Britain’s Future Contracting for Availability Approach
It seems like a simple, and eminently sensible change. Instead of paying for hours of service and spare parts for military platforms, and trying to forecast usage, set required reliability levels. Then implement public-private partnerships and pay defense contractors a fixed rate per year, with incentives and penalties centered around required in-service rates. Sensible? Yes, and financially attractive because it turns large portions of the maintenance budget into pre-contracted, fixed costs. Simple? No.
Minor complications include the critical importance of in-service availability as something that extends beyond a mere contract term, and the need to avoid bankrupting one’s contractors after they have accepted most of your fleet’s maintenance risk. To which one must add factors such as highly variable per-year usage rates for equipment, the lack of adequate information to make accurate forecasts on either side of the table, the importance of creating the right incentives around long-term maintenance so this is not skimped, and the need to factor maintainability into future equipment contracts in a much more integrated fashion. Each one of those aspects, taken by itself, represents a major challenge. Together, they present formidable obstacles to success.
Faced with constrained budgets and rising maintenance costs, however, the British Ministry of Defence has spent the last several years creating exactly this kind of “future contracting for availability” through-life maintenance framework for platform after platform. The efforts of exceptional individuals like former Air Vice-Marshal Nigel Bairsto have made a tremendous difference, and so has the extensive organizational commitment of multiple MoD agencies and front-line commanders. Britain currently leads the world in this field, even as the rising curve of aging defense equipment throughout the Western world forces defense ministries and departments to confront the same issues. This Spotlight article provides an index of DID’s coverage in this area.
DID FOCUS Article – UK Unveils Draft Defence Industrial Strategy. This document dovetails very closely with the new maintenance approach, but its focus is far broader and more wide-ranging. There is also a companion Defence Technology Strategy.
DID FOCUS Article – Design & Preparations Continue for Britain’s New CVF Future Carrier (updated). The CVF will also use this approach, and the effort to make that work has forced changes to the very structure of Britain’s shipbuilding industry.
DID FOCUS Article – The UK’s FSTA: An Aerial Tanker Program – With a Difference. FSTA will be a full public-private partnership, from leased procurement of KC-30/ A330 MRTT aircraft to maintenance support.
DID Spotlight – Britain Hammers Out Through-Life Support Framework for Tornado Fleet. Fully implemented. Describes some of the challenges at a front-line level as well, including the need for a “Dirk Gently” approach to maintenance.
DID Spotlight – UK’s Eurofighters Fly To Availability-Based Contracting. They’re just at the beginning stages.
DID Spotlight – Britain Moves Forward on Harrier Support Agreements. Fully implemented. Contrast this approach with the far less ambitious multinational US/ Spanish/ Italian HISS contract.
DID Spotlight – 24-Year, GBP 1.5B contract to Maintain UK’s Hercules Fleet. Fully implemented.
DID Spotlight – “SKIOS for Sea Kings: Availability Contract Covers Through-Life Maintenance.”
DID Spotlight – Britain’s VC10 Tankers Moving Toward New Support Model. Partially implemented.
- DID (May 29/13) – SSOP: Britain Extends Contracting Innovations into Naval Sensors
- DID (Jan 28/09) – UK Availability Contracting: Starstreaks to the End
- DID (July 21/08) – Britain Signs Through-Life Support Deal for Seawolf Missiles
- DID (June 30/08) – British Secure Long-Term Contract to Support Auxiliary Ships
- DID (Sept 16/07) – MBDA Wins Through-Life Maintenance of UK’s Rapier SAMs. Fully implemented.
- DID (Sept 16/07) – RAF Laying Framework for Typhoon Fighter Support
- DID (July 30/07) – UK Signs 10-Year Nuclear Sub Powerplant Maintenance Contract
- DID (July 19/07) – 2007: Britain’s NAO Reviews RAF’s New Maintenance Approach. Thumbs up!
- DID (March 2/07) – UK’s “Contracting for Availability” Adds Hawks, Looks Ahead. Looking ahead involves a Long Term Partnering Agreement (LTPA) Foundation Contract covering the support and upgrade of the UK’s current and future fixed wing aircraft fleet.
- DID (Jan 8/07) – A Year In the Life: The UK’s Defense Logistics Agency. Includes its merger with the Defence Procurement Agency in 2006, as part of the UK’s through life support approach.
- DID (Oct 24/06) – UK Unveils Defence Technology Strategy. A companion to the Defence Industrial Strategy.
- DID (July 13/06) – UK MoD Issues Report on Through-Life Equipment Management. This report also looks at the challenges created for new equipment procurement, and sets the stage for the DLA/DMO merger.
- DID (May 22/06) – British Search-and-Rescue: A Billion Pound Partnership?
- DID (March 10/06) – AgustaWestland Lands GBP 450M Through-Life Support Contract for UK EH101s
- DID (Feb 20/06) – Boeing Wins Contract as RAF Moves to CH-47 Through-Life Support
- DID (Oct 24/05) – UK Defense Acquisition Policies Criticized, Defended, Improved. A Public Accounts Committee report was highly critical of MoD’s performance and execution under Britain’s “Smart Acquisition” guidelines; the MoD responds, as DID covers both sides.
- DID (Aug 16/05) – Britain Issues $1.2B E-3D AWACS Support Contract. The Sentry Whole Life Support Program, with Northrop Grumman.
- DID (June 21/05) – Raytheon, UK Sign Performance-Based Munitions Support Contract. For their laser-guided Paveway smart bombs.