The NNS engineer, Emmett Smith, has discovered a new polymer coating that can be used as a different hull treatment in place of the now obsolete sonar-absorbing tiles. This necessitates a change of the previous contract where NNS was required to develop a new anechoic treatment for the hull tiles under the P0002 Modification. Under the direction of PCU Delaware’s program manager, Emmett makes the required changes to the previous contract and forwards it to the PM, who then forwards it to the NNS’s contracting officer, MS Biddle. After Ms. Biddle makes the bilateral modification contract incorporating the proposed changes, the contract reaches the Virginia-class Program Management Office PMO through the Navy’s Procurement Contracting Officer (PCO).
The PMO’s engineers are satisfied with the innovative proposal because they recognize that the use of the new hull coating will save the lifecycle costs by 20 percent, save the time of installing new tiles by three months and the Navy and their partners could split the cost savings into 70/30 ratio. However, the program sponsor, Admiral Johnson, does not agree with the proposed change. Although he feels it is innovative and promising, he considers it too risky technically and it as out of scope for the current program and contract. The sponsor cites risks from the fact that the new polymer coating is not a proven like the current technology that uses the hull anechoic coating and tiles. Thus, the NNS is denied their request for change.
NNS Solutions for current Situation
The NNS has found its self in the current situation because the program sponsor is not convinced that the contract changes are within the scope of the current program and contract, he also considers the changes to too risky. Therefore, the NNS need to make sure that the request for contract and program changes made is within scope and riskiness of the program under the new changes is ascertained. The NNS should then prepare a report to that will be forward to the program sponsor outlining how the new proposal is within the scope of the existing program and report (Rozenes, 2011).
The contract involved coming up with a new anechoic treatment for the hull tiles under modification P0002. The introduction of a new Polymer coating as a replacement for the anechoic treatment is within the scope of the program since it serves its intended purpose because it provides a shield for the enemy sonar detection. Modifications P0002 has a number of requirements that have been met by NNS indicating that they are within the scope of the contract. The P0002 modification is a bilateral modification that involves the mutual action of both parties involved. The NNS’s contracting officer developed a bilateral contract after the proposed changes were forwarded to her. Bilateral modifications help to; come up with negotiated equitable adjustments that result from an issued order for change; gives consent to changes, such as the price changes needed by a contract; and reflect other agreements of the parties that modify the terms of the contract. Thus, bilateral modifications involve the negotiation of price, cost and other terms of the contract. The contractor and the contracting officer are required to sign the modifications for them to be effective (Rozenes, 2011).
In this case, the proposed changes in the bilateral contract were forwarded to the Virginia-class Program Management Office (PMO) whereby the PMO engineers were satisfied with the changes as they resulted in saving lifecycle costs. The proposed changes have complied by providing a breakdown of the new estimated costs such as the $ 1,131,000/sub, other related costs, schedule and risks of performance with the implementation of the new innovative approach. However, the program sponsor is also part of the contracting party that should be in agreement with the proposed changes. The risk uncertainty that has been cited by the sponsor will be cleared using the performance risk report of the new approach that has been included in the proposed changes. The report measures the probability and impacts of risks associated with the changes in the contract and how these risks can be mitigated if they became a reality (Rozenes, 2011).
The NNS proposed changes through the bilateral modification contract are within the scope of the program and contract. Therefore, they should prepare a report to the program sponsor to ascertain the issues that led to the denial of the proposed changes. The sponsor may then agree with the new changes leading to the enforcement of the bilateral modifications contract (Rozenes, 2011).
Rozenes, S. (2011). The Impact of Project Management Methodologies on Project Performance. International Journal Of Information Technology Project Management, 2(2), 64. doi:10.4018/jitpm.2011040105