What is Sustainability? - cdn.ymaws.com

What is Sustainability? - cdn.ymaws.com

Acquisition, Technology and Logistics Integrating Sustainability into DoD Acquisition Programs September 2014 Association of Procurement Management Professionals Conference Paul Yaroschak, P.E. Deputy for Chemical & Material Risk Management Office of the Deputy Under Secretary of Defense (Installations & Environment) 1 What is Sustainability? Acquisition, Technology and Logistics Simply put: The capacity to endure. 2 Acquisition, Technology and Logistics The Departments vision of sustainability is to maintain the ability to operate into the future without declineeither in the mission or in the natural and manmade

systems that support it. 3 DoD Sustainability Goals Acquisition, Technology and Logistics 1. Reduce Use of Fossil Fuels 2. Improve Water Resources Management 3. Reduce Greenhouse Gas Emissions 4. Asses Climate Change Vulnerability & Resiliency 5. Minimize Solid Waste 6. Minimize Use & Release of Chemicals of Environmental Concern 7. Sustainability Practices Become the Norm 4 Examples Sustainability in Procurement Acquisition, Technology and Logistics Energy Star Electronics Registered on Electronic Product Environmental Assessment Tool web site

LEED certified buildings Meets DoD Unified Facility Criteria Specification revisions for bio-based products Energy Savings Performance Contracts (ESPCs) & Utility Energy Savings Contracts (UESCs) Uses private sector funding Savings shared with investing company over life of project LEED = Leadership in Energy & Environmental Design 5 ESPC Outlook Acquisition, Technology and Logistics DoD awarded 32 ESPCs worth $541M & 41

UESCs worth $159M from CY12-13. DoD plans to award $600M in performance contracts in FY14 and another $1 billion in FY15-16 6 Sustainability in Systems Acquisition Context Acquisition, Technology and Logistics Sustainment - Sustainment involves supporting fielded systems from initial procurement through reutilization/disposal. Initial provisioning, cataloging, inventory management and warehousing, and depot and field level maintenance. Sustainability The wise use of resources throughout the life cycle to minimize health & environmental impacts and reduce Total Cost of Ownership of things we buy (weapons systems, platforms, equipment) 7

Life Cycle Costs & Impacts Locked-In Early Acquisition, Technology and Logistics Percent (%) of Cost % Cost Locked-In Disposal or Reuse 100 95 85 70 50 Cumulative Costs 10 Development Time Design Use /Maintenance Most Risks & Costs Occur Here 8 Sustainability in Acquisition

Acquisition, Technology and Logistics Objective: Better informed acquisition decisions leading to: Increased sustainability of systems, platforms and supporting infrastructure Minimize health/environmental impacts Promote life cycle thinking Lower Total Ownership Cost How? Sustainability Analysis Using Life Cycle Assessment (LCA) Methods 9 Supporting Better Buying Power 2.0 Acquisition, Technology and Logistics Key Principles Design for Affordability Control Costs Throughout the Life Cycle Affordability constraints should be based on the anticipated available level of future budgets that will be available to procure and support the product being acquired Affordability constraints are the product of budget, inventory, and product life-cycle analysis A Sustainability Analysis helps identify life cycle impacts and related costs. These costs are often hidden or ignored. You cant determine affordability without knowledge of all the costs. 10

DAU1 Magazine Article by NAVAIRSYSCOM Acquisition, Technology and Logistics Affordability is just as important as performance. Leadership is focused on sustainment, where 70 percent of programs lifecycle costs are borneHistory has shown that O&S costs are more likely to exceed projections Navy faces an estimated $3.5 billion O&S funding shortfall between FY 13-19it will take a 15% reduction in Naval Aviation O&S costs to close this gap. An effort of this magnitude must include a dynamic O&S cost reduction strategy. From Naval Aviation Enterprise Strategic Goals: Improve affordability by reducing operating and sustainment costs for fielded systems and implementing life-cycle cost reduction initiatives as part of new systems development. 1 Defense Acquisition University 11 What is a Sustainability Analysis? Acquisition, Technology and Logistics Sustainability Analysis = SLCA + LCCs Streamlined Life Cycle Assessment Gives Relative Impacts

Must be Doable Life Cycle Costs Must be compatible with DoD cost structure Used to Compare Alternatives! 12 An Element in Trade Space Analysis Acquisition, Technology and Logistics Reliability Performance Life Cycle Cost Sustainability Maintainability 13 Sustainability Analysis Outputs Acquisition, Technology and Logistics 1) IMPACTS. Spider-web diagram or bar charts that compares alternatives by showing their relative life cycle human health and environmental impacts

A decision tool for making sustainable decisions 2) COSTS. Life cycle costs for each alternativeinforms Total Ownership Cost estimates Internal (to DoD) External (to society) Contingent (risks) 14 A Sustainability Analysis Covers Full Life Cycle Acquisition, Technology and Logistics System Life Cycle Boundaries Upstream Impacts (Supply Chain) Raw Material Acquisition Material Processing & Part/

Component Production Manufacture/ Assembly Downstream Impacts (DoD and Prime/Sustainment Contractors) Manufacture/ Assembly Operation & Sustainment End of Life 15 SLCA Model for DoD Acquisition, Technology and Logistics Inputs Energy Chemicals & Materials Water Use Land Use System Boundary

Research & Development Production & Deployment Operation & Support Impacts Mission Impacts Outputs Human Health Impacts Environmental Impacts Disposal Life Cycle Costs 16 Sustainability Analysis (SA) Framework Acquisition, Technology and Logistics Inventory Elements ENERGY Type Activity

Quantity Cost CHEMICALS & MATERIALS Quantity Cost Chemical Emission Profiles WATER Source Location/Quality Quantity Cost LAND Use Type Area Occupation Time Cost NOISE Sound Pressure Level Duration Frequency Time of Day Place 17 Sustainability Analysis (SA) Framework Acquisition, Technology and Logistics

Inventory Elements ENERGY Type Activity Quantity Cost Midpoint Scoring Factors Midpoint Impact Categories Endpoint Scoring Factors Endpoint Impact Categories Cost Factors Life Cycle Cost Categories Non-Renewable Resources Fossil Fuel Use Impact Mineral & Metal Use Impact

CHEMICALS & MATERIALS Quantity Cost Chemical Emission Profiles WATER Source Location/Quality Quantity Cost LAND Use Type Area Occupation Time Cost NOISE Sound Pressure Level Duration Frequency Time of Day Place Toxicity Cancer (External) Non-Cancer (External) MISSION/

RESOURCES Internal Costs Ecosystem Toxicity Direct Air Quality Global Warming Potential Respiratory Effects (Inorganic) Indirect ENVIRONMENTAL HEALTH Contingent Respiratory Effects (Organic) Water Resources Water Use Impact External Costs HUMAN HEALTH Land Resources Land Degradation Potential Noise Pollution

Noise Exposure Potential SLCA LCC 18 Sustainability Analysis (SA) Framework Acquisition, Technology and Logistics Inventory Elements ENERGY Type Activity Quantity Cost Midpoint Scoring Factors Midpoint Impact Categories Endpoint Scoring Factors Endpoint Impact Categories

Cost Factors Life Cycle Cost Categories Non-Renewable Resources Fossil Fuel Use Impact Mineral & Metal Use Impact CHEMICALS & MATERIALS Quantity Cost Chemical Emission Profiles WATER Source Location/Quality Quantity Cost LAND Use Type Area Occupation Time Cost NOISE Sound Pressure Level

Duration Frequency Time of Day Place Toxicity Web-based Tool being developed to automate all modeled translations (arrows) Cancer (External) Non-Cancer (External) MISSION/ RESOURCES Internal Costs Ecosystem Toxicity Air Quality Global Warming Potential Respiratory Effects (Inorganic) ENVIRONMENTAL HEALTH

Direct Indirect Contingent Respiratory Effects (Organic) Water Resources Water Use Impact External Costs HUMAN HEALTH Land Resources Land Degradation Potential Noise Pollution Noise Exposure Potential SLCA LCC 19 Comparing Impacts Spider-Web Diagram Acquisition, Technology and Logistics Notional Data Global Warming Potential

100% 90% Human Noise Exposure Water Use Impact 80% 70% 60% 50% 40% Ecosystem Toxicity Respiratory Effects (Organic) 30% 20% 10% 0% Non-Cancer (External) Respiratory Effects (Inorganic) Cancer (External) Land Degradation Potential

Mineral & Metal Use Impact Fossil Fuel Use Impact Alt. 1 Alt. 2 Alt. 3 20 Monetizing Impacts Acquisition, Technology and Logistics Notional Data Global Warming Potential 100% 90% Human Noise Exposure Water Use Impact 80% 70% 60% 50% 40% Ecosystem Toxicity

Respiratory Effects (Organic) 30% 20% 10% 0% Non-Cancer (External) Respiratory Effects (Inorganic) Impact Costs by Midpoint $8,000,000 Land Degradation Potential Cancer (External) $7,000,000 Mineral & Metal Use Impact Fossil Fuel Use Impact $6,000,000 Alt. 1 Alt. 2 Alt. 3

$5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- Alt. 1 Alt. 2 Alt. 3 21 Example Life Cycle Costs Acquisition, Technology and Logistics For Chemical & Materials Personal protective equipment HAZMAT training

Workplace IH monitoring & medical monitoring Hazardous waste management and disposal Air handling/waste treatment systems Emissions/discharge permits Contingent liabilities for health/environmental damages Often hidden and not included in LCC estimates 22 Sustainability Analysis Pilot Project Collaboration with Boeing & Sikorsky Acquisition, Technology and Logistics Calculate impacts & life cycle costs of two design alternatives for two current acquisitions: 117 Boeing P-8A 573 Sikorsky MH-60R Design alternatives: (A) chromated coating system and (B) nonchromated system; manufactured & sustained over 30 years 23 The Power of Cost Magnification Acquisition, Technology and Logistics Design Choice Alternative Paint Primers Differences ($) in Life Cycle Costs per Aircraft Differences ($$) in Life Cycle Cost per Acquisition

(300 Aircraft) Differences ($$$) in Life Cycle Cost for Multiple Acquisitions & Multiple Systems $$$ 24 Sustainability Analysis Implementation Strategy Acquisition, Technology and Logistics Phase 1. Marketing the concept & gaining consensus - Does it make sense & add value? Phase 2. Benchmarking & developing the SLCA method Phase 3. Develop the LCC module - Tie to DoD O&S cost structure Phase 4. Pilot testing - Pilot projects with Boeing and Sikorsky plus 4 others - Apply lessons learned to SLCA process Phase 5. Full integration into acquisition process - Modify O&S cost accounting structure 25 Benefits of Sustainability Analysis Acquisition, Technology and Logistics

Provides a practical yet rigorous and consistent analyses Forces thinking about life cycle activities of system: Human health & environmental impacts Life cycle costs of impacts Bottom line: More informed decisions with more thought to life cycle implications 26 Acquisition, Technology and Logistics Questions & Discussion Paul Yaroschak Deputy for Chemical & Material Risk Management Office of the Deputy Under Secretary of Defense (Installations & Management) 27 Acquisition, Technology and Logistics Backups Paul Yaroschak Deputy for Chemical & Material Risk Management Office of the Deputy Under Secretary of Defense (Installations & Management) 28

Step 1 Define the Scope - Establish functional unit (performance parameter) & system boundary Step 2 Develop the Life Cycle Inventory provide system inputs (resources to be used) Step 3 Estimate Life Cycle Impacts use pre-defined scoring factors Step 4 Estimate Life Cycle Costs Internal, external, and contingent Step 5 29 Display Results & Compare Alternatives Acquisition, Technology and Logistics 5 Steps of a Sustainability Analysis

Pilot Projects - Key Lessons Learned Acquisition, Technology and Logistics Value Proposition. A sustainability analysis can surface cost avoidance & research opportunities Visibility of Hidden Costs. A sustainability analysis uncovers life cycle costs/impacts & helps make more informed design decisions Cost Clusters. The analysis highlights cost clusters & cost drivers Cost clusters are the typically few costs with the most effect on total life cycle costs Working backwards, we can focus actions on the cost drivers & not waste time on inconsequential items 30 Key Lessons Learned (cont) Acquisition, Technology and Logistics Weaknesses in cost granularity and scope. The analysis highlights the need for improvements in the granularity & scope of cost accounting: The team identified where life cycle cost data resides & at what level of detail. In most cases the O&S cost structure and Service VAMOSC systems are aggregated & missing hidden costs Rather than work to improve granularity and scope across all costs, a targeted effort on what matters financially (working backward from cost clusters) will help both prime contractors and the DoD make better design choices that can significantly affect system costs 31

Comparing SLCA Methodology to LCA Acquisition, Technology and Logistics Identify system inputs Assign activities/processes to Inputs Identify system inputs Traditional Process-Level LCA Estimate emissions for activities/processes using emission factors Estimate impacts from inputs by using scoring factors Estimate impacts from emissions using impact characterization factors Aggregate impacts for each impact category Aggregate impacts for

each impact category SLCA 327 Midpoint Impact Categories Acquisition, Technology and Logistics Impact Grouping Midpoint Category Metric Fossil Fuel Use MJ deprived Mineral Resources Use kg deprived Global Warming Potential kg CO2 eq Respiratory Effects (Inorganic) kg PM2.5 eq

Respiratory Effects (Organic) kg NMVOC eq Water Resources Water Use m3 deprived Indicator of resource availability, competing demand, and substitutability of water withdrawn from a specified location, measured in volume of water deprived Land Resources Land Degradation Potential ha.yr arable eq Indicator of the biological quality of the incremental land being transformed and occupied, measured as area units of arable land equivalents per year Cancer (External) CTUh Quantification of an emissions potency in terms of its ability to cause cancer, measured in standardized human common toxicity units

Non-Cancer (External) CTUh Quantification of an emissions potency in terms of its ability to cause non -cancer illnesses, measured in standardized human common toxicity units Ecosystem Toxicity CTUe Quantification of an emissions potency in terms of its ability to kill ecosystem species, measured in standardized ecosystem common toxicity units Human Noise Exposure person.dBA Ecosystem Noise Exposure species.dBA Non-Renewable Resources Air Quality Toxicity Noise Output

Explanation of Metric Indicator of resource availability, competing demand, and substitutability of a specified fossil fuel or source of electricity, measured in amount of energy deprived Indicator of resource availability, competing demand, and substitutability of a specified mineral or rare earth metal, measured in mass of mineral/metal deprived Quantification of all greenhouse gas emissions, measured in units of carbon dioxide equivalents Quantification of all inorganic air emissions that can result in respiratory illnesses, measur ed in units of particulate matter equivalents Quantification of all organic air emissions that can result in respiratory illnesses, measured in units of non-methane volatile organic compound equivalents Quantification of the m agnitude and duration of noise exposure to human populations, measured as recorded decibels (A-weighted) multiplied by size of exposed population Quantification of the m agnitude and duration of noise exposure to ecosystem populations, measured as recorded decibels (A-weighted) multiplied by size of exposed population 33 34 Definition: Costs that might occur in the future as a results of decisions made today. These may or may not be paid by the Department of Defense. Examples: substitute testing due to unavailability of chemicals/materials Definition: Costs paid by society-at-large as a result of pollution and resource consumption during system manufacture, use, and disposal.

Examples: human health (disability adjusted life year) Definition: Costs paid by the Department of Defense during the lifetime of the system including traditional & hidden costs. Examples: material, labor, fuel, facilities overhead Contingent Costs External Costs Internal Costs Acquisition, Technology and Logistics Three Types of Costs Examples of ESPCs awarded by DoD Acquisition, Technology and Logistics A $16 million project with Johnson Controls Inc., to build 5,500 solar panels at Fort Bliss, Texas a project slated to save $42 million over 25 years. A $34 million project with Johnson Controls to install wind turbines and solar panels at Fort Buchanan and 11 Army Reserve Centers in Puerto Rico to save $65 million over 16 years. A $17 million solar panel field at the Army's White Sands Missile Range, N.M. The 4.4 megawatt project will be enough to power 4,400 homes and save $930,000 annually.

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