Shady Contract for Army "Future"

Future Combat Systems isn't just a Borges-esque warren of thousands of interwoven, interdependent technology projects. It's a Borges-esque warren run under a really shady contract.

FCS is the Army's effort to remake just about everything in its inventory -- tanks, artillery, drones, you name it -- and then build a brand new, absolutely titanic operating system and set of wireless networks, to tie it all together.

Paul Francis, who looks at federal contracts for the Government Accountability Office, called it "arguably the most complex" modernization project the Defense Department has ever pursued, in his recent Congressional testimony.

So complex, in fact, the Army figured it couldn't pull off FCS by itself. The service just didn't have the know-how to manage something that big, and that ambitious. Forget a traditional defense contract; the Army needed an industrial partner, instead -- some company that could watch over the zillions of moving parts needed to make FCS work. Eventually, the service settled on Boeing as that partner, or "Lead Systems Integrator," in Pentagonese.

The arrangement, in many ways, made sense for the Army. The problem is, it's a lot easier to crack the whip on a contractor than on a partner. As Francis observes:

T**he government’s ability to provide oversight can be reduced compared with an arms-length relationship; more specifically, the government can become increasingly vested in the results of shared decisions and runs the risk of being less able to provide oversight compared with an arms-length relationship, especially when the government is disadvantaged in terms of workforce and skills.* In the case of FCS, these risks are present.*

What's more, this partnership involves some awfully strange compensation.
Boeing gets more than 80 percent of its not-inconsiderable fee after a
"critical design review," targeted for 2011.

*This is significant because most key [technology] demonstrations occur after this review and, historically, most cost growth also occurs after the review. Because of the technical and other uncertainties, as a research and development contract, it is possible for the LSI [Lead Systems Integrator] to perform satisfactorily and earn its fees even if the FCS is unable to deliver the required performance. *(emphasis mine)

Hmmm...
Ultra-complex projects, next-to-no-oversight, and huge paydays, even for incomplete work. Sounds like the Army's future couldn't be more secure.

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* Army "Future" Pricier, Lamer by the Second
* Son of Crusader
* How to Salvage Army's "Future"

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