Latest effort to reform DoD acquisition borrows heavily from expert panel’s recommendations

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For the fourth year in a row, the chairman of the House Armed Services Committee is pushing a package of legislation that he says will modernize and accelerate the Defense acquisition system.

This year’s version includes at least a couple of key differences though. For one, it attempts to prod the Defense Department to implement the changes Congress has already passed as part of prior-year reform bills.

For another, most of the changes Rep. Mac Thornberry (R-Texas) is proposing were first recommended by the Section 809 Panel, an 18-member team of acquisition experts Congress commissioned in 2017 to provide advice on how to streamline the system.

Among the traits shared by the Thornberry bill and the recommendations the 809 panel has already delivered is an emphasis on scraping years of detritus from the federal statutes that govern the acquisition system.

The overall proposal, which the chairman plans to incorporate into his chamber’s version of the 2019 Defense authorization bill after allowing for a few weeks of public comment, would do away with more than 100 legal provisions, including ones that force the Pentagon to operate more than a dozen offices within its acquisition bureaucracy that may or may not be needed anymore.

“We’re going to get rid of a lot of barnacles on the ship,” Thornberry told reporters this week. “There are a lot of things that have accumulated over the years.”

In many cases, the legal provisions the Thornberry proposal would remove from federal law are no longer in effect anyway. Many were written with explicit expiration dates that have since come and gone, and do nothing but litter the U.S. Code with inapplicable language that only serves to make acquisition law more incomprehensible than it needs to be.

The proposal would also put all of the statutory provisions dealing with Defense acquisition in one section of federal law — something that hasn’t been true since 1947.

“It’s a de-cluttering of the code,” said Cathleen Garman, an 809 panel commissioner who formerly served as a senior House Armed Services staff member. “Primarily what we’re dealing with are what are considered ‘notes’ in Title 10. Trying to read Title 10 and all of these notes sections is overwhelming to a number of practitioners. So why keep them? Why continue to clutter up the code?”

The bill also takes aim at another of the main focus areas the 809 panel addressed in the first full volume of its report, which was released in January.

The panel found that DoD has been backtracking on what is supposed to be a preference for commercial items, and the use of simplified procedures to buy them. The percentage of its dollars spent on commercial goods and services dropped 29 percent between 2012 and 2017.

That’s partially because both Congress and the department itself have made the process for buying commercial items increasingly complex over the past 20 years, including by increasing the number of government-unique contract clauses they impose on commercial firms by 188 percent, and quintupling the number of requirements that flow down to those companies’ subcontractors.

The panel found DoD’s regulations include upward of 40 sometimes-contradictory definitions of what constitutes a commercial item.

The Thornberry bill attempts to  revert to Defense Department to just two: one for commercial goods, another for commercial services.

Dr. William LaPlante, an 809 commissioner who formerly served as the assistant secretary of the Air Force for acquisition, said the lack of clarity on what “commercial” actually means was at the root of several sources of frustration while he was in office.

“One was a belief that there was an uneven application across the DoD on what a commercial item is: a company’s product would be considered commercial in one part of the Air Force, but not another,” he said. “Eventually, I asked around about why this was happening, and somebody dropped a bunch of inspector general reports on my desk, all of which were very critical of one or another decision on a commercial item determination that was made.”

The combination of uncertainty about what constitutes a commercial item along with the layers of additional rules DoD has added to what were supposed to be more simple commercial buying procedures has helped contribute to a slow decline in the use of those procedures.

In many cases, the 809 panel found, it actually took longer to complete a procurement under Part 12 of the Federal Acquisition Regulation — the supposedly-speedier one designed for commercial items — simply because the process of deciding whether something is “commercial” in the first place sometimes drags on for months.

“I’ve found cases where a contract has been delayed for a year-and-a-half over a determination of a commercial item,” LePlante said.

Another provision of the bill would require DoD to come up with a new small business strategy.

It would require the department to not only maximize its use of small businesses in its contracts, but also make sure its small business goals mirror the stated objectives of its overall acquisition system: namely, to achieve and maintain technological dominance over potential adversaries.

David Drabkin, the 809 Panel’s chairman, said the strategy also needs to emphasize a more proactive stance toward seeking out small business innovators that don’t already do business with DoD.

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“When we went out and talked to companies in the field, especially the ones who aren’t already doing business with us – they pointed out that DoD really isn’t knocking on their door,” he said. “And when we looked at the various activities that the department has to reach small businesses, we found that they had lots of folks who went to various meetings in places that tend to be attended by people who already do business with a government. They really didn’t have a focus on going to programs, shows, associations where there were people who didn’t do business with the government. And when we looked at DoD’s industrial base office, while they had a mission to look at the whole industrial base and try to identify the department’s needs, they really weren’t focused on small businesses.”

The legislation would also do away with provisions of federal law that explicitly demand that DoD operate certain offices within its vast acquisition bureaucracy.

The offices that would be removed from Title 10 include the Office of Corrosion Policy and Oversight, the Office of Performance Assessment and Root Cause Analysis, a special liaison to coordinate military research and development between the U.S. and Israel, and several others.

“We’re not focused on eliminating offices, we’re focused on eliminating the requirement so that the secretary can decide whether he wants them to continue as part of his efforts to streamline the management of the department,” said Darryl Scott, another 809 panel member who previously served as the deputy commander of DoD’s now-defunct Business Transformation Agency.

Thornberry said he hopes to get input on the discussion draft from both in and outside of DoD over the next several weeks.

But he plans to incorporate most of the proposals into his chamber’s version of the 2019 Defense authorization bill, alongside another piece of draft legislation he’s proposed that would seek to reduce the department’s bureaucracy by entirely eliminating seven Defense agencies and requiring 25 spending reductions from those that remain.

Thornberry said he believes he has a receptive audience within the Defense Department, including new leaders in the top ranks of its organizational chart that are willing to embrace and collaborate on reforms.

However, he expressed frustration at the pace with which DoD has moved to adopt new regulations that would implement the acquisition reforms Congress has already passed in the last several years’ versions of the National Defense Authorization Act.

Because of that, another provision of the bill would require the Government Accountability Office to study all acquisition-related changes Congress has made since 2010, and report on the degree to which DoD has updated the Defense Federal Acquisition Regulation Supplement (DFARS) to reflect those changes.

“We have not gotten as much change as we could have, should have, and need to,” Thornberry said. “I don’t know if this is intentional, if they’re overwhelmed, or whatever. But we’re focusing on that issue to take the changes we’ve already passed in law to make them real in implementation.”