IDGA Irregular Warfare COTS Deck

Trailing Edge Technology
Solutions:
A paradigm shift for the design and support of COTS products
employed in COIN operations

By Ron Giuntini
Principal, Giuntini & Company, Inc.

IDGA Irregular Warfare Conference
Monday, May 25, 2010

©G&C 2010 1

Presentation Outline

• What Are Commercial Off The Shelf (COTS) Products
• Overview Of COTS Products Employed In Weapon Systems
• COTS Versus Developmental Products
• Trailing Edge Technology Concept

©G&C 2010 2

What Are Commercial Off The Shelf
(COTS) Products
• “Commercial item” as defined in FAR Part 12;
provides framework for buying products under Federal
Acquisition Streamlining Act
• The overall goal is to fill DoD requirements whenever practical by
using products whose design and configuration control is driven
by the commercial market, rather than employing products that
are designed specifically for the military; referred to as
Developmental Items (DI)
• COTS products can also be referred to as Non-Developmental
Items (NDI), or Government Off The Shelf (GOTS) where a
specific COTS product is utilized in several systems

©G&C 2010 3

What Are Commercial Off The Shelf
(COTS) Products
COTS Legacy
Program/
COTS Product Product
A Oversight
Manager
Manager
DI Product
B Program
Manager GFE A Executive
DI Product Office
C
Manager
DI Product E
D
Manager
Program
/System
Manager

COTS Evolving
Program
COTS Product
Manager
A /System Rapid Fielding Initiative
Manager
COTS Product
Manager
B
E Program
COTS Product Executive
C Office
Manager
GFE D System Of Record
DI Product
Manager
D
Program/
Product
Oversight
Manager
©G&C 2010 4

Examples Of COTS Products Currently
Employed By The Services
• Communications & data
• Computers/servers (Dell, HP, IBM)
• Data storage (EMC)
• Routers (Cisco)
• PDAs (Palm, Blackberry)
• Non-embedded software (Microsoft)
• Displays (Trans-Lux, Panasonic)
• GPS (Garmin, Magellan)
• Training simulators (Rockwell Collins, CAE)
• MRAP (Navistar wheelbase)
• Fixed-wing special purpose aircraft (Gulfstream, Beech.
Cessna. Boeing)
• Off-road construction vehicles (Caterpillar, Terex)
• Nuclear, biological & chemical sensors (Smith Industries)
COTS Products Becoming A Platform For DI
©G&C 2010 5

COTS Versus Developmental Products
Product Source Type Comparison
Element COTS Developmental
Acquisition
Made-To-Stock or Assemble-To-Order; from
Cycle Time
immediate to a few weeks delivery. Provides Made-To-Order; with many
For
ability to be extremely quick in reacting to design configuration changes,
Warfighter
operational changes required to fight our can take years for delivery
System
enemies
Delivery

Joint Capabilities Integration and Development System (JCIDS) deliberately
emphasizes analysis and risk avoidance at the expense of speed. JCIDS
normally takes five to nine years, depending on the complexity, from the
time a new system is requested, until a solution is delivered.
Col. Timothy Chyma, US Army Acquisition Corps,
at 2010 Brookings Institute meeting

©G&C 2010 6

More from Col. Timothy Chyma on acquisition speed
“By comparison, the Army’s Rapid Equipping Force (REF) can turn out systems in 7 to
15 months; it can do this because it is small, has access to funding within the same
year it wants to make a purchase, and most importantly it interacts directly with the
units in the field so it understands their needs far better than the traditional
procurement administrator. REF is something the Army should embrace in its long-
term modernization programs.” ….many of the products employed are COTS

The Army’s Training and Doctrine Command (TRADOC), released in 2010 a planning
document, “Operational Adaptability: Operating Under Conditions of Uncertainty and
Complexity in an Era of Persistent Conflict-2016 to 2028,” authored by Brig. Gen.
H.R. McMaster.
“We wanted to emphasize the continuous interactions with an adaptive adversary, the
need to have those qualities of operational adaptability…innovating to seize and retain
that adaptive initiative.”…again COTS products will play a key role
©G&C 2010 7

High capability relative to cost, due to High cost due to amortization
amortization over large population of R&D and of development costs over
Unit Cost
CPI initiatives (Lean, TQM, Six Sigma); though small production population,
COTS integration costs can be high as well as high indirect costs

"The private sector has flattened and streamlined the middle and upper echelons of
its organization charts, yet the Defense Department continues to maintain a top-
heavy hierarchy that more reflects 20th Century headquarters superstructure than
21st Century realities,“ Secretary Gates
"Given America's difficult economic circumstances and parlous fiscal condition,
military spending on things large and small can and should expect closer, harsher
scrutiny. The gusher has been turned off, and will stay off for a good period of time.“
Secretary Gates, 2010

Low-cost COTS products, “frugally engineered,” bundled together as a weapon
system, will be more cost attractive than the employment of high tech systems

©G&C 2010 8

Large population using product, with extensive The less reliable the product,
warranty feedback. OEM warranty costs are 3- the greater the revenue
6% of acquisition value of new products; high generated during the Product
incentive to improve reliability…less Support lifecycle stage. MTBF
Reliability
failures=higher profits…median OEM Profit analysis after initial ILS
After Taxes (PAT) is only 7%, thus warranty studies performed during
costs can have material impact on development stage are rarely
shareholders revisited.
Readily available, at no additional cost in
Technical Cumbersome and expensive
multiple medias; extensiveness often driven by
Documen- to maintain over life of
consumer/safety regulation. Also changes
tation product
tightly managed due to liability issues

©G&C 2010 9

Field Very expensive; in theatre
Service Available on a global basis, even in/close to $400-500,000/year per
Represen- combat theatres. 24/7 coverage provided either contractor FSR. Government
tatives on-site or via call/web FSR out of LCMC can be
(FSRs) $250-350,000 per year
Extensive development for
User friendly products require little training MOS training school and OJT
Training
through training schools and OJT due to learning curve and
turnover
With roll-up of Defense
industry, DoD confronted
with “too big to fail”
There are usually 3-4 global highly competitive situation; often only two
Supplier OEMs for any category of products; all are contractors able to compete;
Base highly capitalized and provide products to large there profits are virtually the
customer base same, which means that they
have the same business
models…which can be good
or bad

©G&C 2010 10

Large R&D (4.5% of sales Caterpillar, 7% HP, Due to long development
Technology
16% Intel) and product tested with large cycle, maturity is a
Maturity
population feedback constantly moving target
A minority of # of weapon
systems deployed are
Technology 1970 Defense/Business/Consumer tech hierarchy; required to be “bleeding
Level 2010 Consumer/Business/Defense tech hierarchy edge,” though they can be
the majority of acquisition
$$$
“We pursue technologies. They are not necessarily the most advanced, but they
are the most useful,” Adm. Eric Olson, Commander,
Special Operations Command (SOCOM) in 2010
COTS products are very sophisticated/complex due to safety, regulatory and
consumer demands/requirements
•A luxury auto has 100 million lines of embedded software code
•A Mercedes navigational system has 20 million lines
•A Ford car has 10 million lines
•A F-35 has 5.7 million lines
•A F-22 has 1.7 million lines
©G&C 2010 11


Interface Often isolated from best
With practices because of a
Enabler to stay current with rapidly evolving
Commercial contractor’s business model
consumer/commercial market
Best of more is more; cost-plus
Practices contracts
Entry level soldiers have used many of the
Technology products in their civilian lives leading to high Often not user friendly
Familiarity levels of productivity in missions employing features
these products

“We have young folks today who are very experienced with gaming, and
they’re not going to be impressed if we have simulations with pop-up targets.
They expect training systems to stack up with the latest Xbox or PlayStation
products.” USMC General James N. Mattis, Commander of US Joint
Forces Command, at 2010 Defense GameTech Users’ Conference

©G&C 2010 12

• "Millennium sailors were born with laptops in their hands...but when we get
them into the Fleet, the disconnect between what they were promised and what
they find will be profoundly disappointing--a veritable bait-and-switch scheme.
They will discover that our "leading-edge-off-the-shelf" and "state-of-the-art"
technology is at best ancient....
The two-way communication bandwidth of a single BlackBerry is three times
greater than the bandwidth of the entire Arleigh Burke destroyer. Looked at
another way, the Navy's most modern in-service multi-mission warship has only
five percent of the bandwidth we have in our home Internet connection....
By the time it gets to the people who need it, it is already out of date.”
Vice Admiral Mark Edwards, Deputy of Naval Operations for
Communications Networks (N6) in April 2008

©G&C 2010 13


Integration Of US management skills in integrating COTS
Multiple products into a solution is a unique strength
Same as COTS
Products Into A of U.S.; difficult for our enemies to
Solution duplicate with same COTS products
Often unique configuration
Rapidly changes to reconfigured product
Configuration that may have some open
platform through open architecture;
Architecture architecture; but currently
software and hardware
small minority of products
Can focus on specific mission
Design No power to make changes to designs;
requirements to optimize
Influence military purchases are often <1% of sales
mission effectiveness

©G&C 2010 14


Diminishing
Manufacturing With relatively short product lifecycles, Can also be a challenge when
Sources, supply chain challenges can often occur a product is out-of-
Materiel sooner than later; big issue is electronic production and DoD funding
Shortages products where lifecycles are only 2-5 years is erratic
(DMSMS)
Organic Life No National Stock Number (NSN) assigned
Cycle to COTS products; little Item/Commodity Infrastructure established to
Management Manager planning, nor depot repair for support product; often more
Command reparables. Often dependent on Contractor efficient, but can be less
(LCMC) Logistics Support (CLS); no tight oversight, effective than COTS CLS
Support resulting in many issues

CECOM has created a Common Hardware System (CHS)
Program Office, as well as Software Engineering Center
(SEC)/Post Production Software Support (PPSS) for dealing
with selective COTS products

©G&C 2010 15


Major “misallocation” of supplemental,
acquisition and O&S/M money in order to
rapidly field systems “outside” of normal Usually “cleaner” demarcation
Funding LCMC processes; PM Offices often “own” between acquisition funds
COTS products into Product Support and O&S/M funds
lifecycle stage. Many times COTS are not
part of system of record
Same access; global internet and
Enemy Access distribution enables rapid acquisition to use Not accessible
against our Warfighters

With Joint Programs, the management of
COTS is often very challenging

©G&C 2010 16



Can be very cumbersome to obtain COTS
Importation Or products with dual use into US, or export Rules much more black and
Exportation US products to our allies; lots of inter- white
governmental agency squabbling

Wide range of environmental driven design
features not included; temperature ranges,
sand, humidity and others have smaller
OPTEMPO range than experienced by military. Though Can be designed to adapt to
Adaptability new niche products being produced by any foreseen environment
OEMs for “severe” use (i.e. Panasonic
ToughBook and Extreme Adventures
employment)

©G&C 2010 17

Product Source Type Comparison Product Source Type Comparison
# Element COTS DI # Element COTS DI
1 Unit Cost + - 13 Design Influence - +
2 Reliability + - Diminishing Manufacturing
Technical 14 Sources, Materiel Shortages - +
3 + -
Documentation (DMSMS)
Field Service
4 + - Organic Life Cycle
Representatives (FSRs)
15 Management Command - +
5 Training + - (LCMC) Support
6 Supplier Base + - 16 Funding - +
7 Technology Maturity + - 17 Enemy Access - +
8 Technology Level + - 18 Importation Or Exportation - +
Interface With 19 OPTEMPO Adaptability - +
9 Commercial Best + -
Practices
10 Technology Familiarity + - COTS products have
Integration Of Multiple many more favorable attributes
11 + -
Products Into A Solution as compared to
Configuration Development Items (DI)
12 + -
Architecture

©G&C 2010 18

Overview Of Weapon Systems & COTS Products

Overview Element 1980 2000 2010 2015 Impact Upon DoD
estimate

Less funding available, as
DoD overall spending
10.0% 3.2% 4.0% 3.3% well as less impact on
as a % of GDP
overall economy
DoD weapon system
acquisition spending
as a % of all US 18.0% 8.0% 15.0% 10.0% Less influence upon OEMs
capital goods
investment
Estimated COTS Recognize need to shift to
spending as a % of COTS; DoD less than 1%
<1.0% 1.0% 2-5% 5-10%
overall DoD weapon of OEM product demand in
system acquisition $$ 2015
Estimated fast-track
Fully embracing COTS
equipping COTS 1.0% 5.0% 25-35% 30-50%
whenever possible
spending $$ %

©G&C 2010 19

The Trailing Edge Technology
Concept For COTS Products
The trends are favorable for COTS products, but the military Acquisition
organizations must become “smarter” on how they integrate COTS
products…introducing “Trailing Edge Technology;”
a concept to be employed by Program Manager Offices in the design/
production and product support stages of the lifecycle of weapon systems
Product Support Processes
(at field/line or at depot)
Hi 1. Correct after
unplanned failure
2. Correct before
planned failure
3. Reset after
Product Product Support Stage deployment
Population & 4. Improve reliability
5. Assure capability
Product Operate Stage 6. Evolve technology
7. Repair catastrophic
Product damage
Retirement 8. Store short/long
Stage
Product term
Product Initial Redistribute
Distribution Stage
Lo Stage
Product
Requirements, Product Production Stage Product Out-Of-Production Stage
Design &
Development
Stages

=
Total Product Lifetime
©G&C 2010 20

The Trailing Edge Technology Concept
For COTS Products: Value Proposition
• !Frequency of failures through piggybacking upon continual reliability
improvements by OEM
• ! Duration of product support processes, and in turn " materiel
availability, through improved maintainer/tech worker productivity due to
piggybacking upon OEM continual improvements on:
! TOC &
• Technical documentation " Mission
Effectiveness
• Design-For-Maintainability
• Training tools
• " Familiarity of products through programmed upgrades
• ! DMSMS issues through programmed upgrades
• #/" Capabilities through programmed upgrades;
The military can not fall behind what our enemies can readily acquire
Some savings would be off-set by higher integration cost for programs
©G&C 2010 21

For COTS Products: Design/Production
• COTS items selected in the design process and employed during
the production process would be in a not-new condition:
• Repaired, refurbished, or overhaul conditions; this type of
acquisition has been done before
• Resulting from a lease return or warranty return to a supplier.
• COTS products can lose as much as 75% of their value within
18 months after being produced, thus a $1,000 computer is
worth about $250 after 18 months.

©G&C 2010 22

• The proposed concept is to:
• Acquire 18 month old not-new COTS products for $.25 on the dollar
of the new condition acquisition cost during the production stage
• Take the “extra”$.75 and use it for future not-new condition
programmed upgrades to be performed every 18 months

The following is the series of actions comparing to the legacy
approach for managing COTS based systems versus that of a new
business model (they are for illustration purposes; each COTS product
will have different ROIs for this concept
Programmed upgrades can occur at a depot or
in the field/line as a Like-Kind Exchange

©G&C 2010 23

Cumulative Acquisition $$$
$2000 A
A

$1500 A
A
$1000 A
COTS (A)cquisition Date
A
$500 A
A
$0
Trailing Edge P P P P P P P P COTS (P)roduction Date

7/08 1/10 7/11 1/13 7/14 1/16 7/17 1/19 7/20
$2000 A
COTS (A)cquisition Date
$1000 A

Legacy P P COTS (P)roduction Date

7/08 1/10 7/11 1/13 7/14 1/16 7/17 1/19 7/20
Legacy Programmed Upgrade Every 6 Years. Average Trailing Edge is
3.75 years “younger than Legacy”
©G&C 2010 24

For COTS Products: Product Support
03-10 Failed COTS Reparable LRU, 07-06 Production Date

Like-Kind Current Replacement Value (CRV) $1,000

Cost Of Repair $400

Legacy Approach Trailing Edge Approach

BER/Washout rate 65% or BER/Washout rate 25% or $250;
$650; repair within limits for repair outside limits for retention
retention and disposed

Simplified; 09-08 date of LRU production,
Repaired and forwarded to typical Like-
Kind acquired for $250 in a repaired
maintainer for installation
Exchange condition, and forwarded to
employed maintainer for installation

COTS Reparable LRU 18
COTS Reparable LRU 48
months old production date
months old production date
with cost of $250
with cost of $400
©G&C 2010 25

For COTS Products: Product Support
This concept can be adapted to a Performance Based
Logistics/Outcome-Based Product Support Business Model
•Contractor can be provided with a fee for executing concept
•Contractor can work with depot under a Public Private Partnership
(PPP) to execute concept
•A Product Support Integrator (PSI) and a Product Support Manager
(PSM) must work closely together to assure that the initiative is
meeting the Warfighter requirements and favorably impacting TOC

©G&C 2010 26

Conclusions
• COTS products are playing a much larger role in the
design of weapon systems
• DoD leadership should continue to think out-of-box in
order to assure that our Warfighters have continuous
access and support of the COTS products that they
require in order to defeat our enemies;
the Trailing Edge Technology business model is one way
to help them lead that initiative

©G&C 2010 27

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