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DoD memo starts to cleave its acquisition office in half, reassigns workforce

Defense acquisition civilian personnel will see no changes in their title, series or grade as the Defense Department begins to cleave the office of acquisition, technology and logistics in half on Feb. 1.

Jan. 31 memo obtained by Federal News Radio and signed by Deputy Defense Secretary Patrick Shanahan outlines just how the Pentagon will split its acquisition office into an office of research and engineering and an office of acquisition and sustainment. Congress mandated the split in the 2017 defense authorization act.

“In elevating the mission of advancing technology and innovation while simultaneously fostering distinct technology and acquisition cultures, we must also take the opportunity to reform processes, internal practices and regulations and continue to remove barriers to innovation in research, engineering, acquisition and sustainment whenever possible,” the memo states.

Starting Feb. 1, the memo officially dissolves the acquisition, technology and logistics office and begins building the Offices of the Undersecretary of Defense for Acquisition and Sustainment (A&S) and the Undersecretary of Defense for Research and Engineering (R&E) over the next two years.

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Now Undersecretary of Defense for Acquisition and Sustainment Ellen Lord told reporters at the Pentagon Feb. 1 that the workforce will not see any changes in function at this time.

“Current state is what it was yesterday. The future state has been laid out pretty clearly… We have some uncertainty in terms of where people will end up but there is a view of where we are going. We have been very clear in saying we are not doing a big reduction in force or anything like that. We are downsizing according to what Congress has laid out,” Lord said.

She added that the reorganization is about changing the way DoD does business.

“You’re going to see an enormous amount of training and exercises,” Lord said. “We do a lot of things in the department very well, but we haven’t learned how to scale that. We have [the Defense Innovation Unit Experimental], who has found out how to reach out to small businesses and really use other transaction authorities. We need to scale that in the department.”

Lord said she will need special assistance in three areas to jumpstart her effort. She will appoint a leader in human resources to focus on leadership development and talent acquisition.

“I need someone who can work with me to make sure we have strategic thinking around our human capital to make sure we are developing the next generation of leaders,” Lord said.

The second assistant will specialize in finance to promote a culture of “watching the numbers.”

A third will focus on software.

“As we reorganize the way we do business the thread that runs through all of our programs and all that we do is software and I believe that we need to catch up with the private sector and make sure we are using contemporary software development processes,” Lord said.

The memo serves as a line of demarcation between the two offices and moves resources and workforce from the office of the assistant defense secretary for research and engineering to the authority of the undersecretary of defense for research and engineering.

Other components falling under the authority of undersecretary for R&E include DoD’s innovation hub Defense Innovation Unit Experimental and its rapid acquisition Strategic Capabilities Office.

DARPA, the Defense Missile Agency, DoD Test Resource Management Center, Defense Microelectronics Activity and Defense Technical Information Center will transfer to undersecretary for R&E as well.

The undersecretary for R&E will act as the sponsor for the Defense Science Board and the Strategic Environment Research and Development Program Scientific Advisory Board. All other advisory boards under the former acquisition office will be sponsored by the Undersecretary of Defense for Acquisition and Sustainment.

The acquisition and sustainment office is getting the more day-to-day acquisition policy resources in the divorce.

The workforce at the front office of the old acquisition, technology and logistics office will move to, as will employees from the assistant secretaries for acquisition; energy installations and environment; logistics and materiel readiness; and workers for the assistant secretary for nuclear, chemical and biological defense programs.

The Defense Contract Management Agency, Defense Logistics Agency, Defense Threat Reduction Agency, Defense Acquisition University and Office of Economic Adjustment will all transfer to the undersecretary for A&S.

The memo does not signal the completion of the split of the acquisition, technology and logistics office.

DoD created an office of strategy and design, which is headed by Ben FitzGerald to oversee the reorganization.

Shanahan also tasked the Defense Innovation Board with identifying new opportunities to utilize business and technology workforce practices to improve the design of the new organizations.

By June 1, Shanahan wants complete realignment of personnel, resources and authorities across both the undersecretary for R&E and the undersecretary for A&S down to the deputy assistant secretary level. He also wants a plan for the update and tracking of resources in an authoritative data system.

Shanahan also asks for the office of strategy and design to propose a link between the undersecretary for A&S and other DoD and office of the secretary of defense components.

Then serving as Defense Undersecretary for Acquisition, Technology and Logistics, Ellen Lord told reporters in October the split would be a phased transition.

The purpose of the split is to give the research and engineering side more time to innovate and not worry about mundane buying tasks.

The research and engineering side will work on prototyping, experimentation, tech transition, tech development, allocation of resources of research and unifying research efforts.

On the other hand, DoD has assigned roles like acquisition policy design, procurement of goods and services, sustainment policy, logistics, maintenance, industrial base policy, contract administration, nuclear modernization and countering weapons of mass destruction to the acquisition and sustainment side of the house.

Lord said her initial reaction when she took office is DoD spends a lot of time on the acquisition side and very little time on the experimentation and sustainment side.

Mary Miller, who is performing the duties of assistant defense secretary for research and engineering, said last April that employees were skittish about the split.

“The workforce is uncomfortable. They don’t know what it means and we haven’t been able to tell them much because the secretary is still kind of saying ‘Do I like this plan? Do I not like this plan? What do I really want to do?’” Miller said.

Miller said there will be a natural tension between the two offices. One is about creating risk, while the other is about mitigating it.

“It’s a great strategy, but it’s exceptionally challenging to implement,” Miller said.

The challenge goes beyond simply reorganizing the offices, it deals with changing the culture within the new offices as well.