In Parts 1-9 I provided some of the background and government actions that I believe set the stage for the story of one of the biggest procurement fails in US acquisition and contract history in terms of real dollar costs, but more important, opportunity costs.
The National Reconnaissance Office (NRO) Future Imagery Architecture (FIA) acquisition played out over nearly fifteen years from an idea in the early 90s-but really the culmination of ideas and a campaign of risk reduction actions that started in the late 50s, 60s and 70s-followed by a number of implementations and further advances in computing and digital signal processing, that represented somewhat of a long march to refine the art of the possible, including experimentation, prototypes, demonstrations, technical and scientific breakthroughs, etc., from pre-acquisition stage to formal acquisition competition in three specific, funded stages and contract award in 1999.
Later schedule delays, cost overruns, loss of confidence in the capability of Boeing to complete the optical portion of FIA, culminated in 2005 with the embarrassing and seemingly disqualifying event of the cancellation of Boeing’s effort. The government subsequently awarded the “optical” component of the procurement to the firm that had successfully built and flown all previous US satellites, Lockheed Martin Corporation (LMC) just not at all by coincidence the 2d place finisher-or first place loser-to Boeing in the procurement.
Our government has somewhat of a sorry history of picking contract firms that are really good at “something” and making the misjudgment-sometimes caused by government idjiotcy-of sending a message to the leading firm so as to prevent “cockiness” and discourage taking “daddy Warbucks” for granted.
Or sending a message to corporate that nothing is certain in life-except stupidity-or if the lead contractor is some type of hated character, enemy, or insufferable braggart who is not careful of showing disdain for the “quality” of the customer-the government team, or in the case of FIA a combination of things, including the desire to save some money on a project that had almost no chance of success at the funded contract price the government was “inflicting” on the contractor: that the contractor was either silly enough-or desperate enough-or crazy enough to sign on the bottom line and obligate itself.
How serious do contractors take these procurement opportunities? Most cleared people in the business did not believe the NRO was going to recompete the contract. Some like Boeing, incumbent Lockheed Martin, Northrop, General Dynamics-the bigger firms who decided to make a run at being “primes”-allocated serious coin and key personnel to the effort and tens of millions of dollars to their “capture teams.” For FIA I’ve read varying accounts where Boeing and LMC allocated up to 1% of the anticipated contract value or 100M dollars!
Cost and budget data on large projects such as FIA ends up in volumes broken into the components of the effort and it is absolutely a full-time “cost team” job seeing to the details, including the government mandated reports, the corporation reports and all manner of Work Breakdown Structure (WBS) metrics on cost to budget, and materiel procurement reports: the paperwork is mind numbing. Our capture manager had a conference room dedicated to the management of our effort, where he had some 15 or 18 binders to track the WBS allocations for each of the partners.
For the last stages of FIA as Phase B completed and the final-Phase C-began, the firm I joined in fall 1997 was up to its neck with at least a dozen or more firms with teaming agreements to provide various elements of support and systems integration work: many of these efforts were as top secret as the project itself. A number of the company’s personnel worked as subject matter experts for the NRO as somewhat hired “gunslingers,” PhD level optics, radar, communications or modeling and simulation system advisors, who often knew some of the flaws in bids and proposals much better than the government.
When our relatively small team-our firm had about 820 employees at the time-gathered in the Atrium of our corporate headquarters at Fair Oaks to hear the results of the government announcement, there was shock and amazement to hear that Boeing won both satellite contracts: it really was unbelievable to most of us. For others it meant an immediate move to the Boeing FIA team headquarters at Seal Beach, California.
While others in the corporate management layer of the firm almost immediately began golden parachute plans to market our firm for sale to some bigger fish, as our booked work value had just gotten a steroid injection that would see our par valuation (for our shares in our Employee Stock Ownership Plan) go from $1 per share to initially $23, which led to purchase by Veridian within the year at $50 per share and later still purchase of Veridian by General Dynamics: the little fish get gone, while the bigger fish get bigger! Two of the secretaries that had worked for at least 20 years or more showed up at work with spanking new Ferraris!
Just to be clear about the FIA award, Boeing won the satellite portion of the contract as announced by NRO leadership 3 September 1999, while Raytheon was awarded in June 1999 the contract for the ground or the Mission Integration and Development (MIND) piece.
What eventually went so wrong that Boeing was unable to produce the optical component of FIA, leading to LMC getting the bullpen nod? There is perhaps no program in US history that received as much critical scrutiny as this procurement-from both Armed Services and Intelligence committees in congress, the General Accounting Office, the NRO IG, the Pentagon IG, the Pentagon Program Analysis and Evaluation office, USDI Staff, CIA IG, space commissions, among others.
NRO Dir Mr. Peter B. Teets directed an internal study effort to get to the bottom of the problem in early 2002: it was not a pretty mess. There are as many theories and “factoids” about the problems the government and Boeing faced, as well as the problems caused by somewhat of a relatively inexperienced but very aggressive engineering team, complicated by a number of vendors that proved none too savvy in the space engineering domain. There was also a new “spate” of emerging acquisition reforms that mandated to allow the contractor to run-in effect-its own supervision effort over its sub-contractors rather than have a traditional program where the government oversees program milestones, aided by an empowered systems integration element that works with the contractor to communicate status and to function as a check for the government.
This was a recipe for disaster and encouraged contractors to bluster through status updates where the government was ill-equipped to combat the narrative or to take corrective action until something became a true showstopper. It also encouraged the worst behavior on the part of some contractors.
I was conducting a program review up at Gaithersburg, Maryland in 2006 the “old school way,” and was working through the compartmented artifacts that we (I) had never seen assembled in one place until the onsite review (documents that went through our engineering board for approval and control by our enterprise Configuration Control Board–and I did get a big piece and some award fee from our SI over that…)
With ~43 artifacts on the back table, I was going through number ~26 when I came across a dollar bill halfway through the book. I pulled it out and looked at it-and I could tell by the murmurs behind me that it meant something that I clearly was not aware of-I finally turned and said-“I think we are due for a ten-minute break so we can get these conversations completed off-line.”
The LMC PM, lead engineer and chief architect rushed up to my seat and asked, “Did you find the dollar?” I showed it to them-and the Chief Architect said-“OMG, we have been doing that for almost ten years with acquisition on reviews, and you are the first guy who ever found it!” He was pretty excited, and I said, “Foxtrot Uniform and the horse you rode in on you POS:” Man, I was mad. I got over it later at Happy Hour with our team-and it is hard to blame them when they routinely went to all that trouble and were convinced-because they watched like hawks-that nobody on the government side ever seemed to read the stuff that was mandated by them, that they spent hours and hours and hours over to produce-well paid for by the government! And then shredded it!
I disagree in many respects that dollars lost or frittered away represent the metric that counts when it comes to judging big “furry” acquisition failures. I have been on both sides of the dance-all three if you consider there are government personnel putting out proposals/soliciting bids, contractors answering with proposals, and government supervisors overseeing the building of the “house.” My friend who built the Army Photographic Imagery Interpretation Facility at Zweibruecken AFB was a most unwelcome visitor on the construction site: the Germans were outraged that he would dare visit to check on them, and even more furious when they discovered he spoke German!
In most cases there are lost opportunity costs that are incalculable, and that applies in the case of FIA in spades. One of the projects that was well underway from a risk reduction and studies view was the so-called Long Dwell Imager (LDI) or the New Imaging System (NIS) program. The community had been studying the concept throughout the 1990s and had matured several concepts. The idea of using the Soviet Molniya Orbit had been studied for years and years, with a plethora of new designs consisting of spinning apertures and huge pieces of glass, as well as interesting concepts of operation that would provide serious dwell time over what was referred to as the “scum bag belt.”
The NRO stood up a program office and the community approved establishing the NIS Requirements Working Group, a tri-chair led by the CIA, NIMA and the JROC, with participation by each of the services and Strategic Command as the COCOM representative. The NRO-Advance Science and Technology Directorate-was lead for the project, which was later pretty much bled to death as the NRO struggled to come up with funds as FIA doubled-and then tripled in cost.
The NIS program was eventually killed by the Mission Requirements Board (MRB) when the NRO briefed further delays in the Initial Operating Capability or launch date, significant increased costs of >20%, and reductions in projected capability (like please, kill me now…)
Similarly, the Discoverer II Program (aka, Space Base Radar) transitioned out of DARPA to the USAF headquartered out at Los Angeles AFB. It was seemingly a viable program, but the costs were judged prohibitive in the FIA era. Congress was in no mood to fund what looked like a vastly underfunded program that was not supported by the IC–CIA-in particular, and there was the little matter that the USAF-SMC-was briefing a program of some 9 satellites in the base program at a cost of some 4.7B minimum, whereas studies showed they needed at least 12-but ideally 16-at the projected orbit to do the tracking they insisted was going to be possible and the key performance criterion for the system.
The USAF did not place much emphasis on myriad so called Advanced GEOSPATIAL Intelligence or GEOINT products that would be possible with the sensor, the major capability feature to NIMA, CIA and NSA to enable scum bag tracking and elimination.
Additionally, while the USAF maintained the program baseline story, LMC engineers visited congress and briefed that if they “scraped up all the spare parts and junk sitting around their factory, they could produce 2 satellites for about 4B total.” Northrop Grumman, Baltimore had a prototype of the projected radar type envisioned for the system-an Advanced Electronic Steerable Array (AESA)-and a good story that went with it, as with the plethora of fighters-including the Joint Strike Fighter-scheduled to include AESA populated arrays as their mainline sensor system, they had a credible story on how costs would be driven down as the chips were mass produced over time. However, this was 2003 and the projection for chip production missed the need for article use for SBR by quite a bit. Congress was in no mood for this system, and it was eventually killed after several years of feckless activity.
There were several other promising compartmented programs in the “no chance while FIA is a two-legged dog” category and all of these programs went the way of the dinosaur to contribute to the FIA “hat” collection. Now whether some of these programs would have been viable or not is pure conjecture, given how early in the development cycle they were (really concept definition,) although NIS had a large piece of glass and was working on risk reduction image processing algorithms and beam steering techniques, as well as image quality studies, while SBR conduced an Industry Day and a down select to a handful of vendors for a candidate radar payload, while one of the follow-on special systems was undergoing technical testing, several billion dollars into a fairly well defined program.
I do know having an NIS with a hugely agile footprint that acted synoptic and could produce short term, poor man’s video, covering a large swath nearly half a hemisphere capability that could be touched in milliseconds with a fast-steering, optical control chain anywhere within the boresight-that could augment small footprint ISR platforms-would have gotten us left of the bang on the CIED battle near immediately.
In many cases like FIA or other such government national intelligence programs, the specific objectives of the program often encompass or cascade into or promise enduring goodness for our first line of defense in our strategic Indications and Warning (I&W) program represented by each of the combatant commands on the frontier and front lines. The government’s capability to monitor emerging events and shape those that represent risks to us, our friends, allies, strategic partners and trade partners, is of inestimable intrinsic value and is priceless when it works as envisioned.
What would have been the value if instead of a KH-9 bucket return system on watch as the Soviet hordes staged at Kyber Pass, poised to invade Afghanistan in December 1979, we had a real time system that provided those data near immediately, vice in 1980 when the bucket return system showed the evidence? It may have meant nothing but would have given the Carter administration the opportunity to get its wits about it as the functions of government dealt with the inevitability of such an action.
What makes these systems so valuable when applied within a cascading system of capability is the reason the US government invests so much money in them in the first place. My definition of their intrinsic value is when they are operated in somewhat of an idyllic or utopian “ideal manner” by sharp and highly talented people, with the resulting information-when provided to decision makers-affords them the optimal time and space to assimilate the information and make the best decision they can make.
That is what the intel business is about: preserving freedom of decision and maneuver for our folks and compressing the timeline for them.
Like having a quarterback talented enough to recognize the defensive set and switch to the optimal counter play while under the center.
I’m about through with the introduction that leads to the effort described by a friend that tells the tale of what had to be considered to make some lemonade out of these lemons.
End of Part 10.
17 November 2022
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