January 15, 2015

Can the Air Force follow a naval lead in bending its cost curve?


Here at the Atlantic Council last night, Air Force Secretary Deborah Lee James delivered an address on how her department wants to “bend the cost curve” in armaments. To review the reference, the cost curve is the concept in  economics which relates unit cost to units produced. The problem, she said, was that the Air Force Department (and I say arguably the Navy Department too) have been spending “more and more to get less and less.” Bureaucratic sclerosis and risk-aversion aren't helping: the secretary was “horrified” to learn that her department takes an average of 17 months to award even a sole-source contract. So, while not quite fearing an end of history through Augustine’s Sixteenth Law, she announced three initiatives aimed at fixing the problem. She intends to enhance cooperation with industry, expand the number of competitors for the Air Force’s business, and improve the Air Force’s internal procurement processes. That’s all very logical, but we know so because announcements like this are not new.

That’s because Stalin’s line about the quality of quantity has both narrative power and analytical support. Visions of swarming, networked drones are yet just visions, but technological progress in machine learning may continue apace awhile, even if Moore’s Law runs out. More concretely, research by Wayne Hughes and John Schulte at the Naval Postgraduate School has argued that numbers of ships will matter greatly in missile combat at sea, and that the defensive power of those phased-array radars and rows of anti-aircraft missiles is overestimated. Then there’s that infamous briefing from RAND about what happens when those never-so-few stealth fighters run out of ammunition. If this is valid, then the Navy and Air Force have definitely been spending more to get not just fewer ships and aircraft, but less staying power in the fleet.
Either way, hedging that bet might be worth a modest investment. Let me recall the strong signal on Tuesday at the Surface Navy Association meeting in Crystal City. There Vice Admiral Rowden, Commander US Naval Surface Forces, described his vision for prioritizing lethality throughout the surface fleet. Given his cost constraints, he finds that the most logical means of increasing that lethality is distributing it. The admiral ultimately wants to arm not just his cruisers and destroyers with long-range anti-ship missiles, but his frigates, landing ships, and even auxiliaries. No potential enemy will be able presume that the super-carrier group is the center of all American naval power. Rather, American attacks may swarm in from surface groups along any bearing. That’s important, because the number of American super-carrier groups is not and will not be increasing. As even carrier enthusiast Bryan McGrath put it today, 'platform-agnostic is economical’; so from here on in the Navy, “if it floats, it fights.”
Missiles on auxiliaries may be a fetching idea, but the idea can be extended. How about weapons and sensors and relays on tanker aircraft? The Marine Corps flies a good deal too, and has forged some clever innovations with its Harvest Hawk program. Those KC-130s have been around for decades, and will be for decades more, in yet more guises. If they fly, and fly for considerable cost, should not they fight? Fairly, one of Secretary James' more intriguing announcements was the $2 million prize the Air Force is offering for a new medium-sized turbine engine. Why? Because a more efficient engine, she said, would be particularly important for future drones—another way of distributing combat power. It’s entirely possible that there are some wild-but-workable unmanned ideas floating around that vast black budget. And distributing fighting power with smaller weapons and platforms is one of the ways to lure more potential contractors into bidding on more programs.
What could all this mean for the Air Force? There are multiple ways of bending cost curves, but with different time horizons. At the dinner following our event, I took particular note of the observation that secretaries have limited opportunity to overhaul the way their services fight. This is not news either: HMS Victory was forty years old when she served as flagship at Trafalgar. But even as they keep a weather eye on twenty or thirty-year problems of training and equipping, leaders can make small changes that demonstrate hitherto unconsidered operational alternatives. The question, then, is not whether Secretary James and Assistant Secretary Laplante have stumbled onto a novel three-part management strategy. They have not. But facing their cost constraints, they probably have greater determination than some of their predecessors to make those eminently sensible strategies stick. If they start with some small wins, they may more clearly signal resolve and build a culture of deck-plate innovation and risk-taking that the Air Force seems to have lost.
James Hasík is a senior fellow at the Brent Scowcroft Center on International Security.