Changing times call for Army and industrial base to collaborate on solutions
From The Army Acquisition Executive
The Honorable Heidi Shyu
As we enter a new calendar year, the Army faces challenges of an evolving fiscal reality and the transition from wartime production to peacetime requirements. The Army and its industrial base must work together to address these issues head-on. The hard truth—sustaining readiness in this fiscally constrained environment—necessarily means fewer investments in the future. Budget uncertainty complicates the procurement landscape, but communication and cooperation will allow the Army and industrial base to meet our respective goals.
Although the organic and commercial industrial base sectors are often discussed as distinct communities, public-private partnership at Army depots and essential facilities is a potential core strategy to ensure that parts and materials are available to sustain platforms and equipment at appropriate readiness levels.
Defense spending is projected to make up only 12 percent of the federal budget in FY17, down from 17 percent in FY13. Those numbers are a world away from the 49 percent of the federal budget consumed by defense during the 1960s. At the same time, the budget for research, development and acquisition (RDA) is declining faster than the overall defense budget.
Nothing highlights this more concretely than the Army’s total obligation authority (TOA) for FY14, which, at $129.7 billion, is 15 percent lower than the FY12 Army TOA of $152.6 billion. Compare this to the FY14 Army RDA budget of $23.95 billion, which is down an amazing 28 percent from the FY12 RDA budget of $33.2 billion. A Nov 28, 2013, article in The Washington Post profiled members of the West Point Class of 2014 and gave a compelling description of the challenge. A 22-year-old cadet wisely noted that the key question is not how to do more with less, but how to determine “what we’re going to do and what we’re going to do well.” In other words: What’s going to be good enough?
Procurement budgets naturally contract after a war. The end of the Cold War saw a wave of consolidation, mergers and acquisitions in the commercial base. Although industry consolidation reduced duplication and redundancy, it also resulted in many of today’s critical defense assets being manufactured by only a limited number of firms. As the U.S. manufacturing sector has decreased overall, defense manufacturing has taken on a greater significance for remaining firms. But while there are fewer large players than in previous drawdowns, there has been a proliferation of small businesses working as subcontractors—providing engineering services, doing research and development, and manufacturing specialized components.
Today’s industrial base includes a large population of highly skilled technical and knowledge workers, many of them employed by specialized third- and fourth-tier subcontractors. Keeping these skilled employees within the industrial base has the added benefit of enhancing support for the Army’s small business partners. The rapid decline in our RDA budget creates significant challenges for small companies that must diversify quickly, but the Army has met its 25 percent small business goal for the past three years. This helps small businesses continue to innovate and deliver products and services to our warfighters.
It is just as important to note the opportunities created by the coming drawdown. The Army and industry can begin a new level of dialogue around modernization, which technologies best meet national security needs and how to integrate new technologies into existing infrastructure. Although the organic and commercial industrial base sectors are often discussed as distinct communities, public-private partnership at Army depots and essential facilities is a potential core strategy to ensure that parts and materials are available to sustain platforms and equipment at appropriate readiness levels.
As the Army assesses and identifies capabilities and competencies at its depots and arsenals, the commercial base is a vital stakeholder. The commercial base, in particular, is well-positioned to help the Army better use commercial off-the-shelf products and production techniques that can yield new efficiencies and increase the buying power of the defense dollar.
Consider an example from Program Executive Office Ammunition: Staff implemented a long-term strategy for recurring procurement of artillery and mortar components. A $2.7 billion small business set-aside strategy eliminated the need for more than 100 separate market surveys, synopses and requests for proposals, and reduced average delivery time from 18-24 months to 45-60 days. This efficient new procurement strategy will help the Army avoid $60 million in costs while supporting small business.
Multiyear procurement (MYP) is another proven strategy for lowering cost to the taxpayer while reducing financial uncertainty for industry. The CH-47 Chinook MYP has saved taxpayers nearly $500 million to date while enhancing the environment for sharing lessons learned between the Army and industry, and incentivizing quality assurance.
As President Ronald Reagan observed, “no weapon in the arsenals of the world is so formidable as the will and moral courage of free men and women.” We remain committed to providing the best equipment to the warfighter at the best value for the taxpayer. Painful choices will have to be made on force structure, readiness and modernization. The Army’s desired end goal is to meet the nation’s and world’s security needs while we invest in emerging technologies to develop the next generation of capabilities.
By Claire Heininger
ARLINGTON, Va. (April 30, 2013) — The U.S. Army has been named one of the world’s most innovative research organizations, after earning more than 300 patents for new technologies in a three-year period.
The Army joins the ranks of private companies such as 3M, Apple, AT&T, Dow Chemical, DuPont and General Electric as one of the 2012 Top100 Global Innovators named by Thomson Reuters, the multimedia and information conglomerate. The U.S. Navy was also named, making the two service branches the first government agencies to make the list.
“This recognition is shared with the members of our Army Science and Technology community who perform research relevant for the Army and our important mission, and provide the innovation that contributes to a strong national security posture,” said Heidi Shyu, the Assistant Secretary of the Army for Acquisition, Logistics and Technology (ASA(ALT)), who accepted the award on behalf of the service during a small ceremony at the Pentagon. “Nearly 12,000 scientists and engineers perform their work daily knowing that it will benefit our Soldiers by providing them with the best technology available to successfully accomplish their mission.”
The award focused on all organizations having 100 or more “innovative” patents, defined as the first publication in a patent document of a new technology, from 2009-2011. Thomson Reuters then used its proprietary methodology to measure the organizations’ success on a variety of metrics, such as “influence” — how often their research was cited by other innovators in their subsequent inventions — and “success,” the conversion rate of patent applications to granted patents.
The Army scored well in both of those categories, with more than 8,500 citations of its inventions published from 2007-2011, and 327 granted patents out of 436 published inventions from 2009-2011. The service also stood out for the broad range of subject matter covered in its inventions portfolio, ranging from training software that uses virtual robots to dispose of simulated explosives, to a folding shield that protects the operator of a tank weapon station, to a vaccine guarding against infection by the Ebola virus.
“This illustrates how we attack many Army-unique problems, yet also contribute in wide-ranging areas,” said Dale A. Ormond, Director of the Army Research, Development and Engineering Command (RDECOM). “Our portfolio was heavy in weapons, ammunition and blasting, but also pharmaceutical products, polymers and computing.”
More than 900 individuals contributed to the Army’s patents, including personnel from RDECOM, the Army Corps of Engineers and the Army Medical Research and Materiel Command, as well as some of their partners from industry, government and academia. Three of those individuals, representing all the Army innovators, were honored at the award ceremony, including Ronald E. Meyers of the Army Research Laboratory, who was the top innovator with 11 patents; John E. Nettleton of the Communications-Electronics Research, Development and Engineering Center; and Bartley P. Durst of the Engineer Research and Development Center, Corps of Engineers.
The recognition by Thomson Reuters illustrates the depth, skill and dedication of the Army science and technology community and the impact of their efforts both within and beyond the military, leaders said.
“Our people operate in the space between the state of the art and the art of the possible where innovation is paramount and focused on addressing needs unique to the Army,” Ormond said. “We also develop technologies that have a major impact once they leave the military world. It’s an incredible value for the taxpayer.”
In a constrained budget environment, deliberate investment in science and technology is essential to drive continued innovation, Shyu said. The Army is developing a strategic plan that will protect and facilitate science and technology efforts that are essential to Army modernization, addressing the state of emerging and evolving threats; trends in commercial technology; current and emerging equipment requirements; and research in core priorities that address Army-unique challenges.
While it is difficult to predict future technology developments, leaders expressed confidence in the Army workforce to continue accelerating innovation to give Soldiers the decisive edge.
“Army Science and Technology cannot survive without innovative scientists and engineers,” said Mary J. Miller, Deputy Assistant Secretary of the Army for Research and Technology. “We are lucky to have an amazing group of scientists and engineers to invent, innovate, mature and demonstrate technology that provides increased capability to the Warfighter.”
By Skip Vaughn
The Army acquisition executive looked out over the classroom of contracting student Soldiers and told them how valuable they are.
“Thank you for what you guys do every single day,” Heidi Shyu, assistant secretary for acquisition, logistics and technology, said. “You guys are the future of our acquisition work force.”
Shyu visited the Army Acquisition Center of Excellence on April 3 at its building on the campus of the University of Alabama-Huntsville. The center is under the Acquisition Support Center, out of Fort Belvoir, Va.; and its classes fall under the Army Logistics University, Fort Lee, Va. The 47 students, most of whom are military, represent three classes which last from 3-4 weeks. The center has been located on the UAH campus since 2006 and in Madison Hall, 301 Sparkman Drive, since January 2011.
Before addressing the students, Shyu met briefly with the staff and faculty. She called the three classes – including Project Management, Contracting Level-2 and Contract Pricing — very important. “What they’re learning is valuable, it’s incredibly marketable,” she said.
She gave an overview of the international environment, her role as the Army acquisition executive and the need to take lessons learned from the last decade of war.
The Army’s spending reflects the declining budget. In fiscal 2011, the Army did 470,000 contracting actions and obligated $124.3 billion. That declined in fiscal 2012 to 412,000 contracting actions and $107.5 billion obligated.
Shyu pointed out that 64 percent of the Army’s contracting actions are competed. Last year 27.2 percent of contracts went to small businesses and “that’s huge,” she said.
She told the students that contracting or acquisition isn’t a job they can do by themselves. It entails the requirements, the money and an acquisition plan. “It’s got to all come together,” Shyu said.
She invited questions from the students; and the first dealt with the budget and sequestration. “We’re trying to make the smart decisions,” she said.
Among the students was Staff Sgt. Trevor Dodge, 27, from Windsor, N.H. He is midway through the four-week Army Basic Contracting Course. At the end of April, he will be leaving Fort Hood, Texas, for Fort Belvoir, Va.
“I thought it was great,” Dodge said of Shyu’s presentation. “She gives a view we don’t get very often. She hinted at things that are coming in the future so that kind of gives you a purpose in your job.”