In this special episode of the Acquisition Talk podcast, we listen into an event that explores how defense programs can harness modern development practices. Center for Government Contracting executive director Jerry McGinn moderates a panel with DIU director Michael Brown, head of strategy at Anduril Industries Zachary Mears, and Deputy PEO for Ground Combat Systems James Schirmer. They discuss ideas brought up in the Acquisition NEXT report recently released by Mason GovCon including adaptive requirements, continuous market research, and modular open systems.
Download the full-text transcripts.
In the episode, Jim Schirmer describes how in the new optionally-manned fighting vehicle, the Army is trying to control the architecture and define the key interfaces. This would allow companies to keep the intellectual property to their black boxes inside the interface boundaries while releasing government from the vendor lock of being beholden to the prime for all upgrades. “For us, this is this is new territory, so it’s way too soon to know.”
Zach Mears from the new defense entrant Anduril described the barriers to entry associated with long sales cycles and continuing resolutions, issues that rarely plagues commercial business. This can be a lot for companies to tolerate, especially if it is low profitability and only represents a few percent of their revenue. He argues the government needs to award and incentivize companies based on value rather than reducing everything to a labor hours. By doing so, government ignores issues of employee skill and use of modern software techniques. This focus on value is easier when evaluating functional prototypes rather than paper plans. At Anduril, Zach said, “We believe that risk to delivery as well as the risk to return on capital investment on capability should rest with industry.”
Mike Brown argued that 11 out of 14 of the defense modernization priorities are led by commercial firms, meaning DoD must have a “fast follower” strategy for adopting and integrating commercial tech. In this world, “You don’t need to start with requirements, the commercial market has already built it.” Usually defense official think the longer they criticize paper designs they will get to the right answer. However, this reliance on prediction indicates hubris. The alternative is an iterative approach, akin to how aircraft in the 1950s, can help align DoD with commercial processes.
Here are a few good quotes:
- Zach Mears: “I think the prognostication from Marc Andreessen, now almost two decades ago, that software has been eating the world — It seems like for DoD the meal is too un-gamely.”
- Mike Brown: “Relying on RFIs or industry days is a way to ensure that we keep the ecosystem closed and we don’t invite new people.”
- Jim Schirmer: “From that CDD we derived a system spec. It was lengthy we, I think we referenced like 114 mil specs in there, which for us was half what we usually do.”
We will be hosting a second panel on Acquisition Next discussing Contracting Strategies for Modern Software. I will moderate an excellent panel: Florence Kasule, Director of Procurement at USDS; Eric Obergfell, Director of Contracts at AFRL; Caitlin Dohrman, President/GM of Improbable US Defense & National Security. You can register for that on Tuesday March 22 at 1300 EST here.
Challenges of User Collaboration
Jim Schirmer discussed how General Hodne from Army Futures Command mentioned that the IVAS program started without a detailed set of requirements, which allowed the program office and contractor to navigate towards solutions that the Army would never have thought to ask, and away from solutions that soldier didn’t really want. But that was a unique case in some ways that is difficult to apply to other programs like OMFV:
They [IVAS] were in a sole source relationship. Soldiers could go hang out with Microsoft engineers and soldier opinion could be provided. Whereas when we were trying to do build our our Section M for our RFP, there was a desire to have soldier feedback on prototypes be part of source selection criteria. And the lawyers were very uncomfortable.
What if Sergeant X likes the seat being low and Sergeant Y thinks the seat should be higher up?. How much adjustment is allowable and what’s opinion? Or, what if we have a mediocre crew on this particular vendor’s vehicle and a really good crew on this particular vendor’s vehicle that somehow skews the results?
… Our system is geared toward ensuring fairness more than effectiveness. And we never successfully navigated how to make use of most soldier feedback.
That fixation on “fairness” requires predefining all the specifications in Section L of the contract solicitation and then evaluation criteria in Section M. But that can mean that military users do not get what they want because so much of the “value” of a weapon system is in the intangibles.
As Jim mentioned, the judgment also depends on the concept of operations. If the threat is IEDs from below, then you want the vehicle to have more armor and to be higher up. If the threat is from more sophisticated threats, then you want a low profile and frontal armor.
When OMFV moved towards a short two page requirements document with high-level characteristics, Jim noticed that “industry didn’t like it, to be honest with you, we got a lot of complaints back channel.” Zach responded that “I can’t say that I’m surprised that industry reacted negatively.” Traditional defense primes do not want to take on uncertainty or risk associated with such freedom.
Acquisition Next
I was pleased that the participants found our Acquisition Next report useful. One tool in the DoD acquisition toolbox that has become a permanent authority is Commercial Solutions Openings (CSOs) which provides a lot of flexibility in contract solicitations that alleviates problems Jim Schirmer alluded to.
One of the ways we’re able to attract vendors is by minimizing their own opportunity costs to respond to a solicitation… We call it commercial solutions open, and I think it embodies a lot of what you’re describing in the acquisition next approach, for example, agile work statements. So we don’t start with requirements which often dictates how the department might start to bring in a new capability, a process it’s well honed, if you’re going to build them new aircraft or tank.
CSOs are an important tool that can be used for not just buying commercial products and services, but any R&D effort up to $100 million. I would love to see greater adoption of CSOs. They can be paired well with Other Transactions, but can also work with the FAR. Some of the flexibilities including oral presentations, streamlined procedures, and comparative evaluations are also available through multiple-award IDIQs. It’s another tool that we discuss in the Acquisition Next report.
“I think that Acquisition Next really provides some great ideas we can take advantage of so much today,” Mike Brown said. “Kudos to you, Jerry, for what you, Charlie, Eric, and the team have done.” Zach mentioned. “I think the report is real fodder. Now it’s just a matter of how we get to the real mechanisms of adoption and tackle those barriers to adoption.”
Thanks Jim, Mike, and Zach!
I’d like to thank Jerry McGinn for moderating this excellent panel, and Jim Schirmer, Mike Brown, and Zach Mears for participating. Be sure to listen to the whole thing for tons more insights. The panel was featured in a recent Department of Defense article, Addressing DoD’s tech focus areas requires new approaches. And of course, check out Mason GovCon’s new report, Acquisition Next: A Playbook to Break the Industrial Age Paradigm.
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