Acquisition
Management
in
the
United
States
Air
Force
and
its
Predecessors
DISTRIBUTION STATEMENTA
Approved
for
Public
Release
Distribution
Unlimited
Lawrence
R.
Benson
Air
Force
History
and
Museums
Program
1997
20050429
024
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US Air Force Acquisition Management: Historical Evolution, Notas de aula de Design
An historical account of the acquisition management practices in the united states air force and its predecessors. It covers the period from the early days of the air corps to the establishment of the air force systems command and the air force materiel command. The challenges faced by the air force in building an effective relationship with private industry and the impact of political and fiscal factors on acquisition procedures.
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Acquisition Management
in the United States Air Force
and its Predecessors
DISTRIBUTION STATEMENTA
Approved for Public Release
Distribution Unlimited
Lawrence R. Benson
Air (^) Force History and Museums Program 1997
FOREWORD
In its first fifty years as an independent armed service, the United States Air Force (USAF) has fostered science and tech- nology and-in partnership with the private sector-developed and produced the complex tools of aerospace power that helped the Free World prevail in the Cold War. The foundation for these extraordinary^ achievements^ was^ laid^ in^ the^ forty^ years before the Air^ Force^ separated^ from^ the^ U.S.^ Army^ in^ 1947. This booklet tells the story of how the air components of the Army and then the USAF organized and managed the activities required to get aircraft and other weapon systems from the drawing board to the flightline or the launch pad. Published as one of a series of booklets celebrating the 50th anniversary of the USAF in 1997, this study^ is^ the^ first^ overall historical synopsis of the service's acquisition structure.^ The text was originally prepared as a chapter in the Air Force Ac- quisition Factbook, a compendium of acquisition programs and policies published by the Office of the Assistant Secretary of the Air Force (Acquisition). Hence the^ study^ is^ intended^ both^ to educate personnel in^ today's^ acquisition community^ about^ their antecedents and to commemorate^ this^ aspect^ of^ the^ Air^ Force's heritage to^ a^ wider^ audience.
RICHARD P. HALLION
Air Force Historian
ii
CONTENTS
- Overview
- 1914-1939 From the Great War through the Great Depression,
- The Arsenal of Democracy, 1939-1945
- Postwar Demobilization and Deliberations, 1945-1950
- Separate R&D and Procurement Commands, 1950-1961
- The Ascendancy of Systems Command, 1961-1986.
- Reform, Streamlining, and Centralization, 1986-1996
- Appendix: Key Acquisition Organizations and Leaders
- Glossary of Abbreviations
- Bibliography
- Notes
Acquisition (^) Management
in the United States Air Force
and its Predecessors
Overview
During the Twentieth Century the United States be- came the world's premier (^) aerospace nation, both com- mercially and militarily. Inventing, developing, testing, evaluating, buying, and producing the implements of air power grew into an enterprise of unprecedented com- plexity. Leading this effort, the United States Air Force evolved from a small division of the Army's Signal Corps into one of the nation's largest purveyors of technology. As it did so, the Air Force frequently revised its organ- izational (^) structure to manage these tasks-now referred to collectively as the acquisition process. Although the historical circumstances and the state of technology changed (^) greatly as the century progressed, some recur- ring patterns of organization emerged. Before World War II, when the manufacturing (^) of American military airplanes was a low-volume, hand- work-type industry, (^) the U.S. Army concentrated almost all air acquisition management activities at one organi- zation in the vicinity of Dayton, Ohio (^) (the birthplace of aviation). Also included (^) within this organization--desig- nated in 1926 as the Air Corps' Materiel Division-were the logistics functions of supply, maintenance, support equipment, and industrial planning. (^) Although some key procurement decisions were made in Washington, D.C., the Materiel Division played a critical role in fostering the development of American aviation technology during
science and technology. As prefaced in the definitive study of aircraft acquisition in World War II, "one can- not truly understand.. .air power without first coming to appreciate something of the enormous complexity of pro- curement."^1 A comprehensive analysis of acquisition is well beyond the scope of this essay. It is intended merely to acquaint readers with the evolving organizational framework used by the Air Force to acquire the tools of aerospace power.
From the Great War through the Great
Depression, 1914-
Although Orville and Wilbur Wright sold the first military airplane to the U.S. Army Signal Corps in 1909, the United States soon fell behind the^ European^ powers^ in^ aircraft^ design and production-especially after the outbreak of World War I in
- Recognizing the nation's lag in aviation technology, Con- gress created the interagency National Advisory Committee for Aeronautics (NACA) in March 1915. But until the long-delayed completion of its experimental center at Langley Field, Vir- ginia, in^ 1920, NACA^ was^ unable^ to^ contribute directly^ to^ air- craft development. For advancing military technology in general, the National Academy of Sciences convinced a reluc- tant President Woodrow Wilson to endorse the^ formation^ of^ the National Research Council in April 1916 to help mobilize American scientific resources in support of national prepared- ness. Funding and administrative restrictions,^ as^ well^ as^ the military leadership's lack of appreciation for the potential of new technologies, limited the benefits of this umbrella organi- zation. After the United States^ declared^ war^ on^6 April^ 1917,^ NACA took the lead in drawing up a plan for aircraft production. The War Department disregarded^ NACA's^ plan^ in^ favor^ of^ a more ambitious one of its own. Not even an expensive, crash program by an energized government-industry partnership could make this rash plan into a reality. The effort came under the aegis of the Aircraft Production Board--created on 12 April 1917 as an element of the recently formed National Defense Council^ to^ co- ordinate aircraft manufacturing for both the Army and^ Navy. The Army's internal organization also proved inadequate for managing its air mission, and on 20 May 1918, President Wil- son elevated Army aviation from the Signal Corps to^ the^ War Department. Three days earlier, the President had established within the Army a Bureau of Aircraft Production, responsible for what would today be considered acquisition management. The War Department had already created the Division of Mili- tary Aeronautics, responsible for operations and^ training.^ On 24 May 1918 both organizations became components of the newly created Air Service. The Air Service, however, was not
lecting, testing, and evaluating inventions. The history of weap- ons in^ the^ United^ States^ is^ filled^ with^ evidence^ on^ this^ point."l- With the postwar demobilization, the Air Service abruptly terminated most acquisition programs, leading to financial chaos in the fledgling aircraft industry and thousands of court claims against the Government. For the future, Congress man- dated fixed-price contracts because of its perception that the cost-plus contracts used during the war had led to excess profi- teering. In the immediate postwar period, the Air Service fo- cused much of its attention on managing the surplus of supplies and equipment inherited from the war. In 1919 its residual air- craft development resources were further concentrated at McCook Field. Here the Engineering Division added the Tech- nical Section of the Division of Military Aeronautics, a testing squadron at nearby Wilbur Wright Field, and aircraft experi- mental activities from Langley Field. The Supply Division in Washington exercised procurement responsibility for the Air Service; however, as formalized by the National Defense Act^ of 1920, the Office of the Assistant Secretary of War was tasked with industrial planning for the Army. Formation of the Army- Navy Munitions Board helped assure some^ degree^ of^ inter-serv- ice coordination in acquiring weapons. Despite the postwar drawdown, the Materiel Division-un- der the command of^ Col.^ Thurman^ H.^ Bane--developed^ some
Like top-ace Eddie Rickenbacker, shown here with his French Spad 13, all American combat pilots in the Great War had to fly Allied air- craft.
6 4
significant technical innovations (^) as it began to evolve into an arsenal-type organization. The Division even built some new aircraft models. After 1923, however, money for such experi- ments became even scarcer. In recognition of the need to main- tain an industrial base of private aircraft companies, Chief of the Air Service Maj. Gen. Mason Patrick in 1925 restricted the Engineering Division's design activities and prohibited it from building experimental aircraft. The U.S. Army Air Corps, which replaced the Air Service on 2 July 1926, united the Engineering Division with the Field Service Section at nearby Wilbur Wright Field to form (^) the Ma- teriel (^) Division on 15 October 1926. The new division, which moved to Wright Field* when McCook Field closed in 1927, was responsible for (^) the Air Corps' acquisition functions. It included the following six sections: (1) War Plans (responsible for indus- trial mobilization), (2) Experimental Engineering (research, de- velopment and testing), (^) (3) Field Service (depot management), (4) Repair and Maintenance, (5) Inspection, and (6) and Pro- curement (later Contracting), which had previously been con- trolled from Washington, D.C., by the Air Service's Supply Division. Delegated great authority for all these (^) functions, the Materiel Division was represented in Washington by a liaison office. It thereby practiced a form of "cradle to grave" manage- ment, although some of its authority (^) began to migrate back to the Office of the Chief of the Air Corps in Washington in the late 1930s. Despite some interesting work in its laboratories, the Mate- riel Division's R&D activities (^) focused primarily on applied re- search. Most fundamental (i.e., basic) research during the interwar years was, (^) by law, the province of NACA and the Na- tional Bureau of Standards. With its limited resources, the Ma- teriel Division initially concentrated (^) on maintaining and upgrading the Air Service's inventory of fewer than 1,000 serv- iceable aircraft and related equipment.
*To keep the Engineering Division in Dayton, as McCook Field became too small, a group of local businessmen in 1924 purchased (^) and donated to the Air Service an area that encompassed Wilbur Wright Field, Huffinan Prairie, and the Fairfield Supply Depot. The installation, which opened in 1927, was re- named Wright Field in honor of both Orville and Wilbur. In 1931 the eastern portion was designated Patterson Field in honor of the leader of the purchase campaign's son, who had died testing a DH-4 there during World War 1.
Examples of^ Aircraft^ Procurement^ by^ the
Air Service and Air Corps
Liberty V-12 aircraft engines being produced by the Dayton- Wright Airplane Company in July 1918. (Note^ that^ women^ worked in the aviation industry during World War^ I^ as^ well as^ World^ War II.)
Curtiss JN-4 "Jenny"^ trainers,^ which^ the^ American^ aircraft^ in- dustry was able to produce in quantity during World War I.
Martin MB-2 Bomber, one of 50 built by Curtiss Aircraft as part of an Air Service program to divide orders among different manufacturers during the postwar recession in the aircraft industry.
The all-metal Martin B-10 was the world's most advanced bomber when first delivered in 1934 but became obsolete in only a few years.
ous barriers stood in the way. Provisions in the laws enacted af- ter World War I to foster competition and prevent profiteering resulted in rigid and inflexible procurement practices unsuited to the realities of the aviation industry. The political forces of isolationism and widespread distrust of "the merchants of death" (i.e., the armaments companies), as^ well^ as^ Congres- sional frugality and Air Corps timidity, precluded an efficient relationship with private industry^ and^ an^ effective^ buildup^ of air power. The acquisition process remained slow and deliberate. So- called "design competitions" yielded unrealistic paper proposals from inexperienced businesses. Meanwhile, the prospects of only short-term fixed-price production contracts awarded^ to^ the low-bidder in sealed-bid competitions deterred the more^ capa- ble aircraft manufactures from risking loss of capital or even bankruptcy to develop advanced aircraft.^ To^ obtain^ limited numbers of new aircraft, the Materiel Division relied heavily on small purchases of experimental aircraft, which it then ran through exhaustive tests. Although seldom leading to produc- tion in quantity, these contracts and other arrangements helped maintain a residual capacity for producing military air- craft. The Navy's Bureaus of Aeronautics and Ordnance also helped advance^ aviation^ technology^ with^ projects^ that^ some- times complemented and sometimes competed with those of the Air Corps. In late 1938 the War Department began to reform Air Corps acquisition procedures to provide more incentives for aircraft manufactures to develop new aircraft. But this promis- ing concept was soon overtaken by world events. Consistent with Air Corps doctrine, a large share of its lim- ited funds in the late 1930s went toward bombers, such^ as^ the four-engine B-17 Flying Fortress, at the expense of advanced pursuit aircraft comparable to^ those^ being^ produced^ in^ Europe. Other available funds went toward observation aircraft, soon proven an outmoded type. Nevertheless, a few competitive American fighters, such as the P-38 Lightning and^ P-39^ Aira- cobra, were being developed, and others began to enter design and experimental stages. These would be ready for large-scale production after the war began.^ Successful commercial^ aircraft, such as the DC-3, would be easily adaptable for military use as cargo and troop carriers to support a truly global conflict.
Meanwhile, British and French (^) aircraft orders began to prime the pump of the American aircraft industry.
The Arsenal of Democracy, 1939-
The United States during World (^) War II became an industrial giant of unprecedented proportions. (^) When President Franklin Roosevelt, (^) in May 1940, boldly called for production of 50, aircraft per year, even the Air Corps was (^) taken aback. In the next five years, after having mobilized (^) its industrial resources for total war, the United States produced (^) more than 300, military aircraft. Three quarters of these were (^) acquired by the U.S. Army Air Forces (AAF), which was established (^) on 20 June
- The Chief of the AAF, General Henry H. "Hap" Arnold, devoted much of (^) his attention to the daunting challenge of building the greatest air armada (^) of all time. Adapting assembly line procedures to the mass production of aircraft, the small aviation companies of the 1930s grew into major corporations. At the same time, the already mature automotive (^) companies re- tooled to produce engines and some aircraft as well as (^) legions of trucks and tanks. At its peak (^) in 1943, the American aircraft industry employed more (^) than 2.1 million men and women. The AAF was part of a national structure for weapons devel- opment and (^) procurement which also included Great Britain. At the top, (^) the War Production Board, created in January 1942 helped mobilize and allocate industrial resources.t Under this powerful body, which (^) included an Aircraft Production Board, was the Joint Aircraft Committee. Comprised of British, U.S. Navy, and AAF officials (including General Arnold), this com- mittee decided overall aircraft (^) production priorities as well as ruling on standardization questions. As before (^) the war, NACA continued to serve as the "silent partner" of U.S. air power with its research projects and technical expertise. Another high-level
*The largest aircraft manufacturers (^) of World War II were (in order of num- bers produced) North American, Consolidated, Douglas, Curtiss, Boeing, Lockheed, (^) Grumman, Republic, Eastern, Bell, Martin, Chance-Vought, Beech, Ford, Fairchild, Cessna, Piper, and Goodyear-all (^) of which had been in the aircraft business (^) before the war. tThe War Production (^) Board superceded the Office of Production Manage- ment, which the President in January 1941 superimposed (^) on a National De- fense Advisory Commission he had appointed in May 1940.
When he took charge (^) of the B-29 (^) project, Brig. Gen. Kenneth (^) B. Wolfe became the first manager to (^) be re- sponsible for all aspects (^) of an (^) aircraft acquisition pro- _.... (^) gram.
Producing the Boeing (^) B-29 Superfortress-the (^) most complex aircraft of (^) World War II-presented unprecedented (^) technical and manage- ment (^) challenges.
government body, the National Defense Research Committee of the Office^ of Scientific^ Research^ and^ Development^ (successor^ to the National Research Council of World War I), worked directly with private industry and universities on many key non-aero- nautical projects of direct benefit to the AAF. Internally, the Air Corps and then the AAF frequently reor- ganized to deal with their explosive growth from a close-knit element of the small pre-war Army into the largest aerial^ force of all time. With the outbreak of World War II in Europe, the Air Corps moved the position of Chief of the Materiel Division to Washington on 2 October 1939, with an assistant supervis- ing activities at Wright Field. The Air Corps began expanding rapidly, and the Materiel Division was superseded by two new commands. To manage^ logistics^ functions,^ the^ Air^ Corps^ Maintenance Command was formed on 29 April 1941 at Patterson Field, lo- cated adjacent to Wright Field. This command, originally built from the Materiel Division's Field Service Section, was^ replaced on 17 October 1941 by the Air Service Command. In December 1941 it came directly under General Arnold. For exactly one year, until 15 December 1942, the command's headquarters were located in Washington, D.C., but thereafter returned to Patterson Field. To manage its procurement and related RDT&E functions, the AAF made two changes on 16 March 1942. It redesignated the growing office of the Chief of the Materiel Division in Wash- ington as the Materiel Command, while redesignating subordi- nate elements at Wright Field as the Materiel Center. On 1 April 1943 Headquarters Materiel Command moved back to Wright Field to be near the headquarters of the Air Service Command, but it left behind the former commander and much of his staff as the Assistant Chief of Air Staff for Materiel, Maintenance, and Distribution. The split between acquisition and logistics caused confusion and duplication. So, on 17 July 1944, the AAF merged the two commands into the AAF Air Technical Service Command, headquartered at Patterson Field.* Once again the manage- ment of materiel functions were together, but on a much
*Wright and Patterson Fields were administratively merged in 1945 and named Wright-Patterson Air Force Base (AFB) in 1948.