SECNAV Announces Five New Principles for Navy Acquisitions

13.05.2010 Secretary of the US Navy Ray Mabus announced five governing principles for US Navy and Marine Corps acquisitions at the US Navy League's annual Sea, Air, Space symposium May 5.

Designed to address the affordability of procurement programs, these principles are also intended to empower program managers to seek cost-savings, establish baseline performance parameters for US Navy and Marine Corps programs, and support development of the acquisition workforce.

Similar to the US Navy and Marine Corps' five energy goals outlined in October, Mabus outlined the acquisition principles the US Navy plans to execute:

• clearly identify the requirements;
• raise the bar on performance;
• rebuild the acquisition workforce;
• support the industrial base; and
• "make every dollar count."

Mabus did, however, draw a clear distinction between the five energy goals and the acquisition principles, stating "These are not goals, these are imperatives, these are "have-tos". In order to build the fleet that we need – the US Navy, the Marine Corps and our industry partners – we have to do all these things."

Discussing the first principle, Mabus said the US Navy would put all programs through a formal Gate Review Process. This process will allow acquisition teams to properly analyze the requirements before granting a contract. "We're going to be doing this analysis on everything," the Secretary said, including the future SSBN, the Ohio-class replacement submarine and other initiatives.

Turning to the second principle, Mabus vowed to raise the bar on performance by holding both industry and the US Navy - Marine Corps acquisition team more accountable for what they do. "Quality has to improve, man hours have to come down, and budgets and milestones have to be met. That's the bar," he said.

In line with the second principle, Mabus also announced a new aviation and shipbuilding change-order policy that requires leadership review "to ensure that both unit cost and total ownership costs are considered before a change-order is approved." He said the US Navy would redefine acquisition standards to allow for more industry collaboration.

Citing the third principle and current education programs in place, Mabus said, "the US Navy and Marine Corps are creating wonderful opportunities for the future of America [that] will bring some very lasting benefits to our country." The secretary challenged his acquisition team to enhance these efforts with a plan "to double the Department of US Navy's science, technology and engineering outreach" by 2015.

Mabus addressed the fourth principle by announcing establishment of an Industrial Base Council that will begin meeting later this year. The Council is intended to bring together representatives from major shipbuilding and aircraft firms and will be "an opportunity for [the US Navy and Marine Corps] to be more informed about industry concerns," he said.

Mabus also encouraged top performing companies to improve performance so that they will qualify to join a Preferred Provider Program, expected to be released for comment in the Federal Register later this month. Through this program, the US Navy would reward contractors with favorable contract terms, conditions and payment schedules "in return for consistent and exemplary contract performance." Mabus mentioned that energy efficient products and manufacturing capabilities would be part of entry criteria.

Mabus also said the US Navy will turn to fixed-price contracts to "make every dollar count." Cost-plus contracts will only be used for high risk, first-of-class ships and other high-risk systems.

Mabus closed by saying "The US Navy and the Marine Corps are the most formidable expeditionary fighting force the world has ever known. There has never been a force like the fleet we put to sea and the Marines that ride with that fleet and fight ashore. Building an effective partnership between industry and the US Navy will reduce costs and will lead us to the fleet that we need. We owe that to America and we owe that to the generations that will follow us."