Total Package Procurement Explained
Total Package Procurement (TPP or alternatively TPPC) was a major systems acquisition policy introduced in the United States Department of Defense in the mid-1960s by Secretary of Defense Robert MacNamara.[1] It was conceived by Assistant Secretary of Defense for Installations and Logistics, Robert H. Charles.[2]
TPP involves combining as a single package for the procurement a number of related requirements including the design, development, production and support of major systems.[3] This concept was a "pendulum reaction" to the prior cost reimbursement policies in major weapon systems.[4]
Total Package Procurement was not successful and was abandoned shortly after MacNamara left office.
Description
TPP is a method of procuring at the outset of the acquisition phase under a single contract containing price, performance and schedule commitments, the maximum practical amount of design, development, production and support needed to introduce and sustain a system or component in the inventory.[3]
The purpose of TPP was to procure under the influence of competition as much of the total design, development, production and support requirements for a system or component as may be practicable thereby:
- Providing firmer 5-year force structure program package planning information concerning performance cost and schedules.[3]
- Discouraging contractors from buying in on the design and development effort with the intention of recovering on the subsequent production program.[3]
- Permitting program decision and source selection based on binding performance price and schedule commitments by contractors for the total program or major part of it.[3]
- Providing a firmer basis for projecting total acquisition and operational costs for use in source selection and in the determination of appropriate contractual incentives.[3]
- Motivating contractors to design initially for economical production and support of operational hardware which may not receive sufficient emphasis in the absence of productions commitments.[3]
- Requiring contractors to assume more responsibility for program success thereby permitting the Government to monitor programs more in terms of surveillance and less in terms of detailed management.[3]
Results
Total Package Procurement did not succeed. The unique complexity of shipbuilding made Total Package Procurement particularly inappropriate for these programs.[5]
Notable programs that encountered major problems with the TPP approach were the Air Force's Lockheed C-5 Galaxy[1] and AGM-69 SRAM, the Army's Lockheed AH-56 Cheyenne,[6] the Tarawa-class amphibious assault ships (LHA),[5] and the Spruance-class destroyers.[5]
Elimination
Upon taking office as Deputy Secretary of Defense in 1970, David Packard issued a May 28, 1970 memorandum that contained a number of major reforms designed to address "the real mess we have on our hands." A key reform was elimination of TPP except in rare situations.[7]
Notes and References
- Book: Michaels . Jack V. . Wood . William P. . Design to Cost . 1989 . . 0471609005 . 238 . 4 January 2016.
- Book: Williams. Michael D.. Acquisition for the 21st century: the F-22 Development Program. 1999. National Defense University Press. 4. 9781428990876. 6 January 2016.
- Book: Code of Federal Regulations . 1 January 1969 . . . 63 . 4 January 2016.
- Book: Two Navy Ship Contracts Modified By Public Law 850804 -- Status As Of July 29, 1979 . 29 July 1979 . . . 1 . 4 January 2016.
- Book: Two Navy Ship Contracts Modified By Public Law 850804 -- Status As Of July 29, 1979 . 29 July 1979 . . . 2 . 4 January 2016.
- News: Pentagon Buying System Backfires. 5 January 2016. United Press International. Beaver County Times. 3 July 1969.
- Book: Brown . Shannon A. . Providing the Means of War: Historical Perspectives on Defense Acquisition . 2005 . US Army Center of Military History and Industrial College of the Armed Forces. 145–146 . 9780160876219 . 4 January 2016.