lead time | The Contracting Education Academy

December 14, 2020 By cs

IRS moves to speed up contracting through new procurement research partnership

The Internal Revenue Service recently set sights on introducing new technology-driven capabilities and applying innovative data science techniques to improve and elevate its procurement operations.

And last week, the agency launched a research partnership valued at almost $1 million that marks a deliberate move in that direction.

Through the newly unveiled collaboration, agency officials, university professors and students equipped with procurement and machine learning experience, and members of Virginia-based small business Data and Analytic Solutions will form a multidisciplinary team intended to accelerate the IRS’ contracting and award processes. It emerges as federal buying largely remains notoriously slow.

“When it comes to contracting, everyone seems to want it faster, cheaper, and better,” IRS Chief Procurement Officer Shanna Webbers told Nextgov over email Tuesday. “We recognized that we cannot continue to do business as usual and expect a different result.”

With that view top of mind, Webbers’ office earlier this year embarked on what she called “a game-changing transformation” that drew from feedback shared by procurement employees within the agency, as well as its customers and industry partners. Building on that, the organization is bringing forth new tools and techniques — like data analysis, visualization, and machine learning, among others — to advance how work is performed.

Keep reading this article at: https://www.nextgov.com/emerging-tech/2020/12/irs-moves-speed-contracting-through-new-procurement-research-partnership/170431/

May 14, 2020 By cs

Why restarting the global economy won’t be easy

As the world contemplates ending a massive lockdown implemented in response to COVID-19, Vinod Singhal is considering what will happen when we hit the play button and the engines that drive industry and trade squeal back to life again.

The U.S. gets close to a trillion dollars of products annually from Asian countries, and most are shipped by sea, which requires a four-to-six-week lead time. Here, containers are stacked at a Georgia Ports Authority facility in Savannah. (GPA Photo: Stephen B. Morton)

Singhal, who studies operations strategy and supply chain management at the Georgia Institute of Technology, has a few ideas on how to ease the transition to the new reality. But this pandemic makes it hard to predict what that reality will be.

“We know pandemics can disrupt supply chains, because we’ve had the SARS experience, but this is something very different,” said Singhal, the Charles W. Brady Chair Professor of Operations Management at the Scheller College of Business, recalling the SARS viral pandemic of 2002 to 2003. But that event did not have nearly the deadly, worldwide reach of COVID-19.

“There is really nothing to compare this pandemic to,” he said. “And predicting or estimating stock prices is simply impossible, unlike supply chain disruptions caused by a company’s own fault, or a natural disaster, like the earthquake in Japan.”

The earthquake that shook northeastern Japan in March 2011 unleashed a devastating and deadly tsunami that caused a meltdown at a nuclear power plant, and also rocked the world economy. It was called the most significant disruption ever of global supply chains. Singhal co-authored a study on the aftereffects, “Stock Market Reaction to Supply Chain Disruptions from the 2011 Great East Japan Earthquake,” published online in August 2019 in the journal Manufacturing & Service Operations Management.

But COVID-19 represents a new kind of mystery when it comes to something as complex and critical to the world’s economy as the global supply chain, for a number of reasons that Singhal highlighted:

The global spread of the virus and duration of the pandemic. “We have no idea when it will be under control and whether it will resurface,” Singhal said. “With a natural disaster you can kind of predict that if we put in some effort, within a few months we can get back to normal. But here there is a lot of uncertainty.”
Both the demand and supply side of the global supply chain are disrupted. “We’re not only seeing a lot of factories shutting down, which affects the supply side, but there are restrictions on demand, too, because you can’t just go out and shop like you used to, at least for the time being,” he said. “And all this is taking place in an environment where supply chains are fairly complex – intricate, interconnected, interdependent, and global.”
Longer lead times. “We get close to a trillion dollars of products annually from Asian countries, about $500 billion from China,” Singhal said. “Most are shipped by sea which requires a four-to-six-week lead time. The fact that logistics and distribution has been disrupted and needs to ramp up again will increase lead time. So, it will take time to fill up the pipeline, and that is going to be an issue.”
Supply chains have little slack, and little spare inventory. While manufacturing giants such as Apple, Boeing, and General Motors have more financial slack to carry them through a massive economic belt tightening, their suppliers, spread out across the globe, come in different sizes, different tiers, “and these smaller companies don’t have much financial slack,” said Singhal, pointing to a report of small and medium sized companies in China, “which have less than three months of cash. They’ve already been shut down for two months, and cash tends to go away quickly.

“Many of these companies may go bankrupt,” he added. “So we need to figure out how to reduce the number of bankruptcies. Government is going to play an important role in this, and the stimulus package the U.S. has approved will be helpful.”

Trying to get a handle on how stock markets are responding to all that has happened is like trying to take aim at a moving target during a stiff wind. Volatility has increased significantly since February 13, when the Dow Jones index reached an all-time high of about 29,500.

“That’s because we did not expect the pandemic to spread and disruptions initially were low because of pipeline inventory,” Singhal said, noting that since then the Index dropped sharply, to 18,500 on March 23 (a decline of nearly 38 percent), it picked up and was back to 22,000 by March 30. “The same is true of other stock markets. The Chinese stock market was down 13 percent, but they seem to have the pandemic under control.”

While COVID-19 is making it difficult to predict what the market will look like, Singhal has some ideas of which industries will be most affected.

“Travel, tourism, entertainment, restaurants – businesses that rely on people going out—will take a long time to recover, in terms of profitability and stock price, even once the pandemic is contained,” he said. “People are going to be hesitant to travel after all this. Tourism will take a hit.”

Essentials like groceries are surging as people stock up in reaction to being shut in, but this isn’t a long-term trend. Singhal doesn’t expect this trend to continue as shopping habits and store shelves eventually normalize.

Companies that sell basics, with a strong online presence, will do well, “but industries like automobiles and electronics, which have global supply chains and have a hard time replacing specialized, high-tech components will be affected,” said Singhal, who also has suggestions on the most important issues to address and how to help speed up the recovery and bring supply chains back to normal (or whatever normal looks like after this):

The ability to bring capacity online, especially for small and medium-sized companies. “Facilities and equipment may need some time to restart,” he said. “Staffing is a big issue. How quickly can you get people back to work? Also, can you get the raw materials and build up the inventory to support production? That may be tough when pent up demand is being released and everybody is competing for limited supplies.”
Distribution. Lead times already are long, he notes, and a sudden increase in demand for logistics and distribution services as everybody ramps up again could extend lead times.
Prevent bankruptcies. Government programs need to be established (like the U.S. stimulus package) to keep small- and medium-sized firms in business. This concern extends to second- and third-tier suppliers, and large firms like Apple or Boeing or GM, should do the same for their most critical suppliers.
Build slack. “Preserve cash, get new lines of credit or draw down lines of credit, maybe cut dividends or stock repurchases,” Singhal said. “And build inventories of critical components.”

Singhal also stresses the need for transparency, up and down the supply chain: “What that means is, companies need to have a good understanding of what is happening to their customers and suppliers, but not just their immediate, first tier customers and suppliers, but also their customers and suppliers, and so on up and down the line.”

It will be very important going forward for the next several months to monitor the health of the supply chain from both the customer perspective and a supplier perspective, because this is a new world, says Singhal, who adds an optimistic postscript, “It’s a crisis situation now, but I think we can put it back together.”

Source: http://www.news.gatech.edu/2020/05/10/why-restarting-global-economy-wont-be-easy

For more coverage of Georgia Tech’s response to the coronavirus pandemic, please visit our Responding to COVID-19 page.

The Contracting Education Academy at Georgia Tech has established a webpage where all contract-related developments related to the coronavirus (COVID-19) are summarized. Find the page at: https://contractingacademy.gatech.edu/coronavirus-information-for-contracting-officers-and-contractors/

April 13, 2018 By AMK

DoD can reduce time to contract

Every administration takes office with the intent to improve the government’s performance, including reducing the time it takes to award contracts for the services and products the government needs for its operations.

**The Marine Corps uses this chart as a guideline for commercial item lead times.**

Nearly every administration in the past 50 years has undertaken specific steps to reduce what is commonly called Procurement Acquisition Lead Time, or PALT. In the end, though, it’s hard to find concrete evidence of success, as complaints of excessive PALT continue to plague the acquisition system and present challenges to both government and industry.

What exactly is the problem? Why does it take too long to get to a signed and executable contract? Is it the time it takes to determine the government’s requirements? To translate those requirements into a statement of work (or similar description) that forms the basis for a solicitation and ultimately a contract? Is it the time for the government to solicit and evaluate bids for that work? To award the contract and get to a start date? To comply with all the procedures and reviews and reports needed along the way? And what exactly is “too long” a time for any or all of those steps?

Keep reading this article at: https://www.federaltimes.com/acquisition/2018/03/23/dod-can-reduce-time-to-contract/

November 17, 2016 By AMK

When and when not to accelerate acquisitions

Why don’t we do all our acquisition programs faster? What keeps us from having all acquisition programs be “rapid” acquisitions? The short answer is that, if we choose to, we can trade quality for time.

Sometimes that is smart, and sometimes it isn’t.

**The author of this article is Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics.**

Often, and for good reasons, we demand high quality, and that takes more time. What I mean by “quality” in this case is the suite of features we want in the equipment intended for a large fraction of the force and that we keep in our inventory for a long time — 30 or 40 years, in many cases. Quality includes high reliability, maintainability, operation in a range of climates and terrains, modularity and upgradability, well-designed user interfaces, cybersecurity, robustness against responsive threats, and effective training and logistics systems. None of these things is free, and they all take time to design for and test.

For most so-called Programs of Record, we do take the time to design and build products of the quality desired by the customers, our operational communities. If you want something quick, it is generally going to be of lower quality — but that may be perfectly fine, depending on what you want. This is the operator’s call; the acquisition system responds to operator requirements. As acquisition professionals, we do want a two-way continuing discussion about requirements throughout the design and development process — and beyond. That conversation is necessary because design and development always involve a voyage of discovery. And because many desired design features have to be traded off against each other and against cost, those trade-offs should be operator/customer decisions, but should still be decisions informed by acquisition professionals.

To do anything, we need money and a contract. There are vehicles that let us spend some money quickly, particularly for early stage prototypes, and there are some contract types that allow us to move out quickly, but they have limitations on scope, purpose, and amount we can spend. Lead time can be close to zero, or up to 2 years if we have to wait for a budget to be prepared, submitted and funded by Congress. We can work contracting activities (preparation of the request for proposal or even source selection) and milestone review processes (Defense Acquisition Board document preparation, as required) in parallel with the process of getting money — and usually we do so. If we already have the money, then some time is needed to have a contract. Again, for some limited purposes, this can be fast — but for major competitive awards this now takes about 18 months, close to the time it takes us to get funding from Congress. That’s twice the time it used to take a couple of decades ago, and one of the actions we are working is to reduce this lead time.

Experimental Prototyping

If we just want a small number of prototypes for experimental purposes, and we only care about some key features and not the overall quality of the product, we can deliver in a matter of months or a few years, depending on how much new design work has to be done and the lead time for building small numbers of items or acquiring any needed subsystems from the manufacturers in the supply chain. If we want to try out a new kind of capability, to experiment, and don’t care about long-term ownership quality quality-related features, then rapid prototyping is the way to go. We can do this sort of thing fast, and the technical community loves to work on projects like this. However, some quality aspects such as safety must be dealt with when we work with energetics such as munitions and rocket propellants. We can do experimental prototyping without having a program of record, so no acquisition system bureaucracy overhead need be involved in an experimental prototype program. The product you will get from an experimental prototyping program is unlikely to be one you can just replicate and field in large numbers—it wasn’t designed for that. Sometimes we have liked the key features of experimental prototypes and just bought more of them. Because of their poor quality for long-term ownership and use, this has often been a disaster (see Global Hawk and the Exoatmospheric Kill Vehicle, as examples).

Assembled Items

Next up on the quality hierarchy are assembled items that focus on one or two key performance parameters that we do want in larger quantities, but where we are willing to sacrifice some aspects of quality in order to have an important operational capability fast, usually for operational reasons or maybe because we’ve been surprised by a threat. Think Mine-Resistant Ambush Protected MRAP (vehicles), which were pulled together from existing automotive components. The goal was to get more protection to the field and to get it fast. MRAPs were a big success. We saved a lot of lives. MRAPs are relatively simple designs assembled from existing components and designed for low-end threats. They lack a lot of the features needed or desired by the Army, however, and almost all of the 30,000 or so we built are going out of the inventory now that the major counterinsurgency campaigns are over.

New Designs

Next on the quality scale are new designs that take into account all the things the customer wants. These are high-quality products, and they take longer, but that’s because we ask for more of them and have to do more work designing, building and testing. We want integrated designs that have many features desired by the customer (again requirements). Think of the Joint Light Tactical Vehicle (JLTV). The JLTV is a much higher-quality product than any of the MRAPs. It will be in the Army inventory for decades, and most of the cost will be in maintenance and sustainment. The Army wants a highly reliable, maintainable design that will operate in a wide variety of terrain and in any climate. This is very different from what we did with MRAPs. JLTV is still a relatively simple design, but it has taken several years to mature the designs and pick a winner. For most of these systems, we do use the standard acquisition system milestones associated with decisions to start risk reduction (if needed), design for production and production itself. When the acquisition system’s set of milestone decisions is needed, we do this in parallel with the actual work so we don’t slow programs down. The decision process adds overhead, but it generally does not add time.

Highest Quality

Highest of all in terms of quality are systems like the F-35 fighter jet. These are designs that integrate the newest technology, have the highest possible performance, and that we count on for a significant, decades-long military advantage. We want quality features like high reliability, maintainability, upgradability for tech insertion, well-designed user interfaces, cybersecurity, anti-tamper, resilience against jamming and responsive threats, and a host of other things our operators understandably desire. These systems are the Formula 1 race cars that are going to win against the best there is and do so for years, not just for one racing season. They are not Chevies. These are our highest quality and most difficult products, but these are also the ones that often make the most difference in terms of technological superiority and operational dominance. They take several years in development, and often we need to do a risk-reduction technology maturation phase before we start designing for production. That adds 3 years or more if we build risk reduction prototypes before we start designing for production. For these systems, you do have to wait about 10 years, but they are what populates most of our force. Think F-18 combat jet, Aegis missile defense, DDG-51 destroyer, the Virginia SSN submarine, F-15 and F-22 fighter jets, C-17 military transport aircraft, AMRAAM air-to-air missile, Abrams tank, Bradley fighting vehicle, Patriot missile, and Apache helicopter. Notably, every one of these high-quality systems struggled to get through development and into production. Most were close to cancellation at some time in their development cycles.

The acquisition system can produce experimental prototypes quickly, but if our customers want a high-quality product that we will have in the inventory in large numbers for a lot of years, that takes longer. Many of the demonstrations we have funded in the budget are experimental early prototypes. We are effectively buying options to do lower risk follow-on Engineering and Manufacturing Development phases leading to production. The ability to afford those follow-on programs, or even a subset of the concepts we will have demonstrated in the next few years, will be problematic. Unfortunately, the threats we are most worried about are not low-end threats — we are going to need high-quality robust designs.

This article originally appeared in the November-December 2016 Defense AT&L Magazine now available at: http://dau.dodlive.mil/category/defense-atl/