The prospect of conflict with China has prompted the U.S. Air Force to change the way it buys weapons, pushing defense companies to look for new ways to make money.

The military will need to operate thousands of connected systems across vast distances if war breaks out in the Pacific, posing new challenges for the Pentagon’s acquisition community, Andrew Hunter, the service’s acquisition manager, said at Defense One State of Defense trade event.

“If you think about the typical acquisition approach: cost, schedule, performance; see the hunter, buy the hunter, operate the hunter. It’s more complicated than that. It is about how these elements interact effectively to achieve a war outcome in a particular mission. So we tried to design our acquisition toolset, which is not radically different from the tools of the past, but to solve this particular problem, which is our pacing challenge,” Hunter said.

To do this, the service invests in mission systems of an aircraft or platform, and establishing direct relationships with suppliers instead of going through large defense companies to manage suppliers. This means that prime contractors, who have historically benefited from controlling the entire architecture, must relinquish some control.

The Air Force still needs traditional defense majors to integrate systems onto a platform, Hunter said, but future money will go to those with the “best of breed in of mission systems”, in addition to the integration work.

“Now these are things that (major traditional defense players) would have considered their competitors’ systems, there are more opportunities for them in this area as well. More competition. And then for smaller vendors, an opportunity to get into the game more easily and have a direct relationship… with the government, and that’s crucial, to also have that engagement with the mission systems vendors,” Hunter said.

Hunter cited the Collaborative Fighter Program as an example of their new approach to acquisition. The program was set up to allow companies to bid on future tranches if they miss the first, creating a more dynamic relationship with the industry.

The department has also learned, through trial and error, that placing all the risks on industry during the development phase of programs leads companies to ignore potential risks, which can harm the department in the long term. , he declared.

“Every time we convince ourselves that we have found a program (in which) the risk is actually so low that we can probably resort to fixed price contracts here, even during the development phase, we end up finding risks that we didn’t like,” Hunter said.

He highlighted two Boeing programs in which the service massively underestimated development risks: the T-7 jet trainer and the KC-46 tanker. The two fixed price contracts resulted in huge losses for Boeing and delayed capacity for the Air Force.

Hunter remains fairly confident in Boeing’s ability to turn things around, despite the company’s defense arm. bleeding billions and a recently concluded seven-week strike that ended short-term deliveries on hold.

“I am confident that Boeing can continue to deliver quality aircraft. I think the record shows that ‘on time’ has been a question mark over the last few years, and we’d like to see them get back to that,” Hunter said.

Although Boeing is still behind on a few programs, when they deliver results, they are “effective fighter jets,” Hunter said, so the engineering talent is “still there.”

The Pentagon needs a healthy, profitable industrial base, Hunter said, because without it, companies won’t be able to retain a talented workforce.

“We need the best, because the things we do are really difficult. It is therefore in our interest that the industry is profitable within reasonable limits. And I think overall we’re getting there, and we have to be careful that we don’t push an industry to a place where it’s no longer profitable, unattractive for capital and unattractive for human talent,” he said. he declared.