WASHINGTON, May 22, 2009 – Reforming the Defense Department’s acquisition system is going to be a long and difficult process that will require cooperation across the department and with Congress.

One of the recommendations in Defense Secretary Robert M. Gates’ fiscal 2010 defense budget request is to reform the department’s procurement system.

People of all political stripes agree the acquisition system needs reform. Cost and timeliness are just two areas that often spiral out of control.

Understanding the bureaucracy and the laws surrounding the process are key to reform, a senior military official who has studied the issue said, speaking on background.

Many people come to government believing they are going to reform acquisition, the official said. “Acquisition is an incredibly regulated activity,” the official said. “If you gloss over that, you really don’t have a chance of succeeding.”

Laws and federal and defense acquisition regulations govern the process. The Office of Management and Budget has a way of looking at procurement. Then, the Congress has oversight of the process via appropriations and authorization. Each perspective brings different needs and different checks and balances into play.

Anyone wishing to reform the process needs the knowledge of each stakeholder, the official said.

“Not having that insider understanding of the real bureaucracy that’s associated with it, you can get to the point where you think you have some influence over the process and it will only take you a few months to learn that you don’t,” the official explained.

While it’s a daunting task, it is not an impossible one, the official said. There are ways to make changes in the system.

There is room for different procurement, the official said.

The regulations don’t restrict the department from having different systems. The systems in the past were based on cost, and while cost needs to remain an element, it can’t be the main determinant, the official said. “We need to figure out how to re-categorize in ways that make sense.”

Part of the problem is the differing needs of war and peacetime. When the nation is not at war, the department becomes risk-averse and tries to be more businesslike, the official said. When the nation goes into a conflict and lives are on the line, the risk calculus in the bureaucracies often doesn’t change.

Gates has said on a regular basis that he has a department at war, but there are portions that have not made the transition. “That’s the disconnect,” the official said. But even in war, the official added, there should be priorities of acquisitions.

Urgency, the official said, obviously is a factor in determining the risk factor. There is a difference in a procurement where “somebody is going to die and an 80 percent [solution] might save them,” the official said.

In the successful procurements in the current wars, officials have built a process driven with urgency from the field. What’s fundamentally different is that it’s the customer — the combatant commands — saying what they need, and not the supplier.

The definition of success is a 60 to 80 percent solution, the official said. “We’ll establish what the key attributes are going to be for functionality so they have commonality,” the official added. Then the program transitions to a service.

But once a service is carrying the ball, procurement specialists still will need to live with the basic configuration, the official said.

The process today, the official said, tends toward a greater role for the combatant commands.

“In peace, the pendulum swings toward services,” the official said. “In wartime, it swings to combatant commanders, because they see changes on the battlefield that become emergent needs.”

The fight against roadside and car bombs tends to turn every 30 days. Changes must happen quickly to remain ahead of the enemy. “If you are dealing on a 30-day cycle, then a two-year budget to build and field can’t work,” the official noted.

Requirements, acquisition and resources need to be tied together, the official said. “It is critical to have resourcing match acquisition and requirements,” the official said.

Bringing the requirements, acquisition and resourcing is possible if the principal officials who make those decisions are consistent across all three areas, the official said.

The official said he doesn’t believe changes in the laws are necessary now. “We have to clearly and implicitly define the law that is impeding the process and then suggest changes to statute,” the official said. “I’ve seen people go in and try to legislate changes. They have to think about Congress, the oversight and unintended consequences.”

Gates also wants to hire more government employees to manage procurements. He spoke of “contractors managing contractors” in some acquisition projects and the need for government oversight. Again, this goes back to the differences between war and peace, the official said.

In war, building a robust acquisition force makes sense. A lot of money is being spent on a lot of equipment, but when peace returns, there will be a large acquisition force with few projects to manage. (The next Quadrennial Defense Review could review whether National Guard and reserve personnel may be the answer to this, the official said – check if in the terms of reference) The department has to be careful to not in-source just to get more government employees, the official said, and must understand what the “shock absorber” is once the conflict stops.

The acquisition work force should include all components, the official said. Active-duty acquisition experts would be fully usable across the full range of activities. Guard and reserve personnel could be the shock absorber when the nation goes to war and acquisition professionals are needed quickly.

Government employees and, finally, contractors, could also be part of the mix. The government would use more contractors as temporary employees to bridge the time it takes to bring a Guard and reserve person on active duty or to hire and train a government employee, the official said.

There is precedent for using the Guard and reserve to fill out a specialty. The reserve components have the vast majority of civil affairs specialists, for example. These personnel often bring the experiences of their civilian jobs with them, and there is no doubt that they could do the same in the acquisition field, the official said.

“We would have to set an expectation with the force on how they will be used,” the official said. “This would allow them to set expectations of employers as well.”

All this requires a change of culture – one of the hardest things for any organization to do, the official said. Joint acquisition is an increasing goal for the department.

“We must get away from the mindset of ‘I must have my own,’” the official said. “There is a difference between a radio that goes into an airplane and a radio that goes into a truck. But there doesn’t have to be a difference in the waveform.”

A certain amount of duplication of capabilities is necessary, the official said. Car rental companies, for example, affiliate with a specific automobile company, but a certain number of cars will come from a different company to guard against a systemic problem with one company.

Frustration in the Defense Department stems from a culture that says each service must have all its own capabilities and cannot depend on other services to provide it, the official said.

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