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Bill Greenwalt knows acquisition like few people on earth. For more than a decade he wrote acquisition laws — and fought off some — while a staffer on the Senate Armed Services Committee. Then he went to the Pentagon, where he oversaw industrial base issues, which often included acquisition policies. Bill, now a wise man at the American Enterprise Institute, understands the politics governing acquisition reform, but, more important, he knows the effects such policy changes can have on both the US military and the companies who build its weapons. He sees America facing a once in a generation chance to improve how America buys its weapons and offers his ideas for others to consider as they grapple with this arcane but important issue.

We can all point to acquisition disasters, malpractice or stupidity over the last 15 years: NPOESS, FCS, the airborne tanker (twice), the F-35, EFV, LCS and several major software programs. Frank Kendall, defense undersecretary for acquisition, technology and logistics, has said our acquisition system needs fixing, as has the likeliest candidate to become chairman of the House Armed Services Committee, Rep. Mac Thornberry. I asked Bill to write these three op-eds because of the importance of the topic and his unique background, but you can blame him for any bad ideas. I doubt you’ll find any. The Editor. 

Bill Greenwalt

Once more unto the breach for acquisition reform, dear friends, once more; and close the wall up with our past rules and regulations! In the days of rising budgets there’s nothing so becoming an official as attacks on waste and fraud; but when the blast of budget cuts blows in our ears, then imitate the action of a reformer.

My apologies to the Bard, but the time is right for real acquisition reform. No, really! You can feel the initial stirrings in the air as the Pentagon finally begins to face the budgetary reality that it can’t afford its current force structure. Justifiable fears are rising about a declining innovation gap with China and other countries. So something has to be done. As in the past, the House and Senate Armed Services Committees will be the focal point for any serious reform effort and the annual National Defense Authorization Act scheduled to begin markup in the House on April 30th will be the first opportunity to change the system.

This is a once in a generation chance, one forced on us. Why? First, budgets are being slashed to such a level that a realization sets in that there are no other alternative courses of action. Then a chance arises at implementing management reforms that include not only fixing how the Pentagon buys goods and services, but also changing the way it does business. We are on the cusp of one of those inflection points. The last one occurred just after the fall of the Berlin Wall and started with a plethora of hope, good ideas, and some significant change. But these opportunities for reform are not always acted upon or sustained. There are no guarantees of success this time around, and if history is any guide, there is a good chance that the government will get it wrong.

Historically, Pentagon acquisition changes have not been a positive experience. Instead of adopting best practices, the laws and policies flowing from the Hill and the Pentagon follow a well-worn path that ebbs and flows with the rise and fall of the defense budget. Dollars flow into the Pentagon during wartime or in a crisis, immediate needs are met, corners are sometimes cut, and inevitably some mistakes are made. The presence of fraud is a constant threat with the expenditure of taxpayer dollars. The more money that flows quickly to a war zone the greater are the chances for theft and fraud. Those who disagree with spending more on defense or who oppose the given conflict decry the inevitable examples of waste and fraud and Congress rushes to pass new laws to rein it in.

As the conflict or crisis subsides, austerity sets in. Budgets are cut and a procurement holiday begins. Costs rise to meet the new acquisition oversight requirements imposed during the budget run-up, but because of an implementation lag they don’t start to be felt until the budget declines. Innovative firms with other commercial options exit the business while defense-unique firms hunker down and get ready to comply with whatever regulations are passed. Competition declines and costs rise again from the need to prop up more sole-source suppliers.

Then further handwringing ensues about the cost of acquisition. Studies are conducted, organizational changes are called for and more oversight and compliance legislation and regulations are enacted. The defense acquisition and legal bureaucracy overreacts  legislative requirements in such a way as to ensure maximum damage to existing programs by ignoring flexibilities embedded into the law. These trends continue until the military force is a hollow shell of itself and everyone waits for the next crisis to increase the defense budget. Repeat.

Since World War II we’ve seen two times when this cycle was temporarily reversed and real acquisition reform and innovation resulted. The first was during the implementation of Eisenhower’s New Look policy and it really only succeeded because the rot in the acquisition process had not yet set in. The U.S. owes its military dominance, the development of the nuclear triad, the beginnings of the information age, and advances in satellite reconnaissance and communications to this period of rapid competitive operational prototypes that pushed the boundaries of technology development.

The second period of positive acquisition reform and the only one that attempted to hack away at the thicket of laws, rules, and regulations that had enveloped the system since World War II was the commercial item acquisition reforms of the 1990s. Far-sighted defense leaders like David Packard and William Perry understood that by the mid-1980s the defense acquisition system had resulted in the creation of an isolated grouping of defense unique contractors who specialized in adhering to Pentagon rules but were now technologically behind the commercial marketplace. The resulting reforms enshrined in law in 1994 and 1996 allowed the Pentagon to bring in current technology and practices – primarily from the information technology sector. Unfortunately, this effort ultimately ended with mixed results as advocates for the status quo rolled these back in the last decade.

So, if the time is right because of where we are in the budget cycle, what can be done now to kick-start the right kind of acquisition reform? How can these reform efforts draw on the streamlining lessons learned from the 1950s and 1990s, rather than leading to more stifling bureaucracy and regulation? The problems we face have been decades in the making and will require more than one National Defense Authorization Act to fix. Still, much can be done this year to build on the types of reforms that worked in the past and, secondly, to lay the intellectual groundwork for a new acquisition system. The question remains whether the Pentagon and the Congress will reach the right consensus on what needs to be done as happened 20 years ago or will allow this opportunity to slip by.

Comments

  • Don Bacon

    There is no need for acquisition reform. There is a need to obey the law.

    The Code of Federal Regulations of the United States of America

    Title 32-National Defense
    213.3 (excerpts)
    (5) Technical uncertainty shall be continually assessed. Progressive commitments of resources which incur program risk will be made only when confidence in program outcome is sufficiently high to warrant going ahead. . .

    (6) Test and evaluation shall commence as early as possible. A determination of operational suitability, including logistic support requirements, will be made prior to large-scale production commitments, making use of the most realistic test environment possible and the best representation of the future operational system available. The results of this operational testing will be evaluated and presented to the DSARC* at the time of the production decision.
    http://tinyurl.com/lw4mqg9

    *Currently this is done by the MDA (Milestone Decision Authority) which in the case of the F-35 is the Under Secretary of Defense (Acquisition, Technology, and Logistics)

    Rather than obey the law on the F-35 program, we have conconcurrent development and production, which the MDA Frank Kendall has correctly characterized as acquisition malpractice.

    “Putting the F-35 into production years before the first test flight was acquisition malpractice. It should not have been done.”

    • Federal Register Comic Strip

      You come here quoting the CFR and suggesting the rule of law and the regulations that govern action within executive agencies can fix this issue? Surely you jest……the generals, admirals, SES positions, and similar others do not obey the law, they do not face accountability.

      • Jon

        Note he came here stating up front; “There is a need to obey the law.”

        That said, there is no accountability. But a disregard for the law and a total lack of personal accountability is increasingly a hallmark of our government and its functionaries.

        They can reform acquisition till the cows come home, but passing “National Defense Authorization Acts to fix it” is meaningless, when they don’t even obey current laws.

        • Gary Church

          If a law is being broken who has jurisdiction to arrest and prosecute? I thought no one was above the law in the United States. No nobility and we did away with the robber barons at the turn of the last century. Guess they are back. This always ends with a bunch of starving people fighting the military in the streets and the military wondering why they are killing their own people. If we have another great depression there will be guillotines this time.

    • WeirdLore

      My personal experience has been that the DOD level operational suitability evaluators are clueless buffoons.

      The “system” devides accountability and authority and is hopelessly bureaucratic. For major weapon systems, put someone in charge and give them time to bring a functional, supportable system to the field. If they fail, fire them.

  • CharleyA

    Everybody talks about reform, but never seem to articulate what exactly it means. So I’ll take a stab: remove the service chiefs from direct or indirect control of the process. They can justify the need and develop the specs, but let civilian professionals manage the programs. No rotating military program officers who face undue “attention” from above, and are never really held accountable for delays and overruns.

    • Don Bacon

      That was tried on the F-35, a “joint” program which sidelined the service chiefs. It doesn’t work. Now the F-35 program is being managed by “civilian professional” Frank Kendall who is in Lockheed’s pocket, and one service chief in particular (CNO) has suffered.

  • http://www.IT-AAC.org/ John Weiler

    Bill, again, you have eloquently outlined a very complex challenge that DOD has struggled with for the past two decades, and appreciate identifying the unique challenges of buying commercial IT. Unfortunately, I agree that the likelihood of success is very slim, especially if we continue to approach the problem with the same process and thinking that got us their in the first place. Those who control the current acquisition process and their FFRDCs have demonstrated their inability to embrace commercial best practices nor discover the “penicillin for what ails Defense IT”. Its a culture and accountability challenge indeed.

    In 2010, congress directed OSD (NDAA Section 804) to establish an Open and Agile Acquisition process that would be tuned for the fast paced IT market. Unfortunately, the OSD acquisition bureaucrats stuck with what they were comfortable with, and commenced with yet another rewrite of DoD5000, ignoring the rule of law.

    One very astute Defense executive noted “There is a lot of talk about agility, speed, acq reform, etc, but, in general, no one seems to be willing to take the actions needed. They would rather just talk about it. When you look at the chart that shows the DoD acquisition model (you know the one I’m talking about that looks so byzantine), every would agree that it doesn’t make sense. …. Right now, I see DoD increasingly moving away from good practices, to just giving up.”

    Congress has already reached out to a dozen think tanks and industrial groups who have already offered actionable advise. The IT Acquisition Advisory Council (IT-AAC) is one of several who are willing to put country first and challenge the status quo. Hopefully there are leaders in congress, the white house and the pentagon who recognize the eminent National Security Threat predicted in the 2009 Defense Science Board Report on Defense IT Acquisition Challenges. There is a better way.

  • Grantland

    I am not sure where to start; there are so many issues to be addressed. For example, when we went away for MIL-STD programs, did we throw out the baby with the bath water?

    What needs to be address is supportability. We need to tailor proven System Engineering Supportability processes to a COTS environment. TI/APB programs life cycles can be as short as 6 years and in some cases longer.

    The acquisition community has done a great job in providing new capabilities however, supportability is lacking. Why, because we are focused more on Moore’s Law and COTS, then the requirements to maintain our systems. How does the next TI fix my present supportability issue? It does not!

    We are in the war business, when was the last time you saw a server farm dive to test depth or be shot off the end of a carrier? A submariner is forward deployment and underwater; if we did not understand that a commercial supportability/maintenance concept does work within that environment, then we are in big trouble.
    If we do understand and I do believe we do, then we need to address those 20 year life cycle process and how they can be tailored to fit TI/APB, COTS programs. Those 20 year life cycle processes worked and their principals still apply.
    V/R
    Grantland