Under Secretary of Defense for Acquisition and Sustainment Dr. William A. LaPlante holds a press brief at the Pentagon, May 6, 2022. (DoD Photo by US Navy Petty Officer 2nd Class James K. Lee)
Updated 1/7/2023 at 2:30 pm ET to include comment from the Office of the Secretary of Defense.
WASHINGTON — As the Biden administration readies to release its federal budget requests for fiscal 2024, the Defense Department is facing new congressional demands to justify its expanding use of streamlined acquisition authorities that are meant to rapidly put capabilities into the field, in part by bypassing some traditional checks and balances.
The FY23 omnibus appropriations act, signed by President Joe Biden on Dec. 29, for the first time levies numerous detailed reporting and certification requirements on the Pentagon regarding the use of “Section 804” Mid-Tier Acquisition (MTA) and rapid prototype programs — with the documentation to be included with the FY24 defense budget request. Which means when the budget hits Congress on March 9, the fight over the future of MTAs will officially kick off.
Congressional appropriators believe the new processes will create greater transparency and improve oversight. Text accompanying the omnibus makes clear lawmakers are concerned that some DoD and service programs may be inappropriately stretching MTA and similar legal authorities beyond their original intent, and in a manner that “obfuscates costs and limits transparency” even for what are essentially major, long-term defense programs.
“The language [in this year’s appropriations act] is consistent with language we’ve been carrying for several years re: MTAs. Intent is to ensure that middle tier acquisition authority is used as appropriate, and not as a tool to circumvent traditional acquisition rules for larger programs,” one senior Hill staffer involved told Breaking Defense.
But supporters of the acquisition streamlining authorities call the new requirements overkill, and warn they will undercut the very raison d’etre of those acquisition reforms: to move much faster than the infamously calcified acquisition process typically allows.
“It really misses why the MTA pathway was needed in the first place (because it took too long to even start a prototyping effort under the traditional pathway due to approval timelines),” Matt McGregor, an acquisition expert at MITRE, told Breaking Defense in an email.
Bill Greenwalt, a former Senate appropriations staffer who had a key role in designing the acquisition reform language in question, also worried about the potential for the reporting language to slow what progress DoD has made in reforming the traditional acquisition process, which has over the years come to eat up decades of development before a major new weapon system is ready for action.
The reporting language, he told Breaking Defense in an interview, “is designed to slow the process down to the take these special authorities that allow the department to move faster, and to essentially try to conform them to [the old] peacetime predictive linear model, which of course will ensure that the United States falls behind its adversaries.”
A day after publication of this report, a Pentagon spokesperson provided the following statement to Breaking Defense:
“The Department understands concerns about the increasing number of MTA programs and appreciates Congressional interest in sufficient, responsible, and agile oversight of such programs. The Department commits to providing the requested information in a timely manner, as instructed in the congressional language, while still maintaining the foundational premise of the MTA pathway to rapidly prototype and field capabilities for the warfighter.”
MTAs Born For Short-Term Prototyping, At First
MTA authorities originally were created by Congress in the 2016 National Defense Authorization Act to allow rapid prototyping and/or rapid fielding of breakthrough technologies, in part by waiving certain requirements of federal acquisition law for measuring performance. Under MTAs, program managers can forgo a number of oversight activities such as certain planning reports and independent cost assessments. The law specifically limits the lifetime of MTA efforts to five years, unless an extension is granted by senior DoD acquisition executives.
But over the past several years, some House and Senate lawmakers, as well as at the watchdog Government Accountability Office (GAO), have become worried that the Pentagon and the military services are have been pushing MTAs too far.
Specifically, the FY23 appropriations language questions the practice of using rapid prototyping to actually buy and field operational equipment, and in particular chides DoD for developing large and expensive programs in a piecemeal fashion using MTA authorities.
The latter practice is especially prevalent in recent Space Force programs, including the multi-billion, decades-long Next-Generation Overhead Persistent Infrared System missile warning satellite development effort.
MTA and Section 4021 Other Transaction Authority are the acquisition bread and butter of the Space Development Agency, whose mission is to iteratively orbit large numbers of satellites equipped with new capabilities as they develop. The agency, in fact, was created precisely with a remit to use streamlined acquisition authorities like MTA to enable that iterative process whereby improved satellites go up every two years.
The FY23 appropriations language also bemoans a lack of adequate budgetary and planning information to allow either DoD or Congress to properly oversee progress of MTA programs, as well as for service acquisition officials to manage integration of all the MTA chunks of bigger programs.
The FY23 omnibus act, in the Division C defense statement [PDF] of agreement by the House and Senate, explains: “the spectrum of programs using these types of acquisition authorities ranges from small programs that have already deployed prototypes, to programs that by virtue of their scope and cost would otherwise be subject to reporting requirements and acquisition regulations applicable to traditional major acquisition category I programs.”
The language elaborates:
This is of particular concern as programs increase the use of acquisition strategies that utilize both rapid prototyping and rapid fielding authorities sequentially, together resulting in a ten-year acquisition program, or by purchasing excessive numbers of end-items under the rapid prototyping authorities for eventual fielding, rather than only procuring the number of units required for testing. […]
Further, there is concern that budgeting for these de facto end-items incrementally with research and development appropriations instead of fully funding them with procurement appropriations obfuscates costs and limits transparency and visibility into Services’ procurement efforts.
Detailed Reporting Requirements: Transparency Or Red Tape?
Thus, lawmakers are demanding that the Pentagon’s FY24 budget submission include an entry by the DoD offices of Research & Engineering and Acquisition & Sustainment detailing all programs using MTA authorities and a rationale for doing so, as well as cost estimates and a long-term acquisition strategy for each. They also require the Director of Test & Evaluation (DOT&E) to certify a testing plan for each.
Supporters of MTA programs decry the new requirements as far too stringent.
“Why would the appropriations committee require DoD to report on all current and pending MTA rapid programs to provide rational for their acquisition and contracting strategies, cost estimates in detail, full funding certification, and DOT&E certification and risk assessment of their test strategy? This isn’t required for DoD’s largest MDAP programs,” Modigliani said, referring to major defense acquisition programs.
“The crux of the issue is rapid prototyping and rapid fielding run counter to the traditional, drawn-out acquisition programs where all the requirements are defined upfront and locked down, detailed cost estimates to include lifecycle costs for decades, and programs are locked down to baselines and measured via industrial age systems. Traditional auditors and analysts struggle with a more dynamic environment with prototyping, experimentation, and iterative development/production,” he said.
If followed, Modigliani warned, the requirements would “drastically impede DoD’s rapid acquisition abilities. The Middle Tier of Acquisition pathway is one of DoD’s most valuable tools to rapidly deliver capabilities … to deter China’s threat.”
Greenwalt argued that the language pushed by appropriations committee staff actually is contrary to the desires of lawmakers and staff on the policy committees overseeing DoD, who are publicly pushing a “go fast” acquisition approach to keep ahead of China. The spending committee staff, he charged, are “stuck in a peacetime, time-doesn’t-matter, process-based, bureaucratic, Soviet-style Gosplan world.”
The Hill staffer, however, said appropriators have not received similar complaints from the Pentagon.
“As to criticism, we have not heard from DoD that it negatively impacts their ability to use MTAs. We have been very careful in crafting the language to ensure that it does not hamper the applicability of MTAs in proper circumstances,” the staffer said.
Further, in a Jan. 20 speech to the Defense Acquisition University, DoD Undersecretary for Acquisition & Sustainment Bill LaPlante said “there is a lot of goodness” in MTA programs, praising the fact that some Section 804 prototyping programs “look like their going to be real — they’re going to get to production.”
In particular, he noted the progress being made by none other than the Space Development Agency. “I think the one that I’m watching very carefully is a Space Development Agency, which is looks like they’re on track to deploy low Earth orbiting commercial-based satellites in large numbers the next year or two using … the MTA pathways and commercial contracts,” he said.
A Space Force spokesperson told Breaking Defense that the service is continuing its quest to speed acquisition of space programs, including through the use of MTAs.
“The Space Force, including the Space Development Agency, is committed to leveraging all authorities provided by Congress that help us accelerate the delivery of new space-based capabilities to meet warfighter needs. MTA authorities continue to offer a pathway for rapid prototyping and rapid fielding in two to five years. We will continue to be transparent with Congress on the use of MTA,” the spokesperson said.
