A New America: How Millenials Are Sparking Change

Otto Kreisher
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Otto Kreisher
June 4, 2014, 7:57 a.m.

The head of the Aerospace In­dustry As­so­ci­ation today en­thu­si­ast­ic­ally wel­comed the pack­age of ac­quis­i­tion re­form ini­ti­at­ives an­nounced Tues­day by De­fense Sec­ret­ary Gates and offered sug­ges­tions for ad­di­tion­al changes to im­prove ef­fi­ciency and save bil­lions of dol­lars.

While not­ing in­dustry con­cern with some of the pro­posed changes, AIA Pres­id­ent Mari­on Blakey said the 23 dir­ect­ives to the de­fense ac­quis­i­tion work force were a real step for­ward and will align closely with many of the re­com­mend­a­tions the in­dustry gave the Pentagon.

AIA wants to work with Gates and Ashton Carter, the un­der­sec­ret­ary of de­fense for ac­quis­i­tion, to re­fine and im­ple­ment the ac­quis­i­tion re­forms, she ad­ded.

“We be­lieve that really re­du­cing cost in­ef­fi­cien­cies will re­quire a joint DOD-in­dustry part­ner­ship,” she said.

Ad­dress­ing the Air Force As­so­ci­ation’s con­fer­ence at the Na­tion­al Har­bor con­ven­tion cen­ter, Blakey said Con­gress also must be in­volved. While prais­ing the ac­quis­i­tion-re­form le­gis­la­tion en­acted in the last ses­sion, she cau­tioned that Con­gress does not like to be in­volved late in the pro­cess.

Cit­ing AIA’s long-run­ning de­mands for ex­port-con­trol re­form, Blakey said Con­gress will have to be per­suaded that the sweep­ing changes the Obama ad­min­is­tra­tion has pro­posed can pro­tect na­tion­al se­cur­ity while help­ing U.S. firms in­crease for­eign sales.

In em­bra­cing the Gates-Carter ini­ti­at­ives and prom­ising in­dustry co­oper­a­tion, Blakey noted that the ef­fort to re­duce un­ne­ces­sary costs to shift funds to pro­cure­ment dur­ing a de­clin­ing de­fense could af­fect all of the aerospace in­dustry, not just the de­fense sec­tor.

“The stakes are very high,” for the eco­nomy as well as na­tion­al se­cur­ity, she said.

Blakey ex­plained sev­er­al of the 96 pro­pos­als AIA presen­ted to Carter to re­duce the cost and the time re­quired to de­vel­op and pro­duce high-tech sys­tems.

First was more use of mul­ti­year pro­cure­ment con­tracts. Al­though not all pro­grams are com­pat­ible with mul­ti­year con­tracts, she said this would work for most air­craft pro­grams, in­clud­ing the F-35. She noted that the re­cent mul­ti­year agree­ment for Navy F/A-18 and EA-18 air­craft could save $600 mil­lion.

An­oth­er pri­or­ity was per­form­ance-based lo­gist­ics, in which in­dustry main­tains or sup­ports de­fense sys­tems on a cost-per-unit basis. Al­though some de­fense of­fi­cials do not like it, Blakey said a PBL con­tract re­duced the cost of a fly­ing hour for the C-17 trans­port by 28 per­cent.

The in­dustry also wants a sharp re­duc­tion in the re­quire­ment for cost data in con­tracts.

She noted that in the last con­tract for C-17s, after nearly 200 had been bought, Boe­ing had to sub­mit 63,000 pages of cost data. After years of pro­duc­tion, cost could be de­term­ined by ana­lys­is, she said.

AIA also sup­ports re­duc­tion in “gov­ern­ment-unique re­quire­ments” and more use of planned block up­grades to sys­tems.

When a ques­tion­er at the con­fer­ence noted the ex­pec­ted clos­ure of sev­er­al of the large air­craft pro­duc­tion plants as pro­grams end, Blakey sug­ges­ted the Pentagon should be more con­cerned in pre­serving the crit­ic­al in­dus­tri­al base.

When those fa­cil­it­ies are gone, she said, “you can’t get them back.”

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