Fraud, Waste, and Abuse in the Air Force, Part II

After having more questions and answers last fall, we began researching to try and understand what was happening to the Automatic Test Equpment business. Our research led to some interesting findings and perhaps the most interesting was discovering a huge Obama donor was involved with Teradyne the major supplier of Commercial Off-the-Shelf (COTS) ATE parts to the Warner Robins Depot.

Some answers began appearing in January 2009. There was an article in January 09 on Top Stock Picks – Teradyne” which said: "Teradyne could further boost its market position by buying more competitors or just watching them go out of business. We view Teradyne as a very solid company whose stock should soar when the semiconductor industry begins to rebound. We recommend buying Teradyne up to 6." What was this all about? Did this person prepare the way for an investor to make big bucks by buying Teradyne.

In researching, it was discovered after this article came out, that George Soros bought stock in Teradyne, which immediately brought to question WHY? Then you discover that Teradyne became the company of choice to buy COTS for the depot to build more Versatile Data Automatic Test Systems (VDATS). Even in January 09, the full picture of what was about to happen was not clear. Within months of this article it changed from ‘consider’ VDATS which was not fully operational, to VDATS MUST be used. This left the companies who have been in the Automatic Test Equipment (ATE) business for years asking why. No real answers were forthcoming. In May 2009, Soros purchased more Teradyne stock.

The depot realized they would require more help to assemble these test stations so they put out a solicitation with the statement you had to use Teradyne parts and attached a price list for Teradyne to buy the parts to build these stations. The solicitation was pulled off the street before the holidays in 2009. Then the solicitation came back on the street recently, and it was discovered that Teradyne, who is the majority supplier of parts, had raised their prices. Since the depot released this solicitation, they had to know prices had risen. Was this reason for pulling it back before the holidays?

Essentially what the Robins Depot is doing is asking companies to bid on a contract that will put them out of business? If that isn't rich, nothing is.
There are approximately 67 companies in various parts of Automatic Test Systems from the companies who provide the complete system (hardware and software) to ones providing various parts and software used in the system. Companies in the Automatic Test business spend millions on upgrading their equipment, testing, and ensuring the Air Force weapons systems get the most for their dollar. Today the depot is turning private companies away in favor of their own VDATS which is an erector set and now has to have R&D to make it work.

The ATS for the F-35 was supposed to be this super system by Lockheed LM Star never seen before. The pilot would fly in and the data would be automatically downloaded to the ATE as he landed so they would know what was wrong with circuit cards in the plane. Last we heard there was no money to build this system, as Lockheed aero needed the money for the aero side. Lockheed was looking at VDATS, which makes no sense when their LM Star is one of the four systems on the market along with BAE (IAIS), ATTI (BRAT) and Northrop Grumman (IFTE). We would hope the DoD is not going to buy off on that VDATS boondoggle and instead would require Lockheed to take more money out of hide to give the F-35 program what was promised in the contract.

We think it unlikely that we would have VDATS for the F-35 but then we cannot believe that the F-16 program, which has just completed upgrading their test equipment from BAE,was told they need to go to VDATS and to put VDATS along with R&D in the budget. We are not sure if the F-16 complied or the depot put it in the budget for them.

We have yet to hear about AWACS but since VDATS is not deployable and does little RF, we would expect them to balk at any Robin’s request

Instead of fixing the Global Hawk problem of currently sending everything back to the contractor, which is more expensive to do the testing instead of buying ATS, the depot wants VDATS for Global Hawk as well. Global Hawk currently has contractor support to keep them in the skies over Afghanistan.

Does anyone at Warner Robins or the Pentagon care that they are on the verge of putting 67 companies, a lot of them small businesses, out of business in favor of bringing ATE in house as VDATS along with hundreds of engineers are being put on the Government payroll at Robins? In the process they will be giving the weapons system an inferior product. Are they trying to nationalize this segment of the military contracting business?

Air Force Materiel Command several years ago tried to take money from the Oklahoma City ALC at Tinker AFB, OH, back to Wright-Patterson AFB, Ohio, including on the B-52 when the B-52 had never been at Wright-Patterson, in order to save jobs at Aeronautical Systems Center (ASC) since they lost the ‘Super Systems Program Offices (SPO’s) as there are none of the huge major contracts for new weapons systems left at ASC In the Materiel Command attempt to take the money, they learned they couldn’t touch depot funds. It never should have happened, as it is well known that you cannot mix different colors of money in DoD, but that did not stop them from trying.

One major problem we see is that a lot of moves of programs and people are done to protect bases/assets from the Base Realignment and Closure Commission even when it makes no sense to make the moves. There seems to be a huge void of common sense in the Air Force today. Lessons learned over the years look to be ignored as the Air Force forges ahead trying to build a better mousetrap. Sometimes it pays to look back at what has happened to get the Air Force to this position.

When Bill Clinton came to office, George H.W. Bush had put the mergers in play in the Air Force and merger mania became the name of the game inside and outside the Air Force. We now have everything 'super' in the Air Force to the detriment of the mission. When the F-16 was brought on board, we had many companies who specialized in certain parts of the plane who were given a piece of the contract and worked together along with the Air Force.

Now we have these super companies who build aircraft -- Lockheed Martin, Northrop Grumman, and Boeing. Take a look at these three and you see three giants who merged with other major companies -- Lockheed with Martin Marietta, Northrop with Grumman and Boeing who took over McDonnell Douglas and kept their original name. Their management of these three companies was paid over $20M each for these mergers. What benefit has it gained? Waste of taxpayer dollars for one.

Look at where this 'merger' mentality has gotten us today -- Lockheed bids on a contract and gives part of the contract to their Logistics operation. There is one major flaw -- they share the contract now within their own company instead of being partnered with an independent contractor. When Lockheed Aero needs money for any problem with the plane such as the F-35 being overweight for a carrier, Lockheed takes the money from their own logistics leaving them with little dollars to develop the systems they need to sustain the aircraft. Lockheed could not do that with another company.

L-3 awarded a contract to ADVINT, LLC, a member of the Teradyne Support Network, near the end of the year for work on the F-35 when this work was originally bid to be done in house at Lockheed. Why? Is the answer because they have little money left in the logistics side to do the work? The other ‘Why’ still being asked is Why would Lockhood even consider helping on VDATS to put the LM Star out of business. That effort to help sent a signal to the depot that they were prime to use VDATS on the F-35 and have not been shy about telling people that.

ATE and support equipment are only a small portion of what is wrong on the F-35 but did some Lockheed people look at VDATS as a way to cover up the cost-overrun and behind schedule that Lockheed was facing on the F-35? Where was the Air Force Program Review Office (AFPRO) at the AF Plant at Fort Worth when the plane fell behind and went over budget? It is their responsibility to ensure everything is going smoothly and schedule is being met. Did anyone report the overrun and behind schedule to the Super SPO at the Pentagon. When did the cover-up start and how high did it go? Who knows, but we suspect it went higher than the head of 'Super' SPO who was fired. How much of it is true or rumor? We have double checked our sources but for now would prefer to leave it as substantiated rumors coming out of Texas.

Complicating all of this goes back to the merger of Air Force Logistics and Air Force Systems Commands on July 1, 1992, no thanks to the first Bush Administration. Checks and balances are now gone from the Air Force into one Command -- the 'Super' Air Force Materiel Command where everything is in one big pot now for the weapon systems. One major problem is that Logistics is now considered the same as Systems down to the depots and it is not working as the Command morphed into System Command's 'bright and shiny' mentality. Gone are the days when there were two commands fighting for money to be replaced by one 'Super' Command who calls the shots and when one side goes out of bounds, there is no one to bring them back in bounds like on the F-35.

Before the merger, Logistics people in the SPO would have been making visits to Lockheed to check their progress on a host of items starting with their Automatic Test System (ATS) under development and would have discovered very quickly something was wrong and Lockheed had pulled money from logistics to aero.
Many people questioned establishing the so called ‘Super’ SPOs in the Pentagon to handle the new large weapon systems like the Tanker, F-22, and F-35 that would be coming into the pipeline. For years they had been at Aeronautical Systems Division at Wright-Patterson AFB, Ohio, but now Acquisition of large weapon systems being moved to the Pentagon presented a whole new set of challenges. Some considered the close proximity to DC a problem because of potential political influences but the concerns were brushed aside.

Others thought that the ‘Super SPO’s’ would not have the necessary on-site contact with the manufactures involved in the new weapon system which in a lot of instances has turned out to be the case. Instead of visiting the sites, they have chosen to have the contractors come to the Pentagon to give their briefings, which has given credence to some earlier fears. Ask the Marine Corps General in charge of the F-35 Joint Program Office how well that worked out to receive Pentagon briefings since he was fired from the F-35.

Let’s look at the track record of the Super SPO’s.

Tanker contract still not awarded after years and years but the people in the office keep right on drawing high salaries. The last time they awarded the contract to Northrop Grumman, Boeing protested and they pulled back the award and changed the solicitation. Now Northrop Grumman objects and they do nothing. Air Force is wasting a lot of tax dollars on salaries to get nowhere.

F-22 had all kinds of problems while under development and because of the stealth feature is a maintenance nightmare. Now it has been cancelled and capped at a low number. How about Foreign Military Sales (FMS)? Crickets chirping. One devastating substantiated rumor we heard was that the salesmen for the F-22 were told to push the F-16 overseas as it was a better plane. We have spent billions of dollars and the F-16 is better? Maybe what should have happened is for the F-16 to have been upgraded and forget the F-22.

F-35 problems were ignored as Lockheed continued to fall behind in schedule and cost overrun the program trying to get the plane underweight for the carrier and a host of other problems such as wiring problems in the missile bays. Problems are not unexpected on a new weapon system. However, the fact that the problems on the F-35 were ignored and a rosy picture was painted by Lockheed officials as late as last fall should have been detected long before they were a problem.

The Air Force has an AFPRO at the major Air Force plants like the AF plant at Fort Worth leased by Lockheed from the government. That office is the first line of defense for the Air Force and if they don’t keep close controls, the contract can get out of a hand in a hurry. Being overweight for a carrier has been common knowledge in the defense industry for sometime so there was no excuse for the Super SPO not to know. The AFPRO didn’t do their job but neither did anyone in the chain – looks like the “I know nothing” philosophy was at play.

As for Lockheed, the day they took one dime from logistics to aero, the Air Force should have been told. Now they have the Air Force and the taxpayers over a barrel and look to be milking it for all it is worth. Talk about salaries of Wall Street. How about the President of Lockheed Martin making over $20M (closer to $30) a year? No wonder our planes cost so much with salaries like that.

Is the DoD going to really look into the cost overrun or are they going to turn a blind eye and eventually give Lockheed all the money they want?

Bottom line is the F-16 in the 70's was a great example of a joint operation of then Systems and Logistics Commands, which worked very well in conjunction with General Dynamics at Fort Worth. That model of major weapon system being brought into the inventory was thrown out the window. Was the reason to save jobs at the Pentagon by making Super SPO’s? If it was to keep more control, it failed miserably on the F-35.
It is obvious by what is happening the Air Force has a real problem in the way they are operating today not only on brand, new weapon systems but on the systems that provide support for the aircraft. Sometimes old ways of doing business are better and in the long run will save a lot of money. We know these ideas have been discussed before and today they still have merit:

1. Super SPO's -- return them to ASC at Wright-Patterson AFB where they have the labs and know how to do the job without political pressure. Whatever minor problems they had in the past is nothing compared to what the Super SPO's have done while being in the political arena of the Pentagon.

2. With a return of the SPO's to ASC, then it is time for the Air Force to admit that Logistics and Systems was a bad marriage and need a divorce. They were much better Commands as adversaries instead of together. That would return checks and balances to the operation.

3. Depots are there for a reason to overhaul the aircraft and once they entered into the world of Systems Command, it has been a disaster and translated into a gigantic money pit. They want to be like ASC and that was never intended. Now, an Operating Command has to beg the Robins depot for an upgrade for their ATS, get turned down and told to spend at least ten times as much money for a new system they don't want along with now having to budget for R&D. The depots were only given systems like Automatic Test and Avionics to strengthen the depots to prevent BRAC closure, which obviously didn't work since Kelly AFB was put on the BRAC and closed.

4. Automatic Test Equipment/Systems, Avionics, and any other of the support systems of the aircraft need to go back to ASC who will at least play fair with the weapons systems. The other two depots Tinker and Hill AFBs do not have the same problem and we are not sure why. All we know is that there is not enough money in the Air Force for the WR-ALC at Robins to be wasting money to try and manufacture something in the depot that is already available from a number of companies

NOTE: All information contained in this document came from public sources along with a few individual sources. If anyone would like further information on this, please send an email to

http://www.blogger.com/truesoft.474@gmail.com

Fraud, Waste, and Abuse in the United States Air Force - Part I

The F-35 is not the only problem facing the Air Force today but the one we hear about the most. One of the biggest problems right now is flying under the radar and could end up costing taxpayers billions of dollars in the end, providing an inferior system, and adding a lot more civil service employees to the bloated federal payroll. People who are in charge of Air Force offices today are treating our tax dollars like a slush fund for pet projects and empire building. In a time where tax dollars are in short supply, this is mind-boggling.

We started out with these basic questions when we originally started our own investigation. These are the answers we have come up with after months of investigation and research:

What is the ultimate cost? Billions! Why? The attempt to bring all of Automatic Test Systems (ATS) in house in DoD and thereby putting small and large Automatic Test Equipment (ATE) companies out of business. How? Demanding Air Force Weapon Systems only buy Versatile Data Automatic Test Systems (VDATS)from the Warner Robins Depot and not allocating money for upgrades. Manpower? Hire people as Civil Service employees from local universities and from the companies they are putting out of business to help with rehosting every Test Program Set (TPS) in the Air Force to VDATS. Fraud, Waste, and Abuse? YES!

A Reply to our Freedom of Information (FOI) request on VDATS and the F-35 was sent back from the Secretary of the Air Force office. The letter answered the questions on ATE with half-truths and spin along with a few downright lies, which we are sure the author was provided by the depot. We asked for data and testing results for VDATS and received none. The reply said nothing about the F-35. Suffice it to say the final chapter has not been written, and why we have continued to investigate.

You may be asking why Automatic Test Systems (ATS) are so important. In a nutshell these are the systems made up of hardware and software that test all the Line replaceable units and circuit cards in the weapons systems. These test systems are used to diagnose problems in aircraft avionics and weapon system components so that the component can be repaired and replaced on the aircraft or put into the supply system for future use.

Today, we have an Air Force organization in Air Force Materiel Command attempting to put 60+private companies out of the Automatic Test Equipment (ATE) business. These Government employees are no longer disguising what they are attempting to do. This ATE organization at Warner Robins Air Logistics Center at Robins AFB, GA, has set course to do empire building by lavishly infusing millions into billions of dollars on their own in-house Versatile Depot Automatic Test System (VDATS). They are calling it manufacturing of VDATS, but it is actually buying 90% of VDATS as Commercial Off- the- Shelf (COTS) from Teradyne and building it like you would an erector set.

Warner Robins is assembling VDATS and now demanding the weapon systems managers buy the new VDATS instead of buying ATS from companies with a long expertise in this area. The other services buy their ATS from commercial companies, so why does Warner Robins think they have to build their own? These private ATS companies have spent hundreds of millions on their ATS systems for Research and Development (R&D) and Independent Verification and Validation (IV&V) to meet the requirements of the DoD. We are now hearing a rumor that after Robins takes over all of ATS for the Air Force, they want to take over the Navy CASS and Army IFTY and change it to VDATS as well.

The In-house Government ATE office is now asking companies to provide all their proprietary data to the depot, with no strings attached, so the depot office can give that data to any company to help with VDATS. In other words, the depot expects a company who has spent millions on development and manufacturing to give all that information to the Air Force so the Air Force can use it as it sees fit with nothing given back to the company who had the original data.

Maybe their ultimate goal is nationalization of the aerospace companies so everyone works for the Department of Defense and they control what the companies do like they do General Motors. They said it couldn’t be done with GM but it was.

In some instances Robins is camouflaging the name VDATS and budgeting for it under other names on aircraft platforms like versatile tester so that VDATS isn’t always listed on the budget. This makes it harder to find how much is being spent on VDATS. Then they are also budgeting for research and development (R&D) as part of buying the new VDATS testers. Until now, we thought R&D happened as part of developing a new system before it was approved.

The former Logistics depots, especially the one at Warner Robins Air Logistics Center, looks to be trying to shed a depot image to be like a mini System Program Office 'SPO' no matter how much they have to spin the truth, outright lie or how much it costs. We doubt if anyone in the Air Force can even fathom the old Logistics Command telling an Operational Command what system they have to buy and put it in their budget even though they only want an upgrade. We have that problem today at Warner Robins ALC in their Automatic Test System operation.

GAO did a report in 2006 and said the Air Force needed to reduce the number of different testers at Robins so what does the depot do? They decide to build a tester and throw out the rest of the testers even if their new tester (VDATS) doesn't work as it is billed. That is not what GAO said to do but that was the Robins interpretation in order to build an empire. How do you build that empire? Make sure people from the depot get sent to the Pentagon to cover for your operation.

The biggest fraud at the time was getting VDATS put in the Air Force Family of Testers at the Pentagon before it was completely built and fully tested. They sold the military chain on the necessity of taking this action, which goes against their own regulations. In order to be part of the Family of Testers there are all kinds of requirements including it must be fully operational, tested, and validated. It appears all the requirements to become part of the Family of Testers were waived by the Air Force for the Warner Robins depot.

There are at least four companies who have been trying to get their proven testers in the Family of Testers for years, but to no avail. These companies have done the Research and Development (R&D), Independent Verification and Validation (IV&V); fields tested their systems, and have sold them to the Air Force but were not admitted to the Air Force Family of Testers. Yet, a Warner Robins depot plan from their ATS office to build the tester from COTS was accepted into the Family of Testers without being fully built or tested. It was announced in their local media they had their first test station AFTER it was already accepted in the Family of Testers. How do you get the certifications when there is no system? Robins managed to get VDATS put in the Family of Testers without testing or certification.

The reason it is so important to be in the Family of Testers is every contract has to at least look at the Family of Testers before giving the rationale to choose another tester. That has been tossed out as well, as Robins is making VDATS virtually mandatory now, once again going against the Air Force/DoD regulations and if they have to they will rewrite the regulations.

Air Combat Command wants upgrades not new VDATS testers for some of their weapon systems, but the depot is demanding they put the new VDATS testers in the budget not the upgrades. The pleas from Air Combat Command are met with silence at the depot. Warner Robins wants every system to get VDATS at a cost exceeding $1B and probably much higher before it is over. Once again the old Systems Command ‘shiny and new’ bug has hit Robins and ‘Common Sense’ has been tossed out the window.

What we learned on Friday morning after several calls for info is that the WR-ALC has taken the item managers and equipment specialists for the various weapon systems out of the equation when it comes to automatic test systems. Instead all funding has to come out of the empire of ATS at the depot. That means the item managers and equipment specialists now cannot do their job for their weapons system they know best. An Item Manager is an individual within the organization of an inventory control point or other such organization assigned management responsibility for one or more specific items of materiel. An Equipment Specialist serves as the technical expert on complex and sophisticated systems/equipment to support the overhaul and repair process. /equipment to support the overhaul and repair pro

On top of this, all weapons systems have been told not only to put new VDATS in their budgets for over $100M, but the egregious part is they are also being told to put R&D money into the budget for the VDATS Testers so they can make them work for the weapon systems. These will be replacing perfectly good testers. Some of the weapon systems are balking at spending over $100M when they could get an upgrade for $10M.

If all that wasn't bad enough, the B-1 just finished buying Teradyne testers last summer for a cost over $70M and were told recently by Warner Robins ATS office to put VDATS in their budget for over $100M plus R&D. No one replaces ATS in that length of time. Upgrades yes, but a whole new system and now they also have to add program costs for R&D? That R&D really is insanity since it should have been done before the first VDATS was declared operational and long before it was put in the Family of Testers. Now the weapon system has to add more cost to cover R&D and no one seems to see anything wrong with that in the Air Force. Beam me up, as this is not the Air Force of earlier years where people were concerned about how they spent money.

WR-ALC has been on a hiring binge for engineers to fix VDATS. Why? It should have been tested out long before it got in the Family of Testers. Late one Friday afternoon in February we learned that Robins ALC plans to rehost all Test Program Sets (TPS’s) using ‘C’ language. This means the software to test all assets will have to be rewritten at a cost of billions of dollars? Why? So Warner Robins can build an empire. But who is the man behind that empire. It never dawned on us, when we first heard about VDATS, they were going to make every weapon system get all new VDATS instead of any upgrades to the current testers or that they would have to rehost all TPS’s which is a huge undertaking, extremely expensive, and in some instances almost impossible to do.

Company after company has lost money on rehosting as it costs more than they bid but now here comes the Government employees with an unlimited budget, it seems, to do the job. Some of these engineers conducting the rehost are also inexperienced. Billions of dollars will be wasted on rehosting in order to cut the number of Automatic Test Stations at the depot. That doesn’t even count the $100M for each weapon system plus add-in cost for R&D to replace their current system when the weapon systems want upgrades for around $10M. Not cost effective at all.

All requests for upgrades are being turned down in favor of the weapon system buying VDATS, which has been demonstrated incapable of doing RF well and is not deployable due to size and mobility. All of this makes no sense what so ever.

Does anyone at Warner Robins or the Pentagon care that they are on the verge of putting 67 companies, a lot of them small business, out of business in favor of bringing ATE in house? In the process they will be giving the weapons system an inferior product. If this whole takeover of ATS by the Robins depot is not fraud, waste, and abuse, nothing is.

Stay tuned for Fraud, Waste, and Abuse Part II in the United States Air Force on Wednesday, Februrary 3, 2010.

NOTE: The research and compilation for this document was done by people with over 100 years of combined experience in Automatic Test Equipment both inside and outside the Department of Defense.

The background material used in this document is available to the public and any requests for the the material should be sent to truesoft.474@gmail.com

All the initial material was turned over to the Congress last year but in today's Congress, investigations move very slowly and are stonewalled by Democrats in some instances.