On Sept 4/07, “$5B in CENTCOM Contracting Under Scrutiny” discussed ongoing investigations related to the wartime staple of contracting fraud. In mid-September 2007, Secretary of the Army Pete Geren appointed the “Special Commission on Army Acquisition and Program Management in Expeditionary Operations” to review contracting linked to the war effort. The 6-member commission was led by former Undersecretary of Defense for Acquisition, Technology and Logistics Dr. Jacques Gansler, and now the report is in. Its blunt assessment? Many people have gone above and beyond the call of duty – but in the end a spiral of not enough people, too little training, and an antiquated system, equals serious problems managing contracting and fraud in Iraq. [Full report – PDF | Army article w. link to briefing video | Release: Army accepts report’s conclusions]
Secretary of the Army Geren pointed to post-Cold War cuts to the Army acquisition budget as one of the principal reasons behind the shortage of trained people, since it takes a number of years to restore that; at present, only 36% of those with contract oversight in Iraq and Kuwait are certified. Dr. Gansler, however, noted that the Army had 5 generals on the contracting force, and now has none. He recommended establishing an Army Contracting Agency and adding 5 generals to the Army contracting force, adding another 400 Soldiers and 1,000 Civilians, plus another 583 Army personnel to fill positions in the Defense Contract Management Agency.
Gansler acknowledged that “expeditionary contracting” is more demanding, because the needs of the operational commander are often immediate. This has been true since Wellington sent a reply to London from Spain, asking if they wanted him to oversee accounting or fight Napoleon. The question is how to implement valid shortcuts, while remaining within the law. In addition, products must often be purchased quickly from host-nation countries – indeed, involving host-nation businesses, who may have very different cultural standards and training, can be vital to military success. Making all of this work poses new challenges to military contracting, and success may require specific Congressional relief from statutory provisions such as Buy American, the Berry Amendment and Specialty Metals, and some civil service provisions. Not least of which is the proviso that contracting officers who volunteer to go to a war zone may lose their life insurance and medical benefits.
Overall, there is little question that the standard DoD contracting system is inadequate for dealing with the needs of expeditionary contracting in the modern world: too slow, too bureaucracy-laden, too nativist. The question is whether existing approaches to resolving that problem can be considered adequate either, and what should be done. The Gansler report is a first step toward offering answers.
Analyst firm Vector Strategy recently released a report that provides a forecast of materials required to meet the Department of Defense’s annual procurement rate of armor for military ground vehicles. The forecast covers a time horizon of 2006-2013 inclusive, and covers only of military ground vehicles purchased by the DoD for deployment by US military services, addressing the supply chain, the competitors, and the demand and prospect for various materials involved in that chain.
The firm projects that over $8 billion of material will be required, covering steel, aluminum, ceramics, composites, transparent armor, and more. They expect 2008 to be a surge market due to MRAP vehicle armor procurement, and EFP (Explosively Formed Penetrator, think “instant tank shell”) land mine protection for Hummers and MRAPs. They’ve clearly based their report on Pentagon plans, for the market is expected to sag a bit from 2010-2011 timeframe, then grow substantially by 2013 due to JLTV armor and a transition to higher cost non-metallic armor solutions. This depends, of course, on one’s assessment of what JLTV will become – if anything. In 2008, meanwhile, metals will retain a 2/3 share of the market by weight, with demand driven by light tactical vehicles (38% of material requirements), mine resistant vehicles (31%) and other combat vehicles (20%); the remaining 11% covers armor for medium and heavy tactical vehicles, and marine specific vehicles.
The USAF has about 20% of its C-130E/H Hercules fleet on the ground or under significant flight restrictions right now, and has been pleading to be able to retire them instead of spending time and maintenance dollars on aircraft that will probably never fly again. This percentage will continue to grow as the hours continue to pile up. Meanwhile, the C-130Js are performing well in Iraq and Afghanistan, where their performance suffers much less from the heat and high altitude than C-130E/H versions. US Special Forces are also looking to renew their aging C-130 specialty aircraft and gunship fleet, but they worry that platforms like the C-130 won’t be survivable 15 years from now.
Both groups have made noises lately about a competition that could involve Airbus’ recently-delayed A400M, which breaks through the 20-ton cargo barrier that has stymied several US armored vehicle programs. Those rumblings, and the delay, may have handed Lockheed both motive and opportunity to make its proposal…
The German Federal Office of Defence Technology and Procurement (BWB) has signed a contract for the delivery of 5 ParaLander systems by end of 2007, for use by the Bundeswehr’s ISAF contingent in Afghanistan. This may be welcome news indeed, as it will ease the strain on Germany’s aged C-160 Transall aircraft, who are facing readiness and maintenance issues even as their replacement A400Ms will be late in arriving.
The ParaLander system enables precision air delivery from heights of up to 10,000 metres/ about 35,000 feet, and over distances of up to 50 km/ 30 miles. This allows aircraft to fly safer and less stressful mission profiles at high altitude, with minimal maneuvering. Paralander shares a system architecture and mission planning module with EADS DS’ ParaFinder, the mission planning and navigation system used by the German Special Forces for high-precision parachute jumps from high altitudes.
DRS Sensors & Targeting Systems – Optronics Division in Melbourne and Palm Bay, FL recently announced $48 million (36 + 12 million) in orders from U.S. Army’s Aviation and Missile Command at Redstone Arsenal in Huntsville, AL. The orders cover FY 2008 electro-optical design and engineering, manufacturing, provision of spare parts, field service support, and general depot repairs for the Mast Mounted Sight (MMS) systems installed on OH-58D Kiowa Warrior scout helicopters, which have seen very heavy use in the current war. See esp. DRS’ explanations of the battlefield benefits of mast-mounted helicopter sights vs. roof-mounted alternatives
This year’s orders are part of a current five-year Indefinite Delivery/Indefinite Quantity (ID/IQ) contract that has a maximum value in excess of $700 million. Since the beginning of this indefinite delivery/ indefinite quantity contract in December 2003, DRS has been awarded approximately $276 million from AMCOM to produce and maintain MMS systems; DID also covered the $33 million February 2006 order.