On March 26, 2018, Secretary of Defense, James Mattis, wrote a memo addressing the 2018 National Defense Budget, and President Trump\u2019s passing of the omnibus spending bill<\/a>, advocating to all members of the Department of Defense to be \u201cpeerless stewards of taxpayers\u2019 dollars.\u201d Secretary Mattis went on to express the importance of utilizing every dollar strategically by writing, \u201cit 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.\u201d<\/p>\n <\/p>\n 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. \u00a0In the past, Secretary Mattis has been very critical of congress, recently saying \u201cin 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.\u201d<\/p>\n As part of Burdeshaw\u2019s<\/a> 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\u2019s position on this budget and what it means for industry. Lt. Gen. Gary Trexler, USAF (Ret), a Burdeshaw Sr. Principal, said, \u201cindustry 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.\u201d 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, \u201cthe 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.\u201d<\/p>\n Both President Trump and Secretary Mattis are embracing change in the Department\u2019s 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<\/sup> century. Secretary Mattis outlined eight modernization investment areas in his 2018 National Defense Strategy.<\/p>\n Maj. Gen. Steven Silvasy, USA (Ret), a Burdeshaw Associate Sr. Principal, points out that Secretary Mattis has provided \u201ca lot of nuggets\u201d<\/em> 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 \u201cthe 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.\u201d<\/em> The focus will be on speed of delivery, continuous adaptation and modular upgrades.<\/p>\n The \u201cold culture\u201d that Secretary Mattis aims to change, tolerated under-performing programs of record and an acquisition process that failed to deliver a consistent \u201clowest cost\u201d and \u201chighest performing\u201d product. Lt. Gen. Mark Schissler, USAF (Ret), a Burdeshaw Associates Sr. Principal, stated, \u201cSecretary 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\u2019s long overdue: a new and serious level of performance accountability on every expenditure.\u201d Lt. Gen. Schissler believes that this holds true significance to the defense contractors and industry, in that \u201cto gain value for every dollar America spends on defense, our acquisition team and defense contractors must be full players.\u201d<\/p>\n 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\u2019s 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.<\/p>\n Lt. Gen. James Pillsbury, USA (Ret), a Burdeshaw Associate Sr. Principal, provided insight on the Army\u2019s maintenance methodologies saying, \u201cthe Army must do things differently.\u00a0 One area that can, and must, be improved is maintenance of the equipment that has been rode hard these past 17 years.\u00a0 Industry has the tools to bring predictive maintenance to our equipment and we must accept it.\u00a0 Why do we bring a Blackhawk into Phase Maintenance every 720 hour?\u00a0 We do so because the base document established in the 1970\u2019s, said that is the interval it should be.\u00a0 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?\u00a0 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.\u201d<\/p>\n As part of Industry\u2019s strategy to capitalize on the market plans for 2018\u2019s defense budget, maintenance technology, software and modernization are key avenues to consider.<\/p>\n It is clear from Secretary Mattis\u2019s 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.<\/p>\n \u201cWe cannot expect success fighting tomorrow\u2019s conflicts with yesterday\u2019s weapons or equipment. To address the scope and pace of our competitors\u2019 and adversaries\u2019 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.\u201d stated Secretary Mattis.<\/p>\n 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.<\/p>\n <\/p>\n2018 National Defense Budget Strategy: Industry<\/strong><\/h5>\n
2018 National Defense Budget Strategy: Modernization Investment Areas<\/strong><\/h5>\n
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2018 National Defense Budget Strategy: Maintenance Improvement<\/strong><\/h5>\n
2018 National Defense Budget Strategy: Today\u2019s Battle, Tomorrow\u2019s Mission<\/strong><\/h5>\n