Public-Private

Partnership (PPP)

PPP Metrics BREAKOUT

Greg Dierker

U.S. Air Force Public Private Partnering

Gil Diaz

Raytheon

November 15, 2012

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Metrics Breakout

Definition

Problem Statement: Services lack a

standard methodology to effectively

demonstrate the benefits/value of Public-

Private Partnerships to the government

Desired Outcome: Develop a standard

process for objective and metric selection

including metric tracking roles and

responsibilities

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Identified Objectives

1. Reduce Cost of DoD Parts and Services

2. Reduce DoD Cost of Ownership

3. Leverage Private Sector Capital Investment Recapitalization

4. Maintain Core/Critical Skills

5. Enhance Readiness and Improve Efficiency and Effectiveness of CITE

6. Improved Support to the Warfighter

7. Develops new Processes Best Practices

8. Maximum Utilization of CITE Resources (People, Equipment and Facilities)

9. Foster Cooperation between DoD and Private Industry

10. Sustains the Defense Industrial Base Strategy

11. Promotes New Technologies and Modernization

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Metrics Breakout

Results

Scope: The Metrics framework and balanced scorecard apply to

all PPPs without constraining practitioners. The tool assists in the

identification of desired objectives and supporting metrics.

Services would benefit from:

a common understanding concerning the statutory objectives

and related supporting metrics for each of their Public-Private

Partnerships (PPP)

a standard methodology for selecting the desired objectives

and supporting metrics for each of their Public-Private

Partnerships (PPP)

a standard format for reporting the optimal mix of metrics for

each of their Public-Private Partnerships (PPP)

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Metrics

PPP Metrics Framework

Goal – Flexible, repeatable and consistent measurement of

PPP value

PPP Balanced Scorecard

Project

Provide a common metrics matrix that clearly cross references measures to desired objectives

Deliver a metrics reporting format to aid

leadership assessment of PPP value

Objective

PPP Metrics Identification Tool

Automate the common metrics matrix to ease and enhance the metrics application process for PPP practitioners

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Key Activities &

Milestones

PPP Metrics Framework – February 2013 Identify and prioritize the preferred metrics- Jan 13

Define specific metric information - Jan 13

Develop the two illustrations - Feb 13

PPP Metric Identification Tool – April 2013 Complete automation - Feb 13

Add specific metric information - Feb 13

Complete minor enhancements to tool - Mar 13

Test and Debug Tool - Apr 13

PPP Balanced Scorecard – March 2013 Adopt/modify balanced scorecard approach- Mar 13

Evaluate quadrant definitions - Mar 13

Establish run rules - Mar 13

Team Currently Meets on a Weekly Basis

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Questions?

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Draft Objective and

Metrics Matrix

Objectives Simplified and Grouped

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Problem Statement: Services lack a standard methodology to effectively demonstrate the benefits/value of Public-Private Partnerships

Metric

Commercial cost avoidance

Cost savings

Cost of goods sold

Depot/Arsenal productivity cost reduction (labor hours)

Reduces Labor rates

Private sector dollars received for plant and equipment recapitalization (depot/arsenal activation)

Core workload hours performed organically vs planned hours

Creates CORE hours/ adds to CORE sustainment

Creates or retains jobs

Organic depot/arsenal turn time

Depot/Arsenal quality/material deficiency returns

Depot/Arsenal on time delivery

Reduce risk

Depot/Arsenal first pass yield

New employee skills acquired

New processes incorporated

Reimbursement dollars received from private industry (lease)

Existing facility square footage used for partnership workload

Organic workload hours (above-core) attributed to partnership

Depot/Arsenal revenue received

New technologies incorporated

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PPP Metrics Framework

Charter

Title: PPP Metrics Framework

Opportunity or Problem Statement:

Services lack a common understanding concerning the statutory objectives and related supporting metrics for each of their PPPs.

Business Impact:

Provide a systematic management approach for demonstrating the benefits/value of PPPs.

Goal Statement / Objectives:

Provide two metric framework illustrations. The first illustration will depict the statutory objectives and groupings of supporting metrics. The second illustration will be a matrix that depicts the primary and secondary metrics identified that best support the respective objectives. Specifically, Identify and prioritize the preferred metrics (depot, common, higher headquarters) used to measure achievement of desired objectives, define specific metric information (definitions, formulas, …) and develop the two illustrations based on results from the first objective.

Scope: This framework applies to all PPPs. However, the practitioner still has the flexibility to apply other unique metrics as applicable.

Team Members:

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PPP Metrics Identification Tool

Charter

Title: PPP Metrics Framework

Opportunity or Problem Statement:

Services lack a standard methodology for selecting the desired objectives and supporting metrics for each of their Public-Private Partnerships PPPs.

Business Impact:

Automated process using a common metrics framework provides a consistent approach for all PPP practitioners to use where the chosen metrics are aligned to the desired objective(s).

Goal Statement / Objectives:

Provide a standard and automated process that enables PPP practitioners to identify the primary objectives and metrics that will be tracked to ensure to demonstrate the benefits/value of their PPPs. Objectives: complete automation of Metrics Framework (load and link metrics to objectives), add specific metric information (definitions, formulas, …) to tool, complete minor enhancements to tool (while remaining within the defined scope), test and debug the tool, and release 1.0 demonstration version.

Scope: The tool assists in the identification of desired objectives and supporting metrics. The tool is not currently planned to act as the data repository or graphical display of the metrics.

Team Members:

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PPP Balanced Scorecard

Charter

Title: PPP Metrics Framework

Opportunity or Problem Statement:

Services lack a standard format for reporting the optimal mix of metrics for each of their Public-Private Partnerships PPPs.

Business Impact:

Provide ease of evaluation and comparison of PPPs within and across Services through the use of a common metrics framework.

Goal Statement / Objectives:

Provide a standard, easy to use, metrics report format that will enable leadership to make an accurate assessment of the health and benefits to the Service provided by each individual PPP. Objectives: adopt/modify an existing COTS balanced scorecard approach (e.g. Kaplan & Norton), evaluate quadrant definitions for applicability to PPPs and redefine as appropriate, and establish run rules defining the proper balance between and among quadrants.

Scope: This scorecard format would apply to all PPPs but does not constrain practitioners from identifying and

tracking other supporting metrics as applicable.

Team Members:

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