Pentagon Hard Pressed to Absorb Next Round of Acquisition Reforms

Rep. Mac Thornberry

The Defense Department’s contracting bureaucracy has struggled to stay ahead of an avalanche of new dictums that have come down from Congress and the White House over the course of the Obama presidency.

Yet another round of sweeping reforms looms later this year as the House Armed Services Committee’s “Acquisition Agility Act” makes its way through the legislative process. HASC Chairman Rep. Mac Thornberry, R-Texas, says he fully understands the burdens of compliance and implementation of new measures, but he is convinced that these are necessary changes that will help the

Pentagon move technology faster to troops in the battlefield.
Thornberry unveiled a draft bill last month and is expected to release an updated version next week in the chairman's mark of the 2017 National Defense Authorization Act before the full committee takes it up.

The Pentagon will be given a 2019 deadline to carry out the new reforms, although Thornberry recognizes that some rules could take longer to flow into the procurement system.
“We asked DoD to tell us how they plan to implement the changes,” Thornberry told reporters April 21. “I tried to be sensitive to the fact that some changes do take time.”

Thornberry said he has made some revisions to the language in the initial draft — in response to objections raised by Pentagon officials and industry groups. But the centerpieces of the bill will remain in place. He wants the Pentagon to start acquiring cutting-edge components to update existing weapon systems. He is directing the Defense Department to buy “open systems architectures” as much as possible so they can be updated frequently, and to get into the habit of “prototyping” and “experimenting” with technologies before the government commits to long-term contracts. He also wants the Pentagon to create a more inviting business environment for small businesses, startups and other innovators that typically shy away from government work.

“We need to get top technology to the war fighter faster,” said Thornberry.
Defense officials and contractors agree with the spirit of the new legislation, but worry that the procurement system is still playing catch-up and will be hard pressed to absorb a fresh load of directives.

The Pentagon is still putting into action measures from the Weapon Systems Acquisition Reform Act of 2009, past NDAAs, the defense secretary’s “Better Buying Power” initiative and other executive branch actions and regulations that are issued to implement legislation.

The Thornberry bill has thrown into sharp relief the difficulties of mandating changes across a huge procurement bureaucracy like the Pentagon’s. Rules have to be drafted, sent out for comment and revised. “This takes a lot of time,” said Roger Jordan, vice president of government relations for the Professional Services Council. There is also a cultural change associated with procurement reforms, he said during a conference call hosted by Bloomberg Government. The workforce needs to be trained on changes and incentive structures. This being an election year, implementation will be delayed further than it normally would.

Bloomberg analyst Cameron Leuthy said the basic tenets of defense procurement — how to buy faster, smarter, cheaper — won’t change, but he predicts DoD will “struggle with competing goals.” It has to keep prices low but still foster competition. It must increase procurement of commercial goods and services while ensuring prices are fair. And it must simplify the acquisition process while reducing risk to the government.

The Pentagon is now up against the “snowball effect” of years of reforms, said David Berteau, president and CEO of the Professional Services Council. There is widespread confusion among contracting officers who “can only deal with the guidance they have” but also are aware of the expectations that they have to comply with new laws.

In the case of the Thornberry bill, “it will be years before you see the results in place” as rules trickle down into solicitations and the contracting process. Last year’s NDAA had more than 50 provisions on defense procurement. “At some point we're going to have to stop and catch our breath,” said Berteau. For now, “they're moving ahead.”

Jordan credited Thornberry for being “willing to take criticism to get to a better product.” But he cautioned that regulatory burdens and “compliance stuff” are significant and “cut both ways” because they could drive some businesses out of the market. Contractors also have had to cope with a litany of White House executive orders in recent years that have increased the cost of doing business with the federal government, Jordan said. “Without taking significant steps to look back and not add new things, it's only going to get worse.”

Berteau said the Acquisition Agility Act would pose new requirements both on the Pentagon and on contractors. “We've seen little to reduce the burden on industry.”

Thornberry anticipates more pushback on his bill and will consider making further revisions over time. “We are going to have to keep working on acquisition reform constantly,” he said. “I do not pretend that we are solving [everything] with this bill.” The procurement of contractor services is one area that has yet to be dug into. “There’s a whole list of things I want to get into,” he said. “I realize some of the changes are going to take time because they [contracting officers] have to do their job every day while these changes are taking place.” Extending the implementation deadline until 2019, he added, “gives us a chance to make adjustments.”

Former HASC general counsel and deputy staff director Roger Zakheim, now a government affairs attorney at Covington & Burling, said Thornberry is prepared to fight this battle for the long haul, as he is poised to stay at the helm of the armed services committee for six years. “Thornberry knows that when it comes to defense acquisition, he can’t legislate out of the problem. Legislation is just one tool he has,” Zakheim said April 20 at a National Defense Industrial Association forum. “He knows he has to keep pressing the DoD leadership.”

Photo: Defense Dept.

Topics: Procurement, Acquisition Reform, Defense Department