AOF
Commercial Toolkit
Commercial Guidance for the UK MOD Defence Acquisition Community
version 2.10.9 - August 2010
Commercial Guidance for the UK MOD Defence Acquisition Community
version 2.10.9 - August 2010
|
Explorer
|
Content
Obsolescence Management : Commercial AspectsWho should read this page?This page is primarily provided for Commercial Officers, but is also relevant to all those involved in MOD projects who wish to cascade responsibility for managing obsolescence risk to Industry. What does this page provide?This page briefly explains what Obsolescence Management (OM) is and explains the major elements that need to be considered when contracting for it. It also shows you what is mandated, where you can find further policy and guidance, identifies who you can go to for advice and provides a list of further reading. What is Obsolescence Management?OM is defined as ‘co-ordinated activities to direct and control an organisation with regard to obsolescence’ where obsolescence is the impending loss of production of an item, or support services from the original manufacturer or supplier. OM is an acquisition process the overall aim of which is to manage the balance between operational availability and cost of ownership. An Acquisition Team’s requirement for OM should be flagged up to commercial staff by the Request for Contract Action which will dictate the contractual approach taken to the allocation of OM responsibility. Where can I find policy and guidance on Obsolescence Management?The Obsolescence Management Commercial Policy Statement (CPS) [67KB PDF] details MOD’s Commercial Policy and Guidance on OM. Sample clauses for use when assigning OM responsibility to a contractor or the MOD or both are at Annex A of the CPS. The Defence Logistics Support Chain Manual (JSP 886) What is the Legal Framework for Obsolescence Management?There is no legal framework (statute) for OM. What is the general principle when dealing with Obsolescence Management?The key principle is to ensure that OM is managed, at an early stage in the procurement process, as an integral part of design, development, production and in-service support in order to minimise the financial and availability impact throughout the product lifecycle. The two main elements to be addressed when contracting for OM are:
What is mandated when dealing with Obsolescence Management?Where OM risk is to be managed by the contractor Acquisition Teams are responsible for ensuring the contractor has the necessary knowledge and expertise to do so. On the basis of design once, implement as many times as needed, payment for an obsolescence resolution is to be made for each type (where engineering and testing are the same) irrespective of the number of systems that it has been used on. Acquisition Teams must therefore take into account the use of the equipment by any other Team and ensure they agree which Acquisition Team takes the lead on the obsolescence resolution. How this is paid for should be covered in a cost model which must be clearly defined during contract negotiations. An OM Plan must be developed in accordance with International Electrotechnical Commission standard IEC 62402:2007 – Obsolescence Management – Application Guide. Who do I go to for advice?
What training is available on Obsolescence Management?There is no formal MOD training course on OM. However TLS-OM can provide one to one learning or a group presentation to a team. What further reading might help?AOF content:
|
