Groundhog Day All Over Again

By November 2, 2016September 3rd, 2018Acquisition, Army ALT Magazine
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Acquisition ‘reform’ is on the table again, as it has been at least once in each decade since the end of World War II, such that it seems like ‘Groundhog Day’ without Bill Murray, with the same proposals coming up again and again. But this time there’s reason to believe that the current reforms aren’t merely reactive but deliberate and forward-looking—and, just maybe, effective.

by Mr. Steve Stark, Ms. Margaret C. Roth and Mr. Michael Bold

The United States’ dissatisfaction with its defense acquisition system and its concomitant desire to “reform” it is as old as the country itself. Given the number of blue-ribbon committees and the countless studies performed since the 1950s, it’s hard to imagine any facet of government studied so many times, in more depth and, predictably or freakishly, often with similar results—sometimes exactly the same.

Reading the findings and recommendations from all those studies and reports, they very quickly become confusing rather than informative because, whether the report is from the 1970s, ‘80s, ‘90s or today, it’s difficult to pin the finding to a particular era without looking at the date of the study. Take this excerpt, for example: “Federal law governing procurement has become overwhelmingly complex. Each new statute adopted by Congress has spawned more administrative regulation. As law and regulation have proliferated, defense acquisition has become ever more bureaucratic and encumbered unproductive layers of management and overstaffing.”

If that sounds familiar, it’s not because it was written last year. In fact, that observation dates back 30 years, to the 1986 report of the Packard Commission, also known as The President’s Blue Ribbon Commission on Defense Management. It may sound familiar because many continue to decry the morass of regulation governing defense acquisition, much of it layered on in reaction to untoward events.

If the diagnoses of the ills are similar with each go-round—burdensome regulations, cost overruns, slipping schedules, poor management or performance and a lack of incentives for success—the prescriptions are equally so: Professionalize the workforce. Buy commercial. Increase competition. Simplify. Centralize. Decentralize. Reorganize.

DISCUSSING OPTIONS

DISCUSSING OPTIONS

Secretary of Defense Ash Carter greets Sen. John McCain prior to testifying before the U.S. Senate Armed Services Committee on Capitol Hill in December 2015. McCain’s version of the NDAA for FY17 calls for dividing the USD(AT&L) into two undersecretaries, one for management and support and one for research and engineering, and represents a move toward greater innovation as a way to counter the diversity of enemy threats. (DOD photo by U.S. Navy (USN) Mass Communication Specialist 1st Class Tim D. Godbee)

PLUS ÇA CHANGE
The French saying, “plus ça change, plus c’est la même chose,” could be the definition of defense acquisition reform: The more things change, the more they stay the same.

But since it’s not, it makes sense to define acquisition reform, which isn’t quite so simple, as the RAND Corp. points out in its 2005 study “Reexamining Military Acquisition Reform: Are We There Yet?” But RAND punts that ball even as it runs with it, with a report maintaining that acquisition reform is essentially in the eye of the beholder. “We elected to treat ‘acquisition reform’ as being defined by whatever specific initiatives we could identify that were formally launched and pursued under the banner of ‘Acquisition Reform.’ “

During the 1980s, “Are We There Yet?” states, acquisition reform meant “putting controls in place to reduce ‘waste, fraud, and abuse’ (both real and perceived) in transactions with contractors.” In the 1990s, the report adds, acquisition reform meant attempts to “make the acquisition process more responsive, effective, and efficient.”

In the Center for Strategic and International Studies’ “Measuring the Outcomes of Acquisition Reform by Major DOD Components,” acquisition reform falls out similarly. “Historical reforms have ranged from efforts targeting perceived waste, fraud, and abuse in the 1980s, to a focus on streamlining overly rigid military specifications and processes in the 1990s, to a focus on transformational technologies under Secretary of Defense Donald Rumsfeld in the 2000s.”

In a statement to the House Armed Services Committee in 2013, Moshe Schwartz, a specialist in defense acquisition, said, “Efforts to address cost overruns, schedule slips, and performance shortfalls have continued unabated, with more than 150 major studies on acquisition reform since World War II. Every administration and virtually every secretary of defense has been a party to an acquisition reform effort. Congress has also been active in pursuing reform efforts, by legislating changes through the annual National Defense Authorization Acts as well as through stand-alone legislation, such as the Federal Acquisition Streamlining Act of 1994, Clinger-Cohen Act of 1996, and the Weapon System Acquisition Reform Act of 2009.”

Yet, while waste, fraud and abuse haven’t been in the news much of late, cost is still an issue.

Current reform proposals—an iterative approach from the House Armed Services Committee and a more structural one from the Senate Armed Services Committee (SASC), which have yet to complete the reconciliation process and both of which President Obama has threatened to veto for reasons not entirely related to defense reform—combine the desire to make acquisition cheaper and the imperative to make it faster.

“Cost is still an issue,” said Jon Etherton of Etherton and Associates Inc. in an interview with Army AL&T in July. “I guarantee that, if we have a program that suddenly were to have serious overruns or other kinds of things that people would consider to be out of control, cost would be back on the front burner.” Etherton is a respected acquisition authority, having spent 18 years as a Senate staffer, 14 of them on the SASC. Now the senior fellow for acquisition reform of the National Defense Industrial Association (NDIA), he co-authored, with Will Goodman, “Pathway to Transformation: NDIA Acquisition Reform Recommendations.”

CAN I GET A WITNESS?

CAN I GET A WITNESS?

U.S. Rep. Mac Thornberry, R-TX, chairman of the House Armed Services Committee, questions Defense Secretary Ash Carter during his testimony on DOD’s proposed FY17 budget in Washington, D.C., on March 22. Thornberry noted earlier this year that threats against the U.S. are growing in number and diversity, and said that getting better technology into the hands of the warfighter faster is an imperative. (DOD photo by USAF Senior Master Sgt. Adrian Cadiz)

BOTH WANT IT, DEPENDING ON WHAT ‘IT’ IS
Perhaps the most unusual aspect of the current round of acquisition reform—in contrast to past efforts—is that both Congress and DOD are pushing for it. From one perspective, DOD got a wakeup call on 9/11 and is still waking up.

Since the creation of DOD in 1949, the U.S. military has relied on a kind of technological war of attrition that either prevented adversaries from acting or made it extremely unlikely that an enemy would prevail. However, the 9/11 attacks showed that, while the U.S. might not be defeated in a conventional way, it was vulnerable to asymmetric threats that are very hard to predict and defeat. The proliferation of improvised explosive devices in Iraq and Afghanistan were examples of this paradigm, that despite spending trillions of dollars on the best, most sophisticated systems, the U.S. was vulnerable to psychologically devastating attacks from equipment as cheap and low-tech as garage-door openers, fireworks and pressure cookers.

The rapid advance of technology has made previously unattainable weapons and technology, or weaponizable technology, much more accessible to nihilistic nonstate actors, much in the same way that Amazon has obliterated the barrier to entry to book publishing, for example, or Apple has made music recording and video producing accessible to anyone with the desire to use the technology. So it may be that in this round of defense acquisition reform, DOD and Congress are finally becoming fully awake to the necessity to change the paradigm and keep up with the speed of technology—ideally, to keep ahead of it. We would not need the Joint Improvised-Threat Defeat Agency, for example, if sufficiently advanced technology existed to defeat improvised threats.

At the same time, however, in addition to asymmetrical nonstate actors using cheap, off-the-shelf technology, the U.S. still has to contend with more traditional potential adversaries—states with large armies, large defense budgets and very sophisticated technologies. Add to that the experience of the wars in Afghanistan and Iraq during which the Pentagon rapidly acquired and fielded a variety of materiel, such as the Mine Resistant Ambush Protected vehicle, while traditional, multidecade procurements lumbered along. And add to that the 2011 Budget Control Act, which created sequestration. Throw in a presidential election in which the down-ballot races appear significantly less predictable than usual, and we have a circumstance in which many may want to see some kind of reform, even regard it as urgently needed, but it’s anybody’s guess what will happen.

For Sen. John McCain, the Arizona Republican who chairs the SASC, reform is an absolute must. “America’s broken defense acquisition system is not just a budgetary scandal. It’s a national security crisis,” he told War on the Rocks in July 2015. In May, he told the Brookings Institution, “Instead of one great power rival, the United States now faces a series of trans-regional, cross-functional, multi-domain and long-term strategic competitions that pose a significant challenge to the organization of the Pentagon and the military, which is often rigidly aligned around functional issues and regional geography.”

“The last major reorganization of the Department of Defense,” McCain continued, “was the Goldwater-Nichols Act, which marks its 30th anniversary this year.” Some, however, fear that the Senate version of the FY17 National Defense Authorization Act (NDAA) would take DOD back to the pre-Goldwater-Nichols era of inter-service rivalries and cost and schedule overruns. Goldwater-Nichols essentially removed the service chiefs from the acquisition chain of command, a move some see as a serious defect in the law.

The very mention of acquisition reform causes eyes to roll, as Rep. Mac Thornberry can attest from personal experience. Yet, according to Thornberry, the Texas Republican who chairs the House Committee on Armed Services, “A couple things have changed in recent years. One is the technology cycle is faster than it’s ever been and it’s speeding up. Secondly, we have a greater number and more diversity of serious threats that we’ve ever faced. So, the way I explained it to the Rotary Club back home is, if it takes us another 20 years to field the next airplane or ship, it’s going to be out of date by the time it gets there and we will not be able to defend the country.” Thornberry made his remarks in March at the Brookings Institution. “The necessity of getting better technology into the hands of the warfighter faster seems to me to be an imperative,” he added.

Thornberry went on to say that he’s a bit haunted by history. “There have been nations that have just missed a major change in warfare and have gone into decline as a result.” He’s concerned, he said, that history “will catch up with us someday, but if I can do anything through different reforms, whether it be the organizational reform, the personnel reform or the acquisition reform to delay that day when we go into decline, then I want to do it.”

LEADING THE CHARGE

LEADING THE CHARGE

Dr. Jacques Gansler, vice president emeritus at the University of Maryland and former undersecretary of defense for acquisition, technology and logistics, discusses best collaborative practices and success stories during the Department of the Navy SBIR/STTR Primes Summit held in December 2015 at the Office of Naval Research in Arlington, Virginia. Gansler, author of a landmark acquisition reform study in 2007, continues to decry the tangle of regulation governing defense acquisition, much of it implemented in response to unforeseen events. (USN photo by John F. Williams)

OVERSIGHT AND OVERHEAD
Personnel, organizational and acquisition reform are all important, but reform in oversight and regulation might be in order as well. In “Defense Acquisition Reform, 1960-2009: An Elusive Goal,” Dr. J. Ronald Fox literally wrote the book on acquisition reform, and he provided the following breakdown of the many layers of oversight:

Each participant in the acquisition process exercises an oversight responsibility to ensure that laws and regulations are observed and programs pursued efficiently. Consequently, there are numerous oversight and monitoring agencies. The executive branch has the Justice Department and the Office of Management and Budget; the Department of Defense and each military service have an independent inspector general and auditing office; and Congress uses the Government Accountability Office for program audits and assessment, the Congressional Budget Office for budget and program cost estimates, and the Congressional Research Service and Office of Technology Assessment for analyses. Industry has its legal resources, Washington representatives, and industry associations to protect its interests. The government manager of a major systems acquisition program must be sensitive to all participants’ positions and their vested interests.

And that’s not to mention the acquisition bureaucracy itself, plus the test and evaluation bureaucracy, including the powerful Office of the Director, Operational Test and Evaluation in the Office of the Secretary of Defense (OSD).

What does all that cost? What percentage of the budget for any given program or weapon system goes to overhead? On the industry side, that’s easier to measure because overhead is built into the contracts. On the government side, there are no charge numbers to distinguish between direct work and overhead work.

As such, it’s next to impossible to measure the costs of all of those layers of bureaucracy —the personnel doing the reporting or testing or evaluating and the time it takes for people working on a program—in industry or government—to respond to all of the regulatory requirements. According to Etherton, Congress 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. That boils down to two issues—direct and indirect costs. “The 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 regulatory 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 [measure 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.”

BOOTS ON THE GROUND

BOOTS ON THE GROUND

Former Secretary of Defense Donald Rumsfeld tours the Transit Center at Manas, Kyrgyzstan in June 2013, accompanied by Col. Shirlene Ostrov, then the 376th Expeditionary Mission Support Group commander, and Lt. Col. Tom Doan, then the 376th Expeditionary Logistics Readiness Squadron commander. Acquisition reforms unveiled under his second term as secretary of defense—2001 to 2006—focused on transformational technologies. (USAF photo by Tech. Sgt. Krystie Martinez)

EFFECTIVE MANAGEMENT
Government program managers are often at a disadvantage against their industry counterparts, said Fox, a professor emeritus at Harvard Business School, a former assistant secretary of the Army for procurement, contracting and logistics, and a former deputy assistant secretary of the U.S. Air Force USAF.

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

The 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 program manager positions. “They 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. “They 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.

“The Defense Acquisition University has made good progress in recent years improving the training of acquisition managers, but there is more work to be done,” Fox said. “… There needs to more careful selection of program managers and other key managers to weed out those who have phobias for obtaining and working with quantitative data. … If an acquisition manager of a large engineering development program does not have a strong academic background in science, engineering, mathematics and possibly business administration, the manager is likely to be in over his or her head to begin with. Not everyone can be an effective manager of large engineering development programs.”

Speaking June 16 at the third Army Innovation Summit in Williamsburg, Virginia, the Hon. Frank Kendall, undersecretary of defense for acquisition, technology and logistics (USD(AT&L)), said that engineers should be managing engineers, just as physicians should manage physicians and lawyers be in charge of lawyers. Unlike the other services, the Army has a real problem establishing this degree of expertise, Kendall said, with only one-third of Army program managers being subject matter experts in the fields they manage.

“If you’re supervising engineers, it’s really helpful to have an engineering degree. … I think you guys need to take a look at that, [and] frankly, Katrina, I think you need to do better there. The other services do not have that situation.

“There is a world of difference—and I’ve seen this a hundred times, a thousand times—between a program that is led by somebody who understands the design and the issues related to the design and the risks and what’s needed to address those risks, [and] somebody who doesn’t. … Industry will always put a good face on things, and you’ve got to understand what’s really going on,” Kendall said.

Creating effective program managers will require more than 15 or 20 weeks of training, Fox said. In addition to finding managers “who do not have an aversion to quantitative analysis and interpretation,” Fox said, the training should include gaining a familiarity with the problems that arise between government and industry on major programs. “This means the acquisition workforce needs to understand, in depth, the industry forces that contribute to these problems and be skilled in working with their industry counterparts.”

The only way to make acquisition careers more attractive to both military and civilians, Fox said, is to reward good performance. “I believe government acquisition managers need to be provided with significant rewards—such as cash and/or promotion opportunities—in response to outstanding performance in implementing acquisition reforms.” That would send a message to the workforce that DOD is serious about reforms and would have a ripple effect that would compel others to learn how to implement and use more competition and should-cost program management, he said.

Congress, Etherton said, has explored the idea of a separate acquisition career path for military officers—creating a sort of special branch, like the Army’s Medical Corps or Judge Advocate General’s Corps—but quickly abandoned it because of the effects it would have on promotions and force structure.

Under the current promotion system, “You cannot have people staying too long in one place, or they essentially become non-promotable to a higher level,” Etherton said. “That conflicts in certain cases with some of the needs of the management of the acquisition process. Could I see us getting to that place at some point? It’s a possibility, but we really haven’t had much of a debate on that since the late 1980s.”

WHERE TO NEXT?

WHERE TO NEXT?

Program officials conduct preflight system checks on reconnaissance drones at Network Integration Evaluation (NIE) 16.1 at Fort Bliss, Texas in September 2015. A review of acquisition reform studies over the past decades reveals consensus on the importance of getting new technologies like drones into the hands of warfighters faster and cheaper, but a wide range of approaches on how to best accomplish that goal. (Photo by John Hamilton, White Sands Missile Range Public Affairs)

INCENTIVES TO SUCCEED
No program can succeed without proper attention to the myriad decisions, large and small, that take a product or service from conception to delivery. Hence the Better Buying Power (BBP) initiatives. 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.

A secondary issue is the degree to which these incentives need to be a matter of law, not just policy.

From the government’s perspective, incentives to manage an acquisition program efficiently and economically take a number of familiar forms besides career advancement, including greater flexibility to reprogram monies saved by creating efficiencies; the ability to carry over such savings to a new fiscal year rather than “use it or lose it;” and more leeway to choose the particular contracting vehicle for a given program. Add to that list a new focus, on Capitol Hill and in the Pentagon, on creating incentives for early experimentation and prototyping to reduce the programmatic risk of relying on immature technologies, and a potentially powerful set of tools emerges to equip program managers to succeed.

Industry’s incentives to succeed are quite different, and much simpler—shareholder value and, to an extent, profit—but at the same time more difficult to translate to government acquisition policy and procedures. In his experience, Etherton said, “Shareholder value is the overarching incentive,” at least for publicly traded companies. “It’s not necessarily profit on a specific contract,” although, he added, “I see DOD looking at that as their shorthand for what incentivizes companies.”

The government lacks a clear understanding of what constitutes shareholder value, Etherton believes. “I frankly think you really need to get some of the senior folks on both sides and put them in a room and say, ‘We’re going to talk about incentives and really try to get an understanding of that, and combine that with some of the analytic things’ that measure performance on both sides of the table,” he said.

“It’s very difficult for the government folks to take more of an enterprise view of things,” the former aerospace industry lobbyist added.

Rather, the program management professionals tend to consider themselves at the mercy of the federal budgeting process, not to mention uneven and erratic congressional appropriations. Even within the Pentagon, Etherton said, acquisition managers tend to have little interaction with the budget managers and no sense of influence in that arena.

For industry representatives seeking government business, however, there is a direct link between what they do and their companies’ financial situation: “You’re either making money or you’re not making money. It’s a fairly simple thing to start with. Then you build your process and see what feeds into that … that, again, is sort of a more complex concept of shareholder value,” Etherton said.

Reducing this gap in understanding, to some degree, are DOD acquisition leaders with extensive experience in industry, Etherton added, such as Kendall, USD(AT&L) since 2012, and Shay D. Assad, director of defense pricing since 2011 and Kendall’s principal adviser, particularly on all program-related contract negotiation matters.

Kendall, for example, is a former vice president of engineering for Raytheon Co. and, more recently, a managing partner at Renaissance Strategic Advisors, a Virginia-based aerospace and defense sector consulting firm. Assad worked for Raytheon from 1978 to 2000, when he retired from the company as the chairman and CEO of its engineering and construction business.

Etherton is not optimistic that defense acquisition and fiscal managers can reach a better understanding of each others’ incentives and motivations, but he views that as critical to effective acquisition reform. “I think until we start doing that, whatever transformation reform, whatever your target is, we’re just not going to get there. Those will be very difficult conversations involving lots of stakeholders in the government with vested interest and experience. … People have told me over and over again, when I talk to government folks, that’s never going to happen. Maybe not, but I would hope that we would at least tend to move in that direction and see how far we can get,” he said, with the next step being to widen the circle of discussion to include the White House Office of Management and Budget and the congressional appropriations committees.

Fox believes that incentives, rather than processes, must change if acquisition reform is to succeed, and he sees several opportunities for improvement. ”First, DOD can negotiate contractor profits more often as return on investment rather than as return on sales, reducing an incentive for cost growth. Second, program managers and contracting officers need more training and ‘practice’ in dealing with typical challenges and problems that occur regularly on large engineering development and production programs.” Finally, Fox told Army AL&T, “government acquisition managers need to be provided with significant rewards,” namely cash, promotion opportunities or both, to recognize outstanding performance in implementing acquisition reforms.

“If those practices are adopted, the news would travel quickly throughout the acquisition workforce. That would mean the USD(AT&L) is very serious about this. More members of the acquisition workforce would say, ‘I better find out how to implement and use more competition, ‘earned value’ and ‘should cost.’ ‘Simply applying modest effort to achieve these objectives is not sufficient,” Fox said.

A BETTER BUREAUCRACY
Whatever their incentives to deliver exemplary products and services to the warfighter and be model stewards of taxpayers’ money, the acquisition workforces throughout DOD still add up to something called bureaucracy.

An overriding issue—and a contentious one, in current acquisition reform efforts—is the shape of the overall bureaucracy as much as its size: Who will have a hand in developing new programs? Who will have the final say in whether a program flies or dies? Who will have special authority, and how much of it, for rapid acquisition? Determining the optimal balance of authority involves not just OSD and the individual services, but also the service chiefs and the Joint Chiefs of Staff, the technical thinkers as contrasted with the management thinkers, and the rapid and traditional acquisition cadres.

Congress took a first step in reshaping the defense acquisition bureaucracy last year with provisions in the FY16 NDAA, which increased the individual services’ program approval authority. Specifically, each service’s acquisition executive would gain milestone decision authority (MDA) for major defense acquisition programs unless the secretary of defense made an exception. The USD(AT&L) already had the discretion to delegate this authority to the services and did so frequently, along with delegating MDA for smaller acquisition programs to the service acquisition executives.

Also in the FY16 legislation, the service chiefs took on a bigger role in acquisition, with a requirement that the MDA consider the appropriate chief’s views on the program’s cost, schedule, technical feasibility and performance tradeoffs.

While not without critics who see just more bureaucracy, these changes are baby steps compared with what the NDAA for FY17 could do to DOD’s acquisition chain of authority—assuming the House and Senate agree and the president signs the final legislation. The House version of the bill, spearheaded by Thornberry, hews relatively closely to the status quo, whereas McCain is pushing hard for major changes at the heart of the decision-making process: the Office of the USD(AT&L).

The Senate-passed bill called for dividing the office into two undersecretaries: one for management and support, focusing on business operations, and the other for research and engineering, focusing on technology and innovation and harking back to 1986, when the USD(AT&L) replaced the undersecretary for research and engineering. The revived position would have an assistant secretary to set DOD-wide acquisition and industrial base policy and oversee weapons development. This restructuring of Kendall’s office would erase the current seven assistant secretaries and deputy assistant secretaries from the organization.

FIXING TO ROLL OUT

FIXING TO ROLL OUT

FIXING TO ROLL OUT
The Army conducted a demonstration of Rapid Vehicle Provisioning System in late February 2016 at Fort Bliss installing and configuring all of the vehicles of the 2nd Brigade Combat Team, 1st Armored Division that are equipped with Warfighter Information Network-Tactical Increment 2 in preparation for NIE 16.2 in May. The Army is now modernizing the quick-reaction model it honed in OEF and OIF. (Photo by Amy Walker, PEO for Command, Control and Communications – Tactical Public Affairs)

McCain touts the re-establishment of an undersecretary for research and engineering as a strong move toward greater innovation in acquisition at a time when innovative thinking is vital to the country’s military success against the diversity of enemy threats, known and unknown. He’s seeking to build on Goldwater-Nichols, not undo it. As McCain said June 8 during the opening Senate floor debate on the NDAA for FY17, “Put simply, Goldwater-Nichols was about operational effectiveness—improving the ability of the military services to plan and operate together as one joint force. The problem today is strategic integration—how the Department of Defense integrates its activities and resources across different regions, functions and domains, while balancing and sustaining those efforts over time.”

To maintain central oversight of the services’ acquisition activities in the spirit of Goldwater-Nichols, the Senate bill looks to OSD’s Director, Operational Test and Evaluation and its Office of Cost Assessment and Program Evaluation.

From at least one project manager’s perspective, Congress is missing the mark in attempting to streamline the acquisition bureaucracy. In his opinion, milestone decision authority should rest with the program executive officer (PEO), said Dr. Robert F. Mortlock, a retired Army colonel who managed defense systems development and acquisition efforts for the last 15 of his 27 years in the Army, most recently as the project manager (PM) for Soldier protection and individual equipment under PEO Soldier. Mortlock retired in September 2015 and is now a lecturer for defense acquisition and program management at the Graduate School of Business and Public Policy at the Naval Postgraduate School.

“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,” Mortlock wrote in a commentary for this issue of Army AL&T. (See “Been There, Done That,” Page xx.)

If PEOs had milestone decision authority for acquisition programs, DOD could make optimal use of OSD and service acquisition staffs by giving them exclusively oversight roles, Mortlock wrote, stating that “it would empower the right folks and simplify the PM chain of command, applying a key principle of war—simplicity—to defense acquisition.”

SETTING A ‘RAPID’ PACE
In its “Pathway to Transformation,” NDIA laid out the conflict between traditional defense acquisition and modern-day needs for new battlefield capabilities, citing:

  • Overly complex acquisition laws and regulations and their enforcement bureaucracy, which together create unclear lines of authority and accountability in program management.
  • Micromanagement in response to perceived failures in the acquisition system, with ever-increasing process compliance and reporting requirements.

The solution, NDIA stated, would not require a wholesale reform of defense acquisition to more closely resemble rapid acquisition authorities. Nor, the report concluded, would the creation of rapid acquisition authorities necessarily become a device to circumvent the traditional acquisition system. “For our part, NDIA does not believe there is a ‘one size fits all’ approach that will uniformly deliver the best acquisition outcomes. Different kinds of acquisition programs require different kinds of tools, authorities, and oversight to ensure integrity in the process.” The organization called for DOD to create new tools for rapid acquisition.

A year later, the NDAA for FY16 helped set the pace for DOD to pursue more aggressively several new acquisition processes, not entirely separate but distinctly unequal from the traditional acquisition system, to explore and mature promising technologies before they become part of a program of record, and the momentum continues.

The legislation, Public Law No: 114-92, established several avenues to faster procurement:

  • Rapid acquisition authority, enabling a contracting officer to purchase items to rectify a document deficiency that could result in a cyberattack or other life-threatening situation.
  • Mid-tier acquisition programs, authorizing rapid prototyping and rapid fielding.
  • Alternative acquisition pathways, to acquire capital assets and services that meet critical national security needs.
  • Pilot Program for Streamlining Awards for Innovative Technology Projects, geared toward information technology in particular and to contracts, subcontracts and modifications valued at less than $7.5 million and awarded to a small business or nontraditional defense contractor.

In separate initiatives to spur defense innovation, Secretary of Defense Ash Carter has created the Defense Innovation Unit Experimental and the Strategic Capabilities Office to strengthen the U.S. technological edge. Recognizing that these are new areas of exploration for DOD, Carter continues to evaluate and modify the design and function of these organizations.

The Army is now modernizing the improvisational quick-reaction model that worked in Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF), making it a permanent part of the acquisition system in the form of the new Army Rapid Capabilities Office (RCO). (See “Seizing the Advantage,” Page xx.) This new rapid-response entity takes lessons learned from similar efforts in the Air Force, quick reaction capabilities and the prototypes-turned-programs of OEF and OIF; exercises like the Network Integration Evaluation; and specialized entities such as the Joint Improvised-Threat Defeat Agency, the Army Rapid Equipping Force and the U.S. Army Special Operations Command.

The Army RCO aims to go beyond closing current capability gaps to stimulate aggressive, proactive capability development and leverage disruptive technologies that force our adversaries to respond to us, in line with DOD’s Third Offset Strategy to establish U.S. military overmatch in a volatile, unpredictable world.

TWO STEPS BACK?

TWO STEPS BACK?
Maj. Gen. Thomas A. Horlander, director of the Army Budget, outlines the Army’s FY17 budget during a briefing at the Pentagon, Feb. 9. Some experts are concerned that the Senate version of the FY17 NDAA would bring back interservice rivalries and cost and schedule overruns largely eliminate by the Goldwater-Nichols regulations. (Army Photo by C. Todd Lopez, U.S. Army News Service)

CONCLUSION
Clearly there is no perfect solution to the perennial problems of acquisition cost overruns, bureaucratic overreach and predictable obsolescence. In the near term, much depends on whether and how the Thornberry and McCain camps resolve their considerable differences over the next NDAA. Longer term, beyond the complex universe of possible defense acquisition reforms, are, of course, forces beyond the control of anything that acquisition reforms can affect directly.

NDIA’s November 2014 “Pathway to Transformation“ posed the concept of “boundary conditions,” i.e., factors outside of the DOD acquisition system that are uniquely resistant to change, including the federal military and civilian personnel systems and DOD’s budgeting and program planning processes. They still stand firmly in the way of acquisition reform, Etherton said.

“So I think we’ve got to figure out a way to get a different conversation where you say, look, we can change the workforce or we can deal with promotions and we can deal with education. We can deal with different contract types and some of these things. But until we start talking about the impact of some of these bigger issues on the process, we’re going to be in this equilibrium that we’ve been in. Things are just going to slide back. We’re not really going to fundamentally change the process that we have. That’s my belief.”

Mortlock took a similar view but cited slightly different variables that he thinks Congress and DOD must reconcile to make acquisition reform work. The reason that decades of initiatives for change have fallen short of making a real difference, he believes, is that they have failed to address requirements, funding and acquisition reform with equal vigor. “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,” he stated.

But the threats facing the U.S. across the globe—their diversity and urgency—are powerful motivators to make defense acquisition work better, faster, and sooner rather than later. As with the acquisition of urgently needed new capabilities, it is also true of acquisition reform: Timing is everything.


MR. STEVE STARK is senior editor of Army AL&T magazine. He holds an M.A. in creative writing from Hollins University and a B.A. in English from George Mason University. In addition to more than two decades of editing and writing about the military, science and technology, he is, as Stephen Stark, the bestselling ghostwriter of several consumer-health-oriented books and an award-winning novelist.

MS. MARGARET C. ROTH is an editor of Army AL&T magazine. She has more than a decade of experience in writing about the Army and more than three decades’ experience in journalism and public relations. Roth is a MG Keith L. Ware Public Affairs Award winner. She is also a co-author of the book “Operation Just Cause: The Storming of Panama.” She holds a B.A. in Russian language and linguistics from the University of Virginia.

MR. MICHAEL BOLD provides contract support to the U.S. Army Acquisition Support Center. He is a writer and editor for Network Runners Inc., with more than 30 years of editing experience at newspapers, including the McClatchy Washington Bureau, The Sacramento Bee, the San Jose Mercury News, the Dallas Morning News and the Fort Worth Star-Telegram. He holds a B.J. in journalism from the University of Missouri.

This article was originally published in the October – December 2016 issue of Army AL&T magazine.

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ONLINE EXTRAS

Re-examining Military Acquisition Reform: Are We There Yet?” RAND Corp

Pathway to Transformation: NDIA Acquisition Reform Recommendations

Defense Acquisition Reform, 1960-2009: An Elusive Goal,” by Dr. J. Ronald Fox

Video of Sen. John McCain and Rep. Mac Thornberry discussing the FY17 National Defense Authorization Act

Transcript of Senate Armed Services Committee Chairman John McCain speaking at the Brookings Institution about the 2017 NDAA

Transcript of House Armed Services Committee Chairman Mac Thornberry speaking at the Brookings Institution about the 2017 NDAA

Twenty–five years of acquisition reform: Where do we go from here?” House Armed Services Committee hearing, Oct. 29, 2013