A Q&A with the Hon. Frank Kendall
As the United States winds down its involvement in more than a decade of war, acquisition has been in a nearly constant state of change—from heating up to cooling down, from massive budgets to budget-tightening. Along the way came the Gansler Commission Report and Better Buying Power (BBP) 1.0, 2.0 and 3.0. Efforts to carry out the recommendations of those seminal initiatives have shown some progress but continue to be hindered by outdated and often onerous processes and procedures, not to mention unwieldy bureaucracy.
The Hon. Frank Kendall, undersecretary of defense for acquisition, technology and logistics (USD(AT&L)) since May 2012, has had a front-row seat—in many instances, the driver’s seat—in many of these efforts, particularly BBP. A champion of critical thinking and innovation in acquisition, Kendall places a high value on professionalism. He sees great potential for the talents and experience in today’s acquisition workforce, given the right tools to perform, the right environment in which to innovate and the right processes to ensure accountability.
The next five years promise a whole new set of challenges for defense acquisition, plus more of the same, as DOD shrinks its force structure against a backdrop of multiple regional conflicts with global implications, all while budgets remain unstable. The fact that the new secretary of defense, the Hon. Ashton B. Carter, preceded Kendall as USD(AT&L) and was the architect of BBP places acquisition in an even brighter spotlight.
In an interview Feb. 11 with Army AL&T magazine, Kendall offered his views on what DOD and specifically the Army are doing—and what they need to do next—to make acquisition work better for all concerned.
Army AL&T: What’s your response to some people’s claim that, as SAP executive Tom Sisti put it, “We seem to be in a kind of procurement ‘Groundhog Day’ where we recycle through a lot of the same recommendations” for acquisition reform?
Kendall: We’ve tried to break that cycle. There is such a cycle, and the way I describe it is, we don’t like the performance we’re getting right now, so we tend to try to do something else, which is often something we’ve tried before with similar results. Some of the ideas that have been around a couple of times I’ve seen in my career: fixed-price development, for example, and, more recently, putting service chiefs more in charge of acquisition have come around a few times. I don’t think that either one is the path to success.
What I’ve tried to be is very consistent over the last few years on the suite of things that I would call the core parts of Better Buying Power that we’re trying to do to improve our performance—things like having competition and having competitive environments, focusing on cost-consciousness through the use of should-cost as a management tool, understanding how to incentivize industry and using appropriate contract types. Those are all very core things, and we need to be better at them. It’s not that we shouldn’t do something entirely different, it’s just that we should get better at the things that we already have the authority and the opportunity to do.
Army AL&T: And how do we do that?
Kendall: It’s partly development and training, it’s partly constant attention, it’s partly providing tools to people so that they have a better basis to make decisions. When we did Better Buying Power 1.0, I refer to that as sort of focused on best practices, to have a list of best practices that we wanted people to follow. We weren’t trying to tell people to always use those practices, just that they should consider them as they went through their decision-making process.
In Better Buying Power 2.0, we focus much more on professionalism and providing tools to people to make good decisions. If you’re going to ask people to use the appropriate contract type, you need to give them some guidance on what to think about and what circumstances to use, what kind of contract. The same is true with things like performance-based logistics, where we need to do more on the training and policy and guidance side to help people make better decisions and do a better job.
Army AL&T: You’ve spoken a number of times on the problem with the “schoolhouse solution” and people having a knee-jerk reaction to recommendations on this or that coming out—that a particular contracting mechanism is appropriate, and then everyone wants to go and use that mechanism for everything, which is not appropriate.
Kendall: That’s absolutely right. We do such a wide variety of things in the Department of Defense, and we have such a wide variety of circumstances. If you just look at product acquisition or development, the risk profile for different products is very different, and that drives how you structure the acquisition. And you can, in some cases, do fixed-price development contracts, and in other cases—most cases—you want to do cost-plus, but not always.
In some cases, you’re trying to support a warfighter who’s engaged in combat, and you’re going to accept a lot more risk in how you structure the acquisition, because it’s really important to have that capability in the hands of the warfighter as quickly as possible. So we need to be flexible, and we need to think. One of the fundamental premises, if you will, of Better Buying Power 2.0 was about the importance of people thinking critically about their options and about the best course of action in a given circumstance.
Army AL&T: Do you think we’ve made progress in that respect, getting away from schoolhouse thinking?
Kendall: Yeah, I do. I think a lot of people embrace that. It gives more room for creativity. I think it’s more challenging, and some people embrace that. There are people who, I think, like to be told what to do. Frankly, they’re not the people we need leading our programs. We need people who have good judgment and have a good basis for making the judgments that they have to make based on their experience and training and so on.
Army AL&T: You have said that the real problem is the burdens and limitations placed on program managers in doing their jobs. With the legislative solutions that are working in DOD, what do you hope to accomplish?
Kendall: That particular set of initiatives has a relatively narrow purpose, and it’s to remove some of the complexity and overhead and, in some cases, even inconsistencies in the rules that govern our program managers. I was motivated, when we were doing the DOD 5000.02 acquisition system instruction, when I realized the very long section of tables of compliance requirements that our program managers had to follow—very complicated, very hard to work your way through, and a big burden to meet all those requirements.
So the intent with that initiative was to go see if we could simplify all that and make it more comprehensive and clearer and more coherent, and I think we’ve had some degree of success. It’s not, on its face, exciting things, but they are things that will give our program managers back something they need more than anything else, and that’s time.
Army AL&T: What is the status of that legislative initiative?
Kendall: It’s gone forward. It’s been approved by the Office of Management and Budget, and it’s up on the Hill now for consideration. It’s been delivered to both of the authorization committees. And, as they work through their thoughts on acquisition reform, I’m hoping that we can work together on this. I think there are other ideas out there that we will be discussing as well. But so far, the response I’ve gotten from both the House and Senate sides has been very positive. I think it will probably be associated with the National Defense Authorization Act ultimately, the authorization bills.
I understand that the House may do a separate bill on acquisition reform, and it may incorporate some of these [ideas] in that. But I don’t believe anything’s been filed yet.
Army AL&T: Can you share with us some of the ideas and suggestions for improving acquisition outcomes that you offered during recent testimony before the House Armed Services Committee?
Kendall: I’ve testified before both the House and Senate Armed Services Committees on this, and one thing that I think comes back with a fair amount of consistency on both sides of the aisle—and I think I agree with this—is the program management professionalism and strengthening our program managers, having more tenure for them so that they can stay in their positions longer and finding ways to compensate those who do a good job. And also, in some cases, hold accountable people who are not doing such a good job.
I’m more a carrot than a stick person as far as this is concerned. I think we need to reward good performance and attract the best talent possible to our senior leadership positions in acquisition, whether it’s program management or engineering, contracting, testing or another field. So I’m encouraged by that. Our legislative initiative did not address that directly, but I am very interested in working with Congress on ways to strengthen our senior leaders.
Army AL&T: What significant progress do you think we have made in strengthening senior leadership?
Kendall: I think we have made some progress in terms of defining the qualification requirements for key leadership positions, and there are several of them that apply. One of our career fields has started having a professional certification board as a pilot program; this is the developmental test community. And some of the other fields, I think, are going to follow that. I’m leaving this to the career field managers to make their own decisions on this. I don’t want to impose this on people. It needs to be a grassroots thing that the career field embraces.
I think we are holding people accountable in the sense that—we started this some time ago—all of my acquisition decision memorandums carry in their first paragraph the name of the program manager and program executive officer who brought the system forward and recommended the decision to go forward, so that there’s some historical reference there and some accountability. I would like to keep some of our best talent around. I’m looking for ways we might do that. I see too many of our best program managers at the grade roughly of O-6, colonel or maybe captain, leaving because they don’t make it to the star level in their service, and these are enormously capable people who’ve developed a huge body of expertise and are very talented. I’d like to find a way to keep those people around longer.
Army AL&T: Our “Critical Thinking” Q&A with GEN Perkins [GEN David G. Perkins, commanding general of U.S. Army Training and Doctrine Command], in the current January-March issue, was a very good conversation regarding the Army operating concept, what it means and what it accomplishes, what it doesn’t accomplish, and why it’s necessary. We got into the issue of acquisition and how that fits into the requirements picture, and his conclusion seems to be that the current system is based so heavily on programs of record that it’s hard to respond to changing needs and evolving threats. What’s your thinking on that?
Kendall: I think we need more flexibility in our acquisition system. But I think the fact that they’re programs of record really shouldn’t limit that. We have, for example, configuration steering boards at least annually—I think in many cases, early on, it should be more often—where the senior requirements person for the service and the senior acquisition person sit down together to look at requirements adjustments that need to be made in response to reality, in response to either things we’ve learned through the development program on the one hand, and on the other hand changing threats.
We also need to be designing flexibility into our programs so that we have modular programs where we can do upgrades in key areas where technology’s moving more quickly, and where we control interfaces so the government has the ability to introduce competition for some of those things, as opposed to being a captive of a source that we select for the primary development.
So there are a lot of things that we can do to add flexibility. It has to be thought about, it has to be designed in and it has to be paid for. This isn’t free. There are cost impacts of doing this. We can’t escape ultimately the fact that large-scale, complicated things take a while to get through development. Just going through the design process, fabricating prototypes and doing testing takes time. But you can design into those products the ability to be more agile, and you can design into your process the ability to make changes as necessary while you’re going through development.
You’ve got to be a little bit careful about that, because if requirements are constantly changing, you’re always chasing them, and you never get a design that you settle on as you get into the field. And we’ve had that experience in the past a few times.
Army AL&T: Are there specific examples where you think the Army has succeeded in building in flexibility to acquisition?
Kendall: I think it’s a work in progress. There’s been some flexibility built into how they proceeded with the WIN-T [Warfighter Information Network – Tactical] program, where they’ve responded to facts on the ground plus budget reality to try to get to the right place there. I think [Army Acquisition Executive] Heidi Shyu is well aware that [the Army] needs to do this and she’s trying to structure programs so that they can do that. Some of the current thinking on the air defense side I think is in line with that, too.
Army AL&T: In the context of BBP, you’ve said that it’s hard to eliminate unproductive and bureaucratic processes because of comfortable habits of years and even decades. What sort of a culture shift do you think will be necessary for meaningful acquisition reform to take hold in the Army specifically?
Kendall: I was referring as much to OSD [the Office of the Secretary of Defense] as the services when I made that comment. There are very deeply ingrained ways of doing business, ways of doing staffing in particular. And I think this is just as true in the services as it is in OSD, including the Army, where an awful lot of, I’ll call them stakeholders, feel that they have to have a certain degree of influence over what goes on. And I think that getting that streamlined has really been a struggle. And getting it focused on substantive things has been a struggle.
There’s kind of a compliance mentality where people have a list of things they expect to see, and if they don’t see them, that’s a problem—as opposed to being focused on what are we really trying to accomplish here and what actually matters in terms of the substance of what we’re doing, as opposed to the rule set, if you will.
Army AL&T: Could you be a little bit more specific about that mode of thinking?
Kendall: Yeah, I get a fair amount of programs that come in, and what are raised as issues are, “Is the baseline current?” and “Are the LRIP [low-rate initial production] quantities still the same?” and “Are we going to have a Nunn-McCurdy [exceed, by at least 15 percent, a program’s unit cost baseline]?”—and those sorts of things, which are about the bureaucracy and its functioning. They’re not about, “Did we meet our timelines for certain things?” They’re not so much about what we’re actually doing and whether it’s a smart thing to do or not.
When I look at a program, what I first want to see is, what am I building and what are the risks associated with building that? And then, what are we doing to mitigate those risks, and how are we structuring the acquisition to incentivize industry to do the best possible job? How are we structuring the source selection so that we get the best possible solution for the money? Those are things that are substantive and matter. But often those are the things that people are not focused on. They’re more concerned about whether all the bureaucratic I’s have been dotted and T’s have been crossed.
Army AL&T: Shifting to the global environment, we now seem to be in a more or less continuous war footing, given the contingencies that arise with nonstate actors in opposition to a variety of states. What effect do you think this is having on the structure and practice of DOD acquisition?
Kendall: We’ve done a lot to meet the needs of operational commanders as they’re engaged in operations. We’ve established a group called the Warfighter Senior Integration Group that originated under Dr. [Ashton B.] Carter when he was in this position and that I chair now. It meets monthly; it is actually meeting every two weeks now because we have separate meetings on Afghanistan and the Iraq-Syria situation. And that group brings together all of the DOD stakeholders in the services to essentially address the needs of the combatant commanders, the operational commanders in theater.
And the idea—and I think we’ve been pretty good at this—is to cut through the red tape, to get rid of all the bureaucratic barriers, the authority barriers, the money barriers, the contracting barriers that get in the way of giving operational commanders what they need as quickly as possible. And I think we’ve had a lot of success with that. There is a group in my office called the Joint Rapid Acquisition Cell that is coordinating all of this. I think we’ve come a long way, and I don’t want to see that lost.
When Dr. Carter was here as the deputy [secretary of defense, from 2011 to 2013] and even when he was in my position [from 2009 to 2011], he felt very strongly about that, and so I know we’re in sync on this, and Deputy Secretary [Robert O.] Work is also. The department needs to have the ability to respond quickly when operational commanders need that. And it was something that did not exist in the early days of our campaigns in Iraq and Afghanistan. We’ve built the capability to do that, and we need to keep it.
This is a separate track, if you will, from the normal acquisition track, which is, you know, a little bit more risk-averse, but also involves large sums of money and programs that take years to do under any circumstances. That’s a different part of what we do. And I think we’ve done a pretty good job of establishing both tracks and making them both work more effectively.
Army AL&T: Does this borrow at all from the much-vaunted special forces acquisition methods?
Kendall: The special forces people do a good job of acquiring niche capabilities relatively quickly. They focus on core requirements. And a lot of what they do is personal equipment or modifications to existing equipment that can be done on a relatively quick basis, and they do it in small quantities. They’re flexible about some of the environmental requirements that we have to worry about. I think that works well for them, and we can do the same thing.
What we’re doing in rapid acquisition is very similar to that in many cases. I wouldn’t say it was modeled on the SOCOM [U.S. Special Operations Command] model, but it’s very similar.
Army AL&T: We wanted to ask that because there is a lot of talk about how SOCOM acquisition is the answer to everything.
Kendall: Unfortunately it’s not. And the reason it’s not is that some of the key warfighting systems that we buy, some of the things that really provide us with core capabilities are very large, complex and inherently long programs that need a lot of careful management to be successful. One of the principal things that has to be managed in that process is risk. And before we embark on a $10-or-more billion development program, we need to do risk mitigation in many cases to ensure that we’ve got the technology risks in particular, and in some cases manufacturing risks, under control and where we need them to be.
So you need a phase that does that for those large-scale programs. And I’m talking about things like the next-generation fighter, the next-generation bomber, the next-generation surface combatant, maybe the next-generation combat vehicle, where you’re trying to get a substantive leap ahead in capability, a quantum improvement in capability relative to anything else that exists in the world or that you anticipate existing in the world.
Now these are the things that give us technological superiority at the end of the day. And they inherently involve more risk. So that’s a different world, frankly, than the world that SOCOM lives in. They don’t do that sort of thing.
Army AL&T: What’s your assessment of where the United States stands in technical superiority, compared with our adversaries?
Kendall: I’m very concerned about that. I’ve been concerned about it for years now. I’ve done testimony about this, I’ve written about it. I’ve given speeches about it. I think that people are probably tired of hearing me talk about it. But as I look at the intel data on what some foreign countries are doing—particularly China; to a lesser extent, Russia; and even countries like Iran—they’re acquiring capabilities that are designed to defeat the United States.
China, in particular, is doing so very aggressively. It’s building counter-space capabilities to attack our space assets. It’s building capabilities to attack our aircraft carriers and our air bases. It’s building capabilities to take us on in the air with things like electronic warfare and advanced air-to-air weapons, and very capable air defenses. And the China I’m looking at now is nothing like the China I looked at 20 years ago when I left the department. We have a big problem here. While we’re doing sequestration and cutting our budgets and [are] very, very busy around the world with a lot of real, right-now problems with extremist groups and so on, we are in a situation where we are losing ground. And I think we are losing ground to a dangerous degree relative to potential future adversaries and to the technologies that they might field to others or sell to others.
Army AL&T: Can you address the limitations of what incremental upgrades can do, engineering change proposals and that sort of thing? Is DOD research and development [R&D] really suffering with the cuts in funding?
Kendall: Yes, absolutely, and if you look at the structure—we were at a high of over $80 billion and now we’re down more in the $65 billion category. We were even lower than that. That’s in our request.
What is happening, as we go through budget deliberations and reach compromises and so on, is we end up, because of near-term requirements, covering our deployed forces, emphasizing readiness and force structure over modernization. And in particular, I’m concerned about our pipeline of new products. When I compare the data on the pipeline of new products to the pipeline, again, of China, it is dramatically different. We are essentially digging a hole for ourselves, and we’re forced into that by the resource levels that we’re at. Uncertainty about those resource levels has a big impact, because there’s a tendency in that environment to hang on to force structure that we ultimately may not be able to afford. It prevents us from confronting some of the choices we may have to make.
So, getting some stability in our budget so we have some kind of idea of what to anticipate is critical. When we submit a budget that may be $40 billion, $35 billion above what we’re actually going to get at the end of the day, that leads to huge distortions in our planning and in how we allocate resources. We really have to get this resolved. It’s really crippling the department.
Army AL&T: Are the services doing anything in a smaller way to keep up the pace of incremental improvements?
Kendall: There’s a lot more of that going on, because we’re forced to do it. The biggest part of our R&D account right now is the upgrades to existing programs. We’re doing a lot to keep things around longer than we had initially intended, and where we can, we’re upgrading some of those things. The Bradley and the M1 in the Army, for example, are good examples of that. The one thing that we have been able to protect in the budgets, we’ve chosen to protect, is the science and technology accounts. So the basic work that will give us programs in the field 20 years from now, maybe, or 30 years from now—we’re protecting that. It’s the effort that’s going to give us capabilities in 10 or 15 years that we’re shortchanging right now.
Army AL&T: You’ve stated that you’d like to leave as a legacy a stronger and more professional Defense Acquisition Workforce. Why is this legacy so important to you, and what are the programs you’ve put in place to establish that?
Kendall: When I look at the history of defense acquisition, it’s almost impossible to correlate any policy change with improvement. What I’ve tried to do over the last several years and will keep doing is to make a lot of policy changes and a lot of practice changes that make incremental improvement. So I’m hoping that those will, when you knit them together, have a substantial impact. But I’m also very interested in improving the capability of our key leaders in acquisition to make good decisions, which is basically their professionalism.
Now we have a very professional workforce. I don’t by any means want to say anything negative about it; it’s a great workforce, and I’m very proud to be part of it. But we can all improve. I can improve, everybody can improve. And I think [that includes] strengthening that workforce and creating a culture in which people are allowed to make those decisions, in which senior leadership outside the acquisition community listens to acquisition professionals about technical risk and about what it will really take to deliver a program, and heeds that advice. So I think it’s a long, slow process to
build up that sort of capability in any workforce, but I think we’re making progress there. And we’re going to keep at it as long as I’m in this position.
Army AL&T: Do you see any sort of end point in that progress?
Kendall: No. The whole idea of continuous improvement is that there are always ways that you can improve. You’re never perfect. And I made the analogy to football, in a five-page paper I did for Sens. McCain [John McCain, R-AZ] and Levin [now-retired Sen. Carl Levin, D-MI] in a compendium they put together. We’re in a competitive game here, and if you think of the acquisition people as basically a football team, all the players have to be as good as they possibly can be. The other team’s trying to be as good as they can possibly be, too. And you never get to an end state. You’re always trying to get better, you’re always reacting to what the other guys are doing.
And you have to do everything right. You’ve got to recruit well, you have to train well, you have to plan well, you have to execute well in everything that you do. That’s in a sense an unattainable end state, but that’s what you strive for. You strive for that continuously, and you keep working for constant improvement.
This article was originally published in the April – June 2015 issue of Army AL&T magazine.
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