Congress is looking to slightly expand the new appropriation for software, BA 8, from 9 pilot programs to 12. Jared Serbu has a great article on it, and follows the story to the huge new step:
Another big culture change for both appropriators and for DoD acquisition managers would be to start allocating funds not just with colorless money — but by portfolio, instead of allocating funds to individual programs. Outside advisory boards have urged the department and Congress to adopt that approach too.
DoD has also asked Congress for permission to pilot the concept. Lawmakers haven’t yet embraced it, but Defense officials think it would pair well with the idea of no-color money, said Lt. Gen. Duke Richardson, the top military official in the office of the assistant secretary of the Air Force for acquisition, technology, and logistics.
“Let’s say you just took air dominance — take all of our air dominance programs and put them together, along with reporting mechanisms back to Congress that are very transparent. If we have a program that stumbles a little bit, it would be nice if we could very quickly pivot that money to something else that’s waiting and ready to go,” he said. “I think we could put in mechanisms that would allow us to report that change, but would at least stay inside that same mission area … I would love to be able to explore that. We want flexibility, but we also want [funding] on time so that we’re not constantly in a re-plan.”
But [AFMC commander Gen. Arnold] Bunch said getting Congress’s assent for that kind of flexibility comes back to trust — another reason to make sure the software color of money pilots stay scandal-free.
Think of it this way. The ability to move money in the Department is constrained in two major ways. First, by appropriation (which is a combination of service and “color of money“). Continuous development and operations (devops) in modern software breaks the clear, linear distinction between RDT&E, Procurement, and O&M in a system’s lifecycle.
Second, by program element. While this is a lower level item in the budget, it is higher level in overall importance. It determines what a program is in the first place and whether it gets funded at all. While a military service perhaps has to manage across a few appropriations, it has to manage hundreds of program elements!
Transforming appropriations helps you accelerate an already programmed effort. Transforming programming itself helps you accelerate the entire enterprise through portfolio management. BA 8 does not mean DoD will be able to adopt new products any faster than the 2-5 years ahead of need. It does not consolidate requirements, funding, and acquisition, remove layered decisions, or improve program choice. BA 8 does not provide flexibility to move money to higher valued uses.
Consider: Every time a leader wants to move money from one program to another it is because in his or her estimation, DoD gets higher value for the money and improves outcomes. The fact these leaders are constrained — they cannot make program tradeoffs — every time they want to move money is a real opportunity squandered. And DoD eats those costs on a daily basis, which manifests as lower capabilities, lower readiness.
By simply consolidating program elements into logical portfolios, defense decisions will be run by capable leaders rather than diffused across numerous functionals with no responsibility to deliver capability to the warfighter. I recommend organizational portfolios like PEO Ships in the Navy or PEO Digital in the Air Force — which by the way also represent capability portfolios. This aligns with traditional defense management as well as industry best practices.
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