Surface Ship Maintenance & Modernization Industry Update

As part of CNRMC and SEA 21’s commitment to actively engage and continually communicate with our Industry Partners, I am sending this message to provide a few recent updates regarding key efforts underway within the Navy’s Surface Ship Maintenance and Modernization community.

NAVSEA’s #1 goal continues to be on time ship delivery, and we need your ongoing support and collaboration to achieve this goal! We have a number of efforts underway within our community to support on time delivery, and the Private Sector Improvement (PSI) Initiative and Private Sector Optimization (PSO) plan continue be NAVSEA’s main area of effort to meet this goal.

Concurrent to the PSI and PSO efforts is the Perform-to-Plan (P2P) project, a Surface Warfare Enterprise-led effort, which aligns OPNAV, Fleet, TYCOM and NAVSEA in an effort to achieve on time delivery. While the five (5) PSI Lines of Efforts overlap with the 10 P2P Lines of Effort, they are not one and the same. Instead, these two projects are complementary and support cross-organizational alignment throughout the Surface Enterprise. One significant benefit of P2P is the opportunity it provides our community in highlighting to our Navy’s senior leaders the challenges we are seeing in on time ship delivery in today’s environment.

We recently engaged in discussions on these very topics during the 2019 National Ship Repair Industry Conference (NSRIC) held at the Westin Crystal City in Arlington, VA in the first week in April. During NSRIC, Navy and Industry partnered to make, significant strides in aligning and defining our shared goals and challenges. Below is a summary of topics we discussed:

  1. During NSRIC CNRMC/SEA 21 took advantage of the audience and hosted an industry day April 4th. This continued a quarterly drum beat over the last year of formally meeting with industry. CNRMC provided an update on PSI/PSO and an overview of P2P. Industry shared the following as their primary interests and issues:
    • Industrial Base Stability and Predictability
    • Avoid a Continuing Resolution by passing DOD Appropriation by 1 Oct
    • Improved Relationships with Contracting Departments
    • Shorten timeline for decision making (Contractual and Technical)
    • Continue to reduce burdensome requirements and regulations
    • Improve the Balance of Risk with Navy and Industry Partnership
    • Industry Workforce Stability and Development
  2. To better communicate demand to industry and at industry’s request the Workload Charts are now being released every two month.
  3. In an effort to streamline contract oversight VADM Moore challenged CNRMC to reduce checkpoints by 50%. There are four pilot availabilities identified (ARLEIGH BURKE (NASSCO), BULKELEY (BAE), ESSEX (NASSCO), & SHOUP (BAE)) where the RMCs are teaming with industry to reduce checkpoints. CNRMC has also recently reduced the checkpoint call out time from 4 to 2 hours.
  4. Updates to the Navy’s Acquisition Strategy, which addressed Acquisition Strategy 2.0 Goals.

    Acquisition Strategy 2.0 Goals were defined as follows:

    • Predictability and Stability for Industry
    • Identifiable Future Grouping of Ships
    • Improved Resource Planning
    • Mitigate Resource Issues
    • Dry Docks
    • Personnel
    • Increase Industrial Capacity
    • Increased Opportunity to Complete CNO Availabilities On Time

    There were many discussions surrounding these goals, but for practical purposes they were focused on the Navy’s plan to make modifications to its existing strategy to increase predictability and stability, while continuing to utilize the fundamental Firm Fixed Price (FFP) construct that led to improved cost and schedule trends. Major contract strategy changes include:

    • LCS 1 – 4 test ships (long-term modernization/maintenance contract)
      • Horizontal grouping of all ships competed
        o Includes CNO, EM/CM, preventive maintenance, facilities, corrosion control, foreign port support (all facets of current MAC)
        o Include requirement for relationships with unique OEMS
    • LCS Independence Class (long-term modernization/maintenance contract)
      • Docking CNO availabilities only
      • Maximize dock utilization
      • Utilize existing MAC for non-docking CNO, EM/CM, preventive maintenance, facility maintenance, corrosion control in homeport
      • Utilize existing MAC for any OCONUS requirement
    • Horizontal Grouping (across multiple fiscal years)
      • Horizontal groups of logical coast-wide docking availabilities competed
      • Stand-alone competitions for non-docking availabilities
        o Not included in horizontal groupings as those competitions are restricted to yards with docks
      • All other complex CNO availabilities and EM/CM competed under existing complex MAC
      • All other non-complex EM/CM availabilities competed under existing non-complex MAC
    • DDG 1000 (long-term modernization/maintenance contract)
      • Horizontal grouping of all ships
        o Includes CNO and EM/CM
        o Include requirement for relationships with unique OEMS

    Changes specific to Acquisition 2.0 Contracting were noted during INDP as follows:
    – LCS 1- 4 test ships (long-term modernization/maintenance contract)

    • Compete known package for first ship
    • Follow-on ships in the grouping
        o Class Standard Work Templates (for BAWP), modernization service requirements, material burden rate, composite rate per ship, schedule extension rate/day, and dock extension rate/day
        o Negotiate remainder of work as package is solidified for each ship
    • Potential (after initial award) to issue resource planning delivery order to prime for follow on ships
    • LCS Independence Class (long-term modernization/maintenance contract)
    • Compete known requirements
        o Horizontal Grouping (across multiple fiscal years)
    • Solicit as a stand-alone group or in “lots” if schedules vertically align
    • Compete known package for first ship
    • Follow-on ships in the grouping
        o Class Standard Work Templates (for BAWP), modernization service requirements, material burden rate, composite rate per ship, schedule extension rate/day, and dock extension rate/day
        o Negotiate remainder of work as package is solidified for each ship
    • Potential after initial award to issue after initial award issue resource planning delivery order to prime for follow on ships
        o DDG 1000 (long-term modernization/maintenance contract)
    • Compete known package for first ship
    • Follow-on ships in the grouping
        o Class Standard Work Templates (for BAWP), modernization service requirements, material burden rate, composite rate per ship, schedule extension rate/day, and dock extension rate/day
        o Negotiate remainder of work as package is solidified for each ship

These were meaningful discussions that allowed for enhanced transparency and understanding of our challenges on both sides. But perhaps Secretary Spencer captured our shared purpose best during his NSRIC speech, when he said,

“Our goal is a true partnership based upon the concept of shared risks producing shared rewards, where we provide industry with a clear line of sight to our needs and resources, and industry understands that our security, stability, and prosperity relies on ready and credible combat forces able to project American power. We must work together, within the legal boundaries, to enable you to provide solutions to our challenges. From my time in the private sector, I learned that no organization can succeed in a vacuum – we cannot do this alone. We need the support of industry if we’re going to increase readiness and meet the operational demand signal of today and tomorrow. We need to be more efficient in how we conduct our business in order to strike the balance between sustainability for industry and value for the taxpayers.”

As we move forward in our efforts to maintain and sustain the Fleet, Navy and Industry have an obligation to seek opportunities to share ideas and concerns in order to continue building the Government-Industry team. While projects such as P2P and Acquisition 2.0 seek to improve on time delivery through government initiatives, we will never be successful without teaming with Industry.

The next Government-Industry opportunity to engage will be at ASNE’s Mega Rust 2019 14-16 May 2019 in Portsmouth, VA. While we are not planning a breakout session, events such as Mega Rust that bring Government and Industry together, are always great communication opportunities. We look forward to continuing our discussions there, and in our other engagements and interactions until then.

And, as always, thank you for your continued support of the Navy and your ongoing dedication to sustaining our Fleet!

V/R, Lloyd
Mr. Lloyd H. Jones
Deputy Director CNRMC, Code 100B
Phone: (757) 400-0012
Cell: (202) 944-0743