ARMY AL&T
This ambitious schedule requires development and fabrication of the airship concurrent with integration of the ground stations, communications, and sensors to enable use within the area of operations during a three- plus-year JMUA. Under the OT, the contractor must also establish logistic support in the area of operations for operation and maintenance of the LEMV during the JMUA.
Nontraditional Contractors Needed
Before the LEMV, hybrid airship tech- nology had only been explored outside DOD by companies at their own R&D expense. No full-scale hybrid airships existed, only small-scale models (60-foot and 125-foot experimental versions). The technology to achieve the required combination of persis- tence, payload, altitude, and range was unproven. Many of the companies pos- sessing technology critical to achieving the LEMV performance requirements were not traditional DOD contractors and lacked the understanding, systems, and orientation to perform within the standard federal acquisition framework.
Because of this, the USASMDC acqui- sition team presented an acquisition strategy based on an OT agreement to the Office of the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (OASAALT).
As expected for an acquisition approach that offers such a high level of flex- ibility, OTs are highly restricted and are subject to an extensive review and approval process.
Following in-depth market research and analysis, OASAALT concurred with the OT approach, which then was approved by the Under Secretary of Defense for Acquisition, Technology, and Logistics in December 2009. After congressional notification, the solicitation was issued in mid-February 2010. An award was made in mid-June
2010, following evaluation of two proposals and negotiation of all offers, to a team led by Northrop Grumman Corp. that included Hybrid Air Vehicles Ltd. of Cardington, England (a nontraditional company), at a cost- plus-fixed-fee amount of $154 million for the initial prototype LEMV system and a total agreement value of $517 million including options.
This team aligned well with the OT legal requirements and intent, bringing Hybrid Air Vehicles’ extensive knowl- edge and hybrid airship technology into the agreement.
Measures of Success The OT-based acquisition of the LEMV was a success on a number of levels:
• A level of competition was obtained during the source selection that could not have been achieved under a FAR-based approach.
• The increased flexibility supported the approach to obtain intellectual property rights for future DOD acquisitions, which will set the stage for competition if the LEMV transi- tions into a major DOD program. The LEMV contract included obtain- ing a special license agreement that gives the U.S. government rights to technology developed commercially and at company expense prior to the LEMV project, unlike most technol- ogy developed outside DOD and subject to major data rights restric- tions. The special license agreement grants the government rights irrespec- tive of whether the technology was originally funded by the contractor, subcontractor, or the government.
• The ability to integrate existing R&D from nontraditional DOD sources resulted in lower develop- ment costs and significantly less development time. Use of existing technology outside traditional DOD sources will enable the LEMV to meet its aggressive 18-month delivery schedule. Independent development
of this technology through traditional DOD acquisition methods would have been impossible within the required timeline.
• While Hybrid Air Vehicles furnished its extensive knowledge of hybrid air- ship design and fabrication, it lacked the full system expertise and the managerial structure and experience to manage a large, complex, and highly aggressive project. Northrop Grumman had the managerial experience and expertise to run a difficult project as well as the comprehensive ability to integrate the airship as a complete sys- tem, but the company lacked expertise in hybrid airship technology.
• The LEMV entered Critical Design Review in November 2010 and is on track to complete system fabrica- tion and test in mid-2011 before final acceptance and transportation to the area of operation in 2012.
If successful, the LEMV will be consid- ered for transition to a major program and subsequent production under a FAR-based acquisition.
The potential market for hybrid airships is significant for both government and commercial markets. The LEMV approach has leveraged existing technol- ogy that was privately funded, to decrease government cost and schedule and to advance the technology to the level where it can become commercially viable.
RONALD J. DILLON is the Agreements Officer for the LEMV Technology Project. He holds a B.A. in history from Colorado College and an M.B.A. from Orlando College. Dillon is Level III certified in contracting and is a Senior Contracting Officer and U.S. Army Acquisition Corps member.
LTC ROBERT J. HANNAH is the Deputy Project Manager for LEMV. He holds a B.S. from the U.S. Military Academy and has 15 years’ experience as an acquisition officer.
APRIL –JUNE 2011 65
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