My distinguished colleague from New Mexico, Mr. Runnels, asked the Defense witness, “Who made this decision to put it-the level of R. & D. to be performed in-house-at 35 percent and what is the rationale? What is the magic in 35 percent?” The response of the witness was “The issue was should we stay at 43 percent or come down to 23? It was essentially a judgment decision. I cannot defend the exact percentage”
… I want to see our acquisition process produce weapons systems in the 2- to 5-year timeframe that it took back in the 1950s. I want to make absolutely certain that we do not do away with our in-house capability that has taken decades to establish just because one or two or a handful of misinformed people want to reach an arbitrary in-house to out-of-house ratio. At the same time, I do not want to foster incompetence. If there are nonproducers in the in-house system, then we should fire them, change the management or close them.
That was Chairman Richard Ichord (Missouri) in 1977, “Hearings on Office of Management and Budget Circular A-109: Major System Acquisition Policy,” Before the Research and Development Subcommittee of the Committee on Armed Services, House of Representatives, Ninety-Fifth Congress, First Session (Nov 1 and Dec 1, 7, 1977) and Second Session (Apr 6, 10, 14 and Sep 18, 1978).
We still look fondly of the 2- to 5-year development timelines of the 1950s decades, and along with the Chairman I speculate that perhaps the in-house bureaus and technical services had a large role to play. That figure, roughly 43 percent of R&D performed by the government rather than contractors, may seem absurdly high today. But in the 1950s it was the strong contention of the Army and Navy that roughly a third of the funds should be managed in-house to keep up the technical talent necessary to evaluate contract decisions. And so knowledge based in “hands-in-the-grease” work rather than fact-checking documentation may ultimately accelerate of progress.
I think the Kessel Run software factories around the Department are showing a resurgence of in-house development. Of course, a lot of that work is in concert with contractors, but the government manages and performs the work more directly rather than relying on the proposals of primes.
It should have been obvious decades ago that relying on program offices to procure contractor-devised systems would create stovepipe capabilities. Without in-house enterprise thinking about common components, enabling tools, and interfaces, the systems would never talk to each other.
30 or 40 percent in-house is quite a lot. I don’t have much of an opinion on what percent should be performed in-house, but I feel fairly confident about the direction of change required.
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