AV-8B Harrier II

The USA’s AV-8B Harrier IIs have gone from the most accident-prone fighter aircraft in the fleet to a much safer jet whose hover capability and LITENING surveillance and targeting pods proved extremely effective in the urban warfare scenarios of Iraq. Britain’s Harriers are moving step-by-step toward a comprehensive through-life support contract in which the contractor has full responsibility for aircraft servicing and availability. In recent days, the USA, Italy and Spain have also signed a Harrier Integrated Supply Support (HISS) performance-based support deal, worth up to $400 million.

Is this a step forward in terms of contracting for support? Is the British contracting model on its way across the Atlantic? The answers are yes, and not exactly…

The HISS Agreement: How It Works

EAV-8B Matador
(click to view full)

HISS is a 5-year performance-based logistics contract to support AV-8B Harriers operated by the U.S. Marine Corps, Italy and Spain, with an option for an additional 5 years. It supports numerous AV-8B systems, including a combination of electromechanical, avionics, electrical and structural components made up of approximately 1,050 stock items.

The nations involved have been flying Harriers for quite some time, and know the support costs involved. They sat down with Boeing to estimate those costs over the HISS contract period, then agreed to a fixed budget based on those estimates. Boeing is now responsible for carrying out the repairs on those systems, and allocating those monies within the budget. As a firm-fixed price contract, Boeing can pocket savings that it finds as long as it meets the agreed levels of service. Desired engineering changes, if any, can be developed at Boeing’s expense and then brought to the customers for possible approval and reimbursement.

Boeing is establishing partnerships with fleet readiness centers in North Island, CA and Cherry Point, NC through the agreement. Work under HISS will include asset repair management (spares and consumables), meeting delivery response times, obsolescence management, reliability and maintainability improvements, warehousing, configuration management, technology insertion, transportation and other innovative supply support solutions.

HISS diverges from the emerging British approach to supporting major platforms. While it incorporates some performance-based aspects, is much closer to classic spares & service approaches than it is to Britain’s ATTAC Tornado support arrangement, or even lesser approaches like the USA’s recent B-2 bomber support agreement. Key differences include:

X-35B and Harrier
(click to view full)

It is not through-life, either for individual sub-systems or for the platform as a whole.

By 2017, the process of replacing Harriers with F-35B STOVL aircraft will have begun in the British and USMC fleets, but the aircraft will still be in service.

At 10 years maximum, HISS is long enough that the contractor has incentives to perform long-term maintenance activities… but as the contract period approaches its end, those incentives become slightly weaker than a through-life contract’s. The 5-year break-point may provide an opportunity to shift HISS into a more advanced type of support arrangement, but the set nature of HISS will create obstacles because…

The key metrics in the performance-based contract are aligned with delivery time for spares, rather than aircraft availability.

There is an obvious correlation, but availability also includes measures that remove the need for spares. At the TFD Group’s 2006 conference Nigel Bairsto, the Director General of Logistics Transformation for the UK MOD, offered the example of his efforts to introduce monitoring systems for the Tornados’ engines. The cost of spares and maintenance was known – it was very high, and the engines were responsible for a decent chunk of that. Years of effort, no luck. Once the contractor was paid for subsystem/aircraft availability, however, what was the first thing to go in? Advanced monitoring and diagnostic systems (often called HUMS, Health Usage and Monitoring Systems) – because now it paid them to do it, and was necessary in order to meet the new availability targets.

HISS takes more of a conventional approach to spares and maintenance, and accepts past baseline data as the norm. The USMC has placed basic monitoring equipment on the Harrier’s engine, for instance, but installation of more advanced monitoring is an ongoing military project dependent on military budget priorities. Likewise, new systems within the Harriers are incorporating more diagnostic equipment as they’re added, but it’s incumbent on the governments to do it – and with a fixed-price maintenance contract in hand, the incentive to do so just went down.

For governments who wish cost certainty, HISS is a step forward from past approaches of “provide spare parts when we ask for them, and we’ll pay for them.” With that said, it is not at the leading edge of current practices in the field… and in contrast to the step-by-step British approach toward through-life Harrier support, it is unlikely to reach that destination.

Contracts & Key Events

AV-8B, VTOL mode
(click to view full)

June 1/07: Boeing Co. in St. Louis, MO received a 5-year, $258.5 million firm-fixed-priced requirements, Performance Based Logistics, long-term contract for support of 44 weapons systems of the T/AV-8B Harrier aircraft. This contract contains an option, which if exercised, will bring the total estimated value of the contract to $400 million.

Work will be performed in various US (80%) and OCONUS locations (20%), and is expected to be complete by May 2012. This contract was not awarded competitively by the Naval Inventory Control Point (N00383-07-D-001G). See also Boeing release.