O&S COST MANAGEMENT: O&S COST INFLUENCE ON PROGRAMS A V-22 PROGRAM PERSPECTIVE V-22 Readiness Improvements / Cost Per Flight Hour Reductions N4 Brief 5 January 2011 Mr. Scott Hite, V-22 Joint Program Office (JPO) Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313 1

Background & Context ►Discrete O&S Influence in Design Has projected O&S cost influenced DoD acquisition program product design decisions? · Has projected O&S cost influenced DoD acquisition program product support strategy decisions? · Has actual O&S cost influenced DoD fielded program cost reduction decisions? Dec 1981 MS 0 Dec 1982 MS I Apr 1986 MS II Oct 1992 EMD contract award Jan 2018 CCRAM contract Defin Oct 2005 MSIII Apr 2000 Marana Mishap Jun 2007 MV IOC Mar 2009 CV IOC Apr 2010 GSD Jun 1996 LRIP 1 MYP I FY2008-12 MYP 2 FY20013-17 MYP 3 FY20018-22 Performance Based Logistics (PBL) contract FY2008 Reliability changes Cost Reduction Initiatives FSD contract terminated May 2015 Hawaii Mishap ►Discrete O&S Influence in Design ►Acquisition Environment and where was the focus ►Results Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313

V-22 O&S Requirements Development Key Performance Parameters Reliability MFHBF (Mean Flight Hours Between Failures) Reliability MFHBA (Mean Flight Hours Between Aborts) Contract Requirements Design To Cost Design for Maintainability Technical review process Migrating over time to include logistics support elements Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313

Events Diverting Program Attention from O&S Focus Near term focus always seems to out-weigh the long view Political sensitivities of the V-22 Program Mishaps redirect efforts Safety first Protect the program Increasing demand & changing intended use of the V-22 system Realities of the Environment “Talcum powder” like sand “Reactive sand”/Volcanic ash Maritime environment: Salt spray Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313

Events Diverting Program Attention from O&S Focus Safety Safety Transformational Technology - Speed, Range, Capacity Affordability Modernization/LCC Changes in Operations SPMATF MEUs Disaggregated Ops Expansion of intended use Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313

Absence of another tilt rotor platform for analogous comparison Information per V-22 Selected Acquisition Reports (SARs) – Dec 1997 to Dec 2017 Cost Breech factors: Absence of another tilt rotor platform for analogous comparison Higher cost of repairables than forecast Increased demand for consumables Delayed Intermediate and Depot level repair standup Inaccurate reliability predictions - underestimated complexity factors of 1st generation technology Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313

Actions Today Common Configuration - Readiness & Modernization (CC-RAM) Performance Based Logistics (PBL) Organic Capability Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313

Total Ownership Cost O&S Acquisition Program Baseline reporting formally began in 2005 (includes all V-22 variants) Change to three level maintenance concept Program originally based on two level (no I-level) Service life 10,000 hrs per airframe Antecedent programs (CH 46, MH53J/M, &C-2A) not representative of tiltrotor configuration Navy variant better defined today Constant focus to reduce in a changing fleet environment on each aspect of CPFH Maintenance planning Maintenance Capability (I & D level repair) Contracting strategies for supply R&M design improvements Consumable to repair designations Migrating repair from OEM to organic capability Resetting estimates based on actual data Etc… Dedicated Program Readiness Team Distribution Statement A – Approved for public release; distribution is unlimited, as submitted under NAVAIR Public Release Authorization 2018-313

Wrap-up Design phase has the best opportunity to affect O&S Near term challenges distract from O&S focus Political environment Operating Environment/Mishaps Concept of operations changes Unit cost affordability There are post design phases methods to influence O&S Logistics support concept R&M design changes Disciplined design change implementation – maintaining common configuration