Spares Governance: Buying Lead Time for the Fleet

BY CMDR. BRIAN D. HENDERSON, SC, USN
NAVAL SUPPLY SYSTEMS COMMAND

What exactly is spares governance? In its simplest form, it’s buying parts lead time for the fleet. In reality, it’s a challenging and involved process that every Supply Corps officer should know and understand.

The spares model is based on the buy-in/buy-out philosophy. The program offices and systems commands generate their requirements, socialize these requirements with NAVSUP, and agree to buy out NAVSUP procured assets with appropriated funding. NAVSUP utilizes Navy Working Capital Fund – Supply Management (NWCF-SM) dollars to buy in and stock material in advance of those requirements. This model alleviates what would be long lead times should the fleet/NAVSUP procure material at the time of need. Clear as mud? There’s more!

Spares governance also factors in allowancing. The allowance of spares a unit is authorized to carry is determined by use of approved allowance models and/or demand history. NAVSUP’s role in this process is to ensure allowances are properly calculated. NAVSUP Weapon Systems Support works in conjunction with the hardware systems commands (Naval Sea Systems Command (NAVSEA), Naval Air Systems Command, Space and Naval Warfare Systems Command) to ensure requirements are valid and proper quantities are procured in a timely manner to meet fleet need.

Aviation procurement, Navy; other procurement, Navy; and weapon procurement, Navy (APN-6/OPN-8/WPN-8) are appropriated accounts used to finance the “buy out” of spare/repair parts allowances from the wholesale supply system. To better illustrate this process, let’s use OPN-8 as an example.

The OPN-8 account is comprised of three sub-accounts: interim, replenishment, and outfitting. The interim and replenishment accounts are for pre-material support date (MSD) requirements and are executed by NAVSEA using spares procurement contracts. The outfitting account is for post-MSD requirements and is executed by NAVSUP using NWCF-SM to procure the initial outfitting material. Remember, NAVSUP’s procurement is referred to as the “buy-in” and provides the 18-36-month lead time for parts delivery just prior to the requirement need date.

The requirement need date is driven by the schedule set by the program office. The installation triggers the NAVSUP allowancing process, which signals the fleet to requisition the spares, previously procured by NWCF-SM, from the supply system. This process is known as the “buy-out” and consumes the OPN-8 account funding. The graphic below depicts how sparing works and the numerous stakeholders involved in the process.

New (anticipated) and fielded (actual) system failure both create a demand signal NAVSUP Weapon Systems Support uses to develop the requirement and buy-in material using contract authority. This finances acquisition lead time without using appropriated dollars. APN-6/OPN-8 dollars are then used to buy out material, which closes the buy-in/buy-out loop required for NWCF solvency.

The key takeaway is that NWCF-SM procures parts lead time in advance to support future fleet requirements.

In summary, Navy spares governance requires detailed coordination among numerous stakeholders to ensure timelines and funding streams are positioned to meet the warfighter’s needs. The flexibility of the NWCF-SM ensures NAVSUP can respond to fleet readiness requirements both now and in the future.

Spares in doc pic

March/April 2017