NAVAIR responds to acquisition changes

Sea Power, Apr 1999 by Donnelly, John M

During the Cold War, the roles of contractors and government officials were well defined. Today, acquisition reform has caused the old distinctions to blur. In some cases, the earlier roles have even reversed.

Two significant new examples of these changes help tell the story. First, instead of the government hiring the defense contractor, contractors are now, for the first time, occasionally hiring the government under new "commercial service agreements."

The second major change affects the process of testing major weapons systems. In the old days, the contractor tested its system, then the government tested the system. Now, starting with select programs, public and private testers are working on the same "integrated test teams."

These are probably the two biggest changes acquisition reform has wrought at the Naval Air Systems Command, or NAVAIR, Navy officials say. Specifically affected are Naval Air Warfare Center (NAWC) Aircraft Division facilities in Lakehurst, N.J., Patuxent River, Md., and Orlando, Fla. Also affected are NAWC Weapons Division facilities at China Lake and Point Mugu in California, and Naval Aviation Depots in Cherry Point, N.C., Jacksonville, Fla., and North Island, Calif.

The new phenomenon of contractors hiring the Navy resulted from recentyear reductions in the defense budget. With fewer programs now making demands on the huge complex of NAVAIR ranges, laboratories, and testing facilities developed during the Cold War, the Navy needs to use them both more productively and more efficiently.

"We are going to have to find other customers or we are going to have to close these facilities down," says Robert Young, director for lead management in the NAVAIR business development office.

A Win-Win Situation

But the service is finding other customers, making a virtue of necessity, Young says. NAVAIR, in particular, is making its facilities available for hire to private companies in certain circumstances. As a result, NAVAIR gets to use the facility and also receives significant income from these deals-$10 million so far, says Young.

Industry also benefits from the change because it can take advantage, for the first time, of the U.S. military's unparalleled assets and capabilities, which companies probably could not afford to develop on their own.

This major change, which started just a few years ago, is the result of new laws written as a response to declining budgets and closing facilities. In just that short time, however, the new way of doing business has become the fastest-growing way of doing business at NAVAIR, says Young.

The new laws cleared the way for the government to create special contractual arrangements called "commercial service agreements" under which either a prime contractor hires the Navy as a subcontractor or the company teams with the Navy before any contract has been awarded. The company hires out not just the facility, but also the labor required.

These agreements come with plenty of strings attached. But they enable a fusion of the public and private sectors that, although it was not specifically barred before, was never directly allowed, either-so it was never done, Young says.

The arrangements are so new, in fact, that Young was not at liberty, in all but a few cases, to name specific contractors, because the deals are not final.

The new laws empower NAVAIR to provide its aircraft and facilities for either testing and evaluation of requirements and specifications or for research and development of new capabilities and technologies.

Among the facilities most in demand are the test ranges, hangars shielded for electromagnetic testing, and various sites where equipment can be "shaked, baked, rattled, and rolled"-in other words, "ruggedized," as they say in RDT&E (research, development, test, and evaluation) jargon.

"Say Boeing develops a whole new aircraft," said Young, discussing a hypothetical illustration, "and wants to sell it to a foreign country, possibly for military use. Before that country might want to buy that aircraft from Boeing, the country might want some assurances that the aircraft would meet a DOD [Department of Defense]-type mission.

"In the past, Boeing would have to do that test themselves," he said. "Boeing doesn't own any open ranges like we do. They would have to do a lot of laboratory testing; they might have flown the aircraft to see if it would fly, but they may not necessarily be able to create the dynamic environment we have. They might test one sensor at a time using their very limited resources."

By contrast, he said, the Navy "has ranges throughout the United States that are fully instrumented, and we are able to create very dynamic electronic and combat environments. In the past, Boeing couldn't use them [the ranges] if it was going to be a private Boeing sale."

Navy and industry officials also provided some real examples (minus the names of the companies and foreign countries involved). In one case, a company that is competing to win a contract (from another company) to build an aircraft made entirely of composite materials is making use of one of NAVAIR's structures laboratories. The company's only other option would be a laboratory owned by one of its competitors-but the design in question is proprietary, and the possibility of compromise was inevitably very high.