Beware the budget squeeze
By Karen Walker
December 01, 2009
December 01, 2009
It will be hard to turn up at this year’s I/ITSEC exhibition and convention and not feel a sense of optimism.
Aside from the December sunshine and warmth Orlando typically offers, this will be another record year for exhibitors — some 550 booths — and the need for training systems seems only to grow year by year. Across the ever-expanding halls, all manner of new technologies and innovations will vie for attention. And I/ITSEC is always well supported by the customer; delegations of armed forces and government personnel from around the world will scrutinize those technologies for better ways to meet training gaps.
But it would be wise not to be overly bullish. Not all the signs out there portend an easy ride.
Take, for instance, the trend for rapid-acquisition equipment to meet urgent training needs. Often fueled by the wars in Iraq and Afghanistan — the requirement for counter-IED training devices is an obvious example — these are the so-called 80-percent solutions that can sometimes bypass the program-of-record system because urgency trumps process.
On the one hand, these programs seem like good news for the industry. And you’ll see no shortage of innovative products on the I/ITSEC show floor targeted at winning this type of business.
But there are potential long-term dangers associated with rapid acquisition. First, it can give the false impression to lawmakers that all business might be done this way. It cannot. High-fidelity, networked, collective simulator systems can’t be turned around on a dime. Nor can multinational simulator programs. Production of image generator and display systems are highly specialized skills that also require months, often years, to develop.
Second, interoperability standards tend to fly out the window with rapid acquisitions. Customers around the world have been demanding common standards for training equipment so it can be easily linked regardless of which manufacturer made which piece, and so that upgrades are painless. It’s my bet, however, that many of the quick-fix training devices purchased for counter-IED, convoy, urban and other battlefield training will prove to be one-offs. At the point when it’s recognized that this type of training needs to be institutionalized, but none of this equipment is standardized, the finger pointing will start and the training industry will get stuck with the blame. Stand by for the GAO report and the congressional outcry.
Then there’s the 800-pound avatar sitting in the middle of the exhibit floor. His name is Budget and he has an only slightly smaller brother called Acquisition Reform.
There’s a sea change occurring in the defense systems budgetary process that starts here in the U.S., but is being mirrored in much of Europe and in Australia — all key areas for simulation and training equipment development. The Pentagon and White House are moving toward greater use of fixed-price contracts to constrain budget busts that can occur with cost-plus deals. And there’s a general move to rein in defense spending, reform the acquisition process and rewrite those major programs that have blown their budgets.
That’s not a bad thing at the surface level, but that’s rarely where the training and simulation industry operates. Training equipment is almost always a sub-component of whatever the real equipment program is, be it for a plane, vehicle, ship or weapon. This means that many training and simulation companies are sub-contractors. So guess who the budget squeeze will be passed down to?
All of this is not to say that we should be unduly pessimistic, either. I/ITSEC is this industry’s largest get-together, a great opportunity to discuss these challenges and work out ways to present a strong, unified voice to lawmakers. New partnerships, deals and contracts will emerge from this year’s show, and this is a highly entrepreneurial industry that is passionate about its work. So it will adapt and doubtless the best will survive.
Providing, that is, industry remembers that not all of its challenges are virtual or constructive.
