BBP Initiatives Employed in Acquisition Strategy for Navy Destroyer
Guided by Better Buying Power initiatives, the Navy team leading the acquisition of three DDG 51 Class Guided Missile Destroyers successfully conducted an innovative competition. In 2009, the Navy agreed to allocate the construction of three DDG 51 Class Guided Missile Destroyers to two shipbuilders while truncating the DDG 1000 Program. After extended sole source negotiations resulted in unacceptable pricing, the team obtained permission to modify the acquisition strategy. In less than 90 days, the team developed and obtained approval for the modified strategy and issued a request for proposals. These actions resulted in competitive Fixed Price Incentive Firm contracts for DDG 114 and DDG 115 as well as a priced option for the FY12 DDG, exemplifying Better Buying Power initiatives. The Team set a short timeline and adhered to it while incentivizing industry productivity. The Team combined an innovative strategy, Profit Related to Offers (PRO) with other contract provisions including sharelines and ceiling values to obtain true competition while sustaining the shipbuilding industrial base.
The team accomplished this effort less than six months from the decision to compete to contract award, while satisfying all procurement regulations and policy and utilizing the newly implemented enterprise resource planning system in the award process. This competitive procurement resulted in savings of $298 million to the Navy across these three ships and established the conditions for the follow-on FY13-17 multi-year procurement for DDG 51 class ships.