Procurement Issues That Congress Won’t Fix

The new foreign policy mantra in Washington is that the world is on fire. The nation’s weapons procurement machine, meanwhile, keeps partying like it’s 1999.

The Defense Department and Congress are embarking on a new effort to rewrite procurement legislation and the Pentagon introduced an updated “better buying power” policy to make the military’s procurement bureaucracy more nimble and skilled at buying world-class technology.

These initiatives are commanding the spotlight these days, along with a full court press by the Pentagon and congressional defense hawks to increase military spending. But there has been little discussion about the larger problem in weapons acquisitions, which is that the Pentagon is investing most of its procurement dollars in yesterday’s technology.

Military pundits like to describe the current situation as an “inflection point” where the military has to decide if it wants to continue to double down on what it knows best or make bold moves to stay ahead of rapidly changing enemies and threats.

“We are in a chase trying to figure out where this world is going,” says retired Army Lt. Gen. David Barno. Meantime, the military is planning for the future based on an outdated strategy and is under massive economic pressures caused by budget cuts but also by its crushing personnel and overhead costs that keep rising unconstrained.

Further, the military’s weapon-spending priorities are out of touch with reality, says Barno, a former top commander of NATO forces in Afghanistan and a prolific scholar. Most of the Pentagon’s procurement budget is being consumed by expensive programs that were conceived for a different world, he says. And there is little to no investment in technologies the military will need in 2025 like cyber weapons and extended-range, superfast platforms to overcome enemy “anti-access” strategies. This imbalance could be potentially disastrous for the United States, Barno warns. “I’m not sure this is the best investment portfolio to put the majority of your dollars into,” he says during a panel discussion at the Stimson Center.

He predicts the 21st century will see three overlapping types of conflict that Barno calls “wars of silicon, wars of iron and wars in the shadows.” The military is overinvesting in conventional “wars of iron” where it clearly dominates, and not nearly enough on advanced technology to fight the “wars of silicon” where it faces daunting competitors. Enemies will be armed with modern technology and highly sophisticated weapons including biological agents and cyber arsenals to attack critical infrastructure.

As the defense establishment in Washington gets bogged down in debates over the procurement process and sequestration, the nation’s adversaries are gaining access to technology that could eventually counter current U.S. advantages.

Too much money is going into a small number of weapon systems — notably the F-35 joint strike fighter and the Navy’s littoral combat ship — that were conceived in the 1990s and will not help the United States dominate in the future, Barno says.

The Pentagon’s leadership recognizes this problem. They blame it on an acquisition pipeline that takes decades to produce systems and cannot possibly keep up with the pace of change in world events and technological innovation. Defense officials and Congress say the solution is less red tape and simpler contracting rules. The sponsor of new acquisition reform legislation, Chairman of the House Armed Services Committee Rep. Mac Thornberry, R-Texas, insists the Pentagon must become more agile. “I hope that by streamlining the process, improving accountability and eliminating outdated regulations, we can start to get some of that edge back.”

Such wishful thinking stands in contrast to the reality that the Pentagon is too bloated and entrenched in its way of doing business, observers point out. The Defense Department’s fixed costs — most attributed to large “back office” staffs and overhead — keep going up, and “we don’t have money for the things we really need,” Barno says. “We are operating the most inefficient organization imaginable in the 21st century. Pay, benefits, healthcare are eating more and more of the defense discretionary dollars. There aren’t enough dollars left to buy weapon systems.” And Congress in this case has not helped as it continues to reject Pentagon proposals to close bases and shrink inventories.

A new push the Pentagon began last year to inject innovation into defense programs is a good start but is not likely to achieve results unless there is a radical change in the procurement culture, says Randy Starr, defense industry analyst at the consulting firm Strategy&.

The Pentagon badly needs advanced technology in areas like cyber warfare, electronics and big data that are exploding outside the defense industry, Starr says. “How do you get access to technology outside the establishment? That’s hard,” he adds. “Saying they are going to change the acquisition process is one thing. Doing it is something else. At the end of the day, if the government doesn’t make it easier to do business with them, commercial companies are going to walk away. They don’t need the military market.”

An effort like the Pentagon’s better buying power is a “noble aspiration,” Starr says. “But the proof is going to be in actually changing acquisition procedures and rules to make it easier for DoD to get access to technology.” So far there is no sign that is happening. Tech companies only see barriers around the military market. “The last thing a commercial company is going to do is subject itself to federal accounting regulations or cost accounting disclosures. It’s not worth the price.” The exceedingly complex defense procurement regulations should only be used to make unique weapon systems, says Starr. “There is no way they can use the current regulations to acquire the innovative technology from companies that don’t want to do business that way.”

In conclusion, innovation is evolving at such a pace and such a magnitude that for the military to keep up and maintain access to the most advanced technology, it will have to dramatically change what it buys and how it buys.

Topics: Defense Department, Procurement