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  • Acquisition Armageddon
    Posted by David A. Fulghum 5:14 PM on May 12, 2011

    With the Pentagon facing yet another round of budget cutting there are hints that the U.S. Air Force’s new bomber program is popular and the increasingly expensive F-35 program is not.

    “The [new] bomber is incredibly important to us,” says Erin C. Conaton, Under Secretary of the Air Force. “To remain a world-class power, we need a penetrating bomber force that can touch difficult-to-reach areas of the globe.

    For cost reasons, “The mandate is to not look at exquisite capabilities, but rather at a requirement set that isn’t trying to do everything on board a single platform,” she says. “That’s part of the reason we’re looking at a family of systems [with] intelligence, reconnaissance, electronic attack and communications partnering with that strike platform to get it where it needs to be.”

    So far, the service has begun standing up a program office, Conaton says. A considerable amount of analysis has gone into making decisions about the family of systems, but the detailed requirements work is still ahead

    'We got a general mandate to stand up the program office. There is a fair amount of analysis that went into decisions about the family of systems, but the detailed requirement work is still to come.'

    Asked about the vulnerability of the F-35 program to additional cuts, Conaton hinted that because of rising costs and the need to make up in some degree for the retirement of 1,500 fighters and strike aircraft, Joint Strike Fighter spending will be regularly scoured for more savings and additional “efficiencies.”

    “We’re committed to recapitalizing our fighter force,” Conaton says. “There’s no doubt though, [that]  we are going to look at every part of our budget – acquisition, people and O&M. I can’t give a precise answer about where [the F-35 spending] is going to be. [But,] we’re going to look at a range of programs that might be ripe for additional efficiencies.”

    Newly revealed details of F-35 cost issues, assembled for the Pentagon’s Selected Acquisition Report (SAR) dated Dec. 31, shows an average procurement unit cost (APUC) of $125 million for 1,763 USAF F-35s and $150 million for the Navy variants. Already the cumulative cost and schedule pressure have resulted in Munn-McCurdy breaches in the 2001 and 2007 baselines for both program acquisition unit cost (PAUC) and APUC. According to the SAR, “the breech is currently at 78.23% for the [original 2001 figures] and 80.66% for the APUC.” The increase over the 2007 baseline is figured at 27.34% for the PAUC and 31.23% for the APUC. “These increased costs reflect the comprehensive program restructure … that occurred in 2010,” the report continued. “New calculation will be completed against the new Acquisiton Program Baseline currently being updated for the milestone B review scheduled [for this month].”

    But there are already obstacles to rapid improvements to altering budgets, roles and missions. At the top of the list is the demand for additional experienced and specially trained officials to speed the acquisition process. However, demand is far greater than the supply.

    “Shaping the civilian workforce is not an inconsequential challenge,” Conaton says. “We’re attempting to grow our civilian workforce over the next five years by about 25,000 people, but the allowance we’ve been given is about 4,000 people.”

    “We have to reallocate our civilian work force under very different assumptions, which means not doing planned in-sourcing and a variety of other things so that we’re not unduly hitting one area of our work with the cumulative effect by reducing both civilian employees and contractors. That analysis is on-going. We don’t know exactly how this is going to get laid in. The choices haven’t been made yet, but we know the reduction is real.”

    Moreover, there are institutional differences between the Pentagon and Congress that will continue to ensure that negotiations over future defense budget cuts and a reassessment of military roles and missions will be difficult, says Conaton, who previously served as staff director for the House Armed Services Committee.

    “The speed of action is much different,” Conaton says. Where a letter from a lawmaker may take three hours to prepare and send, the reply [from the Air Force] may take “six to eight weeks if we are being speedy.” That delay is perceived in Congress as either a hidden problem or a purposeful delay on the military’s part.

    Another issue is “long memories” among Congressional staffers who have been in place far longer than their defense counterparts, she says. Military planners are often blind-sided by understandings or agreements made years before in other administrations about how programs are to be conducted and on what schedule.

    “We have to understand what we’ve said in the past, be consistent to the maximum degree and, if we make a change, be able to explain why,” Conaton says.

    Tags: ar99, ngb, F-35, tacair

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