Final Slides_SecArmy Visit

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Honorable John M. McHughSecretary of the Army

Army Materiel Command

Sustaining the Strength of the Nation!

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Facer – What I Want To Leave You With

Theme today: how we‟ve adapted – and are adapting – for our future

Several updates on items you asked for (BRAC, Efficiency Directive)

Will discuss several efficiencies

Visit to the Prototype Integration Facility this afternoon

Looking forward to your thoughts throughout … intended as a discussion vice a brief

Takeaway: All about supporting the Warfighter

GEN Dunwoody

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What I Want To Leave You With

Thanks For Taking Time To Visit

A Decade at War

Adapting and Transforming

Looking Forward to Your Thoughts

Sustaining the Strength of the Nation! 2

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Facer – AMC Commanders and Deputies

{Gen Dunwoody – Introduce Team – Around the Table and Room}

Welcome Back! Thanks for taking the time to visit …

Showed this at your last visit

Approx 1/3 of our leadership have turned over (yellow) or are scheduled to turn over (green)

Takeaway: New faces, new place, new facilities ... same dedication and professionalism

GEN Dunwoody

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Spec Assistant

Ms. Terry Gerton

Civilian 245 |Mil 407

Army Contracting Command

ExpeditionaryContracting Command

Mission and Installation Command

Mr. JeffParsons

BG Joe Bass

BG Steve Leisenring

Civilian 5,610|Military 504

Aviation and Missile LCMC

MG JimRogers

Mr. Ronnie Chronister

Civilian 9,842 | Military 89

AMC SWA

BG JesseCross

Civilian 1,415 |Mil 749

AMC Band

CW4 Peter Gillies

Civilian 0 | Military 31

US Army SecurityAssistance Command

BG ChrisTucker

Mr. RobertMoore

Civilian 561 | Military 38

CECOM LCMC

MG RandyStrong

Mr. Ed Thomas

Civilian 8,687| Military 61

Chemical MaterialsAgency

Mr. ConradWhyne

Mr. Don Barclay


Army Sustainment Command

MG YvesFontaine

Mr. Scott Welker


AMC Commanders and DeputiesAs of 1 June 2011

Research, Development & Engineering Command

MG Nick Justice

Mr. Gary Martin

BG John McGuinness



Military Surface Deployment& Distribution Command

MG Kevin Leonard

Mr. Mike Williams


Joint Munitions Command JM&L LCMC

BG Gus PernaMr. JyujiHewitt

BG Gus Perna


TACOM LCMC

MG Kurt Stein

Mr. MikeViggato


Assembled ChemicalWeapons Alternatives Program

Mr. ConradWhyne

Mr. Joe Novad

Civilian 32| Military 0

New Since Mar 2010

Departing Next 6 Months

H.Q. Army Materiel Command

BG John Wharton

LTG DennisVia

GEN Ann E.Dunwoody

Mr. JohnNerger

CSM Jeff Mellinger


3

http://www.army.mil/media/112419/

http://www.army.mil/-images/2010/03/10/66548/army.mil-66548-2010-05-17-160544.jpg

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Facer - Priorities

Continuous process of reviewing/updating priorities

Cross-walked your priorities against ours and review weekly

Takeaway: Mutually supporting efforts

GEN Dunwoody

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SecArmy Top Priorities

1. SA Directive: Optimization of Materiel Development/Sustainment

2. DOL Transformation

3. Special Installations Pilot

4. Service Contract Management/Portfolio Alignment

5. Terms of Reference/Succession Plan

6. LMI/LIW Implementation Plan

7. Workforce Quality of Life

8. Operation Red Zone (BRAC)

9. Operational Energy Initiatives

10. Strategic Communications

CG, AMC Top Priorities

Priorities

Executing Your Priorities

1. Ensuring a Highly Capable “Force” within Fiscal Constraints

2. Transforming the Institutional Army

3. CSA Transition

4. General Order #3, HQDA

5. Accountability

6. Army Modernization, Equipping & Continued Reset

7. Quality of Army Life

8. ANC Follow-on Actions

9. Energy

10. POM 13-17 DevelopmentAs of: 11 April 2011 As of: 10 Jun 2011

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Facer – A Decade at War . . .

Discussed this in the UK

Most of us consumed with budgets and other daily challenges

Sometimes, we need to take a step back and remind ourselves this has been a …

Tough …

Demanding …

And challenging decade.

{Gen Dunwoody – Introduce LTG VIA and Decade @ War}

Takeaway: We all have much to be proud ofGEN Dunwoody

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“In the past decade, America’s Army has been challenged and prevailed in some of the most daunting tasks in the history of our military.”

~ SecArmy McHugh, 31 March 2011 5

A Decade at War . . .

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Facer – . . . Fighting on Two Fronts . . .

Fighting two wars …

In Iraq … Ended major combat operations in August of 2010 … Now completing the drawdown

Increased operations in Afghanistan

One of the toughest combat environments... … landlocked country … … the size of Texas, with only 2% of its roads … few paved … and 18 – 20,000 foot mountains …

Takeaway: Building a better life for others

LTG Via

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. . . Fighting on Two Fronts . . .

Afghanistan

Support/Sustain the Surge

Building Partner Capacity

50% Surge Equipment from Iraq

Iraq

Complete Drawdown

Build Iraqi Capabilities and Self-Sufficiency

Set Conditions for Department of State/Others

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Facer – . . . In a Tough Distribution Environment . . .

… In a very demanding environment … not just today … but for future missions

Truly a "ground" operation

Political environment, border delays, attacks, dependence on foreign carriers and weather - all make for an uncertain distribution environment

Takeaway: Mission success despite all the challenges

LTG Via

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Political Unrest

Expanding Militancy

Host Government Rule

Uncertainty

Economic Issues

Visibility Issues

. . . In a Tough Distribution Environment . . .

Border Delays

Attacks

Weather

Theft & Pilferage

Labor Issues

Road Conditions

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Facer – . . . While Supporting Contingency Operations . .

Support provided at home and abroad

Peacekeeping and Stability operations in Africa …

Humanitarian Relief in Haiti …

Disaster response in Japan …

Small footprint with strategic reach-back

Contracting (Mr. Parsons)

Transportation

Sustainment

Takeaway: Quiet success … often assumed away

LTG Via

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. . . While Supporting Contingency Operations . . .

Haiti - Hurricane

Haiti – Earthquake

Chile – Earthquake

Pakistan – Floods

. . . And Now Japan

Rapid Port Opening

Water Purification

Logistic Support

Emergency Rations

Mortuary Affairs

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Facer – ... And Responding to Other Threats

Environment of increasing change and uncertainty

Popular uprisings … and instability across the Middle East …

Regional threats - North Korea

Takeaway: With experiences of the past decade, confident we can

overcome the challenges of the next decade

LTG Via

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. . . And Responding to Other Threats . . .

Revolutions Autocratic Subversion Terrorism

Regional Instability Extremism Political Unrest

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Facer – The Impact of BRAC

{LTG Via – Mr. Nerger and Mr. Marriott and impacts of BRAC on Command

and People}

And … we‟ve executed BRAC …

At AMC … BRAC impacted 11,000 employees (1 in 6 employees) across 25 states

Shifted our centers-of-gravity:

Redstone, AL Aberdeen, MD Rock Island, IL Warren, MI

Congressional interest Intense at Monmouth (CECOM)

Takeaway: Continued to execute all missions throughout BRAC

Mr. NergerMr. Marriott

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• Involves half of all US States• One out of every six AMC employees affected (approximately 11,000)• More moves and more people affected than any other Army organization

Red River, TX

*Warren, MI

Natick, MA

Milan, TN *Redstone Arsenal, AL

Stennis Space Center, MS

Kansas, KS

Glenn, OH

Closing

Realigning - Loss

Realigning - Gain

Ft. Huachuca, AZ

Umatilla, OR

Concord, CA

Scott AFB, ILTobyhanna, PA

Alexandria/Falls Church, VA

St. Louis, MO

Ft. Belvoir, VA

Ft. McPherson, GA

Langley, VA

Ft. Monroe, VA

Ft. Gillem, GA

Riverbank, CA

Deseret, UT

Newport, IN

Adelphi, MD

Ft. Eustis, VA

Watervliet, NY

Letterkenny, PA

Selfridge, MI

Lone Star, TX

Corpus Christi, TX

Ft. Sam Houston, TX

Sierra, CA*Aberdeen, MD

Ft. Monmouth, NJPicatinny, NJ

Iowa, IA

Crane, IN

Anniston, AL

Bluegrass, KY

Tooele, UT

McAlester, OK

Shaw AFB, SC

*Center of Gravity

*Rock Island, IL

The Impact of BRAC

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Facer – A Time of Transition

Not simply a matter of moving once - in most cases … multiple moves (office and home)

For some folks the first lifetime PCS (97% civilian + 3% military

Deliberate process … orientation briefs, sponsorship, etc.

Also taking care of those leaving AMC/Army

Facilities = Economy of Force (no café/gym/auditorium)

Currently in 31 Temp facilities

Move disrupted by tornadoes in late April/early May

Takeaway: Stressful times for the workforce (+ lack of adequate cafeteria, gym, meeting space) Mr. Nerger

Mr. Marriott

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A Time of Transition

AMC HQ Belvoir 31 Temp Facilities at RSA

Consolidate From Two Bldgs to One

Home HomeHotel Apartment

Personal Move

School Year Housing Market Geo Bachelor New Community

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Facer – People – Our Greatest Resource

AMC is the largest employer of civilians in DoD

97% = Civilian - represents more than a quarter of all DA Civilians

Center-of-gravity for the generating force

Still Stressed – 22 Suicides since 2008 (4 this year)

Army focused on Soldiers – need complementary program and attention to civilians

Takeaway: Working collectively to support our workforce

Mr. NergerMr. Marriott

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People – Our Greatest Resource

Taking Care of Our People 12

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Facer – Translating Intent into Action

Institutional adaptation is the challenge of our time It‟s hard but not impossible Tendency to focus on the Operational Army 4 Decades without adapting the Institutional Army

An organization in motion … record speed … not in decades but years

Operationalized our institutional command over the past 10-years

Since 2008 … adapting to an enterprise approach … really a mind-set

Three directives LMI LIW Optimization

Takeaway: A busy decade ... Abut next few years even more challenging!GEN Dunwoody

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Oct 2010CECOM at

APG

Jun 2011ACC at RSA

Apr 2011LMI/LIW

Full Scale Pilot

Mar 2011Optimization Directive

Oct 2010CONUS DOLs

OPCON to AMC

Sep 2010Operation New Dawn

Jan 2010Haiti Relief

Support

Oct 2009R2TF FOC

Oct 2009Special

Installation Pilot

Oct 2009ACC

Fully Operational Capable (FOC)

Sep 2009Secretary McHugh

Appointed

Translating Intent into Action

20112009 2010

Institutional Change at an Unprecedented Pace

Jun 2011AMC at RSA

Oct 2011Fleet Management

Expanded FOC

Enterprise Centric

Sep 2009USASAC at RSA

Nov 2010TF APG Directive

May 2011Services Acquisition

Directive

Mar 2011LMI/LIW Directives


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Facer – Fiscal Realities

You‟ve seen this chart … but we can‟t ignore it Learn from History Can‟t assume everyone knows it Funding at peak of every conflict Reductions every time – no exceptions

2d & 3d order effects TF Smith Hollow Army

Expect a soft landing – never happens – always a clift

Sec Lynn – 0 for 4 … not 0 for 5

Takeaway: Setting the stage for success

GEN Dunwoody

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Fiscal Realities

Budget Low Points

End of WWII

Korean War Vietnam

War Height of the Cold

War 9/11

Future Unknown

HollowArmy

Task Force Smith

“We have gone 0 for 4 in managing the draw-downs to date. We cannot afford to go 0 for 5.”

~ William Lynn, DepSecDef, May 2011UNCLASSIFIED

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Facer – Maximizing Limited Resources

Can‟t „salami-slice‟ our way out of budget …

… „Salami-Slicing‟ is the easy way out …

5%, 10%, 15% - leads to the same results … share the pain equally andavoid strategic choices

Need to make some Strategic Choices Assess Strategic Risk then Develop Strategic Strategy

Bottomline – must turn „salami-slice‟ guidance into capabilities and risk to ensure we make informed decisions

Takeaway: Not about what‟s best for one individual … about what‟s good enough for everyone

GEN Dunwoody

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Maximizing Limited Resources

A Bold New Strategy . . .

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Facer – Fundamentally Different Way

{Gen Dunwoody – Introduce Ms Gerton and Doing Things Differently}

Need to assess where we divest and when we invest

Strategic Choices will shape our forces

Our Focus: Prioritize the capabilities we need Eliminate redundancies Identify where we are willing to accept risk Make informed decisions

Adapt to Win - On and off the battlefield

Adapting our institution to move beyond

Legacy organizations Outdated technologies Antiquated processes

Takeaway: Our challenge is finding a fundamentally different way of doing businessMs. Gerton

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Fundamentally Different Way of Doing Business

Becoming More Efficient and Effective 16

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Facer – Why is This so Hard?

The Institutional Army …

Unfortunately many have become entrenched – which creates silos that hinder:

Coordination Collaboration Communication

Takeaway: More agile/more flexible/more responsive

Ms. Gerton

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Why is This so Hard?

“Institutional change is about doing things better, doing them smarter and taking full advantage of the progress, technology, knowledge and experience that we have available to us.”

~ U.S. Army Posture Statement, 2011UNCLASSIFIED 17

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Facer – Unity of Effort

(Slide Builds While Speaking)

All about breaking down the walls between silos

Adaptation occurs right in the center – where the best ideas and talent from each silo is optimized

We can exchange information that leads to informed decisions

Number of examples … DOL transfer, FMX, Special Installations …

It used to be that information was power … today, shared information is power

Takeaway: Shared information breaks down the barriers

Ms. Gerton

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UNCLASSIFIED Breaking Down the Silos

Unity of Effort

Readiness

Materiel

ServicesPeopleCollaborate

Cooperate

Coordinate

Communicate

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Shared this at one of my first AEBs

Primary focus during conflict:

Buying new equipment to support the Operational Army

Good reasons for doing that…

We don‟t like to get rid of anything (“just might need it”)

Very expensive – no longer affordable

{Gen Dunwoody – Introduce Mr. Dwyer and Why Adapt}

Takeaway: If we don‟t adapt, we won‟t find a different way of doing business

Facer – Why Adapt?

GEN Dunwoody

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Why Adapt?

WWI

2011Desert Shield/StormVietnam

KoreaWWII

19An Unaffordable Approach

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(Slide builds while speaking) Transformed Army

fewer headquarters

more combat brigades

Modularity/ARFORGEN … right intention … no bad actors

Built separate „piles‟ of equipment in order:

to get the right stuff

to the right place

at the right time

Takeaway: With a smaller budget – no longer an affordable strategy

Facer – Multiple Piles

Mr. Dwyer

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Unit Equipment

Theater Sustainment Stocks

Capability Sets

Excess Defense Articles

Theater Provided Equipment

Depot Stocks

Training Sets

Non-Standard EquipmentLeft Behind Equipment

Pre-Deployment Training Equipment

Army Prepositioned Stocks

Multiple Piles

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Facer – Multiple Managers

(Slide builds while speaking)

Each pile has own manager

Difficult to synchronize available equipment

If you‟re the customer, who you go to depends on what you need and

when you need it

Takeaway: Can‟t afford to continue doing business this way

Mr. Dwyer

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Multiple Managers

Program ManagersArmy Materiel Command

Army ServiceComponent Commands

Army Commands

Program Executive Officers

Medical Command

Reserve Components Lifecycle ManagementCommands Rapid Equipping Force

Direct Reporting Units

HQDA G-8 (Finance)

HQDA G-4 (Logistics)

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Facer – Multiple Sources of Repair


Multiple organizations established own repair capability

Own people

Own resources

Inventory

o Repair parts

o Tools

o Equipment

Optimizing repair capabilities is complex

Takeaway: Can no longer afford redundancy

Mr. Dwyer

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Multiple Sources of Repair

Commercial Industry

Unit Maintenance

Depots/Arsenals

Installations

Program Managers

Special Repair Teams

TrainingMaintenance

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Facer – Multiple Management Info Systems


Led to numerous independent information systems

Iron Mountains of equipment after Desert Storm

Thousands of containers in theater

No visibility on what was in them

Or where they were

o Shipped containers into the theater

o Shipped them back without opening them

Committed to Intransit Visibility and Total Asset Visibility

Takeaway: We are facing the same challenge today

Mr. Dwyer

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Multiple Management Info Systems

AWRDS

CIF-ISM LMP

MENS-E

SAMS-IE SAMS-E PBUSE

TEWLSSARSS

WMMSTAMMIS

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Facer – SECARMY Guidance

You directed us to fix just a few short months ago

Thanks – we would not be where we are without your guidance, direction

and top-cover

Took us a year before your guidance to get to this point

Now we need to push this mission (ball) into the end-zone

Still a few antibodies out there … we continue to educate and inform

Highway example (was on highway, now in express lane)

All about culture change

Takeaway: Providing visibility and speed we‟ve never had before

GEN Dunwoody

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Secretary of the Army GuidanceLead Materiel Integrator

(LMI) DirectiveLogistics Information

Warehouse (LIW)

22 March 2011

“I am designating Commander, U.S. Army Materiel Command (USAMC) as the Army’s LMI with the mission to synchronize the distribution and redistribution of Army materiel in accordance with Department of Defense and Army directives and priorities.”

John M. McHugh

22 March 2011

“I am directing the Commander of U.S. Army Materiel Command (USAMC) to undertake the task of creating a repository for Army logistics data that will provide a single, common location for all Army materiel stakeholders to access, acquire and deliver data and information for managing Army materiel.”

John M. McHugh

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Facer – Integrating and Optimizing


“Brute Force” was way of the past … now must take fundamentally different

approach … that will lead us to …

… one authority …

… one source of repair …

… one information system …

… all working together to achieve complete transparency and visibility of

every piece of equipment across the Army

Already made progress ... can now

see ourselves better ... in real time versus just a projection

provide pinpoint disposition for what‟s coming out of our depots and arsenal

And better focus our resources on what needs to be repaired

Takeaway: Much accomplished … more to do {Example = Tanks and/or Howitzers}

[Transition to BG Brian Layer for Demo]Mr. DwyerBG Layer

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Logistics I

nformation W

are

house

Lead M

ate

riel I

ntegra

tor

Integrating and Optimizing

US Army

MaterielCommand

MultipleSources of Repair

MultipleManagers

MultiplePiles

Multiple Info Systems

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Facer – Decision Support Tool

Strategic choices … how we manage materiel to meet Army readiness

Systems approach to manage materiel

Leveraging AST … predictive tool that allows us to optimize solutions

BG Layer

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Decision Support Tool

Lead Materiel IntegratorDecision Support Tool

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Facer – Pilot Key Takeaways

Multiple touch points

In real time …

Minutes/seconds vs months/years

BG Layer

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Exceeded expectations

LMI demonstrated ability to produce a coordinated Army-wide materiel sourcing solution per Army priorities and law

Automated Army-wide materiel solutions in minutes/hours

Rapid course of action analysis allowed multiple excursions

LMI collaboration process worked extremely well to resolve stakeholders issues

Pilot Key Takeaways

Demonstrated Successful Progression 27

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Facer – Efficiencies Directive

{Gen Dunwoody – Introduce Ms. Gerton and TF DFR Status/Update}

Your directive to us in March

Met with Ms. Shyu, 17 June

Updated you a few weeks ago

Follow-up to your questions

Takeaway: Work ongoing

Ms. Gerton

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Efficiencies Directive

Mission: Conduct a review to create a more agile and cost effective research, development, and acquisition system by analyzing work flow and optimizing organizations, processes, and procedures to support the work.

Key Tasks

• 150 day review

• Save $3B annually by the end of 2015

• Deliberative approach to process and

cultural transformation

• Optimize PEO and AMC responsibilities

More efficient, effective, and agile

and free-up resources to build the Army of the

future.

$3B Savings Will Require a Team Approach

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Facer – Strategic Issues (Technical)

Ms. Gerton

You told us what you wanted us to do …

• These strategic issues get at the “Why”

• The underlying issues that if addressed will get at the “So What”

Takeaway: Hard Issues that have impacted how we operate for years

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Strategic Issues (Technical)

What We Found . . .

1. Lack of Enterprise traceability of funds (flow, source, what spent on) results in inefficiency, lack of visibility, limited ability to: perform management controls, redirect $ to higher priorities, and forecast.

2. Process inefficiencies, to include multiple layers of management result in reduced effectiveness and efficiency; leads to increased: throughput time, cost, and distance from customer.

3. Army research strategy that lacks Army-unique focus results in ineffective use of available research $ and insufficient transition to development programs.

4. Capacity of depots, arsenals and storage plants difficult to synchronize with Army OPTEMPO resulting in over/under capacity and lagging response.

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Facer – Strategic Issues (Environmental)

Ms. Gerton

Strategic Issues con‟t …

Takeaway: These “environmental” issues are the root cause of the majority

of the current issues we currently face and will be the most difficult to

address / resolve

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Strategic Issues (Environmental)

What We Found . . .

5. Lack of consensus on organizational roles, missions, and functions combined with misalignment of authority, responsibility, and accountability result in multiple faces to Soldier, unnecessary overlap, tension among organizations, and competing objectives.

6. Lack of trust leads to redundancy within and between AMC & ASA(ALT) resulting in increased cost and unnecessary competition.

7. Lack of enterprise-level incentives and governance results in overlap, duplication of investments, lack of strategic focus, inefficient enterprise management and sub-optimal materiel solutions.

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Facer – Specified Task to Strategic Issues

Cross-walked the issues from two previous charts across specific tasks

Takeaway: Taking a holistic approach

Ms. Gerton

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UNCLASSIFIED The Strategic Issues Mapped to the Specified Tasks

Specified Task to Strategic Issues Cross-Walk

Strategic IssueSpecified Task

1 2 3 4 5 6 7

Conduct a review to create a more agile and cost-effective research development and acquisition system by analyzing work flow and optimizing organizations, processes, and procedures to support the work

X X X X X X X

Optimize PEO and AMC responsibilities to improve the agility and reduce overlaps and redundancies in the Army‟s [RDA] activities… the study should recommend the skills required in the PEOs and those needed to be developed and maintained in AMC

X X X X

Create an integrated strategy for efficient and coordinated research and development through item management and sustainment

X X X X

Organize efforts to identify technologies that must be in-house while leveraging from commercial, academic, and other government laboratories

X X

Reduce life-cycle costs from cradle to grave X X X X X X X

Support the Army‟s goal to create an auditable financial system & time-to-task reporting for all sources of funds

X X X X

Develop a plan that pursues a significant reduction of personnel and annual savings of $3B by the end of FY 2015, with initial savings realized by the end of FY 2012 and FY 2013

X X X X X X X

1.

2.

3.

4.

5.

6.

7.

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Facer – ASA(ALT)/AMC Funds Flow ($FY10)

Ms. Gerton

First time

• We‟ve had this level of visibility

• Has taken 115 days to compile

• Indication that our financial systems are not set up to enable

effective management or support quick financial decisions

Takeaway: Never had funding visibility to this level before and we need to

change our funding flow / processes

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ASA(ALT)/AMC Funds Flow ($ FY10)

AMCOMA

PM Support Contracts

PM PrimeContracts

HQAMCLCMCs

Other MSCs

ATEC

•SETA

•Products

•Services

•Development

•Procurement

•Support

•Engineering Services

•DT/OT

•Prod Testing

•Stockpile Testing•Acq Suppt

•Log Assist

•Matrix Labor

•Distro/Trans

•Depots/Arsenals/Plants

(AWCF)

•R&D

•Matrix Labor

•Services

(lab & mat)

ASA(ALT) PEOs/PMs

Other AMC CustomersOther Army ($8.7B)Other DOD ($1.9B)

Other US Gov ($110M)FMS ($421M)

All Other ($264M)

LOGSA

•Data Whse

•Acq Suppt

•Sust Suppt

•Analysis

RDTE $2.52B (Base)

$6.6B (Base)

$111.5M (OCO)

$18.0B (Base)

$16.3B (OCO)$1.9B (Base)

$4.3B (OCO)

$2.5B (Base)

$8.9B (OCO)

Technology

Development

Engineering & Manufacturing

Development

Production &

Deployment

Operations &

SupportMS

A

$11.4B

MS

B

MS

C

Repair/Reset

RECAP

$415M (Base)

Materiel Solution

Analysis

Disposal

$56.4M (Base)

$63.3M (OCO)

$490K

$850K

$2.1B (Base)

$8.6B (OCO)

•Field Suppt

•War Reserves

•Supply (AWCF)

$295.7M

$19.2M

RDECOMARL

AMSAARDECs

$2.5B

$291.2M (Base)

$237.7M (OCO)

$118.8M

AMC (RDT&E)(with ASA(ALT) Direction)

R&DSBIR

MANTECH

EE II MM OO SS TT UUPEGs

AMCProc

$2.5

2B

$355M

$415M

$89M

$89M

$1.9

B$1.6

B

$7.3

B

$57M

AMC Funding Source

PEO/PM Funding Source

Funding Receiver

Program Eval Group (PEG)

RDT&E

Procurement

OMA

Other

Legend

$1.1B $10.3B

$3.3

B

$1.7

B

$442M

$204M

$31M

$116M

$362M

$549M

$145M

$57M

$668K

$1.2

B

$32.4

B

$12M

$124M

$31M

$24M

$35M

$397K

$6.5

B

Summary:ASA(ALT) Base = $27.7BAMC Base = $5.4BASA(ALT) OCO = $20.7BAMC OCO = $8.9BAMC Other= $11.4BTOTAL= $74.1B

RDTE Procurement OMA

ASA(ALT) ASC

(Apportionment)

63

ASA(ALT) PM Chem Demil

$1.2

B

Tracking the Money 32

UNCLASSIFIED


Facer – Process Focused Concepts

Stratified across three levels … based on difficulty of implementation

Takeaway: Stratified concepts across implementation levels

Ms. Gerton

UNCLASSIFIED


Process Focused Concepts

UNCLASSIFIED Stratifying the ConceptsConfidence Level

1 - Virtual IMMC

2 - Software Management Support

3 - Reliability Improvement

4 - Next Gen S/W Field Support

5 - AWPS and LMP

6 - ATEC (RDECOM and ATEC)

7 - Excessive Inventory Savings

8 - ARL Direct Funding

9 - Virtual Contracting

10 - Alt. Matrix Mgt Model (FFRDC)

11 - RDE AWCF

12 - CNA Study 2006

13 - Merge EE and SS PEGs

14 - Make all reimbursable funding AWCF

15 - Provide SS PEG funding to PEO's

16 - DA G-4 Conventional Ammo WCF

17 - Secondary Item PBL

18 - Ammo Supply Point $ B

ene

fit

of I

mplement

ation

Risk of ImplementationLow Medium High

Low

Med

ium

Hig

h

1 2

4 5 6

8 9 11-19

High MedLow

11-1911-1911-1911-18

3 7

10

Inter-dependencies are not yet addressed

33

UNCLASSIFIED


Facer – Non-Process Focused Concepts

Stratified across three levels … based on difficulty of implementation

Takeaway: Stratified concepts across implementation levels

Ms. Gerton

UNCLASSIFIED

UNCLASSIFIEDUNCLASSIFIED 6767UNCLASSIFIED 34Stratifying the Concepts

Confidence LevelRisk of Implementation

Non-Process Focused Concepts

1 - Virtual IMMC

2 - Dr. Braverman

3 - Right-size Organic IB

4 - OCIE (CIF) Reduction

5 - CBM+

6 - Converge RDA

7 - Next Gen S/W Field Support

8 - Lead Materiel Integrator (LMI)

9 - LAISO

10 - ATEC (RDECOM and ATEC)

11 - Lab Reorg

12 - Consolidate TMDE Spt

13 - Logistics Innovation Agency

14 - DA Staff Redundancy (Reduction)

15 - PEO Aviation

16 - Redefining Generating Force

17 - Consolidation of Contracting

18 - Decker Wagner $ B

ene

fit

of I

mplement

ation

Low Medium High

Low

Med

ium

Hig

h

1 2

78

10 11 1213

149

17 1815 16

3-73-4

65

High MedLow

Inter-dependencies are not yet addressed

UNCLASSIFIED


Facer – Gap Analysis (Funding)

One example … and probably the most significant

Takeaway: Lack of adequate funding visibility is a major impediment

Ms. Gerton

UNCLASSIFIED

UNCLASSIFIED

Strategic Issue 1. Lack of Enterprise traceability of funds (flow, source, what spent on); lack of adaptation to ERP systems (LMP, GFEBS) results in inefficiency, lack of visibility, limited ability to perform management controls, redirect funds to higher priorities, and forecast and does not taking advantage of its full capability via unauthorized work-arounds, inability to divest legacy systems and realize ROI, and not harvesting staffing savings.

Lack of financial accountability across enterprise

Dollars flow from multiple PEGs and organizations

Accounting system does not provide visibility into work funded and accomplished

Not taking advantage of full ERP capability via unauthorized workarounds causes inability to divest legacy sys & realize ROI via reduction of staff

Sub IssueOrg Impact

(e.g., req‟d change in org structure)

Annual Savings($ Millions )

RDE AWCF

All Reimb. to be under AWCF

Provide SS PEG $s to PEOs

ARL Direct Funding

Virtual Contracting

RDE AWCF

ARL would not be allowed to accept reimb work

LMP system includes time and attendance reporting linked to workload

Electronic contracting provides direct feeds to std financial systems

Provides caps on what is in overhead

Supports financial accountability system, but goes beyond materiel issues

Would program & execute OMA by wpn sys

Process Concept

How Process Change Addresses Sub-issue

Extent that Concept Solves Issue?

limited mod major

S/W Mgt Support

Fully commits / enforces corporate ERP solution and max divestiture of legacy systems

None

If fully implemented and enforced, concept designed to directly address issue

$10-$100‟sM (initial est.)

Limits matrix mgt O/H TBD

TBDNone

None

Puts matrix mgt under small office to min O/H

Provides stronger traceability of funds

Supports financial accountability system NoneNone (note: excludes 6.1/6.2) Provides traceability for

reimb.

Provides traceability for reimb.

TBD

Need to assess impact on SLAD

TBDWould focus ARL research efforts

Provides traceability for reimb.

Establish LC Mgt PEG

All program LC funding programmed from single PEG

Merging of EE, SS, and part of TT PEG

Provides coherent approach during programming process

Minimal

TBD

None MinimalProvides better financial accuracy, trace. of workld & reduced redund. trans.

None (note: excludes 6.1/6.2)

Alt. Matrix Mgt Model (FFRDC)

Gap Analysis (Funding)

Lack of Funding Traceability and Visibility 35

UNCLASSIFIED


Facer – Time Line

On track to deliver recommendations to you next month

Takeaway: On track

Ms. Gerton

UNCLASSIFIED

UNCLASSIFIED 36

Time Line

AAE IPR #2 (12 Apr)

Brief to SA

Battle Rhythm Events

Brief to DUSA and ASA(ALT)AAE IPR #1 (1 Apr)

DUSA / MECC IPR #1 (27 Apr)

CG Update #1 (25 Mar)

CG Update #2 (31 Mar)

VCSA Update (22 Apr)

AAE / DUSA Update (11 May)

AAE / DUSA Update (26 May)

AAE / DUSA Update (17 Jun)

AAE / DUSA Update (6 (Jul)

1 MAR 11: SA Memo to Optimize RD&A

28 Jul 11: Recommendations to SA

SA Update (19 May)

35 Days

Remaining

SA Update (23 Jun )

On Track!

UNCLASSIFIED


Facer – Army FMS Across the Globe

{Gen Dunwoody – Introduce few quick topics:}

BG Tucker = FMS

Mr. Parson = ACC, Gansler status & Contracting

Mr. Dwyer = Industrial Base

BG Wyche = Chem Demil Status

Changing the channel … quickly talk about changing the way we do

business

Process used to be slow & cumbersome … more streamlined now

Tremendous growth in FMS sales

300% cumulative increase

Takeaway: Supporting the COCOM Cdrs

BG Tucker

UNCLASSIFIED

UNCLASSIFIED

COUNTRIES: 30

CASES: 444

VALUE: $2.7B

TOTAL ACTIVE FMS

COUNTRIES: 154

CASES: 4631

VALUE: $121.7B

COUNTRIES: 50

CASES: 1394

VALUE: $13.4B

COUNTRIES: 32

CASES: 231

VALUE: $590M

COUNTRIES: 22

CASES: 1720

VALUE: $87.7B

COUNTRIES: 20

CASES: 842

VALUE: $17.3B

Army FMS Across the Globe

FMS Portfolio by Region

Security Assistance TrainingCountries: 15Personnel: 125

Building Partner Capacity and Goodwill

FY07-FY10 $62.5B~4600 Cases

FY03-FY06 $18B~3400 Cases

37

UNCLASSIFIED


Facer – Army Contracting Command (ACC)

Aggressive implementation of Gansler Report

Increase stature of military contracting personnel

Restructure organization & restore responsibility

Provide training & tools

Obtain legislative & policy support to enable contracting

effectiveness

Takeaway: Thank you for your support!

Mr. Parsons

UNCLASSIFIED

UNCLASSIFIED 38

Gansler Report, Oct 07General Order #6Establishment of

Army Contracting Agency,Oct 02

Realignment of ACAto AMC, Jan 08

General Order #20Establishment of ACC, ECC

and MICC, Jul 08

Army Contracting Command

Expeditionary – Responsive - Innovative

UNCLASSIFIED


An idea of the breadth and scope of the contracting business

Mr. Parsons

Facer - Scope and Impact of ACC Contracting

UNCLASSIFIED

UNCLASSIFIED

Scope:

FY 10 Federal Contact Spend - $536B

FY 10 DOD Contact Spend - $366B or 68% of Federal

FY 10 Army Contract Spend - $140B or 38% of DOD, 26% ofFederal

FY 10 ACC Contract Spend - 93B which is:• 17% of Federal Spend• 25% of DOD Spend• 65% of Army Spend

39

INCREASING COMPLEXITY

Scope and Impact of Army Contracting Command

Contracting Must Be An Army Priority !

Impact: Supports systems acquisition, sustainment, training, mission and installation missions, and worldwide expeditionary operations (108 in FY10)

UNCLASSIFIED


Big business … high visibility … must keep up momentum

All about capability brought to the fight

Takeaway: More work to be done

Mr. Parsons

Facer - Contracting Workload vs Personnel

UNCLASSIFIED

UNCLASSIFIED 40

Contracting Workload vs Personnel

All About Becoming More Efficient and Effective

Gulf War I

Bosnia/Kosovo; 1995 - present

9/11 Attacks

OEF, 2001-present

OIF, 2003-

present

$166B

$132B

$35B

Gansler Report

UNCLASSIFIED


No Facer comments

Mr. Parsons

Facer - Key Takeaways

UNCLASSIFIED

UNCLASSIFIED 41

Contracting must become an Army core competency

Contract dollars as percent of DoD outlays declining slightly, but will remain higher than pre-Gansler levels

As budgets decline, we need to become better and smarter buyers

Need the right number of people (mil and civ), with the right skill sets, at the right place

Now is not the time to be penny wise and pound foolish

Key Takeaways

We Can’t Risk Losing Momentum

UNCLASSIFIED


Facer – Modernizing the Industrial Base

Prior to 2007, investment in organic industrial facilities flat

Couldn‟t compete against Army priorities (barracks, etc)

Reset gave us that visibility

Now: Visibility of requirements and priorities – something we didn‟t

have before

Portfolio reviews allow us to take holistic views – divest excess and

modernize the rest.

Portfolio focus was on OIB. AMC consistently showed entire facility

requirements …

Takeaway: Progress made … more to do

Mr. Dwyer

UNCLASSIFIED

UNCLASSIFIED

Modernizing the Industrial Base

Aging infrastructure Risk accepted; focus elsewhere (BRAC, GTA, etc.) Modernizing through prudent reinvestment

Accomplished a Lot . . . Much More to Do

Pre-2007 . . .

PAA: $1.01B at GOCO Ammo Plants

MCA: $540M for AMC projects

AWCF: $850M in Capital Investment

Visibility on GOCO plants

New missions needing facilities

Portfolio Review Address Quality of Work Environment Special Installation Transfer Investment Needed: PAA: $150M annual + $50M for QWE for 6 years MCA: $350M per year for 15 years

Way Ahead . . .

Progress . . . 2007-2011

Old Ammo Plant Facility

New ANAD Power Train Facility

2011

GOCO = Government Owned, Contractor OperatedAWCF = Army Working Capital Fund

42

UNCLASSIFIED


Facer – Organic Industrial Based (OIB) Req

Total requirements – over $8B (OIB and Materiel Enterprise)

Antiquated facilities inefficient and reduce ability to address

ARFORGEN

VCSA tasking to fix in 5-7 years vs 24-30

Takeaway: Requirements identified and prioritized

Mr. Dwyer

UNCLASSIFIED

UNCLASSIFIED

Organic Industrial Based (OIB) Requirements

“Provide mature plan with associated timeline that solves the problem in 5-7 years vs 24-30 years” (VCSA Guidance)UNCLASSIFIED

MCA$5.9B72%

PAA$1.5B19%

AWCF$150.6 M

2%

RDTE/ECIP$79.3 M

1%OMA$517M

6%

Demil and Disposal Costs1174 Structures - $105M

CIP and OMA/OPA Tails $1.9B

1207 Projects - $8.1B

43

UNCLASSIFIED


Facer – Organic Industrial Base (OIB)

Have Prioritized OIB requirements

Available FY13-17 funding = $250M

Critical unfunded requirements = $913M

Takeaway: Methodical approach & addressing the problems over time

Mr. Dwyer

UNCLASSIFIED

UNCLASSIFIED First Time With This Level of Visibility

Our Organic Industrial Base (OIB)

Industrial base has assumed increased risk over the years

MCA (and other) funding continues to decline

Establishment of an Army Initiative for the OIB and Materiel Enterprise working to correct imbalance by 2020

44

UNCLASSIFIED


Facer – Bottomline: It’s All Possible With Our People

Can‟t do it without our team of professionals

Sampling of some of our awards since FY10

Takeaway: A great team … doing great work

GEN Dunwoody

UNCLASSIFIED


Bottomline: It’s All Possible With Our People

SECARMY/CSA/DA Safety Awards

Presidential Rank Awards

Chief of Staff Combined Logistics Excellence Awards

7 Army Acquisition Corps Awards

Decoration for Exceptional Civilian Service Awards

Army Greatest Invention Awards

Defense

Standardization Program Winners

Dedicated Professionals

LSS Awards

SHINGO Awards

4 Lean Six Sigma Awards

ACC recipient of the 2011 CIO 100

Recognized Supporter of Historically Black

Colleges and Universities (HBCUs)

6 Value Engineering

Awards

UNCLASSIFIED 45Our People Are Our Credentials




UNCLASSIFIED


Facer – Closing Comments

No facer comments

UNCLASSIFIED

UNCLASSIFIED

Honorable John M. McHughSecretary of the Army

Army Materiel Command

Sustaining the Strength of the Nation!

46UNCLASSIFIED

UNCLASSIFIED

UNCLASSIFIED

UNCLASSIFIED

BACKUP

UNCLASSIFIED

UNCLASSIFIED

Army Contracting Officer

MAJ John Cockerham

Convicted of $9.6M in Contract Fraud (SWA)

SWA: 466 Contracting

Investigations Since

2005

SWA Suspects:

72% (240 of 329) are

US ARMY

GAO Audit results continue to list the same conclusions:

Fraud, Waste, & Abuse In Army Contracting

Area of Continued Emphasis 47

UNCLASSIFIED

UNCLASSIFIED

15,184

17,642

20,100

22,557

25,015

27,473

FY11

FY09

FY10

FY14

FY13

FY16

FY15

FY12

Accelerating Chem Demil

Well Ahead of Schedule

N/AN/AHT, HD

Projos, Mortars

Pueblo, CO

(PM

ACWA)

N/AN/AVX, GB, H

Rockets, Projos

Blue Grass,

KY (PM

ACWA)

3,8513,851GB, VX, HD, HT

Rockets, Mines, TCs

Pine Bluff,

AR (CMA)

2,9473,720GB, VX, HD, Rockets,

Bombs, Mines, Projos,

Spray Tanks, TCs

Umatilla,

OR (CMA)

2,2492,254GB, VX, HD, HT

Rockets, Mines, Projos,

Mortars, TCs

Anniston,

AL (CMA)

13,59913,617

HD, HT, H, GA,L,GB,VX

Projos, TCs, Spray Tanks

Rockets, Bombs, Mines,

Mortars

Deseret, UT

(CMA)

Cumulative

ProcessedTotal Original

Tons

Agent and

Storage Configuration

Sites

(Owner)

Actual Destruction Data Date: As of 13 Jun 11

Treaty progress: 87.4% of declared agent (Stockpile and Non-Stockpile) destroyed.

As of 13 Jun 11

CMA Portion of

100% Milestone Progress

Note: CMA portion: 27,473

ACWA portion: 3,137

Goal Actual

Legends: = Operational = Project design/construction = Campaign Completed

Actual

Scheduled

CLOSING

Operations

Complete *

Feb 12

Aug 11

Nov 11

Nov 10

N/A

N/A

*Earliest CrediblePlanning Date

200714,739

FY07

Bar GraphGreen Bar = Actual DemilYellow Bar = APB FY GoalGray Bar = Projected APB

48

UNCLASSIFIED

UNCLASSIFIED

So, Where Do We Go From Here?

“If you don’t like change, you will like irrelevance even less.”

~ General Eric Shinseki, CSA, December 2001UNCLASSIFIED49

UNCLASSIFIED

UNCLASSIFIED 50

AMC Across Our United States

Every AMC Job Creates ~1.27 Local Community Jobs

01 – 004950 – 499500 – 49995000 +

People

Primary AMC Locations

UNCLASSIFIED

UNCLASSIFIED

Challenge Into Opportunity

Sierra Army DepotIncrease from 3135 vehicles in 2008 to over 10,000 Combat Vehicles and related equipment today including 1941 Tanks, 7731 APCs and 133 Howitzers

Letterkenny Army DepotIncluding 1,684 HMMWVs

Red River Army DepotIncluding 3,868 HMMWVs, 1751 Bradleys,

1525 Trucks and 491 Trailers

Anniston Army DepotIncluding 672 M1s, 285 M109s, 1,019 M113s, and 554 M88s

Opportunities for Added Value to Army Sustainment Operations 51

Final Slides_SecArmy Visit

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