The subject of outsourced defence services has a long and varied history, but in recent times the sheer costs of keeping the latest aircraft, ships and military assets serviced, upgraded and free from obsolescence has seen a huge expansion in the range of services on offer commercially, or on a government-to-government basis, to customers worldwide. The rationale for outsourcing is not just the possibility of saving money through competitive pressures, compared to providing these services in-house, it now also extends into detaching even some operational services from the armed forces to provide a complete turnkey solution. In such case the customer nation"s military retain ultimate control over how such assets are deployed on their behalf, with embedded uniformed specialist personnel within the organisation, and direct responsibility remaining with the armed forces.
Outsourced solutions come in a variety of different forms, but a key advantage of switching in-house provision to an external contract-based solution is that such agreements can include regular upgrading of equipment, or the selection of completely new equipment. Within such packages a large proportion of the costs and effort involved in negotiating a value-for-money solution can often be achieved far quicker than through traditional government-run equipment-selection procedures, which often suffer from major delays and subsequent cost increases. In the outsourcing example the government customer specifies the military support requirement but then puts this out to tender and considers the offers that result. By leaving the bidder to submit detailed proposals concerning how the requirement can be met, and that can include aspects of training, equipment selection, repair and maintenance, and upgrades during its time in service, customers can have a clear choice of the best solution to meet their needs.
There will be incentives for contractors to over-deliver on the basic specification so that the chosen supplier can share financially in any additional financial savings that result from the winning bid being a success.
A very big element of complete support packages is the ability for a contractor to offer innovative services, such as "pay by availability" where a customer completely outsources the provision of maintenance and spares support, and doesn"t have to operate and maintain an extensive logistical spares organisation. The supplier guarantees to provide a minimum number of assets at all times and to repair and replace as required. This transference of the financial risks from customer to supplier comes at a price of course, which has to be recognised in the contract, but experience of it working for customers has shown that it can result in dramatic increases in availability of equipment and quick-reacting support when it is needed. One reason for this, which in some cases has seen transformational improvements, is because the contractor has a clear priority focus on delivering the solution as soon as possible whereas if on-going maintenance and repair activities are carried out in-house by the military, support programmes can suffer from fluctuating funding surges or contraction and disruptive changes in operational priorities. All the major global defence suppliers, including as BAE Systems, Boeing, Lockheed Martin, Raytheon, Northrop Grumman, Leonardo, Dassault, Airbus, Cobham, Thales and QinetiQ, operate overseas-based defence companies that are focused on customer-specified support activities but are linked internationally to enable them to have maximum synergy and experience-sharing across all regions. External military service provision is widespread amongst Western nations in particular, but the UK has probably led the way in outsourcing large segments that include whole areas of support activity. Boeing Defence in the UK is responsible for a growing proportion of total service provision for helicopter and fixed wing military aircraft fleets. This workload is increasing as the results of previous support contracts that have greatly reduced costs and availability levels. The UK"s 60-strong fleet of CH-47 Chinook helicopters is maintained in a wide-ranging contract that has included major upgrades to retro-fit advanced cockpit systems allowing more commonality across the fleet, where many different versions are in service. Boeing has said that this contract has saved the UK MOD over _150 million in the last five years in support work. The company is also responsible for the supply and support of a new fleet of 50 AH-64E Apache attack helicopters and new P-8A maritime patrol aircraft. A completely new maintenancebase is to be established, complete with all training and support facilities to sustain these new fleets long-term. In a similar way Lockheed Martin is deeply involved by providing training and support for UK fleets of C-130J transport fleets and the AW101 Merlin helicopters of the Royal Navy. L-M has been responsible for the modernisation and integration of new anti-submarine systems in the Merlin Mk 2 and has been awarded a contract to manufacture and integrate the new airborne early warning version, known as Crowsnest. Leonardo is responsible for sustaining the existing UK Apache and Wildcat fleets and supporting the new AgustaWestland helicopters that are being delivered to a new Bristow support contract to replace military Search and Rescue helicopters with a completely outsourced SAR organisation.
Some very high profile outsourced programmes have been developed to maturity in the UK in recent times. One is Air Tanker, which is a completely contracted-out service for the Royal Air Force, and which operates 14 A330-200 Voyager tanker and transport aircraft. This fleet provides a core air-tanking fleet of two and three point refuelling platform aircraft for the RAF and each aircraft can also carry up to 270 passengers and 34 tons of cargo. Air Tanker flies a mixed fleet of new Airbus A330 aircraft, some as dedicated air tankers, and some as passenger and troop carrying transports. All are equipped to act as tankers if required, or in the government VIP role.
The provision of flight simulation and actual flight training has long been a market where commercial companies have provided aircraft, instructors and training facilities for customers on a global scale. Many exist in the USA, using former military aircraft and instructors, and much government-to-government training is provided, as is currently the case where the USA has established new training and operational facilities for the re-established Iraqi Air Force. In the UK all military flight training is now in the hands of outsourced suppliers, operating basic turboprop Tucano and AT-6 trainers and Hawk advanced jets, and also twin-engine King Air and Honda Jets for multi-engine pilot training, and a variety of light training helicopters. BAE Systems is also experienced in providing pilot and engineering training and management expertise in conjunction with sustainment contracts in the Gulf Region, notably for the Kingdom of Saudi Arabia, but also around the world, including Australia, where the company has a large defence footprint in surface, sea and air programmes.There can be no doubt that outsourcing is providing a very flexible extra option for defence planners as they contemplate how to keep sustainment costs affordable into the future