Under the exasperated sighs of “Riiiiight” and “Surrrre,” Boeing has proudly announced on November 8 a “partnership” (read “monopoly”) with the United States Air Force (USAF). This partnership is supposed to help everyone involved to reduce “supply chain costs.”
As I’ve noted before, the government and military’s acquisitions systems are broken. This system affects the costs and time it takes to acquire new space systems to help inform and protect the United States. Boeing’s announcement is a response to theoretically help fix the process. But it doesn’t. This overarching agreement will slow down the acquisitions process and make it more expensive.
The whole rationale for this overarching agreement is that historically it took too much time for each individual complex to come up with an agreement with Boeing each time the USAF wanted Boeing to work on something. That’s probably true–I’ve yet to see an acquisitions process that moves quicker than glaciers at the height of Earth’s Ice Age. This agreement doesn’t fix the government side of the problem.
There’s nothing in the announcement regarding a change in government regulations or requirements, so those probably still exist. I didn’t see an announcement regarding changing or streamlining government decision processes, so those probably still exist, too. Because those haven’t been changed means it will likely take the same amount of time, or longer, to accomplish actions on the government side. If you’ve never been confronted by the petty government tyrant who makes people and companies wait, because he or she can, then you’ve never experienced the true greatness of government involvement in full. Or the time when a critical decision-maker took leave (vacation) but didn’t empower anyone in their chain to make decisions while gone. Yeah, those are great times…
This process will take longer, because now that there’s an overarching contract, each Logistics complex will likely need to coordinate with the other two complexes. And that takes time. These complexes might eventually figure out the easiest way to coordinate is establish a central coordination office, which I don’t think exists yet. But this central office will add another layer of time, people, and bureaucracy to an already cumbersome process (again, more people equals more money). Not only that, just tracking all the different changes, requirements, and direction from each complex will be very tricky–and the government has not shown itself to be capable of dealing with tricky. This agreement will allow opportunities for obfuscation and the moving around of money. The government automatically then becomes slower, slightly more clueless, and more expensive. Who, then, benefits from this announcement?
The obvious beneficiary is Boeing. This reduction will obviously allow them to reduce or change the number of people on their side who had to deal with the painful acquisitions process. So they’ll be able to streamline their side but maybe keep, or even build a higher, profit-margin for the company and executives. I say higher, because the government typically gives some kind of monetary award to contractors for making processes more efficient.
Other big companies involved with the government will also benefit, as they can point to the Boeing agreement as a primary reason for changing their agreements to be the same. Lockheed Martin, Northrop Grumman, Raytheon–all of them would love to cut their overhead to keep up profit margins and contracts. Of course this means the central coordination office the government will probably have to man will be bigger. They might hire those good people laid off by the benefiting companies.
I’m sure there were a lot of PowerPoint presentations to the government, showing just how much better things would be with these overarching agreements. I’m sure the words were couched in such a way as to make it seem as if Boeing was doing a favor to the government by helping them figure out a way to find efficiencies in the supply chain with this agreement. And someone on the government side bought off on the idea.
The contractor is only a part of the problem. The only way things will get cheaper with government programs is to decrease the government overhead–stop adding people–get rid of some. Then be mindful of the money given to them by taxpayers. The reason why the acquisitions complexes exist, is because the government is supposed to be in charge of the money and programs, a frugal and good custodian of taxpayer money. A fantastic job they’ve managed to avoid for quite some time. It won’t just be space operations that will suffer, but the defense of the nation.
- Boeing and Lockheed Team for Air Force Long Range Bomber Bid (news.usni.org)
- Boeing Partners with US Air Force to Reduce Supply Chain Costs (spacemart.com)
- Boeing’s forced squeeze: This is how the middle class dies (thenewstribune.com)
- Boeing Streamlining Work With Air Force (fool.com)
- Tim Egan: Under My Thumb | New York Times (nytimes.com)
- Boeing, Air Force team up to cut supply chain costs (bizjournals.com)
- Boeing: Biggest state subsidy in U.S. history (seattlepi.com)
- Lockheed Martin and Boeing team up in a new USAF Long Range Strike Bomber program (theaviationist.com)