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IMMEDIATE RELEASE

Release No: 514-98
October 01, 1998

DOD LIFE CYCLE COST REDUCTION AWARD WINNERS ANNOUNCED

Under Secretary of Defense for Acquisition and Technology Jacques S. Gansler today announced the recipients of the third annual Life Cycle Cost Reduction Award. Gansler presented the awards during opening ceremonies of the Department of Defense Logistics Reform Focus Day held at the Pentagon.

Deputy Under Secretary of Defense for Logistics Roger Kallock said that 57 nominations were received for the award this year that was established to recognize the success that people involved in logistics undertook to reduce life cycle costs. One project was chosen from each of the Military Services, the defense agencies and one from industry to be the recipient of the award for their component. The deciding factors considered included returns on investment, payback time, qualitative process improvements, and joint ventures. The project receiving the highest score was awarded the overall DoD Life Cycle Cost Reduction Award.

The 1998 awardees are:

The Longbow Missile Cost Reduction Team-Part of the joint venture composed of Lockheed Martin Electronics and Missiles and Northrop Grumman, along with teams located at key subcontractors and government program offices. This industry group received the overall DoD Life Cycle Cost Reduction Award. Among this team's initiatives were the acceleration of procurement build that achieved a reduction from 10 to eight years, along with a $235.7 million reduction in overall program procurement costs; and the incorporation of cost reduction design and process initiatives that projects an actual cost savings of $445.6 million-80 percent above the goal and commitment.

The Army's M157A2 Integrated Product Team-This team streamlined fuel procurement while efficiently addressing safety and operational deficiencies through a full-scale material change program. The team achieved a life cycle cost reduction of more than $10 million with an investment of less than $.4 million.

The Naval Surface Warfare Center, Dahlgren, Va. Division's Shipboard Collective Protection Team-This group reduced the life cycle cost of shipboard nuclear, biological, and chemical defense filters by more than 75 percent, saving $60 million over the next ten years.

Air Force's Medium Range Air to Air Missile Vision 2000 Implementation Team-A new acquisition strategy developed by this team significantly reduced all costs in the AMRAAM program. The average unit procurement cost for the program decreased from more than $750,000 to under $400,000 in a contract awarded in April 1998. With its three priced options, the contract will save the Air Force and Navy $150 million over the next four years.

Marine Corps V-22 Osprey Joint Bell Boeing/Government Team-This team is developing an innovative blade tracking technology that will reduce rotor track and balance maintenance flights by 80 percent. The implementation of this technology will result in a $45 million life cycle cost savings.

Government/Industry Single Process Initiative Integrated Process Team-This group, which included the Defense Logistics Agency, the Defense Contract Audit Agency and the Boeing Co, was recognized for its accomplishments in modifying business and operational practices. The team generated more than $19 million in cost savings and provided more than $40 million in cost avoidance for future Apache Longbow production and logistical support.

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