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National Defense > Blog > Posts > Air Force Seeks Escape From Acquisition Death Spiral

10/19/2012

Air Force Seeks Escape From Acquisition Death Spiral
By Sandra I. Erwin



The U.S. Air Force plans to spend more than $30 billion annually on new weapons. That is a hefty budget, even by Pentagon standards. But the Air Force nonetheless will have to pare down its wish list because most of that funding will be consumed by a handful of programs whose costs keep rising.

To illustrate the Air Force’s shrinking buying power, Lt. Gen. Charles R. Davis showed Pentagon contractors a list of 10 acquisition programs. Those systems alone will gobble up $20 billion in 2013, or more than two-thirds of the modernization pot.

If current trends continue, the same 10 weapon systems will devour an even larger share of the budget in the years ahead, Davis warned. This will leave the Air Force with limited options to modernize its aging fleet of combat aircraft, and could delay plans to deploy advanced weaponry that can defeat enemy air defenses in a future conflict.

There are simply too many programs in the Air Force’s budget and not enough money to pay for them, said Davis, the military deputy at the office of the Air Force assistant secretary for acquisition.

“Our $35 billion to $36 billion in modernization funding gets to be strained very quickly,” Davis told defense industry executives Oct. 17 at the Air Armaments Conference. The gathering was held at the Emerald Coast Convention Center, not far from Eglin Air Force Base, Fla.

Air Force leaders are in no mood to commit to acquisitions until current programs are financially sound, he said. “Short of new bombers, there is no desire to start new programs with costly production tails, even when the system is truly needed.”

An overambitious weapons-acquisition plan is par for the course at the Defense Department. The Pentagon’s appetite tends to always exceed its projected budgets, but the armed services still have managed to keep most of their cherished programs alive by delaying production or reducing the size of the orders. As Pentagon spending doubled over the past decade, there was no reason to stop shoving more programs into future budgets.

With the days of rampant spending coming to an end, Air Force acquisition programs are in the crosshairs. Further, the Air Force leadership is not likely to sign off on many new procurements in the foreseeable future, at least until current program costs are under control, Davis said.

Managing weapons costs, however, is becoming increasingly difficult for the Air Force in the current climate of political gridlock, Davis said.

“We'll have to figure out how we deal with the combined, compounding effects of continuing resolutions” and the paralysis that has gripped the Pentagon over the threat of across-the-board budget cuts that are scheduled for Jan. 2. These sequestration reductions are not expected to affect any acquisition program that already is under contract, but the uncertainty has caused widespread dysfunction across Defense Department procurement programs.

“That’s a big problem right now … the untold amounts of churn and inefficiency, and continual readjustments of programs,” Davis said.

In the absence of a long-term budget, he said, it is “all but impossible to execute [programs] with precision and efficiency.”

The situation is severe enough that it has drawn the attention of the service’s Chief of Staff Gen. Mark Welsh.

Welsh ordered procurement officials to stop the bleeding and find a lasting solution.

“Gen. Welsh is looking for a corporate approach to modernization,” Davis said.

A corporate method of managing programs would mean a drastic departure from the traditional way of doing business. It would require dispersed Air Force offices to work together across multiple programs, share technology, eliminate redundant projects and ensure that they have sufficient funding in the budget before any contracts are signed.

“We need to do things more efficiently,” Davis said. A case in point is unmanned aircraft. Dozens of programs were launched to meet war demands, but each aircraft was purchased by separate bureaucracies and from different contractors, which resulted in a mixed fleet with incompatible data links and ground control stations. “They should have common software and control systems,” Davis said. “We're working this issue quite vigorously.”

The Air Force also is feeling added pressure to modernize its fighter fleet in response to the Defense Department’s strategic shift to the Pacific. That will require stealthier, more survivable aircraft that can penetrate defended airspace and weapons that might have to be targeted without access to GPS satellite signals.

“We’ll be fighting in a contested environment [populated by] air-defense systems,” Davis said. “Many areas that we didn't use to consider contested are now contested,” he said. “We become a GPS crippled nation to some degree. … We are trying to reduce our dependency.”

The preferred weapon in these scenarios would be the F-35A Joint Strike Fighter. The Air Force regards it as the linchpin of its future fleet. But years of program restructurings and cost overruns have caused significant delays, and JSF will enter service several years later than planned. As a result, the Air Force will have to spend billions of dollars upgrading older F-16 and F-15 fighters. Those are unplanned expenses that the Air Force would have to fund by dipping into other parts of its acquisition budget.

“This is going to be a fairly costly program,” said Davis, speaking of the legacy fleet upgrades. “The money is going to be a challenge.”

Instead of a comprehensive overhaul of the avionics, radar and survivability systems, the Air Force might pursue an incremental upgrade, one piece at a time.

Because of the JSF delays, said Davis, “This is an important program that we have to take on.”

A new long-range bomber is another expensive program that the Pentagon expects the Air Force to acquire.

The bomber is still a highly contentious topic within the Air Force leadership. There is still no consensus on what the end product will be, or how much it should cost. There is too much fear of a B-2 repeat, Davis said, referring to the stealth bomber the Air Force built in the 1980s that ended up costing $2 billion a piece. “The new bomber is not going to have all new avionics, all new engines, all new airframes, it is not going to be developed from the ground up.”

The Air Force is more inclined to support programs that “integrate the stuff we have,” said Davis. ‘We need to do things better with what we have.”

All programs from now on will be closely scrutinized, not only for their worthiness but also for potential technological overreach, Davis said. “We have programs with questionable strategies that are put on a very challenging course,” he said. Welsh, the chief of staff, wants every program manager to answer these questions: Can I pay for it? If so, from where do I take the money?

The lack of discipline of the past decade has “put us on a course that I don't think is going to be sustainable for any length of time.”

Program reviews have to be “more aggressive” upfront to prevent a situation like today’s when too many programs are under contract and the budget can’t support them, Davis said.

One way to begin rectifying past sins is to better train the procurement workforce, he said. “We have lost talent in government teams to build things,” he said. “I worry that our contracting and management workforce does not necessarily have the business skills to have an intelligent conversation with contract officers and managers on the industry side.”

Posted at 8:32 AM by Sandra Erwin | Permalink | Email this Post | Comments (3)

Comments

Re: Air Force Seeks Escape From Acquisition Death Spiral

A derivative of the F-22, call it the F-22B, perhaps enlarged a bit like the F18E was from the first generation module, would make a great penetration bomber. It's already got the attributes needed, and the newer technology adapted from the F-35 would seem to be a natural.
Frank at 10/20/2012 9:07 PM

Re: Air Force Seeks Escape From Acquisition Death Spiral

It would seem that an adaption of the F-22, call it the F-22B would make a lot of sense. Enlarge it a bit like the F-18E was from the earlier versions, adapt systems from the F-35, and make any other changes required and it would seem to have all the required attributes.
Frank at 10/20/2012 9:10 PM

Re: Air Force Seeks Escape From Acquisition Death Spiral

Seems to me that defense contractors would listen very closely here.  "The USAF is more inclined to support programs that integrate the stuff we have."  Not a retrofit, not a low cost modification, but a truly new production cost (mindful of the appropriations pots) using currently employed systems where we have trained airmen ready to do some OJT maybe.  There's a niche there.  Just need to grab onto it.
jrb at 10/26/2012 1:31 PM

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