Pentagon Purchasing Is Overdue for an Overhaul By Charles Josef Duch
http://www.wsj.com/articles/pentagon-purchasing-is-overdue-for-an-overhaul-1437608461
Defenders of the system say bureaucratic hurdles prevent failure. Have they not heard of the RAH 66 Comanche?
Here’s an anecdote that illustrates the problems with U.S. defense acquisition: The Navy, concerned about corrosion of equipment that spends its operating life surrounded by salt water, began requiring paperwork to certify that new systems would be corrosion free. But the rule applies without exception, meaning Navy staff go through the motions to certify the corrosion resistance of, say, new software programs they acquire.
Rep. Mac Thornberry cited this example when rolling out legislation in March that would overhaul Pentagon procurement. Mr. Thornberry, who leads the House Armed Services Committee, wants to give program managers more responsibility and eliminate dozens of reports required by Congress or the Pentagon. “The system has just grown these barnacles around it that’s made it so sluggish it’s a wonder anything comes out the other end,” he told the Washington Post.
This is a worthwhile endeavor: For foes of excessive bureaucracy and paperwork, the Pentagon is what one would call a target-rich environment.
ENLARGE Let’s start with a 150-page document called “Operation of the Defense Acquisition System”—in effect, the bible of Pentagon acquisition. Under the generic procurement model it describes, every program goes through three milestones. The initial analysis and decision to pursue a specific product is Milestone A. This is followed by the decision to commit resources for its development (Milestone B) and the decision to put it into production or deployment (Milestone C).
At each of these “milestone decision” points, statutes and regulations require staff to produce dozens of documents and memorandums and analyses—a Bandwidth Requirements Review, and a Capability Development Document, and a Preservation and Storage of Unique Tooling Plan. These are augmented by service-specific paperwork, like the anticorrosion document that captured Rep. Thornberry’s attention.
The cost of this process is enormous. At each level of the hierarchy, documents are reviewed, vetted and edited. This can take from a few weeks to several months, depending on the complexity. This process repeats up the chain of command. Eventually after hundreds of man-hours of drafting, editing and reviewing, the Defense Acquisition Board—which is led by the undersecretary of defense for acquisition, technology and logistics— weighs in. At any level of the process, the document can be kicked back to its originating office (or any office in between) for changes.
While the costs of this process are incalculable, one estimate exists. A 2005 Heritage Foundation study, “Congressional Restraint Is Key to Successful Defense Acquisition Reform,” cites a tally by Henry F. Cooper, the director of the Strategic Defense Initiative in the early 1990s. Mr. Cooper noted the direct costs of addressing, over six months, about 900 issues for the Defense Acquisition Board. The total tab: 75,000 government labor hours, 250,000 contractor labor hours, more than a ton of supporting documents and $22 million.
Defenders say the bureaucratic hurdles protect against failure. The idea is that multiple reviews and extensive documentation mitigate program risks. But they didn’t prevent spectacular failures like the RAH 66 Comanche, a helicopter that spent 20 years in development at a cost of about $7 billion before being canceled in 2004; the Future Combat Systems, an Army modernization effort canceled in 2009 with almost $29 billion in sunk costs; or a new Navy presidential helicopter, the VH-71 Kestrel, canceled in 2009 after blowing through $4.4 billion.
It’s true that some progress has been made. A 2005 Rand Corp. study lists 62 reforms to defense acquisition implemented between 1989 and 2002. But most only nibble around the edges—for instance, using purchase cards for small-dollar procurements or encouraging the purchase of commercial off-the-shelf products. Larger reform has proved elusive, even to powerful advocates like former Defense secretaries William Perry and Donald Rumsfeld.
Both the House and Senate versions of the 2016 National Defense Authorization Act include language on acquisition reform. The Senate bill shifts ultimate acquisition authority from the Pentagon to the military service that will own the system or product. That would remove an entire level of bureaucracy.
The Pentagon’s acquisition chief, Frank Kendall, is against this effort, saying it will interfere with the procurement process. But the current system has been in place for nearly 30 years when defense acquisition has become more complicated and more expensive.
Reform has strong proponents in Rep. Thornberry and Sen. John McCain, who are intent on reducing the paperwork burden on program managers. Thus there is reason to hope that the House-Senate conference committee will keep meaningful reform in the final bill.
“This bill seeks to ensure that the department and the military services are using precious defense dollars to fulfill their missions and defend the nation, not to expand their bloated staffs,” Sen. McCain said in June. “While staff at Army headquarters increased 60 percent over the past decade, the Army is now cutting brigade combat teams.” The McCain-Thornberry initiatives are a credible start to fixing an overly bureaucratic process.
Mr. Duch has worked on several Defense Department acquisition projects as a contractor, is a graduate of the Defense Acquisition University, and led a 2002 Army study that responded to the question, “Why does Army Acquisition take so long?”
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