Tag Archives: DoD

March 7, 2014 · 8:00 am

Augustine’s Laws and the future long-range bomber

The US Air Force is moving ahead with its plan to develop a new long-range bomber aircraft to be operational by the mid of next decade. The program is not yet launched, but within this year it is expected that we will see the launch of a request for proposals (RFP).

I read about the latest moves about this program-to-be in an article from DefenseNews, “USAF To Shed Light on ‘Mystery’ Plane“. Apart from different declarations from officials and industry, the article provided some main general clues:

The Air Force intends to begin fielding the bomber in the mid 2020s, with penetrating capability in mind. The service will procure 80 to 100 planes, which will mostly be made with existing technologies. Those machines will also have both standoff and direct-attack munitions and room for a large payload.

The service also is exploring the idea of the aircraft being optionally manned.

Service officials have cited a cost of $550 million per plane as the ceiling for the program, but even that figure has some mystery to it. Observers have noted that the figure does not include research and development (R&D) costs, which could drive that amount up.

My first reaction on that figure of $550 million per aircraft was:

For those not acquainted with him, Norman Augustine served in many positions both in the Administration (Under Secretary of the Army) and in the Aerospace & Defense industry (CEO of Lockheed Martin). Lately he lead the Committee that was reviewing the US Human Space Flight Plans. He wrote a fantastic book, “Augustine’s Laws”, about the aerospace and defense industry, the problems that plague their programs, etc. I reviewed that book in this post.

However, after writing that tweet I decided to check it myself…

See below the original graphic from the book depicting the trend of increasing costs of bomber aircraft:

Trend of Increasing Cost of Bomber Aircraft (source: Augustine's Laws).

Trend of Increasing Cost of Bomber Aircraft (source: Augustine’s Laws).

I extrapolated the trend with the information provided in the article, that is, a $550 million unit cost with an entry into service by the mid 2020s, see below where that spot is in the enlarged graphic:

Updated Trend of Increasing Cost of Bomber Aircraft (source: Augustine's Laws + future long-range bomber information).

Updated Trend of Increasing Cost of Bomber Aircraft (source: Augustine’s Laws + future long-range bomber information).

You will see that I marked 2 different spots in red and blue. The blue one corresponds to the unit cost ceiling of 550M$ reported in the article. You will see that the spot is way off the 70-year old trend (from the end 1920s-1990s). Therefore, I decided to continue the trend line and see at what unit cost would a bomber aircraft with entry into service in the mid 2020s still follow the trend, and I marked that unit cost in red. The result is that the future bomber would have to cost about $500 billion apiece, or a cost roughly equal to the entire Department of Defense yearly budget.

That may seem impossible today, completely off reality. How could that happen? Start by imagining that the budget which will be earmarked for 80-100 airplanes along several years, in the end serves to procure many less units (40?, 10?… 1?). Then, add to that the information appearing in the article accompanying the 550M$ figure, “the figure does not include research and development (R&D) costs, which could drive that amount up”. Put all that together and we might end up seeing, 10 years from now, that Augustine’s was right on the spot.

In fact, the assertion that one single airplane would cost the US Air Force the entire DoD yearly budget was exactly predicted by Augustine in his Law number IX, though he applied it for tactical fighter aircraft, and the date in that case would be a bit later, 2054:

In the year 2054, the entire defense budget will purchase just one tactical aircraft. This aircraft will have to be shared by the Air Force and Navy 3 1/2 days each per week except for leap year, when it will be made available to the Marines for the extra day. (LAW NUMBER IX)

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Update (2014-03-08): See in the article from Bloomberg, “Long-Range Bomber’s Development Would Get $12 Billion“, a declaration from Lt. General Charles Davis: “Is it going to be $550 million a copy? No, of course it’s not going to be $550 million a copy once you add in everything.“. The article includes further figures providing a new estimate of 810M$ apiece… The closing of the gap between 550M$ and ~ 500bn$ has started.

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November 4, 2012 · 8:30 am

Looking at History through US Foreign Military Sales

If an alien came to Earth and had to quickly make sense of the last half century of History, he could get a first glimpse of geographical hot spots and changes of regime by looking at US Foreign Military Sales program data (please refer to my previous post for an explanation of the program and sources of data).

For example, take the figure below. It shows the historical data of FMS deliveries (in thousands of $) from 1970 to 2010. As you can see deliveries stopped in 1980. What is even more telling, in the 4 years to 1979 (from 1976-79) the arms sales delivered to this country represented a whole 34% of the complete US FMS program over that period (see the total volume of deliveries in this graphic from a previous post). Which country do you think it coud be?

Which country could this be?

This alien, combining these data would know that something that happened in that country, from representing a third of military sales to not taking part in the program ever again… you may have guessed right: Iran, where the Islamic Revolution started in 1978, the Shah left the country in 1979 and at the end of that year the hostage crisis started.

Having taken a look at the graphic of Iran, find below the one for Iraq:

 

In the graphic you can see that from 1970 to 2005 there were not FMS agreements and deliveries from 2006. Nevertheless you can see that during the 1970’s and 1980’s there were commercial arms sales to Iraq from American contractors (this is also published by DSCA), which deliveries stopped altogether in 1990 (invasion of Kuwait in August 1990 and subsequent first Gulf war). Then, once the second Gulf war had changed the regime, commercial and FMS sales restarted from 2003.

There are plenty of cases to look at: Cuba not forming part of FMS since before 1970, Russia neither (though receiving commercial arms since 1992), Spain having been always part of FMS program (including during dictator Franco’s time) but which agreements surged in 1982 with the order of 72 McDonnell Douglas F/A-18 fighters (the same year in which it joined NATO), Chile, Venezuela, China…

Russia: never part of FMS.

Before concluding this post let me show again the distribution of FMS deliveries during the last 60 years per region (shown in the previous post) and a table with the main receivers in each region:

FMS Sales per region (1950-2010, source: DSCA).

FMS Agreements per region and selected countries (1950-2010, in k$ – source: DSCA).

Which have been then the top receivers of FMS Arms sales agreements in the period 1950-2010? In order:

  1. Saudi Arabia (16.9% of global FMS program)
  2. Egypt (7.3%)
  3. Israel (7.1%)
  4. Australia (4.1%)
  5. Korea (South) (4.0%)
  6. United Kingdom (4.0%)
  7. Turkey (4.0%)
  8. Japan (3.7%)
  9. Germany (3.3%)
  10. Greece (2.7%)

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November 2, 2012 · 8:00 am

US Foreign Military Sales

The Foreign Military Sales (FMS) is a program managed and operated by US Department of Defense (DoD) on a no-profit and no-loss basis. Countries and international organizations participating in the program pay for defense articles and services at prices that recoup the actual costs incurred by the United States. This includes a fee (currently 3.8% of what the defense articles and/or services cost, in most instances) to cover the cost of administering the program.

Foreign countries may also opt to procure directly from American contractors in Direct Commercial Sales, though FMS ensures third countries rates similar to those received by the DoD (bargaining power) but the items will be the standard procured by the USA, not especially tailored to the needs of other countries. In any case the sales will have to pass the same approval requirements for the sale of defense materials to third countries.

The Defense Security Cooperation Agency (DSCA) is the one managing this program and the one which publishes the different deals (Major Arms Sales Notification and FMS Contract Awards).

The DSCA also publishes historical data of the FMS sales by year and per country and region. (I have always admired the openness of the different US agencies in their publishing of data to work with).

In the graphic below you can see the total US arms sales agreements with foreign countries and FMS-program agreements during the last 40 years.

Total Military Sales (*) and FMS-program agreements (in k$) per year.
[(*) Total Sales includes foreign sales not made through FMS program]

You can see how most of the agreements are close within the FMS program, which ensures moderate costs to the third countries and a standardization for US allies. You can notice as well how the first Gulf war and the recent wars in Irak and Afghanistan have increased FMS agreements.

However, given that military equipment takes time to build, there is a lag between those sales agreements and when the arms are delivered. See below the two lines representing FMS agreements and FMS deliveries (both in k$).

FMS (in k$): agreements vs deliveries per year.

You can see how the deliveries show a growth trend since the 1970’s, with peak at the end of ’90s.

The following question is: to which countries were those sales…

FMS Sales (1950-2010) per region.

I will end this post with this graphic, showing how the Middle East (“Near East & South East Asia”) is the region which received the most of FMS during the last 60 years. In a following post I will dive into which specific countries as that is a very interesting analysis deserving a single post.

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January 22, 2012 · 10:00 am

Savings and consultants

Last Friday, I wrote a post about a measure by the US DoD to produce efficiencies by publishing the actual cost of the preparation of each report and study in the front of each document.

As part of that same  “Defense Efficiencies Initiative” launched in 2010 by former Secretary of Defense Robert Gates, there were as well the following two:

“[…] immediately cut the dollars allocated to advisory studies by 25 percent.”

“[…] cut the size of the staff support contractor cadre by 10 percent per year for three years […]”

Another report (1) by the Congressional Research Service  [PDF, 86KB] assessing the efficiency of Gates’ initiatives found these ones as the ones with the higher potential savings for the DoD.

Nearly everyone working in a big corporation can sympathise with such initiatives, having sometimes wondered where is the added value of certain reports or the cost/benefit of shiny consultants’ teams brought in to solve an important issue based on noise-affected inputs received by insiders in too-short time to digest them only to produce yet another costly report and leave having created barely anything else but costly entropy.

A former colleague has a wall in his office covered by a collection of tens of leaflets from what he calls “strategic consultants”. I took on his habit of picking those leaflets, and even though I don’t collect them I do publish them in my Twitter account from time to time:

https://twitter.com/#!/javierirastorza/status/96623169644924928

https://twitter.com/#!/javierirastorza/status/131786083699662848

https://twitter.com/#!/javierirastorza/status/154655970201567232

That much for the perceived value of consultants.

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(1) Cost of Congressional Research Service assessment not available.

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January 20, 2012 · 8:00 am

Savings and reports

Yesterday I had a hilarious conversation with 3 work colleagues on the cost of several things: ranging from the cost of having 30 people enclosed in a day-long meeting to the cost impact of having the toilets of a whole office building not working for two days (cost measured by the extra time needed for fulfilling physiological needs).

This reminded me of the US Department of Defense’s “Defense Efficiencies Initiative” launched in 2010 by former Secretary of Defense Robert Gates.

One of the initiatives was to:

“[…] publish the actual cost of the preparation of each report and study prepared by DOD in the front of each document. “

See the implementation in the picture below:

Cost of DoD Strategic Management Plan FY 2012 - FY 2013: $169,010 (FY 11 dollars).

The cost of preparing the Department of Defense Strategic Management Plan FY 2012 – FY 2013 was $169,010. You may see the document here [PDF, 1.6MB] and judge by yourself whether you find it worthy of those 169k$.

Now, imagine if in the next crowded meeting you are attending the first slide of the first presentation said “Gentlemen, with this meeting today we’re consuming: xxk€”. The same applies for IT systems down, facilities not operating as they should, etc.

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NOTE: Researching and writing this post took me about an hour. The cost of that hour? You name it 🙂

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March 19, 2011 · 11:00 am

Lamentable entrevista de Ana Pastor a Mahmud Ahmadineyad

El pasado día 15 leí varios tweets haciendo referencia a una entrevista que la periodista de TVE Ana Pastor había hecho a Mahmud Ahmadineyad. Así que la vi.

Debo ser muy raro, porque no he dejado de leer elogios a la periodista y a mí me parece que la entrevista, el papel que hizo como entrevistadora, es lamentable. Sin paliativos.

Me explico:

Se pasa la entrevista interrumpiendo las respuestas del entrevistado o apresurándole con frases del tipo “déjeme estamos terminando, me dicen que se me acaba el tiempo”.

En ocasiones contradice al entrevistado. Aunque éste diga cosas que no sean ciertas, ¿interesa acaso lo que piense la entrevistadora?.

Sonríe mostrando desinterés por las respuestas del entrevistado. Por ejemplo, cuando Ahmadineyad le dice que las armas que usa Libia son vendidas por Occidente. Quizá no le guste escucharlo, pero antes de hacer la entrevista podría haberse informado y habría visto que es cierto.

Esto último me es fácil de comprobar porque he visitado las fuentes anteriormente. Dejo a continuación un par de ejemplos fácilmente demostrables:

  • España. Fuente: el ministerio de industria [PDF]. Las exportaciones en 2009 NO fueron de defensa ni armas como la prensa ha dicho en varias ocasiones, sino lo que se llama material de doble uso, como radares para navegación y control de tráfico aéreo. En total fueron 12.7 millones de €. Habría luego que ver el uso que finalmente se le da.
  • Francia e Italia. Fuente: el Stockholm International Peace Research Institute (SIPRI), autoridad internacional en la materia. En la siguiente herramienta, se puede hacer una búsqueda de exportaciones de armas con destino Libia en los últimos 20 años. Aparece un registro por valor de ~168M€ de exportación de misiles anti-tanque MILAN por parte de Francia, y otro por valor de ~80M€ de exportación de helicópteros por parte de Italia.
  • Estados Unidos. Fuente: el Departamento de Defensa. En su informe anual de 2009 [PDF] muestra como Libia, que había estado bajo embargo durante años, desde 2006 comenzó a recibir exportaciones comerciales de armas desde Estados Unidos, aunque por un valor muy bajo, menos de 1M$ en 2009.
  • …

Si la gente vitorea la entrevista porque le ha plantado cara a Ahmadineyad, me parece bien, pero le podría haber tirado un zapato o una estatuilla de Il Duomo a la cara, en vez de hacer una entrevista.

Si TVE quería incordiar y molestar a Ahmadineyad, podría haber hecho muchas otras cosas, en vez de una entrevista.

Si querían presentar una imagen deplorable o ridícula de Ahmadineyad podrían haber hecho un documental, en vez de una entrevista.

A mi ese hombre también me parece detestable. Pero es que Ana Pastor termina la entrevista diciendo “creemos que es bueno escuchar todas las opiniones”, y precisamente eso es lo que no ha hecho. Si desde TVE, no lo querían hacer que no le hubiesen puesto un micrófono delante para empezar.

Lamentable.

Lo único bueno que me pareció que tuvo la entrevista fue el saludo final en farsi.

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