Poor planning and management in the acquisition process cost the Defense Department almost $6 billion in its 2012 budget, according to one contracting expert.
Congress pulled $5.9 billion in funding for fiscal-year 2012 from the Pentagon, citing the “pervasive instability” of some of the department’s acquisition strategies.
That’s what Ray Bjorklund, vice president and chief knowledge officer at Deltek, found when he examined the final defense budget approved by a House-Senate conference last month.
In a post for the Washington Business Journal, Bjorklund cited lawmakers’ frustration with a particular military department, which sought to update its budget request — to the tune of $1.6 billion.
But lawmakers balked.
“This magnitude of change in funding across a multitude of programs, identified after submitting the budget only ten months prior, indicates a pervasive instability,” the conferees wrote.
So,Congress, which Bjorklund said has become increasingly “picky” about DoD management of large acquisitions, stepped in and cut off funding.
Bjorklund, joined In Depth with Francis Rose to discuss what to do to get the money flowing again.
He broke down the specific numbers, mapping out what percentage of the cuts can be explained poor execution, inadequate planning and so on.
Of the $5.9 billion in cuts related to poor acquisition management:
36 percent related to inadequate acquisition planning
19 percent related to to poor contract execution
18 percent related to procurement delays
27 percent related to general cost or schedule growth
Bjorklund said the numbers suggest both industry and DoD are lacking some necessary skills in their respective workforces. “And because there’s not enough experience, a lot of mistakes are being made,” he added. “And the mistakes are not disastrous, but the mistakes end up costing industry money and it costs DoD money.”
Better acquisition management will require some give-and-take from both government and industry, he said. “It’s really both sides of the table that have some accountability and responsibility in this,” he added.
That could be difficult, considering the department is expected to slim down in the years ahead, with an inevitable effect on contractors’ bottom lines.
But there is likely a competitive advantage to being proactive.
“Companies that really follow through on making sure that they’ve got a well-trained acquisition workforce that could work closely with their government customers … are probably going to be far more competitive, because customers like service providers and suppliers that can deliver on time and within budgets,” he said.