Description
Organization: NAVAIR
Team Name: Harpoon Block II Acquisition Team
Related Acquisition Topic(s): Acquisition Practices Streamlining, Commercial Practices, Cycle Time Reduction (CTR), Integrated Product Teams (IPT), Integrated Product and Process Development (IPPD), Other Transaction Authority (OTA)
Description:
On 13 November 1998 the United Stated Navy (USN) and McDonnell Douglas Corporation entered into a Section 845 Agreement to develop a major upgrade to the Harpoon Weapon System (HWS) referred to as the Block II Program.
Examples of Integrating Defense with the Commercial Base and Practices: · Boeing is funding the entire R&D program estimated at $46M. · Contractor investments benefiting Department of Defense (DOD) programs are in sync with current DOD acquisition reform initiatives. Block II sets precedence for other DOD contractors to follow. · The USN contributions include: critical Government Furnished Equipment (GFE) valued at $8M, Government Furnished Information (GFI), rent free use of depot equipment, technical and program management expertise. · Boeing will recover their investment through a risk recovery payment applied to sales of Block II missiles and missile retrofit kits. As with commercial products, development investments are recouped though unit sales. · Internal Rate of Return (IRR), a widely used commercial capital budgeting concept was used to determine reasonableness of the business arrangements contained in the Section 845 Agreement. IRR recognizes the time value of money to determine if a capital investment generates sufficient cash flow to justify the investment. · International customers are offered the opportunity to upgrade their HWS investments at an affordable rate verses being forced to procure other modern weapons offered by foreign competitors. Selection criteria: 1.a. Reducing Life Cycle Costs: · The USN retains the right to purchase Block II at below Boeing manufacturing cost for up to 300 retrofit kits in exchange for its participation. Selection criteria: 1.d. Promoting Continuous Improvement of the Acquisition Process: · The Section 845 Agreement was tailored to the requirements of the program thereby reducing 50% of non-value-added sections and clauses entailed in a standard DOD contract. The Section 845 will facilitate the product development and delivery to our international HWS allies by 2001.
Other Salient Acquisition Reform Initiatives:
· The agreement promotes rapid development of the Block II prototype and allowed the Navy to incorporate value-added terms and conditions. · The HWS receives a major upgrade without any DOD appropriation requirements. Selection criteria: 1.b. Making the Acquisition System More Efficient, Responsive and Timely: · The program was initiated by an unsolicited proposal from Boeing verses a standard RFP. Selection criteria: 1.c. Integration Defense with the Commercial Base and Practices: · Authorization to release Block II technology to current HWS customers as well as additional allied nations was granted by standard USN International Programs Office policy and procedures prior to signing the Section 845 Agreement. · This partnership strengthens the US industrial and commercial based ideology with the government. · Block II integrates a Global Positioning System aided Inertial Navigation System (GPS/INS) into the baseline HWS from existing Non-Developmental Items (NDI) and software developed under other DOD acquisition programs. Selection criteria: 1.e. Accomplishing Specific Goals Associated with Acquisition Reform Initiatives: · Integrated Product Teams (IPT) are organized to include Government and Industry co-chair members vice Government teams with contractor input.
What is the Block II Program?
· Next evolutionary upgrade to the HWS will provide GPS/INS accuracy to the missile guidance system. · Provides increased effectiveness against ship targets in the littoral environment and adds a new strike mission capability against land targets at GPS accuracy. · Provides a 10 to 1 improvement in ship target to shore separation accuracy. · New build Harpoon missiles with Block II technology and performance enhancements will be on the order of 50% less expensive than the primary foreign SUW competitor. · The early 70's technology Midcourse Guidance Unit (MGU) is replaced by a 90's technology Guidance Control Unit (GCU). Preliminary GCU results indicate a 2:1 reliability factor increase over the MGU and the GCU provides the capability to perform software upgrades in-country verses shipping missiles back to the depot.
Why is Boeing willing to invest in the Block II Program?
· HWS is the largest deployed Surface Warfare (SUW) weapon throughout the world with 24 active allied nations. · Boeing market analysis projects an investment payback period of 2 to 3 years based on sales to current and potential new international customers. · Positions Boeing as a leader in the international marketplace for SUW weapon systems. · Boeing marketing research indicates a substantial market exists with current HWS customers and potential for new customers for Block II like weapon system technology. · The Block II maintains technological and performance superiority to any other SUW weapon system in the world and provides the logical path for future technological enhancements.
Why is the USN participating in Block II Program?
· Harpoon is the only medium range SUW weapon in the USN inventory. This program offers the USN the opportunity to evaluate Block II performance without requiring appropriations in the FYDP. · Ensures opportunity for the USN to affordably upgrade the HWS in the future. Selection criteria: 1.c. Integration Defense with the Commercial Base and Practices: · Continued international sales of HWS: · Supports USN International Programs Office infrastructure. · Allows the USN to maintain control of SUW weapons in the foreign competition market, which might otherwise decrease our knowledge and ability to defeat any future cruise missile threat.
