Tag Archives: US Air Force

Yeager (book review)

yeagerChuck Yeager was the US Air Force flight test pilot that broke the sound barrier for the first time on October 14, 1947, flying on board of the rocket-propelled Bell X-1. That part of his biography is widely known.

Reading his autobiography you discover that he went from being an uneducated child in rural West Virginia to retiring as a general of the US Air Force, acquainted with several US presidents and other dignitaries, he was the first pilot to become ace in a single day by shooting down 5 German fighters at World War II. Previously, he had been shot down by the enemy when flying over France near Angouleme, he escaped the Germans on ground with the help of the resistance and crossed the border to Spain via the mountains carrying the heavily injured body of a fellow American. He fought as well in Korea and Vietnam, he flight tested dozens of American aircraft and a MIG 15 taken from the North Korea, he set up and led the Air Force Space school which provided for plenty of astronauts for NASA initial space programmes, he became friends of female aviator legend Jackie Cochran, and altogether made him receive plenty of medals and recognitions. Plenty of remarkable achievements in a lifetime.

Many considered Yeager the best pilot in the Air Force at his time. What it seems clear is that he had a privileged eye sight which allowed him to spot enemies, trouble, etc., much earlier than others. He had a deep knowledge of the machines he flew despite of his initial lack of engineering education. He overcame that by eagerness to learn, by continuously asking to the best engineers available to him, and thanks to his experience in maintenance. And he flew a lot. He repeats several times throughout the book that experience, flying continuously, flying plenty of different aircraft, was what made him a great pilot. Despite of those assets, he recognizes as well that luck played a big role in shaping his career. From being born in a time when the flying over the speed of sound was something unknown to surviving various close calls both in war operations and during flight testing.

Let me quote some of the gems I had marked in his book:

“I got sick the first few flights […] like everyone else, I sweated through my first solo.”

“… most of us reached a point where, if a pilot borrowed our Mustang on our day off and was shot down, we became furious at the dead son of a bitch. The dead pilot might have been a friend, but he wasn’t as special as our own P-51…”

“I was still the most junior officer in our squadron […] there were several captains who were rubbed wrong being led by a new lieutenant. One of them was assigned to my flight of four, and refused to follow my orders. […] We were over Germany and this guy was flying as tail-end charlie, but lagging too far back in the rear, and ignoring my order to close up. […] I did a big barrel roll and came in behind him; he never saw me. Then, I fired a burst right over his canopy. The bastard saw that. He closed up immediately, and did what he was told.”

“Flying came with the marriage licence, and I had no problem with that.” (Glennis Yeager)

“I doubt whether there where many who loved to fly as much as I did.”

“Wright Field was a fun place to be, loaded with every airplane in the inventory…”

“[…] the real barrier wasn’t in the sky, but in our knowledge and experience of supersonic flight.”

Arrogance got more pilots in trouble than faulty equipment.”

“The real art to test flying was survival; maybe only a spoonful of more luck and more skill made the critical difference between a live test pilot and a street name.”

“The best pilots fly more often than the others; that’s why they’re the best. Experience is everything. The eagerness to learn how and why every piece of equipment is everything. And luck is everything, too.”

“And luck. The most precious commodity a pilot carries.”

“I was always afraid of dying. Always. It was my fear that made me learn everything I could about my airplane and my emergency equipment […]”

I strongly recommend the reading of this book (423 pages in the paperback edition).

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KC-46 EMD contract (update March 2015)

About two years ago I wrote a post, KC-46 EMD contract 101, in which I reviewed the nature, implications and status of the Fixed Price plus Incentive Firm (FPIF) that the US Air Force had signed with Boeing for the tanker K-46 Engineering Manufacturing and Development (EMD) contract.

I have been wanting to write an update of that post with how the situation has evolved for some months. The recent article in Bloomberg, Boeing KC-46 Tanker Suppliers Behind on Deliveries, GAO Finds, has finally triggered this review.

A recap of the main points from the Bloomberg article:

[…] The boom for the first KC-46 has been “delayed by eight months due to design changes and late parts deliveries,” […]

The delays have resulted in a slip of at least three months in the initial flight of the first fully equipped development aircraft. […]

[…] GAO said “another supplier has experienced significant delays in manufacturing” aerial refueling wing pods […]

[…] the Air Force projected in a revised estimate this year that Boeing will have to absorb $1.5 billion for exceeding a $4.8 billion ceiling to develop the first four planes.

Bloomberg cites GAO as a source. GAO stands for US Government Accountability Office. Every year, in March, the GAO releases its “Assessments of Selected Weapon Programs” where it reviews the Department of Defense (DoD) main programs. Find here [PDF, 10.4MB] the 2015 report released on March 12. It contains just 2 pages about the “KC-46 Tanker Modernization Program (KC-46A)”. What does it say? Main take aways:

[…] After the critical design review, the program had wiring design changes that led to several delays, including at least a three month delay to KC-46 first flight. The program does not plan to demonstrate a full system-level prototype until April 2015, 21 months after its critical design review. […] 

[…] key suppliers have continued to experience difficulties with the design and manufacture of aerial refueling systems, such as refueling booms and wing aerial refueling pods. The boom that was to be installed on the first KC-46 has been delayed by eight months due to design changes and late parts deliveries. Another supplier has experienced significant delays in manufacturing wing aerial refueling pods for qualification testing and development aircraft due, in part, to challenges with parts delays and engineering design changes. As a result of these delays, first flight of an aircraft that integrates military sub-systems has slipped at least three months to April 2015, 21 months after critical design review. […]

[…] Boeing is encountering more than twice the number of software problems than originally estimated that prevent or adversely affect the accomplishment of an essential operational or test capability.

[…] the program office noted that it has mitigated financial risk with the competitive fixed-price incentive development contract with firm-fixed and not-to-exceed pricing for the production of the aircraft. More than 57 percent of the development work has been completed. Boeing has met or exceeded all contractual requirements. […]

The program performance review that the GAO makes is seen from the Air Force point of view, which, as indicated above, since the contract is a FPIF, the USAF feels protected and thus it does not show any sign of the 1.5bn$ over cost that Bloomberg mentions that Boeing will have to bear:

Program Performance (fiscal year 2015 dollars in millions)

Bloomberg quotes a 1.5bn$ estimated over cost based on Air Force data.

The GAO published in March 2012 [PDF, 1.1MB], February 2013 [PDF, 1.2MB] and April 2014 [PDF, 1MB] three reports reviewing the KC-46 tanker program. Interestingly enough the reports from 2012 and 2013 included such estimates of the over cost using Air Force data, the 2014 report did not. See 2012 and 2013 estimates below:

KC-46 EMD Estimates 2012.

KC-46 EMD Contract & Estimates (March 2012).

KC-46 EMD Contract & Estimates.

KC-46 EMD Contract & Estimates (February 2013).

Why did the GAO not include such estimate in 2014 report? Wasn’t the information available? The release of such estimates in 2012 and 2013 did not sit well in some spheres?

Today is March 21st 2015. I guess we shall see soon the annual report from the GAO with the specific view on the KC-46 program. I wonder whether such cost estimate will be included this time (hopefully yes). In any case, I guess the information from the Air Force estimate has been duly leaked.

The contract was awarded on February 24th 2011; about a year later USAF was already estimating that Boeing suffered already over 750m$ over costs from target price, 260m$ over ceiling price. For the Air Force the picture was bleaker. One year later the figures had increased again. Luckily for USAF the FPIF contract has a point of total assumption on the side of the contractor (Boeing), as I indicated in the post from 2013:

KC-46 EMD FPIF Contract.

KC-46 EMD FPIF Contract (March 2013).

Let’s see where we would be now in the previous curve taking the information from Bloomberg as good (“[…] the Air Force projected in a revised estimate this year that Boeing will have to absorb $1.5 billion for exceeding a $4.8 billion ceiling to develop the first four planes.”):

KC-46 EMD FPIF Contract - 2015

KC-46 EMD FPIF Contract (March 2015 update, based on Bloomberg)

As I mentioned in the blog post from 2 years ago: this is the typical FPIF contract curve, which is the only thing which is missing in ALL the news, budgeting materials, GAO reports, etc., that I have read and is the most illustrative graphic to understand what is going to happen if the cost overruns keep piling and who is going to bear which amount of the cost from which point.

Bloomberg and the US Air Force estimate that those 1.5bn$ over the ceiling price are going to be born by Boeing as the FPIF contract stipulates. However, I wanted to call here the attention to the FY2016 budget request from the USAF (DoD) [here, PDF, 8.5MB], see below:

See "Total Cost" and "Remark" (source: Exhibit R-3, RDT&E Project Cost Analysis: PB 2016 Air Force).

See “Total Cost” and “Remark” (source: Exhibit R-3, RDT&E Project Cost Analysis: PB 2016 Air Force).

As you can see the USAF budget request for the KC-46 program includes the remark:

The contract ceiling price of $4.9B is the government’s maximum financial liability on the prime contract. The “Total Cost” value represents the Milestone B Service Cost Position (SCP), which accounts for the ceiling price of the contract plus the financial risk of potential design changes for the KC-46 Aircraft

I would not discard that through the justification of “design changes” the American tax payer will have to bear part of those estimated 1.5bn$ over the ceiling price. We will see.

Finally, I think it interesing to see the planning included in the budget request from USAF (below), as it indicates a Tanker First Flight in the 3rd quarter of 2015 (not April 2015 as quoted by Bloomberg (“initial flight of the first fully equipped development aircraft”)).

USAF FY2016 budget request - KC-46 Planning.

USAF FY2016 budget request – KC-46 Planning.

You can compare it with the planning presented in February 2012 with FY2013 budget resquest:

USAF FY2013 budget request - KC-46 Planning.

USAF FY2013 budget request – KC-46 Planning.

The GAO talks about a “first flight of an aircraft that integrates military sub-systems has slipped at least three months to April 2015”, but in my view that doesn’t mean a “first fully equipped development aircraft”. In 2012 the planning had a tanker first flight at the beginning of Q2 2015 which in the 2015 plan it is shown in Q3 2015, thus the 3-month delay mentioned by the GAO.

I am indeed looking forward to the KC-46-specific report from the GAO that may be about to be published (1).

(1) I may then have to write another post with a new update.

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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)

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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B-52 Stratofortress, nuclear disarmament and The Boneyard

One of the oldest flying aircraft in the US air force is the bomber B-52 Stratofortress, built during the 1950s. Over 700 of them were built during a decade with only above 70 today being used in the active or reserve forces. The retired ones are either in museums or in The Boneyard.

Part of B-52 retired fleet.

Part of B-52 retired fleet.

During the visit to AMARG, the guide explained us one historical anecdote taking the following picture as the departing point:

B-52 Stratofortress without horizontal tail plane.

B-52 Stratofortress without horizontal tail plane.

The curiosity of the picture: as you can see the aircraft has no horizontal tail plane (HTP). 

The story went as follows: as part of Arms Control and Disarmament agreements between the USA and USSR, the USA had to retire a certain number of B-52 aircraft from service (over 300 of them). At some point a soviet delegation visited The Boneyard at Tucson to witness the retirement of those A/C. However, they said that being the AF base right there, side by side of the boneyard, the USSR could not have any guarantee that those B-52s would not be immediately put back into active service just after the soviets had left the city, and thus required that Americans dismantled the HTPs from all B-52s that were to be retired as part of the agreements. In that way they could always check via satellite image whether they had those HTP on or off…

Later on I checked the story in the Wikipedia where you may see the whole background of the START agreement. Some of the aircraft were chopped into 5 pieces. Those you cannot see in the guided visit to Davis-Monthan AFB but you can see them in satellite image here:

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US Air Force fleets evolution

In these days in which the sequester is being often in the media, this will be a very brief post to bring to the memory a study prepared by Mitchell Institute for Airpower Studies, founded by the Air Force Association, “ARSENAL OF AIRPOWER: USAF Aircraft Inventory 1950-2009” [PDF, 6.5 MB], published in November 2010.

I wanted to bring forward some comments and two graphics:

  • “To put matters into perspective, a single C-17 can carry the equivalent of 15 C-47 loads (as well as cargo that could never fit inside a C-47) and deliver that cargo anywhere in the world within hours without requiring en-route staging bases.”
  • “The average cost of a flying hour over the past decade is around $23,000 (in constant FY11 dollars), compared to about $11,000 in 1985 and roughly $4,800 in 1970.”
  • “For example, a single B-2 now armed with 80 Joint Direct Attack Munitions (JDAMs) could strike as many targets as five of the 75-aircraft 1991 Gulf War era packages.”
US Air Force fleet evolution 1950-2009.

US Air Force fleet evolution 1950-2009.

US Air Force Airlift fleet, 1950-2009.

US Air Force Airlift fleet, 1950-2009.

The keyword here is capability, not numbers.

I will come back to here in following posts.

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KC-46 EMD contract 101

The US Government Accountability Office (GAO) has recently published a report about the KC-46 Tanker Aircraft [PDF, 1.2 MB]. In it the GAO reviews the situation of the program, measures introduced, costs, technology development, etc. In the first page it summarizes:

“The KC-46 program 2012 estimates for cost, schedule, and performance are virtually the same as last year’s, with the contractor running very close to the planned budget and schedule”.

On the technical side it points to several challenges: flight test plan, completion of engineering drawings, relocation of personnel and facilities related to defense equipment, etc.

However, in this post I wanted to focus only on the costs and contractual sides of the program, given the amount of articles that we could read about it during the past year. Several news have reported about the cost overruns in the program and about how these were to be born by Boeing.

The last time I read about the topic, the reported overrun was of about 1.2bn$ on a 4.4bn$ contract, out of which ~500M$ would be born by USAF and the remaining 700 M$ by Boeing (see articles from Bloomberg, Aviation Week, The Seattle Times…).

But, where do these figures come from?

One of the many things I like of the USA is the transparency in making lots of information and data available to the public, for example, budgeting information of the Air Force, GAO’s assessments, hearings at the Senate and House of Representatives Committees, etc. Thus, you can find:

Contractual framework

From the USAF budgeting material, page 675, under the paragraph “E. Acquisition Strategy“, the explanation of the different contracts structure for the KC-X program (the name of the program prior to the contract award) can be found:

“The KC-46 program released a final Request for Proposal (RFP) on 24 Feb 2010, and entered source selection on 9 Jul 2010. The KC-46 program held a Milestone B Defense Acquisition Board (DAB) on 23 Feb 2011, received approval to enter EMD from OSD AT&L on 24 Feb 2011, and awarded the KC-46 contract to Boeing on 24 Feb 2011 to develop and procure 179 KC-46 aircraft. The KC-46 contract procurement was conducted via a full and open competition per Federal Acquisition Regulation (FAR) Part 15, and resulted in a FY 2011 EMD Fixed Price Incentive Firm (FPIF) contract. The EMD phase will develop, build, and test four KC-46 aircraft, and will qualify receiver aircraft.

Production will begin in FY 2015 with two Low-Rate Initial Production (LRIP) lots (Firm Fixed Priced (FFP)) and then Full-Rate Production (FRP) options (FFP with Not to Exceed (NTE) + Economic Price Adjustment (EPA)). The LRIP and FRP options will be exercised following successful completion of Operational Assessments (OAs) for the LRIP decisions, and a successful completion of Initial Operational Test and Evaluation (IOT&E) for the FRP decision.”

Thus, so far only the Engineering Manufacturing and Development (EMD) contract  phase has been contracted, on February 24th Feb 2011 (you can see Boeing and DoD press releases).

Cost Assessment by GAO:

From the Government Accountability Office (GAO) assessment of the program, referred above:

“The current development cost estimate of $7.2 billion as reported in October 2012 includes $4.9 billion for the aircraft development contract and 4 test aircraft, $0.3 billion for the aircrew and maintenance training systems, and $2 billion for other government costs to include program office support, government test and evaluation support, contract performance risk, and other development risks associated with the aircraft and training systems. […]

Through December 2012, Boeing has accomplished approximately $1.4 billion (28 percent) in development work and has more than $3.5 billion (72 percent) in estimated work to go over the next 5 years. […]

Barring any changes to KC-46 requirements by the Air Force, the contract specifies a target price of $4.4 billion and a ceiling price of $4.9 billion at which point Boeing must assume responsibility for all additional costs. […]”

See the table below showing Air Force and Boeing contract amounts and estimates:

KC-46 EMD Contract & Estimates.

KC-46 EMD Contract & Estimates (Source: GAO).

The report from GAO offers the following graphic referring to what they call “management reserves“:

KC-46 EMD Management Reserves (Source: GAO)

KC-46 EMD Management Reserves (Source: GAO)

This graphic shows well the rate at which Boeing has been supposedly burning its margins. However, it does not reflect at all the nature of the issue, related to the type of contract this “Engineering Manufacturing and Development” (EMD) contract: a Fixed Price plus Incentive Firm type of contract (FPIF).

Fixed Price Incentive Firm contracts

It is not easy to find good literature online about these types of contracts. The Wikipedia for instance does not have yet an article on FPIF contracts, but only on the calculation of the Point of Total Assumption. However, you can find a couple of good sites with explanations and examples of FPIF contracts here and here [PDF from the US Army].

Some concepts that we need to bear in mind are (definitions from the link above):

Target Cost (TC): The initially negotiated figure for estimated contract costs and the point at which profit pivots.
Target Profit (TP): The initially negotiated profit at the target cos
Target Price: Target cost-plus the target profit.
Ceiling Price (CP): Stated as a percent of the target cost, this is the maximum price the government expects to pay. Once this amount is reached, the contractor pays all remaining costs for the original work.
Share Ratio (SR): The government/contractor sharing ratio for cost savings or cost overruns that will increase or decrease the actual profit. The government percentage is listed first and the terms used are “government share” and “contractor share.” For example, on an 80/20 share ratio, the government’s share is 80 percent and the contractor’s share is 20 percent.
Point of Total Assumption (PTA): The point where cost increases that exceed the target cost are no longer shared by the government according to the share ratio. At this point, the contractor’s profit is reduced one dollar for every additional dollar of cost. The PTA is calculated with the following formula. [thus, PTA = (Ceiling Price – Target Price)/Government Share + Target Cost]

Where can we get these figures for the KC-46 EMD contract? Some of them are referred to in the different reports and budgeting materials (explicitly or implicitly) and others can be found in the following letter from US Senator John McCain to the DoD from July, 15 2011 [PDF, 400 KB].

Thus for the KC-46 EMD contract we have:

  • Target Cost: 3.9 bn$.
  • Target Profit: 500 M$.
  • Target Price: 4.4 bn$
  • Ceiling Price: 4.9 bn$
  • Share Ratio: 60% / 40% (Government / Boeing).
  • Point of Total Assumption (calculated): ~4.73 bn$.

With this information we can produce the typical FPIF contract curve, which is the only thing which is missing in ALL the news, budgeting materials, GAO reports, etc., that I have read and is the most illustrative graphic to understand what is going to happen if the cost overruns keep piling and who is going to bear which amount of the cost from which point:

KC-46 EMD FPIF Contract.

KC-46 EMD FPIF Contract.

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Quiz: How loaded do US Air Force transport aircraft operate?

Let me share with you one funny quiz I did for some colleagues at the office:

On average, how loaded do US Air Force transport aircraft, C-130 Hercules and C-17 Globemaster, operate? (as a percentage of their maximum payload capacity: let’s take the figures reported by the US Air Force, ~16.5 tonnes for the C-130 -“maximum normal payload”-and 77.5 tonnes for the C-17)

Before continuing reading below, take your chance in the poll below, where I offer 4 possible responses: 3 from my colleagues’ responses to the quiz plus the correct one:

Background. Before posing the quiz to my colleagues we were commenting on a piece of news of an Antonov 124 which had landed in Spain to load some equipment weighing 1,000 kg. The An-124 reported payload capacity is 150 metric tonnes. For those not being number-crunchers: that means using the one of the biggest cargo aircraft to load it up to 0.7% of its capacity.

After having read this last paragraph you may have changed your opinion as to which is the correct answer to the quiz.

I based the correct result on a news release from the US Air Force dating from the beginning of 2007. At that time I was working in Airbus Military strategy where I would like to pick up any number related to aircraft and play with it (the hobby has stayed). That release offered figures US Central Command air transport operations, including operations Enduring Freedom (Afghanistan) and Iraqi Freedom. Find the results from that short number play:

US Air Force average loads (in tonnes) for C-130 and C-17 during 2005 and 2006.

US Air Force average loads (in tonnes) for C-130 and C-17 during 2005 and 2006.

If you do the math, you will immediately get the right answer: C-130 Hercules, 22% and C-17 Globemaster, 17%.

“What a waste of resources!” you may think. A former senior colleague pointed to that result: “You buy a Mercedes to travel with the family and baggage, then on a Sunday when having to go out to get some bread or any week day when you go alone to work… when you get to the garage and find a Mercedes… Guess which car you take?”

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