DoD Procurement Chief: Acquisition Programs Stuck in Cycle of Failure

2/6/2012
By Sandra I. Erwin

The Pentagon's weapon procurement woes are well known. They are mentioned in countless speeches and blue-ribbon studies, but never successfully tackled, said the Defense Department’s acting acquisitions chief Frank Kendall.
“I keep giving the same speech and talking about the same things,” Kendall said Feb. 6 in a speech at the Center for Strategic and International Studies.
“There’s a certain 'Groundhog Day' feel to this,” Kendall said.
A combination of an entrenched culture, management incompetence and bad contractor performance has snowballed over the past decades into an avalanche of embarrassing program failures.
Kendall said he has seen many attempts at acquisition reforms under various guises, but the problems that existed in the 1980s and 1990s continue to this day.
“Sen. McCain was pretty much spot on,” said Kendall, citing the Dec. 15 Senate floor speech in which Senator John McCain, R-Ariz., called out the Pentagon for wasting billions of tax dollars on military boondoggles.
What happens is that too many programs get started and “we find out later on that they were unaffordable,” said Kendall. “We have got to stop that.”
Buying weapon systems has become a cliché for Einstein’s definition of insanity: Doing the same thing over and over and expecting different results.
“There’s an awful lot of ‘conventional wisdom’ in our business on what works and what doesn’t,” said Kendall. Contracting trends such as “concurrency” — the overlapping of development, testing and production — and fixed-priced buying are embraced and rejected in cycles, he said. In the past two decades, “We have been for-or-against concurrency four or five times, and for-or-against fixed price contracting four or five times,” he said.
“We are now going through another cycle” where concurrency has fallen out of favor — with the F-35 Joint Strike Fighter as the cautionary tale — and fixed-price contracting is back in vogue even though it has resulted in several procurement failures in the past.
The use of concurrency in the Joint Strike Fighter program has caused untold damage in time and money, Kendall said. “Putting the F-35 in production years before the first test flight was acquisition malpractice,” he said. “It should not have been done. But we did it.”
The JSF management was self-deluded by optimistic predictions that digital simulations could replace actual flight tests. “Now we’re paying the price,” he said. “We’re finding problems in all three variants” of the F-35.
Kendall has instructed the Pentagon’s procurement bureaucracy to question the conventional wisdom and to rely on actual data to make decisions. “The sign outside my door says, ‘In God We Trust, the rest must bring data,’” said Kendall. “We tend to retry things every 10 years or so because we don’t remember what happened the last time they were tried,” he said. “That is because we don’t have any data. … It takes data and in-depth analysis to understand what really works.”
Kendall acknowledged that it will be difficult to turn things around unless managers are held accountable. Because programs extend over decades, “We make decisions and we don’t see the impact for years. … We’re not around to take credit or blame for what we did,” he said. Having hard data to hand down to successors would help, but common sense business practices also are needed, said Kendall. “Acquisition is not a science, there’s always some art in this.”
A key contributor to the current procurement woes is a deficiency of skills in smart business practices within the Defense Department, he said. When military leaders sit down to chart their equipment investments, they often fail to abide by one of the standard rules of capital planning: Don’t commit to buying something if you don’t know you can afford it. The price-is-no-object approach worked over the past decade when military budgets were soaring, but will not be acceptable in the coming downturn, Kendall warned.
If the portfolio being modernized is combat vehicles, for example, officials must decide how many they should replace and how many they should repair or upgrade. On that basis, said Kendall, “you derive a cost cap for the new program. It’s standard capital planning: Make investments we can afford.”
When such a drill was conducted for the Army’s Ground Combat Vehicle program, Kendall said, “It was a revelation to the G-8 [chief of resources] of the Army how much money he was going to have for other things.” That exercise led the Army to change its funding priorities and delay the start of the program.
“That’s our problem,” said Kendall. “We start things we shouldn’t have started.”
He also blamed current troubles on a convoluted bureaucratic method for deciding what weapons the Pentagon should by — known as Joint Capabilities Integration Development Process. “It’s too cumbersome,” and it’s not clear it produces any valuable outcomes, Kendall said. “We don’t want people setting pie-in-the-sky requirements.”

Topics: Procurement, Acquisition Reform, Defense Department

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