An uncertain future for Middle-Tier of Acquisition

Here’s a couple slices from an interesting Breaking Defense article on Middle-Tier of Acquisition (MTA) pathway for rapid prototyping and rapid fielding. First, what’s going on. Congressional appropriators in their FY23 report included some restrictive language, here’s why:

Text accompanying the omnibus makes clear lawmakers are concerned that some DoD and service programs may be inappropriately stretching MTA and similar legal authorities beyond their original intent, and in a manner that “obfuscates costs and limits transparency.”

And here’s the excellent Pete Modigliani commenting on those requirements, which in some cases are over-and-above what is required of major defense acquisition programs:

“Why would the appropriations committee require DoD to report on all current and pending MTA rapid programs to provide rational for their acquisition and contracting strategies, cost estimates in detail, full funding certification, and DOT&E certification and risk assessment of their test strategy? This isn’t required for DoD’s largest MDAP programs,” Modigliani said, referring to major defense acquisition programs.

 

“The crux of the issue is rapid prototyping and rapid fielding run counter to the traditional, drawn-out acquisition programs where all the requirements are defined upfront and locked down, detailed cost estimates to include lifecycle costs for decades, and programs are locked down to baselines and measured via industrial age systems. Traditional auditors and analysts struggle with a more dynamic environment with prototyping, experimentation, and iterative development/production,” he said.

Bill Greenwalt was one of the Senate Armed Services Committee staffers who helped draft the MTA authority in Section 804 of the FY2016 NDAA. This is what he had to say:

Greenwalt argued that the language pushed by appropriations committee staff actually is contrary to the desires of lawmakers and staff on the policy committees overseeing DoD, who are publicly pushing a “go fast” acquisition approach to keep ahead of China. The spending committee staff, he charged, are “stuck in a peacetime, time-doesn’t-matter, process-based, bureaucratic, Soviet-style Gosplan world.”

An unnamed Hill staffer responded that he or she had not heard from DoD itself that the new language and oversight requirements hampers the use of MTAs. But I personally believe that there are some interesting challenges that traditional oversight has yet to address:

What is the Program of Record?

MTAs are intended to have options. You can MTA a subsystem and use the Software Pathway for software, then integrate on a Major Capability Pathway. Or you can MTA a prototype into an MTA fielding. Or various combinations.

OSD wants to tie MTAs to eventual, larger Programs of Record so they can measure cost-schedule-performance. Not having full lifecycle cost estimate is problematic for them, incremental decisions and management by real options challenge the “universal” measure of oversight through cost-growth to baseline.

Have you noticed that there is rarely any discussion over whether MTAs lead to good or bad outcomes, or whether innovation is making it into the hands of warfighters faster or cheaper than otherwise? Fixation on process and compliance. Even the DoDIG had some good things to say about MTAs, and from an organization designed to go find problems, that should say something.

Can you Field with RDT&E?

One of the interesting parts of the appropriations report was concern that RDT&E funding for rapid prototyping resulted in “de facto end-items” that would be fielded rather than doing that through procurement appropriations.  Yet the whole purpose of MTA was to rapidly get systems into the hands of warfighters to provide empirical evidence as to baseline requirements, sustainment, lifecycle costs, and so forth. This “early” operational capability such as seen in places like Task Force 59 should be praised. Unlike the industrial era, modern products are in continuous development and delivery.

Transparency or Rice Bowls?

I think a lack of transparency is synonymous with a lack of regular “waterfall” documentation, lifecycle cost estimates, and compliance mindsets. Many elements of the Pentagon agree with appropriator language because they feel that rapid acquisition bypasses their functional process, even if their contribution to fielding working capability is tenuous. Milestone B, for example, took over 50 separate offices review and approval, an absurdity which drove the need for MTA in the first place.

Is the FYDP too Rigid?

DoD shouldn’t require full funding in the Future Years Defense Program (FYDP). This closes the door to optionality and changes in cost, schedule, or technical direction. In other words, it suppresses error correction by pretending that enough planning and analysis will obviate change in the world. RDT&E is supposed to give options to procurement decisions, not be pre-programmed (basically entitling a development no matter their relevance or execution). If every prototype embarked upon enters procurement, that is a sign of a subpar RDT&E portfolio.

The real problem here is that no one in the services is willing to get rid of functional equipment in the outyears of the FYDP for a speculative program that could revolutionize the fight, but isn’t guaranteed to. Full-funding forces that tradeoff before knowledge is available.

Conclusion

Those are a few of the issues that jumped out to me for MTA that need to be overcome if DoD is going to truly adopt rapid prototyping and rapid fielding. All of this, of course, connected back to PPBE Reform. If DoD has capabilities of record with outcome-based budget portfolios, then managers can make real-time tradeoffs to deliver at the speed of relevance. Of course spend plans and details should be provided to oversight, but they need to be allowed to drift with updated information. (By the way, my Jan 2020 article on MTA looks fairly prescient.)

I joke with the new oversight rules, in 5 years folks will look at all the Adaptive Acquisition Framework pathways and say, “Why do we have all these pathways when we have the same steps? Why don’t we just get rid of confusion and consolidate them into a single pathway?” The acquisition pendulum tends to swing back and forth.