These days it seems that the first thing former senior defense officials do once leaving office is to start proposing reforms to the way the Pentagon spends money. Former Under Secretary of Defense for Policy, Michelle Flournoy, started the ball rolling with some very sensible proposals not only with respect to acquisition reform but dealing with exploding personnel costs. In what might be setting a world record, former Deputy Secretary of Defense Ashton Carter, who only retired two weeks ago, has an article in Foreign Affairs proposing ways to ensure that his former department doesn’t lose the skills it developed over the last ten years of war in getting the forces in combat the critical capabilities that they need.
Although the article is titled “Running the Pentagon Right,” Dr. Carter makes a compelling case that this is impossible, that the normal acquisition system is well and truly broken. For example, he says this about the requirements generation process:
“The usual process of writing ‘requirements,’ an exhaustive process to determine what the military needs based on an analysis of new technology and future threats, would not suffice in Afghanistan and Iraq. That is because the system known inside the Pentagon as ‘require then acquire’ demands complete information: nothing can be purchased until everything is known.”
Even if one could generate accurate and timely requirements, the funding process does not allow for flexibility. The result is that the technology cycle and that for defense spending decisions is increasingly out of whack.
“The Pentagon usually crafts its requests for funding as far as two years in advance. It must submit detailed budgets to Congress and then wait until the money has been authorized and appropriated before getting any program off the ground. This lengthy lag time makes it difficult to pay for urgent needs. Furthermore, the Pentagon has little flexibility to finance new needs that arise outside the budget cycle. Any significant movement of funds requires securing permission from Congress, which can take months.”
Then there are the problems of overregulation, bureaucratic inertia and the mania for fairness as opposed to efficiency or even cost effectiveness. Unfortunately, but understandably, Dr. Carter doesn’t own up to the fact that his efforts to reform the acquisition system have contributed significantly to this problem.
“To actually purchase anything, defense officials must navigate an intricate web of laws, regulations, and policies that are geared toward the acquisition of complex weapons systems and equipment in large quantities over years. The system was designed to foster fair competition among manufacturers and to maximize the buying power of taxpayers’ dollars — but not to move quickly. Moreover, the officials responsible for acquisitions are loath to take risks, since they can be held personally accountable if something goes wrong.”
A related problem is the Pentagon’s drive to ensure that it is getting a good price for what it buys no matter what it costs in terms of lost time, a reduction in the quality of the goods and services procured or the increased government personnel required to oversee the search for the last penny of savings. Describing the way the Pentagon evaluates potential solutions to its requirements, Dr. Carter wrote:
“Normally, such evaluations require a series of time-consuming steps, such as conducting market surveys, hosting events at which the military can inform vendors of its needs, requesting bids, and conducting months-long selection processes. In normal times, this system allows the Pentagon to acquire the best technologies on the market at the best prices.”
What Dr. Carter doesn’t say is that this evaluation process is so restricted by regulations and the fear of providing any one contractor a competitive advantage that there is no real dialogue between industry and the Pentagon regarding these potential solutions. As a result, the Pentagon often does not acquire the best technologies on the market. And because of the burden of regulations, oversight and bureaucracy, neither does it necessarily get the best price.
While Dr. Carter’s recommendation’s make sense they do nothing about the problems he identifies with the peacetime defense acquisition system. But, apparently he thinks this is not necessary. At the beginning of his article he states that, “Although the department still struggles to contain the costs of military systems, it has come a long way in providing better buying power for the taxpayer.” I beg to disagree. As I and many others interested in acquisition reform have written over and over and as the above citations from Dr. Carter’s article demonstrate, the acquisition system does not consistently provide good products and services, on time and at the best price.
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