Air Force Signs Agreements With Major Defense Contractors to Cut Red Tape

With a huge backlog of airplanes in need of repairs and maintenance work, the Air Force logistics command decided it can no longer afford to spend months negotiating contracts for each of its three major depots.

Under a new arrangement, the Air Force Materiel Command will sign business partnerships with major contractors to cover work at all three depots — Oklahoma City Air Logistics Complex, Ogden Air Logistics Complex in Utah, and Warner Robins Air Logistics Complex in Georgia. The intent is to expedite projects and reduce administrative costs, officials told National Defense.

Each depot routinely signs individual deals with contractors for specific projects, with each negotiation taking months to complete. To speed up the process, the Air Force Materiel Command’s Air Force Sustainment Center has recently entered “enterprise partnership agreements” with several companies. Instead of having each depot hash out contracts separately, the ASC will agree to broad terms with suppliers on behalf of the three depots.

“There were many motivating factors behind the transformation, and becoming a more efficient and effective organization was at the top of that list,” said Shannon Wagner, public-private partnering lead at the Air Force Sustainment Center, located at Tinker Air Force Base, Oklahoma.

“Our first goal was to standardize the partnering processes across all three industrial complexes,” Wagner said in a statement. Contractors with potential business at more than one depot are eligible for so-called “enterprise partnership agreements.” The AFSC so far has signed agreements with Lockheed Martin, Boeing, Northrop Grumman, General Atomics, Raytheon, Rockwell Collins and Parker Aerospace.

“It’s a step in the right direction,” said Tom Tilden, principal account manager for Rockwell Collins Service Solutions. The enterprise agreement “replaces a cumbersome administrative process,” he said. The company and the AFSC last month settled on “overarching terms and conditions” for a partnership for all three air logistics complexes.

Depot maintenance deals usually involve protracted negotiations over the wording because each party is trying to protect its own interest. Under an enterprise partnership agreement, all that wheeling and dealing is done and out of the way upfront. “It’s similar to major primes negotiating universal terms and conditions with their suppliers,” said Tilden. “It provides major administrative relief, and can save a lot of time and effort.”

Depot work can be a huge business opportunity for defense contractors as the Air Force spends about $2 billion a year on weapons logistics support.

Contracts with military depots are loaded with red tape. Under the traditional approach, the Air Force first has to identify a piece of equipment as a candidate for depot activation and contact the manufacturer to begin the process. Then the government and the vendor negotiate a partnership agreement for that one piece of equipment with the particular depot. Then they can go forward with the details of how the depot activation would occur, which is called an implementation agreement.

With the enterprise approach, “We don’t have to do the partnership agreement any more,” said Tilden. “We can just go straight to negotiating the implementation agreement on specific projects.”
Although it’s a simplified process, it still complies with government contracting laws, he said. “A partnership agreement doesn’t sidestep any federal acquisition rules or regulations, and doesn’t replace a contract.”

For contractors, there are significant benefits, such as easier communications with customers, Tilden said. “The enterprise agreement sets up a forum for discussions that didn’t formally exist before. … It provides a forum for regularly scheduled meetings and discussions about partnering opportunities,” he added. “I think that is very important for both government and industry.”

Chris Jones, corporate vice president and president of Northrop Grumman Technical Services, said the partnerships are an “innovative method to provide much needed logistics and sustainment services more affordably. … It eliminates the need to build separate partnerships with each Air Force complex each time there’s a new opportunity,” Jones said in a written statement. “We can now leverage the larger agreement by simply developing a tactical implementing agreement with the concerned complex and rapidly get the work started."   

The Air Force Sustainment Center, led by Lt. Gen. Bruce A. Litchfield, employs more than 32,000 military and civilian personnel, and maintains most of the Air Force’s fleets, including the A-10 Thunderbolt II, AC-130, B-1 Lancer, B-52 Stratofortress, C-5 Galaxy, C-17 Globemaster III, C-130 Hercules, E-3 Sentry, E-6 Mercury, E-8 Joint STARS, EC-130, F-15 Eagle, F-16 Falcon, F-22 Raptor, HC-130, HH-60 Pave Hawk, ICBM, KC-135 Stratotanker, MC-130, MH-53 Pave Low, RQ-4 Global Hawk, U-2 Dragon Lady, and UH-1 Iroquois aircraft. 

Topics: Aviation, Logistics