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Finding a Cure for What Ails Defense Acquisition

Why the Pentagon’s prescription for staying ahead of the curve falls short.

Around the nation’s capital, defense acquisition reform is surely in vogue. Last month, Rep. Mac Thornberry, R-Texas, capped off his multiyear expedition in this space with the unveiling of a House bill to modernize the Pentagon contracting. On the other side of Capitol Hill, Sen. John McCain. R-Ariz., and the Senate Armed Services Committee have taken up the issue as well.

Enter Frank Kendall. Just a few short weeks after Thornberry put his stake in the ground, the Pentagon’s undersecretary for acquisition, logistics, and technology released Better Buying Power 3.0. The initiative complements Thornberry’s broad legislative push with a set of tactical recommendations that aim to coax the many stakeholders in the defense sector toward more efficient collaboration and more effective outcomes. Though BBP 3.0’s provisions get way down into the weeds of the Defense Department’s acquisition machine, its fundamental (and lofty) goal is to protect American “technological superiority.” In this light, the initiative builds on earlier versions appropriately in certain respects and falls short in others.

While the message is “stay the course” in some areas, this latest cut ventures into new terrain in several ways to preserve the military’s technological edge. BBP 3.0 reinvigorates “prototyping and experimentation” to get greater capabilities out to soldiers at a faster clip. The initiative also promotes stronger long-range research and development efforts, positioning the Pentagon to harness new technologies for tomorrow as well as for 2030. It’s a prudent, yet ambitious campaign.

In this same vein, the initiative spells out how to get better at enticing more of the commercial sector and its innovative advances into the fold. Among other upgrades to the acquisition professional’s toolkit, it expands access to Other Transaction Authority, which can accelerate a program’s development and creates communities of practice around rapid acquisition of commercial-off-the-shelf products. In addition, like Thornberry’s bill, Kendall’s initiative intends to make DOD far friendlier to small businesses and offers new incentives to attract potential industry partners, regardless of size. The idea is to push the Pentagon to keep pace with commercial innovation so the military doesn’t lose out on the next big idea.

Unfortunately, it will take more than BBP 3.0 to bring DOD to the cutting edge. A memo with Frank Kendall’s seal is strong, but not powerful enough to tear down all of the department’s barriers to commercial entry. There should be more focus on simplifying requirements, streamlining contracting processes and reducing administrative hurdles for suppliers to compete. Without these changes, as one investor in Silicon Valley said, “startups will bleed to death” if they go after government and defense business. With or without a flood of new suppliers, matching the rhythm of private industry is sure to be an uphill (though noble) battle. Accelerating the bureaucratic behemoth that is the Defense Department is no small task; the Tim Cooks of the world won’t be slowing down to let the military play catch-up any time soon.

Turning to the roughly 150,000 acquisition professionals charged with putting BBP 3.0 guidance into practice, the initiative steers clear of some of DOD’s stickiest personnel issues. Nothing is said about adjusting the relatively short tenure cycle for program managers, which results in lost institutional memory and, according to some in the field, contributes to weaker outputs. There is limited mention of skills and competencies such as problem-solving and relational skills, which are among the most critical. And the initiative opts not to consider the culture of risk aversion that pervades the department’s acquisition function and curbs its agility throughout the development process.    

One more area to highlight is service acquisition. BBP 3.0 does nudge the system in a positive direction on matters relating to this buying domain, which accounts for more than 50 percent of the department’s spending. However, the future could look even brighter for service acquisition if the initiative didn’t avoid some game-changing considerations. A cadre of defense-industrial experts warn that the balance between permanent government employees and temporary contract hires—brought in through service contracts—is out of whack. Sadly, BBP 3.0 is mum on this issue. Additionally, Kendall’s initiative doesn’t dig in on how best to improve visibility across the thousands of service contracts it awards every year. Until he or others in the Pentagon tackle this issue, it will be nearly impossible to track prices departmentwide and, consequently, to prevent overspending.   

Even though he sidesteps certain improvement areas, Kendall has packed some goodness into BBP 3.0’s 33 pages. Now action shifts from the Pentagon’s inner circle to the DOD’s rank and file. It is up to the foot soldiers in the department’s acquisition community to grow the Pentagon into a more efficient buyer. Short of a swift and effective rollout, the initiative will go down as a toothless memo and the future of the American military’s technological dominance may remain uncertain.

Alex Haber is a business analyst in the national security practice at Censeo Consulting Group. Raj Sharma is the company’s chief executive officer and co-founder.

(Image via Jean Lee/Shutterstock.com)

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