Defense Acquisition Reforms: The Studies Keep On Coming (UPDATED)

Pentagon procurement chief Frank Kendall just released thethird annual “Performance of the Defense Acquisition System” as well asstatus reports he has received from program managers. The Center for Strategic and International Studies last week unveiled “Measuring the Outcomes of Acquisition Reform by Major DoD Components,” which was funded by the Pentagon via the Naval Postgraduate School.

Despite an abundance of data, there is much confusion in the defense industry about where things go from here. There is clearly a desire by the Defense Department to light a fire under its contractors and to shake up the industrial base by recruiting new suppliers from the tech sector. Regardless of what happens with the now deadlocked 2016 National Defense Authorization Act, the idea of finding “alternative pathways” to innovation is here to stay.

Many defense executives have been frustrated that so much of the debate has been about internal government processes — notably the NDAA’s language that would have the secretary of defense delegate major procurement authorities to the individual military services — and less about how the industry can better work with the government to design and build weapons that will give the military an advantage in combat, but also that can be produced at affordable prices and on schedule.

It is a sore subject among defense executives that the Pentagon is looking at Silicon Valley for answers to its innovation challenges. The notion of “alternative pathways” excites a lot of people because everyone is so fed up with the current system. But how that idea will translate into actual work in the defense procurement trenches is still unclear. As one industry insider put it, an alternative pathway is like the second-string quarterback: Always the most popular player on the team who hasn’t made the mistakes that the first stringer has made. But can the backup guy the counted on to perform?

The NDAA will tell the Pentagon to create an alternative path for procurement programs to move faster, and to inject more commercial technology. The details of how that will be applied to specific projects are yet to be hashed out.

Lawmakers have put a big spotlight on internal Pentagon organizational issues — like shifting milestone decision authorities and charging the services penalties for cost overruns — that would have a huge impact on the government side but will not change much in how the industry does business.

A central question that defense executives would like answered is how the Defense Department will rank its priorities as it plans for the future. So far, it has been all about the process rather than the substance.

An illustration of the special attention paid to process issues is the constant back and forth over how the Defense Department buys commercial items. Defense contracting officials spend a lot of time and energy determining whether something is commercial or not, in order to ensure it is priced fairly. Recent revisions to existing regulations have sparked blowback from companies that allege the

Pentagon demands excessive cost and pricing data for products that are privately developed. The uproar has masked the larger question of what commercial products the Pentagon needs that it cannot obtain at fair prices. If the Pentagon wants to work with Silicon Valley, it first has to know what it wants and decide if it wants to pay the asking price before it spends valuable time determining whether the product is actually commercial.

Nowhere in the NDAA or the latest DoD studies is there a guidebook for how the military would channel innovation to tackle national security challenges. Everyone says they want it faster and cheaper but little is discussed about how the acquisition system ought to adapt to changing requirements as the battlefield becomes more complex.

Kendall’s new study on the performance of defense programs paints an optimistic picture of military acquisitions. It provides data that show what works and what doesn’t work.

All that procurement program number crunching still does not answer a major concern within the Pentagon of what specific investments should be made to help U.S. forces deal with savvy enemies.

The issue is how to balance the pursuit of lofty goals like “technological superiority” against the immediate demands to fight today’s enemies who kill American troops with roadside bombs and AK-47s, and fire rockets from the back of pickup trucks.

Richard Ginman, the Pentagon’s former director of defense procurement and acquisition policy, cautioned that the prominence given to “metrics” in defense programs can detract from important questions such as the “output,” or whether the needs of combat troops were met in a timely manner and at an affordable price.

“I applaud efforts to put metrics on how to make decisions,” Ginman said last week at the rollout of the CSIS study. “What we usually look at is process. What is the contract type? Is it the right contract type? But do we understand why we’re doing what we’re doing? I worry about bumper stickers.”

Steven Grundman, a former Pentagon industrial policy director and now a fellow at the Atlantic Council offered one takeaway from the voluminous research on acquisition reforms. “The data says that this is an immensely complex system. And acquisition managers do need better tools and better direction on how to make difficult choices.”

UPDATE: This story was updated with a link to the new DoD report on the performance of acquisition programs.

Topics: Procurement, Acquisition Reform, Defense Department