Wednesday, September 23, 2009

Five Points for Acquisition Reform

Concluding Observations on Achieving Lasting Reform:

I would like to offer a few thoughts about other factors that should be considered so that we make the most out of today's opportunity for meaningful change. First, I think it is useful to think of the processes that affect weapon system outcomes (requirements, funding, and acquisition) as being in a state of equilibrium. Poor outcomes--delays, cost growth, and reduced quantities--have been persistent for decades. If we think of these processes as merely "broken", then some targeted repairs should fix them. I think the challenge is greater than that. If we think of these processes as being in equilibrium, where their inefficiencies are implicitly accepted as the cost of doing business, then the challenge for getting better outcomes is greater. Seen in this light, it will take considerable and sustained effort to change the incentives and inertia that reinforce the status quo.

Second, while actions taken and proposed by DOD and Congress are constructive and will serve to improve acquisition outcomes, one has to ask the question why extraordinary actions are needed to force practices that should occur normally. The answer to this question will shed light on the cultural or environmental forces that operate against sound management practices. For reforms to work, they will have to address these forces as well. For example, there are a number of proposals to make cost estimates more rigorous and realistic, but do these address all of the reasons why estimates are not already realistic? Clearly, more independence, methodological rigor, and better information about risk areas like technology will make estimates more realistic. On the other hand, realism is compromised as the competition for funding encourages programs to appear affordable. Also, when program sponsors present a program as more than a weapon system, but rather as essential to new fighting concepts, pressures exist to accept
less than rigorous cost estimates. Reform must recognize and counteract these pressures as well.

Third, decisions on individual systems must reinforce good practices. Programs that have pursued risky and unexecutable acquisition strategies have succeeded in winning approval and funding. If reform is to succeed, then programs that present realistic strategies and resource estimates must succeed in winning approval and funding. Those programs that continue past practices of pushing unexecutable strategies must be denied funding before they begin. This will take the cooperative efforts of DOD and Congress.

Fourth, consideration should be given to setting some limits on what is a reasonable length of time for developing a system. For example, if a program has to complete development within 5 or 6 years, this could serve as a basis to constrain requirements and exotic programs. It would also serve to get capability in the hands of the warfighter sooner.

Fifth, the institutional resources we have must match the outcomes we desire. For example, if more work must be done to reduce technical risk before development start--milestone B--DOD needs to have the organizational, people, and financial resources to do so. Once a program is approved for development, program offices and testing organizations must have the workforce with the requisite skills to manage and oversee the effort. Contracting instruments must be used
that match the needs of the acquisition and protect the government's interests. Finally, DOD must be judicious and consistent in how it relies on contractors.
--Statement of Paul Francis, Managing Director:
Acquisition and Sourcing Management

I especially like the focus on the system and incentives that tend to lead to certain outcomes rather than a focus on particular techniques or methodologies. Mandating techniques for cost estimation or risk management is a waste of time, any mandated technique will be gamed because of the pressures and incentives inherent in the system.

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