Contracting strategy plays a critical role in the overall acquisition strategy for programs as contracts facilitate the progression of a program through the defense acquisition life cycle. This starts at the early stages of the materiel solution analysis phase and continues through to the operations and support phase. Effectively and efficiently managing contracts is critical in maintaining a programmatic schedule, as the contracting timeline can take years. The contract requirements package and statement of work development can take anywhere between 6 to 12 months. Soliciting proposals and contract awards takes 6 to 12 months and producing components can take 12 to 18 months. To sustain the production line and prevent any costly delays, initial contract planning must be executed years in advance. This elongated contracting timeline means a solid contracting strategy must be developed and continually updated as the program progresses. The importance of contracting strategy will be highlighted in the analysis of the UH-60V Black Hawk program, including the management of the production supply chain, component obsolescence, and sustainment support.
The acquisition process is rarely smooth, and ensuring contracts have appropriate risk mitigation built into them is necessary. The UH-60V program primarily accomplishes this by building multiple options and option years, including a minimum/maximum procurement range. This provides flexibility as unforeseen events and costs can impact a program’s ability to execute its acquisition strategy. The program office works closely with the Army Aviation and Missile Command (AMCOM), AMCOM Logistics Center (ALC), and Army Contracting Command (ACC). Only 15 UH-60Vs currently exist as the program is undergoing low-rate initial production (LRIP) with an upcoming operational test in the 4th quarter of fiscal year 2022, a precursor to the program going into full-rate production (FRP). Perhaps the most intriguing aspect of the program is that the government has unlimited rights to most of its technical data package—all exceptions to this are intentional and align with the program’s sustainment plan. This is a first for a major Army defense acquisition program and provides an unprecedented opportunity for future applications Army-wide. Additionally, the UH-60V is the first Army aircraft to implement the modular open system approach, which is a critical design element in the development of the future vertical lift program and a top priority for the Program Executive Office Aviation. The open system architecture cockpit design provides digital multifunctional displays, allows for rapid future integration, and enhances aviation Soldiers’ situational awareness.
The program will address current capability gaps and meet operational requirements by employing an evolutionary acquisition approach to leverage mature technologies successfully integrated into other military aircraft. The structure of the program is unique among other acquisition programs because contracting strategy plays a critical role in the successful execution of the program. The first unique aspect of the program is that there is no prime contractor or original equipment manufacturer (OEM). The government performs that role as both the program integrator and production line. For the UH-60M, Sikorsky is the OEM and manages both the supply chain and production of the aircraft. For the UH-60V, the product office manages the supply chain, and Corpus Christi Army Depot executes the production in which a UH-60L is recapitalized and a digital cockpit installed. As such, the product office is a prime contractor in that they manage smaller sub-contractors through various contract vehicles.
The UH-60V program office’s contracting strategy is concentrated among five main contracting efforts. The electrical A-Kit contract procures a new electrical wiring harness for the aircraft, while the mechanical A-Kit contract procures the mechanical components needed to support the new cockpit. Requests for proposals will go out soon to the industry for both A-Kits as new contracts will be awarded under a full and open competition for the program’s FRP phase. For the actual cockpit itself, or B-Kit, a vast majority of the cockpit components are government-furnished equipment procured through the Army’s supply system. The remaining B-Kit components are contractor-furnished equipment (CFE) procured through a contract with the Redstone Prototype Integration Facility (PIF), but ALC will manage these items soon with their own contracts. The program’s software and engineering service contracts are executed through the PIF and will soon be transitioned to a task-order contract. The product office will utilize the Air Force’s Information Analysis Center Multiple Award Contract vehicle to select a prime vendor to facilitate future engineering services, software development, and component integration.
Currently, the program is preparing to transition from the LRIP phase to the FRP phase. As such, new contracts are required to support this transition and must be planned carefully and deliberately to ensure there are no gaps in the supply chain that could cause delays in the production line. Any breaks in the production line may lead to personnel and equipment being reassigned to other projects, causing production schedule delays which translate into fielding delays to units waiting on new aircraft. Another challenge for the program regarding contracting strategy is the procurement of components being utilized for production and sustainment simultaneously. In terms of the average acquisition timeline, the UH-60V program moved quickly between the production and sustainment phases of the life cycle. The program office must procure enough components to meet current production demand while accounting for any spares that may be needed as more units are fielded aircraft until the Defense Logistics Agency procures enough of its own components to feed the Army’s supply system.
Perhaps one of the greatest challenges in sustainment is obsolescence management, and the UH-60V program is no different. A great example of this challenge is the Army’s transition to the military code (commonly known as the “M code”) satellite-capable Embedded GPS Inertial Navigation System (EGI). The EGI provides precise location, velocity, and attitude to the aircraft fire control computer or integrated system processor for processing targeting information. A completely different program office is developing this new component in conjunction with Air Force software. Hence, the fielding and availability is out of the control of the UH-60V program office. The current EGI component the platform is utilizing is obsolete and is no longer in production. The contract strategy calls for procuring enough current obsolete EGIs to meet production requirements plus a few additional units as risk mitigation should the new EGI component fielding schedule be delayed. The final quantity purchased took a lot of analysis and coordination with outside stakeholders.
The Data Concentrator Unit (DCU) is another component facing obsolescence issues. However, the UH-60V program office is responsible for procuring a qualified replacement. The DCU collects and converts analog flight data into informative digital readouts for pilots, allowing them to understand the aircraft’s various systems’ performance in real time. Currently, a qualified replacement does exist, and the program must utilize its engineering services contract vehicle to modify the contract to execute a new DCU qualification effort. The program must work with the contractor to determine the cost and duration of the effort, and how it will affect the capability to supply the production line. Similar to the EGI, the program office must procure enough obsolete DCUs to sustain the current production requirements, provide spare units to sustain the fleet, and have enough left over as risk mitigation should the new DCU qualification effort run into delays.
These challenges highlight the importance of developing and executing a well-thought-out contracting strategy for defense acquisition programs to properly manage supply chains in the production and sustainment of their products developed for the warfighter. Paying close attention to periods of performance dates ensures sufficient time to modify the contract to extend or prepare for follow-on actions. It is important to remember that ACC’s standard procurement action lead time for any contract actions is 14 months. Properly developed transition plans are vital as any missteps made in the present can potentially cause schedules to slip months or even years. This will also mitigate any supply chain risks to the industrial base that could cause costly delays in the production line. Another method of risk mitigation in contract strategy is using multiple contract vehicles. This allows the government to have full and open competition, ensuring the best value is achieved. This also prevents the government from being beholden to a single large contractor and experiencing the issues that can come with “vendor-lock.” The unique structure of the UH-60V Black Hawk program highlights the importance of contract strategy and can provide valuable lessons throughout the acquisition and sustainment workforce.
Maj. Chris Carlstedt currently serves as an acquisition officer and the UH-60V Black Hawk assistant product manager in the Utility Helicopter Project Office, Program Executive Office Aviation. He holds a master degree in Project Management degree from Pennsylvania State University and a bachelor degree in Business Administration degree from Colorado State University.
This content is published online in conjunction with the Summer 2022 issue of Army Sustainment.