Proposed Acquisition Teamwork
National Center for Advanced Technologies
Cycle Time Improvements
1250 Eye Street, N.W., Suite 1100, Washington, D.C. 20005
30 October 1996
At the request of Dr. Spiros Pallas, an ad hoc team of the Industry
Affordability Task Force, under the chairmanship of Mr. Mike Robinson, Rockwell
North American, met to discuss potential participation in a USD/AT initiative
dealing with International Cooperative Opportunities. Seven companies (ranging
in product from ground vehicles to avionics, electronics, engines, and
airframes) were represented. All agreed that the end result of this
get-together would be the preparation of a draft white paper to be coordinated
with the balance of the task force prior to delivery to OSD.
International Cooperative Opportunities is a concept, initiated by the USD/AT,
to jointly develop requirements with other nations, with European Allied
nations at the outset, and potentially globally. The concept is derived from a
US study completed in the Spring of 1996, which indicated that joint
requirements activities between the allied nations was "meager". Additionally,
while there is good cooperation between governments in international armaments
activities, and there are some company-to-company activities, the process of
sharing requirements jointly is not very well formulated.
The initial discussions of the group revolved around the reaction of the
companies to the fundamental concept of participating with offshore governments
and companies in the early identification of mutual armament requirements. A
point paper to stimulate the conversation was distributed prior to the
gathering (attach 1).
The general sense of the participants was: International Cooperative
Opportunities could be fundamentally a good concept, given the imploding state
of the nation's defense industry, the rapidly diminishing defense budgets, and
the world armament market situation, if the significant barriers can be
surmounted. All of the representatives agreed that the environment in which
their business is conducted has substantially changed in the recent past, and
was very likely to continue to change. Both foreign and U.S companies are
competing for greatly shrinking defense investment resources. Because of this,
more innovative ways of conducting global commerce, fitting both the defense
needs of the US Government and the business needs of US companies, should be
investigated. They also agreed that the environment within the DoD is becoming
more receptive to industry input and recommendation, with industry becoming
more of a partner in the defense decision making process.
Barriers to International Cooperation
The largest impediment to a successful program of international
cooperation is the United States defense requirements process itself. Even in
today's more cooperative environment, US industry typically does not share in
the requirements generating process. While individual programs can be cited
that belie the previous statement, industry is told that requirements
definition is "the warfighter's domain", and industry need only to be reactive
to them. The insight of the members of the ad hoc team into the foreign
requirements definition processes-- particularly in Europe-- on the other hand,
shows that foreign governments and their industries work closely throughout the
requirements process, forming a unified country position from the outset. The
impact of attempting a joint government-industry international requirements
definition with these divergent philosophies would at best result in:
The result of that situation cannot bode well for U.S. interests. Thus, with
those facts in mind, prior to any further pursuit of an international program,
the model for industry participation in the US defense requirements process
must be redefined.
the European parties showing up with a solid agenda,
the U.S. Government with a desire, and
U.S. Industry attending to find out what is going on.
A second barrier is the potential reluctance of the operator/warfighter to
participate in a program that would diminish the technological fighting edge he
has enjoyed over the past decades. Convincing the warfighter to share tactical
advantage with peers, be they allies, is a consideration that must be addressed
before approaching Europe.
- Once the domestic requirement process is ironed out, proceeding to the next
step of international sharing could be best met by dealing with the Europeans
on a multilateral basis rather than a bilateral basis. The rationale behind
this idea is simple. In the U.S., multiple companies with similar product
lines, have traditionally acted in competition with each other, vying for the
global defense market. European companies are usually singular entities within
their respective nation, dealing closely with their government, with little or
no intra-country competition. Competition in the European scenario is evolving
to an inter-country, e.g.. the British Aerospace competing with Dasa or
Aerospatiale to become the "kingpin of EU defense". Thus, multi-lateral
dealings would place the European industry in a similar competitive position
as the U.S. industry, and a level playing field would result.
There is a concern within the U.S. industry that the Europeans might gain a
significant advantage over their U.S. counterparts if the initiative is pursued
without a closer partnership between U.S. industry and U.S government. One
member of the group felt the initiative could be a unilateral opening of the
U.S market. If in fact this were true, it could be extremely detrimental to
the U.S. armament industry. It therefore becomes extremely important for U.S.
companies to have a greater role in the requirements process, and in the
planning and execution of the ICOG initiative, prior to the initiative gaining
While technological parity is not a prerequisite for exploring joint
requirements, there needs to be a clearer picture of what are the European
industries' plans and motives in participating in this initiative. For
example, two questions (which equally apply to both sides of the equation)
must be answered with regard to the participants. Will the governments be
willing to invest significantly increased R&D funds to participate as full
partners? Will the companies be willing to take secondary roles if their
capabilities are not equal to the task of being the program prime? The
answers, however important, are still predicated on the USG and the US
Industry operating in a closer relationship.
Potential of Cooperative Opportunities
The potential of increasing markets to US companies is significant enough to
pursue this concept to its fullest.
Countries and companies within the EU are tending to focus their activities
within the union at the exclusion of the U.S. This initiative could keep the
European doors open. However, it must be recognized from the out set that the
U.S will become a partner (and not always the senior one) in the new systems
that result from the requirements.
The dream of interoperability may become a reality as a result of this
Dealing with the Europeans on a multi lateral basis will:
- Provide the largest market potential for products that will result from
their requirements. This is good for both industry and government as increased
sales potential while lowering both acquisition and operational support
(because of interoperability) costs.
Provide room for multiple U.S. companies to participate and compete for
the resulting products. This is because U.S. competitors will have multiple
industrial teaming opportunities. (e.g. U.S. company A teams with British
aerospace while U.S. Company B teams with Germany's Dasa).
Be more acceptable to European industry by allaying the fear that either a
U.S giant will totally overwhelm them or another European company will gain
advantage over them in becoming the EU kingpin.
While there was some concern voiced about technology parity, or technology
transferring during the requirements phase, this concern was considered to be
not significant, as long as the company had ultimate authority and control over
the dissemination of technology (proprietary information). The benefit of
technological intelligence would probably gravitate to the US companies, and
outweigh any technological intelligence traveling the other way. For the most
part, technology transfer typically does not occur early in the requirements
phase of weapons systems acquisition. Technology transfer, however, could
potentially become significant later on in the acquisition. Therefore, any
insight gained by U.S. companies into the U. S. requirements process will be
beneficial when dealing with EU industries, in understanding their
state-of-the-art, and by providing knowledge and time to protect U.S.
competitive edge in the product development phases. Current barriers to US
companies trading with offshore governments would have to be addressed. The
traditionalists within the DoD would have to be assuaged. (i.e. contracting
vehicles, export control, Acquisition Reform, Military Specifications would
have to be addressed). On the European side, the capability (and will to
increase capability) to become an equal partner will have to be addressed.
It is suggested that an industry-government workshop be held to
examine and structure a new US requirements development model, that includes
industry as a partner. A broad based industry group (air, sea, land, hardware,
software, mechanical, electronics. propulsion) could be formed to interface
with government (DoD, State, JCS J-8) and service requirements organizations to
work this issue. It might be beneficial to identify three or four programs at
various stages in the process to serve as models rather than solve the issue
totally. It will take strong, clear, leadership from OSD to overcome long
established territorial boundaries to accomplish this task.
It is suggested that a follow on industry- government workshop to examine
and identify the most appropriate interface in Europe (NATO, EU), and how it
would best be used to facilitate the international cooperative program (venue,
format, program level, participant level). Additionally, an examination of what
EU activities and changes should take place to assure a balanced approach to
requirements sharing. A review of what have been the past impediments to true
cooperation would be a good start in this activity.
It is suggested that a parallel activity, or a close follow- up program of
international cooperation proceed with pacific rim nations. This is because,
with the possible exception of Japan, the countries are less amalgamated than
in Europe. They see a more urgent threat and have funds to pursue new programs.
Joe Syslo, NCAT, 30 October 1996, 202 371-8455, 202 371- 8573(fax) e-mail
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