$
Requirements were re-examined and refined in some cases or eliminated altogether in order to streamline the program. Waived requirements related to capabilities that were determined to be less crucial to the program and there- fore would allow for effective, informed requirements trade-offs. Restructur- ing the technology and blending key elements
of the program of record
with COTS technologies resulted in a reduction of more than $380 million in procurement cost and $880 million in total savings over the lifetime of the program.
Recommendation Review and re-evaluate requirements and consider all trade-off options in looking for ways to conserve resources.
LL_52: Assess production line capac- ity and timelines for similar systems with the same configuration to possi- bly modify production purchases and reduce cost.
Background Better buying power was achieved through the implementation of economic order quantity with international part- ners, resulting in $62 million in savings in FY12. By assessing production line capacity and timelines for missiles with the same configuration, additional mis- siles could be incorporated as part of the production buy, thereby reducing the average unit procurement cost for U.S. and international partners.
Recommendation Look for contract synergy when pos- sible, given the stage of the product in the acquisition life cycle, for U.S. and inter- national contracting opportunities.
TECH REFRESH
The National Guard’s C Signal Company, 29th Infantry Division, receives training on Warfighter Information Network – Tactical (WIN-T) Increment 1 technical refresh upgrades at Pikesville, MD, Jan. 14. While WIN-T is highly specialized DOD software with its own costs, the costs of COTS software licenses can be significantly reduced through economies of scale and purchasing for the enterprise; however, such savings can be difficult to obtain given the Army environment in which commands, appropriations and implementation schedules often operate separately. (U.S. Army photo by Amy Walker, Program Executive Office Command, Control and Communications – Tactical)
CONTROL COSTS THROUGHOUT THE PRODUCT LIFE CYCLE
LL_179: When negotiating enterprise software contracts, define the scope of the enterprise, understand the software you are buying and have an immediate need or guaranteed funding for some portion of the licenses to realize cost savings.
Background Economy of scale in procuring enter- prise software licenses and services is an obvious mechanism to cut costs. In prac- tice, however, it is extremely difficult to
achieve in the Army environment where commands, appropriations, existing con- tracts, programs and implementation schedules often operate separately.
Recommendation Define the scope of the enterprise. Te boundary should be where the business processes become more different
than
alike. Additionally, understand the software you are attempting to buy; become familiar with its capabilities and how it is sold. Obtain 100 percent firm commitments for how much each organization can pay now and in the future. Agreements should be structured such that the government does not
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