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REGION: North America
TOPIC: Military
Online NewsHour
FORUM
Posted: May 12, 2008

A Closer Look at Defense Contracts

Forum Introduction
Northrup's C-45 Tanker; Photo Illustration When the U.S. military gave a new tanker contract to Northrop Grumman, its competitor, Boeing, called on the Government Accountability Office to investigate, claiming that it did not receive a fair evaluation. Two retired generals who works as consultants to either company answered your questions.
QUESTIONS
Why do we need these air tankers now?
Did the Air Force tell both parties that they wanted something different?
How does the military come to these million dollar decisions?
Was the fuel efficiency of these air tankers taken into account?
D. Burch of Indianapolis, Ind. asks:
What makes an award decision objective? How does the military come to these million dollar decisions?
ANSWERS
Ret. Gen. Gregory Martin responds:
Ret. Gen. Gregory Martin responds:

Dear D. Burch

Excellent question. The Department of Defense follows Federal Acquisition Regulations, its own directives and other legislative direction as it applies in order to establish a fair competitive environment. Those rules attempt to create objective criteria, by which each competitor can strive to use engineering and formula driven techniques to arrive at the optimum solution when proposing that the government select their product to meet its needs as expressed in a request for proposal.

Unfortunately, because the weapon systems our military needs require the highest technology, there will always be a certain amount of risk associated with almost any major acquisition system being developed to be superior on the battlefield. During the Source Selection process, a government team of the most experienced engineers, cost and accounting specialists, science and technology experts, contract managers, operational users and program managers do their best to assess the likely delays in the proposals, from each competitor, to meet the planned cost, schedule and performance goals.

These assessments are based on the maturity of the technology being used, the documented past performance of each competitor on similar programs and the experience and depth of the management team each competitor will use to develop, test and field the new weapon system. These assessments review objective data, but in the end, the final scores often involve some subjectivity.

So, although we can use very objective scores with regard to fuel burn rates, range, payload, survivability, weapon accuracy and estimated maintenance and sustainment costs, assessing risk that a competitor can deliver as promised on schedule, on cost and meeting all operational requirements is subjective.

Ret. Gen. Ron Fogleman responds:
Ret. Gen. Ron Fogleman responds:

The way the system is supposed to operate is that the primary operators establish the criteria to provide the combat capability required. The acquisition community is charged with producing a "Request for Proposal" (RFP) that reflects the operators' requirements.

The aerospace industry prepares a response to the proposal by designing and proposing an aircraft to meet the stated requirements in the RFP. The acquisition community is then charged with forming a source selection committee to evaluate both of the proposals to see which meet the requirements and provide the best value to the Air Force and the taxpayer.

This committee is supposed to evaluate the proposals against the criteria in the RFP to include total system and life cycle cost.

Next Question and Answer

ONLINE NEWSHOUR LINKS

May 6, 2008
Extended Interview: Gen. Gregory Martin, former commander, Air Force Material Command


May 6, 2008
Extended Interview: Gen. Ronald Fogleman, former Air Force chief of staff




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