By Geoff Fein
Naval Air Systems Command (NAVAIR) is in the midst of an effort with 11 of its largest industry partners to examine why some programs are facing cost and/or schedule issues.
In July, Navy officials, including Delores Etter, the service’s acquisition chief, and Rear Adm. Allen Myers, director air warfare division (N88), briefed the industry cooperative exchange, a gathering of Navy and approximately 60 industry representatives, Vice Adm. David Venlet, commander NAVAIR, told Defense Daily in a recent interview.
Venlet told industry representatives that he wanted the Navy and industry to work together to determine the root causes of cost and schedule issues.
“I am also telling them, ‘this is not about getting money back from you. This is about keeping our promise to execute the programs that we sign up to do together,'” he added. “That takes the tension out of the air.”
Venlet acknowledged there are issues on both sides, processes that he believes industry needs to understand…that need improving…as well as issues on the government side.
“We need to do better at taking our requirements and turning them into a technical baseline that is sound,” he said. “Because with that good translation of requirements to technical baseline then we can estimate it better.”
The Navy falls down on cost estimates because the service missed that critical step, Venlet added. “We rushed to a technical baseline that may not be fully complete, so we underestimate it. Then we lay in a budget that’s not adequate, and the whole execution gets off on the wrong foot.”
Venlet isn’t pointing fingers. He acknowledges there are issues arising from industry and the Navy that lead to cost and schedule problems. But he hopes that sitting side-by- side with industry, they can all come together to begin to solve the problems.
“To fix them, it is going to take us cooperating together on either improving processes or removing barriers,” he said.
NAVAIR has a team of system engineers, cost analysts, and contracts folks, who have gone company-by-company, contract-by-contract, within each company, and then within each contract, Venlet said.
And he added, “NAVAIR is going to work-break-down-structure element-by-work-breakdown-structure-element, until the service finds common ones that are causing either cost or schedule overruns across all contracts.”
“And we are finding some common ones,” Venlet noted.
“The ones we are finding are not rocket science. It’s, at a generic level, things like supplier management, and there is a lot of detail and texture to that one top level of supplier management,” he said.
One example is estimating bill of materials or staffing plans that are routinely not executed well, as well as staffing plans at primes and staffing plans at suppliers, Venlet added. “So that actually gets into supplier management as well.”
“It’s common things like that we are finding across contracts within companies and some companies that we thought were good managers of suppliers,” he said.
Even the companies recognized they were not doing well in that area, Venlet noted.
“There has been some mutual revelation and discovery here that we are encouraged about, and we’ve actually got some process improvement activity we are doing jointly with several companies,” he said. “I have some ongoing…three…and we are trying to work toward getting two more by the end of the year.”
One issue arising out of the process improvement activities has been the recognition that as industry has been motivated to outsource a lot of their activities, that has increased the burden of the supplier management issue, Venlet said.
“As they have done that to manage their cost…that’s a harder job to manage the more you outsource. It’s not a turn key thing you can turn over without managing carefully,” he said.
System integration also becomes harder than thought when industry looks to outsource the function, Venlet added. “And that tends to be a common source of underestimating either an effort financially, staffing-wise, or length of time.”
“This work break down structure element investigation is making it pretty clear that’s it’s almost undeniable,” Venlet said. “But here is the refreshing part. We don’t find ourselves arguing with companies about what the root causes are. When we do it this way, and let the data lead us to it, it’s almost undeniable that is a root cause. Now it’s a question of what do we do about it? What do we change to not make that a cause of a cost/schedule overrun?”
Venlet said the effort to seek out root causes for cost and schedule overruns is going to take some time to yield results and efforts. “The contracts that are read today for cost and schedule…you can’t do anything to turn them green overnight.”
“What you have to do is stop the overruns and execute the remaining baseline with a commitment,” he added. “So we want to do two things: stop the overruns on the red ones and stop them from getting redder. And then we want to take new programs and make sure they get on a sound footing so they can execute successfully without overrunning their programs.
Venlet doesn’t have a false hope that all of the red programs will turn green. He is actually hoping that he has begun a process that will carry on into the future.
“I hope there are two, three, four commanders after me in NAVAIR who will look back and say, ‘glad they started that back then because now, things like BAMS (Broad Area Maritime Surveillance) and P-8, may some day be executing successfully…five, six or seven years from now, or closer to their IOC (initial operational capability).”
Venlet says he has hope for the efforts and points to the Navy’s EA-18G “Growler” program as a success story.
“It is performing very well today. That is one [program] delivering on time, on schedule. Some of the software modules in its development were delivered early. Fight tests…we were actually radiating power out of the pods in flight, on the ranges, ahead of schedule last year. So we were very happy with how that program is going and we’d like to make more programs operate like that,” he said.
Along with the Boeing [BA] EA-18G’s first flight, Lockheed Martin‘s [LMT] Joint Strike Fighter (F-35) flew on time last December and in August, Northrop Grumman‘s [NOC] E2-D Advanced Hawkeye held its first flight on time, Venlet points out. “Those first flights of major systems are huge.”
This summer the Boeing’s P-8 had its critical design review (CDR) and Sikorsky‘s [UTX] CH-53K underwent its preliminary design review (PDR). Additionally the Navy had a CDR for the carrier variant of the F-35, he added. “All three went very well.”
“When you get through design reviews like that, it gets you on the drum beat of a schedule of ‘OK we are now going to start cutting and bending metal to make those vehicles fly on time,'” he said. “So those first flights and design reviews are really encouraging to me. That says there are legs underneath Marine Corps and Navy aviation, for real key systems that are going to define our future.”