Pentagon unveils latest acquisition crusade

Pentagon unveils latest acquisition crusade

The Pentagon’s top acquisition official is fed up with how long it takes the military to develop vehicles, weapons and equipment. He wants to improve efficiency, yank out bureaucracy, build up the military’s acquisition workforce and make it easier for U.S. defense companies to sell to international customers.

Frank Kendall, undersecretary for acquisition, technology and logistics, laid out his plans to accomplish these lofty goals under Better Buying Power 2.0 — the Defense Department’s weapon buying guidance. It’s certainly  not the first time a Pentagon acquisition chief has made bold statements demanding change to an acquisition system that’s roundly criticized inside and outside the military.

“I’m very unhappy, I’ll put it that way, with how long it takes us to get products to the field. It’s taking much too long, as far as I’m concerned.  And I’m — I’m having several efforts underway to try to understand what the root cause of that is,” Kendall said Tuesday in the Pentagon press room.


Kendall’s predecessor, Deputy Defense Secretary Ash Carter, tried to fix military acquisition in 2010 when he unveiled Better Buying Power 1.0. Two years later, the Pentagon’s largest acquisition program is still very much in doubt as the head of the Joint Striker Program called the Pentagon’s relationship with Lockheed Martin the worst he’s ever seen. For large weapons programs, the Pentagon still overruns on development costs by close to 30 percent.

“One of the things I’m motivated by is the remarkable constancy of our poor performance,” Kendall said.

Kendall discussed making sweeping changes in a 36-point plan that makes up Better Buying Power 2.0. Many are repeats from the first version, but there have been some changes.

Kendall is backing off the push he and Carter made for fixed price contracts back in 2010. Fixed price contracts have a place in low rate production, but he worries too many acquisition officials see it as a magic bullet to cure all acquisition development ailments.

“People thought that that had become the right kind of contract to use for almost everything. And that wasn’t what we wanted. We wanted people to use FPI [fixed price incentives] more in certain situations, and in particular for low rate production,” Kendall said.

Kendall knows Congress will not like this move. Lawmakers often point to fixed price contracts as a victory for the Pentagon. The Air Force’s fixed price tanker contract is seen as an example to follow for other major acquisition programs. The Pentagon acquisition chief knows he may have created his own monster on Capitol Hill.

“I’ve been very clear with the people on the Hill who are enthusiasts for fixed price. I don’t think it’s a panacea. It certainly shifts risks to industry, but there’s inherent risk in most development programs and I think we need to balance that,” Kendall said.

The tanker program should not serve as the rule, Kendall explained. A fixed price contact worked with the tanker program because it had firm requirements, mature technology, rich bidders, experienced defense companies, and a business case to succeed, Kendall said.

Kendall took aim at a significant early phase of any major weapons develop program — the technology development phase. The point of the TD phase is to reduce risk by building prototypes ahead of the engineering  and manufacturing development phase of a program.

The Pentagon launched a study that examined the TD phases of ten programs to include the high profile Joint Air to Ground Missile, Ground Combat Vehicle, Joint Light Tactical Vehicle and Nett Warrior programs. Kendall found that industry and military officials had stopped removing risk.

“Industry wasn’t trying to reduce risk. Industry was trying to win the EMD phase and get into a sole-source position for production. That was their motivation. It was obvious that that is not unreasonable for that to be their motivation,” he said. “It wasn’t our motivation. Our motivation was to get risk out so we’d have the right bidder come in and win the EMD phase.”

Kendall does want to help a defense industry worried about their future as the Pentagon prepares to sustain massive cuts to its budget that could reach $1 trillion in cuts over the next decade. Defense leaders have told Kendall they will need to be more competitive in international markets to stay afloat. The open spigot of U.S. defense dollars is closing.

“In the current climate, with budgets kind of around the world coming down, frankly, for defense spending, industry is looking to do foreign sales more than ever to help keep their base healthy,” Kendall said.

In response, the military’s acquisition force will make exportability a priority early in design phases of certain programs. Anti-tamper characteristics will be built into the beginning of programs opposed to waiting until the end, Kendall said.

Congress has already approved the start to a pilot program to improve exportability for the Air Force Three Dimensional Expeditionary Long-Range Radar and the Navy’s Next-Generation Jammer. Kendall said these programs could be the first of many if the pilot goes well.

Kendall feared the department will not reach its full potential until it does a better job at improving the professionalism of the military’s acquisition workforce. He said the Pentagon must do a better job at rewarding those who succeed and punishing those who fail while leaving room for officials to make mistakes.

“We have a lot of very professional people, but we can be better, and we can have a deeper bench,” he said.

He recognized the challenges that programs face when program managers often spend only two or three years at a certain assignment. Salary freezes have made the military’s job even harder trying to keep acquisition professionals working for the military and not fleeing to defense companies.

“Frankly, I think that there’s no more important legacy that any of us as managers can have than to leave behind a stronger workforce than the one we inherited,” Kendall said.

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“Frank Kendall, undersecretary for acquisition, technology and logistics, laid out his plans to accomplish these lofty goals under Better Buying Power 2.0 — the Defense Department’s weapon buying guidance … Kendall’s predecessor, Deputy Defense Secretary Ash Carter, tried to fix military acquisition in 2010 when he unveiled Better Buying Power 1.0.”

A few years down the line, we will witness the proud unveiling of Better Buying Power 3.0, followed by BBP 4.0, and 5.0, and 6.0, and so on and so forth.

Shortly to be scrapped and replaced by Patriotic Purchasing Protocol 1.0. Then Patriotic Purchasing Protocol 2.0, and 3.0, and so on and so forth, ad infinitum, ad nauseum.

The one thing you never ever hear good old boy Frank attack is the idea of paying defense contractors a profit on development work. No, he was hand picked by the defense industry for this job because of his adherence to the priciples of fleecing the US taxpayer while appearing to talk tough on the obvious failures of the procurement system. He’s a regular John McCain.

By the way, this is probably a good time to provide a somewhat related Dilbert link: http://dilbert.com/strips/comic/2011–07-18/

Why can’t the contractors respond to a RFP and prototype(s) using their own money. Competition works well in
the private sector why not the public sector. I would love to have a contract competition where win or lose I would be compensated from my expenses. Build a better mouse trap and they will come. There would have to be oversite to ensure the contract winner did not build in development costs into the follow-on contract. another key point would be the prohibition of any 01-… from being employed by defense contractors for at least five years and 10 years in their area(s) of expertise. let’s stop letting tail wag the dog. Case in point the LCS program. The Navy should go back to the days when BUSHIPS designed it’s ships. Currently to appease contractors and legislators there are two different classes of LCS with little commonality. Who would have though…two different pieces of *rap, built to civilian specs that could not fight their way out of a bathtub. I wont even go into the F35 A,B,and C’s. Better Buying Power — Better Buying BS is more like it.

That would address at most 1/2 of the problem as the other 1/2 of the problems are cuased by incompetent military and GS employees. As a software developer I’ve worked on contracts headed by weahter officers, weather GS, helicopter pilots, fighter pilots and bomber pilots but only once worked under a real computer / communications officer. A few of the other officers performed OK but none of them were even close to being as effective as the computer / communications officer.

“The Pentagon’s top acquisition official […] wants to improve efficiency, yank out bureaucracy”

HA HA HA !! The Pentagon IS the bureaucracy…

” I’m having several efforts underway to try to understand what the root cause of that is “
YOU are the root cause, dude !

“We have a lot of very professional people, but we can be better, and we can have a deeper bench,”
Nope. We have a lot of very professional bureaucrats…

In the military pecking order computer guys are either too important to pull away from their tasks or don’t “deserve” other billets, such as those required to network with the private sector and jump to industry, or to move up the food chain.

Yeah, I’ve noticed that and it takes it’s toll in the software projects. Not that I’ve seen the kind of cost skyrocketing that the LCS and F-35 have gone through but it’s still worse than it should be.

They claim they fix it every 4 years. Don’t forget this is the same federal government who buys a $12 dollar hammer for $50 and takes 4 years for a competition for which hammer is better. Come on same crap as usual at the pentagon.

Give it a rest, folks. Somebody finally comes along who not only recognizes that there IS a problem, but has some concrete (and fact-based) ideas about how to make things better, and all you can do is whine.

The fundamental problem behind 90% of the waste is that the services can’t make themselves not ask for more than they can afford (or, indeed, more than is currently possible). Kendall actually gets this, and is trying to some way to inject reality into the requirement-setting process BEFORE it leaves the JROC and gets set in stone.

Affordability Analysis as currently practiced by the services is a joke, because it’s done one program at a time, and any program (even F-35) looks affordable in isolation. Kendall gets this, and is actually trying to force the services to do affordability analysis at the portfolio level and higher.

Asking some GS-11 or O-5 with no finance background to hold a hard line against Boeing or L-M in contract negotiations is pathetically naive. Kendall gets this, and is working to find ways to make that particular negotiation a bit less one-sided.

I’m as skeptical as the next guy about how well Kendall will succeed with all of this, but at least (thank God, at last) he’s working on the real problems.

First, everything you point to — taken in isolation — should drive some improvement. Yet U/S Kendall is still looking for root causes of our acquisition mess. The issues have been aired for the better part of a generation and seem well understood by many in the business. The need for drastic changes seems clear, but who will pursue them? We found some of our banks “too big to fail”. By default, are we finding defense acquistion “too big to fix”?

You know, back when government employees were designing NASA rockets that took us to the moon, NASA employees were reverently called “rocket scientists” and were respected around the world. Funny how ever since they started outsourcing rocket design to contractors they are all routinely referred to as obstructionist idiots. Same is true of the USAF designers that came up with the design of the X planes, and the Navy designers that built the fleet that stomped the living sh it out of the world’s combined navies in WW2. Too bad the defense contractors have the money for the really good lobbyists and all the propaganda mouthpieces on the internet. I guess to the winner go the spoils. Clearly the winner here is not the US taxpayer.

When Japan attacked the US, our equipment and manpower training was pitiful to say the least. Not sure of the timeframe, but when this country needed to respond, every single element went to work and quickly got us in the defense game. Now we have Generals that play footsie, and allow Americans to be killed in a foreign land that any idiot knew their country couldn’t or wouldn’t protect our personnel. In fact it appears that at the very top, we have a leader that chose to go to bed and then fly to Vegas instead of doing his job. I worked in Embassies around the world, and in one of them controlled the Red secure phone for an Ambassador, and guess where it’s connected. Well let me tell you… It’s connected to the security desk in the State Department, and the Ready Room in the basement of the White House. Let me see if what we are being told, neither security section told anyone in command. If you believe that, perhaps I can sell you Martha’s Vineyard… Or perhaps Cuba..
Now we need to understand that if they told no one, failure of leadership abounds. That is almost as bad as knowing and doing nothing. Unlike the reaction to Pearl Harbor, we have no one left in our country to kick start a reaction or defend those that choose to serve our needs in other countries. Now the subject of military equipment. Even if we can build it less expensive, and faster… It won’t do and good because we no longer have a Government that cares, and no longer have leader that will Plan and carry out the mission. This is a shame, because we were once a great nation. Now we are about to be downgraded to a Triple “A” country.

I know the feeling. I was one of those comm-computer system programmers in the AF. It was rare to see an O-6 comm-computer officer, much less a 1-star. On the officer side of things (I was enlisted) they basically made them a jack-of-all-trades unfortunately and a lot of knowledge has been lost.

The is the same song, being sung by the same folks but charging more each time. The same people Eisenhower warned Americans abut.

I’ve worked for both the procurement and Logistics divisions of several different organizations both Federal and Local Government, and I’ve learned from my thirty plus years of experience that the only way improvements are going to happen is if those responsible for the decision making process are held accountable to performance standards. And not just on paper but through either puntative actions with regards to pay scale upto even termination. The old verbage that “Hey I’m okay as long as I atleast show up to work. Who said I had to actually work or perform” needs to be removed from the work enivronment as well as the attitude that a person is untouchable after they’ve been vested in the orgaization for a period of time. We need to give employees a reason to be productive and not just puntitve, but a system that really rewards those that perform and it’s measurable. As a country we need to pull off the blinders and stop thinking that we are still on top of the industry world as a leader, we have allowed ourselfs to get soft and lazy, as idividuals we need to be held accountable for our actions and lack of actions as well.

Amen, Amen, Amen, the problem is the natural nature of a US business to Maximize the Share Holders Wealth. He does make a good point by highlighting the Development Phase and the importance of reducing risk with a prototype, but the contractors know that the real money is made in EMD and can double those profits if you keep the system in test. The outsourcing of design and development work to contractors has caused this hugh spike in weapon system cost with nothing being delivered. As a contractor I just don’t get it. I sat in the Government spaces, Use the Government computer, Shit in the Government toilets, receive my tasking from a GS civilian or military employee and then the middle man a contractors takes over 50 percent of their GSA schedule based bill rates for my services. This whole decrease the size of government has been a shell game. If we agree that Defense of the US is a primary responsibility of the Government let’s revisit the most efficient way to satisfy that requirement.

Exactly. Liars like Carter talk talk talk about reform but there is no punishment for screwing up. If they really wanted reform they would throw all their power points away and then round up all of the people who ran all those failed programs, and especially the F-35, and conduct mass firings / forced retirements. Then go to all the companies that ran those programs and demand that either the people who ran them on the industry side are fired or the company won’t get a dime in taxpayer dollars ever again. You’d see a sea change in procurement in under a year, but Carter never really wanted to fix anything and neither does Kendall. SSDD.

That’s exactly the point! After all is said and done, more is said than done.

The lack of accountability is a cultural problem, not something specific to the DoD or even government in general. Not long ago I was working for a Fortune 500 company that had the same problem. In our new politically correct world we can’t hurt anyone’s feelings by holding them accountable. Remember the good old days when if you screwed up your boss called you on the carpet about it? Those were the days!

I provided the exact same recommendations that showed up in Carter’s efficiencies memo. The problem was that the memo was not codified in the FAR and no Flag and SES and other GS15/14 “experts” could figure out what to do to put them in practice. You should heard the dialogue.…“we don’t know how to do this…” from the so called highly paid experts in the DoD. How do I get on these think tanks and provide the steps and processes to follow thru with the policies. All of my life in the DoD I have seen people get assigned to work on IPTs who just don’t get it and they come back and brag that they just chnaged the wording to existing policies to meet the memo language. ALL A JOKE!!!! Mr Kendall needs to do what McNamara did in the sixites and bring in a new fresh team of thinkers and shake up the pentagon mess. The Stimson report coming out today is a great start…now SecDef Panetta needs a team that can follow thru on the recommendations.

I really think that not much will change. There are too many members in congress sticking their nose in the pentagons front door to see that the $50.00 hammer contract goes to a company in their state.The pentagon should be recruiting adults with experience in the hardware that gets purchased. Recruit the 18 year olds that drive a tank separately. Stop all of the free golf outings and other bribery that goes on. The next secretary of defense needs to be a person with backbone,not a pentagon insider.

You can see the futility of reforming contractors here — to the mind of the small time crook he’s not guilty because everyone is doing it.

No hes trying to roll back the very limited reforms that have occured. He’s part of the problem not the solution.

If Kendall had given that speach in any other industry they would ave fired him and called in the cops. Only in the Military Industrial Complex is fraud racketeering and conspiricy considered reform.

You cant fix a mafia problem through powerpoints and slogans you need criminal investigations and long jail sentances. The same applies to the contractors.

Guys working at Home Depot or Lowe’s would be happy to work for a third his salary and they know Hammers.

To your point on the self-funded prototyping…we don’t have the coffers to fund everything that makes sense for us and for what we see the services looking for. One reason is that after we win, we’re held to low profit. Might sometimes do good on the first FFP delivery order, but actuals are reviewed the second time around, and we’re back to 10% on operations which is about what the corp requires. Apple can charge whatever the market will bear — for the life of the product — and if Apple were only making 10% (ever) on actual delivery costs, they’d be off doing something else. Even software licenses are subject to this FAR/DCMA issue. It’s all meant to protect the taxpayer, but without a real upside that can fill the R&D coffers, we invest what little we have into chasing 10% programs to keep the doors open.

Actually, you’ve got it backwards. The contractors agreed to give up their higher profit percentage on delivered hardware if the government would give them the lower profit margin across development, testing, and production. But let’s look at the risk they bear. Profit should be based on risk, not some arbitrary number a contracting officer pulls out of their ass. There is basically no risk for the contractor during development. If anything goes wrong, the contractor covers it up and continues to pull down their full award fee. During test there is a little more risk because at least something has to work. Then during the initial low rate production the risks are fairly high, and then it dereases during steady production. During all that time, they make 10%, so to maximize their profit they try to stay in development as long as possible.

None of the contracts I’ve ever been on delayed development and testing and all of them delivered the software on time. And the software was capable of doing it everything it was supposed to do.

The biggest problem I’ve seen is the government completely changing requirments and even then we delivered on time and under budget. 1/2 the problem IS on the government side.

The whole purpose behind the DO-178 standard is to delay software development. Well, ok, it has one other purpose. It keeps real software development companies from doing embedded software development for aircraft. Just remember the DoD’s motto: You can buy better, but you just can’t pay more!

Perhaps the issue is that government people may not have enough private sector experience to serve as their reality check? Either the government’s PM or someone else more tangentially related to the program…

Hell, the whole reason for having requirements instead of a design specification is to drag out development.

Hell, it took decades of “reform” to get things as f’ed up as they are now. I’m sure this idiot will want to add to the pile up.

I don’t think the problem is that people don’t know the system is failing. I think they are making so much money off of avoiding the problems that they don’t want to know. Look at the behavior of these generals like Petraeus. I’m sure he’s not a bad man, but on the other hand he was and has continued to be a person who was promoted based on his ability to put personal loyalties above every shred of moral conscience, and now we are supposed to be surprised that he’s boinking some DC who re? I’d be more surprised if he wasn’t. We don’t promote people because they are good at war now. We promote them because they only see what they are supposed to see. They are promoted based on their moral ambivalence. So it should be no surprise when they show no backbone.

I thought Petraeus was pushed up on the cloud of the surge’s success.

However, getting directly to DCIA requires some degree of interpersonal relatability…

Which particular reforms do you think he’s trying to roll back here???

You seem to have forgotten what started the whole acquisition reform away from level 3 TDPs…DoD couldn’t afford it! Go ahead and go back to them, but get prepared to hire all the engineers currently working for contractors onto the Govt payroll and then have to STILL pay them when things slow down or Congress decides to play games and not fund things, etc. etc.

If you ever actually saw the requirements and the list of SDRLs for that hammer you’d wonder how in the world it could ONLY be $50. Contractors didn’t invent the dozens of new ridiculous requirements that are faced nearly every year. If it was up to them you get a hammer which did the job, felt good to your hand, lasted a reasonable lifetime and at a fair price. But now go add on all the latest tree-hugger requirements like outlawing cad-plated connectors (which have been in use for 40+years), no lead solder (the replacement of which causes dozens of issues not the least of which is reliability problems), the list goes on for pages (hundreds of pages actually). Maybe all you holier-than-thou types ought to try and make something that is subject to all these BS requirements and you’d have a slight clue what dirty-rotten-stinkin-lyin contractors have to deal with…fact is YOU DON’T HAVE A CLUE!

When an LCS costs more than an Iowa class battleship, I’m pretty sure our current “reforms” have run their course.

Accountability is paramount to success of a program. Metrics and communication of performance to push/pull a program to the original contract scope are requirements for process improvment.

Duh,
Frank Kendall has been in the Pentagon for years. He’s part of the problem. His new motto is “Do now what I didn’t do before.”

I do commend the under secretary for focusing on continuity of staff. Consider, as an example, the trouble that the government has been having concluding its negotiations with Lockheed Martin on the fifth lot of low-rate initial production (LRIP 5) for F-35s: eleven months of talking, and only now are the two sides concluding an agreement. The government’s program manager is yet again new; Lockheed’s—Tom Burbage—has been in place for the past twelve years. It’s reasonable to wonder if negotiations would have gone faster if the two PMs had had the time to really develop a longstanding working relationship.

The Navy Department understands the sort of continuity required in at least one job: even since the departure of Admiral Rickover, the Navy has left its heads of Naval Reactors in place for six to eight years. That’s the sort of longevity one sees in important corporate industrial jobs, and it’s time to consider the utility of that sort of experience in military procurement positions as well.

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