Shoulder-to-Shoulder Contracting Presented By: James Gill David Block

1
(No Transcript)
2
Shoulder-to-Shoulder ContractingPresented
ByJames GillDavid Block
3
Who we are

• Mr. James Gill
• Currently Contracts Committee, SMC
• 30 Years of Acquisition Experience
• Peacekeeper, Small ICBM, SBIRS, SBR, Launch
  Programs
• Professor Cal State San Bernardino, National
  Security Studies
• Mr. David Block
• Currently Deputy Chief SBIRS Contracting, SMC
• 25 Years of Acquisition Experience
• Sustainment of F-117, A-10, F-111, Classified
  programs
• Major weapons systems acquisition, SBIRS, SBR

4
Overview

• Definitions
• Traditional approach
• Benefits of Shoulder-to-shoulder
• Issues with shoulder-to-shoulder
• Lessons learned
• Positive
• Improvement
• Conclusions

5
Definitions

• Fact finding
• Process by which the government assesses the
  information provided by the contractor in
  response to the request for proposal
• Shoulder-to-shoulder
• Describes a specific form of fact finding,
  applicable in sole source arrangements, where the
  government and the contractor work as a team to
  build a proposal
• For the purposes of this briefing, the term is
  synonymous with alpha-contracting, IPT pricing,
  one pass pricing

6
Traditional Approach

• Traditionally, the acquisition would follow a
  serial path
• The Government would issue an RFP
• Contractor would prepare proposal
• Customer, DCAA, and DCMA would analyze the
  proposal
• Fact finding would be scheduled
• Usually, proposal would be updated to address
  misunderstandings (red-line or new proposal)
• Negotiations would conclude
• Process is formal and long taking as much as 6-8
  months on major acquisitions

7
Problems with the traditional approach

• This highly serial process where the government
  and the contractor pass products back and forth
  over a formal fence, is not conducive for a
  meeting of the minds
• The contractor must interpret the government
  requirement, leading to misunderstandings over
  scope and available resources
• Information may flow, no agreements made
• The process can lead to competing teams
• This may be a model for adversarial negotiations
• Not a good start for performance after
  negotiations are complete
• Disruptive to the government/contractor
  relationship
• A significant investment in resources is expended
  by the government and contractor as the pursue
  this long process
• Inefficient and expensive

8
Shoulder-to-shoulder

• This process has been around for quite awhile
• Process has many names, Alpha contracting, IPT
  contracting, one pass contracting
• All are attempts to shorten the time it takes to
  negotiate changes to a program
• Government works in a team with the contractor to
  prepare the proposal
• DCAA, DCMA, and other government stakeholders are
  often part of the team
• Allows for detailed communication between the
  government and the contractor during proposal
  preparation
• Enhances communication, resulting in better
  understanding of the requirements and available
  resources
• Builds a team to enable contract performance
  after negotiations
• More of a parallel process, which should reduce
  lead-time

9
Shoulder-to-shoulder Process

• Step One
• Government and contractor establish a schedule
  for the process and the basic ground rules of the
  team
• Develop organizational structure of the the team
• Leadership team, individual IPTs
• Step Two
• Team discusses the requirement so that the
  contractor completely understands the government
  requirement
• Step Three
• The team jointly prepares the basis of estimate
• All areas of direct costs are agreed to at the
  lowest level
• Disagreements are raised up the chain of command
• Process to agree to disagree if appropriate
• Step Four
• Contractor prepares the proposal based on direct
  cost inputs
• Government documents shoulder-to-shoulder process
  in preparation of negotiations
• Step Five
• Negotiations of any areas of disagreement,
  indirect costs and fee

10
Issues

• How much authority should be delegated to S2S
  Team?
• Clearance Approval Authority has limited
  visibility into agreements that are made during
  S2S process
• Without a documented trail, there is no way to
  validate amount of time effort involved in S2S
  process
• Formal, structured and disciplined process must
  be in place including training for S2S team,
• Given relative inexperience of workforce, S2S
  should be judiciously applied there are limited
  ways to validate effectiveness of S2S
• Team Members must appreciate that there will be
  legitimate areas of disagreement catalogue
  those areas and identify them to Clearance
  Approval Authority

11
Issues

• How much authority should be delegated to S2S
  Team?
• Avoid temptation toward groupthink legitimate
  differences should be highlighted, not covered up
• S2S is labor intensive and should be restricted
  to those actions where resources are available to
  support this approach most Program Offices do
  not have enough resources to support S2S for all
  proposals
• Too many clearances have come in with no
  differences between the Government and
  Contractors positions, S2S should not force
  parties to agree
• When no differences exist at Clearance, have team
  show where Contractors initial input was
  rejected or where a revised BOE was utilized due
  to Government team input

12
Lessons Learned

• Shoulder-to-shoulder process is used extensively
  in the Space Based Infra-Red System (SBIRS)
  System Program Office at the Space and Missile
  Center in Los Angeles, CA
• A recent application of the process was the
  addition of the Mission Capability Station
  Backup
• This was approximately an 90M effort
• Definitization of an Undefinitized Contractual
  Action
• Generally viewed as a success by the government
  and the contractor
• The following is a discussion of the pros and
  cons of the process as an illustration

13
Positive 1 of 2

• Up front training of all stakeholders is
  beneficial
• Process for all participants
• Government training on how contractor team
  develops proposals
• Proposal themes are encouraged and highly
  effective in building team synergy
• FISH Flexibility instill team values stay on
  schedule HEO capability to the user
• Team adopted a stuffed fish mascot, tee shirts
• Face-to-face kick-off and ice breaker
• Breaks down the natural barriers that exist when
  people dont know each other
• Establish team awards to encourage performance
• Ethical considerations, so needs to emphasis
  recognition not monetary reward and criteria must
  be based on successful completion of the process

14
Positive 2 of 2

• Set expectations that BOE reviews and training
  would be done face to face
• Appropriate server access for all participants,
  including applicable subs, so that information is
  freely shared
• Preparation of stop light charts beneficial in
  tracking progress
• Keeping BOE delta hours checklist after each BOE
  review
• Ensured IPTs keep their tracking current
• Essential for final technical review report
• Daily stand ups with proposal leadership team
  critical to keeping schedule

15
Improvement (Organizational)

• Insure adequate buy-in from team members and
  their management
• Individuals must have adequate time to
  participate in the process
• Ensure prime and all significant subcontractors
  have bought into the process at the management
  level
• Ensure all company work sharing agreements are
  vetted prior to beginning the proposal process
• Disagreements in the contractor team over scope
  of participation of subs and TWTA
• Ensure DCAA and DCMA are totally committed to the
  process
• Insure government and contracting pricers are
  participating in the POE review

16
Improvement (Proposal Ops)

• Proposal schedule must take into account lags for
  company specific management reviews
• Allow for adequate time in the schedule to allow
  prime proposal manager to develop RFP/SOW for
  subcontractors and IWTAs
• Government must fully staff and coordinate
  requirements through all appropriate stake
  holders prior to start of process
• Functional managers must have final approval of
  all lower level IPT BOE inputs
• Dont try to standardize company unique BOEs

17
Improvement (Techniques/processes)

• Insure mechanism for cross talk among all IPTs
• This allows baseline change impacts to be
  addressed across the entire proposal team
• Provide checklist to insure BOEs contain
  appropriate justification
• Create a catalog of all required BOEs to insure
  completeness
• Date and time stamp all BOEs
• Ensure that bill of materials (BOM) gets same
  level of scrutiny as the BOEs
• Vendor quotes on BOM better than engineering
  judgment

18
Improvement (Roles and Responsibilities)

• Ensure team members involved in the
  reviews/decisions wear the team hat as much as
  possible
• Limit individual company and government
  perspective
• Win/win solutions should be the goal
• Ensure roles and responsibilities are fully
  understood by all participants
• If multiple companies, remember who is the prime
• Within the team, understand limits of
  responsibilities of the individual
• Understand what items are beyond the scope of the
  review, such as Fee and indirect rates

19
Conclusions

• Shoulder-to-shoulder is a valuable tool in the
  movement to reduce cycle time for major weapon
  system contracting
• Senior managers must implement a disciplined,
  formal process to insure a reasonable application
  of the process
• Must protect the integrity of the process to
  prevent future scandals tainting the acceptance
  of this valuable tool
• Remember that faster does not always mean better