V-22 OSPREY CITED FOR EXCELLENCE IN ACQUISITION REFORM
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Posted 05/04/99 07:09:12 AM --- More Division of Public Affairs news articles
By Gidge Dady, V-22 Public Affairs
NAVAL AIR STATION PATUXENT RIVER, MD. (May 4) -- Dr. H. Lee Buchanan, assistant secretary of the Navy for Research, Development and Acquisition, presented the V-22 government and industry team the 1999 Department of Defense (DOD) Acquisition Executives (DAE) Certificate of Achievement for excellence in Acquisition Reform here May 3.
The V-22 Osprey tilt-rotor aircraft is the slated replacement for the Marine Corps' aging fleet of Ch-46 Sea Knight and CH53D Sea Stallion helicopters.
Colonel Nolan Schmidt, V-22 program manager, accepted the prestigious award on behalf of the V-22 team, which is cited for its work in establishing a "highly-innovative, commercial, fixed-price contract for commercial engine procurement and commercial logistic support of the Allison AE-1107C engine." This contract is known as "Power by the Hour" because Allison provides the majority of the maintenance and supply support beyond the flight line. This support includes configuration management, training, spare parts inventory, and engine certification.
"For the first time, the Allison and the V-22 team have directly aligned warfighter requirements with industry's primary motivator, profit. Our warfighting customer's number one engine requirement is for the engine to stay on the wing and run reliably, consistently, and with the lowest level of maintenance possible. When Allison fills that warfighter requirement, optimally it will improve their bottom line while decreasing overall program cost in the future," said Schmidt.
"It is estimated that the Power by the Hour Program could ultimately save the Department of Defense over $533 million by enabling us to avoid costly investments in engine logistics infrastructure. More important, with its fixed cost per engine operating hour, the program gives Allison incentive to constantly seek improvements in V-22 engine reliability and safety," said Buchanan during the presentation. Other benefits include increased combat readiness and decreased engine-life cycle costs to DOD and increased profits to Allison.
Buchanan added that the $533 million savings resulting from this highly innovative program and process will enable the Navy to have one more ship. "You are truly out in front in acquisition reform and a superb example of how to make the acquisition system more efficient and responsive."
The collaborative DOD effort between the Naval Air Systems Command, the Naval Air Warfare Center Aircraft Division, Patuxent River and Lakehurst, N.J.; Naval Aviation Depot, Cherry Point, N.C.; Naval Air Technical Data and Engineering Service Command; Aviation Support Logistics-Commandant Marine Corps; Naval Supply Systems Command; Naval Inventory Control Point, Philadelphia; and, the US Air Force began in 1996. It culminated with the May 1998 contract award, which program officials believe is an approach that "could be a watershed event in future logistics support program planning." During this two year effort, a side-by-side comparison was made of engine life cycle costs for a commercial engine supported by Power by the Hour versus a military engine operating with internal military support. The latter was more costly because of the infrastructure investment required for military support, according to Cmdr. Mike Ahern, V-22 deputy program manager for business.
Ahern added that with the commercial approach, no investment was needed for the stand-up of depot or intermediate level repair capabilities or depot repair parts. In short, the V-22 program will save millions of dollars as well as increased engine flying hours by procuring commercial engines and logistics support for the V-22 engines.
The award of this contract is an example of integrating the DOD into commercial bases and practices. "The V-22 team successfully established a process by which material and information flows between the military and contractor to support all maintenance and supply actions. By using Electronic Data Exchange, the team created a seamless channel from the operator to the contractor using existing DOD and contractor capabilities," said Ahern.
The DAE Certificate of Achievement recognizes individuals, groups, and teams who make exceptional contributions to improving life cycle costs and/or DOD acquisition systems and programs.