19

DEFENCE ACQUISITION
W
hile the UK defence establishment is smaller than that of
the US, many of their dynamics and challenges are identical.
The Department of Defenses (DoDs) Quadrennial Defense
Review (QDR) process is long established and a well-dened mechanism,
versus the more pragmatic and sporadic British Defence Review, of which
the Cameron administrations Strategic Defence and Security Review
(SDSR) is the latest in a sequence of reviews dating back to the 1950s.
1

The UK, however, has repeatedly sought to make sense of the defence-
industrial relationship in recent years with the MoD-led Defence Industrial
and Technology strategies, which aim to best target investment for the
longer term. The DoD, by contrast, could be seen by the casual observer at
the macro-level as having taken a more laissez-faire approach in an era of
plentiful budgets and highly demanding military operations abroad.
US DoD acquisition reform can be seen against the backdrop of a newly
elected administration that, once having taken immediate measures
to safeguard against economic depression, needed to address govern-
ment spending patterns. Being a Democrat administration, there was
an additional requirement to approach the subject of national security
spending with caution in order to reduce any perceptions as to being
soft on defence spending.
The rst step in the administrations acquisition reform efforts emerged
in May 2009 with the passing of the Weapon Systems Acquisition Reform
Act.
2
Driving the Act politically was the identication of 95 major projects
that had a cumulative cost over-run of some $295 billion. To those familiar
with the defence acquisition process, the Act identied little new. Concerns
over the level of systems engineering skill in DoD, the role of combatant
commanders in dening requirements, issues of cost/schedule/perfor-
mance trade-offs, bureaucratic conicts of interest, technological maturity
assessment and independent cost analysis are all issues in which the acqui-
sition community on both sides of the Atlantic are well versed.
DoD Acquisition Reform:
Something Old, Something New
Dr Jeffrey Bradford, a transatlantic defence and national security consultant, formerly with Babcock
International Group, and a prior specialist with Arthur D Little, reviews the US approach to reining
in the cost of acquisition in existing procurement programmes
Robert Gates, US Secretary of Defense, warned Congress that,
We still live in a very dangerous and often unstable world.
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20 RUSI DEFENCE SYSTEMS SPRING 2011
DEFENCE ACQUISITION
EADS/Northrop Grumman team had its competitor squarely in the cor-
ner. Following the crisis and concerns as to the economic vitality of the
US, Boeing has regained momentum. With a presidential election cycle
less than two years away, domestic politics can only play an increasing
role in the development of this contest.
7
2. Project Management the Joint Strike Fighter
The Joint Strike Fighter ( JSF) programme remains the largest and most
complex procurement in the DoD portfolio. It has also been somewhat
inoculated against cancellation, by both the end of the F-22 Raptor
production line and a long list of international partners keen to replace
their F-16 eets. Originally, the JSF was conceived as a three-variant
procurement STOVL (short take-off and vertical landing) for use
by the USMC and UKs Royal Navy (succeeding the AV-8B Harrier), a
naval variant to replace US Navy F-18 Hornets and an air force version
to replace the F-16. Spiralling project costs led to the project manager
being replaced in 2010. More recently, the STOVL variant was placed
on a two-year probation period. Furthermore, following the UKs SDSR,
the Royal Navy will now take delivery of the conventional F-35C variant,
instead of the F-35B STOVL version.
The DoDs response represents a mixed carrot-and-stick approach for
industry. Replacing military programme managers on the one hand,
threatening industry with termination of a variant if it cannot be brought
under control on the other, while also accelerating some spending to eld
selected aircraft sooner.
3. Commercial innovation Littoral Combat Ship (LCS)
The latest development in the Littoral Combat Ship programme has been to
procure two types of vessel rather than to down-select to a single design.
The US Navy and contractors then agreed a xed price for 10 vessels,
though with the novelty that the US Navy signs an annual contract for two
ships which it can terminate if cost and production targets are not met.
8

This sample of programmes illustrates the US DoD application of many
classic tools for acquisition reform at a time when budgets are stretched
owing to macro-economic conditions and over-extension with overseas
deployments. A combination of cost-saving in the back ofce with pres-
sure on vendors and political partners elsewhere are methods with which
CEOs in many industries would feel familiar.
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J Ior morc dctails of thc Lcpartmcnt of Lcfcnsc Quadrcnnial Lcfcnsc Pcvicw (QLP) proccss
scc www.dcfcnsc.gov/qdr/ Ior dctails of thc Lk Ministry of Lcfcncc J9 Octobcr 20J0 8tratc-
gic Lcfcncc and 8ccurity Pcvicw (8L8P) scc http://www.mod.uk/LcfcnccIntcrnct/Lcfcncc-
Ncws/LcfcnccPolicyAndBusincss/8tratcgicLcfcnccAnd8ccurityPcvicwPublishcd.htm
2 8.4S4 lhc 7capon 8ystcms Acquisition Pcform Act of 2009 (Covcrnmcnt Printing
Offcc: 2009)
3 l Lanicl, Acquisition Pcform Plays kcy Polc in Pcntagon`s Cost 8avings (LoL: JS uly
20J0). www.dcfcnsc.gov/ncws/ncwsarticlc.aspxid60039
4 A Butlcr, 8I lcsts 8lips Again, Purchasc lo Bc 8lashcd, 8m`Xk`feN\\b, JJ anuary 20JJ
S L8 Lcpartmcnt of Lcfcnsc, LoL Announccs $JS0 Billion Pcinvcstmcnt from Iffcicncics
8avings, LoL 0J0-JJ, 6 anuary 20JJ
6 Ior morc dctailcd analysis of thc programmc, scc Congrcssional Pcport 8crvicc P822J03
VH-7J/VXX Gi\j`[\ek`Xc?\c`Zfgk\iGif^iXd19XZb^ifle[Xe[@jjl\j]fi:fe^i\jj (CP8: 2009)
7 Contract awardcd to Bocing in Icbruary 20JJ
8 L8 Navy, littoral Combat 8hip Contract Award Announccd, L8 Navy NN8J0J229-09,
29 Lcccmbcr 20J0
The DoD leadership, aware of the bow-wave of new procurement
programmes alongside the cost of maintaining forces on operations,
initiated a plan to seek $100 billion in cost savings in the 2012 defence
budget DoD procurement in 2009 was some $375 billion, against an
overall US government procurement spend by all departments of $560
billion.
3
According to reports, the air force found $34 billion; the army
$29 billion; the navy around $35 billion; and some $2 billion was also
identied from special operations budgets.
4
January 2011 saw an early announcement of next steps, including
consolidation of Information Technology infrastructure and cancellation
of the long-suffering US Marine Corps Expeditionary Vehicle system. In
addition, the development of the STOVL Joint Strike Fighter variant (for
primary use by the USMC and Royal Navy) was put on a two-year hiatus.
Alongside the headline-grabbing cuts, an emphasis is being put on
building procurement skills among the acquisition community and
reinvesting cost savings on more urgently needed requirements.
5

Following the release of the new acquisition reform plans, the Secretary
of Defense, Robert Gates, travelled to China for a bilateral meeting,
during which the Chinese Air Force publicly tested a new generation
stealth aircraft. Against the testing of the J-20 and discussion in recent
months of carrier-killing missiles targeting US Naval supremacy, one
can only wonder how long the resource pressure will endure at the
Pentagon before political concerns lead to a more pragmatic view. If
nothing else, the actions of the past year will curb some of the excesses
in defence procurement and refocus minds on deriving value from the
process rather than simply perpetuating the system.
While this analysis yields no new insights into the basic dynamics of
procurement, DoD responses to four programmes the presidential
helicopter, Joint Strike Fighter ( JSF), Future Tanker (KC-X) and Littoral
Combat Ship (LCS) perhaps give an inkling into what will drive
Departmental and US acquisition thinking over the coming few years.
1. Protectionism the Presidential Helicopter and future tanker
(KC-X) programmes
One of the earliest casualties of this exercise was suspension of the
presidential helicopter programme an important signal from the
White House as to the seriousness with which they treated cost over-
runs at a time of national economic challenge.
6
Additionally, and per-
haps unintentionally, against the backdrop of international defence
procurement politics and protectionist tendencies, the fact the presi-
dential helicopter involved a European player could only have played
well to a domestic political audience keen to preserve domestic US
acquisition capabilities and business.
As for the replacement airborne tanker, while the Boeing and EADS/
Northrop Grumman pendulum has swung back and forth in the past few
years, one can suspect that political exigencies will lead to either a two-
plane solution or a domestic preference. Prior to the nancial crash, the
The actions of the past year
will curb some of the excesses
in defence procurement