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Spares Acquisition Integrated with Production (SAIP)

ALCL 173

DAU GLOSSARY DEFINITION

A procedure to combine procurement of selected spares with procurement of identical items produced for installation on the primary system, subsystem, or equipment.

Alternate Definition

A technique used to acquire replenishment parts concurrently with parts being produced for the end item.

Alternate Definition Source

Defense Federal Acquisition Regulation Supplement (DFARS) Procedures, Guidance, and Information (PGI) 217.7503(1).

General Information

Most defense systems, and in particular weapon systems, require spare parts (hereafter, “spares”) to continue to meet availability requirements throughout the life cycle.  Procurement of spares includes both initial spares and replenishment spares.  Initial spares, generally associated with provisioning, are procured to support a system or end item for an initial period of service.  After the initial period, replenishment spares are required to replace stocks for use in maintenance, repair, and overhaul. 

Spares can further be categorized as reparables (i.e., repairables) or consumables.  Reparable items, as the term implies and as defined in Department of Defense Instruction (DoDI) 4140.01, are items of supply subject to economical repair (at either depot or field level).  Consumables, as defined in Department of Defense Manual (DoDM) 4140.26, are items (except explosive ordnance and end items) that are normally expended or used up beyond recovery in use.

As specified in DoDI 4140.01, spares procurement balances support goals, total supply chain costs, and performance factors; includes best-value selection among support alternatives; and minimizes life cycle costs.

Spares may be procured in conjunction with their parent end items during production or via separate contracts.  The Production and Deployment (P&D) phase of the Major Capability Acquisition (MCA) pathway of the Adaptive Acquisition Framework (AAF), or equivalent life cycle phase for other AAF pathways, represents the primary opportunity to procure parts while the system is in production.  (Other opportunities exist for system modifications).  For programs with a lengthy production run, this may include both initial and replenishment spares.

The Defense Federal Acquisition Regulation Supplement (DFARS) 217.75, “Acquisition of Replenishment Parts,” (28 Dec 17) provides guidance on requirements related to acquisition of replenishment parts.  This includes a process known as Spares Acquisition Integrated with Production (SAIP), a technique to obtain spares “to ensure the safe, dependable, and effective operation of equipment.”  The DFARS provisions include:

  • Procurement of replenishment parts concurrently with production of the end item(s)
  • Direction on use of “full and open competition” when the necessary technical data and associated license rights permit; or limited competition (with appropriate justification and approval) among the original equipment manufacturer (OEM) and other qualified sources when rights do not permit
  • Additional guidance for aviation critical safety items
  • Limitations on price increases
  • Tailored contract provisions when SAIP is utilized

SAIP is one tool in the Product Support Manager’s toolkit to meet DoD materiel sourcing requirements.  With SAIP, the Government pays the same or similar price for the spares procured for production assets, with reasonable additional charges for packaging and delivery.  SAIP candidate parts are analyzed against demand and the end item production schedule.  From this analysis, the Government selects and contracts for feasible SAIP items, which are then manufactured concurrently with items intended for the production line. 

SAIP has been utilized since at least 1985 (see Government Accountability Office (GAO) report), has at times been embedded in Service policy, and remains a valid part of a system’s product support strategy during production when supported by the necessary analysis and cost estimates.