MRO Americas

Industry Officials Rebuff USAF Sustainment Proposal

Move to buy back intellectual property rights on military equipment criticized by two industry executives at MRO Americas panel on Tuesday (April 9).

A U.S. Air Force official’s month-old proposal to buy back intellectual property rights on military equipment from industry drew sharp criticism from two industry executives during an April 9 panel at MRO Americas. 

“I say that’s absolute bullshit,” said John Johns, chief executive officer of the Gryphon Group. “I think it’s a fundamental mistake to pursue that kind of logic.”

Johns’ rebuke was echoed by Tim Matthews, a retired rear admiral and now vice president of F-35 sustainment for Lockheed Martin. 

“I’m more convinced than ever that that would be a mistake,” Matthews said. “It shoudln’t be an either/or proposition.”

Both speakers on the conference’s panel on maintenance forecasting were responding to an active proposal by Will Roper, assistant secretary of the Air Force for Acquisition, Technology and Logistics. 

Speaking at the McAleese/Credit Suisse Defense Programs conference on March 8, Roper said he wants the Air Force to regain control of sustainment and modernization of weapons platforms by possibly paying a licensing fee or royalty for the intellectual property rights. Roper’s objective is to concentrate the industry on designing and developing aircraft for his proposed “capability pipeline,” in which new aircraft models would enter service on a short-term cycle. 

It’s a proposal that would suggests radical changes in the structure of the industry. Many companies rely on the long-term stream of revenue created by supporting military aircraft for decades. To incentivize the industry, the Air Force would have to replace the cash flow from the sustainment phase of a product’s lifecycle by offering more development and production work. 

But Johns is skeptical such a change is feasible. 

“You would really have to short-cycle development to the point of absurdity, so that he’s producing the next generation fighter at the same time he’s fielding the first one,” Johns said. “If Mr. Roper can envision something like that, then there maybe is a value proposition in it. But that’s not anywhere close to executable.”

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