PROCURE-TO-PAYTRAINING SYMPOSIUM 2018

DCMA Overview

Presented by: Mr. Craig Morgan, DCMA

12018 Procure-to-Pay Training Symposium

One team, one voice delivering global acquisition insight that matters.

We are the leading experts in contract administration, Independent cost analysis,

quality assurance, cost, schedule and supply chain predictability.

We will enable our partners to achieve contract and program objectives.

INTEGRITY - “Committed to the highest standards of ethical and moral behavior at all times”

SERVICE - “Working for the benefit of our nation and putting professional responsibilities before self-interest”

EXCELLENCE - “Committed to exceptional performance in everything we do”

We will conduct comprehensive contractadministration in order to provide independent analysis of contractor’s performance, program

status & risk.

We will ensure on time delivery of high quality, affordable products to the warfighter.

DCMA’s Mission, Values and Vision

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One team, one voice delivering global acquisition insight that matters.

DCMA Mission, Authority and FunctionsDepartment of Defense Directive 5105.64

• Mission: DCMA performs Contract Administration Services for DoD and authorized federal agencies, foreign governments, international organizations, and others.

• Specific guidance on roles & responsibilities for Contract Administration and Maintenance– Federal Acquisition Regulation 42.302(a) – Defense Federal Acquisition Regulation Supplement 242.302(a)

– 78 functions (normally assigned to DCMA) if DCMA administers the contract• Incorporates broad range of disciplines: Contract Administration, Engineering, Quality Assurance, Financial

Management and Payments, Higher level Financial Analysis, Project Management, Industrial and Property Management, Safety, Aviation, and Accounting

4 functions must be performed by DCMA if we administer the contract• Negotiation of forward pricing rate agreements • Establishment of final indirect cost rates and billing rates• Determination of contractor’s compliance with Cost Accounting Standards; including disclosure statement adequacy

& compliance• Determination of Adequacy of contractor's accounting system

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One team, one voice delivering global acquisition insight that matters.

Under Secretary of Defense(Acquisition & Sustainment)

Defense Contract Management Agency

ChairmanJoint Chiefs of Staff

Secretary of Defense

Buying Commands

Combat Support Agency

Army

Navy

Air Force

Marines

Contract AdministrationDefense Logistics

Agency

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Defense Acquisition Community

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Financial & Business OpsMs. Conklin

Contracts (Acting)

Ms. Fitzpatrick

Quality AssuranceMr. Shields

Information Technology

Mr. Coleman

Human CapitalMs. Butera

Portfolio Management &

Business IntegrationMr. Eady

Technical DirectorateMr. Fanney

Special PrgmsMr. Norris

Mobilization Assistant

Col Kubinec

Office of Independent AssessmentMr. Conforto

General CounselMs. Bell

Equal Employment OpportunityMs. Galimore

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InternationalCAPT Ebright

Sr En AdvisorCMSgt Mitchell

Central RegionCOL Wizner

East RegionCAPT Murphy

Chief of Staff (Acting)Ms. Short

Small BusinessMs. Evelyn-Bellamy

Diversity & Inclusion

Mr. Braxton

Dep DirectorMs. Greening

Organizational Chart

DirectorVADM Lewis

Aircraft Operations

CAPT Batchelor

West RegionCol David Learned

Corporate OperationsMs. Short

One team, one voice delivering global acquisition insight that matters.

Presence in the U.S.

DCMA Western RegionHeadquarters – Carson, CA

Contract Management Offices- Boeing Huntington Beach, CA- Denver, CO- Lockheed Martin Denver, CO- Lockheed Martin

Sunnyvale, CA- Los Angeles, CA- Palmdale, CA- Phoenix, AZ- Raytheon, Tucson, AZ- Santa Ana, CA- Stockton, CA- NPO

(NASA Product Operations), San Antonio, TX

DCMA Eastern RegionHeadquarters – Boston, MA

Contract Management Offices- Atlanta, GA- Baltimore, MD- Boeing, Philadelphia, PA- Boston, MA- Garden City, NY-Hampton, VA- Hartford, CT- Lockheed Martin,

Marietta, GA- Lockheed Martin,

Moorestown, NJ- Lockheed Martin, Orlando, FL- Manassas, VA- Orlando, FL- Philadelphia, PA- Raytheon, Tewksbury, MA- Sikorsky Aircraft,

Stratford, CT- Springfield, NJ- APO (Aircraft Propulsion Operations), Hartford, CT - NSEO (Naval Special Emphasis Operations), Philadelphia, PA

DCMA Central RegionHeadquarters – Chicago, IL

Contract Management Offices- Bell Helicopter,

Forth Worth, TX- Boeing, St. Louis, MO- Chicago, IL- Dallas, TX- Dayton, OH- Detroit, MI- Huntsville, AL- Lockheed Martin,

Forth Worth, TX- Twin Cities, MN- AIMO (Aircraft Integrated

Maintenance Office) Operations), St. Augustine, FL

Contract Management Offices

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One team, one voice delivering global acquisition insight that matters.

DCMA International

Europe

Americas

HQ DCMAInternational

Middle East

Pacific

Canada• LAV (SANG)• F-18• F-35/F-135• AH-64• V 22

United Kingdom• F-135 / F-35• F-16• JSOWS

Korea• F-15 / F-16• A-10• H-60• RC-12• CH-47

Switzerland• F-18

France• UH-1• AH-1• ALFS

Israel• F-35• F-35 Helmet

Kuwait• AH-64• M1A2• CH 47

Saudi Arabia• F-15C/D• F-15SA• E-3

India• CH-47• C-130J• AH-64• F-16 Atsugi, Japan

• SH-60• F-18• SM-3

Nagoya, Japan• F-35 FACO

Malaysia • C-130J

UAE • AH-64• CH47

Thailand• F-16

Taiwan• F-16

Turin, Italy• C-27J

Cameri, Italy• F-35 FACO

Turkey• F-35• F-135 FACO

Mizuho, Japan• F-135 FACO

Kisarazu, Japan• V-22

Australia• F-35• H-60• F-18

Christchurch, New Zealand• LC-130H - National Science Foundation

Oman • Vehicles(Special Purpose)

Tunisia• F-5 E/F

Denmark• F-35• F-16

Norway• F-35

S. Africa• Husky 2G

Colombia• USA RDECOMR&D AGRMNTS

Brazil• USA RDECOMR&D AGRMNTS

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One team, one voice delivering global acquisition insight that matters.

• Full service on-site supporto Can be either co-located with major contractor or

geographically oriented

• On-site eyes and ears of the customers

• Accept products for military services

• Provide business systems insight and ensure compliance

• Analyze contractor performance capability• Assess contractor progress and authorize payments

Mandatory Structure

Flexible ─ based on workload

Contracts GroupQuality

Assurance Group

Engineering/Manufacturing

Group

Commander/Director

QA Team Engineering Team Manufacturing Team Contracts Team

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Typical CMO

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Total Contract Amount $5.1 trillion

Obligated Amount $2.0 trillion

Serviced Contractor Locations 19,495

Active Contracts 343,261

• Contract Unliquidated Obligations $232.4 billion

• ACAT I (IAC, IC, ID) & II Programs 163

Aircraft Accepted (FY17) 1,354

Aircraft Acceptance Flying Hours (FY17) 16,810

Oversight of Government Property $154.6 billion

Progress Payments $19.7 billion

Performance-based Payments $12.3 billion

1st Qtr FY18 Data

DCMA at a Glance

Scope of Work Span of ControlCivilians On-Board 11,258

Military (Active Duty – 390, Reserve – 147) 537

Budget Authority $1.46 billionFY18 Request

Reimbursable Target $238.9 million

Authorize $630 million in contractor payments per business day

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Ensuring the Warfighter gets what was ordered on time and at the right cost

One team, one voice delivering global acquisition insight that matters.

$6.03 billion actually saved, recovered and cost avoided against a $1.4 billion budget =

4.3:1 Return on Investment

DCMA Value to DoD – Fiscal Year 2017

DCMA Measurable Return on Investment (ROI)

• Saved: $749 million− EVMS streamlining efforts, final incurred cost rate settlements

• Recovered: $2.008 billion− Litigation, contract terminations, property claims

• Cost Avoided: $3.279 billion − Commercial Pricing, Worker's Comp claims, EEO settlements

• Projected savings over the next 3-5 years: $2.65 billion− Pricing proposals and final incurred cost recovery efforts

DCMA Contribution to Lethality• In Fiscal Year 2017, DCMA delivered 741.2 million items worth $173.3 billion to the warfighter

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We find $6 billion for every $1.4 billion the DoD invests in us

One team, one voice delivering global acquisition insight that matters. 11

Product Deliveries(October 2017 to January 2018)

Platform Deliveries (Unit Cost > $1M)

Aircraft• 26 Fighters ($2.3B)• 19 Tiltrotor ($1.3B)• 5 Electronic Warfare ($300.5M)• 12 Transport ($729.9M)• 2 Airborne Early Warning ($289.1M)• 4 Anti-Submarine Warfare ($554.2M)• 101 Helicopters ($1.2B)• 19 UAV’s ($129.3M)

25 Aircraft Engines ($229.7M)31 Missile Systems ($376.4M)273 Missiles ($812.1M)67 Combat Vehicles ($216.1M)2 Radar Systems ($51.4M)15 Sonar Systems ($49.4M)

Magnitude of Item Deliveries

Total Items• 150.2M items delivered• $25.5B in total product deliveries

DLA Contract Items• 25.4M items delivered• $2.7B in total product deliveries

Program Items • 490.7K items delivered• $15.1B in total product deliveries

Aircraft• 2 Fighters ($95.2M)• 4 Tiltrotor ($259.1M)• 1 Electronic Warfare ($60.1M)• 4 Anti-Submarine Warfare ($554.4M)• 8 Helicopters ($129.6M)

8 Aircraft Engines ($163.1M)15 Missiles ($25.4M)32 Combat Vehicles ($68.5M)5 Targeting Pod Enhancements ($8.1M)6 Countermeasure Systems ($9.7M)1 Sensor Netting System ($1.5M)

Total Items• 36.3M items delivered• $4.3B in total product deliveries

DLA Contract Items• 7M items delivered• $600M in total product deliveries

Program Items• 49.6K items delivered• $1.9B in total product deliveries

Platform Deliveries (Unit Cost > $1M) Magnitude of Item Deliveries

OCT–DEC 2017 JAN 2018

72% On-Time Delivery 72% On-Time Delivery

Direct Warfighter Support

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DCMA Acquisition Workforce

85%

15%

DCMA Civilian Workforce

Acquisition

Non-Acquisition

35%

30%

13%

7%

3%3%

2%

7%

DCMA Acquisition Employees

Quality Assurance

Contracting - Cost/Pricing

Engineers

Industrial Specialist

Program Integration

Property Management

Information Technology

Various Other

One team, one voice delivering global acquisition insight that matters.

Pre-Award/Steady State

•Forward Pricing RateAgreements

•Production capacity

• Commercial Items• Business system insight• Financial Stability

Request for Proposal and

Source Selection

• Proposal analyses• Contract/clause construction• Market research/assessment• Anticipated technology shifts

• Cost & Pricing• Corporate motivations for incentive structures• Reality of production promises• Lessons learned

Contract Performance

ContractCloseout

• Negotiate final rates• Reconcile deliverables• Property disposition

• Contract Closeout• Funds Release• Canceling Funds

• Program Assessment Reports• Small business compliance• Payment authorizations/withholds• Production status compliance

• Contractor Performance• Delivery status• Contractor Fraud• Subcontract insight

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Where DCMA Contributes by Phase

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