House panel targets DoD acquisition reform, but will that be enough?

Dov Zakheim, senior adviser, Center for Strategic and International Studies

Michael O'Connell | April 17, 2015 5:46 pm

The House Armed Services Committee is taking another crack at defense acquisition reform.

Committee chairman Buck McKeon (R-Calif.) recently tasked Vice Chairman Mac Thornberry (R-Texas) to head up a new panel looking at ways to reform the defense acquisition process.

“While this Committee has led successful efforts to improve the way the Department acquires items and services, there are still significant challenges facing the defense acquisition system,” McKeon said in a release. “We cannot afford a costly and ineffective acquisition system, particularly when faced with devastating impacts of repeated budget cuts and sequestration.”

The announcement came as experts on defense acquisition gave the committee some guidance on how to proceed. One of the witnesses was Dov Zakheim, former undersecretary of Defense (comptroller) and now a senior adviser at the Center for Strategic and International Studies. He says a new approach to defense acquisition reform has the potential for new results and the old approach won’t work this time around either.

“The way that we’ve been trying to do it, which is essentially focusing on specific issues with legislation, addressing them or process improvements is just not the way to go,” Zakheim told In Depth with Francis Rose. “It clearly hasn’t worked.”


Real reform starts with educating the acquisition workforce

When Zakheim first came to Washington in 1975 to testify before the Senate Committee on Government Affairs, that body conducted a series of hearings, one of which was on acquisition reform.

“Here we are well over 35 years later still grappling with the same problem,” he said. “I believe the fundamental issue revolves around personnel. If you don’t have an educated consumer, you’re just not going to buy the right things.”

At the time of those earlier hearings, DoD’s focus on acquisition was in purchasing goods, while today’s focus has shifted more to acquiring services. Zakheim said this change has made it more imperative for the Pentagon to hire the right acquisition personnel.

“When you talk about goods, clearly our people by definition are simply not up to speed with the state of the art,” he said. “There’s nothing on the civilian side that requires them to get any kind of technical re-certification.They could go to Defense Acquisition University and maybe take an online course, but that’s not the same thing as getting up to speed with aeronautical engineering or computer science or IT or physics or whatever.”

At the same time, a lack of knowledge on the hardware side means DoD acquisition personnel rely too heavily on services contractors for guidance.

“It’s not so much knowledge of the substance, but it is knowledge of how to manage these kinds of contracts,” Zakheim said. “How to write them up. How to oversee them. How to ensure that there’s accountability for those who do oversee them.”

These are very similar to the problems Zakehim encountered when he was on the Commission on Wartime Contracting in Iraq and Afghanistan.

“What I found was that people rely far too heavily on services contractors — even for managing that,” he said. “So, you get tangled up in all kinds of questions like: ‘What is inherently governmental and should contractors be potentially advising program managers to go in one direction as opposed to another?’ … So, again, the educational part is different in the sense that you need a different kind of education, but you still need the education.”

Other agencies can learn from DoD’s successes

Bill Greenwalt, a visting fellow at the American Enterprise Institute, also testified before the House Armed Services Committee about how the Homeland Security Department could apply some of the lessons learned from the Pentagon regarding acquisitions.

He said in a Pentagon Solutions interview recently that DoD is good at bringing in contractors and commercial solutions to leverage the lessons learned in that marketplace — for instance, research and development in the technology industry.

Greenwalt told the committee the shift to Lowest Price, Technically Acceptable is a bad idea.

“LPTA kind of assumes that the government knows the requirement and outlines that requirement and the bidders respond to it and whoever has the lowest price wins,” he said. “But, there are other things out there that the government doesn’t know best, the government doesn’t know everything and there’s a need for best-value solutions and best-value contracting and I think LPTA has overtaken best value and that’s something of a concern.”

Greenwalt says sequestration and the Budget Control Act offer an opportunity for the government and oversight agencies to refocus on the bottom line and to implement acquisition reform goals of the mid-1990s tailored to any new circumstances.

“We’ve kind of gone full circle,” he said. “When the budget went down in the post- Cold War (era), we needed to do everything smarter, faster, cheaper with limited resources. And that’s when the commercial item contract and reforms of the ’90s, the Federal Acquisition Streamlining Act and so on came into place. When the budgets increased, a lot of the government moved away from those good practices. The idea is that more than likely with this next budget downturn, there is that opportunity to go back and take advantage of some of those good best practices in acquisition.”

The key will be to identify which DoD best practices can be replicated at DHS and which best practices are “dead ends” — those that add cost but no value to the taxpayer or national security.

“There are some good things that have come in the past that we need to go out and study those,” Greenwalt said, adding that the oversight community needs to assess what best acquisition practices are working not only in the federal government but in other governments and the private sector.

Consistency needed to achieve acquisition reform

Zakheim said he felt a real sense of bipartisanship between McKeon, Thornberry and Ranking Member Adam Smith (D-Wash.) approaching the issue in a bipartisan manner, but he admitted that might not be enough to bring about reform.

“You’ve got to have consistency,” Zakheim said. “You’ve got to have the new guy coming in and saying, ‘I’m running with the same ball that the old guy has.’ In other words, it becomes a handoff and you don’t drop the ball and start all over and go the other the direction, to the other end zone. In addition to that, I would argue that what you need not only is consistency at the undersecretary for acquisition level, you need consistency at the deputy secretary level. In fact, you need a deputy secretary that really is understanding of, with experience of, top level management.”

In addition, people in DoD have told Zakheim they would like specific educational standards, which isn’t the case across the board.

“That’s in part because OPM is still functioning as it functioned for the last 30 years or more,” he said. “You need to be able to have specific requirements, educational requirements, you need to be able to advertise for those. Right now, you say, ‘Higher degrees recommended.’ Well, if you have somebody who wants to hire their best friend and their best friend doesn’t have a hire degree and their best friend is one of the last three standing, which they invariably are, then they just hire their best friend, degree or no degree. If, on the other hand, it was required as opposed to recommended that they had a higher degree, that would be a different story and you would hire the person with more knowledge and probably more recent knowledge. That’s one thing they could do.”

Despite these challenges, Zakheim remains optimistic that it is possible to fix the defense acquisition process.

“We cannot afford not to fix it,” he said. “[Former Lockheed Martin CEO] Norm Augustine said years ago, ‘If we keep going where we’re going, we’ll be down to one tank, one ship, one airplane.’ Take a look at how many planes we produce now relative to that first hearing that I mentioned took place. Take a look at how many ships we now have per year as opposed to how many we were able to purchase then. We don’t even build tanks, so there’s nothing to talk about there. The point is, we cannot go on this way. We’re an innovative people. We can figure this out. We just have to try to do something different.”


DoD acquisition programs remain alive, but sequestration damage is real