5

Cost Effectiveness and Utilization

The easing of international tensions and the inevitable pressure on defense spending reductions contribute significantly to a downward spiral of the business base at the Arnold Engineering Development Center (AEDC). In addition, the U.S. Air Force (USAF) has altered its policy so that all ground testing for aerospace systems need not be conducted at AEDC. Less expensive facilities may be used in cases where the program manager judges that alternate facilities are suitable. Coupled with the fact that practically no purely commercial testing is conducted at AEDC due to the prohibitive commercial rate structure, it is not surprising that concerns have been raised regarding AEDC's future business base.

The committee finds it difficult to argue against an Air Force policy that allows program managers to use the most cost-effective development facilities for their programs.

The committee believes that, to some extent, AEDC can compensate for such potential erosion of its business base in several positive ways:

  • Communicate to potential Department of Defense and commercial customers the unique capabilities and technology available at AEDC so that no potential customer is lost. Establish a good communication link with all DoD customers to ensure that, when the unique capabilities of AEDC can be justified in development testing, the specific requirement to use the facilities is written into the program plan.

  • Lower costs to both DoD and commercial customers by instituting customized offerings of support activities for tests. Charge the customer only for what is required and wanted.

  • Increase commercial use of the facilities by charging commercial customers DoD rates.

The above areas can generally be characterized as marketing the AEDC product, offering customized support activities to the needs of the customer, and broadening the business base by attracting more commercial customers while, at the same time, maintaining valuable national resources in a state of readiness for the purposes for which they were designed and built.



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OCR for page 48
Future Aerospace Ground Test Facility Requirements for the Arnold Engineering Development Center 5 Cost Effectiveness and Utilization The easing of international tensions and the inevitable pressure on defense spending reductions contribute significantly to a downward spiral of the business base at the Arnold Engineering Development Center (AEDC). In addition, the U.S. Air Force (USAF) has altered its policy so that all ground testing for aerospace systems need not be conducted at AEDC. Less expensive facilities may be used in cases where the program manager judges that alternate facilities are suitable. Coupled with the fact that practically no purely commercial testing is conducted at AEDC due to the prohibitive commercial rate structure, it is not surprising that concerns have been raised regarding AEDC's future business base. The committee finds it difficult to argue against an Air Force policy that allows program managers to use the most cost-effective development facilities for their programs. The committee believes that, to some extent, AEDC can compensate for such potential erosion of its business base in several positive ways: Communicate to potential Department of Defense and commercial customers the unique capabilities and technology available at AEDC so that no potential customer is lost. Establish a good communication link with all DoD customers to ensure that, when the unique capabilities of AEDC can be justified in development testing, the specific requirement to use the facilities is written into the program plan. Lower costs to both DoD and commercial customers by instituting customized offerings of support activities for tests. Charge the customer only for what is required and wanted. Increase commercial use of the facilities by charging commercial customers DoD rates. The above areas can generally be characterized as marketing the AEDC product, offering customized support activities to the needs of the customer, and broadening the business base by attracting more commercial customers while, at the same time, maintaining valuable national resources in a state of readiness for the purposes for which they were designed and built.

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Future Aerospace Ground Test Facility Requirements for the Arnold Engineering Development Center MARKETING THE AEDC PRODUCT AEDC effectively has a dual mission: system test and evaluation, and the development and installation of advanced testing techniques. The perceived major role and responsibility of AEDC is that of a service organization to USAF laboratories, system program offices, and industry. Strategically, it must also anticipate test requirements for future Air Force systems. Two influences dominate the planning and operations. One is the breadth of the technology spectrum that makes up today's conceivable flight envelope. The other is the exceptionally long lead time that is required to carry out the necessary research, development, and advocacy for new test facilities. The AEDC products correspond to its mission: data acquired in well defined simulations throughout various portions of the flight envelope and the advanced facilities themselves that are developed for future operations. The core activity has been aerodynamic and propulsion development testing, supplemented by environmental space and component system testing. In view of recent DoD policy, AEDC is aggressively developing further improvements in its present well-respected test procedures and services. Essentially, DoD now allows USAF testing to be contracted to any suitable facility, in or out of the government. There appears to be little acknowledgment of the special constraints that are imposed on AEDC when use is made by sponsors from commercial or foreign spheres. The revised paradigm shows signs of effectively removing a substantial portion (possibly one-third for fiscal year 1991) of AEDC's historic support that follows from its reimbursable budget authority for test operations. AEDC has responded with countermeasures to enhance its marketability, including attempts to increase productivity, promote greater staff participation in test assessment, and enlarge upon the interactive interest shown to developing system needs by way of on-site representation assigned by the center to other USAF laboratories. AEDC also is aggressively pursuing its vision of fulfilling imminent USAF needs by developing its role as a supplier of unique facilities in hypersonics, space, and integrated ground/flight/computation advanced testing. The intent is to extend the reach of the test simulations within the critically demanding regions of the envelope and to make available a strong component of interactive computational methods both for interpretive purposes and to minimize actual testing time requirements. Such an expansion of the AEDC test boundaries potentially provides an extremely competitive sphere of operations that meets both the nation's military needs and nationwide and international interests. It also implies a staff commitment to responsibility for more intense involvement with the details of data acquisition and interpretation, which is of growing technical importance and should be a major marketing attraction. The committee recommends that AEDC place representatives at customer sites to provide good communication links and customer support to ensure that appropriate potential business converts to actual business. CUSTOMIZED SUPPORT ACTIVITIES Development testing at AEDC is very costly because the facilities are large, sophisticated, and unique, and the Center insists on doing a first-class, comprehensive job of support activity for the tests it conducts and only offering full-service testing support. Developing operational

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Future Aerospace Ground Test Facility Requirements for the Arnold Engineering Development Center modes in which the customer has the option of negotiating specifically required partial services will increase facility utilization. Of course, there are limits to what can be offered here, particularly when facility safety is considered. Nevertheless, test cost reductions can be substantial if such flexibility of test support operations is managed properly. The committee recommends that AEDC develop practices wherein the customer has the option of negotiating for partial-service testing support for only the services specifically wanted and needed, thereby minimizing customer test program costs. BROADENING THE BUSINESS BASE WITH COMMERCIAL TESTING AEDC presently has a varying charge rate structure, depending on who the customer is and who sponsors the test. DoD customers pay the direct costs of running a test. Other government users (such as NASA) pay some indirect charges in addition to the direct charges (if the test does not have the sponsorship of a DoD program). Commercial users pay a full, indirect charge in addition to direct charges if the test does not have the sponsorship of a DoD program. Although the ratio of commercial to DoD charge rates varies somewhat depending on the test in question, that ratio is typically on the order of two to one. Work related to foreign military sales is charged at the higher commercial rate. Air Force program managers working with commercial users can design and conduct tests of significant value to both military programs and the commercial customer. The commercial customer still pays the costs, and the charges are levied at the DoD rate, that is, direct charges only. In recent months there has been some indication that a change in the charging policy might be in the offing. This new policy would allow the DoD rate to be applied to commercial tests provided the AEDC commander within the LRPT guidelines deems it in the interest of the Air Force to do so. The committee strongly supports this philosophy. The AEDC commander might find benefit to the Air Force for several reasons: the technology being developed by the commercial test has some direct or indirect benefit for military technology requirements; the product being developed by the commercial customer might have some future military application; the commercial testing might help level-load the work within AEDC facilities, providing better productivity and efficiency for the AEDC military programs; and the test data may be of use to the government. The committee finds that commercial access to AEDC at DoD rates is consistent with the original concept, funding, and evolution of AEDC and with the Unitary Plan Act of 1949. It is also consistent with the objectives set forth in the Federal Technology Transfer Act, which encourages cooperative research and development (R&D) agreements in order to accelerate the

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Future Aerospace Ground Test Facility Requirements for the Arnold Engineering Development Center accessibility to and commercialization of DoD laboratory efforts. Last, it is also consistent with NASA charging practices for proprietary commercial testing. The committee recommends that DoD policy state that commercial testing at AEDC is encouraged when such testing works to the net national advantage. The LRPT, with the support of AEDC, should undertake a study of measures that would encourage such testing, including delegating to the AEDC commander the authority to approve rates for commercial testing that are comparable with rates for DoD testing. Consideration should be given to the criteria that the AEDC commander should apply to determine at which facilities and under what circumstances such rates are justified in the net national interest. INSTITUTIONAL SUPPORT OF GOVERNMENT R&D TESTING A small fraction of AEDC's capacity should be available for the support of research and development, as compared to the primary testing for development programs. This fraction, 5 to 10 percent, should be institutionally funded in a separate research and development account and available for researchers at USAF laboratories, NASA, and other government laboratories and test centers. Such a program would attract key people to test at AEDC, make AEDC's unique facilities better known (flow conditions and size), and provide AEDC with additional contact with the R& D community. Such a regularly scheduled program may be an effective way to expand into vacant test periods where underutilized facilities may be usefully operated. Schedules must give the major programs priority but should not restrict the R&D efforts for long periods. The committee recommends that a separate institutionally-funded research and development account be provided specifically for a limited amount of research in AEDC facilities by such users as the Wright Laboratories and NASA.