The Army says it’s implementing most of the recommendations of a blue ribbon panel set up to study ballooning acquisition costs.
The study, led by Gil Decker and Lou Wagner, a former Army acquisition chief and a former head of the Army Materiel Command, respectively, made 76 recommendations to the Army for avoiding massive cost and schedule overruns.
The panel found that since 2004, the Army pumped between $3-and-$4 billion per year into large acquisition programs that it eventually wound up cancelling, including the Army’s Future Combat Systems, the Armed Reconnaissance and Comanche helicopters and many others. In all, the costs of the cancelled programs total approximately $100 billion.
After spending months reviewing the recommendations, the Army now is either implementing or has implemented 63 of the 76 recommendations, Army Secretary John McHugh testified before the Senate Appropriations Subcommittee on Defense on Wednesday.
McHugh said the other 13 recommendations require more study by the Army, but overall, he said the Decker-Wagner report was “revelatory.”
“I think the number one thing was our inclination in the past to not control requirements,” he said. McHugh said the Future Combat System, cancelled in 2009, was a poster child for that problem. “Requirements keep getting built on and built on, the time of the acquisition stretches out and pretty soon the cost has skyrocketed and you have an underperforming program, to say the least,” he said. “We’ve tried to a better job in stating the requirements, keeping them less reliant on immature or unavailable technologies.”
McHugh said the Ground Combat Vehicle is an example of a program in which they’re trying to do better. The Army grouped the requirements in its initial request for proposals for the GCV into tiers and categorized priorities.
But McHugh said the first RFP listed too many specific “tier one” priorities.
“When the RFP went out there were 990 tier one requirements,” he said. “That was at the outset, before we’d actually seen a spiral of increased requirements. To the corps’ credit in the acquisition side of the equation, they looked at it and said to themselves, ‘here we go again.’ And it was a tough decision, but they recalled that RFP and reduced the tier one requirements by 75 percent and put the rest of the requirements up into tier two and tier three where you can trade for costs as the development goes forward. It was a tough decision, but it was one that I think was very soundly supported by the industry.”
Gen. Martin Dempsey, the Army’s new chief of staff, said the service actually has a good track record managing cost and schedule on smaller acquisition programs and rapid acquisition programs. He said the major problems have been around the large acquisition category 1 programs that use the traditional DoD 5000 procurement process.
“The real challenge is to figure out why do we do so well in some of these rapid acquisition procedures and not so well in the very deliberate DoD 5000 series,” he said. “I think we’ll find ourselves in a position of believing that we should pull the future toward us and not have aspirations to deliver programs much beyond seven, eight, nine years. When they stretch beyond that they become the definition of lacking credibility.”
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