A Systematic Use of Performance Based Logistics
The Quadrennial Defense Review and the Defense Industrial Base
October 2015 | by David Delaney
Many subjects in the 2010 Quadrennial Defense Review (QDR) come as no surprise, but one area that hasn’t received as much attention in previous efforts is that of America’s defense industrial base. This QDR discusses how America’s industrial base has provided the United States with a technological edge and that it must be monitored and nurtured. Most of the attention paid to the defense industrial base in the press refers to the major defense firms that manufacture new weapon systems. The QDR released this week highlights the importance of improving acquisition as you would expect, but it also discusses the need to shape the capabilities required in the industrial base, including sub-tier suppliers providing parts and components, that sustain fielded weapon systems.
The environment these systems operate in is challenging. Long acquisition timelines and the high cost of modern weapon systems means they are often operated past their originally designed life cycles and at higher operations tempos than anticipated. This operating environment, coupled with anticipated reduced future defense acquisition budgets, make sustainment of currently fielded weapon systems even more critical to ensure they are ready.
The QDR states that the Department of Defense and our nation “require a consistent, realistic, and long-term strategy for shaping the structure and capabilities of the defense industrial base.” To enable the development of this strategy, a vision of the optimal structure of the sustainment industrial base is necessary.
This vision would have to be clear enough to effectively manage expectations with the government and industry thereby enabling senior leaders in both sectors to make appropriate capital investment and workload planning decisions. Private industry will need to make tough choices about how to remain competitive and in some cases will look towards an increase in sustainment workload to utilize and preserve their industrial and engineering capabilities. The military services have both a risk mitigation and statutory requirement to retain core logistics capabilities within the U.S. government. It is a case where there will only be so much of the pie to go around and a vision is needed to help prevent these entities from scrambling for their portion in an unbalanced approach.
For this vision to be effective it will have to inform a decisive strategy and, almost by definition, that will make it unpalatable for some stakeholders. It will require a sustained effort by leadership at the highest level, effective communication that warfighting capability is at stake, and the ability to weather a barrage of initiatives which will attempt to shift the focus away from optimal mix of sustainment capability needed by the military (hard to measure yet essential to national security) to the number of jobs or dollars associated with workload (easy to measure and important, yet not the key to combat capability).
A wide range of strategies could be implemented to execute the vision including emphasis on DOD’s current effort to insource activities previously contracted out to commercial entities into government. This effort could specifically pursue core sustainment capabilities which present the most risk to readiness. This is not a push for workload just because it may be labor intensive and therefore secures a predetermined number of jobs from the commercial sector to the government sector. Rather, a focus on the capabilities which truly need to be within the DOD without regard to the number of jobs attached to those capabilities. Another strategy that might be pursued is a modification to the program management architecture to elevate industrial capability program manager-like leaders which have crosscutting purview across weapon systems in critical capabilities such as precision manufacturing and low observable technology. These industrial capability program managers would be in a better to position to pursue innovative partnerships that are needed with industry to preserve capability for the nation versus a platform only view.
Finally, the QDR speaks to an integrated approach and the need for sophisticated relationships with industry. Innovative partnerships are possible between the DOD and industry and have proven effective in the past such as Air Force’s Heavy Press program in the 1950s where unique capital equipment was paid for by the U.S. government but resided in a private facility. Another example of a unique partnership which might be looked to is the Civil Reserve Air Fleet (CRAF). Innovation is possible with the right momentum and CRAF-like partnerships, with a focus on a source of targeted surge industrial capability, versus airlift capability, is worth exploring.