Chet’s Blog

MANAGEMENT AND COST BASELINES ACTIVITIES

The management team’s first responsibility is to create a baseline which

corresponds to the needs of the technical baseline.  The program

organization can then begin to function during the proposal in their new

roles.  Program assignments and leadership role assignments aid in the

responsibility structure which is critical to the success of proposal

preparation.  Experienced team members or consultants establish a Work

Break Down Structure (WBS) and a Master Milestone Schedule.  These program

tools are the glue which bind all program tasks dictated in the Statement

of Work (SOW) and ultimately tell the story of how the program goals will

be achieved.  Preliminary WBS’s and schedules form the backbone of the

STORYBOARD DEVELOPMENT.

 

In the event that the customer issues a Statement of Objectives (SOO), the

team has the flexibility to use it as the structure on which to build a

Contractor Statement of Work (CSOW).  The CSOW should retain the same

numbering and nomenclature scheme as the SOO since the government will

grade according to its directives.  Imagine if a bidder came up with a

completely different structure and numbering scheme.  The evaluators would

have a much easier time awarding points to a competitor that followed their

scheme.

 

The following is a quote from the U.S.  Army PEO STRI Program Executive

Office for Simulation, Training, & Instrumentation concerning SOOs

(http://www.peostri.army.mil/STRIAM/SOWGENERATOR/): This document

introduces a new concept called the SOO which shifts the responsibility for

preparing the SOW from the government to the solicitation respondents.

Following recent DoD direction to lower government costs by encouraging

innovative contract options and flexible design solutions, the SOO captures

the top level objectives of a solicitation and allows the offerors complete

freedom in the structure and definition of SOW tasks as they apply to the

proposed approach. However, the requirement, content and purpose of the SOW

in the contract remain unchanged… The key is to keep the SOO clear and

concise and to provide potential offerors with enough information and

detail to structure a sound program, designed to be executable and satisfy

government objectives. The SOO is used, along with other information and

instructions in the RFP, by offerors, to develop the contract work

breakdown structure, statement of work, and other documents supporting and

defining the offerors proposed effort. SOO content depends both on the type

of program and on the program phase. It is possible that a ‘mature’

program, such as one which has been fielded for some time, could require

slightly more detail in the SOO to properly integrate with other, ongoing

parts of the program. The SOO is replaced at contract award in the contract

by the proposed SOW.

 

So, although the SOO is only offered as guidance, the wise bidder expands

on its structure to define their particular approach.

 

Once these the SOW and the WBS tools are in place the Management baseline

can proceed.  At this point there are several other base line ingredients

to design and capture including the: Program Organization, Program

Schedule, key personnel, past performance and management processes.  Each

of these key areas can be worked well in advance of the final RFP release. 

If they are, you will find your company in an excellent position to

concentrate on any new direction the final RFP may take.

 

PROCESS FACILITATING: Baselining is like a long trial for a group of

sequestered jurors.  Don’t pick sides, don’t alienate, demand the best

performance, find out what people have to offer and what they need to allow

them to make the greatest contribution (writing help, computer access,

etc.):  it’s a “Stone Soup” process.

 

 

COST BASELINES NEED TO BE AUDITABLE The cost baseline uses the same tools

as the management baseline:  Work break down structure (WBS), WBS

Dictionary and Statement of Work (SOW).  It is the proposal management

group’s job to use these documents to structure the proposal for the best

cost.  This means two things: One, each of the items in the WBS must be

addressed in the SOW and Technical Volume, and two, there must be ample

detail in the WBS and SOW to describe the costed elements of the proposal. 

These items include hardware, software, engineering services, engineering

design, logistics, test and other work to be accomplished on the program.

 

The WBS and SOW need to be tightly laced throughout the other volumes of

the proposal.  How is this accomplished?  Remember your Outline and Cross

Reference Matrix?  Go to it like the grail and spend the time to fill in

the column for SOW and WBS references.  When you have accounted for every

line item in those documents against a paragraph in one of the proposal

volumes, you will know that you have done your job.

 

 

The WORK BREAKDOWN STRUCTURE (WBS) If you structure your proposal so that

the evaluators can easily find your responses, you will probably have a

well-structured WBS.  On occasion the RFP will offer the first three levels

of the structure eliminating some of the guess work, but when they don’t,

rely on Mil-Std 881 and your baseline documents.

 

FRANK SAYS:  If the RFP offers guidance:  FOLLOW IT!  Don’t go off in your

own direction because you think that your company has a smarter way of

doing business.  Remember, the evaluators will have to compare your

approach to the competitors.  If the competitor followed the guidance and

made it easier for them to score they will get the point and your company

will not.

 

The MIL-HDBK-881 gives the following definition: A work breakdown structure

(WBS) provides a consistent and visible framework for defense materiel

items and contracts within a program. This handbook offers uniformity in

definition and consistency of approach for developing the top three levels

of the work breakdown structure. The benefit of uniformity in the

generation of work breakdown structures and their application to management

practices will be realized in improved communication throughout the

acquisition process.

 

Below the third level you are on your own but it is best to use the MIL-STD

for guidance.  The other levels should follow the flow of your baseline

definitions.  In the hardware world this might mean breaking down modules

into sub-components and Lowest Replaceable Units (LRUs).  Build hardware

and software trees that reflect your builds down to the lowest level that

you can identify them.  These trees should then be reflected in the WBS.

 

FRANK SAYS: Mirror your hardware and software trees (from your baseline

document) in the WBS for total proposal auditability.  The more things tie

together the more credible they are.  While you’re at it, mirror your

organization structure for engineering, logistics, training and other

organizations into the WBS too.  If you’re selling services show how they

break down by discipline.

 

Tips & Tricks: Always break your structure down to the lowest level that it

can be best costed.  If two vendors or team members are responsible for

cost within a single block, break it down again until each cost element is

discrete.

 

The government wants the cost elements for its products broken down to

match CLINs.  Here is what MIL STD 881 defines as non-product elements that

should NOT be costed: Do not include elements which are not products. A

signal processor, for example, is clearly a product, as are mock-ups and

Computer Software Configuration Items (CSCIs). On the other hand, things

like design engineering, requirements analysis, test engineering, aluminum

stock, and direct costs, are not products. Design engineering, test

engineering, and requirements analysis are all engineering functional

efforts; aluminum is a material resource; and direct cost is an accounting

classification. Thus none of these elements are appropriate work breakdown

structure elements.  SPECIFICATION TREE Another important part of your

baseline is the Specification Tree.  This tree allows the bidder to

organize functional requirements by system components.  By starting your

tree early you can see where extra resources may be needed to further

define your technical approach.  Here is what MIL STD 881 has to say about

the specification tree: A specification tree, developed by systems

engineering, structures the performance parameters for the system or

systems being developed. It subdivides the system into its component

elements and identifies the performance objectives of the system and its

elements. The performance characteristics are explicitly identified and

quantified. Completed, the data listing represents a hierarchy of

performance requirements for each component element of the system for which

design responsibility is assigned. Because specifications may not be

written for each product on the work breakdown structure, the specification

tree may not match the work breakdown structure completely.

 

AUDIT YOUR WORK The cost baseline relies on the structuring of the

technical and management baselines.  Without auditability in your cost

structure you have no chance of convincing the client that you can do the

job.  Cost, therefore, must be managed hand-in-glove with the rest of the

proposal development.  The most important feature of the baseline exercise

is to develop an analysis that supports a winning cost.  This analysis can

then be broken down into bogies for each part of the program (design,

development, test and manufacturing efforts).

 

If you are the vice president or director of marketing it is your business

to research the client’s budget and the approximate amount available for

the solicitation.  From that information you and your team can determine a

point on the curve where the best cost, the winning cost, should be.

 

The Program Manager is responsible for parsing out cost bogies to each

vendor, team member and internal department to ensure that they have the

correct goal for their estimates.

 

After the Cost Kick-off the bogies are released and a milestone is set for

collecting the estimates.  All estimates must be accompanied by

justifications that match the WBS Dictionary definitions.  If a bid comes

in above the boogie the justifications must include detailed rationale so

that the Program Manager can manage the cost problems early in the game.

 

This approach eliminates last minute high estimates from being thrown over

the wall at the last minute and blowing the cost strategy.  Although this

may sound like a simple approach, it is almost never followed.  And when it

isn’t, unpleasantness is almost always the result.

 

SUMMARY

 

The challenge of the baseline meetings brings out the creative best in a

team.  Strategies will fall out of the sessions so that meaningful

storyboard writing can begin.  Other important program decision points will

also surface, including the need for additional team members and long-lead

item identification.  It is the beginning of the creative process and a

win for your company.

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