Robert Gates: Pentagon’s acquisition office has accumulated too much power

Robert Gates, the former Defense secretary who has frequently complained the DoD acquisition system only delivered rapid results when he was personally bird-dogging the program in question seemed to side with lawmakers’ current attitude on procurement reform Wednesday, saying that too much authority has been centralized within the Pentagon’s acquisition, technology and logistics office.

Testifying before the Senate Armed Services Committee, Gates acknowledged the rationale for the reforms which created the AT&L organization and centralized big  decisions within that office nearly 30 years ago: systems back then were too gold-plated, too parochial and lacked sufficient oversight when most of the levers of power laid within the military services.

But he is ambivalent about how things have worked out.

“We’ve succeeded in building a new layer of bureaucracy with thousands more employees and new processes to feed it, but when it comes to output, the results have been quite mixed,” he said. “As secretary, I found that despite all the [Office of the Secretary of Defense] and joint oversight mechanisms, far too many major weapons and equipment programs were ridiculously overdue, over-cost or no longer relevant to the highest priority defense needs. Problems with the services running acquisitions led to greater centralization and oversight to AT&L, but that led to another set of problems in the form of a sizable central bureaucracy that adds delays and costs without discernible benefit.”

Frank Kendall, the current AT&L chief, has said repeatedly that he recognizes the problem, and as part of DoD’s Better Buying Power initiative, has begun voluntarily delegating decisions to the military services in cases where programs don’t appear to need an extra layer of hand-holding.

But Gates said there is probably a need to devolve more decisions to lower levels on a more permanent basis, while also acknowledging that there is no magic formula for how much procurement authority should be held by the services versus the Office of the Secretary of Defense.

“In terms of how you adjust the balance, it is clear to me that the balance has shifted too far to AT&L, and therefore, there needs to be some strengthening of the role of the services, but central to that will be forcing the service leaders, the chief of staff and the secretary, to hold people accountable,” he said. “But the problem that I ran into in the Defense Department is that any problem, whether it’s acquisition or anything else, affects multiple parts of the department, none of which can tell the other what to do. They only reported to me or to the service secretary. No one below the secretary could actually get everybody in the room and say, ‘This is what you have to do.’”

The annual National Defense Authorization Act currently awaiting a signature or veto by President Barack Obama would shift the balance in favor of the services by giving their assistant secretaries for acquisition the authority to make milestone decisions on new weapons systems – an authority currently held by DoD’s AT&L organization – and by giving the uniformed chiefs of the Army, Navy, Air Force and Marine Corps the responsibility to balance cost, schedule and performance for as long as a program is in the works and being built.

Gates offered no specific opinions on those measures, but said whatever Congress does, it needs to ensure that the secretary of Defense has the ultimate say-so over killing or approving programs, or over moving systems outside traditional acquisition channels. He noted that he personally cancelled or capped 30 different programs and it took his own almost-daily involvement to quickly deploy mine-resistant vehicles to Iraq and Afghanistan.

“I cannot imagine a service chief or service secretary being able to overcome the intense internal pressures and voluntarily do away with, for example, programs like the Army Future Combat System, the airborne laser, the Zumwalt destroyer, or dozens of other troubled and needlessly exquisite systems that had built up a loyal service constituency,” he said. “The simple fact is that such decisions are not just programmatic, they’re political. And only the secretary of Defense, with the strong support of the president, has the clout, the power inside the Pentagon, with industry and here on the Hill to make those decisions and make them stick.”

Gates testified Wednesday as the leadoff witness in what Sen. John McCain (R-Ariz.), the committee’s chairman, said would be the first of a dozen hearings over the next year on the extremely broad topic of Defense reform.

Future hearings, McCain said, would zero-in on particular subjects such as civilian and military personnel management, potential organizational changes within DoD, alternative defense strategies and the future of warfare.

The former secretary was peppered with questions on all of those topics over the course of two-and-a-half hours. Many of them focused on the multiyear budget impasse between Congress and the White House that has plagued the Pentagon and the rest of government since his departure as Defense secretary in 2011. As Gates noted, each of the past seven fiscal years has at least started with a continuing resolution – and DoD has operated under CRs for one third of the days that have passed over the last six years.

Gates said the uncertainty has caused local commanders to make rational but wasteful decisions about how to run their organizations.

“The problem with this uncertainty is you have to adjust all of your spending because you can’t start anything new, and instead of dispersing the money over a 12-month period in a planned way, you have to hurry up at the end of the fiscal year,” he said. “And when you get a cut of 30 percent in the operations budget halfway through the fiscal year – which is what happened in 2013 because of sequestration – you end up with a third of the Air Force active duty fighter wings grounded, the Harry S. Truman can’t deputy to the Persian Gulf. This uncertainty ripples down to every level, and so what you have are commanders at lower levels not wanting to get caught short, so they’re very conservative in the way they spend their money because they don’t know what’s going to happen. So you have less training, less exercises, less maintenance. I mean, these are all the things that can be put off and they are being put off, and the backlog of maintenance in the Navy, for example, is becoming huge.”

Gates departed government service prior to sequestration taking effect in 2013, but said that one of his largest mistakes, in retrospect, was his bullish insistence on transitioning funding for things such wounded warrior care out of DoD’s overseas contingency operations budget and into the base budget. That decision was based on the belief that those programs would continue to be needed over the long haul and that OCO funds would go away at some point.

But that was before the federal budget process went off the rails and left OCO as the only discretionary account that’s not subject to arbitrary budget caps.

“Now, guess what? All of those programs are now being hit by sequestration and by continuing resolutions and everything else. So what I thought would protect those programs ended up making them vulnerable, whereas if I’d left them in OCO they’d still be fully funded. That’s the kind of perverse consequences you get from not having consistency and regular appropriation bills.”

Gates also bemoaned what he feels is a severe underinvestment in the other federal agencies that have quite a lot to do with overseas affairs.

As former Secretary of State Condoleeza Rice was fond to remind him while both were in office, DoD has more personnel assigned to military bands than State has for the entire Foreign Service.

“When I last left government in 1993, the U.S. Agency for International Development had 16,000 employees. They were dedicated professionals, there were accustomed to working in dangerous and difficult circumstances in developing countries and they brought extraordinary not only skill, but passion. When I returned to government 13 years later in 2006, AID was down to 3,000 employees and they were mostly contractors, and that is a measure of what’s happened in the development part of our broader strategy. For those of us who can remember the U.S. Information Administration in its heyday, what we have in the way of strategic communications in our government today is a very pale reflection of that. That whole civilian side been neglected for a very long time.”

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