Clash of the Admirals

Those attending the morning session today at MRO Military 2010 in Phoenix witnessed a fascinating exchange between active and retired U.S. Navy admirals that elucidates one of the most stubborn stumbling blocks in MRO and sustainment: profit and control.

After a panel of high-level executives – many former flag officers – finished talking about how to transition performance-based sustainment to the next generation of business model, Rear Adm. Tim Mathews, commander of Fleet Readiness Center Southeast, asked the group when any of them thought industry might avail government of more cost data.

To that, former Vice Adm. Jim Zortman, now senior vice president for lifecycle logistics and support at Northrop Grumman, quickly fired back a question of his own: why does it matter? As another panelist and former vice admiral – Walter Massenburg – said minutes before, if the government is spending less (or at least better than before) and getting the weapons availability it asked for, what does it matter how much profit industry is making?

Some members of the audience, apparently from the private sector, erupted in applause. But beyond that momentary emotional outlet, the exchange was a tangible example of the deep-rooted differences that government and its industry backers face, regardless whether the actors wear a suit or a uniform. To be sure, both sides declare that providing for the warfighter is their top priority. But for industry, the need to show shareholders and owners a profit comes a very close second. Government, meanwhile, must drive the hardest bargain it can for national security and taxpayers.

The panel session ended with calls for improved communication, trust and cooperation between the two sides, and those calls should be heeded. But the fact is, government and industry will always have competing priorities just under the surface. Maybe it’s time to declare a détente in the accusations, at least.

Tags: mroam10, om99, MRO