Saturday, August 12, 2017

Self-Interest

Lockheed has let it be known that they are investing internal effort at packaging Patriot missiles onto naval vessels (1) – this despite the existence of Standard anti-ballistic missiles that already exist, do the same job, and already have integrated software tying the weapon into the ship’s sensors and fire control system – in other words, a complete and integrated package.  So, why is Lockheed looking at naval Patriots which would, at best, be redundant?  Self-interest.  They’re doing what’s potentially good for Lockheed.  If they can sell an existing product they can make money without any great development cost.

What’s wrong with that?  Nothing.  Self-interest is the foundation of capitalism and free markets.  However, Lockheed’s interests are not necessarily the same as the US military’s interests.  In fact, it would be rare and only coincidental if Lockheed’s interests and the military’s interests aligned. 

Lockheed’s interest is making money.  The military’s interest is combat.  The point is that we, and the military, need to recognize that when we turn to industry for products and support, we’ll get whatever the company believes will generate the most money for them rather than what will provide the best combat option.

When the Navy issues its final Request For Proposal (RFP) to industry for the new frigate, Lockheed Martin and Austal, the manufacturers of the LCS, are not going to respond with a brand new frigate design – they’re going to respond with a modified (to the smallest degree they believe they can get away with) LCS.  Why?  Because that’s what’s in their best self-interest.  It’s how they can make the most money.

When the government initiates the next F-35 program, the manufacturer isn’t going to respond with the most cost effective and efficient manufacturing program – they’re going to respond with the program that is the least likely to be able to be killed off just as Lockheed Martin set up the elaborate fifty sate/one hundred country disbursed manufacturing model that they knew Congress would be unwilling to kill due to the distributed jobs aspect.

When a manufacturer “tests” a developing weapon system, they’re not going to test it under combat conditions to see how it really works.  That’s not in their self-interest.  They’re going to test it in a contrived scenario carefully calculated to make the system appear as good as possible.

If Bath is asked about a potential new destroyer, they’re not going to propose a brand new design – they’re going to propose a modified Burke because that would be in their best self-interest.

Consider all the ship type variants that Huntington Ingalls Industries (HII) has suggested for roles ranging from a frigate to ballistic missile defense (BMD) to amphibious assault, among others.  Each was based on – you guessed it – the LPD-17.  What’s the odds that the optimum frigate, BMD, and assault ship are all met by the same LPD-17 basic design?  Of course they’re not!  HII is proposing what they can make money on, not what would be the most combat effective solution.  HII’s interests do not align with the military’s.


LPD-17 Frigate/BMD/AAW/Assault


The point in this is that we, and the military, need to keep this self-interest concept firmly in mind as we deal with the defense industry.  We need to run everything we hear, see, or procure from industry through the cynical filter of “what’s in it for them?” and recognize that what we’ll get is a sub-optimum response or product that serves industry’s interests not ours.  That means that if we want an optimum service or product we have to drive the acquisition process and not leave it to industry.

When I hear comments like the those from former CNO Greenert, and now Richardson, saying that they can’t wait to see what industry “gives” us next, I cringe.  Industry will give us what is in their best self-interest rather than what we need.  Sure, industry will make some attempt to align their interests with the military’s just because doing so will increase the odds of them getting what they want: money.  That alignment, however, will be as minimal as possible.

There’s nothing wrong with inviting industry to make suggestions as long as that process of research and investigation is divorced from actual acquisition. 

On a related historical note, the Spruance was the first ship design that the Navy threw completely out to industry.  While the Spruance turned out to be a fine design, there was no guarantee that it would.  Witness the more recent LCS which was designed with minimal [useful] input from the Navy and wound up being an unmitigated disaster.

The military needs to stop throwing out open-ended invites to industry which allows industry to pick the product and, instead, start driving the acquisition process.  That means re-establishing in-house expertise, generating extensive and precise requirements, and demanding the exact product that will provide the best combat performance.  If the military doesn’t have a better idea of what’s needed than industry then we need to clean house on military leadership and start over.  The military needs to take back the acquisition process from industry.



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(1)Breaking Defense website, “Lockheed Studies Sea-Launched Patriot PAC-3 & New 6-Foot Missile”, Sydney J. Freedberg, Jr., 9-Aug-2017,

17 comments:

  1. In a previous life at Big Defense Company, the head people started to tell their uniformed customers that "hey, you know we're here to make a profit, right? Because if we don't meet our profit targets, we don't get to do this anymore, and you don't get anything."

    Some of the generals and admirals seemed surprised at this.

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    1. Surprise aside, the answer from the military should have been, yes, someone will make a profit from us but it doesn't have to be you, Big Defense Company, and we will get what we want.

      We need to encourage and grow our smaller companies so that they become viable competitors to the larger companies. We also need to begin considering and using foreign companies if we can't get the products and services we want at reasonable prices from US companies.

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  2. Isn't bringing back the F-22 in Lockheed Martin's self interest too?

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    1. Of course it is - if it doesn't interfere with the F-35 production.

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  3. An excellent post, CNO.

    Addressing the related issues of outsourcing and deskilling that seemingly every western military has engaged in now for decades.

    And over those same decades look at the outcomes we've been getting. Now a fighter (or transport) squadron cannot operate without a legion of contractors in support (for engines, avionics, etc). Contractors that may not be deployable. A simple navigation radar cannot be maintained by shipboard personnel, and a tech has to be flown in for basic problems. PPT slides from the Prime contractor are swallowed without chewing by the program office (see how the Australian F-35 office simply regurgitates the JSF PMO/LM talking points).

    We manage contracts, not projects.

    Partially that is due to short posting cycles. 2-3 years really isn't enough in the context of a 20+ year procurement timeline (we committed to JSF in 2002 and optimistically will reach IOC by 2021).

    Contributing to the problem is the deskilling. Basket weaving degrees have replaced STEM degrees in many areas. Non-engineers (in contrast to engineers who would have been experienced in project management, back in the day) can be sold any fairy tale the contractors please - and the contractors like it that way.

    It seems no-one questioned the assumptions behind the LCS. The JSF. The Zumwalt. The Ford.

    Given manpower caps. Given those posting cycles. Given the fact a project management career stream is unlikely. And given the increasing dependence on contractor support. Is this a trend which can be reversed, short of an all-out war in which we suffer terribly in the initial stages?

    Changing the direction of the Pentagon seems to be a Herculean task, beyond any mortal. Same for the Australian DoD.

    Of course, the services aren't helping. When we commit to supposedly 5th gen VLO 'fighters' for simple air defence roles. When we spend $3B each for ASW frigates. Or close to $4B for AAW frigates. And probably $4-5B each for a fleet of de-nuclearised SSGs.

    The contractors see us coming a mile away, and they milk us almost to the point we would walk away. And we don't see the con job for what it is. How could we when MBAs are the benchmark, and 'business' principles are foisted upon us?

    If we could accept a 90-95% solution, we could buy enough quantity to matter. But that is a different matter.

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  4. This comment has been removed by the author.

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    1. What I ended up deleting accidental was Eisenhower stated that our biggest threat was the military industrial complex after the LCS F35 Zumwalt and Ford phiascos I have to agree due in part to industry mergers etc and the military not designing what it wants the taking those designs to industry for production instead of accepting what industry sends to the military I don't even know if they do trials in stuff anymore before accepting the hardware as is accept maybe in a computer simulations

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    2. "War is a racket. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives."

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    3. "military industrial complex ... I have to agree ... the military not designing what it wants"

      I have to agree. The mil-ind is a problem, especially the way it is currently structured, however, it would only be a nuisance, not a severe problem, if the military would do their part correctly.

      Good comment.

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  5. All of what you say, CNO, is true, and has been for at least 200 years. This is why the USN built up its own shipyards and design teams. Not because it didn't want to use private industry's capabilities, but because it wanted to do so as an informed and capable customer. Naturally, that requires industry to work harder and its senior managers to think harder. They hate that, like most people.

    In the last few decades, political ideology has been saying that private industry is intrinsically better. It is - if the objective is its profits and an easy life for its managers (which is weighted surprisingly highly in most businesses, although never in those terms).

    So now the Navy needs to rediscover nineteenth- and early twentieth-century wisdom. Hopefully the politicians who been convinced (by money) that private industry is always the answer can be fooled by a "conservative" turn back to the wisdom of the past. If not, the Navy seems doomed to a future of trying to make overly-expensive equipment perform as well at that built on a tenth the budget. By the Chinese.

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    1. When exactly did DOD and more specifically the Navy give up control and the brain trust associated with research and design?

      To my naive mind, the DOD SHOULD be in the business of R&D and SHOULD have full intellectual ownership.

      As I have a libertarian bent, this is difficult to support, but I don't see any other solution.

      I have a 1911 in the safe that has Remington Rand stamped on the slide. These folks made typewriters until they decided to bid on a 1911 contract in 1942. Ford used to make jeeps, tanks and B-24 parts. All these designs were owned by Uncle Same and farmed out to industry. While I agree that defense consolidation does have its efficiencies, the monopoly it creates in R&D, management and production is too much.

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    2. I've covered this in previous posts and you check the archives for details but the short version is that the General Board produced conceptual ship designs, passed them to BuShips for detailed engineering, and then BuShips bid them out for construction (including captive Navy yards). So, the very general answer to your question is that the Navy gave up internal design when they abolished the General Board by order of then CNO Forrest Sherman in 1951 in a power grab political move.

      To the best of my knowledge, the Spruance class was the first ship designed and built entirely by industry.

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  6. bring back govt run navy yards to design and build ships. Or just nationalize all defence industries


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    1. With the overwhelming evidence of how badly the govt runs large organizations (Soc. Security, Post Office, welfare programs, Medicare/Medicaid, etc.) you want to have the govt run shipyards? What leads you to believe they'll do a better job at that than any other task they've attempted?

      In fact, look how badly the govt is running the military right now: gender sensitivity, diversity, appeasement, green energy, inability to manage weapon procurement programs, women in combat - everything but a combat focus. And you want to let the govt run the shipyards!?

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  7. I was thinking more on how it was done during WW2.
    Or Germany during WW2, private industry heavily directed by the military. Not perfect, there's always corruption somewhere but it worked better then, than how things are going now. I do fear that the system is so corrupt at this point that its beyond fixing though.

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    1. Fair enough.

      So, why do you think it worked better in WWII. Do you think simple corruption is the difference? We had lots of corruption in WWII; we just didn't have extensive media coverage and 24/7 cable news to beat it into our consciousness. One could make an argument that while today's problems are more visible, it is actually less of a problem - maybe true, maybe not.

      Is there some other explanation? What do you think?

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  8. You asked why ...

    Lockheed says "The Patriot PAC-3 MSE is a smaller and less expensive missile than the SM-3, since it’s designed to intercept ballistic missiles in the atmosphere rather than in space, which makes the two weapons complementary".

    http://breakingdefense.com/2017/08/lockheed-studies-sea-launched-patriot-new-6-foot-missile/

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