KC-135 Block 45 Program Acquisition Innovation saves millions

TINKER AIR FORCE BASE, Okla. -- The KC-135 Block 45 program, a nomenclature for Communication, Navigation, Surveillance/Air Traffic Management (CNS/ATM) is an avionics upgrade that has recently achieved tremendous success. The KC-135 program office crafted a contracting model to bolster small business participation which resulted in significant savings to the government. Not only is this a feat for the KC-135 program office, but for the entire Department of Defense acquisition community.


During Low Rate Initial Production, the team negotiated and procured Group A kit technical data from its prime contractor, Rockwell Collins. The Group A kits consists of piece parts to include items such as wiring, trays, mounts, clamps, nuts, and bolts – items that are vital to the overall integration of the digital avionics upgrade. Conversely, the Group B kit items are the modifications’ main components such as screens and processors. Obtaining the technical data for the Group A kits allowed the KC-135 team to solicit bids and later award contracts to five small businesses.


Deputy Program Manager 1st Lt. Joshua Neace broke down the process a bit further. “The first phase of our model was structured so that the first lot of kits was built by five of the lowest bidding contractors in order to ensure the vendors could produce to quality performance standards,” the lieutenant explained. “The next phase was structured so that one of the five qualified vendors would build the entire lot of kits, awarding to the lowest bidder.” Naturally, the competition spurred a quality product for the government at the lowest price to the taxpayer. The savings from this strategy – millions.


“We’ve embraced OSD’s Better Buying Power initiative, and as a result, we’ve not only driven competition but we’ve seen significant savings,” Lieutenant Neace said.


Better Buying Power was an initiative introduced in 2010 as a part of the Department of Defense’s acquisition reform for efficiency. Essentially, the primary objectives are identifying and pursuing cost savings opportunities and highlighting competition.


Frank Kendall, the Under Secretary of Defense for Acquisition, Technology and Logistics, was the brain power that launched the Better Buying Power initiatives, emphasizing that “competition is the most effective tool we have to control cost.” Mr. Kendall advocates wise stewardship of taxpayer dollars through these principles and guidance.


The KC-135 program office team did just that. Rather than taking the traditional contract approach of utilizing a single contractor to continue the production effort, the team embraced the increased workload and risk by constructing a multiple award small business contract strategy in order to maximize every taxpayer dollar.


Contracting Branch Chief Alan Lee spoke to the success of the Fair Opportunity Notice award.


“This allows the aircraft avionics to be totally revamped,” Mr. Lee said. “The Department of Defense is about the only entity in the U.S. promoting small businesses in this way.  We track and report everything to Congress that we give to small businesses as well as having small business goals for each year. The Air Force could have acquired all the kits from [our prime contractor] and had them do everything, but instead the team took the bigger risk and bigger challenge. This kind of continuous competition drives the price down, providing the best value for the government and real life savings while still meeting performance requirements.”


Capt. Anthony Konakowitz, who operated as the lead program manager, praised his team’s efforts and their willingness to do something out of the norm for a major acquisition program. “The group,” he said, “vetted small businesses but arguably the most tedious work came from the auditing process – every single dimension, every centimeter, and wire was audited and accounted for.


“Talk about risk – there are a lot of unknowns when utilizing small businesses. We have large kits that we need produced, both in size and volume. But, my initial concern eased through the process and as we built relationships with these small businesses,” he said. “If they are capable, we want them to have that opportunity to work.”


This “game changer” strategy was not implemented overnight. The program, which began back in 2009, began with a vision for promoting and planning small business participation for kit builds to save taxpayers’ money. Finding and vetting the businesses capable had to be prioritized. If the businesses failed, the team would’ve lost time and money, having procured the data rights without effect, and inevitably forced back onto the contracting table with their prime.


Col. Mark Mocio, program manager for KC-135 and Legacy Tanker Division chief, stressed that the team has a significant responsibility to be good stewards of the taxpayer dollar.


“It took a lot of energy, creativity, and upfront planning to enable this strategy. There’s a lot of responsibility and risk. We have to be extremely diligent,” the colonel explained.


A program born and bred here at Tinker Air Force Base, everything has been done in-house.


“Our integrated team of operators, maintainers, engineers, logisticians, equipment specialists, contracting officers, and program managers developed the requirements, schedule, cost, and contracts to produce the final products that our warfighter likes and needs,” Lieutenant Neace said.


This effort supports the installation taking place at the Oklahoma City Air Logistics Complex. “This Fair Opportunity Notice will also open up the avenue for foreign military sales,” Mr. Lee said. By cutting down acquisition time for foreign partners, Group A kits would be accessible for a competitive price, while saving time on the backend; a win-win.


Seven years after the wheels started turning, the benefits are finally being reaped. The aircraft has been flown for 60 years, and the program office is confident this effort will help to ensure its lifespan to 2040.


A sophisticated, trained, professional KC-135 workforce set the precedence. The team was deliberate and intentional, and as a result was able to perform exceptional market research, identify potential risks, promote effective competition, and ultimately provide a cost savings of $30.9 million over the life of the program.


“We have an incredible team,” Lt. Neace said, “multifunctional and multi-generational. Though a different group of individuals started this program, the success is a testament to our acquisition leadership, as they seamlessly bring together a major effort with a highly mobile workforce. It’s been extremely rewarding to see the delivery of this capability to the warfighter.”


The Block 45 upgrade is the third major avionics upgrade to the KC-135 fleet. In the Air Force’s transition to the KC-46A, the Block 45 upgrade has allowed its aircraft to remain the backbone for the air refueling taskforce. The Block 45 team just completed. Low-Rate Initial Production on Sept. 20 with 36 modified aircraft. The program has now moved into Full-Rate Production and will no doubt continue to exceed expectations.