The Air Force's FIRST rule: Keep outsourcing flexible
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Outsourcing has a definite appeal for agencies that want to achieve efficiencies of scale and free up resources for higher-impact uses.
Outsourcing has a definite appeal for agencies that want to achieve efficiencies of scale and free up resources for higher-impact uses.Yet long-term, multimillion-dollar outsourcing deals are so complex that defining all the requirements and responsibilities up front seems nearly impossible. What if priorities shift, as they so often do? What if more functionality is needed? How do you anticipate contingencies?The answer lies at the very beginning of an outsourcing deal, before any development work starts. It's critical to build in flexibility through a spiral development delivery model'not a linear project plan.What's the difference? Rather than define a rigid, step-by-step path, an agency can reach its destination through a series of iterations, or spirals, looping in tighter and tighter.This approach requires two things:At the Air Force's Electronic Systems Center Financial Information Systems Program Office (ESC/FN) at Wright-Patterson Air Force Base, Ohio, we used the approach for a $40 million, long-term outsourcing contract. Accenture's Government Operating Unit in Reston, Va., is helping us design and build the Financial Information Resource System.FIRST will be an integrated, flexible, standards-compliant, budget-decision support system that 3,500 Air Force users will access through an intranet portal. FIRST could have up to 6,000 users. It's built on commercial products such as NCR Corp.'s Teradata Warehouse and the Brio Reporting and Analysis tool from Brio Software Inc. of Santa Clara, Calif.From the beginning, we adopted a spiral development delivery model to let Accenture's project team respond to changing process requirements. At the same time, the Air Force is closely involved in all phases of system definition, development and delivery.The rolling-wave concept of planning deals with the highest-priority or riskiest requirements first. The contractor recommends how to minimize cost and schedule impact of changes. Because our primary focus is on cost and schedule, we remain flexible about reallocating requirements as needed from one release to the next.Each major project release has two or three spiral phases of design, development and testing. That builds in continuous improvement and confirms that our goals were met.The spiral development delivery model cannot function under a rigid contract structure. The FIRST contract has well-defined procedures for both in-scope and out-of-scope changes to ensure that both the Air Force and the contractor know how changes must be handled.The contract is a cost-plus-award-fee vehicle with base labor costs and expenses paid monthly. Profit is awarded every six months if the project achieves specified performance goals. This type of vehicle is suitable when enough uncertainties exist to prevent estimating costs under a fixed-price model. When estimates change, the established contract price ceiling can be changed accordingly.The first year alone brought three contract change proposals. All change proposals, from requirements definition through pricing, are handled by a team with representatives from the Air Force, Accenture and the Defense Contract Audit Agency. With each change proposal and resulting modification, new line items have been added.Four years are now left on the contract. FIRST has remained on budget and on schedule because our delivery model breaks the complexity down into manageable components. It is still a large-scale development project, but its series of tightly managed phases are adding up to a successful outcome regardless of the inevitable twists along the way.
Process emphasizes highest-priority and riskiest goals
Intranet access
Performance goals
Dane Warf is chief of ESC/FN's Budget Systems Division at Wright-Patterson Air Force Base, Ohio.
The FIRST budget-decision support system is built on commercial products and eventually could have up to 6,000 users.
'The Air Force's Dane Warf
The Air Force
- Top-down cost and schedule targets for major releases
- Detailed, bottom-up plans every few months.
Intranet access
Performance goals
Dane Warf is chief of ESC/FN's Budget Systems Division at Wright-Patterson Air Force Base, Ohio.
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