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On March 26, 2018, Secretary of Defense, James Mattis, wrote a memo addressing the 2018 National Defense Budget, and President Trump’s passing of the omnibus spending bill, advocating to all members of the Department of Defense to be “peerless stewards of taxpayers’ dollars.” Secretary Mattis went on to express the importance of utilizing every dollar strategically by writing, “it is now contingent on us to gain full value from every taxpayer dollar spent on defense. As such, every decision we make must focus on lethality and affordability.”
Secretary Mattis understands the importance of this national defense budget and the trust the American people have bestowed upon him to ensure that the funds appropriated to the defense budget are used strategically and sparingly. In the past, Secretary Mattis has been very critical of congress, recently saying “in the past, by failing to pass a budget on time or eliminate the threat of sequestration, congress sidelined itself from its active constitutional oversight role. It has blocked new programs, prevented service growth, stalled industry initiative, and placed troops at great risk.”
2018 National Defense Budget Strategy: Industry
As part of Burdeshaw’s new business model and its access to many retired flag officers, we reached out to a few of our Senior Principals for their professional opinion on the Secretary’s position on this budget and what it means for industry. Lt. Gen. Gary Trexler, USAF (Ret), a Burdeshaw Sr. Principal, said, “industry should not see the budget as a windfall, but instead realize the Government customers will likely be more, not less demanding, given Secretary of Defense Mattis holding them accountable.” Contractors are going to need to find new ways of producing much more effective products in terms of lethality at a reduced cost, in order to remain competitive in this market. Lt. Gen. Trexler goes on to say, “the defense industry providing solutions and services to the United States Department of Defense, needs to be keenly aware of the opportunities this budget provides, but also the requirements that will be levied on them to demonstrate relevancy, transparency, and affordability.”
Both President Trump and Secretary Mattis are embracing change in the Department’s acquisition process. The main focus of key decision makers for new and existing programs is going to be reduction in regulations, faster procurement cycles, and modernization of the military. Industry needs to align with the Departments mission and help the United States prepare its defense for the 21st century. Secretary Mattis outlined eight modernization investment areas in his 2018 National Defense Strategy.
Maj. Gen. Steven Silvasy, USA (Ret), a Burdeshaw Associate Sr. Principal, points out that Secretary Mattis has provided “a lot of nuggets” in his 2018 National Defense Strategy and the recent memo reinforces his desires to dramatically change the way defense business is done. Secretary Mattis states that “the current bureaucratic approach, centered on exacting thoroughness and minimizing risk above all else, is proving to be increasingly unresponsive. We must transition to a culture of performance where results and accountability matter.” The focus will be on speed of delivery, continuous adaptation and modular upgrades.
2018 National Defense Budget Strategy: Modernization Investment Areas
- Nuclear Forces
- Space and Cyberspace as Warfare Domains
- C4ISR
- Missile Defense
- Joint Lethality in Contested Environments
- Forward Force Maneuver and Posture Resilience
- Advanced Autonomous Systems
- Resilient and Agile Logistics
The “old culture” that Secretary Mattis aims to change, tolerated under-performing programs of record and an acquisition process that failed to deliver a consistent “lowest cost” and “highest performing” product. Lt. Gen. Mark Schissler, USAF (Ret), a Burdeshaw Associates Sr. Principal, stated, “Secretary Mattis just set a higher standard for every member of his department, military, and civilian alike. With a single piece of paper, he called for a change in culture that’s long overdue: a new and serious level of performance accountability on every expenditure.” Lt. Gen. Schissler believes that this holds true significance to the defense contractors and industry, in that “to gain value for every dollar America spends on defense, our acquisition team and defense contractors must be full players.”
2018 National Defense Budget Strategy: Maintenance Improvement
Acquisition changes on new platforms and weapon systems are not the only area the Department and industry partners need to focus on. Modernizing our maintenance methodologies and reducing total cost of ownership is another area that can free up resources that can be better utilized elsewhere. The Department needs to consider adopting and adapting successful changes in maintenance programs such as the Navy’s institution of Reliability Centered Maintenance (RCM) and the Air Forces Reliability and Maintainability Information System Sustainment program (REMIS), to reduce the cost of period maintenance.
Lt. Gen. James Pillsbury, USA (Ret), a Burdeshaw Associate Sr. Principal, provided insight on the Army’s maintenance methodologies saying, “the Army must do things differently. One area that can, and must, be improved is maintenance of the equipment that has been rode hard these past 17 years. Industry has the tools to bring predictive maintenance to our equipment and we must accept it. Why do we bring a Blackhawk into Phase Maintenance every 720 hour? We do so because the base document established in the 1970’s, said that is the interval it should be. Why not install sensors on the rotating and dynamic components and measure the vibrations of those components to see if they are out of tolerance? This would enable the commander and his/her maintenance folks to fix what is going to break and not inspect that which is in acceptable limits.”
As part of Industry’s strategy to capitalize on the market plans for 2018’s defense budget, maintenance technology, software and modernization are key avenues to consider.
2018 National Defense Budget Strategy: Today’s Battle, Tomorrow’s Mission
It is clear from Secretary Mattis’s position on the new budget, that spending focus is not only on the concerns of today, but the future battlefield, as we enter into a high intensity future amongst other large powers and adversaries.
“We cannot expect success fighting tomorrow’s conflicts with yesterday’s weapons or equipment. To address the scope and pace of our competitors’ and adversaries’ ambitions and capabilities, we must invest in modernization of key capabilities through sustained, predictable budgets. Our backlog of deferred readiness, procurement, and modernization requirements has grown in the last decade and a half and can no longer be ignored. We will make targeted, disciplined increases in personnel and platforms to meet key capability and capacity needs.” stated Secretary Mattis.
Having access and understanding of how each branch, division, and command will implement, measure, and be accountable to Secretary Mattis and the Department of Defense will provide invaluable insight the competitive defense industry.
CEO – Burdeshaw Associates, LLC
Burdeshaw Associates, LLC has been providing the strategic consulting services of retired flag officers, SES level executives and industry professionals for nearly 40 years.