Defense Acquisition Chief: ‘There Are No Simple Solutions’

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’sFord-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 unveiledanother batch of procurement reforms Nov. 13, known as “better buying power 2.0.” The1.0 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 the2.0 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

Topics: Defense Department, DOD Leadership, Procurement, Acquisition Reform, Defense Department