JFCOM Industry Symposium

1
JFCOM Industry Symposium
Miss Suzanne Patrick DUSD (Industrial
Policy) Portsmouth, Virginia March 18, 2004
2
The Defense Industrial Base Healthy and
Innovative
THE HISTORICAL CONTEXT Financial Health

• Financial Measure 1985-1990 1996-2000 2003
• Operating Margins 6 12 9.51
• Price/Earnings 8.5x 26.4x 35.4x2
• 1 Operating margins are substantially penalized
  by write-offs against commercial aircraft and
  space programs
• 2 2003 P/E is strongly inflated by poor earnings
  performance of The Boeing Company

Sources ODUSD(IP), Standard Poors Compustat
3
The Defense Industrial Base Healthy and
Innovative
REINFORCED BY A HEALTHY FY05 BUDGET OUTLOOK

• Defense Spending at 401.7 billion up 30 from
  FY01
• Procurement at 74.9 billion up 24 from FY01
• RDTE at 68.9 billion up 68 from FY01

Sources ODUSD(IP), DoD Comptroller
4
The Defense Industrial Base Healthy and
Innovative
INNOVATION AND RESPONSIVENESS 2001-2003

• JDAM monthly production quadrupled from 700 to
  3,000 in less than six months
• Laser Guided Bomb more than doubled at 33 price
  reduction with new competitor going from
  initial qualification to 100 award in one year
• New suppliers entering with unprecedented speed

Sources ODUSD(IP)
5
The Defense Industrial Base Healthy and
Innovative

• Innovation and Responsiveness 2001-2003
• JDAM monthly production quadrupled from 700 to
  3,000 in less than six months
• Laser Guided Bomb more than doubled at 33 price
  reduction with new competitor going from
  initial qualification to 100 award in one year
• New suppliers entering with unprecedented speed

Source ODUSD(IP)
6
Roadmap to the Future
Source Adapted from Transforming the Defense
Industrial Base A Roadmap, ODUSD(IP), February
2003 (www.acq.osd/ip)
7
Joint Staff Functional Concepts
Battlespace Awareness

Capabilities of commanders and all force elements
to
understand the environment in which they operate
and the
Global Hawk, MP
-
RTIP, NAS,
Uses
adversaries they face.
a variety of surveillance
Predator UAV (MQ
-
9), NPOESS,
rmonized
secure
capabilities to gather information, a ha
SBIRS
-
Hi
gh,

-
2
Cobra Judy Replacement, E
net
centric environment to manage this information,
and a

Advanced Hawkeye
collection of capabilities to analyze, understand
and predict.

Command and Control
Capabilities that exercise a commanders auth
ority and


direction over forces to accomplish a mission.
I
nvolves

planning, directing, coordinating, and
controlling forces and
GBS, AEHF
,
FBCB2, JTRS,
SMART
-
T, WIN
-
T, MCS, NESP

operations.
P
rovides the means for a commander to recognize

what is needed and ensure that appropriate
actions are taken.

For
ce Application

Capabilities to engage adversaries with lethal
and non
-lethal
methods

across
the entire spectrum of conflict.
Includes all
AMRAAM, DDG 51,
G
MLRS,
battlefield movement and dual
-
role offensive and defensive
JDAM, JSOW, CVN 21, MM III
,
co
mbat capabilities in land, sea, air, space, and
information
SSGN

domains.

Protection

Capabilities that defend forces and U.S.
territory from harm.
Includes missile defense and infrastructure
protection and other
ATIRCM/CMWS, PAC
-
3,

capabilities t
o thwart force application by an adversary.


Chem Demil
Focused Logistics

Capabilities to deploy, redeploy, and sustain
forces anywhere
-
in
or above
the world
for
sustained, in
theater
operations.


LPD
-
17, C
-
130, CH
-
47, H
-
1
Includes traditional mobility functions of
airlift, sealift, and
-
AKE,

Upgrades, GCSS, T
spacelift as well as short
-
haul (intra
-
theater and battlefield)
T
-
-
17,

45 Training System, C
transportation.
A
lso includes logistics C2, training, equipping,
C
-
5 RERP, FMTV, V
-
22, MH
-
60

feeding, supplying, ma
intaining and medical capabilities.



Source Joint Staff Functional Concepts and
ODUSD(IP)
8
A Functional Capability View of U.S. Battlespace
Awareness Programs
Source Adapted from Defense Industrial Base
Capabilities Study Battlespace Awareness,
ODUSD(IP), January 2004 (www.acq.osd/ip)
9
Functional Capabilities Applications in Defense
Enterprise Strategies
Source ODUSD(IP)
10
A Corporate Operating Group Mapped by Functional
Capabilities An Example
by Functional Capabilities
BAE SYSTEMS
Force Application
BattlespaceAwareness
Command and Control
Focused Logistics
DUSD(IP) edits
Source BAE Systems,
11
The Mapping of Business Units by Functional
Capabilities
DUSD(IP) edits
Source BAE Systems,
12
Existing Capabilities Australian MoD Projects
Source Australian MoD
13
Future CapabilitiesDCP Australian MoD Projects
Source Australian MoD
14
Consolidated View Existing and Planned
Australian MoD Projects
E X I S T I N G P R O J E C T S
F U T U R E P R O J E C T S
Source Australian MoD
15
Consolidated View Existing and Planned
Australian MoD Projects
E X I S T I N G P R O J E C T S
F U T U R E P R O J E C T S
Source Australian MoD
16
Consolidated View Existing and Planned
Australian MoD Projects
E X I S T I N G P R O J E C T S
F U T U R E P R O J E C T S
Source Australian MoD
17
Consolidated View Existing and Planned
Australian MoD Projects
E X I S T I N G P R O J E C T S
F U T U R E P R O J E C T S
Source Australian MoD
18
Consolidated View Existing and Planned
Australian MoD Projects
E X I S T I N G P R O J E C T S
F U T U R E P R O J E C T S
Source Australian MoD
19
Business Strategy Assessments Based on a
Consolidated Functional Capabilities View
Candidate DoD Proposal
Source OUSD(ATL)
20
Initial Findings Based on Assessment of Major
Defense Acquisition Process in C2
1
Footnote 1 Many C2 programs are funded through
platform acquisition programs vice stand alone

• Battlespace Awareness and C2 programs consume
  only modest proportions of overall budget.
• Surprisingly, overall planned C2 spending as a
  percentage of all functional capabilities will
  decline from an average of 4.5 in FY03-FY07 to
  2.1 in FY15.
• Low funding levels could be because C2 funding is
  imbedded within other functional capability area
  programs however while planned C2 expenditures
  remain relatively stable at 2.8-2.2 billion per
  year from FY03-FY07, from FY08-FY15, expenditures
  will decline by an average of 9 per year to 0.7
  billion.

Source ODUSD(IP)
21
Crafting Defense Business Strategies by
Functional Capability
Source ODUSD(IP)
22
The Global Defense Supplier Examples Australia
SME Technology
Source ODUSD(IP)
23
Consolidating Maps of Military Capabilities of
Functional Areas The First Step
Australia
United States
Command and Control
NAS
Wagtail
HF Mod
Para- keet
Joint Forces Objectives
FCS
Raven
MMA
Force Application
Command and Control
F-22
ACS
Assess gaps and overlaps relative to intended
coalition missions. Rationalize overlaps and
harmonize requirements based on common
operational objectives.
Force Application
Global Hawk
Battlespace Awareness
ANZAC
AESA
Battlespace Awareness
NINOX
Protection
Vigil- are
NULKA
LADS
Protection
PAC-3
SHORAD
HPCM
Focused Logistics
Focused Logistics
Source ODUSD(IP)