How DoD Wants to Keep Costs Under Control

Here’s a little clue as to one way the Pentagon is going to try — key word being try — to really drive down the cost of its big ticket weapons buys in an age of limited budgets. Just this week DoD’s top weapons buyer, Ashton Carter, tapped his former acquisitions director, Shay Assad (pictured above), as the newly created Director of Defense Pricing. In other words, Carter is putting Assad in charge of negotiating the lowest possible price on weapons.

From Defense News:

“We simply intend to be much more professional, much more capable, when it gets to sitting at the table and negotiating the price on behalf of the taxpayers,” Assad said during a June 2 briefing at the Pentagon.

The creation of the position is part of Pentagon acquisition executive Aston Carter’s Better Buying Power initiative to buy more for less money. Part of that initiative is looking beyond program cost estimates and determining what a program should cost.

In his new role, Assad will help program managers hit these should-cost targets, which will be set at levels less than official budget estimates.

In addition, he will spend more time improving the contracting and pricing work forces in “improving their skills on what it is we pay on the goods and services we buy.”

Getting as much bang for the buck is going to be critical as the five-sided crazy building is going to be facing continued budget pressure despite the need to modernize its aircraft, ground vehicles, long-range strike weapons and ship fleets for the 21st century.

Think about it; right now the Pentagon has the F-35 Joint Strike Fighter Program, the KC-46 tanker modernization program, the Ground Combat Vehicle, the Amphibious Combat Vehicle, the new strategic bomber, the Gerald Ford class of aircraft carriers and a host of high-end UAV programs just to name a few of its big modernization efforts.  Given the current budget drawdown, the Pentagon and defense industry are going to have to put some serrious discipline into buying and fielding these weapons on cost and schedule.

One of Assad’s first endeavors will be to give the F-35 program some serious scrutiny in light of new reports that its costs are once again predicted to spike beyond previous estimates. Assad will be “intimately involved” in the negotiations for the fifth batch of production jets that are underway, according to Defense News.

 

 

 

  • Dfens

    Yeah, we’re going to get tough with those contractors, but we’re still going to pay them more if they drag out development and jack the price of the weapons through the roof than we are if they come in with a good weapon developed on-time and on-schedule. Yeah, that’ll show them. Morons.

  • chaos0xomega

    Here’s an idea, how about we go back to the way things were in the olden days, let the defense companies come to the DoD instead of the other way around. They pay the development costs, etc. and taxpayers pick up the tab by paying the unit price or whatever you want to call it. Rather than the taxpayer funding everything from beginning to end. Maybe that will help us end all the gold plated nonsense we got going on for us these days, and instead we’ll get something reliable, using real technologies that we understand, etc. instead of stuff that won’t be mature for another 10-15 years.

    Remember, “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”

    • Dfens

      Relying on capitalism is way to risky today. What we need is a Soviet Union style 30 year plan, just ask anyone in Washington DC. We cannot leave our defense up to the capabilities of the unwashed citizens. No, we need leadership. We need the anointed, superior humans to tell us what to build and when to build it. Capitalism holds nothing over our new fas cist way of building weapons. The government tells the companies what to build and they build it. It worked so well for Germany — oh wait, we beat their ass, hell, even the commie Russians were part of beating their ass. Maybe we should rethink this…

      • guessed

        Good sarcasm always runs the risk of being mistaken for sincerity.

        • Brian

          Fortunately we don’t see any of that on this site.

  • Chin Lu

    I don’t understand americans when they talking about their army and military spending. They refer their spending like they spend as a 3. world country. Relax men.
    There is no nation on the planet who can afford like you.
    I have always hear about, age of austerity , age of limited budgets etc.
    You have half of the planet military spending and every year this budget is growing . You look like bratty little sisters :))

  • @E_L_P

    When / If the F-35 becomes a stable design then from that, a production learning curve may actually happen, Until then you can’t think about lowering costs much unless you want to fire a bunch of workers that should be building 50+ jets a year by now but can’t because production maturity can only handle 30-some.

    Hoping costs will be lower on LRIP-5 is a smoke screen because they don’t as of yet have a lot of things figured out with only 4% of testing done, mountains of software and a real working helmet to name a few issues. The program has to get beyond the mistake-jet phase.

  • seeker6079

    How ’bout “tirer un pour encourager les autres” for running costs through the roof?

  • superraptor

    If the DOD would allow honest strategic thinking involving its top leaders and experts. with the goal of making the US military stronger while spending less, new more cost efficient avenues could present themselves.

    Example: why is an all stealth tacair force really needed? Would it not be better to replace the A-10 with rugged flying gatling gun type UCAVs for CAS at 20 mill/piece rather than 200 mill a piece which the f-35 really will cost. Would it not make more sense to restart production of 400 copies an upgraded F-22B fighter/bomber with IRST at 250 mill/piece than production of 1000 F-35s at 200 mill/piece while continuing of production of new more powerful F-18SHs and new block F-16s at 60 mill/copy combined with new stealthy UCAVs a la the X-47.

    At its present price the F-35 has become unsupportable. Crucial design issues have not even been addressed yet including the very important incorporation of 6 internal air to air missiles and changing the air duct inlets to make the F-35 faster and more agile in the air combat role. Could not find any funding request for this.

  • OMEGATALON

    With still more to come as the DoD is getting ready for proposals of the NGAD (Next Generation Air Dominance) fighter jet that will be designed to replace the US Air Force F-22 Raptor and US Navy F-14 Tomcat; it is unclear at the moment on whether the new aircraft will be manned or a UCAV like the X-47 or Lockheed proposed Sabre Warrior which is capable of being both manned and unmanned.

  • Oblat

    Carter needs to be fired - he is open collusion with the contractors.

    No commercial organization would put up with a purchasing manager who says that ensuring the profits of the defense contractors was his number one priority.

  • Sanem

    won’t be easy for the Obama Administration: after 8 years of the highest defence spending in decades, they inherited 2 wars and SEVERAL “most expensive weapons program of all times” (Air Force, Navy, Army, USMC). and with elections coming up it’s hardly the time to withhold money from your most important financiers :/

    I say get a small, elite force of high performance systems (F-22, F-35, B-2) to take out enemy air defences, and fill out the rest with UAVs for cheap, expendable numbers (1 F-35 = 10+ MQ-9’s)

    I find it extremely hard to predict what the next generation of aircraft will look like, because with nano-technology and AI on the verge of becoming usable I believe we’re about to see technology our current world can’t even imagine, something like going from the Wright brothers to the Spitfire in just 15 years time

  • roland

    In WWI and WWII gold was used to help countres like Russia, Germany, Japan and other countries to meet their demand and supply. We should do the same to revitalize our economy and security thoughout the country and the world.
    http://useconomy.about.com/od/monetarypolicy/p/go…

  • MattMusson

    Waste and Fraud at the Pentagon - is still waste and fraud.

  • Mark O’Connell

    The other night I watched a NOVA show on the battle of the X planes. It was the battle on who would build the JSF. What hit me most was that the F-35 was to cost 1/3 that on the F-22. The whole reason to go this way was because of how cheaply they could purchase the JSF.

  • Riceball

    Or maybe Shay is the one piloting that F-35. :D

  • Brian

    If you really want to keep costs under control, we need to buy less expensive products that require fewer new technologies. Instead of buying an F-22 that has stealth, new radar, new engines, supercruise, and a billion new technologies, buy some new F-15s with new radar. 5 years later, buy a new jet design that has new engines. 5 years after that, buy an upgraded version that does some extra thing. Incremental improvements cost a lot less.

    The problem with that, of course, is that you’ll have entire generations of aircraft that never see combat. You’ll be scrapping perfectly good airplanes that work just fine, just because something new came out.

  • asdf

    simple avionics for starters and periodical upgrades are the key imo to an affordable fighter.
    along with top-notch raw performance.

    there is nothing wrong with f/a-18 avionics, in fact they are supposed to be quite good for a striker, so you use that for a start, then develop and certify the eots for example and install it (if the customer desires).

    what really drives the cost of the plane up (or will, if it doesn’t yet), it the test-as-you-build.