Aviation Week Engineering Leadership Notes

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Mike Mecham With Knowledge Partner Booz Allen Hamilton November 9, 2012 Huntsville, AL

KNOWLEDGE PARTNER

With the outcome of the presidential election fresh in their minds and the prospects of budget cuts looming, senior industry and government engineers and executives at our Huntsville Leadership Breakfast stepped back for a few minutes to consider the big picture of the overlapping responsibilities and goals of original equipment manufacturers (OEMs), engineering service companies and government contract offices. There were two roundtable discussion groups with a total of 23 participants, including the hosts. The days discussions focused on Defense Department strategies relative to organic growth, supporting and encouraging competition among suppliers, and improving program controls and efficiencies to reduce costs. The participants discussed these subjects from their experience with Army aviation.

Aviation Week Engineering Leadership Notes

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The first panels main topic was what strategy is best for the Defense Department to think about weapons development, modernization and sustainment and what is the best way for the department to engage industry in pursuit of that strategy?

Findings:
The DOD tends to think of fleet modernization and platform development in distinctive phases: a) the current fleet; b) current fleet modernization; and c) new programs. This approach is often at odds with good planning for sustainment. If sustainment is viewed in a horizontal time scale it involves two parallel phases of a weapons systems lifespan: fielding with the current fleet and a subsequent fleet modernization effort. The third time scale is development of a new program, most commonly undertaken even as the current fleet usage is undergoing modernization. Sustainment is carried vertically from the current fleet operations into fleet modernization. Similarly, technology insertion is carried from fleet modernization into new programs. The problem is that sustainment and tech inserts are stovepipes. Both need to be part of a larger lifecycle planning process that begins with the fielding of the system by the current fleet, carries through the systems planned modernization process and is part of the planning and development phase of the systems successor. Planning for sustainment needs to emerge in the original year of execution, not as an add-on later when maintenance/repair events require sustained attention. Modernization is usually cast as a second act for a weapons system. But budget realities mean the Army must carry weapons systems far beyond their originally planned endof-life, which underscores the need for planning for modernization in initial design. Determining the operational capabilities of weapons systems on the battlefield is difficult and follow-through often lags, usually because of budget cuts. Unmanned aerial vehicles are a good example. The early assumption was that they would increase the capabilities and operational efficiency of the war fighter for the next 20 years. But funding deficiencies are preventing developmental follow-ons from being undertaken. Tech insertion presents its own challenges. Having the latest and greatest for many platforms has to be considered against the realities of decreasing resources. Crosspollination between industry and the government is one solution for evaluating risks and opportunities when pursuing technology development. An early assessment of the growth potential of new platforms is important. The RAH-66 Comanche was cited as an example of a platform with rising development costs that committed the sin of not offering good growth potential. It had wrung out all the technology currently available. This shows why it is important for there to be good communications among the government, contracting and research and development (R&D) communities so technology development opportunities and barriers are well understood.

Mike Mecham With Knowledge Partner Booz Allen Hamilton November 9, 2012 Huntsville, AL
KNOWLEDGE PARTNER

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 Legal and competitive limits become roadblocks to the very government and manufacturing interaction needed to promote technology development. Europeans and others abroad enjoy closer government-industry interaction. They also do not operate with the same ITAR restrictions as their U.S. counterparts. U.S. aerospace and defense (A&D) manufacturers would like the same freedom to collaborate but face a high hurdle getting there because of anti-trust regulations. The government is not doing a good job of linking operational requirements to science and technology research. Linkage restraints include legal and competitive limitations imposed on government-industry interaction that end up short changing platform development. In this regard, communications between government and industry are too often reactive to issues that arise rather than proactive for solving problems or advancing platform development and sustainability. The commercial off-the-shelf (COTS) model is advanced for its presumed budget savings, which are intended to shorten development schedules and reduce costs. But the fact that few commercial items readily lend themselves to weapons systems raises the question of whether either of these goals can effectively be achieved except in a few cases. For instance, small gas turbine engines may well be suited for the civilto-military transition. But once power demands raise the realities of military operations, with their harsher operating environments and demand for higher operating temperatures, means that what started out as COTS ends up being redesigned at great cost. Similarly, military and commercial helicopters operate in different environments and have different crash sustainability requirements. It is difficult, at best, to adopt the COTS model. The emphasis on COTS underscores the broader concern that Army aviation is not retaining its share of science and technology funding. Funding that should be reserved for consistent science and technology investment is siphoned off to cover other programss budgets. So aviation is a bill payer rather than a source of innovation. Similarly, the Army tends to borrow funding from its biggest R&D programs in order to sustain lower-priority efforts to keep every program alive. The result is costly stretch-outs for the main programs. The better solution would be to set priorities for what is affordable. The greatest concern about the first panels finding was the question of DOD strategy for sustaining its industrial base and the organic knowledge/skill sets of its depot organizations. Depots require healthy engineering staffs. But huge investments are required to sustain those staffs.
Mike Mecham With Knowledge Partner Booz Allen Hamilton November 9, 2012 Huntsville, AL
KNOWLEDGE PARTNER

Aviation Week Engineering Leadership Notes

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The DOD needs the involvement of OEMs. At a small scale, DOD development agencies can innovate. But carrying that innovation to a large-scale effort is very difficult without the early involvement of OEMs and major suppliers, because they bring design, material and manufacturing expertise that is essential if development programs are to have good sustainability and be cost-effective. The Defense Department does not have an effective avenue for reaching out to small suppliers to tap their specific areas of expertise. But most importantly, the Defense Department needs to connect with non-traditional manufacturing and engineering sources, who hold great promise, especially in providing computing/Internet/electronics solutions. But non-OEMS are either not sought out or discouraged by the DODs procurement requirements. As a result, they are often not even aware that they might be able to participate in defense programs.

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The second panels focus was on strategies that are most effective for improving program controls and reducing costs.

Findings:
When government and industry partner together, sustainment and modernization are well executed. But constrained resources are weakening this partnership. In addition, the partnership needs to be maintained throughout a systems lifecycle. The decision to do this must be part of the programs baseline. But such careful planning is often a victim of constrained resources.

Aviation Week Engineering Leadership Notes

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Performance Based Logistics is not living up to its promise of providing industry with incentives to extend the life of parts and components. That failure was singled out as one of the biggest must-fix issues discussed in the panels report. The chief systems engineer for the Army is taking on PBL, but the subject cannot be isolated to that office alone. It needs to be pursued vigorously across the board, because the Armys organizational structure defeats the purpose of PBL; resources are allocated through different offices. As a result, it becomes a challenge to work across organizational lines to sustain support. The Army tried to address this long-running inefficiency with the Kiowa, but with middling success. The DOD must get involved in driving efficiencies from the resources standpoint, including better linkages between program staffs. The development of leaders for integrated product teams (IPT) is the best strategy for addressing the PBL issue. This King IPT approach will allow the leaders to look across an entire portfolio to establish priorities and common touch points. A Program Manager Integrator for systems engineering would be an especially useful King IPT. Their big task will be to consolidate program requirements efficiently from development through sustainment. The second big issue that participants noted in Panel Twos discussion was its emphasis on the unintended consequences that acquisition statutes are having. The Army is seeing a reduction in its experienced acquisition workforce. Lowest Price Technically Acceptable (LPTA) requirements are not allowing industry to help with development and design.

Mike Mecham With Knowledge Partner Booz Allen Hamilton November 9, 2012 Huntsville, AL
KNOWLEDGE PARTNER

Contractors are spending too much time meeting acquisition requirements, in part because the acquisition decision chain seems to be set up so that no one has to make a decision. The acquisition and industry communities need to be able to partner on developing requirements to drive down development costs and increase sustainability. Intellectual property and data rights issues continue to be major headaches for program leaders, because OEMs guard them. Data rights need to be built into the acquisition strategy up front. Contractors are bracing for sustainment to be squeezed by budget constraints, largely because of the need to sustain personnel budgets. The result will be that as programs reach development, and sustainment issues arise, it will be too late to address this cost squeeze because there will be no money to pay for the sustainment effort. Better focus on sustainment during the requirement development phase is the best solution. Too many systems are being built for platforms that are not yet fielded with the assumption that they will work as advertised.
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Conclusions:
A number of themes and key positions played out in the discussions at the two tables. The lack of success of Performance Based Logistics and the unintended consequences of acquisition statutes rose to the top of the list of problems. But a close look at many of the concerns such as the need to build data rights into acquisition strategy up front, the impact of budget constraints on Army modernization programs, and insertion of the most modern technology into existing programs in a resource-constrained environment all point to a need for greatly improved communications between government and industry.

Aviation Week Engineering Leadership Notes

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Companies need to be more aware of emerging requirements and the technological advances that drive those requirements to make more informed investment decisions. At the same time, government needs to become more educated about the intellectual capital that is vital to the health of the aerospace and defense sector and how companies derive the greatest value from its talent pool. Government also needs to foster greater competition and innovation to address modernization shortfalls.

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Mike Mecham With Knowledge Partner Booz Allen Hamilton November 9, 2012 Huntsville, AL
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