Exhibit A-11. An article by GAS published in Military Science & Technology, Vol 1, No.84, 1981

In the premiere edition of Military Science & Technology, C. E. (Chuck) Myers Jr. gave to the readership the rationale behind the concept of a Hi l Lo mix of tactical aircraft as seen by those in the Office of the Secretary of Defense (OSD), where he served from late 1973 to 1977. In this article, Spangenberg presents a somewhat different view of both the history and the value of the Hi/Lo mix concept as applied to our tactical aircraft programs --a perspective from what he calls the "working level" within the Navy, "well downstream of those populating the policy level within the OSD. "

Hi:Lo = Cost:Capability

In a world made up of "We's" and "They's," the We's (the good guys) at my level had a great deal of trouble understanding the They's in OSD, who kept us busy with their solutions to either problems which didn't exist or were irrelevant to those which did. Although I sometimes emerged as a spokesman against the various "innovative" management and technical concepts foisted upon us by the OSD "speculative theorists" (Adm. Hyman Rickover's terminology), my position was invariably consistent with that of most (but not all) of my associates, technical and operational, within the Navy. As a civilian, I had somewhat less of a problem in speaking out than my friends in uniform.

The case for the unsophisticated fighter presented by C.E. Myers Jr. in "HI/ LO What??" concerns itself only with a NATO scenario in central Europe in which the U.S. Air Force provides tactical support for ground forces, including the maintenance of air superiority over the battlefield. Apparently, Myers sees no need for a Hi capability, or sophisticated fighters in this engagement; and by discussing only this one requirement, the issue of a Hi/ Lo mix is completely avoided. I will leave to the Air Force the task of restating the justification for their sophisticated F-15s and F-111s to complete successfully missions that cannot be handled by such aircraft as the F-5 and F-16. From press reports, however, it is clear that some operational commanders are reluctant to replace their sophisticated, all-weather F-4 aircraft with the simpler F-16, now equipped with offensive systems designed only for visual conditions.

The history of the OSD Hi/Lo mix concept (my version) goes back to 1972, when the services were given a briefing entitled, Designing to Cost, or Assessing the Budgetary Realities. In that OSD sponsored presentation, it was shown that the funding levels necessary to meet the combined requirements of all the services, according to their planning documents, were far greater than the probable defense budgets of the future. One of the "solutions" of the study to that supposed problem was a "Hi/ Lo Force Mix" with the "Hi" force providing "technical superiority with Hi performance" and the "Lo" force providing "numerical adequacy and Lo total costs." No specific programs were identified as candidates for the Hi/ Lo treatment, nor were any cost and effectiveness estimates of alternative forces provided to justify the concept. Had one of the services proposed such a generalized (and obviously somewhat naive) solution to an OSD posed problem, there would have been an immediate demand to provide the missing specifics. With the concept starting at the policy level, however, the "Hi/ Lo Mix,"in short order, joined the already long list of OSD management buzzwords: Fly Before Buy, Competitive Prototypes, Value Engineering, Cost Reduction, Independent T&E, Milestone Contracting, Design-to-Cost, etc. All were well-intended, but badly advised attempts to solve the procurement budget crunch.

In retrospect, it is difficult even now to believe that those conducting the study were surprised to find that the sum of the costs associated with long-range plans bore little resemblance to the projected budget. Imbalances of this nature have certainly always existed in the military (and I would guess in any organization which puts together similar long-range plans). Development and production programs are brought into balance with fiscal reality in two steps, short-range plans and, then, in the annual budget. Almost invariably, the so-called "out years" show much higher quantities and costs than those included within the base years of any plan.

Now, back to history. The OSD study also observed that virtually all defense products were increasing in complexity and cost. These unit increases, coupled with fairly level budget projections, obviously created a "numbers" problem. To the services, of course, this was not exactly news; military planners had been living with the problem since World-War II. In naval aviation, as an example, unit prices tended to double each time it became necessary to replace one of our tactical aircraft due to obsolescence. The price of the F-4 was about twice that of the F-8, as was the price of the A-7 relative to the A-4. In each case, however, the increase in capability, or effectiveness, was even greater which made the procurement justifiable, first to the Navy command, then to all the review authorities in the DoD and Congress. With force levels dictated by the budget since about 1950, it should be obvious that the trade-off between numbers and effectiveness was a well considered problem at all echelons within the services.

Indeed, the novelty of Hi/ Lo mixes as a solution to the acquisition problem has existed for some time. New models enter fleet use gradually over a period of years, creating a Hi/ Lo mix in the operational forces, if not the procurement budget. The phasing out of the Navy's F-4s by F-14s, for example, was originally planned to span about five years after initial fleet introduction. This will actually take at least twice that long due primarily to reducing the production rate from the planned 96 aircraft per year to first one-half, then one-third of that. Obviously, this made the Hi end of the Navy's fighter mix (F-14) cost more, while the Lo end (F- 4) continued to lose capability due to the problems of aging.

Another rather obvious and reasonable mix employed by the Navy was seen every time a carrier was deployed. The aircraft complement included both some relatively Hi and Lo cost aircraft. To find a Hi/ Lo mix to comply with an arbitrary management requirement, a mix of all-weather fighters with visual attack aircraft (F-4/A-4, F-14/A-7) would have represented a much more viable solution than attempting blind mixes within all types.

It is clear, then, that the problem which OSD was trying to solve was not new to the services, and the basic idea of using mixes of weapons to meet overall goals was well established. Thus, the real question is whether it is OSD or an individual service which is more competent to select the types of aircraft and weapons needed to meet that service's overall mission requirements. Experience indicated the latter. The Navy's record of success in aircraft development choices, when allowed to proceed unhindered, is about as high as OSD's record is low.

Further illustrations are found in the implementation of concepts in the fighter aircraft field. By 1970, the USAF had completed their mission analyses, selected their concept, conducted competition, and had contracted with McDonnell Douglas for the development and production of about 750 F15 aircraft to replace part of their F-4 force (F-111s had previously replaced some F-4s). Shortly thereafter, a competitive lightweight fighter (LWF) prototype program was undertaken as part of a broad OSD initiative. Contracts were let for the XF-16 and XF-17 by the Air Force as the winner of the competition, which by now had evolved into the Air Combat Fighter (ACF) program described in Myers' article. It was through this program that the OSD (and Congress) in 1975 authorized 650 F-16 aircraft in addition to the previously approved USAF tactical fighter program.

Meanwhile, the Navy's F-14 program, approved in 1969 as a total Navy and Marine F-4 replacement, came under attack by OSD as too costly. The Navy was ordered in 1971 to find "a lower cost alternative to the F-4", and later, "a lower cost complement to the F-14." A capability level greater than that of the F-4J, the airplane being replaced, was an agreed upon condition of the early studies.

For reasons which have never been clearly explained, the OSD considered that the F-14, with its long-range, multi-shot fire control system and its Phoenix missiles, was too expensive to be procured in the quantities originally justified and planned, and a compromise design somewhere between an F-4 and an F-14 would be adequate for handling moderate threat situations.

The Navy examined improved F-4s, carrier versions of the F-15, stripped F-14s, and new designs. Nothing could be found which came close to meeting the conditions better than an F-4, and less expensive than more F-14s. Even a new LWF, less capable than an F-4, could not compete fiscally in the limited quantities which were being considered. Despite these results, the Navy was told that its F-14 program would be reduced to a one squadron per carrier level, vice two, and the Marine buy was eliminated. Congress and OSD combined to dictate that the other half of the Navy's fighter needs should be met by a carrier version of a lightweight fighter. All these actions by OSD were taken with no proof supporting their concept.

The implementation of the Hi/ Lo concept in the fighter case thus added a lower capability model to the planned inventory of fighters for both the Air Force and the Navy. For the Air Force, as previously mentioned, the model was completely additive, but for the Navy it was a substitution of a less capable design in equal numbers. As might be expected, the acceptance of the concept by the services reflected these facts.

The Air Force, gaining 650 aircraft, did not elect to argue that for the same funds it could have bought higher capability. In the 1975 hearings on the LWF, for example, the Air Force disclosed that they estimated 520 F-15s could be procured and operated for the same life cycle cost as the 650 F-16s. The 20 percent increase in estimated quantity would hardly compensate for the difference in unit effectiveness.

The Navy, on the other hand, fought against the great loss in capability involved in the substitution of ACFs for F-14s, and did manage to delay the imposition of sentencing, as it were, for a year or two. In the last of a series of studies on how best to cope with the OSD decision, the Navy adopted a compromise plan, similar to one which had been worked out a decade earlier when one squadron of F-111Bs was being mandated. Characteristics were established for a design which could serve as both an F-4 and an A-7 replacement. This would increase the total quantity of aircraft sufficiently to make it less of a fiscal disaster, as well as offer some hope that the attack capability of the carrier could be enhanced by the higher performance of the new design.

Meanwhile, reduction in fighter capability could be partially offset by using the normal attack squadrons in a "swing" role as fighters. This 1974 version of VFAX was then compromised still further when OSD and Congress combined to dictate a lower level of capability, more nearly commensurate with the Air Force's ACF.

By 1975, the Navy had consented to the plan, conducted competitions between carrier versions of the F-16 and F-17 (each upgraded to a higher level of capability), and selected the latter as their choice, redesignating it as the F18/A-l8. Cost comparisons showed that the purchase of about 800 F/A-18s was slightly less expensive than purchasing more F-14s while developing and producing a new attack airplane as an A-7 replacement. Not as well publicized at the time were the cost estimates showing that the cost of F-14s and new A-7s was less than that of an equal number of F/A-18s, with an overall capability level substantially higher. The cost history of the lightweight fighter programs, particularly the F-18, demonstrates quite conclusively that the claimed cost savings were, to say the least, illusory.

It appears that in every case, adding a Lo capability design turned out to be more expensive than continuing a Hi capability design already in production. This led in 1974, to an examination of a general case in which the so-called "sunk" costs did not tend to dominate. The case was based on the assumption that 800 all-weather fighters, or 400 all-weather plus 400 day fighters during the same period, would be developed and produced. The results of the exercise, published in Astronautics and Aeronautics, were both surprising and quite convincing. The mix of "Hi's" and "Lo's" cost 40 percent more than all "Hi's," when the higher capability design was 50 percent heavier than the Lo, and 25 percent more when the Hi was twice as heavy as the Lo. These results were due to the development bill for the second design, and the unit cost increases for both designs when the production rate for each was halved because of split procurement.

Certainly, the Hi/ Lo mix concept seems unable to solve quantity deficiencies in our tactical aircraft inventory. For the Air Force, the costs of buying the lower capability F-16s are about the same as would have been involved in procuring an equal number of F-15s. For the Navy, the F-18 fighters are costing much more than an equal number of F-14s would have cost. Likewise, it is now evident that the A-18s are not only more expensive than an equal number of A-7s, as had been predicted, but are also more expensive than the vastly more capable A-6s.

The chaos and confusion (described by Myers) of the scene over the battlefield is nothing as compared to those elements which have been created in Washington by the advocates of very simple solutions to very complex problems. If simple fighters could win a war, their fiercest advocates would be found within the services. The concept of small size, Hi reliability, Lo maintenance, Lo cost, and all the other attributes of goodness, is indeed, a common goal, but only when the product is capable of performing its primary mission. The simple Lo cost/ Hi reliability club lost favor as a weapon when it was found less lethal than a Hi cost/Hi maintenance bow launching some complex and frequently errant arrows.

We are doing far too little in developing new weapons which will give us some edge of advantage, particularly when we admit we are always going to be outnumbered. Our thunderstorm of weapons had better be of a variety that outranges and outkills those being launched against us. Let's get on with some real solutions to our problems.