Streamlining FMS Procurement of the F-100 AEGIS Equipment

Streamlining FMS Procurement of the F-100 AEGIS Equipment

Organization: NAVSEA, PEO Surface Combatants/AEGIS

Team Name: AEGIS Program Team

Related Acquisition Topic(s): Cycle Time Reduction (CTR), Financial Management, Integrated Product Teams (IPT), Integrated Product and Process Development (IPPD), Paperless Contracting, Partnering

Description:
During the recent procurement of the F-100 AEGIS equipment, the Navy/Raytheon Spanish Foreign Military Sales (FMS) F-100 Contract Team created an industry/government partnership that distinguished itself in the timely cost effective award of the F-100 AEGIS SPY-1 Transmitter and Continuous Wave Illuminator contract using radically streamlined acquisition techniques. The techniques successfully employed were the use of parametric cost modeling, electronic submission of a streamlined proposal, and the use of an inter-disciplinary government/contractor team resulting in the concurrent execution of required tasks further reducing cycle times. The team reduced cycle time by 60%, from 190 days to 69 days; produced overall cost savings of 12%, from $122M to $105M; and reduced by 52%, from 499 man-days to 239 man-days, the contractor effort in proposal preparation, business clearance and post-award audit support.

Program Acquisition Innovation Highlights: The Spanish Raytheon acquisition coincided with the FY 98-01 Multi-Year procurement. The Navy employed economies of scale by combining the procurement of Spanish long lead material and Multi-Year long lead material. This effort produced a 32% return on investment, reducing projected costs from $20M to $12M.

The original Spanish F-100 Raytheon procurement used traditional contracting methods. The result was a four volume, 1832 page paper proposal, generated by department, and applying discrete rates for labor category and specific accounting periods. The proposed cost to the Navy was $102M for four ship sets and the required support. The estimated time to review such a proposal was 180 days, requiring 499 contractor and 55 Defense Contracting Auditing Agency (DCAA) man-days of support.

The Navy and Raytheon convened and empowered an Integrated Product Team (IPT) to review the Spanish F-100 contract methodology. The IPT, consisting of stakeholders from the Navy, and DCAA, determined that the Spanish procurement was adaptable for using parametric cost modeling. The overall model was validated by the contractor/Navy team, and was used to estimate costs for each task. The decision by the IPT to change the proposal methodology resulted in the requirements for an updated proposal. Raytheon, following the agreements made by the IPT, produced a 40 page all-inclusive electronic proposal, and by using consolidated historical rates, lowered the contract value to $93M, a reduction of $9M.

The IPT redesigned the evaluation process, eliminating the traditional sequential evaluation process and the negotiation of individual line items. The team established a concurrent audit, technical evaluation, fact-finding, and pre-business clearance process providing material to each team member using the established electronic environment. A waiver from the requirement to submit certified cost and pricing data was approved based on the maturation of the AWS Program. This process lessened the cycle time from 120 to 46 days and negotiations, post business clearance, and award cycle time was reduced from 60 to 23 days; The Raytheon man-days in supporting this procurement decreased from 499 man-days to 239 man-days, a 48% reduction. The successful conclusion of this procurement, and the resulting cost savings of $15M, was only possible through the trust and commitment to acquisition reform demonstrated by the award recipients.

NAVSEA, PEO Surface Combatants/AEGIS

AEGIS Program Team