Air Force eyes 3-D printing as a way to trim costs
By AARON GREGG | The Washington Post | Published: September 27, 2019
In a bid to control the soaring cost of keeping its aging fleets battle-ready, the Air Force is pursuing legal arrangements with defense contractors that allow it to 3-D print old aircraft parts rather than order a new one.
The Air Force has printed more than 1,000 aircraft parts to date, officials say, allowing it to avoid paying exorbitant prices for parts that are no longer in production. Manufacturers, which often hold intellectual property agreements covering the parts, typically receive a flat fee in exchange.
Such agreements are part of a broader set of efforts underway at the Pentagon to use next-generation technologies to drive costs out of the Pentagon's vast, taxpayer-funded supply chain, while also ensuring equipment problems don't hurt the military's readiness.
"We need a new set of rules and a new business model to work with industry so that old parts don't become the limiting factor of how ready we are to go to war," assistant Air Force secretary Will Roper said in a recent interview.
One such deal with GE Aviation, the jet engine division of General Electric, covers two specific components of the F110 turbofan engine that powers the F-15 and F-16 fighter jets. Under the terms of the agreement, GE is to bring its own 3-D printers into Air Force repair depots and train the military's repairers to use them, Roper said. It also comes with a licensing scheme in which the Air Force pays GE a fixed fee every time it prints a spare.
3-D printers create three-dimensional products from a wide variety of materials by building them using specialized computer software.
Roper said the Defense Department does not mind the fees as long as it contributes to the service's readiness goals. The Air force faces the dual challenges of keeping more of its planes battle-ready while also increasing its total number of squadrons.
"Fighting over the legality of whether we can reverse-engineer a part is not where we want to spend our time," he said. "We'd like to pay a fair price for being able to do that and move on."
3-D printers are seen as a possible solution for a problem that has dogged the Air Force since the Cold War. The Defense Department estimates that approximately 70 percent of a military airplane's long-term cost actually comes from sustaining it. The purchase price, even though it is usually in the tens of millions of dollars, is smaller than the combined cost of repairing and maintaining it.
The problem is made worse by the fact that today's Air Force is made up of more old aircraft than at any time in the service's history.
At the beginning of 2019 the Air Force had roughly 5,500 aircraft, by far the largest force in the world. But a recent report from the Congressional Budget Office placed their average age at 28 years. Hundreds of them are approaching their sixth decade of service, and they are expected to become even more costly to maintain as they age.
Part of the problem is that aircraft manufacturers often hold intellectual property agreements for aircraft parts that give them a degree of control over the price. In some cases, contractors have used intellectual property arrangements to justify outrageous price increases. Government officials overseeing the supply contracts often don't challenge the price increases or even ask for financial data that would show whether the price is fair.
In a report from the Defense Department inspector general released earlier this year, an aircraft supply holding company called Transdigm was accused of earning "excessive profits" on a sample of 47 spare parts. The inspector general identified profit margins ranging from 17 percent to well over 4,000 percent for specific spare parts.
The company later paid the Defense Department back $16.1 million for the products. Company executives said Transdigm had not broken any procurement laws, and described the payment as voluntary.
In other cases, parts are hard to find because the aircraft's original manufacturer has shut down the production line. When such a part is critically necessary to achieve the military's readiness goals, price concerns often go by the wayside.
"What I have a hard time doing is getting excited about intellectual property that is on the geriatric side of the Air Force," Roper said. "For a part that is sitting on a 40- or 50-year airplane, it's hard for me to think that that [intellectual property] is there for the right reasons."