[War] United States: Acquisition Reforms

[pentaj2 at Scranton.edu]

"Acquisition Reforms"
6 February 2007
President John Williams
United States
=========================
PRESIDENT ORDERS MASSIVE ACQUISITION OVERHAUL
Tells Armed Services Committees in White House meetings on FY14 
budget "The game must change"

Kevin McLaren for Army Times

Washington (Feb 6) - In a surprising outcome of the long-expected 
daylong meeting between the DOD senior leadership, the Congressional 
Armed Services Committees, the White House's National Security Team, 
and officials from the Office of Management and Budget, the President 
has decided to sidestep Senate delays in confirming his nominee for 
Secretary of Defense Julius Abbot and order massive changes to the 
Defense acquisition system on his own initiative.

In the largest of these changes, each of the Services' acquisition 
commands are being assembled into the United States Supply Command, 
responsible, in the President's words, "for acquiring everything the 
American servicemember might use, wear, fire, consume, or otherwise be 
issued." This command, to be headed by Army General Michael Mazzuchi, 
will act much as USSOCOM does for service Special Operations' Forces.

Hot on the heels of this change comes yet another from the Commander 
in 
Chief: Acquisitions will be decided on a Defense-wide basis. As was 
noted by the President, "While each service may use their equipment 
slightly differently, and special needs on occasion neccesitate new 
equipment, in many cases, the differences are not in the equipment 
needed but in the tactics needed in employing said equipment. To name 
some examples: The MP guarding an Air Force flight line does not need 
a 
significantly different pistol from the MP guarding an Army classified 
workspace. The Marine Corps and the Army are in many cases 
distinguished not by -what- they use, but -how- they use it. They use, 
in too many cases, more or less the same basic equipment, but acquired 
through two, separate, acquisition processes." This process, in a 
further change, will include the Coast Guard; while it remains a part 
of the Department of Homeland Security, its role as a national defense 
force and the increasing size of its acquisition needs place its 
equipment situation beyond the capabilities of many civilian federal 
agencies to properly oversee and control, according to the President.

This, in many cases, will result in savings to the government through 
reduced administrative expenditure, and greater volumes in equipment 
and supply purchases. While the services will retain the ability to -
request- certain things, the actual decisions will be made at the DOD 
level. Where services are requesting similar items, an attempt will be 
made to hammer out a common solution. In response to Press questions, 
the President indicated that while a reduction in personnel employed 
was expected to be one of the benefits, as duplicate positions are 
streamlined, no layoffs or reductions-in-force were seen as necessary; 
as billets became vacant, they would be eliminated where possible.

Congressional leaders, when asked, responded somewhat positively to 
the 
changes. While the consolidation does raise the spectre of base 
closings in the next BRAC round, service leaders were confident that 
any base that lost activities to the President's consolidation 
measures 
would be able to find new work. Particularly noted was the 
President's "Working Greenspace" initiative presented in the Interior 
Department budget request, which would see military bases as linchpins 
for habitat corridors; this could see many bases, no longer usable as 
supply or acqusition posts, used as training areas, with unused land 
being restored to wilderness, which would increase training space 
available to the services.

When asked, the President outlined the structure of the new command. 
Below the Headquarters would be functional directorates; hypothetical 
examples being a 'Ground Weapons Directorate', 'Aircraft 
Directorate', 'Maritime Systems Directorate', 'Individual Clothing and 
Equipment Directorate' and so forth; much would be left to General 
Mazzuchi as to how the Command would be organized, and the President 
noted that the organizational structure he presented was merely one 
example out of many possibilities.

The acquisition process would, as expected, change drastically: The 
services would present annually to the Joint Acquisition Direction 
Board their proposed needs, stated generally. With the exception of 
Role-specific equipment (ships for the Navy as one example), each 
proposal needed to have the support of at LEAST two services, and all 
proposals needed to have a defined role and have full technology 
development completed, with all 
critical technologies matured before a project left the technology 
development phase. The JADB (composition to be determined) would 
winnow 
down the projects and write proposed requirements for design and 
development. Any number of technology development studies could be "in 
the system"; not all were going to lead to actual fielded equipment, 
the President noted, and that was not necessarily a bad thing. 
However, 
a system would only be allowed to reach concept development if all 
technologies were mature, and the concept development process would 
see 
the assignment of the program manager who would be attached to the 
program from the beginning of concept development until either program 
termination (which, it was emphasized by the President, would -never- 
be held against the PM if it were to occur during concept 
development: "Concepts may wind up not working. That is the nature of 
development. Learn what you can, and go on. The PM's job is not merely 
to get a project from paper to the field, but also to be able to 
say 'No, this concept isn't ready. Hold it back.' or 'No, this concept 
won't work, kill the program,'" he explained) or the end of fielding, 
when at all possible. Concept development programs would be fewer in 
number than technology development programs, and would be limited. 
Programs that reached the end of concept development would have the 
firm concept of the system nailed down. The technologies needed to do 
the task would be mature. As an example: To continue the example, An 
aircraft would have a firm description of its tasks and the 
requirements it had to meet laid down. 
The technologies for the aircraft would be mature. The system 
development and design phase would then take the system from paper 
studies 
to blueprints. SDD would be asking "How to we get an aircraft with X 
requirements and Y technologies built? What would it look like?" 
System 
Design and Development would NOT be complete until ALL engineering 
drawings were released in their final versions, a prototype had been 
built and tested (when at all possible), and production processes were 
under control and statistically measured as mature.

Additionally, contracts would be dramatically changed: Cost-plus 
contracts would be an exception, not the rule. As much as practical, 
the government should attempt to use fixed-price contracts, with 
rigorous performance and warranty clauses. "The reality is, there are 
a 
good number of firms that get 80 to 95 percent of revenue from 
Government contracting, particularly Defense contracting. If they 
screw 
us over in cost or quality, why -shouldn't- the Government then refuse 
to do business with them? Yes, that means the company will likely go 
under. Yes, -that- would mean job losses. Well, I hate to say this, 
but 
so be it. 95 percent of the people who work on government contracting 
in general, and defense contracting in particular, are actually among 
the best people you could ever meet. Let me say that now. I have known 
some of the best, most hard-working, most patriotic people...among 
contractor employees during my time in the Army and Congress. But that 
other 5 percent causes no end of trouble. The other five percent, that 
tiny fraction that sees government contracts as easy money, that 
forgets what results from their work, that sees it as 'just another 
job', that five percent will make life harder for everyone else," the 
President noted.

In addition, a blue-ribbon panel would be appointed by the Secretary 
of 
Defense to look at the issue of ownership of technical data. "At 
present, for a variety of reasons, contractors generally own technical 
data. Say, for example, the data needed to manufacture a rifle. 
Government hired em to develop, government is the beneficiary...But 
the 
work product produced, the manufacturing design data and blueprints 
and 
such, is owned by the contractor. Okay, there are some good reasons 
for 
that...But it also tends to hold the government hostage. We couldn't, 
say, take the F35's specs and say 'Okay, here is an F35. It's been 
built. We need more. Who can do the job at best quality, lowest cost?' 
No, instead we're stuck with the original contractor," the President 
noted. "Better, some say, to make people sweat. Yes, you can earn a 
profit off that design, but an aircraft designer, for example, should 
perhaps live more like a contracted writer, not a manufacturing firm. 
We then should be taking the design and going 'Okay, we have a design, 
who's up for the manufacturing of X units to Y specs at no greater 
than 
Z price per unit?'

"There are reasons to argue that. Plenty of reasons. But one problem 
does arise: Who, besides the US Government and countries the US 
Government authorizes sales to, is going to be legally -buying- a 
combat aircraft, say? We're not talking about really mass-demand 
products, after all. I think most people would be hard-pressed to fit 
a 
tank in their garage, despite how much a 120-milimeter cannon might 
improve one's ability to get past traffic jams."

This proposal, even in referral to a blue-ribbon commission to 
consider 
the issue, has sparked vociferous industry opposition, but also 
Congressional support.

The President concluded his remarks with a statement that seemed to 
indicate the broad direction of the White House's thoughts on 
acquisition reform.

"I hate to give investment advice from this podium, but...Both defense 
contractors and their shareholders need to get off the quarterly-
earnings crack pipe, because the government is not going to support 
the habit. Not anymore. -Everything- about government contracting is 
*long-term*. Quit thinking a quarter or two, start thinking a decade 
or two. You'll never make massive profits on this stuff, or at least 
you shouldn't. But, on the other hand, neither are you ever likely to 
find government going out of business. And though we may wish 
otherwise, I'm not sure it's a good idea to figure that we'll ever be 
able to abolish war, either."
---
Sources:
http://www.federaltimes.com/index.php?S=2627488
http://www.acqnet.gov/comp/aap/index.html
http://www.gao.gov/new.items/d07406sp.pdf
http://www.gao.gov/new.items/d07388.pdf
---
Actions:
1. US Supply Command (Acronym to be decided by...those who decide 
acronyms:)) established, along with JADB.
2. All acquisition programs to be decided at DOD level, as mentioned 
above.
3. Acquisition process to be reformed, to focus on -knowledge-based- 
acquisitions.
4. Contract reform. It sounds drastic, it isn't. Cost-plus was first -
really- used in the 70s because of the high inflation of the time.