Performance Based Mission Support Building a Performance Focus for the Warfighter Lyle Eesley Center Director for Contracting

Performance Based Mission Support

Building a Performance Focus for the Warfighter

Lyle EesleyCenter Director for Contracting

CON353 Advanced Business Solutions for Mission Support

Overview

• Where performance is critical

• Alignment of Support and Mission

• Strategic vision for Mission support

Combat Support Joint Task Force Air Operation Center

Determine Strategic

Objectives

Air Tasking Order

Strategic Planning

Commanders

Guidance &

Objectives


Mission Planning

Flight Plan

Tactical Planning

Determine Strategic

Objectives

Air Tasking Order

Strategic Planning

Commanders

Guidance &

Objectives


Mission Planning

Flight Plan

Bomb Damage

Assessment

Execution & Sensor

Feedback

Tactical Planning

ObserveOrientDecideAct

Determine Strategic

Objectives

Air Tasking Order

Strategic Planning

Commanders

Guidance &

Objectives Launch Sortie


• Leadership• Clear command and control• Effective communication & feedback systems

• Common goals• Unified effort

• Teamwork facilitated at all levels

• Mission focused• Objective information

• Effective Planning• Strategic • Tactical• Performance Goals

Keys to Success

Mission Planning

Flight Plan

Bomb Damage

Assessment

Execution & Sensor

Feedback

Tactical Planning

ObserveOrientDecideAct

Determine Strategic

Objectives

Air Tasking Order

Strategic Planning

Commanders

Guidance &

Objectives Launch Sortie

Are our Support services always aligned with our Mission ?

Contracting Community

FunctionalCommunity

Customers

Contractor

Stakeholder

Mission

PBMS Requires Alignment with Mission

Contracting Community

FunctionalCommunity

Customers

Contractor

Stakeholder

Mission

Doing things Right Doing the Right Things

Doing the Right Things – The FAR Part One Challenge• Vision:

– All participants are charged with making decisions that deliver the best value product or service to the customer

• Performance Standards– Satisfy the customer – cost, quality, and timeliness of delivered

product or service– Minimize administrative operations cost– Conduct business with integrity, fairness and openness– Fulfill public policy objectives

• Exercise personal initiative and sound business judgment to provide best value

• In exercising initiative, actions that ensure the best interests of the government are within your authority unless they are specifically prohibited by law or policy

Survival in a Knowledge Economy

“The winners and losers in the information age will be differentiated by brainpower. It takes 2% of Americans to feed us all, and 5% to make everything we need. Everything else will be service and information technology, and in the world humans and brains will be the key variable.”

T.J. RodgersFounder of Cypress Semiconductor

Avoid becoming a turtle

• The currency in today’s economy is knowledge• Developing superior knowledge as a business

advisor requires you know:– How your customer defines mission support value– Best business practices in the commercial marketplace– How to apply best practices in shaping business deals

that will support your customers mission objectives• Requires a Strategic Vision for your customers• Step away from the “inbox”

– Focus on total “enterprise” contract needs

Develop Strategic Mission Support Goals

• Strategic support goals provide:– Overarching foundation for all acquisition efforts – Alignment with stakeholder mission requirements– Communicate and connect with mission and people– Reflect best commercial practices– Measurable to evaluate performance

• Develop implementing strategies to achieve goals– Strategies ensure unity of effort and direction– Alignment of all acquisitions

• Support Goals provide the “commanders guidance” for assessment, planning and execution phases

Stakeholder and Customer inputs help shape performance outcomes

Key Stakeholders:• Commander(s)• Senior leaders• Tenants

Key Customers:• Service

Recipients• CE• Functionals• Operations

Interview Focus:• Strategic Objectives

• Performance priorities

• Mission

• Expectations

• Criteria for Success

Interview Focus• Desired Outcomes

• Performance Objectives

• Expectations

• Criteria for Success

Shape:• Performance

Objectives• Strategies• Metrics

• Performance Outcomes

• Metrics

What’s your customer’s Vision and expectations for contractor support?

• Service Delivery

• Quality Program• Commitment to

Mission• Customer Focus• Process

Improvement• Cost Savings

Government Norm Best-In-Class

Complies with requirement

Acceptable

8 to 5

If it’s in the PWS

Tell me what you want

me to do

Deliver to the letter of

the contract

Delivers innovation and “service with a smile”

Root cause analysis

24/7 if needed

Looks for feedback

Drives new initiatives and best practices

Continually brings cost and performance improvements

Your Vision and Support Goals drive the Performance you get !

Develop Mission Support Objectives

CostCostPerformancePerformanceGOALS::

Strategies:

• Attract and partner with best-in-class providers• Identify, measure, and manage outcomes• Develop our people and processes to achieve business goals

PerformancePerformance

Support Strategies

GoalCostsCosts

Continuously Maintain Alignment

Customer Support Delivery Requirements

Stakeholder Mission support Expectations

Support Objectives: Foundation for Acquisition Process

Support Objectives

Customer

Support Support ObjectivesObjectives

Cost &Performance

LevelsStrategic

Market Research

Assess The

Opportunity

Form theTeam

Stakeholder

Process steps for delivering PBMS

Strategic Market Research shapes planning• Commercial sector is facing the similar challenges• Successful business advisor must continuously stay

abreast of current thinking & best practices– Dialogue with industry, research trade organizations, etc.– Focus on business principles you can apply – there are no silver

bullets – Strategic direction of the industry– Leading service providers– Develop effective assessment tools to determine cost and

performance levels

• Will present contract performance, structure, etc. meet the organization’s strategic mission support vision, goals & strategies?

Assess

Facility Management Metrics- (Mfg)Q4 FY00 Q1 FY01 Q2 FY01 Q3 FY 01 Q4 FY 01 Q1 FY02 Q2 FY02 Q3 FY02

Building 1 FM Cost 2351000 2042995 1613000 898496 723177 816779 676924 401495

Building 2 FM Cost 1699000 1335050 1268000 1283992 1506671 1511553 1251288 433336

Building 3 FM Cost 2502000 1789029 2072000 2089341 2229025 2321697 2135403 2289992

Central 1292000 1113643 432000 620714 518731 436900 353280 227423

Health & Safety 63070 79000 44111

Total FM Cost $7,844,000.00 $6,343,787.00 $5,464,000.00 $4,936,654.00 $4,977,604.00 $5,086,929.00 $4,416,895.00 $3,352,246.00

Overall Cost per Unit $11.02 $8.60 $8.09 $6.66 $5.25 $5.59 $5.17 $3.66

Cost per Sq.Ft. Gross $6.70 $5.42 $4.67 $4.22 $4.65 $4.75 $4.17 $3.16

Cost per Head $1,285.00 $1,064.00 $971.00 $883.00 $853.00 $883.00 $850.00 $645.00

Total FM Cost

$0.00

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

1 2 3 4 5 6 7 8

Total FM Cost

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

1 2 3 4 5 6 7 8

Cost per Unit

Cost per Sq.Ft. Gross

Cost per Head

$0.00

$500.00

$1,000.00

$1,500.00

1 2 3 4 5 6 7 8

Cost per Head

Current Facility Cost Trends

Continuous Improvement Process reduce cost while meetingCustomer performance expectations

Q4 FY00 Q1 FY01 Q2 FY01 Q3 FY01 Q4 FY01 Q1 FY02 Q2 FY02 Q3 FY02

Understand Performance Data

Here you are


$ 3.5 $ 3.0 $ 2.5 $ 2.0 $ 1.5 $ 1.0 $ 0.5

Efficiency


0.0

0.1

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0.5

0.6

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0.8

0.9

1.0

$ 3.5 $ 3.0 $ 2.5 $ 2.0 $ 1.5 $ 1.0 $ 0.5

Efficiency

Effe

ctive

ness

Essential To Identifying Performance Gaps . . .

Current Potential

Organization

Processes

Svc Level Standards

Technology

Customer RelationshipManagement

Culture

Skills/Experience

Contract Management

Practices Focus

Best Performers Are Circled

0.0

0.1

0.2

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0.5

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0.9

1.0

$ 3.5 $ 3.0 $ 2.5 $ 2.0 $ 1.5 $ 1.0 $ 0.5

Maintenance Costs

A1

A2

A3

A4

A5

A6

A7

A8

A9

A10A11

A12A13

A14

A15

A16

A17

A18

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A21A22

A23

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A26

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A28

A29

A30

A31

A32

A33

A34

A35

A36A37

A38

A39 A40

A41

A42

A43

A44

A45

A46A47

A48 NB

Best Performers Are Circled

Administrative Facilities - Maintenance Cost/SF Maintained

Unit Cost

Comprehensively Assess Practices That Drive Site Performance

Organization

Practices/Process

Technology Applications

Continuous Improvement

Supplier Management

• Spans of control• Orientation - process/functional,

etc.• Worker to supervisor ration• Lines of accountability• Broad/Narrow role definition• Layers• Other

• Performance measures• Failure analysis ability• Cost control ability• Compliance/safety programs• Incentives• PM basis change management• Performance trending• Performance based contracts• Supplier performance management• Other

Investment Strategy

Asset Profile/Standards

Marine Corps Air Station, Miramar

Cost and Performance Management Practical Application

Strategic Planning

• An overarching strategic plan was developed for the organization.– Addressed all issues facing the Miramar

– Incorporated high level goals and objectives

• Tactical or operational plans were developed.– Linked to the strategic plan

– Translated strategic initiatives into actionable plans

© 2000 Grant Thornton LLP

A cost and performance management system creates the linkages

Base-Wide

Process Owner

Vision

Initiatives

MetricsSt

rate

gic

Pla

nSt

rate

gic

Pla

n

Tact

ical

Pla

nsTa

ctic

al P

lans

Tact

ical

Pla

nsTa

ctic

al P

lans

Business ProcessesBusiness ProcessesProcessesProcessesInput Output

ProcessMetrics

AndTargets

ProcessMetrics

AndTargets

ActivityMetrics

AndTargets

ActivityBasedCostingModels

G-6G-6G-5G-5G-4G-4G-3G-3G-1G-1 G-8G-8G-7G-7Function Managers

Targets

Goals

Activity Based Costing/Management

• Modeled the entire organization using ABC– 170 million dollars in resources– Over 2,200 FTEs– 15 separate departments

• Built models around major processes– Flowed resources to the activities– Traced activities to cost objects

Activity Based Costing/Management (Continued)

• Developed performance measures for the processes and outcomes– Process measures were leading indicators

– Outcome measures were lagging indicators

Benchmarked Miramar’s Aircraft Fueling Operations

• The following depicts Miramar’s fueling division:– Provides hot and cold fuel support to operational squadrons

aboard MCAS Miramar– 52 FTEs and an annual operating budget of $2.5 million – Delivers approximately 31 million gallons of fuel per year– Mix of both cold and hot fueling operations– Average fueling response time was 45-60 minutes

Benchmarking Peer Group

• Identified several benchmarking candidates.• Looked at both civilian and military operations.• Evaluated similar processes.• Benchmarking group included:

– Commercial airport, Naval Air Station, Other MCAS

ANN COST

$0

$1,000,000

$2,000,000

$3,000,000

MCAS XXX NAS OTHERMCAS

COMM.AIRPORT

# FTEs

0

20

40

60

MCAS XXX NAS OTHER MCAS COMM.AIRPORT

Benchmark Comparisons


GAL/YR

010,000,00020,000,000

30,000,00040,000,000

MCAS XXX NAS OTHERMCAS

COMM.AIRPORT

AVG COST PER GAL

$0.00$0.02$0.04$0.06$0.08$0.10


CYCLE TIME (MIN)

01020304050


CUSTOMER SATISFACTION

3.54.2

4.7 4.8

0.0

1.3

2.5

3.8

5.0

MCAS XXX NAS OTHER MCAS COMM. AIRPORT


Benchmark Results

Organization

Process

Technology

Culture

Performance Drivers

Performance Management

Serv

ice

Leve

l(E

ffect

iven

ess)

High

Avg

Low

Low HighAvg

Cost Level(Efficiency)

Expected Tradeoff

COMMERCIAL AIRPORT

••

•

•

(High Costs) (Low Costs)

MCASXXX

COMMERCIALAIRPORT

Performance

NAS

MCAS XXX

OTHERMCAS

Best in Class Performance

• The response time to begin a fueling operation was under 10 minutes.

• 6 FTEs dispensed over 35 million gallons of fuel per year.

• The average cost of operations was $400K annually.

• A reported high level of customer satisfaction.

• Implemented automated planning and scheduling systems.

• Pre-staged fuel trucks for predicted demand increases.

• Installed electronic metering and record keeping procedures.

• Augmented the workforce with part time employees for surge operations.

Best in Class Practices

Miramar’s Fueling Operations

• Fuel pits were manned during all hours of airfield operations regardless of demand requirements.

• There was no established communication link between the tower and the fuel center.

• Flight schedules were not maintained in the fuel division.– Resulted in inadequate planning and scheduling– Sub-optimized the workforce

• Improper mix of truck and pit fueling operations.

Initiatives

• Developed a web based planning and scheduling system.

• Established a direct radio link between the fuel division and the tower.

• Pre-staged fuel trucks and equipment for surge operations.

• Established night shift to fuel all aircraft for following day’s mission.

Results

• Reduced the response time down from 45-60 minutes to 25 minutes.

• Decreased the annual cost of operations by $527K or 22%.

• Increased customer satisfaction; or the number of complaints decreased significantly.

Customer

SupportSupportObjectivesObjectives

Cost &Performance

LevelsStrategic

Market Research

Assess The

Opportunity

Form theTeam

MissionArea Support

Strategies

ValueBased Performance

Requirements

Stakeholder


Mission Area Support StrategiesOne Size Doesn’t Fit All

Mission Support Strategy

Mission Area Support Strategies

• Develop support strategies for specific mission areas– Your value add is superior market knowledge

– Mission areas should be defined in commercial terms

– Align Stakeholders’ mission needs and Business Goals

• Expand mission area cross-functional teams – Adapt best commercial principles & practices

– Dialogue with service providers & like organizations

– Assess potential impacts - both internal and external

• Mission area strategy drives specific Value-Based Performance Requirements (VBPR) packages

Plan

Value Based Performance Requirements (VBPR)

• VBPRs integrate all elements of an acquisition into unified package– Performance-based or SOO-based requirements focused on

outcomes – Acquisition approach and type of contract – Performance incentives – Source Selection approach and evaluation criteria– Performance Management Plan

• Must align with Support Goals and Mission Area Support Strategy

Plan

Value Based Performance Requirements

Stakeholders

Mission Needs Expectations Success CriteriaCustomers Performance Needs Expectations Success CriteriaMarket Research Commercial Practices Public Sector BestPolicy and Regulations

Past PWS or SOW

The following should be cast together from inputs received:1. Statement of Work Focused on Mission outcomes Uses commercial practices Does not say “HOW” Sets Expectations clearly2. Acquisition Strategy Type of Selection process Type of contract & Incentives Evaluation Criteria3. Performance Management Approach Part of the team or supplier Performance metrics Contractor QA Requirements Government QA approach

Support Strategies

Goal

Customer

Assess &Manage

Performance

Support Support ObjectivesObjectives

Cost &Performance

LevelsStrategic

Market Research

Assess The

Opportunity

ConsistentSource

Selections

Form theTeam

MissionArea Support

Strategies

ValueBased Performance

Requirements

Stakeholder


Execute and Manage Performance• Source Selection process

– Driven by Support Goals – Selection team must be familiar with Support Goals

• Performance Management– Partnership driven - Contractor(s) and in-house team– Track contracts and orders with outside agencies – Validate performance received against Support Goals and

provide feedback– Insure performance aligns with Stakeholder mission

performance needs

Execute

TANSTAAFL – Principle

Key Principle in building effective partnerships

TANSTAAFLThere

Ain’tNo

SuchThing

AsA

FreeLunch

Key Principle in building effective partnerships

Conclusion - PBMS

• Team Effort

• Requires a Culture Shift

• Strategic focus and alignment

• Tailored to support mission outcomes

• Linkage of requirement, incentives, contract and performance assessment ensures that performance aligns with Mission objectives

Balanced Scorecard

Technical Performance

Customer Satisfaction

Cost Control

Other Objectives

Client Objective

s & Strategy

Characteristics of a Scorecard

• Balanced between External and Internal Measures

• Balanced between Outcome Measures(Lag) and Performance Drivers (Lead)

• Balanced between Objective Measures and Subjective Measures

• Translates Mission and Strategy into Actions and Measures

Balanced Scorecard approach to SDS

Performance Objectives

Transportation 3

Financial

Customer Learning & Growth

Internal Business Process

Readiness

Supply Management 4

Support Services 5

Flight Line Support 6

Aircraft Maintenance 7

M

ERUSAE

S

Facility Management 1

Information Technology 2

Overall Assessment


Balanced Scorecard approach to SDS

Transport people 3

Financial



Readiness

Transport cargo 4

M

ERUSAE

S

Fleet Maintenance 1

Fleet Administration 2

Function: Transportation

Building the Balanced Scorecard

Define the performance objectives for Fleet Maintenance:Internal Business Process Deliver a fully operational fleet of vehicles, professional in appearance and maintenance, that meet our customer’s mission needs.

Customer Objective: Delight our warfighters, other clients and Stakeholders through integrated client focus, flexibility, innovation and teamwork.

Financial Deliver the service within budget targets

Learning and Growth Enhance and develop your staff to deliver safe, superior support to our client base

Readiness Meet all mobility taskings to ensure there are no transportations delays and ensure all priority 1 vehicles are fully mission ready

Define key measures

Internal Business Process Vehicle availability rate

Customer Objective: Customer satisfaction data on monthly trend chart

Financial Actual expenses vs budget

Learning and Growth % of certified maintenance personnel

Readiness Deployment delays attributable to vehicle malfunctions


Balanced Scorecard SDS

Fleet Maintenance: Includes all activities associated with Preventive and Corrective Maintenance programs and Accident Repairs. Objective is to ensure a robust vehicle maintenance program using current and applicable T.Os and manufactures instructions. Vehicles should always be professional in appearance and available in sufficient quantities to meet Wing Mission needs for daily operations, exercises and deployments. Special focus on critical, priority 1 vehicles.

Performance Measures (Metrics):

Vehicle Availability Rate

Average customer satisfaction survey results (monthly data)

Budget Dollars vs Actual Expenses

% of Mechanics certified

Exercise or deployment delays attributed vehicle availability

Priority 1 Vehicle Availability Rate


Customer Financial Learning/ Growing

Readiness

> 80%

Std

86%

> 97% 100%

> 80% 90%

+-02%+10%

> 50% 35%

< 1 0

Measure and Manage Performance

Metrics by Function and SubfunctionFleet Maintenance

Vehicle availability rate% Scheduled vs unscheduled maintenance Average maintenance cycle timePerformance against approved individual development plansSafety % of lost time hours to total hours workedCritical or Major incidents% of maintenance delays due to parts availability

Preventive Maintenance% of vehicles exceeding service intervalsAverage maintenance cycle time

Corrective Maintenance% of repaired vehicles returned within 5 days for reworkAverage maintenance cycle time

Accident RepairRecovery(towing) response timeAverage accident repair cycle time

Effic

ienc

y

Effectiveness

©2000 UMS Group Inc., All Rights Reserved

Combat CapabilityCosts Down

Foster ExcellencePerformance UP

Wing CC

Group CC

Squadron CC

Flight

Shop

KPIs

Sub-ProcessMeasures

Individual & Productivity Measures

ProcessMeasures

Functional Asset Group Measures

Work Completion Measures

Asset Measures

Program Measure

Performance measure information identified at all work strata and ensures alignment of effort on mission results

Combat Capability

% of Launch Capable LCCs

Equipment Failure Rates

Asset Improvement Project Schedule

Adherence

Problems Identified Before Critical

Failure Rate by

Equipment Type Asset Inspection Replacement Rate, Reinforcement Rate

Preventative Maintenance Plan

Completion

KPIs

Sub-ProcessMeasures


ProcessMeasures



Asset Measures

Program Measure

KPIs

Sub-ProcessMeasures


ProcessMeasures



Asset Measures

Program Measure

Align detail measures with higher level measures and drive down to work activities

Balance Scorecard SDS QASP

Method of Surveillance

QASP

Objectives

Transportation

Financial


Internal Business Process Readiness

Maintenance

Environmental

Utilities

FE&AS

Information Technology

Comptroller

B

senisu

s

Lines

Measures

Objectives

Transportation

Financial


Internal Business Process Readiness

MaintenanceMaintenance

EnvironmentalEnvironmental

Utilities

FE&AS

Information Technology

Comptroller

B

senisu

s

B

senisu

s

Lines

Lines

Measures

Measures

MHHHH

MHHHH

HHHHH

HHHHH

LHHHH

LHHHH

LHHHH

High Impact (H)Medium Impact (M)Low Impact (L)

Documents

Performance Based Mission Support Building a Performance Focus for the Warfighter Lyle Eesley Center Director for Contracting