Military MRO Industry Faces Historic Squeeze

By Michael Bruno
Source: Aviation Week & Space Technology

Sequestration also kept military personnel from traveling to the conference—the lone U.S. military representative there drove himself from nearby Robins AFB, Ga. USAF Col. Daniel Hicks, aviation commander at the Defense Logistics Agency, did not address in-sourcing concerns in his presentation, although he concurred with worry about the uncertainty and ripple effects on government and industry. “It's got to ripple through the industry, and it's got to ripple sooner rather than later,” he said.

Nevertheless, despite what could be seen as a potentially historic opportunity to refashion how the U.S. military seeks and acquires MRO for its equipment and systems, most executives voicing opinions at the conference said they expect the so-called “50-50” and “core” mandate to remain in effect. U.S. law based on post-World War II drawdown concerns requires the Defense Department to maintain a core MRO capability of its own, rather than outsourcing it all to the private sector. Moreover, at least half of the military MRO workload has to be provided within the government. Flattening, and now declining, defense budgets have spurred advocates of change to call for altering or scrapping the law, but most business executives are apparently resigned to its permanency.

“I never, never tilt against that,” said Randy Fowler, a former assistant deputy undersecretary of defense for materiel readiness who now is director of life-cycle management integration at Lockheed Martin. Credited with helping to introduce and grow use of performance-based logistics (PBLs) inside the Pentagon, Fowler said he expects the 50-50 requirement to outlive him.

Whalen echoed the sentiment to conference attendees: accept it and try to help the government meet its needs through contracts that also help industry, like PBLs. “One of the things industry needs to do is take risks,” he said.

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