Couple the limited space with delays due to poor planning, material not showing up on time, expanding work package scope and more, the waterfront has the potential to create a lot of headaches for ships in repair and the fleet operators planning to deploy them.
There is “no shortage of work to do” to improve on-time figures.
We have outlined barriers Navy and industry face to achieving on-time delivery of ships out of maintenance, as well as several solutions we’re trying to put into play to make the situation on the waterfront more tenable to maintainers and operators.
Our potential to be successful” is determined well before a maintenance availability even starts. When planning products and drawings aren’t completed on time, when items are added to the work scope late, and when materials don’t show up at the repair yard a month ahead of the start of work, the potential to be successful is greatly diminished.
Navy is trying to do better planning on its part, and ensure the yards are doing the same, to increase that chance of being successful.
Must create a well-defined scope of work, that is finalized early, planned appropriately and has good work specifications. To support that, Navy has acknowledged that it is awarding contracts too close to the start of work and now allowing enough time for planning.
“We have lots of data, and we use that data as we’re evaluating progress toward starting an avail. We have not come across an availability yet” that has fully met the goal of having material on hand on time. Sometimes industry thinks it’s okay if the material arrives ahead of need, and sometimes the Navy simply awards contracts too late to support on-time arrival of material.
Another planning effort has to do with assumptions for how long the work should take: “you’re not going to make your schedules if you start out with availability durations that are unrealistic.
“So we went and took a look at how long we were scheduling availabilities for, took a look at the model we used to estimate those availability durations, and we found some areas that probably weren’t giving us very good estimates.”
An Availability Duration Scorecard was created, which took into consideration port capacities and other current data to more accurately predict how long work would take and therefore to help the fleet commanders level-load the ports, rather than creating a backup of ships waiting to get work done.
The scorecard initiative was meant to get after better on-time delivery and creating predictable workloads for repair yards, as wells as efforts to contain growth in the scope of work packages, as primary ways to boost low on-time delivery rates.
Once the availabilities begin, Navy has a lot of requirements that bog repair workers down, further contributing to delays in the work and lengthier availabilities. A hard look at quality assurance checkpoints in particular highlighted to Navy leaders that redundancies and bureaucratic requirements were getting in the way of getting ships fixed up and returned back to the fleet for operations.
After asking industry what requirements they’d like to see nixed, they want a reduction in quality assurance rules. That was “a little far a leap for folks from a risk perspective,” but by working together compromised on a list of quality assurance checkpoints that represented a 50-percent reduction from previous requirements.
“We think, based on just how long these checkpoints take, it potentially – again, potential, because we haven’t realized anything – it could save a few weeks give or take several days. For the company to be doing blast and paint or something like that under the hull, to stop, to do a four-hour checkpoint callout … there’s a lot of impact to the schedule in wait time that that creates.”
“What we noticed when we started going through it was, there was a lot of duplication of effort already in what we were doing, so that was pretty easy. We really pulled back on non-critical coded areas, we took a lot of risk in cutting back checkpoints … on non-critically coded areas.
“So there’s a lot more work we can still do there. We have chiseled away at the low-hanging fruit.”
“It’s less about capacity. There’s enough capacity if we just are smarter and more willing to look for that path to yes. Tandem docking is a great idea industry pitched to the Navy and that “we’re transparent and willing to work with anything that they’re interested in trying.”
There was some risk but not as much as one might think: both ships would have to be undocked at the same time, so a delay in one would delay both, but these two particular warships were chosen because the docking portion of their work scopes were almost identical.
The ships may diverge in the work they need done once the under-hull portion is completed in the dry dock, but they should remain on similar timelines in the dry dock as long as something “extreme” doesn’t happen.
Tandem docking helps increase the capacity of the waterfront. There’s all kinds of ways to leverage that capacity with innovative thinking and the willingness to find a path to yes.
Other innovative ideas aimed at shortening the duration of the availabilities – and therefore making better use of available capacity – are coming from industry partners who are constantly looking for better and more efficient ways to pull shafting, do paint and blast work and more.
A top priority on the Navy side – was improving the relationship between Navy and industry. When I came into the job there was a lot of tension and finger-pointing happening, and we’ve sought to “build a stronger partnership and how we work together to solve problems.”
There is certainly room for improvement on the Navy and contractor side – and an imperative to improve, with operational pressures on the surface fleet increasing when more ships are stuck in port waiting for maintenance.
Navy does not want for ships will go out on deployment with material deficiencies, so the repair industry must figure out how to get the full scope of work conducted in a shorter timeline without sacrificing quality and safety.
Innovative ideas like tandem docking help, and new technologies and processes that shave days or weeks off of availabilities help. But systematic challenges remain that the Navy/industry team will have to continue to tackle in the long-term.
“The scope of the work is getting much more complex, and that’s challenged some of our industry base. “There’s an excess of work in the port. We are routinely seeing no bids on work, especially on some of the continuous and emergent maintenance availabilities. No one has the capacity.
Workload is excessive and industry will have to look at growing their workforce in particular trade skills to keep up. “We have to get to the point where we’re providing industry incentives to go and hire the people and retain the work force.
There are times industry is limited in taking on work because they don’t have enough welders – specifically aluminum welders – so the Navy needs to prove it can provide stable and predictable workloads over the long-term.
Some contractors are pitching the Pentagon on a new idea for reducing the cost of Naval Fleet: sign an extended multi-year maintenance deal instead of negotiating a new contract every year. There’s also a performance-based twist: industry has to provide enough spare parts to keep the fleet battle-ready.
Navy and industry often negotiate new deals every year to maintain the fleet and negotiations often take most of the year and by the time a contract is signed, it’s time to begin negotiating the next one.
“It’s a commitment on industry’s part to a long-term deal and it would bring along the partners as well as the supply chain and allow us all to establish long-term arrangements with our vendor base.
If there is a multi-year deal industry could bank on having a certain level of money coming into their activities and be able to work long-term arrangements with the vendor base, everybody benefits from that.”
Industry is proposing that DoD transition to a performance-based logistics approach in which contractors are incentivized to reduce costs. Traditional sustainment concepts measure inputs, whereas performance-based logistics measures success in terms of outputs—in this case, readiness and affordability.
DoD and industry need to negotiate ground rules governing how performance-based logistics would be implemented. Following the pattern used in other performance-based arrangements, including those between prime contractors has with its own suppliers will be sufficient time to earn back its up-front investment.
Transitioning to long-term increments would eliminate the current practice of annual negotiations for sustainment, a process that results in considerable price variability from year to year.
By migrating to a system of only one negotiation for a multi-year, DoD would get a more predictable outcome in terms of cost and performance. It would also shift most of the execution risk to industry, which is a common feature of all performance-based logistics contracts.
Industry has the position that both sides will do better with the long-term deal, which will allow us to lock in longer-lead parts contracts and assure its suppliers of steady work at known prices.
Capability and affordability are usually traded off against each other in Pentagon arrangements for supporting combat systems, so leaders want to know why contractor thinks it can simultaneously increase readiness and decrease costs.
The short answer is examination of the processes surrounding the sustainment function identifying numerous ways in which money can be saved without sacrificing readiness. These include reducing manpower and material costs, improving inventory control, automating tasks and predicting with greater accuracy when maintenance actions will be required.
Industry sees this new performance-based logistics deal as an opportunity to stand behind the product from the sustainment perspective.
1. What is a product support arrangement?
Product support” and “product support arrangement” is defined as: Product support — the package of support functions required to field and maintain the readiness and operational capability of major weapon systems, subsystems, and components, including all functions related to weapon system readiness. Product support arrangement — a contract, order, or any type of other contractual arrangement for the performance of sustainment or logistics support required for major weapon systems, subsystems, or components.
2. What attributes indicate equipment might be good candidates for a performance based logistics arrangement?
Every system, sub-system and component that requires maintenance, repair or overhaul subsequent to entry into the inventory should be evaluated to determine whether or not performance based logistics support might be appropriate. Many, but not all systems, sub-systems and components are good candidates. Attributes indicating to be appropriate include when equipment has reached a level of maturity that potential sustainment providers can reasonably approximate failures Attributes indicating equipment might not be good candidate for a performance based logistics arrangement to include highly complex or new technology equipment entering the inventory where failure rates are completely unpredictable and equipment exiting the inventory after of deploying contract
3. How does a program office determine the cost savings/avoidance associated with a performance based logistics arrangement?
Through a Business Case Assessment costs associated with the scope of effort are tracked and the period of performance identified for proposed performance based logistics arrangement. Estimated costs are compared to the current product support solution costs for the same operational outcome to make a determination of anticipated costs for the sustainment options. Undefinitized Contract Actions should not be used in evaluating savings of a performance based logistics arrangement since contract terms, specifications, or price are not agreed upon before performance is begun under the action.
4. What practices and procedures could negatively impact successful performance based logistics implementation?
Performance based logistics arrangements are negatively impacted by too many metrics “informational” metrics that are not part of product support responsibility but consume their resources to track, and metrics that work counter to one another Micromanaging workers to the point that it impacts their ability to perform.
5. What is the appropriate performance based logistics contract length?
The performance based logistics arrangement must be long enough for the provider to recover any investments made to improve their product and/or streamline their processes to meet requirements and give them time to identify issues impacting reliability or improve processes, design the fix, field the improved subsystem or implement the improved processes, and recover the investment. Less complex subsystems and components or arrangements that require less investment to improve may have shorter arrangements.
6. What should be considered when selecting performance incentives?
Considerations for selecting performance incentives include ensuring incentives are built upon performance objectives/standards and are realistic, measurable, and attainable also aligning incentives with the effort and contract value and structuring incentives for largest overall impact and avoiding any unintended consequences, while providing value for achieving mission Being careful what you ask for, since you will likely get it and may not be able to afford it – or may not have really needed or wanted it.
7. What are the key considerations of performance measurement?
It is essential to translate performance outcomes specified by Warfighter into performance metrics in the arrangement. These metrics must be appropriate for the delegated level of responsibility and outcome assigned to product support provider with measureable unit and time frame. The differences between the top-level performance outcome and the metric included in the arrangement are included below. A Performance Outcome is Requirement typically stated by customer while a performance Measure: is typically a number e.g., “miles per gallon” and “cost per mile” and a performance Metric is a measure with unit and conditions e.g., “average # miles in traffic”
8. What constitutes a good performance metric?
Good performance metrics should be: Key to achieving and improving performance Linked to system-level objective Appropriate to scope and responsibility Reflective of processes that contractor has control of Specific to a unit of measure Specific to an acceptable range or threshold, able to motivate desired long-term behavior and understood and accepted easy to collect data and verify Readily assessed Able to provide timely feedback.
9. Can performance thresholds be used?
Thresholds must be established in all cases. Sometimes thresholds and objectives may be used with incentives to deliver the higher performance level: Measurement during a period of Time like number of assets from the depot each period, percentage not mission capable supply Improvement over multiple periods, product improve quality targets period, process eg, increase efficiency and reduce support cost from previous period.
10. Can these top-level life cycle sustainment outcome metrics be put on contract or should tailored lower-tier metrics be used?
Top-level sustainment outcome metrics and/or lower-tier metrics can be put on contract. One of the most critical elements of a performance based logistics strategy is the tailoring of metrics to the operational role of the system and ensuring link of the metrics with the scope of responsibility of the support provider. The platform level and specifics of the arrangement will dictate whether to use top-level outcome metrics, lower-tier metrics or both.