Pentagon: Acquisition Reform Key to Strategic Choices Review

Pentagon: Acquisition Reform Key to Strategic Choices Review

Improving the acquisition of weapons systems and platforms through cost-conscious strategies and more effective prototyping is a key part of the Defense Department’s ongoing Strategic Choices Review, Pentagon leaders told an audience May 23 at the Center for Strategic and International Studies (CSIS), Washington, D.C.

“Secretary Hagel asked me, working with Chairman Dempsey, to conduct a strategic choices and management review, to examine the choices that underlie our defense strategy, posture and investments, including all past assumptions and systems,” Deputy Defense Secretary Ashton Carter told the audience. “Everything’s on the table: roles and missions, war planning, business practices, force structure, personnel and compensation, acquisition and modernization investment, how we operate, how we measure and maintain readiness.”

Carter mentioned the ongoing review, designed to assess Pentagon strategy in light of recent developments within the Pentagon’s Better Buying Power program — an acquisition-focused effort unveiled in 2010 to save money,  improve efficiency, incentivize industry, increase competition, and maximize productivity.


“We directed 23 principal actions in five major areas:  first, to target affordability and cost growth in our programs; second, to incentivize productivity and innovation in industry through profit and partnership; third, to promote real competition wherever we could; fourth, to improve our tradecraft in the acquisition of services, as opposed to goods; and fifth, to reduce nonproductive processes and bureaucracy in the government, as well as in industry,” Carter told the audience.

Better Buying Power was started in 2010 by Carter and Frank Kendall, current Under Secretary of Defense – Acquisition, Technology and Logistics (ATL).

“Competition is an effective way to reduce costs. We want people to think of creative ways to create a competitive environment for industry, so that there is a reason for people to work harder to keep the business that they have. We’re not trying to take out profits to cut costs but we do want to tie profits to performance,” Kendall explained.

Rapid prototyping of next-generation and developmental programs is designed to minimize risk and “hedge against an uncertain future,” Kendall added.

Kendall spoke about prototyping and the importance of properly framing technological readiness in the context of a discussion about Better Buying Power 2.0, a follow-on initiative to the original 2010 Pentagon effort.  BBP 2.0 builds upon the main tenets of BBP 1.0 by extending a new set of principles such as increasing the successes of the acquisition workforce.

“It takes professionals when it comes to getting those little decisions right, getting the acquisition strategy right. It is important to really understand the technology maturity of your program and really understanding what makes industry perform better,” Kendall said.

For instance, Kendall talked about the important of assessing technological readiness of a prototype or demonstrator system, saying it is important that the design being assessed be similar to the one planned for further development and production.

“We want demonstrations of technology that actually reduce the risk of the program,” he explained.

Kendall also talked about establishing criteria regarding a concept for government-industry partnerships originating in the 60’s, called “Skunk” works, where small teams and units collaborated on acquisition programs.

“The idea is you have very small professional teams and that team is empowered. You are focused on the substance of what’s being done. Both sides, government and industry, will have a very professional team that will understand the nature of the work. Both sides will know what needs to be done, the nuts and bolts of the design,” Kendall explained.

A few other techniques mentioned by Kendall include the use of term called “Lowest Price Technically Available (LPTA),” which is essentially a plan to ensure a path foward which finds the least-expensive way of accomplishing a significant acquisition or developmental goal.

“My guidance to the workforce is, if you don’t use LPTA, you can’t define an objective standard to measure performance,” Kendall said.

Another key cost-saving technique expressed by Kendall is the “Should Cost” effort, a method by which program managers and acquisition professionals are encouraged to find enterprising or innovative ways to lower anticipated costs of a given acquisition effort.

Overall, Kendall talked about BBP 2.0 in terms of an ongoing process wherein leaders and workers in tandem gather metrics and view things with a critical eye, ever-mindful of improving upon past performance.

“The way to improve it is with continuous effort to understand the results you are getting, why you are getting them and where you can make improvements on the margin. That is what this is all about. The range of the problems is so diverse that each problem needs to be assessed in its own right,” Kendall said.

As far as identifying goals for BBP 1.0 and 2.0, Kendall explained that while much progress has been made thus far – one idea is to reduce the percentage of cost over-runs for major ACAT 1 programs.

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the DOD is still lacking smart buying power until generals in charge now go, they never will.

BB2? What baloney. They’ve done all this before to no good outcome. What’s needed is better leaders and politicians who stop making stupid decisions about WHAT they need and WHAT they buy. They need contractors to show a product that works (paid for with THEIR dollars), not form a lot of government-industry teams that will thrash about spending money on concepts ad infinitum to maximize THIER profits. STOP paying contractors for play toys and make them show us real products that work, and DON’T pay them until they do. We need to STOP subsidizing incompetence — in design, in engineering, in production, and in operating costs. THAT would be a sea change that could result in the Pentagon getting better weapons and more reasonable costs, which means we could even afford more of them! Wouldn’t that be a change!

“Kendall also talked about establishing criteria regarding a concept for government-industry partnerships originating in the 60’s, called “Skunk” works, where small teams and units collaborated on acquisition programs.”

Err, ‘Skunk Works’? Someone miss Kelly Johnson’s rules? Less layers on the decision-making pyramid, very close coordination with The Customer, pushing decision-makers together to do their jobs instead of delaying things to weekly meetings and delegating appropriate powers downwards, perhaps even as low to the guy on the shop floor. Put the engineers close to the shop floor, and no surprises for the government customer, and in turn the government doesn’t drop last minute changes on the designers.

When even the military leadership of this nation has no idea of what kinds of force structure is required to defeat the threats we face (as has been admitted elsewhere), all bets are off. And as long a the defense industries we have keep consolidating, there will be less and less competition. Furthermore, the vast migration of the US manufacturing base to China (etc.) during 2002–2008 reduces the potential competition even further.

The entire acquisition system should be extirpated and and replaced with one similar to that used by the British. They use a threat analysis board comprised of civilian and military experts that analyze the threats, and determine the weapons and force structure required to defeat those threats — and parliament only approves the expenses.

A similar system in the USA would translate into a huge reduction of: redundant research; congressional meddling; design changes that today occurs all the way through construction; and cronyism between defense industries and the general/flag staff.

The Brits get a far better deal for the money spent than the US taxpayer, who gets the lousiest deal in the western world by far.

“We directed 23 principal actions in five major areas: …second, to incentivize productivity and innovation in industry through profit and partnership”

They have yet to walk the walk, but so far Hagel is doing a good job of talking the talk. Right now all of the financial incentives with the exception of one are aimed and encouraging contractors to drag out development and jack up costs as high as possible. Plus, when you pay a contractor a profit to design a weapon, and the same amount of profit to build it, it leaves them with a negative incentive to ever build the weapon. Their risk is greater than the reward, at least until the assembly line is very mature, which is to say, all of the subcontractors are in place and producing a static product.

If Secretary Hagel needs a recommendation for the first useless standard to get rid of, he can start with the FAA’s software standard DO-178. It’s well past time that scam was ended. Functional testing would be far better and provide better results. That low level crap should have fallen by the wayside in the ’70’s.

Maybe there’s some light at the end of this tunnel, and maybe its not a train coming toward us. Damn, it was a lot more fun to be skeptical and negative all the time. I’ve gotta call them like I see them, though.

It seems to never occur to the DoD that part of the reason there is so much cost growth is because the initial cost estimates<./i> are invariably and unrealistically optimistic and based on incomplete understanding of requirements and CONOPS. No serious production cost estimate can possibly be made prior to critical design review — yet entire acquisition budgets, running up to 20 years, are made long before that milestone. Nunn-McCurdy actually works to exacerbate the problem, not solve it.

Right, so just give them a blank check up until CDR and see how well that works out for you. No really, you can trust defense contractors. They only have your best interests in mind. They are not all about making money, because in a capitalist society like ours, that would be bad. Capitalism = altruism, don’t you know. It’s the new math.

poor cost estimation is just a symptom of the deeper problem of pursuing too much technological risk in major defense acquisition programs. this would be solved if dod leadership adopted incremental improvements to proven weapon systems vs chasing pie in the sky. pie in the sky can be pursued and technology can be matured more properly through much less risky & costly ventures such as rapid competetive prototyping & pilot projects rather than in trying to ramrod it into a too big to fail polictical machine. add mathematical illiteracy & lack of courage to the senior leadership’s failings, and a lack of appreciation for technical aptitude in the general officer ranks (operators wear the stars & lawyers hold the political power), and you have identified the root causes and solutions to the problem. finally all this talk of reform & efficiency is a meaningless insulting joke that doesn’t amount to much more than a lot of busy work & powerpoints, when the resourcing priorities indicate that sustaining funding for F-35 and similar failed programs are the real priority.

Poor cost estimation is a symptom of the fact that the US taxpayer is footing the bill for all research and development costs. The US taxpayer is, therefore, the only one with anything at risk in this system of “hide the salami” procurement. If the companies themselves had to pay for their own R&D like they did when aerospace was booming and our vehicles really were “cutting edge” then the rest of the problems with technology and how it is applied would take care of themselves.

If you have time, any chance you could walk the readers through part of it?
http://​upload​.wikimedia​.org/​w​i​k​i​p​e​d​i​a​/​c​o​m​m​o​n​s​/​4/4

Unless I’m missing something, or some kind of bottleneck in the process it looks pretty normal.

Sadly, the TAS board in the US would be polluted with conflicts of interest before it ever came together.

Oh ..problems..Tanker.…first a sweetheart lease arraignment to supply ate a contractor that brought a turkey to the table called JSF née F35. Then a scandal.then a lockout of that contractor for dirty dealing then a new competition where another firm was nearly begged to compete. Then what THEY won. Then the deal was protested. Then a new competition written it to deliver the lowest cost refueling capacity but to built a specific number of aircraft at a goven cost…and on contractors cost data leaked to the other,..who won!!!! And not long ago the chief of strategic air fueling arm stated that while the 707 and dc 10 based planes are old…they have very low hours on the airframe were being reengineed and new avionics were being installed and the force would be fine without the leased planes. He was relieved of duty I think. Oh and the non Boeing plane flew was in production can be bougth today and now Boeing ran through all thier management reserves and have not fielded a plane. So why would a company put hiker own money’s..( BTW there is a lot of mandatory cost share in the prototype pages..F 22 he amount was so high the contractors demanded that they owned the IP of the designs…the government agreed..when the F22 was awarded to LMCO Boeing team…the NGC Mc Donnel team was asked for tier design to have LMCO build it.…the team requested a fee for the design IP ..it was not insubstantial..it was refused. The F23 design was left out the F22 built and the full contract built the program closed out and I think no battle time yet..I may now be wrong.

The F18 EFwas a completely new plane compared to the F 18 ABCD series. About one thousand have been delivered. These have been used in theaters since I think the late 1990s and the production one still In gear.

You think maybe some one might see success and learn from it.

Just read AVweek. The stuff is in the back issues.

Or The new light export fighter ground attack. A firm put up its own money a billion dollars. And just when the award was to be let. The congress changed its mind. And would not allow export which was a prime justification for the program. One billion dollar down the rat hole of a small company.why risk this idiocy.

Or the light cargo…cancelled.planes being bought today and sent straight to the desert to Rojas the Air Force does not want the planes…they were never the real customer..the army needs them not the Air Force. But the air Focre wants no competition for its pet projects.

The joint chiefs is ajoke ..they run separate fifedoms. The

don’t stop you are on a roll!

I agree 100% contractors abuse the system and they know how to play the game, we need proven quality products before commiting millions of dollars that could be use to better our economy

They do not follow the proper acquisition guidelines, I agree!!!

At that level, it might look normal. Of course, the whole problem with writing requirements and then testing to them is the whole GIGO issue (garbage in, garbage out). So you tested your code and it met your requirements, where your requirements any good to begin with? Seems to me the best way to write software is the way software has always been written. What is it supposed to do? What does it have to do to do that? And so on until you get down to actual code. You break it down functionally, then you test it functionally.

Oh, I see what you mean.

“Hey look, this code meets arbitrary benchmarks”

“Have you tested it in the simulator”

“No, that’s for the validation phase”

“Oh bummer, that’s fifty million lines of code to debug. Better push back the milestones!”

That said, I doubt programming is still boutique to the point of people hand-coding and doing silly human things like forgetting their semi-colons. Perhaps it’s not bugs in that sense, but bugs in the sense that the coding standards cart is coming before the functional horse.

DoD should be given the authority to create positions that are full time, half time or quarter time so that all thsoe retired military and eligible retirees can work less hours so that mgmt has flexibility in handling direct labor costs instead of this furlough insanity going on.

It is worse than you imagine. It meets the DO-178 standards, and that’s the end of it. Then it goes to either the simulator or the airplane (often the full up flight deck simulator doesn’t lead the airplane by much) and the fully qualified software is used by the pilots who then proceed to find out there are all kinds of bugs in the system as they try to put the simulator or aircraft through its paces. So then they have to reopen the code, reprogram, retest, recertify, it goes back on the airplane and they try again. At no point is the software functionally tested. That is to say, they don’t put it in the simulator and fly across the dateline. They don’t simulate what happens if you lose the radar altimeter because you’re flying banked over water and the antenna isn’t getting a return. All these things are left to chance. Hopefully the flight test crew finds most of the hidden gems. Sometimes, as with the F-22 dateline incident, the line crew finds them.

The acquisition guidelines are the problem.

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