Aviation Supply Chain Hot Topics

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Aviation Supply ChainDefense Supply Center
Richmond

• Aviation Supply Chain Hot Topics
• 2008 Aviation Supply Chain Business Conference
• June 2-4, 2008

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Agenda

• Introduction Aleeta Coleman, Procurement
  Process Support Directorate
• Discussion Topics
• Questions and Answers

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• Green Products
• Aviation Engineering Directorate
• Defense Supply Center Richmond

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Agenda

• Background
• Laws and Regulations
• Acquisition
• Suppliers Issues
• Suppliers Incentives
• Case Study
• Resources

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Green Procurement

• Pollution Prevention (P2)
• Biobased Products
• Recycled content Products
• Energy Efficient Products
• The Federal Government plays several roles
• Policy maker and regulator
• Advocate for technology
• Generator of pollution
• Consumer of goods and services
• Green Procurement or buying Green
• Reuse
• Recover
• Recycle
• Minimize waste

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The Law

• Clean Air Act (CAA)
• Energy Policy Act (EPACT) 2002 and 2005
• Energy Independence and Security Act (EISA)
• Farm Security and Rural Investment Act (FSRIA)
• Pollution Prevention Act (PPA)
• Resource Conservation and Recovery Act (RCRA)

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Executive Order 13423

• Strengthening Federal Environmental, Energy, and
  Transportation Management (EO 13423)
• Replaces many previous EOs
• Upgrades the goals of those EOs
• Establishes sustainability policy for operations
  underlying each agencys mission
• President signed in January, 2007
• Core of the current DoD and DLA Green Procurement
  Program

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Other Guidance

• Federal Acquisition Regulation
• Many requirements and clauses concerning Green
• DODI 4715.4 Pollution Prevention
• Affirmative procurement (Green) within DoD
• Alternative Fuel Vehicle Program
• Addresses waste prevention
• Eliminates reliance on Ozone Depleting Substances
• DODI 5000.2, Operation of the Defense Acquisition
  System, paragraph E7.1.7 Environment, Safety and
  Occupational Health (ESOH)

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Scope of Federal Program

• Recycled content products
• Energy- and water-efficient products
• Standby power devices
• ENERGY STAR and FEMP-designated products
• EPEAT-registered products
• WaterSense
• Alternative fuel vehicles/alternative fuels
• Biobased products
• Environmentally preferable products
• Green cleaning
• Green meetings and conference services
• Non-ozone depleting substances
• Low or non-toxic or hazardous chemicals

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The Acquisition Process

• Sustainability and preventing pollution and
  ssusis now a primary goal in any acquisition.
• Life cycle costs increase with disposal of
  hazardous wastes and environmental degradation
• By looking at P2 and sustainability, factors such
  as worker safety, indoor air quality, and
  recyclability can also be taken into account
• The goals
• Reduce waste
• Conserve energy
• Recycling
• Creating markets for Green products

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Suppliers

• Selling Green
• Selling Green products to DLA
• Federal Catalog System
• DOD EMALL
• Must meet one or more attribute requirements
• Green Products are identified as such
• Vendors may self-declare their products as Green

Vendors or suppliers must ensure that the Green
Procurement Product (GPP) statements and claims
to the government are accurate and reflect the
true characteristics of the product. All claims
are subject to verification. Misstatements or
misrepresentation of facts may be cause for
removal or disbarment from future government
solicitations.
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Suppliers (cont.)

• Vendors have an incentive to sell Green products
  to DLA
• These products will be highly visible
• DLAs customers are looking for Green items
• Products subject to procurement preference
• Other Federal agencies subject to the same 'buy
  Green' mandates as DLA Products with reduced
  hazardous components may be easier to ship and
  require less personal protective equipment by
  your employees handling them
• Increasing talk of including Green considerations
  in evaluation factors for awards
• Office of Federal Procurement Policy has proposed
  that all non-Green items be out of the inventory
  in two years

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Suppliers (cont.)

• Department of Defense (DoD) EMall
• An internet-based electronic catalog system run
  by the Defense Logistics Agency that is available
  to federal buyers
• Uses a search engine to access product
  information from a wide variety of government and
  supplier-managed catalogs
• Users
• GPC holders from DOD and military services
• Shoppers from DOD and military services
• Other Federal government and Civil Agency
  personnel
• Budget and Finance offices
• Contractors with government contracts

DOD EMALL now has over 1450 commercial catalogs
with over 32 million items available to
registered users
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Suppliers (cont.)

• Types of Green products
• Energy Efficient Products
• Energy Star
• Federal Energy Management Program (FEMP)
• Biobased Products
• Hydraulic Fluids
• Fuels and fuel additives
• Penetrating lubricants
• Many other categories, new ones being defined
• Recovered content items
• Many other Green categories
• Any item or service that meets the intent of P2

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Impact

• Government required to buy Green products when
  they meet requirement and are economically
  feasible
• Prices may be higher but life cycle costs may be
  lower
• DLA customers have their own Green goals and will
  require DLA to acquire Green products for them
• Customer supply and ordering systems may require
  use of Green items or will offer Green
  alternatives

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ENAC Codes

• Environmental Attribute Code (ENAC)
• Two-digit code that indicates that a product
  meets the specific measurable and verifiable
  environmental criteria of one or more of the DLA
  Approved Environmental Attributes
• Website www.dlis.dla.mil/PDFs/Procedures/vol10.p
  df
• Joint Group on Environmental Attributes
  (JGEnvAtt)
• Comprised of voting representatives from DLA,
  GSA, and the military services with advisors from
  the Dept. of Energy, the EPA, USDA, OSD, the
  Office of the White House Environmental Executive

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Case Study

• Re-refined Motor Oil Program
• 79 Stock numbers
• Closed loop
• Direct Vendor Delivery
• Used oil pick-up  
• Meets required technical certification
  requirements
• Competitive prices
• Easy credit card purchasing at DoD EMALL
• Reduces Americas dependency on foreign oil
• Promotes recycling of used oil

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Resources

• DLA Green Procurement www.dlis.dla.mil/Green/
• Selling Energy-Efficient Products to the Federal
  Government www1.eere.energy.gov/femp/pdfs/sellin
  g_eeproducts_to_gov.pdf
• FEMP Product Efficiency Recommendations
  www.eere.energy.gov/femp/procurement
• EPA Comprehensive Procurement Guidelines
  www.epa.gov/cpg
• EPA P2 www.epa.gov/epp/pubs/vendors.htm
• ENERGY STAR Program www.energystar.gov/
• Office of the Federal Environmental Executive
  www.ofee.gov
• USDA BioPreferred Program www.usda.gov/bioprefer
  red

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Surge and Sustainment (SS)Policy Update
Presented By Charmaine Camper DLA HQ
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What Changed

• New surge policy language, procedures, guidance,
  and instructions
• New clauses/provisions
• Revised SS CLIN structures
• New SS execution process
• Innovative IB tools to support DLA Industrial
  Base Capability
• New presentation of surge schedule
• Monthly Wartime Rate (MWR) replaced D1-D6
• Metrics

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New Policy Standard Enterprise SS
Clauses/Provisions

• 52.217-9006 Surge and Sustainment (SS)
  Requirements
• 52.217-9007 Surge and Sustainment (SS)
  Instructions to Offerors
• 52.217-9008 Surge and Sustainment (SS)
  Evaluation
• 52.217-9009 Surge and Sustainment (SS) Pricing
• 52.217-9010 Limitations on Use of Surge and
  Sustainment (SS) Government Investment

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MWR Replaced D1-D6

• A single monthly wartime rate that represents
• The Services recurring Wartime requirement,
  starting 30 days after a surge order is
  initiated.
• MWR will replace the current D1-D6 surge schedule

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SS CLIN Sample - RFP
Monthly Wartime Rate MWR (i.e. Delivery of 45
EA every 30 days for six months)
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IBMS WICAP Overview

• IBMS and WICAP work together to obtain contracted
  industrial base coverage for go-to-war
  requirements
• IBMS
• Disseminates go-to-war requirements
• Identifies whether or not coverage exists
• If partial or no coverage exists, item targeted
  for a long-term contract
• Manages suppliers Capability Assessment Plans
  (CAPs)
• Manages awarded contracted coverage
• Provides performance metrics on ability to meet
  requirements
• WICAP/eCAP
• Suppliers use system to prepare CAP in response
  to a solicitation
• Collects IB capability measured against go-to-war
  requirements
• Identifies investment requirements to improve IB
  capability

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WICAP - eCAP (electronic Capability Assessment
Plan)

• Standardizes Supplier Capability Assessment Plan
  (CAP)
• Based on MWR Format
• Identifies investment opportunities
• Enterprise SS Clause 52.217-9007 Surge and
  Sustainment (SS) Instructions to Offerors
• Offeror must complete the CAP online and print
  the CAP or questionnaire summary for submittal as
  part of the proposal or the offer. Additionally
  any attachments cited in the online CAP must be
  submitted as part of the offer. Any changes to
  the CAP before solicitation closing date or after
  contract award to identify changes in coverage
  must be done using these websites. Instructions,
  examples and points of contact for the CAP are
  available on the website. The online sites for
  completing the CAP are
• The CAP must be completed using eCAP at
  http//www.dla.mil/wicap/

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WICAP eCAP (electronic Capability Assessment
Plan)

• Standardized format
• Improved management
• Captures surge coverage
• Identifies shortfalls
• Identifies investment opportunities

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Proposal

• Vendor SS requirement after solicitation closes
  IAW clauses/provisions
• Submit prices for surge CLINS ( or )
• Submit information to provide rationale for the
  price difference between surge peacetime
  quantity (certified cost/price data required if
  TINA applies) IAW Clause 52.217-9009
• Complete submit capability assessment plan
  (CAP) to include an exit strategy using e-CAP at
  http//www.dla.mil/wicap/
• Print hard copy of CAP and submit with the offer
  

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Specialty Metals

• Sec 804 National Defense Authorization Act FY
  2008
• Presented By Robert Sebold
• Associate Counsel, Contracts

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Specialty Metals

• Steel if it contains manganese, silicon, copper,
  aluminum, chromium, nickel, titanium, tungsten
• Metal alloys consisting of nickel, iron-nickel,
  cobalt base alloys
• Titanium and titanium alloys
• Zirconium and zirconium base alloys

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Sec 804 NDAA FY 08

• Applies SM restriction to contracts over 100,000
  for Aircraft and Components of Aircraft (as well
  as Ship and Tanks) at all Tiers.

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Exceptions

• Contracts below 100,000
• Electronic Components
• Commercial off the Shelf (BUT exceptions to the
  exception apply)

• Qualifying Country
• Commercial Derivative Military Article allows
  contractor special conditions to certify
  compliance and
• De minimis exception

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Exceptions to COTS

• High Performance Magnets (unless the magnet
  itself is incorporated into a COTS item)
• Fasteners procured as end items (law provides for
  special conditions for fastener manufacturers to
  certify compliance.

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Waiver

• New National Security Waiver
• Under Secretary of Defense for Acquisition,
  Technology and Logistics may approve a written
  determination to accept noncompliant material if
  he determines acceptance is necessary to the
  national security of the United States.

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Strategic Metals Buffer Pilot Project

• Presented By Joie Coppedge
• Chief, Industrial Preparedness Branch

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Problem Statement

• No proactive DOD management approach for
  industrial technologies and capacity for
  strategic raw material used in the production of
  go-to-war items thus
• confusion and sub-optimal results for acquisition
  planning, fixed cost investments and priority
  allocations
• long ramp up time and production delays exist
• Strategic metals as a raw material input for
  production of class IX items often represents a
  critical path constraint creating extended
  production lead time delays

Pilot Project Objectives

• Demonstrate the feasibility of DLA
• Serving as critical raw material provider for DLA
  procured items
• Using a supply chain improvement to mitigate
  production lead time delays

Warstopper initiated pilot concept has wider
application (e.g. JALC task)
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Lessons LearnedWarstopper Tactical Investment
Raw Material Investment
Surge Event Diagram
Traditional Warstopper Investment Target

• OEF/OIF demand surged 1300
• 300M Steelcritical Path constraint
• Steel investment--300K
• Cut lead-time from 571 to 77 days
• Estimated ROI is 10.4 -- or a 2.8 million WRM
  offset
• Pre-positioned steel at vendor
• Executed surge worked!
• Now supported under Army transmission maintenance
  contract original investment returned to
  treasury
• Lessons Learned
• Planned vs. Actual requirement gap
• Tactical level investments are not flexible
• Not transferable to other vendors liability
• Need new money to support other items (e.g.
  torsion bar, landing gear)

Tactical Approach
Hydraulic Motor Transmission Race (Bradley
Fighting Vehicle)
Strategic level investment may provide flexibility
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Investment Points(Strategic Metal and Repair
Part Supply Chain )
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Buffer Concept
Contracting Officer
Strategic Metal Buffer Management Tool
Manufacturers
MILSVC/COCOM
Industrial Specialist
Pilot Manager (DNSC)
Identification of Need
Contracts Strategic Resource
Associations, Industry, MILSVC and others

• Finished Raw Material
• Main Product Sheet, Rod, Pipe, Wire, Rail,
  Shape, etc.

• Requirements for
• DLA SS planning requirements
• Other DLA purchased items
• Other Service items

• Corp Exigency Contract (w/ Mills)
• Cast forms (main product precursor)

Plan, Manage, and Allocate the Strategic Resources
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Material Candidates

• The pilot program is limited to specialty metals
  required to support Warstopper eligible items
  bought by DLA.
• Steel specifications 300M and 50M are the initial
  candidates for the specialty metals buffer.
• The pilot must not conflict with current weapon
  system production (e.g. MRAP) requirements.

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Expected Benefits

• Improved customer support
• Positioned to respond to unexpected demand
• Reduce production lead time up to 70 weeks
• Reduced investment costs
• Strategic material vs. item level investments
• Flexibility to apply resources where needed
• Establish DLA as OSD provider for critical raw
  material
• Repeatable model for other raw materials
• Improved critical raw material mapping to NSN

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Indicators of Success

• Pilot
• Strategic metal capability is established and
  available
• Users aware of the capability and can make
  requests
• Material allocated, accepted and relevant to
  reducing
• lead time
• Pilot Completion
• Concept proven as a repeatable model for
  readiness
• improvement
• Post Pilot
• OSD adopts model as a strategic DOD resource and
  
• practice
• DLA, Industry, and the Services establish a long
  term
• effort or working group that oversees the
  practice

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Pilot Project Milestones
Decision Point For Project Expansion
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• Questions?