Total Package Procurement

Total Package Procurement (TPP or alternatively TPPC) was a major systems acquisition policy introduced in the United States Department of Defense in the mid-1960s by Secretary of Defense Robert MacNamara.[1] It was conceived by Assistant Secretary of Defense for Installations and Logistics, Robert H. Charles.[2]

Six Spruance-class destroyers fitting out in 1975; this class of warships was ordered under the Total Package Procurement policy

TPP involves combining as a single package for the procurement a number of related requirements including the design, development, production and support of major systems.[3] This concept was a "pendulum reaction" to the prior cost reimbursement policies in major weapon systems.[4]

Total Package Procurement was not successful and was abandoned shortly after MacNamara left office.[5][6]

Description

TPP is a method of procuring at the outset of the acquisition phase under a single contract containing price, performance and schedule commitments, the maximum practical amount of design, development, production and support needed to introduce and sustain a system or component in the inventory.[3]

The purpose of TPP was to procure under the influence of competition as much of the total design, development, production and support requirements for a system or component as may be practicable thereby:

  • Providing firmer 5-year force structure program package planning information concerning performance cost and schedules.[3]
  • Discouraging contractors from buying in on the design and development effort with the intention of recovering on the subsequent production program.[3]
  • Permitting program decision and source selection based on binding performance price and schedule commitments by contractors for the total program or major part of it.[3]
  • Providing a firmer basis for projecting total acquisition and operational costs for use in source selection and in the determination of appropriate contractual incentives.[3]
  • Motivating contractors to design initially for economical production and support of operational hardware which may not receive sufficient emphasis in the absence of productions commitments.[3]
  • Requiring contractors to assume more responsibility for program success thereby permitting the Government to monitor programs more in terms of surveillance and less in terms of detailed management.[3]

Results

Total Package Procurement did not succeed.[5] The unique complexity of shipbuilding made Total Package Procurement particularly inappropriate for these programs.[5]

Notable programs that encountered major problems with the TPP approach were the Air Force's Lockheed C-5 Galaxy[1] and AGM-69 SRAM,[7] the Army's Lockheed AH-56 Cheyenne,[7] the Tarawa-class amphibious assault ships (LHA),[5] and the Spruance-class destroyers.[5]

Elimination

Upon taking office as Deputy Secretary of Defense in 1970, David Packard issued a May 28, 1970 memorandum that contained a number of major reforms designed to address "the real mess we have on our hands." A key reform was elimination of TPP except in rare situations.[6]

References
  1. Michaels, Jack V.; Wood, William P. (1989). Design to Cost. John Wiley & Sons. p. 238. ISBN 0471609005. Retrieved 4 January 2016.
  2. Williams, Michael D. (1999). Acquisition for the 21st century: the F-22 Development Program. National Defense University Press. p. 4. ISBN 9781428990876. Retrieved 6 January 2016.
  3. Code of Federal Regulations. Washington, D.C.: U.S. Government Printing Office. 1 January 1969. p. 63. Retrieved 4 January 2016.
  4. Two Navy Ship Contracts Modified By Public Law 850804 -- Status As Of July 29, 1979 (PDF). Washington, D.C.: U.S. General Accounting Office. 29 July 1979. p. 1. Retrieved 4 January 2016.
  5. Two Navy Ship Contracts Modified By Public Law 850804 -- Status As Of July 29, 1979 (PDF). Washington, D.C.: U.S. General Accounting Office. 29 July 1979. p. 2. Retrieved 4 January 2016.
  6. Brown, Shannon A. (2005). Providing the Means of War: Historical Perspectives on Defense Acquisition. US Army Center of Military History and Industrial College of the Armed Forces. pp. 145–146. ISBN 9780160876219. Retrieved 4 January 2016.
  7. "Pentagon Buying System Backfires". Beaver County Times. United Press International. 3 July 1969. Retrieved 5 January 2016.
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