Brian Bradley
NS&D Monitor
1/9/2015
The Air Force is expected to award a contract by mid-January to sustain the Ground Subsystem for the Minuteman 3 as part of the Future Intercontinental Ballistic Missile Sustainment and Acquisition Concept (FISAC) after the service on Jan. 8 named Boeing the awardee of a $51.2 million cost-plus-award-fee FISAC contract to maintain the missile’s Guidance Subsystem. Air Force spokesman Ed Gulick confirmed the timeline for the expected Ground Subsystem award, but did not forecast a specific date, citing potential impacts on competition. “The contract award process is proceeding as anticipated,” Gulick wrote in an email to NS&D Monitor. “However, since the schedule is event-driven, the Source Selection Authority does not provide forecast award dates in order to allow for those events to occur with rigor and without undue schedule pressure.”
Propulsion Subsystem Award Up Next
Solicitations for the Ground Subsystem have attracted bids from Boeing and Northrop Grumman, while the FISAC Propulsion Subsystem has drawn offers from Northrop and ATK, whose bid was supported by Boeing. The Air Force released a Request for Proposals for the Propulsion Subsystem on April 1, and the Air Force anticipates an award by Oct. 1, according to Gulick. The Air Force originally intended to award the Propulsion Subsystem contract in early- to mid-Fiscal Year 2014, but the service extended the acquisition schedule hoping to promote more competition and generate more proposals, Gulick said.
Guidance Subsystem Award to Boeing
Boeing beat out only Northrop Grumman for the FISAC Guidance Subsystem contract, which entails engineering support and program management support services. “The primary focus will be to ensure any modifications or changes to the guidance system will maintain and/or improve system-level performance,” the contract announcement states. Boeing has worked on ICBM Guidance Systems since 1958. The company’s Directed Energy and Strategic Systems (DESS) Division will split the work between Hill AFB, Utah; the DESS unit’s base of operations in Huntington Beach, Calif.; and DESS’ repair and assembly plant for ICBMs, military aircraft, guidance, navigation and control and antenna systems in Heath, Ohio. Work on the AFNWC contract is expected to finish by Feb. 1, 2023. $13.2 million in FY 2015 operations and maintenance and research, development, test and evaluation funds were obligated upon award.
The Guidance Subsystem is the second FISAC Subsystem contract, after the Air Force in June awarded Lockheed Martin Space Systems a $109 million sole-source contract—with options that could increase its value to $452 million—to extend the company’s 40-plus-year stretch of sustaining the Minuteman 3 Reentry Subsystem. Lockheed’s work will be focused at Hill AFB, according to Lockheed Martin spokeswoman Lynn Fisher.
On Oct. 1, upon award of the Propulsion Subsystem contract and one day after Northrop’s ICBM Prime Integration Contract (IPIC) expires on Sept. 30, the FISAC is expected to take full effect. Despite the upcoming conclusion of the IPIC, Northrop Grumman spokesperson Pamela Wade said her company plans to stick with ballistic missiles. “It is Northrop Grumman’s intention to remain in the ICBM business,” she wrote in an email to NS&D Monitor.
Subsystem Contracting Authority Placed with Air Force
The FISAC construct is intended to govern sustainment of the Minuteman 3 until the weapon’s expected 2030 retirement. The Air Force is transitioning to the new construct and away from the business-managed structure of the IPIC, which Northrop Grumman led from 1997 to 2012. “One of the significant changes in the FISAC contract was that the Air Force would increase their organic capacity to do the system integration job,” Rick Hartle, Director of Business Development for Boeing Strategic Missile Systems, told NS&D Monitor.
The FISAC places ownership of the ICBM technical baseline and control of ICBM subsystem contracts with the Air Force, as opposed to the IPIC, which aligned subsystem subcontracting authority with Northrop. However, under the FISAC, contractors of respective ICBM subsystems—comprising reentry, ground, propulsion and guidance—can award their own subcontracts.
BAE Serving as Integration Support Contractor
In July 2013, the Air Force awarded BAE Systems a $534.9 million contract to serve as the FISAC’s Integration Support Contractor (ISC), a role in which BAE will co-locate with the AFNWC ICBM System Program Office (SPO) at Hill AFB, providing systems engineering advice and support to the Air Force, which is transitioning to its role as ICBM weapons system integrator and is directly contracting for Subsystems. The FISAC team, consisting of the ICBM SPO and the ISC, will organize and lead the Subsystem teams in developing acquisition strategies and conducting source selections. The Air Force publicly introduced the FISAC through a sources sought notice in January 2009.
Since BAE was awarded the integration support contract, Northrop has maintained its position as ICBM Prime Contractor under a partial-bridge contract, which was initiated to continue until the FISAC’s ISC and Subsystem contracts can replace the current IPIC structure. “The government is stepwise walking through, if you will, dismantlement of that current Northrop Grumman IPIC contract on their path to implementing the full FISAC,” one industry executive told NS&D Monitor. Northrop continues to transition Minuteman 3 management duties to the Air Force.
BAE Has Assumed ICBM Engineering Duties
BAE Systems in June 2014 assumed systems engineering, integration, test and sustaining engineering responsibilities in support of the ICBM SPO, Ian Rankin, Vice President/General Manager of Warfare Systems in BAE Systems’ Intelligence & Security division, wrote in an email to NS&D Monitor. Rankin also indicated that inter-organizational collaboration has gone well during the initial phases of the new construct. “Collaboration during both the Integration Support Contract (ISC) transition and thereafter has been very positive,” he wrote. The FISAC allows cross-teaming across Subsystems in line with Organizational Conflict of Interest guidance/mitigation plans. “BAE Systems closely supported the Government in this transition effort from the Partial Bridge Contract, and again we felt that was a very positive and effective transition,” Rankin stated. “Many team building activities were scheduled to assist in developing a structure of seamless collaboration across all parties.”
Until Jan. 8, Boeing subcontracted through Northrop to work on the ICBM Guidance System. Peggy Morse, Vice President of Boeing’s DESS division, said even though Boeing has recently competed for FISAC contracts, collaboration between different ICBM contractors has been synergetic. “It’s helpful when everybody else has the health and well-being of the weapons system at heart. We don’t seem to have any issues with that,” she told NS&D Monitor. “Now it’s a little different when you’re in a competitive environment, because teams form up and face off, so over the last year, while we’ve been in source selection, we’re a lot more careful about what we do, particularly with a company that we’re competing against, because we don’t want to give anyone a leg up on their competition either. But I would say in general the working relationships are very cordial, and the teamwork is great.”
Industry Officials Applaud Communication Under FISAC
Rankin also wrote that communication across the current FISAC landscape has gone well. “With Government direction, support and advice, both BAE Systems and Lockheed Martin worked jointly to develop an integrated task tracking system to ensure all tasks were clearly defined and assigned to the responsible contractor,” he wrote in a Jan. 6 email to NS&D Monitor. “All parties understand the acceptable means of communication and are working within those guidelines. Thus far, information has been flowing well and there have been no issues or reasons for concern.”
While the FISAC entails separate government contracts as opposed to the IPIC’s subcontract-dominated structure, Gulick said that contractor agreements have opened avenues to free-flowing communication between different entities. Under the FISAC, the ISC has access to mission-related data in contractor informational databases with unlimited or government purpose rights, but the ISC is also required to have non-disclosure agreements with subsystem contractors and potentially some subcontractors, according to an October 2010 Industry Day Q & A. Morse expressed optimism about future of Air Force interaction with Strategic Systems contractors. “I think they’re about ready to open it up and allow contractors to participate,” she told NS&D Monitor.
Industry Concerns
The Industry Day Q & A indicates that prospective bidders had expressed concerns about potential conflicts of interest if Northrop Grumman won FISAC Subsystem contracts while serving out its prime integration role under the partial-bridge. While Northrop has thus far not received a Subsystem contract under the FISAC, it has worked on the ICBM Propulsion system as a part of its ongoing Partial-Bridge contract. The company was awarded a $90 million Partial-Bridge modification in August to sustain the Minuteman 3’s propulsion system until the IPIC expiration date. The Air Force indicated in the Q&A that it would not rule out awarding the company Subsystem contracts. “The ICBM SPO intends to avoid [Organizational Conflicts of Interest] where possible, but retain the flexibility to mitigate potential OCIs if possible to meet warfighter needs,” the Q & A states. “Those requirements that cannot be included in the partial bridge contract due to OCI issues and cannot be accomplished organically will be met through other contract vehicles, or deferred.”
Will the FISAC Cut Costs and Boost Government-Contractor Interaction?
The Air Force believes the weapons support construct is bringing more robust competition, which traditionally cuts costs, according to Gulick, the Air Force spokesman. “These savings will enable us to reinvest in our weapon system through modernization efforts and/or to meet other critical needs,” he said. In addition to changing the basic ICBM contracting structure, the FISAC will establish a new body whereby the ICBM SPO and Chief Engineer can interface with the ISC and selected lower level contractors, according to Air Force documents. A “Tech Council” is being created to allow industry to express concerns and innovative ideas with the ICBM SPO, and to vet Subsystem integration issues. It is not a decision-making body.
