The organization and function of the Defense Department is so antiquated that it may well prove unable to deliver the changes that the nation needs. So, even as it focuses on potentially existential threats to the nation, somebody must address the conversion of the “horse and buggy,” which is the present-day Pentagon, to make it perform like a modern turbocharged vehicle.
The challenges are many, but if there is focus on simplicity the department could be improved while dramatically reducing the problems faced by small contractors. The payoff for even modest improvement could be felt most by the smaller contractors, as they are most at risk under the current system. The focus should be to enlarge and modernize commercial interaction done by the department to make it less adversarial, more collaborative, transparent, accountable and sensitive to business cash flow needs.
There is a remarkable asymmetry between the government and industry with respect to fundamental contractual and administrative execution.
The first problem is one of predictable communication and consistent government performance. As an example, when processing a government contract for a simple procurement action inexplicably takes nine months versus the three months promised, the impact at the company level is complex and potentially devastating. This problem is exacerbated when the contracting entity does not provide any communication regarding revised performance timelines. Delays such as these put small businesses in a no-win position. Many businesses live in a world without adequate cash flow and little to no backlog. So, in this situation, waiting until contract award means that long-long lead production items from the manufacturing base will not be on hand when work should start. Production lines that go dormant do not come back to life easily or quickly. Workers trained and available today can’t be stored on dry ice for the six month delay; they are either laid off or employed elsewhere.
So, for many small firms in this situation, there is no choice but to take risk and begin committing precious resources on an un-awarded contract. This in turn intensifies the dependency of the small contractor on the government who now truly controls their fate.
The government must establish and live with reasonable performance standards and timelines. When it fails to do so, it should pay compensation promptly, just as the contractor is now required to pay “consideration” when he/she fails to meet government performance standards.
When both sides have leverage on the other it will drive improved communication and partnership. Presently the burden is entirely one-sided and gives the department unfair power.
In the current calculus people don’t count — either inside or outside of government. The Defense Department should institute modern relationship metrics to measure how individual teams align to their respective missions.
Major consulting firms with international portfolios such as Gallup and Korn-Ferry assist Fortune 500 firms in executing individual employee surveys measuring internal engagement, leadership and performance annually. The first year results of such a survey done on the department’s corporate structure — to distinguish it from the operational force — would probably stun its leaders. They would be given the opportunity to confront the reality that organizational alignment, leadership, teamwork, sharing and collaboration are all capable of major improvement when compared with global norms for like-sized entities. Gathering these results on an annual basis will afford defense leaders the opportunity to evaluate leadership development programs, workforce business processes, software and a host of other factors directly relevant to improving performance. Probably as important as anything, leaders who cannot accept candid feedback on issues will be forced to confront the reality that they must either embrace the input or leave.
In a parallel initiative, there needs to be lateral entry from business to government service at the mid-tier levels. This would bring an infusion of additional talent to a limited entry profession and augment the experience and knowledge base in the bureaucracy.
In addition to internal feedback, there must be measurement of relationships with contractors. The contracting process has to be made more collaborative and timely. A lot can be learned by comparing the business experience of two recent contracting processes. One was a standard government request for proposals to make a $80,000 piece of utility equipment for delivery over a 10-year period. The other was a commercial RFP for a similarly priced comparable item for multiple-year performance. Both were competitive contract awards with multiple competitors. The differences between the two processes could not have been more obvious. The defense-related RFP was 70 pages; the commercial RFP was 27 pages. The commercial RFP was readable and straightforward; the other was complex and contained endless references to additional government standards. The commercial RFP encouraged innovation by outlining desired characteristics and inviting new approaches, the other set specific standards for performance.
The commercial process encouraged continuous dialogue and explanation of performance priorities while the DoD process was terse and regulated by legalistic formality. The dialogue with the commercial partner enabled the prospective partner to educate its customer on new and evolving technology and materials. The government’s enforced silence did nothing to generate shared understanding. But most importantly, the commercial process timeline from initiating contracting action through prototype production was 10 months whereas the government’s was two years.
In a world where collaboration and speed are essential to success, the antiquated government process is increasingly costly and inefficient.
The process of transforming major enterprises and complex relationships requires courage and persistence. The difficulty of implementing change in an organization as large as the Defense Department should not be the argument for failing to start. It is already one or two decades behind leading-edge commercial businesses and is falling further behind.
Nothing recommended above is new, revolutionary or suspect — it’s just good practice.Stephen M Speakes, a retired Army lieutenant general, is president and CEO of Kalmar Rough Terrain Center, in Cibolo, Texas. The views expressed are those of the author and do not represent those of any organization.Photo: NASA