Breaking OEM vendor lock with technical data packages the DoD owns for aircraft mods against new threats

In this Q&A with Brady Hauboldt, vice president of business development for SNC’s Intelligence, Surveillance & Reconnaissance, Aviation and Security (IAS) business area, we discuss: how today’s digital scanning and modeling tools give middle-tier aerospace and defense firms like SNC the upper hand in helping the Air Force and SOCOM meet global threats with new aircraft modifications; and why Multiple-Award Contracts (MAC) ID/IQs are the best way to swiftly modify legacy platforms with new and different mission packages.

Breaking Defense: Describe the threat environment that is necessitating the modification of legacy aircraft for better sensors, communications and countermeasures.

Hauboldt: As the United States shifts priorities out of the Middle East and toward emerging near-peer threats, the Department of Defense is seeking to pivot its investments and acquisition strategies. There are long-term development modernization programs in the president’s fiscal year ’24 budget request to address that threat, but they’re not here and not now. If the United States goes to war today or tomorrow, we’re going to go with the weapon systems we already have in inventory.

Those weapons systems need to be modified, adapted and returned to the fight at an exceptionally rapid pace to make them viable in a high-threat environment against an enemy like China who is currently able to react quickly in a great power competition. China is learning a lot from the conflict in Ukraine, not just from when the first shot was fired, but throughout what will likely be a long, simmering conflict that’s sort of a Cold War II.

It’s clear that the choke point preventing agile and innovative modification to legacy weapon systems, especially aircraft, is a continued reliance on OEMs.

During the TSPR – total system performance responsibility – era, many OEMs gradually pulled all of the intellectual property toward their side of the ledger, preventing the government from capitalizing on growing and capable parts of the defense industrial base. Today, we have OEMs who are struggling to meet execution needs, especially in post-production aircraft modification.

In my opinion, it’s the worst case scenario for the DoD, which is now forced to award contracts to OEMs who are struggling to deliver on time and on budget, while at the same time there’s an emerging need to tap into the depth and breadth of the defense industrial base.

Breaking Defense: Given that scenario, in what ways is SNC working to meet a 2025-2027 timeframe for key AC modifications to meet the near-peer threat?

Hauboldt: This is where digital and agile contracting can go hand in hand and complement each other. I’ll start with digital. The advent of modern digital tools in recent years has revolutionized how we are able to approach post-production modifications. During that time, we’ve perfected our modification techniques with USSOCOM and other special-mission-aircraft customers.

Digital scanning, modeling, spectrography and analysis tools allow for unprecedented recreation of digital data packages. That’s a term SNC uses; think of it as a post-production technical data package applied to the specific modification you’re pursuing. But we don’t need the OEM technical data to do so.

This cracks open the previously incorrect concept that OEM technical data packages are required for competition. This is no longer true with digital tools. They allow us to generate a near-complete digital data package in lieu of a traditional TDP. It also allows the DoD to compete new modifications for more rapid delivery.

The way that SNC views a digital stack begins with customer requirements. Programs need to be born digital, and I’m seeing positive examples of the government producing digital reference architectures to communicate a requirement such that industry can respond via a model-based systems engineering approach.

In addition, digital becomes real by starting with the physical artifact — the aircraft in our case. To have a digital twin, you need to start with the physical twin. In a post-production world, that simply means access to the aircraft and the digital tools I mentioned earlier.

Today, SNC is inducting aircraft into our hangars and we’re scanning and generating digital models of those aircraft in anticipation of the urgent need for modifications. We’re doing that without taking the aircraft out of the fleet. Once we have that data, we can generate the first digital models. It can be anything from a simple model, like an outer mold line, to a complete aerodynamic or electromagnetic model.

At this point in building up our digital stack, we are at parity with the clean-sheet digital aircraft design. We design from digital models based on empirical data, and are investing heavily in tools, training and multi-level security digital environments today. We now have the ability to provide our customers with digital models and designs that represent the authoritative source of truth. Our engineers, production operation, contracting, finance, program managers are all working off the same source of digital data.

At the same time, we’re linking that with our supply chain and manufacturing base to further reduce error, improve program execution and accuracy, cut costs and rapidly meet our customer needs for digital design and development.

We’re on track to be the first to offer true digital twins in a post-production environment. That’s a concept that’s difficult to comprehend on a legacy aircraft or weapon system because many of those were designed decades ago. In many cases, the legacy design artifacts are insufficient to certify modifications. We have crates of data from OEMs that reflect the original design, and it’s simply not useful in the digital world.

Breaking Defense: The digital capabilities you describe also go beyond the digital stack for new modifications. How so?

Hauboldt: Digital tools facilitate more efficient lifecycle support and predictive maintenance, and the integrated digital environment (IDE) enables us to do more work more efficiently with less demand on the human resource. Not because we are wanting to hire fewer people, but simply because industry and the DoD are all competing for the same diminishing pool of talent and experienced personnel.

A digital enterprise, paperless factories and hangars, automation linked to the IDE and other advantages of digital transformation mean we will be able to focus limited resources where they add the most value to the program and our deliveries to the warfighter throughout the life cycle.

Breaking Defense: This digital engineering skillset is also suited to upcoming Multiple Award Contracts (MAC) ID/IQs on legacy platforms. Please explain.

Hauboldt: I’m an advocate for them, and I wished the DoD used them more often because they’re flexible. They can be used to compete or for sole source, whichever makes the most sense for the specific requirement.

Time and again, I’ve seen the department launch 10-year sole-source ID/IQs for future modifications on a platform when individual modifications may be competed. Using a multiple award ID/IQ, the department can essentially prescreen the offer to find those who are capable of performing, and then use whichever approach makes sense for a particular solicitation.

For example, if there’s OEM-owned software source code related to an aircraft operational flight profile, then that’s one that likely would go sole source. In a case of a beyond-line-of-sight communications mod, that can be competed. Through a MAC ID/IQ, you can choose the best acquisition strategy that meets your needs at the time of need. And by using those digital tools I mentioned, a digital data package can be generated with government rights, further encouraging competition in the future – which can result in increased innovation and speed.

Under the federal acquisition regulation, the government could also use FAR Part 16 streamlined procedures on MAC ID/IQs. I’ve seen very rapid contracting on the order of 30 to 60 days for large solicitations using this approach, driving down competitive timelines and reducing resource impacts to both the government and industry.

Breaking Defense: What you described earlier regarding OEM technical data packages and sole-source contracting is known as vendor lock. Please explain.

Hauboldt: There is a myth, and the OEMs perpetuate it, that only OEMs can do the work. With modern digital tools and digital design practices, this is simply no longer true. Oftentimes, the data OEMs possess is decades old. It was not designed, nor prepared, in such a way that it can be used in a digital-design methodology for instant modifications now needed for an aircraft. The OEMs must also start from scratch.

We’re using the exact tools that any OEM would do to design that data package for a particular requirement. In some cases, we’re working from data that even the OEM doesn’t have to meet a particular government requirement.

Better yet, when we create data, we empirically collect that data under contract so it becomes property of the U.S. government. We’re not co-mingling our data with data collected under contract with the OEM’s intellectual property. We cannot convey their data, but by creating or recreating it independently – and empirically for the government –it becomes government purpose rights or unlimited rights. This then allows the government to turn around and compete a modification – breaking vendor lock.

SNC has done this time and time again. We have developed a data package on a modification for the CV-22 and gave the entire data package to the Navy program office. They then turned around and awarded the work to another contractor. And that’s perfectly fine; that freedom is the point. It’s the customer’s data, their right, and their acquisition strategy. At SNC, we want our customers to come back to us for future work because they want to, not because they have to.

For us, breaking vendor lock is about communicating to our government customers, particularly mid-level contract managers and engineers, that it can be done. Work doesn’t have to go back only to the OEM. I encourage our government customers to think critically, ask good questions and listen to industry through the RFI process of market research before making the decision on a sole source. Frankly, we are one of many companies who can do this work now, and do it well, if given the opportunity.

Breaking vendor lock is about competing a contract and giving a broader part of the industrial base an opportunity to demonstrate that we can do these modifications, and do them better in some cases than the OEM. It’s also about clawing back the intellectual property from the OEMs, such that the government can then compete with future modifications and reduce life cycle costs.

Simply put, owning the data package, using open architecture, decoupling from flight-critical or mission-critical components is a way to be agile and respond flexibly to future weapon system modifications even on legacy aircraft.

Breaking Defense: SNC is presently expanding its industrial capacity in Dayton, Ohio, and elsewhere. Tell us about that?

Hauboldt: I like to say that SNC is a bit of a unicorn in the aerospace and defense sector. We are number 53 in total sales, but the No. 1 privately held company in the sector. SNC is seeing tremendous growth on our horizon while most of our competitors are shrinking or merging. That means two things for defense customers.

First, with about 5,000 employees, we’re small enough to be agile yet large enough to succeed. We model ourselves on one of our key customers — U.S. Special Operations Command. Our workforce is well-trained and well-resourced so we can deliver. We are not functionally aligned; rather, we are program aligned and all focused on the same customer mission.

Second, with private ownership comes the ability for long-term strategic investments and prioritization. When we see a need for our customers in new markets, we move there. In many cases, we move ahead of need. That’s how we came to our Aviation Innovation and Technology Center in Dayton, Ohio.

Our expansion in Dayton capitalizes on the incredible aerospace and defense manufacturing base in Ohio, the logistics speed in the heart of the Midwest, low-cost infrastructure, great community support and proximity to our U.S. Air Force customers.

SNC’s first hangar in Dayton was completed in under 12 months and officially opened for business in February this year. We have already inducted aircraft to the site and are preparing to break ground on the second hangar.

In a time when most of the defense industrial base is shrinking, we’ve continued to grow. SNC has built one or two hangars every year for about 15 years – in multiple locations – to keep pace with our increased modification work and meet customer needs.

While our small and mid-size MRO hangars have been profitable, we see the urgent need to help the U.S. Air Force, SOCOM and others modify ever larger aircraft, especially Air Mobility Command aircraft, few of which have the ability for long-haul comms.

Long-term plans include multiple additional MRO hangars including North America’s largest emissions-free paint and de-paint hangars. This positions SNC well to support the world’s largest aviation projects, up to and including the C-5M Super Galaxy or
747-8.

Breaking Defense: Final thoughts.

Hauboldt: Modern digital tools are here and available now to help industry break vendor lock. Digital data packages can now be produced for legacy weapon systems, and the data generated under contract is the property of the U.S. government.

The government should be a demanding customer in this regard. The DoD can use that advantage to prepare weapon systems for future modifications and sustainment. Even if the modification doesn’t happen today, even if it’s not in the budget, it’s coming. So get ready for it.

Some platforms are starting to do that by leveraging and taking full advantage of MAC ID/IQs to accelerate competition and leverage the mid-size aerospace and defense sector. Leveraging the middle tier helps grow the industrial base, keeps it from shrinking and improves the U.S. responsiveness for the near-peer fight.

As I said up front, the U.S. may not know exactly what the next modification to a legacy weapon system might be, but waiting to find out in the middle of a fight is simply too late. Every time I visit the National Museum of the United States Air Force in Dayton, I am reminded of how many aircraft underwent modifications in time of war. The question is whether we are ready to do the same today.