AU/AFF/013/2008-05

AIR FORCE FELLOWS (SDE)

AIR UNIVERSITY

HARD SKILLS, SOFT SKILLS, SAVVINESS AND DISCIPLINE--

RECOMMENDATIONS FOR SUCCESSFUL ACQUISITON:

CASE STUDIES OF SELECTED BOEING WEAPONS PROGRAMS

by

Roger J. “Torch” Witek, Lieutenant Colonel, USAF

A Research Report Submitted to Air Force Fellows, CADRE/AR In Partial Fulfillment of the Graduation Requirements

Advisor: Mr. Eric Briggs, Director

Secretary of Defense Corporate Fellows Program

Maxwell Air Force Base

May 2008

Disclaimer

The views expressed in this academic research paper are those of the author and do not

reflect the official policy or position of the US government or the Department of Defense. In

accordance with Air Force Instruction 51-303, it is not copyrighted, but is the property of the

United States government.

ii

ABOUT THE AUTHOR

Lieutenant Colonel (Colonel select) Roger J. “Torch” Witek is currently a Secretary of

Defense Corporate Fellow assigned to The Boeing Company Weapons Division in Saint Charles,

Missouri. He is a command pilot with more than 2,700 hours of flight time in the F-15A/B/C/D

and the F-4E/F with 132 combat hours. “Torch” Witek has held a variety of flying assignments

to include Deputy Commander, 3rd Operations Group and Commander, 19th Fighter Squadron,

Elmendorf Air Force Base, Alaska. He has served on the United States Forces Korea staff as

Chief of Special Technical Operations. “Torch” Witek is a graduate of and was an instructor at

the German Air Force / United States Air Force F-4E/F Weapons School. He is a distinguished

graduate of the Reserve Officer Training Corps, Undergraduate Pilot Training, and Squadron

Officer School. “Torch” Witek has earned a Bachelor of Science degree in Mechanical

Engineering from the University of Illinois, a Master of Science degree in Mechanical

Engineering from the University of Idaho, a Master of Arts degree in Military Operational Art

and Science from Air Command and Staff College at Air University, and Master of Arts degree

in Airpower Art and Science from the School of Advanced Airpower and Space Studies at Air

University. Lieutenant Colonel Witek’s next assignment is to the Office of the Secretary of

Defense for Policy, Global Security Affairs.

iii

Preface

Each year, two officers with highly successful operational command and staff backgrounds

from each Service are assigned to rotating Fortune 500 companies to glean the best of change,

innovation, and leading edge business practices that could be implemented to transform the

Department of Defense (DoD). The program that makes this possible is the Secretary of Defense

Corporate Fellows Program (SDCFP). The program’s website offers a complete overview and

can be found at http://www.ndu.edu/sdcfp/. Usually, SDCFP fellows write their respective

senior service school graduation research paper requirements about the best business practices

they experienced with their respective companies. Since the SDCFP fellows collage their

relevant observations and recommendations in an outbrief to Pentagon officials at the end of

each school year, I decided to write a more detailed paper for the DoD acquisition community

using my perspective as a career-long fighter pilot.

I was fortunate to be assigned to The Boeing Company and extremely privileged that

Virginia Barnes, the Vice-President (VP) of the Weapons Division in Saint Charles, Missouri,

fought to sponsor me. As VP she is responsible for over 1000 employees and a portfolio that

includes the Harpoon, Stand-off Land Attack Missile-Extended Range (SLAM-ER),

Conventional Air Launched Cruise Missile (CALCM), Joint Direct Attack Munition (JDAM),

and the Small Diameter Bomb (SDB) programs. She has a wealth of experience with naval

support systems and the International Space Station. Ms. Barnes takes pride in mentoring and

loves to teach the “soft skills”; those ultra inclusiveness techniques backed up by a “kill with

kindness” demeanor that are needed to build interpersonal relationships between people in

government and industry and between prime contractors and their suppliers.

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Ms. Barnes’ position as VP and her joy for mentoring allowed me access to the rest of The

Boeing Company leaders. From the start, she secured a slot for me at the much heralded The

Boeing Leadership Center (BLC) Program Manager’s Workshop (PMW). For a week, not only

did the BLC indoctrinate me on the company’s eight program management best practices, but the

PMW was the foundation for developing career long contacts with professionals working on the

787 Dreamliner, Army’s Future Combat System (FCS), and National Aeronautics and Space

Administration’s International Space Station. Two months later, Ms. Barnes sent me to the

LEAN+ Conference in Seattle, Washington, for a one week conference. With 1200 attendees,

including The Boeing Company customers, I learned about continuous process improvement and

the elimination of waste. Ms. Barnes coordinated an extra day with tours and interviews with the

Phantom Works Support Technologies Program Manager (PM), B-2/CALCM Conversion PM,

F-22 Assembly Center Senior Manager, 737 Production System Manager, and the 787 Chief

Pilot. I also attended her boss’s (Mr. Chris Chadwick, VP and General Manager of Global Strike

Systems) leadership team offsite programs as well. From there, I coordinated several interviews

and tours with the F/A-18 and F-15E PMs and with the Virtual Warfare Center (VWC) -- all in

Saint Louis, Missouri. Besides Saint Louis and Seattle, Ms. Barnes also sent me to southern

California and to Philadelphia to learn about the satellite and rotary aircraft businesses.

With an efficiency I grew accustomed to expect, Ms. Barnes hosted the first of nine SDCFP

Company Days. She secured keynote speakers such as John Lockard, President, Precision

Engagement and Mobility Systems; Chris Chadwick, VP and General Manager (GM) of Global

Strike Systems; Dennis Muilenburg, VP and GM of Combat Systems; Tony Parasida, VP and

GM of Airborne ASW and ISR Systems; George Roman, VP of Government Relations; and

Steve Goo, VP of Program Management. These senior level executives talked about The Boeing

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Company’s Leadership and Management Models and Program Management Best Practices,

strategic to tactical alignment, and United States and international defense markets.

Half way through my fellowship, Ms. Barnes moved up to VP and Deputy GM for FCS in

St. Louis and continued to mentor me. Debbie Rub-Zenko became the new VP of Weapons.

Ms. Rub-Zenko came from Missile Defense Systems in Huntington Beach, California. The

Boeing Company decided to merge the missiles and weapons division to leverage competencies

off each other. Ms. Rub-Zenko added tours with her Patriot Advanced Capability-3 and Aegis

Missile Defense System leadership teams to my previously planned southern California trip.

My mentors day-to-day at the Weapons Division were Dan Jaspering, Director of Direct

Attack; James Brooks, SDB PM, and Mike Wasylczyk, Focused Lethality Munition (FLM) PM.

Dan, Mr. Jaspering sent me to Earned Value Management (EVM) training where I learned the

intricacies of building work packages and good executable schedules; it taught me what it means

to balance the three legged stool of acquisition – cost, schedule, and technical performance. I

lived the SDB daily battle rhythm (meeting schedule) and followed FLM from a Joint Concept

Technology Demonstration (JCTD) to a Low Rate Initial Production (LRIP) Milestone B

decision. I saw a FLM JCTD live-fire event at Holloman Air Force Base (AFB), New Mexico,

with the Secretary of the Air Force, Michael Wynne, in attendance. Besides the opportunity to

speak to Sue Payton, Assistant Secretary of the Air Force for Acquisitions, at the Air Armament

Symposium, I traveled to the SDB and FLM Systems Project Office (SPO) at Eglin AFB, Florida

several times to experience the military/customer side of acquisition. There, I was included in

audiences with Judy Stokley, Deputy Air Force Program Executive Officer for Weapons.

At Eglin AFB, Colonel Richard Justice, Commander, 918th Armament Systems Group

(ARSG) for Miniature Munitions, allowed me access to his team. Richard Walley, Deputy

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Director, 918th ARSG; Bill Wise (SDB-II, 682nd Armament Systems Squadron (ARSS)) and

Greg Postulka (SDB-I, 681st ARSS), are dedicated government civilians and contractors

currently leading and supporting the SDB program. They were valuable in providing archival

and current data. And even with my few months experience in “acquisition”, Lieutenant Colonel

Chris Baird, Commander, 681st ARSS, treated me like a peer.

This corporate experience would not be possible without Eric Briggs, Director of SDCFP.

He is a one man shop with a limited budget at the National Defense University. Mr. Briggs has,

however, the Office of Net Assessment’s and Mr. Andrew Marshall’s clout to recruit Fortune

500 companies every year to support this program. Mr. Briggs also coordinated orientation

briefings and training from senior military and civilian leaders, government think tanks and

research labs, and the University of Virginia Darden Graduate School of Business.

Aside from the experience of working at The Boeing Company, I enjoyed learning best

business practices and interesting perspectives from the Company Days at this year’s SDCFP

participating sponsors: Oracle in Reston, Virginia, Cisco Systems in San Jose, California; 3M

Company in Saint Paul, Minnesota; CACI-Athena in Arlington, Virginia; Amgen in Thousand

Oaks, California; Time Warner/CNNMoney.com, in New York City, New York; Lockheed

Martin Missiles and Fire Controls, Orlando, Florida; and SRA International in Fairfax, Virginia.

Finally, the motivation to complete this paper lies in the Air Force Officer Doctrine

Development and Education Center requirement. There are approximately 100 Air Force

Fellows (AFF) in over three dozen programs who receive intermediate or senior developmental

education credit. Many thanks are given for the patience of Ms. Dee Taylor, Director, AFF;

Staff Sergeant Kimberly Langston, AFF Non-Commissioned Officer in Charge and Senior

Airmen Marcus Henry for keeping us fellows in check.

vii

ABSTRACT

This report analyzes The Boeing Company’s Joint Direct Attack Munition (JDAM) and the

Small Diameter Bomb Increment One (SDB-I) defense acquisition weapons programs in terms

of leadership, teaming, strategy, and execution. A description of defense acquisition processes

are covered in Chapter 1. Chapter 2 follows with a historical review and editorial of the latest in

defense acquisition transformation and Department of Defense expectations for defense

contractors. The JDAM case study as a Defense Acquisition Pilot Program is described in

Chapter 3. The managerial actions from that program are compared through the lens Professor

Jim Collins provides in his book, Good to Great. Chapter 4 is the hallmark, stand alone chapter

that presents the ongoing SDB-I case study that has not been told at any length in any acquisition

publication as of yet. Although the case studies are presented chronologically; leadership,

teaming, strategy, and execution lessons are summarized at the end of Chapters 3 and 4. Chapter

5 analyzes the Laser JDAM, the Focused Lethality Munition (a SDB-I derivative as a Joint

Capabilities Technology Demonstration), and the Small Diameter Bomb - Increment Two (SDB-

II, a risk reduction competition phase before Milestone B) programs to determine whether these

programs are following any lessons from JDAM and SDB-I. Chapter 6 recommends that “hard

skill” leadership is needed for development programs, “soft skill” teaming arrangements are

needed in both development and production programs, business savviness allows win-win

scenarios for both government and industry, and disciplined, repeatable processes are key for

successful execution.

viii

CONTENTS

Chapter Page

DISCLAIMER ………………………………………………………… ii

ABOUT THE AUTHOR ……………………………………………… iii

PREFACE ……………………………………………………………... iv

ABSTRACT …………………………………………………………… viii

1 REDS TO GREENS AND ACQUISITION ACADEMICS ………….. 1Defense Acquisition 101 ………………………………………………. 2

U.S. Code and the FAR ……………………………………….. 3The “Big A” Trinity …………………………………………… 3

JCIDS …………………………………………………. 4PPBES ………………………………………………… 5DAS, the “little a” ……………………………………... 7

What to Remember about Acquisition ……………………………..… 10

2 TRANSFORMATION IS IN THE EYE OF THE BEHOLDER …….. 14Commissions, Directives, and Analyses ……………………………… 15

Recent Initiatives ………………………………………………. 16DSB ……………………………………………………. 17QDR ……………………………………………………. 17BGN ……………………………………………………. 17DAPA ………………………………………………….. 18DAT ……………………………………………………. 18BTA ……………………………………………………. 19

Government Accounting Organization ……………………….. 19Nunn-McCurdy Breaches …………………………………….. 20

Stakeholder Expectations of Industry ………………………………… 21“The A-Team” ……………………………………………....... 21Government Expectations …………………………………….. 23

On Time, On Cost, On Target ………………………… 23Ownership of Product Health ………………………….. 23Realistic Marketing and Budgeting ……………………. 23Matured Technologies ………………………………….. 24Flexibility ……………………………………………….. 24

Lessons from Transformation and Expectations ……………………….. 24

3 JDAM: BREAKING PARADIGMS AND STAYING THE COURSE. 27In the Beginning, It Was Going to be Different ………………………. 28

First Who, Then What ………………………………………… 28

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Integrated Product Teams (IPTs)……………………… 29More Effective Leadership …………………………… 30

DAPP, There’s a Waiver for Every Rule ……………………… 31It’s the Economy, Stupid ……………………………………… 32

Price-based Strategy …………………………………… 33Supply Trust and Motivation …………………………… 35Rolling Down-Select …………………………………… 36

The Boeing Company and JPO Continue the Saga …………………… 37Compromise and Supplier Management ……………………….. 37Incentives, PPCC, and Lean ………………………………….... 39New Product Development and Technical Insertions ………… 41Carrots and Sticks for Price-based Acquisition………………… 42

Summary of WWJD (What Would JDAM Do?) ……………………….. 45

4 SDB: TIME MATTERS ……………………………………………….. 51The Leap from Labs to Industry ……………………………………….. 52

MNS, ORD, and AoA ………………………………………….. 52Catalysts and Programming ……………………………………. 53

A JDAM Repeat? More of the Same, and Different …………………... 55Champions, Mold Breakers, and Stable Requirements ………… 56The “Go-Fast” Plan and Picking IPT Members ………………….. 58Alien Autopsy …………………………………………………. 59Buy, Make, or Sell “Build to Print” ……………………………. 60Trunk Monkey Certified ………………………………………. 61SAMP Deviations with Disciplined Source Selection …………. 62

SDD Investment and Production Challenges …………………………… 64In the Interest of Time …………………………………………… 65

More Organizational Support …………………………… 66Camp McClendon ………………………………………. 66Battle Rhythm ………………………………………….. 67Incentives ………………………………………………. 67

Seamless Verification …………………………………………… 68Fielding Accolades and Challenges …………………………………….. 69Lessons from the Perry Award Winner …………………………………. 72

5 DERIVATIVE PROGRAMS: AS THE PENDULUM SWINGS ……. 77Laser JDAM ……………………………………………………………. 78

The Customer May Not Know What It Needs …………………. 78Going Backwards on Requirements ……………………………. 80

FLM …………………………………………………………………….. 81Brief Background about JCTDs ………………………………... 82FLM MUA, Attributes, and Challenges ………………………… 83

SDB-II ………………………………………………………………….. 85Why the Re-compete? ………………………………………….. 86Technology Priority Challenge …………………………………. 87

What’s the Future? ……………………………………………………… 87

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6 RECOMMENDATIONS ………………………………………………. 91Leadership and the Hard Skills …………………………………………. 91

#1: Each major acquisition program needs a champion who picks one priority. ………………………………….. 92

#2: Choose “glass breakers” to lead development programs. ….. 93 Teaming and the Soft Skills ……………………………………………... 95

#3: Build inclusive IPTs at all levels and empower them. ..……. 96#4: Motivate, trust, verify, coach, and reward suppliers. …......... 97

Strategy and Business Savviness ………………………………………. 98#5: Keep improving competition transparency. ………………. 98#6: Embrace price-based acquisition, incentivize behavior, and expect warranties. ……………………….. 98

Discipline and Execution ……………………………………………….. 100#7: Limit KPPs to avoid requirements creep …………………… 101#8: Maintain a disciplined battle rhythm and protect

your organizational wall! ………………………………. 100Applicability for Bigger Programs ……………………………………… 102Conclusion ………………………………………………………………. 103

BIBLIOGRAPHY ………………………………………………………. 105

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Illustrations

Figure/Table

1.1 Defense Acquisition Structure ……………………………………… 4 1.2 JCIDS CBA Process ……………………………………………….. 6 1.3 PPBES On/Off Year Processes ……………………………………… 8

1.4 Milestone Framework ……………………………………………….. 101.5 Acquisition Categories ………………………………………………. 11

2.1 Past Acquisition Transformation …………………………………….. 162.2 DAPA Recommendations …………………………………………… 182.3 Seven Deadly Sins of Program Management ………………………... 20

3.1 DoD and Commercial Comparison ………………………………….. 293.2 JDAM Waiver Metrics ………………………………………………. 333.3 PPCC Carrots and Sticks ……………………………………………. 443.4 JDAM Accuracy, PPCC, and Production …………………………… 463.5 JDAM JPO-MD/Boeing Lessons …………………………………….. 47

4.1 Original SDB Program ……………………………………………….. 554.2 SDB Baseline Program ………………………………………………… 564.3 SDB Part Changes from CAD to SDD/Production ……………………. 604.4 SDB Early and Often …………………………………………………. 664.5 SDB Risk versus Test …………………………………………………. 704.6 SDB SPO-Boeing Lessons ……………………………………………. 73

5.1 FLM Program …………………………………………………………. 845.2 Laser JDAM, FLM, and SDB-II Lessons …………………………….. 88

6.1 Industry Margin Comparisons ………………………………………... 1006.2 Acquisition Spectrum …………………………………………………. 103

xii

Chapter 1

Reds to Greensand Acquisition Academics

"Management is the gate through which social and economic and political change, indeed change in every direction, is diffused though society."

—Robert McNamara, former U.S. Secretary of Defense1

Variability exists in any operation and needs to be managed. Decision making in operations

is very context dependent and measuring success can present challenges—especially when some

decisions are government regulated. In an attempt to provide the status of Department of

Defense (DoD) acquisition programs, color coded Probability of Program Success (PoPS)

measures were created.2 According to typical PoPS scores, “red” signifies a high risk program or

that cost, schedule or technical performance has been poor. “Yellow” is a medium risk program

or that cost, schedule or technical performance has been declining. “Green” is a low risk

program performing according to plan. When Sue Payton, Assistant Secretary of the Air Force

for Acquisition, took over her job in 2006, she inherited 127 significant and expensive programs

that promised to deliver new and enhanced combat capability to the warfighter—10 percent of

which she graded “red” in May 2007. “We wake up every morning worrying,” Ms Payton

exulted, “about getting those red programs turned to yellow, and the yellow programs turned to

green.”3

1 On-line, Internet, available from http://en.wikiquote.org/wiki/Robert_McNamara.2 Predictive scoring of future program health is explained in “The Probability of Program

Success (PoPS) Operations Guide,” October 9, 2003, Acquisition Community Connection – Program Success Factors – Operations Guide, n.p., on-line, Internet, available from https://acc.dau.mil/Search.aspx?id=1&m=All&q=PoPS+Operations+Guide.

3 The Honorable Sue Payton’s (Assistant Secretary of the Air Force for Acquisition) remarks at the Air Force Defense Strategy Seminar, Washington D.C., May 17, 2007, Air Force Link, n.p., on-line, Internet, available from http://www.af.mil/library/Speeches/speech.asp?id=329.

1

At the 2007 Air Armament Symposium in October 2007, Major General David Eidsaune,

Program Executive Officer for Weapons and Commander of the Air Armament Center, reported

that the weapons programs worth $3.9 billion were graded 74 percent in the green, 21 percent in

the yellow, and 5 percent in the red.4 In front of over 700 attendees and more than two dozen

major defense contractors and small business companies, Boeing’s Joint Direct Attack Munition

(JDAM) and Small Diameter Bomb (SDB) programs were heralded as “model” programs.

Although JDAM and SDB have not gone without challenges, this report will analyze the

leadership, teaming, strategy, and execution that made those programs successful. Dissertations

and case studies have been done on the early JDAM program years and will be summarized and

updated. Similarly, the SDB case study will be presented for practically the first time. Then the

follow-on JDAM and SDB derivative programs will be compared to their predecessors’ footsteps

to reinforce the conclusions that “hard skill” leadership is needed for development programs, that

“soft skill” teaming arrangements are needed in both development and production programs, that

business saviness allows win-win scenarios for both government and industry, and that discipline

is key for successful execution.

In order to judge, critique, or much less model any DoD acquisition program, one must

understand what measures of merit programs are being graded against. The complex DoD

acquisition system means managers are constantly trying to improve the “system of systems”

(SoS).5 In this case, the DoD acquisition SoS is unlike a combat aircraft combining the airframe,

engines, avionics, radar, and weapons subsystems or a fighter data link combining the radar

picture of many different combat aircraft for a single combat aircraft to use. Instead of

combining technologies, the DoD acquisition SoS combines laws and governmental processes.

This chapter provides a review of defense acquisition laws, regulations, and structure.6 The next

2

chapter summarizes defense acquisition transformation pertaining to commissions, panel

assessments, congressional amendments and government expectations of industry.

Defense Acquisition 101

Unfolding the regulatory practices that affect defense acquisition is an important part of

understanding budgeting and program funding. The defense acquisition SoS is strictly guided

by United States (U.S.) Code, the Federal Acquisition Regulation (FAR), and a trinity of

governmental systems known as the Big “A” Acquisition Process.

U.S. Code and the FAR

Title 10 of the U.S. Code dealing with the Armed Forces generally prescribes how the DoD

goes about manning, training, and supplying their military services. The 1941 Fifth

Supplemental DoD Appropriations Act, now known as the Berry Amendment has become part of

Title 10. In order to protect the U.S. industrial base during periods of war, the Berry

Amendment gives acquisition preference to domestically produced, manufactured, or home

grown food, clothing, fabrics, and specialty metals.

Title 41 governs public contracts and requires the DoD to use the FAR for its acquisition

processes.7 The FAR is a series of policies and procedures that demand contractors meet

governmental customer needs in terms of cost, quality, and timeliness and to conduct this

business fairly and in an ethical manner. The FAR also includes socioeconomic requirements,

such as certain items must be purchased only from U.S. firms and for large firms to subcontract

to small, disadvantaged businesses, specifically those being owned by women or minorities.

The DoD also has an agency supplement, the Defense Federal Acquisition Regulation

Supplement (DFARS).8 In January 2005, the DFARS was amended, however, to include

3

exceptions to Title 10 for the acquisition for food, specialty metals, and measuring tools from

outside the U.S. when supporting contingency operations or meeting an urgent need.9

The “Big A” Trinity

The defense acquisition structure is a trinity of three interdependent processes of

requirements, budgeting, and acquisition; also known as the “Big A.” The requirements system

is the Joint Capabilities Integration and Development System (JCIDS). The budgeting system is

the Planning, Programming, Budgeting, and Execution System (PPBES). The acquisition

system, known as the “little a”, is the Defense Acquisition System (DAS). This defense

acquisition structure is represented in Figure 1.1.

Figure 1.1 Defense Acquisition Structure10

JCIDS. In June 2003, the Chairman, Joint Chiefs of Staff (CJCS) approved the Joint

Capabilities Integration and Development System (JCIDS) to replace the 30 year old

4

Requirements Generation System (RGS). The JCIDS addresses capability gaps and shortfalls

defined by combatant commanders. 11 The RGS was a threat-based assessment while the JCIDS

is a capabilities-based approach to requirements generation. Currently the DoD develops,

produces, and fields capabilities (as opposed to fielding systems) based on strategic direction

from the National Military Strategy (NMS) and National Defense Strategy (NDS).

The JCIDS process begins with developing joint integrating concepts and the capabilities

they imply from the U.S. Secretary of Defense (SECDEF) and the Combatant Commanders

(COCOMs). From these joint integrating concepts, the Joint Chiefs of Staff (JCS) refine

requirements quarterly and develop an integrated priority list. Then the Vice-JCS and the service

vice-commanders form the Joint Requirements Oversight Council (JROC) to validate capability

requirements and determine procurement strategies.

A three-phased Capabilities Based Assessment (CBA) is conducted to assess joint

integrating concepts. First, a Functional Area Analysis (FAA) defines operational objectives and

tasks. Second, a Functional Needs Analysis (FNA) assesses how current and programmed

capabilities accomplish FAA tasks. Then the FAA and FNA results are combined into a Joint

Capabilities Document (JCD) which highlights capability gaps. The JCD is the baseline for the

third CBA phase, the Functional Solution Analysis (FSA). The FSA evaluates alternative

solutions to address capability gaps and its results are published in an Initial Capabilities

Document (ICD) for material solutions and in a Joint Doctrine Change Request (Joint DCR) for

non-material solutions. Further analysis or acquisition decisions are conducted under the

Defense Acquisition System (DAS), but the JCIDS’s Capability Development Document (CDD)

and the Capability Production Document (CPD) are used to support major design Milestone

approval decisions that usually lead to new contracts and defense expenditures to continue

5

acquisition programs. The previously mentioned capability gap defining ICD supports Milestone

A decisions for concept demonstrations. When technology matures, the CDD provides a more

detailed solution to support Milestone B decisions to start the System Development and

Demonstration (SDD). Finally, the CPD supports Milestone C decisions for low rate initial

production (LRIP) and operational tests. Milestones will be discussed later on in this chapter and

the JCIDS CAB process is represented in Figure 1.2.

Figure 1.2 JCIDS CBA Process12

PPBES. SECDEF Robert McNamara implemented the Planning, Programming, and

Budgeting System (PPBS) in the early 1960s. DoD’s Management Initiative Decision (MID)

913 replaced it.13 The new PPBES process has four phases. The planning phase begins with a

review of the NMS and NDS and produces the Strategic Planning Guidance (SPG). In 2008, the

Guidance for Employment of the Force (GEF) and the Guidance for Development of Force

(GDF) replaced the SPG coming out of the Under-Secretary of Defense for Policy.14 The GEF

6

and the GDF (the old SPG) lead the Enhanced Planning Process under fiscal constraint to

prioritize military force modernization, readiness, sustainability, and supporting processes for

program development in a document known as the Joint Planning Guidance (JPG). The JPG

links the planning and programming phases and provides military services guidance to develop

their program proposal known as the Program Objective Memorandum (POM).

The POM starts each service’s programming phase. The POM projects time-phased

allocation of forces, resources, and manpower six years in advance. POMs identify funding

shortfalls that the Joint Staff mitigates with alternative solutions that are sent off to the SECDEF

for decision. The results are documented in a Program Decision Memorandum (PDM).

The budgeting phase occurs simultaneously with the programming phase. Each service

submits its budget concurrently with its POM. Budget submittals project resources for two years

into the future with considerable financial detail that are analyzed by the DoD Comptroller and

the Office of Management and Budget (OMB). The analysis results in a Program Budget

Decision (PBD) that proposes financial adjustments for the SECDEF to approve. After final

adjustments, an overall DoD budget is submitted as part of the President’s request to Congress.

The execution phase occurs along with the programming and budgeting phases. The

execution phase provides feedback for defense acquisition programs through metrics that

measure output versus planned performance. If program goals are not being met; observation,

reallocation, restructuring, or cancellation of programs might be recommended.15

Although the DoD must request funding from Congress annually, the new PPBES exercises

the planning and programming phases in even-numbered years (called “on-years”) and the

budgeting and execution phases in both even-numbered years and odd-numbered years (called

“off-years”).16 The PPBES on/off-years processes are represented in Figure 1.3.

7

DAS, the “little a”. The Defense Acquisition System (DAS), or the “little a”, entails

organizational construct, decision milestones, and acquisition categories. The 1986 Packard

Commission recommended the current Program Manager (PM), Program Executive Officer

Figure 1.3 PPBES On/Off-Years Processes 17

(POS), Component Acquisition Executive (CAE), and the Defense Acquisition Executive (DAE)

8

hierarchy. PMs are responsible for accomplishing program cost, schedule, and technical

performance objectives with a staff of engineers, logisticians, contracting officers, and quality

assurance, evaluation, and business management personnel. PMs are military officers or federal

civil servants who report to PEOs for program execution purposes (and may also report to

another leader for organizational reporting purposes). A PEO might be responsible for one large

program (like F-22A or the Joint Strike Fighter) or for a portfolio of similar programs like Major

General David Eidsaune, Air Force PEO for Weapons does. PEOs are military officers or

federal civil servants who report to CAEs who are usually called Service Acquisition Executives

(SAEs). Most SAEs report to the Undersecretary of Defense for Acquisition, Technology, and

Logistics (USD AT&L), who also serves as the Defense Acquisition Executive (DAE).18

The DoD uses decision milestones to guide materiel development and direct capabilities

production of acquisition programs. Milestone A, B, and C have a specific set of warfighter,

statutory, and regulatory requirements. Milestone A is the result of the concept refinement (CR)

phase that enhances the concept decision (CD) with the development of a technology

development strategy (TDS). Following a Milestone A decision approving the TDS, the

technology development (TD) phase reduces technology risk by determining appropriate

technologies to be integrated into the full system. All technologies intended for the full system,

however, are not required for Milestone B decisions. Spiral development allows the DoD to add

less mature technologies into the full system after Milestone B which starts the Systems

Development and Demonstration (SDD) phase.19 However, Milestone B establishes the baseline

that Nunn-McCurdy breaches are based against.20 Within SDD, the systems integration (SI)

phase combines various subsystems into a single prototype. Still within SDD, but after SI; the

system demonstration phase tests prototypes for military utility and to identify deficiencies. The

9

Design Readiness Review during SDD provides an opportunity for mid-phase assessment of

design maturity and spiral development insertion opportunity. Milestone C represents the

beginning of low rate initial production (LRIP) which is meant to prepare manufacturing and

quality control processes for full-rate production (FRP), provide factory-produced products for

operational test and evaluation (OT&E) and to declare initial operational capability (IOC).

Defense acquisition milestones are depicted in Figure 1.4.

Figure 1.4 Milestones Framework21

Each milestone must be approved by a Milestone Decision Authority (MDA), usually the

DAE, CAE (SAE), or PEO. MDA oversight of acquisition categories (ACATs) increases as the

value of the program increases. If money is not the issue, complexity and risk usually fall under

as special interest designations. Major Defense Acquisition Programs (MDAPs) receive the

most DoD and Congressional scrutiny and are categorized as ACAT I programs. ACAT

designation and decision authorities are represented in Table 1.5.

What to Remember about Acquisition

The DoD acquisition process is a trinity of the “Big A”; JCIDS, PPBES, and the DAS. The

JCIDS is a capabilities-based approach using strategic guidance to identify capability gaps and

IOCBA

System Development& Demonstration Production & Deployment Operations

& Support

C

User Needs & Technology Opportunities

Concept Refinement

TechnologyDevelopment

System Integration

System Demonstration

LRIP Full-Rate Prod & Deployment

DesignReadinessReview

FRPDecisionReview

Sustainment Disposal

FOC

Process entry at Milestones A, B, or CEntrance criteria met before entering phasesEvolutionary Acquisition or One Step to Full Capability

ConceptDecision

10

alternative solutions. Although planning and parts of programming occur every other year, the

PPBES requires budgeting and execution every year. The “little a” DAS establishes the

authority and organizational structure with the PM, PEO, CAE (or SAE), and the DAE; each

Acquisition Category

Reason for ACAT Designation Decision Authority

ACAT I MDAP (10 USC 2430, reference (n)) o Dollar value: estimated by the USD(AT&L) to

require an eventual total expenditure for research, development, test, and evaluation (RDT&E) of more than $365 million in fiscal year (FY) 2000 constant dollars or, for procurement, of more than $2.2billion in FY 2000 constant dollars

o MDA designation MDA designation as special interest

ACAT ID: USD(AT&L) ACAT IC: Head of the DoD Component or, if delegated, the DoD Component Acquisition Executive (CAE)

ACAT IA MAIS: Dollar value of AIS estimated by the DoD Component Head to require program costs (all appropriations) in any single year in excess of $32 million in fiscal year (FY) 2000 constant dollars, total program costs in excess of $126 million in FY 2000 constant dollars, or total life-cycle costs in excess of $378 million in FY 2000 constant dollars

MDA designation as special interest

ACAT IAM: ASD( C3I )/DoD CIO ACAT IAC: CAE, as delegated by the DoD CIO

ACAT II Does not meet criteria for ACAT I Major system

o Dollar value: estimated by the DoD Component Head to require an eventual total expenditure for RDT&E of more than $140 million in FY 2000 constant dollars, or for procurement of more than $660 million in FY 2000 constant dollars (10 USC 2302d, reference (o))

o MDA designation 4 (10 USC 2302(5), reference (p))

MDA designation as special interest

DoD CAE or the individual designated by the CAE

ACAT III Does not meet criteria for ACAT II or above Less-than a MAIS program

Designated by the DoD CAE at the lowest level appropriate

Notes: In some cases, an ACAT IA program, as defined above, also meets the definition of an MDAP. The USD(AT&L) and the

ASD( C3I )/DoD CIO shall decide who will be the MDA for such programs. Regardless of who is the MDA, the statutory requirements that apply to MDAPs shall apply to such programs.

An AIS program is an acquisition program that acquires IT, with the exception of IT that involves equipment that is an integral part of a weapon or weapons system, or is an acquisition of services program.

The ASD( C3I )/DoD CIO shall designate programs as ACAT IAM or ACAT IAC. MAIS programs shall not be designated as ACAT II.

As delegated by the Secretary of Defense or Secretary of the Military Department.

Table 1.5 Acquisition Categories22

11

capable of acting as a milestone decision authority for different levels of acquisition categories.

Finally, acquisition officers must abide by U.S. Code and the FARs, with particular attention to

the Berry Amendment which promotes domestic and small business opportunities. Despite these

rules, some acquisition programs still over-spend, over-run, and under-achieve. Clearly any

product, service, and process can be improved upon to create even more value. Chapter 2 will

examine acquisition transformation and how the government tries to curb these disappointments.

12

Chapter 2

Transformation is in the Eye of the Beholder

Simply put, the Department of Defense acquisition process is broken.

—House Armed Services Committee Report, May 5, 200623

The U.S. Government authorized the U.S. War Department to procure six large frigates in

1794 which became the first major weapons system acquisition. Seventeen months later, six

keels were laid but only three of the frigates were built due to schedule and cost overruns. That

very first purchase laid the foundation for an interesting pattern that has been repeated for over

two centuries under countless administrations.24

Aside from the amazing military industrialization that geared up to help win World War II,

a transformation of the modern defense acquisition didn’t begin until the 1960s under Secretary

of Defense (SECDEF) Robert McNamara. As a former President of Ford Motor Company,

McNamara brought his system analysis discipline to the Department of Defense (DoD) and

instituted the Planning, Programming, and Budgeting System. Although SECDEF McNamara

tried to cut costs by consolidating service programs (like making the Air Force buy the Navy’s

F-4s and A-7s), he still experienced an average development program cost increase of 20

percent. In fact, following SECDEF McNamara’s reign, numerous commissions with infamous

names such as Fitzhugh (1971), Carlucci (1981), Packard (1969, 1985), Perry (1994), and

Rumsfeld (2001) failed to turn that 20 percent cost increase around.25 While each time these

23 National Defense Authorization Act for Fiscal Year 2007. Report 109-452 of the Committee on Armed Services, House of Representatives on H.R. 5122, May 5, 2006, p. 350, on-line, Internet, available from http://a257.g.akamaitech.net/7/257/2433/15May2006/514/www.gpoaccess.goc/serialset/creports/pdf/hr109-452/title8.pdf.

24 On-line, Internet, available from http://www.ussconstitution.navy.mil/historyupdate.htm.

14

leaders implemented new oversight, directives, and instructions or reemphasized old initiatives;

cost overruns, schedule delays, and missed expectations continued within DoD acquisiton.

This chapter summarizes historical commissions, reviews recent analyses, describes

controversial reports, and includes some of the most enduring legislation amendments affecting

acquisition transformation. In addition, numerous government customers’ expectations of the

corporate defense industry are described. This background could be used to examine whether

DoD is clear about what it actually has and what it really wants. Being clear about how DoD got

where it is today is one of the first steps to leading transformation.

Commissions, Directives & Analyses

Over the past 35 years, many acquisition transformation commissions and directives have

focused on slow, almost evolutionary improvements to the much prescribed acquisition process

explained in Chapter 1. “Fly Before You Buy” was recommended in the 1970s. However,

today, programs are begging for more investment dollars to have companies build working

prototypes during competitive risk reduction competitions. Multi-year funding was argued for in

the 1980s, but it was a struggle for the F-22 program to get a three year deal in 2007, which will

save the government millions of dollars. The 1990s emphasized commercial off the shelf

equipment (COTS) and commercial business practices, but Congress and the public cringes

when a sub-supplier is from a foreign nation. In 2001, SECDEF Donald Rumsfeld complained

about bureaucratic inertia within the DoD acquisition community, but today more oversight and

less insight are demanded because of Nunn-McCurdy breaches which will be explained later in

this chapter. Table 2.1 summarizes past acquisition commissions’ recommendations and

directives. The next section will analyze what the latest initiatives have in store for acquisition

system of systems.

15

Since 2005 several analyses have been conducted focusing on defense acquisition. Common

recommendations include strengthening the roles of Combatant Commanders (COCOMs) and

the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD AT&L),

investing in the general defense acquisition workforce, and emphasizing “time certain

Recent Initiatives

Packard Initiatives – 1969- Improve quality of information from development phase; Restore contractor competition to reduce risk- Promoted “design-to-cost” goals; Regulate OSD’s involvement; Beginnings of Milestone Decision Authorities

Fitzhugh Commission – 1971- Indicted McNamara’s Total Package Procurement strategy- Called for more prototyping and increased testing, known as “Fly Before You Buy”

DoDD 5000.1, The Defense Acquisition System - 1972- Latest version May 12, 2003 provides basic management principles for DoD acquisition

DoDI 5000.2, Operations of the Defense Acquisition System - 1974- Latest version May 12, 2003 provides Milestone framework

Carlucci Initiatives - 1981- Recommended increased use of multi-year funding to gain more efficient production rates

Nunn-McCurdy - 1982- Provide increasing levels of oversight for programs more than 15% of baseline estimates

Packard Commission - 1985- Called for the establishment of the PM, PEO, CAE (or SAE), and DAE hierarchy

Defense Reorganization Act - 1986- Established the SAE and consolidated acquisition decision-making in the hands of the civilian leadership- Codified many of the Packard Commission recommendations

Section 800 Report - 1993- Reviewed existing legislation and recommended repeal or amendments- Focused on streamlining and simplifying acquisition laws

National Performance Review - 1993- Vice President Gore promoted using commercial standards for more acquisition programs

Federal Acquisition Streamlining Act (FASA) – 1994 (Expired in 1998)- Consolidated and simplified hundreds of laws into unified procurement code- Facilitated use of commercial items and practices- Enabled advent of electronic commerce in the federal government; Allowed streamlined contract processes- Established statutory basis for Defense Acquisition Pilot Programs (DAPP)

SecDef Perry Memo - 1994- Directed DoD to replace Military Standards (Stds) and Specifications (Specs) with Commercial Stds/Specs

Federal Acquisition Reform Act (FASA II) - 1996- Eliminated the General Services Board of Contract Appeals which exercised contractor bid protests

Defense Reform Initiative - 1997- Consolidated the industry and addressed erosion of core capabilities - Need to recover interest in DoD requirements by commercial sector

The Road Ahead - 1999- Addressed the slowness of logistics to meet sustainment needs- Requirement to integrate civil-military industrial base

16

Rumsfeld’s Challenge - 2001- Bureaucratic inertia stopping crucial initiatives, excess infrastructure- Planning, Programming and Budgeting System (PBBS) outdated, went to PPBExecutionS with even/odd yrs- Technology moving faster than DoD, that is deploying outdated technology

Table 2.1 Past Acquisition Transformation26

development” and “risk-based source selection.” The Defense Science Board (DSB), the

Quadrennial Defense Review (QDR), the Beyond Goldwater-Nichols (BGN), and the Defense

Acquisition Performance Assessment (DAPA) are all influential in the SECDEF’s bi-annual

Defense Acquisition Transformation (DAT) report. Likewise, the DoD’s Business

Transformation Agency (BTA) began publishing an annual Enterprise Transition Plan (ETP) in

2005 that lays out a roadmap for achieving DoD’s business transformation by implementing

changes to technology, process, and governance.

DSB. The Summer 2005 Defense Science Board (DSB) Study, “Transformation: A

Progress Assessment Volume II,” made several key business assessments of the DoD. It said the

DoD does not have an effective multi-year business plan that aligns people and financial

resources to its missions (a sharp contrast to the Fitzhugh Commission recommendations in

1971). The DSB also said that Combatant Commanders are under-represented in the JCIDS

process and that accountability of performance to objectives is weak (the Nunn-McCurdy

Amendment has only resulted in a handful of cancelled programs since 1982).27

QDR. The February 2006 Quadrennial Defense Review (QDR) “Reshaping the Defense

Enterprise” section addresses acquisition transformation; “There are several ongoing reviews of

defense acquisition improvements being conducted both within and outside the Department in an

effort to address these issues. Their results will inform the Department’s efforts to reshape

defense acquisition into a truly 21st century process that is responsive to the joint warfighter.”28

The QDR purposefully offers optimistic generalities because there are too many studies being

done with too many political constituencies to satisfy.

17

BGN. The April 2006 Center for Strategic and International Studies’ “Beyond Goldwater-

Nichols: U.S. Government and Defense Reform for a New Strategic Era” (BGN) devotes a

chapter in Volume II to acquisition transformation. It gives consideration to the “Big ‘A’” and

“little ‘a’” and makes recommendations to improve the JCIDS and PPBES processes; again,

recommending more COCOM say-so in the acquisition process and for more stable funding

through multi-year contracts.29

DAPA. The January 2006 Defense Acquisition Performance Assessment (DAPA) project

report attempted to answer Acting Deputy Secretary of Defense Gordon England’s request for

“an integrated acquisition assessment to consider every aspect of acquisition.”30 The DAPA

report made recommendations in six major elements summarized in Table 2.2. DAPA repeats

many of the old great ideas that government has been trying to implement since the Packard

Initiatives. This suggests an implementation problem. Experts may have a solution and players

could be refusing to take recommended actions.

Organization- Realign authority, accountability, and responsibility at the appropriate level; Streamline acquisition oversight- Increase of USD (AT&L) stature and authority, Establish Four-Star Systems Commands for Acquisition

Workforce- Rebuild and value the acquisition workforce; Make acquisition a core competency in the Services- Incentivize and stabilize acquisition leadership

Budget- Enhance the Planning, Programming and Budgeting process for high confidence estimates- Establish a distinct Acquisition Stabilization Account

Requirements- Replace JCIDS with COCOM led requirements procedures; DoD agencies must compete with solutions- Give program managers authority to defer non-key performance parameter requirements to later blocks - Add an “Operationally Acceptable” test evaluation category

Acquisition- Adopt a risk-based source selection process- Shift to time-certain development procedures and make schedule a key performance parameter Reposition Milestone B to occur after Preliminary Design Review

Industry- Share long range plans with industry; Restructure competitions to motivate industry to invest in technology- Require government insight and favor formal competition for major subsystems when a Lead System Integrator acquisition strategy

is pursued

Table 2.2 DAPA Recommendations31

18

DAT. The January 2008 Defense Acquisition Transformation (DAT) report is the third

edition in response to the biannual congressional reporting requirement in Section 804 of the

John Warner National Defense Authorization Act for Fiscal Year 2007 based on the

recommendations from DAPA, DSB, BGN, and the QDR. Most noted improvements in the six

major elements of the DAPA include promoting networked collaboration for best business

practices (Workforce), continuous process improvement to streamline processes (Acquisition),

time-defined acquisition to provide relevant products to the warfighter (Requirements), capital

accounts for stable funding (Budget), industry days for companies to respond to military needs

(Industry), and an Enterprise Transition Plan (ERP) to allow senior leaders to make strategic

choices (Organization).32

BTA. The September 2007 DoD Business Transformation Agency (BTA) Enterprise

Transition Plan (ETP) implemented the Enterprise Risk Assessment Methodology (ERAM).

ERAM requires programs to identify and mitigate risks that would keep programs from

achieving their objectives. This ETP details ERAM implementation progress on 100 systems

and initiatives.33 At least the BTA is more predictive than the Nunn-McCurdy process.

Government Accounting Organization (GAO)

The GAO issues both legal decisions and reports in relation to defense acquisition.

Although the Federal Acquisition Reform Act of 1996 (“FASA II”) eliminated the General

Services Board of Contract Appeals which exercised contractor bid protests, the GAO may hear

both pre-award and post-award protests under its general authority to audit and settle financial

matters on behalf of the federal government. The GAO, however, still cannot order injunctive or

declarative relief, as can the courts. In 2007, losing contractors protested the granting of the

CSAR-X development and production contract and the KC-135 maintenance contract. In turn,

19

the GAO found incorrect usage of acquisition procedures and upheld the contract protests. As a

result, the Air Force was compelled, although not legally required, to rebid the contracts.34

While the Defense Acquisition System of Systems delays procurement or maintenance, time and

money are wasted and the warfighters are put at risk until resolved.

Since the DoD doubled its investment in new weapons systems from $750 billion to $1.5

trillion between 2000 and 2007, measuring efficiency of programs is of great importance. For 30

years, the GAO’s reviews of weapons programs in general have found consistent cost increases,

schedule delays, and technical performance shortfalls. The GAO has provided annual

assessments of selected weapons programs since 2003. GAO’s annual Assessment of Selected

Weapons Programs provide congressional and DoD decision makers with an unbiased, fact-

based approach to identify risks and create strategies for improving troubled programs.35

Troubled programs commonly violate one or more of what has become known as the “Seven

Deadly Sins of Acquisition” shown in Table 2.3.

1. Strained workforce, bad people management skills2. Immature technology, wanting the latest and greatest3. Failing to have good, stable requirements; mismatched wants and needs4. Poor management; trying to do the job without enough resources or a good schedule; not identifying and mitigating risks; no good, repeatable processes5. Poor Communication across the supplier-contractor-customer-user spectrum6. Lack of competition in building prototypes7. Non-result incentives

20

Table 2.3 Seven Deadly Sins of Acquisition36

Nunn-McCurdy Breaches

Senator Sam Nunn (D-GA) and Representative David McCurdy (D-OK) amended the

Defense Authorization Act for Fiscal Year 1982 to limit cost growth in major defense acquisition

programs (MDAPs). The amendment calls for program managers to report a “Nunn-McCurdy

Breach” to their SAEs if the cost of weapons programs grow by more than 15 percent above

original baseline estimates. When total costs grow by more than 25 percent above original

estimates, the amendment also calls for funding termination of weapons programs within 30 days

of notice. To remain funded, a SECDEF certification is required and that responsibility is

delegated to the Defense Acquisition Executive (DAE). Military services must provide written

documentation to the DAE that the program in jeopardy is essential to national security, that

there are no alternatives at less cost, that the new cost estimates are reasonable, and that the

management structure is adequate for program continuation.37

Since 2000, there have been 12 “significant” breaches (30 percent over baseline) and 22

“critical” breaches (50 percent over baseline). Two examples of “critical” breaches are the

Navy’s Theater Ballistic Missile Defense that was cancelled and the Air Force’s Joint Air to

Surface Standoff Missile that was given a deferment for one year to execute a recovery.38 In

2007, the net cost increase in 94 DoD acquisition programs from June to September was $7.65

billion—over 80% due to poor cost estimating. Not all breaches are bad. Some are due to

quantity changes or additional capabilities. For example, the Navy’s EA-18G had cost increases

of $321 million to accommodate the purchasing of five additional aircraft.39

21

Stakeholder Expectations of Industry

When it comes to acquisitions, several stakeholders’ expectations must be considered.

Besides the defense contractors and suppliers, there are the customers, the brains, and the bank,

or “The A-Team” in honor of “Big A” acquisition.

The A-Team

Defense acquisition contracts are usually supported by a consortium of a prime defense

contractor and other sub-contractors that provide jobs in many states. Prime contractors see

themselves as designers and system integrators.40 Large defense contractors vary in their degree

of vertical integration, but generally find it financially beneficial not to manufacture every single

component anymore. Instead large defense contractors design systems (hopefully with ever-

increasing commercial off the shelf equipment to save on cost) and concentrate on final

assembly.

The warfighters are the ultimate customer and usually represented by the Combatant

Commanders (COCOMs). COCOMs let their needs be known to the respective services. In the

Air Force’s case, the requirements makers at Air Combat Command become the defacto

customers who work the Planning, Programming, Budgeting, and Execution System (PPBES).

The brains, not excluding the defense contractors, are the military acquisition program

management offices like the Air Force’s Electronic Systems Command at Hanscom Air Force

Base (AFB), Massachusetts; Air Systems Command at Wright-Patterson AFB, Ohio; Air

Armament Center at Eglin AFB, Florida; research groups like Defense Threat Reduction Agency

and Defense Advanced Research Projects Agency, and the test community like the test wings at

Eglin, Holloman, and Edwards AFBs. Unfortunately, it is easy at times for the brains to become

the customer because most everyone wants to look successful to their boss.

22

The bank controls the purse strings and they reside at oversight offices, financial

management offices, and Congress. The oversight and financial management offices sit at each

service’s headquarters staff and at the joint staff that deal with the PPBES approval. Acquisition

category milestone decision authority resides with the Program Executive Officers (PEOs),

Component or Service Acquisition Executives (C/SAEs), and the Defense Acquisition Executive

(DAE). Ultimately, Congress approves the President’s budget each year. Representatives and

Senators want the best, most affordable, cutting edge warfighting systems for service men and

women. They often struggle to balance their support of this objective with their support for

programs that provide jobs for their constituents. Sue Payton, Assistant Secretary of the Air

Force for Acquisition, the SAE, insists, however, that the USAF will choose the best value

programs according to her motto, “No fears, no favors!”41

Government Expectations

At Boeing’s 2007 Team Leader Training in Saint Louis, Missouri, in November 2007, Judy

Stokley, Executive Director and Deputy Program Executive Officer of the Air Armament Center,

described government expectations of industry.42 She emphasized effective, affordable, and

reliable products (on time, on cost, on target); ownership of product health; realistic marketing

and budgeting; matured technologies; and flexibility to surge or drawdown in response to

changing war needs.

On Time, On Cost, On Target. Contractor program managers should actively manage

schedule and cost variance with the Earned Value Management System (EVMS) and ensure

agreement over technical performance measures (TPMs). There will be problems and the

23

government and contractor must solve them together. Bottom line, the program baseline agreed

to at Milestone B is the DoD’s contract with Congress.

Ownership of Product Health. Defense contractors that resort to contract legal wrangling

present a problem. Using contract disputes to avoid producing the best final product possible let

tax payers down and even worse may result in loss of life. Meeting the requirements of the

contract is not enough, the product or service that was promised in discussion should be

delivered. We want contractor program managers to fill in the gaps and not argue about

contractual terms. Contractors can increase their chances of winning contracts and increasing

profits by demonstrating performance and codifying it consistently in metrics like EVMS and

TPMs and offering warranties.

Realistic Marketing and Budgeting. Contractor business development folks and engineers

or scientists should avoid false optimism. The marketing people and those designing the

product, system, or service need to be on the same page. Sometimes one or the other sells the

program with unrealistic funding estimates and reliability problems.

Matured Technologies. System Development and Demonstration (SDD) is where most

development dollars are spent. The military-industry relationship needs to structure robust SDD-

readiness phases to accurately predict realistic SDD phases. Contractors should do early wind

tunnel tests and instrumented captive carry flights to demonstrate technologies so the

technologies are mature by Program Decision Review.

Flexibility. The government faces a challenge when predicting what will be needed for the

next war. Variability increases the complexity of management decisions in many ways. Hence

contractors need agility to surge or cut production and respond to changing war needs.

24

Lessons from Transformation and Expectations

There is a plethora of acquisition transformation and layers of customer expectations to

satisfy. As cumbersome as the governmental “Big A” acquisition processes are, acquisition

transformation has gone around the proverbial block a few times. There is not much difference

in the intent of the original 1969 Packard Initiatives and the recommendations of the 2006 DAPA

project report. The initiatives are clear about what is needed, but rarely realized. Both reports

recommend specific OSD involvement, investment in development and demonstration, risk

reduction through competition, and stabilization of cost estimates and funding. Even the latest

memorandum from the acting Under SECDEF directs “two or more competing teams producing

prototypes through Milestone B” to combat SDD technical problems.43 If we continue to be

disappointed or unable to achieve those expectations in the field, leaving potential danger for the

warfighter; perhaps a change in who has authority over military acquisition should determine

when and what requirements are met. The warfighters through the requirement makers need to

have a more constant and consistent voice—state the requirements clearly, remain true to them,

and do not change them to maximize chance of success. It comes down to ends, means, and

ways. The ends are the expectations, the means is transformation, and the ways start with

avoiding the (GAO’s) Seven Deadly Sins and meeting expectations. Understanding the source

of variations that have contributed to expectation disappointments in the past presents the

opportunity for managerial action to control them in the future.

25

Chapter 3

JDAM: Breaking Paradigms and Staying the Course

If we couldn’t make reform work with JDAM, with a real military weapon, then reform just wasn’t worth doing.

— Bill Mounts, Office of the Secretary of Defense, 199444

The Joint Direct Attack Munition (JDAM) is a low cost “strap-on” guidance kit that

converts existing unguided ballistic bombs, like the Mark (Mk)-80 and Bomb Live Unit

(BLU)-100 “dumb” bomb series, into “smart”, accurate, all-weather weapons for most Air Force

and Navy combat aircraft.45 The JDAM kit consists of a tail section with integrated aerodynamic

control surfaces, a stabilizing strake kit, and an integrated inertial navigation system (INS)

coupled with a Global Positioning System (GPS) receiver giving the bomb an unclassified range

of 15 nautical miles with an unclassified accuracy of 10 meters circular error probable.46

Over 90 percent of the bombs dropped in Desert Storm were “dumb” bombs. Although the

news showed combat aircraft using some laser and TV-guided weapons; smoke, dust, and cloud

cover limited the employment of precision guided munitions. To make precision all-weather 44 Bill Mounts, 1994 Director of International and Commercial Systems Acquisition,

reported directly to Colleen Preston, the Deputy Under Secretary of Defense (Acquisition Reform), who was responsible for recommending Defense Acquisition Pilot Program (DAPP) candidates to the Under Secretary of Defense, Mr. John Deutch. For the complete story about the Joint Direct Attack Munition’s Engineering and Manufacturing Development competition and what types of programs would be good DAPP candidates, see Cynthia Ingols and Lisa Brem, “Implementing Acquisition Reform, A Case Study on Joint Attack Munitions,” July 1998, on-line, Internet, available from www.dau.mil/pubs/pm/pmpdf98/j-harman.pdf.

45 The Mark (Mk)-84 and the Bomb Live Unit (BLU)-109 are 2000 pound bombs; with the JDAM kit, they are the Guided Bomb Unit (GBU)-31s. The Mk-83 and BLU-110 are 1000 pound bombs; with JDAM, they are GBU-32s. The Mk-82 and the BLU-111 are 500 pound bombs; with JDAM, they are GBU-38s.

46 FAS Military Analysis Network, “Joint Direct Attack Munition (JDAM), GBU-29, GBU-30, GBU-31, GBU-32,” February 28, 2008, on-line, Internet, available from http://www.fas.org/man/dod-101/sys/smart/jdam.htm. Circular error probable (CEP) is a simple measure of a weapon system's precision. It is defined as the radius of a circle into which weapons will land at least 50% of the time.

27

bombing a reality, separate Air Force and Navy research and development programs merged to

form JDAM in 1991 as an Acquisition Category (ACAT) I-D program. This required JDAM to

report to the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L).

This chapter will retell the JDAM development story and then tell the relatively untold story

of how the JDAM program was sustained for another decade. For companies and organizations

to be successful, Jim Collins argued in his book Good to Great: Why Some Companies Take the

Leap that you have to get the right people, in the right seat, on the right bus, headed in the right

direction. Then after you confront the brutal facts of your company’s situation, you have to

decide what your company is good at and do that in the very best way.47 Throughout this

chapter, examples of effective leaders building teams and developing and executing their

strategies exemplify Mr. Collins’ observations of the type of behavior great companies exhibit.

According to Mr. Collins' it is necessary to decide and then do what you are good at. Examples

of this will unfold in this chapter and be carried over to the Small Diameter Bomb program in the

next one.

In the Beginning, It Was Going to be Different

In order to prove a low-cost, low-risk IGS/GPS solution to industry, a pre-JDAM look-a-like

weapon went through an Operational Concept Demo (OCD) between January 1992 and April

1993. OCD HIGH GEAR was a small, quick reaction, operations orientated program supported

by General Ron Yates, Air Force Materials Command commander and General Michael Loh, Air

Combat Command commander. HIGH GEAR built six weapons and launched five weapons

through weather to within a 5.5 meter accuracy.48

In April 1994, JDAM transitioned to a two-phased engineering and manufacturing

development (EMD, known today as System Development and Demonstration, see Chapter 1).

28

EMD-I focused on reducing Average Unit Procurement Price (AUPP) and manufacturing risks.

McDonnell Douglas (MD, merged with The Boeing Company in 1997) competed against Martin

Marietta (MM) for 18 months during EMD-I in order to be selected for EMD-II (fabrication,

extensive testing and evaluation in preparation for low-rate initial production) and earn

production contracts for 40,000 Mk-84 and 83 and BLU-109 and 110 tail kits worth $1 billion.

First Who, Then What

One of Mr. Collins’ observations on effective transformation is to first have the appropriate

people in the right place in the organization, then figure out what needs to be done differently,

and then decide how to implement change.49 General Joseph Ralston (former Director for U.S.

Air Force Operational Requirements) called on Terry Little (an Air Force civilian who

previously worked for General Ralston on classified defense projects) to lead the JDAM Joint

Program Office (JPO, although the Air Force was designated executive agent) in early 1993. Mr.

Little had the reputation for being “a firebrand, an agitator for change, and for pushing

entrenched government processes to the breaking point.”50 Likewise, Mr. Little built a team of

change agents that had “the energy and ability to think differently.”51 He conducted a two-week

seminar on acquisition reform in the summer of 1993 at Eglin Air Force Base (AFB) and

eventually took his team to visit The Boeing Company (Boeing) Commercial Aviation,

Motorola, and Apple to compare DoD’s business practices to commercial industries’ practices.

Their DoD-Commercial comparisons are depicted in Table 3.1.

DoD Historical Commercial

Buyer/Seller Relationships Adversarial, Opportunistic Collaborative, Long Term

Buyer Specification Detailed “How-To’s” End-Item Performance

Buyer Specification Lots (With Flow Down) Little (Without Flow Down)

29

Primary Award Criteria Technical Promises and Lowest Cost Past Performance and Best Value

Data and Reporting Extensive and Formal Minimal, by Exception and Informal

Basis for Negotiation Costs Price

Development contracts Cost Type Fixed Price

Table 3.1 DoD and Commercial Comparison52

Integrated Product Teams (IPTs). One of the top commercial benchmarks was having

collaborative, long-term producer-customer-supplier relationships. Mr. Little not only formed

executive and working integrated product teams (E/WIPTs), but he had two separate teams of

Air Force “helpers” that were separately assigned to MD and MM. The “helpers” were not

auditors or supervisors, but part of the team that became emotionally wedded to their assigned

company to win the roll-down selection for EMD-II. In MD’s case, Charlie Dillow, MD’s PM,

and Colonel Joe Shearer, the JPO lead MD helper, acted together as equals. The government

team members ended up spending more time at their contractor locations than at the JPO at Eglin

AFB. When working at Eglin AFB, contractor team helpers were “fire-walled” from each

other’s work and the JPO’s source selection team was also fire-walled from them.

Even test, logistic, and finance functionals from the Office of the Secretary of Defense

(OSD) participated in IPTs. In the past, the JPO put their strategy together and sent it to the

Pentagon for review. It would take several weeks for each OSD functional to call the military

program manager (PM) and ask questions. For JDAM, OSD functionals worked with the

services’ staff on a WIPT to draft and review a single acquisition management plan (SAMP).

The WIPT submitted SAMP recommendations to the overarching IPT (OIPT) for review to pass

to the Deputy Undersecretary and Undersecretary of Defense for AT&L for approval. Most of

the work was done by action officers negotiating compromises at the WIPT level and selling the

30

plan to the JDAM’s OIPT chair. During this process, the OSD and JPO agreed on down-select

strategies and FAR/DFAR waivers to allow the JPO and Mr. Little incredible flexibility.53

More Effective Leadership. Six months into EMD-I, Charlie Dillow, MD’s JDAM PM,

knew that MD’s current JDAM $28,000 price tag was too high to win the $1 billion JDAM

contract to produce 40,000 tail kits. He was motivated by thousands of MD layoffs caused by

cancelled programs like the $3 billion A-12 and lost competitions such as the recent $1.5 billion

Tomahawk production contract. In the past, “business as usual” would use EMD-I funding to

build the best technical performing product supported by lots of technical reports. Mr. Little,

however, wanted contractors to spend EMD-I funding to buy down risk by designing in

affordability, testing components, flight testing the system, and reducing the overall life cycle

cost. The new source selection criteria weighted production lots 1 and 2 AUPP and past

contractor performance pretty heavily.54 Together Mr. Dillow and Colonel Shearer learned on

the fly to develop and implement a new strategy to drive down costs within 12 months.

Luckily, MD was going through an organizational change that combined MD’s aircraft and

missiles divisions. The aircraft division had strong engineering stove-piped organizations, while

the missiles division was known for innovation and being risk takers. To combine the two

cultures, MD introduced change sponsors and agents. Mr. Dillow’s supervisor, Dave Swain,

Deputy General Manager of New Aircraft and Missile Products, and Mr. Swain’s supervisor, the

General Manager, were two change sponsors. Within Boeing, JDAM had senior executive

support to break paradigms such as designing “Cadillac” products as opposed to “affordable”

products. Even Charles H. Davis III, a MD Supplier Manager, thought JDAM broke stove-piped

barriers, “It (JDAM) truly was defined as a product team, and … we did a lot of working around

31

a table to get the best product we could.”55 This transformation may not have been possible

without the right people mobilizing the talent of others to achieve the goal.

DAPP, There’s a Waiver for Every Rule

Two weeks after the EMD-I competition began in April 1994, OSD designated JDAM as

one of five Congressionally mandated Defense Acquisition Pilot Programs (DAPPs). As a

DAPP, JDAM was provided legislative authority to implement provisions of the Federal

Acquisition Streamlining Act of 1994 (see Chapter 2). DAPP facilitated the use of commercial

off-the-shelf items and practices, allowed contractor configuration control, enabled electronic

commerce, streamlined contracting processes, minimized data requirements, and provided

statutory relief. Statutory relief came in the form of expedited waivers from Federal Acquisition

Regulation (FAR), Defense Federal Acquisition Regulation Supplement (DFARS), and DoD

5000-Series regulations. This relief allowed the JDAM JPO to re-strategize EMD-I to make it

more commercial and streamlined the milestone review process and reporting procedures.

The OSD/JPO SAMP agreement gave Mr. Little waiver authority to all FAR/DFAR, minus

any statute or executive order. The program received 25 FAR waivers, 25 DFARS waivers, and

almost a blanket DoD 5000-series regulation waiver.56 Waivers allowed small U.S. based

companies to be subcontracted that otherwise would not have been because required price data

justification was too cost and labor intensive. Waivers also allowed MD and MM to have Class

II change authority to approve component configuration changes as long as form, fit, and

function remained the same. In return, the JPO wanted the contractors to offer a 20 year

warranty to promote quality within their designs. Mr. Dillow said,

The crowning jewels of the JDAM EMD-I strategy was the contractor Class II authority and the 20 year warranty. Although the government allowed the contractor to do technical insertions to improve performance and ultimately make

32

more money over time, the JPO felt that their product to the warfighters was protected with the 20 year performance specification warranty.57

Also critical to Mr. Little’s price-based acquisition strategy was the Truth in Negotiation Act

(TINA) exceptions the strategy operated under. JDAM would not have to show and prove its

cost accounting because there was adequate price competition and most of the parts were capable

of commercial use.58 These FAR/DFAR waivers and TINA exceptions could not be assumed

and had to be fought for on future production lot contract negotiations--the life-blood to the

successful JDAM acquisition strategy. Table 3.2 shows more JDAM waiver metrics.

It’s the Economy Stupid

During President Clinton’s “peace dividend” defense budget slashing years, it was no

surprise to Mr. Little that General Merrill McPeak’s (Air Force Chief of Staff in 1993) top

priority for JDAM was cost because of the large inventory of “dumb” bombs that the kits were

Bridge Metric Baseline

JDAM Pre-DAPP

Realized

With Waivers

Number of Military Specifications/Standards in Request For Proposal (RFP)

87 0

Contract Data Requirements Lists in RFP 250 22

Proposal Evaluation Time in Hours 35,000 11,000

Number of Pages in RFP 986 285

Statement Of Work Pages 137 2

Table 3.2 JDAM Waiver Metrics59

going to be strapped upon. Knowing original estimates were as high as $68,000 per tail kit, Mr.

Little boldly told General McPeak that JDAM would cost $40,000 per kit. General McPeak

demanded that $40,000 per be a ceiling, not a goal. Five months into EMD-I, MD proposed a

$28,000 AUPP for 40,000 JDAM kits. By August 1995, with one month to go in EMD-I, MD

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planned to submit a proposal for well under $20,000 per kit.60 MD was able to do this with a

unique commercial pricing strategy with a relatively flat learning curve where the government

would save lots of money up front and the contractor would gain profit in later production years

as long as affordability was continually designed into the product.

Price-based Strategy. JDAM started with six key performance requirements (now called

key performance parameters, KPPs). They were weather capability, accuracy, in-flight

retargeting capability, warhead compatibility, carrier operability, and primary aircraft

compatibility.61 Since low unit cost was General McPeak’s number one goal, it was added as a

seventh KPP to EMD-I source-selection.62 The JPO made several critical decisions that allowed

the contractor to manage its own unit cost. With Mr. Little’s leadership, the JPO embraced a

priced-based strategy. The foundations of price-based strategy are designing in quality up front

backed up by a warranty, giving the contractor configuration control and allowing the use of

commercial standards as long as performance specifications are met; all in order to design out

cost. As long as KPPs were met, cost cutting was in the contractors’ control.

The JPO preferred a price-based proposal strategy as opposed to a cost-based strategy.

With single-year, cost-based contracts, there was no motivation for contractors to reduce costs--

they would make less money. With a standard percentage fee, contractors would make less

money if costs were reduced. On the other hand, the more sub-contractors charged, the more

money prime contractors would make. With a multi-year, price-based strategy, contractors can

give the government a price that is competitive. In order to attract customers in the commercial

world, companies frequently plan an attractive, but relatively flat price curve that is not

profitable until several hundreds or thousands of the products are sold. Companies do this

knowing as they make changes to lower their costs in future years that they will be able to retain

34

those gains. It is still a win-win for the government and the prime contractor. The Air Force and

Navy customers get a product that they can take out of storage at 20 years, do a built-in-test

(BIT), attach the tail kit to the dumb bomb, and expect it to work. If the BIT fails, they can send

the tail kit back and have it repaired with no questions asked.

Mr. Little also encouraged his MD and MM IPTs to embrace priced-based acquisition. In

the past, engineers designed the best product regardless of cost. They now had to learn to design

affordability in at the outset to reduce cost and not reverse engineer the design to get cost out.

The IPTs analyzed each JDAM component to find cost drivers. The contractors not only gave

each supplier and their sub-supplier price targets with continual updates, but sub-suppliers were

allowed to participate in performance specification development. The synergy of sub-suppliers

analyzing each other’s part of the puzzle realized solutions that would not otherwise have been.

MM and MD both have affordability stories. Both companies’ IPT teams realized on

several occasions that government furnished equipment (GFE) was significantly more expensive

than commercially available products. In MM’s case, they found that the Navy’s standard metal

fin tail kit was twice as expensive as a proposed injection molded fin tail kit. The Navy had bad

experiences with similar parts using the same base material, but MM wanted to use a different

lamination process. MM ended up overriding the Navy’s objection in order to lower costs.63

Supplier Trust and Motivation. The continual push for acquisition transformation and the

declining defense budgets of the 1990s made companies like MD realize that it is more profitable

not to produce every part of the products they provide. As a DAPP and with Mr. Little’s

encouragement to use commercial standards, companies like MD not only learned how to

become a final assembler, but they learned to be a systems integrator. Companies like MD

35

learned how to combine multiple designs and functions, and they learned how to nurture and

manage a multitude of suppliers.64

For MD, Mr. Dillow flowed down the same JPO relief, like configuration control, given to

MD and also made suppliers part of the IPTs. He set cost objectives on every supplier

component and requested warranties. Where small companies could not offer warranties, MD

took on the risk with the overall warranty given to the JPO. The EIPT which consisted of major

supplier Vice-presidents and Boeing’s Mr. Dillow and Mr. Swain oversaw the efforts of the

WIPTs and met monthly. The EIPT solved problems, made decisions, supported the WIPTs, and

presented one voice.65 To encourage complete and open communication between the WIPT

members, non-disclosure agreements were signed between MD and its subcontractors and

between each supplier. Mr. Dillow and MD led by example by showing MD’s financials and

program management reserve. Mr. Dillow realized “that if suppliers weren’t successful in

getting costs out, then we wouldn’t have a prayer.”66 These kinds of actions built trust between

MD and the suppliers and between the suppliers.

Suppliers provided 80 percent of MD’s JDAM design. The guidance and control unit

(GCU) was the largest sub-system and accounted for 60 percent of Boeing’s cost. The GCU

consisted of the Inertial Measurement Unit (IMU, made by Honeywell), the GPS receiver (made

by Rockwell Collins, RC), and the mission computer (made by Loral who was bought out by LM

later). RC had difficulties in keeping components off their GPS board and it kept their costs

high. They attributed it to MD’s GPS antenna design. MD did not want to change the design in

fear that it would result in other sub-systems’ poor performance. The epiphany for MD’s IPT

occurred when RC asked to select a different commercial antenna, but paid for Honeywell’s and

Loral’s requalification requirements.67 RC ended up winning the Spirit of Excellence award for

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JDAM, the highest supplier award from MD.68 MD inspired the rest of the supply chain by

awarding a tiered system of gold, silver, and bronze preferred suppliers which enjoyed perks like

multi-year and non-compete contracts.

Rolling Down-Select. The JDAM JPO gave MM and MD three report cards during the 18-

month EMD-I selection period. The report cards were conducted during an open discussion

forum. Color grades were awarded against each competitor’s plan so they could change course if

needed. Previously, the government rarely gave competing contractors any information. The

new EMD-I report cards directly contributed to the final decision to award EMD-II. The key

aspects of this new cooperative “rolling down-select” saved the government money and

prevented protests.69 However, at any time, the JPO could excuse a contractor in a rolling down-

select, but that would involve paying a “termination liability” fee. In this case, MM and MD

competed to the end and MD won the rolling down-select in September 1995 with a final AUPP

between $14,000 and $15,000, well under the original estimate of $68,000, the original target of

$40,000, and the original bid of $28,000.70 Although MD’s proposal was through production lot

11, the JPO awarded MD a firm fixed price contract for production lots 1 and 2; putting the

initial risk on MD to succeed. The JPO also accepted MD’s Procurement Price Commitment

Curve (PPCC) that took the contract out to production lot 5; less risky for, but very motivating to

MD. MD was the first in the defense industry to use a PPCC concept.

The Boeing Company and JPO Continue the Saga

With a $14,000 AUPP, the government increased its purchase commitment to 87,000 tail

kits for an estimated $1.2 billion in future contracts. Although the first contract was signed for

production lots 1-5, it was based on a relatively flat PPCC curve out to production lot 11.

Although no single action can be viewed as the reason for the JDAM EMD-I success, certainly

37

much can be attributed to Mr. Little and Mr. Dillow. Their persistence in working in a consistent

direction can account for much of the program’s success. Several JPO and MD PMs have

followed between 1994 and 2008 to lead JDAM and have lessons to share.

Compromise and Supplier Management

Two years into the 40-month EMD-II contract and at the beginning of low-rate initial

production, the Mk-84 (2000 pound general purpose bomb) JDAM friction brake did not keep

the tail fins from moving on the F/A-18 inboard station during prolonged transonic flight.

Boeing’s initial design calculations had the JDAM fins exposed to the transonic region for just a

few minutes over its entire life. The JPO’s requirement for the JDAM was 50 hours of captive

carry flight regardless of environment. Although MD designed a new robust tail pin fin that

would work for five hours and not break for 50 hours in the transonic region during the entire life

of the weapon, neither the JPO nor Boeing wanted to pay for the new robust tail pin fin.

After a year long stalemate and withholding MD’s 1998 award fee, Carl Avila (Boeing’s

PM) and Oscar Soler (JPO’s PM) realized they needed to hammer out a compromise that was not

necessarily supported by either’s management. The JPO wanted to meet its delivery schedule to

the warfighter, avoid litigation since Boeing’s original Operational Requirements Document

addressed low altitude transonic flight, and to preserve the competitively achieved PPCC.

Boeing wanted the government to pay for and submit an Engineering Change Proposal and

wanted the PPCC to be reset because the AUPP would raise about $700 per kit. Mr. Avila and

Mr. Soler finally agreed that the JPO would recognize the increase in PPCC and that Boeing

would do the EMD work at cost with no profit. Until the solution was incorporated into

production lot 4 deliveries in 2001, the Navy accepted more BLU-109 and BLU-110 (1000 and

2000 pound penetrator bombs) JDAM kits instead of Mk-84 kits during production lots 1-3 to

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keep JPO deliveries on schedule. In return, Boeing offered to redesign the new robust tail pin fin

at cost. Due to the progress made, Boeing received 100 percent of its 1999 award fee.71

At the same time, Operation Allied Force was looming over Yugoslavia in early 1999. The

Joint Chiefs of Staff directed rapid acceleration of JDAM production. Luckily, JDAM had just

moved from an old dispersed production facility in Saint Louis, Missouri, to a renovated

automated production facility in Saint Charles, Missouri. Mr. Avila remembered that they

tripled production in six weeks from 100 kits a month to 300 kits a month and that “it couldn’t be

done without the continued supplier communication that began way back in EMD-I.”72 Even

today, Boeing maintains a disciplined “battle rhythm” of quarterly visits, weekly video

teleconferences, and daily teleconferences with their suppliers to establish trust, verify

performance, and prepare and coach through changes. Between solving the friction brake

solution gridlock and tripling JDAM production, Richard Walley, then the JPO Acting System

Program Director for JDAM, felt that “Carl Avila and Oscar Soler did as much to save JDAM as

Charlie Dillow and Terry Little did to set up the program.”73

Incentives, PPCC, and Lean

By 2000, Kim Michel and Mike Hatcher took over for Mr. Avila at Boeing and Mr. Soler at

the JPO, respectively. They began their combined tenure with two important challenges. The

first was the EMD sole-source contract to produce Mk-82 (500 pound general purpose bomb)

JDAMs for integration onto the F/A-18, and the B-2. The second key concern was positioning

for the production lots 6-11 contract.

Although Boeing already had experience integrating the Mk-84, Mk-83, BLU-109, and

BLU-110 JDAMs on all U.S. combat aircraft and one international fighter, it was not ready to

commit to a single outer mold line Mk-82 JDAM without testing it in several aerodynamic

39

vibration environments. Air Combat Command was not sold on the 500 pound JDAM variant

because they were already vested in the Small Diameter Bomb program.74 General John Jumper,

Air Force Chief of Staff, however, directed the Mk-82 JDAM development because he wanted

the option of delivering 80 Mk-82 JDAMs (GBU-38s) from a single B-2. Northrop

subcontracted Boeing to fit 80 GBU-38s into the B-2.75 The JPO used an effective cost plus

award/incentive fee in contracting the Mk-82 EMD program. The award fees were aligned with

meeting cost and schedule aspects of the program while the incentive fees were based on those

performance aspects related to the single outer mold line that Boeing was concerned about.

As Boeing was preparing their strategy to secure the contract for production lots 6-11,

JDAM had already reached full-rate production in April 2001. Discussion began outside of

Boeing and the JPO, namely at OSD, that Boeing’s JDAM PPCC was not competitively acquired

for production lots 6-11. According to OSD, Boeing’s cost and pricing data were required since

its FAR waivers and TINA exceptions expired with the 1994 Federal Acquisition Streamlining

Act in 1998. The original JDAM EMD-I and first production lots 1-5 contracts were based on

DAPP waivers to FARS and TINA exceptions. OSD argued that the production lots 6-11

contract should be cost based. OSD wanted the opportunity to look at Boeing’s financial books

to make sure Boeing was not making an excessive profit. Ms. Michel, Boeing’s PM, recalled,

“Without putting things in writing, I spoke with Mr. Hatcher and my boss, Mike Marks, spoke

with Mr. Hatcher’s boss to let them know approximately what our margins were so they felt

comfortable that they were not doing the Air Force a disservice by preserving the (price-based)

contract structure.”76 The JPO supported Boeing’s strategy and reminded OSD about the initial

savings that was gained. “What eventually saved the PPCC deal for Boeing,” recalled Mr.

Wally, former JPO JDAM Deputy PM, “Was when Darlene Druyun (Assistant Secretary of the

40

Air Force for Acquisition and the Source Selection Officer for JDAM) said that she considered

production lots 6-11 PPCC in the original awarding of the first production contract.”77

Three months after the World Trade Center was attacked in 2001, air strikes over

Afghanistan used about half of the 10,000 JDAM kits in inventory. By early 2002, the original

Saint Charles production facility was operating 24 hours a day producing 1600 kits a month, the

maximum the factory was designed to generate. To meet an expected 3,000 tail kits per month, a

new assembly line would have to be built and suppliers prepared. A proposal to increase

production was offered in October 2001 and the contract was signed in December 2001. Again,

a logical debate on price ensued as OSD thought it should receive a larger price break with the

increase in kits procured, but Boeing explained how it was taking a risk in meeting those high

production numbers. With a new factory built and paid for by Boeing and the sub-contractors

supported by the government, 2,000 kits a month were produced by September 2002 and 2,800

kits a month by August 2003.78

In preparation for a new factory and higher production, Ms. Michel held 3P (production,

preparation, and process) and AIW (accelerated improvement workshops) lean events with 30

people from her production team, suppliers, and the government. The JPO did their part and

secured an approximate $10 million Manufacturing Technology Directive contract that

eventually made way for a $130 million “not to exceed” Undefinitized Contract Authorization to

facilitate increased production to meet the critical Operation Enduring Freedom (OEF) schedule.

All the money went to the suppliers to help increase their production with almost $90 of the $130

million going to Honeywell alone to help them produce better IMUs and to do it faster.79 As

previously mentioned, Boeing invested their own money to build the new factory right next to

the old factory, all with new lean material handling concepts.80

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New Product Development and Technical Insertions

New capability can be funded by having a new requirement imposed or it can be funded by

re-investment. As OEF raged on and Operation Iraqi Freedom (OIF) loomed, war planners

became concerned about GPS jamming and spoofing. Since DoD issued a Program Decision

Memorandum requiring a GPS anti-jam (AJ) capability, the JPO wanted Boeing to work with the

Harris Corporation and RC to develop a GPS AJ and selective availability anti-spoof module

(SAASM) for JDAM. As a new product development requirement, Boeing agreed to a $34

million cost plus award fee contract in February 2003 and planned to have it delivered beginning

in 2006 with production lot 9.81

The retention of contractor Class-II authority was and continues to be fundamental to

Boeing for meeting their PPCC. It allows them to stay current with technologies and allows

JDAM parts to avoid becoming obsolete. For instance, Boeing changed out JDAM’s advanced

core processors five times since its inception. In order to strategically position for a production

lot 12-17 contract, Boeing re-invested company profits (as opposed to independent research and

develop money or new business funds) to develop a single-board, fully digital Integrated GPS

Anti-jam System (IGAS) as a technical insertion. AJ/SAASM was an analog two-board module.

Boeing had already replaced the RC 5-channel GPS card with a less expensive RC 12-channel

GPS card. With their Configuration Control Board Class-II authority, they were able to easily

change a part as long as the performance specification and the interface control document were

met or not impacted. Realizing the future of AJ capability, the JPO funded a few million dollar

software integration program that would eventually make AJ/SAASM obsolete. In the end, this

was a win-win business case for the JPO and Boeing Company. While JDAM was reaching

36,000 tail kits a year during 2002 to 2005, Rick Heerdt, Boeing’s JDAM PM, complimented his

42

JPO counterparst, “The Rutledge’s (Brian and Linda) had incredible integrity and real business

acumen, he knew how to incentivize and understood the basic tenants of price-based

acquisition.”82 Even though the JPO funded the AJ/SAASM quick fix to begin delivery in

production lot 9, the JPO will still save money and get more capability out of production lots 12-

17 by funding Boeing’s software development for the IGAS.

Carrots and Sticks for Price-based Acquisition

John Harnagel replaced Mr. Heerdt at Boeing in 2005 and worked with Linda Rutledge who

replaced Brian Rutledge at the JPO. In June 2007, Kerry Bush became the current JDAM PM.

He has been with the JDAM program for the last 15 of his 25 years at Boeing and has worked

with all the JDAM icons including Terry Little, Charlie Dillow, and Linda and Brian Rutledge.

Mr. Bush’s current JPO counterpart is Lieutenant Colonel (Lt Col) Susan Miller.

Although Mr. Harnagel took over a very strong and robust program with powerful and open

relationships with the JPO customer and Boeing’s suppliers, he recalled that “it still was a

daunting task to juggle AJ/SAASM integration into lots 9-11, to cut production in half after lot 9,

and to keep the AUPP on the PPCC.”83 Likewise, together over time, it was also a daunting

accomplishment for Boeing’s Mr. Harnagel, Ms. Bond (acting JDAM PM between Mr. Harnagel

and Mr. Bush), and Mr. Bush and the JPO’s Ms. Rutledge and Lt Col Miller to sign a $116

million U.S. government production firm-fixed price contract in January 2008. The contract was

for more than 4,000 tail kits to be delivered in 2009 for production lot 12 with options for

additional tail kits in production lots 13-17 for a potential $590 million program through 2015.84

Boeing securing this contract was not a foregone conclusion. Mr. Harnagel commented that,

“the JPO could not just approve another JDAM sole-source contract with Boeing without due

diligence.”85 Once again there was skepticism in the acquisition community outside the JPO that

43

Boeing had made too much money on their price-based acquisition strategy over the last decade.

Mr. Harnagel’s JPO counterpart, Ms. Rutledge, was required by FAR to put out a synopsis to

invite companies to bid on the production lot 12-17 contract. Before the synopsis invite went

out, Ms. Rutledge sent out a Market Research letter with a statement of objectives (SOO) and a

system requirements document (SRD) in August 2006. What the outside community and the

competitors were slow to realize was the amount of investment Boeing and the JPO put into

JDAM--new factories, sub-supplier manufacturing technology assistance, SAASM/AJ and

IGAS. MD gained a competitive advantage through years of technical insertions. Boeing’s

competitors became less interested when they learned that the technical performance

specifications tightened (JDAM was doing much better than the required 13 meter accuracy),

that Boeing owned the JDAM technical drawings, and that the delivery schedule had to be

maintained to keep a high OEF/OIF inventory. Ms. Rutledge convinced Ms. Payton at OSD to

keep Boeing’s price based acquisition strategy because she “did not want to revert back to a cost

based deal that would chase sub-suppliers away and ultimately increase the AUPP.”86 To secure

the future, Boeing took a risk and agreed to concessions like making Boeing qualify a second

production source if it could not meet their PPCC. Other carrot and stick agreements have been

in place since the production lot 1-5 contract and are depicted in Table 3.3. And as Spring 2008,

just like in EMD-I, these opportunities and risks flowed down to the suppliers.

Carrots Sticks

No Competition Guarantee Full Cost/Pricing Data Required

Price Proposal Only Contractor Qualifies 2nd Source

Contractor Configuration Control JPO Configuration Control

No In-plant/In-process Oversight JPO In-plant/In-process Oversight

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Table 3.3 PPCC Carrots and Sticks87

To reach an agreement on the AUPP, Boeing management again opened their JDAM

financial books to the JPO to dispel any other myths. That data revealed JDAM actually meant a

financial loss in the early production lots and then made “fair” margins after that. In fact, Figure

3.4 depicts how JDAM’s performance improved significantly while the price remained within 15

percent of the original value in 1993 dollars. This remained true in spite of production peaking

in 2003 and additional requirements requested by the JPO that resulted in AUPP increases for the

new robust tail pin fin, AJ/SAASM, and container improvements. Then Mr. Bush had his team

develop and offer “matrixed” pricing for up to 12,000 tail kits a year that simply lowered the

price per kit if more kits were bought than planned in option years (accounting for inflation). He

also promised to keep the prices the same for foreign military sales (FMS) which allowed the

government to take advantage of FMS quantities on the “matrixed” pricing which was not done

in the past.88 This was a challenge because Mr. Bush had to sign up suppliers and prepare the

workforce that yearly production lots were most likely going to decrease. Yet by communicating

this reality early, Mr. Bush was able to get supplier buy-in so they could manage and manipulate

their manufacturing lines to support potential commercial opportunities, just like Mr. Little

envisioned staying the course.89

Summary of WWJD (What Would JDAM Do?)

As of March 31, 2008, Boeing had delivered over 193,106 JDAM kits to the Air Force,

Navy, and foreign countries with 119 months of on-time deliveries to the U.S. government.90 Mr

Dillow said, “The way this program met an AUPP on a PPCC for 11 production lots while

always exceeding the KPPs is truly unbelievable and unheard of.”91 The JPO/Boeing JDAM

team received the 2004 William J. Perry Award for outstanding leadership and technical

45

achievements resulting in significant contribution to precision strike systems.92 For

manufacturing excellence, Boeing received the 2005 Shingo Award for its JDAM factory.

JDAM was so successful because it avoided the seven deadly sins of acquisition and met

government expectations that were explained in Chapter 2. First, bad people management skills

were avoided with Mr. Little being chosen as the JPO JDAM PM. He drove change

management with DAPP being his license. Second, immature technology was avoided by

nurturing capabilities through the HIGH GEAR OCD. Third, stable requirements were

maintained with only seven total KPPs. Furthermore, competing contractors had the flexibility

to trade off TPMs to lower AUPP. Fourth, JDAM released a phenomenal 53 weapons in the six

months prior to the LRIP decision of which 22 of them were accomplished during an early Air

Force operational assessment. Over a four-week period, operational crews put JDAM through an

operationally representative evaluation, including targets shrouded and obscured by weather. All

22 weapons successfully performed up to their operational requirements including overall

accuracy of 10.3 meters, significantly better than the 13 meter requirement.93 Fifth, IPTs allowed

communication from the Pentagon to the JPO and from the sub-suppliers to the contractor.

Sixth, EMD-I pitted MD against LM in a rolling down-select, a very open competition. Seventh,

result based incentives were used for the Mk-82 JDAM program to get 80 JDAMs into a B-2 on

schedule and within cost. Expectation-wise, the JDAM program met General McPeak’s ceiling

price, provided a warranty, exceeded accuracy performance, met the PPCC with leading edge

commercial performing parts, and met production surges at a moments notice in time of war.

Figure 3.4 shows the relatively flat AUPP curve with minor increases due to tail pin fin fix and

IGAS over the history of increasing and decreasing production lots.

46

Figure 3.4 JDAM Accuracy, PPCC, and Production94

There are several acquisition best practices concerning leadership, teaming, strategy, and

execution that can be gleamed from the JDAM development and sustainment phases. Table 3.5

summarizes lessons from EMD-I and the first 12 years of production. All the money saved by

the JPO and Boeing’s investments laid the ground work for the Small Diameter Bomb program.

Leadership: Choose directive, “hard skill” leaders to start a transformational development

program.--Mr. Little picked and trained his EMD-I team to embrace commercial practices. Mr. Little had the authority from JDAM being a DAPP and he had the will to exercise waivers to get relief from FAR, DFAR, and TINA red tape.

Higher headquarters must prioritize and corporate executives must support transformational change.--General McPeak set cost as a priority and MD’s Mr.Swain allowed Mr. Dillow, MD’s PM, to form the best team and to go after a low AUPP.

Teaming: Form IPTs made up of government, contractors, and suppliers to win and sustain a

program.--Communication and information sharing up and down the chain of command is not enough. Acquisition teams must reach across traditional boundaries to be most effective in achieving team goals as RC was convinced to redesign the GPS receiver and requal a new antenna.

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Develop “soft skill” relationships with open and candid communication. Use inclusiveness to build trust and motivation.--From the beginning, non-disclosure agreements between all suppliers helped build trust for productive IPT dynamics. Once specific IPTs realized that they had a real say in the matters to reduce AUPP, they set in motion a process of continuous improvement.

Strategy: Use a rolling-down select scheme with candid feedback evaluation periods based on

past performance.--This method of source selection gives each competing contractor interim grades and the best chance to improve. The point is to make the competition as transparent as possible to get the best possible product and to avoid protests.

Use carrots and sticks to stay on PPCC with firm-fixed price contracts and incentivize contractor behavior.--The government needs to allow the defense industry to make a respectable profit. Profit motivates the prime contractor to continually invest into new state-of-the-art and inevitably less expensive COTS parts.

Execution: Select a limited number of key performance parameters (KPPs) and keep them stable.

--Let the contractors figure out how to solve the KPPs without requirements creep. Allow trade-offs on other performance-based requirements to attain desired AUPP.

Delegate Class II Authority to the contractor to manage part configuration and obsolescence.--Drive in more capability and drive out cost with new product development (SAASM) and technical insertions (IGAS) with COTS parts.

Table 3.5 JDAM JPO-MD/Boeing Lessons95

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Chapter 4

SDB: Time Matters

The DOD acquisition process is not getting new systems to the field quickly enough.

— Donald Rumsfeld, former U.S. Secretary of Defense96

The Small Diameter Bomb (SDB) system consists of the Guided Bomb Unit (GBU)-39

Small Diameter Bomb Increment I (SDB-I) weapon and the Bomb Rack Unit (BRU)-61 smart

pneumatic carriage. The SDB-I is a 7.5 inch wide, 285 pound, precision guided, relatively low

collateral damage bomb. The SDB-I is an All-Up-Round (AUR) that consists of a Global

Positioning System (GPS) enhanced inertial navigation system (INS) with the latest Selective

Availability Anti-Spoofing Module/Anti-Jam (SASSM/AJ) technology giving it a circular error

probable of 2 meters.97 This weapon has a uniquely designed 206 pound penetrating, blast

fragmentation warhead with a special 38 pound high explosive fill allowing it to penetrate one

meter of reinforced concrete or three feet of steel-reinforced concrete to destroy missile

launchers, aircraft revetments, and bunkers. The SDB-I has a fold-out diamond-back wing to

achieve a stand-off range of more than 60 miles from high altitude drops.

The AUR has no regularly scheduled preventive maintenance or testing requirements in the

field. The AUR storage container has corrosion control and the SDB-I has a Built-In-Test (BIT)

capability either in or out of the container. When four GBU-39s are carried on a single BRU-61,

they are intended to replace a single 2,000 bomb like the general purpose Mark (Mk)-84 and the

penetrating Bomb Live Unit (BLU)-109, providing combat aircraft the ability to carry four times

the amount of bombs. The smart BRU-61 carriage allows pre-mission selectable end-of-stroke

velocity/pitch rate pneumatic ejection (the first of its kind) for simplified integration onto aircraft

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with external carriage capability or internal weapons bays. The carriage also generates weapon

launch acceptability regions for the aircrew.98 Currently, only the U.S. Air Force uses the SDB-I.

This chapter reveals the relatively untold SDB acquisition story from its birth in the

laboratories, to component advanced design (CAD), to system development and demonstration

(SDD), to full rate production (FRP) and delivery into the combat environment--all in record

time. Much like in the previous chapter on the Joint Direct Attack Munition (JDAM), Jim

Collins’ Good to Great: Why Some Companies Take the Leap ideas on having the right people,

in the right seat, on the right bus, headed in the right direction, doing what they are good at, will

ultimately frame lessons on leadership, teaming, strategy, and execution.

The Leap from Labs to Industry

The SDB system’s ancestral tree began in 1995 with the Miniaturized Munitions

Technology Demonstration (MMTD) to evaluate possible technologies for a new 250 pound

class, precision guided, stand-off bomb.

MNS, ORD, and AoA

In 1997, Air Combat Command’s (ACC) Miniature Munitions Capability (MMC) Mission

Need Statement (MNS) asked for a weapon with the following capabilities: increased kills per

pass, carried on a multiple ordnance carriage, precision capability in adverse weather, capability

against hardened targets, reduced munitions footprint, increased weapons effectiveness against

area targets, minimized potential for collateral damage, and reduced susceptibility of munitions

to countermeasures.99 The Miniaturized Munitions and Carriage System Operational

Requirements Document (ORD) developed two Key Performance Parameters (KPPs). One was

weapon loadout and the other was interoperability with GPS. All other requirements, thresholds,

and objectives were tradable. Although the threshold requirement for weapons effectiveness

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(WE) was 17 weapons to kill 14 designated fixed target types with 80% probability of damage,

there was trade space between accuracy, WE, reliability and other parameters included to kill 14

targets. Another ORD requirement was affordability. The government customer and warfighter

were willing to make tradeoffs between technical performance requirements to gain the benefit

of lower average unit procurement price (AUPP) and total life cycle costs.100 The Air Force

Research Laboratory (AFRL) and civilian industry developed prototype carriage systems in 1997

in the form of smart multiple ejector racks to allow a single military electrical bus equipped

aircraft station to carry, communicate with, and eject multiple weapons.101

In February 1998, the Milestone 0 decision initiated the start of a Concept Exploration phase

and directed ACC to conduct an Analysis of Alternatives (AoA). By October 2000, the AoA

validated the MMC MNS. It validated 22 concepts that captured potential technologies and

justified operational requirements to include the need to target relocateable and mobile targets.102

The conclusion of the AoA was to go forward. The MMTD transitioned into the Small Bomb

System in 1998, which later became the Small Smart Bomb (SSB) Extended Range (ER)

Advanced Technology Demonstration (ATD).103 The Munitions Directorate of the AFRL

demonstrated stand-off ranges and weapons effectiveness of miniature munitions with the

MMTD and the SSB ER ATD programs.

Catalysts and Programming

Lynda Rutledge was the Program Manager (PM) at Eglin AFB’s Miniature Munitions

Program Office (this office is now called the systems program office, SPO) and she was

affectionately known as the “Mother of SDB”. By December 2000, she had convinced Ken

Lockwood from the AFRL to combine funds with the SPO to make SDB a “program of record”

within the government.104 Congressional FY01/FY02 plus-ups formed the financial basis for

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subsequent contract awards. At that time, General John Jumper, Chief of Staff for the Air Force

(CSAF), wanted the F-22 to become more than a single mission air superiority fighter. He

believed the F-22 needed an air-to-ground capability. Since there was not going to be as many

F-22s as he originally planned, the aircraft needed small weapons to put into the weapons bay to

increase the number of targets it could prosecute.

Raytheon, Lockheed Martin (LM), and The Boeing Company (Boeing) responded to a

spring 2001 Request for Proposal (RFP) to compete in a Component Advanced Design (CAD)

competitive risk reduction program. Each company was evaluated on past performance, risk,

maturity, mission capability, and contract price. The relationship between low risk and high

maturity was of a very different nature than traditional acquisition programs. Ms. Rutledge

emphasized to the competing contractors that a better grade will be awarded to lesser capability

as long as their submittal was mature and working. “Can’t let promises rule,” Ms. Rutledge

explained, “In the past, contractors would promise the moon and give us (the SPO) plans on how

they would get you there, but we were working against a schedule and did not want to fund new

science. We (the SPO) incentivized maturity.”105

Dan Jaspering was involved with SDB part-time until it became a program of record and he

became Boeing’s first official SDB PM in early 2001. James Brooks was his Chief Engineer.

During the CAD RFP phase, Mr. Jaspering and Mr. Brooks concluded that they would need to

prioritize building and flying prototype hardware in the fixed-price CAD phase.

In August 2001, a Milestone A decision called for a two-phased SDB program and allowed

entry into the CAD competition. The SDB-I phase concentrated on an INS/GPS weapon for

stationary targets and a multiple ordnance carriage; while SDB-II focused on a terminal seeker to

handle moving targets. The CAD phase would have two competitors design, develop, test, and

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conduct system-level risk reduction. In September 2001, the SPO awarded Boeing and LM two

$47 million fixed price CAD contracts.106 The SDB program is represented in Figure 4.1.

Figure 4.1 Original SDB Program107

A JDAM Repeat? More of the Same, and Different

The previous chapter attributed JDAM’s success to direct leadership, integrated product

teams, commercial practices, waiverable rules, affordability, supplier teaming, and open and

helpful source selection strategies. The SDB program had a similar start-up and added other

attributes.

The JDAM was designated as a Defense Acquisition Pilot Program in 1994 and was

expected to operate more like a commercial than government business to emphasize

affordability. Likewise, SDB was designated as one of six Pathfinder programs in 2002 as “a

program that could blaze a path for others to follow.”108 Those working on Pathfinders adopted a

“try it and see if it works” mentality with two main objectives. First, foster an active and

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cooperative dialogue between the warfighter, scientist, acquirer, and tester. Second, make

collaborative spiral development a standard operating procedure in the acquisition community.

Unfortunately, funding constraints and immature technology forced the Secretary of the Air

Force (SECAF), CSAF, and the Commander of ACC (COMACC) to defer SDB-II requirements

in May 2002.109 The program was re-competed in April 2006 and will be explained in Chapter 5.

Figure 4.2 shows how the SDB-I program was base lined in 2002. SDD overlapped with the first

low rate initial production (LRIP) lot making required assets available (RAA) available at the

end of operational testing (OT).110

Figure 4.2 SDB-I Program Baseline111

Champions, Mold Breakers, and Stable Requirements

In contrast to General Merrill McPeak, the CSAF during JDAM’s development, who made

cost that program’s battle cry; General John Jumper, who eventually became the CSAF during

SDB’s development, placed emphasis on schedule—a different leg of the three-legged stool of

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acquisition. “You will deliver SDB Spiral 1 to the Warfighter in FY06,” General Jumper first

championed the SDB as COMACC making his intent clear in 2001, “Schedule is paramount.

Although your initial delivery schedule will be on the F-15E, make no mistake; your chief

customer is F/A-22.”112 Judy Stokley, Deputy for Acquisition, Air Armament Center recorded in

a Memo for Record:

I can’t overstate the positive impact of the CSAF establishing a clear priority among the competing demands of cost, schedule, and technical performance. This fostered a “don’t accept no” attitude, forced hard decisions by the warfighters to live with a spiral/incremental approach – the “80% solution”, and gave the program team leverage to focus stakeholders on meeting commitments.113

Judy Stokley previously served as the Air Force Program Executive Officer for Weapons

(AFPEO/WP) at the Air Armament Center. At the start of CAD she appointed Colonel James

McClendon Program Manager (PM). Colonel McClendon operated like Terry Little; the

original, successful, cut-to-the-chase Joint Program Office PM for JDAM. Although Ms.

Stokley and Colonel McClendon both had over 15 years of acquisition experience in developing,

testing, and running Acquisition Category 1D programs, they were not of the traditional, and

often criticized, defense acquisition mold. Ms. Stokley commented that, “We practiced rabid

aversion to accepting viewgraph promises, marketing, and under-bidding.”114 Colonel

McClendon’s view on acquisition reform was that “there is no cookie cutter approach, but it

gives you the permission to think!”115

These champions and mold breakers (General Jumper, Ms. Stokley, Colonel McClendon,

and Air Combat Command) kept SDB requirements stable. The warfighters came to understand

and accept the original ORD KPPs which remained the same throughout CAD—loadout and

interoperability, the second of which DoD required a GPS anti-jam and selective availability

anti-spoof module. These leaders also convinced warfighters not to lock down any threshold

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requirements until near the end of CAD in order to proceed with an evolutionary acquisition

strategy that provided an initial capability based on mature technologies. This strategy allowed

flexibility and enabled the competing contractors to trade technical performance for schedule and

lower risk, consistent with the CSAF’s demand of “RAA in 4QFY06.”116

The “Go-Fast” Plan and Picking IPT Members

In order to build and fly hardware the way Mr. Jaspering and Mr. Brooks envisioned within

a fixed budget, they essentially traded man-hours for hardware and flight assets. If Mr.

Jaspering’s staff was to be lean, whoever was going to be assigned to SDB had to be the best.

Boeing wanted to win this contract and Mr. Jaspering’s boss (Vice-President and General

Manager of Advanced Aircraft and Missiles) allowed him to choose among the company’s best

to build an A-team of Integrated Product Team (IPT) leads and engineers.117 Jim Brooks, the

Chief SDB Engineer at the time, recalled, “The competitive advantage was using a hand-picked

team whose experience enabled them to independently drive multiple fronts while staying

connected to the program level strategies.”118

Building the team was a balancing process between keeping discipline and still going fast.

Essentially, they decided to lay down a “go-fast plan”. They held a series of meetings to recruit

motivated and skilled people and set improbable goals to see who was interested and who was

not. Those who were interested, and willing to innovate, were asked to join the IPTs, as well as,

a few naysayers because it is good to have a few “grounding” people.119

Also included in the IPTs was Bill Wise, the SPO designated Boeing “helper” who once

worked directly for Ms. Rutledge. Just like in JDAM, the SDB helper was to act as a liaison

between the contractor and the SPO. This involved assisting to resolve discrepancies and

interpretation issues regarding user requirements and the RFP, monitor the integrated master plan

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and schedule (IMP/IMS), develop oral presentations, and most importantly, to help the company

win the contract! Mr. Wise remembered his Boeing “helper” time as “the best training in 26

years of my military acquisition life.”120 He was impressed at how Boeing’s SDB IPT teams

grew as an integrator, allocated cost and technical performance requirements, and emphasized

testing to reduce risk. This approach sharply differed from the usual business development

“promises”. Mr. Wise was also impressed by Mr. Jaspering’s battle rhythm (the disciplined

meeting schedule) and communication routine that required a dominant person to institute. Mr.

Jaspering’s “Weekly 5-15” (5 main bullets of accomplishments/issues that take 15 minutes to

type, a Boeing standard) that was sent to all IPTs kept the team focused on the “Go Fast” plan.121

Alien Autopsy

Colonel McClendon coined the term “alien autopsy” because experience showed if the

configuration of any weapon changes through development, any testing done before changes

were made become invalidated. The objective of “alien autopsy” was to document a baseline

configuration and freeze it. Colonel McClendon wanted the same configuration in production as

in developmental and operational testing. This is a challenge when prime contractors are trying

to produce a cost effective weapon but need to test prototypes early, avoid part obsolescence, and

keep reliability.

There were two levels of configuration maturity. Although processes and some suppliers

were leveraged off of JDAM, there were some new companies with critical components that

needed to be qualified. For example, General Dynamics Ordnance and Tactical Systems (GD

OTS) bought out IMCO Tool and Die that made the warhead case, Aerojet made the warhead

fill, KDI Precision Products made the fuze and height of burst sensor, MBDA made the

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diamondback wings, and Sargent Fletcher made the BRU-61. The “Alien Autopsy” in Figure

4.3 depicts the part and company changes between CAD and SDD.

Figure 4.3 SDB Part Changes from CAD to SDD/Production122

Buy, Make, or Sell “Build to Print”

The diamondback wing is designed and built by MBDA, a European consortium that

specializes in guided missiles and missile systems.123 In order to get the SDB-I AUR AUPP

down to $30,000 during full rate production, Boeing conducted a “virtual” competition between

MBDA and an internal and parallel Boeing diamondback wing development based on Boeing’s

Stand-off Land Attack Missile-Extended Range production design. At the beginning of CAD,

MBDA’s wing cost approximately $15,000; the goal was to get the diamondback wing cost

down by a factor greater than two. Coming out of CAD, Boeing chose MBDA for the wing.

Boeing engineers designed the smart, pneumatic, multiple ejection BRU-61. Building bomb

racks was not a core capability of Boeing weapons, so Boeing sold the design rights to Sargent

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Fletcher (SFI) who had a history in bomb rack development. SFI evolved from a builder to an

integrator and final assembler. This California company learned about globalization and sub-

supplier quality through managing Ultra (a British company that builds compressors), and Artus

(a French company that builds compressor motors and controls).124

In the end, all suppliers were assessed and challenged. “Not all the companies were treated

the same,” Dan Jaspering recalled, “But they were all treated fairly.” Once a company made the

final cut, it had the opportunity to become a partner for life. If they continued to meet technical

specifications, on-time deliveries, 20 year warranty (JDAM and SDB were first programs to

offer this), and quality, they would receive ever increasing degrees of preferential status.”125

Trunk Monkey Certified

As a prelude to seamless verification of the total system, subsystems needed to be tested in

preparation for LRIP. In anticipation of the type of environment this new weapon was going to

be flown, many tests were proposed that Colonel McClendon and the SPO could not afford. He

consistently demanded that contractors do sensible component tests.

Colonel McClendon and Mr. Wasylczyk were frustrated that previous military standard

(milstd) tests did not simulate the real world and invariably, a component would fail in theater.

On one occasion which set the tone for the rest of the program; Mike Wasylczyk, the lead SDB

airframe engineer, needed to test the plastic arming generator (AG) cover that would deploy in

flight. Mr. Wasylczk had such confidence in the product’s durability that he hammered on the

cover during one SPO meeting to show it would not break. Colonel McClendon approved of Mr.

Wasylczk’s methods, accepted the AG cover as designed and dubbed it Trunk Monkey Certified

(TMC).126 In actuality, TMC testing went above and beyond milstd tests on many occasions.

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TMC became more sophisticated when Mr. Wasylczk tested the ball screw on the MBDA

diamondback wing. When the wings deployed, they would pivot around the ball screw. Instead

of figuring out a milstd test for sand grains per a volume of air to mimic use in a desert

environment, Mr. Wasylczk developed an alternative test. The weapon was attached to a jeep

and driven around the desert. The wings deployed properly—again, his innovative test worked.

These approaches were cost effective, yet when AAC leadership was briefed, they challenged the

results because a milstd test was not used. Colonel McClendon was willing to stake his

reputation on the improvised testing and asked if the leadership wanted to approve an additional

test that would jeopardize “RAA in 2006”--they backed down.127

SAMP Deviations with Disciplined Source Selection

Colonel McClendon created, and the DoD approved, the SDB Single Acquisition

Management Plan (SAMP) version for SDD in the middle of CAD in 2003. Just like in JDAM,

the SAMP authorized the military SDB PM to deviate from Federal Acquisition Regulations and

from Defense, Air Force, and Air Force Material Command (now reformed into Air Force

Systems Command) regulations. The SAMP encouraged commercial practices and parts and

purposely did not mandate use of military standards for testing. The SAMP called for early

contractor involvement, full-time SPO “helpers” assigned to each competitor, and the formation

of temporary working groups to assist competitors. The source selection was transparent with

open communication, oral proposals, and down-select criteria listed out of the SAMP: Risk

(weapons and carriage system design, production representative hardware, aircraft integration,

accuracy, effectiveness), Affordability (AUPP weapons, AUPP carriage, SDD contract price),

Contractor Past Performance (responsiveness, meeting the IMP/IMS, systems engineering),

Mission Capability (weapons and carriage system design, accuracy, effectiveness, growth for

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precision against movers, in SDB-II), and employing small disadvantaged businesses

(pass/fail).128 Demonstrated performance of production representative hardware was the key

discriminator between the competitors. Ms. Stokley explained:

Colonel McClendon and his Source Selection Evaluation Team (SSET) implemented a new scale of 1-10 to measure system design maturity (this scale is roughly analogous to the Technology Readiness Levels for component technologies defined in the Defense Acquisition Guidebook). This moved the SSET from difficult-to-discriminate low/moderate/high ratings to very objective 1-10 assessments of exactly what had been flown and to what result. Motivated by this, both contractors accomplished a robust Critical Design Review (CDR) during the CAD phase.129

Another key feature of the source selection was the use of interim feedback to both

contractors during the competition. This is what made it a “rolling” down-select. Three formal

evaluation periods were scheduled to include routine and interim feedback for each period. Each

evaluation rated risk, affordability, contractor past performance, and mission capability. Except

for contractor past performance, interim ratings did not count in the final grade, but provided the

contractor with a vector check to make mid-course corrections where needed. Previously,

Colonel McClendon recalled contractors spending hours creating “Why I am BLUE” briefs,

referencing to the best color grade a company could receive. Furthermore, he felt his SSET was

initially lazy and needed to be trained to give feedback information early in the competition and

to use data to back it up. The SPO gave contractors a draft feedback a week early to comment on

it and gave it back again with a possible.130 To enter SDD, level three build-to drawings had to

be at least 85 percent complete and the contractor’s Configuration Control Board had to be

established and functioning.131 Following the third and final formal evaluation period, the final

selection was made to Boeing.132

Since results-based systems engineering in terms of production representative hardware was

so important, contractors received credit if they demonstrated performance greater than the

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threshold. They did not receive credit, however, for promising greater performance in future

spirals. Carefully designed criteria made difficult for any company to gain competitive

advantage by under-bidding the work. This strategy allowed the SPO to avoid cost overruns

during SDD and/or price hikes during production. Ms. Stokley wrote:

Their estimates had to fall within 15 percent of our government estimate for SDD. For production, we required the contractors to offer fixed prices for lots 1 and 2 and price commitments for lots 3 through 7, and we did independent cost estimates of each contractor’s design. Their bid had to fall within 15 percent of our government estimate of their design costs to be adjudicated realistic by our SSET. Colonel McClendon held another 5 percent, and the AF gave the program about $2M each year of additional funds for further risk reduction activities. It is important to note that we received this additional funding because of our stellar financial execution.133

In August 2003, the CAD competitive risk reduction program ended. After a favorable

Milestone B Acquisition Decision Memorandum designating SDB an ACAT 1D program in

2003, the SPO awarded Boeing a three year SSD contract worth $188 million with options to

build 24,000 weapons and 2,000 carriages over the next 10 years with a potential program value

of $2.5 billion.134

SDD Investment and Production Challenges

Systems Engineering (SE) was gaining increased emphasis during the SDB Systems

Development and Demonstration (SDD). SE emphasizes the development and organization of

complex systems. The technique involves taking a holistic view in the development effort that

helps meld all technical contributors into a unified team effort, forming a structured development

process that proceeds from concept to production to operation and, in some cases, through to

termination and disposal. Some people view SE as writing reports, developing computer models,

and conducting virtual simulations. SE is about applying discipline to the processes to get the

warfighter what he wants and needs. The SPO measured SE effectiveness by the quality of the

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product produced, test successes, and changes required versus the volume of paper to accomplish

it. Although SE may be highly effective in creating the latest technology breakthroughs for

modeling and simulation; the process takes longer and costs more. This section examines how

Time Certain Development (TCD) was supported, Seamless Verification (SV) was used, and

what to do when the operational environment brings up challenges during production.

In the Interest of Time

The CSAF’s directive of “RAA in 2006” for SDB was in the interest of time. Most trained

acquisition professionals believe that a PM needs to balance the three legged stool of schedule,

cost, and technical performance to achieve success. This does not mean all three legs have to be

equal. Indeed it means that if the PM chooses one leg over the other two, the PM needs to be

aware that this will affect the other two legs. If a program is based on schedule, then someone

needs to have the authority to flex funding or requirements.

To ensure “RAA in 2006,” Colonel McClendon wanted to do as much component and total

system testing up front as possible. By finding money every year and using end of year fallout

money, Colonel McClendon was able to buy more spare parts for testing and to buy down more

risk. He consistently positioned Boeing and the SPO to be ready for another flight test. In fact,

Colonel McClendon warned his bosses not to expect money back from the SDB program and

that he would scavenge for other SPO’s unspent money.135 Mr. Jaspering was always pleased

with Colonel McClendon’s efforts and did not want to be in the situation of “never having

enough money to do things right the first time, but always having enough money to do it

over.”136

What normally took the weapons acquisition community 13 years to accomplish took the

SDB program under six years. In explaining Time Certain Development, an anonymous

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engineer once said, “SE won’t solve what building and testing will!” Figure 4.4 shows what the

SDB program accomplished in 63 weeks in what normally takes double the time.

Figure 4.4 SDB Early and Often137

More Organizational Support. Just because the CSAF declared “RAA in 2006,” did not

mean it automatically happened. Intense bureaucratic inertia with pressures and priorities from

multiple programs could bring any program to its knees. To ensure the CSAF’s directive was

realized, Major General Robert Chedister, Air Force Program Executive Officer for Weapons,

and Commander, Air Armament Center (ACC) in 2004, issued a policy early in SDD that

completing SDB on schedule was AAC’s top priority. SDB was excluded from an Operational

Readiness Inspection (ORI) as it approached the Milestone C LRIP decision.138 General

Chedister gave Colonel McClendon carte blanch (or Colonel McClendon assumed) to expedite

developmental test missions at Eglin AFB with the 46th Test Wing.

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Camp McClendon. Colonel McClendon had to often rejuvenate support for SDB at the

Pentagon. He hired a support contractor, a retired AF officer with experience on HQAF staff, as

the full-time point of contact (POC) for the DoD. This POC handled DoD staffers by catching

working IPT members in the Pentagon hallway. Colonel McClendon deployed with six

personnel from the SPO to the Pentagon for two months at a time for the Milestone B decision

for SDD approval in 2004 and the Milestone C decision for LRIP approval in 2005 (while they

missed the ORI). He wanted to ensure milestone success by getting the latest information to the

Pentagon decision makers and their staffs. The SPO created tabbed booklets with several range

and accuracy histograms for the Overarching IPT members. Colonel McClendon was

determined to keep tracking right on schedule.139

Battle Rhythm. Boeing supported schedule by also keeping a strict focus on the “RAA in

2006” objective too. Mr. Jaspering is credited for setting up a “battle rhythm” of discrete

meetings with discrete objectives that are still in effect today that keep the Boeing team focused

towards its goal. Every Monday, a staff meeting is held to which the SPO is always invited via

video teleconferencing (VTC), to go over the calendar and action items. Every Wednesday is the

SPO-run Engineering IPT meeting to address technical issues to which Boeing is a required

participant via VTC. Every Thursday is Boeing’s SDB program business meeting to which the

SPO is invited via VTC. Here, Earned Value Management (EVM) numbers are analyzed,

expenditure or schedule options or recovery plans based on EVM are discussed, and supplier

status and delivery schedules are reviewed. The Thursday business meeting was Mr. Jaspering’s

only mandatory meeting for IPT leads. Either they had to attend or send a representative who

could speak authoritatively. Otherwise, Boeing and the SPO had meetings to resolve “fires” and

those usually occurred just over the phone.140

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Incentives. The SPO further supported the scheudle with incentives. Beyond the base fee

of 3 percent, the remaining 12 percent of the fee was broken down into schedule (RAA, key

activities, and system test) and system stability (design stability and cost prediction/control). In

the early stages of SDD, the schedule was weighted heavier than system stability. In the latter

stages of SDD, the system stability was weighted heavier. The stability incentive also

contributed to RAA in 2006 by freezing design and configuration changes for production lots 1

through 3 and operational test (OT). The expectation was that the contractor would design in

reliability from the start. The carrot was $5 million for each production lot unchanged and the

stick was an all or nothing incentive. These stabilization incentives were another reason why

Colonel McClendon created the “alien autopsy” concept to hold the configuration steady.

Seamless Verification

Previous to seamless verification (SV) in the Air Force test world, the weapons acquisition

community allowed the contractor to develop the flight test requirements, then go into

development test (DT) supported by Eglin AFB, followed by OT supported by Nellis AFB, and

concluded with a graduation exercise overseen by Air Force Operation Test and Evaluation

Command (AFOTEC) at Kirtland AFB.141 Under SV, DT and OT are involved at the start of the

development, live fire, and operational testing per a Test and Evaluation Master Plan (TEMP)--

all for the purpose of maximizing the elimination of the bugs in order to get the best weapons out

to the warfighter as quickly as possible. SDD used the F-15E as the threshold aircraft in SDD

for SV because of compatible Operational Flight Program (OFP) update schedules, current

combat role, and availability to support developmental and operational testing.142 As a

pathfinder program:

Some members of the OT community fully embraced the SV initiative. AFOTEC assigned a representative to the SDB SPO. The actual operators from the 53rd

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Test Wing became involved in the program to provide direct feedback and advice on the feasibility of requirements implementation. And even the DoD Live Fire test community embraced the SV initiative. Their goal was to have no unique live fire testing.143

Since a typical guided SDB-I flight test cost $125,000, Colonel McClendon was adamant about

being the responsible test officer (RTO) in control. Since Colonel McClendon worked hard for

every program dollar and was responsible for schedule, cost, and technical performance, he felt

he should make the calls for test pass or fail--and he did. He established very specific primary

and secondary objectives. Both Colonel McClendon and Mr. Jaspering signed the test objectives

before each test as there would be no confusion post test as to what was expected. In Colonel

McClendon’s eyes, the flight test could fail secondary objectives but move on with a pass and

with, more importantly, new data. SDB was certified for OT in September 2005, 23 months after

the SDD award and after passing 35 of 37 developmental test flights. 144 Colonel McClendon felt

that “although the RTO was the decision maker, the SPO had a great relationship with the test

wing commander and we ensured we recognized the test wing team that helped us at every

opportunity.”145 Figure 4.5 represents the responsibility Colonel McClendon had in reducing risk

with the test opportunities he had.

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Fielding Accolades and Challenges

Indeed, the SDB team fulfilled the CSAF’s directive of “RAA in 2006” by delivering the

first SDB weapons and carriages to the Air Force in August 2006.146 The SDB program also

declared Initial Operational Capability on F-15E six months early in October 2006, as well as it

being used in combat by a Lakenheath AFB F-15E for the first time in Operational Enduring

Freedom.147 In December 2006, Boeing and the SPO agreed to the first full-rate production

contract worth $80 million for 1,600 weapons, 300 carriages and associated support

equipment.148

Finally, this string of accomplishments led to the SDB receiving the 2007 William J. Perry

Award by the Precision Strike Association in February 2007 to recognize outstanding leadership

and technical achievements resulting in significant contribution to precision strike systems.149 A

year later in February 2008, Boeing delivered its 1000th SDB-I and 200th BRU-61 while keeping

the program 20 percent under the cost that the SPO has committed.150

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Figure 4.5 SDB Risk versus Test151

“SDB enjoys a great reputation within DoD as a model weapon-acquisition program,”

Colonel Richard Justice, commander of the 918th Armament Systems Group at Eglin AFB, said,

“And a significant reason for that is from our strong partnership with Boeing.”152 The program

has not, however, gone without challenges. Every program experiences flight test failures.

Luckily, flight test failures have been few and far between for the SDB program. When failure

does occur, the SPO and Boeing aggressively assess and mitigate any issues.

The combat environment concerns Mr. Brooks, the current Boeing SDB PM, the most, “The

real world will find additional imperfections and the team has to be ready to respond as fast as

possible.153 Mr. Jaspering, the original Boeing SDB PM, predicts “DoD needs to understand if

the test environment is different than the AOR, because some issues won’t be found until

deployed.”154 Then success becomes a matter of reputation. Lieutenant Colonel Chris Baird,

commander of the 681st Armament Systems Squadron for SDB I, claims:

The SDB program has become a victim of its own success following JDAM and the SDB weapon. However, even though the BRUs are contractually meeting their specification in theater, it is below the warfighter’s expectations. Thankfully, Boeing and us can talk candidly with each other and have been working through these issues.155

There were two BRU-61 anomalies in OT, but due to limited number of test opportunities and

the success of the BRU earlier in SV, no one was sure if this was indicative of future issues or

not. By being proactive, the SPO and ACC put in place a Carriage Reliability Confidence

Program to perform additional testing and to closely monitor carriage failures in the field.

Boeing learned things from the warfighters on real world deployments and the changes that had

to be made. Unfortunately, improvements will always lag the findings and the warfighter’s

patience is short. In retrospect, Colonel McClendon wished he had “trunk monkey certified” the

BRU-61 some more.

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Mr. Jaspering agrees and supports the current overlapping of SDD with production as

depicted in Figures 4.2 and 4.5 because there needs to be an initial funding mechanism for

reliability and growth challenges. By keeping SDD contracts in place into the production phase

for a few years, the SDB team can correct and understand any issues the warfighter experiences.

Again, with SDD overlapping production, the SDB software could be easily modified to handle

the close air support (CAS) environment that is more prevalent in Operations Enduring Freedom

and Iraqi Freedom as opposed to a stand-off weapon as was originally designed. In the end,

ensuring effective communication is one of the most difficult challenges. Unfortunately since

the SDB has hit FRP, the SPO and Boeing is coming up with CAS OFP ideas and not the

warfighter. Additionally once in production, SV becomes too cumbersome for relatively simple

OFP changes.

Lessons from the Perry Award Winner

Despite any past or current challenges, the SDB program has been successful because it

avoided the seven deadly sins of acquisition and it met a majority of expectations as explained in

Chapter 2. First, choosing the right person, Colonel McClendon, as the SPO SDM PM meant the

project had a leader with highly effective people skills. Second, technology was matured by the

MMTD and the AFRL. Third, requirements remained stable with just two KPPs. Just like in

JDAM, competing contractors’ threshold objectives could be traded for time. Fourth, risk

reducing repeatable process came in the form of early testing (trunk monkey certification) of the

components and seamless verification of the whole weapon system. Fifth, IPTs not only fostered

communication for the supply chain again, but also for decision makers inside the Pentagon.

Sixth, CAD had Boeing and LM competing in a rolling down-select and then there was a virtual

competition between Boeing and one of its suppliers. Seventh, result based incentives were used

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for schedule and stability to meet “RAA in 2006.” Expectation-wise, the SDB program met

General Jumpers’s target date, provided a warranty, and exceeded accuracy performance. Time

will tell if the warfighter totally buys into the weapon.

There are several leadership, team building, strategies, and execution that can be gleamed

from SDB development and early production as acquisition best practices. Table 4.6

summarizes lessons during CAD, SDD, first production lots, and immediate wartime usage.

Leadership: Champions must choose a clear priority, it allows for easier decision making.--Gen

Jumper set time as a priority which flowed down to Maj Gen Chedister who established an AAC policy to support SDB testing.

Choose “hard skill”, resolute, and experienced leaders to spark a development programs.--Ms Rutledge got the science project out of AFRL and would not stand for any contractor promises during the CAD competitive risk reduction program. Col McClendon took a Pathfinder program as permission to think and authored his own rules in the SAMP. Mr. Jaspering recruited an A-team at Boeing who supported his “Go-Fast” plan and audacious goals. Both Col McClendon and Mr. Jaspering were JDAM PMs for the government and Boeing, respectively, and guided SDB from SDD to LRIP.

Teaming: Develop strong government/contractor/supplier IPT partnership to meet the goal

and to communicate its relevance.--Col McClendon and Mr. Jaspering leveraged the expertise and relationships made during JDAM. Working IPTs were formed at the Pentagon to educate staffers before important Milestone decisions.

Empower teams to get involved early and to be innovative.--Seamless verification leveraged all aspects of the test community. TMC was the epitome of Col McClendon approving of innovative component testing.

Strategy: Invest early and often in testing components and the whole system.—With a fast

moving program, the PM needs to test early and often and to replicate as close as possible the conditions in the field. Col McClendon always went out of his ways to

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buy more parts, to build more assets, and to conduct as many flight tests as he could.

Incentivize the behavior you expect.--Part of Boeing’s award fee was based on keeping lot 1-3 production lot configurations the same. The SPO believed this would keep the program on schedule. Additionally, the “alien autopsy” concept motivated Boeing to keep the same suppliers it had in CAD as it had in SDD.

Execution: Select a limited number of key performance parameters (KPPs) and keep them

stable.--Let the contractors figure out how to solve the KPPs without requirements creep. Allow trade-offs on other performance-based requirements to attain the desired RAA. The SPO incentivized Boeing to keep the configuration the same.

Disciplined battle rhythm drives consistent execution.—Mr. Jaspering held mandatory weekly VTCs concerning engineering, risk assessments, configuration control boards, and EVM. He managed EVM weekly vice reporting it monthly.

Table 4.6 SDB SPO-Boeing Best Lessons

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Chapter 5

Derivative Programs: As the Pendulum Swings

Program, Planning, Budget, and Execution leaves little room for timely exploitation of innovation or maturing discoveries.

— John Wilcox, Director of JCTDs156

The Laser Joint Direct Attack Munition (LJDAM) program, the Focused Lethality Munition

(FLM) Joint Capability Technology Demonstration (JCTD), and the Small Diameter Bomb

Increment II (SDB-II) Risk Reduction Competition are derivatives of JDAM and SDB

Increment-I (SDB-I) programs. Major General David Eidsaune, Program Executive Officer for

Weapons and Commander of the Air Armament Center, Eglin Air Force Base (AFB) called

JDAM and SDB-I as model-acquisition programs at the 2007 Air Armament Symposium in

October 2007. Both programs are currently in production.157 The original JDAM program began

as an Operational Concept Demonstration to answer the need for an all weather precision

weapon after Operation Desert Storm. Then Congress mandated JDAM as a Defense

Acquisition Pilot Program (DAPP) to streamline acquisition flexibility. In contrast, LJDAM

began as a Boeing Company (Boeing) investment to fulfill the need to hit a moving target in

Operations Iraqi Freedom and Enduring Freedom (OIF and OEF). As a Congressional mandated

Pathfinder program to cut acquisition length and after initial testing, the SDB-I was advertised as

a low collateral damage weapon due to its smaller blast and fragmentation radius as compared to

a conventional 500 pound Mark(Mk)-82 JDAM equipped series bomb (Guided Bomb Unit,

156 John Wilcox, Assistant Deputy Secretary of Defense for Precision Engagement and Director of JCTD Programs, “Working Urgent Warfighter Solutions Inside the PPBE,” the Air Armament Symposium, Fort Walton Beach, Florida, October 11, 2007, slide 5, on-line, Internet, available from http://www.ndiagulfcoast.com/events/archive/33rd_ symposium/ day1/10_Wilcox %20-%20Air%20Armament%20Symposium%202007%20-%20October%2010-11,%202007.pdf.

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GBU-38). Due to the enemy engaging coalition troops from positions near schools, hospitals,

and religious buildings in OIF and OEF, the FLM evolved from the military labs into a JCTD as

an ultra low collateral damage weapon because of its confined blast radius. While the JDAM

program prioritized cost and SDB-I program emphasized schedule, the SDB-II competition is

prioritizing performance against stationary and specifically categorized moving targets. Several

questions about the programs come to mind. Are LJDAM, FLM, and SDB-II following in the

successful footsteps of JDAM and SDB-I? Are these derivative programs applying any of the

lessons offered by JDAM and SDB-I? This chapter will attempt to answer these questions, as

well as, what is the same and different in relation to leadership, teaming, strategy, and execution.

Laser JDAM

The LJDAM (GBU-54) expands the capability of the JDAM. It provides a modular laser

sensor kit that is easily installed to the front of existing JDAMs in the field. The laser-guided

JDAM adds mission flexibility to attack targets of opportunity, including mobile wheeled,

tracked, and boat targets, to the already outstanding Global Positioning System / Inertial

Navigation System (GPS/INS), all-weather capability, that the current JDAMs offer.158 The Air

Force and Navy already have Laser Guided Bombs (LGBs), but its current capability is limited

against fast moving targets. The next section describes how one retired Air Force warrior, now

Boeing contractor, provided the customer an option to meet an unfilled need.

The Customer May Not Always Know What It Needs

Feedback from Air Force F-16 and Navy F/A-18 aircrew in OEF in late 2001 and early 2002

was that they were getting re-fragged off their scheduled Air Tasking Order missions to Targets

of Opportunity (TOO) 60 to 80 percent of the time. Eventually, aircraft TOO weapon loadout

consisted of a LGB on one wing (for weather good) and JDAM on the other wing (for bad

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weather). No matter what happened on the missions, half the loadout would be invariably

wrong. Furthermore at the beginning of OEF, aircrew confidence of JDAM’s GPS

commensurate coordinates for attacking targets was low. After Enduring Look studied tactical

results for OEF and the initial results of OIF in 2003, JDAM achieved a circular error probable

much better than expected.159

Steve Wingfield, a former F-4E and F-15E Weapons System Operator and Air Combat

Command (ACC) requirements staff officer, now manager of Boeing JDAM business

development, built a business case suggesting that Boeing Weapons was missing out on business

opportunities stemming from an unsatisfied mission. In 2002, it took him just nine months to

convince Mike Marks, Vice-President of Weapons, and Rick Heerdt, JDAM Program Manager

(PM) to approve $20 million for independent research and development and flight tests to

expand the target set for the JDAM by giving it a laser to engage moving targets. Mr.

Wingfield’s process was slowed, however, because it took him four years, 2002 to 2006, to

convince the Air Force that LJDAM could fulfill a well documented requirements gap to engage

moving targets as a formal requirement. 160

The grassroots process began when Mr. Wingfield was invited to the annual Combat Air

Forces Weapons and Tactics Conference (CAF WEPTAC) at Nellis Air Force Base (AFB) in

January 2003 (and every January thereafter). Each year at WEPTAC, the Air Force warfighters

consolidate their Top-5 Requests for the Commander of Air Combat Command. The attending

warfighters report their consensus perspective to their respective Combatant Commanders

(COCOMs) who in turn consolidate their requirements into the Integrated Priority List to

compete for funding. In 2005, Mr. Wingfield briefed Air Force Lieutenant General (Lt Gen)

Walter Buchanan, Commander, U.S. Central Command (CENTCOM) Air Forces and showed

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him a video of a LJDAM hitting a 15 miles per hour (mph) bread van.161 Lt Gen Buchanan was

an instant supporter of this “field installed” capability and asked to be informed of Boeing’s

progress. He wanted to see the capability against faster moving targets. In lieu of formal

requirements, Mr. Wingfield helped develop the Air Force’s system requirements for a mission

flexible JDAM/LGB type weapon to hit fixed targets with a 3 meter circular error probable

(CEP) and a 40 mph moving target with a 5 meter CEP.162 Mr. Wingfield continued visiting

WEPTAC and CENTCOM Air Forces (CENTAF) once a year. Finally in 2006, Boeing hit an

Armored Personnel Carrier (APC) at 25 mph. To keep Boeing’s cost as low as possible, they

shared range time with other testing and provided contractual consideration to the JDAM Joint

Project Office to get the moving target LJDAM testing accomplished163 This motivated Lt Gen

Gary North, Lt Gen Buchanan’s successor to begin crafting a CENTCOM Urgent Operational

Need (UON) statement for a moving target capability. In September 2006, the LJDAM scored a

2 meter “hit” on a 40 mph target, motivating CENTAF to encourage ACC to include LJDAM in

a planned evaluation of inventory weapons against fast moving targets. Finally, the Air Force’s

422nd Test and Evaluation Squadron supported a fast moving target test which included LJDAM.

Although the threshold criterion is 40 mph, the objective criterion is 50-70 mph.164

Going Backwards on Requirements

In the past, requirements were directed from the top-down or were based upon the

experiences from the last war. For the Air Force, ACC owned that requirements process. There

used to be enough warfighters/operators doing staff jobs working requirements and they were

always willing to take risks and make decisions. But today, most of the warfighters/operators are

on the front line fighting or planning for the next operation and contractors are doing more of the

requirements paperwork. By law, these contractors cannot sign up to any requirements and they

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do not sit on source selection boards. As more and more staff jobs concerning acquisition are

sourced out, fewer active duty decision makers are available. And to slow down the process

even more, JROC and Materials Command all have a vote in the process.165 After four years of

Mr. Wingfield courting the Air Force, Boeing was awarded a $28 million quick reaction

capability contract for delivery of 600 laser seekers for existing inventories of Mk-82 500 pound

bombs, 200 of which will go to the Navy by June 2009.166 The first 15 laser kits were delivered

to the Air Force in April 2008 and are expected to be employed in support of OEF/OIF.

In a separate effort, the Navy is running a $214.6 million competition for the Direct Attack

Moving Target Capability (DAMTC) program. DAMTC seeks over 17,000 JDAM and/or LGB

weapons as the foundation for a dual mode weapon that is capable of prosecuting moving targets

up to 70 mph.167 This is the second quick reaction capability (QRC) effort to answer the UON

for a fixed wing aircraft moving target weapon. DAMTC’s goal is to field a solution by fiscal

year 2009, but Laser JDAM is already fielded. What normally takes 10-12 years to develop took

industry 3-4 years to develop. This time frame included the Air Force’s requirements.

FLM

The FLM (GBU-39B) is an ultra low collateral damage version of the SDB-I weapon. The

GBU-39B is designed to be carried on the smart SDB Bomb Rack Unit (BRU)-61 four-place

carriage. FLM uses an advanced, multiphase blast explosive (MBX) fill. The MBX fill was

developed by the Air Force Research Lab (AFRL) Munitions Directorate at Eglin AFB and the

fill was produced in limited fashion as government furnished equipment from the High

Explosive Research and Development (HERD) facility, also at Eglin AFB. The composite

carbon fiber case was developed by Lawrence Livermore National Laboratories and is currently

subcontracted out to Aerojet. The FLM warhead was designed to create a more intense and

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lethal near-field blast with significantly less warhead fragmentation.168 The FLM was not

intended to replace SDB-I, but to compliment it. "FLM is a ultra low-collateral-damage variant

of our SDB I system that provides a large blast effect with very few metal fragments," said

Boeing SDB Program Manager Dan Jaspering, "it will allow the warfighter to prosecute targets

in confined areas while minimizing the risk of damaging adjacent structures.”169

Brief Background about JCTDs

According to John Wilcox, Assistant Deputy Secretary of Defense for Precision

Engagement and Director of JCTD Programs, “The primary goal of the JCTD Program is to

demonstrate, operationally assess, rapidly deploy, and transition capability solutions and

innovative concepts to address the joint, coalition and interagency operational gaps and

shortfalls.”170 JTCDs began as Advanced Concept Technology Demonstrations (ACTDs) in

1995. Since then, of the 168 JCTDs/ACTDs that were initiated, 100 completed a demonstration.

Of that 100, 45 transitioned to a program of record, 33 produced residuals that are meeting

warfighters needs, and 22 were returned to the technology base.171

COMCOMs sponsor JCTDs through their codified operational priorities and needs. Due to

the increasing successes of JCTDs with residuals out in the field, the Office of the Secretary of

Defense (OSD) has developed a set of best practices in the JCTD Practical Operating Guidelines

(POG), Version 1.0, to support the JCTD life cycle from candidacy and development through

operational demonstrations and assessment, to effective transition planning and fielding. Some

of the best practices include using mature technology; providing tactics, techniques, and

procedures; results within three years; being joint; demonstrating prototypes; leaving behind

residuals; and backing it with a robust military utility assessment (MUA).172

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Michael Wynne, Secretary of the Air Force (SECAF), and Sue Payton, Assistant Secretary

of the Air Force for Acquisition, approved FLM as a candidate JCTD in February 2006 at a

“Breakfast Club” meeting where service JCTDs are vetted.173 In fact it has become well known

that FLM was the SECAF’s pet project to support the warfighters in OIF/OEF in the timeliest

manner. In April 2006, CENTCOM sponsored FLM as an out of cycle JCTD to determine the

military utility of the FLM system based on CENTAF’s identification of an UON for a low

collateral damage weapon. In August 2006, the 918th Armament Systems Group and Boeing

entered into a $27 million contract arrangement for the integration and test of the FLM warhead

into the SDB weapon system and delivery of 50 FLM weapons residuals in 2008 with the Air

Force potentially procuring as many as 450 SDB I FLM units through 2012.174

FLM MUA, Attributes, and Challenges

The FLM program underwent a robust three-phased MUA. The first phase involved

weaponeering workshops to understand collateral damage estimation better and to incorporate

FLM mission planning into SDB-I. The second phase detonated static warheads to verify FLM’s

blast characteristics versus personnel, personnel in light vehicles, and personnel in various

masonry structures. The third phase conducted flight tests with both Guided Test Vehicles

(GTVs) and live tactical rounds. The GTVs were flown for accuracy because the new warhead

had different mass properties than SDB-I. The live rounds were flown against simulated

environments consisting of personnel in or near light trucks, adobe and masonry houses, and oil

pipelines. The FLM program is represented in Figure 5.1. Note that the 50 FLM residuals were

delivered to the Air Force on February 28, 2008, three months early.175

Mike Wasylczyk, Boeing’s first and current FLM PM, attributes the success of the FLM

program to an experienced and small team made up of Boeing and Eglin AFB Systems Program

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Office (SPO) professionals who took on an aggressive and simple test schedule with some

leveraging off the SDB-I program. Mr. Wasylczyk felt the Boeing/SPO team became a mini-

integrator of AFRL, Lawrence Livermore, HERD, and Aerojet.176 Mr. Wasylczyk’s testing

methodology evolved under USAF Colonel (Retired) James McClendon, the original SPO SDB-I

PM. Colonel McClendon dubbed Mr. Wasylczyk’s simple, but realistic testing results as “Trunk

Monkey Certified.”177 Mr. Wasylczyk and the Boeing/SPO team said they look forward to

FLM’s operational use by Lakenheath AFB’s F-15E’s in OEF/OIF during the summer of 2008.

Figure 5.1 FLM Program178

As alluded to by John Wilson, the Director of JCTD Programs, transitioning a successfully

demonstrated JCTD to a program of record or to low rate initial production (LRIP) can be

challenging.179 In FLM’s case, there will be a significant gap, several months to a year, between

the delivery of residuals to Milestone C approval (for LRIP) to actually producing the first

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production lot of FLMs. Mr. Wasylczyk believes there are three challenges. First, FLM suffers

from the same reputation that SDB-I suffers from, not being originally designed as a close air

support weapon. Second, there are competing low collateral damage programs in every service.

Third, FLM’s funding scheme is making the FLM hard to afford, “It comes down to the

timeliness of the money,” according to Mr. Wasylczyk, “it is tough on the supplier base when

you only plan to make a hundred weapons a year for just a few years.” 180 If FLM weapons are

not used by the warfighters now, JCTD success can still be declared if the MBX fill is put inside

a Mk-82 carbon fiber case with a laser JDAM kit or if a miniaturized laser JDAM-like package

can be put on front of the current FLM—all to satisfy the warfighter.

SDB-II

The second SDB weapon, (SDB-Increment II, SDB-II) provides a robust network capable

weapon against stationary and specifically categorized moving targets and, if necessary, from

stand-off ranges. In April 2006, the Air Force awarded Boeing and Raytheon $144 million each

to compete in a 42-month risk reduction program competition, which has a potential value worth

of $1.3 billion.181 This is not the same as the rolling down-selects for JDAM and SDB-I. The

SPO will carry both contractors to the end of the risk reduction competition hoping that the

competition will yield two very viable prototypes. Only one “helper”, not a team of helpers, is

assigned to each contractor. Although interim feedbacks for each contractor will not count

towards the final selection, past performance is part of the four source selection factors. The two

most heavily weighted source selection factors are past performance (based on recent and

relevant Contractor Performance Annual Reports) and proposal risk (technology readiness levels,

manufacturability), followed by mission capability (performance specifications and robustness),

and cost (estimated within independent government estimate).

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For SDB-II, Boeing has teamed with Lockheed-Martin. In this relationship, Boeing

performs as the prime contractor and system integrator. Boeing is responsible for the overall

weapons system and will supply the air vehicle and data link system. Lockheed Martin is

responsible for the tri-mode seeker that enables the all-weather attack and categorization of

moving targets, a critical requirement for SDB-II.182

Why the Re-compete?

As originally reported, funding constraints and immature technology forced the SECAF, the

Chief of Staff for the Air Force, and the Commander of ACC to defer SDB-II requirements in

May 2002. In August 2003, the Air Force discovered additional funding that could be applied to

SDB-II requirements. Since Boeing won the SDB-I Component Advanced Design competition,

the Air Force submitted a sole source justification and approval letter in November 2003 to

award Boeing the SDB-II moving target requirements to in a spiral development effort during

Boeing’s System Development and Demonstration (SDD) phase. In October 2004, Darleen

Druyun, former Assistant Secretary of the Air Force for Acquisition, pleaded guilty to arranging

prospective employment for herself, her daughter, and her son-in-law at a company she was

negotiating with. That company was Boeing and most of the negotiation was thought to be

associated with the now defunct Boeing 767 Tanker Lease deal. When Ms. Druyun’s testimony

became public in October 2004, it showed that most of the family job negotiation was during the

time the original SDB-II requirements were deferred in 2002. In light of this information,

Lockheed-Martin submitted a protest to the Government Accountability Office (GAO) in

November 2004. In February 2005, the GAO recommended that the Air Force conduct a

competitive procurement for the previously deferred SDB-II requirements, especially since

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Boeing’s contract was not yet amended to perform such duties.183 In an interesting turn of

events, Boeing and Lockheed-Martin decide to team together and compete against Raytheon.

Technology Priority Challenge

The Air Force is not expected to award a sole source contract for the SDB II SDD phase

until late 2009, a full three and a half years for the competitive risk reduction phase. The SDB-I

Component Advanced Design competition only took two years. Just as SDB-I was named as a

Pathfinder program, ACC nominated SDB-II as a Time Certain Capability (TCC) pilot program.

According to Lieutenant Colonel Jason Denney, the SDB-II PM out of the 682nd Armament

Systems Squadron, “TCC gives the PM the power to make trades below the KPP requirements

level to get a capability out to the field on-time.”184

Without divulging any competition sensitive issues, the SDB-II technological challenge is

getting squeezed, even with 18 months left in the risk reduction competition between

Boeing/Lockheed-Martin and Raytheon. In the near term, the laser homing capability in the

SDB-II tri-mode seeker is already emerging now with Laser JDAM and DAMTC. In the far

term, SDB-II could be supplanted by the Joint Air-to-Ground Missile’s (JAGM’s) advanced

electro-optical seeker that the Army and Navy are supporting.185

What’s the Future?

So the pendulum is definitely swinging for the next generation of Boeing weapons. JDAM

combined a couple of service programs to become a DAPP. LJDAM and DAMTC are

potentially diverging away from jointness to get what their respective services want to engage

fast moving targets with a laser designator. Although Boeing was able to develop LJDAM in

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two years, it took four years to convince the Air Force to procure this capability. This lag time

cost the warrior and perhaps even the OEF/OIF efforts in numerous immeasurable ways.

Although FLM makes the case for agile acquisition, it had the luxury of leveraging off the

existing SDB-I program. Nevertheless, FLM took only 18 months from concept to delivery of

residuals. Even with the SDB-I handicap, it took the leadership of one person and the effort of a

small team to drive the testing schedule home.

JDAM’s champion was General McPeak and JDAM’s motto was cost. SDB-I’s champion

was General Jumper and SDB-I’s motto was schedule. SDB-II’s motto, by default, is about

technical performance. SDB-II currently has several good PM’s, Lieutenant Colonel (Lt Col)

Jason Denny from the SPO, Dick Bernard from Boeing, and Rich Roellig from Raytheon.

However, the Air Force is sending Lt Col Denney to the Industrial College of the Armed Forces,

a very good opportunity, but the PM position will be unfilled for a few critical months during the

risk reduction competition. Although SDB-II was dubbed a TCC, its customers want incredible

performance that other programs might partially realize first.

Not without challenges, Table 5.2 summarizes some Laser JDAM, FLM and SDB-II lessons

on leadership, teaming, strategy, and execution that might be useful in the future.

Leadership: At times, one person can make the difference.--Mr. Wingfield singlehandedly

created the Laser JDAM program for the Air Force and for Boeing. Although AFRL and Lawrence Livermore National Laboratories invented the FLM concept and Ms Rutledge brought it to industry, Mr. Wasylczyk developed a no-nonsense team and plan to deliver weapons to the warfighter in 18 months. One question that remains is, who is that legendary person for SDB-II?

Teaming: Small, dedicated IPT teams can meet finite requirements.--Laser JDAM and FLM

were built around small teams that avoided large group inertia.Strategy:

Stretched out funding can not sustain a program at a good AUPP.--Assuming FLM receives Milestone C approval for LRIP and warfighters choose to employ FLM in OEF/OIF, buying only 100 weapons a year for just a few years is not fiscally

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prudent for companies to commit. Execution:

The only proof is test data, especially against the expected environment, this reduces risk.--Although in previous chapters, testing lessons came under teaming for inclusion and empowerment, Laser JDAM and FLM showed how testingearly and often sold the programs.

Table 5.2 Laser JDAM, FLM, SDB-II Lessons

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Chapter 6

Recommendations

Program management will always be as much art as it is science.

— Terry Little, Testimony to House Armed Services Committee, 2006186

This report described the convoluted acquisition process the Department of Defense (DoD)

has used since Secretary of Defense Robert McNamara instituted system analysis discipline in

the 1960s and summarized the history, effectiveness, and most recent attempts at acquisition

4 Major General David Eidsuane, “Air Armament 2020: a PEO Perspective”, at the Air Armament Symposium, Fort Walton Beach, Florida, October 11, 2007, slide 9, on-line, Internet, available from http://www.ndiagulfcoast.com/events/archive/33rd_symposium.htm.

5 Chairman of the Joint Chiefs of Staff Instruction (CJCSI) 3170.01F, 1 May 2007, p. GL-19, on-line, Internet, available from http://jitc.fhu.disa.mil/jitc_dri/pdfs/3170_01f.pdf, defines a system of systems (SoS) as “a set or arrangement of interdependent systems that are related or connected to provide a given capability. The loss of any part of the system will significantly degrade the performance or capabilities of the whole. The development of a SoS solution will involve trade space between the systems as well as within an individual system performance.”

6 Defense acquisition professionals take initial and career continuation training courses ranging from days to months at the Defense Acquisition University (DAU) and from the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) Knowledge Sharing System ({A}KSS). The DAU course homepage is on-line, Internet, available from www.dau.mil/schedules/schedule.asp. The AKSS course homepage is on-line, Internet, available from https://akss.dau.mil/default.aspx.

7 U.S. Code information is on-line, Internet, available from www.gpoaccess.gov/uscode/.8 Federal Acquisition Regulation information is on-line, Internet, available from at

www.arnet.gov/far/.9 Valerie Bailey Grasso, “The Berry Amendment: Requiring Defense Procurement to Come

from Domestic Source,” Congressional Research Service Report for Congress, 21 April 2005, is on-line, Internet, available from www.fas.org/sgp/crs/natsec/RL31236.pdf.

10 Defense Acquisition Performance Assessment Project Report, January 2006, Figure 4, p. 4, on-line, Internet, available from www.acq.osd.mil/dapaproject/documents/DAPD+Report-web/DAPA-Report-web-feb21.pdf.

11 JCIDS is governed by CJCSI 3170.01F, 1 May 2007, on-line, Internet, available from ahttp://jitc.fhu.disa.mil/jitc_dri/pdfs/3170_01f.pdf, and uses procedures in the Chairman of the Joint Chiefs of Staff Manual (CJCSM) 3170.01C, 1 May 2007, on-line, Internet, available from http://jitc.fhu.disa.mil/jitc_dri/pdfs/3170_01c.pdf.

12 CJCSM 3170.01C, Figure A-2

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reform/transformation. In an effort to capture learning from successful acquisition

reform/transformation, this chapter takes the lessons from the Joint Direct Attack Munition

(JDAM) program as a Congressional mandated Defense Acquisition Pilot Program (DAPP) and

the Small Diameter Bomb (SDB) program as a Congressional mandated Pathfinder program to

offer practical recommendations in the realm of leadership, teaming, savviness, and execution

13 Stephen Chadwick, Defense Acquisition: Overview, “Issues, and Options for Congress,” Congressional Research Service Report for Congress, 20 June 2007, p.7, on-line, Internet, available from www.fas.org/sgp/crs/natsec/RL34026.pdf. As of June 1, 2008, DoD Directive 7045.14 and DoD Instruction 7045.7 that govern PPBES have not been updated since MID 913.

14 For the latest recommendations on the Guidance of Employment of Forces (GEF) and the Guidance of Development of Forces (GDF), see “Coalition Warfare Management Plan 2009-2010, p.5, on-line, Internet, available from http://www.acq.osd.mil/ic/cwp/FY09%20files/CW%202009-10%20MgtPln_final%20draft%20clean.doc.

15 Defense Acquisition Guidebook, 20 December 2004, Chapter 1.2, on-line, Internet, available from https://akss.dau.mil/dag/Guidebook/IG_c1.2.asp.

16 DAU offers an online course on PPBES, class number CLB009, on-line, Internet, available from https://learn.dau.mil/html/clc/Clc.jsp?d=.

17 Defense Acquisition Guidebook, Figures 1.2.1 and 1.2.218 Complete information on DAS organizational hierarchy can be found in the Department of

Defense Directive 5000.1. “The Defense Acquisition System.” 12 May 2003, p. 2-3, on-line, Internet, available from http://www.dtic.mil.whs/directives/corres/pdf/500001p.pdf and in the Final Report to the President, by the President’s Blue Ribbon Commission on Defense Management (commonly known as the Packard Commission), “A Quest for Excellence.” June 1986, p. 53-54, on-line, Internet, available from http://www.ndu.edu/library/pbrc/36ex2.pdf.

19 For more on evolutionary acquisition in general see Gary Pagliano and Ronald O’Rourke, “Evolutionary Acquisition and Spiral Development in DoD Programs: Policy Issues for Congress,” Congressional Research Service Report for Congress, May 17, 2006, on-line, Internet, available from http://digital.library.unt.edu/govdocs/crs//data/2006/upl-meta-crs-304/RS21195_2006May17.pdf.

20 The Nunn-McCurdy amendment calls for program managers to report a to their SAEs if the cost of weapons programs grow by more than 15 percent above original baseline estimates.

21 Defense Acquisition Guidebook, 20 December 2004, “Modified Life Cycle Framework View,” Version 1.6, July 24, 2006, on-line, Internet, available from https://akssdev.dau.mil/dag/DoD5000.asp?view=framework.

22 Department of Defense Instruction 5000.2, “Operation of the Defense Acquisition System,” May 12, 2003, Modified Enclosure 2, Table 1, on-line, Internet, available from https://akss.dau.mil/dag/DoD5002/Enclosures_2.asp.

25 David S. Christensen,  David A. Searle,  Dr. Caisse Vickery, “The Impact Of The Packard Commission's Recommendations On Reducing Cost Overruns On Defense Acquisition Contracts,” Acquisition Review Quarterly, Summer, 1999, on-line, Internet, available from http://findarticles.com/p/articles/mi_m0JZX/is_3_6/ai_78177456/pg_7. Searle provides detailed

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that supports some of the hypotheses Jim Collins in his book Good to Great: Why Some

Companies Take the Leap. Collins makes several propositions’ that he supports with data on

why some companies were built to last.187 The case studies on the JDAM (Chapter 3), the SDB-I

(Chapter 4), and the Laser JDAM, Focused Lethality Munition (FLM), and SDB-II (Chapter 5)

information on acquisition program cost increases from 1969 to 1995 and the effect of Transformation Commissions on cost control.

26 Defense Acquisition Performance Assessment (DAPA) report, January 2006, Modified Figure 8, Sample of Past Acquisition Reforms, on-line, Internet, available from http://www.acq.osd.mil/dapaproject/documents/DAPA-Report-web/DAPA-Report-web-feb21.pdf. Also included, Thomas L. McNaugher, New Weapons, Old Politics: America's Military Procurement Muddle, 1989, Brookings Institution Press, ISBN 0815756259.

27 Defense Science Board 2005 Summer Study on Transformation: A Progress Assessment, Volume II: Supporting Reports, April 2006, page 9, on-line, Internet, available from http://www.acq.osd.mil/dsb/reports/2006-04-DSB_SS_Transformation_Report_Vol_2.pdf.

28 Quadrennial Defense Review (QDR), “Reshaping the Defense Enterprise,” February 2006, on-line, Internet, available from http://www.defenselink.mil/qdr/report/Report20060203.pdf.

29 Center for Strategic and International Studies, “Beyond Goldwater-Nichols: U.S. Government and Defense Reform for a New Strategic Era,” April 2006, on-line, Internet, available from http://www.csis.org/media/csis/pubs/bgn_ph2_report.pdf.

30 DAPA report, p. 2.31 Ibid., modified Figure 9.32 Defense Acquisition Transformation, January 2008, on-line, Internet, available from

http://www.acq.osd.mil/documents/804Reportfeb2007.pdf.33 DoD Business Transformation Agency (BTA) Enterprise Transition Plan, September

2007, on-line, Internet, available from http://www.defenselink.mil/dbt/products/2007_ BEA_ETP/etp/Data/September_2007_ETP.pdf.

34 All four adjudication processes (through the procuring agency itself, the General Accounting Office of the General Services Administration in Washington D.C., the United States Court of Federal Claims in Washington D.C. or “Claims Court,” and the protesting contractor’s local federal district court) for bid protests are explained by Joseph Valof, “Government Contracts, Federal Protests Bids,” no date, The Association of Independent General Counsel (AIGC), on-line, Internet, available from http://www.aigclaw.org/tic73.html.

35 The GAO Defense Acquisitions: Assessments of Selected Weapon Programs, March 30, 2007, on-line, Internet, available from http://www.gao.gov/new.items/d07406sp.pdf.

36 Ms Sue Payton, Assistant Secretary of the Air Force, Acquisition, has referred to the GAO’s Seven Deadly Sins of Acquisition at the Air Force Defense Strategy Seminar in Washington D.C. on May 17, 2007; at the Air Force Fellows Orientation at the Pentagon on August 1, 2007; and at the Air Armament Symposium. The GAO has not formally referred to “Seven Deadly Sins of Acquisition” in their reports at the time this paper was written, but

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examined programs that DoD and The Boeing Company (Boeing) managed and should bring

into question how Collins would believe DoD faired with regards to his concepts.

Leadership and the Hard Skills

One of the propositions Collins builds is that people are the most important asset in the

organization. Ensuring that their work fit their skill levels (getting the right people on the right

certainly inferred to them in their “Assessments of Selected Weapons Programs.” A Google search for “Seven Deadly Sins” finds several acquisition articles. For example, Wayne Turk’s “Seven Deadly Sins of Program Management,” Defense AT&L, January 1, 2006, on-line, Internet, available from http://www.dau.mil/pubs/dam/01_02_2006/tur_jf06.pdf.

37 Nunn-McCurdy unit cost breach information can be found at the AT&L Knowledge Sharing System “Ask a Professor,” on-line, Internet, available from https://akss.dau.mil/askaprof-akss/qdetail2.aspx?cgiSubjectAreaID=4&cgiQuestionID=18958.

38 Find DoD quarterly “Selected Acquisition Report Summary Tables” since December 1969, on-line, Internet, available from http://www.acq.osd.mil/ara/am/sar/index.html.

39 Selected Acquisition Report, September 30, 2007, on-line, Internet, available from http://www.acq.osd.mil/ara/am/sar/2007-SEP-SARSUMTAB.pdf.

40 Valerie Bailey Grasso’s Congressional Research Service Report, RS22631, “Defense Acquisition: Use of Lead Systems Integrators (LSIs) – Background, Oversight, Issues, and Options for Congress,” March 26, 2007, on-line, Internet, available from http://www.fas.org/man/crs/index.html. An acquisition program is really a system of systems, where various platforms (ground vehicles, aircraft, and ships) are to be linked together by computer networking technology. Companies can act on behalf of the government and are called Lead System Integrators or LSIs. The LSIs for the Army’s Future Combat System program is Boeing and Science Applications International Corporation.

41 Sue Payton’s (Assistant Secretary of the Air Force for Acquisitions) presentation at the USAF Fellows Orientation at the Pentagon on August, 1, 2007.

42 Judy Stokley’s (Deputy Air Force Program Executive Officer for Weapons) presentation, “What Do Your Government Customers Want?” to Boeing’s 2007 Team Leader Training, Saint Louis, MO, November 1, 2007.

43 John Young, Acting Under SECDEF for Acquisition, Memorandum for Secretaries of the Military Departments, Chairman of the Joint Chiefs of Staff, Commander of Special Operations Command, Directors of the Defense Agencies, and Component (Service) Acquisition Executives, “Prototyping and Competition,” September 19, 2007. Can be found in the AT&L Knowledge Sharing System, on-line, Internet, available from https://akss.dau.mil/Documents/ Policy/ 20070921%20Prototyping%20and%20Competition%20ATL.pdf.

47 Jim Collins, 2001, Good to Great: Why Some companies Take the Leap, HarperCollins Publishers Inc., ISBN 0-06-662099-6. 

48 Gregory Postulka interview on February 21, 2008. Mr. Postulka is a retired Air Force Colonel who was the JDAM military program manager in 1992. He currently is a 681st Armament Systems Squadron civilian contractor.

49 Collins, 41-64.

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bus) is the difference between being a good company and a great one. Collins claims that

effective leaders are more “plow horse than show horse.” This means that effective leaders forgo

the celebrity status available to many who lead major corporations. Level-5 leaders pass the

credit and take on the blame for how their organizations perform. In this paper, I have argued

that effective leaders like Mr. Little, Mr. Dillow, Mr. Avila, Colonel (Col) McClendon, Mr.

50 Ingols, 6.51 Ibid, 8.52 Ibid, Exhibit VII.53 Ibid, 15-16.54 Charlie Dillow interview on March 6, 2008. Mr. Dillow is retired from The Boeing

Company and was MD’s first JDAM program manager.55 Ingols, 23. Reconfirmed with an interview with Charlie Davis, The Boeing Company

JDAM New Products Manager on February 11, 2008.56 Federation of American Scientists, Joint Direct Attack Munition, p. 2, on-line, Internet,

available from http://www.fas.org/man/dod-101/sys/smart/ppcp97c1.htm#1.0.57 Dillow interview.58 The original Truth in Negotiations Act was signed in 1962 to give government an equal

standing with defense contractors. The current TINA is dated February 11, 2003, found on-line, Internet, available from http://www.acq.osd.mil/dpap/policy/policyvault/2003-0013-DPAP.pdf.

59 Federation of American Scientists, Joint Direct Attack Munition, p. 7; summarized Tables 1.3-3 and 4.

60 Vernon Loeb, “Bursts of Brilliance,” The Washington Post, page 9, December 15, 2002, found at The Boeing Company’s News Clips, on-line, Internet, available from http://The Boeing Companynews.web.The Boeing Company.com/archive/12_02/121602/021216p_in_ hightech.html.

61 JDAM Single Acquisition Management Plan, Air Systems Command, Eglin Air Force Base, March 1996, p.11. Can be attained through the Freedom of Information Act.

62 Charlie Davis interview on February 11, 2008. Mr. Davis was the MD Supplier Manager in 1996. He currently serves as The Boeing Company’s JDAM New Products Manager.

63 Ingols, 13.64 Malee V. Lucas, Supplier Management Practices of the Joint Direct Attack Munition

Program, Submitted to the Department of Aeronautics and Astronautics in Partial Fulfillment of the Requirements for the Degrees of Master of Science in Aeronautics and Astronautics and Master of Science in Technology and Policy at the Massachusetts Institute of Technology, 1996.

65 Ingols, 30.66 Ibid, 28.67 Ibid, 33.68 Ibid, 31.69 Mark A. Lorell, John C. Graser, An Overview of Acquisition Reform Cost Savings

Estimates, RAND Report, MR1329, 2001, Page 55, on-line, Internet, available from http://www.rand.org/pubs/monograph_reports/MR1329/MR1329.ch4.pdf.

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Jaspering, Mr. Wingfield, and Mr. Wasylczyk, just to name a few, embodied these principals and

built teams that led to the success of their programs. Another concept Collins encourages is that

leaders must confront the brutal truth about what their organizationa are able to achieve. He

offers the concept if being a “hedgehog”; organizations should decide what they are good at and

rally around the one common denominator that makes them successful188

#1: Each major acquisition program needs a 4-star champion who picks one priority.

70 Ingols, 33.71 Carl Avila interview on February 11, 2008. Mr. Avila was The Boeing Company’s JDAM

Program Manager from 1997 to 2000. He currently serves as The Boeing Company’s He currently serves as The Boeing Company’s Advanced Weapons Program Manager.

72 Ibid.73 Richard Walley, Lieutenant Colonel, USAF (retired), interview on April 29, 2008. He

was the JPO JDAM Deputy PM and the JPO Acting System Program Director for JDAM in 1999. Mr. Walley is a government civilian currently serving as the Deputy Director of the 918th Armament Systems Group.

74 Walley interview. He was the JPO Mk-82 JDAM PM at the time. Also based on Rick Heerdt interview on February 14, 2008. He confirmed the Air Force’s lack of interest outside the JPO. Mr. Heerdt was The Boeing Company’s JDAM New Product Development Lead during that time. Mr. Heerdt was The Boeing Company’s JDAM Program Manager from 2002-2005. He currently serves as The Boeing Company’s U.S. AWACS Block 30/35 Program Director.

75 “JDAM History,” April 27, 2005, confirmed General Jumper’s directive, on-line, Internet, available from http://www.globalsecurity.org/military/ systems/munitions/jdam-history.htm confirmed General Jumper’s directive.

76 Kim Michel interview on February 14, 2008. Ms. Michel was The Boeing Company’s JDAM Program Manager from 2000-03. She currently serves as The Boeing Company’s Integrated Defense Systems Director of Supplier Management.

77 Walley interview.78 “JDAM: a GPS-INS Add-on Adds Accuracy to Airstrikes,” Defense Industry Daily,

January 14, 2008, on-line, Internet, available from http://www.defenseindustrydaily.com/jdam-a-gpsins-addon-adds-accuracy-to-airstrikes-03313/.

79 Kerry Bush interview on February 12, 2008. Mr. Bush was The Boeing Company’s Mk-82 JDAM Program Manager in fall 2001. He currently serves as The Boeing Company’s JDAM Program Manager.

80 Kim Michel interview. “New material handling concepts” included suppliers unloading their trucks freight right onto the feeder lines for JDAM production with reusable containers; live remote monitoring of bench stock-when suppliers see consumables below a red painted line, they are responsible for ordering and restocking; and a highly computerized containerized and shipping system to handle the several JDAM variants and multiple military service and international customers. Even the labor union agreed to multiple job grades for individuals.

81 “JDAM: a GPS-INS Add-on Adds Accuracy to Airstrikes”82 Heerdt interview.

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It is not often that a 4-star general or equivalent wants their name tied to any major

acquisition program, especially if it is highlighted for a Nunn-McCurdy violation. Furthermore,

what organization would open itself to more scrutiny? However, done correctly, 4-star

sponsorship can ensure the right people are put on the right seat on the right bus going in the

right direction. The 4-star champion needs to pick one of the three legs of acquisition--cost,

schedule, or technical performance to focus on.

83 John Harnagel interview on February 16, 2008. Mr. Harnagel was The Boeing Company’s JDAM Program Manager from 2005-06. He currently serves as The Boeing Company’s Integrated Defense Systems Director of Supplier Program Management.

84 Defenselink: Contracts for Thursday, January 10, 2008, on-line, Internet, available from http://www.defenselink.mil/contracts/contract.aspx?contractid=3684.

85 Harnagel interview.86 Linda Rutledge interview on February 29, 2008. Ms. Rutledge was the JPO JDAM

Program Manager in 2005. She currently serves as Director, 708 th Armament Systems Group, Eglin AFB.

87 Ingols, Exhibit 15.88 The Boeing Company already had experience in integrating Mk-84 JDAMs onto Israeli F-

16s, The Boeing Company’s first foreign military sales (FMS) contract in 2000. The Mk-82 EMD propelled a direct commercial sales JDAM co-production contract with Alenia Marconi Systems of Italy (later merged with MBDA Missiles Systems, a European consortium) and an FMS dual F-15K/JDAM contract to South Korea. JDAM is now sold to 19 countries.

89 Bush interview.90 As of March 31, 2008, 117,374 JDAM tail kits were delivered to the Air Force, 66,673 to

the Navy, and 9,059 to international customers. Data provided by James Maddock, The Boeing Company Weapons, Program Plans and Scheduling-Production Operations Manager

91 Dillow interview.92 Bill Barksdale, “The Boeing Company JDAM Team Receives William J. Perry Award,”

The Boeing Company News Release, January 22, 2004, on-line, Internet, available from http://www.The Boeing Company.com/ids/news/2004/q1/nr_040122m.html.

93 “Joint Direct Attack Munition (JDAM), GBU-29, GBU-30, GBU-31, GBU-32”94 Used information from “JDAM: a GPS-INS Add-on Adds Accuracy to Airstrikes,”

Defense Industry Daily, and from inflation schedules to compute 1993 and current year AUPPs.96 Evolutionary Acquisition Tutorial, October 2007, on-line, Internet, available from

www.afit.edu/ls/knowledge/KO-04/DOD5000_KO04.htm.97 681st Armament Systems Squadron, “SDB and FLM Questions/Answers for ABC News

Interview,” February 2008. Circular error probable (CEP) is a simple measure of a weapon system's precision. It is defined as the radius of a circle into which weapons will land at least 50% of the time.

97

As Chief of Staff of the Air Force (CSAF), General Merrill McPeak championed JDAM.

Through his tutelage, General Joseph Ralston (former Director for U.S. Air Force Operational

Requirements) hand-picked Terry Little as the first Joint Program Office (JPO) JDAM Program

Manager (PM). In Mr. Little’s first meeting with General McPeak, it was clear that cost was the

number one priority. Eventually, JDAM came in well under cost and was one of the heroes of

98 Marguerite Ozburn, “Small Diameter Bomb Increment I Backgrounder,” March 2007, on-line, Internet, available from http://www.boeing.com/defense-space/missiles/sdb/docs/ SDB_ overview.pdf.

99 Office of the Inspector General Department of Defense (IGDoD), “Powered-Low Cost Autonomous Attack System Advanced Technology Demonstrator,” Audit Report No. D-2001-106, May 7, 2001, p.2, on-line, Internet, available from www.dodig.osd.mil/Audit/reports/fy01/01-106.pdf. Also in James R. McClendon, Colonel (Retired), USAF, “SDB Single Acquisition Management Plan (SAMP),” September 1, 2003, p. 7. Col McClendon was a former USAF SDB Program Manager.

100 James McClendon, Colonel (Retired), USAF, “SDB Single Acquisition Management Plan (SAMP),” September 1, 2003, p. 8. Colonel McClendon was the USAF SDB Program Manager, Air Armament Center, Eglin Air Force Base (AFB).

101 Ibid, p. 7.102 IGDoD, p. 3; and McClendon, SAMP, p. 7.103 This ATD came right out of the laboratories as opposed to an Advanced Concept

Technology Demonstration (ACTD) that is sponsored by the Office of the Secretary of Defense.104 Bill Wise interview on February 28, 2008. He was the SPO’s designated Boeing “helper”

during CAD. Mr. Wise is currently a Senior Acquisition Engineer contractor for Sverdrup Technology.

105 Linda Rutledge interview on April 7, 2008. She was the Miniature Munitions PM in 2001. Ms. Rutledge is currently serving as the Director of the Direct Attack 708th Armament Systems Group at Eglin AFB.

106 Erik Simonsen and Bob Algoratti, “Boeing Awarded Small Diameter Bomb Contract,” Boeing News Release, October 3, 2001, on-line, Internet, available from http://www.boeing. com/defense-space/missiles/sdb/news/2001/q4/nr_011003b.html. Also found in Andreas Parsch, “Directory of U.S. Military Rockets and Missiles, Appendix 5: Guided Bombs, SDB, 2006,” on-line, Internet, available from http://www.designation-systems.net/dusrm /app5/sdb.html.

107 Lynda Rutledge, “SDB Industry Day Brief”, February 22, 2001. Slide 17. She was the Miniature Munitions PM in 2001. Ms Rutledge is currently serving as the Director of the Direct Attack 708th Armament Systems Group at Eglin AFB.

108 Bnet, “Interview with Marvin Sambur, Assistant Secretary of the Air Force : pathfinder program testing the potential of spiral arms development - Acquisition - Evolutionary Acquisition - Cover Story,” July 2003, on-line, Internet, available from http://findarticles.com/p/articles/mi_m0KAA/is_4_32/ai_111202132/pg_1.

109 In February 2005, the Government Accounting Office (GAO) sustained Lockheed Martin’s protest of the sole source award to Boeing for SDB-II based on Darlene Druyun’s

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Operation Allied Force. Likewise as CSAF, General John Jumper championed SDB. Although

he wanted a small bomb to fit within the F-22 bay doors, it was clear that schedule was most

important when he met with Lynda Rutledge, the Miniature Munitions PM. Eventually, Col

McClendon was hand-picked as the first official SDB PM to lead the charge of “RAA (Required

Assets Available) in 4QFY06.” After much convincing by Steve Wingfield, a Boeing business

criminal conviction for violation of interests as the Air Forces Principal Deputy Assistant Secretary for Acquisition. The GAO could not rule out Ms. Druyun’s influence on getting the SDB-II requirements deferred inappropriately as she was setting up jobs for her daughter and son-in-law at Boeing.

110 Bill Wise interview.111 James McClendon, Colonel (Retired), USAF, “Small Diameter Bomb, Briefing to OSD

General Counsel,” December 2003, slide 29. Colonel McClendon was the Program Director, Direct Attack, Air Armament Center, Eglin AFB.

112 Ibid, slide 5.113 Judy Stokley, Deputy for Acquisition, Air Armament Center, Memorandum for the

Record (MFR) on SDB Increment I Program Performance to Dr. Lamartin, presiding officer of the Overarching Integrated Product Team (OIPT) for consideration of SDB to LRIP, April 2005.

114 Ibid.115 Colonel James McClendon, USAF (Retired), interview on March 10, 2008. Colonel

McClendon was the USAF SDB Program Manager, Air Armament Center, Eglin AFB from CAD to summer 2006.

116 Stokley MFR.117 Dan Jaspering interview on March 6, 2008. He was Boeing’s first SDB PM from 2001 to

2006. Mr. Jaspering currently serves as Boeing’s Director of Direct Attack, Weapons Division.118 James Brooks interview on March 7, 2008. He was the SDB Chief Engineer until he took

over as Boeing’s SDB Program Manager in Summer 2007.119 Ibid.120 Bill Wise interview.121 Ibid.122 McClendon, “SDB, Briefing to OSD General Counsel,” Slide 13.123 MBDA was created in 2001 following the merger of Europe’s major businesses in the

sector: Matra BAe Dynamics in the UK and France, Aerospatiale Missiles in France, the missiles activities of Alenia Marconi Systems in the UK and Italy and EADS/LFK in Germany. MBDA is jointly owned by BAE Systems (37.5%), EADS (37.5%) and Finmeccanica (25%). More information can be found on-line, Internet, from http://www.mbda-systems.com/mbda/site/FOScripts/siteFO_contenu.php?lang=EN&noeu_id=33.

124 http://www.sargentfletcher.com/125 Jaspering interview.

126 ? McClendon interview. Verified by interview with Mike Wasylczk on March 17, 2008. He was the lead SDB airframe engineer. Mr. Wasylczk currently serves as Boeing’s Focused Lethality Munition PM. This “hammering” incident was right after the 2003 Superbowl

99

development manager, Laser JDAM’s champion was Lieutenant General (Lt Gen) Walter

Buchanan, Commander, U.S. Central Command (CENTCOM) Air Forces. Lt Gen Buchanan’s

priority was technical performance against a 40 mile per hour target. Likewise, the FLM Joint

Capability Technology Demonstration’s champion was the Secretary of the Air Force, Michael

Wynne. Although CSAF Wynne was already convinced technically that FLM was achievable, it

commercial that featured a trained monkey helping drivers out of sticky situations at the push of an On-Star-like button.

127 McClendon interview.128 McClendon, SAMP, p. 6.129 Stokley MFR.130 McClendon interview.131 Stokley MFR.132 McClendon, SAMP, p. 11.133 Judy Stokley Memorandum.

134 Being News Release, “Boeing selected for small diameter bomb contract,” August 28, 2003, on-line, Internet, from http://www.boeing.com/news/releases/2003/q3/nr_030828o.html

135 McClendon interview.136 Jaspering interview.137 McClendon, “SDB, Briefing to OSD General Counsel,” slide 30.138 Stokley MFR.139 McClendon and Wise interviews.140 Jaspering interview.141 Wise interview.142 McClendon, SAMP, p. 8.143 Bnet, “Interview with Marvin Sambur” Assistant Secretary of the Air Force: Pathfinder

Program Testing the Potential of Spiral Arms Development,” July 2003, on-line, Internet, from http://findarticles.com/p/articles/mi_m0KAA/is_4_32/ai_111202132/pg_4.

144 Captain Louis Roscetta, “Small Diameter Bomb Certified for Operational Test and Evaluation,” Air Force Link, September 30, 2005, on-line, Internet, from http://www.af.mil/news/story.asp?storyID=123011981

145 McClendon interview.146 “Small Diameter Bomb I Delivered Ahead of Schedule,” Air Force Link, September 6,

2006, on-line, Internet, from http://www.af.mil/news/story.asp?id=123026454147 Technical Sergeant Russell Wicke, “ACC Declares IOC for Small Diameter Bomb,” Air

Combat Command, October 5, 2006, on-line, Internet, from http://www.acc.af.mil/news/story.asp?id=123028489.

148 Marguerite Ozburn, “Boeing Receives First SDB Full-Rate Production Order from U.S. Air Force,” GlobalSecurity.org, Dec 19, 2006, on-line, Internet, from http://www.globalsecurity.Org/military/library/news/2006/12/mil-061219-boeing01.htm.

149 Marguerite Ozburn, “Boeing SDB team receives William J. Perry Award,” Boeing News Release, February 2, 2007, on-line, Internet, from http://www.boeing.com/ids/news/2007/q1/

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took the Air Force Research Laboratory, the Systems Project Office, and Mike Wasylczyk,

Boeing’s FLM PM, to drive the schedule to deliver residual weapons early to the warfighter.

#2: Choose “glass breakers” to lead development programs.

Although Collins does not specifically call Level-5 leaders “glass breakers,” there are

similarities to the hedgehog concept—having faith in a philosophy and empowering the team.

070202a_nr.html.150 Tim Deaton, “Boeing Celebrates Small Diameter Bomb Delivery Milestones,” Boeing

News Release, February 28, 2008, on-line, Internet, from http://www.boeing.com/news/releases/2008/q1/080228a_nr.html. Colonel Richard Justice, commander of the 918th Armament Systems Group at Eglin AFB, gave the “20 percent under cost” figure during his comments at the 1000th Delivery Ceremony at Boeing weapons, Saint Charles, MO, on February 28, 2008.

151 McClendon, “SDB, Briefing to OSD General Counsel,” slide 28.152 Deaton.153 Brooks interview.154 Jaspering interview.155 Lieutenant Colonel Chris Baird interview on February 28, 2008. He is the commander of

the 681st Armament Systems Squadron for SDB I.157 Major General Eidsuane, “Air Armament 2020: a PEO Perspective,” at the Air Armament

Symposium, Fort Walton Beach, Florida, October 11, 2007, slide 9, on-line, Internet, available from http://www.ndiagulfcoast.com/events/archive/33rd_symposium/day1/06_Gen%20Eidsaune %20Final%20NDIA%209%20Oct%2007v4.pdf.

158 Marguerite Ozburn, “Laser JDAM Backgrounder,” July 5, 2006, on-line, Internet, available from www.boeing.com/news/feature/farnborough06/assets/bgs/Laser%20JDAM.pdf.

159 Circular error probable (CEP) is a simple measure of a weapon system's precision. It is defined as the radius of a circle into which weapons will land at least 50% of the time.

160 Lieutenant Colonel Steve Wingfield, USAF (Retired), interview on March 19, 2008. He was a F-4E and F-15E Air Force Weapons Systems Officer and Requirements Staff officer at Air Combat Command. Mr. Wingfield currently serves as a Boeing Manager of JDAM Business Development.

161 “For the test, a Laser JDAM was released from a U.S Air Force F-16 flying at 20,000 feet approximately four miles from an unmanned truck moving at 15 miles per hour. A second F-16 trailing the test aircraft targeted the truck with a laser. The inert JDAM tracked the laser to the target and scored a direct hit on the truck.” Chris Haddox and Bill Barksdale, “Boeing Laser JDAM Hits Moving Target in Flight Test,” Boeing News Release, May 24, 2005, on-line, Internet, available from http://www.boeing.com/ids/news/2005/q2/nr_050524n.html.

162 Circular error probable (CEP) is a simple measure of a weapon system's precision. It is defined as the radius of a circle into which weapons will land at least 50% of the time.

163 Marguerite Ozburn and Chris Haddox, “Boeing Successful in Second Laser JDAM Moving Target Test,” Boeing News Release, September 18, 2006, on-line, Internet, available from http://www.boeing.com/defense-space/missiles/jdam/news/2006/q3/060918a_nr.html.

164 Wingfield interview.

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On both sides of the aisle, the military’s and Boeing’s program offices did not choose “glass

breakers”, they chose change agents for their PMs. Those particular PMs rewrote the rule book

by doing what was best for the warfighter and not their career. A case in point--where are these

folks now? Maybe one is infamous. What is not said in a 2007 Management Journal about

change agents say they tend to “get buried” after the organization is transformed.189

165 Wingfield interview.166 Marguerite Ozburn, “Boeing Awarded Laser JDAM Contract,” Boeing News Release,

June 11, 2007, on-line, Internet, available from http://www.boeing.com/ids/news/2007/q2/070611c_nr.html.

167 Statement of Bruce W. Clingman, U.S. Navy, Director of Warfare, before the Subcommittee on Air and Land Forces of the House Armed Services Committee on FY 2008 Navy TACAIR Programs, March 22, 2007, p.6, on-line, Internet, available from http://armedservices.house.gov/pdfs/JointALSPEF032207/Clingman_Testimony032207.pdf.

168 Waldine Messmore, Captain, USAF, 681st Armament Systems Squadron, Eglin AFB, “Talking Paper on FLM JCTD,” November 30, 2007. Aerojet is a world-recognized aerospace and defense leader serving armament markets since 1942. More information can be found on-line, Internet, available from http://www.aerojet.com/home.php.

169 Chris Haddox and Marguerite Ozburn, “Boeing Wins $27 Million SDB-I Focused Lethality Munition Contract,” Boeing News Release, September 27, 2006, on-line, Internet, available from http://boeing.com/news/releases/2006/q3/060927b_nr.html.

170 John Wilcox, Assistant Deputy Secretary of Defense for Precision Engagement and Director of JCTD Programs, “JCTD Program Practical Operating Guidelines (POG), Version 1.0, Narrative Description,” February 20, 2008, on-line, Internet, available from http://www.acq. osd.mil/ jctd/POG/JCTD%20POG%20Narrative%20Description %20v%201.0.doc.

171 Wilcox, Air Armament Symposium, Slide 5. To find out the latest in active JCTDs, go to the JCTD Homepage, on-line, Internet, available from http://www.acq.osd.mil/jctd/index.htm.

172 Wilcox, POG. See footnote 14.173 James Parslow, Captain, USAF, interview on April 14, 2008. He was the very first

USAF Focused Lethality Munition Program Manager in 2006.174 Marguerite Ozburn, “Boeing Awarded $17.7 Million SDB-I focused Lethality Munition

Contract,” Boeing News Release, March 22, 2007, on-line, Internet, available from http://www.boeing.com/news/releases/2007/q1/070322a_nr.html.

175 Tim Deaton, “Boeing Celebrates Small Diameter Bomb Delivery Milestones,” Boeing News Now, February 28, 2008, on-line, Internet, available from http://www.boeing.com/news/releases/2008/q1/080228a_nr.html.

176 Mike Wasylczyk interview on March 19, 2008. He currently serves as Boeing’s Program Manager for the Focused Lethality Munition.

177 See Chapter 4 about Mike Wasylczk’s testing methods being compared to the 2003 Superbowl commercial that featured a trained monkey helping drivers out of sticky situations at the push of an On-Star-like button.

178 Messmore “Talking Paper on FLM JCTD.”

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As the JPO JDAM PM, Mr. Little was a hedgehog about using commercial practices and

parts that met commercial specifications to get the JDAM under the expected Average Unit

Procurement Price (AUPP) set by General McPeak. Mr. Little used the DAPP license to

practically self approve waivers to Federal Acquisition Regulations (FARs) and Truth in

Negotiation Act (TINA) to reduce documentation, overall level of effort, and give contractors

Class II configuration control. Mr. Little comes closest to being infamous as the National

Aeronautics and Space Administration’s Academy Sharing Knowledge describes him as “a

nonconformist, even a renegade, and to some people, it's downright amazing he has thrived for as

long as he has working for the government, let alone the DoD.”190 After JDAM, he ran the Joint

Air to Surface Standoff Missile program. Following his retirement from the Missile Defense

Agency, he testified in front of the House Armed Services Committee about DoD Acquisition

Reform no less. Mr. Little said:

The most important factor in deciding how much oversight and review a program should have is who the program manager is. In short, my job (as a program manager) was not to manage the program, but to lead it. …I have had much more experience than my peers. Program Management will always be as much art as it is science. …I was unwilling to commit to concrete cost, schedule, and performance until I had enough information to do so. …(in regards to JDAM) We managed cost as if it were a technical requirement.191

179 Wilcox, Air Armament Symposium, Slide 5.180 Wasylczyk interview.181 “Raytheon Awarded 144M Small Diameter Bomb II Risk Reduction Contract,”

Spacewar, April 24, 2006, on-line, Internet, available from http://www.spacewar.com/reports/Raytheon_Awarded_144M_Small_Diamter_Bomb_II_Risk_Reduction_Contract.html.

182 Marguerite Ozburn, “SDB-II Backgrounder,” May 2006, on-line, Internet, available from www.boeing.com/news/feature/farnborough06/assets/bgs/SDB%20II.pdf.

183 Government Accountability Office (GAO) Report B-295402, February 18, 2005, p. 2-8, and p. 15, on-line, Internet, available from http://www.gao.gov/decisions/bidpro/295402.pdf.

184 Jason Denney, Lieutenant Colonel, USAF, interview on October 28, 2007. He is the SDB-II PM out of the 682nd Armament Systems Squadron.

185 For more information on the Joint Air-to-Ground Missile (JAGM), on-line, Internet, available from http://www.raytheon.com/media/ausa07/docs/factsheets/jagm.pdf.

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Even Lt Gen Ronald Kadish, Air Force (retired), who is known for saving the troubled C-17

program in the mid 1990s, claimed that “the most important quality in a PM is leadership.”192

On the contractor side, Charlie Dillow, McDonnell Douglas’ (MD’s) JDAM PM, was a

change agent in guiding the integrated product teams (IPTs) to design in affordability as opposed

to a Cadillac of a weapon. There may not as many publicized articles on Charlie Dillow as there

are on Mr. Little, but Mr. Dillow lives on a comfortable retirement provided by Boeing. Carl

Avila, who followed Mr. Dillow, did the unexpected and compromised a year long dispute

instead of going to court with his Systems Program Office (SPO) counterpart over who was

going to pay for a disputed requirements change on JDAM. After his PM tour, Mr. Avila

became Boeing’s Advanced Weapons PM. Lt Gen Kadish lived through a similar event when he

compromised with Boeing’s Don Koslowski over $2.5 billion in claims over the C-17

program.193

Another example of a leader being innovative within the framework of the DoD

acquisition process was Col McClendon, the SPO SDB PM. He believed he had the license as a

Pathfinder program to rewrite the DoD approved rules in the Single Acquisition Management

Plan (SAMP). The SAMP allowed deviation from the Berry Amendment, FARs, and from

certain Defense, Air Force, and Air Force Material Command regulations. The SAMP also

encouraged commercial practices and purposely avoided use of military standards for testing.

After meeting “RAA in 4QFY06,” Col McClendon retired knowing he would not make

Brigadier General. On the other side of the aisle, Dan Jaspering, the Boeing SDB PM,

implemented his “Go-Fast” plan with a hand-picked team. He led SDB to full rate production

and was promoted to Director of Direct Attack, responsible for all JDAM and SDB programs.

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If there were not any glass breakers in the derivative programs, there were certainly a couple

of door beaters. Steve Wingfield beat on many doors from the warfighters to Lt Gen Buchanan

to convince them of the need for Laser JDAMs. Mike Wasylczyk, known for his Trunk Monkey

Certified testing methods in SDB-I, brought FLM from a JCTD to a Milestone C decision for

low rate initial production (LRIP). For SDB-II, it is too early to judge who will step up and lead

that program to the next successful level.

Teaming and the Soft Skills

Collins’ concept “putting the right people on the right bus” is all about building teams fro

success. He suggests leaders encourage and listen to ideas from anyone chosen to be on the team

who share similar values and philosophies, but who might have a different perspective or

approach to help the team reach the same goal. Once the team is formed and trained, however,

the team must be empowered to make decisions and monitored only so that decisions are made in

a timely manner.

#3: Build inclusive IPTs at all levels and empower them.

The JDAM and SDB programs had integrated product teams (IPTs) that consisted of

military program office, prime contractor, and supplier personnel. Each program has numerous

IPTs, indeed, as many teams as subsystems in each weapon. As Lt Gen Kadish said, “The most

important way to stay funded as an acquisition program is information.”194 Communicating up

and down the chain of command may be natural, but as organizations become more flat and

matrixed, communicating across functional stovepipes is a positive synergy in organizational

behavior that is just starting to be realized. Lt Gen Kadish stated again that, “95 percent of all

problems in any program derive from some form of poor communication.”195 Both programs had

IPTs during the competition phase and each competing company had at least one military

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program office “helper” who became “native” in that a “helper” was supposed to assist their

contractor understand the requirements and help them to win! Once the “rolling down-selection”

was made, the JPO and SPO assisted the IPTs in design, flight testing, configuration changes,

and trouble shooting. The only caution with IPTs is to not let them get too big or immobile due

to bureaucratic inertia. Eventually, PMs have to make the call and avoid analysis paralysis.

The JDAM program formed working IPTs that included test, logistic, contracts, and finance

functionals from the Office of the Secretary of Defense (OSD) to draft, review, and approve a

SAMP that validated Mr. Little’s FAR and TINA waivers. Eventually the test IPTs formed the

concept of seamless verification that brought both developmental and operational test personnel

to the table to plan and leverage off each other. Furthermore, JDAM formed executive IPTs

made up of supplier vice-presidents to resolve any issues and present one voice for the working

IPTs. Besides forming these usual IPTs, the SDB program formed temporary IPTs in the

Pentagon, called Camp McClendon in honor of Col McClendon, for the sole purpose of

educating staffers right before critical Milestone decisions. Well into successful production,

JDAM and SDB continued the IPT construct.

In terms of empowerment, both of the JDAM competing company’s design IPTs eventually

came to the realization that government furnished equipment (GFE) was less cost effective than

using COTS. Martin-Marietta (MM), in particular, annoyed some at the Navy for using a

commercially proposed injection molded fin tail kit instead of standard metal fin tail kit. Terry

Little allowed MM to override the Navy’s objection in order to lower AUPP. Likewise, Col

McClendon supported the creative Trunk Monkey Certified testing methods of the SDB test IPT.

#4: Motivate, trust, verify, coach, and reward suppliers.

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DoD and Congress certainly have enough checks and balances over the acquisition system

of systems. Although this recommendation does not endorse more oversight from DoD over

prime contractors, it is critical with most prime contractors acting as systems integrators to verify

and coach their suppliers to success.

To motivate and build trust among suppliers, the JDAM MD executive IPTs decided that

each company must sign non-disclosure agreements with one another. This inspired Rockwell-

Collins to step up to requalify a Global Positioning System (GPS) antenna for MD’s GPS

receiver motivated the rest of the MD supply chain to rally around reducing MD’s AUPP.

Boeing took a particular interest in Sargent Fletcher (SFI) to build the Bomb Rack Unit

(BRU)-61. In fact, Boeing sold the BRU-61 design rights to SFI. When SFI was struggling with

their sub-suppliers, Boeing and the SPO mentored and provided coaching to get them back on

track. Boeing values their suppliers, so they motivate them with a tiered system of gold, silver,

and bronze ratings which incorporate perks like multi-year and non-compete contracts.

Strategy and Business Savviness

Although the aerospace defense industry averages only single digit margins, many in the

military perceive traditional contractors as greedy. When building high volume and/or highly

complex systems, the cost becomes staggering. However, instead of building “Cadillac’s,”

traditional aerospace defense contractors have evolved into building the best value product. To

make a return on share holders’ investments, companies have become “hedgehogs” as systems

integrators to save costs in order to be competitive. But who should the government choose?

#5: Keep improving competition transparency.

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The source selection process is very difficult and DoD tries to be fair and impartial to avoid

any protests to the Government Accountability Organization. Both JDAM and SDB went

through rigorous and demanding requirements to conduct fair and open competitions. JDAM

instituted a rolling down-select process that allowed interim feedbacks to the each competing

contractor and allowed them to improve. Military program office “helpers” were assigned to

each contractor as a liaison to help their team win. SDB-I took the rolling down-select one step

further and emphasized proof and not promises. In SDB-II, rolling down-selects evolved into a

risk reduction competition. In rolling down-selects, the government can terminate a competitor,

but in a risk reduction competition, both competitors compete until a source selection is made,

preferably choosing between a couple of prototypes and proven hardware. Lt Gen Kadish touts:

The single most powerful determinant of success in any program is how good your contractor is. Choose wisely, then work hard to help them succeed. In contrast, a good SPO and a weak contractor will make life tough. On the contrary, a good contractor can make a mediocre SPO look like heroes.”196

#6: Embrace price-based acquisition, incentivize behavior, and insure with warranties.

After Boeing won the initial JDAM and SDB production contracts, securing subsequent

contracts was not automatic for Boeing. The company faced scrutiny and had to continually

convince the acquisition community that they were not making an unfair amount of money

(Boeing’s reputation suffered from the convictions of Mike Sears, a Boeing executive, and

Darlene Druyun, the Air Force’s top acquisition official in 2004). Boeing’s strategy was like any

other commercial practice. They offered an initially low AUPP and a relatively flat procurement

price commitment curve (PPCC) for the upcoming years. In return to accepting the offer, the

military program offices wanted a warranty on the weapons. This made Boeing design in

reliability from the start, but it also incentivized Boeing to avoid obsolescence and lower cost

through planned technical insertions. Over time, this is how Boeing will recoup their

108

investments. If Boeing had not met the promised PPCC, penalties would have been administered

that began with more oversight and ended with the loss of configuration control.

Besides the carrot and stick incentives for meeting PPCC, other incentives were cleverly put

in place for derivative contracts like the Mark (Mk)-82 JDAM, SDB, and FLM. Award fees

became more like insurance and behavior outcomes were incentivized. There were award fees

for delivering the new Mk-82 JDAM on time and under cost, for keeping the SDB configuration

stable, and for FLM to conduct flight tests on time—all resulting in successful outcomes and

increased profit for Boeing shareholders. If defensive contractors failed to make money, those in

the industry would close or move to another line of work. The government needs to recognize

that firms like Boeing have shareholders who expect to make profits. Examining a firm’s profit

margins offers one method to evaluate how much the company makes—the aerospace defense

industry happens to have the lowest margins in the industry as represented in Figure 6.1. In

relation to fees, the government should simply give a reasonable opportunity to earn the standard

15 percent restaurant tip!

109

21

7.0 6.33.5

5.4 5.3

GD LM RTN NG BA

Net Earnings as % of RevenueNet Earnings as % of RevenueIndustry ComparisonsIndustry Comparisons

Sources: Fortune, Yahoo Financials and Company ReportsSources: Fortune, Yahoo Financials and Company Reports

40

32 31

26

21

Pfizer Qcom BOA Msoft J&J

Other IndustriesYr 2006 Yr 2006

A&D Sector

Figure 6.1 Industry Margin Comparisons197

Discipline and Execution

Unattainable requirements and a simple lack of execution are two major reasons defense

acquisition programs become Nunn-McCurdy violations. . Collins argues that companies should

drive home their hedgehog philosophies; they must impart a culture of fanatical discipline. In

the end it comes down to organizations maintaining their “Wall”. If programs employed Collins’

suggestion, violations may be avoided.

#7: Limit KPPs to avoid requirements creep.

Steve Goo, Boeing Vice-President for Program Management, once said that programs

suffering from requirements creep, “It usually starts with the Request for Proposal, the

110

requirements are usually understated. If the services wrote what they actually needed, they

would never be able to afford it.”198

JDAM and SDB had relatively few Key Performance Parameters (KPPs). They let the IPTs

figure out how to accomplish them. Other technical parameters were left open to negotiation in

order to meet price, in the case of JDAM, and schedule, in the case of SDB. In fact, to meet

schedule SDB gave award fees to Boeing to keep the first three production lot configurations the

same in order to meet schedule. However, modification to SDB parts did take place for actual

cost and performance improvement, but with Class-II change authority,

#8: Maintain a disciplined battle rhythm and your organizational wall!

It could be well argued that Mr. Little, the original JPO JDAM PM, took a fanatical,

disciplined approach when applying commercial practices to the basic strategy of procuring an

affordable weapons tail kit. In turn, Mr. Dillow, Boeing’s first JDAM PM, empowered his IPTs

and passed down cost objectives to each of them —and held them to it. The discipline of their

strategies worked but the question became whether they were repeatable. The answer to that

question become evident during the SDB program when Mr. Jaspering, Boeing’s first SDB PM,

established a consistent battle rhythm for scheduled meetings. At that point the repeatability of

the strategy was recognized as a best practice. If not to accomplish a specific task, the fact that,

at first, forced communication evolved into natural communication which in turn built trust and

in the end formed relationships, the model worked. When accomplishing a specific task, Mr.

Jaspering made sure the request was within scope of the project. To end this series of

recommendations in a most appropriate way, below is a discourse on how to protect an

organization’s wall:

Acquisition programs fail because cost, schedule, and performance expectations were not met, especially in the development phase. PMs need to know if they are

111

a staff based or task based organization. Most contractor acquisition organizations are tasked based evident by IPTs and their military counterparts are more staff based. If program managers realize that their organizations are indeed tasked based, then they need to understand the difficulty level and the margin available in their programs, instill disciplined systems engineering, and never, ever manage a task based organization as if it were a staff based. How should program managers protect their wall, or in other words, protect their organizations from unplanned or unfunded tasks? Keep the team focused on executing the plan faster and better. Prevent unplanned tasks from coming through the wall. Avoid the urge to squeeze in unplanned tasks. If unplanned tasks must come through the wall to help out the warfighter, simply require a Budget Change Request to accept new funding, reallocate management reserve, or delete other planned work …OR consciously overrun.199

Translation for Bigger Programs

With the zeal to build network centric systems to conduct warfare, one of the arguments

against the previous eight recommendations might be that apples to oranges cannot be compared

—i.e. the scope of the project and the size of the organization. Developing 25,000 to 180,000

weapons at $15,000 to $1 million per is much different than producing 200-4,000 tanks or

aircraft at $1 to $100 million per, yet most of the recommendations are repeatable. Having a

champion, picking a priority, selecting the right PM, conducting transparent competitions, and

embracing price-based acquisition should be applicable to very large programs. On the other

hand, building IPTs in a very large program runs the risk of becoming yet another unmanageable

bureaucracy. Furthermore, large programs like the Future Combat System (FCS) and the Joint

Strike Fighter (JSF) have so many KPPs to meet; it is a wonder that any can be met. FCS has so

mnay products and the JSF had to satisfy requirements from three separate services in almost

three different operating environments. Finally, in an effort to help any acquisition program

determine what type of organization it is, Figure 6.1 offers an acquisition comparison spectrum.

112

Figure 6.1 Acquisition Spectrum Comparison

Conclusion

In summary, acquisition programs trying to transform need support from the highest levels.

This champion must be willing to stick out his or her neck to logically pick a priority the

program must focus on. Furthermore, the champion needs to be comfortable to approve a PM

who is a strong decision maker and who stands more for service than about self. The PM has to

throw out the rule book in the most overt way, and ask for any and every waiver that does not

broche on fraud and waste or violate ethics, to get the job done. This same “glass breaking” PM

also needs to have a softer side in building and empowering IPTs that believe in what he or she

believes, yet avoid getting bogged down. Choose suppliers willing to build long term

partnerships, but never assume everything will always be perfect once you do—motivate, trust,

verify, coach, reward. For source selection, transparency offers feedback and competition of

prototypes buys down risk when transitioning to production. Allow defense contractors to make

113

a fair buck--treat incentives as tips for desired behavior. Although spiral development is useful,

make sure the basic requirements do not creep. Not knowing the desired scope of the project

kills expectations and eventually the program itself. Finally, successful acquisition programs

come down to contractor execution. They must take a prodding approach, maintain a disciplined

battle rhythm of meetings, test early and often, and avoid being distracted when unplanned

requests are attacking their organizational wall.

114

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Walley, Lieutenant Colonel Richard, USAF (Retired). Deputy Director of the 918th Armament Systems Group. He was the JPO JDAM Deputy PM and the JPO Acting System Program Director for JDAM in 1999. Interviewed by author, April 29, 2008.

Wasylczk, Mike. The Boeing Company’s Focused Lethality Munition PM. He was the lead SDB-I airframe engineer. Interviewed by author, March 19, 2008.

Wingfield, Lieutenant Colonel Steve. USAF (Retired). The Boeing Company’s Manager of JDAM Business Development. He was an F-4E and F-15E Air Force Weapons Systems Officer and Requirements Staff Officer at Air Combat Command. Interviewed by author, March 19, 2008.

Wise, Bill. Senior Acquisition Engineer contractor for Sverdrup Technology working working for the 682nd Armament Systems Squadron as the Boeing “helper” for SDB-II. He was the SPO’s designated Boeing “helper” during SDB-I CAD. Interviewed by author, February 28, 2008.

ManualsChairman of the Joint Chiefs of Staff Manual (CJCSM) 3170.01C, “Operation of the Joint

Capabilities Integration and Development System,” Joint Interoperability Test Command, 1 May 2007. On-line. Internet, May 3, 2008. Available from http://jitc.fhu.disa.mil/jitc_dri/pdfs/3170_01c.pdf.

MemorandumsStokley, Judy. Deputy for Acquisition, Air Armament Center, Memorandum for the Record

(MFR) on SDB Increment I Program Performance to Dr. Lamartin, presiding officer of the Overarching Integrated Product Team (OIPT) for consideration of SDB to LRIP, April 2005. Copy on file.

Young, John. Acting Under SECDEF for Acquisition, Memorandum for Secretaries of the Military Departments, Chairman of the Joint Chiefs of Staff, Commander of Special Operations Command, Directors of the Defense Agencies, and Component (Service) Acquisition Executives, “Prototyping and Competition,” Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) Knowledge Sharing System (AKSS), September 19, 2007. On-line. Internet, May 3, 2008. Available from https://akss.dau.mil/Documents/ Policy/ 20070921%20Prototyping%20and%20 Competition%20ATL.pdf.

Papers / Articles“Boeing selected for small diameter bomb contract,” Being News Release, August 28, 2003,

On-line. Internet, May 4, 2008. Available from http://www.boeing.com/news/releases/2003/q3/nr_030828o.html.

“JDAM: a GPS-INS Add-on Adds Accuracy to Airstrikes,” Defense Industry Daily, January 14, 2008. On-line. Internet, May 4, 2008. Available from http://www.defenseindustrydaily.com/ jdam-a-gpsins-addon-adds-accuracy-to-airstrikes-03313/.

“JDAM History,” GlobalSecurity.org, April 27, 2005, On-line. Internet, May 4, 2008. Available from http://www.globalsecurity.org/military/ systems/munitions/jdam-history.htm

“Joint Direct Attack Munition (JDAM), GBU-29, GBU-30, GBU-31, GBU-32,” Federation of American Scientists, February 28, 2008. On-line. Internet, May 4, 2008. Available from http://www.fas.org/man/dod-101/sys/smart/jdam.htm.

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“Raytheon Awarded 144M Small Diameter Bomb II Risk Reduction Contract,” Spacewar, April 24, 2006. On-line. Internet, May 5, 2008. Available from http://www.spacewar.com/reports/Raytheon_Awarded_144M_Small_Diamter_Bomb_II_Risk_Reduction_Contract.html.

“Small Diameter Bomb I Delivered Ahead of Schedule,” Air Force Link, September 6, 2006, On-line. Internet, May 4, 2008. Available from http://www.af.mil/news/story.asp?id=123026454.

Barksdale, Bill. “The Boeing Company JDAM Team Receives William J. Perry Award,” Boeing News Release, January 22, 2004. On-line. Internet, May 4, 2008. Available from http://www.The Boeing Company.com/ids/news/ 2004/q1/nr_040122m.html .

Deaton, Tim. “Boeing Celebrates Small Diameter Bomb Delivery Milestones,” Boeing News Release, February 28, 2008. On-line. Internet, May 4, 2008. Available from http://www.boeing.com/news/releases/ 2008/q1/080228a_nr.html .

Haddox, Chris and Barksdale, Bill. “Boeing Laser JDAM Hits Moving Target in Flight Test,” Boeing News Release, May 24, 2005, On-line, Internet, May 5, 2008, Available from http://www.boeing.com/ids/news/2005/q2/nr_050524n.html.

Haddox, Chris and Ozburn, Marguerite. “Boeing Wins $27 Million SDB-I Focused Lethality Munition Contract,” Boeing News Release, September 27, 2006. On-line. Internet, May 5, 2008. Available from http://boeing.com/news/releases/2006/q3/060927b_nr.html.

Ingols,Cynthia and Brem, Lisa. “Implementing Acquisition Reform, A Case Study on Joint Attack Munitions,” Defense Acquisition University, July 1998. On-line. Internet, May 4, 2008. Available from www.dau.mil/pubs/pm/pmpdf98/j-harman.pdf.

Loeb, Vernon. “Bursts of Brilliance,” The Washington Post, found at The Boeing Company’s News Clips, December 15, 2002. On-line. Internet, May 4, 2008, Available from http://The Boeing Companynews.web.The Boeing Company.com/archive/12_02/121602/ 021216p_in_ hightech.html.

Myers, Dominque. “Acquisition Reform-Inside the Silver Bullet, A Comparative Analysis-JDAM versus F-22,” Acquisition Review Quarterly, Fall 2002. On-line. Internet, May 4, 2008. Available from http://www.dau.mil/pubs/arq/arq2002.asp.

Ozburn, Marguerite. “Boeing Awarded $17.7 Million SDB-I focused Lethality Munition Contract,” Boeing News Release, March 22, 2007. On-line. Internet, May 5, 2008. Available from http://www.boeing.com/news/releases/2007/q1/070322a_nr.html.

Ozburn, Marguerite. “Boeing Awarded Laser JDAM Contract,” Boeing News Release, June 11, 2007. On-line. Internet, May 5, 2008, Available from http://www.boeing.com/ids/news/2007/q2/070611c_nr.html.

Ozburn, Marguerite. “Boeing Receives First SDB Full-Rate Production Order from U.S. Air Force,” GlobalSecurity.org, Dec 19, 2006. On-line. Internet, May 4, 2008. Available from http://www.globalsecurity .org/military/library/news/2006/12/mil-061219-boeing01.htm .

Ozburn, Marguerite. “Boeing SDB team receives William J. Perry Award,” Boeing News Release, February 2, 2007. On-line. Internet, May 4, 2008. Available from http://www.boeing.com/ids/news/2007/q1/ 070202a_nr.html .

Ozburn, Marguerite and Haddox, Chris. “Boeing Successful in Second Laser JDAM Moving Target Test,” Boeing News Release, September 18, 2006. On-line. Internet, May 5, 2008. Available from http://www.boeing.com/defense-space/missiles/jdam/news/2006/q3/060918a_nr.html.

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Ozburn,Marguerite. “Laser JDAM Backgrounder,” Boeing News Release, July 5, 2006. On-line. Internet, May 5, 2008. Available from www.boeing.com/news/feature/farnborough06/assets/bgs/Laser%20JDAM.pdf.

Ozburn, Marguerite. “Small Diameter Bomb Increment I Backgrounder,” Boeing Website, March 2007. On-line. Internet, May 4, 2008. Available from http://www.boeing.com/defense-space/missiles/sdb/docs/SDB_overview.pdf.

Ozburn, Marguerite. “Small Diameter Bomb Increment II Backgrounder,” Boeing Website, May 2006. On-line. Internet, May 5, 2008. Available from www.boeing.com/news/feature/farnborough06/assets/bgs/SDB%20II.pdf.

Parsch, Andreas. Directory of U.S. Military Rockets and Missiles, Appendix 5: Guided Bombs, SDB, December 19, 2006. On-line. Internet, May 4, 2008. Available from http://www.designation-systems.net/dusrm/app5/sdb.html.

Roscetta, Captain Louis. USAF. “Small Diameter Bomb Certified for Operational Test and Evaluation,” Air Force Link, September 30, 2005. On-line. Internet, May 4, 2008. Available from http://www.af.mil/news/story.asp?storyID=123011981.

Sherman, W. Scott and Garland, Gail E. “Where to Bury the Survivors? Exploring Possible Ex Post Effects of Resistance to Change,” S.A.M. Advanced Management Journal. Cincinnati: Winter 2007. Vol. 72, Iss. 1. On-line, Internet, May 5, 2008. Available from www.goliath. e cn e xt.com/coms2/gi_0199-6528113/ W h e r e -to-bury-th e -survivors.html .

Simonsen, Erik and Algoratti, Bob. “Boeing Awarded Small Diameter Bomb Contract,” Boeing News Release, October 3, 2001. On-line. Internet, May 4, 2008. Available from http://www.boeing.com/defense-space/missiles/sdb/news/2001/q4/nr_011003b.html.

Turk, Wayne. “Seven Deadly Sins of Program Management,” Defense AT&L, January 1, 2006. On-line. Internet, May 3, 2008. Available from http://www.dau.mil/pubs/dam/01_02_2006/tur_jf06.pdf.

Valof, Joseph. “Government Contracts, Federal Protests Bids,” The Association of Independent General Counsel (AIGC), no date. On-line. Internet, May 3, 2008. Available from http://www.aigclaw.org/tic73.html.

Wicke, Technical Sergeant Russell. USAF. “ACC Declares IOC for Small Diameter Bomb,” Air Combat Command, October 5, 2006. On-line. Internet, May 4, 2008. Available from http://www.acc.af.mil/news/story.asp?id=123028489.

Witek, Lieutenant Colonel Roger, USAF, Secretary of Defense Corporate Fellow, “The Wall Manifesto for Acquisition Program Management Organizations,” Air University Quick Look, Air University Research Information Management System, January 15, 2008. On-line, Internet, May 5, 2008. Available from https://www .afresearch.org/skins/RIMS/home.aspx .

Presentations / Speeches / TestimonyClingman, Bruce W. U.S. Navy, Director of Warfare, before the Subcommittee on Air and Land

Forces of the House Armed Services Committee on FY 2008 Navy TACAIR Programs, March 22, 2007, On-line, Internet, May 5, 2008. Available from http://armedservices.house.gov/pdfs/JointALSPEF032207/Clingman_Testimony032207.pdf.

Eidsuane, David. Major General, USAF. Commander, Air Armament Center. “Air Armament 2020: a PEO Perspective”, Air Armament Symposium, Fort Walton Beach, Florida, National Defense Industrial Association, October 11, 2007. On-line. Internet, May 3, 2008. Available from http://www.ndiagulfcoast.com/events/archive/33rd_symposium.htm.

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Little, Terry. Acquisition Advisor to the Director, Missile Defense Agency, before the House Armed Services Committee regarding DoD Acquisition Reform, March 29, 2006. On-line. Internet, May 5, 2008. Available from http://armedservices.house.gov/comdocs/schedules/3-29-06LittleTestimony.pdf.

Payton, Sue. Assistant Secretary of the Air Force for Acquisition, Remarks from the Air Force Defense Strategy Seminar, Washington D.C., Air Force Link, May 17, 2007. On-line. Internet, May 3, 2008. Available from http://www.af.mil/library/ Speeches/speech.asp? id=329.

Payton, Sue. Assistant Secretary of the Air Force for Acquisition, Remarks from the Air Force Fellows Orientation at the Pentagon on August, 1, 2007.

Rutledge, Lynda. Former Miniature Munitions PM in 2001. Currently serving as the Director of the Direct Attack 708th Armament Systems Group at Eglin AFB. “SDB Industry Day Brief”, February 22, 2001.

Stokley, Judy. Deputy Air Force Program Executive Officer for Weapons, “What Do Your Government Customers Want?” Remarks at Boeing’s 2007 Team Leader Training, Saint Louis, MO, November 1, 2007.

Wilcox, John. Assistant Deputy Secretary of Defense for Precision Engagement and Director of JCTD Programs, “Working Urgent Warfighter Solutions Inside the PPBE,” Air Armament Symposium, Fort Walton Beach, Florida, National Defense Industrial Association, October 11, 2007. On-line. Internet, May 5, 2008. Available from http://www.ndiagulfcoast.com/events/archive/33rd_ symposium/ day1/10_Wilcox %20- %20Air%20Armament%20Symposium%202007%20-%20October%2010-11,%202007.pdf.

Reports“Coalition Warfare Management Plan 2009-2010,” for Acquisition, Technology, and Logistics

(AT&L), 2008. On-line. Internet, May 3, 2008. Available from http://www.acq.osd.mil/ic /cwp/FY09%20files/ CW%202009-10%20MgtPln_final%20draft%20clean.doc .

“Selected Acquisition Report (SAR) Summary Tables,” since December 1969, Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L), no date. On-line. Internet, May 3, 2008. Available from http://www.acq.osd.mil/ara/am/sar/index.html.

“The GAO Defense Acquisitions: Assessments of Selected Weapon Programs,” U.S. Government Accountability Office (GAO), March 30, 2007. On-line. Internet, May 3, 2008. Available from http://www.gao.gov/new.items/d07406sp.pdf.

Chadwick, Stephen. “Defense Acquisition: Overview, “Issues, and Options for Congress,” Congressional Research Service Report for Congress, Federation of American Scientists, 20 June 2007. On-line. Internet, May 3, 2008. Available from www.fas.org/sgp/crs/natsec/RL34026.pdf.

Government Accountability Office (GAO) Report B-295402, “Lockheed-Martin Protest,” Government Accountability Office (GAO), February 18, 2005. On-line. Internet, May 5, 2008. Available from http://www.gao.gov/decisions/bidpro/295402.pdf.

Grasso, Valerie Bailey. “Defense Acquisition: Use of Lead Systems Integrators (LSIs) – Background, Oversight, Issues, and Options for Congress,” Congressional Research Service Report, RS22631, Federation of American Scientists, March 26, 2007. On-line. Internet, May 3, 2008. Available from http://www.fas.org/man/crs/index.html.

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Grasso, Valerie Bailey. “The Berry Amendment: Requiring Defense Procurement to Come from Domestic Source,” Congressional Research Service Report for Congress, Federation of American Scientists, 21 April 2005. On-line. Internet, May 3, 2008. Available from http://fas.org/sgp/crs/natsec/RL31236.pdf.

Kadish, Ronald. Lieutenant General, USAF (Retired), Panel President, “Defense Acquisition Performance Assessment Project Report,” Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L), January 2006. On-line. Internet, May 3, 2008. Available from http://www.acq.osd.mil/dapaproject/documents/DAPA-Report-web/DAPA-Report-web-feb21.pdf.

Lorell, Mark A. and Graser, John C. “An Overview of Acquisition Reform Cost Savings Estimates,” RAND Report, MR1329, RAND, 2001. On-line. Internet, May 4, 2008. Available from http://www.rand.org/pubs/monograph_reports/MR1329/MR1329.ch4.pdf.

National Defense Authorization Act for Fiscal Year 2007. Report 109-452 of the Committee on Armed Services, House of Representatives on H.R. 5122, GPO Access, May 5, 2006. On-line. Internet, May 3, 2008. Available from http://a257.g.akamaitech.net/7/257/2433/15May2006/514/www.gpoaccess.goc/serialset/creports/pdf/hr109-452/title8.pdf.

Office of the Inspector General Department of Defense (IGDoD), “Powered-Low Cost Autonomous Attack System Advanced Technology Demonstrator,” Audit Report No. D-2001-106, Office of the Secretary of Defense, May 7, 2001. On-line. Internet, May 4, 2008. Available from www.dodig.osd.mil/Audit/reports/fy01/01-106.pdf.

Pagliano, Gary and O’Rourke, Ronald. “Evolutionary Acquisition and Spiral Development in DoD Programs: Policy Issues for Congress,” Congressional Research Service Report for Congress, University of North Texas Library, May 17, 2006. On-line. Internet, May 3, 2008. Available from http://digital.library.unt.edu/govdocs/crs//data/2006/upl-meta-crs-304/RS21195_2006May17.pdf

President’s Blue Ribbon Commission on Defense Management (commonly known as the Packard Commission), Final Report to the President, “A Quest for Excellence.” National Defense University Library, June 1986, On-line. Internet, May 3, 2008. Available from http://www.ndu.edu/library/pbrc/36ex2.pdf .

Staff StudiesCenter for Strategic and International Studies (CSIS), “Beyond Goldwater-Nichols: U.S.

Government and Defense Reform for a New Strategic Era,” CSIS, April 2006. On-line. Internet, May 3, 2008. Available from http://www.csis.org/media/csis/pubs/bgn_ph2_report.pdf.

Defense Acquisition Transformation (DAT), Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L), January 2008. On-line. Internet, May 3, 2008. Available from http://www.acq.osd.mil/documents/804Reportfeb2007.pdf.

Defense Science Board (DSB) 2005, “Summer Study on Transformation: A Progress Assessment, Volume II: Supporting Reports,” Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L), April 2006. On-line, Internet, May 3, 2008, Available from http://www.acq.osd.mil/dsb/reports/2006-04-DSB_SS_Transformation_Report_Vol_2.pdf.

DoD Business Transformation Agency (BTA), Enterprise Transition Plan, Department of Defense, September 2007. On-line. Internet, May 3, 2008. Available from http://www

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defenselink.mil/dbt/products/2007_BEA_ETP/etp/Data/September_2007_ETP.pdf.Quadrennial Defense Review (QDR), “Reshaping the Defense Enterprise,” Department of

Defense, February 2006. On-line. Internet, May 3, 2008. Available from http://www.defenselink.mil/qdr/report/Report20060203.pdf.

Unpublished Documents681st Armament Systems Squadron, “SDB and FLM Questions/Answers for ABC News

Interview,” February 2008. JDAM Single Acquisition Management Plan, Air Systems Command, Eglin Air Force Base,

March 1996. Can be attained through the Freedom of Information Act.Kadish, Lieutenant General Ronald, USAF (Retired). Former Program Manager that saved the

C-17 program in the mid 1990s, “Six Great Truths of Acquisition.”Lucas, Malee V. “Supplier Management Practices of the Joint Direct Attack Munition Program,”

186 Terry Little, Acquisition Advisor to the Director, Missile Defense Agency, before the House Armed Services Committee regarding DoD Acquisition Reform, March 29, 2006, p.7, on-line, Internet, available from http://armedservices.house.gov/comdocs/schedules/3-29-06LittleTestimony.pdf.

187 Jim Collins, 2001, Good to Great: Why Some Companies Take the Leap, HarperCollins Publishers Inc., ISBN 0-06-662099-6. 

188 Ibid. 189 W Scott Sherman, Gail E Garland. “Where to Bury the Survivors? Exploring Possible Ex Post Effects of Resistance to Change,” S.A.M. Advanced Management Journal. Cincinnati: Winter 2007. Vol. 72, Iss. 1; pg. 52, 12 pgs, can be bought on-line, Internet, available from goliath.ecnext.com/coms2/gi_0199-6528113/Where-to-bury-the-survivors.html.

190 “ASK Talks with Terry Little,” National Aeronautics and Space Administration’s Academy Sharing Knowledge, March 3, 2005, on-line, Internet, available from http://appel.nasa.gov/

ask/issues/04/interview/index.html.191 Little, p.3-8.192 Ronald Kadish, Lieutenant General, USAF (Retired), former Program Manager that saved

the C-17 program in the mid 1990s, “Six Great Truths of Acquisition,” Truth #5, Unpublished.193 Kadish, Truth #6.194 Kadish, Truths #1 and 2.195 Kadish, Truth #4.196 Kadish, Truth #3.197 Robert Trice, Senior Vice-President, Business Development, Lockheed-Martin, “The

U.S. Aerospace and Defense Industrial Base,” February 2008, slide 20. An unpublished, but non-proprietary presentation given to the Secretary of Defense Corporate Fellows Lockheed-Martin Company Days.

198 Steve Goo interview on August 24, 2007. Mr. Goo is Boeing’s Vice-President for Program Management.

199 Roger Witek, Lieutenant Colonel, USAF, “The Wall Manifesto for Acquisition Program Management Organizations,” Air University Quick Look, Air University Research Information Management System, January 15, 2008, p.2, search on-line, Internet, available from https://www.afresearch.org/skins/RIMS/home.aspx.

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Submitted to the Department of Aeronautics and Astronautics in Partial Fulfillment of the Requirements for the Degrees of Master of Science in Aeronautics and Astronautics and Master of Science in Technology and Policy at the Massachusetts Institute of Technology, 1996.

McClendon, Colonel James. USAF (Retired). “Small Diameter Bomb, Briefing to OSD General Counsel,” December 2003, He was the first USAF SDB PM. Mr McClendon now works for the Raytheon Corporation. Can be attained through the Freedom of Information Act.

McClendon, Colonel James R. USAF (Retired), “SDB Single Acquisition Management Plan (SAMP),” September 1, 2003, He was the first USAF SDB PM. Mr McClendon now works for the Raytheon Corporation. Can be attained through the Freedom of Information Act.

Messmore, Captain Waldine. USAF. 681st Armament Systems Squadron FLM PM, “Talking Paper on FLM JCTD,” November 30, 2007.

Trice, Robert. Senior Vice-President, Business Development, Lockheed-Martin, “The U.S. Aerospace and Defense Industrial Base,” February 2008, slide 20. An unpublished, but non-proprietary presentation given to the Secretary of Defense Corporate Fellows Lockheed-Martin Company Days.

WebsitesDefense Acquisition University (DAU), April 2008, On-line, Internet, May 3, 2008, Available

from http://www.dau.mil/.Defenselink: Contracts for any day of the year, On-line, Internet, May 4, 2008, Available from

http://www.defenselink.mil/contracts/contract.aspx?contractid=3684.Department of Defense, no date, On-line, Internet, May 3, 2008, Available from

http://www.defenselink.mil/.Federal Acquisition Regulation (FAR), March 2008, On-line, Internet, May 3, 2008,

Available from http://www.arnet.gov/far/.Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L)

Knowledge Sharing System ({A}KSS), April 2008, On-line, Internet, May 3, 2008, Available from https://akss.dau.mil/default.aspx.

U.S. Code, GPO Access, April 2008, On-line, Internet, May 3, 2008, Available from http://origin.www.gpoaccess.gov/uscode/.

95 A portion of the information came from Dominque Myers, “Acquisition Reform-Inside the Silver Bullet, A Comparative Analysis-JDAM versus F-22,” Acquisition Review Quarterly, Fall 2002, page 315; on-line, Internet, available from http://www.dau.mil/pubs/arq/arq2002.asp.

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