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GAO tells Air Force: Improve Service Conditions for Drone Pilots

April 17, 2014 by · Comment
Filed under: GAO, Syndicated Industry News 

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3 Steps for Successful Agile Implementation of Government Operations and Maintenance Projects — Article

ESI IntBy Peter Schmidt, MBA, PMP, ACP, CPL
Vice President Client Services, ESI International

Established software systems account for 68 percent of overall federal IT investments and present the single greatest opportunity for agencies to ensure they continuously deliver IT value. Working within a few guidelines, Agile methods are very effective for delivering rapid and flexible modifications to established systems. However, agencies’ use of Agile for operations and maintenance (O & M) of established systems has been uneven and ad hoc at best. An examination of the reasons behind previous Agile shortfalls, and a three-step approach to implementation will provide a framework for federal agencies’ IT project success.

What went wrong?

The failure of many agencies to conduct the appropriate annual operational analysis (OA) is partly to blame for limited successes with Agile in the management of embedded infrastructure. When conducted at all, OA is performed only partially or infrequently. According to the Government Accountability Office’s (GAO) IT report titled “Agencies Need to Strengthen Oversight of Billions of Dollars in Operations and Maintenance, ” agencies often rely on a highly structured budget submission process, referred to as Capital Planning and Investment Control (CPIC), in lieu of OA. As a result, agencies do not routinely gauge the need to modify or terminate an existing investment. Nor can they recommend modifications or redesigns to forestall potential obsolescence.

Steps for sustainable change

Following are steps agencies can take to achieve sustainable transformation and tangible benefits through an Agile approach to O & M investments.

Step 1: Obtain executive support and understanding of the benefits of Agile
Finding a champion tops the list of steps to successful Agile implementation and execution. The most common barriers to executive support are (1) their lack of time to oversee a project, (2) their need for more information to make an informed decision and (3) their fear of losing control. Today, one might be hard pressed to find agency IT or operations executives who haven’t heard of Agile. Most know what Agile is, but much fewer know how to make it work in government environments. A good way to overcome the first two barriers is to set up an executive level briefing that shows why Agile is the right approach. To overcome an executive’s skepticism or reluctance to cede control, uncover the source of concerns by conducting one-to-one conversations.

Step 2: Conduct Rigorous Operational Analysis

When one or several executives have offered their support, the team can begin to identify the right systems or processes for applying Agile to O&M. Conducting thorough OA will help to
• Determine where in the system lifecycle the operating investments are currently situated,
• Gauge to what extent investments are improving administrative efficiency or citizen services,
• Determine whether investments are continuing to help the agency fulfill its strategic goals,
• Identify which steady state and mixed cycle investments are good candidates for Agile methods.


Such an integrated process will encourage development and operations teams to collaborate on building and managing a system throughout its lifecycle. Improved collaboration between development and production teams reduce cost and risk while simultaneously raising customer satisfaction by delivering upgrades at the optimal times. Conducting routine OAs will close the loop started with the CPIC process by giving development and operations teams shared visibility and accountability for a system’s performance after its release.

The Office of Management & Budget’s (OMB) guidance on OA suggests that agencies should address 17 key factors which can help identify systems in need of enhancements or updates, as well as:

• Areas for innovation in customer satisfaction, strategic and business results, and financial performance,
• Identification of whether there is a need to redesign, modify or terminate the investment,
• Recommendations to redesign or modify an asset in advance of potential problems.

Demand for service delivery and administrative efficiency is rising and sequestration cuts are leaving few budgets untouched, so making the right judgment call on whether to enhance or retire a system is more crucial than ever. Why? Because as systems reach their retirement or disposal phase, the cost of running them escalates rapidly over time.

Step 3: Prepare the organization for Agile
The next step is to assess the readiness of the organization, project manager, team and stakeholders to adopt Agile practices. This should be measured in the following areas:

• Innovation – How much do the organization, project manager, team, and stakeholders value innovation and creativity over organizational stability?
• Independence – To what extent can people make independent, product-related decisions without consulting other groups within the organization?
• Risk tolerance – How much are people willing to accept and work with uncertainty?
• Resource allocation – To what extent are people able to devote resources full time to one investment rather than divide people’s time among multiple investments?
• Flexibility – How able is the organization to accept multiple approaches to documentation and measuring progress?
• Customer focus – How much can customers and the organization partner with each other?

Regardless of an organization’s Agile maturity, teams with the right skill set will help ensure the success of an Agile O&M effort. Findings of a recent survey of participants of an ESI International Agile for Government Executives workshop corroborated this: participants cited the lack of teams with the right skill set as a critical barrier to implementing Agile in agencies.

Improvement with Agile

The high sunk-cost of the existing infrastructure and the budget-driven need to operate systems for a longer period point toward the need for better, more agile approaches to managing the O&M function. Agile methods are a well-recognized approach to managing these challenges more effectively and should be the standard for any government agency looking to realize the benefits of improved operational efficiency.

About the Author

Peter Schmidt, MBA, PMP, ACP, CPL is Vice President Client Services at ESI International. For any questions or comments, Mr. Schmidt can be reached at [email protected] or visit ESI International’s website http://www.esi-intl.com.

[1] Agencies Need to Strengthen Oversight of Billions of Dollars in Operations and Maintenance Investments, GAO-13-87, Oct 16, 2012

[2] Ibid

Overview of the Virtualization and Cloud Market Vendor Landscape for Small and Medium Businesses

This executive summary evaluates virtual infrastructure and management, end user computing, and cloud service provider solutions from leading vendors, to enable senior decision makers in SMB organizations to decide which vendors in the market offer the best virtualization and cloud solutions.


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Software Integration Remains One of the F-35 Highest Risks – GAO

April 17, 2013 by · Comment
Filed under: GAO, Lockheed Martin, Syndicated Industry News 

f35c_production650Last month we published a review of a preliminary report prepared by the Government Accountability Office (GAO) about the F-35 program. Software integration, helmet displays, logistics support, arresting hook and airframe durability were the areas of...

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F-35 Costs Expected to Top Half a Trillion Through 2037

March 11, 2013 by · Comment
Filed under: GAO, Lockheed Martin, Syndicated Industry News 
F-35 AF-1 & AF-2 Arrival at Edwards Air Force Base. Photo: Lockheed MartinA report prepared by the US Government Accountability Office (GAO) paints an overall positive picture for the F-35 program, as the restructured program irons out problems uncovered through testing

F-35 Costs Expected to Top Half a Trillion Through 2037

March 11, 2013 by · Comment
Filed under: GAO, Lockheed Martin, Syndicated Industry News 
F-35 AF-1 & AF-2 Arrival at Edwards Air Force Base. Photo: Lockheed MartinA report prepared by the US Government Accountability Office (GAO) paints an overall positive picture for the F-35 program, as the restructured program irons out problems uncovered through testing

Beechcraft Corp. to Protest Again on the US Air Force Decision to Award LAS Contract to Embraer

AT-6-Aerial300Beechcraft Corporation today announced that it will formally protest to the U.S. Government Accountability Office (GAO) the U.S. Air Force’s (USAF) recent award of the Light Air Support contract to its Brazilian competitor, Embraer. “We simply don’t understand how the Air Force can justify spending over 40 percent more – over $125 million more – for what we consider to be less capable aircraft,” Bill Boisture, CEO, Beechcraft said.

GAO Expresses Concerns with KC-46A Development

The Government Accountability Office (GAO) released a report on the KC-46A new aerial tanker program and expressed some concerns with the schedule. Boeing (BA) won the contract to develop a version of their 767 airliner and deliver 17 aircraft after a long struggle with EADS (EADS:P).

GAO is worried that some of the software that is being developed to control the mission planning, defense and routing of the aircraft is being done at the same time as production and testing. GAO also considers the new fuel boom operating station and control higher risk as it has yet to be demonstrated in normal operating environment and at a high maturity. Similar systems are in use on only 3 tankers operated by non-U.S. military.

The KC-46A contract as expected has had some cost increases and earlier this year the Director, Operational Test & Evaluation (D,OT&E) also expressed that the test schedule was not adequate and the program did not allow enough time for the necessary testing.

The Air Force and Boeing dispute the reports claiming the program is on track and risks manageable.

TRICARE Disputes to Continue as TriWest to Protest UnitedHealth’s Win

Earlier this month the U.S. Department of Defense decided to award the TRICARE West management contract to UnitedHealth Group (UNH). This was the culmination of almost two years of effort to award this very large contract. Previous attempts to award the nearly $20 billion contract were protested by the loser as TriWest Health Alliance the incumbent and UnitedHealth attempted to win the contract.

TRICARE is the main medical insurance program for the U.S. military. It covers active duty members, their dependents, retirees and some Reservists and National Guard members. Under TRICARE personnel utilize civil providers as well as military medical facilities and the companies with the contracts manage the execution of their benefits. The U.S. is divided into regions and different contracts are awarded to various contractors to operate them. TriWest had been formed to do the West contract and has had it until the latest round of contracts in 2009.

Now only ten days after the announcement of the award to UnitedHealth after two rounds of protest TriWest is saying it will file a protest against this latest decision. In their press release the company states that this is due to concerns that the “contract is the result of a flawed and unfair process.” Specifically they believe that due to their lower price the contest should be re-evaluated.

The normal process for the protest is that it will be reviewed by the Service awarding, then may go to the Government Accountability Organization (GAO) and ultimately to the Federal Courts if a party is not satisfied. The result of the review could be denying the protest allowing UnitedHealth to keep the contract, a direction to redo the source selection, a new contest or in rare cases the award is overturned and given to the protester. Protests normally are allowed 100 days. During the protest the new contract cannot be executed so UnitedHealth’s effort will be placed on hold.

The contract is the majority of TriWest’s business. The near term health of the company requires them to keep it. They have little to lose by protesting this award.

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GAO Finds Billion Dollar Overrun on Initial F-35 Production

Testifying to Congress yesterday the Government Accountability Office (GAO) reported on cost growth and overruns of the F-35 Joint Strike Fighter (JSF). The JSF program headed by Lockheed Martin (LMT) suffered cost increases of a billion dollars on the first four production orders for the aircraft.

These buys are for 63 aircraft which means about an average of almost $16 million each. The F-35 is the largest acquisition program in the world and ultimately over 2,000 will be built for the U.S. and allies to replace the F-16, F/A-18 and A/V-8A aircraft.

The cost overruns will be shared by the government and Lockheed in about a 65-35 ratio.

The GAO stressed there have been some improvements in the program and its stability but expressed concerns that there is still too much concurrency in it with simultaneous production, development and testing. This could lead to changes to the aircraft as they are being built adding time and cost.

The F-35 has suffered from schedule delays as it works through the testing and development program. One of the reasons for this added time and cost is that there are three different versions of the aircraft. One has vertical takeoff ability, another short and the the third conventional. This is for use not only on aircraft carriers but also to replace the unique capabilities of the A/V-8 Harrier which can land and take off vertically.

With the expected decline in the defense budget further increases like this will not only stretch out the production timeline but also reduce available funds for other programs. The Air Force has to invest in new tankers and bomber aircraft as well as the JSF. The Navy could see it needing more funds for ship building and the Marines ground vehicle programs could suffer.

As with all defense programs as time goes by it will solve its issues but the Pentagon has to face the question as to at what cost.

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Sierra Nevada and Embraer’s Light Attack Contract Canceled by Air Force

Late yesterday the U.S. Air Force announced that it had canceled the contract signed in December with Sierra Nevada and Embraer to provide Light Attack aircraft for use by the Afghan military. The contract was in dispute by Hawker Beechcraft whose own proposal had been eliminated by the Air Force prior to source selection even taking place and no work was being done by the winners.

Hawker was in the process of suing in Federal court to get the decision to award to the winning team overturned. Earlier it had been denied a chance to protest as the Government Accountability Office (GAO) ruled it did not file in time. During one of the first court hearings about the case the Air Force admitted that they had gone ahead and given the contract to Sierra Nevada who was going to use aircraft manufactured by Brazil’s Embraer SA. Sierra Nevada had established a plant in Jacksonville for this effort.

Not only did the Air Force cancel the existing contract they announced that they will conduct an investigation of the process used to select the winners. There was no discussion of whether there would be a new requirement and contest.

Hawker had bid a version of their T-6 trainer used by the Air Force and Navy currently while Sierra Nevada was going to use a variant of Embraer’s Tucano aircraft which is in use by several countries. The initial contract would provide systems for use by the Afghans with the potential for further sales to the U.S. or other customers.

This is the third major acquisition in the last ten years that the Air Force has struggled to award. The KC-X tanker took three tries before Boeing (BA) won it. The CSAR-X new rescue helicopter never was completed despite two tries and multiple protests. This means that the LAS contract will have to be begun again or a new requirement created.

Hawker Beechcraft has had its struggles over the recent years due to the general downturn in aviation. Facing a rougher future with the proposed cuts in the U.S. defense budget it had been reported that the company had recently engaged a law firm known for its work in bankruptcy or restructuring. The decision by the Air Force will only be good if a decision is made to have another contest which there is no guarantee that Hawker will win.

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Lockheed Martin (LMT) Protests Award of Navy Contract to Northrop Grumman (NOC)

At the beginning of the month the U.S. Navy awarded the first in a series of contracts to begin installing consistent networks on ships. The initial value of this contract is for $36 million and would be for installations on 3 ships.

The Consolidated Afloat Networks Enterprise Services (CANES) program is to undergo testing this year and have a Milestone C Low Rate Initial Production Decision to support completion of the first install by the end of the year.

Northrop Grumman (NOC) beat out Lockheed Martin (LMT) for the production contract. Both had been awarded development contracts a few years ago. If all options on the contract are exercised it could be worth over $600 million and be installed on 54 ships. Next year after more testing there will be a Full Rate Production Decision leading to the award of a much larger contract.

Yesterday though Lockheed formally protested the award citing a belief in flaws with the Navy’s evaluation of the two proposals. The protest will be reviewed by the Government Accountability Office (GAO) who have one hundred days to come to a decision. Normally the protested contract is placed on hold while the GAO conducts its review. If Lockheed disagrees with the result then they may appeal to the Federal courts.

Protests have been rising consistently over the last two decades as the Pentagon issues fewer contracts and company’s fight harder for market share. They are disruptive but Federal law allows almost any decision to be protested although the GAO often denies them. The biggest factor for now is that it delays the start of work by Northrop and disrupts the program’s schedule.

Unfortunately for the Services and the Defense Department many cases are decided in favor of the company protesting which continues to highlight the need for the process as some selection decisions have proved flawed for many reasons. The KC-X tanker contract originally awarded to Northrop was successfully protested by Boeing (BA) who won the contract upon a new competition was ordered.

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Army Decides to Recompete Radford Contract

In June the U.S. Army announced that it had awarded a contract with BAE Systems (BAE:LSE) to run the U.S. explosives production facility at the Radford, VA Army Ammunition Plant. The losing company, ATK (ATK), who had had contracts to run the facility for several years protested the award. Under normal processes the Government Accountability Office (GAO) which is responsible for deciding these matters would have made a decision no later then September.

The protest though is now not necessary as the Army has decided to recompete the contract which led to the GAO dismissing the protest. After a review by the GAO the Army will change some parts of the Request for Proposals (RFP) and allow bidders to submit new ones. This is good news for ATK as the Radford contract had a value of over $800 million over its ten year duration.

Because of this decision ATK, the incumbent, will continue to operate the plant and be paid by the Army until a new contract is awarded. Both BAE and ATK have indicated they will submit new proposals and there is always a potential for other companies to also try to win the work.

If the U.S. defense budget does decline for any company the key will be keeping their existing contracts and then attempting to win new ones. Having a core of existing work will cushion any lack of new work caused by the reduced opportunities available in the next decade or so as the U.S. reduces its investment in Iraq and Afghanistan as well as new development programs or building up stockpiles of weapons and munitions.

ATK recently had a rough quarter with sales down which led to a drop of about 4% in profits when compared to the similar quarter last year. One areas where revenue was down was sales of ammunition to U.S. allies like Afghanistan. The loss of the Radford contract would have reduced annual revenue $80 million or so or about 2%. A chance to win the work back will only help the company in the future.

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UnitedHealthCare Takes Next Step in TRICARE Protest

As we had written last week the Government Accountability Office (GAO) had ruled against UnitedHealthcare’s protest of the award of the Southern Region TRICARE contract. This meant that the contract would go to Humana (HUM) who had actually been the incumbent back in 2009 when the government tried to award the latest group of TRICARE medical management contracts.

TRICARE is the medical insurance program offered by the Pentagon to its active duty members, their dependents, retirees and selected Reservists and National Guardsmen. The country is divided into regions and one insurance company is awarded a contract to manage it. These contracts are quite large in the region of $4-5 billion a year.

In 2009 the government attempted to award new five year contracts for the different regions. Three of the contracts were protested for various reasons but normally because the source selection criteria were not followed correctly. Two of the three have been resolved but the Southern one still remains in a legal battle. Originally Humana lost the contract to UnitedHealthcare but protested. That led to a decision to have a new contest which Humana then one. UnitedHealthcare then protested that decision. The GAO denied the protest and let the award to Humana stand.

Now Unitedhealthcare has decided to sue in the U.S. District Court of Federal Claims which is the next step in the protest process. In their press release from Tuesday the company states: “The Pentagon disregarded its own stated goals for this contract, and military families’ access to quality health care in the South will be put at risk as a result.” The company continues to believe that the decision by the government to choose companies for the TRICARE offering low reimbursement rates limits care and choice for the military.

The lawsuit should take a few months to decide and the current TRICARE contract should continue with Humana

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TRICARE Protests Continue

TRICARE is the primary medical insurance program for the United States’ military. It covers those personnel, their dependents and retirees along with selected Reservists and National Guardsmen. It functions like a HMO for its members. The Defense Department divides up the country into regions and awards large contracts to individual health insurers to manage these. In 2009 new contracts were awarded but three of them were protested with one, the Southern Region, still not resolved.

The Southern contract was originally awarded to UnitedHealthCare but the incumbent Humana (HUM) protested the decision. The Government Accountability Office (GAO) which reviews protests agreed that the Defense Department had failed to carry out a proper source selection and it was decided to have another competition for the potential $23.5 billion of work.

That contract source selection occurred this spring and it was decided that Humana was the winner. UnitedHealthCare promptly protested that decision basing their claims on a belief that Humana offered too low a payments to providers to lower their costs and that may end up forcing providers from TRICARE limiting the members options.

That protest has now been resolved with the GAO ruling in Humana’s favor. UnitedHealthCare is still reserving the right to appeal that decision which it can to the Federal Courts. Normally in these situations the incumbent stays in while the protest goes on which means Humana will be the provider and collect revenue and earnings from this contract.

There is no doubt the Defense Department made serious errors in this cycle of contracts. Three of the four were protested and in all three cases the original winner has not kept the contract. UnitedHealthCare looks like they will continue their protest of the second attempt to award the South Region contract so a final decision may not be made until the Fall. It will have taken the Defense Department almost two-and-a-half years to resolve all of this.

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GAO Denies U.S Aerospace’s Protest

The third bidder for the KC-X tanker contract, U.S. Aerospace (USAE) and its Ukrainian partner Antonov, had their protest denied yesterday by the Government Accountability Office (GAO).

The company had filed the protest because the Air Force had said their proposal was delivered past the deadline for submission. U.S. Aerospace claimed that their courier was deliberately delayed and should have been allowed to make the delivery on time.

This decision leaves only the Boeing (BA) and EADS (EADS:P) bids as being considered for the contract. The Air Force had previously said that a decision would be announced around the middle of November but there have been reports that this might slip.

Contract Delays Put Pressure on GPS Constellation

The Government Accountability Office (GAO) released a report on the U.S. Air Force’s plans to upgrade the critical Global Positioning Satellite (GPS) constellation. The report available here raises concerns that due to the delays in awarding a contract to build and launch the new Block IIIA satellites that the number in space may fall below the minimum threshold of twenty-four.

Lockheed Martin (LMT) is the prime contractor for the new satellites. The goal of the program is to launch the first one in 2014 which is barely three years from now. Delays in awarding the contract lasted almost three years. Rather then extending the launch date a matching amount the Air Force only extended it two. This means that Lockheed and its team will have to make up twelve months of schedule.

The report states that “However, the long-term impact of a delay to GPS III could still reduce the guaranteed size of the constellation to fewer than 24 satellites, which might not meet the needs of some GPS users.” (p. 9) The Air Force has offered mitigation plans that would extend the life and capability of the existing satellites that would aid if there were delays to the launch of the new satellites.

GPS is not only critical to the U.S. military but supports all manner of civil operations and activity. Decline in the number of satellites would affect the ability of the military to carry out their assigned missions. The civil uses such as aviation navigation would also be affected perhaps reducing capacity and efficiency of airline traffic.

The GAO report highlights concerns not only with satellite production and availability but also other parts of the GPS system including ground station development. Without new, updated ground stations the system may not be able to fully achieve its capabilities and that development has also been lagging. If if is not synced up properly there will be delays in the GPS system properly utilizing the new Block IIIA satellites.

The Air Force also faces challenges with its launch capability for satellite. The service needs to be able to launch several systems over the next few years and the focus on using the EELV vehicle reduces the number of launch sites and vehicles.

The report lays out that the GPS constellation so critical to many activities around the world is facing several issues as it is updated with new satellites. The Air Force and other agencies involved have developed plans to reduce risk but the report concludes “schedule may leave little margin to address challenges that may arise. Such issues could affect the Air Force’s ability to launch satellites on time, which in turn may affect future GPS constellation availability.” (pp. 38 – 39).

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Air Force Preparing for Slip to KC-X Award?

September 8, 2010 by · Comment
Filed under: Boeing, EADS, GAO, KC-X, KC-X Tanker News, Syndicated Industry News 

There are now reports that the U.S. Air Force may slip the announcement of a winner of the KC-X contract until the end of the year. The last planned date was the middle of November. This was a slight slip as the original goal was to have work start on that date.

Now it could be as late as just before Christmas that an award will be made. There are potential concerns with the results of the mid-term elections in early November that may have to be reflected on when coming to a decision on whether to award to Boeing (BA) or EADS (EADS:P). No matter what the program may see further delay if the loser protests the decision.

The Government Accountability Office (GAO) is also addressing two protests by the U.S. Aerospace (USAE) and Antonov team over the failure of the Air Force to accept their proposal claiming it was delivered five minutes too late. There is a chance that any upholding of the protests would cause further delays to the source selection and award.

The KC-X is now on its third iteration over the the last nine years and continues to look as if a new tanker won’t be purchased anytime soon.

Lockheed Gains From L-3 Suspension as it Starts Supporting Air Force SOCOM

The U.S. Air Force recently suspended L-3 Communications Holdings (LLL) from work on various contracts because it faces criminal investigation over misusing government email and IT systems. Because of this suspension Lockheed Martin (LMT) was given the contract back to execute. The total value of the contract if all options are executed is about $5 billion.

L-3′s Special Support Programs Division is now banned at least temporarily from receiving new contracts or task orders. The group had a contract to manage the U.S. Air Force Special Operations Command’s IT network including email. The company used their access to the system to examine emails from government employees, their own workers as well as contractors to look at bidding on other contracts. They also attempted to discover if their employees were sharing information with other companies relative to competitions.

The news and suspension have had little effect on the company’s stock with it closing yesterday at 88.39, down a little over one-quarter-of-one-percent. If the case goes on to find criminal acts the company could see more suspensions, fines and limits on their ability to bid on new contracts as a whole rather then with just one unit.

Lockheed will transition to take over the contract over the next four months, slowly assuming the duties. Lockheed had won the work away from L-3 in 2009 but the two companies were waiting on a protest filed by the loser to be resolved. The decision to suspend the group means that Lockheed will get the contract which will last until late into the next decade. The wait to resolve the protest by the GAO may have delayed the start of this work by several more months.

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House Armed Services Committee: Langevin and Turner Call for Improved Accounting of Total Nuclear Weapons Complex Costs

June 21, 2010 by · Comment
Filed under: GAO, Syndicated Industry News 
House Armed Services Committee: Langevin and Turner Call for Improved Accounting of Total Nuclear Weapons Complex Costs
Ike Skelton, Chairman
June 21, 2010

Langevin and Turner Call for Improved Accounting of Total Nuclear Weapons Complex Costs

Washington, D.C. – Responding to a Government Accountability Office (GAO) report released today, Strategic Forces Subcommittee Chairman Jim Langevin (D-R.I.) and Ranking Member Michael Turner (R-Ohio) called for a more comprehensive and accurate assessment of the total costs of developing and maintaining the nation’s nuclear weapons.

“We must have a clear picture of the total costs of maintaining an effective nuclear stockpile to be able to accurately assess current and future needs and capabilities. We need to know exactly where the money is going and how it is being used. I am pleased that National Nuclear Security Administration has agreed with the GAO’s recommendations and has already begun to implement these accounting changes to improve their financial tracking and budgeting systems,” said Chairman Langevin.

“Having GAO’s independent assessment is particularly timely given NNSA’s release last week of its Stockpile Stewardship and Management Plan. NNSA plans to seek over $29 billion over the next four fiscal years and it is absolutely essential that NNSA be able to justify this increase and explain how it will benefit stockpile stewardship and management,” said Ranking Member Turner.

In November 2008, the Strategic Forces Subcommittee requested that GAO examine NNSA accounting practices and assess whether reductions in the nuclear stockpile would significantly affect nuclear weapons costs related to the Readiness in Technical Bases and Facilities (RTBF) operations and Stockpiles Services. GAO’s report, entitled “Actions Needed to Identify the Total Costs of Weapons Complex Infrastructure and Research and Production Capabilities” (GAO-10-582), recommends that NNSA develop guidance for consistent collection of total cost information and use this information for budget formulation and program planning.

The GAO report concludes that:

· NNSA cannot accurately identify the total costs to operate and maintain weapons facilities and infrastructure because of differences in sites’ cost accounting practices.

· NNSA does not fully identify or estimate the total costs of the products and capabilities supported through the Stockpile Services R&D and production activities.

· Reducing stockpile size is unlikely to significantly affect NNSA’s RTBF Operations of Facilities and Stockpile Services costs because a sizable portion of these costs is fixed to maintain base nuclear weapons capabilities.

· Without complete and reliable information about these costs, NNSA lacks information that could help justify planned budget increases or target cost savings opportunities.

· NNSA has efforts underway that, if fully implemented, will provide more accurate information on costs related to maintaining U.S. nuclear weapons.


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Military Base Realignments and Closures: DOD Needs to Update Savings Estimates and Continue to Address Challenges in Consolidating Supply-Related Functions at Depot Maintenance Locations. GAO-09-703, July 9

March 12, 2010 by · Comment
Filed under: GAO, Syndicated Industry News 
July 9, 2009

The Government Accountability Office (GAO) today released the following reports, testimony, and correspondence:

Military Base Realignments and Closures: DOD Needs to Update Savings Estimates and Continue to Address Challenges in Consolidating Supply-Related Functions at Depot Maintenance Locations. GAO-09-703, July 9

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GAO Report: Overseas Contingency Operations: Reported Obligations for the Department of Defense. GAO-09-791R

March 12, 2010 by · Comment
Filed under: GAO, Syndicated Industry News 
July 10, 2009

The Government Accountability Office (GAO) today released the following reports, testimony, and correspondence:

Overseas Contingency Operations: Reported Obligations for the Department of Defense. GAO-09-791R, July 10

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Air Force Plans Quick Turn Around On KC-X Contract

It is expected that the final RFP for the KC-X New Aerial Tanker program will be released this week. At a recent forum the Secretary of the Air Force, Michael Donley, said that they hope to have the contract awarded by the end of the summer. This means that if you allow a few months for the proposals to be prepared and submitted the source selection will only take ninety days or so. This is an aggressive time line for a contract this large.

It may be that the Air Force is expecting the Boeing (BA) and Northrop Grumman (NOC) proposals to be much like the ones they submitted in 2008. This will make it easier to do an evaluation and award. There is a great deal of historical work to draw upon. Of course that competition ended in a Northrop win, a Boeing protest, and the GAO upholding it. This led to the current attempt at a contract.

Of course if only Boeing submits a bid as might happen it will make the whole selection process easier.

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U.S. Department of Defense Still Not Sold on Split Tanker Buy

Responding to growing pressure from Congress and some in industry to the idea of splitting the KC-X tanker procurement between Boeing and EADS Secretary of Defense Gates said that the idea would be bad policy. The Hill reports that any cost savings from more rapid production would be offset by the increased logistical tail of having two separate systems. In this day and age when the quantities of equipment purchased is minimal the U.S. cannot afford a dual source for one mission. While some have said that this proposal would more rapidly field capability a split fleet would require two supply chains, training networks and support networks. More will be found out when the Obama administration releases its FY10 budget proposal in the near future.

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Army Pushes Back on FCS

Due to its complexity, cost and risk the Future Combat System (FCS) program is required to have an annual report to Congress submitted by the GAO. This was done recently. The FCS is the largest and probably most complex program under development right now by the U.S. military. It is being managed and integrated by Boeing and SAIC. The GAO continues its negative view of FCS and the Temple Daily Telegram reports that the Army acquisition folks countered that with calls to reporters. FCS is a system of systems which will used wheeled armored vehicles, unmanned ground and aerial vehicles all linked by a variety of data links and systems. Its goal is to increase the speed, accuracy and response of the Army. Parts of it have been developed and deployed where they can in Afghanistan and Iraq. The current Stryker vehicle units are the interim step from the M1/M2 based units to the FCS. As it is the largest program in the Army consuming a few billion dollars a year and has risk it is obviously the place that Congress and the Obama administration is looking for cuts. Until the FY10 budget is released there will be this back-and-forth between the Army and other parts of the government as that service tries to preserve as much of the program as they can.

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Congressman Murtha Makes Inefficient Recommendation for KC-X

Congressman Murtha, the powerful Democratic head of the House Appropriations Subcommittee for defense, was visiting Mobile, AL and made a rather stupid recommendation for the KC-X program. The Seattle Post-Intelligencer reports that he said the Air Force should split the work between Boeing and the EADS-Northrop Grumman team. Unless the military is going to buy large numbers of a system — and 150 odd tankers does not count — the costs associated with having two training, support and parts systems are unjustifiable. The aircraft would also end up more expensive as there is less economy of scale available with small lot buys. Murtha is just trying to split the knot but the suggestion is not practical.

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