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: Performance Metric: Fund to a 67-year recapitalization rate by 3007'
Metric Description. The facilities recapitalization metric (FRM) is a performance indicator that measures the rate at which an inventory of facilities is being recapitalized. The term "recapitalization" means to restore or modernize facilities. Recapitalization may (or may not) involve total replacement of individual facilities; recapitalization often occurs incrementally over time without a complete replacement.
The performance goal for FRM equals the average expected service life (ESL) of the facilities inventory (estimated to be 67 years, based on benchmarks developed by a panel of Defense engineers in 1997). The ESL, in turn, is a function of facilities sustainment. "Sustainment" means routine maintenance and repair necessary to achieve the ESL, To compute a normal ESL, full sustainment levels must be assumed. A reduced ESL results from less than full sustainment. For this reason, the metrics for facilities recapitalization and facilities sustainment are unavoidably linked and should be considered together.
Sustainment levels required to achieve a normal ESL are benchmarked to commercial per unit costs; for example, $1.94 per square foot annually is needed to properly sustain the aircraft maintenance hangar inventory for a 50-year life cycle. The facilities sustainment model (FSM) adjusts these costs to local areas and assigns the costs to DoD Components and funding sources.
The recapitalization rate—measured by FRM in years—is compared to service life benchmarks for various types of facilities. For example, the ESL of a pier is 75 years, and the ESL of a dental clinic is 50 years (provided the facilities are fully sustained during that time). The average of all the ESL benchmarks, weighted by the value of the facilities represented by each benchmark, is 67 years. Weighting is required to normalize the ESL. For example, without weighting, 50 years is the ESL of a hypothetical inventory consisting of administrative buildings (75-year ESL) and fences (25-year ESL). But fences are insignificant compared to administrative buildings—DoD has $22 billion worth of administrative buildings, but only $3 billion worth offences and related structures—and should not have equal weight. The ESL of this hypothetical inventory when weighted by plant replacement value is 68 years, not 50 years.
For evaluating planned performance, both metrics (FSM and FRM) are converted to dollars (annual funding requirements) and compared to funded programs in the DoD Future Years Defense Program (FYDP). Both metrics can also be used to measure executed performance.
V&V Method. Recapitalization rates are computed according to set procedures for transmitting program and budget data to the Office of the Secretary of Defense (maintained by the Program, Analysis and Evaluation Directorate of the Office of the Secretary of Defense) and set rules as described in the August 2002 document. Facilities Recapitalization Front End Assessment. Data collection procedures are quite complex and are derived from multiple sources to include several hundred FYDP program elements, multiple funding appropriations and resources from outside DoD, and hundreds of thousands of real property records. The various data elements are summarized and merged in the Defense Programming Database (DPD) Warehouse, where the recapitalization rate is computed from the data. All the data submitted to the DPD Warehouse arc audited for accuracy by multiple DoD offices. The benchmark for the DoD average recapitalization rate goal (67 years) is based on service life benchmarks developed by DoD in 1997.
Sustainment rates are computed in a similar manner. Approximately 400 benchmarks for sustainment are contained in the DoD Facilities Cost Factor Handbook and are each documented for source and estimated quality. These individual cost factors are combined with real property inventory databases by the DoD FSM, which is maintained under contract by R&K Engineering of Roanoke, VA. FSM outputs are merged with programming and budget data contained in the DoD FYDP; merging is done in the DPD Warehouse, where sustainment rates are computed.
Performance Results for FY2002. Shortfalls in facilities recapitalization (and associated sustainment) were considered in development of the amended FY2002 and FY2003 budgets. Although performance as measured by the budgeted recapitalization and sustainment rates improved from FY200I levels, the targets (67-year recapitalization rate and full sustainment) were not achieved in either budget. As a result of not achieving full sustainment levels, the theoretical service life of the inventories (67 years) suffered another incremental reduction. As a result of not achieving a 67-year recapitalization rate, obsolescence in the facilities inventories increased incrementally. The cumulative and compounding effect of these shortfalls is measured by the number of C-3 and C-4 facilities reported in the Department's readiness reports (68% of facility classes are reported as having serious deficiencies that adversely impact mission performance).
Because of the way these metrics are constructed, the underperforming results of FY2002 and FY2003 do not directly affect the sustainment and recapitalization performance targets for FY2004. The goal for sustainment remains full sustainment; a 7% shortfall in programmed sustainment in FY2003 cannot be offset with 7% overage in FY2004. The interim goal for recapitalization remains 67 years, even though past performance has already reduced the service life of the facilities inventory. The direct effect of undersustainment and underrecapitalization is captured in the accelerated recapitalization rate that is required to restore readiness to at least C-2 sums by 2010.
Metric Description. The Secretary of Defense has established a goal to eliminate all inadequate family housing by the end of FY2007. Each Military Service has developed a Family Housing Master Plan that outlines the approach it will follow to achieve this long-term goal. These plans identiFYthe program requirements, by year, to eliminate inadequate family housing by FY20O7.
Inadequate housing, in general, is any unit that requires a major repair, component upgrade, component replacement, or total upgrade. Each Service has evaluated its housing and identified inadequate units. Each Service has then developed a plan to eliminate this inadequate housing through a combination of traditional military construction, operations and maintenance support, and privatization.
V&V Method. Information was gathered directly from the Military Departments and supported in their Family Housing Master Plans, which are submitted annually to the Deputy Under Secretary of Defense (Installations and Environment). These master plans provide detailed information, by installation, on the Service's ability to achieve the 2007 family housing goal.
Performance Results for FY2002. The Department reduced inadequate family housing by 27,000 units through revitalization, demolition, and privatization. Interim targets have not been established because housing privatization negotiations often change the scope of projects, making targets impractical. Further, the housing privatization process takes over a year to complete, and during this time, varying economic conditions and financial arrangements between prospective contractors and their financial lenders can change. This would cancel a project and return inadequate inventory to the fiscal year, thereby skewing targets.
Performance Metric: Reduce Major Defense Acquisition Program (MDAP) acquisition cycle rime (months) ''""
Metric Description. Acquisition cycle time is the elapsed time, in months, from program initiation—when the Department makes a commitment to develop and produce a weapon system—until the system attains initial operational capability (IOC). This metric measures the average cycle time across all Major Defense Acquisition Programs (MDAPs). During the 1960s, a typical acquisition took 7 years (84 months) to complete. By 1996, a similar acquisition required ll years (132 months) from program start to IOC. To reverse this trend, DoD established an objective to reduce the average acquisition cycle time for MDAPs started since 1992 to less than 99 months, a reduction of 25 %. We achieved that initial objective. We did so through rapid acquisition with demonstrated technology, time-phased requirements and evolutionary development, and integrated test and evaluation. To continue that improvement, the Department will seek to reduce the average cycle time to less than 66 months for all MDAPs started after FY2001. To achieve that objective, the Department is introducing improvements to development and production schedules similar to those it initiated for managing system performance and cost. Rapid development and fielding of weapon systems—leveraging new technologies faster—will enable U.S. forces to stay ahead of potential adversaries.
V&V Method. The key measure for this objective is the average elapsed time from program start to IOC, measured in months. Average acquisition cycle time is computed using schedule estimates from Selected Acquisition Reports (SARs). The Department also monitors MDAPs through the Defense Acquisition Executive Summary reporting system and the Defense Acquisition Board review process. In FY 1998, the Department began to evaluate cycle times of new MDAPs (as well as schedule changes for ongoing programs) during its annual program and budgeting process. There are 42 MDAPs in the post-FY1992 calculation of the FY2001 actual.