Exec seeks better dialogue with DoD

The head of Boeing’s defense business on Monday called for better communication between the Pentagon and defense companies in the face of challenging times awaiting the industry.

Dennis Muilenburg, the president and CEO of Boeing’s Defense, Space & Security unit, said that effective communication and partnerships between defense companies and the Department of Defense (DoD) are essential to foster innovation, speed up acquisition and drive down production costs.

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“Let’s face it, once-effective communications between DoD and industry have slowed in recent years and this has hampered our ability to effectively work together for the benefit of the war fighters and U.S. national security,” Muilenburg said in his address to a lunch organized by the National Aeronautics Organization.

Some acquisitions failures of the past have created a “dangerous spiral of delays and cost growth with yet more oversight,” he said.

Muilenburg was quick to point out that Ashton Carter, the Pentagon’s acquisition chief, has worked to develop “communications lines and partnerships” between industry and government.

One of the examples of better communication with the defense industry is the Pentagon’s new competition to build Air Force refueling tankers, according to Muilenburg.

“We continue to enjoy very robust, ongoing dialogue with the customer on [the] tanker [program], and I think this is one example where the communication lines were very open,” he said.

Boeing has been locked in a fierce fight with a Northrop Grumman-EADS team for a new Air Force midair refueling tanker contract worth at least $40 billion.

The effort to replace the Eisenhower-era tankers has been rife with controversy for almost a decade. The controversy started after a lease deal with Boeing for the tankers went sour and two Boeing executives went to jail for ethics law violations.

After opening the contract for competition, the Air Force last February chose the aircraft offered by the Northrop Grumman-EADS team. Boeing then successfully protested that award with the Government Accountability Office, and the Pentagon decided to open a new competition.

The final request for bids is expected within a month. After seeing a draft of the request for bids in December, Northrop Grumman threatened to pull out of the competition, arguing that the bidding process was stacked against it. Northrop said that without changes to the selection criteria, it could not submit an offer.

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Meanwhile, Muilenburg said that his company is “well-positioned” to bid and that Boeing will adjust its offering to meet the military’s requirements for a new tanker.

Muilenburg also called for more multi-company engagements with the Pentagon on issues of mutual concern to defense companies. Among the concerns facing the defense industry is how to protect the expertise of the workforce as the number of defense programs declines.

The dwindling number of acquisition programs represents a great “danger” to the industry, Muilenburg said. In the 1980s there were 17 major aircraft acquisition programs. Now the number of programs is at 11 and is expected to whittle down to six by 2020, Muilenburg said.

Muilenburg and other Boeing officials are making the rounds on Capitol Hill, trying to understand the budgetary landscape ahead and garnering support for the defense industrial base.

On Monday he visited lawmakers to discuss a next-generation aircraft program. Such a program is critical to keeping innovation, research and development and skill within the industry, he indicated.

“We are concerned right now about what … that next-generation aircraft [would be] and making sure that there is congressional support for the next-generational aircraft, whatever it will be,” he said.