Here’s a slice from a great episode of Hondo Geurts and Lauren Bedula’s Building the Base podcast with Representative Mike Gallagher (R-WI).
The Pentagon doesn’t need to turn itself into a Venture Capital organization. The Pentagon needs to procure things. It needs to buy certain things. Right now it needs to buy munitions. If we change figure that out, and get out of our dysfunctional budget cycle, I think that would go a long way to incentivizing capital to flow into the defense business. Capital will flow to where there is money to be made. DoD makes it too difficult as a customer. That’s the biggest thing we need to fix.
Congress can play a role by moving to a multiyear procurement authority, we’re talking about that right now for munitions. I think that’s entirely sensible. The problem we confront is that, no offense to my friends on the appropriations committee, but historically, the appropriators — or let me be more accurate, the appropriations staffers — don’t like multiyear procurement authority because it diminishes their year-to-year power. I think that’s short-sighted at best. It’s something we’re going to have to figure out in Congress.
The other thing that comes to mind, because of Mac Thornberry’s leadership, we’ve given the Pentagon all sorts of exotic authorities. OTAs, this, that, and the other. It seems the Pentagon has not used those authorities aggressively. We need to do a better job of oversight. I have in mind a monthly or quarterly hearing with all the service secretaries or whoever the right person in acquisition is, as ask for the stats on how many times you’ve used X, Y, and Z authorities. Why aren’t you using it? Did we miss the mark in how we constructed this? What’s going on here? We don’t need a new legislation to make a new fund or OTA, but do basic oversight of the Pentagon. [Emphasis added]
There was a whole lot there. Certainly multiyear procurement authority is just one example of a sensible flexibility that is constrained by equities in the budget process. Hopefully the Congressional PPBE Reform Commission will help move along an important discussion on this topic.
But I really like Gallagher’s point on oversight. Certainly DoD has a bewildering number of authorities. However, most programs continue to get run as is they were an MDAP. The number of Middle Tier of Acquisition (MTA) and Software Acquisition Pathway (SWP) efforts are relatively few.
USD A&S Bill LaPlante mentioned that there were about $50 billion spent on MTA programs since 2016 and $2 billion on SWP programs. “Now if you look at all these on a sand chart, it’s very sobering.” When you add in all the traditionally run programs, MTA and SWP are a “tiny sliver… it’s nothing compared to where we’re spending all the rest of that money.”
Congress and Pentagon leaders have to create a safe space for these programs and incentive their use. Like the poppy that grows too tall gets cut, the program that tries a new authority gets extra scrutiny — potentially negating the original purpose of the authority to move quickly.
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