Via Naked Capitalism

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

Captain Elle Ekman, a logistics officer for the United States Marine Corps, wrote an op-ed in the New York Times on Wednesday that shocked me – and I don’t shock easily, Here’s One Reason the U.S. Military Can’t Fix Its Own Equipment.

Apparently, even the US military doesn’t enjoy a  right to repair for materiel it purchases, and instead must ship some equipment back to the states, for maintenance and repair by the original manufacturer, rather than fixing it locally.

No joking.

Why?

Over to Captain Ekman’s op-ed:

A few years ago, I was standing in a South Korean field, knee deep in mud, incredulously asking one of my maintenance Marines to tell me again why he couldn’t fix a broken generator. We needed the generator to support training with the United States Army and South Korean military, and I was generally unaccustomed to hearing anyone in the Marine Corps give excuses for not effectively getting a job done. I was stunned when his frustrated reply was, “Because of the warranty, ma’am.”

At the time, I hadn’t heard of “right-to-repair” and didn’t know that a civilian concept could affect my job in the military. The idea behind right-to-repair is that you (or a third-party you choose) should be able to repair something you own, instead of being forced to rely on the company that originally sold it. This could involve not repairing something (like an iPhone) because doing so would void a warranty; repairs which require specialized tools, diagnostic equipment, data or schematics not reasonably available to consumers; or products that are deliberately designed to prevent an end user from fixing them.

I first heard about the term from a fellow Marine interested in problems with monopoly power and technology. A few past experiences then snapped into focus. Besides the broken generator in South Korea, I remembered working at a maintenance unit in Okinawa, Japan, watching as engines were packed up and shipped back to contractors in the United States for repairs because “that’s what the contract says.” The process took months.

I also recalled how Marines have the ability to manufacture parts using water-jets, lathes and milling machines (as well as newer 3-D printers), but that these tools often sit idle in maintenance bays alongside broken-down military equipment. Although parts from the manufacturer aren’t available to repair the equipment, we aren’t allowed to make the parts ourselves “due to specifications.”

The right to repair has become more prominent on the political agenda, with both Senators Sanders and Warren endorsing versions of the concept, as has the editorial board of the New York Times (see Right to Repair Initiatives Gain Support in US).  The Federal Trade Commission debated the idea during a workshop this summer, and Ekman and captain Lucas Kunce submitted a comment letter, Comment Submitted by Major Lucas Kunce and Captain Elle Ekman, which provides details that support her NYT op-ed.

How the Military Lost Control of its Right to Repair

Efforts to streamline defense production ended up with these bizarre repair implications (some may say this was a feature, not a bug, and I won’t bother to quibble). From the FTC letter:

In 1970, the DOD funded one third of all research and development (R&D) in the Western world. Key aspects of technology and product development could be organized by the Pentagon due to the sheer size of its budget. As the civilian sector grew both in the U.S. and abroad, the clout once possessed by the national security community in the marketplace diminished. By 1992, the amount of aggregated R&D spending directed by DOD had dropped from one third to one seventh. By 1999, it fell to 16% of just domestic R&D.3 As the technology revolution of the 1990s accelerated, and as the post-Cold War environment induced further relative reductions in military budgeting, an increasing amount of critical cutting-edge technology development occurred in the commercial sector.

Policymakers responded to this change by shaping DOD’s procurement choices around norms in the civilian economy, with the hope that DOD could leverage “dual use” technology developed in the commercial sector. One goal of these efforts was to loosen rules on vendors trying to sell commercial products. Since the 1990’s, the Pentagon, along with the rest of the Federal government, endeavored to become a “better customer” to industry and vendors, by reducing oversight, simplifying rules, and becoming more trusting of industry. This over-arching policy goal was implemented through changes to US Code, the Federal Acquisition Regulation (FAR), and the Defense Federal Acquisition Regulation Supplement (DFARS), among other policies, rules and regulations.

Another policy choice was to encourage concentration across the defense industrial base in order to reduce overhead in industry. At a famous dinner with contractor CEOs nicknamed the “last supper” in Pentagon lore, Secretary William Perry directed defense contractors to consolidate to address a changing budgeting environment.Secretary Perry’s dinner worked. In 2005 the Center for Strategic and International Studies (CSIS) found 107 contractors that had consolidated to five. This consolidation was also an example of DOD following civilian sector financial and industrial norms, as in the 1980s and 1990s there was consolidation across most industries in the civilian economy.

The consolidation of industry, acquisition reform, and relatively less money spent on R&D, contributed to DOD’s current weakened negotiating strength and increased its drive to be a better customer in order to acquire items and services to accomplish missions. The situation is well captured in a DOD negotiating guide from 2001:

“Challenges to the Government today are to find ways to entice commercial industry into collaborating with the Department in vital research efforts, and to acquire commercial products using commercially friendly terms. While the acquisition streamlining legislation of the 1990s went a long way to create more commercial-like contracting processes for the government, some practices from past decades are holdovers to today.”

Another effect of the consolidation of the defense industry is the soaring use of sole source contracts. Sole source contracts are used when DOD is unable to find competition for an item or service and therefore is limited to negotiating with a single vendor. To illustrate how prevalent this has become, in the first three quarters of 2016, more than 50% of DOD contracting dollars were awarded without competition. The DOD has in many cases become a “price taker”, accepting terms and conditions commonly used in the commercial marketplace for weapons systems and vital products. Because of this shifting power dynamic, the decisions made for the commercial marketplace, like the FTC’s decisions on the right to repair, impact and influence federal contracting and DOD. (Jerri-Lynn here: citations omitted).

Translation: no right to repair. As the letter continues:

The FTC’s examination of right to repair is critical for this type of contracting because, when purchasing commercial items or processes, the Federal Government is limited to acquiring “only the technical data and the rights in that data customarily provided to the public.”The federal government, therefore, frequently finds itself in the exact same position when acquiring goods and services as a civilian or individual purchaser accepting a standard terms of use, warranty, or repair agreement.

The net result:  serving military are reprimanded for trying to repair balky equipment on site. I’ve not been able to find data on how widespread it is for the military, the eye popping size of military contracts means that beaucoup bucks are involved (and I’m not the only one to find it difficult to assess how widespread the problem is; see this Extreme Tech account, The US Military Needs Right-to-Repair Legislation to Fix Its Own Broken Equipment).

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Yet Kunce and Ekman’s FTC letter provides examples that show the problem is not just an abstraction:

Although the problem will become far more significant in the future, the issue today is not just theoretical. The following examples demonstrate how right to repair influences military operations. Note how both commercial and non-commercial items are affected with these contractual terms.

– While in Korea for an exercise, a mechanic was prohibited from conducting maintenance on a generator because the warranty would be voided, leaving the unit with the choice of voiding a warranty or losing the equipment that supported their training.
– Deployed Marines who did conduct maintenance on warrantied equipment were reprimanded because they voided the contract when they fixed the equipment.
– The process for managing secondary reparables (SECREPs), costly parts that
are economical to repair (e.g., various types of engines and transmissions), includes shipping these items back to the contractor in the continental United States from Okinawa, Japan, because repair efforts by Marines would violate repair support contracts. This creates significant transportation costs and time costs, and reduces forward-deployed unit readiness.
– New equipment increasingly incorporates electronics, and diagnostic software and data needed to trouble shoot is either not available for procurement or not procured because of the up-front procurement cost. The costs saved up-front are then absorbed during the equipment’s life-cycle and are manifested in increased Marine man-hours spent trouble-shooting and repairing equipment because Marines do not possess all of the tools and diagnostic equipment that would help them do maintenance more efficiently.
– Marines possess capabilities to fabricate, machine, and manufacture repair parts using a variety of tools (e.g., water-jets, CNC mills).While creating parts can save money and time, these parts either need to be reverse engineered or made according to manufacturer specifications. Often, those specifications are cost- prohibitive or Marines are not allowed to create the part due to manufacturer restrictions. As the Marine Corps continues to expand its capabilities in additive manufacturing (i.e., 3D printing capabilities), part manufacturing will continue to face vendor-induced obstacles. These obstacles will prevent Marines from repairing equipment if a part is unavailable due to supply chain issues in austere environments
– Overall, Marines are less capable of repairing equipment in extreme circumstances because they are not allowed to repair the equipment during regular operations and do not have the tooling, diagnostic equipment or diagrams, or hands-on experience (Jerri-Lynn here: citations omitted.)

Kunce and Ekman discuss two case studies, involving the Medium Tactical Vehicle Replacement (MTVR) and the Joint Light Tactical Vehicle. The base contract for the former was for $2,424.5 billion, with an additional contract for modifications, repairs and maintenance, and the vehicle has been used for ferrying troops and equipment since 1998. According to the FTC letter:

This warranty and repair contract was similar in many ways to those in the civilian or commercial world. The vendor became the repairman, and the warranty limited the right to repair for a third party, in this case, maintenance Marines. In a short-sighted way, that is good, because it frees Marines to perform other duties. However, the restrictions mean limiting the capability, flexibility, and experience of Marines who will be needed to conduct these repairs if they are ever in a hostile, kinetic arms, or D-Day-like situation.

This arrangement also increased cost to DOD. The requirement to return the parts stateside for repair incurred high shipping costs, and time spent in transit from overseas locations and the fixed price repair cost meant that significant funds were expended on repairs that could have been repaired faster and cheaper by Marines present at the location in which the repair was required.

What Is to be Done?

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As I mentioned above, both Sanders and Warren propose a right to repair for farm equipment, and legislation is pending in approximately twenty states, some of which covers consumer electronics.

As Gizmodo reports, Lack of Right-to-Repair Protections Is Even Screwing With the U.S. Military:

Gay Gordon-Byrne, executive director of the Repair Association, told Gizmodo by email that the problem Ekman raises in her piece “illustrates the pervasiveness of repair monopolies and their very real-world consequences.”

“The military cannot possibly function without being able to fix their own stuff—but here we are. Farmers cannot put food on the table if they cannot fix their own stuff—but here we are,” Gordon-Byrne said. “Consumers are waking up to the fact they cannot fix their stuff either—and the legislative solution is in front of us. We don’t need to wait for the federal government to unlock monopolies—we can do it right now by passing right-to-repair legislation in any of multiple states.”

Gordon-Byrne noted the many bills that have been proposed in more than 20 states that hoped to secure right-to-repair protections for consumers. Gordon-Byrne said detractors of these proposals have described the bills as “too broad,” but she added that she doesn’t think “that argument is going to hold water going forward.”

“If we cannot fix our phones and bulldozers while waging war,” she said, “we’ve really screwed ourselves.”

Obviously, general right to repair legislation is not the only way to address the military issue. Speculating on how procurement specifications could be amended to fix this, however, is above my pay grade.

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More Apple Shenanigans

Meanwhile, Apple continues its shenanigans over the right to repair, responding earlier this week to questions at a hearing before the subcommittee on antitrust, commercial and administrative law of the committee on the judiciary.

As Motherboard tells the story, Apple Tells Congress You’ll Hurt Yourself if You Try to Fix Your iPhone:

Apple’s primary arguments were that iPhones are too technical for the average person to repair without special training, that doing such repairs could be dangerous, and that it costs Apple more money to do repairs than they charge. It’s the first time Apple has ever gone on the record about its repair policies at length.

“Repairs that do not properly replace screws or cowlings might leave behind loose parts that could damage a component such as the battery, causing overheating or resulting in injury,” Apple said when asked why it stops third party repair stores from receiving official parts and information. “For these reasons, we believe it is important for repair shops to receive proper training when obtaining access to spare parts and repair manuals.”

But, right to repair proponents weren’t fooled. According to Phone Arena, Apple: we fix iPhones at a loss, Right to Repair proponents cry ‘absurd!’, quoting Nathan Proctor, Director of the Campaign for the Right to Repair at US PIRG:

“Apple’s argument is absurd. In defending their decision not to make spare parts or service information available, the company claims that certain parts and information are necessary for a reliable repair. It’s a totally circular argument. Apple wants their customers, and the federal government, to accept the notion that while a repair monopoly exists, it’s a beneficial monopoly, made for our good.”

Apple also tries to claim it actually loses money on its repair monopoly. No, really. Motherboard again:

Apple also seemed incapable of answering basic questions about the repair market it insists it must tightly control. When the Congressional committee asked Apple how many technicians it had, it claimed there were tens of thousands. When the Committee asked how much revenue Apple generated from repairs, Apple claimed that “For each year since 2009, the costs of providing repair services has exceeded the revenue generated by repairs.”

Apple seems to be performing a sleight of hand here, and including in its “repair”  figures the costs of fixing its crapified  products, such as the debacle with its butterfly keyboard (see  Design Genius Jony Ive Leaves Apple, Leaving Behind Crapified Products That Cannot Be Repaired). Motherboard concurs:

The idea that Apple is losing money on repair is wild, and a curse of its own making. The answer by Apple seems vague on purpose. Throughout the years, Apple has had to offer many “service programs” for defective products. Most notably, Apple has had to replace a large number of MacBook and MacBook Pro devices for free because it designed an unrepairable keyboard that breaks easily and with normal use. Rather than replacing a few keys on those devices, Apple has to replace half of the computer. If Apple is including warranty repairs and service program repairs in addition to standard retail repairs, well, then, it is quite simply misleading the public and Congress.

And,  if it’s in fact actually the case, and Apple is losing money on repair – as legitimately defined, and not including its design-driven own goals – it should be happy to facilitate efforts by third party repair services to enter or expand their presence in this market. If they can undertake the repairs at lower cost, and turn a profit, this saves Apple from losing money from maintaining its repair monopoly.

Not to mention the reduction in e-waste that would follow from repairing rather than discarding products that might be salvaged.

How about it, Apple?

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