Previously, I discussed the messaging from the Reagan National Defense Forum that “Time is running out with Silicon Valley.” It was intimated that major acquisition reform is not needed, and instead defense officials need to change their culture in order to award major production contracts to at least a few firms in the next few years to keep interest alive.
I understand the hesitancy for more acquisition reform. Frank Kendall, former USD AT&L and now SecAF, prefers the term acquisition “improvement” to reform. But there is always the chicken-or-the-egg problem with culture and regulations.
Can acquisition personnel, who often feel that programs are far out of their personal control, actually decide on their own to award major production contracts to promising new entrants? Can they just read the Defense Acquisition Guide, and figure out how to find tens or hundreds of millions of dollars, fill out for thousands of pages of documentation, go through 50+ layers of approval, and just get it done? What about an acquisition executive, or even the DepSecDef?
Well, technically, the new acquisition pathways like MTA and SWP allow officials to “tailor in” documentation/approvals, so they wouldn’t even need to get a waiver from the higher ups! So why doesn’t it happen?
I’ve heard stories of folks writing requirements documents in a couple days, wrestling up money from a canceled program, doing quick contracts, but they’re all a “work in progress.” The more money involved, the more the process creeps back in.
Anyway, here’s my take on where DoD is in acquisition improvement:
Contracting
We are seeing backlash to OTAs in public and private conversations. Through August in FY21, OTA growth excluding Covid was concentrated in just 3 out of 255 funding offices, most of the rest have decreased OTA usage year over year. Stan Soloway has noticed lots of “FAR-creep” into OTAs and worries that it might end up like FAR 12 commercial items which had 150+ clauses added back in since the 90s. OBTW, there’s also a backlash to FAR 12, particularly commercial “of a type” (meaning, it isn’t the exact item bought on the open market). IDIQs have promise but aren’t using all the streamlining and exemptions available to it, and seem to be hampering contractor planning.
Acquisition
While the DoDIG’s favorable report on MTA was welcome, many people are now taking jabs at the new pathways. They were OK in the early days because the irregularity allowed things to happen, but over the last two years we’ve seen a dozen functional DoDIs reassert their bureaucratic dominance. I predicted the rise of the functional backlash when MTA’s 5000.80 came out and took heat for it, but I think I’m pretty well vindicated.
Perhaps not Acquisition, but the new JCIDS guidance didn’t seem to go in the right direction. MTA and SWP pathways are actually in some ways requirements experimentation/reform that former VCJCS Hyten couldn’t address through the JCIDS.
Budgeting
I think the previous reform efforts were all good but sabotaged in the scaling phase by the budget process. The RDER fund and BA 8 are relatively small in size and potential. But the PPBE Reform commission in the FY 22 NDAA could be massive. Let’s presume it is led by forward looking people (a potentially fatal presumption). Recommendations would start coming out in FY24ish, filter into NDAAs the next 1-3 years, and then implementation in the years after that. So budget reform will not save the current cohort of companies entering defense.
Former Navy acquisition executive Hondo Geurts had a LinkedIn poll about what’s the next thing to fix in acquisition (with 1,399 respondents):
- Budgeting, 31%
- Barriers to entry, 11%
- Contracting, 48%
- Other: 10%
The fact budgeting even got 31% can be seen as a win, because it seems to have been off everyone’s radar since the Jackson Committee hearings in 1967-1969 period (well, some people had it on their radar but literally no action… Participatory Mgmt, Goldwater-Nichols, and the Rumsfeld era do not count as budget reform!).
DoD can cycle all it wants in contracting and acquisition reform, but if the last 5-6 years failed to break through, then there’s really no future hope until this generation of leaders retire. DoD has to address the real problem of governance (PPBE, requirements, oversight) if it wants to deter China and Russia in the near and medium term by demonstrating its resolve to rapidly field asymmetric military capabilities.
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