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Pentagon embraced flexibility to up its acquisition workforce

(Federal Times) The expansive list of federal hiring authorities has seen mixed responses from agency human resource offices, with some saying that options help them to fill critical positions, while others say that the increasing number and complexity of hiring authorities does more damage than good.

But according to the Government Accountability Office, the Department of Defense has had success over the past five years in using such authorities to expand their substantial civilian acquisition workforce.

“The Department of Defense has used human capital flexibilities extensively to hire, recruit and retain its civilian acquisition workforce. Since 2014, usage rates for hiring flexibilities — alternatives to the traditional, competitive hiring process — have generally increased,” an Aug. 15 report said.

“DoD leadership has encouraged its hiring personnel to use these flexibilities, such as direct hire authorities, to reduce the length of the hiring process. From fiscal year 2014 to 2018, DoD used hiring flexibilities for 90 percent of its approximately 44,000 civilian acquisition workforce hiring actions.”

According to data collected by the DoD’s Human Capital Initiative, the civilian acquisition workforce increased by nearly 17 percent over that period, going from 134,808 employees in 2014 to 157,318 in 2018.

Read More Click (Federal Times)

By: Jessica Bur

Date: 8/16/2019

US Navy’s #1 Acquisition Priority Flounders

WASHINGTON — The U.S. Navy’s $122.3 billion Columbia-class ballistic missile submarine program is off to an inauspicious start after faulty welding was discovered in several missile tubes destined for both the Columbia and Virginia-class programs, as well as the United Kingdom’s follow-on SSBN program.In all, 12 missile tubes manufactured by BWXT, Inc., are being scrutinized for substandard welds. Seven of the 12 had been delivered to prime contractor General Dynamics Electric Boat and were in various stages of outfitting, and five were still under construction. The Navy and Electric Boat have launched an investigation, according to a statement from Naval Sea Systems Command spokesman Bill Couch.

“All BWXT welding requiring volumetric inspection has been halted until the investigation is complete,” Couch said.

The bad welds came to light after discrepancies were discovered with the equipment BWXT used to test the welds before shipping them to GDEB, according to a source familiar with the issue.

The discovery of a significant quality control issue at the very outset of fabrication of Columbia injects uncertainty in a program that already has little room for delays. The issue is made even more troubling because it arises from a vendor with an excellent reputation, and raises questions about whether the Navy can deliver Columbia on time, something the Navy says is vital to ensuring continuous nuclear deterrent patrols as the Ohio class reaches the end of its service life.

The issue with the missile tubes, part of the common missile compartment to be installed in both Columbia and the UK’s Dreadnought submarine program, should not put the Columbia program behind schedule, Couch said. The impact on Royal Navy’s Dreadnought program is less clear, Couch said.“Impacts to the delivery of missile tubes to the UK will be assessed upon completion of GDEB’s efforts to define and scope next steps,” Couch said.

BWXT is one of three vendors sub-contracted to deliver tubes for Columbia and Dreadnought and one of two on contract for Virginia class, Couch said. The quality control issue not only impacts the U.S. and U.K. ballistic missile submarine programs, but might also impact the schedule for the Navy’s next iteration of the Virginia class, Virginia Block V, which incorporates additional vertical-launch missile cells, known as the Virginia Payload Module.
“The Navy is assessing the potential impact to Virginia-class submarines with VPM,” Couch said.

Early indications are the issue is contained to just tubes fabricated by BWXT, Couch said.

“The Navy/GDEB team is working to bound the scope of the problem and engineering assessments are ongoing to assess and determine remediation for the identified issues,” Couch said. “Initial reports indicate that the other vendors do not have the same issue, and they continue to produce missile and payload tubes.”

The Navy awarded General Dynamics a $101 million contract for SSBN missile tubes back in 2016. Design work for the common missile compartment goes back nearly a decade. In September, the Navy awarded a $5.1 billion contract to General Dynamics Electric Boat to finish design work for the boat ahead of beginning construction in 2021.

What impact the faulty welds will have on the cost of either Columbia class, already among the most expensive programs in Defense Department history, or Virginia class is unclear, said a Navy official familiar with the details speaking on background. A July Congressional Research Service report put the cost of acquiring the 12-ship Columbia class at $122.3 billion.

“It’s not a good sign for a program that has had a lot of attention, it’s the Navy’s number one acquisition priority,” said Bryan Clark, an analyst with the Center for Strategic and Budgetary Assessments and a retired submarine officer. “It’s an early and pretty significant failure in a major component from a manufacturer with stellar reputation.”

In a statement, General Dynamics said the company was committed to limiting the impact on the U.S. and U.K. sub programs.

“General Dynamics Electric Boat is investigating a weld issue identified by one of its subcontractors on missile tubes delivered to GDEB for use in the U.S. COLUMBIA and UK DREADNOUGHT SSBN programs and payload tubes for the VIRGINIA Class SSN program,” the statement reads. “GDEB is working closely with the subcontractor and the Navy to mitigate any potential impacts to these programs. As our customers expect the best from us, safety and quality are central to the culture at General Dynamics Electric Boat.”The Navy needs to start construction on Columbia in 2021 to have the boat out on patrol by 2031, a schedule NAVSEA still thinks its on track to meet.

“The Navy purposely planned for early construction of the Common Missile Compartment including missile tubes and first article quad pack, to mitigate risks such as these, and construction start for Columbia remains on schedule in FY2021,” Couch said.

Ultimately, however, it is probably too early to tell if there will be any significant impact to the Columbia schedule, said Clark, the CSBA analyst.

“The problem is that this causes challenges down the line,” he said. “The missile tubes get delayed, what are the cascading effects of other components down the line? It’s a pretty intricate dance at Electric Boat when it’s building two other fast attack boats at the same time so what the impact of a delay here will be might not be clear.”The question of whether the Navy can recover from the setback is still an open one, said Thomas Callender, also a retired submarine officer and analyst with the Heritage Foundation.

“The Navy does not have a lot of margin in the time-frame for the class, especially in the first hull, so that is a worry.”

By: David B. Larter

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GAO Decision Threatens US Military Dominance; Reject It

(Breaking Defense) It hasn’t attracted much attention but a seemingly minor quasi-judicial ruling is a prime example of how our acquisition system serves as a means to self-inflicted unilateral disarmament.

Unless senior leadership in the Defense Department acts in the next few weeks, this Government Accountability Office’s (GAO) protest decision in favor of Oracle and against the Army and Transportation Command will ensure that China will dominate the future military application of quantum computing, artificial intelligence and machine learning, data analytics, biotechnology, robotics and autonomous operations. Even before the recent GAO ruling the odds were daunting that the Pentagon could pursue the right policies to compete and win in what is now the arms race of the 21st century. Unless the Defense Department engages, those odds just got perilously worse.

Why would such a seemingly mundane judgment have such a wide-ranging impact? In one fell swoop, this decision kills DoD’s ability to access Silicon Valley and the rest of leading edge commercial innovators in the US and the free world. While it may not be obvious to many, the only way for the U.S. to compete with China in the next decade will be to harness the engineering talent and the lead that the commercial market currently has in emerging technologies. To understand the significance of this, note that six out of the eight technologies identified in the National Defense Strategy as vital to future national security are being led by the commercial marketplace. To provide for its security the U.S. needs to find a way to partner and contract with commercial companies that until now would not work with the Pentagon because of its massive compliance requirements, its excruciatingly slow acquisition and contracting processes and the way it treats intellectual property.

OTAs (Other Transactions Authority) are currently the only way to remove the barriers necessary to get these non-traditional sources of innovation to do business with the military. Properly constructed, OTAs help speed up the process, respect a company’s IP through negotiation rather than regulatory fiat, and result in contracting under commercial terms and conditions. Any CEO of an advanced commercial technology company understands all too clearly that contracting with the U.S. military in any fashion besides an OTA probably jeopardizes his or her company’s culture and technologies. It is no coincidence that Elon Musk’s SpaceX would not exist without NASA’s aggressive use of OTA authority embedded in the Space Act of 1958. The expansion of OTA and Experimental Authorities was one of the centerpieces of the recent McCain acquisition reforms designed to explicitly meet the threats posed by China and Russia. By expanding OTAs at the Defense Department to correspond to the authorities of the Space Act, Congress opened the door to the creation of hundreds of new SpaceX’s to disrupt the defense market by bringing in new competition and innovation. This, because of GAO’s intervention, will likely no longer happen.

The implications of the GAO’s ruling are massive. it essentially overturns the benefit of every ongoing OTA conducted to date by declaring all production OTAs based on these efforts cannot move forward. This is outrageous. The law and DoD’s policy are clear that all OTA’s that were awarded under competitive procedures are eligible to continue on to production. The OTA award in question that GAO based its judgment on originally had 21 bidders. If that doesn’t meet the statutory criteria then nothing will.

Even worse, GAO now gives anyone, including parties that have never bid on the original OTA, the ability to slow down and stop future OTAs through the protest process. The protester, Oracle, was not even among the original 21 bidders and yet GAO still decided to rule on the case. Finally, GAO through this decision has inserted itself to be the sole ruler on when a prototype is complete and when, if ever, it can transition to production. Never mind that the warfighter decides as in the case in question that a capability developed under an OTA prototype has proved itself and is worth buying quickly to save lives or provide a military advantage, GAO believes only its lawyers are the ones competent enough to do that.

Without the benefits of OTAs it now makes no sense for a Silicon Valley firm to want to partner with the DOD under current circumstances. The only way forward based on the GAO ruling is to prepare to litigate one’s way through a legal morass and hire an army of Washington consultants and lawyers to navigate through a constantly changing compliance process. Even if OTAs are somehow able to survive in a more limited form, GAO by establishing a newfound protest jurisdiction will ensure that OTAs will become more like the traditional contracting process through a death by a thousand cuts review process. GAO through its protest review of the traditional acquisition system has no shortage of blame for the inadequacies of the current process and the national security risk is it will use the same criteria to judge OTAs as it now does with traditional contracts. This type of review will be the death knell of acquisition reform and the only real winners here are China and Russia.

What can be done to alleviate this catastrophic decision by GAO? The Trump Administration can first of all reject the ruling. GAO’s protest decisions if mandatory would be essentially unconstitutional, as they would constitute a legislative veto over the executive branch. The legal fiction to get around this situation is to make GAO’s decisions advisory and non-legally binding, but with reporting requirements to Congress when a decision is not acted upon. While rarely done, DoD should ignore this decision. This could risk some congressional handwringing and possible intervention — especially if the sponsor of the protest continues to spend millions of dollars on a lobbying and legal effort to eradicate OTAs — but it is better to have that discussion and debate with Congress than to accept this fait accompli. The question of Oracle’s motive in this area is probably the subject of an entirely different column, but as a one-time member of the innovative Silicon Valley club, suffice it to say the company seems to have seriously lost its way. It no longer is acting as the innovator it once was nor is it serving the interests of the United States with its actions.

An even bolder and more highly recommended move by the Trump Administration would be to reject the right of GAO to review any OTA in the future. During debates on expanding OTAs, Congress did not consider nor grant GAO any role in overseeing OTAs, which is why this GAO action is so monumental. GAO has usurped greater power over the acquisition system and the negative consequences of this should be checked.d

To address any legitimate concerns that OTAs might be misused, the Pentagon should consider setting up a very streamlined disputes mechanism to review their uses and to listen to contractor concerns about either the process or better alternatives.

Finally, the Defense Department must fix so-called commercial item contracting, dealt with in FAR Part 12. This is something the department should have done long ago. By failing to implement the commercial reform laws passed on the 2016-2018 NDAAs, Pentagon innovators have been forced to use OTAs in cases where a reformed FAR Part 12 contract could work just as well. By not acting on authority given them by Congress to remove the barriers to FAR Part 12 contracting that have arisen in the last decade, the department risks using OTAs in the wrong situation. That could provide openings to roll back reforms by special interests that prefer the status quo. This should be fixed immediately.

Finally at GAO, the Comptroller General should get involved and review the implications of this cloud decision. When the protest division of GAO ignores the law and makes procurement policy with profound national security implications, GAO’s leadership should review it and act. Until America’s national security situation improves, the ability to use OTAs to experiment with new technologies and acquisition approaches and processes to access new sources of innovation should not be limited.

Written by Bill Greenwalt, a defense consultant and senior fellow at the Atlantic Council, was the acquisition policy staffer on the Senate Armed Services Committee for almost a decade and served almost three years as deputy undersecretary of Defense for industrial base policy.

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Air Force “Delta” Office to Rehaul Acquisition Process

( The U.S. Air Force has established a new office to streamline how it procures and sustains weapons, platforms and networks.

The office, dubbed “AQ Delta” and placed under Assistant Secretary of the Air Force for Acquisition, Technology and Logistics Will Roper, is not intended to manage programs, but instead “identify things that are slowing us down and to rewire the system” in the acquisition process, said Air Force Secretary Heather Wilson.

“Delta” is incorporated into the name because it means change, she said.

Wilson revealed the new unit during a town hall at Hurlburt Field, Florida, on May 4 when an airman asked what the service is doing to better integrate systems and “break down barriers” when “money is keeping us apart” from advancing new programs.

If there are problems, a team of finance and acquisition experts would pinpoint them and “say, ‘Alright, let’s stop working around systems; start rewiring it,’ ” Wilson said.

The idea replicates what Roper helped create at the highest levels at the Pentagon: the Strategic Capabilities Office, which aims to get around bureaucratic problems and more effectively advance programs in the Defense Department. The office was stood up by then-Defense Secretary Ash Carter.

Wilson has touted the Air Force’s progress in improving its procurement approach, often pointing to additional acquisition authorities, rapid prototyping endeavors and even the service’s “Light Attack experiment” ongoing at Holloman Air Force Base, New Mexico.

For example, the Air Force in recent budgets has received more acquisition authority from Congress to push down decisions to program officers so they can spend more time managing their designated projects “than managing the Pentagon,” Wilson told lawmakers Thursday.

Extra authorities at lower levels have given the service an edge in more rapid prototyping for concepts such as the “next-generation missile warning satellites, new engines for the [B-52 Stratofortress], and hypersonic weapons,” she said before the Senate Appropriations subcommittee on defense.

Accelerating how the Air Force acquires new weapons isn’t the only item on the agenda; the service is rethinking maintenance as well.

Since assuming his role in February, Roper has signaled that the Air Force may be more open to competing sustainment or upgrade contracts.

The practice would allow for additional companies to compete for upgrades on current programs, which are often automatically dedicated to the firm that originated them.

“I would like to be able for a system to continually compete, replace and upgrade, all the different components,” Roper said earlier this month.

Wilson endorses the idea.

“In general, competition helps to drive up performance and drive down cost, and so competition works,” she told in a May 4 interview. “And it’s true in military procurement just as it is in the private sector.” / 18 May 2018 / By Oriana Pawlyk

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Air Force Speeds Up Space Acquisitions

(Breaking Defense) The Air Force, eager to get inside the decision cycle of China and Russia, is pressing ahead hard and fast to substantially speed space acquisition.

In what is something of a test case for the service, Air Force Secretary Heather Wilson last night committed to building the next generation of missile warning satellites, OPIR, in five years. The existing SBIRS satellites, after years and years of delays and cost overruns,  still take nine years to get into orbit.

To get the birds into space more quickly, Wilson told reporters before an after-dinner speech that they will use “known sensors” and a commercial satellite bus. On top of those capabilities, Wilson said they “may have” defensive capabilities, carry more fuel and and more maneuverable so they can fight (defensively) in space if the need arises.

This is clearly a new standard for American military satellites: build them so they can defend themselves. Why? As Wilson put it in her speech here: “We built exquisite glass houses in a world without stones.” Today, the Russians and Chinese are building stones and appear ready to use them.

Another key to achieving this will be substantial change to how Space and Missile System Center, the people who buy the Air Force’s satellites and related launch systems, does its job. Wilson told me they will break apart the familiar vertical stovepipes — which govern position and timing, space superiority, and remote sensing — and create a new structure. There will be a production corps and a development corps that will function across multiple programs, she said.

The initial reorganization will be done by October, Wilson said.

Why is the Air Force trying to get these sophisticated satellites into space in five years?

Will Roper, new head of Air Force acquisition and former leader of the Pentagon’s Strategic Capabilities Office, told reporters it is “aggressive goal,” one they set because things wouldn’t happen faster unless, in effect, they said they would. He made clear we’ll see more such stuff goals set for Air Force acquisition programs. Prototyping should help get these birds into space more quickly, he said. That will help weed out the incompetent and the slow. “We want to not be afraid,” he said. Of course, my self and a host of other reporters and congressional aides and erstwhile experts will be watching closely, ready to point fingers should this not happen.

Bear in mind that it’s not entirely clear when those five years start– after companies build prototypes and the Air Force picks a winner or….?

But the senior Air Force officials really are trying to change what they see as an often crippling culture that punishes failure and spend years trying to figure out why something failed, instead of just fixing it and getting on with things.

On top of the SMC changes, a new office is being stood up to work with Roper to “rewire” the acquisition system and make current procedures, that require dodging the slower bits of the acquisition system, standard practice. It will “work with program managers to identify areas for streamlining and improvement,” an Air Force statement says.

“Their job,” Wilson said in her speech, “is not to buy things but to change the Pentagon rules on how we buy things so that speed is possible.”

Will these changes blow my or others socks off, as Secretary Wilson boldly claimed? Let’s hope so.

By COLIN CLARK for Breaking Defense

on April 18, 2018 at 4:00 AM

Five Myths About Pentagon Weapons Programs

(Defense One by Frank Kendal) There is an unfortunate array of mythological perceived wisdom in Washington about the development, testing, and production of America’s cutting-edge weapons. Here are five examples:

Myth 1: The defense acquisition system is broken.

The United States has possessed the best-equipped military in the world for decades. The superior performance of its defense acquisition system helped bring the Soviet Union to defeat and allowed America to engage any adversary it has faced on conventional battlefields with decisive advantages. The defense sector of the U.S. economy has a strong positive trade balance largely because U.S. weapons are superior to those of our competitors.

Sustaining the U.S. position of military technological superiority over time requires that the acquisition system must take risk, and sometimes those risks result in cost overruns, schedule slips, and even canceled programs. This does not imply, however, that the system is broken. Creating a complex weapon system that is a generation more advanced than anything in existence is never a low-risk venture. That risk can be managed and mitigated, but it cannot be eliminated.

The defense acquisition system is far from perfect. There are many opportunities to improve efficiency, and the occasional dramatic program overrun or failure attracts significant attention, but to say the system is broken is just not supported by its overall history of success.

Myth 2: Excessive bureaucracy is the core problem with defense acquisition.

There is certainly too much bureaucracy in the defense acquisition system. Bureaucracy is not, however, the reason that some programs experience cost overruns, schedule slips, and sometimes cancellations. Those problems arise because of errors in the substance of program planning and or execution. Bureaucracy is an overhead cost overlaid on the system.

The bureaucracy’s significant failing is that it does not always succeed in its purpose of preventing major problems. For example, the problems the F-35 encountered — excessive weight, software development delays, and numerous design flaws requiring correction — had nothing to do with the bureaucracy and everything to do with program planning and execution. A similar case is the CVN-78 Ford aircraft carrier program, in which problems with integrating several unproven subsystems led to massive cost overruns.

The bureaucracy associated with contracting and major program decisions is also not a primary schedule driver, for the simple reason that these processes are planned to accommodate a generally predictable and much more real schedule driver: the availability of appropriated funds.

Bureaucratic processes are generally started so that they complete in time to support planned major events such as contract award dates, which are in turn controlled by the availability of funding. Repeated Continuing Resolutions and the threat of sequestration are much bigger problems for schedule execution and program stability.

Reducing the overhead costs associated with bureaucracy is a worthy goal, and that work should continue, but two things should be kept in mind. First, that the source of the bureaucracy is largely the U.S. Congress, which annually passes a National Defense Authorization Act that almost always increases bureaucracy by adding requirements that have to be implemented through regulations. Second, it is important to realize that bureaucracy is not entirely cost that adds no value — or more simply put: “don’t throw the baby out with the bath water.” Many of the mechanisms put in place to implement and review program planning, monitor performance, and to support sound program decisions do have value, and do lead to improved planning and execution. Removing those mechanisms may marginally reduce overhead, but it will not improve planning or execution, and may well lead to poorer decisions.

Myth 3: Innovation is stifled by the acquisition system.

The pace at which innovation moves through the system can be accelerated, but there is no shortage of creativity or new ideas, or access to cutting-edge technology in the defense acquisition enterprise. The combined efforts of Defense Department laboratories, defense industry, and organizations like the Defense Advanced Research Projects Agency are all focused on creating new and exciting options for U.S. forces. Outreach to commercial technology has always been conducted by government technologists and the defense industry. Competitive pressure continuously motivates defense companies to develop and acquire the best available technology.

There are two fundamental obstacles that impede the transfer of innovative technologies to our warfighters, often by consigning new ideas to the well-known “valley of death” between demonstrated technology and fielded capability. Those obstacles are the closely related lack of funding and the lack of formal operational requirements. The early experimental stages of technology maturation and experimental prototyping are inexpensive and do not require large long-term budgetary commitments or formal requirements from operational leadership. In the previous administration, a large number of experimental projects were funded. However, starting a major program that will lead to a significant fielded capability also requires a willingness to prioritize resources for that purpose and the decision by the military operational community to support a “requirement” for the new capability.

These are the shoals upon which new ideas founder, not the Department’s access to technological innovation. The defense acquisition enterprise does not control budgets or operational requirements; it responds to them. True innovation, which includes new operational concepts, will have to come through strong leadership beyond just the acquisition community, and importantly at the expense of other familiar and more traditional military service budget priorities.

Myth 4: Stronger “punishments” for cost overruns and schedule slips will lead to better performance.

The assumptions behind this myth are that neither industry nor government program management is adequately motivated to do well, and that cost overruns and schedule slips can be reduced or eliminated through stronger financial incentives to industry and stronger disciplinary actions to program managers whose programs experience major problems. In fact, most contract arrangements do provide effective financial motivation. For example, development contracts that lead to production provide, on average, profit margins of about 6 percent.

Production contracts provide margins at twice that rate. Doubling profitability is a strong motivator for any commercial company. Similarly, all the hundreds of government program managers I’ve ever known have been strongly motivated to keep their programs from becoming problem children or being canceled.

It is wishful thinking to imagine that we will get better results if we force defense companies to risk bankruptcy through contract mechanisms like firm-fixed-price development (definitely not a commercial practice) or if we threaten program managers with public firing. The more likely result of the more aggressive use motivational “sticks” is fewer companies willing to work for a Defense Department that exposes them to unbounded financial risk; and fewer qualified people willing to serve as government program managers who can be arbitrarily fired for poor program performance they had no real control over.

Myth 5: There is some new form of undiscovered “acquisition magic” that will fundamentally improve results.

The quest for this elusive Holy Grail has taken many forms, going by names like “total quality management” or “reinventing government” or “transformation” or “total system performance” or “lead system integrator.” Some of these initiatives contained sound ideas and some led to marginal improvements; most had little effect or were actually quite counterproductive. The most recent form of acquisition magic appears to be something called “rapid acquisition,” which is generally understood as streamlined but high-risk acquisition that accepts a lower quality products. Rapid acquisition has its place, primarily when operational urgency dictates the need to accept risk, accept waste, and get a basic capability lacking desirable but non-essential features to the field as quickly as possible. This was the case with the highly successful Mine Resistant Ambush Protected (MRAP) vehicle program to counter improvised explosive devices. One should remember, however, that of the roughly 30,000 vehicles produced at a cost of tens of billions of dollars, only a few thousand are still in the Department’s inventory; the rest have been scrapped or disposed of. Contrast this program to the more deliberate Joint Light Tactical Vehicle, or JLTV, which took much longer to field, but will serve the Department for decades. Haste does make waste, and speed is not the only virtue.

After decades of searching for some new form of acquisition magic, it may be time to accept that the basics of fostering professionalism in both government and industry, developing sound requirements through close operator and acquirer cooperation, strong well-crafted incentives, and disciplined attention to detail, all embedded in a management approach of data-driven continuous improvement, represents the best route to improving defense acquisition.

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Fire Them: Sen McCain Wants to Hold Defense Officals Accountable

( The chairman of the Senate Armed Services Committee is playing hardball with the Pentagon when it comes to acquisition programs that end up billions of dollars over budget or deliver years late.

In a hearing before the committee Thursday, Sen. John McCain took to task Ellen Lord, the new under secretary of defense for acquisition, technology and logistics, for recent examples of acquisition malpractice, including the Army’s Future Combat Systems and the USS Gerald S. Ford, the first of the Navy’s new class of supercarriers.

FCS was canceled in 2009 after six years of work and more than $6 billion in taxpayer investment; the Ford was delivered earlier this year, more than $2 billion over budget and 15 months later than expected.

McCain said he asked Chief of Naval Operations Adm. John Richardson who was responsible for cost overruns and was told Richardson didn’t know.

“I mean, there’s such a thing as accountability, and all of the things that were just covered by the witnesses here … there’s no penalty for failure,” the Arizona Republican said. ” … When I go to a town hall meeting and tell my constituents that we blew $6 billion and there has not been anyone fired or replaced or — or — or new way of doing things, they’re not really very happy.”

Lord declined to talk about specific personnel actions in an open hearing, telling McCain she preferred to discuss the matter privately in his office.

“We, as a team, are working very closely together to look at functions and individuals in OSD and in the services, the duties they’re required to perform,” she said, “and are determining whether or not we have the right people in the right slots, and I don’t want to talk about individuals here in a broad forum.”

Army Secretary Mark Esper, who also testified, was more direct.

“Senator, I’m not aware of anyone being fired for FCS, to your point,” he said.

McCain has been a longtime critic of a number of major defense acquisition programs that saw large cost overruns or failed to live up to their initial promise.

On Thursday, he said the F-35 Joint Strike Fighter program, now with a $1 trillion lifetime cost, still “operated in dysfunction,” and other programs, such as the Army’s Warfighter Information Network-Tactical, still didn’t work as planned.

“That’s why this committee enacted the most sweeping acquisition reforms in a generation through the last two National Defense Authorization Acts,” he said. “And yet, despite that legislation, and in the face of our eroding military advantage, the department has been unable or unwilling to change.”

Lord, who previously served as CEO of Textron Systems and assumed her current position in August, told reporters following the hearing that she expects to address personnel issues going forward, though she may not reveal all actions to the public.

She added that she is prohibited by law from making any personnel changes or reassignments in the first 120 days of her tenure. That milestone, she added, has only recently passed.

“I think you should expect to see some movements,” she said.

From Military.con By Hope Hodge Seck

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Pentagon: Bureaucracy in Chief

(DOD Buzz, 30 Jan 18) The Senate Armed Services Committee approved by voice vote Tuesday, and sent to the floor for quick action, the nomination of John H. “Jay” Gibson II as the Pentagon’s first “chief management officer [CMO]” with a mandate to shake up the bureaucracy.

“This goes to the fundamental restructuring of the department,” Deputy Defense Secretary Patrick Shanahan told defense reporters last month in anticipation of the confirmation of Gibson, a former assistant secretary of the Air Force and former chief executive of XCOR Aerospace.

“Congress has written in the law many, many times that we need to have a chief management officer,” Shanahan said, and “a good portion of Jay’s responsibility is going to help us transition organizationally and technically.”

Under a re-organization plan approved last August, the new post of CMO will have major responsibilities in the areas of logistics and supply; real property; community services; human resources; health care; and technology systems.

Shanahan, a former Boeing executive, said he expects Gibson will get pushback in all those areas from the entrenched bureaucracy.

“You’ll probably hear screaming and yelling” because of the belief among some career officials that “change is bad,” Shanahan said.

However, “if you’re going to have a more performance-driven operation, you have to unwind the bureaucracy and reorganize,” he said.

Gibson is also expected to have major input in how the Pentagon overhauls the process by which the military buys and develops weapons when the split of the DoD’s Office of Acquisition, Technology and Logistics (AT&L) takes place next month.

Under the National Defense Authorization Act of 2018, which is still bottled up over Congress’ failure to reach a budget deal, AT&L is slated to be broken up in February to create a new undersecretary of defense for research and engineering (R&E)) and a new undersecretary of defense for acquisition and sustainment (A&S).

In the lead-up to passage of the NDAA, Sen. John McCain, R-Arizona, chairman of the Senate Armed Services Committee, and Rep. Mac Thornberry, R-Texas, both argued that splitting AT&L is vital to streamlining the cumbersome process of getting new weapons and technology into the hands of warfighters.

Shanahan said he expects Gibson to make changes in how the DoD operates that could not be undone by future administrations.

“We want to make sure that with the stroke of a pen or a few clicks of the keyboard, we can’t undo progress,” he said. “When you think about enduring change, you have to wire or alter the work so that you don’t regress. That’s the hard part about big bureaucracy — is making enduring change.”

, 30 Jan 2018, By Richard Sisk

Dodging the Formal Acquisition Process

(POGO by Dan Grazier) When Army leaders decided they needed an upgraded version of the Abrams tank, they wanted to get it without enduring what they consider to be a cumbersome formal acquisition process. Any program of this scale would ordinarily be classified as a Major Defense Acquisition Program (MDAP) and be subject to the oversight reviews and regulations that status entails. To avoid this, Army leaders claimed a major modernization effort to a weapon central to their very identity was a mere design tweak, and managed the project through the far less rigorous Engineering Change Proposal process. This is a problem. The MDAP process may be cumbersome, but its intended purpose is to ensure the Pentagon properly evaluates its needs and then enters into programs that will properly meet them. It is also meant to exert the kind of pressure necessary to keep costs under control. While the system is indisputably flawed (the F-35 is an MDAP), the services should not be permitted to simply ignore the laws. Doing so will almost certainly result in weapons of dubious combat value and more cost overruns.

In performing such a maneuver to avoid the toughest of the acquisitions process, the Army is hardly alone. All of the services are increasingly resorting to similar schemes for other high-profile programs. The danger to the taxpayers, to say nothing of the men and women who will have to take these systems into combat one day, is that these complex and expensive weapons systems aren’t subjected the kind of outside scrutiny necessary to ensure the services are purchasing suitable and effective equipment.

Acquisition Reform

Hardly a year goes by without some effort to modernize the Pentagon’s weapons buying process. Senator John McCain (R-AZ) succeeded in pushing into law a provision to split the Pentagon’s office of Acquisition, Technology & Logistics into at least two offices. The long-time chairman of the Senate Armed Services Committee believes this will allow the separate undersecretaries to focus more on their particular offices. The new office of Research and Engineering will focus on innovation while the Acquisition and Sustainment office deals with basic business functions associated with buying and maintaining new weapons. House Armed Services Committee chairman, Representative Mac Thornberry (R-TX), has introduced legislation meant to streamline the process for the past three years. The latest version would allow the services to purchase more items through commercial marketplaces. Previous similar efforts, such as when the Pentagon attempted to change the definition of commercial items to avoid the competitive bidding process, proved problematic. Earlier efforts were geared towards improving program business models and reducing the process’s reports and paperwork. Congress also effectively outsourced acquisition reform to the defense industry when it created the “Section 809 Panel” as part of the FY 2016 National Defense Authorization Act to make recommendations to streamline the way the Pentagon buys weapons. This panel is comprised of several members with deep ties to the defense industry and is the subject of a concerted lobbying effort by the contracting community.

The effectiveness of such efforts is not yet clear, but that might not matter. The usual result of most such efforts is an even more sluggish process—it is a rare problem that can’t be made worse with the addition of more bureaucracy.

Why the Military-Industrial-Congressional Complex Wants to Avoid the MDAP Process

From the perspective of the Pentagon, the defense contractors, and their allies on Capitol Hill, there are advantages in procuring weapon systems through means other than the formal acquisition process. The acquisition process is so complicated and involved that the Department of Defense created the Defense Acquisition University in 1991 to educate personnel on navigating various aspects of the process. A full explanation of the process would fill volumes, but even the basics provide a glimpse into the complexity of the process.

A Major Defense Acquisition Program goes through three separate phases. At the end of each phase, a program goes through a review process to determine whether it has met the criteria to move onto the next phase. These transitions are called “milestones.”

That means we will be spending $22 million to upgrade a $6 million vehicle.

A project begins when the services identify a new military need, or what is known as a capability. This is done through the Joint Capabilities Integration and Development System. This process figures out whether a new weapon system is actually needed to fill the perceived capability gap or if a change in tactics or some other non-material solution can get the job done. This work is reviewed by the Joint Requirements Oversight Council. If they determine a new weapon system is needed, then it goes through the Material Solution Analysis Phase.

A program has to achieve 40 milestone requirements just to pass Milestone A into the second major phase of a program, the Technology Maturation & Risk Reduction Phase. These 40 requirements includes conducting an Analysis of Alternatives, which is a comparison of other weapons that could potentially fill the same need; an Independent Cost Estimate, which helps decision-makers decide if the weapon is something they can afford to pursue (or what tradeoffs should be made if it’s not); and developing a Test and Evaluation Master Plan, which is essential to establish clear testing benchmarks to evaluate how the new weapon system performs in combat. While plenty of redundancy exists within the process, it is meant to protect the interests of both the warfighters and taxpayers. The Government Accountability Office has noted the importance of following through with these steps as part of a knowledge-based process. If the services don’t do so, they create situations where programs “carry technology, design, and production risks into subsequent phases of the acquisition process that could result in cost growth or schedule delays.”

Ideally, multiple contractors will build prototypes that will then be tested as part of a competition to see which design performs the intended mission better. The most successful programs begin this way, with the Lightweight Fighter Program (F-16) and the A-X Program (A-10) being the most notable examples.

The awarding of a contract for the winning design marks Milestone B, and the program passes into the Engineering & Manufacturing Development Phase. The prime and sub-contractors then finalize the development of the system and begin manufacturing enough production-representative goods to complete the Initial Operational Test & Evaluation process.

The successful completion of the realistic combat and live-fire testing phase marks Milestone C, and the program proceeds to full-scale production and deployment to the troops.

Throughout this process, there are numerous review and decision points. This includes a review by the Defense Acquisition Board, which is made up of the Vice Chairman of the Joint Chiefs of Staff, Secretaries of the Military Departments, four undersecretaries of defense, the Director of Operational Test & Evaluation, and others.

Case Study: The Army’s New Tank

The Army commissioned General Dynamics to design an upgraded version of the M1A2 Abrams tank in 2015. The first of what is expected to be 1,500 upgraded versions of the Army’s Abrams tanks rolled off the assembly line at the Lima, Ohio, factory on October 4, 2017. The choice of contractors for the project was hardly a surprise as the Abrams tank is a General Dynamics product. That is not to suggest that another contractor could not perform the work. Other contractors like BAE Systems also build armored vehicles and their component systems. By designating the project as an Engineering Change Proposal, however, the Army had little need to open it to a competitive bidding process as “most ECPs occur in a sole source environment.”

To the casual observer, the Army’s newest tank looks very much like the existing tanks. The M1A2 SEPv3 is still essentially an Abrams tank on the outside. However, the vehicle is quite different on the inside. It sports a new suite of communications gear called the Joint Tactical Radio System, which is supposed to fully integrate the vehicle into the Army’s command and control network. To provide the necessary electricity to power all of the new electronics and conserve fuel in situations where the crew does not need to run the gas-turbine engine, an improved generator has been added inside the hull.

The tank uses the same M256 smooth-bore cannon as the existing M1A1 tanks, but the breach in this variant has been modified to use the Ammunition DataLink to be compatible with the advanced multi-purpose round. This allows the tank’s gunner to send a signal to the round right before it is fired, setting its detonation mode to one of three different settings. It can detonate on impact, detonate on a delay for obstacle reduction, or airburst. This single round replaces four existing rounds, reducing the logistical burden of the armored forces, which is always a great concern.

In response to the threat posed by IEDs, the new tank includes a Counter Remote Controlled Improvised Explosive Device electronic warfare package. Should all of that fail, or when enemy fighters use simpler low-tech command-wired IEDs (which they will), the tank also boasts additional armor protection.

These are not insignificant changes. They add significantly to an already extremely heavy tank. As someone who spent ten years operating in tanks, I can tell you this is a significant problem. The Abrams tank is already too heavy for most of the world’s bridges. This restricts the number of avenues a unit can take to reach an objective, making it much easier for the enemy to predict the unit’s movements. It also increases the logistics burden because a heavier tank requires more fuel.

Sources within the Army say the new variant is too heavy for the Army’s fleet of Heavy Equipment Transport vehicles. The Army relies on these vehicles to transport the tanks across long distances to conserve fuel and to reduce wear and tear on the tanks.

They also do not come cheaply. The 2018 National Defense Authorization Act provides $650 million to upgrade 29 M1A2s to the new configuration. That means we will be spending $22 million to upgrade a $6 million vehicle.
What makes this particularly curious is that at the same time the Army is dodging the MDAP process with the tank upgrade program, the Hercules tank recovery vehicle upgrade program is going through the MDAP process. That means the wrecker will receive greater scrutiny than the weapon it is meant to recover.

Case Study: F-35 Follow On Modernization

The F-35 program is being managed through the regular MDAP process, but officials are now working furiously behind the scenes to prevent the next phase of it from following the same path. No one is quite sure what the latest incarnation of the F-35 will be able to do when the program completes the development and testing process, but that isn’t stopping officials from seeking funds for upgrades to the aircraft. They are continuing to develop a list of needed capabilities for the newer version, called Block 4.

The Pentagon estimates the cost just for the initial phase of the modernization program—the research, development, test and evaluation (RDT&E) phase—to be more than $3.9 billion through 2022. The Government Accountability Office correctly points out that this “would exceed the statutory and regulatory thresholds for what constitutes a major defense acquisitions program (MDAP), and would make it more expensive than many of the other MDAPs already in DOD’s portfolio.”

The F-35 Joint Program Office has strenuously resisted efforts to create a separate MDAP for the Block 4 modernization citing time and money concerns. The Joint Program Office wants to run the modernization program as part of the original contract from 2001. By dodging the MDAP process for this effort, the program would avoid many of the processes meant to ensure proper Congressional oversight. The program would not, for example, have to go through a Milestone B review, which would establish an acquisition program cost baseline and require regular reports to Congress about the program’s cost and performance progress.

Such a move also means the program would not be subject to the provisions of the Nunn-McCurdy amendment which establishes unit cost growth thresholds. This would require the Pentagon to notify Congress if the program’s unit cost grows by 25 percent and calls for the program’s cancellation if the cost grows by more than 50 percent. This, unfortunately, does not happen very often because the law includes a waiver provision that allows the Secretary of Defense to certify that the program is critical to national security and should be continued. Only one program, the Armed Reconnaissance Helicopter, has been cancelled as a direct result of a Nunn-McCurdy breach.

Case Study: The B-21 Raider

The biggest ticket item currently attempting to dodge public scrutiny is the Air Force’s newest bomber, the B-21 Raider. This program is being managed by the Air Force’s Rapid Capabilities Office, a secretive group that is conveniently not subject to many of the regulations Congress imposes upon most acquisition programs.

According the Air Force’s Rapid Capabilities Office website, this outfit has a key advantage the regular acquisition office does not:

“waivers to and deviations from any encumbering practices, procedures, policies, directives or regulations may be granted in order to ensure the timely accomplishment of the mission within applicable statutory guidance.”

The Air Force has been extremely cagey about releasing cost information about the new bomber. During the bid process, service leaders announced a $550 million per aircraft target cost. So far, Air Force leaders have refused to publicly release the value of the B-21’s development contract with Northrop Grumman. The stated reason for the secrecy about cost is that a potential adversary could derive information about the size, weight, and range. Apparently no one will be able to determine any of that information from the artist’s rendering of the new bomber, or from the list of subcontractors Air Force officials publicly announced.


The MDAP process is complex and does often fail to produce weapons that do what they are expected to do or come anywhere close to meeting the original cost expectations. The process is long over-due for a comprehensive streamlining effort. But even though the process is deeply flawed, the protections it includes were put there to protect the interests of the troops and the taxpayers. Just because the services find the process inconvenient, doesn’t justify their efforts to dodge the oversight mechanisms provided by federal law.

Unless Congress arrests this disturbing trend, the services are likely to continue to use these schemes to bypass the rules and regulations put in place to protect both the troops and the taxpayers. The people’s interests are served only when everyone involved in the process of buying new weapons have the correct information at the beginning. As Tom Christie, former Director, Operational Test and Evaluation wrote:

“Upfront realistic cost estimates and technical risk assessments, developed by independent organizations outside the chain of command for major programs, should inform Defense Acquisition Executives. The requirement for those assessments to be independent, not performed by organizations already controlled by the existing self-interests sections of the bureaucracy is essential.”

It is understandable that the services want to speed up the process of fielding new weapon systems. While there are many flaws in the current acquisition system, it is not the root of the problem. Service leaders and their partners (and far too often future colleagues) in the defense industry keep pursuing unrealistic programs and Congress keeps voting for them. Dodging the current acquisition regulations will not fix that problem, but it will make it easier for all involved to hide the bad results from the people paying for them, but presumably not from those who would suffer the consequences if a weapon were to fail in combat.

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FitzGerald to Reorganize DoD OSD (AT&L)

WASHINGTON — Undersecretary of Defense for Acquisition, Technology and Logistics Ellen M. Lord yesterday announced the appointment of Ben FitzGerald as director of the Office of Strategy and Design, according to a Defense Department news release.
In this role, effective Jan. 2, 2018, FitzGerald will serve as the central hub within the Office of the Secretary of Defense to lead the reorganization of AT&L, the release said.

Under section 901 of the fiscal year 2017 National Defense Authorization Act, the Defense Department must disestablish the Office of the USD (AT&L) and establish undersecretaries of defense for Acquisition and Sustainment, and Research and Engineering, as well as the Chief Management Officer, according to the release.

FitzGerald was appointed as a highly qualified expert for a period of five years, the release said.

Breadth of Experience

FitzGerald has a breadth of experience across a range of strategic matters, according to the release. He has served as a professional staff member for the Senate Armed Services Committee, as well as a senior fellow and director of the Technology and National Security Program at the Center for a New American Security.

Additionally, FitzGerald has led and contributed to diverse projects, such as military technology strategy, institutional innovation, United Nations peacekeeping doctrine, transitional law enforcement, the future of urban-littoral combat and the future role of the Marine Corps, the release said.
He also designed and led a variety of war games for military and civilian audiences, ranging from action officers to four-star generals, according to the release.

FitzGerald’s experience working across DoD, the Congress and think tanks, as well as his broad perspective of Congress’ intent for the AT&L reorganization, makes him ideally suited for the position, the release said.

Driving Innovation, Advancing Warfighting Capability

USD(R&E) will drive innovation and accelerate the advancement of the nation’s warfighting capability, while the USD (A&S) will deliver proven technology into the hands of the warfighter more quickly and affordably, the release said.

Working from the reorganization plan previously submitted to Congress on Aug. 1, 2017, FitzGerald will determine how current AT&L functions fit into the overarching objectives of the new structure and whether those functions should transition to R&E, A&S, another OSD functional lead, the military services or be divested altogether, the release said.

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