Orlando AFA Forum

Lt. Gen. George K. Muellner
Principal Deputy Assistant Secretary of the Air Force (Acquisition)
Orlando AFA Symposium
February 16, 1996

I am very honored to have this opportunity to talk to you. My presentation is now a lot shorter than it was a bit ago. The Chief covered two of my major points and General Ralston zeroed out the others.

Our senior leadership and our decision makers on the agenda are those that set priorities, whether they be funding priorities or specific requirements for weapons systems, while I represent the other end of the food chain, the acquisition folks who try to make those priorities and funding applications a reality. I am going to try to show how effective we are at doing that, where we still have problems, and where we think we are going in the future.

Obviously, as all the previous speakers have highlighted, this is a very difficult geopolitical and economic time and environment for us to operate in. We have heard discussions about the high OPTEMPOs that continue to stress readiness and to age our force. At the same time, we are facing at best a zero-sum game and likely decreasing resources to meet those needs. The combination of these things makes the main focus of my presentation even more important.

We must reform our acquisition and our procurement system to ensure we get the maximum bang for that buck taxpayers money that we invest. We need to ensure we get more "rubber on the ramp," in the silo, or whatever the appropriate medium, when we start an acquisition program, and that we have an executable program throughout its life. As a part of this discussion, I m going to run through a number of programs, but I certainly don t mean to cover the entire spectrum. I am going to show some real success stories and a few others that have a ways to go, but are making progress. If I don t cover your program, I am sorry, and I d be glad to address it in the Q&A, all except the hard buried target issue. We are working that issue, and I d be glad to tell you about some of the issues we are working, but that is still a ways out.

For years, the Air Force has benefited from the finest products of the industrial base to give us a technological edge on our adversaries. That has benefited our warfighters, and that has benefited our allies. The technology has been evident in our products in the air, our weaponry, our command and control systems and all aspects of our warfighting capability. We shouldn t shy away from that. We can t forget it. This American way of warfighting has given us an asymmetry on the battlefield that s so important.

As we have moved away from the Cold War, the resources to carry out that philosophy became less and less available. We started to face very hard decisions on how much of a given technology we could afford to put into a product. We started to think about not only delivering the best that technology could offer, but also making that technology affordable in what we brought onto the battlefield. We needed to prove NormAugustine wrong with his "techflation curve," by getting off that curve and make high tech affordable for our warfighters and also for our allies.

We made a lot of progress. The programs I will cover in the next couple of minutes highlight that. You will still see there is a focus on effectively meeting the warfighter s needs, but to do so in a much more efficient manner efficient from the standpoint of delivery of the product to the acquisition system and efficient from the standpoint of the life cycle support of that product while it continues to meet the warfighter s needs. As we go through each program, you will find we are not losing effectiveness, but we are adding efficiency.

Let me start off with a program that has been discussed at great length already. I don t need to talk about the significance of this to our warfighters. After Secretary Perry s recent visit to the Bosnia theater where he flew on the C-17, he came back and gave us an extensive briefing on throughput and what this airplane means to our warfighter on the ramp. So, we know it is well understood, and that s true for President Clinton also. This clearly is our premier procurement program within the Department. It is the highest priority of our warfighters.

This is a program that just a few years ago was in great trouble. This was a program that was not delivering quality products on time and those that were being delivered were fairly expensive, in excess of $330 million a copy. This is a program where government and industry got their act together. We had strong leadership from McDonnell Douglas and Don Koslowski and from the program manager, Maj. Gen. Ron Kadish, who worked this challenge very hard.

The end result is what has become a model program. Along the way they reduced contract deliverablesto less than 25 pieces of paper where initially we were getting 400 plus deliverables. We went from 250 plus Specs on the program to just 3. We went from 80 plus mil standards down to a half dozen that apply. The result has been savings of $4 billion across the whole program. If we get our multi-year procurement approved, the unit fly-away costs for each of these last 80 aircraft that have been approved will be $173 million a copy. That is a radical change from that $330 million number earlier. That is what streamlining can do for you and is what good leadership and good management can do for you.

In industry, some say that approach works fine with big programs, but it doesn t work for small programs and things that are well along the way. This next program, which is also one that supports AMC [Air Mobility Command], proves that wrong. This program was mature; it provides the command and control for AMC to effect the planning, scheduling, and execution of their airlift, tanker and aeromedical operations. It was going into a large number of installations. Through the proper use of commercial, off-the-shelf hardware and the use of existing local area networks at each of those bases, the cost of this program was dramatically reduced. While not as large as others, we achieved a 44 percent reduction in the cost of the program, and we were able to significantly accelerate the beddown. So it works at all levels, and we are having those sorts of success.

JPATS [Joint rimary Aircraft Training System] was one of the initial pilot programs to use the non- developmental effort to fill our warfighters needs. This program, which we are happy to say is now under contract and we are executing, allows us to save over $200 million just in the developmental aspects. It is a program that is going to deliver the replacement for the Air Force T-37 and Navy T-34. A key aspect of this program is that "J". You are going to see I am going to talk about a lot of "Joint" programs. It is a sign of the future and one we need to get more comfortable with. That is a real challenge some days, and I will talk about that more later.

General Ralston certainly highlighted the significance of the F-22 program to the future of the Air Force and more importantly to the future of this nation. I don t need to talk about its technical tenets. They are well understood and, if not, a tour of the displays here will highlight the key ones to you. This program has brought forward not just the best technology, but it has brought a process. An integrated product team of government and industry people working hand-in-hand from the very beginning of the program made that a reality. That has now become a model, not only for our other programs and those of our sister services, but also for the way the Defense Department now functions in the entire acquisition process. The key is an integrated product team.

Along the way, we got rid of most contract deliverables, and inspection standards are way down. One hundred percent of the processes that support the production of this aircraft and weapon system will be under the control of statistical process control. That is an important metric for us to track the quality of the product. Great progress has been made in this, and we are trying to capture this.

We have already started flushing out the tooling with bits and pieces. This August, you are going to see a main airframe coming together. Hopefully, we will have engine certification in December, and we are well on track. At the end of May next year, the first F-22 will be flying as part of EMD [Engineering and Manufacturing Development].

General Ralston also highlighted the importance of our upgrades to the B-1. Clearly, it is the backbone of the bomber force in the out-years, despite the B-52 going to be with us for a long time and the B-2 has a key element. The B-1 upgrades for conventional weaponry and also defensive capabilities are important. In this case we went to a single prime contractor, rather than in the past functioning as an integrator as we did in the early days of the B-1 program. It is a multi-phased program, so it s evolutionary where we bring capability like CBU and cluster bombs up front. We then bring the JDAM like capability that the BVUD program brings to the table and gives us a 500-pound accurate weapon.

Finally, we will add the last of the defensive measures to improve its survivability. We learned our lesson from past failures, and we have gone to industry to act as the integrator. Industry does that a lot better than we do, and as we get into General Ashy s programs in the space world, you will see how we ve learned that lesson there also.

The next program I ll talk to is the B-2. I don t need to highlight its contribution to our warfighting capability. It can hold the highest valued targets at risk on the first day of the war. That why we bought it, and that s clearly what we expect it to do. As a result of working the process very hard, the last airplanes we have received have made it through very vigorous LO [Low-observable] screening and they are ahead of schedule. The first of our airplanes at Whiteman [AFB, Mo.] is now back into the process to get reconfigured to the Block 30, which is the end game configuration, and will be the full-up round as was mentioned earlier this morning.

An example of what can be done in a very mature program is the work done by the program office and Northrop-Grumman with the depot test systems and the support equipment at the depot to maintain this airplane. They eliminated all of the Milspecs and standards. They took the deliverables from 29 down to 5 and along the way saved $60 million. That is $60 million that we can use for modernization and recapitalization in other areas. This was the same team, as was mentioned earlier, that brought us the GATS-GAM, a GPS like capability with the ability to target multiple targets at the same time by using radar and a GPS-aided weapon. We brought the system to reality within two years. The considerable effort by that team has paid off in immediate warfighting capability.

Probably the linchpin of all of the department, by this I mean the broader Department of Defense s acquisition streamlining activities and its pilot program, is JDAM.

During Operation Desert Storm, General Chuck Horner and the other senior warfighters identified a need to hold targets at risk, even under poor weather conditions. That drove us to a program that became the Joint Direct Attack Munition. It is an attempt to take our existing inventory of hard bombs and give them accuracy through GPS-IMU.

We took one of our most aggressive program managers and put him on the program. He originally estimated that if "I do this job right, it will cost about $40,000 a round." Well, he and the industry team went into action. It was a competition between McDonnell Douglas and Martin Marietta which McDonnell Douglas won. As a result of this new approach, it s not a $40,000 weapon, but a weapon costing us $18,000 through delivery of the first rounds, and for the long-term across the entire buy of 62,000 JDAMs for the Air Force, it will cost us $12,000 each.

That was an entirely new mind set for those industrial players. We wanted them to function as a team with members of the program office and to be totally focused on taking cost out. They obviously did an excellent job. The end result is $1.5 billion we can now program for other very high priority warfighting needs, and, by the way, they will get those weapons considerably earlier than we had originally planned.

Another program is the Wind Corrected Munition Dispenser. If we want to operate at medium and high altitudes, we need to be able to use our cluster bombs from that arena. Of course, they are subject to the drift caused by wind and the ballistic inaccuracies of the weapon. By modifying those weapons with a pseudo-JDAM capability using an IMU, you can cancel out the effects of the wind and provide that capability to operate off our bomber force. When you think about a bomber force that is capable of carrying large numbers of these SU-64 and SU-30 dispensers with anti-armor munitions in them like the Senor Fused Weapon, you have a tremendous ability to affect an advancing ground army. This is nother program that is being run just like JDAM. It is in a head-to-head fly-off between Lockheed Martin and Alliant. That will end in the 1997 when we go to a single contractor.

Stand-off weaponry is important. It is especially important to our bomber force to give it viability in our non-stealthy platforms on day one and to allow it to hold a larger percentage of the target set at risk. JASSM [Joint Air-to-Surface Standoff Missile] is the program that was put together after the failure of TSSAM [Tri-Service Standoff Attack Munition]. For those of you that don t remember TSSAM, it was an LO standoff weapon. It had both hard target and also area munition capability, but it became unaffordable. We ended up with a weapon that was going to cost us in excess of $2 million a round. It clearly could not fit into the paradigm that we created today.

JASSM is focused on cost as one of the key performance parameters. Cost will become a key performance characteristic as we get a little farther down stream such that if we fail to meet that cost band,the program is at risk of cancellation just as if it failed to meet survivability or range numbers. This program has to work for the Air Force. We need upwards of 2,400 of these weapons for our bomber force and some of our fighter force in the out years. It is a very key program and one that has joint applications because it also fills Navy needs.

A program important to our future force structure in the Air Force is the Joint Strike Fighter, which is the product that will come out of the JAST program, the Joint Advanced Strike Technology program. This is as a pilot program to capture all of the acquisition reform and streamlining initiatives everything from using electronic source selection, from using electronic medium such as Internet for exchanging information, from getting industry involved with every aspect of the program, to where the developer, the requirer and industry sit down and write the requirements, write the statements of objectives and also put together the various models that are used in underpinning the cost and effectiveness trades that will be made.

This program has done a good job at bringing that teamwork together. It s a competitive program with three teams in competition right now. The schedule provides for selection in the late summer to start a concept demonstration phase in the fall. During that phase, we will have two contractors demonstrating ways to fill the Air Force s requirement, and also that of our sister services and the Royal Navy. So, it s already not only a joint program, but also a program with our allies.

A good example of the way we are going to work in the future is the way the avionics are being treated in this program. Rather than the government putting an architecture on the street and defining the standards, we got a team together that included not only industry, but also included industry associations. We took inputs from them on what was critical in an architecture for us to employ, and to what extent commercial hardware and software would become available. We published a draft and gave industry time to respond.

The draft has been on the Internet for almost two years, and is getting responses. We established decision milepoints throughout the program when we would select the specific approaches to the bus structure and the types of processors, etc. We let industry and the industry associations tell us what was smart, and then government, in concert with the industry associations, adjudicated this path. That s thepartnership with industry which is the mainstay of our whole approach to streamlining.

Joint STARS [Joint Surveillance and Target Attack Radar System] has been talked about this morning. Indeed, the fact we have just flown our 50th mission in support of the Bosnia operations and we are probably going to fly at least 50 more, indicates the importance of this program to the theater warfighters. Some interesting things have happened in the program a fairly mature program that has been around for quite awhile. We put the mission planning system together where the contractors had clear accountability for the design activity and for the performance. As a result, they put together a plan saving about $34 million just in the mission planning. By the way, we ended up getting a product about 64 percent faster.

We found the right button to push, and they delivered a great product that is already supporting us in the theater. I might add, we will accept our first production airplane in mid-March and, interestingly, probably within two weeks of acceptance, the airplane will be enroute to Bosnia. Here is an airplane with two streamers on its squadron flag and it has yet to even go operational. That is rapid prototyping at its best.

In the area of space, clearly we are not lacking reform approaches. I will highlight a couple of the programs that really emphasize different things. In the area of Milstar and communications, we reduced a lot of the deliverables. We have a single contract manager, Lockheed Martin in this case. In taking the cost out of the program, we went from 19,000 plus inspections in the process of receiving this satellite to now we have less than 100. Yet the quality has remained high or has improved in some cases. By the way, we took $236 million out of the program cost. That is $236 million for General Ashy to use on other needs. In doing that, we actually accelerated the schedule five months.

Our GPS program is important to the warfighter, to the civilian and commercial aerospace business and to a lot of other industries. In the case of GPS, for years we had multiple contracts that the government integrated. We went to a single contract manager for the ground component of GPS Loral Federal Systems. They have total responsibility for the performance of the product. We immediately saved $80 million by getting the government out of the integration business. By the way, we were able to decrease thesize of our program office by almost 40 percent.

On the space side, we ve gone to satellites that are high in commercial content using performance-based specs, and we ve reduced the cycle time of building subsequent sustainment blocks of those satellites from eight years to five years. Those satellites should represent better technology which should improve their performance.

Finally, we have the Space Based Infrared System, a very important program to all warfighters. It gives both the strategic and tactical warfighting capabilities warning of missile launches and warning of other threat activities. It replaces our ongoing Defense Support Program [DSP] that provided us warnings of Scuds during Desert Storm. SBIRS gives increased precision so we can improve our targeting, and it is gives reduced cycle time to get that information into the theater with direct downlinks.

To close on an afordable program, General Ashy and Vice Admiral Frost host a requirements review group of all the various warfighters and other communities that make use of this product, and they very aggressively trade off cost and performance. A couple of weeks ago, it was interesting to see all of the service warfighters and the intelligence community locked up in a tough battle trading cost and performance.

We ve had successes, but we have a long way to go in this area. There is still more money to be saved and used for more productive things. I ve highlighted the issue that our warfighters are now very serious about trading off cost for performance. This is an ongoing part of every acquisition activity, not only at the front end, but throughout its life.

Some other initiatives have been called the Common Process Initiative. If you happen to be a manufacturer such as Raytheon, at their Andover facility, they had nine separate contracts across three services for various missile deliverables everything from AMRAAMs to Patriots. They had nine separate sets of manufacturing processes and business practices under contract. That included nine soldering specs, nine quality specs, etc. In their case and in a number of industry partners who have already volunteered to come forward to be pilots, we have driven those multiple processes down to single processes across that production facility and we are already seeing great benefits not only in quality but in taking cost out.

Along those same lines, Lieutenant General Dick Scofield, who heads up our product center at Wright Patterson AFB [Ohio], the Aeronautical Systems Center, is leading a group with his counterpart commanders in the Navy and the Marine Corps and the Army to bring in the lean aircraft initiatives that MIT has developed for us. That has become a very effective tool for getting the aircraft industry as lean as the auto industry.

You've heard mention of the Lighting Bolt Initiatives which we have implemented. These are ways of trying to shock the system, as the name implies. They have been very effective. We started out with eight of them. The ninth is one that you suggested to us. It we need to get together and train together. I am happy to say that this organization, the Air Force Association, stood up, accepted that charge, and hosted a series of roundtables for us throughout the country and has recently hosted three major training sessions. AFA has also agreed to host additional sessions at your request. These have allowed us to get together with industry and train on how to apply streamlining in every aspect of the acquisition process. We are grateful to the AFA for taking on this initiative.

I'd like to change direction to embellish something addressed by several other speakers "Where we are going in the future." As many of you know, Dr. Gene McCall is going to sit down with the AFA Science &Technology Committee this afternoon. He heads up our Scientific Advisory Board which has just finished a year-long effort to look at where the Air Force needs to go in the 21st century in terms of what investments make sense and those that don t make sense. The effort ensures we have the right technologies for arming the Air Force into the 21st century. For those of you who haven t read it, I commend it to you. It is accessible on the Worldwide Web. You will see mention of sall distributed satellites, uninhabited aircraft, use of lasers, and high powered microwaves and something called a photo fighter. That is not a RECCE platform.

They have given us a very good roadmap of where we need to go in the future. The Air Force is responding by reorganizing our S&T program in line with that vision by identifying when and where wedivest of activities that are now more readily available on the commercial market. We also want to put the right amount of money into these technologies that are so important to our future.

I might add, this year, because of some plus up in the S&T accounts at the beginning of the year, the New World Vistas Group is going to be given about $100 million across the FYDP [Future Years Defense Plan] to apply to the two or three most leveraging technologies so we can ensure they really do happen. Again, I commend the study to our industry partners study because it is a direction we think we need to go.

Let me quickly wrap up, and I ll be glad to answer any questions, except for the hard-target munition one. First, acquisition budgets are not going to grow in the near term. Clearly, we have continuing needs that we must deal with. Streamlining can help us both in doing that and it can make industry s processes more effective. That gets our warfighters a lot more hardware for our investment dollars.

To do so, takes a team effort. It requires the development commands, industry and also the warfighter. All three of us must work together, which is clearly happening right now. We need to institutionalize this teamwork. As General Ralston mentioned this morning, he and his staff representing the warfighter community and our staff at AQ, who represent the development side, really work very closely on the budget drills and all of the necessary changes to keep an executable program that hopefully meets the warfighter s highest priorities.

I'd like to sum up with one comment. While we see some tough times ahead from the standpoint of decisions to be made, through teamwork and partnership in these programs as we ve done in our current activities with the field users, and by using discipline when we come to the table with our requirements and our ways of meeting them, we can hold our own. We can provide that 21st Century air warrior the tools needed to meet the Chief s challenge of pursuing an asymmetric strategy to win quickly, decisively and with minimum collateral damage and casualties.

With that, I d like to say we are indeed in an electronic age. If any of you have interest in pursuing any more of this information or any of you want to get access to the New World Vistas Study, don t hesitate to use the Internet and pursue that strategy.

With that, I d be more than happy to take any questions you might have.

GEN. SHAUD: Have you found any important centers of opposition to the Lightning Bolt Initiatives and other recent acquisition reforms and what are you doing to overcome them?

LT. GEN. MUELLNER: Unfortunately, the answer is yes; there is indeed opposition to the initiatives. I first thought more of the opposition would come from industry. That is not the case. Most of the opposition comes from the inertia of our own internal process. We have found a great deal of reticence by various elements in the acquisition community to embrace these streamlining measures and to stop doing business as they ve done for 20 years. These are things they ve done in some cases because of previous problems or because the process evolved that way. What we are doing to fix that is captured in the training sessions we are having with industry. Those sessions have already had positive outgrowth. Those training sessions continue at our product and logistics centers. We also have acquisition streamlining offices at each center.

We also have a team that goes out and helps each of our program managers scrub the RFP on the front end to ensure it incorporates all of those streamlined elements we have tried to put in place. We have had resistance. It has not come from the areas where I thought it would, but we have successfully overcome it or are at least are working to overcome it.

GEN. SHAUD: Acquisition reform focuses heavily on the integration of civilian and military economies, yet the recent New World Vistas Study showcased many technologies that have precious little value to the civilian economy. Is there a potential disconnect here or is that just the way it goes?

LT. GEN. MUELLNER: No. We probably need to read a little deeper into the New World Vistas Study because it did two things: It highlighted some technology areas that clearly are not going to be out there on the shelves in the Wal-Mart of the future, and it also highlighted technologies that will exist in the commercial world, and we ought to quit divesting in them. It did a good job in both of areas and showed us where there are seams between the two. From what we have seen, even in avionics which are "commercially available," there are things like sensors where the commercial market place for those technologies is still not as great as the military market place and the military need. Clearly, in the area of processing and communications, for instance, we need to rely on the commercial sector. The New World Vistas Study gave us a charter to go in that direction. Gen. Shaud: Here is a very specific question with regard to the JAST program. There has been some debate on a gun for JAST. Would you describe the debate and discuss the rationale?

LT. GEN. MUELLNER: I d prefer to defer that question to the next speaker.

GEN. SHAUD: Has the Air Force determined how it will use the $493 million Congressional add on to the B-2 program?

LT. GEN. MUELLNER: We are in the process of finalizing decisions right now. The decision was made recently on how we would pursue allocating the money which was added to the B-2 program. The focus, as hightlighted by General Ralston earlier, is on robusting its conventional warfighting capability and ensuring we have a viable platform to hold those targets at risk from day one and giving us the ability to project power and stay for a period of time, based on availability of spares, et cetera. Sometime in the next few weeks, we will have finalized the requirement by specific components and specific programs.

GEN. SHAUD: Do you forsee any increase in the arena of international cooperation for the development and acquuisition of systems?

LT. GEN. MUELLNER:There is a tremendous push to increase cooperation, but as weare finding out in a number of our ongoing programs, it must be incorporated into the early stages of a program to be effective and be a program which we and our allies can execute. In the case of JAST, we put in place a framework to do allow us and the Royal Navy to satisfy our needs and work to a common solution. We see other programs with existing products on the table where it is much more difficult to harmonize those activities for example the competion between the AIM-9X and ASRAAM [Advanced Short Range Air-to-Air Missile] and between JASSM and CASOM. I believe the UK Ministry of Defense is just as concerned as we are about bad decision getting programs off track. We can better leverage our R&D dollars through international cooperation, but it must be done right and it must be done early in the program.

GEN. SHAUD: Sir, thank you for being with us. I can see the personnel system matched the right person for the job.

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