SPI Concept Paper

  1. INTRODUCTION
  2. FLOWCHART
  3. DEFINITION OF A CONCEPT PAPER
  4. GENERAL
  5. CONTENTS OF THE CONCEPT PAPER
  6. SUMMARY
  7. RISK DOCUMENTATION

INTRODUCTION

The purpose of this SPI Concept Paper Review guidebook is to provide guidance for personnel who are working with contractors submitting SPI concept papers to eliminate multiple processes within the contractor's facility to provide background information on the SPI process. Contractors may find the guidebook useful in preparing their submissions.

The Secretary of Defense issued guidance in December 1995, allowing the Department of Defense (DoD) to eliminate multiple processes within contractor facilities. This initiative is known as the Single Process Initiative (SPI); it is sometimes referred to as the block change initiative.

Contractors may submit proposals/concept papers to reduce multiple, Government-directed business or manufacturing processes at a given site to a single process, where possible. The SPI program modifies all applicable Government contracts via block change procedures to ensure that the benefits are not offset by administrative expense.

DCMA Headquarters encourages any suggestions to improve this guidebook. Suggestions should be submitted through channels to:

  • Defense Contract Management Agency
    ATTN: DCMA-OCS, Supplier Operations
    6350 Walker Lane, Suite 300
    Alexandria, VA 22310-3225
    Telephone 703-428-0969

FLOWCHART

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DEFINITION OF A CONCEPT PAPER

A concept paper is a definitive paper that describes the process the contractor proposes to adopt, the methodology for moving to that process, and includes a cost benefit analysis adequate to determine a rough order of magnitude of the costs and benefits resulting from the proposed change (including any impact on the cost of performance of existing contracts).

Communication is the key to preparing a successful concept paper.

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GENERAL

A concept paper may involve a proposal to combine multiple processes into one process (a single process) or an improvement to an existing process (process re-engineering).

From the beginning, contractors, customers, the Defense Contract Management Agency (DCMA), and the Defense Contract Audit Agency (DCAA) should conduct open discussions to explore the viability of proposed changes.

  • Although contractors are responsible for preparing and submitting concept papers, Government representatives should encourage and assist contractors in developing the papers.
  • The Contract Administration Management Office (CMO) acts as the primary industry interface; the CMO proactively informs contractors about the single process approach and advises them on how to prepare and submit initial concept papers and more detailed proposals if necessary.
  • A risk assessment methodology to identify contractor candidates includes, as a minimum, an assessment of the criticality of the product base to national defense; the magnitude of Department of Defense dollars; and the potential for SPI improvement opportunities.
  • Geographical CMOs should approach contractors with the highest potential for return on investment; the approach selected should be tailored to the individual contractor and include a profile that describes potential processes for SPI involvement as well as other Acquisition Reform opportunities.
  • When appropriate, CMOs should work with prime contractors to encourage participation by subcontractors.
  • CMOs should use Management Councils to facilitate timely and constructive exchange of SPI information, and make recommendations for approval.

Once a contractor has committed decided to participate in SPI, the first step is to assess areas where there is potential for adaptation of a single process or improvement of an existing process:

  • There are obvious candidates for conversion to single processes when an objective assessment is made of the multiplicity of military specifications and standards and duplicative requirements that are imposed on existing contracts by different customers for the same management and manufacturing processes.
  • Based on all SPI activity as monitored by DCMA, the most frequently proposed process changes include the requirements for the quality system; configuration management; calibration standards; material review; cost data reporting; military soldering; subcontractor approval; property management; and test requirements.

The success of SPI depends greatly upon the speed with which the block change is implemented.

  • The expeditious implementation of technically acceptable single processes can significantly decrease the costs of performance and facilitate the realization of the full benefits of Acquisition Reform.
  • The Under Secretary of Defense (Acquisition, Technology, and Logistics) established a cycle time goal of 120 days from the establishment of a concept paper to execution of the block change modification; this goal should be adhered to except where technical or cost benefit assessments cannot be adequately performed within that time frame., or where implementation of the SPI proposal requires legislative or regulatory changes.
  • The four step process comprising the 120 day cycle time are: Proposal Development (30 days), Approval (60 days), Contract Modification (30 days), and Implementation.
  • CMOs should not start the 120 clock with the submission of an "idea paper;" such a paper usually contains only a brief description, an estimated rough order of magnitude cost impact, and a statement of the probability of success - it is used to present ideas to the Management Council or to gather information to prepare a concept paper.
  • Once the CMO receives a concept paper, regardless of whether the paper is acceptable or definitive, the clock begins to tick.
  • The clock cannot stop or be restarted while awaiting an acceptable or definitive paper.
  • CMOs shall report receipt of the concept paper as soon as it is received and use the remainder of the initial 30 day period to obtain additional data as needed. Every effort should be made not to take time from other stages of the review period.
  • Internal Component and Cross Component Disagreements should be escalated up through the chain of command, CMO Commander, Component Team Leader, Component Acquisition Executive, SPI Management Team, and eventually the SPI Executive Council via the "Escalation Policy for the Single Process Initiative".
  • Concept papers that may require Law or Regulation changes will be forwarded through the local Management Councils to the Headquarters, Process Manager, who will provide further instructions on how to handle these changes. The HQ process manager shall provide guidance in drafting the FAR case or legislative proposal.

To the maximum extent possible, the concept paper should be written in performance based language; it should be concise, yet definitive. There is no specified page count (generally two to five pages are common). The concept paper should:

  • State process requirements in terms of specified results.
  • Include criteria and methods of performance measurement for verifying compliance, without stating methods and procedures for achieving the results.
  • Emphasize the outcomes rather than the mechanics of the process ("what is needed" and not "how to").
  • Allow flexibility to seek innovative solutions on how to achieve specified results (emphasize "results oriented requirements rather than "how-to" contract requirements).
  • Avoid inappropriate application of MIL-SPECS or MIL-STDS; use commercial standards or measures of performance when available.
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CONTENTS OF THE CONCEPT PAPER

A "definitive" concept paper includes elements needed to effectively evaluate a proposed change and allow rapid judgment by the Administrative Contracting Officer (ACO). Although some of these elements may not always apply in specific situations, a definitive concept paper should generally include the following:

  • Title
  • Descriptive Summary
  • Planned Transition Approach
  • Implementation of Proposed Process
  • Proposed Metrics
  • Cost Benefit Analysis
  • Impact on Contracts
  • Assessment of Changes in Government's Involvement
  • Statutory/Regulatory/Contractual Changes

Specific information to be included in these elements are (see SPI Concept Paper Template):

  • An accurate list of affected contracts
  • A clear description of the process change(s) being proposed
  • A description of the methodology to move to the proposed single process and a schedule for transition
  • An explanation of how the contractor will implement the process (i.e. how the contractor proposes to maintain quality and schedule during the transition)
  • A description of the proposed metrics that will be used to measure effectiveness and compliance. How will the contractor demonstrate acceptability and reliability of the process?
  • A rough order of magnitude cost benefit analysis, including estimated: implementation costs (if any), cost savings on existing contracts and future cost avoidances. Certified cost or pricing data will not be requested
  • Should there be a process change that would result in significant cost reductions, proposals can include:
    • the annual future savings, forecasted for the period covered by the contractor's indirect expense rate forecast (usually five years).
    • both direct and indirect implementations costs and savings.
    • recurring versus non recurring implementation costs and savings.
    • rationale to support significant estimates of implementation costs and savings.
  • An explanation of the risk impact on existing contracts and an assessment of future impacts.
  • What is the impact (program risk) to the Government and the contractor if the concept is approved/disapproved?
  • An assessment of changes required in the Government's involvement in the process
  • An explanation of required regulatory/contractual changes
  • A list of CAGE codes for the affected facilities.
  • A list of the NSNs that will be affected.
  • Full text or referenced documents as attachments, e.g., internal policies.
  • Proposed MOA language
  • ACO and DCMA technical point of contact phone numbers, FAX numbers and E-mail addresses.
  • Contractor technical point of contact with telephone number, FAX, E-mail address, etc.
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SUMMARY

  • It is important to remember that a concept paper can come in many different formats and styles because it needs to be tailored to the specific process and situation prevailing at a particular location.
  • The fact that some elements listed above may not be included in a particular concept paper does not necessarily make the paper inadequate; it is expected that additional information requested by the local Management Council will be supplied to the cognizant ACO during the review process.
  • The bottom line is: time is money. Do not let preconceived ideas or checklists "block" the SPI process.
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RISK DOCUMENTATION

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This page last updated: April 11, 2014
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