SCHEDULE

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Corrective Actions

• SCHEDULE DELIVERY MANAGEMENT

Prepared by Bonita Dunham and Bert Santiago
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• OBJECTIVES
• Define Corrective Action (C/A) and Root Cause
• Identify when to issue CARs
• Define levels of Corrective Action
• Identify contractual requirements impacting
  Schedule Delivery Management in support of
  Corrective Action Request issuance
• Provide examples C/A issuance

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• CAR Definition
• A request for root cause
• remedy of a
• contractual
• noncompliance

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• Root Cause Definition
• That condition, action, or lack of action that
  led to the problem occurring.
• Note Root cause has been identified when
  effective corrective action will prevent problem
  recurrence

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• WHAT?
• Actions taken to eliminate conditions that
  resulted in a contractual noncompliance
• Root cause of noncompliance should be identified
• Efforts are to the extent of precluding
  recurrence of non-compliant condition

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• WHY (DCMC requirements)
• Directly impacts contractor delivery performance
• CARs identified as Output of surveillance effort
• Tool to facilitate timely delivery
• Rationale that supports surveillance activity

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• WHY (DCMC requirements)
• Supports Right Time metrics
• 1.1.2 Improve on Time Deliveries
• 1.1.3 Reduce Outstanding Deliveries
• 1.1.8 Improve ratio Alerts/Delinquencies

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• WHEN
• On time delivery rate is lt 90
• Data analysis indicates contractual noncompliance
  trend
• Do not issue CAR for EACH delinquency
• Root cause analysis identifies processes
  contributing to poor delivery rates
• Contractor is non-responsive to previous CARs
  (escalation)

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• HOW
• DLAD 5000.4 PROCAS
• Any employee can initiate a CAR
• Maintain a record of all CARs issued, follow-up
  and close-out actions
• C/A implementation and effectiveness of
  contractor actions shall be verified
• Four Levels of Corrective Action

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• LEVEL I
• contractual noncompliance
• requires no special attention
• directed to working level personnel
• may be verbal or written

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• LEVEL II
• written request
• systemic non-compliances
• directed to contractor mgmt responsible for the
  process
• Inform CAT of issuance

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• LEVEL III
• serious non-compliances to contractor top mgmt.
• Govt may pursue contractual remedies
• coordination w/ ACO Cmdr prior to issuance
• issued by Team Leader or above
• copy buying activity cognizant Govt ofc at
  prime as applicable
• Contractor immediately placed on the CAL until
  C/A is verified and CAR closed out

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• LEVEL IV
• involve contractual remedies
• must be issued by ACO, countersigned by Team
  Chief or above
• copy of CAR and all correspondence to buying
  activities.
• proper coordination between CAOs, Districts, HQ,
  customers and other affected Govt activities
  before issuance

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• LEVEL IV(contd)
• assure all resolution efforts are in concert
• contractor immediately placed on the Contractor
  Alert List (CAL) until C/A verification and CAR
  close-out

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• DLAM 8000.5, PROCAS
• CAO management maintain visibility of all LEVEL
  II and above CARs
• Escalation, due to non-responsiveness to lower
  level CARs, as determined by the Contract
  Administration Team

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• Contractual Requirements
• Although schedule violation is basic area of
  Production related C/A, manufacturing processes,
  (such as Manufacturing planning, MRP II, work
  measurement, material handling, integrated
  product development and facility management) are
  likely to be found as the root cause areas.

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• Contractual Requirements
• Contractors requirement relative to many floor
  level manufacturing processes are covered in
  Contract requirements referencing Quality.

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• Contractual Requirements
• BOTTOMLINE Do not limit applicability of
  contract requirements based on functional area
  (i.e. quality or production)... compliance to
  contract requirements includes compliance to the
  delivery schedule.

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• Contractual Requirements
• Complete contract review must be done -to
  identify contractor obligations under the
  contract
• -to identify contractual noncompliances
• -reference applicable contractual requirements
  in CARs

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• Contractual Requirements
• FAR 9.103 Policy
• contracts shall be awarded to
  responsiblecontractors only.

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• Contractual Requirements
• FAR 9.104.1 General Standards
• To be determined responsible, a contractor
  mustbe able to comply with the required or
  proposed delivery or performance schedule

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• Contractual Requirements
• FAR 46.105 Contractor Responsibilities
• The contractor is responsible for carrying out
  its obligation under the contract by

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• Contractual Requirements
• FAR 46.105 Contractor Responsibilities
• Tendering to the Government supplies or
  services that conform to contract requirements

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• Contractual Requirements
• FAR 46.105 Contractor Responsibilities
• The contractor may be required to provide and
  maintain an inspection system or program for the
  control of quality that is acceptable to the
  Government...

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• Contractual Requirements
• FAR 46.105 Contractor Responsibilities
• The control of quality by the contractor may
  relate to, but is not limited to...
• Manufacturing processes, to ensure that the
  product is produced to and meets the contracts
  technical requirements

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• Contractual Requirements
• FAR 46.105 Contractor Responsibilities
• Procedures and processes for services to ensure
  that services meet contract performance
  requirements

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• Defense Priorities Allocation System (DPAS)
  Requirements
• 15 CFR 700.13(d)(2)
• states in part, .shipment or performance will
  be delayed, the person must notify the customer
  immediately, give the reasons for the delay, and
  advise of a new shipment or performance date.

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• Contractual Requirements
• MIL-Q-9858A Quality System Requirements
• Para 1.3 Summary
• The program shall assure adequate quality
  throughout all areas of contract performance

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• Contractual Requirements
• MIL-Q-9858A Quality System Requirements
• Para 1.3 Summary
• All supplies and services under contract,
  whether manufactured or performed within the
  contractors plant or at any other source shall be
  controlled at all points necessary to assure
  conformance to contractual requirements

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• Contractual Requirements
• MIL-Q-9858A Quality System Requirements
• Para 1.4 Relation to Other Contract Requirements
• The contractor is responsible for compliance
  with all provisions of the contract and for
  furnishing specified supplies and services which
  meet all the requirements of the contract.

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• CRITERIA CONDITIONS AND SITUATIONAL EXAMPLES

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Verbal or Level I - Situation A

• While reviewing a random sample of purchase
  orders, the functional specialist notices DPAS
  not being flowed down to sub-vendors from prime
  contractor
• The functional specialist discusses the
  requirement with the contractors purchasing
  agent, who acknowledges omission and immediately
  issues P.O. modification to correct the error.
• Corrective action is furthered by the contractor
  amending his work instructions/procedures,
  requiring flow-down of DPAS requirements

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Level II - Situation A

• Functional Specialist notices a negative trend in
  Ontime delivery performance
• Further analysis reveals consistent problem with
  (sub)vendor material having to be reworked after
  Govt rejection in receiving inspection.
• Reworked material comes from same sub-vendor, and
  is routinely received weeks after the planned
  in-house receipt date.

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Level II - Situation A (cont)

• Production functional specialist coordinates with
  the Quality specialist and issues a written CAR
  based on the negative delivery performance trend
  and the consistently late receipt of deficient
  sub-vendor product.
• The Production functional specialists root cause
  analysis identifies concern in the area of
  purchase issuance i.e. are P.O.s being issued
  with adequate lead timehow is the prime
  contractor controlling his subcontractor

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Level II - Situation A (cont)

• Intensity of functional surveillance is increased
  until an acceptable corrective action response is
  received, implemented and validated.

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Level III - Situation A

• Contractor is non-responsive to previously issued
  Level II CARs, as evidenced in Govt
  documentation
• Continued missed internal milestones, due to late
  receipt of sub-vendor product

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Level III - Situation A

• Situation is coordinated with CAT members
• CAR is escalated by written issuance to head of
  contractor organization, noting that continued
  inaction may lead to more severe measures

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Verbal or Level I - Situation B

• Contractor processing/working hardware not
  identified in daily schedule/bucket. Conflict to
  internal procedures.
• Currently not impacting overall delivery status
  however trend of working around/outside daily
  schedule could have negative impact on contract
  delivery schedule.

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Level II - Situation B

• Contractor continuing to process work outside
  daily schedules/buckets. Still not impacting
  contract delivery schedule, however in violation
  of internal procedures and production plan.
  Internal tracking of hardware becoming difficult
  to manage, monitor and identify.

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Level II Situation B (cont)

• Prior to issuance, coordinate action/activity
  with CAO team. Explain impact.
• CAR issued to Production/Manufacturing Manager
  with copy to production line supervisor. (Good
  idea to copy the contractors Quality Assurance
  department)

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Level III - Situation B

• Contractors lack of action relative to previous
  activity have now caused a delinquent posture to
  delivery schedule. Identifying and tracking
  hardware most difficult. The problem extends
  beyond main production line to spare part
  activity, retrofit effort, and impacting
  inventory accuracy.

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Level III Situation B (cont)

• Unsure of contractors ability to ship end items
  due to the lack of identification and tracking
  ability. Build up/cushion of assets no longer
  available.
• Contractor not able to provide a valid get well
  date.

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Level IV - Situation B

• Contractors lack of action now impacts delivery
  posture (contract delinquency)
• Lack of action adversely impacting associated
  systems (inventory management, BOM accuracy,
  release quality, financial inaccuracies, etc.)

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• Points to Remember
• Corrective action cannot be accomplished without
  understanding contractual requirements
• Corrective action efforts will be ineffective
  without ROOT CAUSE ANALYSIS
• Reference Root Cause Analysis Guide
• - Definitions
• - Process Focus
• - Methods

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• Points to Remember
• CAR request for root cause remedy of
  contractual noncompliance
• Adequacy of stated C/A determined via follow-up
  verification of implementation and objective
  evidence of compliant condition.
• Root Cause identification is Government and
  contractor concern.

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• Points to Remember
• Root cause analysis will uncover Manufacturing
  process areas contributing to the nonconformance
• promotes modified surveillance efforts by the
  Industrial Specialist
• promotes increased process understanding by the
  Industrial Specialist
• promotes evaluation of process efficiencies and
  effectiveness by the Industrial Specialist or
  Industrial Engineer

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• Examples Workshop
• CAR written formats (Levels II thru IV)
• CAR documentation (all levels)
• Root cause analysis Methods
• PROCAS opportunities

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• Give me a lever long enough.. And
  single-handedly, Ill move the world
• Archimedes

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• Schedule Delivery Management

CORRECTIVE ACTION REQUESTS