In this era of cost-conscious military procurement, defense contractors must pay increasing attention to system lifecycle costs and lifetime sustainment.
Put simply, this means military systems designers must be able to estimate not only how much their hardware will cost up-front, but also must estimate how much systems will cost to operate over their lifetimes, as well as plan how to keep them running at peak efficiency from deployment to retirement.
Increasingly, this is becoming the contractor’s responsibility. The days of selling a system to the military without considering the system’s maintenance and upgrades are coming to a close. After all, system repair and technology insertion can be just as difficult a challenge as system design, and the military services, quite frankly, are tired of dealing with the problem on their own.
As a result, it is becoming common for military procurements to require contractor bids to detail the estimated lifecycle costs of their proposed systems from cradle to grave, and also to lay out a comprehensive plan for system maintenance, repair, and upgrades over the 20-plus years that the systems will be deployed.
Obviously this is a pretty good idea. Up-front procurement costs often give not even a vague idea of what the system will ultimately cost the taxpayers to operate over the system’s lifetime-the true costs for the government to own the system over time.
There’s a problem, however. The defense industry today, with few exceptions, is poorly equipped to gauge lifecycle costs or plan for lifetime system sustainment. These issues, historically, just haven’t been the industry’s job, and contractors have had little incentive to work these tasks into the equation.
Until recently, the contractor’s job basically has been to design, manufacture, and deliver military systems; the rest has been up to the government. It’s an uphill battle for companies to prepare themselves for these upcoming challenges, but fortunately some help is at hand.
The U.S. defense industry today has a deep well of lifetime sustainment expertise to draw from, and believe it or not, this resource is coming from the government itself.
Meet the latest incarnation of the Tobyhanna Army Depot in Tobyhanna, Pa. This post of 3,520 government civil employees and 576 private contractors is the largest electronics facility in the world, Tobyhanna leaders claim.
This Mecca of electronics expertise is the U.S. Department of Defense (DOD) primary center of excellence for maintenance, repair, and overhaul of Army, Navy, and Air Force equipment for command, control, communications, intelligence, surveillance, and reconnaissance, better known as C4ISR (see story on page 3).
“Prime contractors normally build systems, whereas we maintain, service, and support systems through the life cycle,” explains Army Col. Tracy Ellis, Tobyhanna’s commanding officer.
When a battlefield C4ISR system breaks or needs to be refurbished, more often than not it ships by truck or by train to Tobyhanna. Not surprisingly, business at the depot of late has been good, primarily because of the high-tempo military operations in Iraq and Afghanistan.
A proliferation of talcum-powder-like dust on military equipment waiting for attention on the Tobyhanna assembly lines attests to the influence that the global war on terrorism is having on the depot’s operations.
Not only do the technicians at Tobyhanna repair military electronics, but they also upgrade it as necessary by inserting the latest components into legacy systems. As well, they closely track the costs of repairing and maintaining a system throughout its lifecycle.
Suffice it to say that the folks at Tobyhanna know more than a thing or two about military electronics system lifecycle costs and lifetime sustainment. Now they are ready to pass on the benefits of their knowledge and experience to the defense industry.
Tobyhanna leaders are offering their services by partnering with private defense contractors as subcontractors who specialize in maintaining, repairing, and upgrading military systems over their lifecycles. “We see this as a major trend,” says Ronald Cappellini, Tobyhanna’s director of business management.
Tobyhanna and the other military depots no longer simply function at the pleasure of DOD. Today they must justify themselves from a profit-and-loss business standpoint.
This approach helps stave off government waste and abuse at the facility, boosts the efficiency of the operations there, and can make partnering with Tobyhanna an attractive option for defense companies charged with lifetime sustainment of the electronic systems they design and manufacture.
Tobyhanna has a unique perspective on how to keep military electronics functioning on the battlefield. Technicians there are involved with communications equipment, computers, optoelectronic sensors, missile systems, air traffic control, electronic warfare systems, and a long list of related equipment.
They know intimately how a wide variety of equipment is supposed to function in the field, have learned by experience how equipment actually functions in the field under real-world and unexpected conditions, they work with a wide variety of companies, and they work with many different technologies.
Let’s face it: defense companies are good at a lot of things where defense procurement is concerned, but they cannot be all things to all people.
“We are not like a large defense contractor that knows about only a few systems. We have a piece of all the systems,” says Robert Lamanna, manager of business development and business management at Tobyhanna.
Leaders of Tobyhanna are urging companies in the defense industry to contact them about opportunities for partnering, subcontracting, or other business relationships.
For more information, contact either Robert Lamanna, manager of business development and business management at Tobyhanna, by phone at 570-895-6844, by fax at 570-895-8271, or by e-mail at [email protected].
Also contact Ronald Cappellini, Tobyhanna’s director of business management, by phone at 570-895-6660, or by e-mail at [email protected].
Editor in Chief