* Top weapons buyer says "No silver bullet"
* U.S. Navy names General Dynamics, Lockheed units "superior
* Shipbuilder Huntington Ingalls fails to make U.S. Navy
By Andrea Shalal
WASHINGTON, June 13 The U.S. Navy on Friday
named units of top arms makers General Dynamics, Lockheed
Martin Corp and Raytheon Co as part of its list
of the top-performing nine suppliers for 2014 based on their
performance over the last three years.
The Pentagon said on Friday it would use such public
recognition of "superior suppliers," incentives and competition
as key tools in its ongoing drive to end years of cost overruns
and schedule delays on key weapons programs.
Top U.S. arms buyer Frank Kendall said the Navy developed
the list as a pilot project this year, but he had asked the Air
Force and Army to compile their own lists this year as part of
the continuing effort to improve defense acquisition.
"We want to recognize their performance, but we also want to
motivate our performers who are not on that list to do better,"
Kendall told reporters as he released a second annual report on
the Pentagon's procurement, development and operating budgets,
which totalled over $350 billion in fiscal 2015 budget request.
The nine companies also included units of General Electric
, Northrop Grumman Corp, a venture of Lockheed and
Sikorsky Aircraft, a unit of United Technologies Corp,
and Britain's Rolls Royce Holdings Plc.
One notable exception was Huntington Ingalls Industries
, one of the Navy's largest suppliers, and builder of
aircraft carriers, submarines and other warships.
Navy acquisition chief Sean Stackley said the suppliers that
did make the list would be offered the chance to reduce certain
contract requirements, including removal of some procedures,
inspections or requirements, which could lead to cost savings.
Kendall said the Pentagon had imposed affordability targets
on 30 of its biggest programs and all but two or three were
within those caps. But he said uncertainty about future budget
levels continued to hamper more efficient investment decisions.
He said the Pentagon remained focused on improving the way
it buys hundreds of billions of dollars of weapons and services
each year, but there was no single "silver bullet" to do that.
Instead, he said the department needed to work on multiple
fronts, including efforts to simplify the overlapping laws that
govern defense acquisitions, better training for federal workers
that administer contracts, and deeper analysis of past programs.
"Defense acquisition is complicated and varying," he wrote
in the 116-page report. "We must empower, encourage and train
our workforce to think - not dictate a cookbook that workforce
members blindly follow."
The report cited good results from contracts with incentive
fees, but said incentives were sometimes counterproductive and
the Pentagon did not always use such measures as well as it
Kendall also highlighted the importance of competition, but
said the department needed to get more creative about injecting
competition into the process given declining defense budgets and
growing consolidation in the industry.
(Reporting by Andrea Shalal; Editing by Diane Craft)