The Key To Acquisition Reform Is A Better Customer

There has been a tendency among defense officials, news outlets and defense analysts to blame industry for most of the acquisition problems and program failures that have occurred over the last several decades. Defense companies have been accused of being too expensive, restraining competition, having conflicts of interest between technical support and production activities, not delivering on their contractual commitments and even not being concerned about the welfare of service personnel. The Under Secretary for Acquisition, Dr. Ashton Carter, has chastised the defense industry for failing to provide the kinds of increasing functionality at reduced costs experienced by the commercial computer industry. A recent example of such a mind set was a speech by Air Force Chief of Staff General Norton Schwartz to a defense industry audience. Responding to a question about how industry could support the Air Force in a period of declining defense budgets, Schwartz said “Don’t blow smoke up my ass.” He went on to chastise his audience for failing to deliver what they had promised, saying “there will be less tolerance … for not delivering.”

General Schwartz did go on to acknowledge that part of the blame rested with the military services and their tendency to hunger after the most advanced technologies and gee whiz capabilities. He promised to restrain his service’s appetite in line with its shrinking budget. He said that the Air Force would do its part to be a better customer but that industry had to do better.

Yet, the reality is that the defense acquisition system is so dysfunctional it is hard to have confidence in General Schwartz’s promise to be a better customer. The acquisition system is not structured to support sensible acquisition. Defense acquisition officials continually change the terms of the bargain, moving money between programs, adding requirements, discovering new technologies and so-called black programs to compete with existing procurements. Government officials resist multi-year procurement contracts or performance-based logistics agreements because of the restrictions they impose on managers’ freedom of action even as they save money. Different parts of the acquisition system do not talk to each other or, like Operational Test and Evaluation, only enter the process when architectures are set in concrete. Government program managers rarely stay around long enough to see their programs through to completion or take responsibility for their decisions.

Just look at the F-35 program. The ability of Lockheed Martin to deliver the Air Force’s version of the Joint Strike Fighter at a price similar to that of the latest model F-16 is predicated on rapidly ramping up to an economically efficient production rate. But the defense department has imposed new, unnecessary and onerous testing and development requirements on the program even though it is doing fine. As a result, the production schedule slips to the right and the buy rate over the next decade declines. So the price goes up and industry gets blamed.

When the Army has had only one successful major acquisition program in the past decade, the UH-72 Lakota helicopter which will never be deployed outside the United States, the question has to be asked: was this a problem created by industry or by the customer? Or when acquisition officials take the program for a new presidential helicopter, one based on a platform, the EH-101, that is already in production and turn it into a multibillion dollar debacle by demanding hundreds of changes to the vehicle’s specifications, who is to blame? Or when the Marine Corps changes its concept for amphibious warfare is it any wonder that the Expeditionary Fighting Vehicle, an amazing piece of machinery, suddenly looks like a white elephant?

The Defense Science Board has proposed a series of reforms based in large part on commercial industry best practices that would go a long way towards bridging the requirements-performance gap identified by General Schwartz. In its recently released study on improving the adaptability of U.S. military forces, the DSB called for a block upgrade strategy for most major weapons programs. This strategy would focus on “rapidly fielding 60- to 80-percent solutions and then subsequently enhancing capability.” The report goes on to assert that “this strategy allows new capabilities to be inserted in a time-phased manner and enables lower risk, lower cost, and faster deployment. Programs, contracts, and budgets can be aligned to support this approach.” The DSB points out a number of successful examples of a block upgrade strategy including the F-16, F/A-18E/F, and ARCI sonar program. The report also makes some very far reaching recommendations related to improving adaptability in such areas as risk-management, increasing global awareness, learning to operate in degraded environments and enhancing the workforce.

The services may be starting to get their own house in order. The best example is the Army’s new request for proposal (RFP) for the Ground Combat Vehicle. The Army identified only four key requirements, the most important of which is growth potential. It also made schedule and cost critical variables. Industry has warned that the Army will have to be willing to live with a platform that at least initially is not the whiz bang system they envisioned in the first, canceled RFP. We will see whether the Army likes what it gets when time, cost and capability are all constrained.