May 7, 2020 | International, Aerospace
By SYDNEY J. FREEDBERG JR.on May 06, 2020 at 2:14 PM
WASHINGTON: What worries the Army's aviation acquisition chief as he helps industry get ready to build a revolutionary new generation of aircraft in the midst of a global pandemic? “It's the mom and pop shops,” Patrick Mason said today. “It's the Tier 3 suppliers, typically on the hardware side.”
“Those are the ones we remain focused on, because those are those are the ones that can end up in a single point failure,” the program executive officer for Army aviation continued. “That's what we're doing right now through COVID and we're going to continue to do that as we look ...to Future Vertical Lift.”
While the big Tier 1 prime contractors should be fine, they depend on smaller Tier 2 suppliers for key components, and they depend on yet smaller Tier 3 suppliers. As you trace the provenance of a crucial component down that supply chain, you all too often find a single point of failure. That's some tiny, easily overlooked company that happens to have the only people who know how to build a particular part, like an actuator or a valve, or the only one who can apply a particular heat treatment or protective coating to someone else's part so it can survive the stresses of flight.
It would be easier if the Army was just winding down production of one kind of traditional helicopter and ramping up another. Then industry could build any new parts required in the old way. But Future Vertical Lift is about building new kinds of aircraft in new ways.
Even the most traditional-looking competitor, Bell's proposal for the FARA scout helicopter, is being designed, built, and tested using new digital tools. Those tools allow much greater precision and efficiency than traditional blueprints, but only for facilities that have the necessary technology installed. Bell and its rivals, Sikorsky and Boeing, are also all eager to use 3D printing and other advanced manufacturing techniques to improve the performance and reliability of key parts while reducing their cost. That's another set of new technologies that small firms can't easily afford.
Will increasing sales of drones help make up the revenue? In addition to the optionally manned FARA scout and FLRAA transport, which will have human crews aboard for most missions, FVL is also building a whole family of completely unmanned aircraft.
The major companies can get in on much of that business, Mason said, but some of their smaller suppliers can't. If you build electronics or write flight control software, then. you can work on either manned or unmanned aircraft. But, Mason said, if you specialize in building a particular kind of hardware for manned aircraft, most drones are so much smaller that they use entirely different systems, such electric actuators instead of hydraulics. So for small manufacturing shops, he said, “there's less synergy.”
Mason's concerns were well supported by a study of the FVL industrial base by the Center for Strategic & International Studies, released today.
“The primes are all in,” said Andrew Hunter, director of defense industrial studies at CSIS, who hosted yesterday's call, “[but] it's a big challenge for those Tier 3 and lower suppliers to make this transition.”
During months of workshops with industry, “the concern that we heard expressed repeatedly was lower down the supply chain, [with] Tier 3 and lower suppliers,” Hunter said. “It's an expensive investment that they may be challenged to raise the capital to do, [and] it certainly will involve retraining their workforce to use these new manufacturing techniques.”
“Industry has to see they're going to get a return on that investment,” he said. “Even optimistic management who are true believers and think they are definitely going to get a return on this investment because they're going to win [FVL contracts], they've still got to justify it to the banks. They've still got to justify it to their corporate boards.”
Changing The Rules
What complicates the business case for contractors is that the Army wants a new approach, not just to building the new aircraft, but also to how it keeps them flying.
Over an aircraft's decades in service, the long tail of operations, maintenance, and upgrades dwarfs the up-front cost of research, development, and acquisition. While the CSIS study calculated that the Army could afford to build the Future Vertical Lift if budgets remain near historical averages – not guaranteed in the wake of the pandemic – the bigger risk is whether or not the service can control those Operations & Sustainment costs in the long term.
Army Futures Command's director for aviation modernization, Brig. Gen. Walter Rugen, said he was confident that extensive physical prototyping and digital modeling would help the service get a handle on those costs. “Our requirements... are still in draft form, so if we need to trade one away to maintain our budgets, we will do that,” he said. “We are going to understand to the greatest degree possible what our O&S costs are and make sure that it's within our budget.”
For helicopters, Hunter said, O&S is typically 65 percent of the total cost over the lifetime of a program. Now, not all that money goes to aerospace contractors, since sizable chunk goes to pay military maintenance personnel, buy fuel, and so on. But contracts to sustain existing aircraft are a more important revenue stream for most contractors than actually building new ones.
While projected spending on R&D (blue) and procurement (red) rise and fall, remaining under $2.5 billion a year, Operations & Sustainment costs (green) remain largely constant at over $7.5 billion — a crucial source of cash for industry. (CSIS graphic)
So any Army effort to economize on operations & sustainment hits contractors where they live. What's more, the Army isn't just trying to squeeze savings out of the existing process; it's changing the rules of the game.
Historically, companies could bid low to build a new weapons system because, once they got the contract, they had a de facto monopoly on maintaining and upgrading that system for decades. Now the Defense Department is pushing hard to break this “vendor lock” in two main ways:
“Part of what we're doing [over] the next year, year and a half, is the strategy associated with the operational availability, that we want out of these platforms, the intellectual property we want to obtain,” Mason said. “What's the valuation of the IP, the intellectual property? Because intellectual property drives their ability to control the aftermarket, and the aftermarket is where you see the year over year cash flow [that's] critical to most of their business models.”
“As you look at Modular Open System Architecture...the business case and the business model associated with it is something that we're working through with industry right now,” Mason said. “It is critical that we have the right incentive structure, it is critical that we provide the right framework so that industry continues to invest and they continue to see a return on that invested capital.”
To prevail in future conflicts, “we can't afford not to do Future Vertical Lift,” Brig. Gen. Rugen said. “What this report talks to is national interest we have in preserving the rotorcraft industrial base as we go forward.”
https://breakingdefense.com/2020/05/armys-shift-to-fvl-poses-big-risks-for-small-suppliers/
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By John A. Tirpak ORLANDO, Fla.—Air Combat Command is shifting from a “fighter roadmap” to a “capabilities” roadmap that will capture many of the things fighters do today, but likely with new types of unmanned systems and “attritable” aircraft, Air Combat Command boss Gen. Mike Holmes said Feb. 27. Speaking with reporters at an AFA Air Warfare Symposium press conference, Holmes said ACC is grappling with “what is a fighter?” in the future. The fighter mission will give way to “attritable” aircraft and “loyal wingmen” unmanned aircraft, in addition to fighters, and possibly different kinds of manned aircraft. The roadmap will be very much dependent on the theaters in which the assets will be used. “What I would rather build is a capabilities roadmap that shows how we're going to accomplish the missions for the Air Force that we traditionally have done with fighters,” Holmes said. “And the subtlety there is, I would hope, 30 years from now, I'm not still trying to maintain 55 fighter squadrons. I think we will have advanced and there will be some other things that we'll be cutting-in.” The roadmap is in roughly five-year stages, which parallel “natural decision points” affecting chunks of the fleet, Holmes explained. The first stage seeks a replacement for the F-15C fleet, which is now aging out of the inventory. Those aircraft will be replaced by F-35s and the new F-15EXs, Holmes reported. The EXs are needed to reduce the overall age of the fighter fleet “so we can afford to sustain it,” he said, noting the EX is “what's available to us now.” The next stage “will be what we call the pre-block F-16s—the Block 25 and 30 Fighting Falcons—that we're still flying.” Within the next eight years, “depending on budgets and capabilities, we'll have to decide what we'll do about those airplanes,” Holmes said. There is an “opportunity” to cut-in “something new: low cost, attritable [aircraft], loyal wingmen, various things we're ... experimenting with.” After that, ACC will confront “the post-Block F-16s—the Block 40s and 50s—that can fly for quite a bit longer, but there is a modernization bill that would have to be spent to keep them useful,” Holmes said, suggesting further service life extension for the F-16 may be coming. Gen. Arnold Bunch, commander of Air Force Materiel Command, said the F-16 post-block fleet could be extended for as much as another 10 years of service life, starting in the mid-20s. A SLEP would have to focus first on making them safe to fly, he said, and they would need technology insertions to make them relevant, “depending on what you use them for.” The aircraft will already have Active Electronically Scanned Array radars and digital backbones, he noted. Finally, ACC is trying to decide what the Next-Generation Air Dominance system should be. “The equation and the math we use for ‘what is a fighter' still works pretty well for the European environment—the range, payload, and distance problem,” Holmes noted. But “it's not as effective a solution in the Pacific because of the distances,” and for that theater, he said, “I wouldn't expect [NGAD] to produce things that necessarily look like a traditional fighter, or in that traditional swap between range and payload that we've done.” Pacific Air Forces boss Gen. Charles Q. Brown, Jr. said in the future a family of systems approach will be more useful given the size of the area of operations and the differences in the adversary. “The family of systems provides us some level of advantage. If you're looking for a single point solution that has to be a fighter. It's the fighter, but not the information that comes off the fighter, the information the fighter gets from other platforms ... ,” Brown said. “How all that comes together will be important to support the fighter of the future, or whatever capability we have.” Holmes said Will Roper, the Air Force acquisition chief, is thinking about more low-cost “attritable” options for the Pacific, “thinking about that long-range problem, what might we come up with.” He has previously allowed that something akin to a large missileer, potentially a variant on the B-21, could be part of the mix, and ACC is also thinking about an “arsenal plane” concept. “Those discussions are going on, and they should be,” Holmes added. But “it is still ... our responsibility to the rest of the force to control the air and space on their behalf.” Roper's team is working with industry to pursue a new “digital” prototyping approach that Holmes said he's pleased with. He noted that Boeing was able to win the T-7 competition by showing it can “design and build airplanes in a different way and at a cost point nobody expected,” and “we think we have the opportunity to spread that across the other things we're doing.” He also says there is support from Capitol Hill with the approach at this stage, and ACC is working hard to share information on the future of ACC combat capabilities at “the right level” of classification. https://www.airforcemag.com/holmes-lays-out-fighter-like-roadmap/