claim of "actuals" for unit test and assembly and to obtain a 45 percent cost reduction in the contract. This repair methodology has been used to determine average repair costs on more than 57 spare parts and systems, resulting in a savings of $21.3 million to the Navy and Coast Guard in 1997 alone.
Using a recent PRICE FIGHTERS-developed methodology to calculate the cost effect of a Restart of Production, PRICE FIGHTERS projected their estimate of the cost to the current production effort. They joined the contractors' Subcontractor Analysis Team and jointly developed a cost evaluation strategy to determine a fair and reasonable price for the six major subcontracted systems.
PRICE FIGHTERS developed procedures and practices to directly support the ALPHA Acquisition initiatives with the Naval Air Systems Command. As a recognized member of the ALPHA Acquisition team, PRICE FIGHTERS has been directly responsible for significant reductions in acquisition lead times, and the cooperative teaming of Government and Industry by mutually establishing long-term pricing structures and policies. Tasks that previously took months or even years can now be performed in weeks, thereby significantly reducing procurement costs and increasing Fleet readiness.
In support of the F-14 program, the PRICE FIGHTERS completed price and cost proposal analyses for several platform upgrades including the Programmable Tactical Information Display System Kit acquisition for the F-14A to F-14B upgrade, as well as the Precision Strike system, resulting in substantive cost savings. The latter effort resulted in savings that allowed for the acquisition of sixteen additional Precision Strike modification kits.
In the Price Challenge Hotline Program, a challenger at the Naval Air Station San Diego, California questioned the $56,210 price of TF34 engine modification kit. The Hotline program determined that the correct price should have been $365, resulting in an annual cost avoidance of more than $8.6 million.
