This issue focuses on our continued emphasis in achieving better buying power for the Army. Since its inception in 2010, the Better Buying Power initiative has resulted in significant accomplishments. It has proved timely, as these efforts to achieve efficiency in our programs and embrace best-value business practices have helped to prepare us for the budget challenges we face now and into the foreseeable future.
The success of the Better Buying Power initiative is attributable to both its comprehensiveness—looking at cost control, competition, affordability analysis etc.—and its timeliness, coming as we transition from a decade of combat into a period of constrained resources in which we can no longer rely on the funding created for overseas contingency operations.
I’m very proud of our Army’s efforts to embrace and implement the Better Buying Power initiative. Our dedicated commitment has resulted in measurable progress and tangible savings for DOD and the taxpayer:•The successful execution of multiyear production contracts for the CH-47F Chinook and 537 UH-60 Black Hawk aircraft has lowered procurement costs by nearly $709 million.•More than $286 million was saved through negotiated contracts for the High Mobility Multipurpose Wheeled Vehicle.
•In another example of multiyear competition, the Family of Medium Tactical Vehicles program saved more than $575 million.•We generated $66 million in savings in buying the double V-hull Strykers and nuclear, biological and chemical reconnaissance vehicles (NBCRVs) using a single contract.•In an example of leveraging real competition, the Joint Tactical Radio System Enterprise Business Model produced at least $500 million worth of efficiencies in the procurement of the Multifunctional Distribution Information System – Low Volume Terminal radio.
Another tenet of Better Buying Power calls for building stronger partnerships with the requirements community to control costs. Making affordability a key performance parameter in our acquisition programs requires flexibility to trade or modify requirements to meet the cost thresholds.
We accomplished this in the Joint Light Tactical Vehicle program. The program’s technology development phase was used to demonstrate the integration of mature technologies as a complete system. The results were then used to refine the requirements through the use of costinformed trades in close partnership with the Army and U.S. Marine Corps user communities, which yielded a set of achievable, affordable requirements.
This effort allowed the Army to reduce the length of the subsequent engineering and manufacturing development phase from 48 months to 33 months, and to challenge contractors to reduce manufacturing costs to meet a target cost of $250,000 per unit. This is an example of what we need to continue to do in our programs.
Our renewed emphasis on affordability analysis and caps to control cost growth has profoundly influenced our planning and execution of current and future acquisition programs. The Army has already implemented affordability constraints in many programs, such as the aforementioned Joint Light TacticalVehicle and the Ground Combat Vehicle. This analysis, accomplished within and across weapon system portfolios, continues to be a major priority for me as I conduct regular program reviews with my PEO community.
I have also emphasized using Better Buying Power 2.0 to focus the role of small business in driving our innovation and fostering competition in Army Acquisition. The Army continues to lead in this critical area. In FY12, the Army’s small business participation amounted to $22.1 billion, more than 27 percent of total Army spending, reflecting our commitment to small business opportunities.
Should-cost principles have been used to incentivize our program managers to achieve value for the warfighter while lowering cost. Over the past year, the Army has executed numerous shouldcost initiatives in Acquisition Category I, II and III programs, with significant success across all three ACAT levels. We are the only service to accomplish shouldcost success in all three categories.
In essence, we incentivize program management teams to examine all cost assumptions based on the history of a given program. We challenge our program management teams to seek creative ways to reduce management
A PROFESSIONAL WORKFORCE
costs. For example, can we reduce costs by examining management efficiencies? Do we really need to build in software development or testing costs at the same levels in a fairly mature program? By examining our assumptions about what a program will cost, we can come to a better understanding of what a program should cost. Overall, we executed some 219 should-cost initiatives in FY12.
As a result, the Army achieved considerable savings in the Stryker program as we combined double-V hull and NBCRV buys, while pursuing efficiencies gained in test methodology. Existing test data were used effectively, and test events were combined to achieve efficiency. This initiative exceeded expectations.
The M855A10/M856A1 Enhanced Performance Round is another program in which we achieved savings by using should-cost analysis. We accelerated cost reduction efforts in the ammunition production process, used a common bullet cup, developed a high-speed cold heading process and decided to conduct production at Lake City Army Ammunition Plant, MO.
We’ve found that should-cost/will-cost methods for ACAT III programs have been particularly successful. They are often the programs with the tightest budgets, so gaining efficiencies theremakes a big difference. We intend to continue building on that success.
Army Acquisition will continue striving to meet our goals as set forth by the Secretary of Defense in April 2009.
But the Army’s commitment to the workforce is not just about numbers. It’s about professionalism—high standards for key leadership positions and strong professional qualifications within every one of the 14 acquisition career fields. We have focused on ensuring that acquisition personnel get the education, training andSince 2009, Army Acquisition has been working toward adding nearly 2,000 professionals to the ranks of the AL&T workforce, under the Growing the Acquisition Workforce initiative at each end. To date, the Army has hired more than 1,700 new acquisition professionals.
THE WAY AHEAD
experiences required of their positions, and the results are telling: 92.5 percent of the workforce is certified as required by the Defense Acquisition Workforce Improvement Act or is within the allowable grace period, an all-time high rate.
In addition, our goal is to ensure that our acquisition personnel remain current by requiring at least 80 Continuous Learning Points every two years, so that their skills stay relevant. We are proud to have had the opportunity to pilot new acquisitioneducation, training and experience programs to ensure that we address acquisition competencies at every level, critical skill set attainment and leadership development. The warfighter depends on you for leadership, because it is you we select to manage acquisition programs and invest valuable public resources.
A key feature of Better Buying Power 2.0 includes a call for long-term investment planning to drive efforts towardaffordable programs. We initiated a strategic modernization planning effort, starting with an understanding of emerging threats, national priorities and capability gaps; it links a detailed analysis of our current programs of record and planned investments in science and technology across a 30-year timeframe. The output of this process will be a detailed road map for our future capabilities across the acquisition life cycle, aligning S&T investments with our programs of record, which
in turn are mapped to long-term sustainment planning.
It’s important to take this long view, because in our current fiscal environment, we cannot afford to make the wrong investments. By taking a long-term outlook, we prioritize and synchronize our modernization and sustainment efforts to ensure that tomorrow’s Armycontinues to be the best-equipped force in the world.
The strides we have made already in achieving better buying power are impressive. The inventive ways in which the workforce has implemented new ideas are encouraging. The focus of the Better Buying Power initiative andour emphasis on professionalism of the workforce are critically important to our success.
I look forward to working with you to implement Better Buying Power 2.0 in Army Acquisition programs. We have tough challenges now and in the future, and our commitment to these sound practices will help us to succeed.