U.S. Air Force Continues to Out Source Training, DRG Benefits

by: Matthew Potter
May 10, 2011

Category: Boeing, Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, Events, Federal Budget Process, logistics, Military Aviation, Services, States, U.S. Air Force | RSS 2.0

In the Nineties as part of the “Peace Dividend” the United States Department of Defense eliminated hundreds of thousand of active duty personnel and over a million civilian positions. Many of those were involved in depot repair and maintenance, weapon production and training which has required these roles to be often taken on by contractors now. Any decisions about in-sourcing and changing the balance between government and contractor must take these earlier decisions into account.

At the same time this has allowed companies to grow into these markets by being able to provide these necessary services including the training of crew and maintenance personnel. Delaware Resource Group (DRG) of Oklahoma is one company that has been able to take advantage of the use of outside contractors for training and has just secured a significant contract from the U.S. Air Force to support tanker aircraft. DRG is a privately held company and its President, Mr. Phil G. Busey, Sr. was recently named Oklahoma’s 2010 Business Person of the Year.

The new contract for support of the KC-10 tanker aircraft whose management and depot are located at Tinker AFB in Oklahoma has the potential to be worth over $50 million. The contract calls for DRG to provide personnel at the major bases for the KC-10 to support training of all aircrew including pilots, flight engineers and boom operators.

The U.S. has relied heavily on their aerial tanker fleet since 9/11 to support operations in Iraq and Afghanistan and the maintaining of high readiness rates and proficient crews is critical to this mission. The Air Force currently operates 59 KC-10 as well as a much larger force of Cold War Era KC-135 aircraft. A new contract was just awarded to Boeing (BA) to build KC-46A aircraft to begin replacing the KC-135.

This addition of a new system to the inventory will down-the-road offer further opportunities for DRG to expand into that market. Traditionally Boeing will most likely received the first support contracts but as the KC-46A enters large scale service the government will look for other suppliers.

Unless the government makes a decision to begin growing the military and civilian workforce the use of contractors for support missions will continue and the market will remain viable for contractors such as DRG.

Photo from wbaiv’s flickr photostream.

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