Air Force Testing New Industry Incentive Strategy to Expedite Acquisition Process

NATIONAL HARBOR, Md. — The Air Force is implementing a new strategy that it hopes will incentivize industry to deliver weapons systems faster, the secretary of the Air Force said Sept. 14. 

“Our ultimate goal in acquisitions should be to deliver capability to the warfighter more rapidly, but unfortunately today it takes too long to develop and field our systems,” said Deborah Lee James during a keynote address at the Air Force Association’s 2015 Air and Space Conference. 

The service hopes its new strategy dubbed “should-schedule” will change that trend. The approach will work in a similar manner to an acquisition management tool the service has been using called “should-cost,” said James. 

“Under the should-cost approach, we challenge our program offices and we challenge our industry partners to beat the independent cost estimate once the program is underway,” she said. “Program offices and industry then employ a multitude of techniques to drive the cost down.”

After the savings are realized and validated the service can use those additional funds and pump them back into its portfolio, James said. She pointed to increased numbers of air-to-air and air-to-ground weapons in the Air Force’s inventory as an example of the benefits of should-cost.

“We now have hundreds more air-to-air and air-to-ground weapons that have become available for today’s fight because we were able to buy them back into our inventory through should-cost savings out of our weapons portfolio," she said “In other words, we saved in those accounts and we were able to plow those savings back into buying more.”

Unlike should-cost, the new should-schedule strategy will focus on delivery time, James said. “We asked ourselves, ‘Can we develop a structure that challenges us and our industry partners to deliver faster than the schedule determined as part of the independent cost estimate?’” She said she is confident the service can. 

“If we can collectively beat the historical developmental schedules and reward behavior in government and industry that speeds things up, we have a real chance to make a difference,” James said. 

The Air Force is going to start implementing the strategy with smaller programs first before applying it to larger weapons systems. Some of the ones under consideration are the bomber armament tester, the enhanced GPS inertial navigation system modernization program and the advanced precision kill weapons system. James said the details for those should-schedule pilots are currently being worked out. 

Established programs will continue to have an engineering, manufacturing and development phase under the should-schedule test run, but the Air Force will “hold a competitive EMD where we reward and incentivize ‘speed to ramp,’” James noted.

“In other words, if an industry partner can propose a solution that credibly offers a way to accelerate successful EMD, then that company would have a competitive advantage for the award.” A proposed accelerated EMD plan would need to survive a detailed sweeping review by independent engineers, similar to should-cost, and the service would only adjust to the faster schedule after it is independently validated, she said. 

James said the should-schedule strategy would not result in the service going sole-source on an item. “We will structure the acquisition strategies to ensure the appropriate level of competition and to take advantage of early opportunities for technical maturation and risk-reduction activities to bring multiple industry teams up to a reasonable design level.”

The new acquisition tool is one of the ways in which the Air Force is trying to ensure that it effectively modernizes its platforms and systems to enable the service to “respond faster than the threat, keep up with the pace of technology [and] keep up with operational innovations of” its airmen, James said. 

The Air Force today is facing some of the hardest challenges in its history. “Some [people] have even said that the idea of an aerospace nation in the U.S. may be waning from our collective consciousness,” she said. 

“Our closest competitors — some of whom don’t mean us well — are closing technological gaps around the world, and our comparative advantages in some cases are dwindling,” she added.

“Government money is certainly very, very tight these days and a brand new graduate out of college may well set their sights more on a job in the Silicon Valley than they would looking to work for the U.S. government or for a large aerospace firm.”

Additionally, the threats of a continuing resolution and sequestration hurt Air Force modernization efforts, she said. 

To make sure that the service stays a step ahead of its adversaries and addresses these challenges, the Air Force is releasing the third document of a three-part trilogy titled the “Future Operating Concept,” James said. 

The rollout began last summer with the unveiling of “America’s Air Force: A Call to the Future,” a document that laid out the reasons why the Air Force needs to change its current approach. In May the service published the second document, the “Strategic Master Plan,” which laid out strategic goals and objectives for the force over the next 20 years. 

The operating concept that the service is unveiling this week will describe the “how” for achieving those goals, James said. It “will lay out how we intend to leverage operational agility in the future as a way to suitably and swiftly adapt to any situation or enemy action,” she said. “Integrated multi-domain operations — cyber, space and air — will be central to this future operating concept.”

Topics: Aviation, Business Trends, Procurement, Acquisition Reform