Candid Voices - military readiness; effects of outsourcing repairs

Air Force Journal of Logistics, Winter, 2000 by Kenneth B. Bowling

The third miss in the SORAP process revolves around defining who bears the fiscal load. Single managers see investing in a new repair technology at an air logistics center as a burden to their program. Hypothetically, if the engine selected for the F-22 were similar to that of the joint strike fighter and others, the F-22 program might have to bear the fiscal load of the initial investment to establish the repair capability at the depot. The investment required might be large compared to other program costs (special tools, training, depot-level technical orders, facilities, and so forth.). The good news is that repair costs are controllable and not subject to the whims of market forces. The problem for the single manager is this is a must pay bill now. The single manager may not have sufficient insight into the design to properly budget for such a large bill in a particular year. This lapse creates a supportability issue for the program.

Then the contractor estimate arrives, and it is much lower because it can do the repairs for a slightly higher cost than the government but without any up-front investment because it already owns the capital equipment, facilities, and skilled labor (all used in production and testing). The likely result is no investment is made for organic repair. The effort goes sole-source to the original developer, and the life-cycle risk jumped another notch. This is especially, even catastrophically, true if that contractor's business base contracts as it responds to the market's supply and demand.

The investment decision would have provided the opportunity to reduce life-cycle costs for multiple weapon systems. This is the greater-good concept that the SORAP ignores. It is the best-value loophole in action. The decision appeared to be the best value, but it was measured only in that year, and we again declared victory before results. The lost savings in out years would have provided needed funds for future modernization efforts. At the same time, it would keep the work force at the air logistics centers current on new technology. Instead, the decision relegates the blue-collar work force at the depots to antique fixer and dealer status (nothing new to repair, just the old stuff). As an aside, ask yourself, what youth today would want a job fixing half-century old parts at a government depot when they could work for a defense contractor making higher pay repairing new technology? The implications are astounding.

Until there is a fundamental change in policy, there is no chance this trend will reverse naturally. According to DoDD 5000.2-R, Mandatory Procedures for Major Acquisition Programs and Major Automated Information Acquisition Programs, [6] cost must be viewed as an independent variable. Accordingly, single managers are required to establish aggressive but realistic objectives for all programs and follow through by trading performance, supportability, cost, and schedule, beginning early in the program. This is not happening because withholding program funds for unknown support investments is nearly taboo, especially when that investment will not realize a positive return on the investment for many years. The fact remains: organic supportability requires investment in infrastructure, equipment, and training, but it usually goes unplanned and unbudgeted.