Service Acquisitions Chiefs Testify on Reform

Original Article: Defense.gov

Top acquisition officials from the Army, Navy and Air Force testified before Congress on April 22 on their collective efforts to make the defense acquisition process more effective and responsive to national security needs.

Heidi Shyu, assistant secretary of the Army for acquisition, logistics and technology; Sean J. Stackley, assistant secretary of the Navy for research, development and acquisition; and William A. LaPlante, assistant secretary of the Air Force for acquisition all appeared before the Senate Armed Services Committee’s subcommittee on readiness and management support.

Shyu contrasted her experiences in industry and government and urged Congress to empower program managers with the authorities necessary to be more agile in guiding programs to successful completion.

“Defense acquisition is a highly risk-averse, compliance-based process with a checklist mentality that has become unduly cumbersome,” she said. “Prior to my service to the government, I spent 33 years working with the defense industry.”

Shyu explained that she controlled her own budget, held a reserve budget, and had the flexibility and “trade space” to identify impacts of performance versus cost, schedule and technical risks.

On the government side, she said requirements are derived or changed without the full knowledge of cost, schedule or technical risk to the program.

Shyu also noted that on the government side, she’s encountered cumbersome paperwork requirements, slow hiring, changes to operational testing without consideration to program impacts and lack of flexibility to offer financial incentives.

Stark Differences

A stark difference, she noted, is what happens when a program runs into problems. “What happens in industry?” she asked. “Everybody would jump in to bail out the program manager, because you are bleeding cash. There’s a financial incentive to reduce loss, so everybody helps out the program manager.”

In government, she said, it becomes “an opportunity to actually take the program manager’s money and use it for their stove-pipe purposes.”

Shyu cited this “fundamental” lack of program manager authority, coupled with “failure to properly align the various stakeholders’ responsibilities” as the factor that most heavily has contributed to the critical shortcomings in the acquisition process.

“I urge Congress,” she said, “to empower the [program managers] with the authority needed to help them guide the program successfully to completion in a manner that’s similarly to industry in which I could move very rapidly.”

Making Every Dollar Count

Stackley said the cost of delivering “extraordinary capability” to the warfighters is proving increasingly difficult for the nation to bear.

He noted former Defense Secretary Robert M. Gates for his 2010 warning that “given America’s difficult economic circumstances and perilous fiscal condition, military spending on things large and small can and should expect closer, harsher scrutiny.”

Shortly after that came the tenets of what is known today as the Defense Department’s Better Buying Power initiative, Stackley said.

“So today,” he added, “in building our budget, every program — things large and small — is subject to answering four most basic questions: What will it cost to buy it? What will it buy us in performance? What can we afford? And what can we do to make it more affordable? Simply put, we must change the cost equation.”

He cited five basic principles: get the requirements right, perform to a stable plan, make every dollar count, build a skilled and experienced acquisitions workforce, and foster a healthy industrial base.

As Gates said, Stackley told the panel, what is necessary is a willingness to make hard choices.

Speed the ‘Fundamental’ Metric

LaPlante said speed is the fundamental metric in discussing agility and adaptability in acquisition.

“If you can do things fast, do it fast,” he said. “Failing fast is better than doing things slow that may or may not succeed.”

LaPlante also noted “promising signs” in acquisition reform, calling them “good things that should be built upon.”

He added, “I am always a believer in looking at what’s going well and building upon it.” The Better Buying Power initiative that Defense Secretary Ash Carter initiated when he was the Pentagon’s acquisition chief now carried forward with Frank Kendall, the present undersecretary of defense for acquisition, technology and logistics, are paying off, he said.

“The ‘should-cost’ savings that all three of our services are having are real, and they’re incredible,” LaPlante said. He emphasized that these savings do not fall into the cost avoidance category.

“People sometimes say it’s cost avoidance,” LaPlante said. “No. Very specifically, they are real savings that’s paying off.”

Using Nontraditional Methods

LaPlante also said the Air Force has done some outreach in nontraditional ways to bring in academia or small businesses.

DoD Instruction 5000.02, signed Nov. 26, 2013, by Carter on his last day as deputy defense secretary, is designed to help in streamlining the acquisition process, LaPlante said.

“We’re trying things in the Air Force,” he added, “and I know the other services are, outside of the acquisition [instruction], doing something that that’s called ‘other transactional authority.’ We’re doing an experiment next month on one of our systems to try to get folks under contract within a week if they impress us with one of their algorithms.”

Experiments like these need attention and encouragement, LaPlante said.