The MHS Capital Investment Decision

Model

Transforming the Decision-Making Process

Tri-Service Symposium, Boston, MA

13 July 2006

2

WHY AM I HERE?

The MHS Capital Investment Decision Model (CIDM)

What is CIDM?

Why do it?

Is there a relationship to the MHS Strategic Plan & QDR 8?

What have we accomplished so far?

How does CIDM work?

Where are we in the process?

How will we implement CIDM?

What are the benefits?

3

WHAT IS CIDM?

Structured decision making that employs the Analytical Hierarchy Process (AHP)

Allows for structuring a decision into smaller parts, proceeding from the goal to objectives down to the alternative courses of action

Employs pairwise comparison judgments throughout the hierarchy to arrive at overall priorities for the alternatives

The decision problem can involve qualitative and quantitative factors

Allows for the consideration of a range of criteria across an organization’s goals and objectives

Provides for an optimization functions as well as provision for policy constraints

Supported by COTS software

4

WHY DO IT?

a. OMB wants us to

b. It works for VA

c. It’s the right thing to do for the MHS

d. All of the above

e. None of the above

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OMB WAKEUP CALLPBD 726 and the FY05 Program

We lost money, projects, and scope in PBD 726

We could not make succinct and compelling arguments that the FY05 program represented good investments for the MHS.

What’s obvious and compelling to you may not be to others.

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FINDINGS OF THE 1986 BLUE RIBBON PANEL

Create an office to centrally plan, program, and budget medical facilities

Issues Resolved

No consistent functional and design criteria across Services

Construction cost variation

Medical projects not comparable

Consistent cost models

Central Management

Centralized Advocacy

MILCON based only

Issues Resolved

No consistent functional and design criteria across Services

Construction cost variation

Medical projects not comparable

Consistent cost models

Central Management

Centralized Advocacy

MILCON based only

Issues Still Pending

No coherent method to define priorities and select projects for recommended funding

Inconsistent planning assumptions

Lack consistent programmatic ability to prioritize capital projects

Issues Still Pending

No coherent method to define priorities and select projects for recommended funding

Inconsistent planning assumptions

Lack consistent programmatic ability to prioritize capital projects

7

WHY DO IT (cont)?CIDM Helps in Many Ways

Expedites planning/acquisition timeline

Simplify and standardize project planning

Articulates real MILCON requirements beyond current TOA

Supports programming of most critical needs of MHS

Provides a logical and consistent rationale for selecting projects

Allows us to articulate what is important and why

Ensures inclusiveness and transparency of decision making

Engages clinical operators and resource managers

Incorporates executive review by the SMMAC

Supports QDR transformation initiatives

Links to strategic and business planning

8

WHAT HAVE WE ACCOMPLISHED SO

FAR? Conducted extensive research

Selected software and model

Received ASD(HA) guidance and resources

Developed, weighted, and scaled criteria

Conducted “Top Ten” exercise

Refined criteria

Developed draft implementation guide

Established QDR 8 IPT from HFSC Planning Subcommittee

Obtained funding for site license and additional consulting

9

IS THERE A RELATIONSHIP TO MHS STRATEGY?

Balanced Scorecard Mission & Customers

Mission Elements

Medically ready and protected force and homeland defense for communities

Deployable Medical Capability

Manage and deliver the health benefit

Mission Elements

Medically ready and protected force and homeland defense for communities

Deployable Medical Capability

Manage and deliver the health benefit

MHS Customers

Combatant Commanders & Service Members

Beneficiaries

People of the MHS

MHS Customers

Combatant Commanders & Service Members

Beneficiaries

People of the MHS

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IS THERE A RELATIONSHIP TO QDR 8?

Medical Infrastructure Transformation

1. Systematic and strategic approach to provide comprehensive visibility of assets

1. Systematic and strategic approach to provide comprehensive visibility of assets

2. Link facility investments with MHS strategic and business goals and enhance joint operations

2. Link facility investments with MHS strategic and business goals and enhance joint operations

3. Transform the MILCON planning, acquisition and recapitalization processes

3. Transform the MILCON planning, acquisition and recapitalization processes

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GOAL 2 OF QDR 8 Link Facility Investments with MHS

Strategic/Business Goals & Joint Operations

Project focus To Market based portfolio focus linked to strategic and business goals

No consistent programmatic ability to prioritize capital projects across the MHS

To Consistent basis for making capital investments and improved focus for articulating Service investment candidates

Current planning and selection process does not acknowledge dynamic nature of MHS operating environment (GWOT, BRAC, Jointness)

To Evaluation criteria that supports investments consistent with unique requirements of military medicine

Inconsistent planning assumptions across Services

To Consistent investment proposal methodology and evaluation

As IsAs Is To BeTo Be

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HOW DOES CIDM WORK?Annual Cycle

1. TMA & Services jointly develop/update evaluation criteria

2. TMA updates CIDM Selection & Proposal Guide

3. Services review business plans

4. Services review strategic guidance

5. Services develop and submit concept papers

6. TMA & Services jointly review concept papers

7. Services develop and submit capital investment proposals

8. Capital Investment Review Board scores proposals

9. SMMAC reviews/approves output

10.TMA submits POM/BES/BCP

And repeat…..And repeat…..

(HA, Army, Navy, Air Force, TMA, Functional Experts)

Coordination/Optimization potential

Capital Investment Review Board (CIRB)

Prioritize/Select

Investments

Concept Paper Submit/Forum

Senior Executive Review

SMMAC Ensure Alignment With Strategic Objectives

and Approve Portfolio

PPMD/Service Execution

Acquire/Field/Maintain Capabilities

TMA

Navy

Army

Air Force

JS

HA

MHSStrategic

Plan

PPMD

FINAL

DOD/

National

Strategy

Guidance

Service Recommendations

Business CaseAnalysis

Business Planning

Mission Imperatives

Strategic Guidance

MHS

Capital

Facility

Planning

Guidance

TMA

Navy

Army

Air Force

HA

NovNov

MayMay

Cap Investment Proposals

JunJun

JulJul

SepSep

Budget SubmitTo Comptroller

Coherent method to define priorities Consistent process Linkage to MHS Strategic Plan Senior executive review Reduced acquisition cycle

Coherent method to define priorities Consistent process Linkage to MHS Strategic Plan Senior executive review Reduced acquisition cycleO

bje

ctiv

es

MHS Facilities Capital Facility Development Process

FeedbackModel Revisions

Updated Guidance

& Criteria

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Priority # Project Overall Score

1 USAMRIID 0.8852 USAMRICD 0.8623 NH Gaum replacement 0.8624 Ramstein Clinic Replacement 0.8625 Federal Healthcare Facility 0.8606 MacDill Clinic Replacement 0.8357 Vicenza Women Ctr 0.8318 Tinker Clinic Replacement 0.8209 Spangdahlem Clinic/Dental Clinic Rpmt 0.818

10 Lackland Dental Clinic Replacement 0.81611 Ft Richardson 0.78212 Ft Drum Dental Cl 0.75213 NH Camp Pendleton replacement   0.74614 Ft Hood Women Ctr 0.72715 Ft Irwin Dental Cl 0.72016 Langley Hospital Alteration 0.69717 Fort Hood Replacement hospital 0.67918 Ft Benning Hosp Repl 0.67719 Ft Riley Hosp Repl 0.67220 Peterson Dental Clinic Rpmt 0.66721 CHPPM 0.66122 Scott AHCC Rpmt 0.64923 NEPMU - 6 replacement  0.64524 NH Beaufort replacement 0.64325 Naval Academy replacement 0.63426 Osan Hospital Addition/Alteration 0.57127 Shaw Clinic Replacement 0.56128 NS Pearl Harbor alt/replacement 0.53929 Boone Clinic replacement 0.53630 Patuxent River replacement 0.50231 NH Jacksonville alteration 0.464

“TOP 10” EXERCISE February

2006

Services’ submitted unconstrained Top 10 capital projects

Based on 2 minute verbal briefs of each initiative – no tangible material or data

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FEB 06 POST EXERCISE PROCESS REVIEW

Lessons Learned

Range of reasons that drive new capital development

The results reflect a point in time based on imperfect criteria and imperfect data

Business planning disconnect

Difficult to provide judgment based on oral presentations – need greater specificity/data/tangible review materials

Some installations may have greater value than others

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WHERE ARE WE IN THE PROCESS?

Finalizing implementation guide

Templates for concept paper and submission

Standardized business case analysis

Developing SMMAC approval plan

How Will We Implement CIDM?

SMMACCIDM

IPTPPMD Services

Revise c r iter ia and sc ales (05/01/2006 - 05/30/2006)

Team W orkshop - Cr iter ia adjustments, Guide Development, Timeline (06/22/2006)

Team W orkshop - Cr iter ia review/update ( if needed) (07/18/2006)

Prepare Draft Capital Decision Guide (06/23/2006 - 07/29/2006)

Staff Development Guide, Concept Paper, and Investment Templates (07/30/2006 - 09/27/2006)

Rec eive c omments and revise mater ials (09/28/2006 - 10/18/2006)

Present to SMMA C for approval (10/19/2006)

Y

NSMMAC approval (10/20/2006)

Implementation Guidance Complete (10/21/2006)

60 Day Service Review

60 Day Service Review

Capital Planning

Submission Process

Approximately 12 monthFor capital submission

Capital Investment Submission Components

1391 Through Block 12

HCRA or functional narrative for non-healthcare

Departmental PFD

Alternatives Analysis

Business Case/EA

Linkage to Evaluation Criteria

Parametric Cost Estimate

Capital Investment Submission Components

1391 Through Block 12

HCRA or functional narrative for non-healthcare

Departmental PFD

Alternatives Analysis

Business Case/EA

Linkage to Evaluation Criteria

Parametric Cost Estimate

C a p In ve s tm e n tR e v B o a r d ( C IR B )

P P M D S e r v i c e s S M M A C

B u s i n e s s P l a n s D e ve l o p e d ( 1 0 /2 2 /2 0 0 6 )

R e q u e s t fo r C o n c e p t P a p e r s ( 1 1 / 0 1 /2 0 0 6 )

D e ve l o p C o n c e p t P a p e r s ( 1 1 /0 2 / 2 0 0 6 - 1 2 /0 1 / 2 0 0 6 )

R e c i e v e C o n c e p t P a p e r s ( 1 2 /0 2 /2 0 0 6 )

T r i S e r v i c e F o r u m ( 1 2 /0 6 /2 0 0 6 )

D e ve l o p In v e s tm e n t P a c k a g e ( 1 2 /0 7 /2 0 0 6 - 0 5 /2 2 / 2 0 0 7 )

Y

NA p p l i c a ti o n Q A R e v i e w /V a l i d i ty /F e e d b a c k ( 0 5 /2 3 /2 0 0 7 - 0 6 /2 1 /2 0 0 7 )

R e v i s e d In v e s tm e n t P a c k a g e s u b m i tt e d ( 0 6 /2 2 /2 0 0 7 - 0 6 /2 4 /2 0 0 7 )

C I R B S c o r e s P r o p o s a l s ( 0 6 / 2 5 /2 0 0 7 - 0 6 / 2 9 /2 0 0 7 )

S M M A C E xe c u ti ve S u m m a r y D e ve l o p e d ( 0 6 /3 0 /2 0 0 7 - 0 7 /1 3 /2 0 0 7 )

Y

NS M M A C A p p r o ve s /M o d i f i e s p r o g r a m ( 0 7 /1 4 /2 0 0 7 - 0 8 /0 3 /2 0 0 7 )

D e ve l o p b u d g e t s u b m i s s i o n ( 0 8 / 0 4 /2 0 0 7 - 0 9 / 1 7 /2 0 0 7 )

B u d g e t S u b m i tt e d to C o m p tr o l l e r ( 0 9 / 1 8 /2 0 0 7 )

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SUMMARY

A more structured systematic approach to capital investment decision-making across the MHS

A coherent method to define priorities and select projects for recommended funding

Consistent and programmatic ability to prioritize capital investments

A consistent basis for selection of investments

MHS Senior executive review of proposed investments

Greater probability of OSD and OMB concurrence

* DOD Blue Ribbon Panel on Sizing of Military Medical Facilities, 1986

Questions