Foundation Forum
November 13, 1998
"Partnerships in Space"
I always love coming back here to Los Angeles among so many friends,
peers and associates. I love seeing all the young people who are part of
a great organization, both the military and the civilians, and those
working with industry. This is a golden opportunity for me. I have to
applaud the AFA and I have to say a special “thank you” to the Air
Force leadership, to General Estes when he was CINCSPACE, to General
Roger DeKok my successor and Gene s predecessor here at SMC, for really
changing the focus of this particular event. This West Coast AFA
symposium has been going on for many years as many of you out there
know. Some of the young officers, as I look out there, probably weren t
even born when the activities first started here. But it has lacked
focus. The idea that General Estes, the AFA leadership, and General
DeKok had, to focus this symposium on space, really was the right thing
to do. I think this is the premiere event of its kind in the Department
of Defense right now.
The space theme is an appropriate one. When you think of space, the
theme for this particular symposium – “Partnership in Space between
the Government and Commercial sectors” — could not be more
appropriate for this particular time. When General Shaud came to me and
asked me if I would be willing to come back out here, he reminded me of
this need for partnership first, and I immediately said “Yes.” Then
he raised the idea of me chairing the panel, and I immediately said
“Yes” again. I was really very ecstatic and happy to have this
opportunity.
I started thinking of this from a historical perspective, but history
from my own career. I thought back 30 years ago. Thirty years ago as a
brand new second lieutenant right out of graduate school, a mechanical
engineer, I came here to the Space and Missile Systems Organization, the
old name for SMC. I thought about the activities that we did here and
the things that we worked on, and the focus that we had in terms of
military space. If we at that time had looked into General Shaud s
dictionary and looked up the word “commercial,” we would have seen
that it said, “sixty-second pause that will allow you to get a beer
during a football game.”
Ten years ago when I came back as a brand new young colonel working
for Lieutenant General Don Cromer and Major General Bob Rankin and was
in charge of the space launch directorate, things had changed
drastically. The Commercial Space Launch Act was in its infancy. We were
just beginning to figure out what that really meant. The big challenge
at the time for us was the development of he Atlas II. It was going to
be our first real entity in terms of the Commercial Space Launch Act.
General Dynamics, down in San Diego at the time, was going to develop
the Atlas II. We were going to marry the military requirements that we
had with their commercial requirements. We would marry a very robust, as
we called it at the time, military space launch manifest against their
commercial launch manifest. In all honesty we weren't quite sure how it
was going to work out.
We knew, at that time, that we were dominant in the military. We had
concerns about this fledgling commercial space launch activity and
whether or not their manifest was going to be a reality. To be very
honest with you, back in 1988, 10 years ago, we were still in the throes
of the Reagan build-up years. The build-up had started to peak, of
course, and we actually started going downward, but still we were very
heady about that. To be honest with you, except for a few visionaries,
like General Tom Moorman and the General Cromers and the General Rankins
at the time, some of us were very heady and very cocky. We were sure
that we dominated space. We being the military, and we weren t quite
sure about all this initiative into the commercial venture.
We also weren t quite sure whether or not when we talked space
dominance if the commercial aspect to that was even anything that we had
to worry about for the future. We were very cocky about that.
Four years ago, I came back here, this time as commander of SMC, and
things had changed drastically. Desert Storm had happened three years
prior to that. Desert Storm was our first real space war. We really
learned that commercialization of space had already taken place. The
Commercial Space Launch Act and commercial space launch activity had
grown exponentially. We found that we were no longer dominant in terms
of that particular venue. Other venues had started to change, too. Space
communications had already started to get very commercial. Even our
needs in that area had started to change drastically. In the areas of
navigation and surveillance, things had changed again and we were no
longer the number one power, if I can use that term, in terms of using
space. We being the military. We did have skills in terms of space
dominance, but space dominance had changed in terms of its definition.
We were no longer the dominant force. The dominant force was commercial
space.
From that historical perspective, 30 years, 10 years and four years
ago, things have again drastically changed. Today I will say that no
longer when we talk about the necessity of partnership, no longer is it
a politically correct term or a nice thing to do, it is absolutely a
necessity. We have to make sure we are partners. It is appropriate that
we talk today about that particular subject. I am very happy to have
these very strong leaders, both from industry and from the military to
be the key focus for the particular discussions. They are going to talk
about where we should be 10 years from now, where we should be four
years from now, where we need to be a year from now. And they will talk
about it from the perspective of their different venues and the areas
that they are responsible for.
The focus of the panel is on challenges: How do we harmonize our
requirements in terms of the things we are trying to do? How do we
combine and harmonize our research and development initiatives, both in
terms of budget and requirements themselves? How do we do shared
planning between the needs of commercial force and civil force in civil
space and what we are still trying to do in terms of the military. How
do we reconcile differences in our very vastly different acquisition
processes? What should be our vision and what specific initiatives
should we have for the next five to ten years and even the next year?
These four people are going to be the ones who talk about that.
I've asked them to talk from their perspective. We are going to start
with the industry perspective. I ve asked Jim Albaugh, the president of
Boeing Space and Communications to start off, then Mike Henshaw, then
Gene Tattini and finally Ron Kadish. The protocol for this morning is
going to be 10 to 15 minutes discussion by each one of the panel members
and then we are going to turn it over for Q&A from the audience and
I encourage all of you to give us your toughest questions. They've been
tough so far. We'd like them to be even tougher. We ve even told the
panel members they can ask questions of each other. I am going to save
one of the toughest questions for last. We are going to save time at the
end for a question that I gave each one of them ahead of time to think
about. I actually have told them a little bit about this about two weeks
ago. I want them to look out in the audience. They have the Secretary of
the Air Force and the Vice Chief of the Air Force present. We have
CINCSPACE, the commander of AFMC, and leadership from industry here in
the audience. This is an opportunity for them to think about one
specific issue they would like to assign as an action item to either of
these gentlemen collectively or anyone individually. If they could ask
them to work an issue in the next year and to report back to this
particular forum, what action item would that be. We will save that
question for each one of them to answer at the end of this session. With
that, I will turn the mike over to Jim Albaugh.
A partnership in space certainly is a good topic to be talking about.
Just the fact that all of us are here today, industry and the Air Force
are here, working as partners, certainly is a big change from where we
were five or 10 years ago and I think General Lyles talked about that.
If we were to be doing this 10 years ago, all the watchdogs would have
gotten very twitchy and I m sure we d have 60 Minutes come barreling
through the doors.
Certainly, partnership, I think, is all about trust and trusting each
other. One of the key roles of leadership is to create that trust and
have a strong belief in one another.
In recent years there has been a massive increase in rules and
procedures across all levels of government and industry that are
designed to protect us from ourselves and protect us from waste, fraud
and abuse. Last week I got a policy across my desk. It came from
Seattle. It was a 13-page policy on how to conduct bake sales in the
workplace. So, those policies are still out there and we have to work on
those. The effect of all that is a spiraling cycle of distrust and
disempowerment.
Since Dr. Perry s initial thrust on acquisition reform back in 1994,
we are seeing a great tearing down of those rules and procedures and a
great build up in trust in relationships. Forums like this only help
that. Companies like Boeing and Lockheed Martin have embraced these new
reforms. In fact, just as DoD and the services are changing, the
industry is changing as well.
It used to be that DoD would announce a specific need and we would go
to the Pentagon and say, “Give us your money.” Today we ask,
“Invest your confidence in us.” Now, don t get me wrong. We still
want your money. But we are prepared to help achieve your goal of
better, less expensive hardware developed in less time and we recognize
that can only happen through partnering.
Let me just tell you a little bit about how that is happening in the
Boeing Company and let me tell you about how I spent last Tuesday. I was
in St. Louis attending the fifth meeting of the Boeing Leadership
Council. This council meets quarterly and includes representatives from
the Service Acquisition Executives, NASA headquarters, the operating
group on-site customer leaders, and the operating group presidents in
the Boeing Company. It was attended by Al Mullaly, who heads up our
Boeing Commercial Airplane Group and Mike Sears who is in charge of our
Military Aircraft and Missile Systems and myself. Mike, Alan and I spent
the entire day working together with our government customers to bring
about change. Why did we do that? Because we think that working together
really provides us the competitive advantage. That is what it is all
about.
The Boeing model for the Joint Leadership Council starts with the
customer coming to the table with their objectives for modernization and
a list of ways to pay for that modernization. We bring to the table what
we think are the core competencies of the Boeing Company: detailed
customer and focus, large scale complex systems integration and lean and
efficient design and production systems. Together we address how to make
money for the Boeing Company, how to save the customer money and how to
improve reliability, operability and capability.
Here are some of the issues we talked about Tuesday. We went through
how well our processes were working at the Boeing Company. We talked
about what some of the new process thrusts should be. We talked about
our projects for civil-military integration, such as the complete
conversion of our C-17 facility to commercial practices. We also talked
about how we could share paperless data and that was discussed early
this morning. One of the concerns that we had would be that all we would
do is digitize what we have already. We have to be very careful we don't
fall into that trap.
In the afternoon, Al and Mike and I talked about how we can help
achieve commercial defense integration throughout the Boeing Company. In
that area, I think Boeing does have a real advantage in that we are 58
percent commercial and we are 42 percent government. At Boeing we
believe the best way to get that integration is to move people back and
forth between the different organizations. Certainly Alan Mollaly and
Mike Sears are two good examples of people who have moved back and forth
between military and commercial. In fact, many of you probably know that
Alan recently left the Defense side and has gone over to the commercial
airplane group. I don't think it is any secret we ve had some issues
over on the commercial airplane side. Alan is introducing them to a new
concept that he learned over on the Defense side and that is something
called Earned Value. That will help the Boeing Company very much.
We also spent several hours discussing common technology needs across
all of the businesses. Airplanes don't know if they are commercial or if
they are military. We talked about technologies like composites,
ceramics, propulsion, avionics, design codes, and design tools. George
Muellner is helping us very much in trying to sort out some of those
technology needs. George has also been very instrumental in helping us
focus some of our technology directions. We have people who are working
on NASA programs; we have people working on Air Force programs and we
have people working on space commercial programs. We have a lot of
redundancy in what we spend our money on and George is helping us sort
that out.
The point I am trying to make is that within Boeing we feel that
working together is a real strength for us and our customers.
Let me show you a chart where partnership with our space customer has
really paid off for us. On airborne laser, as a result of acquisition
reform initiatives, we are going to be able to bring the airborne laser
to fruition in six years. Our original concept had it being brought to
completion in 12 years.
As a result of working very closely with our customer, we just
recently got an award piece score of 100 percent so we have got a
customer who is happy and certainly we are very happy about the score
that we got.
If you look at the Global Positioning Satellite program, there are a
lot of changes. The customer went from giving us a Statement of Work to
giving us a Statement of Objectives. They were able to help us reduce
the Block 2A to Block 2F costs from $43 million per satellite down to
$28 million per satellite. We are going to also increase the on-orbit
lifetime from six years to 13 years. We also think there is some great
applications for that satellite bus that we can leverage into the
commercial area. I would guess that Mike Henshaw is going to talk about
that a little later — he certainly knows a lot more about satellites
than I do.
The other thing that we are doing to GPS is work with our commercial
airplane people. Our goal is to figure out how we can land an airplane
just using GPS alone.
Being a rocket guy, let me talk about what I think is a classic
success story of military-civil partnering and it has already been
talked about a little bit this morning — the Evolved Expendable Launch
Vehicle or EELV.
Prior to acquisition reform, there were no less than 18
launch-related studies between 1986 and 1994. Each one attempted to
develop a future Space Transportation program. With flexible acquisition
reform, EELV will be flying by 2001. We are going to be able to develop
the new Atlas and the new Delta in four years. That is pretty good. I
was just reading the other day that it took Burger King two years to
develop the new french fry. If we can do rocket science in four years
and they develop french fries in two years, I think we are on the right
track.
On EELV, that was no easy challenge that we got from the Air Force.
They set a goal of a 25 percent cost reduction for the cost of payloads
to orbit and they had a goal for 50 percent cost reduction. They also
decided that rather than having a winner-take-all procurement, they'd go
with two suppliers and this provided an opportunity for Boeing and
Lockheed Martin to get into the commercial launch business in a big way
without having to go to Baikonur in order to launch Protons or in the
case of Boeing, having to go to Christmas Island to launch Zenits.
To gain an appreciation of how this has worked, let me site an
example that I am most familiar with. I was involved at Rocketdyne in
the development of the RS-68 engine. We decided on a lox-hydrogen
solution to the EELV problem because we could get a 30 percent increase
in thrust by going with liquid hydrogen. We went back and looked at our
models for developing a new engine and it would take us $2 billion to do
that. We knew that would never meet the design and cost goals that had
been given us by the Air Force. We took a hard look at why it cost so
much historically to develop lox-hydrogen engines and went back and took
a look at the space shuttle main engine. We found that about 75 percent
of the cost and the time was associated with the test, fail and fix loop
that you got into once you got the engine at the test stand. Then we
peeled the onion some more and found the reason we had the failures was
because we were operating in an environment that we hadn't operated in
before in the turbine part of the pump. We also found that we were
introducing new technologies that drove up cost, and time as well.
So, on the RS-68 engine we decided we d operate the turbine in an
environment in which we knew a lot about, from the space shuttle main
engine, and we decided we would introduce no new technologies and we
would focus on cost and cost alone. We were able to reduce the number of
parts by 93 percent, the number of welds by 95 percent and the amount of
labor by 95 percent. So, now, we have an engine that we are going to
develop not in 10 years, but two and one half years. It is an engine
with 50 percent more thrust than the space shuttle main engine, and we
are going to build it for a fraction of the cost — and I am not going
to give that number away today. Believe me.
We have also seen major cost reductions on the rest of the vehicle
and on its operations. Secretary Peters talked about what that is going
to be worth to the DoD — about $6 billion. We think that is a great
investment of the $1 billion that they are giving to Lockheed Martin and
the Boeing Company. It is also going to allow both companies to go out
and compete internationally in the commercial area.
The next example is in an area of communications and information, and
I won't say a lot about as it is really Mike's. I think you've all seen
this chart before and we can argue all day whether or not it is correct,
but it looks at the total demand for data versus time. You can see there
is quiet a short fall there. Clearly, the implication of this is that
DoD is going to have to spend a lot of money or they are going to have
to take advantage of the commercial constellations that are going to be
out there in the future. If you look at commercial Satcom and you look
at the total business from satellites to launch to services, it is about
$40 billion a year right now and within 10 years, it will be $160
billion. I think there is a great opportunity for DoD to leverage what
is going on in the commercial satellite area.
We already know that the government is Iridium's biggest customer and
DoD can't afford to build up capacity for their peak surge demand. The
possibility exists though that they could use commercial resources to
meet many of those serious demands in the event of a future threat.
There is a good example of how this joint military-civil approach can
work and it is called the Civil Reserve Air Fleet. Many of you are
probably very aware of that. The DoD invests in strengthening,
reinforcing and paying for the operation of commercial airplanes. In
return, these aircraft are available for heavy lift duty in the event of
a sudden need by the Armed Forces. That was used to quite an extent in
the Persian Gulf War.
This same kind of partnering can work in satellite communications and
we need to make sure that as we work the systems of systems equation to
get DoD and the military very involved in the up front planning of new
satellite constellations, like Iridium, Teledesic, Elipso, Global Mobile
and others.
Before I close, General Lyles said I was supposed to throw out
something controversial so we could have some lively discussion. I d
like to close by bringing up something that hopefully will help the
discussion. It has been touched on already this morning. That is the
National Space Policy. We all know the objective of the space policy is
for the United States to be a leader in space launch. It provides for
the government to let industry use excess launch capacity on a
non-interfering basis.
When written, we were launching about 75 percent government and about
25 percent commercial. We know that has changed. In the future, that
equation will flip flop and we will be 75 commercial and 25 government.
Commercial launches certainly are consuming all the excess capacity that
is out there and they are driving range costs. On Iridium, we got a task
from Mike to get the Iridium satellites in orbit in a hurry. So, we had
Boeing partnering with Lockheed Martin and Motorola, working with the
Air Force to get all those satellites up in space.
We were working the government around the clock, seven days a week
down at the range and they did a terrific job for us. As a reslt, and
the realization that the equation is changing, there is a lot of talk
about how to share costs more equitably. One approach that everybody
talks about is to put a Space Port in place using the same model that we
use for airports. I initially thought that was the right answer. But my
launch experts have convinced me that may not be the case.
If you look at an airport, it really has a captive market. If you are
in Los Angeles and you want to fly to New York, you are going to LAX.
You are not going to drive up to San Francisco or drive down to San
Diego. If you are going to fly internationally, or going to Tokyo, you
are probably going to fly out of LAX. You are not going to go to some
other location. Really what we have with airports are captive markets.
For satellites, though, people like Don Cromer down at Hughes, are not
going from LAX to space. We are going earth to orbit. It is a different
model. Other than constraints of launch mechanics, we can launch
satellites any place in the world. We can launch them at Baikunor. We
can launch them at Kourour. We can launch them in China. These locations
are heavily subsidized by their governments.
Right now, our launch operations costs are about 10 percent and my
guess is that Mike's are about 10 percent as well. If we take on more
cost sharing, where will that go? Fifteen percent? Twenty percent? I
don't know what that answer is. If they go too high, we could damage the
U.S. commercial launch business and all commercial launches, including
Boeing's and Lockheed Martin's, could windup overseas and once again,
the government could be stuck with all the range costs. I don t have the
answer, but I think it is a bigger issue than for just Boeing or
Lockheed Martin or the Air Force. It really is all about National Space
Policy and we need to work together to come up with the right answer.
The Air Force is taking a leadership role in that. Colonel Jeff
Norton, who may be here today, is working on a range economic model and
Boeing Company will support him in the development of that model. We
intend to take this issue back to Washington to work it on Capitol Hill
and drive this towards a conclusion. I would close by saying a little
more about acquisition reform. I hope this doesn't come across as too
much like a commercial, but it really is a commercial for what the Air
Force has done.
We had a supplier conference in Seattle a couple of months ago. We
had some 400 suppliers there and we started talking about partnering
between the Air Force and Boeing, and partnering between the Boeing
Company and suppliers. We had an artist there that day and the artist
took notes about what we talked about. What he did was put together this
mural that is all about acquisition reform and partnering. If you look
over in the corner, you can see Dr. Perry on the mountain giving us the
message, telling us about the four P's, we've got to do things
differently. Then we unleash these legions of people to go forth and
work acquisition reform. Then we had the “Perseverance Chasm” that
we had to jump over and hopefully we are going to get where we want to
be and that is with better weapons and cheaper weapons in support of our
fighting men and women. Thank you and I look forward to the discussion.
Thank you very much. When industry reps are invited to sit on a panel
with a customer, you think about two cats circling each other. You
wonder just how that is going to happen. Certainly, I am delighted to be
here and to have Jim Albaugh on the panel. I asked (Lt. Gen.) Les
(Lyles), though, why Jim went first. And he said it was because his name
begins with “A” and yours begins with “H”. I said, no, I don't
like that. He said, well, Boeing begins with “B” and you begin with
“L” and I didn't like that, either. He said, well he has more air
than you do and he is taller. I still wasn't satisfied.
Jim and I are partners. Our corporations are partners. The Airborne
Laser's (ABL) 100 percent award fee we were delighted to get along with
him is a good example of that partnership. We compete and are each
other's sub and each other's teammate. Partnering, company to company,
is an extraordinary challenge. Partnering with the customers, whether
they be AsiaSat or anywhere on this earth and, of course, the big
important government customer here stateside, requires some real
thinking. Thinking about this has changed.
The aerospace industry changed dramatically as we moved from
predominantly defense to half, in some cases, commercial. It has to
change in the government and we see some evidence in that, don't we? You
ll see the next time the astronauts walk with Hubble and do the
servicing mission that they will take down the Aesis solar arrays and
put up a production Iridium array right off the commercial line.
You find communication buses, geo communication buses and satellites
through the membrane over to the government side to be used in those
government programs to buy down non-recurring costs. A little bird we
built about the size of this chandelier went to the moon and found water
ice this last January was contracted with NASA not for the bird. They
didn't watch us rivet every hole. They didn't watch us put on
instruments. They contracted for data on orbit. They gave us a certain
amount of money and we went off to try to do that. That worked out well.
These things have begun. But they need to begin in a much more
drastic way. As you and I look at milsatcom, as we look at remote
sensing, indeed as we look at launch vehicles, we are challenged today
to think in an acquisition reform context about those major tenets we
want to embrace. I'd like to talk with you about a few of them.
One is the exploitation of common product to multiple use. The days
are almost over, except for very specialized waveforms and other things
that customers need on the government side, where there is one product,
one use. The day is coming — it may be one year, four years, 10 years
— where we make a drastic move from unique products, satisfying single
customers, to standard products satisfying multiple customers. This must
happen. No one can afford the non-recurring expenses [NRE] and recurring
costs and the long-cycle time for a unique spacecraft or a unique launch
vehicle or even a unique satellite control station for a particular
mission. That means our attitudes in indstry have to change drastically,
towards common products we invest in and bring to multiple users,
commercial and military. The military and government overall attitudes
have to change to accept and not want to redesign and watch the redesign
of a unique product. This is very important. SPO engineers get their
stripes by bringing something along that means something different than
the previous SPO engineer. It is not pinned on any one person, it's just
the way of life. Yet contracting with someone for a launch vehicle that
delivers “X” amount into LEO or GEO, and contracting with someone
from the government to industry to deliver this bit of information or
comm has to become something that is as normal to you and me in 10 years
as it is that EELV would be a commercial/government acquisition.
Four years from now, launch vehicles will be commodities. Some are
today. Between four and 10 years from now, spacecraft buses must be
commodities — things you buy off the shelf. People who want to play in
that game must use much of their own nickel to develop the GEO/LEO
platform payloads will sit on, but it will be standardized payload
interfaces. If I want to talk about payloads a moment, that is the most
unique thing. Yet I must tell you that in Milsatcom, remote sensing and
other places, common payload elements are then going to be the thing we
need to get the price down through commonality. Through an investment on
the part of industry in reducing the non-recurring and recurring
developmental cost, and through standard products from certified
suppliers supporting you in long-term agreements, cycle time goes down.
Jim and I will produce launch vehicles in 12 months. General Estes
once accused our corporation of having a Titan IV at the Cape so long,
he had to put a building number on it. The Titan IV is a highly
effective launch vehicle. But I must tell you that by the time we get an
order for a launch vehicle in this explosive commercial/military world,
we are going to have to put it out the other side of the building in
less than a year.
Today, Don Cromer and I take orders for commercial GEO
telecommunication birds from all over the world. We are expected to take
that order and have a satellite full-up ready to go to the launch pad
out the other side of the door in 18, or 12 and now driving to 10
months. Unheard of? You don t get there except via standardization of
product and long-term agreements with suppliers who you are not
competing every quarter. You can get NRE down and recurring down and
cycle time down by everybody not inventing the thing over every time.
We made some money on Iridium buses. We are going to build 140 by the
time it is all over. We do every one of them just alike, every time. Do
you know that Iridium is only “thermal vac-ed” on the first bird and
the next 150 won't see the thermal-vac chamber? I had a lot of sleepless
nights over that issue — having come from a world where for 30 years
if you changed a screw, you went back from thermal-vac. Yet the world is
going to higher rates and industry is going to higher rates because of
the uniformity from one unit to the next. You will be able to get out of
expensive cycles of test.
How then can the military, or anywhere in government, get its
requirements served which are unique, and will be unique, if industry is
moving toward more standardization, more commonality? That is a big
issue and one we need to wrestle with. It turns out, we have a GEO
broad-band system that you will hear more about in the weeks to come
called Astrolink. It is a broad-band, swtichable at GEO. It is an
information system that will provide a huge amount of information flow
for commercial customers. It could be that the military will need a
broad-band, switchable system on orbit some day, as well. There is no
doubt about it, in fact.
The commercial sector will lead that way via our investment of
several billion dollars in this system before the government, which
would then would come along and buy a commercial system, service from a
commercial provider or simply buy the anti-jam protection or wave-form
required. But a great deal of the bus and a great deal of the payload
digital signal process payload will be common. How then, now, that we ve
gone through and we are coming up on PDR and CDR and about ready to
start manufacturing of a commercial broad-band, switchable bus can
anybody get the requirements known? I would tell you that harmonizing
requirements, the word Les had on his chart, then becomes an issue.
There is no reason why we can't invite interested government agencies
to the PDR and CDR of our system. There is no reason. We disconnect each
other from liability of input. We hear what you have to say and we
secure the payload for your requirements downstream with a hold harmless
attitude later when you might change your requirements. You may be able
to buy a commercial bird on orbit and buy its services, in fact by the
bird. You also may be able then to influence the design early on. You
will certainly do it on EELV. You will let your requirements known for
throw weight and many other issues of ride performance. I am saying in
the commercial satellite world, take the opportunity to make government
requirements in the future obvious to the commercial satellite makers so
we can better design for your needs in the future.
Integrated planning and coordinated investments, all sound
interesting. They can work. In acquisition reform, I just have one
slide. Les, I'll answer the question now what I'd like our leaders to
come back a year from now and answer. “Do we have an Acquisition
Reform II initiative that sweeps up some of the things Jim and I are
saying?” Standards. Partnership. Harmonizing. Use long-term
commitments to gain production economies. Incremental change to meet
evolving requirements. You can take this too far, but it sure needs to
be answered. Can we have longer relationships with our suppliers? I know
we can because we have long-term agreements. We pick a horse and ride
it, to buy down NRE and recurring costs and get their rate up. So should
the government.
As one example, we've been honored to be the Navy's fleet ballistic
missile contractor up in Sunnyvale for 42 and one-half years, from
Polaris through Trident II. We work hard every day in reducing the costs
through every thing imaginable. I don't want to recompete that contract
and for 42 and one-half years, they haven't. Long term buying worked,
even when the unit production went down to one-seventh, the unit price
still went down by half. That was because, we partnered, long-term. Am I
saying, get rid of competition? No. But industry s way of reducing price
is long-term agreement. Some times government's way is too much
competition and not enough long-term involvement.
Second, acquire or think about acquiring a full systems of systems.
It's very difficult today in acquisition with the Air Force to deal with
more than one SPO in one acquisition. Yet, if you looked at milsatcom,
you d want to buy the terminals with it, harmonize all that, make it as
commercial as you can, change it to your requirements on orbit, not have
expensive terminals, but buy commercial ones that are already in use
somewhere. It is hard to do that unless you go cross SPO, system of
systems.
Employ commercial business terms. We are going to see in our
lifetime, liquidated damages from a government launch that is not
launched on time. We are going to see in our lifetime, ensuring
government launches by industry, very quickly as commercial becomes more
and more interesting. We need to move beyond single process initiative
to standard products and components that make a difference and have
leverage in your acquisition cycle. Employ streamlined processes and
fewer tests with greater quantity of production and focus on procurement
of services where possible. That has been spoken about a lot today.
Thank you for this time. For us operators who are out there
scratching the hard pan to beat Boeing (laughter), let me just say that
the issue of how we all take advantage of higher quantities is something
that needs to be right between our ears every day, whether it is a
commercial customer or a government customer. Thank you very much.
Good morning. I feel a little bit out of place with all the
distinguished space expertise in the room. I am going to presume to tell
you things from a little bit different perspective and I may not get out
of here alive. My perspective is one of information and knowledge
management in pursuit of our national security. I will say some things
today that will build on what has already been said, but also my hope is
to stimulate some thoughts about how we can actually proceed to do the
things that we have been talking about, but with a little bit of a
flavor of this idea of knowledge management and execution of our
military requirements.
I am going to propose an on-going process today to form a consortia
with industry and our various government centers, not as a one-time
activity but as an ongoing process of real acquisition reform. Building
on the thought of experimentation will help us define our requirements
because, I will assert right off the bat, a lot of our problems with
requirements is that we really don't know what we want in this brave new
age of information and space until we see what we have. The timing gets
screwed up. The standards and exploitation of commercial activities are
very difficult. I am going to boil this down to two points and build on
the study that General Tattini talked about but at a lower level of
detail.
The first point I would make is that we have almost too many choices
in trying to bring real information to try to make things work. By the
way, if you look at the exploding commercial activities, there is not a
lot of historical precedent for military systems. That is part of why we
are struggling with this right now. The demand for commercial products
and services are a poor measure for current and future needs. It is a
simple fact. The technological change is accelerating at a pace that
makes us all uncomfortable. That is one of the reasons why we are here
today – the discomfort we feel with dealing with this change and the
changing world. We have learned lessons the hard way in our acquisition
paradigms, and we don't want to give those up without knowing what risk
we are going to take.
The idea is to take and make proper changes and choices in this big,
uncertain world that we are in. Imagine a future, and I am not so sure
it is all that much of a future, where some soldier engaged in heavy
combat on a battlefield can call home and talk to his wife. Imagine a
future where instead of TV news, we have the personal interaction of the
battlefield in the home. Imagine a future if we don t take advantage of
commercial opportunities, where people will use the technology out there
in a way we never thought about from a military perspective and it will
have all kinds of policy and organizaional and military implications. We
could be faced with a situation of having obsolete systems and
organizational structures that will erode the trust and confidence that
our citizenry has in our ability to execute a war.
We already have instances where the infrastructure that our wonderful
platforms in space, airborne and on the ground provide to our
warfighters an overload of data, a barrage of information that they
would rather turn off or just use it to watch CNN than to use it in the
warfighting mode. That usually happens because we have all this
technology dumped to the warfighter about the time that they can't
figure out how to use it and they are under extreme stress.
So, we have a lot of choices and there will be a lot of products out
there that we need to provide our warfighters that we may not know how
to do it. I think we've only just begun to understand what this systems
of systems thing is like. We've talked a lot today about platforms and
by platforms I means specific weapon systems. SBIRS, the C-17 and the
F-22 are all platforms. Rivet Joint, the Joint Stars, and AWACS are
difficult to produce and acquire in and of themselves. But the
integration and interoperability of these platforms is becoming
extremely important, and is its own weapon in the future battlefield.
We have visions today and we talk about them as systems of systems.
We talk about them as network centric warfare. We talk about this
integration and interoperability as a global grid infrastructure. But
that is our vision. We have a very difficult problem turning that vision
into actual execution and it is easier to build the network than it is
to figure out how to use it.
We size our platforms wrong when we have a platform centric activity.
I don't mean to criticize the platform centric nature of our systems
because you have to take bite-sized pieces in order to execute things.
But we also have to understand how it is going to be used in an
interoperable and integrated way. When we size our Satcom to the
constellation of the satellites and the difficulties of focusing on
satellites on orbit, we miss the opportunity that Iridium has shown us.
If you size it to the customer, you get a different answer and a
different capital investment structure. We need to think that through.
It is not obvious to military planners, and I use that in the
broadest sense all the way from the acquirers to the requirers, how to
you use commercial systems that are upon us. We have found, in many
cases, that we can't write a requirement well enough to take advantage
of these types of things. A way around that is to use experimentation
and a high ops tempo like we just did in EFX 98 on the command and
control side. In EFX, it is okay to fail in a particular requirement or
okay to modify the systems in order to do the job better. But if we
don't factor in this idea of experimentation, which is not exercising
and is not wargaming, it is experimenting with technology and infuse
that into our commercial services idea, we are going to have a hard time
deciding how to take advantage of it and we are going to be a victim of
the commercial service instead of a driver of it.
I would like to propose a set of forums and I know General DeKok and
I and General Tattini now and General Raggio on the Air Force side are
trying to bring our respective organizations together to do
cross-program office, cross-product center type of thinking in this
area. We need to extend that to the industry, but not on a one-time
basis, but on a continuous basis. Embedded in that idea is this thought
of experimenting, where we take communications capability and we take
the capabilities and imagery and sensors that we have both in military
systems and commercial side and we figure out how best to use them in a
high ops tempo, stressful warfighting situation. And then defining what
the requirements are in the business arrangement to use that.
I would offer one other thought and I think this came out of our
experience in EFX. The projections for bandwidth and data requirements
ought to be looked at with very skeptical assessments, because it will
lead us into an investment strategy that may not be correct. We went
into EFX 98 with this idea that we were going to have a bandwidth
problem and a data flow that would clog up the capability in our
communications area. So we artificially limited the capability. We went
through the satellites that we thought we would have in 2003 and we
found the bandwidth required was a fraction of what we thought it was
going to be to run a full reach-back operation. With those kinds of
revelations that could come out of experimentation, it will change our
approach to the space and airborne requirements and lower our overall
investment in capitol structures. In my view, we can take advantage of
the services provided by the commercial capability both on orbit and on
earth.
In order to make the network centric activity work and try to
overcome our necessary reliance on the platform focus, I would offer
these ideas to build a strong partnership with industry – not only in
the space arena, but with information technology companies and our
aerospace traditional base. Thank you.
It is an honor to be a part of this panel, and thank you for inviting
me. You would have to have been asleep for the last couple of years if
you didn't really think that there is a major convergence between
military and commercial requirements in space. There is no question
about that. We are clearly converging. Once you accept that, then the
next hurdle is partnering and partnership between the U.S.
military-civil and commercial users of space.
What I'd like to do is just spend a couple of minutes talking about a
number of subjects. Let me make one point as we talk about partnering
with our industry, which evolves then to a term that we ve started to
adopt that says commercialization or making use of commercial space,
which in my mind is a little bit different than acquisition reform as we
ve known it today. And I ll talk about that in a second.
I was hoping the folks would steal my thunder on the EELV. They have
done that, from Secretary Peters all the way through to our industrial
panel members. This has truly been a break through in how the U.S.
government and industry does business with one another. We have had a
major success. We have had a major source selection announcement. The
trick to this now, from the government side, working with industry, is
how do we administer this contract and we have brought it out from
behind the green door of the source selection process. There are now
agreements on pieces of paper between source selection teams on one side
of the table and industry teams on the other side of the table as how
they envision this commercialization will operate. Now it is going to be
up to those of us, to include the Air Force Space Command to interpret
how we are going to do those kind of things.
Let me throw one other organization into the mix here as we use EELV
as an example of delivering a service to us. That is the National
Reconnaissance Office. There has to be that partnership on the part of
government to execute this contract in a way that the majority of us in
this room think it should be executed. That is no small sum in that
regard. But it is a success and it would have been benign neglect on the
part of the government if we had not done this kind of an acqusition as
we did it today.
GPS is the next one. What more can I say about GPS? It is now
becoming a public utility internationally. We understand that and
commercial input to this process is absolutely essential to continuing
the military presence in some kind of a navigation and timing system in
the next 10 years or so. At least, that is my belief. There is one other
point in that regard. When we look at our user equipment, just this past
year, the commercial sales of user equipment for this particular system
has outnumbered government purchases by billions of dollars. You should
know that and as we continue to dialogue with Commerce and with the FAA
on GPS modernization and a number of the issues that General Myers
alluded to in his conversation, we need to keep that part of this thing
firmly in the back of our minds as we go through this. GPS, EELV, are
very good examples. There are many, many more though.
When you look at the commercial revolution, there are many things
that we are just beginning to scratch the surface of in terms of
military use of commercially available capability. This is a different
way of saying partnering than perhaps what Jim or Mike talked about in
their presentations under the guise of a contract. This is the kind of
thing that our using community and the operators are going to have to
work together with the acquirers now. We need to sort out and search out
solutions, especially in the area of commercially available imagery and
constraints, licensing agreements, and those kinds of things on
commercial imaging capabilities.
How do we bring all of this together? The senior leadership of the
Air Force has assigned a study to the space and missile systems center
through the Air Force at our last Corona session. What they ve asked us
to do is a very extensive and comprehensive look at commercially
available space alternatives against current Air Force based mission.
What is different about this? These are some examples of some of the
studies that have been discussed and mentioned as we ve gone through the
day. There are four major studies culminating in the Corona tasks to do
the Space Opportunities Study. My vice commander, who just came from
Washington, is very fond of telling me that the differences between
these things now versus what we have done in the past is, we will take
these studies now from inside the Beltway where we have the policy
makers and the thinkers and the strategists now to outside the Beltway
into the executing agents of the U.S. Air Force both in Colorado Springs
and here in Los Angeles and now let the doers figure what we can execute
from the policy and from the studies that we ve had in the past.
We look at this as an opportunity and let me spend just a couple of
seconds for the benefit of our folks in industry here talking you
through what the approach is to do this particular study.
Key to the way we are going to put this together is commercial input
in terms of initiatives and to the study group and industry
participation in this study as we go through it. This gives you a flow
down of where we are going.
As a first cut at the organization, this is how we are going to look
in terms of five mission areas. In each one of those areas, we hopefully
are going to be fairly specific relative to what kind of
commercialization opportunities are available to the U.S. Air Force and
to the users in industry today. We looked very extensively at cost. We
also have to roll up military utility in these things, and it is going
very rapidly. You see we put an announcement in Commerce Business
Daily. We are going to get industry input. We are going to have a
kick off meeting here in Los Angeles next week and we will go from there
then leading to a final report on the study net summer, but even more
importantly, you don't get serious about these kind of things unless
they impact our POM.
It is the intent at least of the senior leadership to pick off those
things that come out of this study that merit implementation and to
impact the FY O2 POM as we drive through these kind of things. One of
the first evidences of how serious we are in this regard is Secretary
Peters announced meeting in Washington on December 1 and 2. Our study
group will take a lot of that out of that meeting and roll it into this
study.
There are a few challenges we are going to have to face and let me
just briefly touch upon those.
In order for any kind of military use of commercialized space to be
relevant, it is going to have to help us execute the military mission.
We look upon this Expeditionary Aerospace Force as one of the driving
models in force sizing exercises behind what this study will do and
enough has been said about where space and our reach back capabilities
and our capability to do those kind of things are and required.
Just let me tick off to you what we are attempting to do: develop
dynamic management tools and systems, store, search, retrieve, edit,
visualize, integrate, exploit, prioritize and disseminate information in
real time. That is part of what the Air Force and the war fighters are
looking at in terms of requirements coming from these space systems.
This is probably something that Jim and Mike should pay a little bit
of attention to. We want to open a door up here for a lot more
innovation, and a lot more risk taking. We look now to a number of
smaller companies in this space sector, those folks that have tended to
be very innovative with some of what they are doing and we are going to
encourage participation from those folks in this study.
Finally, the last challenge we have is that we have to look at ways
to authenticate these commercial-like arrangements whatever they turn
out to be. In the past, we have talked about alliances. We have used
industrial partnering, those kind of things. When it comes down to
actually putting it in a contract and actually putting money behind
these concepts, we have had a very difficult time doing that and we have
placed a lot of the blame for that right squarely on the FAR and quite
frankly some of what we have been doing has been self defeating because
of the way the Federal Acquisition Regulations are written. Part of the
charter for this is going to be to try to break some of those paradigms
down to try to get to some of the business relationships that both Mike,
more so than Jim, alluded to in his presentation and to try to get after
what we are starting to refer to now as true alliances between the U.S.
military and our industrial partners.
Finally, one of the things that we have to do is we have to look for
common purpose and common philosophy relative to our interfaces between
the military acquisition community and the industrial base that provides
their commercial customers with product as both of these folks alluded
to.
I thank you for your time. I am very interested in what has been said
here this morning and, hopefully, I ve added just a little bit of light
to this problem of partnering and commercialization of space.
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