4.6.2 Early Industry Involvement: Industrial
An Industrial Capabilities Review is a powerful tool available to PMs for determining general industrial capabilities. To avoid potential problems in the subsequent competitive process and to ensure that a "level playing field" is maintained, an announcement in the Commerce Business Daily should
be made to inform all potential offerors that the Government plans to conduct
an Industrial Capabilities Review and to request responses from all interested
parties. Below is a general approach that PMOs may find readily adaptable to
any type of capability review. The basic steps in the process are to:
Obtain the Source Selection Authority's approval to
conduct the review.
Establish the criteria for the
Identify the potential contractors who will
participate in the review.
Provide an advance copy of the review material to
Select the review team, ensuring that it has the
necessary mix of talent.
Train the team on the purpose of the review and
Conduct the review and evaluate the
Provide feedback to each contractor on the results
of their review and assessment.
Provide the results to the PM.
This review is an appraisal of general industrial
capabilities and supports identifying potential program risks and best
practices rather than evaluating specific contractors.
Regardless of the approach, the PMO should determine
what specific information is needed. DoD 4245.7-M is a good guide to help
tailor a set of questions for the contractors. The questions generally focus
on two areas consistent with protection of contractor proprietary information.
What is the state-of-the-art of the technology
proposed for use in the system?
What are the general developmental/manufacturing
capabilities of the potential contractors (including experience, tools,
processes, etc.) as compared to industry best practices?
Table 4-2 shows some of the specific areas or sources
for risk identification. It includes a number of areas (threat, requirements,
design, etc.) that have been shown through experience to contain risk events
that tend to be more critical than others, and which ones should receive the
most management attention. Risk events are determined by examining WBS element
product and processes in terms of risk areas. Process areas are specifically
addressed in DoD 4245.7M. They are general in that areas of risk could be
present in any program from either source (WBS or process). They are intended
as a list of "top-level" risk sources that will focus attention on a specific
area. The PMO and contractor(s) will have to examine lower levels to
understand the actual risks that are present in their program and to develop
an effective management plan. The risks shown are not intended to serve as a
simple checklist that one should apply directly, then consider the program
risk-free if none of the listed risks are present.
An examination of the program in these areas can help to develop the final
program acquisition strategy and the risk-sharing structure between the
Government and industry. The PMO can also use the results to adjust the RFP
for the next phase of the program.
- Uncertainty in threat accuracy.
- Sensitivity of design and technology to threat.
- Vulnerability of system to threat and threat
- Vulnerability of program to intelligence penetration.
- Operational requirements not properly
established or vaguely stated.
- Requirements are not stable.
- Required operating environment not described.
- Requirements do not address logistics and
- Requirements are too constrictive - identify specific solutions that
force high cost.
- Design implications not sufficiently considered
in concept exploration.
- System will not satisfy user requirements.
- Mismatch of user manpower or skill profiles with
system design solution or human-machine interface problems.
- Increased skills or more training requirements
identified late in the acquisition process.
- Design not cost effective.
- Design relies on immature technologies or
"exotic" materials to achieve performance objectives.
- Software design, coding, and testing.
Test and Evaluation
- Test planning not initiated early in program
- Testing does not address the ultimate operating
- Test procedures do not address all major
performance and suitability specifications.
- Test facilities not available to accomplish
specific tests, especially system-level tests.
- Insufficient time to test thoroughly.
- Same risks as contained in the Significant Risks
for Test and Evaluation.
- M&S are not verified, validated, or
accredited for the intended purpose.
- Program lacks proper tools and modeling and simulation capability to
- Program depends on unproved technology for
success - there are no alternatives.
- Program success depends on achieving advances in
- Potential advances in technology will result in
less than optimal cost-effective system or make system components
- Technology has not been demonstrated in required
- Technology relies on complex hardware, software, or integration
- Inadequate supportability late in development or
after fielding, resulting in need for engineering changes, increased
costs, and/or schedule delays.
- Life-cycle costs not accurate because of poor
logistics supportability analyses.
- Logistics analyses results not included in
- Design trade studies do not include supportability
- Production implications not considered during
- Production not sufficiently considered during
- Inadequate planning for long lead items and
- Production processes not proven.
- Prime contractors do not have adequate plans for
- Sufficient facilities not readily available for
- Contract offers no incentive to modernize facilities or reduce
- Immature or unproven technologies will not be adequately developed
- Production funding will be available too early - before development
effort has sufficiently matured.
- Concurrency established without clear understanding of
Capability of Developer
- Developer has limited experience in specific type of
- Contractor has poor track record relative to costs and
- Contractor experiences loss of key personnel.
- Prime contractor relies excessively on subcontractors for major
- Contractor will require significant capitalization to meet program
- Realistic cost objectives not established early.
- Marginal performance capabilities incorporated at excessive
costs-satisfactory cost-performance tradeoffs not done.
- Excessive life-cycle costs due to inadequate treatment of support
- Significant reliance on software.
- Funding profile does not match acquisition strategy.
- Funding profile not stable from budget cycle to budget
- Schedule not considered in trade-off studies.
- Schedule does not reflect realistic acquisition planning.
- APB schedule objectives not realistic and attainable.
- Resources not available to meet schedule.
- Acquisition strategy does not give adequate consideration to various
essential elements, e.g., mission need, test and evaluation, technology,
- Subordinate strategies and plans are not developed in a timely
manner or based on the acquisition strategy.
- Proper mix (experience, skills, stability) of people not assigned to
PMO or to contractor team.
- Effective risk assessments not performed or results not understood
and acted upon.