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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
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8.  Lee, Allen D.  "A Strategy to Improve the Early Production
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9.  McNaugher, Thomas L.  "Weapons Procurement: The Futility of
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