Acquisition Evolution
Acquisition is the process of procuring products or services. It involves searching for and vetting the right provider and then creating a contract that binds the buyer to the seller. The contract is always the resulting instrument, whether buying a sailboat or building an aircraft carrier. The acquisition process evolves in complexity as the size and cost of the product or service increases. It continues evolving when many specialties and disciplines are required. Add in the element of time and it becomes even more complex. The final element of acquisition evolution is the complication of a multitude of changes to the original plan.
What follows are illustrations of the enormously complicated acquisition process for building or maintaining a US Navy warship. Not only does the process involve millions or billions of dollars, but the projects also run for months and years and their completion on schedule defines the state of fleet readiness.
The process begins in the first image with a high-level illustration of basic acquisition contracting followed by another illustration depicting the incredibly complex process of dealing with potentially thousands of concurrent changes. And finally, what happens to all that data when the ship returns to service.
*This illustration is a conceptual representation
Complexity of Change
Contract management becomes more interesting when dealing with large projects, costing millions or billions, with thousands of changes, on hundreds of sub-projects, with dozens of subcontractors. And they are all happening at the same time over a period of months or years…to one prime contract! Such is the complexity of acquisitions for the US Navy shipbuilding, maintenance, and modernization of fleet warships.
The prime contractor has a master contract and dozens or even hundreds of individual task orders specifying different contractual requirements for various disciplines such as pipefitters and electricians. Each task order describes, in contract language, how a particular product or service is to be delivered. In the real world of such massive projects, there are frequently unforeseen and unexpected challenges that arise. For example, the parts specified for an upgrade do not fit as intended. The problem is reported, work stops, engineers or subject matter experts evaluate the problem and devise a solution, budgeting may be involved, timing of the necessary change is evaluated, and if deemed to proceed, a revision to the contract of the subcontractor is created, evaluated, and approved. Finally, with revised details, work resumes.
*This illustration is a conceptual representation
The following illustration is an simplified depiction of how a change to a task order is processed. The real-world process is even more involved with additional review and approval steps. Every change involves different authorities, experts, funding, and review but the general workflow is illustrated here. At the end of this workflow, the contract is changed and work resumes. Then the next change goes through this or a similar process. These changes happen potentially thousands of times for every shipbuilding, maintenance, or modernization project. The changes take time and money. Our Open Concurrent Contract Modification (OCCM) module provides unlimited workflows in real time for every type of contract change, routing documentation and actionable data between entities at the speed of light to save time and money.
Building the Future
Once the ship has been built, fixed, or modernized and added to fleet readiness, what is left is a wealth of data from which lessons can be learned and exploited to improve similar projects in the future. The reality is that with hundreds of subcontractors and ship workers involved, the documentation of the project is delivered in many different formats. The data is added to the relevant databases but thorough analysis and insight for the future is lacking when valuable data points are buried in textual documents such as PDFs. Our Savantir™ module of the Open Acquisition System enables the extraction of valuable data from textual documents, thereby providing the Navy with better information in real time from which to improve future projects.
The Last Word
The foregoing illustrations and description of the acquisition process for projects such as shipbuilding, maintenance, and modernization, tell the story of a very large and complex contract modification system that is required for timely work on modern warships. The links above and a visit to our Solutions pages will provide even greater detail on how nGAP and its products will provide real time and actionable data, save time and money, and most importantly, contribute to improved fleet readiness of the US Navy.
Simple Contract Management
The government has contracts with every prime contractor to perform the work required (illustration below). The process begins with finding and selecting the right vendor, negotiating terms, and awarding a contract. The contracted work is completed, invoice and payment are exchanged and the story ends there. But often the work does not go as planned. Maybe the specs were wrong, the conditions on the job were different, the parts were delayed, or the timing or weather got in the way. Whatever the reason, a contract revision is needed to match the new circumstances, costs, and timing. Finally, work resumes, and the rest of the process goes according to script.
This is basic contract management stuff. And while government contracting is complicated by the voluminous and constantly changing Federal Acquisition Regulations (FAR) and Defense Acquisition Regulations (DFAR), the process is thoroughly understood and codified in software offerings such as our own Open Acquisition System (OAS).