BSprA - SMD 6 ÜBERSETZUNG NR.: 2012U-12341 ORIGINAL: DEUTSCH Ü

BMVg AIN I 1 Ref. No. 79-01-01

Bonn, 12 November 2012

Customer Product Management (amended) (Amendment of CPM 2010 on the basis of the Concept for the New Procurement and In-Service Process)

Procedures for Requirement Identification, Procurement, and In-Service Support in the Bundeswehr

Contents Preamble

3

I.

Basic Principles

5

II.

Process

7

1.

2.

3.

Analysis phase 1.1. Objectives 1.2. Work steps and activities 1.2.1. Identification of capability gaps and formulation of functional requirements 1.2.2. Development of proposals 1.2.3. Selection of a solution 1.3. Responsibilities Production phase 2.1. Objectives 2.2. Work steps and activities 2.2.1. Preparations for awarding contracts 2.2.2. Agreement on objectives 2.2.3. Contract implementation 2.2.4. Integrated compliance demonstration 2.2.5. Approval for service use 2.3. Responsibilities In-service phase 3.1. Objectives 3.2. Work steps and activities 3.2.1. Material responsibility for operational viability 3.2.2. In-service and supply responsibility for the maintenance of operational capability and readiness 3.2.3. Product modification, product improvement, replenishment procurement, replacement procurement, supplementary procurement 3.2.4. Support services 3.3. Responsibilities

III. Decisions and submissions 1. 2. 3. 4. 5.

IV. Appendices

Appendix 5 Appendix 6

24 25 27 28

29

Project council CPM Steering Board Signature of CPM documents Submissions to the FMOD Executive Group Submissions to the German Bundestag

Appendix 1 Appendix 2 Appendix 3 Appendix 4

7 7 8 8 11 14 14 15 15 15 16 17 18 18 19 20 21 21 21 21

29 29 30 30 30

32 CPM Process (amended) Project categories Fast-track initiative for operations Analysis of financial requirements, resource planning, budgeting and budget execution Terms and definitions Abbreviations

-2-

32 33 36 38 42 53

Preamble In the context of the reorientation of the Bundeswehr, Defence Minister Dr. Thomas de Maizière also directed the creation of a new, efficient and standardised procurement and in-service support process that is characterised by clear responsibilities and decision-making authority as well as by reduced interfaces. The Bundeswehr Structural Commission’s Report of October 2010 (Focus on Operations – Concentration, Flexibility, Efficiency) served as a starting point for the development of the new procurement and in-service support process. This report states the following in the section entitled "Armaments and Procurement": "The CPM has generally proven its worth; in practice, however, it is characterised by: 

a lack of capability management throughout the entire procurement process,



time-consuming consensual coordination and decision-making processes,



increasing procurement costs, a fragmentation of responsibilities and areas of competence and therefore altogether



non-transparent processes as well as inefficient communication structures.“

In general, the amended CPM features clear responsibilities in connection with clear decision-making authority, the elimination of bureaucracy as far as possible and reduced interfaces to provide the Armed Forces with optimum support. The following characteristics distinguish the amended CPM from the previous CPM 2010: 

only three instead of four phases,



a clear separation between the control tasks of the Ministry and the implementation tasks of the service offices,



the creation of integrated project teams (IPT) throughout the entire life cycle of products and services with clear responsibilities,



synergy effects generated by the creation of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and the ensuing significant reduction in interfaces between the parties involved in the process,



the abolition of the supplementary provisions for "urgent operational requirements" by integrating the "fast-track initiative for operations" into the amended CPM,



avoidance of time-consuming phase documents and bureaucratic processes as far as possible and consequently



a maximum of two instead of previously up to seven interfaces within one phase.

-3-

The amended CPM is part of the new procurement and in-service process which comprises the following procedures: 1. procurement of material solutions in accordance with the amended CPM, 2. procurement of complex services and public-private partnerships(PPP), and 3. non-project procurement (Bundeswehr Purchasing) The amended CPM is the internal FMOD framework directive for capability-oriented requirement identification, timely and cost-effective procurement of operational products and services, and their efficient use. With the amended CPM, the procedural prerequisites for a new culture of cooperation between the military and civilian sectors and between the organisational units involved have been created and responsibilities have been clearly defined. A successful implementation will only be possible if all personnel concerned familiarise themselves with the new procedural regulations and if the new form of cooperation is "experienced" at all levels. All parties involved are requested to proactively participate in the reorientation process.

-4-

I.

Basic Principles

CPM (amended) is the internal FMOD framework directive for capability-oriented requirement identification, timely and cost-effective procurement of operational products and services, and their efficient use. The primary objective is to combine quality, efficiency and flexibility with clear responsibilities and decision-making authority and fewer interfaces in order to provide the armed forces with optimum support. The principles of sound financial management govern every phase of the process and must be observed by those in charge. This means in particular 

limiting requests to those that are necessary,



minimising production risks early on when preparing proposals for solutions,



making use of competitive market opportunities,



initiating economic feasibility analyses at an early stage and



implementing production and in-service control within the agreed-upon timeframe, range of obligations, and budget.

The approval of a budgetary CPM document validates the necessity, legitimacy and cost-effectiveness of the measures specified in the document. For systematisation purposes and when defining standards for all parties involved in a project, quality gates can be used in all phases, especially during the analysis phase of CPM. Efforts should be made to take concerted action with international partners. The Bundeswehr Chief of Staff has overall responsibility for the future development of the Bundeswehr, the operational capability and operational readiness of the armed forces as well as their operations. He or she directs required measures in the integrated planning process. The Planning Directorate, the Command and Control of the Armed Forces Directorate, and the Strategy and Operations Directorate at the Ministry assist the Bundeswehr Chief of Staff in carrying out his or her responsibilities. The Director of Equipment, Information Technology and In-Service Support is responsible from the development of material solutions in the planning category of armaments and, in some cases, maintenance and use (products and services), through production and in-service control to disposal. The technical system knowhow acquired during the entire life cycle (incl. life cycle costs) is pooled at the subordinate Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. The Federal Office carries responsibility for and relies on defence research and technology (R&T) to ensure the availability of own and national analysis and assessment capabilities 1 . In the field of applied basic defence research (R&T level 1) the activities of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support mainly focus on gaining future1

The integration of defence R&T makes it possible to analyse existing technologies, to assess the potential of future developments, to examine the adaptability or integration capability of commercial technologies in the military environment, and to perform feasibility analyses including risk assessments.

-5-

oriented knowledge and the ability to make broad judgements, while in the field of customer-focused defence research and technology (R&T level 2) the focus is on efforts to fulfil technological and system engineering demands for future capability requirements of the armed forces (time horizon of 3 to 5 years). All these activities thus contribute both to the preparation of the analysis phase and to the first part of the analysis phase. During the immediate project phase (second part of the analysis phase), the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support directs the system/solution oriented studies (R&T level 3) for the development of solution proposals regarding technological objectives, usable technologies and the calculation of resulting cost 2 and risks. In combination with feedback about project implementation, product operation and lessons learned from operations, acquired knowledge can be effectively used for the development, enhancement and modification of fielded products. The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support has material responsibility for the operational viability of all products. This includes all product-related management activities that facilitate the safe use of products in accordance with their intended purpose. Within their in-service and supply responsibility for the maintenance of operational capability and readiness, the Chiefs of Staff of the services and the chiefs of the civilian organisational elements are responsible for material aspects of the operational readiness and sustainability of units or agencies in their respective areas. Integrated project teams (IPTs) are created and maintained for the entire life cycle of products in order to guarantee the best possible findings, the continuous availability of know-how, and the uninterrupted and smooth cooperation of all parties involved in the procurement and in-service process. The person in charge accompanies the product throughout the life cycle and performs management tasks as required in the various phases. The person responsible in the Bundeswehr Planning Office or the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support makes independent decisions on his or her own responsibility; endorsements are not necessary. He/she documents his/her decisions.

2

This provides an essential part of the life cycle cost estimate.

-6-

The (amended) CPM process is divided into the following phases: 

analysis phase,



production phase and



In-service phase

(see Appendix 1). Trade and industry have a high level of productive capacity and potential for innovation. The close involvement of trade and industry helps to provide the Bundeswehr with modern and effective products and services and to maintain their operational viability. If possible and justifiable in terms of legal (contracting) provisions, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support will involve representatives from trade and industry in all phases of CPM. Compliance with the principle of neutrality on the part of the contracting authority as imposed by procurement law must be ensured. Especially in the analysis phase, it must be ensured that the involvement or partial involvement of trade/industry in the integrated project team (IPT) does not entail, or appear to entail, any competitive advantage or disadvantage for any company involved in the subsequent contract award procedure, such as any advantage in terms of knowledge or know-how that would distort competition. The following applies to all category A and B projects. Deviating rules for category C and D projects and definitions of project categories are included in Appendix 2. Arrangements for meeting unforeseeable urgent operational requirements are an integral part of this directive (see Appendix 3). II.

Process

1. Analysis phase 1.1.

Objectives

As part of the integrated planning process (IPP), the first part of the analysis phase has the objective of identifying capability gaps and excess capabilities and of prioritising measures for closing such gaps or reducing such excess capabilities. This task is part of capability management within the framework defined by future development and medium-term planning. Potential solutions for closing capability gaps in all planning categories (organisation, personnel, infrastructure, armaments, and maintenance and use) are to be studied from a holistic perspective. If a material solution is chosen (the planning category of armaments and, if applicable, maintenance and use), requirements must be translated into a functional requirement, formulated in the CPM document 3 "capability gap and functional requirement" (FFF), and submitted to the Bundeswehr Chief of Staff 4 via the Director of Planning (if necessary after consultation with other Directors) for approval. 3 4

Central templates will be provided for all CPM documents. or personnel selected by the Bundeswehr Chief of Staff. This shall also apply below in all similar cases.

-7-

Unforeseeable urgent operational requirements must be formulated in the CPM document “capability gap and functional requirement (fast-track initiative)“ (FFF(S)) and be submitted to the Bundeswehr Chief of Staff via the Director of Planning after prior consultation with the Director of Strategy and Operations. The approved FFF or FFF(S) initiates the procurement and in-service process. The second part of the analysis phase is the beginning of the procurement and inservice process. The objective here is to develop on the basis of the approved FFF or FFF(S) several proposals (if necessary with graduated fulfilment of the functional requirement) for closing the identified capability gaps with respect to production, inservice use, LCC and risks, to evaluate these proposals, and to submit them to the Bundeswehr Chief of Staff via the Director of Equipment, Information Technology and In-Service Support for a decision. Due consideration must be given to the principle of sound financial mangement. The decision of the Bundeswehr Chief of Staff will be laid down in the selection decision document. 1.2. 1.2.1.

Work steps and activities Identification of capability gaps and formulation of functional requirements

In the integrated planning process, an ongoing comprehensive comparison of required and available capabilities of the Bundeswehr is conducted by the Bundeswehr Planning Office. This is done in the framework of capability management and under the responsibility of the Director of Planning. The Bundeswehr Planning Office takes into consideration 

capability gaps based on concepts (“top-down approach”), taking into consideration international commitments, e.g. membership in NATO and the EU,



initiatives from the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, which can also result from new findings of defence R&D, and the headquarters/offices of the major organisational elements (“bottom-up approach”) and



initiatives from operational contingents, including unforeseeable urgent operational requirements (also a “bottom-up approach”).

Unforeseeable urgent operational requirements are introduced with a “fast-track initiative for operations” by a major organisational element, an operational contingent, or the Federal Office of Bundeswehr Equipment, Information Technology and InService Support. On account of its urgency, this initiative is given priority. It is submitted outside the annual planning cycle to the Bundeswehr Joint Operations Command, where it is evaluated. If the Bundeswehr Joint Operations Command decides in favour of the initiative, the application is submitted to the Bundeswehr Planning Office, where it is assessed in accordance with the overall system context of the Bundeswehr and existing plans as part of capability management. -8-

Identified capability gaps, initiatives and fast-track initiatives are assessed in the Bundeswehr Planning Office from a holistic perspective in terms of their significance for the mission accomplishment of the Bundeswehr. Consideration is also given to the question as to whether certain capability gaps can be tolerated permanently or for limited periods of time. In this case, capability gaps are monitored but no concrete measures are taken. If the capability is considered necessary, possible solutions for closing the identified capability gaps in all planning categories are analysed and documented in accordance with their priority, in particular 

organisational measures such as o changes to the allocation of tasks in the Bundeswehr o reassignment of a task as part of a joint international effort or cooperation measure o process optimisation



improvements in maintenance and use



measures concerning personnel and training



infrastructural measures as well as



the provision of products and services (material solution).

If a material solution 5 for closing a capability gap is considered (the planning category of armaments and, if applicable, maintenance and use), the Bundeswehr Planning Office will establish and lead an integrated project team (IPT) or task an existing IPT. This team formulates functional requirements in close cooperation with the Bundeswehr Planning Office and the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and with potential users and operators. The Federal Office of Bundeswehr Equipment, Information Technology and InService Support brings its technical and economic know-how to the team, which includes the use of research facilities. If possible and justifiable in terms of legal (contracting) provisions, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support will usually involve appropriate representatives from business and industry at this early phase. The inclusion of the expertise of potential users and operators will be ensured by their participation in the integrated project team.

5

Non-material solutions (outside the planning category of armaments) are not part of this process and are thus not taken into consideration here.

-9-

In order to formulate FFF or FFF(S) documents, the integrated project team examines and evaluates all possibilities for closing capability gaps, taking into particular consideration 

lessons learned on operations



lessons learned by allies and partners



lessons learned from maintenance and use



experience with products and services that are commercially available or that are currently in development, in particular commercial, government, and military off-the-shelf (CGM) products and services



lessons learned from international armaments cooperation



lessons learned from defence research and technology (R&T)



findings and results of non-technical research and studies



findings from  concept development & experimentation (CD&E).

The result of this work in the first part of the analysis phase is the “capability gap and functional requirement” (FFF) document. In addition to describing the capability gap, it also describes the functional requirement and other guidelines for developing proposals for closing the capability gap. It always includes the following information: 

the designation of the required capability



an extrapolation of the capability from reference documents and a description of capability gap in the system context of the Bundeswehr (including relevance for network enabled capabilities)



if applicable, a remark about the relationship to other projects



a description of the functional requirement with the related service use profile and project elements



information about scope, expected duration of use, and future users/operators



requests concerning the availability of the capability



information about the duration and costs of the entire life cycle



funding required for the analysis phase 6



a proposal for preliminary project categorisation



a statement about whether "important national security interests” in accordance with Art. 346 of the TFEU 7 are affected.

6

The FFF or FFF(S) is a budgetary document for the provision of funds (also for stage 3 R&T) in the second part of the analysis phase. The commissioner for the budget must be involved in the preparation of FFF and FFF(S) documents. 7 TFEU: Treaty on the Functioning of the European Union

- 10 -

The FFF is designed to facilitate the development of proposed solutions on the basis of commercially available products, already developed components, or components currently in development. It must not take technical solutions into consideration. In the event of an unforeseeable urgent operational requirement, a fast-track initiative for operations is documented in a “capability gap and functional requirement (fast-track initiative)” (FFF(S)) document in the integrated planning process. This document contains the following additional information: 

a statement on whether rapidly available operational sub-capabilities would be preferred over the required capabilities, even if this entails acceptable risks;



a statement on whether the material solution will be used solely on operations and



if applicable, proposals for commercially available solutions.

The Director of Planning submits the FFF and FFF(S) to the Bundeswehr Chief of Staff for approval. They are then forwarded to the Director of Equipment, Information Technology and In-Service Support, who in turn forwards them to the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. Prior to this, the preliminary project categorisation is laid down in consultation with the Director of Equipment, Information Technology and In-Service Support. For an FFF(S), the Director of Strategy and Operations is consulted in advance. 1.2.2.

Development of proposals

Once the FFF or FFF(S) is approved, the procurement and in-service process is initiated. Responsibility (in the second part of the analysis phase) is then transferred from the Bundeswehr Chief of Staff to the Director of Equipment, Information Technology and In-Service Support. Below the Ministry, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support assumes leadership of the IPT and proceeds on the basis of the approved FFF or FFF(S). Project management and project management accounting are initiated. If possible and justifiable in terms of legal (contracting) provisions, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support will usually involve appropriate representatives from business and industry. The head of the IPT first converts the functional requirement into specific technical and functional requirements which are then used to develop several possible solutions. A distinction should be made between the following: 

the introduction of available products (CGM) and use of services,

 

improvement of fielded products and services (product improvement), and implementation of new products.

To meet the requirement to ensure sound financial management (Section 7 of the Federal Budget Code), consideration should always be given to the use of available products or services as well as the possibility of improvements to available systems. - 11 -

When proposals are being developed, the following tasks may present themselves and can, if necessary, be supported by supplementary analyses and studies (e.g. by way of R&T or modelling and simulation [M&S]): 

market surveys and assessments of available products and services



checking and assessing the potential of already introduced products for improvement



checking and assessing possibilities for developing new products



checking and assessing (national/international)



checking and assessing possibilities for closing the capability gab through public private partnerships (PPP) or cooperation measures



ensuring that no products are introduced in the Bundeswehr that are or will be inadmissible under existing or expected German legislation or international agreements



taking into consideration obsolescence



assessing the proposals (including all project elements) in the context of system architecture, in particular technical and econonomic relationships to planned projects, projects in the production stage, or already available products and servicesdetermining quantities



planning the production and in-service phase across all project elements, if applicable proposing a batch approach or gradual introduction



estimating the resources required for integrated compliance demonstration / operational suitability tests



estimating measures of technical logistic support according to type and, if applicable, scope



indicating risks and their consequences for production and in-service support (resources, for example, should be taken into consideration)



calculating life-cycle costs (LCC) and determining cost effectiveness, if necessary conducting a cost-effectiveness study involving the responsible budget officer



estimating the time and funds required for production and in-servive use during the envisaged life-cycle, using appropriate analysis/prediction and simulation methods (e.g. logistic support analysis)



assessing the degree to which the functional requirement in the FFF or FFF(S) has been fulfilled in terms of quality and quantity of the prioritised requirement catalogue and implications for the intended purpose.

possible

cooperation

measures

Possible solutions must be analysed and assessed in terms of performance, time, costs and risks. Public contracting law must also be taken into consideration - 12 -

(e.g. product and manufacturer neutrality). In this context, contracts can be awarded as part of R&T (for example, to build a prototype for testing the feasibility of technological/technical performance parameters). Studies must be carried out under realistic conditions. Findings from technical evaluations of foreign defence material should be incorporated. Capability gaps can be gradually closed in order to reduce production risks or to make available (partial) capabilities at an early date which can then be gradually supplemented until the full capability is reached (based on the functional requirement of the FFF). Due consideration must be given to the principle of sound financial management. In this case, parts of a project (after the entire project has been planned in full detail) are implemented individually, at staggered intervals, or at the same time. The overall system of the solution must be described. Individual parts must be suitable for their intended purpose and must themselves be operational. The division of a project into individual parts may be made on the basis of performance, quantities or selected users. Consideration should be given to making (sub-)capabilities available earlier, especially for a fast-track initiative for operations whose requirements can be promptly met by current projects. When it is developing proposals for solutions on the basis of an FFF(S), the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support gives special consideration to proposals that make it possible to rapidly fulfil requirements 8 . The head of the IPT must carefully weigh the time of operational availability against the degree of fulfilment of the FFF(S) requirement in close consultation with potential users/operators. The impact of proposed solutions on other projects will be assessed as well. Where commercial products are concerned, proposed solutions can be developed very rapidly based on the suggestions for commercial products specified in the FFF(S). There should at least be a rough estimate of life-cycle costs. Military medical care must fulfil civilian standards and at the same time must meet military operational requirements. Satisfying requirements by using medical equipment that is specific to hospitals or institutes is similar in some respects to fasttrack initiatives for operations. For this reason, proposed solutions are developed and further work steps are taken along the lines of the implementation of FFF(S) 9 . The developed proposals contain statements on

8 9



requirements



quality and quantity of compliance with requirements



time and funds needed for production



funds needed for the in-service infrastructure measures, etc.)

phase

see Appendix 3 that means limitations on proposed solutions and prioritised approach

- 13 -

(logistics,

personnel/training,



cost-effectiveness, life-cycle costs (LCC), and if necessary cost-effectiveness studies involving a budget officer



risk assessment

The developed proposals are submitted by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support to the Directorate of Equipment, Information Technology and In-Service Support. The Director of Equipment, Information Technology and In-Service Support seeks 

a statement by the Planning Directorate on whether the solution can be budgeted for in the medium-term objective, the financial requirement analysis, and the resource plan and



a statement by the budget officer on the budget and/or financial planning.

The Director of Equipment, Information Technology and In-Service Support submits the proposals and a statement on the significance for the armaments industry to the Bundeswehr Chief of Staff. 1.2.3.

Selection of a solution

The Director of Planning specifies the planning category, together with the Director of Equipment, Information Technology and In-Service Support 10 . For an FFF(S), the Director of Strategy and Operations is consulted in advance. The Bundeswehr Chief of Staff selects a proposal 11 . Once the decision by the Bundeswehr Chief of Staff has been documented, the selected proposal becomes a selection decision document. The selection decision document is 

a budgetary document and



the basis, along with industrial agreements 12 , for the agreement on objectives.

The analysis phase ends with the selection and decision document. 1.3.

Responsibilities

As part of his or her overall responsibility, the Bundeswehr Chief of Staff is responsible for the future development of the Bundeswehr, the operational capability and the operational readiness of the armed forces, and operations. On behalf of the Bundeswehr Chief of Staff, the Director of Planning directs necessary measures in the integrated planning process, especially by capability management. In order to exercise his/her responsibility, he/she will be supported in the Ministry by the Planning Directorate and below the Ministry by the Bundeswehr Planning Office. The Bundeswehr Planning Office is the only user from the perspective of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support.

10

In accordance with Appendix 2, Figure 2 There is a different approach for category C and D projects (see Appendix 2) 12 If it is impossible to finalise all contracts at that time, cost estimates for outstanding contracts must be updated according to the selection decision document. 11

- 14 -

Once the Bundeswehr Chief of Staff has approved the FFF or FFF(S), responsibility is transferred to the Director of Equipment, Information Technology and In-Service Support, who instructs the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support to develop relevant proposals. The Bundeswehr Chief of Staff makes a selection on the basis of the prepared proposals. 2.

Production phase

2.1.

Objectives

The objective of the production phase is to provide users/operators with suitable and operational products and services in good time. The framework conditions required for implementation are laid down in an agreement on objectives. In order to ensure the unimpeded, swift, and independent implementation of a project, interventions in the project are generally not intended during the production phase. 2.2.

Work steps and activities

Upon approval of the selection decision document, the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support appoints a project manager. The project manager is the head of the IPT and is responsible for providing future users/operators with suitable and operational products and services in good time. The project manager takes appropriate measures to ensure the implementation of a project within a given performance, time and cost framework. His/her actions must be guided by principles of sound financial management. During the production phase, the IPT should consider knowledge gained and lessons learned from in-service use. The main tasks of the project manager include 

planning, controlling (including error/change management) and monitoring the production process, including all project elements. For projects related to the Bundeswehr IT system, project management will comply with the requirements laid down in the IT strategy of the Federal Ministry of Defence.



Controlling and monitoring of project-related costs with the objective of minimising life-cycle costs, taking into account the product-based usage profile specified in FFF or FFF(S).



Performing a project-related risk management, taking into consideration disruptive factors, including factors influencing product quality.



Controlling the preparation, award and administration of contracts (the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support is the single point of contact for contractors).



Controlling national and international agreements.



Preparing/updating inputs to be used as a basis for the planning proposal for the financial requirement analysis and the resource plan. - 15 -



Preparing and presenting the programme inputs.



Controlling and monitoring the flow of project-related funds.



Representing the project during reviews.



Providing the required information for reporting and project management accounting.



Planning all compliance demonstration activities.



Preparing an approval for use.



Documenting project decisions and updating annexes to the agreement on objectives.



Representing the project externally.



Developing a harmonised national position for international committees. The project manager is the German spokesperson in international committees, unless this task has been assigned to another person.



Helping prepare reports for the committees of the German Bundestag, the Federal Audit Office, and other institutions.



Developing and submitting drafts to amend or cancel the agreement on objectives, if required.

The project manager uses the expertise of the IPT. Measures concerning project elements in the area of future users/operators are planned and controlled by the project manager in consultation with the IPT. Representatives of the future user/operator in the IPT are responsible for coordinating these measures and implementing them in the major organisational elements concerned. The project manager documents the results of the production phase and ensures that all participants are kept informed. Related areas should be included in the decisionmaking process. They provide assistance in coordination with the project manager. User know-how is contributed by the authorised representative of the future user/operator in the IPT. 2.2.1.

Preparations for awarding contracts

The Federal Office of Bundeswehr Equipment, Information Technology and InService Support conducts the tendering procedure and awards the contract. Suitable project control instruments, arrangements for quality assurance, including government quality assurance, risk management provisions as well as a detailed schedule with agreed milestones regarding performance and costs must be specified in the draft contract (which is also a basis for government project management and project management accounting). In addition to the obligations to be met by the contractor, the draft contract must also define criteria for verifying compliance with the contract and legal requirements as well as any necessary support services for government tests. With respect to relevant - 16 -

decisions on the obligation to submit a draft contract to the Budget Committee of the German Bundestag (generally applicable if the contract value exceeds €25 million), the finalised draft contract must be submitted to the Budget Committee of the German Bundestag (parliament) prior to signature. If the outcome of the tendering procedure necessitates changes to the selection decision document (e.g. with regard to required funding), the selection decision document must be updated and resubmitted for approval. Government plans for all relevant project elements must be updated. 2.2.2.

Agreement on objectives

In parallel with preparations for awarding the contract, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support must draw up the agreement on objectives 13 on the basis of the selection decision document and the draft contract awaiting finalisation, ensuring that the agreement is ready for signature when the draft contract has been finalised. Immediately after conclusion of the contract 14 , the Director of Equipment, Information Technology and In-Service Support concludes the agreement on objectives with the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. Timeframes and costs as well as the terms of reference for lifecycle cost management (LCCM) are agreed upon. The agreement on objectives includes detailed requirements for the in-service phase. These requirements are to be updated and specified in an annex to the agreement on objectives; the agreement does not have to be amended for this purpose. The agreement on objectives must include the following information: 

project designation



parties to the agreement



reference documents (FFF or FFF(S), selection decision document, finalised contract)



duration of the agreement on objectives



objectives and tolerance ranges 15 for the production and in-service phases



parameters (figures, project management accounting)



resource requirements



type and scope of reporting

13

In category C and D projects, a project order, which corresponds to an agreement on objectives, is negotiated and concluded between the Director of the Federal Office of Bundeswehr Equipment , Information Technology and In-Service Support and the project manager, based on the selection decision and the contract. 14 If it is impossible to finalise all contracts at that time, cost estimates for outstanding contracts must be updated according to the selection decision document. 15 These ranges must be project-specific and apply particularly to deviations in terms of production times (e.g. maximum delays of 12 months) or cost ceilings (e.g. a maximum cost increase of 15% i.a.w. Section 54, Paragraph 2, Sentence 2 of the Federal Budget Code or by €25 million).

- 17 -

Additional project details can be included in the agreement on objectives if necessary (e.g. special responsibilities and authority). The final nature of the agreement on objectives usually leaves no room for adding requests later. The agreement on objectives can only be amended (adapted/cancelled) for the following reasons: 

changes to requirements resulting from new lessons learned on operations, which as an exception necessitate the amendment of the selection decision document in terms of performance, timeframe or costs, or



disruptions in the course of a project, as a result of which tolerance limits specified in the agreement on objectives are exceeded. In this case too, the selection decision document must be modified in terms of performance, timeframe or costs.

Decisions regarding the future course of action will be taken by the ministerial CPM Steering Board 16 . If this decision necessitates an amendment of the selection decision document, this amendment will be submitted to the Bundeswehr Chief of Staff for approval. 2.2.3.

Contract implementation

Within the scope of project management, the project manager will monitor the implementation of the contract with his/her IPT and take action if objectives specified in the agreement are not fulfilled. Obligations to be performed by offices/agencies must be prepared, directed and monitored by the IPT under the responsibility of the project manager. 2.2.4.

Integrated compliance demonstration

As a general rule, arrangements must be made for integrated compliance demonstration while clearly distinguishing between contractor and customer responsibilities. Suitability of a product will be determined on the basis of performance verification activities to be carried out by the contractor i.a.w. the customer's requirements, the result of operational tests as well as other operational parameters and functional limits. The verification activities performed by the contractor to demonstrate contractual compliance (including the fulfilment of legal requirements and technical safety of the product) and the customer's technical and user tests must be duly coordinated, particularly where vital operational functions of the product are concerned. In the event of successful performance verification, the product will be accepted by the customer. The project manager is responsible for the integrated compliance demonstration. This also includes operational tests performed by the future user/operator, focusing in particular on vital operational functions and taking into account realistic conditions

16

For category C and D projects, decisions regarding the future course of action will be taken by the project council.

- 18 -

determined by the service use profile as well as the project elements 17 . The future user/operator will issue a statement of acceptance once the operational suitability tests have been successfully completed, which are based on operational scenarios laid down in the FFF and the selection decision document. Knowledge acquired within the scope of compliance demonstration must be considered in the ongoing production process and prior to the delivery of each individual item and in the event of future contracts for additional deliveries. Products in use must be retrofitted, if necessary. Available products are not to be subjected to own tests provided that the existing information about their suitability is sufficient to conduct an assessment. Given the urgent nature of fast-track initiatives for operations, the integrated compliance demonstration should be limited to what is absolutely necessary for the intended use and to fulfil FFF(S) requirements. 2.2.5.

Approval for service use

Based on the results of the compliance demonstration and other findings, the Director of the Federal Office of Bundeswehr Equipment, Information Technology and InService Support issues the approval for service use 18 . The approval for service use certifies that 

the product meets the performance requirements as set out in the selection decision document and the contract specifications



safe operation can commence under applicable legal regulations and that product safety is ensured



operational viability is ensured



the product is suitable for its intended use and a statement of acceptance has been issued by the user/operator.

If residual activities are still required for operational viability to be achieved or if partial utilisation is envisaged, the approval for service use must contain information on operational viability. If appropriate, product use restrictions must be specified. Any additional tests that are required must be planned and documented in the approval for service use. When the first item is delivered by the contractor to the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, the Director of the Federal Office assumes material responsibility for maintaining operational viability. When the first item is delivered to the Chiefs of Staff of the services or the chiefs of the major civilian organisational elements, they assume in-service and supply responsibility for the maintenance of operational capability and readiness. 17

Major equipment of the German Navy must comply with the supplementary provisions of the directive on trials (Probefahrterlass) and the Framework Directive on the Integrated Compliance Demonstration for Ships/Boats of the Navy. 18 For category C and D projects, the approval for service use is issued by the project manager.

- 19 -

In the event of an unforeseeable urgent operational requirement, i.e. in the case of an FFF(S), some measures necessary to achieve operational viability before the inservice phase may be disregarded. Measures still to be taken must be documented in the approval for service use and must be carried out during the in-service phase by the project manager. The approval for service use should be issued with the earliest possible operational availability in mind, which is why it can be issued subject to conditions. Especially where products are to be used exclusively on deployment, appropriate expertise should be gathered at an early stage to take advantage of legal exemptions. If a product is subject to restrictions, the future user/operator is free to disregard such restrictions in exceptional cases 19 during an operation, if this decision is based on a risk assessment. The production phase concludes with the acceptance of the last item. Results are then compared to specified objectives on the basis of a target-performance comparison and are documented (conclusion of the production phase). The outcome of this work can be used for project assessment by the project manager and for the transfer of knowledge across projects. The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support is informed about important findings at the conclusion of the production phase. Lessons learned should be made available across project boundaries with a view to continuously improving project management. Production responsibility of the project manager ends upon completion of the production phase. 2.3.

Responsibilities

The Director of Equipment, Information Technology and In-Service Support will conclude with the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support an agreement on objectives for the production and in-service use of a product. The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support is responsible for the implementation of the agreement on objectives. Upon approval of the selection decision document, the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support appoints the project manager and tasks him/her with the implementation of the project. The project manager is made head of the IPT. If practical, several projects should be managed by one project manager. If there are significant system dependencies between otherwise autonomous projects, the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support will task a project officer with the coordination of the projects concerned. During the production phase, the tasks of the Equipment, Information Technology and In-Service Support Directorate consist primarily in exercising technical 19

according to the FMoD Ordinance on the Implementation of the Occupational Health and Safety Act in conjunction with General Handout 1/100

- 20 -

supervision, in particular project management accounting, and finalising documents to be submitted to the Executive Group at the Ministry of Defence and to Parliament. The Planning Directorate or the Bundeswehr Planning Office and the Strategy and Operations Directorate inform themselves about consequences for capability management and for operational availability and about funds management through the annual programme negotiations (APN), through permanent access to projectrelated reporting (project management accounting), and through their entitlement to information about projects. In this way, lessons learned in the production phase become part of the integrated planning process. 3.

In-service phase

3.1.

Objectives

The objective of the in-service phase is the use of products and services in accordance with their intended purpose. All measures to maintain and to restore operational viability, capability and readiness must be carried out in order to ensure the safe and economic use of products and services under realistic conditions and in a legal manner until disposal on the basis of the intended purpose documented in the FFF or FFF(S). 3.2.

Work steps and activities

The in-service phase begins when the first item is delivered to the user/operator and ends with the disposal of the last item. Based on the agreement on objectives for procurement and in-service use, the in-service use part of this agreement is updated and added to the agreement as an appendix. For services 20 , the duration of the period of use is stipulated in the contract. Particularly in the event of an unforeseeable urgent operational requirement, complete operational viability must be achieved and necessary tests must be conducted as quickly as possible if not yet completed. Deficits, if any, must be offset by appropriate support measures (e.g. training support or industrial support). Any remaining measures from the production phase must be completed. The IPT performs production as well as in-service management tasks under the responsibility of the product manager. 3.2.1.

Material responsibility for operational viability

The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support has “material responsibility for operational viability”. The management tasks to be performed focus on maintaining and restoring the operational viability of products and are planned and controlled by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support as 20

For services, the activities of the integrated product team are focused on the material, infrastructure, equipment, services and personnel required for all relevant project elements. Adherence to the specifications of the contract as part of maintaining the operational readiness of a service as such is the responsibility of the contractor, since he has to comply with the contractual requirements.

- 21 -

part of in-service management. Due consideration must be given to the principle of sound financial mangement. The duties of the product manager during the in-service phase include in particular (in addition to observing the principle of sound financial management and taking into consideration the effects on LCC): 

planning, controlling and coordinating all measures for maintaining and restoring the operational viability of introduced products and for carrying out remaining measures for establishing the operational viability of incomplete products. This includes: o coordinating/continuing work on project elements o carrying out remaining measures to establish operational viability o obsolescence management o logistical requirements planning for operational viability 

planning and applying for budgetary funds for logistical services



central logistical material maintenance management in the form of  repairs in Germany and abroad  prognosis of individually issued expendable items, derived from requirements of consumption-dependent follow-on spare-parts needs  system maintenance and modification maintenance and modification

/

software

 commercial maintenance / depot maintenance planning  support services provided by industry 

recording, planning and supervising services in the framework of technical logistic support and post-design support (PDS)

o Risk management o system logistics management

/

equipment

logistics

/

non-operational

fleet



configuration management / subsystems management



modifying material documentation (master data maintenance and modification, technical documentation)



initiating and coordinating measures to carry out  product modifications



initiating reprocurement, procurement activities



initiating product improvements



recording, predicting, controlling and monitoring product-related costs during the in-service phase

supplementary procurement and replacement

- 22 -



providing technical competence if required by “in-service and supply managers responsible for maintaining operational capability and readiness”



compiling the reports of the “in-service and supply managers responsible for maintaining operational capability and readiness” (with information about their origins), assessing the reports as a whole, and entering financial requirements into the planning proposal for the analysis of financial requirements and the resource plan, as well as requesting necessary budgetary funds



managing documentation on product-related decisions



requesting, evaluating and exploiting lessons learned from the use of products



retiring and initiating the disposal of material



controlling the preparation, award and administration of contracts in accordance with national and international agreements. The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support acts as the single point of contact for contractors during the in-service phase



developing and representing a harmonised national position in matters of service use, acting as spokesperson in international committees, unless this task has been assigned to another person



updating the appendixes to the agreement on objectives in accordance with section 2.2.2.



preparing, presenting and assessing the product-related in-service use situation as part of the equipment situation



developing/defining immediate technical measures (for example, restrictions on the use of products or a complete suspension of use) if necessary



evaluating operational data and failure reports as well as other information from in-service use and operations (e.g. expenses) compiled and provided by user(s)/operator(s



recording and evaluating lessons learned from exercises and operations, taking into consideration all project elements, as part of product monitoring



controlling all relevant project elements in the event of a change or modification of the framework conditions or a change of the usage profile on the basis of lessons learned from product monitoring



preparing and submitting programme inputs for development and procurement (for product modifications) as well as budget contributions for product maintenance



monitoring budget execution during in-service use



monitoring material documentation and initiating necessary updates

- 23 -



adapting and defining objectives for spare parts management and for maintenance and production on the basis of operational status of technical equipment and depending on current needs



coordinating product maintenance measures



developing and submitting drafts to amend/cancel the agreement on objectives, if required.

For this, the project manager uses the expertise of the IPT. Measures concerning inservice management in the area of the users/operators are planned and controlled by the project manager in consultation with the IPT. The authorised representative of the user/operator in the IPT is responsible for coordinating these measures and implementing them in the major organisational elements concerned. The project manager documents the results of in-service management activities and ensures that all participants are kept informed. Related areas should be included in the decision-making process. They provide assistance in coordination with the project manager. User know-how is brought into the IPT by the authorised representative of the user/operator. If there is evidence suggesting that product modifications or replacement procurement of alternative products may be necessary, alternative options must be investigated by the project manager in all planning categories; an assessment must be conducted to identify benefits and risks with regard to performance, time and cost. This may entail suboptimal performance or restrictions on the use of the product. The Bundeswehr Planning Office must be notified if there are consequences for the capability profile. 3.2.2.

In-service and supply responsibility for the maintenance of operational capability and readiness

Unlike “material responsibility for operational viability”, the Chiefs of Staff of the services and the chiefs of the major civilian organisational elements have “in-service and supply responsibility for the maintenance of operational capability and readiness” of the products they have been given to use. This includes above all 

ensuring proper use



materiel management



maintaining and restoring the usability of products by performing maintenance with internal resources and/or with the services of third parties insofar as no existing contractual provisions must be changed or no new contractual provisions must be adopted and the configuration of the product laid down in the documentation is not changed. This includes above all o logistics in the area of responsibility 

operational fleet management



managing the use of products - 24 -



expedient repair / battle damage repair (ER/BDR)



prioritising in accordance with targets set by the Chief of Staff

o working on project elements as coordinated by the project manager o systems logistics / equipment logistics (maintenance control of own or assigned resources, targets for follow-on spare-parts needs) o logistic requirements planning for in-service use (planning, applying for logistical services and budgetary funds, prioritising in accordance with targets set by the Chief of Staff) 

carrying out changes to products as directed by and coordinated with the “material manager for operational viability”. The project manager must take the resources of the user/operator into account.



making available product-related lessons learned and expenditure data as well as preparing proposals from users as a contribution to the planning and further development of a capability and to improving the cost management of the Federal Office of Bundeswehr Equipment, Information Technology and InService Support



recording and providing verified operational data and failure reports



prioritisation of allocated budgetary funds and measures of the “material manager for operational viability” for operationally necessary modifications during the current budget, and coordination with the Bundeswehr-wide prioritisation of the Chief of Defence



planning and preparing a contribution concerning the funds necessary for the maintenance of operational capability and readiness for the “material manager for operational viability”



identifying surplus and/or other material no longer suitable for its intended use in order to initiate the retirement and disposal process and reporting such material to the “material manager for operational viability”

3.2.3.

Product modification, product improvement, replenishment procurement, replacement procurement, supplementary procurement

The user(s)/operator(s) and the project manager gain insights from product monitoring and in-service use (operations, exercises, training). Based on lessons learned, they decide if there is need for action. This can include necessary urgent changes to material used on operations, medium-term improvements of existing material, or the procurement of new products.

- 25 -

3.2.3.1

Product modification

Modifications of existing products are only permissible if such measures maintain or restore operational viability or optimise in-service cost effectiveness. At least one of the following prerequisites must be met: 

the product must be adapted to legal requirements (e.g. licensing regulations, environmental protection; occupational safety and health) or must meet national/international obligations



hazards caused by the product to personnel or the environment must be eliminated



major malfunctions or weaknesses of the product must be eliminated



there must be an external need to modify the product (e.g. obsolescence) or a need to restore interoperability or cooperability (e.g. in order to ensure supportability)



sound financial management must be improved during in-service use, e.g. by proof of substantial in-service cost reduction or because a product cannot be procured or repaired in a cost-effective way

All relevant project elements must be considered when planning and carrying out product modifications. The underlying problem and the required measures must be documented in accordance with applicable directives on the modification of defence equipment 21 . The applicable German military standard is the binding document during the in-service phase. The project manager documents and gives reasons for product modifications (see Terms and Definitions) that affect the budget and that have a total cost of less than €25 million. The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support or his or her representatives authorise modifications after consulting with the budget officer and thus give reasons for the budgetary funds that are necessary for product modification. Product modifications that affect the budget and that have a total cost greater than €25 million must be authorised by the CPM Steering Board. If product modifications exceed the tolerance limits specified in the agreement on objectives or deviate from the specified requirements, they will be treated as disruptions in the development of the project (see section 2.2.2.). After the CPM Steering Board has decided how to proceed, the document will be signed by the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and added to the agreement on objectives as an appendix. After the modification is completed, the validity of the existing approval for service use must be checked; if necessary, the approval for service use must be modified and newly declared.

21

(at present) VG 95031

- 26 -

3.2.3.2

Product improvement

Product improvements may result from changes of requirement or from lessons learned from managing material responsibility for operational viability. Product improvement initiatives are submitted to the Bundeswehr Planning Office by or via the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, in accordance with section 1.2.1. The FFF or FFF(S) must be modified or, if necessary, newly issued by the Bundeswehr Planning Office and approved by the Bundeswehr Chief of Staff. Selection decision documents and agreements on objectives must be adapted or newly issued. 3.2.3.3

Service life extension

If it is necessary to extend the service life of a product for operational, technical or economical reasons, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and the Bundeswehr Planning Office agree on the further course of action, taking into account the analysis of financial requirements, the resource plan and the budget; the result is then documented and added as an appendix to the agreement on objectives. 3.2.3.4

Replenishment procurement / replacement procurement

Replenishment procurement on the basis of existing CPM documents is carried out in order to address an existing shortage of fielded products. If replenishment procurement of the original product is no longer possible or economical, other available products can be introduced as replacement procurement on the basis of existing CPM documents. Replacement procurement may also be used to replace missing products (e.g. regeneration). The project manager must document necessary measures and add this as an appendix to the agreement on objectives. 3.2.3.5

Supplementary procurement

Supplementary procurement of existing products is only permissible if it is to meet justified extra demand. The Bundeswehr Planning Office, in cooperation with the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, defines the increased demand in comparison with the selection decision document. The selection decision document will be modified with the participation of the budget officer and submitted to the Bundeswehr Chief of Staff for approval. After approval and submission of the final draft of the contract, the agreement on objectives will be modified. 3.2.4.

Support services

Support services rendered by trade and industry or by the organisational element of equipment, information technology and in-service support may be necessary in order to maintain the operational viability of products. - 27 -

3.2.4.1

Technical-logistic support

Technical logistic support (TLS) includes services related to information collection, processing and provision which are rendered by trade and industry for the purpose of maintaining the operational viability of products in use. The following principles are applicable: 

The type and, as far as possible, the scope of technical logistic support activities should be justified and defined in the appendix to the agreement on objectives.



Technical logistic support activities must be taken into account when it comes to allocating tasks internally and assessing available capacities.



The necessity and cost effectiveness of technical logistic support activities must be checked before a contract is awarded.

The project manager is responsible for recording, planning and monitoring measures of technical logistic support. Technical logistic support services are funded from the maintenance budget. 3.2.4.2

Post-design support (PDS)

Post-design support, which is a basis for decisions on potential product modification, is rendered by trade and industry, the major organisational element of equipment, information technology and in-service support, or, if applicable, by other organisations. These services include the technical effort required for the preparation of a modification, as well as work on software and documentation. Post design services are brought to a conclusion with the decision on the implementation of the proposed modification. The project manager is responsible for planning and using PDS services. PDS is financed by development funds and documented as an appendix to the agreement on objectives by the project manager. This appendix gives reasons for necessary budgetary investments. 3.3.

Responsibilities

The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support has “material responsibility for operational viability”. Management tasks in this phase focus on maintaining and restoring the operational viability of products. All measures that serve to maintain and restore the operational viability of existing products and services are planned and controlled by the project manager of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. In-service management is performed under the direction of the project manager of the IPT.

- 28 -

The Chiefs of Staff of the services and the chiefs of the major civilian organisational elements are responsible for “in-service and supply responsibility for the maintenance of operational capability and readiness” of operational products given to them for use. The Planning Directorate or the Bundeswehr Planning Office and the Strategy/Operations Directorate will be informed at an early date about the consequences for capability management, operational availability and funds management through the annual programme negotiations, through continual access to project-related reporting (project management accounting), and through their entitlement to information about the projects. In this way, lessons learned in the inservice phase will become part of the integrated planning process. III.

Decisions and submissions

1. Project council The project council, a higher management and knowledge transfer body at office level, addresses – at two-month intervals or when necessary – the most important and most critical projects, products and/or services as specified by the Director of Equipment, Information Technology and In-Service Support and the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. The aim is to provide a project portfolio management function, i.e. to identify at an early stage and to assess implications for the overall system and to bring about decisions (e.g. through submissions to the CPM Steering Board if category A and B projects deviate from plans) and to decide on category C and D projects. The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support chairs the project council and appoints its members. The project council performs and/or initiates the following tasks: 

reviewing selected projects, products and/or services with relevant officials,



assessing overall implications of deviations from plans and issuing recommendations for further action for category A and B projects and/or deciding on category C and D projects and



ensuring knowledge transfers between projects in all phases.

Control measures for category C and D projects resulting from decisions of the project council will be independently planned and implemented by the persons in charge. 2. CPM Steering Board In case of critical developments in projects, products and/or services, the Director of Equipment, Information Technology and In-Service Support will employ a ministerial CPM steering board. The Board meets when required and is chaired by the Director. In the event of deviations from plans submitted by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, the CPM Steering Board serves to identify and to assess system-wide implications in connection with - 29 -

ministerially relevant projects, products and/or services and to decide on further courses of action. Amendments/adjustments to the agreement on objectives always require a decision by the CPM Steering Board. Depending on the task at hand, the Director of Equipment, Information Technology and In-Service Support appoints members of the CPM Steering Board. Responsible heads of directorates and the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support will be consulted as needed. Control measures resulting from decisions of the CPM Steering Board will be independently planned and implemented by the persons in charge on their own responsibility. 3. Signature of CPM documents The CPM documents FFF, FFF(S) and the selection decision document are signed by the Bundeswehr Chief of Staff. Agreements on objectives for category22 A and B projects are signed by the Director of Equipment, Information Technology and In-Service Support and the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. Project orders23 for category C and D projects are signed by the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and the project manager. 4. Submissions to the FMOD Executive Group The procurement and in-service process is initiated by the CPM documents FFF and FFF(S), which are approved by the Bundeswehr Chief of Staff, who is part of the FMOD Executive Group. According to this FMOD framework directive, the FMOD Executive Group is to be consulted when projects are assigned to project categories A and B. For category C and D projects, the Executive Group is as a rule only involved when it comes to submissions to Parliament (see Section III.5). 5. Submissions to the German Bundestag Submissions to the German Bundestag (parliament) include

22 23



procurement submissions to the Defence Committee and the Budget Committee



€25 million submissions to the Budget Committee



cost increase submissions to the Budget Committee



discontinued projects with financial implications (including reduced financial burdens) exceeding €25 million to the Budget Committee



in some cases, reports requested by the Defence Committee or the Budget Committee.

See Appendix 2 for project categories. See also terms and definitions  agreement on objectives / project order

- 30 -

The submissions will be signed as follows 

submissions to the Defence Committee are signed by the FMOD Executive Group



submissions to the Budget Committee are signed by the Federal Ministry of Finance Executive Group.

The provisions apply to international armaments cooperation and to purchases within the framework of foreign military sales (FMS). Procurement submissions to the Defence Committee must also include, for the Executive Group, summaries of previous official FMOD statements on the projects in question (statements on security policy and military policy, quantities and prices). Submissions must be made by 

the Director of Equipment, Information Technology and In-Service Support for procurement submissions to the Defence Committee and for submissions concerning the selection of a prime contractor



the Director of Budget and Management Accounting for FMOD contributions to €25 million submissions and for separate cost increase submissions of the Federal Ministry of Finance to the Budget Committee

Coordination within the FMOD will be based on the FMOD Rules of Procedure. The following persons will be consulted: 

the Planning Directorate on all measures with financial implications as part of the integrated planning process,



the responsible budget officer if the submission affects the budget.

Submissions with information on financial feasibility must bear a note indicating when the Budget and Management Accounting Directorate has endorsed the document or expressed a dissenting opinion.

- 31 -

IV.

Appendices

Appendix 1

CPM Process (amended)

Fig 1: Diagram of the procurement and in-service process

- 32 -

Appendix 2

Project categories

A distinction is made between four project categories with different levels of ministerial involvement. Due to their special relevance, category A and B projects are of particular concern to the FMOD. Category A projects are the most important. All other projects are allocated to categories C and D. The Ministry can assign projects to a new category 24 . The budget officer at office level is consulted in category C and D projects (Section 9 of the Federal Budget Code). Project categories are determined by means of key indicators. The criteria and range of values must be continuously updated to ensure proper categorisation. The key indicators are: (1) financial needs, (2) project duration, (3) contract, (4) technology, (5) organisation, (6) political significance 25 , (7) military significance 26 and (8) projectspecific features. Indicators (1) to (5) are assessed at office level and indicators (6) to (8) by the FMOD. Indicators are used in order to ensure that resources are allocated in a cost-efficient manner. This results in different project management and management-accounting measures. The most important decisions regarding category A and B projects are made at the FMOD owing to the special significance of these projects. Based on the selection decision document and the finalised contract 27 an agreement on objectives is negotiated and concluded by the Director of Equipment, Information Technology and In-Service Support and the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. Projects of the categories C and D are finalised by the Offices following approval of the FFF or FFF(S) by the Ministry. For these projects, the Director of the Bundeswehr Planning Office makes the selection decision based on sufficient funding and prior consultation with the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. The Office will make a recommendation from a technical and economic perspective. With this documented decision, the selected proposal becomes a selection decision document and is submitted by the Bundeswehr Planning Office to the FMOD for final project categorisation. If project category C or D is confirmed, responsibility for production and in-service use is 24

In the analysis phase this is done according to Figure 2, in the production and in-service phase the CPM Steering Board will make a decision. 25 Criteria for special political significance:  Matters deliberated or discussed by the Federal Cabinet and Parliament or by committees, commissions or consultants appointed by these organs  Repeated discussion in international institutions or bodies or with partner nations at ministerial, statesecretary, chief-of-defence, armaments-director, ministerial-director, or IT director level  Public awareness and significance 26 Criteria for special military significance:  Significance for more than one Service  Significance for the capability profile of the Bundeswehr (operational capability)  Significance for the operational readiness of the armed forces 27 If it is impossible to finalise all contracts at that time, cost estimates for outstanding contracts must be updated according to the selection decision document.

- 33 -

transferred with the selection decision document to the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. Similar to the agreement on objectives, a project order is negotiated and concluded between the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and the project manager on the basis of the selection decision document and the finalised contract.

- 34 -

Categorisation and selection of proposed solutions The following diagram illustrates the process of project categorisation in the analysis phase: FFF or FFF(S) (incl. suggestion for project category) Provisional project categorisation determined by Planning Directorate* and Equipment, IT and In-Service Support Directorate FFF or FFF(S) approved by Bundeswehr Chief of Staff** Possible solutions prepared by the Federal Office of Bundeswehr Equipment, IT and In-Service Support provisional

provisional

Project categories A,B

Project categories C,D

Submission of possible solutions to Equipment, IT and InService Support Directorate

Selection decision by Bundeswehr Planning Office Submission of selection decision document to Director of Planning* and Director of Equipment, IT and In-Servcie Support for final project categorisation

Assessment of solutions and final projectcategorisation by Planning Directorate* and Equipment, IT and InServcie Support Directorate

upgraded to project categories A,B downgraded to project categories C,D

Submission to Bundeswehr Planning Office for selection decision

Signature of selection decision document*** by Bundeswehr Chief of Staff

Signature of selection decision document*** by Director of Bundeswehr Planning Office

Agreement on objectives between the Director of Equipment, IT and In-Service Support and the Director of the Federal Office of Bundeswehr Equipment, IT and In-Service Support

Project order between the Director of the Federal Office of Bundeswehr Equipment, IT and In-Service Support and the project manager

* for FFF(S) after prior consultation with the Director of Strategy and Operations ** or a delegation chosen by the Bundeswehr Chief of Staff *** budgetary document for production

Fig. 2: Project categorisation - 35 -

Appendix 3

Fast-track initiative for operations

Fast-track initiatives for operations aim at procuring unforeseeable and urgent requirements quickly and efficiently – even if this entails acceptable risks. Fast-track procurement is based on the procedure 28 for project category C with the following additional features: 

priority treatment (if necessary including negative consequences for other projects)



possible solutions limited to products that can be provided within a fixed time frame (up to 6 months after conclusion of a contract)



simplified documents complying with the requirements of Section 24 of the Federal Budget Code



The amount of funds necessary for the implementation of a fast-track initiative for operations will be submitted to the coordinating funds manager reporting to the Bundeswehr Chief of Staff. The coordinating funds manager will obtain the consent of the responsible budget officer.

Fig. 3: Fast-track initiative for operations FFF(S) that require funds of more than €5 million will be submitted for approval to the state secretary via the Bundeswehr Chief of Staff. A selection decision is made by the Director of the Planning Office on the basis of sufficient funding and with the involvement of the responsible budget officer. Financial feasibility is confirmed with the release of funds by the coordinating funds manager reporting to the CHOD. The selection decision forms the basis of the project order.

28

Detailed rules are included in CPM (amended).

- 36 -

The Planning Directorate or the Bundeswehr Planning Office, the Strategy and Operations Directorate and the Budget and Management Accounting Directorate have access to the project management accounting of fast-track initiatives for operations and can thus gather the necessary information. In this context, they are entitled to information about the effects of individual projects on capability management and funds management. This information should be made available as quickly as possible.

- 37 -

Appendix 4

Analysis of financial requirements, resource planning, budgeting and budget execution

Analysis of financial requirements, resource planning and budgeting Within the integrated planning process (IPP), the analysis of financial requirements along with resource planning and budgeting constitute the annual business process, which combines requirement updates, requirement identification decisions, expenditure planning, and budgeting. This process integrates of the former processes of Bundeswehr planning, budgeting and management accounting. It comprises the planning, harmonisation and assessment of necessary measures in all areas of expenditure. In addition, measures are prepared from a budgetary perspective so that a budget can be drawn up towards the end of the business process. A further process is thus not necessary. The basic process is illustrated in the following figure. Details follow from the IPP.

JPV

Fig. 4: Analysis of financial requirements, resource planning and budgeting as part of the integrated planning process The following statements only apply to the planning categories of armaments and, in certain cases, maintenance and use (armament investments and maintenance). The process element is initiated by the planning guidelines of the Planning Directorate. Based on this, the Bundeswehr Planning Office commences in defined areas the requirement update in the major organisational elements, which ends with the requirement identification decision by the Planning Directorate. The following prioritisation of requirements takes place in close cooperation with the major organisational elements. - 38 -

After compiling the planning requirements of the Planning Directorate, the major organisational elements prepare the planning input that will become financially relevant in the fiscal year after next / the financial planning period after next for the analysis of financial requirements. Through the planning input, the major organisational elements can express their own emphases within the framework of the binding guidelines. For armaments investments, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, assisted by the major organisational elements, submits planning input for all projects for which the FFF has been approved to the Planning Office for the creation of the armaments investment element of the planning proposal. Planning input for future projects for which the FFF has not yet been approved is contributed to the analysis of financial requirements by the Planning Office with help from the major organisational elements. In the area of maintenance, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support compiles its own planning input with that of the major organisational elements to create the maintenance element of the planning proposal. It then evaluates the overall input and presents it to the Bundeswehr Planning Office. The origin of input provided by the major organisational elements remains clear. The Bundeswehr Planning Office will compile and consolidate the planning input mentioned above and will harmonise and optimise it with regards to specifications. Afterwards, both areas of expenditure are evaluated by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support as part of its responsibility for the implementation of projects and material responsibility for operational viability. In addition, the organisational elements present the Planning Office with assessments in which they consider the effects on their mission accomplishment in the context of their in-service and supply responsibility for operational capability and readiness. Based on the finalised planning proposal and the assessments of the major organisational elements, the analysis of financial requirements is prepared by the Planning Directorate in coordination with the directorates concerned. In addition, the Bundeswehr Planning Office develops the proposal for the resource plan. Similar to the preparation of planning input (armament investments and maintenance), the Bundeswehr Planning Office will, where applicable, seek input from the major organisational elements in order to complete or update the data base. The managers of the major organisational elements provide further data that are not yet needed for the analysis of financial requirements, for example for more differentiated planning in the areas of expenditure after the annual programme negotiations. The results of the annual programme negotiations regarding readiness for budgeting as well as up-to-date timelines and financial requirements are introduced by the Federal Office for Bundeswehr Equipment, Information Technology and In-Service Support. - 39 -

Once the Federal Government has issued its decision on benchmarks, the Planning Directorate will compile the resource plan for the future budget. In its structure, this corresponds to the budget estimate. After approval by the Executive Group, the resource plan will be submitted to the Budget and Management Accounting Directorate as a final act of annual planning. Based on this, the Directorate will prepare the contribution to the budget estimate for Departmental Budget 14. With the submission of the resource plan to the Budget and Management Accounting Directorate, the budget application is complete.

Prioritisation of maintenance funds within budget execution Based on budget legislation, funds earmarked for maintenance will be allocated by the FMOD budget officer to the manager of the Equipment, Information Technology and In-Service Support Directorate, who will coordinate the distribution of funds across budget titles and allocate funds to the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support to assume material responsibility for maintaining operational viability. Budgeting of allocated funds will be performed at the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. The budget for scheduled central logistic measures will be provided to the project managers. In accordance with the resource plan, funds earmarked for maintenance will be provided, on the one hand, by the Equipment, Information Technology and In-Service Support Directorate to the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support to perform scheduled central logistic measures and, on the other hand, by the coordinating funds manager reporting to the Bundeswehr Chief of Staff (Planning Directorate) to the organisational elements to assume in-service and supply responsibility (including information about origins). In case of (top-down) interventions in funds such as reduced allocations or budget freezes (i.e. deviations from the resource plan), the Director of Equipment, Information Technology and In-Service Support will ask the Director of Planning for a decision in consultation with the Armed Forces Command and Control Director and the Director of Strategy and Operations on how to adapt the budget by modifying the maintenance titles and by setting priorities (e.g. operations, weapon system, etc.), if applicable 29 . In case of additional funds requirements (e.g. due to cost increases or unscheduled maintenance activities [bottom-up]), possible compensations must be developed under the primary responsibility of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support in coordination with the organisational elements concerned, including the Bundeswehr Planning Office if necessary, and subsequently be implemented by the Federal Office of Bundeswehr 29

The Chief of Staff may also set new maintenance priorities in the current fiscal year by modifying the budget structure in coordination with the Equipment, Information Technology and In-Service Support Directorate.

- 40 -

Equipment, Information Technology and In-Service Support. If the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and the organisational elements fail to agree on a common solution, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support will submit the proposal of the material manager for operational viability to the Bundeswehr Planning Office for decision. The Equipment, Information Technology and In-Service Support Directorate is to be informed. The Bundeswehr Planning Office will submit the proposal of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support together with its own evaluation and the opinion of the organisational elements concerned to the Director of Planning for decision. The Director of Planning will consult the Director of Budget and Management Accounting. The Equipment, Information Technology and In-Service Support Directorate will implement the decision.

- 41 -

Appendix 5

Terms and definitions

 Agreement on objectives / project order Agreements on objectives are binding agreements between two hierarchical levels about obligations to be met during a fixed period of time, on their quality and quantity, the funds required and the resources available, and the type and extent of information exchanged. The overriding principle is a transition from individual commands to “management by objectives”. An agreement on objectives forms the basis for a mutual sense of obligation to the agreement in both partners who will then adapt their work accordingly. Agreements on objectives for procurement and in-service use are project-specific agreements between the Director of Equipment, Information Technology and InService Support and the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support on the production and in-service use of product or service solutions. The agreement on objectives is prepared by the Federal Office of Bundeswehr Equipment, Information Technology and InService Support on the basis of the selection decision document and the finalised contract. It is negotiated and concluded by the Director of Equipment, Information Technology and In-Service Support and the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support. The final nature of the agreement on objectives usually leaves no room for adding requests later. Since it signs the agreement on objectives, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support plays an important part in this regime which entails much responsibility and latitude. In category C and D projects, a project order, which corresponds to an agreement on objectives, is negotiated and concluded between the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support and the project manager, based on the selection decision and the contract.  Available products Commercially available products as well as products that have completed development and are ready for manufacture (CGM products).  Concept development & experimentation Concept development and experimentation (CD&E) is a method for examining the degree to which innovative ideas can be of operational benefit to the Bundeswehr using scientific methods in an iterative process comprising the development and experimentation of concepts. The aim of CD&E is to identify the innovation potential of a new idea at an early stage, to evaluate its relevance for the Bundeswehr, to assess its feasibility, and to examine its effectiveness.  CPM documents Findings, important decisions and further courses of action are recorded in CPM documents according to the standards laid down in these procedural regulations. Documents with comparable contents prepared by partners may be declared CPM documents (cover sheet procedure). The following are CPM documents:   

Capability gap and functional requirement document (FFF) and capability gap and functional requirement document (fast-track initiative) (FFF(S)) Selection decision document Agreement on objectives and project order



Approval for service use - 42 -

 CPM Steering Board The CPM Steering Board is a decision-making body of the Ministry. In the event of deviations from plans submitted by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, it serves to identify and assess system-wide implications in connection with ministerially relevant projects, products and/or services and to decide on further courses of action. The Board will meet as and when required under the chairmanship of the Director of Equipment, Information Technology and In-Service Support. Depending on the task at hand, the Director of Equipment, Information Technology and In-Service Support will appoint the members of the CPM Steering Board.  Defence research and technology One purpose of defence research and technology (R&T) is to provide the necessary scientific and technological knowledge and skills in all relevant technologies to make possible task-oriented, intelligent and economical equipment decisions. Another is an early recognition of the significance of new technologies for threats to and capabilities of the Bundeswehr. The results are intended to provide analysis and assessment capabilities needed to make equipment decisions, enhance national security measures in a whole-of-government approach, identify new technologies to incorporate into Bundeswehr capabilities, suggest new solutions, and swiftly make emerging technologies ready to go into production. They include new system concepts and their evaluations and contribute both to a European research and technology base and to multinational cooperation within NATO. They also help to preserve cooperability and defence technology competence in Germany.  Error / change management In error / change management, all errors, problems and resulting technical or functional changes are documented and assessed as to their priority and impact before a decision is made on a further course of action for the project. Reasons for error / problem reports include: system errors, lack of system functionality, newly identified system dependencies or misunderstandings about the mission. To ensure the flexible system structure necessary for IT projects that must meet constantly changing requirements, a project-specific change control board will be established in accordance with V-Model XT for changes exceeding the project manager’s scope of action and liberty of decision-making as specified in the agreement on objectives. This control board will determine the further course of action in coordination with the areas affected. Necessary technical changes are not to exceed the tolerance limits specified in the agreement on objectives.  Functional requirement A functional requirement is the description of the purpose of a required capability which does not in any way restrict the choice of possible solutions. It includes all functionalities and uses 30 as well as relevant conditions of operation and use 31 . It includes a description of the capability-related performance parameters 32 as well 30

With regard to achieving objectives in the capability domains of reconnaissance – command and control – effect and support 31 This includes the possibility of using a description of the operational environments (scenarios, operation profiles, operation vignettes), resulting parameters (e.g. flight altitudes, climate zones, temperature ranges) and appropriate tools and methods (e.g. architecture method). 32 Such as effect, range, protection, transport capacity, interoperability, information exchange requirements

- 43 -

as other characteristics derived from the terms of operation and use 33 . All performance parameters and characteristics must be weighted against one another (prioritised requirement catalogue) and backed up by clearly defined and objectively verifiable criteria. These criteria form the basis for the evaluation of proposed solutions during the analysis phase of CPM as well as of the chosen solution during the production phase, especially during testing and operational suitability tests.  Government quality assurance Government quality assurance refers to the inspection of performance for compliance with contracted technical and related organisational requirements by the customer in public contracts and represents the verifying part of quality control activities. It includes all quality-related contractor processes laid down in the contract. The responsibility of the contractor for his processes and the acceptance of the contracted product remain unaffected.  Initiative Initiatives are reasoned requests from the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, the commands/agencies of the major organisational elements, and operational contingents which, based on lessons learned, point out a need for action to close capability gaps.  In-service and supply responsibility for the maintenance of operational capability and readiness Responsibility of a chief of staff and/or chief of a civilian organisational element for materiel readiness and sustainability among the units/agencies in his or her area. To this end, he or she has personnel, materiel, infrastructure, organisational, procedural and operational resources related to his or her mission.  In-service control Coordination and control of all measures for the maintenance of operational viability of products during their service life. It mainly comprises technical logistic management, control of all relevant project elements and product-related funds management.  Integrated compliance demonstration; The combination – in terms of place, time or contents – of contractor verification activities with operational (suitability) tests performed by the customer, or joint conduct of product suitability tests/trials.  Integrated logistic support Integrated logistic support (ILS) is a process extending over the entire life cycle of a product, in which all product-related logistic considerations are combined in a holistic approach to ensure optimum logistic support of the product at reasonable costs. The ILS process is an integral part of both the analysis and the production phase for the purpose of developing the project element of logistics and service use (in accordance with ALP 10).

33

Such as reliability, serviceability, availability, transport, storage

- 44 -

 Integrated planning process The integrated planning process (IPP) combines the separate main processes of Bundeswehr planning, financial accounting and management accounting. It is interlinked with the preparation of the budget. Future developments set the direction for further planning. The basis for this is formed by the prioritised capability profile as derived from the Defence Policy Guidelines and the National Level of Ambition and is rooted in the Bundeswehr Concept, which outlines what the Bundeswehr should be able to do in the future. Medium-term planning creates strong ties between the conceptual basis and capability management / cyclical process elements. Based on the capability situation, which reflects a comparison of actual and target capabilities, capability management connects initiatives and analyses with resource-based considerations, and monitors their implementation. Detailed work is restricted to initiatives that have a realistic chance of implementation. The combination of the annual parts of planning and budgeting in a single process for financial requirement analysis, resource planning and budgeting forms the core component and expresses the integrated nature of the integrated planning process. The financial requirement analysis identifies and assesses what resources are required, how available resources should be used and what potential risks should be considered. The resource plan is used as preparation for the draft budget. After submission to the Budget and Management Accounting Directorate, this becomes the budget estimate, which in turn becomes the budget following parliamentary discussion and approval. The system of management, agreements on and control of objectives are the instruments of management accounting rooted in the IPP.  Integrated project teams Integrated project teams (IPTs) are established to accomplish the tasks at hand throughout the life cycle of a project/product. The teams are headed by IPT leaders who have exclusive decision-making powers. In order to perform project management tasks, the IPT leader has direct access to the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support on category A projects and to the responsible heads of directorates of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support on category B projects. Ministerial supervision over IPT task performance depends on the line of reporting between the agencies/major organisational elements and IPT leaders and/or which agency/major organisational element has appointed the IPT leader. IPT members include the following: 

Part 1 of the analysis phase (prior to the approval of FFF or FFF(S)): - Bundeswehr Planning Office (IPT leader) - Federal Office of Bundeswehr Equipment, Information Technology and InService Support - potential users/operators (authorised representatives) - trade and industry, if required and permitted by law



Part 2 of the analysis phase (prior to the approval of FFF or FFF(S)): - Federal Office of Bundeswehr Equipment, Information Technology and InService Support (IPT leader) - Bundeswehr Planning Office - 45 -

- potential users/operators (authorised representatives) - trade and industry, if required and permitted by law 

Production phase - Federal Office of Bundeswehr Equipment, Information Technology and InService Support (IPT leader) - future users/operators (authorised representatives) - trade and industry (prior to contract awarding only if permitted by law)



In-service phase: - Federal Office of Bundeswehr Equipment, Information Technology and InService Support (IPT leader) - users/operators (authorised representatives) - trade and industry, if required and permitted by law

Depending on the project, other affected areas (e.g. Federal Office of Bundeswehr Infrastructure, Environmental Protection and Services for infrastructure-related measures or Bundeswehr Operations Command for fast-track initiatives) will be involved. In coordination with the IPT leader, they ensure that the required assistance is provided. In the case of equipment for more than one major organisational element, the (potential/future) users/operators may choose to appoint a joint representative for the IPT. He or she will make sure that other users/operators are appropriately included. For category C and D projects, the formal establishment of an IPT is optional. The consultation of all participants (as in an IPT), however, must be ensured. Several minor projects may be combined in one IPT.  Life cycle cost Life cycle costs are the overall expenses that accrue throughout the life cycle of a product or service (analysis, production and in-service use, including disposal) and that can be assigned to the operational system. Expenses throughout the life cycle may involve many organisational elements that are normally items of the budget or parts thereof. For this reason, expenses cannot be limited to selected cost centres.  Logistic support analysis Logistic support analysis (LSA) serves to systematically identify and electronically collect, present and analyse all information required to achieve the ILS objectives / project element of logistics. LSA supports 

the identification of cost drivers during product analysis, production and inservice use,



influences on design and developments to minimise life cycle costs,



the provision of logistic data to plan and achieve operational viability.

As early as the analysis phase, LSA can provide initial contributions for evaluating product-specific logistic implications (e.g. frequency and time of repair, stockpiling, training requirements, etc.) which will be further consolidated as the project progresses. In order to benefit from LSA, precise requirements for a logistic support system must be developed at an early stage.

- 46 -

 Material management The entirety of measures that ensure the smooth flow of procured material in the supply chain. These measures are based on the application of effective and rational procedures as ordered by logistics management. This involves receiving, identifying, checking, accepting, storing, documenting, planning, releasing, allocating, supplying and removing material.  Material responsibility for operational viability Responsibility of the Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support for the operational viability of products and/or services 34 in the Bundeswehr. This includes Bundeswehr-wide product-related management activities and decisions throughout the procedure that facilitate the safe and appropriate use of products in accordance with their intended purpose as laid down in the agreement on objectives. It begins, as a rule, after the selection of a proposed solution for the capability gap to be closed and ends with the retirement of the product.  Materiel Maintenance All technical and operational measures ensuring operational viability of materiel in connection with in-service control.  Operational capability The ability to accomplish a mission with the available personnel, material, infrastructure, organisational, procedural and operational resources (for example, by developing project elements) (in accordance with Joint Service Regulation ZDv 30/41).  Operational fleet management Operational fleet management includes all measures planned and implemented by the “in-service and supply manager responsible for maintaining operational capability and readiness” in order to maintain the operational capability and readiness of the equipment of a weapons system (fleet) in his area of responsibility. Operational fleet management must be differentiated from systems and equipment logistics measures as planned and implemented by the “material manager for operational viability” for all the equipment of a weapons system (fleet) in order to ensure operational viability of that weapons system.  Operational readiness The ability of a weapon system/technical equipment to perform its intended function. An operational weapon system/equipment is fully available for use.  Operational viability Safe use in accordance with the intended purpose of a product as stipulated in the FFF and FFF(S) and the selection decision document under realistic conditions and with due regard to legal requirements (such as environmental protection and industrial safety). This includes logistic and other measures required for in-service use. It comprises all products, infrastructure, equipment, documentation, services and personnel required for providing, operating and maintaining the product.

34

Services in terms of the procedural regulations are the transfer of user rights to goods and services. They are provided by trade and industry to permanently close capability gaps in the planning category of procurement and, if applicable, maintenance and use.

- 47 -

 Partners National and international government or civilian institutions / companies with whom there is cooperation in the areas of requirement identification, procurement and in-service use.  Post-design support (PDS) PDS designates all development-related work required as a basis for the modification of products. This includes technical efforts required in preparing a modification, including software and documentation efforts. They may be provided by trade and industry or by the offices. PDS is financed from development funds.  Product General term for military and other equipment including computer hardware and software. This term does not cover housekeeping supplies, food, universityspecific equipment, material for training workshops, or material used in connection with the acquisition of sites, site protection, and infrastructure.  Product improvement All measures that aim to improve existing features of fielded products (capability improvement) and have considerable operational, logistic, technical or economic effects. Product improvements resulting from lessons learned during the fulfilment of material responsibility for operational viability must be submitted by the project manager to the Bundeswehr Planning Office by way of initiatives.  Product maintenance This term encompasses all measures designed to preserve or restore the desired condition of a product. They comprise activities such as care, servicing, calibration/comparison testing, preservation, packaging, storage/long-term storage and repair. Information about the desired and actual condition of a product is mainly based on the following criteria: intended purpose stipulated in the FFF and FFF(S) as well as the selection decision document, configuration management, obsolescence management, monitoring / ammunition surveillance, recording and evaluation of operational data and failure reports, technical inspections. In the context of defence materiel, product maintenance is also referred to as materiel maintenance or just maintenance.  Product modification Encompasses all measures that are not product improvement measures but affect material documentation. Minor changes (version changes, software updates, etc.) which only cause marginal changes to material documentation and can be implemented as part of maintenance activities do not require a budgetary document.  Project All measures aimed at a timely and cost-effective procurement of operationally viable products and services as well as their efficient use. A project is mainly characterised by its limited duration and singular conditions. This includes objectives regarding schedule or budget or a project-specific organisation.  Project categories Allocating projects to different project categories allows for efficient resource allocation with sophisticated administrative procedures. The project categories range from A to D. Projects of the categories A and B are relevant to the Ministry - 48 -

and are controlled through agreements on objectives. Projects of the categories C and D are finalised by the Offices following approval of the FFF or FFF(S) by the Ministry. Furthermore, the type and extent of management accounting is differentiated according to category. Category A projects will undergo the most comprehensive management accounting.  Project council The project council is a higher management and knowledge transfer body at office level. It serves to identify at an early stage and to assess the implications of deviations from plans for the overall system and to bring about decisions for project categories C and D. For project categories A and B, it serves to prepare decisions of the CPM Steering Board. The project council meets every two months and on special occasions. The Director of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support chairs the council and appoints its members.  Project elements Constituent parts of a project or in-service control of a project 

Technical and economic elements All supporting measures and processes aimed at providing and maintaining operationally viable products and services with due regard to current technology, all relevant legal requirements, cost-efficient procedures and budget and planning aspects.



Command and control / operation Command and control regulations, operational doctrine and procedures.



Organisation Changes in organisational structures and procedures of military and civilian agencies as well as establishment/disbandment of military and civilian agencies. Preparation of relevant documentation. Documentation relevant to infrastructure requirements must be finalised in time to leave sufficient room for the implementation of these requirements.



Personnel / training Availability of personnel of the future user for the production and in-service phases in the numbers required and with the necessary qualification (including the training organisation and material).



Logistics Definition of all essential requirements regarding plans for, production of and control of logistic assets and procedures on operations and during routine duty, during training and exercises (including material documentation, material maintenance, inspections, material management, technical-logistic support, IT support, packaging, storage, transportation, intended service life, integrated logistic support (ILS) / logistic support analysis (LSA). Logistics requirements must be integrated early on in the preparation of FFF and FFF(S) documents. Implementation is governed by a project-related logistic concept. This concept outlines the logistic framework for the production and in-service use of products and services.

- 49 -



Infrastructure measures Infrastructure requirements and construction execution plans for all locations where the product is used or operated (including schools and logistics facilities).



Occupational safety Ensuring compliance with statutory requirements regarding occupational safety, radiation protection, technical safety and maritime safety.



IT security Ensuring the necessary / required confidentiality, integrity and availability of information processed and transmitted in IT projects or projects with IT elements. All activities relevant to IT security will be incorporated into the planning, definition and implementation of a new project-related IT security concept; they will be adapted to changing requirements and, if need be, expanded.



Military security Ensuring military security for in-service use. This includes structural and/or technical security measures regarding personnel (threats posed by Bundeswehr members / external personnel), physical security (unauthorised entry, access, action, insight or eavesdropping) and organisational security (guarding).



Traffic safety (including flight safety) Traffic safety encompasses all activities, conduct, precautions and measures ensuring the safe use of means and routes of transport by land, water and air.



Ergonomics Requirements for commandability, operability, usability and maintainability of a product with the objective of achieving the highest possible operational effectiveness under given operational conditions. Legal requirements (for example for barrier-free access) must be observed.



Bundeswehr geoinformation affairs Provision of required geo-information documentation and data.



Environmental protection Assessment of any adverse environmental effects generated during production, in-service use and disposal of products, with special consideration of governmental waste disposal obligations; measures for training, operation, logistics and infrastructure.

 Project management Planning, control and monitoring of projects. All command and control tasks and organisation, management techniques and resources necessary for the initiation, definition, planning, control and finalisation of projects.  Project management accounting Part of project management. Project management accounting aims to ensure the achievement of project objectives through target-performance comparisons, identification of problems, assessment of consequences and assistance in the establishment, planning and control of corrective measures.

- 50 -

 Project portfolio management Overall control and monitoring of projects in order to identify at an early stage and to assess implications for the overall system and to bring about decisions.  Quality Gates Quality gates are special milestones of quality inspection in the course of a process. They serve systematisation purposes as well as to measure levels of readiness of certain process elements and to define standards for all parties involved in a project. Furthermore, they improve the judgment capability of decision makers and a possible need for adjustments will be recognised at an earlier date. Quality gates may be used in all CPM phases.  Replacement procurement Procurement of alternative products based on existing CPM documents in order to relieve shortages or replace missing products (e.g. regeneration).  Replenishment procurement Replenishing an existing shortage with identical fielded products on the basis of existing CPM documents. Such shortages may result from use, wear and tear, loss, etc.  Risk management Risk management comprises the systematic identification and assessment of risks as well as the identification and control of resulting measures. Risks must be identified and minimised throughout all phases of CPM for a project or product. Risk management is an integral part of project management.  Services Services, unlike products, are immaterial goods. Their distinguishing feature is the simultaneity of provision and use. For the purposes of this regulation, the transfer of rights of use is also considered a service. Services are usually provided by private industry and are designed to close a capability gap in the planning category of armaments and, in some cases, maintenance and use.  Sound financial management The principle of sound financial management stipulates that an optimum relation be aimed for between intended purpose and expenses. This principle comprises the principles of economy and efficiency. The principle of economy calls for the achievement of a certain result with the smallest possible expenditure of resources. The principle of efficiency calls for the achievement of the best possible result with a certain expenditure of resources. During requirements identification, procurement and in-service use, the factors determining expenditure will be assessed in an iterative process in order to optimise financial management.  Supplementary procurement Procurement of introduced products in order to meet a requirement that is greater than that specified in existing CPM documents. Increased demand may be due to an expansion of the user group or to organisational changes or may be necessary to increase sustainability, etc.  Support services All services provided by trade and industry and the major organisational element of equipment, information technology and in-service support to maintain the operational viability of a product. Support services are subject to in-service management. They consist of - 51 -



provision and supply



preventive and corrective maintenance (incl. software)



technical logistic support (TLS) and

 post-design support (PDS). When deciding whether and to what extent services designed to maintain operational viability should be awarded to trade and industry, the following aspects should be taken into account: Bundeswehr core capabilities, the ability to assess situations and identify critical information, ensuring provision of required services during Bundeswehr operations both in peacetime and during crisis/war.  System architecture System architecture describes the structures, relations and dependencies of systems, parts of systems and system components, both among themselves and with their environment, including the principles and guidelines on which their design and development is based in terms of technology, economy and time.  Technical logistic support Technical logistic support (TLS) includes services in the areas of collecting, processing and making information available. These services are provided by trade and industry as part of maintaining the operational viability of products in use. TLS services are financed from the maintenance budget.

- 52 -

Appendix 6 ALP APN Art BDR Bw CD&E CGM CPM ER EU FFF FFF(S) FMOD FMS ILS IPT IT LCC LCCM LSA M&S NATO PDS Proj R&T SOW TFEU TLS

Abbreviations Allied Logistic Publication Annual programme negotiations Article Battle damage repair Bundeswehr Concept development and experimentation Commercial, government and military off the shelf Customer product management Expedient repair European Union Capability gap and functional requirement document Capability gap and functional requirement document (fast-track initiative) Federal Ministry of Defence Foreign military sales Integrated logistic support Integrated project team Information technology Life cycle cost Life cycle cost management Logistic support analysis Modelling and simulation North Atlantic Treaty Organisation Post-design support Project Defence research and technology Statement of work Treaty on the Functioning of the European Union Technical logistic support

- 53 -