VIRGINIA Class, OHIO Replacement Submarines & Ford … · VIRGINIA Class, OHIO Replacement...

VIRGINIA Class, OHIO Replacement Submarines & Ford Class Carriers Supplier Conference

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Agenda

1. Introduction, Welcome & Purpose

2. Introduction/Discussion of Shipbuilding Plan

3.Discussion of SUBS Team Efforts

4.Submarine Industrial Base Council Overview

5.VCS, OR and CVN Contract Timelines

6.Shipbuilder Lessons Learned

7.Proposal Content

8.Shipbuilder-Supplier Session

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1. Introduction, Welcome & Purpose

Blair Decker, EB

Rob Hogan, NNS

RADM Jabaley, PEO SUBS

Click to edit Master title style

4

Opportunity and Challenge

Exponential Increase in Demand for Material

Single VIRGINIA SSN 7,800 LT

2 VIRGINIA SSN per year 15,600 LT

2 VIRGINIA SSN per year w/ VPM and AS 20,400 LT

CY 2010–2021

2 VIRGINIA SSN per year w/ VPM & AS +OHIO Replacement SSBN 41,200 LT

Su

bm

ari

ne

Bu

ild

Rate

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2. Introduction/Discussion of

Shipbuilding Plan

CAPT Oglesby, CVN Program

CAPT Stevens, VIRGINIA Class Program

CAPT Goggins, OR Program

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CVN Program

CAPT Oglesby

6/21/2016 CVN 79/80 Program Office 7 For Official Use Only

Aircraft Carrier Programs

CAPT Doug Oglesby

CVN 79/80 Program Manager, PMS 379

For Official Use Only

Supplier’s Conference

14 June 2016

NAVSEA: Statement A: Approved for Release. Distribution is unlimited.


Mission:

Deliver Aircraft Carriers

on time, ready for tasking,

at an affordable cost

New

Construction

RCOH

Maintenance &

Modernization

Inactivation

PEO Aircraft Carriers

PEO Carriers Portfolio



GERALD R. FORD Class Focused Investment

GERALD R. FORD Class Ushers in the

Next Generation of Capability, including:

Increased Capability

33% increase in Sortie

Generation Rates

Increased space for flight deck

operations and aircraft

maintenance

Increased Flexibility

Nearly 3 times the electric plant

capacity

Restored weight and stability

service life allowances

Increased Affordability

Reduced manning and 20%

reduction in maintenance costs

Designed for 43-month

maintenance cycle and 12-year

docking intervals



Significant Events

Feb 2011 – CVN 79 Steel Cutting Ceremony

Jun 2015 – DD&C Contract Awarded

Aug 2015 – Keel Laying Ceremony

Jun 2017 – 50% Erected

Apr 2018 – 75% Erected

May 2019 – Island Loaded

Feb 2020 – Launch

Jun 2022 – Delivery

JOHN F. KENNEDY (CVN 79) Status

(Clockwise from top left):

CVN 79 Steel Cutting Ceremony, 25 Feb 2011.

CVN 79 Keel Laying, 22 Aug 2015. Joseph P. Kennedy III signs the keel unit before

the ceremony.

CVN 79’s Aft Pump Room Being Set in Place – 60,000 More Hours of Pre-Outfitting

than CVN 78.

965 Ton Aft Pump Room Superlift Being Moved to Dry-Dock. (Photos courtesy of HII-NNS)



ENTERPRISE (CVN 80) Status

Background: CVN 80 replaces CVN 69 (FY2027 inactivation)

2 years of Advance Procurement (AP) funding (FY16-17)

followed by 6 years of Full Funding (FY18-23)

No advance construction planned

Intend to perform some limited long lead time fabrication

in FY 2017 as an overall cost reduction

Single phase delivery (two-phase delivery is unique to

CVN 79)

CVN 80 expected to continue downward trend in labor

hours (Engineering & Production)

Status: Design for Affordability efforts initiated

Long-Lead Time Material (LLTM) Procurement technical

assessment review in process

Significant Events 2015 – Initial funding for Affordability Initiatives

May 2016 – Advance Procurement (AP) & Long Lead Time Material (LLTM) Awarded

2016 - 2017 – Further LLTM Contract Awards

2018 – First year of Full Funding, award Detail Design and Construction (DD&C) Contract

2021 – Keel Laying

2025 – Launch

2027 – Delivery



Carrier Force Structure Sustainment PB17 Aircraft Carrier Delivery and Inactivation Plan

Steady-state production of FORD Class Carriers on 5 year centers

NIMITZ - class

FORD - class



The Challenge

Budgetary Pressures

Congress continues to apply pressure to the Navy’s budget

Navy’s 30-year shipbuilding plan:

Stresses the budget considerably and

Doesn’t fully support the 308 ship Navy

The solution is not squeezing the suppliers; nor is it reducing ship capabilities

Together we must find opportunities in the challenge to capitalize on the

higher volume of ship construction coming from all programs

Economic order quantities

More efficient production runs

Cross-programmatic thinking

Alignment of requirements

Level loading manufacturing through longer term planning


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VIRGINIA Class Program

CAPT Stevens


15

• Block V (FY19-23 ships) – Planned award Oct 2018 – Up to 10 ships – Multi-Year Procurement (MYP) contract with Economic Order Quantity (EOQ)

– Includes VIRGINIA Payload Module (VPM) and Acoustic Superiority (AS)

• VPM – Increases Tomahawk strike capability – Insertion in FY19-2 and all follow-on Block V ships

– PB17 includes VPM Detail Design and Contractor Furnished Equipment (CFE) Long Lead Time Material

(LLTM)

• AS – Addresses CNO’s undersea dominance mandate – PB17 includes RDT&E funding for SOUTH DAKOTA Insertion Program (SDIP) and AS for Block V

VIRGINIA Class Submarines (VCS)

– Detail Design of Large Vertical Array & Coatings planned for completion in FY17

– PCU SOUTH DAKOTA (SSN 790) will be outfitted and tested during FY18/19 PSA

• VPM and AS represent increased design and construction workload for the industrial

base in the near-term and construction workload beginning in FY19

VIRGINIA Class Block V and Beyond

VIRGINIA Class The Right Submarine for Today with Flexibility for the Future

Design for Affordability (2 VA per year) Blocks I & II (FY98–08) – SSNs 774 – 783 Block III (FY09–13) – SSNs 784 – 791

Block IV (FY14–18) – SSNs 792 – 801 Block V (FY19–23) – SSNs 802 – and later

VPM (beginning with 19-2 ship) and AS increase undersea influence effects

Increase in platform capability

Block I & II

Bow Design

12 VLS Tubes

Block III and later

2 VIRGINIA

Payload Tubes

10 Ships Delivered 8 Ships – 2 Delivered, 6 Under Construction

10 Ships – 5 Under Construction, 5 Under Contract In Design Phase, FY19 Construction Start

RTOC enables increased Ao per hull

16

Block V Overview

• Planned award in early FY 2019 – PB18 Request for Multi-year Approval

– Up to 10 ships, FY19 – FY23

– Fixed Price Incentive contract

– 2 year AP starts in FY17

• Incorporation of VPM to increase undersea strike capacity and AS to pace the threat into

baseline VA

• Will take advantage of MYP with EOQ procurement (CFE & GFE)

• Adequate subcontractor proposals necessary to streamline contracting timeline and

improve responsiveness amongst all parties

Advance Procurement and Economic Order Quantity Funding Critical to Successfully Maintaining Two-Per Year Delivery Cadence

17

FY19 FY20 FY21 FY22 FY23

2 2 1* 2 2

Block V - PB17 Build Profile

*Evaluating a 2nd ship


18

Increasing Submarine Build Rate with

Increasing Complexity

• Single SSN – 7,800 LT

• Two SSNs – 15,600 LT

• Two SSNs with VPM and AS – 20,400 LT

• Two SSNs with VPM and AS and OHIO

Replacement SSBN – 41,200 LT

• Hydraulic power plant pump demand

across the submarine enterprise will

increase by approximately 43% between

2018 and 2021 to support VIRGINIA with

VPM and OR


19

06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

B1 B2 B3 B4 B5 B6 B7 B8 B9 B10 B11 B12

X3 X5 X7 X9 X12 X15 X18

X1 X2 X4 X6 X8 X10 X11 X13 X14 X16 X17 X19

802 804 807 809 817 818 819 820 821

786 788 790 803 805 806 808 810 812

784 785 787 789 791 792 794 796 798 800 811 813 814 815 816

781 782 783 793 795 797 799 801

53 53 54 54 55 54 53 50 52 50 51 51 48 49 48 47 45 44 42 41 42 43 43 44 45 46 47 48 47 47 47 47 49 49 50 50

784782 783 783 785

780 781 781 782 782 784 787779 780 780 781 781 783 786 791778 779 779 780 780 782 785 790 795 797777 778 778 779 779 781 784 789 789 792 794 796 X10 X11776 777 777 778 778 780 783 788 788 791 793 795 801 X6 X8 X9 X10775 776 776 777 777 779 782 787 787 790 792 794 799 800 803 820 X5 X7 X8 X9774 775 775 776 776 778 781 786 786 789 791 793 798 799 802 805 819 819 821 X1 X2 X4 X4 X6 X7 X823 774 774 775 775 777 780 785 785 788 790 792 797 798 801 804 818 818 818 820 821 X1 X3 X3 X5 X6 X722 23 23 774 774 776 779 784 784 787 789 791 796 797 800 803 806 817 817 817 817 819 820 821 X2 X2 X4 X5 X621 22 22 23 23 775 778 783 783 786 788 790 795 796 799 802 805 808 816 816 816 816 816 818 819 820 X1 X1 X3 X4 X5773 21 21 22 22 774 777 782 782 785 787 789 794 795 798 801 804 807 814 815 815 815 815 815 815 817 818 819 821 821 X2 X3 X4772 773 773 21 21 23 776 781 781 784 786 788 793 794 797 800 803 806 810 813 813 814 814 814 814 814 814 816 817 818 820 820 X1 X2 X3771 772 772 773 773 22 775 780 780 783 785 787 792 793 796 799 802 805 809 811 812 812 813 813 813 813 813 813 815 816 817 819 819 821 X1 X2770 771 771 772 772 21 774 779 779 782 784 786 791 792 795 798 801 804 808 810 811 811 812 812 812 812 812 812 814 815 816 818 818 820 821 X1769 770 770 771 771 773 23 778 778 781 783 785 790 791 794 797 800 803 807 809 810 810 811 811 811 811 811 811 813 814 815 817 817 819 820 821768 769 769 770 770 772 22 777 777 780 782 784 789 790 793 796 799 802 806 808 809 809 810 810 810 810 810 810 812 813 814 816 816 818 819 820767 768 768 769 769 771 21 776 776 779 781 783 788 789 792 795 798 801 805 807 808 808 809 809 809 809 809 809 811 812 813 815 815 817 818 819766 767 767 768 768 770 773 775 775 778 780 782 787 788 791 794 797 800 804 806 807 807 808 808 808 808 808 808 810 811 812 814 814 816 817 818763 766 766 767 767 769 772 774 774 777 779 781 786 787 790 793 796 799 803 805 806 806 807 807 807 807 807 807 809 810 811 813 813 815 816 817765 763 763 766 766 768 771 23 23 776 778 780 785 786 789 792 795 798 802 804 805 805 806 806 806 806 806 806 808 809 810 812 812 814 815 816762 765 765 763 763 767 770 22 22 775 777 779 784 785 788 791 794 797 801 803 804 804 805 805 805 805 805 805 807 808 809 811 811 813 814 815761 762 762 765 765 766 769 21 21 774 776 778 783 784 787 790 793 796 800 802 803 803 804 804 804 804 804 804 806 807 808 810 810 812 813 814764 761 761 762 762 763 768 773 773 23 775 777 782 783 786 789 792 795 799 801 802 802 803 803 803 803 803 803 805 806 807 809 809 811 812 813760 764 764 761 761 765 767 772 772 22 774 776 781 782 785 788 791 794 798 800 801 801 802 802 802 802 802 802 804 805 806 808 808 810 811 812759 760 760 764 764 762 766 771 771 21 23 775 780 781 784 787 790 793 797 799 800 800 801 801 801 801 801 801 803 804 805 807 807 809 810 811758 759 759 760 760 761 763 770 770 773 22 774 779 780 783 786 789 792 796 798 799 799 800 800 800 800 800 800 802 803 804 806 806 808 809 810757 758 758 759 759 764 765 769 769 772 21 23 778 779 782 785 788 791 795 797 798 798 799 799 799 799 799 799 801 802 803 805 805 807 808 809756 757 757 758 758 760 762 768 768 771 773 22 777 778 781 784 787 790 794 796 797 797 798 798 798 798 798 798 800 801 802 804 804 806 807 808755 756 756 757 757 759 761 767 767 770 772 21 776 777 780 783 786 789 793 795 796 796 797 797 797 797 797 797 799 800 801 803 803 805 806 807753 755 755 756 756 758 764 766 766 769 771 773 775 776 779 782 785 788 792 794 795 795 796 796 796 796 796 796 798 799 800 802 802 804 805 806754 753 753 753 753 757 760 763 763 768 770 772 774 775 778 781 784 787 791 793 794 794 795 795 795 795 795 795 797 798 799 801 801 803 804 805752 754 754 754 754 756 759 765 765 767 769 771 23 774 777 780 783 786 790 792 793 793 794 794 794 794 794 794 796 797 798 800 800 802 803 804750 752 752 752 752 753 758 762 762 766 768 770 22 23 776 779 782 785 789 791 792 792 793 793 793 793 793 793 795 796 797 799 799 801 802 803751 750 750 750 750 754 757 761 761 763 767 769 21 22 775 778 781 784 788 790 791 791 792 792 792 792 792 792 794 795 796 798 798 800 801 802723 751 751 751 751 752 756 764 764 765 766 768 773 21 774 777 780 783 787 789 790 790 791 791 791 791 791 791 793 794 795 797 797 799 800 801725 723 723 723 723 750 753 760 760 762 763 767 772 773 23 776 779 782 786 788 789 789 790 790 790 790 790 790 792 793 794 796 796 798 799 800724 725 725 725 725 751 754 759 759 761 765 766 771 772 22 775 778 781 785 787 788 788 789 789 789 789 789 789 791 792 793 795 795 797 798 799722 724 724 724 724 723 752 758 758 764 762 763 770 771 21 774 777 780 784 786 787 787 788 788 788 788 788 788 790 791 792 794 794 796 797 798721 722 722 722 722 725 750 757 757 760 761 765 769 770 773 23 776 779 783 785 786 786 787 787 787 787 787 787 789 790 791 793 793 795 796 797720 721 721 721 721 724 751 756 756 759 764 762 768 769 772 22 775 778 782 784 785 785 786 786 786 786 786 786 788 789 790 792 792 794 795 796719 720 720 720 720 722 723 753 753 758 760 761 767 768 771 21 774 777 781 783 784 784 785 785 785 785 785 785 787 788 789 791 791 793 794 795717 719 719 719 719 721 725 754 754 757 759 764 766 767 770 773 23 776 780 782 783 783 784 784 784 784 784 784 786 787 788 790 790 792 793 794711 717 717 717 717 720 724 752 752 756 758 760 763 766 769 772 22 775 779 781 782 782 783 783 783 783 783 783 785 786 787 789 789 791 792 793715 711 711 711 711 719 722 750 750 753 757 759 765 763 768 771 21 774 778 780 781 781 782 782 782 782 782 782 784 785 786 788 788 790 791 792705 715 715 715 715 717 721 751 751 754 756 758 762 765 767 770 773 23 777 779 780 780 781 781 781 781 781 781 783 784 785 787 787 789 790 791706 705 705 705 705 711 720 723 723 752 753 757 761 762 766 769 772 22 776 778 779 779 780 780 780 780 780 780 782 783 784 786 786 788 789 790714 706 706 706 706 715 719 725 725 750 754 756 764 761 763 768 771 21 775 777 778 778 779 779 779 779 779 779 781 782 783 785 785 787 788 789713 714 714 714 714 705 717 724 724 751 752 753 760 764 765 767 770 773 774 776 777 777 778 778 778 778 778 778 780 781 782 784 784 786 787 788701 713 713 713 713 706 711 722 722 723 750 754 759 760 762 766 769 772 23 775 776 776 777 777 777 777 777 777 779 780 781 783 783 785 786 787700 701 701 701 701 713 715 721 721 725 751 752 758 759 761 763 768 771 22 774 775 775 776 776 776 776 776 776 778 779 780 782 782 784 785 786699 700 700 700 700 700 700 720 720 722 723 750 757 758 764 765 767 770 21 23 774 774 775 775 775 775 775 775 777 778 779 781 781 783 784 785698 699 699 699 699 699 699 719 719 721 722 722 756 757 760 762 766 769 773 22 23 23 774 774 774 774 774 774 776 777 778 780 780 782 783 784691 698 698 698 698 698 698 717 717 717 721 721 753 756 759 761 763 768 772 21 22 22 23 23 23 23 23 23 775 776 777 779 779 781 782 783

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

729 729 729 729 729 729 729 729 729 729 729 729 729 729 729 729728 728 728 728 728 728 728 728 728 728 728 728 728 728 728 728727 727 727 727 727 727 727 727 727 727 727 727 727 727 727 727 729726 726 726 726 726 726 726 726 726 726 726 726 726 726 726 726 727 729

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45FY (XX)

FY (XX)

Pla

tfo

rm S

tra

teg

y(P

rocu

rem

en

t S

che

du

le)

Total SSNs in Comm

FY (XX)

New SSN

VA Class(Block 7)

VA Class(Block 6)

VA Class(Block 5)

VA Class(Block 4)

VA Class(Block 3)

VA Class(Blocks 1-2)

SEAWOLFClass

LA Class(VLS)

LA Class(non-VLS)

SSGNs

(18)

(28)

(37)

(12)

VA Block 3

VA Block 4

VA Block 5

VA Block 4 Detailed Design



New SSN

OHIO Replacement SSBN

OR SSBN Requirements Definition

OR SSBN Detailed DesignOR SSBN R&D

New SSN Requirements Definition

New SSN Detailed Design

New SSN R&D

(10)

(19)

(43)VA Block 6VA Block 6 Detailed Design

(48)VA Block 7


SSN Force Structure

Note: Based on PB16 SPB


20

Summary

• Shipbuilding program presents significant opportunity for

increased industrial base workload – Inclusion of VPM and AS

• Affordability is paramount in fiscally constrained

environment – Navy and Industry need to have mutual goal of best value pricing to

maintain and grow our shipbuilding numbers

• OR success tied to VIRGINIA performance – Sustain VIRGINIA cost and schedule performance, while retaining

flexibility for capability enhancement


21

Questions?

#2532 06-14-16 Pg 22

OHIO Replacement Program

CAPT Goggins

23 Supplier Conference June 2016

OHIO Replacement Program Key Messages

Ship Design & Systems Developments

Progressing to Achieve 83% Design Completion Target

Prototyping Missile Tube Module

Reduce Risk to Construction

Test Facilities

Progressing on Schedule to Support Lead Ship

Affordability

Efforts Progressing at Pace to Achieve Cost Objectives

Pursuing Innovative Acquisition Authorities

Improve Cost and Reduce Schedule Risk


OHIO Replacement Program Schedule


ACCOMPLISHED

Integrated Power System (IPS) Compatibility Test

Facility (CTF) MILCON placed (May 2015)

U.S./UK E Fixture Construction Contract Awarded

(May 2015)

Ship Control Concept of Operations Exercise

(COOPEX) Phase 2 (Jul 2015)

JROC Validated CDD (Aug 2015)

Construction Group Established

Gate 4 Technical Baseline Configuration Control

(Nov 2015)

In Process Review / Defense Acquisition Board with

USD(AT&L) (Dec 2015)

Released Design Contract RFP (Jan 2016)

OSD AT&L signed OR Acquisition Strategy (Jan 2016)

ON-GOING & UPCOMING (FY16)

Gate 5 (Jul 2016)

Milestone B (Aug 2016)

Generation 1 Propulsor Testing

Construction of the OR Quad Pack Manufacturing

Facility in Quonset, RI

Manufacturing of U.S. and UK Missile Tubes

Preparation for First Article Quad Pack Missile

Compartment construction

HM&E component prototyping (Diesel Generator,

Air Conditioning Plant, Reverse Osmosis Unit, Light

Emitting Diode (LED) Lighting, Advanced CO2

Removal Unit)

Manufacturing Fixtures OR Quad Pack

Manufacturing Facility

First Article

Quad Pack (FAQP)

OHIO Replacement Accomplishments


Goal: Achieve best value for the Navy in delivering quality, affordable OHIO Replacement (OR), including the Common Missile Compartment for the UK, and VIRGINIA-class submarines (VCS), including VIRGINIA Payload Module (VPM), and CVN common material on time, to specifications, in the necessary quantities, with acceptable risk.

SUBS: A strategy coordinating OR, VCS and CVN programs to achieve the Goal and: Prioritize OR program execution – OR and SUCCESSOR must deliver on time

Prioritize SSN force structure – VCS must deliver on time

Ensure executability and enable affordability during the planned ramp-up in submarine production

Sustain VCS cost and schedule performance, while retaining flexibility for capability enhancement

Retain two shipyards and the supplier base capable of delivering nuclear-powered submarines

Meet decision timing necessary to support RFPs for OR and VCS

Be well informed by FORD Class CVN

SUBS addressed how best to:

Distribute shipbuilder submarine construction work-load share • Accommodate capacity, capability and fragility constraints identified by industry

Employ existing and potential new funding and contracting authorities

Enhance OR/VCS alignment as needed to reduce risk to schedule and cost goals

Leverage volume, stability and maturity of VCS to drive down cost

Incorporate lessons learned from CVN 78 (first in class) delivery

Aggressively pursue cost reduction opportunities to minimize impact on other national priorities

Submarine Unified Build Strategy (SUBS)

Navy Is Transitioning To SUBS-Execution


Procurement Authority Expansion Impact to Industrial Base

Over the next two decades, there will be a significant increase in demand on the nuclear shipbuilding industrial base

The OHIO Replacement (OR) Program, in coordination with VCS and CVN, is working with Congress to expand acquisition authorities

Expanded Authorities Would: Enable innovative funding strategies to gain efficiencies on OR

Support the industrial base with stable EOQ benefits for suppliers across the nuclear enterprise

Reduce schedule risk on ship deliveries and lower enterprise costs


Maintaining Schedule Design ready for construction start (83%) Construction start in 2021 Deploy on schedule (2031 IOC)

Transition from Design to Shipbuilding

Collaboration of builders, maintainers, operators, in the design process Achieve 83% design complete at construction start, enables Manufacturing

Assembly Plan (MAP) detailed planning Utilizing proven technologies and test facilities to mitigate lead ship risk Established Integrated Master Schedule (IMS); execution performance

consistently evaluated Experienced Government and Contractor technical and programmatic

leadership in key positions

Achieving Affordability

Aggressive actions to achieve all cost targets Continuous measurement of progress Challenge industrial base

Milestone B – Aug 2016

Program Focus Areas

#2532 06-14-16 Pg 29

3. Discussion of SUBS Team Efforts

Sara Ainey, PEO SUBS

Cindy Blanchette, EB

Bryan Caccavale, NNS

Jennifer Navarro, GD Corporate

#2532 06-14-16 Pg 30

Submarine Unified Build Strategy (SUBS) Construct and Objective

Coordinated Navy / EB / NNS effort to develop integrated plan for the Nuclear shipbuilding enterprise over the next twenty years

Participation

– Joint effort supported by PEO Subs, PEO Carriers, Naval Reactors, EB, and NNS

– Priority effort for shipbuilders and Navy staffed with critical personnel across key value stream elements (“Lines of Effort”)

1) Design

2) Construction

3) Material and Supply Base

4) GFE / RDT&E

5) Acquisition

#2532 06-14-16 Pg 31

Huge Challenge for Industrial Base - Achieve Generational Ship Construction and Delivery Requirements

31

= 20,000 tons delivered

= VA-Class SSN tonnage

= OR SSBN tonnage

= VPM tonnage

= CVN tonnage

15 Years

(1987 – 2001)

15 Years

(2002 – 2016)

15 Years

(2017 – 2031)

Deliveries: 4 CVNs, 31 SSNs, 10 SSBNs Total Tonnage: 792,000 Tons

Deliveries: 3 CVNs, 14 SSNs, 0 SSBNs Total Tonnage: 408,000 Tons

Deliveries: 3 CVNs, 28 SSNs, 12 VPMs, 2 SSBNs Total Tonnage: 589,000 Tons

#2532 06-14-16 Pg 32

Submarine Unified Build Strategy (SUBS) Focal Points

● Developing a plan to support enhanced congressional acquisition authorities and funding profiles

● Elements of the plan

– Design readiness

– Optimal build strategies

– Shipbuilder facility preparation

– Resource readiness and sustainability

– Industrial base capacity and planning

Add stability and increase predictability across the Navy’s nuclear portfolio and entire industrial base

#2532 06-14-16 Pg 33

Continuous Production Reduce schedule risk and lower enterprise costs

Calendar Year

*Assumes use of National Sea Based Deterrence Fund and incremental funding for the continuous production plan for missile tubes RELEASABLE TO UK IN SUPPORT

OF THE POLARIS SALES AGREEMENT

Program of Record

Pro forma C/P

#2532 06-14-16 Pg 34

Capitol Hill Environment ● DoD Base Budget: $523.9 billion (+$2.2B from FY16 enacted)

– Complies with Bipartisan Budget Act of 2015

– Protects the department from the threat of sequestration

● Some consensus to get through the budget process quickly

– But, would still bet on a CR – how long?

– Presidential election year

– Passing of Supreme Court Justice Scalia may have effect on the budget

process

● World Environment Instability Increases – Russian aggression

– Terrorism

– China’s island building

– North Korea’s nuclear program

– International financial instability

#2532 06-14-16 Pg 35

Congressional Landscape for Shipbuilding

● Shipbuilding Programs are Strongly Supported

by Congress

– Demonstrated through maintaining or adding to President’s

Budget request for submarine programs

● OHIO Replacement is the #1 Priority for the Navy,

Congressional support has followed

– National Sea-based Deterrence Fund shows desire from

Congress to keep funding protected

● Congressional support for adding additional SSNs into

the Shipbuilding Plan, specifically by adding an

additional SSN in FY21

#2532 06-14-16 Pg 36

Defense Bills in Congress

National Defense

Authorization Act (NDAA)

Defense Appropriations

Act or Omnibus

Senate Armed

Services

Committee

(SASC)

House Armed

Services

Committee

(HASC)

Senate

Appropriations

Committee (SAC)

House

Appropriations

Committee (HAC)

Conference Conference

PB17 PB17

House Armed

Services Seapower &

Projection Forces

Subcommittee

Senate Appropriations

Committee Defense

Subcommittee (SAC-D)

House Appropriations

Committee Defense

Subcommittee (HAC-D)

Senate Armed

Services Seapower

Subcommittee

Date

TBD

Date

TBD

#2532 06-14-16 Pg 37

Bill Language Supporting SUBS Initiatives Continuous Production Authority

● The House Armed Services Committee (HASC) included language

in its draft of the NDAA that states:

– Authority for multiyear procurement of critical components to support

continuous production—(1) To implement the continuous production of

critical components, the Secretary of the Navy may use funds deposited

in the Fund, in conjunction with funds appropriated for the procurement

of other nuclear-powered vessels, to enter into one of more multiyear

contracts (including economic ordering quantity contracts), for the

procurement of critical contractor-furnished and Government-furnished

components for national sea-based deterrence vessels. The authority

under this subsection extends to the procurement of equivalent critical

parts, components, systems and subsystems common with and required

for other nuclear powered vessels.

Language Still Needs to be Reconciled in Conference with SASC,

Funding Required from Appropriators to be Effective

#2532 06-14-16 Pg 38

Summary

Acquisition initiatives require Congressional support in

order to take shape—both in the NDAA and

Appropriations bills

Authority for Continuous Production is a possibility in the

FY17 NDAA, but will need funding from Appropriators in

order to be impactful

Engagement with Congress on acquisition authorities

will continue for FY18 budget cycle

#2532 06-14-16 Pg 39

4. Submarine Industrial Base

Council Overview

Robert Dunn, EB

• Advocacy group of over 1,200 members from

over 600 companies – created 25 years ago

• Mission is to educate policymakers and the

public on the need to preserve the strength of

the U.S. submarine force and promote the value

of the submarine industrial base as a vital part of

our national security.

Submarine Industrial Base Council (SIBC)

• Annual 2-day Supplier Days conference in

Washington D.C. held in March

• Over 300 suppliers get updates from Navy and

Shipbuilders on submarine programs and then

engage members of congress on Capitol Hill

• Periodic alerts to engage Congressional

members as needed during the year to address

key SIBC legislative issues

SIBC Activity

• Anyone supporting the submarine industrial

base can and should join

• No cost to join or remain a member

• Sign up via the SIBC website

(www.submarinesuppliers.org)

• SIBC website is a good informational resource

for suppliers on submarine programs and

legislative priorities

SIBC Membership

#2532 06-14-16 Pg 44

5. VCS, OR and CVN Contract

Timelines

Jim Cassidy, EB

Alma Fallon, NNS

#2532 06-14-16 Pg 45

VCS, OR, CVN Contracting Timelines

Topics:

● Supplier Contracting - Goals / Approach / Assumptions

● VCS Block V Timeline

● OR Block I Timeline

● CVN80 Timeline

● Integrated View with Opportunities

● Key Takeaways

#2532 06-14-16 Pg 46

Contracting with Suppliers - VCS, OR, CVN Goals / Approach / Assumptions

● Goals – Expand and Stabilize Industrial Base

– Reduce Material Delivery Risk

– Reduce Overall Program Cost

● Approach – Clearly communicate opportunities (volume / timing)

Supports supplier planning (capital investment / hiring)

– Level supplier and sub-tier workload where possible De-conflict supplier schedules between programs to reduce peak demands

Optimize capital investment and other business decisions with growth

Stabilize workforce to reduce risk (quality / delivery)

Efficiency benefits of continuous production

– Early identification of obsolescence risks and other risks

– Ensure that Multi-Program workload is appropriately reflected in proposals

● Assumptions – FY 17 Shipbuilding plan of record with up to two VA Class authorizations

in FY 21

– Maintain Shipbuilder procurement responsibilities / worksplit

#2532 06-14-16 Pg 47

Notional VCS Contracting Timeline VCS Block V

Handshake

June-2018

Request for Proposal

March-2017

Contract Award

Oct-2018

Full

Proposal due

Sept-2017

Technical

Baseline

Feb-2017

Prime Contract

Supplier Proposals

Request for

Proposals

Dec- 2016

Estimate AP2

Requirements

Sept-2016

Estimate AP1

Requirements

Sept-2017

Receive

Proposals

March-2017

AP1(FY19-1/2)

Funding Available

Jan-2018

AP2 (FY19-1/2)

Funding Available

Jan-2017

Complete cost analysis

for proposals >$13.5M

July-2017

Fact Finding/Audits

FF (FY19-1/2)

Funding Available

Jan-2019

Place AP2

Purchase Orders

Feb-2017

Place AP1

Purchase Orders

Feb-2018

Place FF

Purchase Orders

Feb-2019

Funding &

Purchase

Orders

Cost analysis

provided to Gov.

Jul-2017

#2532 06-14-16 Pg 48

Notional OR Contracting Timeline OR Block I

Contract

Award

Oct-2020

Handshake

July-2020

Full Proposal

due

Sept-2019

OR IPPD

Award

Sept-2016

Prime Contract

Supplier Proposals

Request for

Proposal

Dec-2018

Estimate AP2

Requirements

Dec-2018

Estimate AP-1

Requirements

Dec-2019

Receive

Proposals

March-2019

AP1 Funding

Available

Jan-2020

AP-2 Funding

Available

Jan-2019

Complete cost

analysis for proposals

July-2019

Fact Finding/Audits

Funding &

Purchase

Orders

Place AP2

Purchase Orders

Feb-2019

Place AP1

Purchase Orders

Feb-2020

FF Funding

Available

Jan-2021

Place FF

Purchase Orders

Feb-2021

#2532 06-14-16 Pg 49

Notional CVN 80 Contracting Schedule Detail Design & Construction

DD&C Award

1QCY18

DD&C RFP Amendment

Issued 4QCY16

NNS Start DD&C

Proposal Prep 3QCY16

Supplier Proposals

Prime Contract

RFPs to Suppliers 4QCY16

Supplier Proposals Received 1QCY17

Anticipated Contract Award

1QCY18

#2532 06-14-16 Pg 50

Contracting Timeline – Integrated View Key Supplier Milestones

Supplier Proposals

Funding Availability

VCS Block V

AP2 (FY19-1/2)

1/31/17

FF (FY19-1/2)

AP1, AP2, & EOQ

1/31/19

1/31/20

Next

Increment

AP1 (FY19-1/2)

AP2 (FY20-1/2)

1/31/18

Dec-2016 March-2017

CVN80

OR Block I

Dec- 2018 March- 2019

1/31/21

Next

Increment

VCS Block V

4QCY16 1QCY17

AP-2 Funding

Available

1/31/19

OR Block I

AP1 Funding

Available

1/31/20

FF Funding

Available

1/31/21

Detail Design &

Construction Award

1QCY18

CVN80

Advanced Procurement

In Process

Opportunities:

1. EB include OR Options in VCS Block V RFPs

2. NNS include OR Options in CVN80/VCS RFPs

Challenges:

1. OR requirements maturity for late CY16 RFPs

2. Without MY-MP obligation authority, suppliers will

have to hold OR option pricing for 2 to 4 years

3. CVN80 AP procurements are already in process

#2532 06-14-16 Pg 51

VCS, OR, CVN Contracting Timelines - Key Takeaways

● EB/HII-NNS/Gov’t will conduct VCS, OR, and CVN procurement

activities to:

– Expand and Stabilize Industrial Base

– Reduce Material Delivery Risk

– Reduce Overall Program Cost

● Current Shipbuilder procurement responsibilities / worksplit will

be maintained

– EB/HII-NNS procurement worksplit for VCS is not affected

– HII-NNS will procure all CVN material

– HII-NNS will procure some OR major components consistent with

current VCS procurement responsibilities

For new design items, EB will procure some major components for lead

ship only

● Changes to Shipbuilding Plan of Record could affect procurement

timeline milestones

#2532 06-14-16 Pg 52

6. Shipbuilder Lessons Learned

Jim Cassidy, EB

Alma Fallon, NNS

#2532 06-14-16 Pg 53

Block IV Process Improvement Event Overview & Purpose Purpose: Document the process and timeline for starting a new VCS

Construction Contract Block using Block IV lessons learned

Joint Shipbuilder team pursued this initiative in order to address

recognized problems with the Block IV Start-up

Contracts, Cost Engineering, Engineering, IT, Planning, Material Planning, Material

Procurement, Operations, and Facilities

Deliverables: Block Startup Timeline and formal POA&M

− Less dependency on the “tribal knowledge”; repeatable process

− Clear “road map” of required actions; higher level of preparedness

− Continuous improvement by incorporating lessons learned

Timely Execution & Management of Block Start-up Activities is Critical to Maintain the

Required 2 per year Delivery Cadence and Ensure Success of Program

#2532 06-14-16 Pg 54

Block IV Process Improvement Event Focus Areas 1. Development of Technical Baseline

- Reaching agreement on capabilities/technologies for the Block

- Timing of key decisions and approvals

2. Contract & Funding Processes

- Identification of funding requirements

- Timeliness of negotiation process and contract award

3. Planning & Material

- Adequacy and timing of contract award & funding to support material acquisition

- Establishing component/commodity/casting schedules

- Understanding downstream effects driven by late material

4. Construction Readiness

- Integrating Program plans into build sequence

- Identifying required Resources/Facilities/Footprint to support construction schedules

- Advanced manufacturing efforts (timing)

Developing this Comprehensive Block Start-up Process/Timeline Demonstrated the

Interdependencies of These Focus Areas

#2532 06-14-16 Pg 55

Inadequate Block IV Start-up Activities Impacted Performance and Target Ship Delivery Schedules

In June 2015, the Shipbuilders performed a evaluation of Block IV

production delinquencies

− Due to Block IV Delinquencies, Ship Target Deliveries were adjusted for

the SSN792-SSN795

− SSN796-SSN801 schedules will be continuously reviewed; Shipbuilders’

goal is to be back to baseline schedule by SSN801

− Reduced margin between target and contract delivery dates increases

program execution risk

Timely/Adequate Execution of Block Start-up Activities is Critical to Success of Block

#2532 06-14-16 Pg 56

Late Block IV Material Lessons Learned

Supplier Improvements for Proposal Adequacy and On-Time Delivery are Required

to Support Block V Schedules and 2 Per Year Cadence

Critical/Complex Procurement Process

– New supplier oversight process for build-to-print items

– Additional pre-award activity delayed supplier manufacturing start

Late Design Changes

– Changes associated with obsolescence issues, technical requirement

clarifications, block re-design efforts, and new component qualifications

AP2 Funding Issues

– Delayed supplier manufacturing start due to the availability, allocation,

and Shipbuilder usage of AP2 funding

Supplier Performance (including sub-tiers)

Protracted Negotiations / Proposal Quality

– Supplier proposal quality and Shipbuilder/Supplier negotiation efforts

delayed manufacturing start for some major components

#2532 06-14-16 Pg 57

Block V Technical Baseline Status and Risks

● Tech Baseline establishes the technical requirements for the block of ships and is a key input for cost and schedule

● Status

− Block V Tech Baseline includes multiple changes from Block IV:

VIRGINIA Payload Module

VIRGINIA Payload Module Host Ship Changes

South Dakota Insertion Technology

Obsolescence Changes

OR Commonality and Fleet Upgrade Commonality

● Risks

− Took 4 years to complete TBL for Blocks III and IV; Block V span is 1.5 years

− Early or incomplete TBL will create churn for procurement and manufacturing

− RFPs released to suppliers before final Block V TBL approval

Close Shipbuilder/Supplier alignment is critical for TBL change items

#2532 06-14-16 Pg 58

Shipbuilder Lessons Learned from VIRGINIA Class 2 Per Year Ramp Up

● Electric Boat and HII-NNS performed detailed studies to plan and

execute the ramp up to 2 VIRGINIA Class ships per year

– Even with detailed planning, some challenges affected performance

● Next industrial base ramp up is combined VA/OR/CVN volume

– In addition, Shipbuilders may outsource fabrication / machining work that

has been performed in-house to date

● Consider the following areas based on Shipbuilder lessons learned

– Facility planning

– Workflow / spatial analysis

– Trade workforce recruiting / training

– Knowledge management and knowledge transfer

– Capturing best practices for a less experienced workforce

Shipbuilders using detailed manufacturing/assembly plans

Detailed planning is essential for success with substantial volume increase

#2532 06-14-16 Pg 59

Partnering with the Supply Base to Improve Delivery and Quality Performance ● Capacity Analysis and Development of Delivery Dates

● Collaborating with Prime Suppliers in Support of Managing Sub-Tier

Performance

● Leverage Shipbuilders’:

– Supplier Training Programs

– Risk Management Programs

– Supplier Development and Continuous Improvement Tools

– Technical, Supplier Quality, and Project Management Resources

– NAVWELD – Weld Procedure Development Tool

● Early Engagement during Pre-Award Phase to Ensure Readiness

● Kick-Off Meetings and Program Reviews During Production

● Early Identification of Obsolescence Issues

● Request Shipbuilder Support to Resolve Technical or Manufacturing

Producibility Issues

#2532 06-14-16 Pg 60

Key Takeaways

Shipbuilders developed a comprehensive, integrated block start-up execution plan

Need Supplier Improvements to Ensure Block V Success and Maintain the VIRGINIA Class 2 Per Year Cadence

– Proposal Adequacy / Timely Negotiations

– On-Time Delivery

Close Shipbuilder/Supplier Alignment is Needed for Technical Baseline Change Items to Support Proposal Development

Suppliers should leverage available Shipbuilder resources

– Training, Risk Management, Continuous Improvement, NAVWELD, and Engineering Engagement in Issue Resolution

Consider Shipbuilder lessons learned from 2 per year ramp

– Facilities, Workflow, Workforce, Knowledge Management

#2532 06-14-16 Pg 61

7. Proposal Content

Jeff Robinson, NAVSEA02

Pete Stefanski, EB

Alma Fallon, NNS

#2532 06-14-16 Pg 62

Agenda

Section 1: View of

Adequacy/Quality of Proposals

Section 2: Ground

rules/assumptions

Section 3: FAR Part 15

Overview

Section 4: Audit/Evaluation

Process Expectations

Section 5: Q&A on Proposal

Content

Jeff Robinson, NAVSEA 02

Alma Fallon, Newport News

Pete Stefanski, Electric Boat

Pete Stefanski, Electric Boat

Suppliers

#2532 06-14-16 Pg 63

View of Adequacy / Quality of Proposals

#2532 06-14-16 Pg 64


1) Nuclear shipbuilding demand is growing

2) Align resources to the risks

3) Develop more accurate cost estimates/proposals so

that workload is better predicted and executable

4) To begin a more collaborative approach to procurement

where proposal expectations are understood

#2532 06-14-16 Pg 65

NAVSEA Proposal Review Focus

Prior to 2012

NAVSEA primary focus on

Shipbuilder Labor Hours

Prime Contractor Rates and

Material (Subcontracts)

evaluated using historical

decrement approach primarily

supported by DCAA audits

FAR/DFAR requirements

– FAR 15.408, Table 15-2

2012 and Beyond

Focus on all cost elements for

all prime and all subcontract

tiers

Review of Actual Cost Data for

all contract types

FAR/DFAR requirements

– FAR 15.408, Table 15-2

– DFAR 252.215-7009 Proposal

Adequacy Checklist

#2532 06-14-16 Pg 66

DFAR 252.215-7009 Proposal Adequacy Checklist

Background: DoD published a proposed rule in the Federal

Register at 76 FR 75512 on December 2, 2011, to

incorporate the requirement for a proposal adequacy

checklist into DFARS 215.408, and an associated

solicitation provision at 252.215-7009, to ensure offerors

take responsibility for submitting thorough, accurate, and

complete proposals.

The rule was incorporated on 28 March 2013

https://www.federalregister.gov/citation/76-FR-75512

#2532 06-14-16 Pg 67

Proposal Adequacy Checklist

Public Concerns

Increased Cost to Govt

Additional Requirements

Unnecessary and duplicative

Does not support Better Buying Power

Response

This provision results from a long history of

incomplete proposals resulting in rework and lost

time, and it aims to achieve cost savings by

improving initial proposal submissions

The intent is to increase uniformity across DoD,

minimize local variations, and thereby decrease

proposal preparation costs

Provides uniform tool that is applicable across

DoD to address the inconsistent interpretations of

Table 15-2.

While this initiative predates BBP, it is consistent

with the BBP's cost reduction initiatives.

#2532 06-14-16 Pg 68

Customer Perspective

Adequate Proposals lead to reduced fact-finding questions,

site-visits and negotiation timelines in support of earlier

contract award

Where inadequacies/unsupported costs exist, the reviewer

will be required to extract more information, request field audit

services, and perform additional analysis which delays

negotiations and award

Provide data upfront in electronic format (e.g., Excel) with

linked calculations; the proposal is easier to follow and

understand

Adequate proposals are more likely with upfront discussion

and expectation setting prior to RFP release

#2532 06-14-16 Pg 69

Importance of submitting a compliant proposal

Advantages:

– Compliant to FAR Part 15 to provide adequate supporting documentation

– Minimizes Supplier Support of a Customer Field Audit (less time in facility collecting data)

– Provides the level playing field for a win-win negotiation between all parties (no assumptions)

– Determining if the proposal is adequate to provide a sound basis for pricing decisions and

contract award

– Less findings and subsequent rework for all parties

– Potential to reduce cycle time for contract award and subsequent funding release

– Provides insight for opportunities to maximize supplier capacity

– Provides insight for potential technical improvements (forgings vs castings, history of material

issues, design changes, etc.)

Incomplete Proposals Lead to:

– Increased cycle time to negotiate a contract with the customer

– Inability for the supplier to forecast sales

– Negotiation with Customer resulting in a lower budget because of incomplete information – results

in less budget, and higher risk for the supplier

– Non-Compliance to FAR Part 15 (Unilateral adjustments for failure to comply (Defective Pricing))


#2532 06-14-16 Pg 70

Ground Rules / Assumptions (Quantities, Options, Funding)

#2532 06-14-16 Pg 71

Supplier Considerations and Assumptions When Preparing Proposals

Optimization of EOQ where possible

Level loading of work in facilities through the period of performance

Development of Rates in anticipation of work across multiple

programs

Will be a negotiation point

Will minimize cycle time in process

Recommendations for Option Pricing for multiple programs

Accurate Funding Profiles

Maximize Procurement Opportunities

Procure Most Schedule Dependent Items First

Use of Termination of Liability

Ground Rules / Assumptions (Quantities, Options, Funding)

#2532 06-14-16 Pg 72

FAR Part 15 Overview

#2532 06-14-16 Pg 73

Responsibilities

Government

– Responsible for determining fair and reasonable price for

supplier costs

– Require shipbuilder and/or supplier to submit certified cost and

pricing data when applicable

Shipbuilder

– Obtain and analyze supplier certified cost or pricing data and

submit this data as part of its own cost or pricing data

– Conduct appropriate analyses to establish the reasonableness

of proposed supplier prices

– Include the results of these analyses in the prime

contractor’s proposal

#2532 06-14-16 Pg 74

Responsibilities (cont’d)

Supplier

– For proposals meeting the cost or pricing data threshold, submit

proposals in the format provided in Table 15-2 of 15.408

– Perform the prime contractor’s responsibilities with its sub-tier

suppliers

– Certify that the cost or pricing data is current, accurate and

complete

#2532 06-14-16 Pg 75

If a proposal is FAR compliant

Lead to shorter evaluation and audit time – less

expensive for both the shipbuilder and supplier

Easier to reach a negotiated settlement for a fair and

reasonable price

Quicker award of prime contract to shipbuilder and/or

purchase order to suppliers

#2532 06-14-16 Pg 76

FAR/DFARs Thresholds

As of 10/01/2015, the following thresholds may apply to the

Prime Contractor and/or its suppliers:

Description Threshold ($) FAR Reference

Certificate of Cost or

Pricing Data

$750,000 FAR 15.403-4

Submission of Certified

Cost or Pricing Data

$13.5 million, or when

required by the

Contracting Officer

FAR 15.404-3

#2532 06-14-16 Pg 77

Certified Cost or Pricing Data Requirements

The Contractor is required to submit cost or pricing data in

accordance with the FAR when the conditions of FAR

15.403-4 are satisfied

The Contractor is not required to submit certified cost or

pricing data (but may be required to submit data other than

certified cost or pricing data) when –

1. The Contracting Officer determines that the prices agreed upon are

based on adequate price competition (see FAR 15.403-1(c)(1));

2. The Contracting Officer determines that the prices are set by law or

regulation (see FAR 15.403-1(c)(2));

3. When a commercial item is being acquired (see FAR 15.403-

1(c)(3)); or,

4. When a waiver has been granted (see FAR 15.403-1(c)(4)).

#2532 06-14-16 Pg 78

Certified Cost or Pricing Data Proposal Submission

Submission should follow the instructions at FAR 15.408, TABLE 15-2

for preparing a contract pricing proposal when certified cost or pricing

data are required. Note the following:

The requirement for submission of cost or pricing data is met when

all accurate certified cost or pricing data reasonably available to the

offeror have been submitted … to the Contracting Officer or an

authorized representative

By submitting your proposal, you grant the Contracting Officer or an

authorized representative the right to examine records that formed

the basis for the pricing proposal. It may include those books,

records, documents, and other types of factual data (regardless of

form or whether the data are specifically referenced or included in

the proposal as the basis for pricing) that will permit an adequate

evaluation of the proposed price

#2532 06-14-16 Pg 79

Certified Cost or Pricing Data Proposal Format

FAR 15.408, TABLE 15-2 and the DFARs Proposal Adequacy

Checklist at DFARs 252.215-7009 detail the format and content for

proposal submittal. The following areas are addressed:

● General Instructions

● Material and Services

● Subcontracts (Purchased materials or services)

● Exceptions to Certified Cost or Pricing Data

● Inter-organizational Transfers

● Direct Labor

● Indirect Costs

● Other Costs

● Formats for Submission for Line Item Summaries

● Other

79

#2532 06-14-16 Pg 80

Proposal Adequacy Checklist

● General Instructions

– Disclose any non compliances with Cost Accounting Standards

(CAS) or established estimating and accounting practices

– Disclose known activity that could materially impact costs (e.g.

vendor quotes, trends such as labor efficiencies, changes in

production volume)

– Provide a summary of cost by cost element (by year if

applicable)

– If no Government forward pricing agreement – provide all rates

and factors by year that are utilized in the development of the

proposal and the basis for the rates (base and pool data)

#2532 06-14-16 Pg 81

Proposal Adequacy Checklist (cont’d)

Material and Services

– Proposal to include a consolidated bill of material that includes

the basis of pricing

– The bill of material should include all material items and:

Item description

Source of pricing

Quantity

Price (unit and extended)

#2532 06-14-16 Pg 82


Subcontracts

– If the subcontract exceeds the FAR threshold for cost or pricing

data, the supplier must include a copy of the sub-tier’s certified

cost or pricing data

– Include the cost analysis establishing the reasonableness of the

sub-tier’s pricing or a date as to when the cost analysis will be

complete

– Note: This is an area of consistent inadequacy across industry

82

#2532 06-14-16 Pg 83


Exceptions to Certified Cost or Pricing Data

– Commercial item and the basis on which it meets the definition

– Competition and the basis for establishing the reasonableness

– Pricing set by law or regulation

– Waiver granted

#2532 06-14-16 Pg 84


Inter-organizational Transfers

– For transfers at cost, does the proposal include a complete cost

proposal compliant with Table 15-2

– For transfers at price, does the proposal provide an analysis that

supports exception from certified cost or pricing

#2532 06-14-16 Pg 85


Direct Labor

– Include a time phased breakdown of labor hours, rates and cost

by category or skill level

– If labor is the allocation base of indirect costs, labor must be

summarized so that the applicable overhead rate can be applied

– Basis of estimate to include:

Labor Categories

Labor hours

Task descriptions

85

#2532 06-14-16 Pg 86


Indirect Costs

– Include the basis of estimate and how they are applied

– Include breakdown of cost pools

– Trends – Historical data (three years)

– Budgetary data

#2532 06-14-16 Pg 87

Proposal Adequacy Checklist con't

Other Costs

– Travel

Number of trips

Number of people

Length of trips

Locations

Rates (airfare, per diem, hotel, car rentals, etc.)

Royalties

#2532 06-14-16 Pg 88


• Formats for Submission

– All cost element breakdowns using format in Table 15-2 (or

alternative format if specified in request for proposal)

88

#2532 06-14-16 Pg 89


Other

– Incentive contract type – include target cost, target profit, share

ratio, etc.

89

#2532 06-14-16 Pg 90

Audit / Evaluation Process Expectations

#2532 06-14-16 Pg 91

Audit / Evaluation Process Expectations

Shipbuilder's are responsible to evaluate supplier’s proposal

How is that done?

– Review of supporting data submitted with proposal

– Audit fieldwork at supplier’s facility (DCMA or Shipbuilder and their agent)

How to expedite the process?

– Provide supporting data with the proposal submittal

– Provide as much supporting data as possible in electronic format

Excel with all formulas visible

– Allow the shipbuilders to perform the audit of all cost elements

– Shipbuilders are willing to sign Non-Disclosure Agreement (NDA)

– Audit sample’s selected prior to audit fieldwork and ready at the beginning of the

site visit

– If supporting data is sufficient, site fieldwork may not be necessary

Don’t wait for site fieldwork to provide supporting documentation

#2532 06-14-16 Pg 92

Audit / Evaluation Process Expectations (cont’d)

Shipbuilder's evaluation of supplier’s proposals must

provide meaningful responses to the following questions

for each cost element:

– What is the estimate?

What is proposed and the value associated with it

– What is it based on?

What is the basis of estimate, the source data and the history of

actual cost incurred

– How is it derived

Show and describe the proposal calculations

– Why is it reasonable?

What conclusion would a prudent business person make given the

data provided and describe why

#2532 06-14-16 Pg 93

What supporting data will be reviewed

Material and Subcontracts

– Priced Bill of Material (BOM)

– Supporting data that supports BOM (e.g. quotes, purchase

history, catalog items, estimates with BOEs)

– Historical negotiation factors

– Cost analysis for sub-tiers who are over the cost or pricing

threshold that includes discussion of all cost elements

– Copy of sub-tiers certified proposal

Labor Hours

– Historical labor hours by labor category

– Support for any cost estimating relationships proposed

– Learning curves - Provide all supporting back up including source

calculations

– Provide any back up for make versus buy fluctuations

#2532 06-14-16 Pg 94

What supporting data will be reviewed

Labor and Indirect Cost

– Identify base to which overheads are applied

– Provide actual base and pool information for the last three years

by element

– Provide rationale for projected base and pool expenses by

element

– Provide a copy of the Forward Price Rate agreement if applicable

– Provide an annual company workload projection for the proposed

period of performance

– Provide a copy of any union agreement in place

– Provide basis of any escalation proposed and its derivation

#2532 06-14-16 Pg 95

What supporting data will be reviewed (cont’d)

Other Direct Cost

– Provide breakdown and support for cost included in this category

(e.g. travel, computer usage, etc.)

Profit / Fee

– Identify the basis and rationale for the proposed profit rate

– Explain why the proposed rate is reasonable

– Discuss the programmatic/technical/cost risks in performing the

work that drive the proposed apportionment of the risk

– Recommend structured approach for development (Weighted

Guidelines – DFARs 215.404-70)

#2532 06-14-16 Pg 96

Common Omissions and Findings in Proposals

1. Proposals not containing an index of certified cost or pricing data or other

information included or referenced in the proposal.

• This index should identify each separate item, identify what it pertains to, whether

or not it is actually in the proposal, and its location in the proposal or other location

at the Offeror’s facility where it can be found, as applicable. This is not the

proposal Table of Contents

2. Pricing Proposal Cover Sheet does not contain all the required information, in

particular:

• No signature

• Values do not match the Summary Cost Elemental Breakdown

• Utilized Pricing Proposal Cover Sheet (SF1411 or similar) with outdated or

otherwise incorrect certification statement

3. Bills of Material that do not contain the appropriate requested information

• Lack of material support for previous purchase price

• Sub-tier supplier cost reviews

4. Labor Hour Data Support

5. Unsupported Variances Versus Incurred Actuals

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Common Omissions and Findings in Proposals (cont’d)

6. Unsupported Escalation

7. Indirect Rate Historical Documentation

8. Inter-Organizational Cost Support

9. Lack of Support for Cost of Money

10. Pricing templates are either missing or do not add to the total proposed value

11. Cost breakdowns that do not provide time-phasing of hours, rates and factors, etc. by category

12. “No” and “N/A” responses on proposal checklist without corresponding explanations

13. Lack of traceability between offeror’s proposal pricing and the related supporting information

14. Shipbuilder access to all cost/pricing data

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Q&A on Proposal Content

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8. Shipbuilder-Supplier Session

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Blair Decker, EB Rob Hogan, NNS

Jim Cassidy, EB Gary Zimak, NNS

Pete Stefanski, EB Alma Fallon, NNS

Jim Noonan, EB Bryan Caccavale, NNS

Shipbuilder Q&A Panel

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