DID’s FOCUS Article covering the US Army’s RESET maintenance programs shone a light on an under-appreciated aspect of defense spending. Now a Congressional Budget Office report says the US Army has received $38 billion to date to replace, repair, and recondition equipment that has been lost, damaged, or used extensively in conducting operations in Iraq and Afghanistan.
Using any vehicle heavily will lead to maintenance needs, and combat usage is always far higher than non-combat usage; unsurprisingly, RESET and replacement requests have increased steadily from 2005 to 2007. The US Army has also said that it will continue to need approximately $13 billion annually for that purpose for as long as operations continue at their current pace – and for at least 2 years after hostilities cease.
In short, RESET needs are a big deal, and they are getting high level attention. The recent Congressional Budget Office (CBO) paper [PDF Format, 1.2 MB] was prepared at the request of the House Armed Services Committee. It examines the Army’s requirements and the Administration’s RESET/replacement funding requests, developing estimates of annual costs and comparing them with the Army’s estimated requirements and the Administration’s funding requests. Nevertheless: “In keeping with CBO’s mandate to provide objective, impartial analysis, the paper makes no recommendations.”
The Aerospace Division of Halifax-based IMP Group Ltd. recently received a second 7-year increment for its contract to maintain Canada’s search and rescue (SAR) helicopter fleet. This original contract, which was competitively awarded in 2000, provided for extensions in 7-year increments. The new increment is valued at an estimated C$ 591 million (about $570 million) over 7 years. In return, IMP Group will be called upon to provide first and second line maintenance, including sustained repair, overhaul of helicopter components, and engineering support and spares for the fleet.
Work will take place at the 4 Cormorant operating bases located in Comox, British Columbia; Trenton, Ontario; Greenwood, Nova Scotia; and Gander, Newfoundland. Canadian DND release.
The previous GBP 36 million TRADERS(The Rapier Exchange of Repairable Spares) contract with MBDA was signed in March 2004. In August 2005, however, the MoD’s Land Guided Weapons Integrated Project Team (IPT) launched the Air Defence Availability Project (ADAPT) to provide support to Rapier systems in service on an availability basis, rather than paying for parts and labor. This has been a persistent feature of British defense sustainment contracts, one that larger countries like the USA have been slow to recognize and adopt.
The new ADAPT agreement will sustain Rapier FSC until the system’s eventual out-of-service date in 2020, and the UK MoD estimates savings of GBP 175 million (about $355 million) in whole-life costs over that period – but does not divulge the contract’s total value. Approaches adopted to make this example of “future contracting for availability” mutually beneficial to the MOD and MBDA include contract incentives; a joint management team; contractor and Interated Product Team support co-located at a centre of excellence; fleet management; a ‘one stop shop’ for support to training aids; the use of sponsored reserves; and a first-to-fourth line maintenance policy on operations. MoD release.
Rapier FSC provides Low Level Air Defence over the battlefield for UK forces enemy aircraft and cruise missiles…
Britain’s unusual maintenance approach for military equipment is called “future contracting for availability.” In English, this involves partnerships with contractors that establish fixed-price support services for the equipment’s expected lifespan, with rewards and penalties based on established benchmarks for how often the equipment must be in service. It’s a far cry from the “pay for spares and hours” approach in use around the world, and Britain’s National Audit Office likes what it sees so far.
Implementation generally involves a phased set of contracts and agreements that gets the parties closer and closer to the desired goal. That way, each party understands the risks and demands as the contract’s complexity and comprehensiveness grow. “Britain Hammers Out Through-Life Support Framework for Tornado Fleet” described how this approach works on the ground, and talked about some of the keys to success. “UK’s “Contracting for Availability” Adds Hawks, Looks Ahead” mentioned the MoD’s March 2007 Long Term Partnering Agreement Foundation Contract with BAE Systems, which aims to place all British military aircraft under this kind of framework.