By Michael Bold
FORT BELVOIR, Va. (May 4, 2016) – Acquisition professionals must embrace the principles behind Better Buying Power (BBP) 3.0 to maintain technological superiority for the U.S. military, says Hon. Frank Kendall, the under secretary of defense for acquisition, technology and logistics (USD)AT&L)).
Speaking April 27, in a keynote address on the importance of momentum in acquisition reform at the opening of the annual Defense Acquisition University (DAU) Training Symposium, Kendall sharpened the focus on the principles behind BBP 3.0 that he first outlined in February.
“Our job is always to get as much as we possibly can for the amount of money we have for the warfighters and for the taxpayers,” he told some 450 people gathered in the auditorium at DAU’s Scott Hall and hundreds more watching virtually from 28 video teleconference sites and 48 Defense Collaboration Services sites.
This year’s defense budget moved from a capability-based approach to a threat-based approach, Kendall said, echoing comments by Secretary of Defense Ash Carter earlier this year. While regional conflicts, the Islamic State group and al Qaeda remain threats, the emphasis must shift to higher-end potential dangers: Russia, China and, to a lesser extent, Iran and North Korea, he said. “We are in a contest for technological superiority on the battlefield,” Kendall said.
Defense acquisition needs to move faster and refresh more often, more quickly, he added.
Acknowledging to laughter that “people were relieved I’m not doing a 4.0 this year,” Kendall outlined the principles behind BBP 3.0, which he has revised since first publishing them in February:
1. People matter most; we can never be too professional or too competent.
The acquisition workforce must use its judgment, motivation, courage and expertise to provide the best products for the warfighter, he said: “The real work is done by you, and a lot of other people like you.”
“Building up our own professionalism, learning as much as you can, helping your people develop as much as you possibly can, working really hard, (working) retention hard,” is vital, he added. Among other initiatives that DOD is working on, Kendall said, is one to retain in federal service some of the best performing military officers in acquisition who are retiring.
2. Data should drive policy.
“It’s hard to make people look at the realities,” Kendall said. DOD has learned a lot from looking at the effects of different types of contracts and incentive structures and will do even more studies in future, he said.
3. Critical thinking is necessary for success; fixed rules are too constraining.
“We gotta think,” Kendall said. “That’s our job.” Be analytical and use good judgment, he told the acquisition professionals; don’t follow checklists.
4. Controlling life cycle costs is one of our jobs; staying on budget isn’t enough.
Kendall said progress is being made in ending what he called a “perverse incentive: to spend your money no matter what.” The most important thing to build into the culture of the acquisition workforce, Kendall said, “is the idea that you have to pay attention to cost and do something about it. The manager is responsible for understanding the cost, looking for areas of costs and reductions, setting targets and doing something about it. What I just described is ‘should cost,’ that’s all it is.”
5. Continuous improvement will be more effective than radical change.
“The Hill … likes to do radical change for the sake of doing radical change,” Kendall said. “That’s not how we get better.” Simple solutions and fads don’t work for defense acquisition, he said, and it’s more important to make incremental changes, monitor progress and then fix what isn’t working.
6. Incentives work: we get what we reward.
“Industry responds to incentives,” he said. “It’s really quite simple. If they will make more money doing the right thing, they will do the right thing. If they will not make more money doing the right thing, they won’t do it.”
7. Competition, and the threat of competition, is the most effective incentive.
“One of the best incentives ever is competition, and even the threat of competition,” he said.
He noted that the first set of BBP initiatives, released in 2010, led some to complain that DOD was waging a “war on profit.” Defense companies do deserve a fair profit, he said. “It is not in our interest to put companies in a position to lose money.”
8. Defense acquisition is a team sport.
This is a collaborative venture that we’re in,” he said. Kendall mentioned the 2016 National Defense Authorization Act, which gives the heads of the four armed services increased control over weapons programs and requirements. Kendall, who had expressed opposition to the provision, said it “didn’t really change what the chiefs could and should have been doing, but it told them they had to do it.”
“Essentially, it asked them to pay attention to tradeoffs,” he said.
He noted that BBP 3.0 added the intelligence community to the team.
9. Our technological superiority is at risk and we must respond.
Kendall said he’s been watching the defense modernization programs of China and Russia very closely for over six years, “and nothing I have been watching since day one has made me less apprehensive.”
U.S. defense spending, he said, needs to grow. “We’ve got to get rid of this crazy sequestration thing,” Kendall said, referring to spending limits contained in the 2011 Budget Control Act. They’ve forced the armed forces to reduce manpower, training and equipment maintenance.
Kendall noted that several early demonstration projects were in the 2016 budget. But under current funding, the full-fledged programs would never have made it into the budget. “We’re going to need a substantial increase to stay on top of these threats,” he warned. He added that the acquisition professionals can help; the money they save by running programs efficiently can then be used in research and development. “That’s a great tradeoff,” he said.
10. We should have the courage to challenge bad policy.
“Do not just accept direction that you think is stupid,” he urged the audience. Sometimes policy isn’t an actual reflection of regulation or law, he said. “I want you to be more creative than that. I want you to be more thoughtful than that. I want you to have the courage to speak up.”
Kendall also touched briefly on other topics:
Tight budgets: According to Kendall, “when budgets are tight, we gamble more,” making overly optimistic forecasts on programs in order to get them funded. But down the road that can backfire, and programs will likely exceed those optimistic budget projections. “When money’s tight, we need to be more careful,” he said. “Getting approval is not the goal,” he said. “Success is delivering a program.”
The F-35 Joint Strike Fighter: Kendall testified April 26 before the Senate Armed Services Committee, chaired by Sen. John McCain (R-AZ), a vocal critic of the troubled F-35 program. “Sen. McCain said, he acknowledged that ‘I understand there’s been progress on the program.’ That’s the nicest thing he’s ever said to me,” Kendall said to laughter.
Would he do the F-35 again? “We should not have given so much business to one … prime (contractor). … I would not do that again.”
The A-10 attack plane: “I love the A-10. I was very disappointed when we had to take it out of the budget,” he said. But the A-10 is a “very special purpose airplane,” and resources need to be spent on planes that can do more, he said.
You can find Kendall’s complete speech here.
