‘GROUNDHOG DAY’ ALL OVER AGAIN


A central issue in acquisition reform is how to encourage smart decision-making at every echelon of program management, working within and in spite of the unwieldy acquisition bureaucracy and understanding what will induce industry to produce the best possible product or service at the best possible price.


has no mechanism to measure the cost of oversight, whether it’s necessary or non- value-added bureaucracy.


“On the government side, I really don’t think that there is a real strong effort to quantify all those costs,” Etherton said. Tat boils down to two issues—direct and indirect costs. “Te direct issue is the actual cost of people to actually do all these things … and the indirect issue is that if you have all those people and you assume that [their labor] is a free good [and already paid for]—that these are just people that we have to do this— then what you also lose is any insight into the time component of this, and how much more time does that build into the process?”


Without building in some metrics for measuring the cost of oversight, Congress will never know whether, for example, a program’s cost overruns on the industry side were matched by equivalent costs on the government side as the result of regu- latory compliance.


Nor, for that matter, will DOD and the services understand the true cost of program delays in terms of the man- hours expended. “I hear stories about the pricing exercises that folks are going through,” Etherton said. “It’s like, ‘Well, if this delays the acquisition for a year or two years … just so we can get this lower price, you don’t have anything to [mea- sure the] price reduction against


that


effort.’ I think there is a sense that the decision-making gets distorted a little


bit by the lack of understanding of all those costs.”


EFFECTIVE MANAGEMENT Government program managers are often at a disadvantage against their industry counterparts, said Fox, a professor emeri- tus at Harvard Business School, a former assistant secretary of the Army for pro- curement, contracting and logistics, and a former deputy assistant secretary of the Air Force.


“If you take government program manag- ers and they are dealing with dedicated and experienced corporate program man- agers on the industry side, I think very often the government people are out- gunned,” Fox said in an interview with Army AL&T in July.


Te military’s rotation of officers into and out of program manager roles every three to four years deserves a big chunk of the blame, Fox said. Currently there is no incentive for officers to stay in pro- gram manager positions. “Tey want to get back to the place where they stand a better chance of being promoted, and you can’t blame them for that,” Fox said.


“Tey want to get back to their real job.” Moreover, some officers and civilians are unprepared to deal with the complexities of managing a major defense acquisition program.


1969 Packard Initiatives


• Improve quality of information from development phase.


• Restore contractor competition to reduce risk.


• Establish milestone decision authorities.


1971 Fitzhugh Commission


• Called for more prototyping and testing: “Fly before you buy.”


1972 - 1979


Congressional Commission on Government Procurement


• Called for fundamental improvements in the patchwork of federal procurement laws, directives and regulations.


20


Army AL&T Magazine October-December 2016


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