Accelerating Performance Based Logistics Acquisition Excellence

By Lt. Cmdr. Matt Clute, Director, Common Systems Contracts and Deputy Director, PBL Center of Excellence

The NAVSUP WSS Strategic Acquisition and PBL Center of Excellence team gathers on the front steps of building 1 in Philadelphia to commemorate two years of service. –photo by Maddie Klebe

 

NAVSUP Weapon Systems Support (NAVSUP WSS) established the Strategic Acquisition and Performance Based Logistics (PBL) Center of Excellence (CoE) in Philadelphia in 2016 to synergize an experienced civilian and military contracting and supply chain management team responsible for the most complex and highly visible sustainment contracting requirements of the organization.

“The Center of Excellence provides increased attention and command focus to these efforts,” said Capt. Cody Hodges, NAVSUP WSS Director of Contracts. “It takes advantage of accelerated learning by providing our contracting teams and their customers a shared space to innovate and collaborate.”

The CoE approaches the Naval Aviation Enterprise (NAE) and Surface Warfare Enterprise (SWE) sustainment requirements from a holistic logistics life cycle methodology that addresses the total platform. The team’s primary goal is the development and execution of acquisition strategies that best fit the requirement while supporting the growth of performance-based solutions.

The CoE Team

Envisioned by Hodges and NAVSUP WSS Deputy Director of Contracts Barbara Johnson and endorsed by the command’s executive leadership, the CoE was responsible for 25 percent ($1.42 billion) of the overall $5.7 billion in obligations made by NAVSUP WSS in fiscal year 2017.

The team is led by Mike Forgione along with Lt. Cmdr. Matt Clute, principle deputy, and Larry Garvey. The office is staffed by 24 full-time employees who have between 15 and 35 years of experience.

Working in concert with other stakeholders in aviation and maritime operations, engineering, the comptroller’s office, the office of general counsel, the price fighters, the defense contract management and audit agencies, Navy systems commands and Deputy Assistant Secretary of the Navy leadership, the CoE is responsible for the portfolio of acquisitions that has won 20 of 43 Department of Defense (DoD) PBL awards since fiscal year 2005.

Creating Synergy

The CoE is focused on increasing affordable readiness for the warfighter by enhancing communication and lessons learned across the NAVSUP Enterprise. The CoE flattens a previously stove-piped organizational structure, and has created a centralized repository for sharing acquisition and contracting documents.

A centralized, open workspace encourages collaboration between and among NAVSUP WSS employees and stakeholders, which has led to faster turnaround times and less rework in required approvals. The sharing and development of various ideas and strategies in the CoE environment has also led to better contracting solutions since experienced peers are available to teach, refine ideas and provide new approaches.

Getting to a Strategic Contract or PBL

The transition to a strategic contract or PBL is the culmination of continuous relationship building with a contractor for a particular program. In the early stages of any of these relationships, individual contracts and stand-alone purchase orders are typical.

Once performance and price history are established, moving to a basic ordering agreement (BOA) or long-term contract (LTC) is a logical progression. These contract vehicles are a much more efficient and effective method of executing a large volume of business with a contractor.

Speed to delivery is improved through the use of BOAs since order terms and conditions are already agreed to in advance. Orders placed under BOAs do not need to have terms and conditions negotiated each time as they would in an individual contract or stand-alone purchase order.

LTCs, which are considered strategic contracts, increase the speed to delivery by incorporating pricing, quantities and/or other details that allow transactions to occur very rapidly during the period of time specified in the contract–often up to five years.

The final step, the transition to a PBL, moves the sustainment of a weapon system largely into the hands of the contractor. PBLs delineate readiness level benchmarks that the contractor is incentivized to meet. These contracts define the desired outcome without specifying how to execute the outcome, thereby fostering an environment where the contractor can innovate and create efficiencies given the parameters outlined within the PBL.

In this way, the CoE is able to influence outcomes through strategic industry partnerships. While PBLs take more effort to establish up front since so many things need to be considered and incorporated into the contract (obsolescence management, reliability, demand projections, etc.), the effort is more than worth the results achieved.

NAVSUP WSS employees with the Strategic Acquisition and PBL Center of Excellence discuss an acquisition strategy at an impromptu meeting in Philadelphia. Pictured from left to right: Lt. Cmdr. Matt Clute, Larry Garvey, Susan Stein, Mike Forgione, Kristen McFadden, Steve Van Note. –photo by Maddie Klebe

 

While not every weapon system or contractor is a perfect fit for a PBL, successful PBLs have, oftentimes, led to great leaps forward in the readiness levels of the weapon systems they are designed to support.

Conclusion

The CoE, now in its second year, has been recognized as a “best practice”, following the 2017 NAVSUP WSS Procurement Performance Management Assessment Program (PPMAP), noting it as a model that could be successfully exported to other contracting activities within the NAVSUP Enterprise.

The CoE will continue to make strides in improving warfighter readiness through contracting and acquisition excellence, providing improved supply support at a lower cost.

Summer 2018