Dreaming of a Strategy

DASA(P) looks ahead to new possibilities for streamlining acquisition as a new congressionally created panel embarks on a sweeping review.

by Mr. Harry P. Hallock

A few months ago, I received a phone call asking me to participate on a panel with 17 other current and former colleagues charged with reforming the DOD acquisition system. In Section 809 of the FY16 National Defense Authorization Act (NDAA), Congress created the panel to advise DOD how to streamline the acquisition process, in an effort to maintain an advantage in defense technology.

My initial thought was, “Here we go again! More acquisition reform, only to stay the same.” But as I integrated onto the team and learned more about this initiative, I discovered that Congress had allowed the panel tremendous latitude to improve the acquisition process. Congress has given the Advisory Panel on Streamlining and Codifying Acquisition Regulations two years to review DOD acquisition regulations and policies, identifying those that are working well and could be worth expanding, and those that are unnecessary and should be eliminated. Specifically, Congress asked the panel to examine the buyer-seller relationship, improve the functioning of the acquisition system, ensure the continuing financial and ethical integrity of defense procurement programs and protect the best interests of DOD.

I also thought back to the last time Congress took this much interest in reforming acquisition, in 1991, when it established the Section 800 Panel, whose efforts resulted in procurement reforms introduced primarily through the Federal Acquisition Streamlining Act of 1994 and the Federal Acquisition Reform Act of 1996. This caused me to reflect on my participation as truly an honor and a real opportunity to introduce one of my favorite concepts into the acquisition process.

In 2013, as the deputy assistant secretary of the Army for procurement (DASA(P)), I was asked to join a group of “visionary” acquisition leaders across government, industry and academia to discuss the future of acquisition. I did, and we spent more than a year launching a federal-wide concept that involved developing a common vision and a usable framework with steps for guiding strategy, providing a roadmap and organizing data—all to inform investment decisions, measure progress and provide transparency with an eye toward an improved future for government acquisition. This grassroots movement is called Acquisition of the Future (AOF). AOF participants believe acquisition is the most powerful and underused lever in the federal government for finding efficiencies and driving results. We have tried to think beyond the existing state of federal acquisition and consider what could be possible in an ideal state. In other words, the AOF movement is “daring to dream.”

AOF and the 809 Panel, as it is commonly known, share a common set of goals that include making acquisition more efficient and effective by looking at the future through the lenses of all stakeholders and breaking down barriers that impede progress. I consider potential Section 809 policy changes as a practical application of AOF transformational thinking. And what better legacy can any of us leave for Army acquisition than a living vision for a better way of doing business?

While the 809 Panel is just getting started, three principal ideas that I and others have been promoting are a focus on outcomes, streamlining processes and overcoming workforce challenges.

FOCUS ON OUTCOMES
Congress has told us in recent legislation that it wants DOD to have an agile acquisition process that provides the warfighter with the best capabilities possible. Agile contracting is a concept the department has been slow to adopt, however, probably because it would require us to create an entirely new contracting model—scary stuff in a bureaucracy as big and complex as the DOD acquisition system, with its many stakeholders. Having said this, one idea the 809 Panel is considering involves the government and contractors forming a partnership, a term of art that largely fell out of favor a few years back, to converse informally and share ideas about a better, more inclusive way of generating requirements. We would focus on the entire acquisition team, which includes contractors, and on outcomes, even at the expense of strict adherence to process.

Adopting such an approach would require stakeholders to collaborate early in the planning stages of an acquisition as requirements are being developed and put in a format that can be put out for bid. Program executive offices and requiring activities would have to engage with industry via one-on-one and multiple vendor collaborations early enough in the process to make a difference—meaning that they could submit well-thought-out requirement packages allowing sufficient time for the iterative process needed for successful, agile contracting while realizing the need to look at organizational conflict-of-interest issues associated with this type of early collaboration.

In my more cynical moments, I have been known to opine on Army leadership treating the contracting process as a “necessary evil” that requiring activities must tolerate to get a product or service to the Soldier. In reality, when requirements are well-planned and executed, contracting can truly be agile, a force multiplier and, in contingency operations, a critical enabling function.

Today, many requirements generators regularly send poorly written requirements packages to contracting offices with a “just get it on contract” mentality. This often results from the acquisition team not placing enough emphasis on the pre-award process (acquisition planning). In many cases the contracting officer, the government’s face to industry, takes the blame for mistakes or problems that could have been avoided with proper upfront collaboration.

On the other end of contract execution, the acquisition team is often remiss in not placing the proper emphasis on the post-award process (contract administration). When contract surveillance is successful, the customer knows what it is getting because it is helping the contracting officer monitor contract output, and the contracting officer is aware of contractor concerns that may impact performance. Thus the contractor and the government each does its part to complete the contract as agreed.

In creating a vision for the future, it is likely that the government and industry must abandon our current approach, which lacks this kind of collaborative environment in contract management and oversight, instead favoring an acquisition process that includes a timeline of acquisition events in the planning phase and an outcome-based strategy during contract administration.

STREAMLINING PROCESSES
In addition to emphasizing outcome over simple compliance, the DOD acquisition system must evolve to excise from the rule book burdensome activities with little value. One way to streamline the process would be to consolidate acquisition dollar thresholds incorporated in DOD regulatory guidance. The procurement regulations have multiple thresholds, with various rules for application depending on the commodity or service, whether it is commercially available or a noncommercial item; the delivery and performance locations (within or outside the continental United States); and whether it should be set aside for our congressionally mandated socioeconomic programs. It is possible to consolidate many of these thresholds to establish a set of rules that apply regardless of the requirement, place of performance or delivery location.

As a member of the 809 Panel and a career contract specialist, I, along with my DOD compatriots on the panel, plan to explore ways to clarify existing policy on a number of topics, such as contract type, determination of commercial items and competition rules to ensure that they are necessary and, if so, are clear and straightforward. Current guidance to contracting officers is well-intended but can be complicated and confusing because of the evolutionary nature of the rulemaking process, which has a tendency to endlessly add, and rarely remove, statutory and policy guidance. Compounding this is agency-level guidance that supplements higher-level policy.

The process could be significantly more effective if contracting officers and others involved had to follow a single regulation that was less prescriptive than the existing rule book and had limited supplementation. Clear, easy-to-follow regulations would reduce administrative burdens, improve compliance and make it easier for the various players to work toward a common goal.

It is important to note that as a department, we focus a lot of our attention on policies related to weapon system development; however, in FY15 the Army spent nearly 62 percent of its contract obligations on services, and in FY16 over 61 percent. Given the preponderance of contracting for services, I expect the 809 Panel will focus some of its efforts on reviewing DOD acquisition regulations that apply to services. Although DOD’s Better Buying Power initiatives focus on strategic management of services acquisition, some Army reporting requirements related to contracting for services are extremely burdensome, such as the accounting of contractor services and requests for services contract approval. Automating these manual processes would benefit both government and industry.

WORKFORCE CHALLENGES
Finally, should the 809 Panel introduce a significantly streamlined or entirely new acquisition process, commonly known as the “nuclear option,” it must ensure that DOD has a fully trained and empowered workforce to implement it properly. That is because, if codified as envisioned, streamlined processes would not require the same level of oversight as current processes. Our contracting workforce, in turn, would need to acquire a certain level of expertise sooner than required today to take advantage of the flexibility of simplification and justify the reduction in oversight. To be effective managers of a newly simplified process, acquisition professionals must be adequately trained, both formally and on the job, to think critically, and they must have the authority to make decisions at the lowest possible level.

In this vein, the panel has tremendous freedom to review and make recommendations on deleting or revising department regulations. It likely will focus on revising regulations where necessary to make them less prescriptive and require less internal oversight. Sounds simple, but to make such changes effective, acquisition leaders at all levels must create a culture that pushes back against the risk avoidance that our current workforce seems to embrace. That mindset stifles the creativity and innovation that Congress has asked us to accomplish, notwithstanding lawmakers’ complicity in the status quo. Instead, we need to encourage our younger, less experienced workforce to assume planned risk and ensure the flexibility necessary for truly agile, innovative contracting takes root.

This means we must allow our less experienced practitioners to make honest mistakes without fear of reprisal. As the Irish playwright, novelist and poet Oscar Wilde said, “Experience is simply the name we give our mistakes.” Allowing members of our workforce to make missteps and learn from them is the only way to grow a workforce prepared to become our future leaders.

Therefore, we must create an environment that encourages calculated and educated mistakes and actually rewards those willing to take such risks in the right circumstances and for the right reasons. Thus, mistakes become “teaching moments,” opportunities to gain valuable insights into what went wrong and how the outcome could have been different. For leaders to participate constructively in this process, they, in turn, must do better at coaching and mentoring. A cultural change is very difficult to put into practice if the organization does not conscientiously focus on this critical aspect of leadership.

In addition, we can mitigate the likelihood of recurring mistakes and even avoid others by sharing lessons learned. Databases of lessons learned appear to have limited success, in that they capture and categorize lessons yet are cumbersome to access for specific situations that arise in day-to-day business. However, on-the-job training, mentoring and interactive online forums can be very useful by enabling instant interactions and active sharing of knowledge and experience, which is how today’s youth learn in this instant communication and information age. However we choose to make this happen, interaction and positive reinforcement at all levels are among the best ways to create a learning environment that will benefit individuals and foster organizational agility and innovation.

CONCLUSION
I must admit, the Section 809 Panel has its work cut out for it. With a wide-open mandate from the House and Senate defense oversight committees to assume no parameters and “to think way outside the box,” as one congressional staffer put it, there is virtually no avenue we are prevented from pursuing in the realm of DOD acquisition.

Although an exhilarating prospect, such a large-scale endeavor will require discipline and focus to yield a result that deals effectively with the enormity and complexity of the DOD acquisition process and provides palatable solutions to the department, Congress and the American people, who are demanding such large-scale reform. Regardless of what the panel ultimately decides, my goal as a member is to work with my fellow commissioners to reform the acquisition process by transforming our thinking and adopting a 21st century approach to acquiring our nation’s defense needs.

I believe we can get there by focusing on outcomes, eliminating unnecessary processes and encouraging risk-taking and innovation. I choose to dare to dream! Do you?

For more information on the Advisory Panel on Streamlining and Codifying Acquisition Regulations, go to http://www.dau.mil/sec809/default.aspx.

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MR. HARRY P. HALLOCK was appointed the DASA(P) on July 14, 2013. He managed the development and dissemination of policies, processes and contracting business systems; directed the evaluation, measurement and continuous improvement actions for more than 270 Army contracting offices worldwide, which executed contracts for major weapon systems, base logistics support, construction and wartime operational contracting in Iraq and Afghanistan; and ensured the execution of federal, DOD and Army regulations for acquisition, procurement and related business practices. As the functional career representative for contracting, he oversaw the recruitment, training, certification and professional development of the Army’s contracting workforce. A member of the Senior Executive Service since 2007, he holds an M.S. in program management from the Naval Postgraduate School and a B.S. in business administration from the University of Delaware. He also completed the Army Senior Executive Education Course at the University of North Carolina, the Senior Executive Education Program Intermediate Course at the University of Notre Dame and the Federal Executive Institute’s Army Senior Leadership Development Program. He was Level III certified in life cycle logistics, program management and contracting, and Level II certified in test and evaluation engineering. He was a member of the Army Acquisition Corps. He retired in January 2017 after 37 years of service to the U.S. Army.

This article will be published in the January – March 2017 issue of Army AL&T Magazine.

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ONLINE EXTRAS:

800 Panel report

Federal Acquisition Streamlining Act

Federal Acquisition Reform Act

Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress

Call for Volunteers: Acquisition Management SIG “Acquisition of the Future” Project

Agile Acquisition to Retain Technological Edge Act

Agile vs. Traditional Contract Principles