Stalled Reform in the Pentagon

As sequestration approaches, one area sure to be effected struggles to implement the necessary changes.

As sequestration looms over the Defense Department, the drive to reform or find greater efficiencies appears to be less and less of a priority. This is puzzling; if planners are anticipating cuts, then reform should be a high priority. The pressure of sequestration is felt most strongly in the weapons-acquisition process, which falls under the purview of the undersecretary of defense for acquisition technology and logistics (AT&L). Thus far, it appears that AT&L is bracing for sequestration but still struggling to implement reforms to the acquisition process that would benefit the department as a whole.

As far back as 2010, the House Committee on the Armed Services Panel on Defense Acquisition Reform (appointed by Chairman Ike Skelton and ranking member John McHugh) reported that the acquisition process continued to be tied to weapon-acquisition systems and lacked the flexibility necessary for the modern age. The report went on to give a number of recommendations to reform the acquisition process: grant greater responsibility to the Office of Performance Assessment and Root Cause Analysis (PARCA) for carrying out acquisition-performance assessments; develop a model acquisition workforce that promotes superior performance; aim to get the most out of the defense-industrial base through better contracting and increased use of small to midsize businesses; and, finally, better manage the requirements process.

Unfortunately, with the daily grind of the Pentagon, these principles have had a hard time gaining ground. More worrisome is that reforms appear to have stalled since the committee’s report was issued, and there are signs that they may not be in place by the time sequestration takes hold.

The role of PARCA has not grown in influence as envisioned by the panel. Originally tasked with determining the root causes behind cost overruns, bureaucratic maneuvering has made it increasingly difficult for PARCA’s analyses to provide much insight. Take, for instance, the alleged mismanagement of the Littoral Combat Ship (LCS) affair. The U.S. Navy has announced plans to purchase fifty-five LCSs, but many analysts suspect the Pentagon actually intends to purchase only half of this number. All the talk about fifty-five ships, then, is merely to maintain fixed contract prices at their current rates and elude the Nunn-McCurdy amendment, which specifies that the Pentagon must defend any weapons program whose per-unit cost grows by more than 15 percent. This maneuvering sidesteps the role of PARCA, which is charged with investigating those overruns dramatic enough to fall under Nunn-McCurdy. Rather than PARCA providing greater insight into programs, the bureaucracy’s tactics have evolved, allowing overruns to continue without being detected through PARCA’s root-cause analysis approach as envisioned by the House panel.

The House committee’s recommendation to reform the acquisition workforce has been a focus of AT&L, and an effort to create the model workforce is being pushed through even as sequestration looms. Some estimates suggest that as many as ten thousand new acquisition personnel will be added by 2015. The Defense Acquisition University has been given more open seats for students, and training opportunities for the acquisition workforce have been expanded. Despite these efforts, a number of challenges remain.

The Government Accountability Office (GAO), in reviewing the Defense Acquisition Workforce development fund, found that there was a consistent pattern of not actually using funds for workforce training. The GAO also reported that DoD does not have a plan in place that would align overall strategy with these training funds. Unless such a strategy is in place as new employees come aboard, the acquisition force is unlikely to be the model force desired by the committee’s report. Thus, under sequestration the acquisition workforce would continue to operate in an outdated framework without the ability to manage with less funding.

Meanwhile, AT&L’s effort to improve contracting practices has done nothing to ensure viability of small to midsize businesses if sequestration is implemented. Many defense-market analysts already have begun to predict that sequestration will lead to industry consolidation. Small to midsize companies are the likely victims, as it will be difficult to compete for contracts without the resources of large companies. Unless there is some planning to assist them, the volume of small to midsize businesses supporting the defense-industrial base could diminish. This is a shame, since senior acquisition leaders have acknowledged the invaluable innovations of small to midsize businesses working with the department.

At the same time, wartime acquisition flexibilities that the services currently enjoy will expire as troops withdraw from Iraq and Afghanistan. The services have benefited from not having to deal with the lengthy bureaucratic procedures associated with the acquisition process. This process is famous for contributing to lengthy timelines before fielding. Over the years, there has been continued talk of finding ways to improve this process, but nothing has been implemented successfully. More must be done to find an amiable solution for all parties involved.

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