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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense Executive Summary BACKGROUND In the 1980s, aerospace was a major U.S. economic sector dominated by defense spending. In the 1990s, the U.S. economy shifted gears, moving rapidly into new, nondefense sectors, such as information technology and biotechnology. In those 10 years, the aerospace industry was dramatically consolidated to adjust to a shrinking Department of Defense (DoD) market and decreasing defense investments. In 1989, DoD accounted for 51 percent of aerospace sales in the United States. In 1999, DoD accounted for only 30 percent of aerospace sales (AIA, 2000, 2001a). This change has altered the relationship between the military and the industry but has not been reflected in changes in policies and regulations relating to the defense industry. The United States currently leads the world in aerospace technology. Academia continues to produce skilled aerospace engineers, and industry continues to produce excellent aerospace products. The question is how long this lead can be sustained in the new environment—how long DoD, and specifically the Air Force (which requested this study), can maintain its leadership in aerospace, continue to attract the highest-quality scientific and technical personnel for positions in both government and the defense sector of the aerospace industry, innovate faster than its potential adversaries, and maintain its military advantage. ORIGINS OF THIS STUDY The Principal Deputy to the Assistant Secretary of the Air Force for Acquisition requested that the National Research Council (NRC) review the Air Force’s planned acquisition programs to determine if, given its scale, the highly talented scientific, technical, and engineering personnel base could be maintained, to identify issues affecting the engineering and science work force, and to identify issues affecting the aerospace industry’s leadership in technology development, innovation, and product quality, as well as its ability to support Air Force missions. A major concern of the Air Force is whether the aerospace industry can continue to produce cutting-edge products and attract the highly skilled technical people necessary for the industry to meet the Air Force’s future needs. A related concern is the Air Force’s ability to attract similar personnel to perform and manage research, technical, and acquisition programs as Air Force government service employees. Another concern is the economic health of the aerospace industry, particularly whether the level of funding for research and development (R&D) and science and technology (S&T) provided by the government and the commercial sector is adequate, whether the future of research and test facilities is in jeopardy, and whether U.S. superiority and leadership in aerospace can be maintained. The Air Force’s concerns are based on the following factors: Military budgets have been reduced substantially, resulting in fewer new programs and fewer career opportunities for new people. Industrial mergers have reduced the number of companies and potential suppliers; downsizing, with its attendant instabilities, has made working in the defense industry in general and the defense sector of the aerospace industry in particular (hereinafter referred to as the aerospace defense industry) less desirable. The independent research and development (IR&D) pool is now concentrated in fewer companies. Each remaining company concentrates its IR&D efforts on a single solution, thereby reducing the amount of total design effort. A large number of experienced technical people in both government and industry are approaching retirement age and must be replaced. Because of downsizing, however, relatively few new people have been hired in recent years. Thus, the depth of experience in middle management and the availability of qualified future senior managers are questionable. The growth of other commercial industry sectors,
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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense spurred by rapid growth in information technology, has greatly increased the demand for technical people, especially software engineers. STATEMENT OF TASK The NRC was requested to: Gather information from key sources on the status of, and issues surrounding, the current aerospace infrastructure. This would include information gathering from government and national private sector stakeholders such as NASA, DARPA, FAA, warfighters, academia, senior industry executives, and military acquisition personnel. Examine component sources such as the aircraft engine industry that have been successful despite low and intermittent production rates to determine if lessons learned have wider applicability. Assess whether planned acquisition programs, considering their requisite S&T investment, will provide sufficient opportunities for innovation and to maintain a critical mass of activities to sustain a highly talented engineering talent base. Use planned aircraft and space vehicle development programs, major technology development and weapon system modification programs, and NASA programs as potential information sources. Consider international aerospace market sales prospects, as appropriate. Identify issues relative to the maintenance of an adequately educated, trained, and innovative force of engineering and science professionals to support the national aerospace infrastructure and on how the aerospace industry can maintain its world leadership in technology development, innovation, and product quality. APPROACH TO THIS STUDY To undertake this study, the NRC formed the Committee on the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense, under the auspices of the NRC’s Air Force Science and Technology Board. The committee focused its attention on the trends and issues with the most serious impact on the defense aerospace sector of the aerospace industry, and the committee’s recommendations are focused on remedies available to the Air Force. After reviewing the economic health of the aerospace industry; the Air Force and industry S&T talent base; the quality of test facilities and support capabilities; relevant DoD policies, regulations, and procedures; and management in principal government, industry, and academic organizations the committee made the following general observations: Although procurement funding levels have recently increased slightly, today’s defense aerospace industry provides less work for aerospace engineers as a result of force drawdowns and reductions in procurement funds in the early 1990s. The military has fewer aerospace systems in development today than at any time in the recent past because of decreases in procurements; less apparent need for new systems since the end of the Cold War; and robust, life-extending techniques developed by industry for current aerospace systems that have given new life to older systems. The pool of scientific, technical, and engineering talent in the aerospace field is shrinking as a result of losses to highly attractive, competitive industries. The military and the aerospace defense industry face similar recruitment challenges. The Air Force does not have sufficient resources to support all of its missions and programs. This has caused excessive funding uncertainties and program instabilities. Many commercial firms, both established and new, are reluctant to enter into government contracts (other than commercial sales) because of perceived “unreasonable” government practices. The government service personnel system, which has rigid salary structures and complex, time-consuming hiring practices, has made meeting the needs of government research laboratories extremely difficult. Because a unique characteristic of the aircraft engine industry is that defense products can piggyback onto its commercial products, this sector is not a good model for the aerospace industry as a whole. THE BASIC CONCLUSION The technical resources problem is not separable from the Air Force’s other duties. It affects and is affected by Air Force decisions about current and future missions and needs and what the Air Force develops, buys, tests, and uses in training, which in turn leads to what the future of the Air Force is to be. If the technical resources required are not considered when and where these fundamental matters are discussed and decided, their effects will not be properly taken into consideration. The Air Force pays close attention to those matters it holds most important. For many years, however, it enjoyed high-quality technical resources without paying specific attention to them, but times are changing. In the opinion of the committee, the technical resources will not continue to be of high quality without this specific attention. In the committee’s opinion, this problem is best dealt with by the Chief of Staff of the Air Force saying he wants attention paid to technical quality and quantity and then appointing a deputy for this purpose, preferably as a sole responsibility. Further, although S&T is important, in fact very important, it is only a part of what concerns the committee. The committee believes it would be desirable for a deputy chief of staff (DCS) to have responsibility for S&T as a part of his larger job. Alternatively, someone else could have direct S&T responsibility, as is true for most of the other elements of the DCS’s portfolio. This DCS, in the committee’s view,
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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense would have oversight of all Air Force technical resources and how they fit into what the Air Force is doing and plans to do. The basic conclusion of this report is that if the Air Force is concerned about the future of its technical resources (and it is), it must give the problem the kind of continuing attention that it gives to other serious matters. This attention includes the following: Raising the level of attention by establishing a deputy chief of staff who is also a member of the Air Force Council to oversee the Air Force’s technical resources; Creating an ongoing assessment of Air Force technical resources and planning what to do to ensure their quality; Paying attention to all elements of the technical spectrum, including S&T, which is necessary although not sufficient, as well as R&D, design, and production; Considering separately the health of industry and inhouse labs, the efficacy of program management, and the health of universities—and doing what is necessary to ensure their continued health in supporting the Air Force; and Making sure the technical community fully understands the Air Force’s need for and commitment to high-quality, leading-edge technology and the role of Air Force technology and acquisition people. SPECIFIC CONCLUSIONS AND RECOMMENDATIONS The character of potential adversaries has changed, as has the environment of the defense aerospace industry. For the Air Force to maintain its technological lead, it too must change if it is to maintain the quality of its technical resources. The major areas of change should be in the management of scientific and technical resources, maintenance of the technical work force, the Air Force’s relationship with industry and academia, and related government industrial policies. The committee’s major conclusions and recommendations in these areas are presented below. Scientific and Technical Resources A shrinking budget and some insistence on maintaining business as usual have led to great instabilities. The Air Force has more programs, particularly new procurement programs, than it can support with its present and foreseeable acquisition budgets. As a result, funds are constantly being shifted and reprogrammed to pay pressing bills. This has created unnecessary, debilitating upheavals for both personnel and programs and may prejudice the Air Force’s long-term technology initiatives. The committee recognizes that the Air Force major program budget is heavily affected by the political process. Nevertheless, the Air Force should decide upon, and then protect, the portion of the budget allocated for future technologies, which will determine the quality of its future warfighting capability. Conclusion 1. In the process of refocusing its priorities and as a result of reorganizations predicated on the Goldwater-Nichols Act, the Air Force eliminated the position of Deputy Chief of Staff for Research and Development and thus lost a strong advocate for science and technology. In addition, the Air Force Systems Command was combined with the Air Force Logistics Command to form the Air Force Materiel Command (AFMC). Although this consolidation has streamlined AFMC’s processes for development, acquisition, and support of Air Force systems, it has also reduced the emphasis on technology in general and S&T in particular. Currently, the highest S&T-dedicated position in the Air Force is the two-star Air Force Research Laboratory (AFRL) commander position at Wright-Patterson Air Force Base (AFB) near Dayton, Ohio, which is several levels below the Air Force Council. The AFRL commander reports directly to a general (four-star), the commander of AFMC, of which AFRL is a part. AFMC headquarters is also located at Wright-Patterson. The AFMC commander’s responsibilities are very broad, including the programs at four product centers, five air logistics centers, three test centers, and two major specialized centers, in addition to AFRL. The AFMC commander has too many other important and demanding responsibilities to focus on S&T, and without an S&T advocate of sufficient stature and authority at the Air Staff level where budget decisions are made, support for S&T has declined substantially. Reinstating a senior voice for technology in shaping the future capability of the Air Force would help ensure that decisions affecting technical resources including S&T expenditures are fully considered by Air Force decision makers. Goldwater-Nichols defines the relationship between the Secretary’s Office and the Chief’s Office on technical matters. The Secretary’s responsibilities are clear, but this should not mean the military does not have very strong concerns about and influence on the technical resources of the Air Force and does not have the need for oversight. The committee believes that the Air Force, both civilian and military, must pay more focused attention to its technical resources if it is to continue to get the best weaponry. If Goldwater-Nichols or other constraints make a DCS position unworkable, the role and responsibility recommended could be assigned in other ways. The committee understands, for example, that the Navy has established a position for a two-star Director of Test & Evaluation and Technology Requirements (N091) who reports directly to the Chief of Naval Operations (CNO) and has somewhat similar functions. He serves as the principal interface between the CNO and the Assistant Secretary of the Navy for Research, Development and Acquisition on RDT&E; Resource Sponsor for Navy S&T (6.1, 6.2, 6.3A) investments; Resource Sponsor for RDT&E field activities; and Appro-
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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense priations Sponsor for CNO RDT&E, Navy (RDT&E,N) funding. In any event, the committee believes that high-level attention is needed to get the best result. Recommendation 1. The Air Force should establish a deputy chief of staff, who is also a member of the Air Force Council, with primary responsibility for oversight of all Air Force scientific and technical resources. Among his duties, which should include all Air Force technical activities from concept development through completion of engineering and manufacturing development (EMD) phases, this officer should be the advocate for funding science and technology requirements and for modifying and tracking the implementation of S&T requirements to minimize instabilities in S&T and R&D funding (including new production processes), to ensure that adequate funding is budgeted annually, and to resist attempts to raid S&T or R&D funds to meet short-term budget shortfalls in other areas. The committee believes that whoever is assigned the responsibilities for oversight of Air Force technical resources should be able to act as a high-level advocate for the technical resources within the Air Staff and the department. This individual should be someone who has an extensive scientific or technical education and background, yet also has experience in the operational commands and can appreciate the critical needs of both sides of the house—warfighting and technical. The new DCS would maintain awareness of the status of all aspects of the Air Force’s technical resources and would track the effects of current and proposed policies—concerning personnel, facilities, the Air Force Institute of Technology, education, and research activities—on the technical capabilities base. This person would then serve as an advocate on the Air Staff to ensure that the needs of the technical capabilities base at least get a fair and accurate hearing in the policy decisions of the Air Force. The Air Force Technical Work Force Despite the recent difficulties of attracting qualified people to government defense work, the committee believes the Air Force has marginally enough scientific, technical, and engineering personnel to carry out its current programs and, with the appropriate effort, should be able to attract enough people in the near future to develop and build the systems that are now planned. In fact, the Air Force, even with reduced S&T funding, has the resources to pursue many important programs on the leading edge of technology, providing it sets the right priorities and executes them efficiently. The problem is how to attract new talent in the face of growing commercial competition. This is a new challenge for the Air Force, and meeting it will require a new way of thinking. The committee strongly supports technical education for Air Force personnel at both the Air Force Institute of Technology (AFIT) and civilian universities as a source of technically educated officers for S&T and acquisition force positions. Conclusion 2. Technical personnel—having the types and numbers that are essential for maintaining current and future Air Force technological superiority and for ensuring technical innovations in science, technology, research, and development to support current, emerging, and future capabilities—are just as important to the successful accomplishment of the Air Force mission as the operational and support elements. Recommendation 2. The Air Force should assess the quality and quantity of its technical personnel regularly, taking into consideration its future missions and needs, just as it currently assesses the quality and quantity of its flight personnel and other vital resources. The Air Force should use these assessments to define the types and numbers of technical personnel necessary to maintain current and future Air Force technological superiority and ensure technical innovations in science, technology, research, and development. The results of the assessment should be used as a basis for making policy changes (if necessary) to protect investments that support technical personnel. Ongoing assessments should include the following estimates: The number of uniformed and civil service technical personnel necessary now and in the future, including skills, technical specialties, and years of experience; The organizational base and operating requirements to support the Air Force’s long-term technology needs, including size, skills, and responsibilities for universities and in-house laboratories performing scientific and technical research, industrial contractors that the Air Force considers essential to maintaining a competitive supplier base, organizations the Air Force intends to sustain as sole suppliers in particular areas, and Federally Funded Research and Development Centers (FFRDCs); and The need for research, development, test, and evaluation (RDT&E) facilities, such as wind tunnel facilities and test ranges, for transitioning technology capabilities and meeting research requirements. This is included because high-quality technical people need and will insist on high-quality facilities. These needs should be closely coordinated with the other services and with the National Aeronautics and Space Administration (NASA). These assessments should be the responsibility of the deputy chief of staff recommended above. Finally, that officer should present the assessments of Air Force technical resources, both current and future, to the senior Air Force leadership annually during the periodic meeting at Corona. Conclusion 3. With a nearly 35 percent drop in the Air Force S&T budget over the last 15 years, the Air Force can-
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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense not sustain its technical viability over the long term. Although total S&T funding for DoD as a whole is on the order of 4 percent of the DoD budget, the Air Force has selectively reduced the percentage it allocates for this purpose compared to the other services. The Air Force reductions in S&T funding also come at a time when other sources of federal S&T funding that support the Air Force, such as NASA and Federal Aviation Administration research, have declined significantly. S&T funding is the “seed corn” for the technical superiority of the Air Force. Therefore, the level of S&T funding must be maintained at an adequate level. Recommendation 3. The Air Force should balance current expenditures and investments in future technologies and insulate those budgets from the vagaries of near-term fiscal pressures. Vital science and technology resources should be organized, protected, and nurtured just as carefully as critical operational resources. Relationship with Industry Few, if any, perfectly free markets exist anywhere with many suppliers and many buyers, perfect information, and no applied restraints. The DoD as a monopsony, or single buyer, for the defense industry cannot be said to operate in anything like a free market. This, however, does not mean that there is no competition, just that the competitions are established and controlled by DoD. The DoD has widely varying relationships with its suppliers, ranging from open competitions to what are essentially permanent single sources and all other combinations in between. Since DoD sets the rules, it is responsible for the effects of those rules on its supplier base whether it recognizes this explicitly or not. The committee understands that this is well recognized within DoD but that there seems to be no established mechanism for determining and taking into account the effects on the Air Force’s technical resources when decisions are being made about the competitive conditions for individual programs or for the Air Force program as a whole. In a free market, the responsibility for maintaining a high-quality technical staff can and should be left to suppliers. However, the aerospace defense industry is not a free market. The Air Force and DoD as a whole are a monopsony customer for much of the aerospace industry and therefore have significant influence over the supplier base and infrastructure. Despite changes in DoD policy requiring that all of the services increase their use of commercial off-the-shelf products and modify their procedures to accommodate commercial practices, the Air Force still depends on the aerospace defense industry for high-quality, Air Force-unique products. Through its procurement practices, the Air Force can affect, even determine, the long-term viability of these suppliers. Conclusion 4. In the current environment, the Air Force cannot continue to think of the defense aerospace industry as a competitive marketplace. The way the Air Force uses its resources, by design or otherwise, has a major impact on the viability of the defense aerospace infrastructure that supports the national security interests of the Air Force. Maintaining the traditional arm’s-length relationship with industry must yield to establishing long-term partnerships with responsibilities on both sides. Partnership includes the concepts of mutually supportive and collaborative relationships and two-way exchange in which the parties depend on each other. Industrial organizations must be responsible for maintaining their own capabilities, but the Air Force must be responsible for providing conditions and incentives under which these organizations can remain strong and effective and continue to enhance their technical capabilities. Recommendation 4. Air Force management should take into consideration the effects of its budget and management policies on industry. The Air Force should establish partnerships with defense industries that will encourage industry’s continued effectiveness and enhance its technical capabilities. A number of studies analyzing the defense industrial environment were reviewed by the committee. These studies largely agree that the needs of the industrial base should be taken into account in the acquisition process, that industry metrics must be better understood, and that the export control process must be streamlined. The committee’s investigations substantiated the results of these studies and the validity of their recommendations. Although government oversight of the defense industry is necessary to ensure that taxpayer money is spent wisely and appropriately, current government regulations are focused excessively on detailed cost accounting and adherence to complex processes. As a result of these regulations, efficiency has been undermined, procurement costs have risen substantially, and the attractiveness to technical people of working in defense has been reduced. Unless high-quality people are treated as trustworthy and reliable, they will go elsewhere. Some leading technology corporations have divested themselves of divisions and subsidiaries that made defense products. Although most of these divisions and subsidiaries were acquired by companies that made similar or related products, the number of companies bidding on Air Force contracts has been reduced. The Air Force would benefit a great deal if it could take advantage of commercial technology and processes. New initiatives for modifying the Federal Acquisition Regulations (FAR) should enable a shift toward more commercial-like procurement relationships. Conclusion 5. Current government reforms are a step in the right direction toward dramatically reducing acquisition cycle times and will certainly improve the efficiency of the defense industry. They will also allow greater flexibility in program design and result in processes that are more in tune with industry. Reform should be considered a long-term un-
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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense dertaking and should continue to be visibly supported by Air Force leadership. The issue of whether reducing cycle time will increase near-term budgets depends on whether one is attempting to squeeze all of the existing programs into a shorter time or whether one is trying to do as many as can reasonably be done within the available funds. Programs that cannot be fitted in will be delayed. Over a long period, more programs would get done within the same total funds, most of them sooner than they could be now because of the shortened cycle time and greater efficiency. Recommendation 5. The Air Force, and the U.S. Department of Defense as a whole, should continue to provide strong leadership for initiatives to reduce acquisition cycle times as a means for furthering DoD goals. They should also continue to work toward reforming policies and regulations for acquisition processes, thereby reducing the burden on industry of working with the government. Reforming Policy and Regulations In addition to interesting work, quality people need quality working conditions. A healthy organization, whether in industry or in government, must provide competitive salaries, benefits, and opportunities for growth and advancement. Civil service regulations, which apply to the government service white-collar administrative force, the blue-collar work force, and the technical work force, use standardized processes that are poorly suited to meet the demands of government laboratories performing leading-edge research. Inflexible civil service regulations, hiring practices, employment conditions, and salary structures have resulted in a serious decline in government technical talent, and more and more bench-scale technical work is being contracted out to industry and university laboratories. This adverse trend has exacerbated the problem of the viability and sustainability of government laboratories. Leaders of government technical organizations have been working hard to overcome these difficulties but have not received adequate policy and regulatory support. In the committee’s opinion, the supply of good technical people the Air Force needs cannot be maintained under existing civil service rules and restrictions. Therefore, the Air Force must actively pursue civil service reform for scientific and technical personnel. A Defense Science Board (DSB) Task Force addressing the ability of DoD to attract and retain critical personnel recommended the transfer of authority for the DoD civilian work force from the Office of Personnel Management (OPM) to the Secretary of Defense (DSB, 2000a). The committee did not endeavor to evaluate this proposal but believes that this concept merits serious consideration. Conclusion 6. The Air Force is facing serious competition for high-quality technical people. Although the Air Force can offer interesting and important work for in-house government employees and has a substantial budget, it has had trouble attracting people either directly out of universities or from the commercial sector. Many of the difficulties are related to civil service rules and restrictions that do not allow the salary flexibility and rapid decisions necessary to hire talented available applicants quickly. In order to meet the need to compete more effectively than it does now, the Air Force must provide a quality workplace. Recommendation 6. The Air Force should join the Office of the Secretary of Defense, the other services, and other federal agencies in ongoing attempts to reform the civil service rules for scientific and technical personnel. Universities are the trainers and motivators, the breeding ground, of the future defense work force. Air Force funding for university research is essential for maintaining this connection. The Air Force should cultivate and establish long-term partnerships with universities. Conclusion 7. The universities, faculties, and students whose research is supported by U.S. government funds are an indispensable base for motivating young, well-educated individuals to pursue careers in defense technology and Air Force laboratories. The relationship between universities and the Air Force is symbiotic. Universities need S&T funds from the Air Force, and the Air Force needs both the results of S&T and new technical personnel. If the Air Force wants a healthy relationship it must cultivate and establish long-term partnerships with universities. Recommendation 7. The Air Force should establish long-term, stable partnerships with its supporting universities and their faculty members. The Air Force should decide how much to invest for the future through S&T funds to universities and then protect that investment. The Air Force should also recognize the financial problems facing universities and make sure that contractual and financial arrangements are consistent with the continued health of these important institutions and their ability and willingness to continue to support the Air Force. The Air Force must do more to attract and retain the highest-quality scientific and technical people. As a matter of first principle, highly trained technical people want interesting and important work, which the Air Force has in plentiful supply. Despite reduced R&D budgets, the Air Force continues to devote major funds to solving leading-edge technical challenges. However, the impression in industry and the technical community is that the Air Force is short of money and is concentrating its efforts on operational requirements, modifications, and upgrades at the expense of new technology. Although the Air Force’s emphasis has recently been focused on operational requirements for multiple force deployments, substantial funds are still being invested in inter-
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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense esting and challenging S&T projects. The Air Force should develop a strong, positive message about its technical S&T program. Conclusion 8. Air Force technical programs and opportunities are challenging and exciting. However, the Air Force has not communicated that excitement to the technical community. The Air Force must overcome the perception that opportunities in defense research are limited and that defense is not as important as it was during the Cold War. Recommendation 8. The Air Force should communicate a strong, positive message describing its technical plans and opportunities and ensure that this message is broadly distributed to students, faculties, industry, and the general technical community.
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