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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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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

How the Air Force Plans to Make Space Acquisitions Faster

(Air Force Magazine) When it comes to space acquisition, the Air Force is moving into a new era in which tolerance for risk will be higher and the demand for speed will be greater, Lt. Gen. John Thompson, the new commander of the Space and Missile Systems Center, said Friday at an Air Force Association Mitchell Institute event in Washington, D.C.

SMC is tackling the “need to do some catch-up” by giving more authority to program officers, doing more space experimentation, maximizing its use of Department of Defense regulations, leveraging relationships with commercial space providers, and involving more space operators in program development work, Thompson said.

“We are exiting an era of acquisition reform where the most important things to us were dependability, cost-consciousness, confidence levels, predictability,” he said. “We are quickly moving into another era where innovation and agility are mandated, where we have to learn how to take more risk.”

In order to accomplish this goal, Thompson is working first to “delegate decisions to the right level.” Forty percent of the SMC acquisition portfolio is made up of smaller, acquisition category two and three, programs. “I’ve delegated the responsibility” for those programs to the program executive officers, Thompson said. While he clarified that “I cannot delegate the accountability” for those programs, he insisted that, in the interest of efficiency, “I am not going to approve everything that comes through that Center.”

Thompson is also working to expand SMC’s use of the rapid acquisition authorities of its Operationally Responsive Space office. ORS is “able to deliver not in years but in months,” and the SMC boss wants to maximize that capability to “take a little more risk” in developing new space vehicles.

Taking advantage of ORS will mostly mean “more demonstration, prototyping, and experimentation,” Thompson said. Look for SMC to start “putting up some small bets” in orbit, he said, that will be “useful for operational purposes” but will have experimental value as well. With these on-orbit experiments, “if we prove the concept out,” Thompson said, “then we turn it into a program of record.”

SMC’s people are still looking for other ways to speed up space acquisition within current regulations. “Rapid organizations” in the Air Force have always “figured out a way to hack the 5000 series,” Thompson said, referring to the set of directives that make up DOD acquisition policy.

SMC is also “leveraging commercial space” to make its processes faster. In part, this would mean a shift from “a science perspective” toward “a production mentality,” he said. Industry has moved away from expensive, exquisite satellites and toward deploying more satellites at lower cost. SMC wants to think about “mass producing satellites” and taking advantage of “reusable rockets,” Thompson said.  “I’m not willing to say I’m going to adopt all of it,” but he is giving it all a good look.

Finally, Thompson wants to see more “space operators in program offices,” offering input that will improve the systems under development. This is an insight he has brought with him from previous work in aviation programs, Thompson said, and he wants to see it put to work in space acquisition as well.

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by Wilson Brissett

Defense Innovation Board Recommends Ways for DOD to Go Faster

(Air Force Magazine) The Defense Innovation Board held its second public meeting Tuesday and issued four new recommendations to help the Department of Defense speed up the development and fielding of new technologies. After months of visiting various US military installations, the members of the civilian advisory group agreed “there is no shortage of innovation in the Defense Department,” as Jennifer Pahlka, founder of Code for America, said. The goal of the new recommendations, she said, is “to empower the innovators that already exist in the military.”

First, the DIB advised the Department to create new tiger teams focused on discrete, complex innovation challenges. 

The DOD needs to “identify and prioritize a small number of its most critical warfighting problems” and then “assemble cross-functional teams across organizational boundaries to attack them,” said Milo Medin, a vice president at Google Capital. For this idea to work, Medin insisted, DOD must give the new tiger teams “the decision-making ability to actually execute,” which means they should be able to “rapidly prototype, experiment, and then go into production” on their own authority.

Next, the board recommended the creation of “a new career field focused on innovation and rapid capability development” that would become a devoted professional space for science, technology, engineering, and mathematics (STEM) experts. Currently, in all the services, “there’s no career field for these areas of expertise,” said Marne Levine, chief operating officer of Instagram. 

This “hinders recruitment and it hinders retention,” she said. The goal should be to turn DOD into “a place where individuals can build a career in STEM,” and a new STEM career field would “allow for more rapid and efficient adoption, integration, and iteration of new technologies,” Levine said.

Third, the board would like to see a new “DOD elevator” that can raise up new ideas and allow military members to continue working on innovative projects instead of rotating to something else in the military’s “up or out personnel system,” Pahlka said. Such an elevator would have a “special implementation advisor” and a five- to seven-member committee to identify worthy projects and allow DOD members “to pursue them and own them,” she said.

Finally, the board advised the department to establish “a training program to increase the effectiveness and velocity of technology adoption and integration,” said Richard Murray, an engineering professor at the California Institute of Technology. This program would be modeled on executive education programs common in business schools and would focus on sharing experiences and best practices to encourage military members to “use that flexibility that exists already” in the DOD acquisition system.

“We look forward to partnering with you and moving forward on this,” said Vice Chief of Staff of the Air Force Gen. Stephen Wilson, who offered the DOD senior leader’s response to the DIB’s recommendations. “We know we have to change,” Wilson added. In recent decades the Department has “walked away from accepting risk the way we used to,” he admitted, and he assured the members of the board that DOD leadership wants to “change this culture” and find ways to reduce “risk aversion.”

by Wilson Brissett

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Air Force Presses Acquisition Changes; Incentives Offered On Combat Rescue Helo

(Breaking Defense; by Colin Clark) If Sikorsky reaches the next Combat Rescue Helicopter milestone early, the Air Force will reward the Lockheed Martin subsidiary and “immediately go ahead to” production.

“We’ll see how this goes,” Lt. Gen. Arnold Bunch, the military deputy for Air Force acquisition, said this morning, saying the effort is an experiment the service was watching. Sikorksky is offering the HH-60W, a new version of the Blackhawk. In May, Lockheed issued a press release noting the program had met “several milestones on or ahead of schedule.”
“We’ll see if there are ways we can apply it in a broader sense,” he said at an Air Force Association breakfast.

Bunch also told several hundred Air Force aficionados that the service is pressing ahead with efforts to speed and simplify its acquisition system, taking its Rapid Capabilities Office as a model. He first unveiled this effort in an exclusive interview with my colleague Valerie Insinna the day after the AUSA conference ended.

Today, he said he’s taking the RCO charter and trying “to inculcate that culture across the acquisition enterprise.” The idea is to have fast-moving programs like the B-21 bomber move to production as quickly as is reasonable. Small teams will run programs. The new RCO-like structures will each be headed by a board of directors comprising the Air Force Secretary, Chief of Staff, and the head of acquisition. If the Office of Secretary of Defense manages the program , the undersecretary of defense for acquisition, technology and logistics will also be on the board.
This is all part of the broader push across the Pentagon, largely driven by Sen. John McCain‘s acquisition reform legislation, to bolster the services’ roles in managing much of the military’s weapons systems.

Bunch also signaled major changes to the ways the Air Force buys and manages major software programs. While he admitted the service will probably never get to the levels of speed and flexibility that commercial industry boasts, he did say the service is trying hard to approach it.

“Many have asked if we are going to go exactly to where industry goes in this area. I believe we are going to get closer,” Bunch said. In some areas, such as nuclear weapons and command and control, they may not get nearly as close as they might with less sensitive software. Air Force PEO and CEO roundtables met last week and discussed “agile software development” and resiliency and “the importance of protecting your intellectual property from software threats.”

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Big Impact with Small Changes to Defense Acquisitions

by Dan Helfrich; September 29, 2017 

A study in the New England Journal of Medicine revealed how a set of small changes a group of hospitals made—such as everyone in the operating room introducing themselves and their role in the surgery improved patient care. These study results made me think of what small changes the federal government could make in how it buys goods and services that could bring greater innovation and boost mission outcomes.

Here are three small changes to federal procurement that could lead to big impacts for the government:

Procurement Toward People Not Resumes

Some contracts continue to have the same experience and education requirements year over year. But some of the talent you need may be younger, more skilled at digital or mobile tech. These long-standing, narrow evaluation methods requirement may mean your agency is missing out on innovative, critical talent.

Take Facebook Chairman and CEO Mark Zuckerberg, for example. He has less than 13 years of formal work experience and no college degree. He has, however, been doing computer programming for more than 20 years, developing programs and using machine learning since high school.

Obviously, Zuckerberg is a bit of an extreme example, but my point is there are a lot of young, digitally savvy people—like the 17-year-old who won the most bounties at the recent Hack the Air Force event—who have the tech chops but maybe not the formal career history or education. But that doesn’t mean they aren’t what you may need.

How can you tweak those requirements to get the talent and skills your agency needs? Are there specific skills needed to achieve the project’s objective? Is experience at a tech company or a private sector cyber firm that could be of equal or greater value?

Don’t lose out to top talent who have the chops to solve your problems, but don’t have a traditional background. Your future contract professionals may be at Teach for America or at the Peace Corps right now or coding the next big app in their high school computer class—value those experiences and start thinking differently.

Embrace Outcome-based Contracts

The world of professional services is rapidly changing—starting with how contracts are set up. More than 50 percent of the work we do with private-sector clients has some sort of a value-based or share-in-savings component to it. For example, we agree to only get paid “x” if “y” goal is met. Industry then has skin in the game. The risk is on us to deliver on the outcome.

For the government agency, the key aspect to value-based contracting is having decent baseline measurements. Classic incentives are also another way to encourage greater outcomes. If your agency has that decent baseline data, contracts can be structured so that you are not paying out as much to your contractor but instead your contractor earns a percentage of the savings.

One recent government procurement that includes some share-in-savings language is the Human Capital and Training Solutions (HCaTS) program that is partnership between Office of Personnel Management and General Services Administration. HCaTs is looking for the “best value customized solutions for human capital management and training requirements.” Including a share-in-savings approach will help them get there.

The kinds of people you want to take on your most complicated problems are going to be willing to put skin in the game. One way to find those kinds of people is before your next procurement, ask industry participants to give you some ideas on what types of share-in-savings arrangements they’d be willing to do. See who is willing to put some skin in the game and is here to make great outcomes happen for you.

Allow Agencies to Earn Small Business Credits for All Contract Types

Small companies do work for the government regularly. Sometimes as the prime, sometimes as the sub. In many cases, the work small businesses do as a subcontractor is just as important as a prime. However, agencies only get credit when the small business is the prime.

If we want more collaboration, more innovation, the government can encourage industry to bring in small businesses more often. One change would be to allow agencies to take small business credit, toward their 23 percent goals, for at least their first-tier subcontractors.

For many small businesses, their ability to scale is highly dependent on working with a partner with deep domain and customer knowledge and expertise. Large and small businesses should consider coming together to deliver the work in the best way that serves the client and brings value—and not focus on forcing percentages to meet a set requirement.

There are more ways for service providers—large, medium and small—to work together based on the agency’s desired outcomes and the corresponding deliverables and innovation needed. For example, Medallia is a customer experience software platform that many leading brands use. We’re working closely with them on their first government project. Yet, our client doesn’t get any “credit” for working with them.

More can be done to encourage this type of company—innovative, new-to-government market—to do business with the federal government. One option is to incent the current industry base to bring new and innovative companies into the mix through a type of a protégé program, which could bring greater innovation into government.

What small changes could your agency make in the way it considers the people it hires or contracts with? How could it better incent innovation in industry? There’s a lot of opportunity for small changes that can make a big impact for your agency’s mission.

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Congress, Let Defense Innovators “Breathe Free”

The article below is written by Army Col Richard Hough, who is a senior strategic study fellow in the Army Future Studies Group, gives an in-depth analysis on what’s wrong with the defense acquisition system and how to improve it. I agree with all the conclusion the Col makes in his article, particularly with the need for more rapid decision making. I still believe the fundamental problem with the acquisition community is that Sr. Leadership lack a basic understanding the process. If you don’t understand the basic fundamentals of the process, you can never lead the acquisition community and reform the process. They believe the process is the problem, not them.

(Breaking Defense) America’s defense industry is struggling to boost its innovative entrepreneurs, who need freedom and resources to come up with creative ideas.

Unlike other industries, defense innovators do not benefit from capital incentives to encourage research and development investment. Instead, innovative defense concepts have traditionally been nurtured in an environment combined of countercultural activity, legislative prompting, necessity (often fear), re-orientation and re-organization; which are rarely effective when implemented in isolation. Outlined below is a summary of the current state of the defense acquisitions system and how Congress must help us overcome the status quo.

During the interwar period, George Orwell noted “We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men.” In that vein, let’s look at defense acquisitions and congressional oversight. It is obvious that:

  • Decades of tweaking the system based on the limited findings of panels and oversight committees has resulted in no perceptible cultural change.
  • We do not use our broader cultural strengths and corporate traditions to inform acquisition policy.
  • We have lost sight of long-term and emergent threats while becoming overly focused on current contingencies.
  • Appropriations and regulatory requirements have created a consensus-based decision-making environment that is risk-averse.
  • The acquisition workforce understands that excessive layers of bureaucratic review provides protection from direct accountability.

What is less obvious is whether or not Congress understands its contributions to defense acquisition shortcomings and the resulting dilution of authority and accountability.

No Perceptible Cultural Change 
The 2017 National Defense Authorization Act told the Pentagon to split the undersecretary of acquisition, technology and logistics into two separate jobs: undersecretary for acquisition and sustainment; and a new undersecretary for research and engineering (R&E). The new offices, particularly the R&E, are intended to increase innovation and “change the culture.”

James O’Bryon, former deputy director of Operational Test and Evaluation, questioned whether this was the best approach, essentially taking us back 40 years ago when the Pentagon had essentially the same setup: “I’m not sure, however, that returning to where we were in 1986 is the total answer.” O’Bryon ponders, “So what are we possibly missing in this process as it grinds away?” I would answer that what is missing is honest self-reflection within Congress on its contribution to sustained cultural influences within the acquisition system.

Our Broader Cultural Strengths 
Congressional testimony and defense reports have noted that government constraints on profit margins have compromised acquisitions because, “culturally, we have evolved to a point where the system would rather pay $1 billion and 5% profit for a defense good, than $500 million and 20% profit” from a more innovative supplier.

Overhauling the Code of Federal Acquisitions Regulations (FAR) is overdue. The FAR seeks to promote an accountable system that protects U.S. taxpayers, but it has become the epitome of a bureaucratic risk-averse culture that undermines innovation, partnerships, accountability, and fiscal responsibility.

Congress expects the services to improve relationships with existing and potential defense industry partners, but corporate and government regulators must translate “up to 186,000 pages with over 2,000 pages” added annually by various federal departments.

As a result, current defense firms have traditionally focused their innovation delivery models simply on meeting what the government wants. But what if what the government wants isn’t what it needs?

According to John Kenkel and Andrew Jesmain, of PA Consulting Group, this creates problems:

First, industry has not been incentivized to create new ideas and must deliver solutions defined by the customer, who often lacks awareness or understanding of the array of solutions industry is capable of providing. The result of this paradox is a laundry list of programs and solutions that have been over budget, delayed or canceled outright. Second, this reality creates a sharp contrast in approaches to research and development that differentiates defense firms from their commercial counterparts.

For the Army, these “failures” have cost tax payers billions and are the most obvious reason why oversight is overly centralized. Since 2011 alone, the Army has ended 20 programs, delayed 125 and restructured 124 others.
Figure 1: Major Army Defense Acquisition Programs Cancelled

While acquisition decision-making must improve, sequestration and the focus on present operational requirements hasn’t encouraged bold decision-making on new program initiation either. Plagued by bureaucracy, budget cuts, and canceled programs, mounting legacy equipment costs, and the lack of a major operational concept for over a decade, the Army just doesn’t know what to ask for.

Until the service explores the art of the possible with Congress, industry, and academia, requirements will “have — far too often — proven too ambitious, too expensive or too inimical to innovation.”

Meanwhile, the Pentagon has used various non-traditional acquisition approaches — Section 804 Middle Tier Programs — to avoid establishing new long-term acquisition programs. However, Congress is concerned with the near-term productivity and value of such programs. Unfortunately, where their scrutiny should lie is on the impacts on basic research and how such programs sustain long-term overmatch capabilities.

Losing sight of long-term threats
The good news is Army executives are embracing change. Thomas Russell, deputy assistant secretary for research and technology, says he’s seeking “innovations from industry and other partners wherever possible” to guarantee success of the “most important” acquisition programs. Acting Army Secretary of the Army Ryan McCarthy says that, “the Army must also focus efforts on modernizing today to be ready to fight tomorrow, against increasingly capable adversaries and near-peer competitors”. But any attempt to channel near-term innovation delivery into a disciplined long-term strategy is shortsighted.


At this juncture, when 25 percent of Army acquisition spending is invested in pre-1991 programs and 55 percent in 1991-2001 programs, near-term program changes cannot overcome the lack of a long-term strategy. The “most important” thing the Army can do is to work with Congress to fund a long-term strategy.

Over the last 15 years, the Army has prioritized near-term readiness and equipment needs to combat non-state actors. This has limited its ability to modernize so it can engage in high-end  combat against near-peer challenges.

Meanwhile, the Army is facing increased sustainment costs and reduced funding for concept development and new programs. In turn, major program failures have undermined the Army’s ability to: encourage innovation by major defense partners; solidify a strategic concept; and, formulate consensus on a long-term procurement strategy. If the Army maintains this “demand pull” approach, over an extended period of time, the “likelihood of generating disruptive capabilities” will decline and lend itself to fear-based decision-making in the future.

A Risk-Averse System
In the 2016 NDAA, Congress established the Section 809 Panel whose initial findings include identified influences that Congress must reflect on if real progress is to be achieved.

As an independent panel with credible qualifications, Section 809 Panel has described in their initial report that those operating within the system respond to Congress in ways that Congress fails to recognize or appreciate. Overly complex laws and regulations result in suboptimal risk-averse decision-making. Excessive hearings on non-traditional acquisition pathways have undermined prototyping of new systems; buying commercial off-the-shelf items; and created cultural barriers that undermine technology companies from working with the DoD. And, the “acquisition workforce understands congressional intent thru bureaucratic reviews, budget cuts, hiring freezes, salary freezes, furloughs, continuing resolutions, sequestration, hearings, and statements that it must change.”

While Section 809 Panel has found several other shortcomings and conclusions unrelated to Congress, its final report, due early next year, can highlight that cultural change must start at the top.

Bureaucratic Review Shields Failures From Direct Accountability
Within the acquisition enterprise decision-makers have multiple layers of bureaucracy and accountability. A single Army decision may cross four multi-star organizational boundaries and be subject to 10 flag officer reviews. The requirement is generated by one TRADOC organization, ranked by another, and then transmitted by a third, before senior Army officials review it during three committees.

Why? The obvious answer is a lack of trust and misplaced values imposed at the top of the acquisitions enterprise – authorizations and appropriations.

Overly Prescriptive Laws Undermine Trust
In an effort to highlight how present legal constraints undermine the miltiary’s ability to leverage corporate advantages or to seek disruptive technologies, let us review Section 219 of the 2017 NDAA.

DoD lab directors are permitted to use not less than 2 percent but not more than 4 percent of all funding available to the lab for “off-roadmap”, or disruptive, technologies, according to Section 219, . While the authorities may be helpful, those funds are rarely used because they are only a fraction of those required for bold initiatives without having to seek outside funding — often from PMs — where other priorities and funded near-term concepts trump untested concepts.

Various studies have recommended increasing lab directors’ flexibility and Congress improved a previous 3 percent cap to 4 percent. But we will fall further behind civilian researchers and potential competitors unless we think more creatively.

Congress must clarify the long-term concepts and acquisitions strategies governing DoD weapons buying. Once they are better defined, congressional oversight can then lend itself to overcoming sustainment engineering of existing legacy systems and the risk-averse culture that maintains it.

Additionally, Congress should implement “succeed-fast” and “fail-fast” policies regardless of a system or subsystems Technology Readiness Levels (TRLs). A principle reason why Section 804 innovation initiatives remain relevant is that they are one of the few means available for maturing technologies along such lines. If “fast-fail” policies had been applied to long-term programs the Army might have avoided the numerous failures of major acquisition programs over the last two decades.

Also, Congress should

  • Identify and eliminate internal influences affecting DoD’s risk-aversion culture.
  • Eliminate line item acquisition funding. Retract or cut FAR, eliminate statutes, and reform NDAA development processes.
  • Incentivize corporate and defense decision-making to drive modernization concepts and capabilities development.
  • Increasing lab director authorities to fund disruptive programs.
  • Return acquisition funding to historical norms, and, program for multiple years. Expand limits imposed on acquisition funding authorities across the board.

As we move forward into the twenty-first century, we must put twentieth century bureaucratic practices behind us. In a more complex world trust is the only means of establishing an acquisition and defense strategy capable of avoiding the “we aren’t fearful enough” drumbeat for defense innovation. Like other industries, defense acquisition innovation must recognize that “inspiration flows best when individuals ‘can breathe free,’ thinking creatively without limits of fear.”

Army Col. Richard Hough is a senior strategic study fellow in the Army Future Studies Group. The opinions, conclusions and recommendations are those of the author and do not reflect the views of any entity of the U.S. government.

Top 10 Acquisition Trends of FY17

(Federal Times) As the final push for fiscal 2017 contract obligations comes to an end, it’s helpful to take a step back and assess the contracting environmental trends that have emerged over the past year. Each trend lends itself to further study, so here’s a high-level look at the top 10.

1. Federal sector spending has bottomed out, with anticipated growth.

Following years of declining spending, it is beginning to appear like this decline has bottomed out, with a growth in federal spending on the horizon. While there is considerable talk, firm steps are in motion for increased contract spending, particularly in defense, with reduced civilian agency spending. Clearly, a reevaluation is occurring from the dramatic budget cuts proposed for many civilian agencies, while the Department of Defense will reap increases in the short term. 

2. Incumbent “win” rates are down.

This is due to a variety of factors, but primarily because government customers are looking for financial savings and simply do not see the “best value,” as compared to the past, in the long-term relationships and historical knowledge that have been traditionally offered by incumbent contractors.

3. More and more, government contractors are branching out ― away from government.

Some firms are successfully branching into alternative commercial or state or local government sectors, as opposed to focusing their business solely on federal government contracting. From a business standpoint, it makes sense that firms would attempt to diversify their portfolios when one significant part of their business is in decline, which the federal sector has experienced for more than five years.

4. The job market is improving, but filling these positions is becoming more difficult.

Today, there is an improved acquisition job climate, but organizations are having difficulty obtaining talent. Companies are hiring — particularly for highly skilled positions in cyber, technology and acquisition; that is if they can find talent to fill them.

5. The use of OTAs is on the rise.

The DoD’s Defense Innovation Unit Experimental has rediscovered other transaction authority agreements, and the use of OTAs as an alternative to traditional contracting is increasing. However, whether long-term cultural changes, along with significant time or money savings, are the result of the increased use of OTAs over traditional Federal Acquisition Regulation–based contracts is not completely clear.

6. Category management continues in the form of contract vehicle consolidation.

The impetus provided by the last administration for category management continues. One need only look at how governmentwide acquisition contracts and the Federal Supply Schedules are used against new, standalone awards to see how this is taking shape. However, this begs the question: How many contracts is “enough,” particularly under a shared services model?

7. Reliance on cloud-based services is increasing.

There is now an increased reliance on cloud-based services, with a corresponding decrease in reliance on centrally owned and operated computer hardware. Bottom line: Agencies don’t want to own and maintain IT equipment that takes too long to acquire, grows out of date too quickly and continues to drop in price. The uniqueness of agency needs and their security requirements as important considerations appear to be losing ground as these services can be further commoditized.

8. There is a wider prevalence of technology tools from requirements to acquisition.

Wherever we look, new tools and products are coming to market, intended to make our lives easier. This certainly impacts the nature of the requirements being developed, as well as the process in which their acquisition is conducted. From analysis, reporting and meeting overall needs, technology is becoming evermore the “disruptive” factor for all of us today.

9. Some form of further “acquisition reform” is inevitable.

Everyone from the hallways of Congress to the Section 809 Panel (and other panels) to those who implement both in government and industry acknowledge things must change. However, everyone “owns” this problem, and as such it will take the entire community to address it. From the practitioners to the legislators, all will need to make compromises, or the conversation will simply continue for years to come.

10. Acquisition skill sets are merging.

As the complexities of the process and the technology available to meet them increase, today’s contract managers wear many hats. They are increasingly performing the duties of project, supply chain, cost, proposal and subcontract managers. Operating within the environment of an entire acquisition team raises existing skill needs but simultaneously creates efficiencies. The new Contract Management Body of Knowledge is reflective of this reality.

It has been a tumultuous year. In many ways, acquisition has been on pause, as priorities of the new administration and controversy take center stage. When federal leadership eventually gets back around to acquisition, this list may change. In an outsourced government, nothing is more important than to deliver services to citizens effectively.
Michael Fischetti is the executive director of the National Contract Management Association.

By: Michael Fischetti

Dated: 8/25/2017

When Amazon Meets Defense Acquisition

(Government Executive) Unanswered questions persist about a House provision to allow Pentagon buyers to use proprietary online sales platforms.

Imagine simply flipping open your laptop, firing up your desktop computer or popping open an app on your mobile phone to order office supplies, equipment, or even contract services Amazon-style, two-day delivery included.

That day may not be too far off if a provision in the House version of the annual National Defense Authorization Act makes it into law.

The prospects for commercial online marketplaces in government got a lift in mid-July, when Alan Thomas, the Trump administration’s new chief of the General Services Administration’s Federal Acquisition Service, gave an enthusiastic thumbs-up to the proposal that his agency engage online marketplaces for all agencies to use.

The idea is ensconced in the House-passed version of the 2018 NDAA, which contains policy and suggested budget toplines for the Pentagon. The Senate Armed Services Committee’s version of the bill does not include the online marketplace provision, and it awaits a full Senate vote in September, after the August congressional recess.

The marketplace provision leads Section 801 of the House NDAA and originally was introduced as separate legislationby House Armed Services Committee Chairman Mac Thornberry, R-Texas. His version was Defense-only, but, in committee that vision was enlarged to encompass all of government with GSA as the lead. GSA has been working closely with Thornberry on the bill, according to a report from Federal News Radio.

Continue reading (HERE)

by Tim Cook