More inklings that OSD will be taking power back from the services

For the past few years, acquisition reform has brought with it a delegation of decisions from the Office of the Secretary of Defense down to the military services. Some evidence that the trend has peaked and will start reversing include:

• the rise of CMMC cybersecurity regulations,

• a new OSD chief of Intellectual Property,

• the Joint Artificial Intelligence Center,

• USD(A&S) asserting control over Middle Tier Authorities,

• and perhaps the DOD audit provides USD(Comptroller) some authority as well.

Here is another inkling in the same direction. The DOD Inspector General found poor management of smaller programs by the service acquisition executives (SAEs) — despite the fact that such management was intended to be delegated another step down to the Program Executive Office (PEO). The SAEs are only the decision authority for larger ACAT IC programs, while IIs and IIIs can go to the PEOs or even Program Managers.

The complaint from the IG centered around the fact that the SAEs didn’t have at their fingertips up-to-date information on smaller ACAT II and III programs. But if the SAE did have such information, it would have meant burdensome reporting mechanisms were in place at the PEO level, all of which would defeat the purpose of delegation. In other words, either smaller programs were delegated in name only and in which case the IG would have found no fault, or the SAE delegated programs to the PEOs in fact and the IG finds mismanagement.

More attention should be paid to program outcomes rather than procedural aspects. Of course, that is difficult, and requires something like project historians to delve into the question of whether outcomes are improving with delegation. The less interesting question is whether top management has full insight into a bunch of delegated programs.

The DOD IG recommended that USD(A&S) lead a common data reporting framework. Naturally, this would increase USD(A&S)’s ability to micromanage service programs. Use of middle tier authorities by the services gives USD(A&S) the right to micromanage. And so the shift in power back toward OSD in some cases already underway.

Here’s some of the DOD IG’s findings:

Army, Navy, and Air Force Service Acquisition Executives (SAEs) did not appropriately identify or monitor whether their Departments’ ACAT 2 and 3 program costs and schedules aligned with their respective ACAT designation. For example, in our sample each Department had programs, in their respective acquisition databases, that were not appropriately identified, monitored, or both, including:

• 21 Army programs, valued at $8.8 billion, out of 65 Army programs with estimated total acquisition costs of $22.5 billion,

• 24 Navy programs, valued at  $16.8  billion,  out  of 40 Navy programs with estimated total acquisition costs of $21 billion, and​

• 33 of 55 Air Force programs, 16 of which were valued at $9.7 billion (Air Force acquisition officials did not provide cost estimates for the remaining 17 programs that we reviewed).

These conditions occurred because the SAEs delegated their ACAT 2 and 3 program oversight responsibilities to their respective Program Executive Offices (PEOs) and did not perform required reviews of their Department’s ACAT 2 and 3 programs.

 

As a result, the Army, Navy, and Air Force cannot accurately account for programs and program acquisition costs of up to $144.4 billion dollars. Specifically, the SAEs did not know:

• the total number of ACAT 2 and 3 programs within their respective Departments;

• individual and total program costs of ACAT  2  and 3 programs;

• whether programs were approaching or have exceeded an ACAT threshold, requiring a higher level of oversight; or

• ​whether ACAT 2 or 3 programs were within budget and schedule.