Navy Effort To Lower Maintenance Costs Goes After Unnecessary Requirements

Anyone in the Department of Defense in a position of responsibility for maintenance activities will tell you that rising costs have been “eating their lunch.” One reason for this is that we have a force structure half the size that it was at the end of the Cold War that is five times more active – and this is without counting operations in Iraq and Afghanistan. Much of the equipment base of the current force is of Reagan vintage and is badly in need of modernization. Unfortunately the rate we are modernizing the various fleets is simply too low to significantly impact overall aging. A second reason is that the force is older. The combination of too much aging equipment that is being operated more intensely, often in difficult environments, produces a spike in maintenance requirements and costs.

A third reason is the burden imposed on all of defense acquisition by unnecessary and counterproductive regulations. A study by the Lexington Institute late last year noted that regulations and oversight imposed on the defense industry by the Pentagon and Congress levies a heavy tax on programs. Cutting back on specifications and regulations that serve little or no useful purpose but help to create an inefficient, slow, costly and complex acquisition system could save billions of dollars in both the procurement and operations and maintenance accounts every year.

The Navy seems to have taken this idea to heart. Declining budgets and continuing high demand has forced the Navy to get smarter when it comes to a number of aspects of maintaining ships and aircraft. As a result, it has been able to reduce costs while maintaining performance.

The Navy also has validated the idea of reducing specifications and regulations. Take the case of shipborne generators, as described in a recent article in Inside the Navy (“Material Assist Teams, Smarter Maintenance Schedules Keep Costs Low,” January 28, 2013). Generators for Navy ships cost three times as much as the same piece of equipment purchased commercially. When the Navy examined the reason for this disparity it found that 91 percent of the premium the service pays is due to unique military specifications and the cost of the acquisition process. The latter includes such features as unique accounting methods, demands for cost and pricing data, unnecessary competitive contracting and unpredictable changes in demand. Now PEO Ships is working to figure out which specifications and regulations really matter with the intention of jettisoning the rest.

The nation is on the cusp of a hollow military. A primary reason for this is the unnecessary costs associated with the DoD acquisition system. The boldest initiative the incoming leadership of the Pentagon could do to fix the problem is declare war on that system. Congress could help by requiring rejustification of every technical specification and acquisition regulation.