Malstrom is the largest missile wing in the world, holding 200 missiles over 23,500 square miles in nine counties, an area about the size of West Virginia. The land includes more than 2,000 miles of paved road and 4,000 miles of gravel road. The main base houses 200 people on 3,600 acres, which includes 4.6 million sf of warehouse, manufacturing, laboratory, maintenance, and administrative facilities, and housing.

"Basically, everything that had to do with facilities was broken at that wing," says Tigges. "But if you talk TQM or cost analysis to war fighters, their eyes glaze over. We had to find a way to communicate through our senior leadership that what we needed to change from a business perspective was important. Comparing winning and losing a war to winning and losing customers is what really brought us to the concept of a Business Operations Center."

Tigges based the concept on the Joint Air Operations Center, which the military created after the Vietnam War.

"One of the greatest criticisms of our operations in Vietnam was that everyone was operating in stovepipes," says Tigges. "The troops on the ground were not linking their tactical actions to big-picture objectives."

When Tigges arrived at Malstrom, facilities was operating under the Vietnam model, which he says was to "bomb anything that moves until we 'win.'"

"In facilities, we were writing contracts for every need," says Tigges. "But there was no strategy to link back to, no assessment of how they were performing. There was no integration between various contracts.

For example, the trash contractor sometimes failed to replace the lids on the trash cans, so a stiff wind would blow trash around the base. The groundskeepers came along to mow the grass and shredded the trash into tiny bits. The green team then had to pick up the trash by hand.

"There was no incentive among the contractors to do anything differently just to help out another contractor," explains Tigges. He changed that by taking eight major contracts and consolidating them into one primary contract and one sub-contract, both based on performance incentives. He also did away with the military tradition of fixed-price contracts and instituted cost contracts.

Staging the Facilities Battle

In the 20 years between Vietnam and Desert Storm, the military revamped its approach to begin with an overarching mission that dictates every action on the ground. As circumstances change, the mission is refined, and orders to the troops are updated. More importantly, says Tigges, information from the troops comes back to those in command and, in turn, can inform the larger mission. The same is true of the BOC. This creates an on-going cycle of planning, executing, and assessing.

The presidential mission of Desert Storm, for example, was to get Iraq out of Kuwait. The key military objectives were to knock out Iraq's command centers in order to achieve air superiority and to destroy their weapons of mass destruction.

After drafting the overarching mission, the next step is to create a detailed plan, which results in an Air Tasking Order, a list of everything that needs to be achieved. The Air Tasking Order is a live strategic plan, which is updated daily and sent out to the separate units so they can take the next step—mission planning. Mission, or tactical, planning irons out the details of the strategic plan, such as what weapons to use and how to deploy the troops. The final document is a flight plan, which can be changed on a dime by transmitting new information directly to the fighter jets.

"Information flows from satellites right to the cockpit, not through a hierarchical system," says Tigges. "Businesses need to remove their hierarchical structure, too, if they are going to have value-added information."

Tigges' mission as commander of the contracting squadron was to lower costs and increase performance. He used three simple strategies: attract and partner with the best-in-class providers; identify, measure, and manage key performance indicators; and develop the people and processes to achieve business goals.

In the BOC model, the detailed planning results in strategic plans for each business area. Those strategic plans, in turn, lead to acquisition planning, which is the process that creates the contract documents.

A military operation is analyzed using information from bomb damage assessments. Tigges instituted the business equivalent: a balanced scorecard—including internal scores from the squadron and external scores from the contracts—to evaluate the performance of his program. In both cases, assessment data is used to refine the strategic plan. Changes are folded back into the detailed plan and the process starts again.

The OODA Loop

All along the way, information is moving both up and down the chain of command in what Tigges refers to as the "OODA Loop," which stands for observe, orient to site, decide, and act.

"He who observes, orients, decides, and acts the fastest wins," he says. "If you can't process information rapidly, adjust, and react quickly, you won't win.

"This dynamic nature of the world we live in, and how fast paced it moves, requires a very fast moving model," he continues. "Basically you can effect the model at any point throughout this process."

Chain of Command

Tigges based the BOC command structure on the military chain of command, but at each level there is a team instead of a single person. At the top of the chart is the performance management council, which is made up of wing and group commanders and operates like a board of directors. Tigges meets with them at least twice a year to keep them apprised of his progress in carrying out their mission.

In the middle are the squadron commanders, and below them are four Business Requirements Advisory Groups (BRAGs), which are responsible cross-functionally for overseeing the areas of facilities management, community support, systems and technology, and aerospace operations and maintenance.

All the contracting organizations are connected online through an Inovie software Web-based application called TeamCenter. This project management system has become the primary tool for managing day-to-day business and capturing and sharing information. It can track management issues such as project deadlines, training, business trips, and leaves. The software makes contract templates available online to help contract specialists with the BOC's processes. It also offers a "big picture" view of several projects at once, which helps the different BRAGs visualize how their project fits into the overall goals of the base.

Winning the War

The facilities management BRAG initiated its new approach in the fall of 1999 with a three-day off-site meeting between the people who develop contracts and those who oversee their implementation.

"We got the cats and dogs to talk to each other, and after two days of yelling at each other about past indiscretions, on the third day, they said, 'Yeah, this isn't working.'"

They left that meeting, which was facilitated by a third party, with a plan to perform extensive market research and establish a cross-functional acquisition team to execute a Consolidated Facilities Maintenance Contract.

Executing the contract was another matter. Seven existing contractors protested the change, but the Air Force prevailed after six months of legal battles. The base ended up with a consolidated contract that, at the end of the first year, came in $16,000 under budget. An average of 25 percent more work, valued at $675,000, is being accomplished at the same cost. Custodians are caring for 50 percent more square feet, while grounds crews have doubled the area they care for.

Tigges also has noticed more subtle changes. Workers no longer operate in the vacuum that allowed groundskeepers to mow the trash.

"Now the housing maintenance guys will stop and pick up trash they see blowing across the road," says Tigges.

Performance is evaluated with a balanced scorecard that uses cost, quality, customer satisfaction, and learning and growth/innovation as the key performance indicators (KPIs). On the internal scorecard, cost accounts for 10 percent of a total score, while the remaining three KPIs account for 30 percent each. The external scorecard, used for contractors, values innovation at 10 percent while the rest account for 30 percent each. The overall scorecard assigns a 20-percent value to cost and innovation, and 30 percent to quality and customer satisfaction.

Because the process is constantly evaluated, problems noticed early on result in a major change in the way contracts are written. The federal government requires the military to keep track of its expenditures with more than 70 detailed accounting lines, though there are really only two kinds of money—funds used for housing and funds used for operations and maintenance. Initial contracts specified all the accounting lines, which gave the contractor no flexibility to move money around without actually rewriting the contract.

"Changing a contract can take 30-45 days," explains Tigges. "In Montana, that's half your summer. Now the contractor has more autonomy to make decisions to please the customer. It's important to track the money; we still do the accounting that way, but we don't include it in the contract language."

The other BRAGs are having similar success. In community support, a reduction in dining hall hours saved more than $12,000 in one year; renovation of the youth center is 27 percent complete and ahead of schedule; and an online transcription service for the clinic saved two man-years. The systems and technology BRAG expects to save $13 million by consolidating contracts and allowing contractors to drive innovation. They also are working on a major modification of their contracts to improve alignment among expectations, metrics, and incentives. The aerospace BRAG saved $1.2 million by conducting market research on its missile alert facility elevators and upgrading only seven instead of the anticipated 12 elevators.

The BRAGs' efforts have attracted attention on and off base. Malstrom was featured in the March issue of Contract Management magazine, and the BOC has won several awards from the Air Force for its success. The 341st contracting squadron was named the Air Force Space Command's Outstanding Operational Contracting Unit for 2001.

By Lisa Wesel