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National Defense > Blog > Posts > Defense Acquisition Chief: ‘There Are No Simple Solutions’
Defense Acquisition Chief: ‘There Are No Simple Solutions’
By Sandra I. Erwin



Defense Secretary Leon Panetta recently told a group of weapons procurement officials that the performance of many defense acquisition programs has been “unacceptable.”

During an awards ceremony in which he praised the Pentagon’s acquisition managers for their dedication, Panetta said the purpose of defense procurement is simple: “It’s about supporting the war fighter and it's about protecting the taxpayer.” But far too often, he said, “those two complementary goals are often hampered by runaway costs, constant changes, constant revisions, production delays, and a lot of that leaves us with less than what we need, and it usually comes in later than when we need it.”

The financial wreckage from years of badly managed programs is significant: $50 billion worth of canceled systems since 2001. Several big-ticket projects such as the F-35 Joint Strike fighter and the Navy’s Ford-class aircraft carriers are not yet out of the woods.

Every defense secretary since at least the Nixon administration has sought, mostly unsuccessfully, to reduce waste in Pentagon programs by rewriting policies, changing regulations and increasing oversight.

The Pentagon unveiled another batch of procurement reforms Nov. 13, known as “better buying power 2.0.” The 1.0 version was rolled out in Sept. 2010, when then-Defense Secretary Robert Gates warned that the post-9/11 money gusher was drying up, and the Defense Department had to clean up its contracting act.

During a news conference where they discussed the reforms sought in the 2.0 version of better buying power, Pentagon officials acknowledged that they do not expect things to change overnight, simply because the Pentagon’s procurement system is too large and complex — it acquires $400 billion a year worth of products and services, and has a workforce of 151,000.

“There aren’t easy, simple solutions that are going to ‘reform’ acquisition and make everything infinitely better overnight with one or two policy changes,” said Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall.

The new guidance iterates much of what was in the Sept. 2010 policy and echoes the recommendations of dozens of previous acquisition-reform studies: The Pentagon must do a better job defining weapons “requirements” so systems are affordable to build, contractors should be incentivized to cut cost, military systems should take advantage of cheaper off-the-shelf technology, and the acquisition workforce should be better trained.

Kendall said the 2.0 rule book has a few new twists, such as emphasis on building weapon systems that are export-controls friendly, in order to boost the U.S. industrial base. The Pentagon also has revised previous guidance that called for greater use of fixed-price contracts. Kendall said there had been an “overreaction” to that policy, and that fixed-price contracts are not always preferable, especially in research-and-development projects. “The Defense Department is not good at estimating development costs. [Historically] we have overrun development costs by 30 percent,” said Kendall.

Deputy Defense Secretary Ashton B. Carter, who led the 2010 reform initiative, said he was confident that the latest revisions will move programs in the right direction. “Better buying power 2.0 is a recognition that we can and must do more,” Carter said.

Photo Credit: Defense Department

Comments

Re: Defense Acquisition Chief: ‘There Are No Simple Solutions’

I would disagree with Undersecretary Kendall that there are no simple answers to defense acquisition improvement.  To paraphrase Ronald Reagan, there are no easy answers, but there are simple answers.

Better Buying Power 2.0’s (BBP 2.0) seven focus areas and 36 initiatives show the commitment of senior DOD acquisition
leadership in improving the acquisition process. Unfortunately, BBP 2.0 is largely more of the same. More of the same
additional layers of oversight, improvement‐by‐fiat buzzword approach. Initiatives such as “Eliminate requirements
where cost outweigh benefits” and “Reduce cycle times while ensuring sound investment decisions” will accomplish
nothing.

It is paradoxical that, as our weapon systems get more complex, the organizations and processes to manage those
systems must get simpler.

Radically simpler.

The April 2012 Defense Business Board’s study, “Linking and Streamlining the Defense Requirements, Acquisition and
Budget Processes” highlights the problems in DOD balkanized acquisition structure. To quote from the study: “The
Department of Defense’s (DoD) acquisition system continues to take longer, cost more, and deliver fewer quantities
and capabilities than originally planned.” We are living with an acquisition process designed in the ‘70s and ‘80s, with
every reform since from the Packard Commission, Goldwater‐Nichols act, and SecDef Perry’s Acquisition reform
initiatives simply piled on top of an increasingly dysfunctional system. BBP 2.0 is more of the same. Again, to quote
from the April 2012 study “Despite multiple efforts by Congress and the Department to improve the system, the end
result is still three stovepipes, each of which is a multi‐layered bureaucratic process that is not linked to the others.”
This quote confirms that each service, with its own acquisition bureaucracy, has multiple duplicating functions both
internally and across services. The net result: infighting, lack of accountability, and a waste of resources. I challenge
anyone to sit down and write the organization chart for the services acquisition functions. If it doesn’t end up looking
like a plate of spaghetti, you haven’t done it right. And organizational spaghetti isn’t conducive to providing cutting edge products to the warfighter on time and within budget.

Speaking of spaghetti, look at the defense acquisition lifecycle wallchart. Can anyone profess to understand it? What is
the likelihood world‐class companies like Apple or Toyota would use such a process?

If the goal is better buying power, then simplify organizations and processes.

Start with these two efforts:
1) Radically simplify the DOD Acquisition Lifecycle.
2) Disband the disparate service specific acquisition organizations and reorganize under a single DOD organization.
Jeff Windham at 11/30/2012 12:19 PM

Re: Defense Acquisition Chief: ‘There Are No Simple Solutions’

I disagree sharply with Jeff Windham's recommendation that the acquisition organizations of the individual military departments should be disbanded. True, most defense ministries in NATO have unified procurement organizations, but the sheer size of the American activities leads me to question just how much more efficiency could be obtained with amalgamation. What's lost in that amalgamation is the opportunity for interservice competition. A considerable body of literature points to this as an important source of military innovation.

So, rather than the reorganization he recommends, I suggest considering returning to the relatively decentralized approach of decades ago, when the Army, Navy, and Air Force had more room to pursue their own approaches. Even if they didn't learn from each other willingly, their institutional survival impulses would drive them to emulate their more successful peers' better practices.
James Hasik at 11/30/2012 8:51 PM

Re: Defense Acquisition Chief: ‘There Are No Simple Solutions’

Actually, I rather liked the under secretary's line about ease and simplicity. I do agree with Jeff Windham that a much simpler set of processes is needed, but getting there might not be easy or even simple. The acquisition workforce is trained to employ the byzantine regulations of the FARS and DFARS. As one long-time military procurement analyst put it to me recently, every bureaucrat has his own page or two over which he is king. The process works badly and slowly, but it is a process. Remove that suddenly, and suddenly people accustomed to their creaky ways of doing business have no guidance. As not all are the most enterprising folks, a lot of retraining may be required. So simplification is an important path to follow, but it will actually take some time to implement.
James Hasik at 11/30/2012 9:06 PM

Re: Defense Acquisition Chief: ‘There Are No Simple Solutions’

What I have noticed with the System Acquisition community is that there is no true fear of losing one's job if one fails! This culture includes the civilian government, military and contractors. All three organizations are a mirror image of each other. I can't tell you how many meeting that I have facilitated at PM shops that I have asked the proverbial question "Are there any adults who can make a decision?"...everyone looks at each other and there is nervous laughter and I end up making strategic decisions, which I am often not happy to make, in order to move a program forward. All three organizations are risk averse because they get slapped on the wrist if they are wrong...but they rarely lose their job.
Most PM shops have good people, but they too often have leadership that does not lead, but oversees. Think about how many O-5/6 PMs get lousy fitness reports when a program goes south?..I would guess very few.  With the current 2-3 year career officer rotation period in a PM shop, a PM could lay a bunch of landmines, due to poor management, and they could explode 2-4 years down the road, when the PM has moved on to their next assignment.
With the civilian government workforce paid an estimated 25-35% more than the private sector for like-kind work and with the civilian government workforce productivity 20-30 % less than that of the private sector for like-kind work we have a real problem Scottie!!!
Ron Giuntini at 12/1/2012 8:10 PM

Re: Defense Acquisition Chief: ‘There Are No Simple Solutions’

In response to James Hasik and Jeff Windham,

I read the presentation from the April 2012 Defense Business Board’s study, “Linking and Streamlining the Defense Requirements, Acquisition and Budget Processes” and I really liked the recommendations presented. 

My interpretation, though, was that the overall recommendation was not for one, unified DoD system.  There was an emphasis on standardizing doctrine and simplifying paperwork, but their primary recommendationss were based on linking the requirements, budgeting and acquisitions processes; not combining service-specific acquisitions into one big DoD acquisitions machine.

We've tried this to horrible result.  It's called Joint Acquisitions.  Ever hear of the JTRS or the JSF programs?  These are perfect examples of what was described in the final report of a 2004 Joint Defense Capabilities Studies by E.C. Aldridge which stated, “Much of DoD’s focus is on Service programs and platforms rather than capabilities required to accomplish Combatant Command missions. A Service focus does not provide an accurate picture of joint needs, nor does it provide a consistent view of priorities and acceptable risks across DoD.” 

The JTRS and JSF programs are also perfect examples of failed programs in terms of budgeting, acquisition timeframe, and capabilities.  The reason?  A misconception of the term "simple".  Simple does not mean jamming as much into a box as possible because 5 different customers all want to use the box for their own purpose. 

"Simplifying" the process, the way I see it and the way it is described in the Defense Business Board's study is firmly establishing specific requirements early in the acquisition lifecycle.  Requirements are the base objective of any acquisition effort.  Our greatest acquisition accomplishments, accomplishments that have truly changed the world, have been based on this simple strategy.  The M1 Abrams, the HMMWV, and the UH-60 Blackhawk, even the revolutionary SR-71 and F-117 started as short lists of firm requirements. 

Combining the acquisiiton process into a big DoD machine means that the joint requirements are broad and ever-changing.  Have you ever worked on a project that changed its core objective half-way through the process?  The missions of the four branches of service and special operations community are inherantly different from one another.  Why wouldn't their acquisitions also be different?
Dustin Blanchard at 12/5/2012 1:55 PM

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