Defense acquisition in the United States is quite unique. It is a monopsony that has monopolies embedded within it. People’s lives — even our nation’s survival — depend upon it…
The management of defense acquisition has far more in common with the business world than with either government or military functions, but we build the highest possible barriers to keep people with business and management experience out of government. The government personnel system, designed in part to insulate workers from political capriciousness, more often than not simply insulates individuals from accountability — all while making government service increasingly unattractive.
The defense acquisition process-along with most of our nation’s challenges, such as the provision of energy, building an economy, providing modern healthcare, protecting the environment and rebuilding our infrastructure-are deep in technological implications, yet of the 535 members of the nation’s legislature only two individuals possess degrees in science and six in engineering.
Over the years, those in the administrative branch responsible for managing acquisition programs have become increasingly unlikely to have had hands-on experience in business or management. In short, we are seeking to manage without experienced managers-and when we do find an experienced manager — military or civilian — they generally are moved out of their position before they have the opportunity to manage. The issue most assuredly is not one of dedication or native ability: the issue is a lack of relevant experience and the freedom to exercise that experience. One hundred managers with one year’s experience should never be considered to be the same as five managers each with 20 years’ experience.
In 1965 the Fitzhugh Blue Ribbon Panel summarized the problem in a single sentence: “Everyone is responsible for everything and no one is responsible for anything.”
So what is to be done? By and large the answer to that question is well understood-in fact… What is required is simply Management 101. That is, decide what is needed; create a plan to provide it, including assigning authority and responsibility; supply commensurate resources in the form of people, money, technology, time and infrastructure; provide qualified leadership; execute the plan; and monitor results and strenuously enforce accountability. Ironically, little of this requires legislation — but it does require massive amounts of will…
That was a report by Norm Augustine to a Congressional subcommittee titled “The Acquisition Conundrum.” He sets everything up pretty well but then I disagree sharply with with conclusion. If the same reforms are attempted continuously for 50 or 70 years, and they simply do not work, I think it is inadequate to blame the acquisition workforce for their incompetence and lack of incentives (which is precisely what most “experts” told Congress in 2014 — see the link above).
Yet the DOD management framework was designed between roughly 1945 and 1970. It is dominated by industrial era thinking. Norm Augustine is himself a product of the industrial era. Because the stakes of being wrong are high — the nation’s future security might be at risk if we’ve entered a new economic paradigm and continue to commit to industrial era policies — we should at least consider measures that embrace uncertainty and complexity rather than trying to tame them.
As Rickover said when he ran into wrong-headed policies back in 1968:
After the “nickel letters” experience, I can better understand the frustration that prompted Cromwell to say to the representatives of the Church of Scotland: “I beseech you, in the bowels of Christ, to think it possible you may be mistaken.”
Congress will certainly be needed to reform the defense acquisition system. The program-oriented budget, which presumes that we can peer into the future like Laplace’s demon, is the central impediment to management by real options, to the assignment of authority and responsibility, to benefiting from uncertainty rather than being broken by it.
It requires that budgets are articulated 2 years ahead of appropriation, which may take another 5 to 10 years to turn into an expenditures. That lock-in problem puts a premium on prediction and control, rather than harnessing uncertainty by trail-and-error experimentation with after-the-fact controls.
Only Congress can change the orientation of the budget back into a primarily organizationally-based structure. That would better align with how most other countries budget — they do not marry the program and the budget. They are related constantly, but are not the same thing. This seems like a mundane technicality, but in my mind it is the single most important change that can actually lead to better outcomes.
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