A 'Walk-About' Through the Howling Wilderness of Acquisition Reform

June 25, 1999

Comment: #292

Discussion Thread:  #s 16, 49, 61, 81, 169, 288, 289

In Comment #289, which was a response to Comment #288's discussion of the Army's deployment of Apache helicopters to Albania, an ex-Army helicopter pilot said … "Too many politicians in green suits are worried about the big picture (Comanche, Longbow, CH-47F, UH-60X) to worry about fixing fielded systems. … Guys like Snider (PEO Avn) are pretty bright, but even they are not smart enough to solve the Gordion Knot of sustainability vs. modernization … Reality is the Appropriations guys don't see the value to their constituents in buying parts versus authorizations for new airframes or SLEPS (Service Life Extension Programs e.g. AHIP-Kiowa Warrior, AH-64A -> AH-64D, CH-47D -> CH-47F). [see Comment #289]

These comments reflect a field soldier's view of the courtier mindset of Versailles on the Potomac. This is the mindset that acquiesces to, and indeed encourages, decisions like the Bond-Ashcroft Amendment, which shoved 4 unrequested F-15Es down the Air Force's throat by robbing the spare parts accounts which provide for needed readiness and sustainability [see Comment # 284's].

The implication of his remarks, as well as my comments, was that reversing the process --that is, taking money away from modernization to buy more spare parts -- will solve the sustainability part of the larger readiness problem (which includes training, manning levels, skill levels, retention rates, etc.)

I wish the world were this simple.

The Defense Department has adopted a bi-partisan policy of "continuous reform" since the cosmetic reforms of the Packard Commission successfully silenced the real reform movement in the mid-1980s. Continuous Reform is wonderful, because improvements beckon, yet recede, always enticing you forward, ever deeper into the wilderness. Since the future will be always be different from the past, those who complain about the present in order to fix it can be silenced by the hype of the Spooky Siren of Tomorrow.

The following vignette shows one man's view of what it is like to buy spare parts in this Howling Wilderness of Acquisition Reform. He is a civilian logistician with 26 years experience working for the Air Force. The comments below are his remarks, except where marked by [ ]s, but I have been rearranged and edited them by combining the texts from three separate email messages. If I have inadvertently misrepresented them, I will post his corrections.

-----[begin email vignette]-------

Chuck,

Happy I found you on the 'net.

I am also interested in the issue of declining readiness. I have been involved in USAF logistics from 1972 through 1998. A lot of time in supply, then logistics plans, then system acquisition.

Here is my put on readiness and spares:

Reading #289, the Army officer is close. The money/profit is in production (over priced, fixed-priced contracts), it is not in R&D (cost plus), or in making more spare parts (low production runs, where most of the money is passed through to subcontractors). So the PEO spends what he gets, after all, an appropriation is law of the land.

That being said, profit is the motive to build new stuff … but buying more spares for sustainment is a losing proposition. [There are at least three reasons for this]

[First] The "old" spares are not reliable, so when you buy new spares [with the same unreliable designs or poor quality control], you don't see much improvement. W. Edwards Deming could fix this, but no one in Congress now wants to slow the gravy train in new production.

Read a couple of the recent GAO reports on B-2, F-22 EMD and F-22/F/A-18 E/F testimony. If the spare parts are not reliable when new, adding more spares won't give much readiness. One wonders if we have any performance specification on the contracts we use to buy these systems.

[Second] There are PLENTY of spare parts in the system.

Spare parts fall into three categories: Serviceable, Repairables-In-Work and those parts Awaiting-Action. I can let the first two categories alone, because they are keeping the planes flying and the tanks running. Although less than shining repairs do not help the problem.

The larger problem is due to the parts 'Awaiting Action.' This is caused as much by bureaucratic ineptitude as for any other reason.

You may have heard of "lean logistics". It was supposed to be a reform that applies the "just in time" [Japanese] production practices. This works when the suppliers are competent. This is not the case in Air Force Materiel Command [or other for defense logistics centers in general].

Lean logistics has a corollary in the depots called the Depot Repair Enhancement Program or DREP. DREP measures (1) how fast you repair what you repaired and (2) how well you stay within budget on the repair line. There are NO concerns in DREP for those repairable items Awaiting Parts or Awaiting Maintenance. The result is many of the spares we own are sitting in bins waiting … and waiting … and waiting.

So the perverse result is that more money for spares will cause more stuff to go in "awaiting" status at DREP depots. The real solution is cleaning out the "carcasses" at the repair facilities.

The real tragedy is the operators [units in the field] pay for the repairs WHEN they send the part back to AFMC, but the repairs are backlogged, no parts are on the shelf, and AFMC is still losing money in the business operating fund for depot repairs [To make matters worse, the accounting system underpinning this so-called industrial funding operation can not be audited, so no one knows the real cost of the assets tied up by this operation or can figure out how to efficiently apply scarce resources to fix these problems -- see Comment #s 16, 49, 61, 169].

[Third] The issue of readiness: you budget for spare parts and repair efforts based on two factors: usage, like flying hours or tank miles, AND the inherent quality of the parts, called reliability. The fact is the manufacturers may or may not be delivering reliable systems, BUT the depots are NOT restoring parts to designed or specified reliability specs, even if the manufacturer might have originally met these specs. You can not achieve budgeted readiness if the assumed reliabilities underpinning the forecasted the budget are not produced.

Again, more money for more spares will not produce the desired result [and may in actuality make things worse].

The solution is to measure the right thing in the depots, like the number of backlog carcasses, AND the reliability of parts coming out of repair.

[FINAL COMMENTS ... Or what it is like to wander around in the Howling Wilderness of Acquisition.]

Is the law requiring 50% organic repair [at government depots] dangerous to the defense? I do not know, because more contractor repairs may not be any better from a quality standpoint. [In the defense industry] time and materials contracting are motivators for slow progress and easy profit.

The Office of the Secretary of Defense is closing down its Office of Test, System Engineering, and Evaluation. They might as well -- this office has never stopped any bad specifications from being built into bad systems.

As for Acquisition Reform, we might as well eliminate quality control inspections, they have never allowed to work in the first place.

The lack of concern for quality and reliability throughout the design, manufacture and repair processes has reached a point where I feel readiness is an area that is well past the point of diminishing returns. More money spent on existing systems [like the Apache] won't get much improvement, because the underlying reliability or quality of the product and processes, if you will, won't give you good readiness. Who would buy a car that is broke 2 out of 3 days? Yet that is the mission capability rate of the B-2 [actually, it's worse].

The contractors need to be held to both good reliability and maintainability specifications during design and manufacture. The depots need to support readiness and quality -- NOT average time for successful repair. The organic depot repair budgets are grossly underestimated. On the other hand, adding money may increase the requirements for even higher budgets, because budget revenues come in based on parts returned to the field, and poorer repairs mean more returns, which means more work, and therefore a requirement for higher budgets. So, there are [powerful bureaucratic] motives to put out unreliable repaired items.

It is no surprise that we are building airplanes and other weapon systems that break too often, sort of where the US auto industry was in 1977 or 78. But it is important to understand that the REPAIR PROCESSES ARE ALSO BROKEN.

I have been following a number of other broken processes, and in this regard, working a multi-billion dollar program is an enlightening experience, but I am much happier looking in the mirror since leaving Joint STARS.

Everything is good enough for government work at the gold plated prices [unless your are a soldier like Generals Honore and Cody, see comments #81 & #288 , on the receiving end of these pathologies].

------[end email vignette]-------

And that, dear reader is what it is like for one worker bee to wander around inside the Howling Widerness of Acquisition Reform.

Recommendation: The elite inhabitants of Versailles should put on their muddy boots and take a walk-about in this wilderness so they can learn more about the real world before they give any more speeches about the Revolution in Business Affairs.

Chuck Spinney

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