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Under Secretary Aldridge Briefing on DoD Acquisition Programs

Presenters: Edward C. "Pete" Aldridge, USD AT&L
December 21, 2001 10:00 AM EDT

Friday, Dec. 21, 2001 - 10 a.m. EST

(Special briefing to update DoD acquisition programs.)

Aldridge: I am Pete Aldridge. I'm the under secretary of defense for acquisition, technology and logistics.

I have a short statement this morning, just to get the context. And we're here today to talk about weapon's systems and programs affecting the future capabilities of our armed forces. And then after a couple of comments about some things we've done recently, I'll open it up for any questions you may have on any of these things.

As you may know, the QDR was completed about a month ago, and is available -- in fact, it's available on the web site for anybody who wants to read it. It's even been reported that the president has read it, and he liked it, so that's good news.

The QDR and its companion, which we call the Defense Planning Guidance, has given us a very good basis for making some decisions on the weapon's systems and the supporting programs to go with them.

Also, I'd like to point out that these decisions we made are very strongly influenced by our desire and mandate to properly price the programs in the budget and tell the truth about the schedules and performance, and we've doing that as we have adjusted some of our programs.

As you know, there's a very strong desire by the program advocates to be a little optimistic about what they can achieve in schedule, performance and costs. We're trying to add a little truth in reality to that particular process.

Let me go over some of the decisions we've made. As you know, several months ago we made the decision to go into low-rate initial production of the F-22. We resolved some pricing differences between the Air Force and what we call the cost-analysis improvement group [CAIG], and those are resolved to our satisfaction. And we hope to have first delivery of the F-22 about the 2005 time frame.

The Joint Strike Fighter was priced to the CAIG estimate. It's proceeding very well since the downselect, the Lockheed Martin, that we made here at this podium not too long ago. [ transcript ] We're now in discussions with several of our international partners to see about them joining the program, and it's very positive negotiations ongoing as I speak. First deliver of the Joint Strike Fighter should be in the 2008 period.

When we get the F-22 and the Joint Strike Fighter, we'll have, with essentially all stealth capability, we'll have the ability to just dominate the skies over any adversary.

We terminated the DD-21 program and initiated a program we call DD-X. This is an R&D [research and development] effort aimed toward a family of high-technology ships applying new hull designs, electric propulsion, new gun systems, new radar and stealth technology. This ship addresses the anti-access requirement and improved littoral warfare that we see for the future as part of our transformation directions.

Missile defense: as you recall, when we came on board in this administration, we restructured the missile defense program to meet the president's guidance. We developed a variety of capabilities against missiles of various ranges, from short-range, medium- to long-range missiles, and layered defenses, which include both terminal, midcourse and boost-phase intercept.

And we put together a program that would have dual technology paths in many of those areas. And we have laid the program out to accomplish that. We should expect successes in that program, but we also should expect some failures, as we push the state-of-the-art and the program, in fact, has planned for that. That's the way we've laid it out. It's a hard problem. Very difficult to do.

We are seeing some successes now. You've seen on television the hit-to-kill capabilities for the long-range missiles and long-range interceptors. You've also -- I don't know if you've seen, but you've hard about -- the hit-to-kill technology with the PAC III [Patriot Advanced Capability] against both aircraft, as well as missiles. And we're having very good success with the airborne laser technology.

But we're also uncovering some problems, as we should expect. We had a booster failure recently, after a first success. We've seen some slips in the SBIRS [Space Based Infrared Radar System] High program, a fact of life, slips and we've also identified some slips in the SBIRS Low program, even though SBIRS High is not carried in the missile defense program, it still is a very important element of that. And we've had to terminate the Navy Area missile defense system [ news release ] because of some excessive cost growth. We will develop a new Navy terminal system, based on proven technology, such as the hit-to-kill, and that's being worked now.

Our goal in missile defense is to give the president the credible and effective options to protect our citizens, our allies and our troops against all ranges of ballistic missiles, so we're putting the other program and believe that it will build upon the successes.

We know we're going to have some problems as we proceed, and we're addressing those as they go. But really this is strong support for the president's initiative in this area, and we want to make sure we do it right.

V-22: As you may know, and as I've read in many of the papers, we've had -- I've had some serious doubts about the safety, reliability and operational suitability of the V-22. We've had several independent groups look at the technical aspects of the programs, and we've also had an independent study of alternatives -- the V-22.

While these groups did not find any fundamental reason the airplane would not work, they did make numerous recommendations regarding how to conduct continued flight tests. I personally still have some doubts. But the only way to prove the case one way or the other is to put the airplane back into flight test. But this new flight test program -- and we're going to do that -- but this new flight test which will start in April of 2002 will be much more comprehensive than that previously planned.

It will last for about two years. It must further explore the phenomena called vortex ring state. It must explore shipboard compatibility. It must explore low-speed hover condition, including the conditions of landing when there's dust and debris and things blown up by the props. It must include combat maneuverability. And it must explore formation flying, including refueling conditions.

The flight test effort will be event driven, as opposed to schedule driven. In other words, we'll make progress as we identify various areas. We will not be driven by trying to accomplish something within a certain period of time. The secretary of the Navy and I will do periodic reviews of the flight test results to assess progress. In the meantime, we will slow the production of the V-22 to the minimum sustaining level.

We've made a lot of decisions on other programs, such as C-5 re-engining and reliability improvements, C-130, Advanced Avionics Modernization Program, the joint air-to-surface strike missile [JASSM], the TAKE ship and LPD-17. And we will be looking at restructuring the Comanche program and the Army helicopter, early next year.

You'll see more decisions resulting from the FY '03 budget decisions, which are in the building hopefully this week. I'm not going to discuss any of those today. They have to wait for the presidential decision on the budget later on in time.

And with that, I'll open up for questions.

Yes.

Q: (Inaudible) that just came out, I think, yesterday or today for 48 million to buy Textron modification for the (inaudible)? Is that related to your decision or is that something that was simply in the works, it's just --

Aldridge: That was in the works. That was already part of the previous decisions. This decision is really what's going to happen for the future.

Q: The Osprey, this new testing program that you have outlined, is there a possibility that any troops could be put on these aircraft during any part of this testing.

Aldridge: That is not the intent. This would be flight-testing program, basic airframe.

Q: Well, first, to clarify that, you mean for the next two years, there won't be any tests that carry troops, just aircrews.

Aldridge: That is -- I haven't looked at specifically at the long-range, but we are not planning to put any troops on it. That's not the intent. The intent is go to test the aerodynamic phenomenon, not how many air people it can carry.

Q: What is the minimum sustaining level of production.

Aldridge: It's going to -- FY '02, I believe, had 11 -- I think it was nine and two -- it may have been 10 and two, but around 10 or 11 aircraft per year is about the minimum sustaining, until we get the flight test program behind us.

Q: So just to dot the i's and cross the t's, you've signed today or yesterday the acquisition decision memorandum, approving the new flight --

Aldridge: It's on my desk to sign today. OK. We were working out some details of out-year program content funding, but that -- the program I've laid out is we will continue low-rate production and we will put the program back in flight tests. A much more comprehensive flight test than we anticipated.

The flight test result will cause the R&D T&E [test and evaluation] money to go up, because we'll have to do more flight tests. We're arguing about the dollars, at this point. We basically concluded the program. It's just making sure we had it properly funded. But I expect I'll sign that today.

Q: What's a rough estimate of the cost.

Aldridge: The cost increase.

Q: (Inaudible) budget going to be per year.

Aldridge: Well, the money is going to be in the range of about -- I have so many numbers going through my mind about which year this is -- but it's about 1.5 to 1.8 billion a year. And all of that -- the first two years is all R&D T&E and there will be a little bit of production along what we've had.

Q: (Inaudible) production and testing.

Aldridge: Yes.

Q: (off mike) had pulled about $500 million out of the program because of the sort of limbo status of it. Have you been working with the service to --

Aldridge: The Air Force --

Q: -- get a report back or --

Aldridge: Yes. The Air Force has -- they fund the, what we call, the CV version. That's for the special operations.

Aldridge: FY '02 included two airplanes for the CV version. We're not going to buy any CV versions until we get further down the flight test program, so those monies have been removed and put into the out-years, assuming the program is successful.

Yes.

Q: Mr. Secretary, did you misspeak when you said that it would be all R&D T&E for the first few years. Afterwards you indicated that included some of the minimum --

Aldridge: I did misspeak. There is a small amount of production funds for the airplane, that's right -- some of which carries over from prior years. But, yes, there is production, but most of it's already T&E.

Q: Continuing with the Osprey program, have you looked at the Bell Boeing fixes that they've designed for the nacelles and the computer software and hydraulics systems? Are you confident of those programs yet?

Aldridge: I visited Pax River where they had the V-22 torn apart. We looked inside the nacelles. You can clearly see there was some need for redesign.

We will not be stuffing any of the nacelles until we complete this flight test program. We will build about 34 airplanes, which will have to retrofitted with new nacelle designs and any other things that come out of their flight test program that we need to modify the airplane.

I haven't gone into details about the specifics, but I know they're making the nacelles much more maintainable, because they're putting in additional doors for maintenance procedures and checking procedures.

We are doing some work on the flight test -- on the computer software. There needs to be some changes made to some of the displays because some of the vertical displays need to be fixed. This came out of so many of the recommendations of the technical teams.

And we're looking at some software changes that would give the airplane more control authority at the low speeds.

Q: Sir, you've talked about the importance of having the aircraft be affordable before. What does that mean in this context?

Aldridge: Well, first thing we have to make sure of is that it's reliable, safe and operationally suitable: it can fly off the decks of ships, it can land safely in very cluttered areas, and it can fly at the speeds and conditions that we want to have during combat operations. That's the first thing.

The airplane, when we looked at the alternatives, it has some very unique capabilities, with its speed, obviously the payload capability and its survivability in and out of areas of the world that are very dangerous. There is no other alternative that, basically, can do that.

Aldridge: We would like to see the V-22 succeed in its reliability, safety and operational suitability. That's what the flight test program is all about. And if we can make that happen, it will provide our military, marines and special operation guys some unique capabilities.

Q: You mentioned the cancellation of the Navy area wide program. Perhaps you could speak to how satisfied you are overall with Raytheon and whether this is symptomatic of, you know, problems with the company across a variety of programs.

Aldridge: Good question. No. Raytheon is a very capable company, and they're providing some good capabilities across the board. Some that just pop into my mind, the AMRAAM [Advanced Medium Range Air-to-Air Missile] and the AIM 9X, for example, are outstanding successful programs. This was a problem they were having with the Standard 4-B missile and they ran across, what we call a Nunn-McCurdy breach -- I'll explain that in just a minute. But generally, I'm satisfied with Raytheon. They're pushing the state of the art. They're providing some good capabilities for our military forces. And, yes, they have some problems in some areas and they're trying to address those. And we hope that they are successful in achieving that.

Let me just explain Nunn-McCurdy, because the Navy Area did pop up on that. Nunn-McCurdy is a law passed several years ago that says once you reach a cost growth in excess of 25 percent, you have to report it to Congress in a selected acquisition report and then you have a certain period of time by which to re-certify that the program can be brought in, and there are four criteria. One is, it's essential for national security, there are no alternatives, cost are under control, and the management structure is in place to continue to keep costs under control. We ran up to December 13 with the Navy Area, in which the secretary of Defense has delegated to me the authority to re-certify.

When I looked at that program with those four criteria, I could not answer yes to everyone. And so by law, we had to stop the program. And that's how that occurred.

Q: Which ones did you say yes to?

Aldridge: Two of them. I did have a letter from the chairman of the Joint Chiefs that said Navy Area was essential. The second question, were there other alternatives? There were other land-based alternatives, there were no other sea-based alternatives. So that's a question I could not certify that cost was under control, because it already had exceeded the 25 percent. And independent cost estimates said the number was closer to 60 percent. And that I could not certify that we had a management structure in place to continue to keep, because we kept seeing it go. So it's just, I could not sign a letter to Congress.

Aldridge: And so, we have to restructure the program. That's what we're going to do. We terminated the Navy Area. I've asked General Kadish and BMDO to come back to me with a revised program that will look at a Navy Terminal [terminal phase] defense, but that will also take into account the new technologies which we have been seeing in the missile defense program, such as hit-to-kill technology, which might be applicable to the new design. And I also want to do a spiral development, which is evolutionary development, so we can go make that work.

Q: Not to plow old ground, but where the Navy Area prompt (inaudible) specifically focused on the missile and was the Aegis --

Aldridge: (Inaudible) yes. Most with the missile. There were some interface problems, but mostly with the missile.

Q: (Inaudible) if you're looking at that, what happened here, in terms of any lessons you may draw from this, as far as the management, because this is a program that had been in the acquisition cycle of the seven years had gone through numerous reviews, (inaudible) day of reviews select acquisition reports, that type of thing, and it ends up having to be canceled, but ends up with that kind of a cost-growth. Not in terms of assigning responsibility, but going back and saying, you know, are the reviews done correctly, the selected acquisition reports, the right way to go or what are you looking at.

Aldridge: I think, yes, there are some lessons learned. And I have personally taken on an objective for AT&L [Acquisition, Technology and Logistics], my office, to do some things that take away some of this over-optimism early in the program. I believe all of these programs, and there's many of them, that are in trouble because of optimism about how fast, what the scheduled cost performance was going to be. And we need to do something to address that problem.

One is introduce spiral development in the program. Don't go for the 100 percent solution on -- right out of the gate. You know, do something, if you bring into the field quicker, but it doesn't have to perform at 100 percent, 80 percent is good enough and we'll evolve it with time. So we can get rid of old stuff quicker; we can get the program on the field sooner. It is less risk, in terms of technical risks, cost risks, scheduled risks. So if we can do that and think about evolutionary spiral development, as a program, that's one thing. The other one is properly funding the program in the beginning.

I am insistent upon the programs are properly priced. We're using one of the estimates of the CAIG -- the Cost Analysis Improvement Group -- has been traditionally much closer to what real costs are than the program managers or the services, so we're insisting that these programs, when they go through a DAB [Defense Acquisition Board] process, when I have to approve them, they're priced to the CAIG estimate and we have evolutionary development. And I think those two things will slowly bring into control this risk and optimism that tends to prevail the program managers early in the game.

Aldridge: We will properly price it, and I think that's a cost- savings measure, because we are always under-running programs and -- under-runs -- we slip. Every dollar we take out of a program early we put back $3 to $5 later. So if we can properly price it so we don't have to slip it, then I think we actually can save money.

Q: Secretary, could I -- at the risk of breaking everybody's train of thought, could I take you back to the V-22 for a second.

Aldridge: Yes.

Q: I'd like you to clarify when you mean by "stuffing the nacelles." And the second question --

Aldridge: OK. Sorry. I used to be an engineer, so --

Q: -- second question too.

Aldridge: Are you going to pull like you do on Rumsfeld, two questions. (laughter)

Q: Is your skepticism about this program based on a distrust of tilt-rotor technology as a concept, or is it based on distrust of the V-22 as a product.

Aldridge: My concerns were on the aerodynamic characteristics of this airplane, which has the unusual characteristic that the props are out on a 20-foot lever arm. And the uncertainties of the lift of those two things caused certain control problems with the helicopter.

Plus, the characteristics that the props are relatively small diameter, so you're putting enormous loads on each of the broader configurations. And the concern is, you get -- this phenomena occurs in all helicopters, but the helicopters that normally have the rotor at the center of gravity don't experience these control problems.

I think we can ultimately fix it, but I want it to be proven that we can fix it. Vortex ring state being one of those. Another one is shipboard compatibility. As you come over the deck, one of the props is over the deck and the other one is not, and there's flow conditions that are different. When it's at low speed these props are loaded up; very high pounds per square foot on the props. And so, can it maneuver at low speed when it has to get out of a combat condition, when it's already right at its limit? Those things have to be proven.

Can it land in the dirt and the dust and the snow, sand properly without endangering the people and the crew? Lots of questions. Formation flying -- what happens on the ship deck when one is sitting there and another one is landing with these high velocity.

There's lots of questions we don't have answers to yet.

Q: Is that a tilt-rotor problem or a V-22 problem.

Aldridge: That is a tilt-rotor problem.

Q: And "stuffing the nacelles?"

Aldridge: The nacelles were -- when we put together the nacelle, it was clear that the engineering was not properly thought through in the nacelles when they put the hydraulic lines, the electrical lines into the nacelles.

Aldridge: There were conditions were the electrical lines and the hydraulic lines would chafe against each other, which was one of the crash problems. The chaffing caused -- they were running at a very high pressure, about 6,000 psi [pounds per square inch], in the hydraulic lines. So if you could get a line which wears through, it's going to blow, and that's what happened with one of the crashes.

So we need to make sure that in the engineering we're not permitting that to happen. So they're redesigning the nacelles to make that --

Q: Can you explain what a nacelle does and why --

Aldridge: It's where the engine is for the prop. It drives the propeller. There's two engines, one on either nacelle. And in that nacelles are the hydraulic pressures to allow the nacelles to rotate.

Q: Can we stay on Osprey for a minute? With your two- year flight test program, which you are envisioning is strictly experimental flight testing not operational --

Aldridge: Well, there's operational characteristics in there, yes.

Q: -- and I'm a little concerned about the way you're describing not doing -- stuffing the nacelles until after you've done the flight testing. If they're not building a modified aircraft until after you finish the flight testing --

Aldridge: They're modifying the airplanes that are going to be entering the flight test to be acceptable. But the production design of the airplanes that are continuing to be built that are part of this minimum sustaining level, we're not going to stuff those nacelles until we have the full design of the flight test.

Q: How do you envision going into production in operational capability of this aircraft? It looks like we're going six, seven years.

Aldridge: It's in production now, only at a very low rate.

Q: I mean, when would you envision an IOC [Initial Operating Capability] for this.

Aldridge: Well, IOC is probably going to be several years after we start the production ramp back up. If the program is successful and it looks like we have proven those three things I talked about, that we feel comfortable, then we'll permit the production to start ramping back up. And then shortly thereafter, we'll achieve the IOC, which I think is a squadron of these aircraft.

Q: Are you going to be having Boeing pilots or military pilots? And if so, are they going to be certified test pilots.

Aldridge: They absolutely would be certified test pilots, and I think they're both.

Q: Sir, given the success of the UAVs [Unmanned Aerial Vehicles] over Afghanistan, is there any thought of speeding up the UAV acquisition or the UCAV -- Predator, of course, was --

Aldridge: There's great enthusiasm to accelerate. As you know, in our supplemental, we did buy more Predators. We're looking at the out-year effects of these things. We're very pleased, as you can, obviously, see in the results of our combat operation with Predator and certainly with Global Hawk.

Aldridge: We are very interested in accelerating UAVs and that is one of the primary considerations in our FY '03-'07 budget, which will come out in February. I think you might see some positive things, but I can't say for sure.

Q: I wanted to ask you about jamming aircraft. I know the Navy and Air Force have just completed work on a electronics warfare analysis (inaudible). I wondered what your plans are for eventually replacing the EA-6B.

Aldridge: Well, the EA-6B, as you know, has experienced some very difficult problems right now. It's oval, first of all, but they're experiencing cracks in the wing section that are restricting its operation and we've got to replace the airplane.

I have not seen the -- I understand the study is completed. It's going through the process. I spoke with the CNO [Chief of Naval Operations] just the other day; he's going through it himself. The secretary of the Navy hasn't seen it yet. It'll eventually get up to me. There's some work that we need to do about what role -- they've got an alternative, but is it compatible with Air Force interests? There's lot of things still to be done.

We have to replace the EA-6B. If the alternative study says they have a good answer for that, we ought to press on.

Q: With the UAVs, what would you like to do about re-categorizing the Global Hawk so that Northrop Grumman can show it for possible export? I think the Australians and the Germans, among others, are interested in the Global Hawk. And I understand that there are moves afoot to take it out of the missile technology control regime, where it currently resides.

Aldridge: Yes. We are talking with State about that. There is a joint venture being planned with EADS and Northrop on a thing called Euro Hawk. And, of course, well, you know we sent the Global Hawk to Australia.

There's some discussion about sending it to the Berlin Air Show coming up in May. That is a question because is it going to be needed for the operations. And if it's flying in Afghanistan, we don't have enough of these things to send around to air shows, if they're actually conducting themselves in combat.

So we're looking at that, but it could be possible.

Q: What would it be re-characterized as, if it -- you said you're discussing with State a way to re-characterize it.

Aldridge: Export it. Export it.

Q: And what regime would it fall under? Now it's characterized -- classified under the missile technology control regime.

Aldridge: I don't know how it would be -- what I would be interested in is it permitted that we could go export or export the design. Northrop Grumman and EADS [European Aeronautic Defense and Space Program] would like to build a similar capability, but it would be a European -- why it's called Euro Hawk -- it would be exactly like Global Hawk, but it would be all those technologies that would be applied to that vehicle that we could export. And so, it would be under -- I'm not sure what regime it would be under, but one that we could export, in any event.

Q: One more Global Hawk question. I understand that -- is it Raytheon has -- I believe it's Raytheon has proposed putting a signals intelligence [SIGINT] platform on the Global Hawk within the next six months. Do you know where matters stand on that.

Aldridge: I don't know exactly where that stands, although I do know that the SIGINT collection is of interest. But I don't know exactly where that program is.

Q: Sir, can you point to any examples of ways (inaudible) these experiences with the Osprey since the blue ribbon panel have affected the way you manage other major programs? Are there any fundamental changes in your approach to the major acquisition programs?

Aldridge: I don't think you could apply it to just the Osprey program. I think that has a fundamental -- the way it's designed has some characteristics that we needed to really flesh out the flight test.

The engineering people who built the Osprey grossly underestimated the difficulties of this tilt-rotor, dual-rotor phenomena, and we did not lay out a flight test program that was adequate to prove that fact. Now we have one. I think we'll confidently prove one way or the other whether or not that design is adequate.

Q: I'm sorry to pull you back to the missile program, but the Navy's --

Aldridge: Well, I like the missile program.

Q: The Navy's FY '03 to '07 tentative budget plan at this point had noted in one of its iterations that the current Navy area missile defense program, as it stood for the '03 budget plan, was inexecutable as programmed because there was not enough funding and that the supposition was they would come to DoD at some point or go to BMDO and use them to intercede with DoD to get more funding for that.

What role did that realization on the Navy's part play in your decision to terminate the program, or was it purely an OSD-level decision.

Aldridge: It was an OSD [Office of the Secretary of Defense]-level decision, but it was also a decision that I had to follow because of the law. Nunn-McCurdy says that if I cannot certify by a date specific, which was December 13, 2001, that this program could be brought under control of those four criteria that I mentioned, by law I have to stop funding the program.

The combination of the fact that there was also some significant cost growth in the program, the fact that we are -- the type of terminal defense system is a derivative of an aircraft design, blast fragment warhead rather than hit-to-kill, and a lot of other things that were going on, we decided to go ahead and allow the program to stop. And now, let's step back, take a breath, look at new technology, restructure a terminal defense program for the Navy that makes sense with new technology. And that's what we did.

Q: Obviously, a lot of weapons have been used in Afghanistan. Based on the performance of various systems, do you have any thoughts about whether you should replenish on a one-for-one basis or perhaps move forward with advancing new programs, like JASSM.

Aldridge: I've made a decision -- we had a DAB meeting on JASSM, just two or three days ago. We are proceeding with low-rate initial production on JASSM; great program in good shape. We need to get started. news release ][link no longer available]

The value of precision-guided munitions is clearly demonstrated in Afghanistan. We need to get our production base back up to produce those weapons, to replenish them, and we have to do that. But the precision-guided munitions -- and just to give a little plug -- I know they want me to go, because I'm getting in front of Don Rumsfeld's time.

We have developed two new weapons. One is an earth penetrator, based on a cruise missile.

And another one, which we call a thermobaric. It's a new explosive that is particularly designed for tunnels. We, in fact, tested one out in Nevada just recently, where we skipped a laser-guided bomb into a tunnel and exploded it with a delay fuse, and experienced a significant growth in overpressure for the tunnel and temperature. It's something that we clearly have a need for in Afghanistan, and they're on their way over there.

So with that, I'm going to quit.

Thank you.

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