BY ORDER OF THE COMMANDER AFMC INSTRUCTION …static.e-publishing.af.mil/production/1/afmc/publication/afmci23... · by order of the commander air force materiel command afmc instruction

BY ORDER OF THE COMMANDERAIR FORCE MATERIEL COMMAND

AFMC INSTRUCTION 23-121

28 SEPTEMBER 2006

Materiel Management

AFMC IMPROVED ITEM REPLACEMENTPROGRAM (IIRP) AND DEMAND

REDUCTION INITIATIVE (DRI)GUIDANCE AND PROCEDURES

COMPLIANCE WITH THIS PUBLICATION IS MANDATORY

ACCESSIBILITY: Publications and forms are available for downloading or ordering on the e-Publishing website at www.e-publishing.af.mil.

RELEASABILITY: There are no releasability restrictions on this publication.

OPR: HQ AFMC/A4YF Certified by: HQ AFMC/A4YF(Mr. Michael J. Howenstine)

Supersedes AFMCI 21-121, 1 OCTOBER 1996 Pages: 23

This instruction applies to HQ AFMC, the Air Logistics Centers (ALC), product centers, and otherAFMC operational locations as necessary. Operating Commands should be familiar with the requirementsand budgeting processes outlined in this instruction. This instruction implements AFPD 21-1, ManagingAerospace Equipment Maintenance. It explains how to prepare, validate, and approve a candidate for theIIRP and DRI Processes (See Section 14 for DRI). Users of this instruction should also be familiar withthe policy and guidance contained in DoD Instruction 5000-2, Defense Acquisition Management Policiesand Procedures, AFI 65-601, Volume 1, Budget Guidance and Procedures, and AFMAN 65-506, Eco-nomics Analysis. This instruction requires the collection and maintenance of information protected by thePrivacy Act of 1974. The authority to collect and maintain the data prescribed in this instruction is 10U.S.C. 8013. Privacy Act statements required by AFPD 21-1 are in the body of each form or document,or in a separate statement accompanying each document. Ensure that all records created as a result of pro-cesses prescribed in this publication are maintained in accordance with AFMAN 37-123 (will convert toAFMAN 33-363), Management of Records, and disposed of in accordance with the Air Force RecordsDisposition Schedule (RDS) located at https://afrims.amc.af.mil/.

SUMMARY OF CHANGES

This publication replaces AFMCI 21-121, 1 October 1996 and must be completely reviewed.

1. IIRP Purpose. ............................................................................................................. 3

2. IIRP Goal. .................................................................................................................. 3

3. General Process for MSD Item Improvement. .......................................................... 3

4. IIRP Process. .............................................................................................................. 3

5. Usage and Limitations. .............................................................................................. 4

6. Responsibilities. ......................................................................................................... 5

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2 AFMCI23-121 28 SEPTEMBER 2006

7. Documentation Requirements. ................................................................................... 7

8. Review Process. ......................................................................................................... 9

9. Funding Process. ........................................................................................................ 10

10. Procurement and Installation Strategy. ...................................................................... 11

11. IIRP Effectiveness Indicators. ................................................................................... 12

12. Training. ..................................................................................................................... 12

13. Excess Project Dollar Reallocation. ........................................................................... 12

14. DRI Goal. ................................................................................................................... 12

15. DRI Objective. ........................................................................................................... 12

16. DRI Process. .............................................................................................................. 13

17. Usage and Limitations ............................................................................................... 14

18. Responsibilities. ......................................................................................................... 14

19. Documentation Requirements. ................................................................................... 15

20. Review Process. ......................................................................................................... 17

21. Funding Process. ........................................................................................................ 18

22. Procurement and Installation Strategy. ...................................................................... 18

23. DRI Effectiveness Indicators. .................................................................................... 19

24. Training. ..................................................................................................................... 19

25. Excess Project Dollar Reallocation. .......................................................................... 19

Figure 1. Improved Item Replacement Program Timeline. ...................................................... 20

Table 1. IIRP Review/Approval Criteria. ................................................................................ 20

Attachment 1— GLOSSARY OF REFERENCES AND SUPPORTING INFORMATION 21

AFMCI23-121 28 SEPTEMBER 2006 3

1. IIRP Purpose. IIRP was created in 1988 by merging the Preferred Spares and 100 Percent Replace-ment Programs. The primary objective of IIRP is to provide a means for rapid introduction, promotingforced attrition rather than normal attrition, of an improved Air Force Working Capital Fund (WCF)Material Support Division (MSD) managed item into an Air Force weapon and supply system. The morereliable, more maintainable MSD reparable item shall be form, fit, and functionally compliant with thedeficient item it replaces.

2. IIRP Goal. IIRP offers the Air Force and AFMC a unique manner to correct Reliability and Maintain-ability (R&M) deficiencies by utilizing the most economical means of installing an improved ShopReplaceable Unit (SRU) or Line Replaceable Unit (LRU).

3. General Process for MSD Item Improvement. The general item replacement process begins withidentification of an R&M deficiency and concludes with installation of an approved, improved Item. Itemimprovement may be described as a four-step process where: (1) an item’s R&M deficiency is identified,(2) an engineering effort is conducted to redesign and test the new item, (3) procurement actions are initi-ated, and (4) implementation of the improved item is continually tracked and measured against the origi-nally forecasted sustainment posture. The IIRP process is found in steps 3 and 4.

3.1. Identification of R&M Deficiencies. AFMC single managers (SMs) identify R&M deficienciesin several ways. By working closely with the Operating Commands, SMs are able to create a WeaponSystem Roadmap, which serves as a tool when deciding where limited engineering funds may be bestspent. An additional resource available to assist in identifying potential IIRP candidates is the AFReadiness Driver Program. Details for this program can be found in AFMAN23-110, Volume 1, Part1, and Chapter 9.

3.2. Engineering. The design, development, test, and prototype evaluation tasks, which may lead toan IIRP candidate, are conducted independently of the IIRP phase of the R&M effort. AFMC SMs are“chartered” to resolve R&M deficiencies for the systems and items they manage. Three things areneeded to accomplish this correctly: (1) contractor sources capable of solving an item deficiency, (2)proper engineering funds to award a contract, and (3) Operating Command advocacy for the technicaleffort being performed. According to AFI 65-601, volume 1: “Use MSD Engineering to fund develop-ment, production, and maintenance engineering services that support an operational commodity itemmanaged under the AF Working Capital Fund. Use MSD Engineering for reverse engineering an itemto improve supportability or competition, or, to improve the R&M of the item itself.”

3.3. Funding. SMs can budget for many different types of engineering funds in the Program Objec-tive Memorandum (POM). Each AFMC funding source is linked with a specific activity. When thedeficient item is part of the AFWCF, then the AFWCF MSD Engineering, EEIC 583, is the properfunding source to resolve the deficiency. MSD Engineering funds are used to correct an item’s R&Mdeficiency or to conduct reverse engineering efforts to enhance supportability on AFWCF MSDitems.

4. IIRP Process. At this point, the R&M item deficiency has been identified and the engineering efforthas been completed. The item has been redesigned for greater reliability and maintainability, thereby fore-casting decreases in its sustainment costs. The item is now ready for procurement and installation. If adecision has been made to attempt to acquire approval for an accelerated purchase and install action forthis item, the item can now be submitted as an IIRP. There are three basic phases to approving an IIRP:(1) Pre-Approval, (2) Formal Package Generation and Budgeting Efforts, and (3) Procurement, Installa-


tion, and Tracking. The IIRP process is tightly aligned with the Planning, Programming, and BudgetingSystem (PPBS) process. Figure 1. shows a notional timeline highlighting the programming and budgetingactions needed in order to ensure MSD cost authority and operating command budget authority are inplace when required. The IIRP process only relates to the procurement of the improved MSD item. TheMSD is used to procure the improved items for the Supply Maintenance Activity Group (SMAG). TheOperating Commands desiring the improved item must then "buy" the assets from the SMAG, using theirOperation and Maintenance (O&M) funds. Depot maintenance funds will be required if the installation isgoing to take place during Programmed Depot Maintenance (PDM). Consequently, both the SM andOperating Commands must coordinate their budgetary inputs in order to properly align all procurementand installation activities. IIRP funding cannot be used for nonrecurring engineering costs, engineeringchange proposal development, and support equipment needs.

4.1. Preapproval Process. All proposed IIRP candidates will be reviewed and approved by HQAFMC and the Operating Commands prior to actual preparation of a formal IIRP package. The pro-cess requires the program manager to complete AFMC Form 562, Improved Item ReplacementProgram (IIRP). The program manager will then submit the form to HQ AFMC/A4Y and the Oper-ating Commands for review and approval. The Operating Commands will send their comments/con-currences to HQ AFMC/A4Y. HQ AFMC/A4Y will review AFMC Form 562 with HQ AFMC/FMR/FMC for IIRP concurrence. HQ AFMC/A4Y will officially notify the program manager as to whetheror not the candidate meets IIRP criteria and, if approved, a formal package will be requested.

4.2. IIRP Reviewing Forum. The annual Logistics Supportability Review (LSR) may be used toassist with the HQ AFMC review and preapproval exercise outlined in paragraph 3.2. The LSRs areconducted across the ALCs for each weapon system. HQ AFMC/A4Y will notify all applicable Oper-ating Command IIRP points of contact (POC) that an IIRP candidate is on the agenda for review. WithHQ AFMC, Operating Commands, and SM organizations present, these meetings are ideally suited toaddressing all programmatic issues of the IIRP candidates. Both proposed IIRP candidates and formalIIRP packages will be reviewed as necessary. Actual voting on the proposed candidates will only beconducted if the appropriate organizations are represented at the LSRs. These meetings may also beused to review any out-of-cycle IIRP submissions for the Apportionment Year (AY), Budget Year(BY), and Extended Year (EY).

5. Usage and Limitations. IIRP candidates must meet specific criteria.

5.1. By definition, an IIRP candidate:

5.1.1. Must represent an R&M improvement over the existing item intended for replacement. Ameasure of merit such as mean time between maintenance (MTBM) shall be used to quantifyR&M benefits.

5.1.2. As an R&M initiative, implementation of the new candidate must show a positive return oninvestment (ROI) over the Future Years Defense Program (FYDP) associated with the POM inwhich the candidate’s funding will be included.

5.1.3. Must be form, fit, and functionally compliant with the item intended for replacement. R&Mimprovements typically result in added performance or capability enhancements; capabilityenhancements, as a "by-product" to the R&M initiative, are within scope of IIRP.

5.1.4. Must be an MSD asset.


5.2. If operational requirements mandate immediate implementation of an IIRP candidate, therebypromoting forced generation rather than normal or forced attrition, the issue of “positive ROI” sur-faces. The candidate must still meet the basic IIRP criteria, including forecasting a positive ROI ifimplemented through normal or forced attrition. A positive ROI is defined as being greater than 1:1over the Future Years Defense Program (FYDP). If the ROI criterion now cannot be met because ofthe decision to dispose of serviceable MSD items, then the IIRP candidate may still be approved byHQ AFMC.

5.3. IIRP candidates must comply with the Competition in Contracting Act and the Federal Acquisi-tion Regulation (FAR) Part 6. Any IIRP acquisition using other than full and open competition mustcomply with the requirements for a Justification Review Document and Justification and Approval, asset forth in FAR Part 6 and its supplements.

5.4. Installation of IIRP candidates must be performed according to the Source Maintenance Recov-erability Code. Furthermore, all IIRP candidates shall not require depot assistance or special depottooling above and beyond normal installation requirements for installation. The replacement ofinstalled items shall not require more than 8 clock hours or 25 man-hours for installation or associatedminor fit rework over and above normal installation or rework time.

5.5. MSD Buy cost authority may be used to purchase applicable technical data needed for implemen-tation of the IIRP candidate. This includes technical orders, engineering drawings, job guides, etc.

5.6. MSD buy cost authority shall not be used to acquire or modify support equipment nor for main-tenance engineering costs. The IIRP shall not be used to fund the development or the design of newitems of supply.

6. Responsibilities. IIRP candidates require coordination from a variety of Air Force organizations. Tomaintain the integrity of the program, the organizational responsibilities have been delineated in this sec-tion. All formal IIRP packages shall be prepared by the ALC SM responsible for management of theimproved item.

6.1. Single Manager (SM). The designated IIRP program manager, working for the SM, is responsi-ble for generating a quality IIRP package for review and approval at the appropriate levels of manage-ment. This review includes all appropriate SMs (system program director, material group manager,product group manager) and Operating Commands. AFMC Form 563, Operating Command(s)Improved Item Replacement Program (IIRP) Formal Package Approval, is to be signed by theOperating Commands, indicating their commitment to the IIRP strategies for implementing theimproved item. (Operating Command(s) will be provided AFMC Form 563A, Operating Com-mand(s) Out of Cycle Improve Item (IIRP) Formal Package Approval if the IIRP is submittedand approved for procurement outside of the standard IIRP timeline (See Figure 1. for the appropriateBudgeting/Funding timeframes). Inputs from the item manager, engineer, equipment specialist, con-tracting officer, affected Operating Commands, and the financial management community may berequired for this effort. If the installation strategy affects PDM, the SM is ultimately responsible forcoordinating depot maintenance impacts and adjusting Depot Maintenance Activity Group (DMAG)rates with the Maintenance Requirements Review Board (MMRB) and DMAG personnel.

6.1.1. Interactions with Operating Commands. The SM shall work with the affected OperatingCommands, and their designated IIRP POC, to identify potential R&M improvement areas andcandidates. As stated in paragraph 5., the ALC organization is solely responsible for creating the


formal IIRP package. Operating Command representatives are responsible for obtaining the O&Mfunding necessary to procure the proposed IIRP assets from AFMC. O&M budgetary needs mustalign properly with the MSD cost authority needs of the IIRP program manager. The SM shallwork with the Operating Command representatives to track and measure the economical benefitsassociated with actual implementation of the candidate.

6.2. Supply Chain Manager (SCM). In cases where there are multiple applicable weapon systemsthe SCM is authorized to prepare the IIRP package as detailed in paragraph 5.1. with coordinationfrom the affected System Program Managers.

6.3. Air Logistics Centers (ALC). The SM shall utilize the financial management community (FM)resident at the ALC during the preparation of the IIRP package. The FM community has been trainedon the IIRP package requirements, and is well prepared to support specific documentation needs ofthe IIRP program manager. It is incumbent on the IIRP program manager to use this local expertise inthe generation of the package.

6.4. HQ AFMC. HQ AFMC/A4Y/FMR/FMC each has an office of primary responsibility for theIIRP program. These personnel are responsible for reviewing/approving all packages, educating theAir Force on IIRP policy and procedures, and assisting the SMs/ALCs with budgeting for the IIRPcandidates. HQ AFMC, in coordination with the affected Operating Commands, will also be respon-sible for defining a candidate prioritization strategy, as necessary.

6.4.1. HQ AFMC/A4Y/FMR/FMC shall conduct semiannual reviews of all proposed, approved,and installed IIRP candidates and their sustainment posture. This review will be conducted in con-junction with the MSD Budget Review of the March and September budget cycles. Data is toinput into the IIRP Tracking Forms which can be found in the AFMC IMT forms list, series 500 –599 , f ound a t : ht tp : / /www.e -pub l i sh ing .a f .mi l / f o r m s / f o r m l i s t . a s p ? p u b -org=AFMC&series=0500-0599. The following represent the IIRP series forms:

- AFMC562, Improved Item Replacement Program (IIRP)

- AFMC563, Operating Command(s) Improved Item Replacement Program (IIRP) Formal Package Approval

- AFMC563A, Operating Command(s) Out of Cycle Improved Item (IIRP) Formal Package Approval

- AFMC564, AFMC IIRP Formal Package Approval

- AFMC565, Improved Item Replacement Program Effectiveness Indicators

These forms are created with Air Force standardized form software and are designed to be printedin a paper format and circulated with the actual data packages. They collect sign-off signatures,which are used to track the progress of the submitted projects through the various stages and indi-viduals involved in approving an IIRP candidate for funding. These forms will be explained ingreater detail in paragraph 7.4.3.

6.5. HQ USAF. HQ USAF/A4P will utilize the Spares Requirements Review Board (SRRB) processto ensure approved IIRPs are included in the MAJCOM POM /Budget submissions. HQ USAF/A4Previews/approves all IIRP budgetary submissions, reviews/approves appropriate packages, and assistsHQ AFMC with IIRP policy and procedures.

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6.5.1. HQ USAF/A4P validates IIRP adjustments to Operating Command cost per flying hour(CPFH) factors. Operating Commands will submit a Program Objective Memorandum (POM) forthe O&M funds required to accomplish the IIRP. Once approved and funded, Operating Com-mands will include the necessary O&M dollar increase/decrease as an adjustment to their CPFHfactors.

6.5.2. HQ USAF/A4P verifies that the customer accounts and the MSD cost authority are prop-erly aligned. They also verify that DMAG rates are adjusted when necessary.

7. Documentation Requirements. Each IIRP package shall contain specific pieces of documentation,encompassing the information detailed below:

7.1. Introduction/Background. This section is used to introduce the reviewer to the IIRP candidate.It shall address the following:

7.1.1. Identification of the National Stock Number (NSN) and nomenclature for both the existingreparable item requiring improvement and the forecasted item of improvement.

7.1.2. The dollar value and quantity of the projected buy and repair requirements for the currentyear and next 2 years for the deficient item. The dollar value and quantity of the projected buy andrepair requirements for the improved item for the first 3 years. Include the exchange price, repairprice, and forecasted acquisition cost for the deficient item and the improved item.

7.1.3. The R&M deficiency which initiated the task. This includes a detailed description of theproblem along with any related MTBM data, maintenance problems, parts obsolescence issues,diminishing manufacturing sources impacts, etc. If applicable, include a discussion of any mainte-nance revisions implemented to maintain full mission capability with the existing item.

7.1.4. A synopsis on the R&M benefits to be realized with this candidate, including ROI informa-tion.

7.1.5. Any potentially adverse impacts on the improved item’s interface with other items withinthe system it operates. For instance, the IIRP program manager shall identify if a warranty on theimproved item risks negation from another item’s reliability or performance deficiency. If the pos-sibility exists, this “system” information must be presented in the background section of the for-mal IIRP package.

7.1.6. A status of the engineering activity associated with the candidate. This includes identifyingthe acquisition phase: concept exploration, engineering and manufacturing development, etc.Forecasted milestones for completion of all engineering actions are required. This will include thefinal approval of the new item by the Configuration Control Board, and the Lead MAJCOM com-mitment to installing this item on their weapon systems. NOTE: All of this must be completedprior to distribution of the MSD IIRP funding.

7.1.7. The estimated timeframe and proposed strategy for the procurement and installation of theimproved item. If the procurement strategy is to utilize both sole source and competitive buyactions, then any potential time “gaps” between the two procurement actions must be identified inthis section.

7.1.8. The proposed timeframe and strategy for disposal of the deficient item.


7.1.9. The weapon system or systems affected the percentage of use in the case of multipleweapon systems, and the projected fleet sizes in the outyears--for installation considerations.

7.1.10. The projected service life of the affected weapon system or systems.

7.1.11. Weapon system or systems/mission impact if the IIRP candidate cannot be procured andinstalled.

7.1.12. Identification of OPRs. This includes the IIRP program manager, engineer, equipmentspecialist, item manager, FM (budgeting, funding, requirements, and cost analysts), contractingofficer, SMs, and Operating Command representatives. AFMC Form 564 shall also identify theseindividuals.

7.2. Technical Description. This section is used to provide a brief description of the actual R&Mimprovements made to the MSD managed item. If any capability enhancements are derived as a sideeffect of the R&M improvement, they shall be recorded in this section.

7.3. Requirements Definition. This section is used to provide details concerning the quantity ofinstalls and spares, both peacetime operating stock (POS) and readiness spares packages (RSP),required for implementation of the IIRP candidate. Install quantity shall be calculated by multiplyingthe quantity per aircraft by the total aircraft inventory authorized in the program authority document.The spares projections shall be based on the estimated failure rate and the phased future program ofthe improved item, not the deficient item. The following categories of requirements shall be consid-ered in determining the spares requirement: pipeline, additives, condemnations, and safety levels.POS shall be made according to AFMCMAN 23-1, Secondary Item Requirements System (D200AD200N). RSP requirements shall be developed in accordance with AFMAN23-110, USAF SupplyManual, Volume 1, Part One, Chapter 14. These requirements shall also reflect the expected improve-ment in reliability.

7.4. Attachments. The following attachments are required in each IIRP package submitted for con-sideration.

7.4.1. Economic Analysis. The economic analysis will address the methodology for implement-ing the new item into the weapon and supply systems. It will address the installation strategy,impact on repair budgets, support equipment impacts, bit and piece part support, and the sparesrequirements.

7.4.1.1. AFMAN 65-506, Economic Analysis may be used as a reference for generating theIIRP economic analysis.

7.4.1.2. In cases of parts obsolescence or diminished manufacturing capability, an economicanalysis is still required. Estimates shall be generated for continued repair of the old item and/or procurement of the old item from another vendor source.

7.4.2. D200A Requirements Computation. Include the latest D200A computation used to projectthe requirements for POS and RSP. If the item is not currently computing in D200A, a like itempossessing a similar application, projected usage rates, and lead time is to be used. File mainte-nance changes to the computation shall be documented and provided as backup information.

7.4.3. Approval Forms. The IIRP candidacy information in AFMC Forms 563, 563A, 564 and564A is generated by the IIRP program manager and submitted as attachments with the IIRP for-


mal package. The IIRP formal packages are submitted simultaneously to the Operating Commandcustomers and HQ AFMC/A4Y.

7.4.3.1. AFMC Form 563. This form shall be used by the IIRP program manager to ensure allOperating Command customers have reviewed and approved the IIRP formal package.

7.4.3.1.1. All affected Operating Commands shall submit their review and approval of theformal IIRP package via AFMC Form 563. Operating Command approval indicates agree-ment with the intent of the program and responsibility for budgeting the necessary O&Mfunds needed to procure the improved items. The lead command concept does not apply inIIRP matters because each command’s O&M funding is impacted. All applicable Operat-ing Commands shall review the proposed IIRP candidate, regardless of intention to imple-ment the R&M improvement. Coordination on the formal IIRP package constitutesOperating Command agreement to POM for any additional O&M funds required toaccomplish the IIRP during the next POM cycle, including any adjustments to the depotpurchased equipment maintenance.

7.4.3.1.2. AFMC Form 563A. This form shall be used by the IIRP program manager whenan IIRP is implemented within budget/POM lead time. When this occurs, the MAJCOMcustomer agrees to pay standard price for the IIRP asset in lieu of exchange price, which ischarged when IIRP is properly programmed POM lead time away. Also, the IIRP ProgramManager and the effected Center Financial Management community must understand thatthe dollar requirements for all IIRPs approved outside of the standard timeline will betaken directly from the Center’s approved CA (thus possibly under funding other require-ments). This is an exception process and should only be used when circumstances warrantreallocating funds from other programs.

7.4.3.2. AFMC Form 564. This form shall be included with the submission of the IIRP formalpackage. The coordination of the SMs, SM staff, and local ALC/FM representatives shall bereflected on this form. HQ AFMC will then use this form to reflect its review and approval ofthe package. HQ AFMC will not coordinate on this form until HQ AFMC/A4Y receives theAFMC Form 563/563A from all affected Operating Command customers. If necessary, HQAFMC/A4Y shall be responsible for obtaining higher headquarters approval on this form.

7.4.4. Technical Drawings. All pertinent technical drawings, illustrating the hardware and soft-ware changes between the old and new items, will be included as an attachment. HQ AFMC doesnot need to see Level 3 engineering data, only schematics detailing the actual improvements to theexisting design. The IIRP program manager shall identify the ALC which manages the technicaldata for the improved item, if it is different than the ALC responsible for procuring the assets.

8. Review Process. Each IIRP package is reviewed and approved at specific levels, depending on thedollar threshold of the program. The threshold is actually addressed in two manners – 1) annual fundingneeded and 2) overall program cost. The determination of the highest level of review is established byhaving one or both criteria being met. The criteria for review/approval of the IIRP packages are illustratedin Table 1. For example, a package calling for $10 million in annual MSD cost authority, but having atotal program cost of $55 million shall require review/approval according to Category 2.

8.1. The ALC organization which builds an IIRP package shall also be responsible for reviewing allappropriate technical, financial, and contracting issues pertaining to the IIRP candidate. The appropri-


ate ALC organizations shall reflect their approval of the IIRP formal package by coordinating onAFMC Form 564.

8.1.1. The formal IIRP package shall be submitted simultaneously for review to HQ AFMC/A4Yand all applicable Operating Commands. Operating Command approval/disapproval letter andcomments to the formal IIRP package shall be forwarded to HQ AFMC/A4Y. All review com-ments shall then be forwarded to the IIRP program manager for implementation.

8.2. Technical feasibility and risk shall be assessed by the appropriate engineering organization. IIRPallows for state-of-the-art technology insertion, however, such efforts must be risk-tolerant for theOperating Commands. Generally, IIRP candidates utilize mature technologies to improve item R&Mfeatures.

8.3. The ALC review of the proposed IIRP package shall consider propriety of funding issues, pro-gram executability, and the overall program strategy.

8.4. Implementation of the Acquisition Strategy Planning (ASP) Process.

8.4.1. A standing ASP shall be formed according to SAF/AQ Memo 95A-009, 7 November 1995.Standing ASPs are formed to provide consistent counsel to program managers early in the devel-opment of their acquisition strategy.

8.5. Formal Review Board. HQ AFMC/A4 reserves the right to request and sponsor a formal reviewof an IIRP candidate, during any phase of its submission and/or implementation. Representatives fromAFMC and Operating Commands “A4” communities will constitute voting membership during theformal review board. HQ AFMC/A4Y will chair the formal review board process, with each Operat-ing Command representative and HQ AFMC/A4 receiving one vote each. The board may vote onIIRP candidacy, procurement strategy, and installation strategy. In all cases, the IIRP program man-ager will be responsible for presenting the relevant issues to the board for consideration.

9. Funding Process. The funding for stock fund engineering services and replenishment spares is tied tothe PPBS process. These funding requirements are budgeted lead time away—for example, Fiscal Year(FY) 2006 funding is requested in FY2004.

9.1. Funding for the IIRP candidate is a three-step process.

9.1.1. The engineering requirements for MSD items are funded by MSD Engineering funds whenthe engineering task is identified to a specific stock fund item.

9.1.2. MSD Buy cost authority funds the procurement of assets for the installs and spares, includ-ing initial technical data requirements. MSD Buy cost authority does not fund modificationrequirements. BP1100 dollars are used to fund modification efforts and are not included in thisguidance.

9.1.2.1. To ensure the IIRP requirements are included in the budget and in the OperatingCommand POM submissions, approved packages are submitted in the ALC March BudgetSubmission (i.e., in March 2006 IIRP funding requests for FY08 are submitted). All packagesunder consideration are reviewed and approved in time for inclusion with the March require-ments data, in the August budget submission. IIRP funding requests that meet this timeline areable to charge the exchange price for the assets purchased because the investment costs arerecouped in the Condemnation Expense Materiel Recovery (CEMR) factor. If an IIRP isapproved outside of this cycle and the Operating Commands commit to funding the purchase


of assets, the IIRP can be funded, however, the Operating Commands will pay standard pricefor the assets which is a substantially higher cost. This price will be paid until all deliveries forthis IIRP are made.

9.1.2.2. MSD Buy cost authority for approved IIRP candidates is identified in the annual oper-ating budget documents. Authority to obligate stock fund cost authority comes from the Logis-tics and Sustainment Panel. The level of funding will dictate how much cost authority isavailable to support the IIRP. Approval of the program does not constitute authority to obli-gate cost authority.

9.1.3. The Operating Command requires O&M funding to procure the assets from base supply.There is no free issue. When additional O&M funds are required to accomplish the IIRP, Operat-ing Commands POM for the costs during the next cycle and when approved, adjust their CPFHfactors. If installation of the improved item is accomplished during PDM, the DMAG rates mayneed to be adjusted. If this happens, customer O&M funding may be impacted.

9.2. Failure to budget lead time away for IIRP requirements compromises the funding support to bud-geted Air Force requirements.

9.3. If the project is approved for funding, the SM will, during the annual SRRB cycle, review annualbudget requirements and adjust the requirements and SRRB templates to account for force structurechanges and attrition.

10. Procurement and Installation Strategy. IIRP candidates may be installed in weapon systems inone of three manners: normal attrition, forced attrition, and forced generation. The installation strategy ofthe IIRP program manager will impact the procurement strategy of the improved item candidate. The pro-posed plan for implementing the improved item will be reflected on AFMC Forms 563 and 564 for eachaffected Operating Command.

10.1. The IIRP encourages forced attrition of the improved items—in order to maximize the eco-nomic benefits of the candidates. A normal attrition strategy is defined as: the act of removing a con-demned asset, according to scheduled maintenance, which has no remaining life and cannot berepaired, and replacing it with an improved item—only after exhausting the old item from the supplysystem. In cases of item improvement, the item manager will typically procure the new item accordingto standard item management practices using MSD Buy cost authority. Use of IIRP funding for nor-mal attrition replenishment practices is typically unnecessary.

10.2. Forced attrition involves purging the existing supply of the old item. It’s defined as the act ofremoving an unserviceable asset, according to scheduled maintenance, which has remaining life andreplacing it with an improved item—optioning not to repair the old item. This strategy is recom-mended if implementation of the improved item is economically advantageous to the Air Force and/orparts obsolescence, combined with a lack of repair capability for the old item, deems the action neces-sary.

10.3. By design, the IIRP does not encourage forced generation practices, defined as the act of remov-ing a serviceable asset, according to unscheduled maintenance, with remaining life and replacing itwith an improved item. However, if no repair capability exists for the old item or the rapid implemen-tation is economically advantageous to the Air Force, the IIRP program manager may requestapproval for forced generation in the IIRP package. According to paragraph 4.2., forced generation


of an IIRP candidate may be approved by HQ AFMC only when operational requirements mandateimmediate implementation.

11. IIRP Effectiveness Indicators. In support of current and future budget submissions for IIRP andMSD Engineering funds, AFMC shall track and measure the effectiveness of technical efforts aimed atimproving weapon system R&M. Each IIRP program manager shall track all sustainment costs and reli-ability data for the installed IIRP candidates. Data pertaining to the economic benefits, both forecastedand realized, will be provided annually to HQ AFMC/A4Y and Operating Command IIRP representa-tives.

11.1. Sustainment data for an IIRP candidate shall be tracked by the IIRP program manager. In turn,the SM shall be responsible for providing this information to HQ AFMC/A4Y and Operating Com-mand customers according to AFMC Form 565. The IIRP program manager shall be responsible forupdating the information and forwarding the form to HQ AFMC/A4Y and all Operating Commandcustomers in December of each year. Data will be recorded until the reliability and sustainment costsare recognized by the IIRP program manager as being stable. The reporting requirement in this para-graph is exempt from licensing according to paragraph 2.11.12 of AFI 33-324, The Information Col-lections and Reports Management Program; Controlling Internal, Public, and Interagency Air ForceInformation Collections.

12. Training. The ALC DRI POC is responsible for local implementation of the policies and processesdelineated in this instruction.

13. Excess Project Dollar Reallocation. The ALCs are not allowed to execute any IIRP dollars left overafter the projects have been fully funded without prior permission. Centers must report any remainingproject dollars to HQ AFMC. HQ AFMC may choose to allow the Centers to execute those funds againstother high priority unfunded MSD requirements.

DEMAND REDUCTION INITIATIVE

The Demand Reduction Initiative (DRI) is an accelerated process for funding a group of improvement projects that demonstrate the potential for significant reliability/maintainability enhancements and a cor-responding reduction in support costs. Introduced in 2004, DRI is an augmentation of the IIRP process. It provides an opportunity for AFMC and operating commands to nominate a list of items that collectively generate savings, and to accelerate procurement and installation of those items in order to begin realizing savings more quickly. Once a list of approved projects is established by the DRB and the MAJCOMs, the ‘list’ is then funded or denied funding in its entirety. Projects within the list are exempt from individual funding consideration. If an ALC wishes to request funding approval based solely on the individual merits of a specific project, they should submit that project as an IIRP candidate. DRI submissions are judged with the results of all of the projects summed together and analyzed to see if the combined ROI creates value for AFMC and the AF and is worth investing in.

14. DRI Goal. DRI offers the Air Force and AFMC a unique manner to correct Reliability and Maintain-ability (R&M) deficiencies by utilizing the most economical means of installing an improved ShopReplaceable Unit (SRU) or Line Replaceable Unit (LRU).

15. DRI Objective. Like IIRP, the primary objective of DRI is to provide a means for rapid introduction,promoting forced attrition rather than normal attrition, of an improved MSD Air Force Working Capital


Fund (WCF) Material Support Division (MSD) managed item into an Air Force weapon and supply sys-tem. The more reliable, more maintainable MSD item shall be form, fit, and functionally compliant withthe deficient item it replaces. The DRI seeks to streamline the process by allowing items to be consideredas part of a list that is submitted through the AF corporate structure for approval/disapproval. This meansthat individual items that may have a significant operational impact but may not necessarily show a posi-tive ROI over Future Years Defense Program (FYDP) (and therefore would not be approved through theIIRP) can be included in a list that, in the aggregate, does return a positive financial return. This featureprovides some additional flexibility by recognizing that sometimes payback should be measured in sup-portability, maintainability, and performance enhancement to the warfighter.

16. DRI Process. The DRI process is tightly aligned with the Planning, Programming, and BudgetingSystem (PPBS) process. The DRI process only relates to the procurement of the improved MSD item. TheMSD is used to procure the improved items for the Supply Maintenance Activity Group (SMAG). TheOperating Commands desiring the improved item must then "buy" the assets from the SMAG, using theirOperation and Maintenance (O&M) funds. Depot maintenance funds will be required if the installation isgoing to take place during Programmed Depot Maintenance (PDM). DRI funding cannot be used for non-recurring engineering costs, engineering change proposal development, and support equipment needs.

16.1. Engineering. The design, development, test, and prototype evaluation tasks, which may lead toa DRI candidate, are conducted independently of the DRI phase of the R&M effort. According to AFI65-601, volume 1: “Use MSD Engineering to fund development, production, and maintenance engi-neering services that support an operational commodity item managed under the AF Working CapitalFund. Use MSD Engineering for reverse engineering an item to improve supportability or competi-tion, or, to improve the R&M of the item itself.”

16.2. Validation Process. All proposed DRI candidates will be reviewed and validated by HQAFMC and the Operating Commands prior to actual approval of a formal DRI package. The processrequires the program manager to complete a template, which can be downloaded by clicking on the“DRI Project Submission Form web link located at https://www.afmc-mil.wpafb.af.mil/A4/A4Y/A4YF/DRI.htm. The program manager should submit the completed form to HQ AFMC/A4Y nolater than 15 Aug. The candidates will be loaded into a database and the data provided where possiblewill be validated by HQ AFMC/A4Y. HQ AFMC/A4Y will officially notify the program manager asto whether or not the candidate meets DRI criteria. Once all projects have been validated by A4Y thedata base will be sent to the Operating Commands for review. The Operating Commands will sendtheir comments/concurrences back to the program manager and HQ AFMC/A4Y. All additional com-ments and questions from the program manager should be directed back to HQ AFMC/A4Y for distri-bution to all Operating Commands.

16.3. DRI Board. The Demand Reduction Board (DRB) will be used to formally review and approvethe DRI candidate list during the fall so the projected procurement cost for DRI installations can beincluded in the MSD POM and POM-year price increase. The DRB includes representatives from theOperating Commands, SAF/FMBMR, and HQ USAF/A4PY, and receives presentations by ALC rep-resentatives who will brief the candidates to the board. The goal of the board is to reach consensus onthe candidate list as support from all represented organizations is needed in order for the initiative tobe successful during the AF POM process.

https://www.afmc-mil.wpafb.af.mil/A4/A4Y/A4YF/DRI.htm



17. Usage and Limitations

17.1. By definition, a DRI candidate:

17.1.1. Must represent an R&M improvement over the existing item intended for replacement. Ameasure of merit such as mean time between maintenance (MTBM) shall be used to quantifyR&M benefits.

17.1.2. Must be form, fit, and functionally compliant with the item intended for replacement.R&M improvements typically result in added performance or capability enhancements; capabilityenhancements, as a "by-product" to the R&M initiative, are within scope of DRI.

17.1.3. Must be an MSD asset.

17.1.4. Demand reduction candidates must be delivered and installed within 2 years of receipt offunding. MSD cost authority is allocated by project and execution is tracked by the MPC assignedby HQ AFMC/FMR.

17.1.5. For DRI candidates identified through MSD engineering projects, engineering efforts andfirst-article testing must be completed, so firm reliability improvement estimates can be used inROI computations, and OSS&E approval is in process . Items identified outside the MSD engi-neering process must have received OSS&E certification and CCB approval before they can besubmitted and considered as DRI candidates.

17.1.6. Cannot be a modification action.

17.2. MSD Buy cost authority may be used to purchase applicable technical data needed for imple-mentation of the DRI candidate. This includes technical orders, engineering drawings, job guides, etc.

17.3. MSD buy cost authority shall not be used to acquire or modify support equipment nor for main-tenance engineering costs. DRI dollars shall not be used to fund the development or the design of newitems of supply.

17.4. While not mandatory, it is strongly encouraged that DRI candidates show a positive ROI overthe Future Years Defense Program (FYDP) for the POM in which the funding is requested. This willassist in ensuring that the group of projects shows a positive ROI over the FYDP. If the combined ROIfor all of the projects on the list is positive over the FYDP, it increases the probability that the DRIwill be funded.

18. Responsibilities. DRI candidates require coordination from a variety of Air Force organizations. Tomaintain the integrity of the program, the organizational responsibilities have been delineated in this sec-tion. All formal DRI submissions shall be prepared by the ALC SM responsible for management of theimproved item.

18.1. Single Manager. The designated DRI program manager, working for the SM, is responsiblefor generating a quality DRI package for review and approval at the appropriate levels of manage-ment. This review includes all appropriate SMs (system program director, material group manager,product group manager) and Operating Commands. Inputs from the item manager, engineer, equip-ment specialist, contracting officer, affected Operating Commands, and the financial managementcommunity may be required for this effort. If the installation strategy affects PDM, the SM is ulti-mately responsible for coordinating depot maintenance impacts and adjusting Depot MaintenanceActivity Group (DMAG) rates with the Maintenance Requirements Review Board (MMRB) and


DMAG personnel. If the project is approved for funding, the SM will, during the annual SRRB cycle,review annual budget requirements and adjust the requirements and SRRB templates to account forforce structure changes and attrition.

18.2. Supply Chain Manager (SCM). In cases where there are multiple applicable weapon systemsthe SCM is authorized to prepare the DRI package as detailed in paragraph 16.1. with coordinationfrom the affected System Program Managers.

18.3. Air Logistics Centers (ALC). The SM shall utilize the financial management community(FM) resident at the ALC during the preparation of the DRI package. It is incumbent on the DRI pro-gram manager to use this local expertise in the generation of the package.

18.4. HQ AFMC. HQ AFMC/A4Y/FMR/FMC each has an office of primary responsibility for theDRI program. These personnel are responsible for reviewing/approving all packages, educating theAir Force on DRI policy and procedures. HQ AFMC, in coordination with the affected OperatingCommands, will also be responsible for defining a candidate prioritization strategy, as necessary atthe DRI Board.

18.4.1. HQ AFMC/A4Y shall conduct semiannual reviews of all approved and installed DRI can-didates and their sustainment posture. This review is conducted in conjunction with the MSD Bud-get Review of the March and September budget cycles. Data is to be input into the DRI/DRITracking Form found at https://www.afmc-mil.wpafb.af.mil/A4/A4Y/A4YF/DRI.htm.

18.5. HQ USAF. HQ USAF/A4P will utilize the Spares Requirements Review Board (SRRB) pro-cess to ensure approved DRIs are included in the MAJCOM Budget submissions. HQ USAF/A4P ver-ifies that the customer accounts and the MSD cost authority are properly aligned. They also verify thatDMAG rates are adjusted when necessary.

19. Documentation Requirements. Each DRI package shall contain specific pieces of documentation,encompassing the information detailed below:

19.1. Introduction/Background. This section is used to introduce the reviewer to the DRI candi-date. It shall address the following:

19.1.1. Identification of the National Stock Number (NSN) and nomenclature for both the exist-ing item requiring improvement and the forecasted item of improvement.

19.1.2. The dollar value and quantity of the buy and repair requirements for the 4 years prior tothe current year (historic information), the current year, and next 8 years beyond the current year(forecasted information) for the deficient item. The forecasted dollar value and quantity of the buyand repair requirements for the improved item for the first 8 years. Include the exchange price,repair price, and forecasted acquisition cost for the deficient item and the improved item.

19.1.3. The R&M deficiency which initiated the task. This includes MTBM data, maintenanceproblems, parts obsolescence issues, diminishing manufacturing sources impacts, etc. If applica-ble, include a discussion of any maintenance revisions implemented to maintain full mission capa-bility with the existing item.

19.1.4. A synopsis on the R&M benefits to be realized with this candidate, including ROI infor-mation.



19.1.5. Any potentially adverse impacts on the improved item’s interface with other items withinthe system it operates. For instance, the DRI program manager shall identify if a warranty on theimproved item risks negation from another item’s reliability or performance deficiency. If the pos-sibility exists, this “system” information must be presented in the background section of the DRIpackage.

19.1.6. A status of the engineering activity associated with the candidate. This includes confirm-ing the date OSS&E certification was granted for the project. Forecasted milestones for comple-tion of all engineering actions are required if the OSS&E certification has not yet been granted.This will include the final approval of the new item by the Configuration Control Board, and theLead MAJCOM commitment to installing this item on their weapon systems. NOTE: All of thismust be completed prior to distribution of the MSD DRI funding.

19.1.7. The estimated timeframe and proposed strategy for the procurement and installation of theimproved item. If the procurement strategy is to utilize both sole source and competitive buyactions, then any potential time “gaps” between the two procurement actions must be identified inthis section.

19.1.8. The proposed timeframe and strategy for disposal of the deficient item.

19.1.9. The weapon system or systems affected, the percentage of use in the case of multipleweapon systems, and the projected fleet sizes in the out years--for installation considerations.

19.1.10. The projected service life of the affected weapon system or systems.

19.1.11. Weapon system or systems/mission impact if the DRI candidate cannot be procured andinstalled.

19.1.12. Identification of OPRs. This includes the DRI program manager, engineer, equipmentspecialist, item manager, FM (budgeting, funding, requirements, and cost analysts), contractingofficer, SMs, and Operating Command representatives.

19.2. Technical Description. This section is used to provide a brief description of the actual R&Mimprovements made to the MSD managed item. If any capability enhancements are derived as a sideeffect of the R&M improvement, they shall be recorded in this section.

19.3. Requirements Definition. This section is used to provide details concerning the quantity ofinstalls and spares, both peacetime operating stock (POS) and readiness spares packages (RSP),required for implementation of the DRI candidate. Install quantity shall be calculated by multiplyingthe quantity per aircraft by the total aircraft inventory authorized in the program authority document.The spares projections shall be based on the estimated failure rate and the phased future program ofthe improved item, not the deficient item. The following categories of requirements shall be consid-ered in determining the spares requirement: pipeline, additives, condemnations, and safety levels.POS shall be made according to AFMCMAN 23-1, Requirements For Secondary Items (D200A,D200N). RSP requirements shall be developed in accordance with AFMAN 23-110, Volume 1, PartOne, Chapter 14. These requirements shall reflect the expected improvement in reliability.

19.4. Attachments. The following attachments are required in a DRI package.

19.4.1. Economic Analysis. The economic analysis will address the methodology for implement-ing the new item into the weapon and supply systems. It will address the installation strategy,


impact on repair budgets, support equipment impacts, bit and piece part support, and the sparesrequirements.

19.4.1.1. AFMAN 65-506 may be used as a reference for generating the DRI economic anal-ysis.

19.4.1.2. In cases of parts obsolescence or diminished manufacturing capability, an economicanalysis is still required. Estimates shall be generated for continued repair of the old item and/or procurement of the old item from another vendor source.

19.4.2. D200A Requirements Computation. Include the latest D200A computation used to projectthe requirements for POS and RSP. If the item is not currently computing in D200A, a like itempossessing a similar application, projected usage rates, and lead time is to be used. File mainte-nance changes to the computation shall be documented and provided package.

19.4.3. Technical Drawings. All pertinent technical drawings, illustrating the hardware and soft-ware changes between the old and new items, will be included as an attachment. The DRI programmanager shall identify the ALC which manages the technical data for the improved item, if it isdifferent than the ALC responsible for procuring the assets.

20. Review Process. Each DRI package is reviewed and approved at specific levels. The threshold forapproval is arbitrary and will be determined at the Demand Reduction Board (DRB). There is no limit onan individual project, but the total dollars spent on all projects is determined by the Operating Commandsat the DRB.

20.1. The ALC organization which builds a DRI package shall also be responsible for reviewing allappropriate technical, financial, and contracting issues pertaining to the DRI candidate. The appropri-ate ALC organizations shall reflect their approval of the DRI formal package by coordinating with HQAFMC/A4Y.

20.1.1. All review comments shall then be forwarded to the DRI program manager and HQAFMC/A4Y for implementation.

20.2. The DRI requirement shall comply with paragraph 17.3. and be validated by all reviewing orga-nizations.

20.3. Technical feasibility and risk shall be assessed by the appropriate engineering organization.DRI allows for state-of-the-art technology insertion, however, such efforts must be risk-tolerant forthe Operating Commands. Generally, DRI candidates utilize mature technologies to improve itemR&M features and obsolescence.

20.4. The ALC review of the proposed DRI package shall consider propriety of funding issues, pro-gram executability, and the overall program strategy.

20.5. Implementation of the Acquisition Strategy Planning (ASP) Process.

20.5.1. A standing ASP shall be formed according to SAF/AQ Memo 95A-009, 7 November1995. Standing ASPs are formed to provide consistent counsel to program managers early in thedevelopment of their acquisition strategy.

20.6. Formal Review Board. HQ AFMC/A4 reserves the right to request and sponsor a formal reviewof a DRI candidate, during any phase of its submission and/or implementation. Representatives fromAFMC and Operating Commands "A4" communities will constitute voting membership during the


formal review board. HQ AFMC/A4Y will chair the formal review board process, with each Operat-ing Command representative, HQ AFMC/A4/FM receiving one vote each. The board may vote onDRI candidacy, procurement strategy, and installation strategy. In all cases, the DRI program man-ager will be responsible for presenting the relevant issues to the board for consideration.

21. Funding Process. Operating Commands will agree during the POM process to fund DRI initiatives.Because the price setting process will incorporate the recovery of those funds in the year of execution inthe Condemnation/Material Expense Recovery (CMER), the Operating Commands will POM for theprice at the exchange rate (Which includes the CMER). Once the projects have been approved, HQAFMC/A4YF will advise HQ AFMC/FM of the projects and dollar amounts approved for disbursement.

21.1. The engineering requirements for MSD items are funded by MSD Engineering funds when theengineering task is identified to a specific stock fund item.

21.2. MSD Buy cost authority funds the procurement of assets for the installs and spares, includinginitial technical data requirements. MSD Buy cost authority does not fund modification requirements.BP1100 dollars are used to fund modification efforts.

21.2.1. The dollar amount of funding that needs built into the Operating Commands O&M fund-ing will be determined by the DRI Board, equal to the sum of the dollar amount needed for eachapproved project.

21.2.2. MSD Buy cost authority for approved DRI candidates is identified in the annual operatingbudget documents. The level of funding will dictate how much cost authority is available to sup-port the DRI. Approval of the program does not constitute authority to obligate cost authority.

21.3. The Operating Command requires O&M funding to procure the assets from base supply. Thereis no free issue.

21.4. If the project is approved for funding, the SM will, during the annual SRRB cycle, reviewannual budget requirements and adjust the requirements and SRRB templates to account for forcestructure changes and attrition.

22. Procurement and Installation Strategy. DRI candidates may be installed in weapon systems in oneof three manners: normal attrition, forced attrition, and forced generation. The installation strategy of theDRI program manager will impact the procurement strategy of the improved item candidate. The DRIencourages forced attrition in order to maximize the economic benefits of the candidates.

22.1. A normal attrition strategy is defined as the act of removing a condemned asset, according toscheduled maintenance, which has no remaining life and cannot be repaired, and replacing it with animproved item--only after exhausting the old item from the supply system. In cases of item improve-ment, the item manager will typically procure the new item according to standard item managementpractices using MSD Buy cost authority. Use of DRI funding for normal attrition replenishment prac-tices is typically unnecessary.

22.2. Forced attrition involves purging the existing supply of the old item. It’s defined as the act ofremoving an unserviceable asset, according to scheduled maintenance, which has remaining life andreplacing it with an improved item--optioning not to repair the old item. This strategy is recommendedand preferred if implementation of the improved item is economically advantageous to the Air Forceand/or parts obsolescence, combined with a lack of repair capability for the old item, deems the actionnecessary.


22.3. Generally the DRI does not encourage forced generation practices, defined as the act of remov-ing a serviceable asset, according to unscheduled maintenance, with remaining life and replacing itwith an improved item. However, if no repair capability exists for the old item and the rapid imple-mentation is economically advantageous to the Air Force, the DRI program manager may requestapproval for forced generation in the DRI package.

23. DRI Effectiveness Indicators. In support of current and future budget submissions for DRI andMSD Engineering funds, AFMC shall track and measure the effectiveness of technical efforts aimed atimproving weapon system R&M. Each DRI program manager shall track all sustainment costs and reli-ability data for the installed DRI candidates. Data pertaining to the economic benefits, both forecasted andrealized, will be provided annually to HQ AFMC/A4Y and Operating Command DRI representatives.

23.1. Sustainment data for a DRI candidate shall be tracked by the DRI program manager. In turn, theSM shall be responsible for providing this information to HQ AFMC/A4Y and Operating Commandcustomers. The DRI program manager shall be responsible for updating the information and forward-ing it to HQ AFMC/A4Y and all Operating Command customers in December of each year. Data willbe recorded until the reliability and sustainment costs are recognized by the DRI program manager asbeing stable. The reporting requirement in this paragraph is exempt from licensing according to para-graph 2.11.12 of AFI 33-324.

24. Training. The ALC IIRP POC is responsible for local implementation of the policies and processesdelineated in this instruction.

25. Excess Project Dollar Reallocation. The ALCs are not allowed to execute any DRI dollars leftover after the projects have been fully funded without prior permission. Centers must report any remain-ing project dollars to HQ AFMC. HQ AFMC may choose to allow the Centers to execute those fundsagainst other high priority unfunded MSD requirements.


Figure 1. Improved Item Replacement Program Timeline.

Table 1. IIRP Review/Approval Criteria.

Category Dollar Value Required Coordination Program Approval Level1 <$15M/yr or <$50M total Product Directorate, FM,

Single Mgr(s)HQ AFMC/A4Y (OPR), FMR (OCR)

2 <$25M/yr or<$100M total Prod Dir, FM, Single Mgr(s), ALC/CC, CV, or CD

HQ AFMC/A4 (OPR), FM (OCR

3 <$50M/yr or <$250M total Prod Dir, FM, Single Mgr(s), ALC/CC, CV, or CD, HQ AFMC/A4 & FM

HQ USAF/A4P

4 >$50M/yr or >$250M total Prod Dir, FM, Single Mgr(s), ALC/CC, CV, or CD, HQ AFMC/A4 & FM, HQ USAF

AF Council


Attachment 1

GLOSSARY OF REFERENCES AND SUPPORTING INFORMATION

Abbreviations and Acronyms

ABES—Amended Budget Estimate Submission

DRB—Demand Reduction Board

DRI—Demand Reduction Initiative

IIRP—Improved Item Replacement Program

MSD—Material Support Division

R&M—Reliability and Maintainability

SCM—Supply Chain Manager

SPM—System Program Manager

Terms

Attrition—Describes the replacement of an unserviceable item (beyond repair, condemned) with a newserviceable item.

Condemned Item—When a reparable item can no longer be repaired, it is condemned. Condemning anitem typically generates the requirement to purchase another reparable item to replace it.

Cost Authority—business areas, such as supply operations, are authorized to incur costs whileanticipating customer orders. The SMAG Operating Budget Authority provides CA limitations based onSMAG estimated sales. The CA limitation gives AFMC the authority to incur obligations and expensesfor operating facilities, purchasing of materiel, etc., prior to actually realizing customer sales.

D200A Computation—The Secondary Item Requirements System (SIRS), which replaces theRecoverable Consumption Item Requirements Computation (D041), has been designed to support therequirements function. The system operates on an AMDAHL computer at Tinker Data Service CenterTinker AFB, Oklahoma, with segments run at each ALC and HQ AFMC. The D200 system:

- Computes spare parts requirement for recoverable (XD1 and XD2) items by interchangeability and sub-stitutability subgroups.

- Does the routine clerical, mathematical, and statistical workload involved in computing recoverableitem requirements.

- Forecasts gross and net requirements using past and future programs, usage history, and asset informa-tion maintained within this system.

- Produces reports for management evaluation and action.

- Produces information for other systems.

Economic Analysis—An economic analysis systematically examines costs, benefits and risks ofalternatives. It aids the judgment of a decision maker and reduces the chance of omission or personal bias.


Forced Attrition—Describes the replacement of an unserviceable item (item capable of being repaired,but opting not to) with a new serviceable item.

Forced Generation—Describes the replacement of a serviceable item with an improved serviceableitem, based on unscheduled maintenance.

Form, Fit, and Function—The physical and functional characteristics of an end item, but not thecharacteristics of any of the item's components. By the strictest of definitions, a preferred spare has adifferent configuration than the item it replaces. For purposes of this instruction, if the improved item is“form, fit, and functionally compliant” with the old item, then the “configurations” comprising thephysical and functional characteristics of the two items are deemed similar.

Maintainability—The ability of an item to be retained in or restored to specified condition whenmaintenance is performed by personnel having specified skill levels, using prescribed procedures andresources, at each prescribed level of maintenance and repair.

Mean Time Between Maintenance—Measure of item’s logistics reliability. Use MTBM to measure theaverage life units between maintenance actions, including scheduled and unscheduled events. Select anappropriate MTBM parameter based on Operating Command requirements. Current and plannedinformation systems permit tracking of standard MTBM parameters, such as:

- MTBM (inherent malfunctions)

- MTBM (preventive maintenance)

- MTBM (induced malfunctions)

- MTBR (mean time between removal for cause)

- MTBM (no-defect events)

- MTBD (mean time between demand)

- MTBM (total corrective events)

Modification (MOD)—A "modification" is a change to a system (whether for safety, to correct adeficiency, or to improve program performance) that is in sustainment. An "upgrade" is a change to asystem (whether for safety, to correct a deficiency, or to improve program performance) that is out ofproduction. A "major modification" to a program is defined as a modification that in and of itself meetsthe criteria of acquisition category I or II or is designated as such by the milestone decision authority.Major modifications require a Milestone IV decision unless the decision to modify results from one of thealternatives considered as part of the milestone I decision process. Upgrades are part of the milestone 0decision process.

National Stock Number (NSN)—Consists of the first four-digit Federal Stock Class (FSC) codefollowed by the nine-digit National Item Identification Number (NIIN).

Operating Command—A term referring to any one of the USAF Major Commands. For purposes of thisinstruction, they include Air Combat Command, Air Education and Training Command, AF MaterielCommand, USAF Reserve, Air Force Special Operations Command, Air Force Space Command, AirMobility Command, Air National Guard, Pacific Air Forces, and United States Air Forces in Europe.

Planning, Programming, and Budgeting System (PPBS)—The DoD resources management systemcontrolled by Secretary of Defense (SECDEF) and used to establish, maintain, and revise the Future


Years Defense Plan (FYDP) and the DoD portion of the President's Budget. Sometimes referred to as thebiennial PPBS.

President’s Budget (PB)—submitted every year.

Process—A planned series of actions or operations which advances a material or procedure from onestage of completion to another.

Program Objective Memorandum (POM)—Each service submits the POM to the SECDEFbiannually. It proposes military department and defense agency total program requirements for the next 6years and includes rationale for planned changes from the approved FYDP baseline within the fiscalguidance.

Programmed Depot Maintenance (PDM)—Schedule Develop Level Maintenance (DLM) includinginspection repair skills, equipment or facilities not normally possessed or authorized by operatinglocations.

Reliability—A fundamental characteristic of an item of material expressed as the probability that it willperform its intended function for a specified period of time under stated conditions.

Reparable Item—An unserviceable item, which can be repaired for reuse.

Single Manager (SM)—A manager responsible for integrating two formerly separate concerns (systemsacquisition and sustainment) into a cohesive logistics support function. The scope of the SM’sresponsibility begins in developing a weapon system to meet a specified need and continues through acomplete life cycle of the weapon system until its retirement. During this period, a series of activitiesoccur, many at the same time. The SM establishes the partnership between acquisition and sustainmentinherent in the Integrated Weapon System Management concept. By definition, AFMC system programdirectors, product group managers, and material group managers are classified as SMs.

Unserviceable—An item in a condition unfit for use but which can be restored to a serviceable conditionafter repair, rework, or overhaul. This condition includes items requiring calibration, test, modification,assembly, or the addition of components.

Documents

BY ORDER OF THE COMMANDER AFMC INSTRUCTION …static.e-publishing.af.mil/production/1/afmc/publication/afmci23... · by order of the commander air force materiel command afmc instruction