ARTICLE

March 2004

As Companies Get Larger, They Become Less Responsive, Says Officer

by Sandra I. Erwin

As top U.S. defense contractors continue to expand via mergers and acquisitions, they are, in many cases, making life more difficult for their military customers, said the Army’s head of aviation procurement, Maj. Gen. Joseph L. Bergantz.

Large companies that acquire smaller firms end up creating new divisions within the corporation, but it may take years for those divisions to integrate their operations. This is not helpful when Army program offices are trying to coordinate projects with contractors, Bergantz said during a panel discussion at the Association of the U.S. Army aviation symposium.

“Sometimes, I still see cross-division synergy problems,” said Bergantz. After years of mergers and takeovers, corporations have gotten bigger, “and you have different divisions that don’t necessarily always coordinate or talk between the two, or amongst them,” he said.

On a more positive note, contractors have been able to respond to urgent requirements for aviation parts and repairs that have skyrocketed since the onset of the wars in Afghanistan and Iraq. Aviation units, particularly, have struggled to maintain aircraft and stock enough spare parts.

Bergantz said he had no complaints about the industry’s response to war demands. When urgent requests come from the field, Bergantz said, he is comfortable knowing he can call industry executives late at night and on weekends.

The Army program office for aviation, meanwhile, has restructured its operations, in an effort to be more responsive to front-line unit needs.

After the war in Iraq got under way, the aviation program office began searching for alternatives to traditional acquisition, said Bergantz. One approach was to set up “contractor cells” that would team up with Army program officials to do the “smaller, quick reaction” projects. This is a good idea for the long term, he said. “It will help us develop better contracting officers who will be ‘matrixed’ in the future back into our programs.”

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