Weapons Acquisition: Products And Their Problems AUTHOR Major Maxie W. Phillips, USMC CSC 1991 SUBJECT AREA - Logistics M. W. PHILLIPS EXECUTIVE SUMMARY Since the Korean War, the United States has maintained large military forces in peacetime. during the Reagan Presidency, procurement spending was raised to an all time high. The need to stay ahead of our enemy has driven the system to field weapons as quickly as possible. The problems created by the current process, coupled with the complexity of weapons systems, must be resolved in order to get the most out of a dwindling defense budget. This paper addresses four major problems that apply to todays' acquisition process. First is the "gold-plate" problem - that is, weapons whose capabilities are not cost effective. Second is the theory that the current approach tends to build unreliability into new systems by signalling to program managers and industry that raw performance is more important than reliability and supportability. The third problem is that our current process forces the system to field weapons before they are adequately tested. Lastly, the acquisition process lacks adequate control and planning to ensure quality products will be placed in the hands of our military personnel. My conclusions, resulting from researching the problems, are set forth in the paper. Recommendations to solve this dilemma include: detailed testing of alternative weapons; stabilized program management shops, and revised political influence on the system itself. Only significant change will produce a condition in which choice and knowledge can be brought together in a prudent way. WEAPONS ACQUISITION: PRODUCTS AND THEIR PROBLEMS OUTLINE Thesis Statement: The problems created by the current acquisition process, coupled with the complexity of future weapons systems, must be resolved in order to get the most out of a dwindling Defense budget. I. Evolution of the Acquisition Process A. Aftermath of the Korean War B. Acquisition during Vietnam C. The Reagan Years II. Problems with the Process A. "Gold-Plate" Problems 1. EARLY Optimism of Performance 2. Consensus Building B. Reliability Problems C. Readiness Anguish D. Planning and Control Difficulties III. Solving the Predicament A. Political and Government Continuity B. Cradle-to-Grave Responsibility C. Adequate Testing Before Fielding IV. Advantages to My Solution A. Less "Gold-Plate" B. Improved Reliability C. Fielding Readiness D. Realistic Planning and Control WEAPONS ACQUISITION PRODUCTS AND THEIR PROBLEMS Since the Korean War, the United States has felt compelled to field large military forces in peacetime. During the Reagan presidency, procurement spending was raised to an all-time high. Just as it was' in the 1950's, the need to stay ahead of the threat has justified the urgency to field weapons today. In many cases, especially projects that enjoy a great deal of political favor, this justification continues to work. The problems created by the current process, coupled with the complexity of weapons systems, must be resolved in order to get the most out of a dwindling defense budget. First is the "gold-plate" problem - that is, weapons whose capabilities are not cost-effective.(11:13) Optimism in the early stages of a program about performance, schedule, and cost, combined with inflexibility during development, makes it virtually inevitable that the services will field "gold-plated" weapons. Weapons projects are approved on the basis of very optimistic cost-effectiveness assessments. Costs often turn out to be substantially higher than those originally anticipated. Interestingly, by the time pertinent information is available to judge real cost-effectiveness, the project has acquired so much momentum that cancelling the system can be extremely difficult. Consensus-building during the requirements phase of a project creates another kind of "gold-plate" by loading many capabilities into one system. This phenomena might explain why the Army's Bradley Fighting Vehicle has such a strange combination of capabilities. The U. S. Army started with two very realistic military requirements - for a mobile missile-carrying tank killer and for an infantry fighting vehicle. In putting the two together, however, the service placed the Tube-launched, Optically Tracked, Wire guided missile (TOW) on a vehicle that will travel far closer to the front lines than tank killers need to be, while reducing the size of its infantry squads. Significantly, the vehicle's Tow capability was added after the project had entered development, despite serious resistance to the idea from many senior officers within the Army, and partly because of strong "institutional" support for TOW in the Office of the Secretary of Defense and Congress.(7) The second problem is building in unreliability. The current approach to weapons procurement tends to build unreliability into new systems by signalling to program managers and industry alike that raw performance, such as speed or gun size, is much more important than reliability or supportability. Demonstrating raw performance during development by using pre- production prototypes is relatively easy. Reliability, on the other hand, can only be validated with long and rigorous testing under conditions that try to simulate combat conditions. Emphasis on getting new weapons to the field rapidly, leaves reliability testing until after - often long after - production has begun. In many cases, substantial reliability testing occurs only in operational units that receive the early production weapons. In order to pass the "final exam," those developing new weapons need only to succeed in performance alone. Development proceeds accordingly. (2) The third problem is rushing a new system into the field. The acquisition community is under the assumption that time required to run elaborate reliability tests before production will result in a relative sacrifice of performance, thus the total lead we obtain over the threat will be less by the amount of time taken to test reliability. This rush to production is usually rationalized as a means of maintaining a technological lead over the threat. The problem with this rational, however, is that it mistakes the fielding of sophisticated weapons for the fielding of effective fighting forces. Because weapons reach the field well before important operational and reliability tests have been conducted, it is virtually impossible for those weapons to be truly ready once fielded. Readiness implies the existence of trained crews. It requires spare parts and a maintenance structure adapted especially to the particular needs of the new weapon. The military organization, in short, must adapt to the new weapon - no easy process in any case - but one which requires the kind of information generated by extensive operational testing. Temporary lapse in support is not the only cost the nation's forces absorb in the rush to stay ahead of the threat. In a study of three U.S. Air Force acquisitions (the F- 111, the C-5A, and the F-15), Allen Lee found that slowing down the procurement process saved retrofit costs and improved the overall effectiveness of the air fleet in the long term. Mr. Lee also found that the Air Force's claim that production concurrence was essential to rush the new capabilities to the field was often false. The Air Force decided to accept shortfalls in performance in order to get early versions of the F-111 to Vietnam. Unfortunately, the service lost three of the first six aircraft sent to Vietnam in the first month's action and did not redeploy the F-111A's to that country until 1972.(8) Lastly, the acquisition process has serious planning and control problems. The serious dilemmas caused by this country's mixture of forces at the Commander in Chief's disposal stem from the fact that no one really oversees the procurement process. Alternative systems are often eliminated early in development because of optimistic performance and cost estimates on the primary system. By the time reliable cost and performance data is gathered, dollars invested have grown, and termination, while not impossible, can be a politically traumatic experience. The problem is further compounded by the rapid turnover of nearly all high-level officials involved in the project management, from the service chiefs and politically appointed defense officials down to the program manager. The consequence is that new officials enter their jobs and immediately confront a multitude of programs, about which data are scant and numbers are usually erroneous, as well as a chain of projects nearing completion over which they have little control.(5) Under these conditions, power over projects tends to flow downward toward the permanent bureaucracies, bureaucrats, and technical experts who generate the information provided to higher-level decision makers. Control over the multitude of projects, on the other hand, tends to flow according to service traditions. Influential individuals come and go; in the confusion that surrounds constant personnel rotation, service priorities reassert themselves. The dilemmas listed above were largely responsible for an increase of acquisition reform in the mid-1980's. Incessant problems with fielded weapons led the Congress in 1982 to legislate the creation of a new post, the Assistant Secretary of Defense for Operational Test and Evaluation. After resisting this change for over a year, then Secretary of Defense Casper Weinburger filled the new post in 1984.(3) As criticism of the procurement process grew, President Reagan established a commission to study the process, placing former Deputy Secretary of Defense David Packard as its head. Working together, Mr. Packard and key members of Congress composed a series of acquisition reforms and stated them in the much broader Defense Organization Act of 1986. Most importantly, the act established an Under Secretary of Defense for Acquisition - the so-called "acquisition czar."(1) Although too early to call, it is unlikely that these reforms will have much influence on the process. The Acquisition Secretary will most assuredly become an integral part of the consensus-building process that surrounds developing weapons, adding yet another staff and agency with which program managers will have to deal. This acquisition czar will also become another actor in the ever-increasing consensus-building process, and yet this individual's power will depend largely on the backing of his boss, the Secretary of Defense. Members of Congress tend to blame the performance problems and cost overruns on the defense industry. The call for greater accountability has risen commensurately. The number of Congressional investigations into defense contracting has increased, as has the number of auditors visiting contractors. The Competition in Contracting Act (CICA), passed in 1984 and amended in 1985, is the most important single piece of acquisition legislation to arise from this wave of Congressional reform.(3) This act mandated that the military services use competition to an increasing degree each year. It also ordered the creation of "competition advocates" within each service, to ferret out sole-source purchases that could be submitted to competition. With CICA's passage, it appears that Congress has regressed to 1934, when it first sought to insert competition into the aircraft acquisition process. Historically, it was the Congressional demand for competition that encouraged traditional service procurement bureaucracies to move slowly and with great caution in awarding procurement contracts. It is not clear how members of Congress can pass CICA while at the same time they lament the ever-lengthening amount of time it takes to develope and field new systems.(9) Today, just as in 1934, the problems that make competition for production taboo to the acquisition process have yet to be solved. Research, development, and production continue to be consolidated in massive defense prime contractors. These establishments are still influenced to underbid for development contracts; consequently they maintain the need to "get well" during production. Contractors economic well-being remains tethered to their competence to sell distinctive new technologies; thus they remain as leery as ever to share^R technologies with their adversaries. The conditions for taking the kind of venture essential to develop new and advanced weapons is deteriorating. To be sure, the large defense prime contractors have no other money-making channels to turn to today, and in this sense the government has a greater leverage over the primes today than it did in 1934. Yet one speculates if a nation that wagers its defense on the sophistication of its weapons really wants to bank on firms that are in the defense business only because they can do nothing else. Numerous people have tried to solve the problems inherent to the acquisition process. In this day and age, when it seems everyone is quick to point out the problems, very few people come up with reasonable solutions. In my research of this paper I have developed a new perspective on the depth and scope of the acquisition process. My conclusions, resulting from this research, are set forth below. The weapons acquisition process is in difficulty because it has become increasingly immersed in the American political methods that are conspicuously at odds with what is required to develop advanced technology. The foremost weapons projects link command and power in the single human being or small team; by comparison, American politics splits power across two branches of government and innumerable departments within each one. The finest weapons ventures are conspicuous by distinct trade-off decisions that can be created only under circumstances that foster flexibility; American politics averts sharp trade-offs in support of consensus, but governmental deals once struck can be anything but changeable. Program management has grown into an increasingly political endeavor. Haplessly, the process that program managers and military staffs must select to administer weapons projects politically operate conversely to what they should do to administer their projects technically. This generates severe difficulties in individual weapons systems as well as in the force tenor as a whole. The services have fielded gold-plate, weapons and systems, they have forgone readiness for modernization, and they have fielded weapons of dubious operational utility since the start of the Cold War. Inasmuch as the unit cost of weapons is escalating and the quantity of options under development at any given time is shriveling, the pressure to manufacture in gold-plate and the total amount of money that pays for it are growing immensely. Weapon complexity is growing as well, reliability is plummeting as a result, and the cost of supporting operations is growing. Problems that would have been admissible thirty years ago when the undertaking was new and relatively low in cost now extract a serious toll on the defense budget and the operational competence of the large forces we field. There is no disavowing the need for change, yet the kind of reforms now favored do nothing to change the fundamental incentives that mold the acquisition process. It would be desirable to remove politics from project management. One way of doing this was depicted during the Cold War, when American political restrictions tended to be communicated across projects rather than within them. Competition among the armed forces and the companies working for them prompted information about new weapons to surface, and it even influenced defense firms to be more proficient without threatening their incentives to modernize. Most notably, competition among projects produced concrete working technical options that, under the right situations, allowed politicians and civilian appointees to exercise authority over the nations force structure. Nonetheless, Cold War acquisition was less than flawless. In particular, the blend of research, development, and production made projects difficult to manage technically and hard to stop politically. There is no getting around the necessity to restrict production concurrency in any projected effort to restructure the acquisition process. If policy makers are to truly know what they are buying, there is no replacement for far- reaching hardware testing before production begins. And if developers are to be influenced to improve quality and reliability, they have to know that these features of their designs will be tested sufficiently before production is forthcoming. Detailed testing of alternatives takes time, and this inevitably raises the complaint that the development cycle already takes too long. But the development of alternatives should alleviate some of the gold-plating pressures that make today's large projects that much more complicated and difficult to produce. And to the degree that testing would surface authentic facts, it should permit a much more rational approach to passing on product improvements to the force. In fact, more competent use of product improvements and the introduction of new systems only after intricate testing is conceivably the only way to balance readiness, modernization, and the desire to maintain the nation's technological lead. Imparting a significant split between R & D and production does not mean that the development of weapons can or should proceed without reference to production requirements. There is no reason to delay the transition from development to production any longer than required. Nor, given the complexity of production procedures needed to make sophisticated weaponry, does it make sense to develop weapons without the tooling needed to produce them. In fact, we should broaden the concept of a weapon "system" to include such tooling. The new technique would fund the "system" hence delineated without consenting to production; it would consist of the development of weapons and tools simultaneously, but not "production concurrency" as it is presently understood. The question persists whether the break between R&D on one hand and production on the other should be formalized structurally by breaking the R&D function out of the large production firms in which it presently resides. The introduction of comprehensive testing should cut down on many of the incentives that now influence firms to underbid development and to forgo reliability in the quest of performance. But it would not decrease political pressures these large businesses are able to bring about that frequently color testing and the analysis of test results. A competition among design options in which production firms would stand by, waiting to bid on the winning design, would substantially free the competition from unwanted bias. The ensuing structure would resemble the Soviet system of "design bureaus," quasi-independent R&D firms that vie for production contracts.(9) These could generate their own connections to military users as well as commercial technology firms. Ideally, they would function with substantial autonomy, and also generally exempt from annual line-budget item reviews. Their accountability would be based on productivity over much longer durations, encouraging a definite amount of innovation and risk-taking. Weapons acquisition would continue to be politicized, to be sure, as it should be. But the politics would center on production options, with development liberated from the corrupt incentives that political standards presently give to it. In addition, production - and hence deployment - selections would be based on reasonably legitimate data about costs, technical maturity, and operational suitability. Establishing important choices on solid information would seem to be a self-evident requirement for intelligent public choice. Yet the practices that now delineate weapons acquisition in the United States exactly contradict this requirement. These routines are the result of years of so-called "reform"; they are truly institutionalized traits of the political landscape. It is not at all clear that they can be significantly modified. Such is the predicament of the acquisition process; however, only meaningful change - indeed, drastic restructuring - will produce a condition in which choice and knowledge can be brought together in a prudent way. Bibliography 1. Christmann, Timothy J. " Congress Pledges Legislative Support for Pentagon's Procurement Chief." Defense News, Vol. 2, No. 10. March, 1987. 2. General Electric. "Research Study of Radar Reliability and its Impact on Life-Cycle Cost for the APQ-113, -114, -120, -144 Radars." Utica, N.Y.: Aerospace Electronic Systems Department, Technical Report ASD-TR-73-22, April 1973. 3. Gordon, Michael R. "Data on Production Inefficiencies May Spur New Debate on Defense Contracting." National Journal, Vol. 17, No. 22. June, 1986. 4. Gordon, Michael R. "Help Wanted in Weapons Testing Office but Pentagon Slow to Fill Top Job." National Journal, Vol. 16, No. 41. October, 1984. 5. Healy, Mellissa. "Orr Presses Blue Suits on Close Air Support." Defense Week, Vol. 6, No. 14. April,1985. 6. Huntington, Samuel E. "The Common Defense: Strategic Programs in National Politics." New York: Columbia University Press, 1966. 7. Kaufman, Daniel J. "Organizations, Technology, and Weapons Acquisition: The Development of the Infantry Fighting Vehicle." Ph.D. dissertation, Massachusetts Institute of Technology, May 1983. 8. Lee, Allen D. "A Strategy to Improve the Early Production Phase in Air Force Acquisition Programs." Santa Monica: Rand Corporation, December 1983. 9. McNaugher, Thomas L. "Weapons Procurement: The Futility of Reform." Americas Military Policy. Holmes & Mier Publishers, Forthcoming. 10. Senate, Armed Services Committee. "Department of Defense Reorganization Act of 1986." 99th Congress, 2nd Session. Washington, D.C.: U.S. Government Printing Office, 1986. 11. Senate, Armed Services Committee. "Weapon System Acquisition Process, Hearings." 92d Congress, 1st Session, 1971. 12. Steckler, H.O. "The Structure and performance of the Aerospace Industry." University of California, 1965.
