Cautious Optimism on Procurement Reforms Ahead of NDAA Debate

House and Senate conferees will meet next month to iron out differences over the 2016 National Defense Authorization Act. Of particular interest to Pentagon weapon buyers and the defense industry is whether lawmakers will adopt Senate proposals to shake up the procurement power structure.

Senate language that would shift significant authorities over weapon programs from the defense secretary to the individual military services has surprised Washington insiders, even those who have advocated this move for years and thought it would never happen. And it has galvanized supporters of the status quo who are warning that the proposed changes would reverse recent progress in defense program performance.

Defense experts predict the outcome will be a halfway compromise rather than a seismic shift. They also hope the coming legislation will mark the beginning of what could be a years-long process of repairing a deeply broken procurement system.

“We are not going to invent anything new to fix acquisition,” said retired Lt. Gen. Charles R. "CR" Davis, who recently served as the top military adviser on Air Force acquisition programs.

Davis commended the defense committees for recognizing the current path is unsustainable and for attempting to put Pentagon weapons procurement on track. Legislation, though, will not magically undo decades of bad management. “There is absolutely no new thoughts coming out of any of these discussions that haven’t at one time or another been thought of, used or implemented,” he said in an interview. What is being proposed are “nuanced changes of what’s been done before.”

The troubles in Pentagon procurement, said Davis, in part have been caused by a “lot of people thinking they can fix it by policy or legislation or regulation.”

But he agrees wholeheartedly with Sen. John McCain that there has to be a way to hold officials accountable for missteps. McCain, chairman of the Senate Armed Services Committee, has been the main proponent of the provision to decentralize decision-making power and transfer authorities to the military services.

Davis sees both pluses and minuses in such a move.

When a service faces a major “milestone” decision, such as whether to start production of a weapon system, the advice of the Pentagon’s procurement leadership is helpful, he said. The problem that has festered for years — and ultimately led to the Senate language — is that Defense Department acquisition staffs have grown uncontrolled over the past two decades and created a massive web of red tape that stifles program managers and slows projects to a crawl.

“There is a problem with the role of the AT&L staff,” said Davis, speaking about the large bureaucracy that reports to the undersecretary of defense for acquisition, technology and logistics.

“Many of them have never run a major program. There are hundreds, if not thousands of those folks. They all feel they have vested power.” The Defense Department’s “better buying power” guidance in 2010, especially, has emboldened AT&L staff to “review and provide direction to a program,” Davis said. With so many overseers and no clear chain of command, program managers are distracted from their primary duties to manage cost and schedule.

The Senate bill would transfer milestone decision authority from Undersecretary of Defense for AT&L Frank Kendall to the senior acquisition executives of each service. That would not necessarily fix the larger problem, Davis cautioned. “In some cases, a discussion with Kendall and a small group brings value added. It’s not whether AT&L is the MDA [milestone decision authority] or not. It’s about what you have to do to get there, and how bastardized the system has become by giving the staff what appears to be huge power to redirect things, but no accountability for what they do.”

Program managers are constantly second-guessed by service staffs, AT&L and congressional staffs, said Davis. “You put so many people in charge of a program who have the ability to rewrite your document and redirect your decision” that even simple steps can take months or years. “Power is so diffuse and we no longer have clear definitions of the roles of key players. That’s why we are having issues. … I am with Sen. McCain. Program managers ought to be held accountable, be fired if they screw up, but they need to have the authorities to make decisions.”

The case could be made that the F-35 joint strike fighter might have benefitted from a service-centric chain of command rather than centralized DoD management, said Davis, who oversaw the Air Force F-35A. In the early days of the program, then Chief of Staff Gen. T. Michael Moseley pushed to have Air Force prototype aircraft fielded sooner and to have new features added incrementally. But the Pentagon rebuffed that idea. “If McCain’s service-focused plan had been in place you may have had a different program now. The F-35 authority was so diffuse. There was no one in charge the way it was set up,” said Davis. “There is something to be said about the intent of Sen. McCain’s proposal.” How to actually implement it is up for debate, he added.

On the F-35, there is much blame to go around. Fundamentally, Davis said, the program got on the wrong track the day the acquisition strategy was signed by then Undersecretary for AT&L Jacques Gansler. Besides the much criticized overlap between development and production, the aircraft hinged on dozens of unproven technologies that were way below the maturity level that should have been accepted. “All on a cost-plus contract with all that unproven technology and unproven acquisition processes. There is no doubt that we have lived with the consequences of what was signed that day.”

The NDAA, while well intended, should not be trying to put patches on flawed policies, said Davis. Congress should not be stepping in to perform the functions of a program manager.

“We need to stop and reset,” he said. Congress should write a clean-sheet description of the duties of the major players: the program managers, the contracting officers, the program executive officers, the senior acquisition executives and AT&L. “I think we would end up with a much cleaner system, and more accountable. Until we do that, we’re going to continue to chip around the edges,” he added. “Very few PMs have had a sense of accountability because they have no sense of having the authority to implement the decisions they’re supposed to be accountable for. The system is an aberration of anything that would make sense.”

Other experts doubt McCain’s plan will fix the accountability problem. The services each have “particular motivations” and need supervision, said former acting Deputy Defense Secretary Christine Fox. “I do believe it is important for the secretary of defense to have responsibility and oversight over major acquisition programs,” she said at a Lexington Institute forum on Capitol Hill. Citing the F-35, she said it was an example of the services wanting something badly enough that “they were able to convince themselves that they could indeed have it for less than anyone would have ever predicted, and sooner than anyone would have ever predicted.”

Fox warned that diminishing AT&L authority could undermine Congress’ 2009 acquisition reform legislation that established a Pentagon office — that Fox ran for several years — to produce independent cost estimates of major programs. “Taking the secretary and undersecretary out of the acquisition loop runs the risk of rolling back some of the recent progress that we have seen,” she said. To ensure accountability, “what you need is independent cost estimates with teeth.”

Fox faulted unstable budgets for the negative trends witnessed in program costs and schedules. When budgets are hard to predict, as they have been in recent years, “we don’t cancel, we slip and slide. That’s what we always do under budget pressures and uncertainty.”

Other former Pentagon officials support McCain’s initiative. Tina Jonas, former Defense Department comptroller, said the services should have a bigger role in military acquisitions. “In conversations I have had with military officers, I hear a desire to be brought into the process,” she said. “That would increase accountability.”

Undersecretary for AT&L Kendall has been vocal that he opposes the Senate reforms. His former deputy Andrew P. Hunter, who is now at the Center for Strategic and International Studies, was careful not to take sides in remarks at the Lexington forum. His current boss, CSIS President and CEO John Hamre, has been a persistent advocate of strengthening the authority of the services — a return to how it was before the passage of the 1986 Goldwater-Nichols Act.

“The chain of command issue is central to the more controversial provisions in the Senate bill,” Hunter said. Changing the current structure, however, does not guarantee success, he said. “We should focus on making the process successful.”

Topics: Procurement, Acquisition Reform, Defense Department