The Pennsylvania State University

World Campus

Smeal College of Business

Department of Supply Chain and Information Systems

USAF AIRCRAFT PROCUREMENT BASED ON

CONSUMER OFF-THE-SHELF TECHNOLOGY

A Thesis in Supply Chain Management

by

Mark Lepczyk

Submitted in Partial Fulfillment Of the Requirements

For the Degree of

Master of Supply Chain Management

Table of Contents THESIS STATEMENT ........................................................................................................ 1

INTRODUCTION ................................................................................................................ 2

1.THE FLEET ...................................................................................................................... 3 AGE ..............................................................................................................................................4 AGE DRIVES COST ....................................................................................................................6 INADEQUATE PROCUREMENT ...............................................................................................9

2. ANALYSIS OF PAST PROCUREMENT PROGRAMS................................................ 10 F-22A RAPTOR .......................................................................................................................... 11 F-35 LIGHTNING ...................................................................................................................... 13 C-17 GLOBEMASTER ............................................................................................................... 15 RQ-4 A/B GLOBAL HAWK ....................................................................................................... 17

3. FIXED-PRICE VS COST-PLUS CONTRACTS ............................................................ 18

4. MILITARY MARKET LIFE ......................................................................................... 20

5. PARADIGM SHIFT ....................................................................................................... 21

6. BENEFITS OF COTS .................................................................................................... 22 SIGNIFICANT DECREASE IN TOTAL ACQUISITION COSTS: ............................................ 22 INCREASE MILITARY CAPABILITY: .................................................................................... 23

7. CURRENT MARKET EXAMPLES .............................................................................. 26 ISRAELI AEROSPACE INDUSTRIES EL/W-2068 CAEW/ELI-3001 AISIS ............................ 27 LIGHT UTILITY HELICOPTER (LUH) – UH-72A LAKOTA ................................................. 28 MC-12W LIBERTY .................................................................................................................... 30 AIR TRACTOR AT-802U .......................................................................................................... 30 TEXTRON AIRLAND SCORPION JET .................................................................................... 32 THE TAKEAWAY ..................................................................................................................... 33

8. UNMANNED AERIAL SYSTEMS (UAS): A FRESH START ...................................... 34

9. CONCLUSION .............................................................................................................. 36

Bibliography ........................................................................................................................ 38

FIGURES

Figure 1: “USAF Force Posture Over Six Decades” Source: (Ruehrmund, 2010) ....................................... 3 Figure 2: “Air Force Outlays for Procurement, Operations and Maintenance, and Research, Development Test and Evaluation FY48-FY10 Constant Dollars (Millions)” Source: (Office of the Under Secretary of Defense (Comptroller), 2012)) ...................................................................................................................... 4 Figure 3: “Average Age of U.S. Commercial Aircraft: 1995-2006” Source: (United States Department of Transportation, 2008) .................................................................................................................................... 5 Figure 4: “USAF O&M Outlays and TAI (Not including ICBM) FY50-FY09” Sources: (Office of the Under Secretary of Defense (Comptroller), 2012) (Ruerhmund, 2010)) ...................................................... 6 Figure 5: “Increasing Factors Considered in AFCAIG and OSD CAIG CPFH Models” Source: (Miller, 2012) ............................................................................................................................................................. 7 Figure 6: “MDS Ownership Cost Per Hour With Modifications” Source: (Thompson, 2013) .................... 8 Figure 7: “Aircraft Availability” Source: (Tirpak, 2009) ............................................................................. 9 Figure 8: “F-22 Raptor” Source: USAF/TSgt Ben Bloker .......................................................................... 11 Figure 9: “F-35C In-Flight Refuel” Source: Lockheed Martin/Michael D. Jackson .................................. 13 Figure 10: “C-17 Globemaster” Source: Boeing Photo .............................................................................. 15 Figure 11: “RQ-4 A/B Global Hawk” Source: USAF/Tech Sgt. Johnny Saldivar ..................................... 17 Figure 12: “Contract Risk” Source: (AFMC Contracting, 2007) ............................................................... 19 Figure 13: “Supper Guppy” Source: NASA ............................................................................................... 25 Figure 14: “Dreamlifter” Source: Boeing ................................................................................................... 25 Figure 15: “EL/W 2068” Source: Flightglobal.com ................................................................................... 27 Figure 16: “ELI-3001 AISIS” Source: Flightglobal.com ........................................................................... 28 Figure 17: “UH-72A Lakota” Source: Airbus ............................................................................................ 29 Figure 18: “MC-12W” Source: Defense Industry Daily ............................................................................. 30 Figure 19: “AT-802U” Source: Air Tractor ................................................................................................ 31 Figure 20: “Scorpion Jet” Source: Textron Airland .................................................................................... 32 Figure 21: “Inventory of DoD UAS” Source: (Department of Defense, 2013) .......................................... 34

1

THESIS STATEMENT

USAF aircraft procurement programs, notorious for their excessive costs, exaggerated technical requirements, and delayed contract fulfillment, are no longer sustainable due to federal fiscal constraints as well as a lack of operational justification. The mentality that only aircraft developed exclusively for the military provide the capabilities necessary to meet strategic military objectives must be abandoned. The Department of Defense must comprehensively overhaul its procurement process, looking to readily available commercial airframes to supply its operational aircraft inventory. Utilizing commercial off-the-shelf (COTS) technology can provide efficient, innovative, flexible, adaptable, and cost-effective airframes that will deliver global strike, air mobility, and Intelligence Surveillance Reconnaissance (ISR) solutions to the Department of Defense and keep pace with technology and military objectives as they continue to evolve and develop.

2

INTRODUCTION

The effectiveness of the United States Air Force (USAF) in modern war is rarely contested. The organization can proudly boast that since 1953, no United States ground forces have been killed by an enemy air strike (Greer D. , 2011). For the Air Force, this record translates into clear-cut proof that air superiority has been gained and maintained throughout every conflict the country has participated in since the end of the Korean War: “It is an accomplishment officials have long believed speaks to the superiority of the American approach to airpower-and the need to pay the price in money and effort to maintain that superiority” (Greer D. , 2011).

Unfortunately, we find ourselves in a period where national fiscal constraints impede our ability to continue procuring mass quantities of cutting-edge aircraft, particularly when the cost of such aircraft is increasing at an alarming rate to astronomical levels. Continuing to base our nation’s air superiority on its conventional inventory is simply not financially or operationally sustainable.

Aside from lack of available funds, the prevalence of our participation in unconventional conflicts forces us to analyze the efficiency with which we employ our conventional arsenal. Due to the length of unconventional conflicts paired with the complexity of our response and rapid pace of technological growth, we need to create a more flexible and adaptable arsenal of aircraft to meet both current and unforeseen future challenges – and do so cheaply and efficiently.

The intent of this paper is to introduce a fundamentally different way of employing airpower through the application of supply chain management principals aimed at the procurement stage of USAF aircraft acquisition.

3

1. THE FLEET As of September 30, 2012, the USAF holds a total of 5,551 aircraft in its total force

inventory. This figure accounts for the Total Active Inventory (TAI) of the Total Force, which includes Active Duty, Reserves, and Air National Guard aircraft. The numbers depict an emphasis on Fighter/Attack aircraft with 2,025 aircraft in the inventory. The rest of the fleet is comprised of 162 bombers, 117 Special Operations Forces, 805 Transport, 507 Tankers, and 511 ISR/BM/C3 (to include Unmanned Aerial Systems), 1,213 Trainers, and 202 helicopters (Air Force Association, 2013).

A visual representation of fleet composition over time helps put into perspective the physical size of our current force. It is not, however, an indication of capability or effectiveness as compared to a snapshot in the past (Figure below includes Intercontinental Ballistic Missile (ICBM) inventory).

Figure 1: “USAF Force Posture Over Six Decades” Source: (Ruehrmund, 2010)

First glance at Figure 1 and the reader may assume the decreasing trend in inventory numbers are likely associated with a similar trend in congressional budget outlays for procurement. As Figure 2 depicts, that is not the case. Using constant dollar figures, we can view the “real” fluctuations in Procurement, Research Development Test and Evaluation (RDT&E), and Operations and Maintenance (O&M) outlays from FY48 through FY10.

4

Figure 2: “Air Force Outlays for Procurement, Operations and Maintenance, and Research, Development Test and Evaluation FY48-FY10 Constant Dollars (Millions)”

Source: (Office of the Under Secretary of Defense (Comptroller), 2012))

The shrinking USAF inventory is due largely to technological advancements and superior aircraft designs that allow newer aircraft to replace several older aircraft. Even though the force is “doing more with less” in terms of aircraft, the cost of those aircraft is rapidly increasing. The increase in cost associated with procuring new aircraft has forced the USAF to increase the longevity of aircraft currently in the arsenal; oftentimes well beyond their intended lifespan, in lieu of the procurement of new aircraft. This has two notable effects on Figure 2: 1) high costs of procurement relative to the number of aircraft entering the inventory 2) an increase for O&M and RDT&E outlays relative to Procurement. Increases in Procurement outlays no longer correlate to an increase in TAI, in fact TAI is at an all-time low. O&M outlays and RDT&E outlays are at an all-time high even as the inventory is once again, at an all-time low. With fewer aircraft being procured for the inventory, we are left with a fleet that is rapidly aging despite continuous and costly efforts to upgrade and modernize.

AGE The average age of our 5,551 Total Force Aircraft mentioned earlier is 24.4 years. The

most geriatric of which include the B-52H Stratofortress (50.8), KC-135R Stratotanker (50.9), HC-130P King (46.0), and the T-38C Talon (45.2) (Air Force Association, 2013). An aging fleet is disconcerting for two main reasons: 1) the obvious safety concerns of flying 50+ year old aircraft 2) the increased cost associated with keeping those aircraft operating. The problem of aging aircraft has fully revealed itself and yet there is still no plan to recapitalize a majority of the fleet. In fact, the KC-46A (replacing the KC-135/KC-10) is the only planned new aircraft procurement program through 2025. Furthermore, the troubled F-35 Joint Strike Fighter is not expected to meet required force levels until 2035, additionally no strategic

010,00020,00030,00040,00050,00060,00070,000

FY48

FY51

FY54

FY57

FY60

FY63

FY66

FY69

FY72

FY75

FY78

FY81

FY84

FY87

FY90

FY93

FY96

FY99

FY02

FY05

FY08

Procurement

O&M

RDT&E

5

airlifters or long range bombers will be built for at least 10 years (USAF Safety Advisory Board, 2011).

The B-2 Bomber is slated to retire in 2058 with a fleet average age of 64.2 years, the KC-135R/T in 2045 at 84, the B-52 in 2040 at 79, KC-10 in 2042 at 57.7, F-15E in 2035 43.8, A-10 in 2040 at 59.3, and the F-16 Blk42 in 2020 at 40 (USAF Safety Advisory Board, 2011). I view all of these retirement goals as optimistic considering the lack of a truly viable plan to recapitalize such a large portion of the fleet. Retirement of the KC-135 and KC-10 is dependent on the success of the KC-46 delivery. This is also true for the retirement of the F-15E/F-16/A-10 which is dependent on the F-35 being produced and delivered in sufficient numbers to fill the void of the aircraft it is intended to replace.

The average aircraft age of USAF aircraft, 24.4 years, is not common for U.S. domestic air operations. Commercial air carriers maintain fleet age averages well below that of the USAF.

Average Age of U.S. Commercial Aircraft: 1995–2006 I

All commercial aircraft

Major airlines aircraft

Major airlines share of

commercial aircraft (%)

1995 12.4 11.3 76.1

1996 13.2 12.3 72.5

1997 13.5 12.4 78.7

1998 13.6 12.3 77.8

1999 12.9 11.8 78.5

2000 12.8 11.8 78.8

2001 12.3 11.6 82.9

2002 11.7 11.7 77.8

2003 11 11.7 72.9

2004 10.8 11.1 74.9

2005 11.3 11.3 81.5

2006 11.8 12.1 75

Figure 3: “Average Age of U.S. Commercial Aircraft: 1995-2006” Source: (United States Department of Transportation, 2008)

6

AGE DRIVES COST

Pushing military aircraft well beyond their designed life span makes them vulnerable to structural and mechanical failures unanticipated in the aircraft’s development.

As the Air Force relies on sustaining and modernizing aging aircraft to constitute the bulk of its fleet, it must confront the issue of how aging drives costs. There are two distinct types of aging: chronological aging and cyclic aging or usage. Chronological aging is driven by multiple temporal factors, such as: system obsolescence, problems related to corrosion and environmental degradation at the basing location, and wear. Cyclic aging is driven by the way in which the aircraft is operated or used, such as: fatigue cycles, thermal and stress damage. Both of these aging modes impact the rising O&M costs as the aircraft age. (USAF Safety Advisory Board, 2011)

As a result of growing old, aircraft end up spending considerable more time in depot maintenance, the aircraft availability rates suffer, and spare parts become increasingly difficult to source due to decreasing Original Equipment Manufacturer (OEM) involvement.

Figure 4: “USAF O&M Outlays and TAI (Not including ICBM) FY50-FY09” Sources: (Office of the Under Secretary of Defense (Comptroller), 2012) (Ruerhmund, 2010))

Figure 4 offers a visual depiction of how “O&M” costs do not follow the trend of “Total Aircraft Inventory”. In fact they have predictably grown apart since the early 1960s confirming increase cost associated with fewer aircraft.

0

5000

10000

15000

20000

25000

30000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

FY48

FY51

FY54

FY57

FY60

FY63

FY66

FY69

FY72

FY75

FY78

FY81

FY84

FY87

FY90

FY93

FY96

FY99

FY02

FY05

FY08

$(M

)

FISCAL YEAR

O&M

TAI

7

Seeking a more tangible metric to gauge the efficiency of military aircraft, many look to Cost per Flying Hour (CPFH). The Air Force Cost Analysis Improvement Group (AFCAIG) and Office of Secretary of Defense Cost Analysis Group (OSD CAIG) utilize a CPFH, based on predetermined variables, to predict costs associated with annual flight hour allotments (Miller, 2010).

Figure 5: “Increasing Factors Considered in AFCAIG and OSD CAIG CPFH Models” Source: (Miller, 2012)

Time Magazine published a list of Operational and Ownership CPFH, obtained via a request to the Air Force Comptroller, from 2008-2012 for a majority of the aircraft in the USAF inventory. It is important to note that there is not a linear correlation between hours flown and cost per hour; the Air Force cannot simply fly less to reduce cost. This is due to a multitude of variables, most prominent being that the more time an aircraft sits on the ground the more rapidly mechanical and structural problems are likely to manifest themselves, particularly because they are old aircraft (USAF Safety Advisory Board, 2011). Even if a flying hour reduction did yield cost savings, it would be a moot point. Flying hour allocations are determined based on an operational necessity driven by combat operations requirements as well as aircrew readiness requirements. What CPFH does show is how much it costs to provide a particular capability. Seeing that cost is real dollar figures forces a debate as to whether or not that capability is consuming a disproportionate amount of resources compared to others and if there is a way to reduce overall costs without creating an ineffective force.

8

MDS 2008 2009 2010 2011 2012

A-10C $10,710 $21,141 $22,602 $20,132 $17,716

AC-130U $54,279 $51,271 $53,376 $46,072 $45,986

B-1B $63,551 $68,239 $70,696 $71,026 $57,807

B-2B $161,244 $200,939 $180,708 $139,098 $169,313

B-52-H $67,866 $67,750 $78,376 $62,041 $69,708

C-130J $15,864 $16,477 $12,543 $13,468 $14,014

C-17A $23,817 $22,777 $22,161 $22,743 $23,811

C-5B $56,267 $52,222 $62,221 $74,459 $78,817

F-15E $33,966 $31,595 $32,700 $30,641 $36,343

F-16C $21,201 $23,138 $22,407 $21,639 $22,514

F-22A $64,163 $73,792 $67,524 $138,749 $68,362

KC-135R $17,928 $18,826 $19,609 $16,687 $19,193

U-2S $31,017 $31,640 $29,185 $29,879 $30,813

Figure 6: “MDS Ownership Cost Per Hour With Modifications” Source: (Thompson, 2013)

High costs are not the only consequence to operating an aging fleet. The availability of that aircraft to be used for its intended purpose suffers significantly. An Aircraft Availability rate is the “percentage of a fleet not in Depot possessed status or NMC [Non Mission Capable] aircraft (that are unit possessed)” (Burke, 2007). Those high costs per flying hour are indicative of frequent, expensive, and laborious maintenance procedures, which can only be done when an aircraft is confined to a maintenance facility. Aircraft sitting idle while undergoing maintenance results in the low aircraft availability rates that are evident across the fleet.

9

Figure 7: “Aircraft Availability” Source: (Tirpak, 2009)

The decreased availability of each aircraft is further evident in the amount of flying per individual airframe. In 2012 the Active Duty USAF held 3,934 aircraft (Air Force Association, 2012) and flew 845,001 hours via normal appropriations (Department of the Air Force, 2013) and 257,862 via Overseas Contingency Operations appropriations (Department of the Air Force, 2013) for a total of 1,102,863 hours. Comparatively, in 2012, American Airlines held only 597 aircraft in its fleet and yet managed to fly 1,841,536 hours (Technology, 2013).

INADEQUATE PROCUREMENT The overall decrease in the size of the aircraft inventory, increase in average age, increase in Operations and Maintenance costs, and decrease in Aircraft Availability rates is clear. It is left to conclude that in order to maintain current capabilities and ensure future capabilities, the fleet must be recapitalized. But when reviewing the FY 2013 Programs Acquisition numbers, we are further reminded that aircraft procurement has slowed to a trickle and is unlikely to change unless the financial situation of our country drastically changes in the near future.

10

DoD–wide for FY 2013, a total of $178.8 billion (including Overseas Contingency Operations funding) was requested for Major Weapons System modernization. This total includes $109.1 billion for Procurement and $69.7 billion for RDT&E. $47.6 billion of that money, down from $54.2 billion in FY 2012, is allocated for Aircraft modernization for the Army, Air Force, Navy, and Marines. For the USAF this translates into $885.4 million for twenty-four MQ-1/MQ-9 drones, seven C-130Js, nineteen F-35, and four V-22 Osprey. The rest of the money will either procure new aircraft for the other branches or be used to modernize, test, or missionize aircraft already in the inventory (Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, 2012).

The DoD is constantly battling for their share of funding within the U.S. government as a whole and each branch of service competes within the DoD for their share of that money. Congressional funding is always subject to the priorities and dedication of the standing administration as well as the overall health of the US economy. That being considered, it is unlikely that the problems facing the health of the USAF fleet will change based on the current actions being taken to recapitalize the fleet.

2. ANALYSIS OF PAST PROCUREMENT PROGRAMS

Analyzing past procurement efforts is beneficial because it highlights the negative trends inherent in past pursuits to procure military aircraft. Four programs in particular offer valuable insight: the F-22 Raptor, F-35 Lightning II (Joint Strike Fighter), the C-17 Globemaster, and the RQ-4 A/B Global Hawk. The F-22 is the world’s first and foremost fifth-generation fighter aircraft intended to preserve and ensure air superiority for the U.S. well into the foreseeable future. The F-35 was intended to complement the F-22 fleet as a more affordable, multi-role aircraft with ground attack capabilities and Low-Observable (Stealthy) characteristics. The C-17 was built to be an outsize (oversized) cargo carrying, strategic airlifter, capable of operating at reduced length, unpaved airfields. The RQ-4 Global Hawk is the largest, most advanced unmanned system in the DoD inventory and was fielded to provide persistent long-range, high-altitude ISR capabilities. All four are modern programs that share a few common themes: over budget and behind timeline.

11

F-22A RAPTOR

Figure 8: “F-22 Raptor” Source: USAF/TSgt Ben Bloker

The F-22 program, at the time coined “Advanced Tactical Fighter”, was initiated in the early 1980s. Lockheed Martin made the first delivery in 2003 and Initial Operational Capability was achieved in 2005. Full operational capabilities are scheduled to occur in 2017, seven years later than originally planned. The initial order by the USAF was for a fleet of 750 aircraft. That number fell to 648 in 1991 and after several subsequent cuts, we find ourselves at the conclusion of FY 2013 with the F-22 production line closed, having delivered only 187 operational aircraft (195 total) (Gertler, Congressional Research Service: Air Force F-22 Fighter Program, 2013).

Runaway costs made the program increasingly unpopular in the eyes of the public as well as Congress. Determining the true unit cost of a Raptor can be difficult due to the myriad of ways the cost can be calculated: Figures fluctuate between $137 million and $678 million each based on what types of costs are included in the calculation (Axe, 2011). The variation in cost is best explained in a 2013 Congressional Research Report:

As of December 31, 2010, the final Selected Acquisition Report for F-22 procurement, DOD estimated the total acquisition cost (meaning the sum of research and development cost, procurement cost, and military construction [MilCon] cost) of a 179-aircraft F-22 program at about $67.3 billion in then-year dollars (meaning dollars across various years that are not adjusted for inflation). This figure includes about $32.4 billion in research and development costs, about $34.2 billion in procurement costs, and $676.6 million in MilCon costs.

12

(Gertler, Congressional Research Service: Air Force F-22 Fighter Program, 2013)

As of December 31, 2010, the 179-aircraft F-22 program had a Program Acquisition Unit Cost (or PAUC, which is the program’s total acquisition cost divided by the total number of aircraft acquired [including non-production aircraft]) of $369.5 million in then-year dollars, and an Average Unit Procurement Cost (which is the program’s total procurement cost divided by 179 production aircraft) of $185.7 million in then-year dollars.” (Gertler, Congressional Research Service: Air Force F-22 Fighter Program, 2013)

Those numbers can begin to approach the figure of $678 million, as cited above, when the projected life-cycle costs per unit are introduced (Axe, 2011). Many suspect the manufacturer, Lockheed Martin, of transferring cost into sustainment and modernization in an effort to control developmental and production costs. There appears to be sufficient evidence to support that claim. In the next few years, USAF will need more than $100 million in F-22 retrofits just to enable the aircraft to fly all 8,000 hours of its originally designed life span. Additionally, there is already $11.7 billion (a figure that has more than doubled) outlined for designed upgrade and modernization programs (Gertler, Congressional Research Service: Air Force F-22 Fighter Program, 2013). In FY 2013 $283.8 million was requested for F-22A modernization and an additional $285.8 million in FY 2014 through procurement appropriations (Department of the Air Force, 2013). Another $140.1 million in FY 2013 and $131.1 million in RDT&E funding has been outlined for the scheduled $3.2 billion upgrade (Department of the Air Force, 2014).

There is no doubt that the F22 is a technological marvel, a true feat of engineering and a tribute to the military might of our country. “Lockheed Martin Corporation's F-22 is the most lethal fighter jet in the world. But it has also become a symbol of a broken procurement process that's failing to deliver advanced weapons systems on time, on budget, and in sufficient quantities” (Vartabedian, 2013). Pundits of the F-22 are quick to point out that the aircraft has never seen combat despite over ten years of armed conflict in Operation Iraqi Freedom, Operation Enduring Freedom, and Operation Odyssey Dawn. There is some merit to their criticism. While it is important for the US to actively deter and prepare to respond to potential future conventional threats, such efforts must be undertaken in a more balanced manner with increased focus on the proper stewardship of available resources. We know how much the aircraft has cost the government and the capabilities it provides us, but we are left wondering how much value we gain for that cost and increased capability. “While it’s undetectable in isolated flyaway, unit and lifecycle cost figures, value is inarguably important. A cheap used car that never leaves the driveway is, in a real sense, more expensive than a car you pay sticker price for and drive every day” (Axe, 2011).

13

F-35 LIGHTNING

Figure 9: “F-35C In-Flight Refuel” Source: Lockheed Martin/Michael D. Jackson

The story of the F-35 reads similar to that of its bigger brother the F-22. The F-35 program is unique in the sense that three variants are being created in order to replace the legacy aircraft of the US Air Force, US Navy, and US Marine Corps. The three models include: the F-35A Conventional Takeoff and Landing (CTOL) for the Air Force, F-35B Short Takeoff and Vertical Landing for the Marine Corps, and the F-35C Aircraft Carrier Suitable Variant for the Navy. Additionally, there are eight international partners (United Kingdom, Italy, The Netherlands, Turkey, Canada, Australia, Denmark, and Norway) participating in the cooperative acquisition program with two foreign military sales customers lined up. The Air Force alone is scheduled to purchase 1,763 F-35A variants through 2037, the Navy and Marine Corps plan on a total of 680 aircraft through 2032. Low Rate Initial Production of 365 aircraft, for all customers, began in 2006 and is scheduled to terminate in 2018 (a three year slip from 2001 estimates). PAUC estimates have ballooned from $81.3 million in Oct 2001 to $133.1 million in Dec 2012, a ~50% increase (Defense Acquisition Management Information Retrieval , 2012).

The program has been plagued with excessive delays and cost overruns due largely to unforeseen challenges with developmental technology and changes in program scope. Software integration, the heads up helmet mounted display system, and concerns over premature fatigue in the engine have been of particular concern. A decision on Full Rate Production is scheduled to be made in April 2019. Initial Operational Capability is now listed at TBD for all three branches of service. Test and Evaluation is not scheduled to be complete

14

until February 2019 after hundreds of the aircraft have already been built. Total Program Total Acquisition Cost currently sits at $391.2 billion (Defense Acquisition Management Information Retrieval , 2012). At this stage, attempting to predict life-cycle costs is difficult although few are optimistic that they will be manageable. An article originally published by Foreign Policy offers a bleak outlook:

The current appraisal for operations and support is $1.1 trillion—making for a grand total of $1.5 trillion [assuming a 2011 estimate of $395 million per aircraft], or more than the annual GDP of Spain. And that estimate is wildly optimistic: It assumes the F-35 will only be 42% more expensive to operate than an F-16, but the F-35 is much more complex. The only other "fifth generation" aircraft, the F-22 from the same manufacturer, is in some respects less complex than the F-35, but in 2010, it cost 300% more to operate per hour than the F-16. To be very conservative, expect the F-35 to be twice the operating and support cost of the F-16. (Wheeler, 2012)

The future of F-35 is uncertain due to decreasing confidence domestically as well as among international partners, combined with austere defense budgets worldwide. The consequence of a severely decreased production run on the F-35 will have far reaching consequences. The U.S. military currently has all of its eggs in the F-35 basket and is depending on the program to recapitalize the bulk of the aging fighter/attack fleet discussed earlier.

15

C-17 GLOBEMASTER

Figure 10: “C-17 Globemaster” Source: Boeing Photo

The purpose of introducing the C-17 Globemaster, the Air Force’s premier air mobility platform, is to demonstrate that current military aircraft procurement problems are not isolated to future-generation type fighter-aircraft. Furthermore, a direct comparison can be made to a comparable commercial freightliner in the civilian sector: the Boeing 777. Author A. Lee Battershell performed a thorough comparison on the matter in his book, DOD C-17 versus Boeing 777: A Comparison of Acquisition and Development, where he answers the question: Why did it take the DOD 24 years to build the C-17 yet took Boeing only 9 to build the 777?

While Battershell identifies a myriad of contributing factors, stand-outs include: constant changes in project scope, unrealistic project costs leading to reduced production rates, and the lack of a compelling argument for why the USAF needed the C-17 to begin with. In 1989 the military was calling for 210 aircraft to be produced. That number was temporarily slashed to 120 in the early 90s due to runaway costs. “DOD’s original plan was to buy 210 aircraft for a total cost of $41.8 billion. In December 1992, total program costs for 120 aircraft were estimated to be $39.5 billion at a maximum production rate of 16 aircraft per year” (GAO/NSIAD-95-26, 1995). Subsequently, McDonnell Douglas reduced that number further to 40 in the mid 90s in reaction to unsatisfactory performance.

Mounting cost, schedule, and performance problems continue to plague the C-17 aircraft program. Total C-17 program costs are soaring; the current $43 billion estimate for 120 aircraft now exceeds the last Pentagon estimate for 210

16

aircraft by $1.3 billion. Delivery schedules have again slipped and aircraft are being delivered with increasing amounts of unfinished work or known defects that must be fixed after government acceptance. (GAO/T-NSIAD-94-115, 1994)

The cause for the reduction was furthered by a lack of substantiated need for the aircraft. A 1995 GAO report explains:

Serious concerns about the C-17's cost-effectiveness have prompted Congress to direct DOD to explore alternatives to the full C-17 program. The COEA [cost and operational effectiveness analysis] identified less costly alternatives that could meet airlift requirements and save billions of dollars. In addition, the C-17's program cost continues to increase. Therefore, the savings associated with a mixed fleet of C-17s and commercial freighters could be significantly greater than the COEA reported. (GAO/NSIAD-95-26, 1995)

Ultimately, the Air Force bought more than the originally proposed 210 aircraft and purchased zero commercial freightliners. On September 12, 2013, the USAF received its 223rd and final C-17, delivered to Joint Base Charleston, S.C. (Joint Base Charleston Public Affairs, 2013). The alternatives proposed to the Globemaster included extending the life of existing C-141s, ordering additional C-5s, and adding Boeing 747s to complement the fleet (Greer W. L., 2010). The Air Force succeeded in procuring the C-17 when it added additional requirements that included delivering outsize cargo to forward deployed locations involving short, semi prepared surfaces. The aircraft boasts the ability to land outsized cargo on semi-prepared surfaces measuring 3,000ft x 90ft. There is strong evidence to cause the belief that this advertisement is suspiciously optimistic, particularly when considering the operational limitations of repeatedly landing an aircraft weighing up to 447,000 pounds on a semi-prepared surface. “The yet-to-be-resolved issues include the ability of SPRs [Semi-Prepared Runways] to support the weight of the C-17, the inaccuracy of takeoff and landing data, and the inability to predict the ability of targeted SPRs to support intended operations” (Hansen, 2002). The concerns were validated on March 26, 2003, when the USAF lifted the 173rd Airborne Brigade into Bashur Airfield, Iraq. Bashur is a 6,700-foot, asphalt runway. “Some of the C-17s carried huge M1-A Abrams tanks, and weighed from 250,000 to 300,000 pounds when they landed. The runway, made of asphalt reinforced with more asphalt, took a pounding. The areas where the aircraft touched down began to crack and crumble. The heavy transports ground the runway's asphalt into dust” (GlobalSecurity, 2011).

The merits and accuracy of the cost benefit analysis conducted by the DoD in order to justify procurement of the C-17 can be heavily debated. The bottom line is the USAF pursued the development and large-scale production of an aircraft to meet specific niche capabilities, and its ability to execute those capabilities to the extent advertised can be questioned. The C-

17

17 is a very capable aircraft and has, by many standards, performed well in Operation Enduring Freedom and Operation Iraqi Freedom (OEF/OIF). But, it is important to question whether or not similar capability and performance could have been achieved without 24 years of toil and $69.6 billion spent (TY) (Department of Defense, 2009).

RQ-4 A/B GLOBAL HAWK

Figure 11: “RQ-4 A/B Global Hawk” Source: USAF/Tech Sgt. Johnny Saldivar

The RQ-4 Global Hawk, built by Northrop Grumman, is the DoD’s largest, most advanced Unmanned Aerial System (UAS). The Global Hawks wingspan, at 116 feet, is nearly twice that of the second largest UAS, the MQ-9 Reaper. With a top speed of 400 mph and range of over 1,300 miles, the Global Hawk was created to replace aging legacy manned ISR platforms, and being free from the restrictions of human physiological needs, allow for substantially extended loiter times. In 2000, the Global Hawk successfully flew for more than 31.5 hours at a mean altitude of 65,100 feet (National Museum of the US Air Force, 2011).

Acquisition of the Global Hawk and subsequent operational effectiveness of the vehicle has been a disaster. Slated in 2000 for a production run of 63, that number has been slashed to an estimated 45 platforms. PAUC has ballooned from $85.6 million (TY) in 2001 to $200.2 million (TY) in December 2012 (Defense Acquisition Management Information Retrieval, 2012). As of July 1, 2013, thirty-five Global Hawks were in the DoD inventory (Department of Defense, 2013) with an additional six funded in FY 2013, two funded in FY 2014 and zero funded for FY 2015 (Office of the Under Secretary of Defense (Comptroller), 2014).

18

The program twice breached Nunn-McCurdy thresholds (congressional measures to control acquisition programs) for program cost, once in 2005 and again in 2011. The USAF removed all Block 10 aircraft from service in 2011. The service attempted to fit the Block 20 aircraft with a Battlefield Airborne Communications Node (BACN) to provide intra-theater communication relays. However, the two retrofitted vehicles were unable to fulfill the “around-the-clock” tasking due to poor reliability and availability, therefore funding for additional modified aircraft was pursued. From October 2010 through July 2011, the Air Force conducted Block 30 Initial Operational Testing and Evaluation and concluded the system was not operationally effective for near-continuous ISR; the very role it was designed to accomplish (The Office of the Director, Operational Test and Evaluation, 2011). In 2013 the President’s Budget completely divested RQ-4 Block 30s (Defense Acquisition Management Information Retrieval, 2012).

Production, testing, and operation of Block 40 aircraft continues as the DoD attempts to resolve airframe and sensor package issues. Despite operational ability as well as cost effectiveness remaining a concern, DoD has restored funding to 21 Block 30 aircraft and associated modernization efforts, with $762.7 million allocated in FY 2014 (Office of the Under Secretary of Defense (Comptroller), 2014).

3. FIXED-PRICE VS COST-PLUS CONTRACTS

Government contracting can be split up into two broad categories, Fixed-Price and Cost-Plus Contracts (Cost Reimbursement):

Fixed Price: “…provide for a firm price or, in appropriate cases, an adjustable price. Fixed-price contracts providing for an adjustable price may include a ceiling price, a target price (including target cost), or both. Unless otherwise specified in the contract, the ceiling price or target price is subject to adjustment only by operation of contract clauses providing for equitable adjustment or other revision of the contract price under stated circumstances.” (Governement Services Agency, 2014)

Cost-Plus (Cost-reimbursement): “…provide for payment of allowable incurred costs, to the extent prescribed in the contract. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed (except at its own risk) without the approval of the contracting officer.” (Governement Services Agency, 2014)

19

Figure 12: “Contract Risk” Source: (AFMC Contracting, 2007)

Cost-Plus contracts are typically prevalent in the contracting of major developmental weapons systems because of the projected risk incurred by the bidding contractor. Most common are Cost-Plus Award-Fee, Incentive Fee, and Fixed-Fee. These contracts, however, are becoming increasingly controversial, as they are often perceived as causal to the runaway costs associated with modern developmental programs. While many advocate a shift to Fixed-Price contracting in order to provide contractors with an incentive to control costs, pundits argue that it is not possible due to the inability to accurately predict cost (as illustrated in the previous section) as well as a lack of provided incentive for companies to assume risk and accept contracts. “Michael Sullivan, GAO’s [Government Accountability Office] director of acquisition and sourcing management, argues that contractors would simply not bid on high-risk endeavors, such as R&D projects, if they were operated under fixed-priced contract structures” (Sanders, 2008).

The original intent was for Cost-Plus contracts to carry a program through the developmental stage until costs could become more predictable and therefore Fixed-Price contracts become appropriate. However, major acquisition programs are increasingly undertaken with highly unstable and immature developmental technology and vague, poorly defined requirements. This leads to runaway Cost-Plus contracts and ultimately delayed delivery, increased total acquisition costs, and underperforming equipment. In 2007 the GAO assessed a portfolio of 72 major defense acquisition programs and found that developmental costs increased by 40% from first estimates and total acquisition cost increased 26% from first estimates. Furthermore, the average delay for delivering initial capabilities was 21 months (GAO, 2008).

Of the 72 weapon programs we assessed this year, no program had proceeded through system development meeting the best practices standards for mature technologies, stable design, and mature production processes-all prerequisites

20

for achieving planned cost, schedule and performance outcomes. Eighty-eight percent of the programs in this assessment began system development without fully maturing critical technologies according to best practices. Ninety-six percent of the programs had not met best practice standards for demonstrating mature technologies and design stability before entering the more costly system demonstration phase. Finally, no programs we assessed had all of their critical manufacturing processes in statistical control when they entered production, and most programs were not even collecting data to do so. (GAO, 2008)

Fixed-Price contracting can only be utilized when costs associated with the contract can be estimated with a high degree of certainty. With Firm-Fixed Price contracts, the contractor shoulders 100% of the risk associated with the contract. These contracts can be applied, “when there is adequate competition, prior purchases of similar/same supplies or services, when adequate cost or pricing data is available or the contractor is willing to accept a FFP contract, at a level which represents assumption of a reasonable proportion of the risk” (AFMC Contracting, 2007). While many types of Fixed-Price contracts exist, such as Fixed-Price-Incentive, Economic Price Adjustment, Award Fee, etc., the biggest takeaway is that if program risk is controlled, the contractor has no incentive to inflate a proposal in order to reduce the probability of incurring a loss, Fixed-Price contracts reduce risk to the government and would help improve the overall health of the DoD procurement process. With a Fixed-Price contract, the contractors have incentive to clarify requirements, set realistic expectations for technology involved, and make an on time delivery.

4. MILITARY MARKET LIFE

As explained in previous sections, keeping an aircraft not only flying, but performing a relevant purpose, is a very expensive and challenging task. The rapid rate at which a military aircraft approaches obsolescence is attributable to two main factors: threat evolution and Moore’s Law. When the DoD identifies a specific threat or perceived threat, our adversaries invariably design and procure a counter-measure. The seemingly obvious flaw in this reactionary procurement plan is that the delay we have documented between an idea to an operational capability can often span the better part of three decades. In that time, many threats have come and gone, changed, adapted, and manifested itself in ways we never thought possible. Just as in business where all competitive advantage is temporary, the same holds true in the military. Our potential foes will, predictably and continually, evolve in an effort to undermine our best efforts to gain and hold a strategic and tactical military advantage.

The famous “Moore’s Law”, developed by Intel co-founder Gordon Moore, has gained notoriety since he published a paper in 1965 predicting the near linear increase in integrated

21

circuit efficiency, increasing by a factor of two every year (Moore, 1965). The article came to represent, more broadly, the rate at which technology would continue to advance in the decades to come. “Moore's Law is so perennially protean because its eponymous formulator never quite gave it a precise formulation. Rather, using prose, graphs, and a cartoon Moore wove together a collection of observations and insights in order to outline a cluster of trends that would change the way we live and work” (Stokes, 2008). When Moore’s Law is applied to technology-intensive programs such as an aircraft, one can clearly see the implied pitfalls of taking 20 plus years to produce a technologically advanced weapons system that is in turn expected to maintain relevance decades into the future.

Constant threat evolution combined with “Moore’s law” effectively accelerates the rate at which a military aircraft approaches its operational obsolescence, thereby decreasing its military-centric market life. If the rate at which a major weapons system such as the F-35 or F-22 becomes technologically or tactically irrelevant increases, then the government’s opportunity to recoup its billions of dollars in capital outlay through deterrence or employment of the weapons system, simultaneously decreases.

Author Charles Fine describes the rate of evolution in terms of product life as “product clockspeed”. While a product such as a major motion picture might represent the fastest-clockspeed end of the spectrum, due to the fact that its “half-lives” can be measured in hours, if not days, commercial aircraft production has typically represented the slowest-clockspeed end of the spectrum. Take for example the venerable 747; “Mega–profits still flow from the sales of its 747 jumbo jet 30 years after its launch. The 747s produced in the 1990’s rely on the same basic design and the same manufacturing plan that rolled out the first of these aircraft almost three decades ago” (Fine, 1998). Fine goes on to group military aircraft into the same clockspeed category, but that is incorrect. Current military aircraft, with a high emphasis on integral, developmental technology, built to counter a specific threat or achieve a specific operational objective, have a product clockspeed much faster than that of a commercial product and therefore require a different approach to procurement.

5. PARADIGM SHIFT

In order for the DoD to remedy its broken aircraft procurement process by way of a focus on COTS airframes, a paradigm shift regarding the composition of the fleet must occur. In 2012, The Economist distilled an article written by Admiral Jonathan Greenert, published in the periodical Proceedings, which influenced, articulated, and summarized this key point well. “Military procurement is too focused on building ever-costlier new ships and aircraft of complex design, with built-in capabilities to meet specific threats. Instead of procurement being “platform-centric”, he wants it to be “payload-centric”: highly adaptable platforms able to carry weapons and sensors that can be added or removed, depending on the mission or on

22

technological progress” (Trucks, not limos, 2012). The DoD needs to view aircraft as a delivery vehicle for a particular operational capability. The requirements for that capability, defined in terms of range, payload, speed, loiter ability, etc., should be assessed and subsequently paired with a suitable COTS airframe able to fulfill the determined need. The DoD should focus its developmental efforts on creating modular, open-systems architecture, and therefore interoperable and upgradeable components and mission systems (radar, sensors, munitions, etc.) that enable a COTS airframe with militaristic function. As documented in the previous section, a COTS airframe may have market-life of 30 years or more. This is because that airframe’s life cycle is dictated by its ability to effectively and efficiently deliver performance metrics such as range, payload, speed, etc. When military technology is made an integral part of an airframe, it artificially shortens its effective life-cycle, increasing the rate at which the entire system approaches obsolescence and demands far greater capital investment to operate and maintain its relevance.

There will be no shortage of opponents to this line of reasoning, touting a litany of characteristics inherent in modern military aircraft that cannot be duplicated when utilizing COTS airframes. Where a COTS airframe may fall short in aspects such as maneuverability or stealth, it must compensate with the technological capabilities of its payload as well as in the way we employ military airpower. This is because the advantages of a COTS-dominated procurement strategy are too pronounced and advantageous as a solution for sustained and cost effective military procurement. Developing stealthy, or low-observable weapons systems is not only outlandishly expensive, but it forces significant concessions in the realm of an aircraft’s size, payload, range, etc. in exchange for a lower radar signature, simultaneously incurring high life-cycle costs and once again hinging the relevance of that platform on our enemy’s inevitable ability to procure counter-stealth defenses. Instead of depending on the perpetual advantage of stealth technology to penetrate enemy air defenses, “It may be better ‘to play a different game’, relying more on precision strikes from afar, perhaps using hybrid transport-bombers carrying cruise missiles or swarms of drones” (Trucks, not limos, 2012).

6. BENEFITS OF COTS

Utilization of consumer off-the-shelf technology (COTS) to source military airframes is the best course of action as it provides the following benefits.

SIGNIFICANT DECREASE IN TOTAL ACQUISITION COSTS: - Enable Fixed-Price Contracting. A shift to COTS technology would allow for

increased competition in contract bidding due to higher prevalence of desired products and potential suppliers in the marketplace. When the government shops for a venerable and

23

versatile platform versus a complete weapons system, options are plentiful. Removal of cost uncertainty from the proposed program would enable Fixed-Firm Price contracts to become the overwhelming norm, furthering cost savings and providing incentive for stable and predictable production timelines.

- Eliminate requirement creep. By buying readily available airframes, and therefore working with a drastically shorter timetable from order to delivery, opportunity for requirement creep, particularly that occurring as the result of changes in strategic leadership (Presidential Administrations), would be largely eliminated. As highlighted in the development of the C-17 and F-35, late requirement adds or reworks can exacerbate cost structures and development/delivery timelines. In the assessment of 72 major programs in 2007, cited previously, “Unsettled requirements in acquisition programs can create significant turbulence. Sixty-three percent of the programs we received data from had requirement changes after system development began. These programs encountered cost increases of 72%, while costs grew by 11% among those programs that did not change requirements” (GAO, 2008).

- Allow sourcing from aircraft in commercial production. By purchasing large-scale, commercially available aircraft, the DoD would reap the benefits of low initial purchase price attributable to increased economies of scale. Developmental cost and risk would shift to the manufacturer, essentially allowing the DoD to exit the airplane-building business and focus on airplane procurement, complete with sound, responsible, multi-bid contracts. The DoD would be able to structure long-term purchase and delivery plans and benefit from the potential for bulk order discounts from manufacturers.

- Decrease life-cycle costs. Once again benefiting from competition and economies of scale, life-cycle costs would predictably decrease due to the increased availability of spare parts and maintenance solutions ranging from routine aircraft servicing to depot-level maintenance. The DoD would depend less on unique, proprietary parts manufactured and stockpiled in quantities estimated to sustain a fleet (which the DoD is the sole owner of) throughout its predicted life span. Instead, they would be able to competitively source parts from a much larger market, where parts are produced in quantities to sustain a much larger fleet.

- Enable fleet recapitalization. Instead of waiting for the next major developmental aircraft to revive and replenish an aging fleet, long term strategic recapitalization plans would allow the preservation of a fleet-age similar to that of a major commercial airline, furthering the reduction in overall life-cycle costs that typically escalate relative to an aircraft’s age.

INCREASE MILITARY CAPABILITY:

- Flexible platforms capable of filling multiple roles and purposes. The DoD has struggled to procure a balanced force to meet the prospect of a conventional conflict (mass air

24

war with similarly advanced opponent) along with the demands and requirements of the more prevalent non-conventional conflict (Counter-Terrorism/Counter-Insurgency). This has been highlighted throughout the lengthy campaigns in Afghanistan and Iraq, where conventional platforms such as the B-52 or B-1 bombers have flexed to fill missions such as Close Air Support or Armed Overwatch; missions they were not specifically designed to execute. While both airframes have been effective in their new found roles, that doesn’t mean they are the most effective or efficient option to complete the desired task. A Humvee can effectively fulfill the role of a family’s grocery-getter, but many would view this as impractical, inefficient, and over-kill. This too is true of using the already aging legacy airframes in our arsenal to perform the non-traditional mission sets in unconventional conflicts. A fleet structured to meet both conventional and unconventional threats, based on common platforms and payload-centric capabilities, would lead to a leaner, more cost effective fighting force prepared to meet any challenge that may arise in the near or distant future.

- Adaptable platforms capable of simple and cost effective upgrades or modifications. Upgrading a highly integrated weapons system dominated by proprietary technology such as an F-16 or F-22 can be a formidable and fiscally exhaustive task. A “plug and play”, payload-centric approach would simplify weapons systems upgrades by enabling expeditious and efficient upgrades to modular mission systems. A less invasive and more cost effective approach to upgrading a system’s capability will enable the force to keep pace with technological advancements as well as relevant threats, producing a more lethal, effective fighting force.

Furthermore, for specialty mission-sets that do have unique platform requirements, but do not warrant or require an entire fleet with such capabilities, major airframe modifications can be undertaken to accommodate those requirements and still be substantially cheaper than a developmental aircraft. Relating back to the case of the C-17, there was the desire for limited outsize cargo-carrying capability to support a potential contingency requiring the transport of out-sized Army equipment to remote unimproved runways. This drove the design requirement for the entire C-17 program, as well as formulating the justification for its purchase. It would be more prudent to identify a number of aircraft necessary to meet a particular requirement and subsequently modifying them to fulfill that niche capability. Much like when NASA identified a requirement to move outsized (oversized) components across the country for its operations, they procured the “Supper Guppy”, originally a “stock” Boeing aircraft, it was heavily modified to carry the outsized cargo in the capacity NASA deemed necessary (NASA, 2013).

25

Figure 13: “Supper Guppy” Source: NASA

Boeing pursued a similar course of action in order to facilitate the transport of its own outsized cargo supporting the assembly of the 787 Dreamliner. The heavily modified 747-400, dubbed the “Dreamlifter” can “haul more cargo by volume than any airplane in the world” (Boeing, n.d.).

Figure 14: “Dreamlifter” Source: Boeing

- Rapid procurement to enable a scalable force. Crucial to allowing a force to maintain its warfighting potential through fluctuating periods of fiscal strength as well as periods of war and relative peace, is the introduction of scalability into a force. The ability to

26

rapidly procure or divest COTS airframes empowers the DoD to scale the force appropriately based on the needs of the nation, while preserving the force into a state of constant readiness. The DoD will be able to respond appropriately to demand fluctuations for different capabilities as military conflicts begin and end, or circumstances and priorities change and evolve. Currently, due to lengthy lead times for aircraft that provide any particular role, the DoD must hold that aircraft in its inventory to ensure availability should demand for the aircraft’s role arise. As we have documented, maintaining military aircraft in the DoD’s inventory is astronomically expensive because whether or not they are being used for their intended purpose, they must be flown, maintained, and supported nonetheless. If the DoD adopted COTS, it could postpone differentiation of aircraft until the latest possible moment in order to provide a force scaled to meet relevant demands. Should demands change significantly at any point in time, due to their modular nature, aircraft can be quickly converted to fulfill different roles; the basic airframe composition of the fleet remains the same, yet its capability greatly altered.

- Simplified personnel/training/infrastructure costs. Reducing the number of different airframe types in the fleet (since one airframe can fulfill multiple mission sets) allows the DoD to mimic the business model that has driven the success of Southwest Airlines. In an interview with Slate, Southwest V.P. of Ground Operations, Chris Wahlenmaier, summarized the benefits of the airline’s all Boeing 737 fleet: “We only need to train our mechanics on one type of airplane. We only need extra parts inventory for that one type of airplane. If we have to swap a plane out at the last minute for maintenance, the fleet is totally interchangeable—all our on-board crews and ground crews are already familiar with it. And there are no challenges in how and where we can park our planes on the ground, since they’re all the same shape and size” (Stevenson, 2012). The DoD, similarly, would be able to reduce and consolidate maintenance, training, and operations to accommodate fewer types of airframes, as well as benefit from the pre-existing knowledge base that supports similar aircraft types in commercial fleets. Everything from spare-parts management to aircrew and maintenance technician training would be simplified and streamlined as a result. Furthermore, ground facilities and support infrastructure would require less specialization, necessitating fewer bases and maintenance support facilities.

7. CURRENT MARKET EXAMPLES

Several modern examples of COTS airframes modified for military use exist in the current market. They have been acquired in lieu of developmental aircraft programs for many of the reasons stated in this paper. These examples act as a proof of concept for the COTS acquisition model and serve as a stepping stone for justifying the future acquisition and role expansion of COTS airframes.

27

ISRAELI AEROSPACE INDUSTRIES EL/W-2068 CAEW/ELI-3001 AISIS Israeli Aerospace Industries’ subsidiary ELTA Systems LTD has unveiled two modified Gulfstream 550 variants, the EL/W-2068 Conformal Airborne Early Warning and Control (CAEW) and the ELI-3001 Airborne Integrated SIGINT (Signal Intelligence) System (ASIS). Capitalizing on the long-range, high performance, and low operating cost of the Gulfstream 550, the EL/W 2068 features a conformal integrated sensor suite visible on the side of the aircraft’s fuselage (IAI ELTA Systems Ltd., 2007).

Figure 15: “EL/W 2068” Source: Flightglobal.com

The aircraft’s mission systems allow rapid target acquisition and target information within a full 350 degrees of the aircraft’s position. The aircraft has been fitted with a robust sensor and communications package, as well as a missile approach warning system, chaff and flare decoy dispensers, and directed infrared countermeasures to increase survivability. It has retained its fully COTS, Honeywell Primus avionics package, as well as COTS Rolls-Royce BR710C4-11 Turbofan engines. In addition to its modified fuselage to accommodate the low-drag conformal sensor suite (sensors/antennas blended with and conformed to the aircraft body), the aircraft has an increased zero-fuel weight to accommodate the added weight of its mission systems, additional cabling, three (instead of one) power generators, and a liquid cooling system to cool the added onboard electronics. Gulfstream was awarded the contract initially in August of 2003 with the initial flight of the modified aircraft in May 2006. Customers include the Israeli Air Force as well as the Singapore Air Force (airforce-technology.com).

The ELI-3001 AISIS is based on the same Gulfstream 550 airframe, although modified to fulfill a dissimilar role. Geared more towards intelligence collection, the ELI-3001 was

28

designed to “cope with the challenges of the electronic signals in the modern theater” (Israel Ministry of Defense). The primary tasks of this aircraft include long-range, high endurance missions to search, intercept, locate, and analyze communication and radar transmissions as well as provide real-time reporting of intelligence to field commanders and intelligence organizations (Israel Ministry of Defense).

Figure 16: “ELI-3001 AISIS” Source: Flightglobal.com

LIGHT UTILITY HELICOPTER (LUH) – UH-72A LAKOTA The UH-72A Lakota was initially approved for acquisition by the United States Army

and Army National Guard in 2006. It was acquired to perform “general support” functions typically performed by the rapidly aging, more expensive to operate, UH-60 Blackhawk. Specific tasks performed by the Lakota in permissive environments include Homeland Security taskings, search and rescue, MEDEVAC, supporting counter drug operations, general support, and reconnaissance and surveillance (Defense Acquisition Management Information Retrieval, 2012). The helicopter is produced by American Eurocopter, with 325 airframes funded through 2014 and an additional 55 in 2015 and expected 45 in 2016 (Office of the Under Secretary of Defense (Comptroller), 2014). Total Program Acquisition Cost (PAUC) through 2014 is $1.8 billion ($TY) for 315 airframes. This equates to a unit cost of $5.7 million at the 2012 Selected Acquisition Report down from $5.8 million forecasted in June 2006 (Defense Acquisition Management Information Retrieval, 2012).

29

Figure 17: “UH-72A Lakota” Source: Airbus

The UH-72A has been a rare success story in the realm of military aircraft procurement. Airbus Group (parent of American Eurocopter) won the contract on June 30, 2006, and officially delivered the first airframe to the army on December 11 of the same year. Airbus proudly boasts: “Every aircraft on time, on cost: 290 and counting”, “Lowest cost to buy, own, operate”, “Unbroken record of on-cost delivery”, “30-50% less expensive to fly than Blackhawk”, “Greater than 90% availability”, “More than 150,000 flight hours in total” (Airbus Group, 2014).

Beyond the realm of its procurement, the COTS model is proving successful by relieving the burden of maintenance support and spare-parts management from the United States Army. The Army and National Guard both employ a mix of Contractor Logistics Support (CLS). For both organizations, spare parts and tools are managed and provided (with fill rates greater than 90%) by American Eurocopter for the Guard and Helicopter Services International (under contract by Airbus) for the Army. Additionally, the Army outsources labor performed on the aircraft to its contractor, with a contractually obligated minimum rate of 80% availability (Burke, 2010).

The Lakota remains one of the most outstanding examples of COTS acquisition to date. The aircraft is starting its career in the Army as a utility workhorse, but will undoubtedly be introduced into additional roles as it continues to prove itself as an operational airframe and low-cost weapons system. “The application of proven and new COTS technologies result in an aircraft that is exceptionally easy and affordable to operate and maintain. Extensive use of new, lightweight manufacturing materials and extensive system modularity simplifies maintenance, reducing lifetime ownership costs and logistics requirements” (Airbus Group, 2014).

30

MC-12W LIBERTY

Figure 18: “MC-12W” Source: Defense Industry Daily

The Liberty Project was initiated in response to then Secretary of Defense, Robert Gates’, demands in April 2008 for an immediate increase in USAF Intelligence Surveillance and Reconnaissance (ISR) capabilities to support the wars in Iraq and Afghanistan. The USAF purchased an initial seven Beechcraft King Air 350 turbo prop aircraft and converted them into ISR platforms by adding an exterior sensor suit, improved communications package, and revamped interior to support the crew of sensor operators. By November 2008 a $171 million contract had been signed with Hawker Beechcraft and in June of 2009 the first MC-12W Liberty flight took place over Iraq. The USAF went on to procure 37 MC-12W at a total cost of $17 million per aircraft (Command, 2009). Project Liberty is an anomaly in USAF acquisitions; the USAF succeeded in fielding three expeditionary squadrons within 18 months, and the MC-12W became one of the most heavily tasked assets in theater, proving invaluable to aiding troops on the ground and field commanders alike (Erwin, 2013). “In 2012, the MC-12W was directly responsible for the kill or capture of 710 high value individuals, including senior Taliban leaders, bomb makers, and field commanders for the Afghan insurgency. Project Liberty has also removed more than 3,000 anti-Afghan forces from the battlefield” (Buchanan, 2103).

AIR TRACTOR AT-802U Air Tractor has been producing aircraft for agriculture spraying, firefighting, and utility purposes since the 1950s. Based in Olney, Texas, Air Tractor has produced over 3,000 aircraft for customers worldwide and are renowned for their rugged, reliable, heavy lifting, and low cost capabilities. The AT-802U was first flown in 1990, and in 2002 eight airframes were

31

purchased by the U.S. State Department to spray and eradicate coca crop in South America. The U.S. State Department received its 15th AT-802U in 2007. In 2009 an AT-802U gunship variant was fielded and unveiled at the Paris Airshow (Air Tractor, 2014). Prior to adding weapons and mission systems, the AT-802U costs a mere $2.5 million (Catts, 2013).

Figure 19: “AT-802U” Source: Air Tractor

Capitalizing on its impressive payload of 8,000 pounds combined with its 10 hour ISR mission capability, the Air Tractor can be fitted with a robust communication/sensor suit, over a ton of weapons, and retain the ability to land on short, unimproved dirt “runways”. With cockpit and engine armoring, high dust environment air induction system, self-sealing fuel tanks and lines, ballistic glass windshields, steel tube airframe, inflatable restraint airbags, and eleven munition hard points on the wings and fuselage, the AT-802U provides overwhelming low-tech, yet highly effective capabilities (Air Tractor, 2010). Twenty-four of the aircraft have been ordered by the United Arab Emirates (PR WEB, 2013). Six of the twenty-four are expected to begin service in Jordan after being donated by an “unknown operator” in the region (Jennings, 2013).

32

TEXTRON AIRLAND SCORPION JET A joint venture between Textron, parent of Cessna and Bell Helicopter, and Airland

L.L.C., a relatively new company formed by a group of investors, the Scorpion represents an attempt to design, build, and market a COTS based aircraft to the U.S. DoD without them actually requesting it or outlining any requirements. The intent behind the venture is to field an aircraft capable of performing the USAF’s “low-end” missions; low intensity missions that it performs a majority of the time, utilizing overly capable legacy platforms. This would allow the USAF to preserve the “high-end” missions for aging legacy platforms such as the F-16 or F-15 and advanced weapons systems such as the F-22 and F-35 that were not or will not be procured in large quantities (Textron Airland, 2013). The prospect of foreign sales is also relatively strong for the Scorpion as it offers a low purchase price and promised low operating cost of less than $3,000 per flying hour (Butler, 2103).

Figure 20: “Scorpion Jet” Source: Textron Airland

The Scorpion advertises as a tactical military jet platform using commercially available technologies and processes. The extent to which it incorporates these technologies and processes is unknown as Textron was unable to respond to a request for information due to the programs classification. While the Scorpion doesn’t have a direct civilian equivalent, it is likely sourced largely from COTS parts, processes, and technologies used in the Cessna family of aircraft, and arranged to present the militaristic look military acquisition officials are comfortable purchasing. Not only is the Scorpion expected to provide exceptional value with its low purchase price and low operating cost but also in its multi-purpose, modular, rapid re-configuration design. “The Scorpion’s internal payload bay provides critical operational flexibility to quickly incorporate new payloads, scaling tactical systems performance to meet operational capability needs. With its modular partitioning, loading,

33

alignment and retention system, the payload bay can accommodate a variety of sensors, fuel, and communications modules in the most appropriate capability mix to meet a diverse range of mission performance profiles” (Textron Airland, 2013). Furthermore, its mission systems are built on open standards, not proprietary technology, therefore allowing add-ons and upgrades at minimal cost and effort. Scorpion hopes to fulfill roles such as border security, maritime security, counter narcotics, irregular warfare support, humanitarian assistance/disaster response, and aerospace control alert (Textron Airland, 2013).

THE TAKEAWAY What these examples show is that the COTS acquisition model, even when employed

sparingly, is valid and effective. It enables low-risk contracts (yielding low initial costs which remain fixed throughout a contract’s lifespan), on-time delivery of cost and mission effective aircraft, and drastically shorter concept-to-delivery timelines. The examples also show that opportunities for COTS procurement is fragmented in the sense that a wide-range of airframes are being evaluated and purchased in low quantities to small fleets to fill niche capabilities. While that will always be far better than the alternative of a developmental aircraft procurement program, opportunity exists to reap additional costs savings and benefits. If the COTS model is fully embraced by the DoD and an overall COTS procurement strategy is devised and adopted, then increased commonality of base airframes can be established to further cost savings. Mirroring the Southwest Airlines model detailed earlier, the DoD can field sizeable fleets of common airframe platforms, ready to be rapidly reconfigured to assume a vastly different role.

The examples also show the effect of Moore’s law and the drastic improvement in the size and strength of modern military technology. Massive radar and sensor arrays, once requiring dedicated wide-body airlifters, can now be packed into conformal fuselage attachments and payload bays of crop dusters and light jets. It is rational to conclude that due to the decrease in weight and space required by modern mission systems, advanced sensor and communications capabilities can easily be paired with modern munitions and standoff weapons -a precision guided munition, such as a cruise missile, launched at a distance of often hundreds of miles from a target, in order to allow the delivery vehicle ample opportunity to evade defensive fire (McGraw-Hill Dictionary of Scientific & Technical Terms, 2014)- to produce a lethal COTS-based strike platform that does not require the advantage of stealth or the maneuverability of a modern fighter. The DoD, having outsourced airframe design and development to industry, will be able to focus its efforts on its core competency; the development of modular, standard interface mission systems and munitions packages to further support and enable COTS airframes as a delivery vehicle.

34

8. UNMANNED AERIAL SYSTEMS (UAS): A FRESH START

The demand for Unmanned Aerial Systems (UAS), also known as Unmanned Aerial Vehicles (UAV), or more commonly to the public as “drones”, exploded as a result of the wars in Iraq and Afghanistan. Their ability to provide long-endurance ISR and precision strike capability in the uncontested airspace over the two countries resulted in insatiable demand generated by field commanders. While several of the armed services, the Air Force in particular, were reluctant to divert funds and effort from their future-generation manned systems, DoD and congressional pressure forced a surge in UAS procurement in the early 2000’s. Overall DoD spending on UAS increased from $284 million in FY 2000 to $3.3 billion in FY 2010. Translated into airframes, DoD inventory increased from 167 in 2002 to nearly 7,500 in 2010 (Gertler, U.S. Unmanned Aerial System, 2012). As of July 1, 2013, that number has grown further to nearly 11,000 and represents a diverse inventory of unmanned craft ranging from the massive RQ-4 Global Hawk (35 in inventory) with its 116 foot wingspan, to the man-portable RQ-11 Raven (7,332 in inventory) (Department of Defense, 2013).

Figure 21: “Inventory of DoD UAS” Source: (Department of Defense, 2013)

35

The rise of the UAS presented a fresh slate for DoD acquisitions to plan and procure a fleet of sustainable weapons systems. Thus far, the inventory consists of 13 dissimilar, proprietary airframes, with little to no interchangeable systems or components, fragmented into narrowly focused operational purposes. The most critical requirements for UAS, particularly early on, were relatively simple and straightforward; largest possible payload, longest possible endurance, highest possible altitude. Speed and survivability would be considered nice-to-haves, but not a requirement. Despite this, the removal of a pilot in the airframe has somehow spawned a ground up reinvention of aircraft, capable of exhibiting the most fundamental aerodynamic feats.

The current acquisition approach and its result is increasingly reminiscent of the boom in manned aircraft production documented in the 1950s-1960s where, similarly, we had an immature technology being rapidly fielded to combat a relevant threat (then the Cold War, now the War on Terror). Not only were we producing peak numbers of airframes, but also an increasingly diverse fleet of dissimilar airframes, with decade or less expected lifecycles, specialized for a particular task. History is clearly repeating itself and our response should be based off of the lessons learned from over 60 years of aircraft acquisition experience.

The FY2013-FY2038 Unmanned Systems Integrated Roadmap, published by the Department of Defense, represents a concerted effort by the DoD to successfully acquire UAS systems over the next two and a half decades. The report highlights the need for interoperability and modularity, for reasons identical to those detailed in this paper:

Interoperable interfaces for enhanced modularity and cross-domain data sharing present an opportunity to minimize future lifecycle costs, reduced force structure requirements, and adapt rapidly to changing threats or new available technologies. (Department of Defense, 2013)

DoD is adopting and exploiting open system design principles and architectures to increase competition, foster reuse across systems, and increase interoperability. This new acquisition model requires access to multivendor solutions to enable rapid insertion of new technologies to counter emerging threats, avoid technology obsolescence, and decrease time to field new capabilities. For example, DoD is adopting an open business model to support the implementation of an OA [open architecture] for UAS ground control stations (GCSs) to drive greater acquisition. (Department of Defense, 2013)

Concurrently, subsystem modularity and interoperability of components are essential to affordable improvements, maintenance and sustainment, and increased capability. As payloads, sensors, software, and computing algorithms

36

and devices are anticipated to evolve much faster than the vehicle platforms, creating interoperable component/subsystem interfaces for enhanced modularity represents an opportunity to minimize future lifecycle costs and adapt rapidly to changing threats or new available technologies. Upgrading existing proprietary components may be both expensive and logistically unfeasible because whole platforms may need to be taken out of service and/or replaced. Such a closed development approach has resulted in a number of unfavorable characteristics that impede applications of technical progress and the adoption of new capabilities. […] unmanned systems must be modular so the same or at least similar components can be used in the same or different types of systems, e.g., plug-and-play use of different sensors on unmanned systems (the vehicle and its supporting systems). (Department of Defense, 2013)

The question is whether the DoD will be actionable on its sound theoretical “roadmap” or if UAS acquisitions will follow the charted course of manned systems. While the passages above echo many of the desirable aspects of an effective aerial platform outlined in this paper, they neglect to mention the key to obtaining those characteristics: COTS technology. The key to enabling the execution of the UAS Roadmap is through the utilization of COTS technology, for the same reasons detailed under Benefits of COTS, in this paper.

UAS represents the future of both civilian and military aviation. It is no longer a question of “if” but rather “when” the transition will occur. The urgent needs identified in United States’ latest military engagements have no doubt accelerated this timetable as both the military and industry’s attention and funding has been dedicated and diverted to mature UAS technology. Both the military and aerospace industry has placed increasing pressure on the Federal Aviation Administration (FAA) to legalize and regulate UAS operations in the National Aerospace System (NAS). This would allow the simultaneous operation of manned and unmanned systems in the skies of US airspace, a practice that is currently forbidden, restricting UAS to special use military airspace. Once this occurs, increased commercial applications for UAS will boom and the proliferation of UAS technology will generate an expansive marketplace and increased competition for military UAS to be entirely COTS based.

9. CONCLUSION

The utilization of COTS technology provides the best opportunity for sustained, cost effective, and operationally sound military aircraft procurement. Current and future conflicts will no doubt require air operations in an increasingly dynamic environment, where adaptability and flexibility will be essential to achieve sustained air superiority and support to the war fighter. Our

37

current procurement system is badly broken and that fact is brought further forward as budget constraints increase, as does the duration and complexity of our current and expected future engagements. Public and Congressional tolerance for the astronomical costs associated with modern aerial weapons system is rapidly waning and despite the promises of stricter controls and more vigilant oversight of acquisition programs, improvement to the extent required is unlikely to manifest itself.

This paper advocates drastic change in both the thinking and practices that dominate the acquisition supply chain today. Ample evidence exists to disprove the rationality of the conventional acquisition model. The size and scope of change needing to occur is seemingly overwhelming, as is the bureaucracy that must be overcome, seemingly insurmountable; the consequence of inaction, however, is truly dire. The DoD cannot possibly follow its current trend of aircraft procurement practices and expect to be financially solvent or operationally effective in the near or distant future.

The intent of this paper was not necessarily to engage in an examination of the employment of airpower at a strategic or tactical level, but rather to outline and present sound and applicable supply chain principles with real-world examples of products and technologies that could foreseeably form the foundation of a new, albeit unorthodox, doctrine for air power. The intent was if not to prove, provoke serious thought about the innovative solutions the open market can provide the Department of Defense; solutions previously sourced from a select few privileged firms.

The impetus for change, driven by our budget and blunders, combined with the advent of UAS technology makes this the ideal time for transition. Acquisition decisions made today, as our aging fleet demands recapitalization, will determine the cost and capabilities we carry with us for decades to come. COTS technology can enable us to operate an efficient fleet of innovative, flexible, highly adaptable, and cost-effective airframes in myriad roles. Whether they are ultimately manned or unmanned, the principals remain unchanged, as do the benefits. COTS based, payload-centric airframes, employing modular and interoperable mission systems, are essential to control both initial and lifecycle costs, ensure technological relevance and operational capability, and meet any adversary we encounter throughout the full spectrum of warfare.

38

Bibliography

AFMC Contracting. (2007, August). Contract Types. Retrieved from Defense Procurement and Acquisition Policy: www.acq.osd.mil/dpap/ccap/cc/.../Contract_Types_Aug07.ppt

Air Force Association. (2012, May). USAF Air Force Almanac: Facts and Figures. Retrieved from Air Force Magazin: http://www.airforcemag.com/MagazineArchive/Magazine%20Documents/2012/May%202012/0512facts_figs.pdf

Air Force Association. (2013, May). 2013 USAF Almanac. Retrieved from Air Force Magazine: http://www.airforcemag.com/MagazineArchive/Magazine/2013/0513fullissue.pdf

Air Tractor. (2010, June). AT-802U. Retrieved from Air Tractor : http://www.802u.com/sites/default/files/AT-802U_Brochure_07_10.pdf

Air Tractor. (2014). Production Milestones. Retrieved from Air Tractor: http://www.airtractor.com/about-us/production-milestones

Airbus Group. (2014). UH-72A. Retrieved from Airbus Group: http://www.uh-72a.com/index/index.asp

airforce-technology.com. (n.d.). CAEW Conformal Airborne Early Warning Aircraft, Israe. Retrieved from airforce-technology.com: http://www.airforce-technology.com/projects/caew/

Axe, D. (2011, Dec 14). Buyer’s Remorse: How Much Has the F-22 Really Cost? Retrieved from Wired.com: http://www.wired.com/dangerroom/2011/12/f-22-real-cost/

Boeing. (n.d.). Boeing 747 Dreamlifter Fact Sheet. Retrieved from Boeing: http://www.boeing.com/boeing/commercial/787family/dreamlifter_fact.page

Buchanan, A. D. (2103, March 12). MC-12 Project Liberty Team competes for aviation's 'Greatest Achievement'. Retrieved from Air Combat Command: http://www.acc.af.mil/news/story.asp?id=123339451

Burke, C. L. (2010, July 1). Commercial-off-the-Shelf (COTS): A Success Story. Retrieved from Aviation Today: http://www.aviationtoday.com/regions/usa/Commercial-off-the-Shelf-COTS-A-Success-Story_68854.html#.Uxyu7D9dV8E

Butler, A. (2103, September 16). Textron Unveils Scorpion Light Attack, Recce Jet. Retrieved from Aviation Week: http://www.aviationweek.com/Article.aspx?id=/article-xml/AW_09_16_2013_p22-615375.xml&p=1

39

Catts, T. (2013, August 29). Air Tractor's Crop-Duster, Other Planes Revamped for Military Use. Retrieved from Bloomberg Businessweek: http://www.businessweek.com/articles/2013-08-29/air-tractors-crop-duster-other-planes-revamped-for-military-use

Command, A. C. (2009, June). MC-12W LIBERTY PROJECT AIRCRAFT (LPA). Retrieved from Air Combat Command: http://www.acc.af.mil/library/factsheets/factsheet.asp?fsID=17041

Defense Acquisition Management Information Retrieval . (2012, December 31). Selected Acquisition Report, F-35 Joint Strike Fighter Aircraft . Retrieved from US Department of Defense: http://www.dod.mil/pubs/foi/logistics_material_readiness/acq_bud_fin/SARs/2012-sars/13-F-0884_SARs_as_of_Dec_2012/DoD/F-35_December_2012_SAR.pdf

Defense Acquisition Management Information Retrieval. (2012, December 31). Selected Acquisition Report - Light Utility Helicopter. Retrieved from Department of Defense: http://www.dod.mil/pubs/foi/logistics_material_readiness/acq_bud_fin/SARs/2012-sars/13-F-0884_SARs_as_of_Dec_2012/Army/LUH_December_2012_SAR.pdf

Defense Acquisition Management Information Retrieval. (2012, December 31). Selected Acquisition Report - RQ-4A/B Global Hawk Unmanned Aircraft System. Retrieved from Department of Defense: http://www.dod.mil/pubs/foi/logistics_material_readiness/acq_bud_fin/SARs/2012-sars/13-F-0884_SARs_as_of_Dec_2012/Air_Force/RQ-4A-B_Global_Hawk_December_2012_SAR.pdf

Department of Defense. (2009, December 31). SAR Program Acquisition Cost Summary . Retrieved from Office of the Assistant Secretary of Defense (Public Affairs): http://preview.defenselink.mil/news/PACPRESS.pdf

Department of Defense. (2012, December 31). SELECTED ACQUISITION REPORT (SAR) SUMMARY TABLES. Retrieved from Selected Acquisition Reports Summary Tables: http://www.acq.osd.mil/ara/am/sar/SST-2012-12.pdf

Department of Defense. (2013). Unmanned Systems Integrated Roadmap FY2013-2038. Retrieved from Federation of American Scientists: http://www.fas.org/irp/program/collect/usroadmap2013.pdf

Department of the Air Force. (2013, April). Department of Defense Fiscal Year (FY)2014 President's Budget Submission: Aircraft Procurement, Air Force. Retrieved from Air Force Financial Management and Comptroller: http://www.saffm.hq.af.mil/shared/media/document/AFD-130408-079.pdf

Department of the Air Force. (2013, April). Fiscal Year (FY) 2014 Budget Estimates: Operations and Maintenance, Air Force, Overview Exhibits. Retrieved from Air Force Financial Management and Comptroller: http://www.saffm.hq.af.mil/shared/media/document/AFD-130403-068.pdf

40

Department of the Air Force. (2013, May). FY 2014 Amended Budget Estimates, Operation and Maintenance, Air Force, Volume III. Retrieved from Air Force Financial Management and Comptroller: http://www.saffm.hq.af.mil/shared/media/document/AFD-130521-050.pdf

Department of the Air Force. (2014, April). Department of Defense Fiscal Year (FY) 2014 Presidents Budget Submission: Research, Development, Test and Evaluation, Air Force. Retrieved from Air Force Financial Management and Comptroller: http://www.saffm.hq.af.mil/shared/media/document/AFD-130408-064.pdf

Erwin, M. C. (2013, April 16). Intelligence, Surveillance, and Reconnaissance (ISR) Acquisition Issues for Congress. Retrieved from Federation of American Scientists: https://www.fas.org/sgp/crs/intel/R41284.pdf

Fine, C. H. (1998). Clockspeed. New York: Perseus Publishing.

GAO. (2008, March). Defense Acquisitions: Assessments of Selected Weapon Programs. Retrieved from Government Accountability Office: http://www.gao.gov/new.items/d08467sp.pdf

GAO/NSIAD-95-26. (1995, January 26). C-17 Aircraft: Cost and Performance Issues. Retrieved from Federation of American Scientists: http://www.fas.org/man/gao/gao9526.htm

GAO/T-NSIAD-94-115. (1994, February 10). Military Airlift: The C-17 Program Status and Proposed Settlement. Retrieved from U.S. Government Printing Office: http://www.gpo.gov/fdsys/pkg/GAOREPORTS-T-NSIAD-94-115/html/GAOREPORTS-T-NSIAD-94-115.htm

Gertler, J. (2009, December 22). Air Force C-17 Aircraft Procurement: Background and Issues for Congress. Retrieved from Federation of American Scientists: http://www.fas.org/sgp/crs/weapons/RS22763.pdf

Gertler, J. (2012, January 3). U.S. Unmanned Aerial System. Retrieved from Federation of American Scientists: https://www.fas.org/sgp/crs/natsec/R42136.pdf

Gertler, J. (2013, July 11). Congressional Research Service: Air Force F-22 Fighter Program. Retrieved from Federation of American Scientists: www.fas.org/sgp/crs/weapons/RL31673.pdf

GlobalSecurity. (2011, September 7). Bashur Aifield. Retrieved from GlobalSecurity.org: http://www.globalsecurity.org/military/world/iraq/bashur.htm

Governement Services Agency. (2014, January 1). Federal Acquisition Regualtion. Retrieved from Acquisition Central: http://www.acquisition.gov/far/html/Subpart%2016_2.html#wp1091104

Greer, D. (2011, June 20). April 15, 1953. Retrieved from Air Force Magazine: http://www.airforcemag.com/MagazineArchive/Documents/2011/June%202011/0611april.pdf

41

Greer, W. L. (2010, December). An Application of Cost-Effectiveness Analysis In a Major Defense Acquisition Program: The Decision by the US Department of Defense to Retain the C-17 Transport Aircraft. Retrieved from Institute for Defense Analysis: http://www.dtic.mil/dtic/tr/fulltext/u2/a537484.pdf

Hansen, E. W. (2002, June). EVALUATING THE C-17 SEMI-PREPARED RUNWAY CAPABILITY AN OFF-ROAD MAP. Retrieved from DTIC: www.dtic.mil/cgi-bin/GetTRDoc?AD=ada430864

IAI ELTA Systems Ltd. (2007, June). Conformal Airborne Early Warning & Control (CAEW). Retrieved from IAI Elta Systems Ltd.: http://www.iai.co.il/Sip_Storage//FILES/7/35467.pdf

Israel Ministry of Defense. (n.d.). IAI ISRAEL AEROSPACE . Retrieved from Israel Ministry of Defense: http://www.sibat.mod.gov.il/NR/rdonlyres/0DAA4C34-B3A6-4CD6-B7BD-D6CE907E09A7/0/sod_IAI.pdf

Jennings, G. (2013, June 18). Jordan set to receive donated Air Tractor light attack aircraft. Retrieved from IHS: http://www.ihs.com/events/exhibitions/paris-2013/news/jun-18/jordan-air-tractor.aspx

Joint Base Charleston Public Affairs. (2013, September 17). 20th Anniversary & Final USAF C-17 Delivery P-223. Retrieved from Air Mobility Command: http://www.amc.af.mil/news/story.asp?id=123363190

McGraw-Hill Dictionary of Scientific & Technical Terms. (2014). The Free Dictionary. Retrieved from Encyclopedia: http://encyclopedia2.thefreedictionary.com/standoff+weapon

Miller, A. R. (2012, March). MINUTEMAN III COST PER ALERT HOUR ANALYSIS. Retrieved from DTIC: www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA558466

Moore, G. E. (1965, April 19). Cramming more components onto integrated circuits. Retrieved from Integrated Nanosystems Research Lab: http://web.eng.fiu.edu/npala/EEE6397ex/Gordon_Moore_1965_Article.pdf

NASA. (2013, August 15). NASA Supper Guppy. Retrieved from NASA JCS Aircraft Operations: http://jsc-aircraft-ops.jsc.nasa.gov/guppy/index.html?sess=7a987439cb16f3f3b6df7576977a5fbf

National Museum of the US Air Force. (2011, February 15). NORTHROP GRUMMAN RQ-4 GLOBAL HAWK. Retrieved from National Museum of the US Air Force: http://www.nationalmuseum.af.mil/factsheets/factsheet.asp?id=347

Office of the Under Secretary of Defense (Comptroller). (2012). National Defense Budget Estimates for FY 2013 (Green Book) Excel File. Retrieved from Defense Budget Materials - FY 2013: http://comptroller.defense.gov/budget2013.html

42

Office of the Under Secretary of Defense (Comptroller). (2014, March). Program Acquirsition Cost by Weapon System - FY2015. Retrieved from Defense Budget Materials - FY2015: http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/fy2015_Weapons.pdf

Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer. (2012, February). Program Acquistition Costs by Weapon System FY2013. Retrieved from Office of the Under Secretary of Defense (Comptroller): DOD Budget Requests: http://comptroller.defense.gov/budget2013.html

PR WEB. (2013, June 20). Air Tractor Touts Operational 802U Aircraft at Paris Air Show. Retrieved from PRWeb: http://www.prweb.com/releases/2013/6/prweb10848995.htm

Ruerhmund, J. C. (2010). ARSENAL OF AIRPOWER:USAF Aircraft Inventory 1950-2009. Retrieved from Air Force Association: Mitchell Institute Papers: http://www.afa.org/AFA/PUBLICATIONS/MichellInstitutePapers

Sanders, J. H. (2008, October 16). Defense Industrial Initiatives Current Issues: Cost-Plus Contracts. Retrieved from Center for Strategic & International Studies: http://csis.org/files/media/csis/pubs/081016_diig_cost_plus.pdf

Stevenson, S. (2012, June 12). The Southwest Secret. Retrieved from Slate: http://www.slate.com/articles/business/operations/2012/06/southwest_airlines_profitability_how_the_company_uses_operations_theory_to_fuel_its_success_.html

Stokes, J. (2008, September 27). Classic.Ars: Understanding Moore's Law. Retrieved from ars technica: http://arstechnica.com/gadgets/2008/09/moore/

Technology, M. I. (2013). American Airlines (Excel Document). Retrieved from Global Airline Industry Program: Airline Data Project : http://web.mit.edu/airlinedata/www/default.html

Textron Airland. (2013). Aircraft Features. Retrieved from Scorpion Jet: http://www.scorpionjet.com/aircraft-features/

The Office of the Director, Operational Test and Evaluation. (2011, December). Air Force Programs Global Hawk High-Altitude Long-Endurance Unmanned Aerial System (RQ-4). Retrieved from The Office of the Director, Operational Test and Evaluation: http://www.dote.osd.mil/pub/reports/FY2011/pdf/af/2011globalhawk.pdf

Thompson, M. (2013, April 2). Costly Flight Hours (Excel Spreadsheet). Retrieved from Time Magazine: http://nation.time.com/2013/04/02/costly-flight-hours/

Tirpak, J. (2009, January 9). AIrcraft Availability is Down. Retrieved from AIr Force Magazine: http://www.airforcemag.com/datapoints/2009/Pages/AircraftAvailabilityIsDown.aspx

Trucks, not limos. (2012, July 28). Retrieved from The Economist: http://www.economist.com/node/21559607

43

United States Department of Transportation. (2008). TABLE 3-1-1 - Average Age of U.S. Commercial Aircraft: 1995-2006 (Excel Document). Retrieved from Research and Innovative Technology Administation: Bureau of Transportation Statistics: http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/transportation_statistics_annual_report/2008/html/chapter_03/table_03_01_01.html

USAF Safety Advisory Board. (2011, Aug 1). Sustaining Air Force Aging Aircraft into the 21st Century (SAB-TR-11-01). Retrieved from DTIC Online: http://oai.dtic.mil/oai/oai?verb=getRecord&metadataPrefix=html&identifier=ADA562696

Vartabedian, R. A. (2013, June 16). F-22 program produces few planes, soaring costs. Retrieved from Los Angeles Times: http://www.latimes.com/business/la-fi-advanced-fighter-woes-20130616-dto,0,7588480.htmlstory#ixzz2lVOz6UzU

Wheeler, W. (2012, May 2). The Jet That Ate The Petagon. Retrieved from Center for Defense Information at POGO: http://www.pogo.org/our-work/straus-military-reform-project/weapons/2012/2012-the-jet-that-ate-the-pentagon.html