The U.S. Navy Announces New Acquisition PrinciplesMay 14, 2010

 

nuclear submarine

A top Navy official announced key new principles to guide Navy and Marine acquisitions. At the Navy League's annual Sea, Air, Space symposium held May 5 at National Harbor, Md., Ray Mabus, Navy Secretary, said five new principles would allow procurement managers to cut costs, set a baseline performance to evaluate programs and find ways to better train the acquisition workforce.


The five principles the Navy plans to execute are as follows:

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

While these are similar to the Navy and Marine Corps' five energy goals outlined earlier, Mabus drew a clear distinction between those goals and the new acquisition principles. "These are not goals, these are imperatives, these are 'have-tos," he said. "In order to build the fleet that we need—the Navy, the Marine Corps and our industry partners—we have to do all these things."

Referring to the first principle, Mabus said the Navy would put all programs through a formal review process to analyze the requirements before granting a contract. "We're going to be doing this analysis on everything," the secretary said, including the future Ohio-class replacement submarine and other initiatives. He promised to raise the bar on performance by holding industry and the Navy - Marine Corps acquisition team more accountable. "Quality has to improve, man hours have to come down, and budgets and milestones have to be met. That's the bar," he said.

Stressing the importance of 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 Navy would redefine acquisition standards to allow more industry collaboration. Mabus addressed the fourth principle by establishing an "Industrial Base Council" to bring together representatives from major shipbuilding and aircraft firms to give the Navy and Marine Corps a better sense of the industry's concerns.

In terms of making "every dollar count," Mabus noted that the service will turn to fixed-price contracts. Cost-plus contracts will only be used for high-risk, first-of-class ships and other high-risk systems.