Re: Obama to Defense Contractors: No More Overruns, No More Waste, No More Delays ? Deliver or You're Fired

AndyS wrote:
Andy comments..


Just like everything else, when Obama actually learns something
about the
problem, he will abandon his "promises to reform"..

Having worked in the defense industry for a career, I can tell you
for a fact that most of the cost overruns are a result of the
government changing requirements that sometimes require the
program to start over...... or at least make very expensive
modifications to meet the NEW requirements.


For instance, one general wanted me to modify a terrain following
radar so the pilot could also see weather on his display.... instead
of having a separate weather radar...... He didn't want to know the
details, just how much extra we would charge to do the mod...

Friends, terrain following radar uses transmission frequencies
selected to IGNORE weather , since the only thing we worry
about is where the ground is, and we don't want some little
rainstorm to screw up the absolute reliabilit y of that and have
the pilot fly into the ground at the speed of sound because of
some shower sprinkle that came up out of nowhere......

So, to use the SAME radar to do weather required new computers,
algorythms, hardware.... lots and lots of stuff which, in theory,
could
override the radar's best characteristic ( that of being able to
ignore weather).
I came up with an answer, that, at least on paper, MAYBE could work
but since nobody had ever done it before would have to be tested
and checked, and all we could guarantee is that we could build the
proposed system and test it.... very very very costly since not only
would the hardware and software have to be built on an experimental
basis, but the F-16s would have to be scheduled, flown, analyzed,
etc etc........ We weren't trying to LOSE money, so the government
had to pick up the cost..... very very expensive...

.... And all the general had said was " make it so the pilot can
see weather "...... and his word was GOD since that's what
the government wanted.....

Friends..... THAT is the reason these contracts get out of
hand.....
If the government says to go off and spend a million dollars a
day to check the feasibility of a new requirement, most companies
will do it..... but NOT at their own expense.....

A five dollare toilet seat from ACE hardware would cost a
thousand dollars if the government requires it to tested for
fungus, humidity, pressure altitude, fire retardance, moisture
retardance, weight, material finish, piss resistance, and
color stability........ I don't give a *** about any of that when
I go to ACE hardware, since if the one I buy sucks, then
I'll go to Home Depot and replace it...... when I get time....
The government doesn't work that way... they just tack on
requirements for "absolute and total reliability, regardless"..
.... and that ain't cheap..


So, when Obama learns how things are done, he will back off..
.... just like EARMARKS,... just like GET OUT OF THE MIDDLE EAST....
just like , well, damn near everything he has promised..........

There is nothing more ridiculous than an uneducated
idealist.......who
is put into a position of control...... and NOW has to try to
deliver......

Give him 6 months, and then see how much "change" we have
gotten..... or how much "hope" we have lost......

I like his speeches a lot, tho...



Andy in Eureka, Texas

Personally, I hope he succeeds. The Defense procurement system is badly broken and has been for decades. Boy, do I have stories to tell!

Defense contracts are very adversarial. The Government attempts to write an iron-clad contract for systems that are so complex that it is impossible to anticipate every eventuality. So, even the most minute change becomes fodder for change of scope negotiations.

One example: A government contract to procure a piece of electronic equipment specified every component including a LED indicator on the panel. The manufacturer of the LED had gone out of business, so of course the contractor could not satisfy the terms of the contract without a change of scope modification. But, there were other terms of the contract where the government was holding the contractor's feet to the fire and the government did not want to risk any of the terms of the fixed price contract. The solution? The government contracted separately to set up a company to manufacture the now obsolete LED so that they could avoid renegotiation! Somehow that made sense to them!

We hear a lot about open-ended contracts, sole source awards, and how the government should use fixed price contracts, but there is another side to the story. These systems are very complex and any attempt to specify them in enough detail to justify a fixed price contract is futile. The result is a highly adversarial relationship and greatly increased costs.

Another example: The government solicits proposals for a new weapon system and the bidding is hot and heavy. Companies intentionally bid low, expecting to lose money on the development contract because they know that there are a million ways that they can lock themselves in for the follow-on contracts for production, maintenance and spare parts - contracts that are much more lucrative than the initial development contract and last for a very long time - decades!

This leads directly to another example: The Minuteman missile system that was developed in the '60s carried a single warhead and was intended to last for 20 years. The electronics used the new RTL integrated circuits of the time manufactured by TI. But, the negotiations with the Soviet Union in the '80s changed the balance of single warhead missiles and multiple warhead missiles. The US was faced with the decision of extending the life of the Minuteman missiles or embarking on a long and expensive development effort to build a new single warhead missile. They decided to stick with the Minuteman. The only problem was that many of the systems were now obsolete and they were running out of spare parts. The guidance system, in particular, was made out of these RTL integrated circuits - no longer manufactured. Since the engineers who designed these systems were now dead or otherwise unavailable and since the design was not well documented, the DoD elected to not upgrade the electronics, but to simply set up a line to build these old circuits. Cost? $300M for obsolete spare parts!

And, this was the technology at the heart of MAD!
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