SMITH: It is important to bear in mind that checks
and balances are built into the system — Congress
oversees the Pentagon, the Pentagon oversees the military services, the services oversee the contractors. Of
course, there are auditing agencies and inspector general offices as well. The foundation to improving government acquisition will be built upon more stable
requirements and funding.
What is the future of life-cycle support, including
performance-based logistics (PBL)?
HAVENSTEIN: Through life-cycle support — to
include performance-based logistics and/or capability-based support — needs continued and increased
emphasis. This will be critical to the maintenance of a
strong industrial base and rapid delivering of capability. Necessarily, this will require greater partnering
among DoD support agencies and industry.
ALBAUGH: Boeing recognizes that in order to meet
the enduring needs of our defense customers in the
current budget environment, attention must be paid to
full life-cycle costs and how to keep those costs to a
minimum while ensuring full readiness. There is a real
future in providing performance-based logistical support for the military as they address global threats.
STEVENS: We see the future of life-cycle management and performance-based logistics as very bright.
DoD’s recent emphasis on supportability as a key performance parameter and its continuing commitment to
life-cycle management implementation create a positive business environment. Recent positive PBL contracts, such as the High Mobility Artillery Rocket
System, F- 22 Raptor aircraft and aviation tires demonstrate the operational and cost benefits of PBLs, which
will propel further implementations.
SUGAR: Life-cycle support is usually best led by the
platform designer and manufacturer. Would you take
your new car to a local garage versus an authorized
dealer for a major problem diagnostic? Not likely,
unless perhaps the location was such that a “dealer certified” local maintenance activity would have to do.
Performance-based support for platforms other than
ships appears to be developing positively. We have several major aviation-related systems fielded now that
are making positive contributions to readiness at a predictable cost. We are determining how to apply the
best parts of these successes to our ship platforms.
SMITH: All life-cycle support will be mission focused,
driven by required outcomes versus transaction bureau-
cracy. Supportability will become a critical design parameter as original equipment manufacturers (OEMs) build
DoD weapons systems, having already negotiated multiyear, fixed-price, performance-based support contracts.
Increased hardware and software reliability and maturing
condition-based maintenance technology will dramatically reduce unscheduled failures. And when coupled
with a precision supply chain, logistic footprints will be
greatly diminished. In short, lower cost, more efficient
support, yielding higher availability systems, with sustainment a key driver of OEM revenues and profitability.
What can industry do to deliver increased capability
while reducing costs?
HAVENSTEIN: In partnership with our customers:
drafting and adhering to realistic schedules, ensuring
reliable funding, establishing relevant and enduring
requirements and understanding and accepting associated technical risk will greatly help industry deliver on
our commitments.
ALBAUGH: Industry must always find ways to
increase productivity in meeting the customers’ requirements while reducing costs. It’s essential that we embrace
lean practices throughout the enterprise and focus on
flawless execution. We need to offer our customers realistic proposals and executable plans, where we execute to
the satisfaction of customers who are increasingly intolerant of performance issues. At the same time, we have to
be focused on capabilities that enhance existing systems
rather than the lengthy and costly process of developing
new ones. For example, is it prudent to invest precious
limited resources in developing so-called next-generation
systems, when one could achieve 80 percent of the
desired capability at 20 percent of the cost by evolving
existing systems … at less risk and much faster?
STEVENS: While Lockheed Martin would like to be
able to estimate with precise accuracy the development
cost of systems that take years to develop, it is impossible
to do so. This is especially true when changes in requirements and funding streams occur during development.
We certainly try to control costs, but the best formula
for a successful development program is clearly defined
requirements that remain relatively constant, funding stability and available management reserve, skilled contractor and government personnel, and cost-reimbursable
contracts with the flexibility to adjust technical and
schedule requirements as the program progresses.
There is no formula for achieving “faster, better and
cheaper” on one program. History indicates that no
more than two of the three are possible in any given
product development, not all three together.
