AIPM- Exam 3

After Congress passes the DoD Appropriations Bill and the President signs it, the Office of Management and Budget (OMB) distributes the Budget Authority to DoD.

Apportionment

Who sends apportions funds (Budget Authority) to the DoD Comptroller on a quarterly, annual, or other periodic basis depending on the appropriation?

Office of Management and Budget (OMB)

Flow of funds:

CONGRESS = APPROPRIATIONOFFICE OF MANAGEMENT& BUDGET = APPORTIONMENTDEPARTMENT OF DEFENSE = RELEASEDEPARTMENT OF ARMY = ALLOCATION

Authority granted by appropriation law to enter into obligations that will result in immediate or future outlays.

Budget Authority

What does the Execution Phase in the PPBE process consist of:

CommitmentObligationExpenditureOutlay

An administrative reservation of funds, made upon receipt of a request for spending.

Commitment

Is the legal reservation of funds to make a future payment of money.

Obligation

A charge against available funds evidenced by voucher, claim, or other document approved by a competent authority (represents the actual payment of funds).

Expenditure

Occurs when the vendor cashes the expenditure check and money flows from the Treasury to the vendor or supplier.

Outlay

Happens when a program office has a history of under-utilizing their budget authority.

Over-funding

Occurs when a program cannot execute its planned program with the funds requested.

Under-funding

After funds have passed their obligation period (e.g., RDT&E is 2 years) they go into the _______ for 5 years and cannot be used for new obligations

Expired Account

After the 5-year "expired" period has passed the funds are ________ and can no longer be used

Cancelled

Prepared for all appropriation years that have not been completely expended, even if the period of obligation availability has expired.

Expenditure Plans

Prepared for each fiscal year of funding that is available for new obligations.

Obligation Plans

Requires that funds appropriated by Congress be used only for the programs and purposes for which the appropriation is made.

Misappropriation Act

Prohibits an obligation in excess of the appropriated amount or amount permitted by agency regulations. (Forbids contract or obligation in advance of appropriations and requires agency regulations to monitor and fix responsibility for violations of the act.)

Anti-Deficiency Act

Funds appropriated for a particular area can only be used during the period in which the appropriation is available for new obligations.

The Bona Fide Need Rule

Permits the use of funds for purposes other than those originally intended by Congress.

Reprogramming

Three types of Reprogramming:

Congressional Prior Approval ReprogrammingInternal Reprogramming Below Threshold Reprogramming

Congressional Prior Approval Reprogramming are used when:

Congressional Special Interest ItemMajor system procurement quantity increases General Transfer Authority

Charaterisitics of Internal Reprogramming actions:

No change in the purpose or amounts approved by Congress. Approved by the DoD Comptroller Administrative realignment of funds

Transfer of funds among programs within an appropriation category, but it is subject to certain rules and limitations (up to $20 million of procurement funds can be transferred into a line item and up to $10 million of RDT&E funds can be transferred into a program element through below-threshold reprogramming).

Below Threshold Reprogramming

Below Threshold Reprogramming cannot be used to:

Change the fiscal year (FY) of any funds Change the appropriation category of any funds Transfer funds that require Congressional involvement

Level of Control for RDT&E is the?

Program Element

Level of Control for Procurement is the?

Line Item

The use of an integrated management system that coordinates work scope, schedule & cost goals to objectively measure progress toward these goals.

Earned Value Management (EVM)

Purpose of EVM:

To provide contractor and gov't program managers with accurate data to monitor the execution of their contracts

The time-phased budget plan against which contract performance is measured (initial basis comes from the negotiated cost of the contract and does not include profit or fee).

Performance Measurement Baseline (PMB)

What is the three-step process of PMB:

1. Define the Work (Scope)2. Schedule the Work (Schedule)3. Allocate Budgets (Budget)

How to develop PMB:

1. Identify SOW (Scope of Work)2. Extend WBS to control account work package3. Arrange work packages in order4. Sequence over time5. Classify the work and select an EV technique6. Budget the work packages7. Spread the budget over time8. Calculate cumulative BCWS

An assessment of the contractor's performance measurement baseline conducted jointly by the gov't and the contractor. Also is mandatory for all EVMS contracts (no formal report required).

Integrated Baseline Review (IBR)

Integrated Baseline Review (IBR) objectives:

1. Ensure work package technical content consistent with contract SOW2. Ensure logical sequence of effort consistent with contract schedule3. Assess validity of control account budgets, resources and time-phasing4. Conduct technical assessment of EVM methods (are we getting the right data when we need it?) 5. Facilitate joint ownership of program cost/schedule requirements

IBR Process:

PMB AssessmentIBR PreparationIBR execution

Primary tool for measuring program performance and identifying risks.

PMB Assessment

Begin as soon as practical after determining the need for the IBR.

IBR Preparation

Focus on key risk areas and management processes.

IBR Execution

This metric compares what we planned to spend (BCWP) with what we have actually spent (ACWP) to accomplish a piece of work (BCWP-ACWP)

Cost Variance

This metric compares what we have accomplished (BCWP) with what we had planned to accomplish (BCWS) at a given point in time (BCWP-BCWS). (Does NOT mean schedule slip).

Schedule Variance

Measure of how efficiently the contractor is performing the work based on the original planned budget (the VALUE one receives for every actual dollar expended).

Cost Performance Index (CPI)

Cost Performance Index formula:

Budget Cost of Work Performed (BCWP) / Actual Cost of Work Performed (ACWP)

Measure of how efficiently the contractor is performing the work based on the original time phasing of the budget.

Schedule Performance Index (SPI)

Schedule Performance Index formula:

Budget Cost of Work Performed (BCWP) / Budget Cost of Work Scheduled (BCWS)

Relationship between budget of work complete and the budget for all planned work in the total contract.

Percent Complete

Percent complete formula:

BCWP / BAC x100

Relationship of the actual costs incurred to date to the budget planned for all planned work in the total contract.

Percent Spent

Percent Spent formula:

ACWP / BAC x100

Metrics forecast project over-runs and under-runs

Variance at Completion

Actual Costs accumulated to date + Estimated Cost of the Work Remaining.

Estimates at Completion (EAC)

Required for all contracts complying with EVM standards (5 formats- PM chooses one or combination).

Contract Performance Report (CPR)

Mandatory for DoD EVMS contracts and show the "How" and "When" of the Integrated Master Plan (delivered electronically in contractor's chosen format).

Integrated Master Schedule (IMS)

___________, __________are required for DoD cost or incentive contracts, subcontracts, other transactions and intra-government work agreements with a value at or greater than $50M (then year dollars).

Compliance and validation

If the contract value is less than $50M, formal validation is NOT required; however, the contractor needs to maintain ________ with the standard

Compliance

EVMS Guideline standards do not apply for contracts and programs that are:

Less than $20MFirm Fixed PriceTime and MaterialsLevel of Effort

A good EVMS sets the conditions to develop, progress and maintain a __________.

Performance Measurement Baseline (PMB)

A formal agreement created and signed by the Program Manager and those in the chain of authority up to the Milestone Decision Authority (MDA)

Acquisition Program Baseline

Defense acquisition policy requires every acquisition program shall establish an acquisition program baseline (APB) to ________________.

document the cost, schedule, and performance thresholds and objectives of that program beginning at program initiation.

Is a breach of one or more thresholds of the Acquisition Program Baseline.

Program deviation (breach)

APB sets the program's threshold and objective parameters in three categories:

PerformanceScheduleCost

According to policy, when must a PM notify the MDA of the reason for the deviation and the actions needed to bring the program back within baseline parameters?

Within 30 days (should be a soon as possible)

Within 90 days from a program deviation, one of the following actions must be taken:

1. Program brought back on track or a new APB is approved, changing only those parameters that deviated2. OIPT- level review is conducted to review the PM's proposed baseline revisions and make recommendations to the MDA

Congressional unit cost reporting requirements for Major Defense Acquisition Programs (MDAPs)

Nunn-McCurdy Breach

Two unit cost criteria (in base-year dollars):

Program Acquisition Unit Cost (PAUC)Average Procurement Unit Cost (APUC)

Increase of 15% from the current baseline estimate or 30% from the original baseline estimate (Service Secretary notifies Congress within 45 days of unit cost report (e.g., program deviation report and DoD submits a Selected Acquisition Report).

Significant Breach

Increase of 25% from the current baseline or 50% from the original baseline estimate (in addition to notification and SAR, the USD(AT&L) shall: conduct root cause analysis and assess costs.

Critical Breach

Requirements If Program Is Not Terminated:

Restructure program to addresses the root cause(s) Rescind recent Milestone Require a new Milestone

If Program Is Terminated, the Secretary will submit a report to Congress stating:

Explanation of the reasons for terminating Alternatives considered to address any problemsHow DoD plans to meet any continuing joint military requirements

If either SAR or certification are not submitted on time, funds for MILCON, RDT&E and Procurement may not be obligated for a major contract under the program.

Suspension of Obligations

Part of the systems engineering technical management process which includes participation by subject matter experts who are independent of the program offices; chaired by a senior individual who is outside the program office.

Technical Reviews

Purpose of Technical Reviews:

Assess maturity of the design or development effort (PDR or CDR) and clarify design requirements

Triggers for technical reviews:

Drawings or designs that have reached a certain level of maturity Testing being completed

Who takes the lead of Configuration Management for a particular configuration item?

Either the Government or Contractor

IPT's main Configuration Management functions are to:

identify, control, audit, and account for the status of the configuration

Use configuration management and technical reviews to help develop a ____________ then track and control configuration changes.

Configuration Baselines

Types of baselines:

FunctionalAllocatedProduct

What ensures all product documentation is consistent with its supporting information?

Configuration Management

Design of a system often evolves as the users needs change over time and as new opportunities arise (highest level baseline)

Functional

Design requirements for configuration items below the system level and includes functional specifications, which describe the performance characteristics of a "configuration item" including its Form, Fit, and Function ("designed to spec").

Allocated

Lowest level baseline that concerns the Govnt ("build to").

Product

Maintains control of the functional or system-level baselines.

Government

Responsible for the allocated, or "design-to" level.

Government or Contractor

Responsible for the product, or "build-to" level and below.

Contractor

Types of Termination:

Termination for convenienceTermination for defaultTermination for cause

Allows the Government the unilateral right to completely or partially terminate a contract if: work no longer needs to be done or there is no more funding available.

Termination for Convenience

Allows the Government to completely or partially terminate a contract for non-commercial items because the contractor fails to: deliver on time; endangers a timely delivery; fails to comply with the terms or conditions of the contract.

Termination for Default

Allows the Government to completely or partially terminate a contract for commercial items because the contractor fails to: deliver on time; endangers a timely delivery; fails to comply with the terms or conditions of the contract.

Termination for Cause

Two primary options for resolving contract disputes:

LitigationAlternative Dispute Resolution (ADR)

Avoid using court but sometimes required (usually results in destroyed relationship with the contractor).

Litigation

Court is most appropriate when:

Dispute is over issues of lawFull public record is requiredFraud is suspectedOther party is likely to falsely present their case

Should be the first resort to solve disputes when appropriate and in an environment that is collaborative, not competitive.

Alternative Dispute Resolution (ADR)

ADR Methods:

MediationFact-findingMini-TrialNon-binding Arbitration

A neutral third party listens to the issues, helps develop options, and works with the disputing parties to obtain a negotiated settlement.

Mediation

A neutral technical expert renders an advisory decision to both parties based on the facts presented by the disputing parties.

Fact-finding

Senior-level management listens to both parties and renders a decision.

Mini-Trial

A neutral third party renders a non-binding decision based on evidence presented by disputing parties; Arbitration is closest to litigation.

Non-binding Arbitration

Provide worldwide contract administrative services in support of DoD components, designated Federal and International organizations.

Defense Contract Management Agency (DCMA)

DCMA organization consists of:

Headquarters East districtWest districtInternational district for overseas operations

What Appropriations Categories involves: -Development of equipment, material, or computer application software-Developmental Test and Evaluation (DT&E) -Initial Operational Test and Evaluation (IOT&E) -Operational costs for R&D dedicated installations

RDT&E

What Appropriations Categories involves: -Purchase of major end items and defense systems -Initial issue of spares -Delivery for operational use or inventory

Procurement

What Appropriations Categories involves:-Day-to-day operations -Headquarters operations -Civilian salaries -Travel -Fuel -Minor construction -Training and education-Expenses of operational military forces -Base operations support -Recruiting

O&M

What Appropriations Categories involves:-Pay and allowances of active duty and reserve military personnel -Permanent Change of Station (PCS) moves -Training in conjunction with PCS moves -Subsistence -Bonuses -Retired pay accrual

MILPERS

What Appropriations Categories involves:-Major military construction projects -Construction of military schools -Construction of facilities -Construction of bases

MILCON

Allows KO to unilaterally change drawings, designs, or specifications for supplies that are specifically produced for the Government, method of shipment, packing of supplies, or delivery ("in-scope" changes).

Changes Clause

Types of Contract Modifications:

Bilateral and Unilateral

Bi-lateral agreement where both parties sign/document a full agreement on what will be changed and at what price before the work begins (preferred way).

Supplemental Agreement

A unilateal written order signed by the contracting officer, directing the contractor to make a change that the Changes clause authorizes the contracting officer to order without the contractor's consent (KO needs direction from the PM). Used for Administrative changes (spelling, typo, etc.)

Change Orders

Unauthorized change that requires the contractor to perform beyond requirements of the contract (individual affecting the change may be held personally liable for the additional cost).

Constructive Change (BAD)

During negotiations the government is most concerned with:

getting technical performance within cost and schedule constraints at a fair and reasonable price

During negotiations the contractor is most concerned with:

satisfying the customer, getting follow-on business, and protecting their profit while mitigating risk

Agreement on contract terms, specifications, and price, converting the undefinitized contract action to a definitive.

Definitization

Contract action where contract terms, specifications, or price are NOT agreed upon before performance is begun under the action (unexpected events).

Undefinitized

Undefinitized Contract Actions must include a definitize schedule of :

180 days after issuance, or date when 50% of not to exceed price is obligated

Authority to enter into, administer, and/or terminate contracts.

Procuring Contracting Officer (PCO)

Performs contract administrative functions as assigned by the Procuring Contracting Officer (PCO).

Administrative Contracting Officer (ACO)

Negotiating any settlement with the contractor; normally works for the DCMA (issues a notice of termination).

Termination Contracting Officer (TCO)

Serves as the Contract Administration Office's focal point for a specific program, leading the program support team (PST); coordinator; PMs "eyes and ears" with Contractor.

Program Integrator (PI)

The Three-Step Production and Manufacturing Integration Process:

Influence the Design Process Prepare for ProductionExecute the Manufacturing Plan

Five elements of manufacturing:

ManpowerMeasurementMethodMachineryMaterial

What percentage of the total life cycle cost is consumed for manufacturing?

13-25%

What is three times as much as the cost of development?

Production and Manufacturing

The cost of achieving quality can be broken down into three areas:

PreventionAppraisal Failure

Money spent on avoiding problems, such as utilizing process proofing. Ideally makes up about 50% of the cost of achieving quality.

Prevention

Money spent looking for errors through testing and inspection. Should make up about 35% of the cost of achieving quality.

Appraisal

Money spent correcting errors, often in the form of rework or repair. Should only account for about 15% of the total cost of achieving quality.

Failure

As the production of an item doubles, the man-hours needed to produce that item decrease at a fixed rate.

Learning curve theory

Learning curve theory is most applicable in situations where the following conditions exist:

Uninterrupted serial production Consistent product design Management emphasis on productivity improvement

Deployment Problem Areas:

TrainingPersonnel TurnoverSoftware AnomaliesContinuing Modifications

10 logistics support elements:

1.Maintenance Planning2.Manpower and Personnel3.Supply Support4.Training and Training Devices5.Support Equipment6.Packaging, Handling, Storage, and Transportation7.Facilities8.Computer Resource Support9.Technical Data10.Design Interface

Is minimizing problems up front which requires a very long term outlook.

Effective sustainment

What includes delivery of all logistics elements after the system is fielded that result in operational readiness?

Sustainment Planning

This element involves the identification and programming for military and civilian personnel with skills and grades required to operate and support the system, over its entire life cycle in peacetime and war?

Manpower and Personnel

What is training that has to be repeated?

Refresher Training

What is the preferred Support strategy within the DoD?

Performance Based Logistics

Are a set of "standards of behavior as defined by a group, organization or society" Ethics" help translate our values into appropriate behaviors that respond to the realities of day-to-day life.

Ethics

The extent to which a person fulfills those obligations is based on two aspects:

Ability to distinguish right from wrongLevel of commitment to doing what is right

Six Pillars of Character:

Trustworthiness RespectResponsibility Justice and FairnessCaringCivic Virtue & Citizenship

Three classical ethnical decision models:

Consequentialism / Utilitarianism The Golden Rule Kant's Absolute Moral Duties

End justifies the means as long as the greater good is served.

Consequentialism / Utilitarianism

Do unto others as you would have them do unto you.

The Golden Rule

'Higher truths' are not flexible and there are no exceptions'

Kant's Absolute Moral Duties

The focus of our _____________ program should be to ensure that designs are traceable to capability needs.

configuration management

What combines all three classical models and calls for decisions to take into consideration the welfare of all stakeholders?

Principled Decision-Making Model

Leadership characterized by directing individual workers, providing them with one-on-one training, and resolving conflicts.

Supervisory-style

Type of leadership that involves getting multiple inputs prior to making decisions, developing team member performance, coordinating group efforts, and implementing productive change.

Participative-style

Leadership style that creates team identity and maximizes a group's performance by capitalizing on the diversity of its members.

Team leadership-style

What are The Josephson Institute of Ethics came up with a set of core ethical values that were agreed to by 30 national leaders from education, business, faith communities, and government ?

Core Ethical Values

What values involve treating others with equality, openness, impartiality and consistency?

Justice and Fairness