Industry chief welcomes Defense acquisition reforms

The head of the Aerospace Industry Association on Wednesday enthusiastically welcomed the package of acquisition reform initiatives announced Tuesday by Defense Secretary Robert Gates and offered suggestions for additional changes to improve efficiency and save billions of dollars.

While noting industry concern with some of the proposed changes, AIA President Marion Blakey said the 23 directives to the defense acquisition work force were a real step forward and will align closely with many of the recommendations the industry gave the Pentagon.

AIA wants to work with Gates and Ashton Carter, the undersecretary of defense for acquisition, to refine and implement the acquisition reforms, she added.

"We believe that really reducing cost inefficiencies will require a joint DoD-industry partnership," she said.

Addressing the Air Force Association's conference at the National Harbor convention center, Blakey said Congress also must be involved. While praising the acquisition-reform legislation enacted in the last session, she cautioned that Congress does not like to be involved late in the process.

Citing AIA's long-running demands for export-control reform, Blakey said Congress will have to be persuaded that the sweeping changes the Obama administration has proposed can protect national security while helping U.S. firms increase foreign sales.

In embracing the Gates-Carter initiatives and promising industry cooperation, Blakey noted that the effort to reduce unnecessary costs to shift funds to procurement during a declining defense could affect all of the aerospace industry, not just the defense sector.

"The stakes are very high," for the economy as well as national security, she said.

Blakey explained several of the 96 proposals AIA presented to Carter to reduce the cost and the time required to develop and produce high-tech systems.

First was more use of multiyear procurement contracts. Although not all programs are compatible with multiyear contracts, she said this would work for most aircraft programs, including the F-35. She noted that the recent multiyear agreement for Navy F/A-18 and EA-18 aircraft could save $600 million.

Another priority was performance-based logistics, in which industry maintains or supports defense systems on a cost-per-unit basis. Although some defense officials do not like it, Blakey said a PBL contract reduced the cost of a flying hour for the C-17 transport by 28 percent.

The industry also wants a sharp reduction in the requirement for cost data in contracts.

She noted that in the last contract for C-17s, after nearly 200 had been bought, Boeing had to submit 63,000 pages of cost data. After years of production, cost could be determined by analysis, she said.

AIA also supports reduction in "government-unique requirements" and more use of planned block upgrades to systems.

When a questioner at the conference noted the expected closure of several of the large aircraft production plants as programs end, Blakey suggested the Pentagon should be more concerned in preserving the critical industrial base.

When those facilities are gone, she said, "you can't get them back."