PM TRADE Acquisition Transformation: Process / Product / Organization

PM TRADE Acquisition Development Seminar

Understanding Our Industrial Base

Unintended Consequences in Developing and Releasing RFPs
21 January 2011

Panel Discussion Objectives

1. Have an appreciation for our Industry Base Processes, Timelines, and Constraints in responding to our RFPs. 2. Recognize the need for PM TRADE RFP product and process consistency resulting in higher quality RFPs. 3. Take individual ownership in every step of the process to improve our products

2 PM TRADE Acquisition Transformation: Process / Product / Organization

Rules of Engagement
No Knives No Guns No Hand Grenades No Attitudes No Slimy Contractor Jokes Panel will be blunt, passionate, and respectful in their discussion to convey key points.

Yes, Please Ask Questions!

3 PM TRADE Acquisition Transformation: Process / Product / Organization

Industry Survey of PM TRADE Issues

Tiger Team Interviewed 11 Major PM TRADE contractors 9 large business and 2 small business Not Surprisingly - Consistent message from all contractors interviewed

Level of Frustration Higher than Anticipated

Industry's Major Areas of Concern:

1. Consistency: Unpredictable timelines and process across programs 2. Information: Not enough / inconsistent Industry interface during Sources
Sought & Requirements Development

3. Business Decisions: Sources Sought/Draft Requirements Docs. do not

include Business Case information

4. Industry Base: Cost of Proposals, impacts growing an Industry Base

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Project Teams. do these sound familiar?

Ever feel rushed to put a draft or final RFP on the street? Ever have to change your Acquisition Strategy? Ever have major RFP changes from Draft to Final? Ever postpone release of a draft or final RFP? Ever have requirements changes mid-stream? Ever release a draft and final RFP back to back? Ever release a draft and final several months apart? Ever have weeks on end before releasing answers to RFP questions? Ever provide vague or delayed answers to industry questions? Ever have key team members reassigned. new team = new ideas? Ever publish your contract ceiling as the program budget?

Ever ask for CLINs or CDRLs you really didnt need?

Ever release a draft or final RFP before the holidays? Ever provide/brief inaccurate or incomplete TSIS slides?
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Industry Business Rhythm

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Q1

Q2 Program X RFP Expected

B&P Package X

Q3

Revenue Program X RFP Slips

B&P Package X + Y

Q4

Revenue

Line Forecast

Forecast
Identifying Future Business Opportunities 2-5 years in Future FY Planning Guidance (Corporate)

- Annual Revenue - Annual Profit - IR&D Objectives

Plan
Allocating resources, budgets, and schedules for next years work Line Execution
- Quarterly Revenue Goals - Quarterly Award Goals - IR&D Progression

- Revenue Targets - Profit Targets - IR&D Priorities

Revenue Drives
- Staffing Levels - Indirect Generation - Bid & Proposal Funding - IR&D Funding

QUARTERLY REPORTS
- To Corporate - Corporate to Wall Street

Execute Current year programs

Schedule Planning is Paramount

Industry must meet quarterly and annual plans reductions cause reduction to quarterly and annual reports or projections to Wall Street - De-rate opportunities substantially based on percentage of win - Qualify the customer

Changes to anticipated RFP releases, award delays, protests all equal delays in revenue and additional costs to maintain staff - Over time these costs are added back into rates more cost to the USG assuming the industry member survives - Resource planning becomes chaotic - Impacts organizational credibility - Ultimate concern becomes reduction of industry base less technology and less competition

Industry Business Planning- Proposals

Timing is linked to Revenue and Award goals Value linked to pipeline growth
De-rated by Probability of Win (pWin) pWin established by team, technology, customer relations, overall fit As RFP slides right, revenue slides right and B&P increases As Award slides right, award goals are adjusted right

Track (opportunity not yet qualified; no RFI, no defined requirements, no funding) Pursue (only after approval at BSC with B&P requirements and anticipated ROI presented and approved) Capture (after RFP authorized expenditure of B&P) Proposal Costs Vary
- Fixed Price Reviews must go to higher for above $30 million (Delta BARS required if the proposal varies by 5%) - Cost reimbursable not as stringent

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Industry Proposal Processes

Typical Opportunity Gate Controls

Industry:
- is strategically focused with deliberate business planning cycles
- has a disciplined business development processes

Phase 1: Phase 2: Phase 3: Phase 4: Phase 5: Phase 6:

Assessment Strategy Pre-Proposal Proposal Post Submittal Orders Received

Open & Consistent Communications are a Must !

Customer Issue Theme Customer Requirements

- uses gate controls just like Army Acquisition Milestones

- needs to make the right staffing decisions to meet Customers needs

Benefit

Customer Focus

Customer Discriminators (Evaluation Factors)

Feature Strategy

Gap Analysis Competitive Analysis

Industry needs open, honest, consistent, predictable, and frequent communications to identify gaps in solution space that drives teaming decisions to make effective decisions on resources, people, investments and teaming
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Initial Capture Plan Activities That Support Teaming & Bid Decisions
Initial Assessments
Opportunity Opportunity Assessment Assessment Customer Customer Interaction Interaction Assessment Assessment

Initial Win Initial Win Strategy Strategy

Initial Competitive Assessment

Initial Initial GDAIS SWOT SWOT GDAIS SWOT Assessment Assessment

Customers Need to Buy

Customer Absolute Musts ( CAMs) Potential Teaming Strategies

Competitive Teaming Analysis Competitive Differentiation Competitive Differentiation Competitive Differentiation Assessment Assessment

- Industrys business development processes provide a disciplined methodology for qualifying the opportunity - Prior to building a team, Industry must understand the customer needs

Customers Funding

Refined Win Strategy Statement

Customer Customer Capture Capture Themes Themes Potential Past Potential Past Performance Performance Approach Approach Potential Potential Management Management Approach Approach Teammate Teammate Capture Capture Themes Themes

Potential Risk Identification

Competitors Competitors Teaming Teaming Plans Plans

Customer Call Customer Call Customer Call Plans Plans

Potential Potential Technical Technical Approach Approach

Overall Overall Political Political Assessment Assessment IR&D IR&D Requirements Requirements CR&D CR&D Potential Potential COTS/GOTS COTS/GOTS Requirements Requirements

Price to Win Price to Win and EBIT and EBIT Identification Identification Potential Potential Team Feedback Team Feedback Specific Hot Specific Hot Button Issues Button Issues Acquisition Problems Acquisition Problems And OCI Issues And OCI Issues

Teaming Teaming Execution Execution Plan Plan

Competitors Competitors Potential Potential Capture Plans Capture Plans

Factors and Factors and Objectives Objectives DMP DMP Chart Chart KDM Personal KDM Personal Profiles Profiles

Competitor Competitor Ghosts/Mitigation Ghosts/Mitigation Ghosts/Mitigation Plans Plans

- Must haves and hot buttons provide Industry the insight they need to develop Document Capture technical, management, cost and support baselines Plan

Industry conducts a gap analysis from understanding the problem and their potential baseline solutions to identify pursue / no-pursue, bid / no-bid make / buy, IRAD, and teaming strategies
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Teaming Considerations
What is teaming? Why you want to team

Fill void or eliminate inadequacy

Enhance your capability

Domain knowledge Experience (at least good!) with customer Cost-effective Niche/unique expertise Fill holes or offset weaknesses Successful past performance Future relationships

Why you dont want to team

Makes things more complicated Restricts flexibility and eliminates options Discloses company propriety data and processes Organizational conflicts of interest Cost driver
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Teaming Window of Opportunity

Prime
Fill Gaps based on Requirements Supplement Resources Capture/Share/Manage Risks

Teammates/Subs
Support in accordance to work share Furthering teams capabilities

TYPICAL PROPOSAL TEAM on $200-$250M RFP

25-30 People (Prime + Partners) Proposal Manager, PM, Engineers, SMEs, Finance, Contracts, etc FULL TIME! 2-3 Partners
Industry Stands up Full Proposal Team Advertised RFP release

Teaming Window
Government releases Draft RFP

Proposal Team
Government releases RFP

Teaming Issues of Requirement Flux

Proposal cost increases Teammates/Subs may be reluctant to commit to Prime Prime reluctant to commit work share Work share changes impacting teaming arrangements May require changes to team structure

Teaming Issues of Schedule Flux

Proposal cost increases Proposal team key personnel availability affected (Challenge to hold Personnel, both for Prime and Subs) Team disappointment

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Typical Proposal Team Organization

Operations Decision Manager As process progresses, personnel assigned to the Program Manager might also work for the Proposal Manager

Business Development Manager

On smaller efforts, one person might fill several roles within the Organizational Chart Cost Strategist
Capture Management Support and Proposal Leadership Group

Capture Manager
Review Team Lead

Develops: Win Strategy Capture Plan Price to Win

Contracts Lead
Subcontract Manager Subcontract Administrator

Program Manager
Technical Manager Manufacturing Lead Admin Assistant Program Scheduler

Proposal Manager
Proposal Coordinator Production Team Admin Assistant Pricing Lead

Integrated Product Team Leads (IPT)

Management BOE Lead

Engineering BOE Lead

Manufacturing BOE Lead

Management Volume Lead

Technical Volume Lead

Past Performance Volume Lead

Cost Volume Lead

Defines Solution

Prepares Proposal

Critical to provide Industry with stable and predictable milestone dates to avoid false starts, wastes resources, and provide ability to assemble and sustain quality team Predictable Draft to Final RFP Content and Timelines are Paramount!

Industry Opportunity Process

Potential Programs in the Pipeline

Target Identification Strategic Preparing for Future New Business
New Derivatives

Award Decision Tactical Operational Extending Current Business

Capturing Identifiable New Business

Follow-On Growth

Target Identification Preparing Process

Interest

Pursue

Prelim-B/L Review

Bid

Submit
Proposal Production Post Submittal

Award
Extending Process

Target Qualification

Opportunity Assessment

Strategy Development

Opportunity Positioning

Industry day

Draft RFP

Black hat

gold

RFP storyboard

pink

red

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Types of Reviews/Review Discipline

Decision Tracking
Interest Pursue Mid-Course Bid Submit Pre-Award

Target Qualification

Capture Planning and Strategy Development

Opportunity Positioning

Proposal Production Pink Red Storyboard Team Team

Post-Submittal Substantiation & Transition EN Response Red Team

Black Hat

Gold Team

Blue Team

Black Hat - External review of

competitors that helps us predict and understand competitor strategy, our vulnerabilities, and appropriate actions

Blue Team - External review of

Win Strategy implementation including Key Messages (Themes), Discriminators, and Our Solution. Blue Team and Storyboard review are often identical

Red Team - External review of the

initial draft of our proposal (or response to questions) to ensure effective communication of win strategies and compliance with customer requirements

Gold Team - Internal or external

validation of our Win Strategy including Key Messages (Themes), Discriminators, and Our Conceptual Solution. Recently decomposed

Storyboard Review - Internal

review of section requirements, objectives, themes, and key graphics Predecessor to full proposal development

Pink Team - Internal review of the initial

draft of our proposal to ensure effective communication of win strategies and compliance with customer requirements

into Value Prop Workshop and Technology Workshop, leading to Gold Milestone

Color Reviews
PM TRADE Acquisition Transformation: Process / Product / Organization

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Timeline T-30/45 Days to RFP release

Pre RFP Release Preparation 2-6 Months
Initial Assessments - Sources Sought
Pursue / No-Pursue

First 10 Days after Draft RFP Release

Draft RFP Release Core Proposal Team On Site
Analyze RFP, Strip Rqmts Prep for Kickoff - Outlines - Assignments - Proposal Sch - Program Sch

Business Case Analysis - ROI

Proposal Strategy Draft Exec Sum

Bid / No-Bid

Initial Cost Estimates Business Case Analysis - ROI

Proposal Team Identified -On NoticeDay 11 Day 12 Day 13 Day 14

Day 15

Day 16

Day 17

Day 18

Day 19

Day 20

Black Hat Review

Technical Approach Solidify Team Mates

Proposal Development Schedule

Draft Proposal Draft Win Themes - Proposal Outlines

Draft Layout Print

Day 21 Gold Team Review

Day 22

Day 23

Day 24

Day 25

Day 26

Day 27

Day 28

Day 29

Day 30/45

Bus Area Incorporate Any Changes

Final Mat Review/ Corrections Print Book Check, Pack

Final RFP Release

Final Print

Author Cutoff

Line-By-Line Word-by-Word Review of Changes

Core Team Review

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Typical 30-Day Proposal Due timeline

Day 1 Day 2
Exec Sum

Day 3

Day 4 Bid Decision

Day 5

Day 6 story board

Day 7

Day 8

Day 9

Day 10

RFP Core Proposal Team On Site Analyze RFP

Kick Off

Write Proposal in 7 days

DTC Commit
Initial Cost Rollup

Full Strip Rqmts Prep for Kickoff Proposal - Outlines Team - Assignments On Site
- Proposal Sch - Program Sch

Set PTW Dist. DTCs

Blue Team Review

Proposal Win Themes, Technical Approach, and Content Flow Complete

Day 17 Day 18 Day 19 Day 20

Day 11

Day 12

Day 13

Day 14

Day 15

Day 16

Author Cutoff
Q-Print

Pink Team Review

Print

Incorporate Any Changes Final Cost Rollup

ITA

Layout
Print

Author Cutoff Q-Print

Core Team Review

Core Team Review

Day 21

Day 22

Day 23

Day 24
Bus Area

Day 25

Day 26

Day 27

Day 28

Day 29

Day 30

Red Team Review

Final Author Cutoff

Mat Review/ Corrections

Prop Due
Final Print
Book Check & Pack

Incorporate Any Changes

Deliver Proposal

Print
Core Team Review

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Independent Research & Development (IRAD)

IRAD
What I thought about IRAD What is IRAD? Research and development efforts are initiated, funded and conducted by defense contractors, neither sponsored by a government grant nor required in performing a contract, and must abide by certain Federal Acquisition Regulation and Defense Contracting Audit Agency regulations

Innovation Dilemma
How to insert innovation when there are limited Army RDTE $s available in TRADE programs DoD increasingly searches out COTS based solutions using mature, proven technology to meet the needs of the end-users, thus driving decreases in research & development for training and simulation IRAD funding is often hard to secure for training simulation IRAD resources are limited within companies Discussions and forums on solution gaps are limited

Defense contractors spend in excess of $3 billion annually conducting independent research and development. How can you leverage and influence this innovation?
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Generic IRAD Selection Process

4. Project 3. Define Strategic IRAD
Thrusts Assumptions

6. Target IRAD Budget and

Budget Percentages

7. Strategic IRAD
Decisions IRAD Selection Team

9. Product Line
IRAD Decisions

5. Strategic IRAD
2. Business Growth Driver Tech Roadmaps with Tech Gaps Requests

8. Product Line
IRAD Requests

10. IRAD Kickoff

Gate with Leadership Team

1. Growth Driver roadmaps from Tech Innovation Workshop

11. IRAD
Charge numbers available 23 24 5 4 15 10 13 16 2

{ {

Warfighter Needs Technology Analysis ongoing

Business Growth Driver & Tech Innovation Workshop

Prepare Strategic IRAD Project Decision Packages

IRAD Project Decision Packages for approval

Selected IRAD Project Kickoff Gate

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PM TRADE Acquisition Transformation: Process / Product / Organization

Jan

Feb

Mar

Apr

19-21

May June July

16

Aug Sept

Oct

Nov

Dec

Jan

Generic IRAD Integrated Master Schedule

IRAD can deliver game changers and next generation evolution which government can leverage

12 month planning & approval process

but it takes time and needs collaboration

6-24 month delivery timeline

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PM TRADE Acquisition Transformation: Process / Product / Organization

Independent Research & Development (IRAD)

Why should I care? What are the Benefits?
Enable superior performance of future training systems and components Reduce acquisition costs, life-cycle costs, development risk of training systems and components Strengthen the training industrial and technological base Enhance the industrial competitiveness of the United States Increase the development and promotion of dual-use technologies for training, testing, operational environments Increased capabilities to the Warfighter Improved early communications to forecast needs and gaps Consistent information exchange activities (Industry Days, TSIS, I/ITSEC) Technical Interchange Meetings initiated by either DoD activities or contractors Other voluntary technical discussions or exchanges of information between the scientific, engineering, and operational personnel of the DoD and the contractors Go see what industry has to offer

Find the leverage points

Improved communications between industry and government is the heart of successful leveraging of IRAD
21 PM TRADE Acquisition Transformation: Process / Product / Organization