The US Air Force does not want to reproduce the mistakes of the F-35 program with the NGAD program

According to US Air Force Secretary Frank Kendall, it is essential to avoid, with the NGAD program, the same mistakes that handicapped the F-35 program. But that could be much more difficult to say than to say, with regard to the organization of the defense industry across the Atlantic.

In an interview given to CBS news, the former chief negotiator of the Pentagon's armaments programs and former vice-president of Raytheon, Shay Assad, draws up a vitriolic observation of the invoicing practices applied by the giants of the American defense industry.

According to him, following the industrial reorganization of 1993 which made it possible to merge the fifty major companies of the American Industrial and Technological Base of Defense or BITD, into five large groups which today prove to be the five largest global companies in this field (in the order Lockheed-Martin, Raytheon, Boeing, Northrop Grumman and General Dynamics), the Pentagon has created a monopoly situation for each of the equipment produced, leading to an explosion in the prices charged by these companies.

Thus, according to Shay Assad, in 1990, a Stinger missile cost the US Army $25.000, while Raytheon now charges $400.000 per missile. Even taking into account inflation and technological advancements between missile versions, the price increased 7 times.

Another example cited by the man who now calls himself "the worst enemy of the US defense industry", an oil distributor, bought until recently by NASA at $ 378 per unit, is sold to the Pentagon for $10.000 by its manufacturer.

As for the Patriot missile in the news, it saw its price increase to such an extent that according to Shay Assad, the US Army should have received the equivalent of a year of missile production to simply compensate for the discrepancies unjustified prices charged by Raytheon.

Stinger Ukraine Industrial consolidation Defense | Defense News | Fighter aircraft
The Stinger missiles sent by the US Army to Ukraine had cost it $25k in 1990. They have been replaced by missiles of the same type which are now billed at $400k per unit

The reasons for these derivatives are numerous, in particular the pressure linked to the management of the stock market leading companies to aim for results and a spectacular redistribution. Thus, according to Mr. Assad, the margins contractually negotiated between the state and the defense industry are between 10 and 12% of the budgetary envelope, but frequently reach, in fact, 40% of this envelope.

Another reason is none other than the strong position of manufacturers conferred by the monopolies created by the reorganization of 1993, but also by a certain abandonment of the supervision of contracts and their negotiations, the Pentagon having halved the number of personnel dedicated to this in 2 years. In fact, some manufacturers have even made a specialty of detecting companies holding a monopoly on certain equipment, including spare parts, to buy them back and make huge profits by increasing prices.

If Shay Assad does not, one suspects, particularly good press at the Pentagon, especially since the US defense industry has become over the years the outlet of choice for general officers at the end of their careers, precisely those who roam the corridors of the American General Staff, his observation is no less relevant and well-argued.

And the latest statement from Franck Kendall, the American Secretary of the Air Force, tends to prove him right. For the Minister, in fact, it is out of the question to reproduce in the NGAD program which aims to design the replacement for the F-22 by 2030, thehe same errors that today handicap the F-35 program, referring to the position of extraordinary strength given to Lockheed-Martin by contractual means around this program.

F35A USAF Industrial Consolidation Defense | Defense News | Fighter aircraft
All the data produced by the F-35, in the United States as well as for export, contractually belongs to Lockheed-Martin, which also holds the exclusive maintenance and development of the aircraft.

In fact, when the Joint Strike Fighter program was awarded to Lockheed-Martin, the Pentagon agreed to leave the manufacturer with full and exclusive rights to all the data produced by the device, to the United States as well as for export, as well as on the device over its lifetime.

It is thus impossible for the US Air Force to entrust data from the F-35 to another manufacturer in order, for example, to develop new equipment, or even a new aircraft, without first going through Lockheed-Martin which, although obviously, will do everything possible to assume the said contract.

As Franck Kendall acknowledges, the contractual framework of the F-35 program obliges the US Air Force, but also the US Navy and the US Marines Corps, as well as all the air forces using the aircraft, to pass by the manufacturer for everything concerning the aircraft and its operation, constitutes a serious handicap for the US armed forces and their industrial negotiation capacities.

If the US Air Force remains convinced, within the framework of the NGAD, that it is necessary to rely on a single industrialist for the design and manufacture of the 200 aircraft that will be ordered, Franck Kendall specified that in no case, this time, the data generated by the device and the entire system of systems, will only belong to the industrial.

On the other hand, within the framework of the collaborative combat aircraft (CCA) program which must design and build the drones which will accompany the NGAD and the F-35A in the years to come, Frank Kendall indicates that several industrialists could be solicited jointly, suggesting that this would reorganize healthier competition and therefore better business practices for the Pentagon and the US Air Force.

the NGAD program should make it possible to replace the US Air Force's F-22 Raptors by 2030
If the NGAD will only be awarded to a single manufacturer, the CCA program will be broken down to several manufacturers, in an approach that is reminiscent of that advocated by Will Roper in his time.

It is interesting to note that these drifts did not emerge recently. While serving as Assistant Secretary for Acquisitions and Technological Development of the US Air Force, Dr. Will Roper had already highlighted the constraints imposed on the budget of the US Air Force by the industrial organization applied in particular to the F-35 program, going so far as to declare, in July 2020, that major programs such as the F-35 were today a long-term threat to the future of the American military aeronautical industry, but also on the military power of the United States on the international scene.

For the project management specialist that he is, it was essential to return to a decentralized and competitive BITD, and the best way to achieve this was to abandon large standardized programs to develop programs in small series of devices. specialized combat units, so as to thoroughly reorganize the BITD and its practices.

The comparison of the equipment and maintenance expenditure of the US armies with Western armies that can rely on a national BITD, shows that there is on average a factor of two applying to the US armies, and by transitivity, to many Western armies equipping themselves in Washington.

For example, a Virginia-class submarine is purchased for twice the price of a British Astute, and more than 2,5 times more than the French Suffren, without its performance justifying such a price difference. .

If compared to a Russian Iassen, the price ratio is more than 3,5, as is the case between a Su-35 acquired by the Russian Air Force and an F-15EX acquired by the US Air Force, while an Abrams costs no less than 6 times the price of a T-90M, and a Constellation frigate will cost twice the price of a Chinese Type 052D destroyer.

Neither the differences in labor costs, nor the differences in performance justify such differences which also apply to the costs of maintenance and evolution of equipment, this clearly coming to heavily handicap the American effort to modernize its armies. faced with the return of strategic competition with Russia and China.

Launch of an SSN Virginia Block IV
Today, a Virginia-class nuclear attack submarine costs twice the price of a British Astute, 2,5 times the price of a French Suffren, and 3,5 times the price of a Iassen. Russian

In any case, it is unlikely that the United States will be able to deal effectively with the Chinese/Russian challenge without going through a profound reorganization of its defense industry and trade practices.

Because unlike the previous three decades, the United States must now face powerful adversaries in this field, and more particularly China, which has been able to effectively organize and structure its own industrial and technological defense capabilities, precisely to mass-produce and at controlled costs with efficient equipment.

While the Chinese economy will gradually come into contact with the American economy, and Beijing will most likely expand its network of alliances around the world, the practices of the US BITD today constitute, in many respects , the biggest weak point of a Western camp accustomed to being fed by Washington in this area.

[Armelse]

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