Jerry McGinn and Bill Greenwalt spoke with Vago Muradian on the Defense and Aerospace Report on building industrial resilience. First up is Jerry — executive director at the Center for Government Contracting at George Mason University and former defense industrial policy chief — on doing business with companies in allied countries:
The way I think about it, efforts like Bill’s to create one national technology industrial base which seeks to make the US, Australia, the UK, and Canada one industrial base, there are a number of policy efforts to make allies more engaged. Those export challenges are real and can be address. But there are more practical ways that we can get allies involved and those are more simple things.
For example, when doing an analysis of alternatives in a program executive office, don’t stamp the thing secret no-foreign so that when you’re developing a program you got to get a tech release issued so you can include companies like Rheinmetall, Saab, and so on. There has been good involvement — Fincantieri Marine won the Frigate, Boeing-Saab partnership on the trainer — I’d like to see more of that. There’s so much more that can be done at the systems level, at the component level and even the material level.
There does seem to be an uptick in US-allied industrial partners. Lockheed and Airbus are teaming up to bid on the potential KC-Y tanker program. The US has been testing the Iron Dome missile defense and is teaming up with Israel to develop the Iron Beam laser defense. And of course Norway’s Nammo has become a major supplier of missile rocket motors, such as for the AIM-120 AMRAAM.
I forget where I heard this but it was claimed that a United States commander in a NATO contingent said his favorite aircraft in his inventor were the French Mirage fighters because they had such high up-time and low maintenance costs. Perhaps the fiscally constrained nature of many countries’ defense budgets demand simplicity and reliability of design. One joke was whether the United States should give Iran more F-14s so the sustainment costs could eat up their entire budget.
Here’s a good slice from Bill Greenwalt the innovation problem. I think his view counts for quite a bit considering how he was instrumental as a SASC staffer creating the FY 2016 NDAA reforms for rapid acquisition such as Middle Tier and Other Transaction production:
There’s so much innovation theater because the leadership of the Department just doesn’t understand the innovation potential out there in the venture capital world which is $600 billion in investments moving forward or private equity industry which is at $1.8 trillion. These trillions of investments are the type of companies and innovation that the department needs to leverage. Instead, they are still focusing on $100,000 SBIR grants going to some company. This is a problem the department needs to get their act together on.
The issue going back to scaling — scaling takes money. At some point there’s a need for a flexible pot of money to scale up some of these projects when you find the innovation residing in the private sector that can be adapted to defense needs. You need more than $100,000 SBIR grants, or a $2 million rapid innovation fund contract. You need $25 to $50 to $100 million to scale up ideas. And that’s something the department and the appropriations committee have been loath to do. Until that happens, we’re going to continue to go through this innovation theater and not bring forward the types of capabilities we need.
Why can’t a senior leader find $25-$100 million for a high-impact project in a budget over $700 billion (a rounding error of just 0.00005 percent)? Even projects of $10 million and above require these special pots of money. I’ll leave all that with #PPBE Reform.
Leave a Reply