The factory tour will begin at 2:30 p.m. Members of the media participating in the tour should arrive no later than 2:15 p.m. A press conference is scheduled for 3:30 p.m. If you are only able to attend the press conference, please arrive no later than 3:00 p.m. to allow time for setup.

Media access will only be permitted through McDonnell Douglas Gate 1B. From Banshee, follow signs to McDonnell Douglas Aerospace main offices. Proceed along service road past the main lobby to Gate 1B, the flight ramp entry point.

Information on our acquisition reform efforts follows.

March 13, 1997

97-60

ST. LOUIS, March 6, 1997 -- By aggressively pursuing a variety of acquisition reform initiatives, McDonnell Douglas gained government approval to proceed with several streamlined processes last year that will save the government more than $40 million annually.

Key among the new processes is an advanced quality system based on commercial standards (ISO/Q9000) rather than traditional military standards (MIL-Q-9858 and MIL-STD-1520). By introducing a variety of self-inspection processes and a streamlined corrective action system, the advanced quality system is expected to save about $35 million alone.

"Shifting to a commercial quality system is one of the highest priorities of the defense industry," said John Steurer, vice president of quality at McDonnell Douglas Aerospace. "Many companies have adopted the standards, but we're the only large aerospace company to actually implement, under the acquisition reform initiative, a new quality system based on those standards."

McDonnell Douglas' advanced quality system was authorized by the Department of Defense as a "block change" in 1996. Granted under the DOD's Single Process Initiative (SPI), this authorization allows the company to use this process for every DOD contract it works on, regardless of product or military customer.

Besides the new quality system, McDonnell Douglas also led the industry in 1996 for block change submittals on other streamlining initiatives, many of which have since been approved. These include establishing a comprehensive subcontract plan, submitting annual representations and certifications for proposals, sending vouchers directly to the Defense Finance and Accounting Service, and making autonomous Class II changes.

"McDonnell Douglas has been aggressively pursuing acquisition reform initiatives since 1994," said Roger Witte, the company's vice president of contracts and pricing. "Several of our successful initiatives laid a foundation for industry-wide participation."

The St. Louis-based aerospace company was one of the first to establish an acquisition reform management council to improve communication and cooperation between industry and government for implementing reforms. "The results were so successful, the DOD has been pushing for other companies to form councils as well," Witte said.

Expanding on this concept, McDonnell Douglas is the first large defense contractor to form a corporate-wide management council in addition to its individual site councils. The purpose of this council, formed in August 1996, is to evaluate and recommend acquisition streamlining initiatives that could apply to more than one -- and possibly all -- components of the corporation.

In another industry first, the company entered into a non-disclosure agreement with Motorola, Honeywell and AlliedSignal in 1996 to share streamlining concepts, lessons learned and other insights pertaining to acquisition reform. Its second meeting, held last month, was also attended by Marialane Schultz, SPI team chief for the Defense Contract Management Council (DCMC), as well as local DCMC and Defense Contract Audit Agency personnel.

According to Witte, McDonnell Douglas will be implementing more block change processes in 1997. "We have submitted numerous concept papers proposing changes that could save McDonnell Douglas and the government significantly more money," Witte said. "In fact, we expect to get block change authority very soon on a key manufacturing initiative in work."