Dispels doubts over free flow of spares
Timothy (Tim) Norgart,
Vice President, Business Development Global Services & Support, Boeing Defense, Space and Security
New Delhi: With the growing defence cooperation between India and the United States, new defence platforms and systems worth more than $8 billion are being acquired from the United States.
As the modernisation of India’s defence makes steady progress with the acquisition of new platforms, a major focus is on ensuring operational readiness of the defence platforms through its lifecycle by means of affordable support and services. Evaluating long term support and services requirements and what they will cost is a complex task. Typically, operating costs are drastically reduced if long term training and program based logistics contracts are in place to deliver personnel training, infrastructure, spares, and maintenance.
Boeing, the manufacturer of the giant C-17 strategic airlifter and P-8I maritime reconnaissance aircraft, has offered services and support solutions to the Indian Air Force and Indian Navy to ensure their aircraft fleets are operationally ready. Recently Boeing representatives had a meeting with IAF officials in Delhi to discuss how the C-17 fleet could best be supported with training, support and services once they are delivered to India.
Timothy (Tim) Norgart, Vice President, Business Development Global Services & Support, Boeing Defense, Space and Security in an exclusive interview to Bharat Defence Kavach explained the need for services and support for new acquisitions made by the Indian Air Force and Indian Navy. He also dispelled doubts over the free flow of spares at times of dire need and whether Boeing would support products that are not being produced any longer.
BDK- How do you determine the lifecycle cost of a platform and when and why are long term contracts signed for service and maintenance?
TN- Normally in a procurement contract for an aircraft, the initial support contract is signed which involves training primarily of crew and maintenance staff. One or two years later, the long term support contract is signed separately for long term training, service and support. This helps the buyer to evaluate how that system is going to perform in the first couple of years. Based on this experience the buyer makes a decision on the long term support requirements for the aircraft. Different customers have different requirements and we offer flexibility in choosing the right solutions. The rule of thumb for computing lifecycle cost is that for the entire lifecycle of a system or a platform the amount of money you spend is 75% of the procurement cost. For example, if you bought a group of helicopters for $100 million with a lifecycle of over 25 or 30 years, you will spend about $300 to $400 million for support, service and training.
BDK- How do you dispel doubts of a buyer who thinks such a contract would compromise the secrecy of valuable data on his platform?
TN- We will provide the support based services that India requests. In the case of the P-8I, it will be supported in India. For whatever involvement is required on the direct commercial sale portion, Boeing will engage Indian partners to the extent that the Indian Navy wants us to and based on what expertise they want.
BDK- Why did the Indian Navy opt for some indigenous sensors and systems on board its eight P-8I reconnaissance aircraft?
TN- I think the reason that the Indian Navy put indigenous components in the P-8I is because they wanted those particular systems in the aircraft.
P-8I is a direct commercial sale and whatever involvement we have in the support of P-8I, we will involve Indian industry partners as well to the extent India Navy wants us to. All their classification requirements will be strictly adhered to as we do so all over the world. More than 30% of our global support and services business is from international markets. We have a very robust business in Boeing Australia, Boeing Defense UK, Saudi Arabia and other Middle East countries. We have C-17 aircraft in UAE just like we are going to have ten C-17s here in India.
BDK- Any discussion initiated with IAF on support and service for C-17 aircraft?
TN- We have had preliminary discussions with the IAF on long term support for the C-17 aircraft and showed them the advantages of the C-17 Globemaster III Integrated Sustainment Program (GISP) and how all our international customers have opted for the GISP model of Performance Based Logistics (PBL). Every international buyer for C-17 has bought into this long- term PBL program. With GISP, all C-17 aircraft around the world - no matter who owns them - are supported in a similar manner. The GISP’s “virtual fleet” arrangement ensures mission readiness by providing all C-17 customers, with varied fleet sizes, the benefit of access to an extensive support network for worldwide parts availability and economies of scale when purchasing materials. This brings spares and support closer to the fight and makes the C-17 more affordable to own and operate.
BDK - Can you tell us more about GISP?
TN - Through the GISP agreement between Boeing and the U.S. Government, the Indian Air Force will have access to spare parts and support as part of the Virtual Fleet arrangement. All C-17 customers “buy in” to a pool of spares and support. The C-17 GISP is a public/private agreement designed around the concept of performance-based logistics where the customer pays for readiness, rather than specific parts or services.
Boeing fulfills its GISP role by establishing direct-sales partnership agreements with Air Force Air Logistics Centers (ALC) to perform a variety of C-17 airframe and individual component repair actions. The arrangement allows Boeing to request an ALC to perform specific workloads and ensures extremely high readiness rates for the C-17 at the most affordable cost.
Boeing has supply support management for more than 95 percent of the reparable parts on the C-17. The company continually exceeds contract requirements by achieving a 92 percent delivery rate for these assigned reparable items.
There is an economy of scale gained from the GISP. Spare parts are manufactured and purchased more economically for a fleet of more than 200 air planes flown by US and international customers. In addition, all forecasting for parts and repairs is performed using a centralized database that analyzes data from the entire "virtual" fleet of C-17s.
BDK- How will GS&S support Indian customers?
TN- We are a global business company and we are looking for opportunities to do business in every country we have a presence. We look forward to engaging with our Indian customers and having discussions with them on their requirements. We are looking for more opportunities to be a company that does business from India. We are looking for long term partnerships with Indian industry to better serve our customers now and in the future. Under a long term contract, we setup all kinds of support ranging from perform based logistics (PBL) to major modification upgrades and training.
BDK - Any proposal to setup a maintenance, repair and overhaul (MRO) facility in collaboration with private sector in India?
TN- At this particular time, we have not had any discussions with our customers on MRO requirements. Once the P-8I and C-17 deliveries begin next year, there will be a warranty period for support so there in no exploratory activity for an MRO in the near term. In the future, as the business grows, there are always possibilities for other opportunities in India in areas such as MRO. At this time, there are no such plans.
BDK - How do you maintain flow of spares when production line of a product is closed down at some stage?
TN- We continue to support Boeing defense products worldwide that have been out of production for many years. Even when a production line is closed down, we maintain our engineering expertise and infrastructure. We are able to procure spare parts for products like the B-52 bomber and the 707-based airborne warning and control system aircraft thanks to our vast network of suppliers all around the world.
BDK - What are some of the services and support offerings by Boeing?
TN- Boeing’s Global Services & Support (GS&S) business provides customers with support from product inception to retirement from service. The group has 16,500 employees in 295 locations around the world working to provide customers with readiness and total life cycle solutions.
The business is positioned to support both military and commercial products and services. GS&S is the U.S. Department of Defense’s largest performance based logistics contractor. It is also an industry leader in providing sustainment solutions for Boeing and select non-Boeing platforms. In addition, GS&S is a leader in the field of logistics command and control and training systems. GS&S is comprised of three divisions: Integrated Logistics; Maintenance, Modifications & Upgrades; and Training Systems and Government Services. Combined, these organizations represent the best of Boeing’s support capabilities, enabling GS&S to provide focused logistics and services to meet the current and future needs of Boeing’s customers around the world.