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A Business Process Analysis of the Surface Navys Depot Maintenance Program

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Technical Report

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Naval Postgraduate School Monterey United States

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To maintain the Surface Fleet, the Navy spent approximately 7.2 billion in FY2015 and requested 7.8 billion for FY2016. In response to years of costs overruns and missed deadlines, the Navy wants to make better use of these funds by shifting from executing Multi-Ship Multi-Option Contracts with cost plus fee types to Multi-Award contracts with fixed-price fees. The new contract choice will increase competition and shift risk to the contractor. This thesis conducts an in-depth analysis of the contract change process during execution of depot maintenance availabilities using five ships as case studies. It uses lean principles and lessons from buyer-supplier relationship studies to recommend improvements and to answer two questions. Is the Navys current construct prepared to execute a new contract strategy Is this the best decision to reduce cost and meet schedule requirements The thesis concludes that process improvement is required before shifting to a new contract strategy, and that improving the working relationship with the contractor is paramount to process improvement.

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