Risk-oriented approach to life cycle contract implementation of weapons and military equipment

Abstract

Aim. Today, the development and operation of weapons and military equipment is characterized by fast-growing customer requirements, which, in turn, leads to their increased technical complexity and cost. It is obvious that maintaining the required physical and operational characteristics of high-technology weapons and military equipment by the users is not always possible due to a number of reasons, including insufficient capabilities of the service units that do not have the required personnel, assets and competences. In turn, the manufacturers involved in the delivery of the government defence order are also interested in shaping long-term relations with the customer allowing to build a platform for sound progress. One of the possible solutions for such interaction between the customer and the contractor used worldwide and in Russia is public-private partnership in the form of life cycle contracts. Despite the obvious advantages, its introduction into the practice of weapons and military equipment life cycle is hampered by a number of adverse factors (insufficiencies in the regulatory framework and technical standards, poor level of information technology deployment in LC management) that need to be overcome in terms of both scientific and practical considerations. It is perfectly clear that developing a tool that would allow mitigating a full spectrum of problems as part of this study would be an extremely challenging task. Given the above, the paper aims to examine risks as one of the aspects of this complex problem that implies the development of a new approach to the interaction of the parties involved in a life cycle contract for weapons and military equipment, taking into account the current conditions, interests, goals and objectives. It involves comprehensive analysis of uncertainty and the whole spectrum of possible risks associated with the weapons and military equipment life cycle processes. Methods. The managerial decision-making is based on the decision tree method that allows dividing the complex decision-making problem into component tasks and obtaining quantitative risk estimates, thus developing an adequate system of measures for the prevention of event risks and reduction of their negative consequences. Results. Based on the proposed methodological framework, a risk management algorithm has been developed, a matrix has been defined for assessing risks and their impact on the temporal and technical characteristics, as well as the costs of a project. Conclusion. The suggested approach is universally applicable and can be used by both the officials of military authorities in the process of scientific support of LCC implementation, and by the management of defense contractors as they develop their interaction with the military authorities responsible for the creation and operation of weapons and military equipment.