The Blogger's Roundtable featured a discussion with Col Keith Moore, program manager of the Expeditionary Fighting Vehicle last week. As you know, this is one of the programs that is on the chopping block as far as major defense acquisition programs that are under review. According to a GAO report last year - one that was just updated and released this week - the technology of the program is mature, and low-rate production is scheduled to start in about two years. The challenge is the unit cost, which has soared from an average $8 million to more than $23 million. That's a very expensive drive. I asked Col Moore if, in the process of re-evaluating the program and getting it on track, we might expect to see the unit cost drop. He was not going to commit to that (full transcript here).
Here's -- and, you got to keep in context the fact that, you know, GAO reports are good, and they're -- and, for the most part, my own belief is, most of the time they're at least reasonably accurate. What they absolutely aren't is timely.
You know, I mean, next year there may be a GAO report out on, you know, the Japanese attack on Pearl Harbor.
Q (Laughs.)
COL. MOORE: Is, all of that unit-cost growth, and the other stuff that they had talked about, was all of the stuff that led to the Nunn-McCurdy breach.
So, the rebaselined program already took into account. And PAUC number of $22 million that you cited, is, the reason that that number has grown substantially over time is, one is, because the program's been stretched several times by funding actions, and all those sorts of things, is -- you know,obviously, inflation just drives the cost of things up over time, and when it, you know, when you spend a decade or so, you know, getting to production, you see a lot of inflationary costs.
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What we've actually seen is that, going from the Preliminary Design Review about a year ago, to the Critical Design Review in December, is the contractor has actually been able to reduce -- you know, by a little bit, I mean, about $110,000 a copy. The contractor- controlled costs that will go into the average cost of a vehicle, I would expect that, you know, he may be able to -- that they'll be able to make some other changes like that.
But, one of the things is this vehicle has a very long production run anticipated for it, and so we're sort of buying it at a very low economic order quantity. And one of the ways in which, you know, you can obviously get things cheaper is if you buy more of them in a lot. And the lots are so small that it's hard to get any sort of dramatic cost changes.
No question that the GAO investigative process is slow, but they do get good data. As Col Moore notes, the GAO did the classic move of including overall R&D funds as part of the unit cost estimation. The actual production costs he quoted could run about $15 million a copy - which is still an incredibly high cost, considering that you could buy three Army Strykers with that amount of money. So I had to ask the colonel, who had just told David Axe how irreplaceable this program was for the joint forced entry capability our military required, was the Marine Corps still busy in the area of amphibious operations? I wasn't up on my recent Marine Corps history, but I did know that Afghanistan had no beaches. He replied:
Three demonstrations -- and that's probably the most notable one, is, you know, one of our biggest demonstrations is, if you recall, during Desert Shield, Desert Storm, the Marine Corps parked a Marine Expeditionary brigade off the coast of Iraq, which managed to tie down nine Iraqi divisions against that beachhead to prevent the Marines from landing, which is part of what enabled, you know, the joint Army and Marine Corps land forces that were in Saudi Arabia, to conduct the enveloping movement that ended up destroying a good chunk of Saddam Hussein's army, is because we managed to, with one small brigade, tie down nine divisions. So, you know, that, I think, is a pretty, you know, dramatic thing. And, you know, with this capability -- and I think that's the important thing, the threat of employing the capability is oftentimes more effective, and serves a larger strategic and operational purpose in the employment of it, but you have to have the credible threat of being able to do it.
I grant the colonel that we may need this capability, but it isn't World War II anymore, and Grenada was a long time ago. The Marine Corps seems to have given up a great deal of its expeditionary flexibility when it took M1 Abrams tanks from the Army National Guard years ago, for example. Andrew Lubin also noted during the call that there were other options that seemed much more reasonable. My two cents - the Marine Corps has to re-examine this program in light of SecDef Gates warning that we can't afford to gold-plate these acquisition programs today. But the Marine Corps never admits that they were wrong, and they never back off claims that they need a specific defense capability. I've seen it many times in the CB defense program as well. They never surrender - but maybe they need to learn how to advance to the rear and take the common sense approach when it's clear that they can't afford this vehicle.
WaPo article covering the recently-released GAO article can be found here.
Yes.... DoD acquisition. Need to watch the movie "Pentagon Wars". It really hits close to home.
http://en.wikipedia.org/wiki/The_Pentagon_Wars
Posted by: Yoda | 05 April 2009 at 12:35 PM