1. Total Life Cycle Systems Management 5 February 2002

2. Current Life Cycle Challenges • Estimated weapon system sustainment cost of $62B • Unable to link cost to performance • Average CWT Class IX to 0-level maintenance of 18 days • Disconnects across logistics functions • Services implementing variety of performance-based strategies • We need to accelerate implementation • PMs responsible for life cycle management • Limited sustainment expertise/guidance • No formal oversight mechanisms • Requirements process that emphasizes weapon system performance • Limited attention to life cycle sustainment

3. Total Life Cycle Systems Management Desired End State* Weapon System Managers responsible for the overall management of the weapon system life cycle to include: • Timely acquisition of weapon systems meeting warfighter performance requirements • Integration of sustainability and maintainability during acquisition process • Weapon system sustainment to meet or exceed warfighter performance requirements at best value to DoD (and appropriate visibility) * Desired end state is interrelated with other FLE initiatives: Depot Maintenance Partnering, SMARTT, and Enterprise Integration

4. Performance-Based Logistics DoD 5000 Policy Oversight via DAB/DAES Oversight via R-TOC Forum New program implementation 30 Pilot Programs • F/A-18 E/F • F-22 • AAAV Quadrennial Defense Review Reengineer Product Support • Performance-Based Logistics • Legacy Systems • FY03 DPG • Service Implementation Schedules Lessons Learned Operational Demonstrations Adjustments Linking cost to performance

5. Performance-Based Logistics Ensure System is Sustained at optimum Level per PBA INDUSTRY/ORGANIC Buys Performance As a Package (Including Surge/Flexibility) Weapon System Manager Warfighter(/Force Provider) Support Provider PBA PBA Provide continuous, Reliable, affordable Support per PBA Sustainment Acquisition Disposal Visibility into cost/risk decisions across life cycle

6. Performance Agreements • Warfighter Focused - Systems Level Metrics • Documents range of expected/required performance from warfighter (Force Provider) • Identifies Roles and Responsibilities of Stakeholders • Works for both peacetime and wartime requirements • Resource Management Tool • Facilitates Performance Measurement • Basis for support provider contracts and agreements Agreements executed by customer to document warfighter requirements (within available resources).

7. Financial Mechanisms (Recent PBL Programs) Sentinel C-17 Direct to PM (Planned) Migration to Single Contract (Emerging) Customer Funded Concurrent With Performance Agreement F/A-18 E/F Engine All programs involve varying degrees of AIT, SMARTT, and government/industry partnering.

8. C-17 Funding Requirements Flow Program 3600 BA RDT&E 3010 BA BP 10 (A/C Procurement) BP 11 (Modifications) BP 16 (Spares) SAF/AQ AMC ORD/MNS R&PC Rqmts C-17 SPO Estimates AMC Prioritize 3010 BA BP 16 (Spares) AF/IL ALCs Rqmts Comps C-17 SPO (WPAFB) AFMC AIR STAFF MS DOA (Spares) 3400 BA AETC (Dir) / TWCF (Reimb) EEIC 578 (CLS) AETC/ LG/FM SAF/FM Programmed Flying Hours (PFT) AFCA IG 3400 BA EEIC 609 / 61950 (Supplies) EEIC 644 / 699 (DLRs / A/C Fuel) AETC Rqmts AF/ILS 3840 BA EEIC 578 (CLS) B u d g e t C y c l e* 3840 BA EEIC 541 / 543 (Depot Maint) EEIC 605 / 609 / 619 (Supplies) EEIC 644 / 699 (DLRs / A/C Fuel) SAF/FM AFCA IG ANG/LG Programmed Flying Hours ANG Rqmts AF/ILS TWCF EEIC 540 (S/W Maint) AMC/LG OSD Programmed Flying Hours AMC/FM Rqmts TWCF EEIC 578 (CLS) TRANSCOM C-17 SPO (WPAFB) TWCF EEIC 392 / 409 (Civ Pay / TDY) EEIC 480 / 492 (Utilities / Comm) EEIC 522 / 529 (Civ Eng) EEIC 531 (Custodial Svcs) EEIC 532 (A&E Design) EEIC 569 / 582 (Cont Maint ADPE) EEIC 592 (Misc Cont) EEIC 609 / 619 / 61950 (Supplies) EEIC 627 / 628-638 (Equip) EEIC 641 / 644 (Veh Fuel / DLRs) EEIC 693 / 699 (A/C Fuel)

9. C-17 Funding Execution Flow 3600 BA RDT&E 3010 BA BP 10 (A/c Procurement) BP 11 (Modifications) BP 16 (Spares) 3010 BA BP 16 Spares MSD OA (Spares) 3400 BA AETC (Dir) TWCF (Reimb) EEIC 578 (CLS) 3400 BA EEIC 609/61950 (Supplies) EEIC 644/699 (DLRs/A/C Fuel) 3840 BA EEIC 578 (CLS) 3840 BA EEIC 541/543 (Depot Main) EEIC 605/609/619 (Supplies) EEIC 644/699 (DLRS/A/C Fuel) TWCF EEIC 540 (S/W Maint) TWCF EEIC 578 (CLS) TWCF EEIC 392/409 (Civ Pay/TDY) EEIC 480/492 (Utilities/Comm) EEIC 522/529 (Civ Eng) EEIC 531 (Custodial Svcs) EEIC 532 ( A & E Design) EEIC 569/582 (Con Maint/ADPE) EEIC 592 (Mis Con) EEIC 609/619/61950 (Supplies) EEIC 627/628-638 (Equip) EEIC 641/644 (Veh Fuel/DLRs) EEIC 693/699 (A/C Fuel) System Program Office = Contractor (KTR) = OAC Program KTR 36 SAF/AQ 36 SAF/AQ 47 SAF/AQ 47 AF/IL 64 AETC/LG/ FM 64 AETC/LG/ FM 41 ANG/LG 41 ANG/LG 65 OSD 65 OSD 65 OSD C-17 SPO (WPAFB) SAF/FMB AFMC/FM ASC/FM Other Centers SAF/FMB AFMC/FM ALC/FM Stock Fund KTR AF/ILS AFMC/FMR ALC/FM Item Mgrs C-17 SPO (WPAFB) KTR AETC/FM SAF/FMBO KTR AETC/FM Altus SAF/FMBO KTR C-17 SPO (WPAFB) KTR SAF/FMBO AFMC/FMR Jackson ANG SAF/FMBO ANG/FM TRANSCOM (Expense Auth) AMC/FM ALC C-17 SPO (WPAFB) KTR TRANSCOM (Expense Auth) AMC/FM Charleston AFB TRANSCOM (Expense Auth) AMC/FM McChord AFB

10. Align Financial Mechanisms withTLCSM / PBL • PBL financial strategies negotiated within current financial processes • USD(C) developing new financial architecture • DUSD(L&MR) will engage with USD(C) to ensure “financial architecture” supports how we want to run the business • Consistent with PBL • With appropriate financial controls • With sufficient visibility and accountability

11. Life Cycle Policy

12. WSM Sustainment Guidance

13. Appropriate Sustainment Oversight • Revise 5000-series to require Service-level reviews • Focus on performance vs. customer requirements • Tied to WSM tenure/turnover • Revise DAES to strengthen performance variance reporting based on Performance Agreements • Performance • Cost • Trade-offs • OSD review on an exception basis

14. Refine WSM Professional Development • Program Managers to Weapon System Managers • Revise Advanced PM Course • Expand PM Executive Refresher Course • Influence new PM Capstone Course • Add Executive Acquisition Logistics Course, as mandatory – 1Q, FY 03 • Weapon System Managers staffs (FY 03) • Incorporate FLE/TLCSM in new Log Course (Performance-Based Logistics) • Develop DAU-sponsored sustainment curricula NOW!

15. Proposed Requirements Actions • USD(AT&L) request VC/JCS to emphasize sustainment as part of JROC process (CJCSI 3170) • Services emphasize RAM and sustainment in their respective requirements processes • Incorporate increased emphasis on sustainment in 5000 series • Corresponding emphasis by DAE and CAEs/MDAs at Milestone Reviews

16. JLB Actions • Support development and delivery of comprehensive PBL implementation schedules • Engage with USD(C) to develop enabling financial mechanisms • Support revision of 5000.1/5000.2 to: • Include guidance on performance agreements • Focus on Total Life Cycle Systems Management • Define sustainment phase • Provide WSM sustainment guidance • Incorporate Service and OSD oversight mechanisms • Improve DAU curriculum to include total life cycle management through the Functional IPT process • Support USD(AT&L) request to improve JROC process • Advocate greater consideration of sustainment requirements in SROC