We’ve seen this pendulum swing drastically over the last few decades. In the middle of the 20th Century we saw thousands of companies iteratively delivering game changing capabilities from massive rockets to stealth technology. The military industrial complex grew in the subsequent decades, but the Last Supper in 1993 led to massive consolidation around a few primes. The DoD focused its investments in fewer major weapon systems with winner-take-all contracts that defined industry segments for a decade or more.
With the decline of competition, cost increased while innovation decreased. DoD was vendor locked with its prime contractors and starved the pipeline of future systems. Even with billions in science and technology and research and development projects each year, only a small percentage of solutions crossed the Valley of Death into fielded systems. This was due to the massive Pentagon bureaucracy restricting program changes, risk of Nunn-McCurdy breaches by expanding scope, and perverse incentives by defense primes. Some Pentagon executives compounded the issue by waging a war on contractor profits, which discouraged new R&D investments and drove talent to commercial markets with higher margins.
That was a nice article from Pete Modigliani over at Mitre, “Pentagon Wars 2020: The Return of the Bureaucrats.” Read the whole thing.
Pete presented an image of the pendulum that swings from Speed/Agility/Innovation on one end and Rigid Control/Oversight on the other. He characterizes the 40s/50s Sunkworks Era as representative of Speed/Agility/Innovation and the early 2000s as representative of Rigid Control/Oversight. Over the last three years, Pete depicts the Pentagon moving from Rigid Control down past the mid-point and slightly on the side of Speed/Agility/Innovation. However, he warns that there are some forces starting to push the pendulum back.
In the chart below, I overlaid some of my perspective on Pete’s image. First, I show that the Overton Window of what is seen as acceptable policies for discussion is narrow and biased toward Rigid Control/Oversight. There should be continued conversation to help normalize additional policies in favor of Speed/Agility/Innovation.
Below that, I give some examples of policies which have helped the Pentagon move fast. This includes expedited requirements and Urgent Operational Needs Statements starting in 2004, the Delegation of Milestone Decision Authority starting around 2015, the authorization of Middle Tier and Other Transactions Authority/Commercial Solutions Openings in the 2016 NDAA, and then the rise of software factories like Kessel Run, enterprise software tools, and innovative use of Small Business Innovation Research (SBIR) funds through pitch days starting around 2017. I ague that the next steps in acquisition reform that will move the pendulum further to Speed/Agility/Innovation is (1) International Trade in Arms Regulations (ITAR) as well as issues of classification and clearances; (2) Program budget process and the Planning-Programming-Budgeting-Execution (PPBE) process; and then most of the rest will be culture, workforce, getting board/committee structures working, etc.
I also speculate in red what are some of the forces pushing back on Speed/Agility/Innovation. I wrote a blog post back in January 2020 about these forces which are poised to shift power back to the Office of the Secretary of Defense. Some of these forces include: (1) the Joint Artificial Intelligence Center (JAIC) and the Cybersecurity Maturity Model Certification (CMMC) which got started in 2018. The JAIC was originally intended by former SecDef Ash Carter to the the “AI Czar.” CMMC also adds significant processes. (2) In 2019, we saw the rise of the Intellectual Property cadre and the Pricing cadre, both under OSD leadership. IP is taking a larger role and is being emphasized in the acquisition pathways, particularly software. I haven’t heard too much about the Pricing cadre, but it seems to be a reaction to the TransDigm scandal and DoDIG reports, and points to a reassertion of cost/pricing data requirements. And (3) the release of the new DoD Instructions for the Adaptive Acquisition Framework seem to have given a fair amount of power back to OSD. For example, in Middle Tier, USD(A&S) will chair and advisory board made up of numerous OSD functionals.
Of course, this speculation is all about potential power. It’s not that Ellen Lord and others currently in office want to micromanage the services. Indeed, none of these trends indicate a move back toward Rigid Control/Oversight. Momentum is still toward Speed/Agility/Innovation. But it could be a turning point. A couple other indications include: (1) DoDIG report that the service acquisition executives don’t track ACAT II and III programs; (2) GAO report slamming Advanced Battle Management System (ABMS) for agile/devops/modular approach; and (3) the Pentagon audit. Perhaps most of all, if the nontraditional companies that have been trying to enter defense in the past few years don’t start transitioning into programs of record in larger numbers, then we could lose a generation of entrepreneurs willing to tackle defense problems.
Eric,
Why do you see the Overton WIndow as not including the entire spectrum? Do you think the Skunworks and more agile type methodologies/organizations are unacceptable or too radical for consideration of the mainstream public? Seems to me that there is more room for maneuver here than is depicted (although I completely agree with your red items being indicators of a swing back towards rigidity and control). I am thinking of digging into the ABMS thing a little more – I can’t believe GAO would slam a program for doing what it seems everyone wants acquisition to do – become more agile and responsive.
I think you make a good point. Certainly changing the program budget process is still too radical for real policy discussion. I think a number of people see it as a problem with little chance of being addressed. Because the PPBS is the master controller of everything that’s done in the DoD, we can’t be very close to the Skunkworks agile methodology until we rid ourselves of the biggest waterfall process of them all.