How to Break a Program: Funding Instability, Requirements Changes

The fastest ways to hobble a major acquisition program are to put it through the funding instability of continuing resolutions or to apply constant major changes to the requirements once the program is well underway, panelists said on an AFA Mitchell Institute for Aerospace Studies webinar Nov. 15. The one major aircraft program over the past three decades that escaped serious problems in development and production—the Navy’s F/A-18E/F—benefitted from being largely left alone by Congress and senior Pentagon leaders in these regards.

“If you want to damage a program or make it unsuccessful, create requirement and funding instability,” said Randall G. Walden, head of the Air Force’s Rapid Capabilities Office, which is currently managing the B-21 bomber and Advanced Battle Management System. “The moment you do that, you’re going to break the program.”

Every time he goes to Capitol Hill, Walden said he begs Congress to “please make [funding] stable.” Likewise, changing the requirements—whether driven by Congress or the Pentagon—“drives instability in the program where we may not have the money to cover it.”

The B-21 has gotten high marks from Capitol Hill, and Walden said the program’s success owes much to good communication with Congress, realistic requirements, and stable funding. Changing those aspects “most likely … results in time added, and time added equals cost added,” Walden said.

The Mitchell Institute for Aerospace Studies discussed its recent paper, “From EMD to Milestone C and Beyond: Common Issues that Affect Developmental Programs Transitioning into Production,” during a Nov. 15 virtual event.

The panel was discussing a Mitchell paper by retired Lt. Gen. Mark D. Shackelford, “From EMD to Milestone C and Beyond: Common Issues that Affect Developmental Programs Transitioning into Production.” Shackelford was the senior Air Force uniformed acquisition officer in his last assignment.

Shackelford looked at major aircraft development programs including the B-1B and B-2 bombers; the C-17 airlifter; the KC-46 tanker; the A-12 joint attack plane; and the F-22, F-35, and F/A-18E/F fighters, and of all of them, only the F/A-18 Super Hornet could be considered a largely untroubled program, he said.

The reasons the Super Hornet was an “outlier” to the other major aircraft projects had to do with a number of factors, Shackelford said.

“There was a good relationship between government and contractor, based on their prior relationship on the earlier Hornet,” he said. The program used “integrated product teams, … strictly controlled requirements, had stable funding—only two minor reductions over 12 years—seven test aircraft, ample time to test, a logical workshare arrangement, and substantial management reserve,” he said.

Shackelford hastened to add, though, that while the F/A-18E/F had some “substantial differences” compared to the F/A-18C/D, the Super Hornet was “not a clean-sheet design, but an evolution of the earlier Hornet.” Most of the other programs examined were pursuing some technologies for the first time.

Of the others, some of their banner problems were that the B-2 “started manufacturing before design was complete,” while the F-22 program “underestimated cost and schedule and suffered from a very aggressive bid from the prime contractor” with an “unrealistic cost and schedule [that] distributed workshare” among three different contractors, “and, later in [engineering and manufacturing development], a hands-off approach” from government, leaving too many decisions in the hands of Lockheed Martin.

The notorious 1980s A-12 stealth program suffered from just about every area in which the Super Hornet excelled, Shackelford said, with an adversarial government-contractor relationship, unrealistic schedule and budget, immature technology, and excessive classification that prevented good oversight.

“Lack of flexibility compounds these management problems,” Shackelford noted. “Not being able to recover from a misstep, or negotiate a solution to an unexpected challenge, can leave government or the contractor to double down on approaches with negative outcomes.”

Government needs to apply “active contract management,” he said. Ideally, it also should “own the technical baseline … and make changes to its contractor approach as needed. The goal is to build trust and partnership, backed up by data and accountability.”

When asked if the existing milestone system is in need of an overhaul, given the need to accelerate programs, Shackelford said no.

“I would go so far as to say that the milestone system is OK,” he said. “But we need to be able to tailor the milestone system to deal with the challenges that a particular program is facing. Things like spreading out a milestone event to multiple mini-milestones is one solution that’s commonly taken with that.“ Walden said this is precisely the approach the B-21 has taken, particularly with software.

The true value of the milestone system is “that it gets the detail of what’s going on in the program up to the very top decision-makers so that they get insight into … the overall status of the program. And we’ve got to be careful to keep them informed,” Shackelford said.

The “key decision-makers are actually part of the audience for this paper … because they’re the ones that control things like funding,” he added. Milestone reviews help create a consensus understanding of expectations for a program and “how to deal with them,” Shackelford said.

He found no universal warning signs that a program was headed for problems “other than the importance of communication.” While good progress has been made in pushing decision-making to lower levels, “in general, the information still needs to flow back up so that these decision-makers do control at the very top level, … so that they’re aware of things and have an understanding of the impact of the decisions that they make.”