Moving the ball forward on acquisition reform

These days, at the Pentagon and on Capitol Hill, reform in the way the Pentagon buys weaponry remains a hot topic. Under Secretary of Defense Frank Kendall released his “Better Buying Power 3.0” vision for improvements in how the Department of Defense acquires weaponry, Chairmen Thornberry and McCain of the House and Senate Armed Services committees are leading the way on respective bills to change legal code for such acquisitions, and industry as well as many other actors and voices are pushing their ideas.

On June 10, Brookings convened a group of some 20 specialists from the think tank world, industry, and government circles to discuss various ideas for moving forward. Some of the ideas expressed in the discussion are summarized here, according to Chatham House rules, by which the comments of specific individuals are not revealed but the general substance of the conversation is conveyed. Jeff Jeffress of Censeo Consulting Group helped me kick off the discussion; a wide range of other viewpoints were added to the mix as well.

My own ideas, as recently published in a Brookings paper called “Pentagon Acquisition Policy: Three-Quarters Right, One-Quarter Broken,” include the following recommendations:

• Use Federal Acquisition Regulations (FAR) Title 12 more often, to allow purchases of commercial or commercial-like goods by the Pentagon, with far fewer regulations and requirements than for traditional “Title 15” goods,
• Streamline oversight by Pentagon officials for certain types of contracts (for example, when there is competition, or a close commercial equivalent, to provide some market-based discipline on pricing, making detailed documentation of costs by a unit like the Defense Contracts Management Agency less important),
• Follow the “JIEDDO model” for more technologies—accelerating purchases of key technologies in the way that the Joint Improvised Explosive Device Defeat Organization developed and bought mine-resistant ambush-protected vehicles (MRAPs) and other technologies with fewer requirements for documenting attainment of various milestones, in order to protect troopers in Iraq and Afghanistan as quickly as possible,
• Break down information technology purchases into smaller batches, using open-source and modularity concepts to make sure that various “batches” can subsequently talk to each other, and
• Protect the intellectual property rights of firms selling technologies to the government, especially when most of the investment was conducted by those firms themselves, perhaps for commercial technologies that are close analogues to the systems built for the Department of Defense.

Some of these ideas beg other questions, such as which specific Pentagon contracts can in fact be transformed from their current character into something like a Title 12 or JIEDDO arrangement? There are other big issues I did not address in my paper, such as what changes to the DoD acquisition workforce would be most sensible at this stage?

Thus, the group at Brookings was asked to help generate a number of ideas and observations—and to help Brookings do its part to keep the current national conversation about DoD acquisition reform moving forward. I would group the ideas into two categories—concerning people and DoD organizational/bureaucratic issues on the one hand, and concerning types of contracts and contractors on the other. Specifically, these were some of the key points:

People and organization

• The multiple lines of communication within the DoD acquisition world are excessive, involving program managers, deputy executive officers, executive officers, and then the higher ranks of the DoD acquisition, technology, and logistics office. Perhaps one of these layers could be eliminated.
• Certainly, the amount of paperwork required of these acquisition executives should be scaled back. Undoubtedly, a culture of excess caution and fear of approving projects prematurely should be modified to expedite efficiency and timeliness as well. Often, processes and procedures put in place to prevent abuse are based on just one or two past problems, or mistakes that are not likely to recur. Creating special procedures to be sure they don’t recur may not be worth the time and trouble.
• Within the acquisition workforce, younger professionals should probably have the opportunity to do rotations to learn from best practices in other parts of the broader defense community. But once good program managers are found, they should often be kept on the same job for longer than the 18 to 24 months that is now the norm, to enhance continuity and expertise.
• The total size of the DoD acquisition workforce may not be excessive given the amount of work, and paperwork, demanded of it today.
• However, if one could streamline oversight on most projects and programs, and dramatically reduce it on others, perhaps the workforce could be scaled back at least modestly.
• The acquisition workforce is often seemingly biased against seeing industry make much of a profit. It also tends to feel discouraged from open communications with industry. Both of these realities can be counterproductive.
• In terms of Congressional action, the Senate has often tended to want to prevent abuses and mistakes—adding procedures to reduce the likelihood of such problems, even at the cost of more regulation. The House has wanted, especially this year, to accelerate the pace at which weapons are developed and procured. In some ways, these instincts run at cross-purposes with each other.
• Moreover, one key idea in circulation on the Hill now—moving more responsibility for overseeing programs from the Pentagon’s Acquisition, Technology, and Logistics (AT&L) office to the military services—has engendered significant resistance from the Pentagon. It is not clear that the services have the capacity to carry out such new responsibilities; if assigned them, they might need in effect to recreate (or borrow) much of the existing AT&L workforce to handle the job. But perhaps they would also be somewhat less stringent in the application of various oversight mechanisms, thereby simplifying and speeding the acquisition process. So there could be pros and cons to such a change.

Contracts and contractors

• It is desirable to foster competition and more actors/players in the DoD acquisition world.
• That said, DoD must be careful not to spin its wheels soliciting additional bids for contracts where the additional bids tend just to add time to the process; similarly, the protest process after a competitive bid is awarded adds time as well, even if it is necessary at some level.
• Since the majority of costs for most systems are in the operating/maintenance domains, it is important for DoD not to overlook ways in which the procurement process can lower subsequent operation and maintenance costs, if a system is built in a way that makes it more durable and serviceable. Creating the possibility for greater use of performance-based logistics contracts for maintenance should be a major consideration in acquisition policy.
• DoD needs to be careful not to allow relatively minor modifications of a system originally built according to commercial code (Title 12) to disqualify it, subsequently, for continued Title 12 status. This happens too often, even for systems that are clearly still commercial in their main character.
• It is essential to use Title 12 and related mechanisms for computer contracts if new players are to be induced to compete for DoD contracts. But even that may not be enough to persuade many firms in Silicon Valley and elsewhere to compete for Pentagon contracts. Specifically, even if legislation and regulation allow greater use of commercial computer hardware and software, many firms will doubt that DoD is committed to employing these options, so it will also be important that the Pentagon create successful precedents that DoD takes special care to encourage and shepherd.
• As a rule, having two firms make a given system, in order to encourage efficiency and lower costs through a dual-buy approach to competition, is smarter when DoD need not spend huge sums on duplicative research and development efforts. It is less likely to be desirable when research and development costs are high.

Lots is happening in Pentagon acquisition policy, and Brookings, along with its dedicated colleagues making up the national security industrial base working group, intends to continue to follow and contribute to the debate.