Military Training Dilemma: To Outsource or Not?

By Sandra I. Erwin
CAE offered the government of Brunei a deal it could not refuse: To build a state-of-the-art training center the Southeast Asian nation could make available to its armed forces, civilian aviation agencies and private industries, and split the cost 60/40.

An agreement was signed in 2012. The CAE Brunei “multi-purpose training center” was completed in 2014 and the facility officially started training pilots in September.

The Canadian company, which supplies simulators, training equipment and services in 30 countries, sees the Brunei project as representative of how the training business is trending toward outsourcing.

Most governments cannot afford the upfront cost of building cutting-edge facilities, but they need training services and are willing to entertain alternative business models, said Gene Colabatistto, CAE’s group president of defense and security.

Under the joint venture, CAE owns 60 percent, and the government of Brunei 40 percent. The company recoups its investment over time, providing training services under fee-for-service agreements. And local jobs are created for the host country. Colabatistto said the facility will start offering new simulation-based training programs for the energy, aerospace and health care industries.

These private-public partnerships have become the norm rather than the exception in many countries such as the United Kingdom and Australia. CAE is eyeing new deals in places like Poland, where the government is about to spend billions of dollars to modernize its Soviet-era military helicopter fleet and will need to retrain its pilots.

In the United States, there has been less enthusiasm for privatized training, partly because the Pentagon has had plenty of money to build and operate its own facilities. But that could change as military budgets shrink and officials rethink spending priorities.

The U.S. Navy decided to outsource aircrew training services for its T-44C flight trainer aircraft at Naval Air Station Corpus Christi in Texas. CAE USA is under contract to provide T-44C aircrew training services under a nine-month base agreement for $3.5 million with six one-year options valued at more than $30 million. The contractor-owned, contractor-operated program covers classroom and simulator training for more than 500 students annually.

This type of arrangement is unusual for the U.S. government, Colabatistto said in an interview. “But they’re looking at alternative business models. In this case they didn’t have the capital to build the simulators, but they had the operations-and-maintenance money.”

The U.S. Army made waves in 2002 when it announced it would privatize its helicopter pilot schoolhouse in Fort Rucker, Alabama, under a program called Flight School 21. In 2003 it awarded Computer Sciences Corp. a 12-year contract, with an eight-year option period worth $1.1 billion.

The Army’s flight school project stirred controversy and its critics questioned whether the Army was overpaying contractors for services that could be provided by federal employees. Congress in 2007 passed legislation that restricted the military’s authority to buy new flight simulators under services contracts, unless the secretary of defense seeks a waiver for national security reasons.

Contractors contend that the government should have the flexibility and choice to purchase simulators as part of long-term training services contracts. “The real question should be: ‘What’s the best way for the military services to get the required training, keep technology current, maintain readiness, and at the same time reduce financial risks and save money in a tight budget environment?’” said CAE spokesman Chris Stellwag. “We would like the U.S. to at least be able to consider this sort of approach to training, but right now these laws make it difficult.”

Policy and budget incertitude persists at a time when military leaders are saying they need more virtual training capabilities to keep forces combat-ready, Colabatistto said. The military services have issued new policies that require a set percentage of training be done in simulators.

The military, too, is asking for training technologies that go beyond stand-alone simulators. The industry catchphrase for comprehensive training is “live-constructive-virtual.” LVC is a blend of simulations, computer models and live exercises that requires complex integration.

“It enhances the value of the training,” said Thomas L. Baptiste, a retired Air Force lieutenant general and president of the National Center for Simulation, an advocacy group based in Central Florida.

Combining simulations and live drills is a necessity in air warfare exercises, Baptiste said.

“Some of the F-35 and F-22 fighter capabilities cannot be accommodated in our ranges. They don’t have the right level of threat emitters, not enough space, so you cannot challenge the capability of the airplane,” he added. “Our ranges aren’t keeping up with the capabilities of our most advanced fighters.”

Industry executives have promoted LVC as a tool that combines ground, air and maritime forces in ways that would not be possible in live training. “LVC is the future of effective training for operational readiness,” said Jon Rambeau, vice president of Lockheed Martin’s Training and Logistics Solutions business.

The Navy’s first operational model for LVC training is being planned for Naval Air Station Fallon, Nevada.


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