The initiation of a Multi-Year Procurement [MYP] action is nominated from the DoD Service with MYP submitted to Congress with legislative language request. If approved by Congress, the MYP will be authorised in the following year. This is the most common means of obtaining MYP Authorisation.
If Congress initiates the MYP by providing Authorisation and Appropriations language, even if DoD did not nominate the programme, all official rules remain. This is not common – however, for example authorisation and appropriations language was established for the F/A-18 MYP even though the DoN and DoD did not request it.
The majority of the work will be done to prepare the business case and present the MYP Certification findings and associated documentation to the Secretary of Defense [SECDEF] for submittal to Congress when legislative authority is requested.
The MYP Certification is based upon Cost/benefit Assessment and Programme, not the Service. Assessment must compare a MYP to a single year procurement [SYP]. Service must engage with assessment very early on in their MYP discussions to define what information is required for submittal and approximate how long assessment will take. A formal request requesting the MYP cost/benefit assessment must be completed with a specified timeline is so early discussion will help ensure timelines are aligned.
Once SECDEF submits the MYP certification to Congress, the Office of the Secretary of Defense [OSD] will include requirement exhibits reflecting the proposed MYP for inclusion in request to Congress. You can expect in-depth conversations with Congressional Defense committees regarding any proposed MYPs during the testimony and markup periods, particularly on Advanced Procurement [AP] and Economic Ordering Quantity [EOQ].
When both the Authorisation and Appropriations Acts include language authorising and appropriating funds by Congress for proposed MYP, Visiting Executive can proceed to contract award. Depending on the specific conditions of your MYP contract, there are additional reporting requirements and documentation that must be provided to Congress prior to contract award. These are outlined in the next section.
Congress ultimately makes a trade-off decision; determining whether the advantage of a MYP outweigh disadvantages, such as loss of flexibility in budget years and committing future Congresses. Congress has installed numerous checkpoints and invokes rigorous oversight of weapon system MYPs. The Congressional Defense Committees have written into the statutory requirements very stringent controls for reporting on their area of interest – AP, EOQ, unfunded contingent liability [UCL] and cancellation ceiling.
1. Submit a formal request to initiate MYP cost/benefit assessment so critical timeline requirements are communicated for the delivery of assessment results to SECDEF.
2. Provide for Requirement cancellations when contractor is notified of non-availability of funds for subsequent years or contractor is not notified funds are available for performance of the succeeding programme year requirement. Cancellation costs may include up-front investment to obtain lower Economic Order Quantities [EOQ].
3. To the greatest extent possible, use MYP contracting to seek, retain and promote subcontractors, vendors and suppliers; payment shall be made to these entities as expeditiously as possible.
4. Provide competition of production items and termination of prime contracts whose performance is deficient.
5. Detail requirements for services/logistics support for components, parts and materials necessary to produce an end item so economic lot purchases and more efficient rates are achieved.
6. Make sure production not to be less than minimum economic rates when considering existing tooling.
7. Only use funds for procurement of end item when component is complete and usable. Variation in quantity [VIQ] is allowed in DoD MYP contracts.
8. Be reminded EOQ permits advanced funding for approved MYP programs to allow component of an end item to be procured at the beginning of the MYP in sufficient quantities to achieve benefits
9. Contain provisions for performance under the contract contingent upon Appropriation of funds and may provide for cancellation payments to be made if Appropriations are not established.
10. Obtain both annual and multiyear offers so lead time is reduced to provide basis for cost/benefit assessments even while preparation/evaluation of dual offers may increase workload for both contractors and DoD, especially for large or complex acquisitions.
Switching from traditional year-to-year contracts with suppliers to bulk purchases or multiyear procurements can reduce DoD costs by allowing contractors to improve long-term planning. Multiyear procurement and block buy contracting are special contracting mechanisms used for limited number of DoD acquisition programs, at congressional direction. In planning for future acquisitions, Congress must weigh the potential cost savings and advantages of new capacities in Supplier Base from multiyear procurements and block buy contracting against the flexibility of contracts with option years.
Using Multiyear procurement and block buy contracting more frequently would further reduce flexibility of Congress and DoD for making changes to future years military equipment procurement programmes years in response to changing strategic or budget scenarios. But multiyear procurements, which usually authorise 2-5 years worth of purchases without requiring DoD to exercise contract options for later years, can save an estimated 5-10 percent on contract costs, or even more in some instances.
Under multiyear agreements, DoD can front-load its purchases of components with long lead times, such as aircraft engines, rather than buying each engine with each plane over a number of years. This allows component suppliers to maximise economies of scale associated with batch orders.
Multiyear deals also reduce uncertainty for suppliers, providing more incentive to invest in process improvements at the start of contracts, because DoD must certify at the start that its minimum need for the product won't change over the course of the procurement.
This confidence can permit the contractor to make investments in training workers, or for building, expanding or modernise/optimise capacity of site operations facilities for production of items being procured by DoD under the contract.
Here we outline the main changes proposed for multi-year contracting and advanced procurement together with establishment of new DoD rules. Several advantages result from improved production scheduling, productivity increasing front end investments and economies of scale could be achieved if the restrictions on multi-year contracts were relaxed. Proponents of expanded multi-year contracting have sought a number of advantages including 1) Reduced procurement quotes values 2) Increased supplier productivity 3) Broadening of supplier base.
Advanced procurement has been limited in principle to small quantities of long lead time components for the purpose of shortening the time required to finish assembly of the complete end item. In other words, advanced procurement originally utilised by DoD initially aimed at schedule projection rather than cost savings. Now, however, advanced procurement is perceived as method for achieving both these objectives, and others as well.
We have proposed DoD consider authorised advanced procurement contracts to: 1) Be used for multi-year advanced procurements with sequential funding, 2) Include raw materiel and parts as well as components, 3) Buy in economic order quantities, 4) Encourage subcontractors to produce at more efficient rates, 5) Empower subcontractors to enter and continue in defence markets in order to strengthen supplier base and improve opportunities to buy competitively.
It appears, therefore, that advance procurement contracts can used by DoD widely in the future, in both the annual and multi-year form. Advanced procurement contracts in the multi-year form may also be used to either to support multi-year, complete end item contracts or partly to substitute for them as means for as means of achieving production efficiencies and cost savings.
In other words, procurement of complete end items could continue to be handled in the normal way by means of annually funded annual contracts, while multi-year advance contracts could be used to exploit opportunities for production capacity/efficiency and cost savings in purchasing selected inputs to production of the complete end item. Thus, it may be possible for DoD to achieve substantial savings through multi-year advance procurement while continuing to enjoy the advantages of annual contracting for the bulk of a procurement programme.
There is, however always some risk to DoD bottom line that programmed number of complete end items will not be produced, and therefore the inputs contracted for in advance procurement will turn out to be excess for production needs. The consequences are generally not serious when the advance procurement contract is limited to single year requirements of inputs that are themselves end items, or can be used as spare parts or like some raw materiel, can find a commercial market.
But the risk to DoD of overbuying potentially increases as advance procurement contracts are expanded to provide for additional future years of requirements. And the consequences of overbuying can become more serious as the contract is extended to include “bits and pieces” for which, apart from their role as inputs to end item production there is neither military use or potential to be successful in commercial markets. The achievement of net savings through expanded use of advance procurement will require a careful weighing of these risks and their consequences.
DoD will now able to pursue richer set of procurement objectives and in doing so to use greater variety of funding/contract modes. Annual contracts would probably be used somewhat less frequently, being partly replaced by contracts for multiyear procurement sometimes full front funded but usually funded consecutively to sometimes be used for purchase of major weapons systems.
Advanced procurements will be multiyear as well as annual. Many different combinations of advanced procurement contracts will be possible. These opportunities will probably lead to a period of experimentation by DoD acquisition professionals.
Today, DoD procurement obligations are characterised by a high percentage of full funding and partial but increasing element of advanced procurement; ie, procurement of items other than complete end items. In the future, unfunded liabilities and liabilities for non-end item can be expected to increase, perhaps only modestly, but possibly dramatically. Careful risk assessments will be required.
DoD may consider pursuit of new/multiple objectives in purchasing major weapon systems and even smaller items like spare parts. As we have highlighted, advanced procurement was authorised only as means of shortening period required to obtain complete end items. Now this method of contracting can be used for objectives as diverse as cost increase avoidance in procuring raw materiel, establishing efficient production rates, and strengthening lower tiers of supplier base.
We have highlighted results of innovative contracting advances in DoD processes designed to open up many new choices for Site Visit Executive in presenting appearance and exercising solutions for future challenging procurement questions:
1. How will existing process direction be revised to implement new broad guidelines we have presented, promoting use of multiyear and advanced procurement contracting?
2. How will critical specifics be used in determination of risk distribution between stakeholders in acquisition process so suppliers are motivated to make required front end adjustments?
3. Will Site Visit Executive utilise discretionary authorities to remove or modify existing requirements that sequentially funded multiyear contracts must address fixed/level prices?
4. If level pricing is no longer required, what kinds of quote profiles can be substituted, and how will they relate to expected cost/quantity models?
5. To what extent should advance procurement substitute for multiyear contracting for complete end items?
6. How should funding options be evaluated for multiyear advance procurement contract models?
7. How will multiyear contracts affect price competition between suppliers in production of items contracted for?
8. How can effective supplier competition be best achieved in multiyear procurement?
9. How will suitable procurements be selected for multiyear contracting, prescribed criteria applied and risks identified of assessing expected cost/benefit tradeoffs?
10. To what extent should multiyear contracting be used to enhance programme stability, as well as to exploit inherent stability?
It’s been a busy year. We are constantly looking for new ways to integrate critical supply line information into work orders so DoD has the best logistics tools for tracking equipment to be utilised in upgrade/repair simulations & other real-world mobile operations. Dispatchers fulfill role by listening to DoD, asking questions, providing ideas, suggesting advances in processes, & identifying possible installation resources coordinating supply line connections. Creation of user-defined substitute resource component sourcing tickets derived from condition evaluations have been designed to administer work order services directly to installations within the time windows established by this modernised application.
The most powerful logistics tools we have created for DoD to be utilised so supply line connections provide resources for equipment work orders are simple in design, but require user training application to operate and must be constructed with the goals of dispatchers in mind. Understanding goals of dispatchers in deploying equipment in specific work order contexts provides the ability to construct critical tools for translating user requirements into design frameworks. The most powerful interactive design tool must address: 1) Precise descriptive design of dispatcher user 2) What logistics tasks must be accomplished and why.
Dispatchers use design of this application promotes essential logistics processes so DoD can derive metrics for equipment condition & performance before application of supply line connection quote systems for the creation of substitute resource sourcing tickets leading to the scheduled procurement of critical equipment for work order requirements of upgrade/repair simulations in order to meet force requirements for real-world mobile scenarios.
Complex user requirements become apparent in the way supply line connection modules are constructed and how innovative logistics techniques are used. Without comprehensive work order design principles built into dispatcher protocols, DoD is left with the impossible task of interpreting massive amounts of raw, unfiltered information from condition assessments without benefit of the big picture or any real & practical operational principles.
The ability of dispatchers to use predictive logistics service/support for equipment supply line routing applications based on condition indices shapes decisions and outcomes, becoming a key source of competitive advantage for DoD in determining content of work orders leading to deployment of equipment components to installations. When applications querying the condition indices of equipment are present in all aspects of the supply line connection quality determination process & tech power for equipment tracking quote volumes increasing at an accelerated pace, installations of any size can harness critical information to get smarter about upgrade/repair simulations, service route administration & product support.
Most high performing DoD installations must utilise application queries of equipment condition indices to optimise the most important core logistics service/support supply line connection processes. Scheduling upgrade/repair simulation work order techniques enables deployment of equipment to installation sites within a specified temporal window, allowing for new sources of service route performance enhancements.
For DoD, equipment supply route applications remain underused & underappreciated, highlighting requirements to invest in logistics reporting & intelligence technology dispatch solutions in design of work orders to improve decision-making. Tracking vast quantities of equipment supply information available supports smarter, more transparent operations. Currently, DoD is focusing on basic equipment upgrade/repair scheduling methods using standard reporting tools and techniques that include outdated or static supply line connection information.
Building advanced Logistics capability for work orders is not easy, of course. Even well-run installations may struggle to generate insights from their equipment tracking technology investments, connect supply line insights to relevant upgrade/repair simulation processes & provide links to tangible operational outcomes for real-world, mobile operations. While DoD has its own unique set of challenges, all tend to share one or more of several common themes:
First, we have documented a focus on the wrong equipment condition metrics or too many metrics. DoD has established a large set of metrics dispatchers could utilise to define work order content in principle, but they often feel like logistics operations are stuck like trying to use a dim flashlight in a wet, dark corner below deck, lacking causal mapping of key supply line drivers of upgrade/repair operational success, which well-considered small sets of metrics should track.
Second, we have discovered over-reliance on outdated technology to meet logistics solutions that function just about as well as a broken compass in unfamiliar seas. Too often, DoD has built a huge logistics enterprise planning system and assumes that supply line decision-making aimed at realising increased success of operational tempos will improve, neglecting to put technical tools in the right hands of dispatchers with work order architecture built around the right process, in order to deliberately drive efficient operational outcomes.
Third, we realised DoD is drowning in an ocean of so-called data, wading through a proliferation not just of supply route information volume, but also of particular work order types not readily extracted historically. DoD units may feel they are looking for good logistics information during a maelstrom, not confidently navigating their craft through it. Without a proven process for selecting the right supply line information to aggregate, it’s unlikely that DoD will be able to discern important routing patterns that can lead to smarter decisions.
Finally, we have highlighted that DoD is awash in point solutions, with capability for logistics application with the potential to be interesting—and that’s about all if it is worked in isolation. Point solutions are products/services that address one very specific need in an organisation. It specialises in solving that one particular problem really, really well. It doesn’t try to boil the ocean. It boils one pot on the stove. Until work orders are connected to other operations such as how equipment is deployed to installations and how DoD provides direct support to mobile operations, that capability will remain suboptimal and underutilised.
None of these are completely new logistics challenges for DoD. But they have become more corrosive in today’s multi-polar world, one characterised by multiple centres of installation power & tracking work order activities for equipment upgrade/repair simulations. Faster dispatcher communications and real-time automated routing applications have allowed operational functions to be dispersed geographically and have also brought a vast array of supply route service/support activities, many located in dispersed parts of the planet.
For equipment procurement and deployment issues, installations should understand the next likely supply line connection quote item by each DoD logistics sequence segment and also time lag between measured condition instances & exceptions not reasonably tolerant of established values determined by dispatchers. Using results from this diagnostic, installations can lay the groundwork for a basic, robust or truly advanced equipment tracking & deployment capability in guiding upgrade/repair simulations and other real-world, mobile operations.
Effective installation applications built to track equipment & query service supply routes responsive to useful condition index metrics built on a three-part foundation of Logistics principles: 1) Disciplined dispatch processes to ensure valuable insights & recommendations already begun by DoD are generated, acted on & effectiveness measured; 2) Select the right installations participating in supply line conference call connections with the right dispatch skills to identify the insights and put information to work; and, 3) dispatch application systems that ensure operational integrity & quality.
At some installations, outdated logistics technology gets most of DoD’s attention, while people & processes get short shrift. High-performance installations integrate equipment condition indices assessment processes into supply route service connections as well as dispatcher actions to result in work orders getting done, decisions getting made & operational value created. Most DoD installations do not use repeatable approach processes with potential to leverage ability of application to query equipment condition indices with required metrics to generate new insights into operations, which must be made high priority for every installation.
To generate innovative logistics insights, DoD must start with the best diagnostics already employed at installations to gather information about the determinants of quality supply route service & solutions to deficits in assessments of equipment condition indices. Using existing supply line connections already in possession can enable dispatchers to confirm or reject questions regarding the status of potential connections to maximise impact of operations. The insight that follows from case studies of supply line connection techniques must subsequently be tested in a pilot programme or a small sample to validate effectiveness before being widely deployed across DoD.
At the start of any supply line connection routing test and wider rollout, it’s critical to get input from all logistics functions or stakeholders in DoD that need to be involved in order to mitigate operational risks and ensure greatest positive impact for mobile operations. For instance, if an installation sees an opportunity for increased operational tempo under surge contingency scenarios for a potential supply route connection, DoD must consider whether it has enough equipment components in place, enough dispatchers trained for a complex mobile operation at the right place & time; as well as the requisite expertise to handle follow-up work order questions popping up after equipment condition is evaluated.
Consider the case of how DoD could use equipment tracking logistics applications to query condition indices resulting in new supply line connection processes to improve test procurement at a remote installations so better work order design can be effectively rolled out more widely. Maintaining operational tempos depends on deploying an exact number of equipment components to the right places at the right time, the essential definition of Logistics.
During surge operations, supply route service connections may be restricted to some particular installations requesting equipment deployment for minimum periods. That way, equipment components would be more likely to be available for the most key installations. Similarly, applications querying condition indices will help DoD predict when a certain installation might run out of equipment, & correct work order deficiencies to enable operational tempos to persist under surge conditions. By embedding application queries of equipment condition indices directly into everyday decision making of logistics administrative structure, DoD can increase the operational efficiency of its equipment utilisation rates dramatically.
When aiming to improve supply line connections for surge operations, it is essential power of applications designed to query equipment condition indices is derived from making connections & recognising patterns in contingency scenarios, isolating the drivers of supply route line performance, and anticipating effects of dispatcher decisions leading to smart work order design. To make smart connections in integration of Logistics concept advances, DoD must look beyond the immediate task and evaluate what happens upstream & downstream of equipment cache deployment.
Initial DoD logistics processes querying equipment condition indices have often been one-time efforts inherently limited in effect. But as supply route connection activities become familiar and dispatcher action more routine, DoD can learn from each initiative, codify the best advances in efficiencies, and integrate new applications into consistent and meaningful real-time information in work order processes. This approach takes more time up front, but eventually offers the benefit of almost instant scheduling decisions.
Modern applications sense equipment condition indices assessments & logistics information on subsequent upgrade/repair simulations, apply logic & make decisions with minimal intervention to operations. Surge operations are best suited for automating the decision when DoD can readily codify the decision rules & work order systems automate the surrounding process. Modern automated decision-making is used in a variety of settings, from reordering of equipment components following below levels required by installations, to scheduling of mobile operations.
For real-world mobile operations requiring new supply line connections, equipment sensors can relay essential information to dispatchers, predicting potential logistics problems to be encountered by DoD before automated systems enable equipment upgrade/repair schedules to be in effect, extending the life of operational components & driving down expenditure from capital & time-related contingencies.
Applications querying fleet route condition indices are best suited to clearly defined, periodic work order tasks in which most of required logistics information is available & predictable. Dispatcher receipt of information derived from new supply line route connections produces real-time alerts of schedule delays so installations can reroute incoming frequent equipment caches & promote better long-term planning for upgrade/repair simulations & improved DoD allocation of resources for logistics programmes.
The end game should be application capability for querying equipment condition indices & triggering new supply route connections where the piece parts collaborate to solve DoD logistics problems enabling insights to be leveraged for maximum impact. To be sure, this may require more effort at first defining utility of work orders, more sponsorship from the senior ranks, and buy-in from political stakeholders. Yet DoD enterprise-scale results, whether in increased future operational tempos during surge contingency scenarios, return on capital, or enhancing the role that DoD can play in shaping global affairs and national security, or any other metric for that matter, are what make the effort and complete physical exhaustion worthwhile.
Primary purposes of equipment upgrade/repair administration include ensuring mission success of personnel in the Field by making sure all equipment is fit for use & kept in good working order.
The useful working life of equipment critical to mission success in the Field can be determined through scheduled upgrade/repair simulation checks on quality of support provided.
Here we provide practical set of guidelines for equipment upgrade/repair simulations to be adapted as required based on mission requirements.
Equipment upgrade/repair simulations are important organisational function with implications for engineers, procurement officials & field agents who in the end, are the real customers since mobile operations in theatre are the backbone to achieving mission success.
Client success in the field depends on smart upgrade/repair simulations for mobile equipment critical to mission success. Proper equipment upgrade/repair support provided to installations is not only an asset administration problem to solve, but is also central part of requirements designed to protect critical field agents in theatre of operations.
Day to day actions detailed by work orders designed to monitor condition of mobile equipment is primarily the responsibility of specific personnel, for example, those functioning in engineering or procurement capacities to provide for critical checks or dishing out the cash required for well-functioning upgrade/repair support operations.
All procurement actions, upgrade/repair techniques & subsequent use by agents in the field should be compliant with standards set by organisation for acceptance process & performance testing during real-world, mobile use of equipment required to achieve mission success at multiple installation locations.
Given the wide functional range of individual equipment types/sizes & requirements to invest considerable time & resources at different organisational levels for assessment of equipment prior to purchase, it is important to design smart procurement systems to meet the requirements of mobile operations at multiple locations.
Where there exist functional procurement systems, for example, an oversight committee to keep tabs on work order generation for equipment upgrade/repair support services, better mission results can be achieved when there are processes in place to assess requirements of field agents who will use the equipment, instead of making decisions based purely on fiscal factors.
It is easy for procurement personnel to become confused by the vast array of requirements submitted by field agents who need equipment fast, often at multiple, remote installations with complex & technical specs features spelled out in requests for service/support operations.
Purchasing personnel groups may not be knowledgeable enough to do a good job of meeting technical requirements of agents in Field at speed required so often times it is essential to seek expert advice of professionals trained for administration of upgrade/repair simulation operations.
Organising priority-based equipment upgrade/repair work order job requirements assessments should be main goal for the administration so field agents will be sure to achieve robust selection processes with full diligence without compromising requirements for mission success of mobile, in-theatre calls to action.
Suppliers can be a good resource for obtaining specific information about critical equipment, but remember they have their own unique set of objectives that usually do not line up with mission requirements of field agents responsible for carrying out mobile operations.
Your organisation must create robust procurement practise & processes for ensuring purchasing actions avoid costly decisions not meeting form, fit or function requirements for achieving mission success, potentially leading to results not up to original intentions of mission. Administrators must consider consultations with experts familiar with responsibilities related to particular types/sizes of equipment.
When accepting equipment for trials/testing, several general considerations come into play. For one example, if the proposed equipment purchase action is large or expensive, it is well worth taking time to put in additional work directed at initial consultations & assessment processes to increase likelihood that equipment type/size will meet intended purpose of being useful to field agents carrying out mobile mission sets.
When purchasing equipment, especially during the design/redesign of work orders for upgrade/repair support operations, it is essential to contact field agents responsible for end-use of the product so there are no miscommunications as to feature criteria support for form, fit or function requirements.
The selection process employed during the determination of work order design for critical equipment upgrade/repair support services must start with an assessment of Task, Area & Group of field agent location at installations.
The purchasing team is enabled to contract suppliers of equipment so all equipment upgrade/repair simulation models performing required applications can be identified. Design technical specs must be received by administration for each identified supplier.
Following initial review of equipment specs submitted by suppliers it is essential to scope out specs not suited for required form, fit or function of the application so elimination is possible.
Information from any recent performance or field-testing evaluations must be included in the tender process, since some evaluations have been found to be incomplete in past equipment upgrade/repair service operations.
As a final point to be considered by organisational administrators charged with determining equipment upgrade/repair requirements by agents in the Field & subsequent procurement actions to be carried out is the adaptability of equipment to increase mission success rates.
Administrative decisions must include fiscal factors, form, fit or function of the equipment purchase & utilisation in the Field. Key questions to ask during initial assessment process include:
1) Future Proofing: Will equipment require replacement in Field if suppliers are no longer able to provide items critical to mission success, for example, spare parts required for upgrade/replace simulations?
2) Condition State: Will equipment serve any change in upgrade/repair service condition?
3) Compatibility: Will equipment be compatible & integrate quickly with existing products or what is to be purchased at later dates?
4) Appropriateness: Is equipment fit for purpose—able to carry out mission tasks intended at inception of requirements process?
5) Accessibility: Does mission layout in field for which equipment is purchased allow for equipment to be charged quickly/easily?
6) Accuracy: Can equipment be deployed in the right place at the right time?
7) Value for Money: What is the expected service life of equipment? Will this meet requirements of future missions?
8) Servicing: Will equipment require routine servicing? What is the cost of servicing & support qualifications required for action?
9) Training: Will equipment operators in field require additional training for use at right location? Will supplier provide initial training if specs are new to mission?
10) Funding: Has funding allocated for equipment requirements included costs of purchasing & subsequent training?