Industry: Risk aversion costs more than fast failure

Representatives from some the nation's largest defense firms agreed a culture of risk aversion at the Pentagon is costing the American taxpayer more than "fast failure."
Speaking on the topic of innovation in the 21st century at the Air Warfare Symposium and Technology Exposition, representatives from Lockheed Martin, Northrop Grumman, Boeing, Raytheon, Aurora Flight Sciences and Pratt & Whitney all agreed risk aversion costs more money in the long run.
Citing the need in recent years to present "zero-risk" proposals for defense acquisitions, they said getting cutting-edge science and technology to operational status takes far longer, and costs far more.
In a speech at the same event, Dr. William LaPlante, assistant secretary of the Air Force for Acquisition, explained new "Better Buying Power" initiatives to increase innovation while decreasing costs.
"Failing slow is bad," he said. "Failing fast is OK."
In an effort to reassure industry, LaPlante said he wants to bring the 17-month average time it takes to award a single-source contract from initial request for proposals "down to single digits." Part of that will include fewer requirement changes mid-process.
"A lot of money is spent by industry," he acknowledged. "A lot of frustration on all sides."
LaPlante said the Air Force is going to take a "page out of the DARPA handbook" and expand the use of challenge-based acquisition for innovative experimentation and rapid prototyping.
One such challenge currently underway is for industry and academia to produce what will "almost certainly be a turbine" engine with high efficiency and a high power-to-weight ratio.
"Pick the sweet spot, that if we can pull this off, it will have huge applicability across UAVs and commercially."
The $2 million prize will be announced in May, at which point "whoever wins this, we're going to put hooks in to transfer this technology."
Though shying away from the term "acquisition reform," LaPlante outlined further changes to how the Air Force conducts cost-capability analysis for new projects, by being transparent with industry and communicating every step of the way.
"Should cost" estimates will be used for initial product requirements, and "data-driven negotiations" will allow industry to propose adding further capabilities if they fit into the cost analysis.
Pilot projects for the new approach include the new T-X trainer aircraft, the requirements for which will be finalized by the end of the month.
"There will be a much better understanding, and a way for us to know what we're paying for, and willing to pay for."
Secretary of the Air Force Deborah Lee James in her State of the Force speech said that although "our budget proposal actually busts the sequestration caps" by some $10 billion, thanks to the increased demand for Air Force capabilities -- not only in current missions against the Islamic State but in space and cyber -- leadership recognizes "the taxpayer's dollar is precious."