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Industry News

News from Washington

March 1, 1997
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News from Washington

Sanders Receives Navy Multifunction Antenna Contract

Sanders, a Lockheed Martin company, has received an $8.9 M contract from the US Navy for the advanced technology demonstration concept phase of the multifunction electromagnetic radiating system program. Terms of the contract call for Sanders to design, develop and test a multifunction antenna system that will reduce the number, signature and weight of topside shipboard antennas.

The four functions to be served by the system are UHF transmit and receive communications; joint tactical distribution system transmit and receive; identification friend or foe transmit and receive; and the combat DF V/UHF receive and direction-finding system. The work will be performed at Sanders' Surveillance Systems division in Nashua, NH and is scheduled to be completed in September 1999.

Efforts to Reduce DoD Procurement Oversight Costs are Reviewed

Under the National Performance Review initiative (a program developed in 1993), federal agencies and departments have established reinvention laboratories designed to test agencies' performance improvements by using re-engineering work processes and eliminating unnecessary regulations. In a recent report, the GAO reviews the work of DoD's reinvention laboratories' work.

The DoD's Reducing Oversight Costs reinvention laboratory consists of 10 participating contractor sites along with cognizant Defense Contract Management Command and Defense Contract Audit Agency offices. The DoD requested that participants report on the projects being pursued, the projects' potential savings and actual savings achieved. Participants were also requested to group their findings according to the cost drivers identified in a Coopers & Lybrand 1994 study, which estimated that government acquisition regulations and oversight requirements added 18 percent to the DoDÕs cost of goods and services. Of the 120 cost drivers identified in the report, the top 10 accounted for almost half of the 18 percent cost impact.

Overall, the DoD reinvention laboratory has made only limited progress in implementing changes to reduce contractors' costs of complying with government regulations and oversight. Little success was achieved in addressing nine of the 10 top cost drivers. Through July 1996 (the date of the last status report) laboratory participants estimated that approximately $159 M could be saved annually if all projects were approved and implemented. Approximately $145 M represents reduced contractor compliance costs. Of the $145 M, $11 M represents funds realized from actions implemented.

Principal factors inhibiting the success of the program include the lack of support the reinvention laboratory has received from within the DoD and service agencies, statutory and non-DoD regulatory requirements, disagreements between the DoD and contractor personnel concerning the value of certain oversight requirements, and difficulties in coordinating and approving proposed changes where multiple customers were involved. In October 1996, the DoD announced that the reinvention laboratory program would be canceled.

Government and Industry Instructed to Cooperate

The Electronic Industries Association (EIA) has recommended that the Department of Defense (DoD) and the electronics industry coordinate their planning processes earlier to make better use of scarce research and development (R&D), science and technology resources. Recommendations for improving both government and industry strategic planning were presented at the New Defense Science and Technology (S&T) Strategy Focus Conference held in Arlington, VA in January.

The conference featured industry-prepared assessments of strategic planning for S&T investments, and government discussions concerning the New Defense S&T plans. Government speakers discussed the effects the unified integrated plan had on service and agency technology priorities. Government presentations also covered joint partnerships such as the Army's Federal Laboratory Program and other concepts that include proposals to share personnel and facilities.

EIA study teams presented findings obtained by tracking the S&T planning cycles of both government and industry. The study found that by the time the DoD released information on its budget plans, much of industry had already completed its own planning for the coming year. This time difference impedes the government and industry dialogue seriously, which is critical to the realization of maximum return from technology investments. The situation can be improved if DoD contractors recast their technology planning processes in a manner that aligns their efforts with the customer. By using the New Defense S&T plan as a guide in their planning process, industry should be able to bridge the gap more easily from S&T to product applications.

The New Defense S&T plan outlines approximately $7 B in science and technology budget requests -- approximately one-quarter the total $35 B DoD budget for R&D, training and evaluation. The Joint Warfighting S&T plan focuses on both DoD and service technologies to support the joint commands. Since contractors must deal directly with services and agency customers, and commercial and civil customers can use different technology planning techniques, industry must incorporate all these vehicles into their overall strategy.

GAO Finds FAA Unable to Make Informed Air Traffic Control Decisions

In its recent report, "Improved Cost Information Needed to Make Billion Dollar Modernization Investment Decisions," the General Accounting Office (GAO) studies the Federal Aviation Administration's (FAA) plans for and progress of its air traffic control (ATC) modernization program. The program, which involves investments in new ATC facilities, related support, and new and upgraded software-intensive computer systems, has more than 200 separate projects the FAA estimates will cost more than $34 B between 1982 and 2003.

The GAO notes that over the past 15 years, ATC projects have been substantially over budget, were installed long after originally scheduled and experienced significant performance shortfalls. As an example, the GAO cited the Advanced Automation System, which was restructured in 1994 more than eight years behind schedule. The project's estimated costs tripled to $7.6 B and produced a system with significantly less-than-promised performance.

Citing a model developed by Carnegie Mellon University's Software Engineering Institute (SEI) to derive credible estimates of software-based systems' costs, the GAO found that FAA policies and practices satisfied only one of six SEI requisites for such estimates. In reviewing the estimated preparations for six projects against the SEI requirements, the GAO found that two of the six had little or no documentation supporting cost estimates. While the four remaining estimates were documented, none satisfied all SEI criteria.

Although the FAA's estimating process is weak, the agency says its ATC project cost estimates are firm. The GAO found that software engineering experts generally consider cost estimates imprecise especially during early phases of system development.

During the course of the GAO review, FAA elements initiated efforts to improve ATC cost estimates. A number of groups within the FAA are promoting the adoption of tools for overall improvement of the agency's cost-estimating activities. However, these initiatives are not coordinated and have not been endorsed by the FAA. The GAO recommends that the agency institutionalize defined processes for estimating ATC project costs and that the processes include the requisites defined by SEI.

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