Buying at the Speed Of Technology

Better. Faster. Cheaper. That's become the mantra of Air Force acquisition officials. They hope that a better procurement process that yields faster results will save enough money to compensate for the shrinking procurement budget.

The Administration has requested $14.5 billion for Air Force procurement this year. Unless Congress increases the funding, that's $2 billion less than last year. And the technology that the service is so dependent on is changing rapidly, making reform of the acquisition system doubly important.

"To retain our reputation as the world's premier Air Force, we must have an acquisition system that can keep up with the speed of technology," says Air Force Secretary Sheila Widnall. "Unfortunately, our acquisition system was designed in a different era to meet different demands. That's why we're in the middle of an acquisition culture change."

Leading the charge for change is Arthur L. Money, Air Force assistant secretary for acquisition. Money estimates that reforms already implemented have saved the Air Force about $13 billion in avoided costs. Savings have been achieved by adopting standard business practices, eliminating most military specifications on contracts and allowing contractors to use commercial manufacturing practices whenever possible.

"We're really getting out of the business of telling the industry how to do things," Money says. "We're telling them what we want, and it's their business how they get there."

Among Money's top priorities is to reduce contract cycle time by 50 percent over the next two years. By doing so, the Air Force will save money and put new technologies in the hands of airmen sooner. He wants to standardize business practices at the service's four major laboratories.

Since he assumed the top acquisition position in January, Money has developed an appreciation for the challenge he faces.

"I wasn't aware of how many constraints people are operating under. I'm really in awe of how well the people that have been here are doing given the system."

He cites the impact of Air Force personnel cuts independent of budget fluctuations. "You go out to a laboratory [where personnel] are being reduced by 30 percent and find their budget and the amount of work they're supposed to do are actually going up. We wouldn't have that in industry. Your budget would dictate how many people you had, not two independent constraints [personnel cuts and budget fluctuations] working against each other. We need to fix that."

As the Air Force realizes savings from acquisition reform measures, the money will be pumped back into modernization programs as well as other unanticipated bills, such as the peacekeeping mission in Bosnia.

Top Priorities

Nowhere is the climate of reform more evident than with the Air Force's highest priority program, the C-17 Globemaster III. Formerly a case study for everything wrong with the Defense procurement process, the program has become a model of acquisition reform. The C-17 airlifter, one of the most critical programs in the Administration's national security plan, was on the verge of cancellation in 1993 because of severe performance, management and budget problems.

A vigorous reform effort was launched by the Air Force and contractor McDonnell Douglas. (See "It Flies!" June.) By upgrading management and eliminating many military specifications and standards, performance was improved and money saved. In May, the Air Force ordered 80 more C-17s under a multiyear contract valued at $16.2 billion, which officials believe will save close to $1 billion over the life of the contract.

Also among the Air Force's top priorities is the F-22 fighter, built by Lockheed Martin and United Technologies' Pratt & Whitney subsidiary, for which the Administration has requested $2.3 billion in development funding in 1997. In the spirit of reform, military specifications and standards were reduced from 204 to 31 for the air vehicle, and from 152 to 17 for the engine. Statement of work pages were reduced from 146 to about 20. Contract cycles have been reduced from 40 months to 24 months for the air vehicle and from 30 months to 12 months for the engine.

The first fighter is scheduled to roll off the lines in 1998. Current Air Force plans call for buying 442 F-22s at a total cost of $70 billion. The F-22 eventually will replace the service's fleet of F-15 fighters.

In the meantime, to replace aging aircraft in the F-15 fleet, the Administration has requested $185 million to buy four aircraft, plus $143 million for continued research and development. The House version of the Defense authorization bill would add $120 million to buy two more fighters in 1997 and fund advance procurement of six in 1998.

The Air Force also would receive $106 million for four F-16 fighters under the budget request, and another $143 million for continued research and development of that aircraft, which became operational in 1979.

The Administration has requested $105 million to buy support equipment for the B-2 "stealth" bomber and another $529 million to continue research, development and testing. Congress supports the request, and the House would even add $290 million to the program to accelerate plans to enhance the existing B-2 bomber fleet with precision-guided munitions and other capabilities.

Officials are studying whether it should procure more B-2s, beyond the 20 now in the fleet. In the meantime, the Air Force will convert a B-2 test model into an operational aircraft, bringing the fleet to 21.

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