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2
Review of the Impact of
Regulations, Policies, and
Strategies on Sustainment
INTRODUCTION
This chapter addresses element 2 of the terms of reference (TOR), that is,
“Determine if any modifications in policy are required, and, if so, identify them
and make recommendations for changes in Air Force regulations, policies, and
strategies to accomplish the sustainment goals of the Air Force.” The committee
extensively examined the regulations, policies, and strategies that affect Air Force
weapon system sustainment. The sustainment process actually should begin on
the day when a warfighter states, “We need a…product” and should continue un-
til the product that evolves from that need is retired to a defense recycling center
or, in the case of a weapon system, a reclamation center—often 50 years later. It
is estimated that 65 percent or more of the life-cycle costs relate to supporting
rather than acquiring the system. 1 Sustainment concepts should be considered
alongside of required capabilities at the beginning of the acquisition cycle, but this
has not always happened. Nevertheless, progress toward this goal is being made as
evidenced by new congressional interest and legislation, updated Department of
Defense (DoD) policies, instructions, and reports, and substantial steps by the Air
Force to incorporate an enterprise perspective into the acquisition and sustainment
1 Sue Lumpkins, Principal Deputy Assistant Secretary of the Air Force for Installations, Environ -
ment and Logistics. “Air Force Studies Board Sustainment Study.” Presentation to the committee,
October 20, 2010.
24
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effort. Although significant work remains, there is recognition within the Air Force
that sustainment is important, complex, and expensive.
AIR FORCE SUSTAINMENT GOALS
Element 2 of the TOR states, in part, “to accomplish the sustainment goals
of the Air Force.” The committee maintained a constant focus on the Air Force
sustainment goals, not only for the purpose of addressing them in this report, but
also because goals drive organizations. When a goal is generally understood, then
there are more likely to be a common purpose and higher probability of success.
In its numerous discussions with Air Force personnel, the committee posed the
following questions:
• What are the sustainment goals of the Air Force?
• Who sets the goals?
• How are the goals established?
• Who knows the goals?
• How are the goals tracked and to whom are they reported?
The answers were interesting to say the least. In fact, the majority of respon-
dents were unable to respond in detail. Many talked about aircraft availability (AA),
but, as discussed later in this chapter and in Chapter 4, AA is a parameter that has
many complex elements.2 Overall, who is in charge of achieving AA is in question.
In its search for key sustainment goals, the committee became aware of a measure
for improvement over time during a briefing on Expeditionary Logistics for the
21st Century (eLog21), which is a transformational Air Force campaign to drive
supply chain improvements. The essence of a goal is represented by the last two
bullets in Figure 2-1.
Despite what many people appear to believe, the goals for eLog21 do not also
serve as the goals for Air Force weapon system sustainment. AA is far more widely
reported than cost parameters as the goal. Committee members engaged various
government and industry officials in extensive discussions regarding methodologies
for assessing and calculating AA as well as which officials are accountable for AA.
Unfortunately, the calculation responsibilities were better defined than the target’s
ownership. In fact, after thoroughly investigating AA, the committee concluded
that AA ownership is vague at best and that, because there are so many “cooks in
the AA kitchen,” no one can be held truly accountable. The report’s discussion of
2 See, for example, the “quad chart” from: Ashton Carter, Under Secretary of Defense for Acquisition
Technology, and Logistics. “Strengthened Sustainment Governance for Acquisition Program Reviews.”
Memorandum for Secretaries of the Military Departments. April 5, 2010.
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eLog21 is a transformation campaign that drives Air Force supply chain
operational improvement
Umbrella effort consisting of
multiple logistics
transformation initiatives
Ensures warfighter receives
the right support at the right
place and the right time
Two primary goals:
Increase equipment
availability – to match Aircraft
Availability (AA) targets
Reduce Operations & Support
(O&S) costs – by 10%
eLog21 is implemented through strategic initiatives that focus on improving
processes and information technology to align with eLog21 goals
FIGURE 2-1
eLog21 defined. SOURCE: Grover L. Dunn, Director of Transformation, Deputy Chief of Staff for Lo -
gistics, Installations and Mission Support, Headquarters U.S. Air Force. “Expeditionary Logistics for
Figure 2-1.eps
the 21st Century (eLog21).” Presentation to the committee, January 17, 2011.
this issue is brief, because the committee found no well-established, documented,
top-level sustainment goals with clear ownership for the Air Force.
Finding 2-1. The Air Force does not have (a) consistent, widely understood
goal(s) for aircraft sustainment.
Recommendation 2-1. The Air Force should establish sustainment goals that
are specific and can be understood by all acquisition, contracting, engineering,
and sustainment professionals. The Air Force should then track these goals and
hold key individuals accountable for achieving them.
STATUTES, REGULATIONS, AND POLICIES THAT
IMPACT AIR FORCE SUSTAINMENT
Overview
The complexity of the Air Force sustainment enterprise is reflected in the
myriad of statutes, regulations, and policies that the Air Force must consider when
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performing sustainment tasks. These include legislation that specifies the definition
of depot maintenance (10 U.S.C. § 2460), types of work for the maintenance depots
and core considerations (10 U.S.C. § 2464), amounts of work to be conducted in
the depots, i.e., 50/50 accounting (10 U.S.C. § 2466), and funding levels to be spent
on depot maintenance Capital Investment and Process Improvement, e.g., the 6
percent rule (10 U.S.C. § 2476); regulations derived from the mid-1980s’ Acquisi-
tion Reform Act and the Weapon System Acquisition Reform Act, which require
major acquisition programs to have a weapon system Product Support Manager
(PSM) (10 U.S.C. § 805). Additionally, legislation that affects public-private part-
nerships (10 U.S.C. § 2474) allows for the creation of Centers of Industrial and
Technical Excellence that directly affect depot maintenance activities. These centers
are designated by the Service Secretaries and offer the industrial complex the op-
portunity to partner with commercial industry to gain technological investment
and better support future technologies. Regulations of state and federal agencies,
such as the Environmental Protection Agency, Occupational Safety and Health
Administration, and the Federal Aviation Administration also affect all levels of
the sustainment process, including military operations around the globe. These
regulations are often augmented by DoD and Air Force instructions and policies
designed to facilitate interdepartmental and intra-Air Force activities and imposed
on every level of maintenance, supply, and transportation operations within the
Air Force. Lastly, labor agreements impact many parts of the sustainment process.
Figure 2-2 highlights the complexity of these statutes, regulations, and policies
in the context of the Air Force sustainment enterprise. The realities listed in Figure
2-2 are accepted at face value as policies to be updated over time; however, they
address a myriad of influences and players—statutes, policies, programs, strategies,
organizations, and more. For example, the 3-year-old Air Force Global Logistics
Support Center is responsible for the full spectrum of the Air Force spare parts.
(Policy issues remain in the supply arena, and Chapter 4 includes significant cover-
age of spare parts support.)
With Centralized Asset Management, operations and maintenance funds are
consolidated during the execution year to enable the Air Force as a whole to sustain
the forces. Core/50/50 refers to legislation that directly affects acquisition strategies
and sustainment over the weapon system life cycle. The appointment of a PSM to
major programs is dictated by Section 805 of the 2010 NDAA (Weapon System
Reform Act above). In fact, every “bullet” in the figure has a profound implication
for sustainment. The point of the chart extends beyond the fact that the policy
must be updated. The entire acquisition and sustainment environment is tightly wo-
ven and cannot be separated into individual elements without considering the effects
on the whole. Even more importantly, synchronization of all of these bullets—and
many other “topical bullets” like these—is a herculean task. Without well-defined
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Airworthiness Program Support Reviews
Centralized Asset Management Rapid Response Process
Core/50/50 Reliability, Availability, and
Maintainability
Data Rights
System Integrity
Depot Source of Repair
Sustaining Industrial Capabilities
Global Logistics Support Center
Sustainment Quad Chart
Product Support Manager
Sustainment Readiness Levels
Public/Private Partnerships
Transition Support Plan
Performance-Based Life Cycle
FIGURE 2-2
Sustainment policy updates to be addressed in Air Force policy. SOURCE: Blaise J. Durante, Deputy
Assistant Secretary for Acquisition Integration, Office of the Assistant Secretary of the Air Force for
Acquisition. “Budgeting Considerations Related to Sustainment.” Presentation to the committee,
October 21, 2010.
Figure 2-2.eps
regulations and a key commander in charge, long-term positive effects are unlikely
to be achieved.
Statutes and Regulations
As stated above, numerous statutes and regulations influence the sustainment
process. Throughout the study, the committee reviewed these statutes and regula-
tions and assessed their impacts. Although the statutes principally affect depot
maintenance operations and processes, there is without question a number of
regulations and policies, including policies from the 1980s’ acquisition reform,
that drive DoD and Air Force sustainment practices. In the acquisition area, the
Service Acquisition Executive (SAE), Program Executive (PEO), and Single or
System Program Manager (SPM) have primacy for decisions on a weapon system
during the acquisition process. In today’s operations, it is rare that a major Air Force
weapon system program does not have some type of ongoing acquisition event.
Consequently, the acquisition community has a constant role in the sustainment
process. The 2010 Weapon System Acquisition Reform Act directs major programs
to have a PSM. By enacting this legislation, Congress has emphasized the impor-
tance of thoroughly considering sustainment in major acquisition programs just as
it emphasized through other legislation the importance of the nation’s industrial
depot maintenance capabilities.
Legislation affects depot maintenance operations to a large extent, beginning
with a definition of depot maintenance by 10 U.S.C. § 2460. The statutory defini -
tion of depot maintenance is, at best, ambiguous and subject to interpretation.
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In fact, although the definition seems to be widely accepted by most informed
personnel, a review of the literature revealed that the Army, Navy, and Air Force
take different interpretations of depot maintenance when conducting analyses
and reporting. Different interpretations by different services directly impact the
development of Core capability requirements and sustainment of workloads, as
well as the military’s 50/50 calculations.3 Although the impact on the immediate
sustainment process is minimal, it detracts from clear policy execution, which
leads to debate on sustainment concepts for Air Force weapon systems. The
general sense of those outside the Air Force is that the DoD as a whole must
standardize what is and what is not depot maintenance and then report on ac -
tivities accordingly.4
Because there is debate across the DoD about what is and what is not depot
maintenance, it is worth asking the following questions: Does determining what
is or is not depot maintenance really make a difference to the outcome of the sus-
tainment process? Doesn’t the work need to be done regardless of what it is called?
The answer to the first question is another source of great debate. Without a firm
and universally accepted definition of depot maintenance, program managers will
make decisions that best optimize their own programs. The answer to the second
question is “Yes, however...” Including or not including the various types of work,
by definition, affects Core workload determinations, which, in turn, affects main-
tenance capability and 50/50 work allocations and results.5 10 U.S.C. § 2464, Core
Logistics Capability establishes
a requirement to maintain a core depot maintenance capability that is government-owned
and government-operated (including government personnel) to ensure a ready and con-
trolled source of technical competence and resources necessary to ensure effective and
timely response to mobilizations, national defense contingency situations, and other emer-
gency requirements.6
Core requirement determinations are exceedingly complex. The Air Force per-
forms extensive analyses to determine the wartime taskings for its various aircraft,
3 Logistics Management Institute (LMI). 2011. Future Capability of DoD Maintenance Depots.
LG901M2. February. McLean, Virginia: LMI. Section 4, p. 4-2. Available at http://armedservices.
house.gov/index.cfm/files/serve?File_id=394b31e6-4adc-47ca-a6f5-21547f0751fa. Accessed Febru-
ary 20, 2011.
4 LMI. 2011. Future Capability of DoD Maintenance Depots. LG901M2. February. McLean, Virginia:
LMI. Section 1, pp. 1-18. Available at http://armedservices.house.gov/index.cfm/files/serve?File_
id=394b31e6-4adc-47ca-a6f5-21547f0751fa. Accessed February 20, 2011.
5 LMI. 2011. Future Capability of DoD Maintenance Depots. LG901M2. February. McLean, Virginia:
LMI. Section 4, pp. 1-19. Available at http://armedservices.house.gov/index.cfm/files/serve?File_
id=394b31e6-4adc-47ca-a6f5-21547f0751fa. Accessed February 20, 2011.
6 General Military Law, U.S. Code, Title 10, Section 2472 (February 10, 2010).
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the wartime depot maintenance requirements generated by the wartime surge,
and then the representative types and mix of work that the depots must supply
to meet the wartime surge needs. Then, applying the 50/50 rule (10 U.S.C. §
2466, Distribution of Workload), the Air Force determines the portion of depot
maintenance work that can be performed outside of the organic depots, that is,
by contractors.
The summary effect of these two statutes was widely discussed by many of the
speakers listed in Appendix B. From a process standpoint, many speakers pointed
to the effort that goes into determining Core and 50/50 management and 50/50
reporting. There is, however, a much more insidious issue: the primacy of well-
intentioned PEOs and SPMs who tend to make sustainment decisions that optimize
individual platforms rather than take a more enterprise perspective. For years, this
primacy drove decisions that went outside the Core workload process and produced
adverse 50/50 spreads. In many cases, short-term economics also drove decisions:
it costs program dollars to equip depots to maintain new systems, and such invest-
ments can be reduced or eliminated by deciding to use a variety of partnering or
full contractor support. This situation was further exacerbated by a lack of checks
and balances over decisions that might adversely affect the Air Force sustainment
environment. The Air Force Materiel Command (AFMC) Commander acknowl-
edged that he was responsible for sustainment during the year of execution,7 but
he did not identify who was responsible for enterprise-level decisions during the
planning process. It appears that the inputs prior to the year of execution are not
significant, but once in the year of execution, the AFMC Commander must deter-
mine how the pieces come together and how to finish the year in compliance with
all of the statutes, policies, and directives.
These short-term or longer-term effects place the acquisition community and
the sustainment community at great odds. Compliance with statutes conflicts
with the desire to bring weapon system economics into balance and to simulta-
neously support the weapon system at the optimal level. The committee found
that there has been no strong arbitrator for sustainment, policies on who can
influence or reshape sustainment decisions have been unclear, and SPMs and
PEOs have had decision-making authority. Unless an individual of great stature
makes a compelling case to the SAE, the decision stands. Consequently, the Air
Force has been compelled to closely analyze Core determinations to ensure that
it has the capability and capacity to meet wartime needs, and today the Air Force
is repeatedly on the verge of breaking the 50/50 rule. As pointed out by the LMI,
the services react not to Core analysis and determination, but to the 50/50 re-
7 General Donald J. Hoffman, Commander, Air Force Materiel Command, Wright-Patterson Air
Force Base. Personal communication to the committee, December 9, 2010.
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porting, which must be certified to the Office of the Secretary of Defense (OSD)
and reported to the Congress:
As currently constructed and used, core is viewed more as a reporting requirement
than a management tool. More than one senior military official stated that considerable
attention was paid to the requirements to comply with 10 U.S.C. §2466, the so called
50/50 requirement, because the results were reported to Congress, and they anticipated
adverse actions for failure to comply. In contrast, core requirements received no visibility
above OSD.8
When a violation of the 50/50 rule occurs, the Secretary of Defense must grant
a waiver on the basis of a national security determination. The committee was re-
peatedly told during its visits to Headquarters AFMC, Headquarters Aeronautical
Systems Center, and the Air Logistics Centers (ALCs) of the extraordinary lengths
the Air Force has taken to avoid violations of the 50/50 rule. The consequences
of these actions on finances, readiness, and ALC work loading are discussed in
Chapter 4.
The committee discussed at length all of the statutes that affect sustainment
and particularly depot maintenance and determined that the Air Force at large
has not systematically dealt with Core considerations, the 50/50 workload mix,
and other statutory conditions. After meeting with three congressional staffers,
the committee doubts that these statutes will change substantially.9 By dealing
with these statutes and leveraging U.S.C. 10 § 2474 (Centers of Industrial and
Technical Excellence) to the extent possible; the Air Force can reduce some of
the stressors on the 50/50 calculation. Additionally, instilling discipline into the
overall sustainment determination process could help to eliminate the Core and
50/50 issues.
As dynamic as the legislation is on depot maintenance and acquisition efforts,
the committee found little to no statutory language about managing materiel or
the spare parts piece of the supply chain. However, the committee did find appro-
priate DoD instructions and policies on spare parts management and ample Air
Force guidance and direction on material management. As Figure 2-3 indicates,
the material management policies and instructions are extensive and considered
satisfactory from the process and effect perspectives. However, the committee
8 LMI. 2009. Future Capability of DoD Maintenance Depots: Interim Report. LG901M1. December.
McLean, Virginia: LMI. Section 4, pp. 4-12. Available at http://armedservices.house.gov/index.cfm/
files/serve?File_id=be97f304-3d15-4e96-bc24-689f8cb6c633. Accessed February 20, 2011.
9 Peter Levine, Senate Armed Services Committee, General Counsel, Readiness & Management
Support Subcommittee, Majority Lead; Lynn Williams, House Armed Services Committee, Readiness
Subcommittee, Majority Lead; and Vickie Plunkett, House Armed Services Committee, Readiness
Subcommittee, Minority Lead. Presentation to the committee, February 16, 2011.
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FIGURE 2-3
Material management. SOURCE: Major General Judith A. Fedder, Director of Logistics, Deputy Chief
of Staff for Logistics, Installations and Mission Support, Headquarters United States Air Force. “AF
Sustainment Study—Product Support, Material Management, Transportation.” Presentation to the
Figure 2-3.eps
committee, February 14, 2011.
bitmap
repeatedly observed material shortages to depot repair lines and to a lesser extent
field activities and was informed by depot craftsmen of decisions made for some
systems to switch from contractor support to organic support. Although the poli-
cies may be acceptable, there clearly are some execution issues with regard to mate-
rial management. Chapter 4 discusses parts availability.
Finding 2-2. Over the years, Title 10 of the U.S. Code, DoD, and the Air Force
have issued singular “directives” that have resulted in confusion, inefficiencies,
and lack of accountability in the sustainment process. Title 10 is the “law of
the land,” and because it is unlikely that any “sea-state-change” will occur, the
Air Force must come to grips with its provisions.
Recommendation 2-2. The Air Force should conduct a detailed holistic review
of all appropriate sustainment policies and directives and build a complemen-
tary suite of processes and actions. With regard to the Title 10 mandates, the Air
Force should take near- and long-term strategic actions to ensure maximum
compliance. The Air Force should make long-term acquisition decisions and
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should aggressively pursue opportunities for Centers of Industrial and Techni-
cal Excellence.10,11
ESTABLISHING AIR FORCE SUSTAINMENT POLICIES
Sustainment must be thought of as a process and operated from a “systems”
perspective. Air Force sustainment policies should establish a systems approach
from concept to retirement and should be based on the following:
1. Engineering-based decisions with regard to the processes used to sustain
an organization’s operational systems;
2. A comprehensive approach to gathering and analyzing data;
3. A well-defined governance structure designed to ensure compliance with
the directives prescribing the sustainment processes;
4. Organizational structures optimized and resourced to ensure proper lead-
ership, training, force development, and execution of the sustainment
processes;
5. A culture of collaboration whereby each of the many acquisition and sus-
tainment functions, processes, and procedures is designed with an under-
standing of how individual actions affect the entire Air Force warfighting
enterprise; and
10 Quoting, in part, 10 USC § 2466 entitled “Limitations on the Performance of Depot-level Main -
tenance of Materiel”: “(a) Percentage Limitation.— Not more than 50 percent of the funds made
available in a fiscal year to a military department or a Defense Agency for depot-level maintenance
and repair workload may be used to contract for the performance by non-Federal Government
personnel of such workload for the military department or the Defense Agency. Any such funds that
are not used for such a contract shall be used for the performance of depot-level maintenance and
repair workload by employees of the Department of Defense.” For additional information, see http://
www.law.cornell.edu/uscode/uscode10/usc_sec_10_00002466----000-.html. Accessed July 8, 2011.
11 Quoting, in part, 10 USC § 2474 entitled “Centers of Industrial and Technical Excellence: Des -
ignation: Public-Private Partnerships” and enacted November 18, 1997, by Public Law 105-58: “(1)
The Secretary concerned, or the Secretary of Defense in the case of a Defense Agency, shall designate
each depot-level activity of the military departments and the Defense Agencies (other than facilities
approved for closure or major realignment under the Defense Base Closure and Realignment Act of
1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note)) as a Center of Industrial
and Technical Excellence in the recognized core competencies of the designee. (2) The Secretary of
Defense shall establish a policy to encourage the Secretary of each military department and the head
of each Defense Agency to reengineer industrial processes and adopt best-business practices at their
Centers of Industrial and Technical Excellence in connection with their core competency require-
ments, so as to serve as recognized leaders in their core competencies throughout the Department
of Defense and in the national technology and industrial base (as defined in section 2500(1) of this
title [10 USCS § 2500(1)]).” For additional information, see http://www.law.cornell.edu/uscode/html/
uscode10/usc_sec_10_00002474----000-.html. Accessed July 19, 2011.
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6. Outcome-based metrics designed to ensure appropriate availability of the
operational systems to ensure mission success.
Engineering-based Decisions
As shown in Figure 2-4, the Air Force’s senior sustainment leadership has a
fundamental understanding of the challenges presented by the six principles. As a
starting point, “Technical decisions drive everything that logisticians do.”12 Sustain-
ment actions proceed on the basis of engineering determinations.
When dealing with complex systems with very distinct technology advances,
the DoD must be very deliberate in defining the processes it uses to determine the
failure modes likely to occur in systems that are unique, highly advanced, and based
on highly complex integration of leading-edge technologies. Neither the DoD nor
the Air Force has adopted a single, integrated, fact-based, analysis-derived process
for determining the actions necessary to ensure the integrity of operational sys-
tems throughout their life cycles even though the Air Force indicates that it has
employed the Reliability Centered Maintenance (RCM) and Failure Modes, Effects
and Criticality Analysis (FMECA) processes since the late 1970s.
When the Air Force engaged in major outsourcing activities during the 1990s,
it did not always stipulate a standardized maintenance management concept to be
used by the prospective competitors. The contractors developed individual contract
processes and procedures that may or may not have followed Air Force traditional
practices. Likewise, the processes to determine the tasks, procedures, and frequen-
cies of maintenance actions to operate and sustain systems vary not only between
the ALCs, but also between similar systems within the same ALC. As a result, the
Air Force uses several engineering-based processes to sustain its aircraft fleet. Some
are based on RCM and FMECA, some are based on the processes developed by the
original equipment manufacturer (OEM), some are based on an airline-developed
process known as Maintenance Steering Group Three (MSG-3), and some are based
on what are best described as hybrids.13,14
As Figure 2-4 outlines, there is good life-cycle management engineering and
policy, but the implementation is lacking. The results, highlighted in Figure 2-4,
12 Grover L. Dunn, Director of Transformation, Deputy Chief of Staff for Logistics, Installations and
Mission Support, Headquarters U.S. Air Force. Personal communication with committee members,
Pentagon, Arlington, Virginia, February 14, 2011.
13 United States Air Force (USAF). 1980. Military Standard - Procedures for Performing a Failure
Mode, Effects and Criticality Analysis MIL-STD-1629A. AMSC N3074. November 24. Available at
http://www.everyspec.com/MIL-STD/MIL-STD+(1600+-+1699)/MIL_STD_1629A_1556/. Accessed
May 2, 2011.
14 Jim Gray, Headquarters Air Force Materiel Command/Engineering Directorate, Executive Officer.
Personal communication to the committee, April 11, 2011.
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FY2004 =100%
105.0%
PBL Driven Behavior
100.0%
DPFH % (CY2008 $)
95.0%
> 25%
90.0%
Since
2004
85.0%
80.0%
75.0%
2004 2005 2006 2007 2008 2009 2010 2011
Fiscal Year
FIGURE 2-15
C-17 Global Sustainment Partnership (GSP): Dollars per flight hour (DPFH) reductions FY2004-
Figure 2-16.eps
FY2011. SOURCE: Mark Angelo, Director, C-17 GSP Operations & Site Lead, The Boeing Company;
Robert Tomilowitz, Executive Director, Supply Chain Management and Support Equipment, The Boeing
Company; and Richard (Skip) Whittington, Senior Manager, C-17 GSP Business Development, Boe -
ing Defense, Space & Security. “C-17 Globemaster III Sustainment Partnership.” Presentation to the
committee, January 18, 2011.
FIGURE 2-16
Demand on mobility fleet FY2002-FY2009. SOURCE: Timothy Thomas, Deputy Chief, Maintenance
Figure 2-17.eps
Division, Headquarters Air Mobility Command. “AMC/A4 Perspective.” Presentation to the committee,
bitmap
October 21, 2010.
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tently deliver improved materiel readiness, but assessing the true cost of both traditional
(transactional) and performance-based strategies is difficult, if not impossible, given cur-
rent financial systems.26
Additionally, as Figure 2-17 shows, strong performance factors are derived
from partnering relationships. Cost is always a factor, but the partnerships must
capitalize on each of the partners’ strengths and deliver an outcome to the warf-
ighter that is both highly effective and efficient. In striving to deliver effectiveness
and efficiency, the DoD and Air Force must consider external factors that affect
sustainment strategies, largely the legislative provisions of Title 10 of the U.S. Code.
At the same time, 10 U.S.C. § 2474 offers significant relief by allowing the Air Force
to establish partnering relationships between maintenance depots and contractors
in the form of Centers of Industrial and Technical Excellence. Although this pro-
vision has existed since November 1997,27 only 1 percent of the Air Force’s depot
maintenance work is conducted by public-private partnerships.28 The intent of the
Congress in passing this legislation was to allow Centers of Industrial Technologies
and Excellence—Air Force depot maintenance facilities, in this case—to partner
with industry and share work in the government facilities where both could gain
work and the government facilities could gain technology enhancements to allow
them to take on future work. The workload is taken out of the 50/50 calculations.
26 DoD. 2009. DoD Weapon System Acquisition Reform Product Support Assessment. November.
Washington, D.C.: Office of the Under Secretary of Defense for Acquisition, Technology and Logis-
tics, p. 11. Available at https://dap.dau.mil/career/log/blogs/archive/2010/01/28/implementation-of-
dod-weapon-system-acquisition-reform-product-support-assessment-psa-recommendations.aspx.
Accessed November 22, 2010.
27 Quoting, in part, 10 USC § 2474 entitled “Centers of Industrial and Technical Excellence: Des -
ignation: Public-Private Partnerships” and enacted November 18, 1997, by Public Law 105-58: “(1)
The Secretary concerned, or the Secretary of Defense in the case of a Defense Agency, shall designate
each depot-level activity of the military departments and the Defense Agencies (other than facilities
approved for closure or major realignment under the Defense Base Closure and Realignment Act of
1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note)) as a Center of Industrial
and Technical Excellence in the recognized core competencies of the designee. (2) The Secretary of
Defense shall establish a policy to encourage the Secretary of each military department and the head
of each Defense Agency to reengineer industrial processes and adopt best-business practices at their
Centers of Industrial and Technical Excellence in connection with their core competency require-
ments, so as to serve as recognized leaders in their core competencies throughout the Department
of Defense and in the national technology and industrial base (as defined in section 2500(1) of this
title [10 USCS § 2500(1)]). For additional information, see http://www.law.cornell.edu/uscode/html/
uscode10/usc_sec_10_00002474----000-.html. Accessed July 19, 2011.
28 LMI. 2011. Future Capability of DoD Maintenance Depots. LG901M2. February. McLean, Virginia:
LMI, pp. 4-15. Available at http://armedservices.house.gov/index.cfm/files/serve?File_id=394b31
e6-4adc-47ca-a6f5-21547f0751fa. Accessed February 20, 2011.
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FIGURE 2-17
Partnering strategies produce higher sustained readiness improvement. Notes: 1. Sustained Readiness
Improvement is the number of years over the span of 1999 through 2007 where a weapon system
saw no decline in availability or saw a decline of lesser magnitude than the domain average. 2. F-22,
FMTV, MTVR, and Stryker data do not span from 1999 through 2007 due to their newness. 3. USAF
Figure 2-18.eps
C-130 APU contract awarded to Honeywell in August 2007. Not enough time has occurred yet to
bitmap
include it as a partnership for this evaluation. SOURCE: DoD. 2009. DoD Weapon System Acquisition
Reform Product Support Assessment. November. Washington, D.C.: Office of the Under Secretary of
Defense for Acquisition, Technology and Logistics. Available at https://dap.dau.mil/career/log/blogs/
archive/2010/01/28/implementation-of-dod-weapon-system-acquisition-reform-product-support-
assessment-psa-recommendations.aspx. Accessed November 22, 2010.
Finding 2-9. The Air Force has used a variety of sustainment practices for new
weapon systems and major modifications on older weapon systems without
due consideration of their impacts on the sustainment enterprise. This has
resulted in a wide diversity of sustainment practices and difficulty in tracking
and understanding true sustainment costs.
Recommendation 2-6. The Air Force should develop and direct a sustainment
execution model for weapon systems and major weapon systems modifications
that balances the needs of the individual weapon system with the performance
goals and cost constraints of the overall sustainment enterprise.
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A BENCHMARK: PROCESSES AND POLICIES OF
THE NAVAL AVIATION ENTERPRISE
There are, indeed, wide differences in organization, size, and culture between
the United States Navy (USN) and the Air Force aviation communities.29 The
committee elected to examine how the Navy conducts sustainment operations.
The committee did so briefly, not knowing what it would find, but recognizing
that benchmarking—good or bad—affects thought processes. The Navy faced
challenges in the late 1990s and early 2000s much like those faced by the Air Force
today—in terms of readiness, support, and understanding and controlling costs.
As a result, the Navy initiated a complete review of, and revision to, its approach to
aviation readiness and sustainment. Simply put, the Navy focused on strategic out-
comes—readiness and cost—or, in other words, “Be ready, control consumption.”
This review was necessitated by the observation of the Chief of Naval Opera-
tions that principal performance indicators for the aviation community were con-
sumption oriented and had no value in measuring readiness.30 In addition, only
limited performance indicators existed to provide Navy leadership with informa-
tion about the cost-effectiveness of existing actions to provide readiness, establish
outcome-based budget requirements, and manage operational results. In essence,
readiness was not adequately, or appropriately, defined or measured in terms of its
contribution, performance, and cost, relative to the Navy’s goals.31 As a result of
the review, Naval Aviation was aligned into the Naval Aviation Enterprise (NAE).
The NAE represents a behavior model focused on the warfighter as the Single Pro-
cess Owner (SPO), with Navy resource and provider organizations in subordinate
roles.32 Figures 2-18 and 2-19 provide graphic portrayals of the NAE.
At the apex of the pyramid is the operational commander or supported com-
mander who sets the tempo for the overall operation and is in fact the NAE com-
mander. The many providers who support the commander are on the left-hand
leg. The resource sponsors, who provide the resources to conduct operations, are
on the right-hand leg. Interestingly, although the acquisition arm is under the
Naval Air Systems command and is a force supporter, the maintenance depots and
29Appendix C, Navy Enterprise Transformation , provides additional details on the naval Aviation
Enterprise.
30 USN. 2007. Navy Enterprise Transformation: Working for the Greater Good, pp. 3-6. May.
Available at http://www.thomasgroup.com/getdoc/7c79c3c9-8603-4908-ad89-0ebb0e10a67f/Navy-
Enterprise-Transformation.aspx.
31 Ibid.
32 A similar positive relationship is discussed in Chapter 6 on page 6-29 where the triad of the FAA
+ OEM + Operator is established in the commercial aviation sector to achieve what the Navy imple -
mented in the NAE. More specifically, the arrangement brings together the key elements of operating
a fleet, including sustainment, to achieve an enterprise solution.
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Enterprise Culture and Communication
• Achieve a culture that emphasizes and rewards collaboration, accountability and
transparency among Enterprise stakeholders and partners in support of Naval
Aviation readiness. (Champions: CNAF, DC (A), NAVAIR)
Readiness
• E ngage all Naval Aviation readiness stakeholders and stakeholder organizations
to drive efficient delivery of combat-ready forces to meet current and future
operational requirements. (Champions: CR CFT Co-Leads)
People
• Develop and manage enterprise-wide processes that maintain a diverse, cost-
effective, and technically superior total force to perform all of the functions
required for Naval Aviation to fight and win in combat. (Champion: CNATRA)
Future Readiness
• E ngage stakeholders to effectively produce required levels of future readiness
while optimizing costs. (Champion: OPNAV N88)
FIGURE 2-18
Strategic objectives of the Naval Aviation Enterprise (NAE). SOURCE: Captain Mike Kelly, Commander,
Naval Air Forces (CNAF), Force Material, Maintenance and Readiness. “COMNAVAIR.” Presentation to
the committee, January 17, 2011.
Fleet Requirements
C N AF / D C ( A )
D ir e c t a n d
M on i to r
R qm t s
T h e F le e t
Providers F u nd
E x e c ut e
Resource
Rqmts
R qm ts
Sponsors
O P N A V / H Q MC
a n d m or e . . .
FIGURE 2-19 1
NAE’s enterprise framework. SOURCE: Captain Mike Kelly, Commander, Naval Air Forces (CNAF),
Force Material, Maintenance and Readiness. “COMNAVAIR.” Presentation to the committee, January
17, 2011.
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operational-level maintainers directly report to the commander of the Naval Air
Forces even though they are providers.33
The NAE’s focus shifted from consumption (accumulation of flight time, car-
rier landings, and experience) to metrics (Single Fleet Driven Metric, or SFDM),
reflecting the state of the fleet relative to goals established collectively by the fleet
and senior military and government leadership. The organizational alignment and
commitment to common metrics served to eliminate the “stovepipe” orientation
common to many functionally driven organizations and focused all Naval Aviation
assets on a holistic approach to readiness as shown in Figure 2-20.
As an example, a critical element involved a change to the relationship between
the fleet, i.e., the operators, and the maintenance providers. Wing commodores
became the principals for their aircraft types and were expected to assume re-
sponsibility for readiness, with maintenance providers subordinated to that effort.
Demonstratively representative statements of the NAE’s objective and orga-
nizational and philosophical approach are found in the minutes of the executive
committee’s May 2010 meeting:
“Every time we do this meeting, we find that there is continuing relevance and there is a
continuing reason for the Naval Aviation Enterprise,” said Vice Adm. Thomas J. Kilcline,
Jr., commander, Naval Air Forces. “The NAE is maturing, and every year over the last six
years, we have taken a really good hard look at what we are doing and how we can improve.
This year, as in the past, we questioned the assumptions that underline what we do and
why we do it.”
“The NAE is relevant, if not more relevant today, in championing the processes that deliver
a warfighting capability. The purpose of this meeting is to bring together a core group of
leaders that have an impact on naval aviation,” said James Beebe, executive director for
Commander, Naval Air Forces. “It is all about communication and understanding the
equities that we all have in supporting naval aviation requirements.”34
The NAE is to provide a leadership/management alignment that assures all
functions related to the warfighting capability of Naval Aviation are focused on
the warfighter’s missions (as demonstrated in Figure 2-21). The concept includes
corporate tools and methodologies to integrate financial considerations and mea-
surements into the operational process as a means to address fiscal and budgeting
realities. A plan approved by a Board of Directors (BOD), consisting of the most
senior leaders of the functional activities, exists for each functional alignment and
identifies, prioritizes, aligns, and synchronizes investment efforts for the various
entities. Gaps in capabilities relative to need are addressed with action plans. Prior-
33 USN. 2007. Navy Enterprise Transformation: Working for the Greater Good, pp. 3-6. May.
Available at http://www.thomasgroup.com/getdoc/7c79c3c9-8603-4908-ad89-0ebb0e10a67f/Navy-
Enterprise-Transformation.aspx.
34 Available at http://www.navy.mil/search/display.asp?story_id=53356. Accessed May 1, 2011.
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6 Mo Red Above Avg: 12.8%
6 Mo Red Below Avg: 14.2%
8
7
6
5
4
3
2
1
FIGURE 2-20
Current readiness Big 4. SOURCE: Captain Mike Kelly, Commander, Naval Air Forces (CNAF), Force Ma-
terial, Maintenance and Readiness. “COMNAVAIR.” Presentation to the committee, January 17, 2011.
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Enlisted Personnel RFT
COST PERFORMANCE
SPI: 0.99 CPI: 1.09 EI: 1.00
$6,280
8,000
$7,199 $6,250
7,000
FW $5,745
6,000
AFM
5,000
4,000
SPI: 0.99 AVDLR
3,000
CPI: 1.09
2,000
FF
1,000
0
1
FIGURE 2-20 continued
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FIGURE 2-21
Figure 2-22.eps
Today’s NAE. SOURCE: Captain Mike Kelly, Commander, Naval Air Forces (CNAF), Force Material,
Maintenance and Readiness. “COMNAVAIR.” Presentation to the committee, January 17, 2011.
ity and resource differences between functional units that cannot be resolved by
the NAE are resolved by the BOD for the NAE.
Readiness is addressed in terms of operational goals established by the most
senior leadership consistent with strategic and tactical doctrine. Sustainment is
addressed through the NAE triad alignment that focuses the efforts of the Tech-
nology Developer (ONR/NRL/NRE) and the Material Developer (NAVAIR) on the
needs of the Combat Developer (CNAF/OPNAV/CFFC) to optimize maintenance
processes and support equipment and to provide a holistic approach to meeting
required operational standards. The same model aligns personnel recruitment and
training with operational needs. The focus is on meeting established operational
objectives, or exceeding those objectives within fixed cost budgets, and manage-
ment constraints are exerted to prevent doing more than is necessary to surpass
those goals for which variable costs are involved. Evidence of the process’ success
includes the ability of the NAE to meet operational objectives with a surplus of
manpower, financial, material, flying, and other resources that have been eliminated
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or returned for disposition to senior leadership. The NAE established the behavior
model, organization, and processes to35
1. Provide clear definition, organization, and planning process to achieve the
Single Fleet Driven Metrics for readiness and sustainment.
2. Provide a holistic methodology for organizational and functional alignment
under appropriate warfighter commands, as Single Process Owners, to focus
all asset efforts on the objectives established by the NAE.
3. Provide fiscal/budgetary awareness relative to operational objectives within
all aviation commands to aid in preventing unnecessary variable cost ex-
penditures for unneeded readiness or sustainment capability and provide
improved readiness at reduced cost.
4. Provide a methodology for governance and continuous planning to address
action plans to achieve current and future operational readiness, sustain-
ment, and fiscal objectives in a process of continuous improvement.
5. Provide SFDM as Key Performance Indicators for transparency within the
entire Naval Aviation community relative to readiness performance.
Finding 2-10. Although the Air Force structure and program management
mechanisms are designed differently, the NAE approach provides an interest-
ing governance model and foci for the Air Force to consider as it executes its
eLog21 strategy and deliberates on how to sustain its overall force.
CONCLUDING THOUGHTS
Foremost, the lack of clearly defined sustainment goals affects the entire Air
Force. The Air Force can quickly develop a solution to this situation and then refine
it over the longer term. The Air Force would be well served by assigning a sustain-
ment commander with stature to work with the operational commands as well
as the SAF/AQ, SAF/IE, and AF/A4/7 to develop and vet policy. This commander
could then dynamically shape long-term sustainment planning, be accountable
for achieving the sustainment goals, and oversee execution of the Title 10 U.S.C.
provisions and day-to-day support of the fleet. From the outset of the study, the
committee compared the Air Force sustainment model to general operations of
large commercial firms. As stated earlier, it is imperative to determine who is in
charge and what are the roles and consequences of their being in charge. Figure 2-22
notionally provides a side-by-side comparison of commercial business operations
and accountability to what is considered to be the Air Force model.
35 Vice Admiral Walter Massenburg (United States Navy, retired), Senior Director, Mission Assur-
ance Business Execution, Raytheon Company. “Enterprise Behavior—Fundamental Changes in the
Government Business Model.” Presentation presented to the committee, January 18, 2011.
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COMMERCIAL USAF
Strategic vision Not defined or unclear
GOAL Optimized combat status (C-Rating
Maximize profits
Solid ROI
METRIC Costs and profitability Varies
Aircraft availability (AA),
Operational performance
Mission-capable rates
Customer satisfaction
CEO Too many to list
RESPONSIBLE
Wall Street SECAF/CSAF
JUDGE
Reward or None unless total failure occurs
CONSEQUENCE Replacement e.g., Nuclear Enterprise Breakdown
FIGURE 2-22
Notional model depicting Air Force and Figure 2-23.eps to aircraft sustainment.
commercial approaches
Any system in an organization the size of the Air Force is extraordinarily com-
plex. Based on its interactions with numerous Air Force officials, the committee is
confident that the officials understand what they are doing and the importance of
their duties to the nation. At the same time, they expressed a general frustration
with an inability to control their work processes and achieve positive results.
Challenges in the Air Force sustainment process begin in the SAF/AQ, SAF/
IE, and AF/A4/7 offices, which are responsible for defining policy and procedures
for the subordinate organizations. These headquarters offices must set the tone for
Air Force sustainment. In the absence of well-defined policy and procedures, field-
level commanders and directors take individual action to sustain their fleet. Such
initiative should be noticed, but the commanders and directors should receive clear
guidance and should be held accountable for execution. Statutes have sometimes
served as an excuse from making hard decisions, and these decisions do involve
economic trade-offs. Nevertheless the statutes will remain, and the Air Force must
set the stage for long-term compliance.
The Air Force sustainment process is not broken by statute, policies, regula-
tions, or strategies. However, it is not an efficient enterprise either. As reflected in
several recommendations, the sustainment process can be improved, but to do
so will require continued efforts through programs such as eLog 21 and SAF/AQ
initiatives. Yet, these alone will not address all issues or even solve the key issue. For
the enterprise to truly function as an enterprise, it needs a strong leader…a leader
that is in charge of both planning and execution.
