Americas Defense Meltdown - IT Acquisition Advisory Council

James P. Stevenson • 173strategic sealift and specialized air, with a decreased emphasis on strategic and tacticalairlift, but all at significantly reduced cost compared to current plans.Even with an increased emphasis on aerial refueling, the current plans for tankersare not realistic with respect to either cost or schedule. The yearly cost for thetanker portfolio will increase from approximately $3 billion in FY 08 to at least $7billion in the next five or so years. Based on its plans, the U.S. Air Force will have tomaintain at least that amount for 30 years ($200 billion total) according to currentprojections. The projected cost of just acquiring new tankers over the next 30 years isat least $100 billion. 22 Even worse, there appears to be no backup plan if the largest,oldest fleet in the Air Force is grounded or the KC-135Rs’ service life is significantlyreduced in the near- to mid-term. This is important as 90 percent of the strategic airrefueling capacity resides in the KC-135Rs. The only options appear to be to spendmore money and buy more tankers per year, or let old tankers continue to fly untilthey are grounded or fall apart. Unfortunately, there is an industrial capacity issue andsignificant resource limits on how much the nation can afford to spend per year. Inorder to decrease these funding requirements, we must reduce the cost of the tankerfleet, as well as the demand and/or need for tankers. This leads us to propose a forcestructure that permits reducing tanker numbers in the U.S. Air Force inventory byapproximately 20 percent.According to the Congressional Research Service (CRS), the Air Force strategyof tanker recapitalization, one of bureaucratic averaging, is to buy exactly 179 KC-X, 179 KC-Y and 179 KC-Z tankers. 23 To reduce the cost of the tanker fleet, the AirForce must move towards a smaller, cheaper tanker (KC-Y) as quickly as possible.That would mean stopping the KC-X buy at around 100 tankers (pending analysis ofthe final selection). The smaller, cheaper tanker (KC-Y) should be at least 30 percentcheaper in acquisition costs than the KC-X, and about 30 to 40 percent less expensivein operational and support (O&S) costs. It should require virtually no additionalinfrastructure costs – that is, to be comparable with KC-135R costs. The KC-Y tankershould be no larger than the KC-135 (in both size and weight), and the life cycle costsneed to be significantly cheaper with the ability to use and transfer alternative fuels.Even though there are no commercial derivative aircraft in this class today (fromeither Boeing or EADS), this should help shape the aircraft industrial base on theirnext commercial offerings in the 2010-2020 timeframe (specifically, the Boeing/EADSfollow-on aircraft). This future aircraft should be a “fly-before-you-buy” acquisitionto minimize cost and capability risks. Introducing a third tanker (e.g., KC-Z) to thediscussion is not cost effective for a plan going several decades into the future.There are experts in this field who say there should not even be a thought of savingsin strategic aerial refueling because this area has been woefully neglected andtherefore it is time for it to get its fair share. However, neglect does not mean that weshould accept OSD and U.S. Air Force plans carte blanche. Even with the alternatives