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AFFORDABILITY REQUIREMENTS FORUM 
May 17-18, 2011
National Press Club
Washington, DC

agenda

Last updated: May 13, 2011

Tuesday, May 17
8:00 a.m. Welcome
  • Ed Hazelwood, Editor-in-Chief, Conferences, Aviation Week
  • Katie Taplett, Associate Publisher, Defense, Space and Security, Aviation Week & Space Technology
8:10-8:50 a.m. Keynote: Mandating Affordability As A Requirement
After a decade of steady growth, DoD is facing the prospect of flattening budgets and will have to do more with less. Secretary Gates has made it clear that improving affordability and productivity in weapon systems development and procurement is one of his top goals. A major part of this push is restraining the services’ appetite for requirements – future programs will be designed for affordability, not desire. Unaffordable technical requirements will be discarded at program inception. There will be affordability review requirements, examining acquisition, operation and maintenance costs. Learn about DoD’s new way of doing business and what it will mean for your program.
  • Affordability-based decision making at milestone decision points
  • Systems engineering tradeoff analysis
  • Affordability requirements for acquisition cost and operating and support cost: Understanding and controlling future costs from program inception
  • Setting shorter program timelines and managing to them
  • Confirmed Speaker:Frank Kendall, Principal Deputy Under Secretary of Defense for Acquisition, Technology & Logistics
8:50-9:30 a.m. Air Force Keynote
  • Confirmed Speaker: Lieutenant General Mark D. Shackelford, Military Deputy, Office of the Assistant Secretary of the Air Force for Acquisition
9:30-10:10 a.m. Acquisition Panel: Achieving Affordable, Efficient and Effective Acquisition
  • Keys to successful acquisition programs: Getting it right at the outset with sound systems engineering, cost estimation & developmental testing
  • Building the internal capability to drive the affordability effort: Building skills in cost analysis, systems engineering
  • Building better understanding of industrial operations and lean process approaches
  • Moderator: Michael Bruno, Deputy Managing Editor for Defense & Space, Aviation Week
  • Confirmed Panelists: Jeff Wilcox, Corporate Vice President for Engineering, Lockheed Martin
  • Dr. Dinesh Verma, Executive Director, Systems Engineering Research Center (SERC); Dean, School of Systems and Enterprises, Stevens Institute of Technology
  • Michael P. Gaydar, Deputy Director, Air Platforms SE, US Navy
  • Stephen P. Welby, Deputy Assistant Secretary of Defense for Systems Engineering
10:10-10:30 a.m. Networking Break
10:30-11:10 a.m. Actionable Should-Cost to Improve Affordability
The USD ATL directive on conducting Should Cost Reviews (SCRs) has many SPOs attempting to determine the “what” and “how” of SCRs. SCRs can be a valuable tool in helping drive program affordability if conducted with a focus on determining actionable cost reduction outcomes. This session will address the question, “How can SCRs be conducted to make real cost impact versus becoming ‘just another study’?”
  • Confirmed Speaker: Randy Garber, Vice President and Partner, A.T. Kearney
11:10 a.m. -12:00 p.m. Marine Corps Collaboration with Industry to Produce an Affordable Amphibious Combat Vehicle
  • Designing/proposing solutions that will reduce the operational and support costs over the lifecycle
  • Considering factors such as commonality, modularity of proposed solutions and interoperability among Systems of Systems
  • Identification of affordability trade space
  • Confirmed Speaker: Brigadier General Daniel O’Donohue, Director of the Combat Development Directorate, USMC
12:00-1:00 p.m. Luncheon
1:00-1:50 p.m. Panel: The Secrets to a Leaner Defense Industry
  • Establishing Lean Six Sigma teams to improve processes and performance
  • What’s needed from the government customer? Which reporting requirements and acquisition practices cause industry to adopt processes and make investments that increase non-value added costs?
  • Looking at every cost element: Direct labor, sub-tier suppliers, overhead and general and administrative expenses
  • Potential for savings from lean manufacturing: Pull production (beginning manufacturing only when an order has been received, reducing finished goods inventories), Cellular production
  • Multi-year budgeting to smooth out the uncertainty in budgeting and funding that adds to supplier costs: Could this predictability allow suppliers to manage more efficiently, from hiring and deploying their workforces to procuring goods and services?
  • Moderator: Tony Velocci, Editor-in-Chief, Aviation Week & Space Technology
  • Confirmed Panelists: Mark Signorelli, Vice President/General Manager, Ground Combat Vehicle, BAE
  • Dave Markham, Vice President, Affordability, Lockheed Martin
  • Bob Peak, Director, Systems Engineering, Integration, and Test, EADS North America Inc
1:50-2:30 p.m. Designing for Affordability
The Virginia Class Submarine Reduction in Total Ownership Cost (VIRGINIA RTOC) program has been a successful tool for step-change, enterprise cost reduction. Unique aspects of the program, coupled with the overarching urgency to deliver submarines in a cost-effective and expeditious manner, have catalyzed change and led to tangible results. As of December 2010, the program has been responsible for implementing $3.8 billion in to-go acquisition savings and is projected to increase lifetime operational availability of the Block IV and forward Virginia class submarines.
  • Confirmed Speaker: Mark Alter, Senior Associate, Booz Allen Hamilton
2:30-2:50 p.m. Networking Break
2:50-3:30 p.m. Super Hornet Affordability Case Study
Boeing F/A-18E/F and EA-18G Program Manager Mike Gibbons details how the F/A-18E/F Super Hornet and EA-18G Growler have continued to increase platform capability, while driving out cost. The Super Hornet and Growler program has delivered $1.7B in savings during the course of two multi-year procurements by partnering with the U.S. Navy to implement cost reduction initiatives, by mobilizing the supply base, and by employing advanced manufacturing techniques that maximize Lean production methods. Gibbons will outline how a new Super Hornet and Growler multi-year procurement agreement enables continued savings during the coming years.
  • Confirmed Speaker: Mike Gibbons, F/A-18E/F and EA-18G Program Manager, Boeing
3:30-4:10 p.m. A Capabilities Driven Approach to Affordability
We are entering a period of significant contraction in defense markets that will challenge the affordability of many defense systems. For suppliers of legacy exquisite defense systems, it will be all about reducing fixed costs to bring products and services in line with market-defined affordability targets. For the non-traditional suppliers, those who have entered in the past decade either by exploiting global scale and scope or by introducing disruptive technologies, it will be about broadening the breadth and depth of market engagement. Both industry and government have a role to play in dealing with this challenge. The effectiveness with which they meet this challenge will go a long way to determining the strength of the defense industrial base and its ability to meet our ongoing defense and security needs.
  • Confirmed Speaker: Martin J. Bollinger, Senior Partner, Booz & Company
4:10-5:10 p.m.

Cocktail Reception
Wednesday, May 18
8:00-8:40 a.m. GCV Case Study
  • TD contract change from “cost plus fixed fee” to “fixed price incentive fee”: Contractors that come in below cost will recoup 20 percent of the money saved; contractors that come in over will be responsible for those costs
  • Average unit manufacturing cost affordability targets and lifecycle cost targets
  • Army’s strategy of increased trade space and freedom for industry
  • Confirmed Speaker: Scott Davis, PEO, Ground Combat Systems, USA
8:40-9:20 a.m. Affordability: Getting the Requirements Right
In light of limited Defense & Army budgets, the Army is instilling a culture that firmly challenges requirements. Program Managers are chartered to evaluate cost drivers and interact with combat developers iteratively to ensure that the full cost impact of requirements is fully understood at all levels within the Army. The Army has institutionalized the Capability Portfolio Review (CPR) process that annually reviews all capabilities from a portfolio perspective to validate requirements and identify redundancies. Configuration Steering Boards (CSB) are required annually for ACAT I programs and the Army is expanding into the ACAT II programs and aligning CSBs with its CPR process to maximize efficiency.
  • Confirmed Speaker: Lieutenant General William N. Phillips, Principal Military Deputy to the Assistant Secretary of the Army (Acquisition, Logistics and Technology); Director, Acquisition Career Management
9:20-10:00 a.m. NAVAIR Keynote
  • NAVAIR approach to affordability: Managing tactical aircraft costs in light of DoD’s push for weapon system affordability
  • Managing program costs through development, production, operation & maintenance
  • Confirmed Speaker: Vice Admiral David Architzel, Commander, Naval Air Systems Command
10:00-10:30 a.m. Networking Break
10:30-11:15 a.m.

Navy Keynote

  • Affordability approaches for new programs: SSBN(X), VXX Presidential Helicopter Program
  • SSBN(X): Design tradeoffs and the trimming of requirements – without sacrificing critical capability – to reduce estimated procurement costs by 16 percent
  • Affordability guidelines for program managers: Examining independent cost estimates and cost drivers
  • Confirmed Speaker: Vice Admiral W. Mark Skinner, Principal Military Deputy to the Assistant Secretary of the Navy (Research, Development and Acquisition)
11:15 a.m. -12:00 p.m. A New Strategy for Aerospace and Defense Challenges: Lean Applied to Business Processes
The mandates from the Department of Defense to reduce costs and increase speed of procurement and the related cyclic pressures of the aerospace industry are not new. Most cost-cutting efforts seem to just cut capacity and capability in a time where speed and flexibility win the day. The constraints to lower costs, on-time delivery, and sustainment are no longer on the shop floor. It is time for a new strategy to improve A&D processes. Applying lean to business processes, such as engineering, acquisition and other management processes, can dramatically reduce turn around time and subsequently, costs for any business process or supply chain.
  • Confirmed Speaker: Bill Peterson, Faculty Member, Center for Executive Education, The University of Tennessee
12:00 p.m. Program Conclusion