Been There, Done That: Acquisition Reform

With all due respect, you don’t know jack: A former program manager offers his idea for effective acquisition reform – giving MDA to PEOs

by Dr. Robert F. Mortlock, Col., USA (Ret.)

Attention, senior defense officials, senior service officers and congressional leaders: With all due respect, in most cases you are not the most qualified to make defense acquisition decisions. There are simply too many competing priorities and, frankly, you probably don’t know jack about most program specifics.

The root causes of the program failures within DOD are not hard to identify: changing requirements or “requirements creep;” military-unique, stringent ruggedization requirements; unstable budgets and limited resources; immature technology and integration challenges; the rapid pace of technology changes; deliberate decision support templates unable to adapt to rapidly evolving threats; limited incentives and high barriers to entry for commercial innovation and competition because of a legislatively and regulatory complex federal procurement system; and political pressures and legitimate needs for a healthy defense industrial base to advance national policy objectives. The complex interaction of all these factors makes sweeping defense acquisition reform initiatives ineffective.

The Office of the Secretary of Defense (OSD) and service leaders are the most capable leaders in the history of the profession of arms, as evidenced by the most respected, technologically advanced and most capable military force successfully executing missions around the world. OSD and service leaders are in many ways the equivalent of private sector CEOs, overseeing programs in the billions of dollars. Like the rest of us, they have their capability gaps; the really successful CEOs recognize these limitations and surround themselves with a team that compensates for these gaps. For example, would the CEO of $2 billion company make a large financial commitment without the expert advice of at least one business adviser or a team of MBAs, as well as the board of directors? Not likely. Service leaders? Somehow, their operational leadership excellence equates to business intellect. This way of thinking is a mistake.

ACQUISITION TRIAD

FIGURE 1: ACQUISITION TRIAD
The defense acquisition institution can be thought of as a three-legged stool: one for the generation of requirements (JCIDS); a second for the management of program milestones and knowledge points (DFAR); and a third for the allocation of resources (PPBES). (SOURCE: Dr. Robert F. Mortlock, Col., USA (Ret.)

ACQUISITION REFORM OFF TRACK
I don’t believe that recent legislation in the National Defense Authorization Act (NDAA) for FY16 giving service chiefs more acquisition authority is a step in the right direction. The service chiefs will need to stand up acquisition cells to support these new responsibilities, adding more bureaucracy. The defense acquisition institution can be thought of as a three-legged stool, or a triad, with three decision support templates to guide programs: one for the generation of requirements known as the Joint Capabilities Integration and Development System (JCIDS); a second for the management of program milestones and knowledge points, known as the defense acquisition management system and governed by Defense Federal Acquisition Regulations (DFAR); and a third for the allocation of resources known as the Planning, Programming, Budgeting and Execution System (PPBES). (See Figure 1) The service chiefs already have oversight over two of the three legs: requirements (JCIDS) and funding (PPBES). Real reform will only come when the service chiefs exercise control and oversight of requirements and funding, and layers of bureaucracy and oversight are eliminated from the third leg, the defense acquisition management system described in the DOD 5000 series regulations. (See Figure 2.)

Decades of acquisition “reform” initiatives have failed to produce true innovation and change within defense acquisition because they have not addressed requirements (capability-based and threat-driven), funding (fiscal year- and calendar-driven) and acquisition (milestone- and event- driven) reform with equal vigor. Acquisition reform initiatives have tended to focus on the defense acquisition management system—for example, annual NDAA acquisition reform initiatives from Congress and multiple Better Buying Power initiatives from DOD—and have not succeeded in integrating these mutually supporting decision support templates.

One defense acquisition reform initiative that continually appears over the years is the elimination of non-value-added oversight and bureaucracy. The FY16 NDAA targets the reduction of layers of acquisition bureaucracy. In terms of lean thinking (a well-documented, successful commercial industry best practice), non-value-added oversight and bureaucracy equates to waste. All three Better Buying Power (BBP) initiatives outline goals to streamline management, eliminate unnecessary oversight, reduce documentation and empower program managers (PMs).

However, the success of specific actions taken to effectively change statute, policy or regulations and successfully implement these changes over time is debatable. Therefore, from a former PM perspective, I’ll make a specific recommendation that I believe would target the elimination of non-value-added oversight and bureaucracy.

BUREAUCRATIC OVERKILL

FIGURE 2: BUREAUCRATIC OVERKILL
The layers of bureaucracy and oversight in the defense acquisition management system described in the DOD 5000 series regulations. (SOURCE: Dr. Robert F. Mortlock, Col., USA (Ret.)

MY BIG IDEA
The only way we are very going to truly eliminate unnecessary bureaucracy is to change the mission of OSD and service-level acquisition leaders to oversight, with decision-making being left to those with the expertise to make those decisions. Specifically, I believe that the Milestone Decision Authority (MDA) for acquisition programs should be at the program executive officer (PEO) level. PEOs are trained, educated, certified members of the acquisition profession. They have decades of operational management experience and training in leading program offices, and they possess the necessary technical and business acumen, as well as the mandated acquisition certifications required of members of the acquisition profession. By making PEOs the MDA of acquisition programs, OSD and service acquisition staffs can be optimized for oversight roles exclusively. Their advice to senior leaders would be oversight and not decision-making—a lower threshold. Currently, OSD and service acquisition staffs have grown because they support the defense acquisition executive (DAE) or service component acquisition executives (CAEs) as decision-makers—considerably smaller staffs would be required to support the DAE or CAEs as oversight to PEO MDAs. Ultimately, the MDA decisions are merely recommendations to service leadership, who control the overall service modernization strategy with requirements and resources.

CONCLUSION
So, Congress—specifically, the House and Senate armed services committees, responsible for the NDAA—I’m talking to you: You got it right to try to legislate defense acquisition reform, but you didn’t target the root cause of the issue: non-value-added bureaucracy and oversight of programs. If you want to reduce service and OSD acquisition staffs and not simply transfer the bloat to another part of the service, strip the decision-making authority away from top-level OSD and service officials and give that authority to the folks who are truly and uniquely qualified: members of the acquisition profession who have the education, training, expertise and experience to make those decisions—PEOs. PEOs are demonstrated leaders, acquisition professionals, and an underutilized, invaluable national resource available for OSD and service leaders.

DECISIONS, DECISIONS

DECISIONS, DECISIONS
DOD already has invested in the training, education and experience of PEOs—maximize this investment and empower PEOs as the program milestone decision-makers. (SOURCE: U.S. Army Acquisition Support Center)

The DOD 5000 directive is based clearly and rightly on the policy objectives of flexibility, responsiveness, innovation, discipline and streamlined effective management while emphasizing competition. More BBP initiatives that reiterate the same concepts in the DOD 5000 series are not needed. Enforce the principles and concepts already outlined therein. Keep acquisition reform simple and target the non-valued-added processes. Target bureaucracy and the result will be the elimination of waste and the effective application of the commercial best practice of lean thinking. DOD already has invested in the training, education and experience of PEOs—maximize this investment and empower PEOs as the program milestone decision-makers. Make the PEOs the MDAs for their assigned programs by mandating it in new congressional NDAA legislation and by changing DOD acquisition policy and regulations.

Can I say for sure that PEOs as MDAs would eliminate all acquisition program cost and schedule overruns and performance shortfalls? Unfortunately, no. But it would empower the right folks and simplify the PM chain of command, applying a key principle of war—simplicity—to defense acquisition. I acknowledge that this recommendation only addresses bureaucracy and oversight within the defense acquisition management system—another incremental reform approach, you might say. However, if we first establish trust and confidence in PEOs as MDAs, over time maybe we can expand the conversation to consider giving PEOs not only MDA responsibilities but funding and requirement authorities as well, thus applying another key principle of war: unity of command.

DR. ROBERT F. MORTLOCK (COL, USA, Ret.) managed defense systems development and acquisition efforts for the last 15 of his 27 years in the Army, culminating in his assignment as the project manager for soldier protection and individual equipment in PEO Soldier. He retired in September 2015 and is now a lecturer for defense acquisition and program management in the Graduate School of Business and Public Policy at the Naval Postgraduate School in Monterey, California. He holds a doctorate in chemical engineering from the University of California, Berkeley, an MBA from Webster University, an M.S. in national resource strategy from the Industrial College of the Armed Forces and a B.S. in chemical engineering from Lehigh University.

This article will be printed in the October – December issue of Army AL&T magazine.

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