With the House Armed Services Committee poised to mark up the 2016 National Defense Authorization Act, or NDAA, later this month, it’s important to take a closer look at Rep. Mac Thornberry’s proposal to reform defense acquisitions. Late last month, the HASC chairman framed his “Agile Acquisition to Retain Technological Edge Act” as a starting point for discussion, acknowledging that meaningful reform would take years and multiple pieces of legislation. Thornberry, R-Texas, is wise to manage expectations; plenty of Congresses and administrations have waded into these waters with little to show for their efforts.
Indeed, weapons cost overruns, schedule delays, and failures to deliver promised capabilities continue to plague the Pentagon. The Information Age has also ushered in another dangerous defense acquisitions phenomenon: fielding promised capabilities that were already eclipsed by faster-moving commercial technologies. Sustaining technological superiority may be the US military’s defining national security imperative of the 21st century, and Thornberry’s bill should be evaluated in this context.
Let’s start with the good news.
There is strong bipartisan support for improving defense acquisitions; Thornberry’s bill is co-sponsored by the HASC’s ranking member, Rep. Adam Smith, D-Wash., and both Pentagon and Senate Armed Services Committee leadership have made reform a priority. There is some promising political momentum, and the NDAA – the target legislative vehicle – is likely one of few bills in Congress with wheels to move.
Thornberry’s bill appropriately frames what’s at stake. The concept of “acquisition reform” neither resonates with the public nor sufficiently captures the associated national security implications. Yes, traditional tenets of reform still matter: cost, schedule, and performance. However, the fundamental imperative for reform is sustaining our ability to win the fight by out-innovating the enemy.
One proposal on the innovation front is to make “Other Transaction” (OT) authority permanent, and better use it to attract more agile companies to defense work. This authority allows streamlined business transactions unburdened by federal acquisition regulations, and has been used for decades by innovative organizations such as the Defense Advanced Research Projects Agency, or DARPA. By making it permanent, Thornberry hopes OT authority will be used more broadly across other programs.
Thornberry also recognizes the link between acquisition and personnel reform. Developing and sustaining a lean, agile and innovative acquisition process requires a workforce with the same traits, and Thornberry seems to grasp the need to change the culture.
Finally, the HASC chair proposes to eliminate a host of Congressional reporting requirements installed in previous reform efforts. Such reports and oversight layers can stifle innovation, diffuse accountability, increase cost and schedule, and discourage companies from competing. Congress sometimes fails to recognize this risk or overlooks it to make political hay after an embarrassing acquisitions failure. The bill takes aim at various reports that fail to add value.
So what’s the bad news?
In attempting to remove barriers, Thornberry adds another. The bill generally limits the use of OT authority to small business or nontraditional defense contractors. This seemingly innocuous provision will limit innovative cost sharing, partnering, and consortium building between small businesses and established system integrators. Yes, the Pentagon needs to attract new entrants to the defense industry, but placing unnecessary restrictions on one of its most flexible transaction authorities is not a good way to do this.
Unfortunately, barriers to reform are higher and more deeply rooted than most in Washington realize. Current acquisition processes and workforce policies came of age largely within a post-World War II industrial framework, and this cultural legacy remains entrenched. Managing ship acquisitions is very different than managing agile software development, and the system is heavily biased toward the former. The civilian-dominated defense acquisition workforce is massive, is disproportionately staffed by men between the ages of 40 and 60, and has a hard time recruiting young talent. This culture can be changed, but will require bold leadership on tough issues like civilian hiring reform.
Finally, no matter how effective the reforms, defense acquisitions will never be successful without stable and predictable funding. Sequestration, shutdown threats, and continuing resolutions stifle R&D spending, introduce unnecessary contractor financial risks that taxpayers ultimately cover, discourage competition, and increase the costs of multi-year acquisitions that might have otherwise been funded on schedule. Put simply, the nation cannot achieve its defense acquisition goals without more responsible budgeting, and this needs to be part of Thornberry’s mantra for reform.
On balance, Thornberry’s bill is a good start. The widespread availability of advanced commercial technologies are making it harder for the U.S. military to sustain its technological advantage. The acquisition system needs an overhaul if it is to help turn the military into “the world’s fastest incorporator” of new technology, as Thornberry puts it. For the sake of the nation, let’s hope momentum builds for the difficult work ahead.