While everyone recognizes the importance of training for military
forces, the case could be made, however, that the actual procurement
of training systems is not always a smooth and timely process.
Military forces around the world are continuing to face budget
constraints, human resource shortages and shifting priorities. These
issues sometimes result in less-than-ideal training capabilities.
To help address current training shortfalls, the military services
should consider a novel approach to training armed forces called
“privatized training.” This new way of conducting training
procurement has evolved in recent years.
The United Kingdom was a pioneer in the use of privatized training.
The U.K. Ministry of Defence, over the past five years, has implemented
what is known as the Private Finance Initiative (PFI). A case in
point is the Medium Support Helicopter Aircrew Training Facility
and the Astute Class Submarine Training Service.
The helicopter aircrew training facility represents the first PFI
contract awarded by the United Kingdom, involving defense-specific
assets. It also represents the first contract of this type for simulator-based
training services.
Both the Ministry of Defence and CAE, the contractor, have learned
several lessons through the process. Additionally, the military
customers should address some valid concerns before considering
privatized training services.
Privatization is not necessarily the right approach for all types
of military training. But for some services, such as basic flight
training, it is definitely a viable option.
Potential advantages and obstacles to privatized training should
be assessed, particularly in the United States, where the concept
is gaining momentum, even though it still faces legislative and
perception barriers.
The first issue to address is funding. Both government program
managers and defense industry executives know that funding is always
a top issue in all military programs, not just training efforts.
From the perspective of the government, funding for privatized
military training is typically faster, since the upfront capital
costs are the responsibility of the contractor. The military customer
is agreeing to buy a defined training service. Until that service
can be delivered, the government incurs little expense.
At the same time, the contractor has a significant incentive to
deliver on time and on budget, in order to satisfy financing obligations.
The upshot is that military customers are likely to get the training
that they require much faster than a conventional procurement could
ever deliver.
Under a private-funding initiative, not only can training be delivered
faster, but it can cost less than conventional training programs.
Conventional wisdom suggests that the private sector can be more
efficient in operating a training service, and this wisdom generally
is proving true in the U.K. programs.
The Ministry of Defence recently conducted a detailed analysis
of the Medium Support Helicopter Aircrew Training Facility contract.
Officials determined that the payments due under the PFI approach
over the initial 20-year contract term would be 15 to 20 percent
below the costs of owning and operating the facility themselves.
Some of the other lessons learned include the importance of communication
at all levels with the customers. It’s not enough to simply
address end-user requirements for the training service. As one senior
official from the U.K. Defence Procurement Agency suggests, “Significant
effort must be invested to ensure that teamwork involves all stakeholders
on the public side of a PFI.”
Customer subject matter experts can be valuable contributors. And
the ability of both customer and contractor to manage expectations
is vital—they need to view the entire project as a partnership.
CAE hired an independent research organization to conduct a survey
of military customers, prospects and industry partners involved
in simulation and training. The respondents—the majority of
which were U.S. military representatives—were asked to comment
on their views regarding the privatization of training services
and whether they thought it would become more common in the near
future.
More than 70 percent of the respondents believed strongly that
privatized or outsourced training would become more prevalent in
the defense industry. The most common reasons that would spur acceptance
were “money-saving pressures and spending cuts,” and
“manpower shortages and downsizing of the military”.
While the majority believed more privatized training was on the
way, there were two clear issues or obstacles that respondents identified:
How does the military maintain control over training quality? How
does the military ensure concurrency?
According to one U.S. Army official, “We need to get green-suiters
back in the field, but there has to be some continuing government
role in quality assurance of the training.”
For any privatized training program to be successful, both the
contractor and the customer need to recognize that the content and
acceptance of a commercially delivered training service rests with
the military end user. At the U.K. Medium Support Helicopter Aircrew
Training Facility, CAE employed ex-military, top-of-their-class
helicopter instructors. However, the contract stipulates that active-duty
Royal Air Force personnel are the ultimate authority over the training
syllabus and program.
The need for concurrency between the weapon system platform and
the training assets is a topic heard often in the training industry.
It could be argued that the privatized training approach actually
does a better job of ensuring concurrency than traditional procurement
practices.
With a commercially run training service, the company will be responsible
contractually for ensuring concurrency with platform systems as
well as evolutions in doctrine and operating procedures. Too often
in today’s environment, the training system is procured and,
once it is fielded, it is always competing with the actual weapon
system for budget and resources. Guess who wins that battle more
often—the weapon system or the trainer?
Obstacles to more widespread use of privatized training remain
in the U.S. market. Any contractor needs to have a solid business
case to justify the capital expense required. Typically, such a
case can be made over a long period. However, U.S. laws prohibit—or
at the very least discourage—long-term contracts such as those
common with U.K.-style PFI programs.
While incumbents many times have an advantage when pursuing military
programs, the lack of a long-term contract with usage guarantees
and termination liability makes it difficult for private industry
to secure the necessary financing from banks and lenders.
Some creative approaches appear to be emerging in the United States
for the procurement of training services. Examples are the U.S.
Army’s ongoing Flight School XXI procurement and the U.S.
Air Force’s recent commissioning of a new E-3 flight crew-training
facility.
It’s clear, however, that privatized military training would
accelerate in the United States with legislative changes permitting
long-term government contracts.
It’s important to stress that not every military training
program lends itself to privatization. The military services always
will need to conduct the “sharp end” training, such
as actual mission preparation.
The U.K. experience in the private-funding initiative, however,
suggests that privatization can be a win-win proposition for both
the military and the contractor. It would make sense for other governments
to seriously consider this approach to procuring military training.
Donald W. Campbell is group president of CAE Military Simulation
and Training, in Tampa, Fla.