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Streamlining costs and program structure of Military communication Satellite program model

 

Scalar Market Research aims to provide real-time data and consulting services to clients around the world. The following case study showcases how we work with our Healthcare clients across a range of issues to deliver impactful advantage.

The Client Challenge

Two major Military communication satellite programs were consuming heavy costs. Factors starting from designing, labor and time consumed were adding to costs. To curb the expenses, a cost-effective program was required. Both the program officers and the prime contractor agreed upon creating a more affordable and sustainable governance model. This needed changes in the existing program life cycles and contract structure. The contract structure needed to be shifted to low-rate production. Also, the cost plus award fee contracts were supposed to be converted into fixed price with incentive fee contracts. Because other satellite programs were also undergoing changes, there was a scope to develop a first-ever standard operating model for lean program governance in a low-rate production environment. Scalar Market Research came into role for:

  • Creating a low-cost effective program for the Military communication satellite
  • Helping to form standards for the core baseline governance activities

Approach

Scalar team began with surveys and one-on-one interviews with key players from the government, the prime contractor, and subcontractors involved in the satellite projects. This helped to understand and baseline the existing core governance activities in terms of time, cost, and perceived value. We facilitated cross-organizational workshops to bring together people involved in the government program and address issues like decision making processes, data requirements and reporting formalities, rules of engagement in formal and informal events, and so on. Based on the output from the workshop, agreements were documented as per the program’s operating plan. The documents were formed to guide all interactions and the flow of information as the communication satellite programs were moving into production mode.

Results

As of result of team efforts between Scalar, program officers and contractors, a new lean program governance operating model got implemented across both the Military communication satellite programs. The teams expect a significant cost-cutting on program governance costs. Cost saving of 40 to 50 percent is estimated, thanks to efficient cost management in formal events, program contract data requirement lists (CDRLs), and informal interactions. The contractor labor costs are also expected to fall by 15 to 20 percent. Overall, the new operating model is projected to save $200 million from both the satellite programs combined. The entire process of creating a cost-effective program was a breakthrough for government and contractor collaboration which benefitted the entire lean program.

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