DCMA’s Strategic Plan - Achieving Contracting Performance Expectations & Partnering with Industry to Achieve Performance Goals

Presented By: Marie Greening Leona Fitzpatrick Chief Operations Officer Operations Contracts Director

October 29, 2013

2

Overview

• DCMA Mission

• DCMA Strategic Plan Highlights

• Contracting Performance Measures

• Why it’s important

• Select DCMA Contracting Performance Indicator Achievements and

Current State

• Partnering for Success

3

Overview

DCMA Mission

We provide Contract Administration Services to the

Department of Defense Acquisition Enterprise and its

partners to ensure the delivery of quality procedures and

service to the warfighter on time and on cost

4

Acquisition Enterprise: DCMA’s acquisition customers receive excellent CAS and the management information needed to make sound business decisions.

Policies and Processes: Effective policies and process standards are in place to support delivery of consistent and cost-effective CAS.

Human Capital: A diverse, agile, high-performing workforce equipped with the competencies needed to execute current and future missions.

Stewardship: An ethical organization with well-defined roles, responsibilities, infrastructure and management controls fully aligned to effectively and efficiently manage public resources.

Strategic Plan/Balanced Scorecard

STRATEGIC ENDSTATES

5

• Performance Management:

• Integral component of DCMA’s strategic planning and management philosophy

• Provides ability to track strategic initiatives, assess operations capability

• Performance indicators are the foundation to assessing organization performance for DCMA processes and supplier performance

Strategic Plan Implementation

6

Contracting Performance Measures

• Eighteen Performance Indicators in Eight Main Areas

• Contract Closeout

• Final Overhead Rates

• Canceling Funds

• Undefinitized Contract Actions

• Forward Pricing Rate Agreements/Recommendations

• Proposal Pricing

• Contract Audit Follow Up

• On Time Delivery

7

Why It’s Important

• Each area represents financial interest to both government and

contractor teams

• $1.8B in Canceling Funds in FY 2013

• 55,000 overage contracts for closeout

• Resolution of questioned costs on DCAA audits

• Undefinitized Contracts Actions

Operations DirectorateContract Closeout: Timeliness

P.I. #46

Operations Directorate POC: Eugenia VinsonData as of Sep 2013

Contract Closeout: Close 90% of Contracts within FAR Timeline

8

9

Operations DirectorateContract Closeout: Timeliness

FY 2010-FY 2013Performance Indicator 46

FY10 FY11 FY12 FY13Target % 90 90 90 90# Closed 297,019 274,385 238,328 207,895# Closed on Time 291,045 270,005 234,141 203,289% Closed On Time 98.0 98.0 98.0 98.0

85

87

89

91

93

95

97

99

101

103

105

% C

lose

d on

Tim

e

Operations DirectorateContract Closeout: Overage

P.I. #47

Operations Directorate POC: Marc Rabinowitz/Kerri Roberts

OPERATIONS PERFORMANCE GRAPH Reduce the Number of Overage Contracts by 10%

Sep2012(Baseline)

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

Target 34590 34590 34590 34590 34590 34590 34590 34590 34590 34590 34590 34590

Overage 38433 39441 40267 41532 42952 45461 47120 49878 51608 52276 53880 54817 55603

Baseline Change # 1008 1834 3099 4519 7028 8687 11445 13175 13843 15447 16384 17170

% Change 2.6% 4.8% 8.1% 11.8% 18.3% 22.6% 29.8% 34.3% 36.0% 40.2% 42.6% 44.7%

-

10,000

20,000

30,000

40,000

50,000

60,000

Num

ber O

vera

ge

Total

Baseline Change

Target

Data as of Sep 2013

10

11

Operations DirectorateContract Closeout: Overage

FY 2010-FY 2013Performance Indicator 47

12

Current State

• Contract Closeout• Approximately 48,000 overage contracts for closeout are coded as awaiting

settlement of final overhead rates

• Backlog has steadily grown over the last 4 years

• DCAA is using a multipronged approach to address incurred cost backlog

• DCMA is focused on ensuring contracts awaiting settlement of final overhead

rates have all other action completed

• Will expedite closeout when audits/rates are received

• Partnering with AbilityOne to work closeout actions

• DCMA Initiated Contract Closeout Blitz to focus on closing contracts within

DCMA’s control

• Fixed Price Contracts

• Contracts coded as having a paid final voucher

• “Reopened” contracts

•

13

Current State

• Final Overhead Rates• Performance Indicator “reporting” has been suspended due to system interface

issues between DCAA and DCMA

• Information still flows over to DCMA, just not necessarily aligned to correct office for PI

reporting purposes

• DCMA system indicates over 20,000 open overhead years

• DCAA increased the number of closed audits in FY 12 and FY 13

• DCMA systems tracks status/closure of ACO determined rates and DCAA audit

determined rates

• DCMA and DCAA are ensuring both agencies data is congruent to ensure all

DCAA closed overhead years are accounted for by DCMA

• Facilitates maximum number of closeouts

• DCMA is partnering with DCAA to identify audits needed to close the most

overage contracts

Operations DirectorateUCAs Definitized On-Time

P.I. #50 AQ – UCAs: Definitize 80% of UCAs within 180 days of order issuance or induction of asset

Operations Directorate POC: April JohnsonData as of September 2013

14

15

FY10 FY11 FY12 FY13% Definitized On Time 59 71 72 63# UCAs Definitized 2656 3288 3096 2508# UCAs Definitized On Time 1578 2349 2236 1578

0

10

20

30

40

50

60

70

80

90

100

Operations UCAs Definitized (On Time)

Pe

rce

nt

• Definitize 80% of UCAs within 180 days of order issuance or induction of asset

FY 2010-FY 2013Performance Indicator 50

Operations DirectorateUCAs Overage

P.I. #51 AQ – UCAs: Reduce Number of Overage UCAs by 10%

Operations Directorate POC: April JohnsonData as of September 2013

Baseline Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13

Target 642 642 642 642 642 642 642 642 642 642 642 642

UCAs 714 925 848 790 780 712 760 670 649 644 701 672 672

400

500

600

700

800

900

16

17

FY10 FY11 FY12 FY13# Overage UCAs 490 592 925 672

0

100

200

300

400

500

600

700

800

900

1000

OperationsUCAs (Overage)

Nu

mb

er

• Reduce Number of Overage UCAs by 10%

FY 2010-FY 2013Performance Indicator 51

18

Current State

• Undefinitzed Contract Actions (UCA)

• Navy is largest customer delegating UCAs for issuance or definitization

• In FY 13, there was an average of 1,435 UCAs on hand

• 744 was typically overage

• Main factors for exceeding the 180 days for definitization are

• Non-Receipt of asset

• Late receipt of proposal

• Awaiting additional funds

• Partnering with NAVSUP WSS to develop strategies to reduce

overage backlog and improve timeliness

• Establishment of priced long term agreements has been the most

impactful

P.I. #54

Data as of September 2013

Operations DirectorateProposal Pricing

AQ – Proposal Pricing: Ensure 90% of Pricing Reports Completed within 45 days or Other Mutually Agreed Upon Due Date

Operations Directorate POC: Erik MimsAlternate POC: Rosalind Lanham

19

FY2011 FY2012 FY2013% Target 90 90 90% Completed On-Time 92 94 96# Completed 5,606 6,595 7,283# Completed on time 5,140 6,229 6,998

70

75

80

85

90

95

100

• Ensure 90% of pricing reports completed within 45 days or other mutually agreed upon due date

Operations Proposal Pricing

Pe

rce

nt

20

FY 2010-FY 2013Performance Indicator 54

21

Current State

• Proposal Pricing

• Over 300 Cost/Price Analysts have been added over the past 3-4 years

• Cost Monitoring Program has been reinvigorated

• Corporate Administrative Contracting Officers (ACO) and Divisional

ACOs aligned into a Cost & Price Center

• Integrated Cost Analysis Teams have been established at largest

contractor facilities based on government sales

• Combined Business and Technical focus on contractor pricing

• Knowledge of cost models, cost estimating relationships, etc.

22

Current State

• Forward Pricing Rate Agreements (FPRA)/Forward Pricing Rate

Recommendation (FPRR)

• Performance Indicator “reporting” has been suspended due to system

issues

• Majority of FRPA/FPRRs issued from DCMA Cost and Pricing Center

• CACOs and DACOs reside in the Center

• DCMA Operations Directorate has responsibility for remainder of

FPRA/FPRRs

• In FY 13, about 40% of all contractor divisions had FPRA coverage at

one time or another

• Majority had FPRR coverage at a minimum

• Based on cost monitoring efforts, FPRAs have been pursued in advance

of DCAA audit

Current State

• On-time Delivery and Delinquency Reduction

• Surveillance planning and contractor engagement at facilities (CAGEs)

represents greatest potential to influence and provide positive results

• DCMA Top 500

• Seeking total reduction in the volume of delinquent schedules across

the board

• Affects ability to process contracts 180 days past final delivery date

• Focus on delinquent supply schedules greater than 1 year

23

On-Time Delivery Facilities (CAGEs) in the Top 500 Base of Influence

Operations Directorate

Jan-Jun 2012 Jul-Dec 2012 Jan-Jun 2013 Period To Date (Jul-Sep 2013)

On Time Performance # of Facilities % of Total # of Facilities % of Total # of Facilities % of Total # of Facilities % of Total

> 90% 55 11% 55 12% 51 12% 62 14%

75%-90% 145 30% 110 24% 129 30% 109 24%

<75% 289 59% 297 64% 256 59% 281 62%

Total 489 462 436 452

Causal Factors:1.Actual delinquency2.Data discrepancy3.Unrealistic contract requirement

24

Past Due DelinquencyAll CAGEs

Operations Directorate

Delinquency Posture - By Volume/Type of Delinquency

Type of Delay EOP (30 Jun 2012) % of Del EOP (31 Dec 2012) % of Del EOP (30 Jun 2013) % of Del Period to Date (30 Sep 2013) % of Del

Supply Schedule 135,072 40% 145,307 40% 134,905 39% 142,573 38%

Service Schedule 198,667 60% 217,586 60% 215,463 61% 237,178 62%

Total 333,739 362,893 350,368 379,751

25

26

Partnering for Success

• Submit adequate and timely incurred cost proposals

• Pursue all contract closeout actions while awaiting final overhead rates

• Submit final vouchers in a timely manner

• Submit adequate and timely UCA proposals

• Pursue long term agreements on repetitive repairs

• Submit adequate and timely FPRA proposals

• Know what DCMA says your on time delivery rate is