When we think of alternative acquisition, that tends to be other-transaction authority and middle-tier acquisition.
For [Jonathan] Etherton, these prototyping mechanisms amount to a “lot of really cool fun stuff,” but it’s all weighted toward the beginning of the process. “Move. Do it quick, and all this kind of thing. But when you talk about doing something to scale, where it becomes a major capability, [it] looks to me a lot like the old system.” Because of the program focus of planning, programming, budgeting and execution (PPBE), everything that gets funded as an official, enduring program has to be a program of record. So, sooner or later, everything has to turn to the FAR [federal acquisition regulation].
That was from an excellent article, “FAR Not FAR” in Army AL&T magazine. I agree that OTAs and MTAs do little to get around the most important process in the entire acquisition system — PPBE. I say that because it is the only avenue to money. A sweet acquisition pathway and contracting vehicle mean zilch without money. As Lt. Gen. Joseph McNarny testified in 1944: “The control of money, of course, is what not only makes military forces work but it makes the world go around.”
However, I would disagree with Jon by saying the PPBE process to a major program of record doesn’t necessarily mean the contracting vehicle has to revert to the FAR. For example, the Army IVAS program is transitioning into production with Microsoft using Other Transactions. Production OTAs are up over $800 million total for DoD in FY 2021. They’re relatively small and spread out, but in theory it can be done. I think the formalization of programs through the PPBE, however, requires so much time and documentation that you might as well go with the FAR. The FAR, ironically, also means much less scrutiny from legions of bureaucratic checkers.
The article goes on to quote me:
“There are many issues with MTA and OTA, but the important one here is that they don’t accelerate funding. For example, MTA was passed in the [fiscal year] 2016 NDAA along with a Rapid Prototyping Fund that was supposed to provide a ready pool of funding—but the fund no longer exists. So even if you can get an MTA-to-requirement lineup within a few months and move to an OTA contract, you still have to wait three to five years after an approved requirement to work money into the president’s budget.”
And here’s a little more:
But it is unarguably the case that PPBE is not built to facilitate innovation, at least not technological innovation at the speed that needs to happen today. That system was supposed to go into place in about 1950, Lofgren noted in an October interview with Army AL&T, but the Korean War put that plan on hold. When he became defense secretary in 1961, Robert McNamara adopted program budgeting. For Lofgren, the PPBE system represented “a radical break from your liberal [democratic] traditions, and it was actually an instantiation of Soviet planning methodologies. And now we just take that for granted. We don’t realize how antithetical” that is to the traditional American way of doing business, he said.
In his writing, Lofgren is advocating not for improving PPBE, but for seeking an alternative for resource allocation that is informed by commercial practices, international norms and the traditions of financial management in the United States. So many of the ills that afflict acquisition, he said, stem from the system being centered not on funding the organization developing the program, but on the program itself… But Lofgren isn’t advocating for its wholesale ouster. Instead, he’s arguing, “Any change should move deliberately.” One of the first steps to increasing budget flexibility, he said in a November email exchange, “is to improve program reporting and analysis so that the department can build trust with its stakeholders.”
Lofgren is not alone. Both armed services committees, in their versions of the National Defense Authorization Act for the 2022 fiscal year, have earmarked funding for a commission to study the PPBE system, Lofgren said.
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