Presented by Major Michelle “Shelli” Brunswick Professor, Acquisition Management Future Trends in Defense Acquisition The ...
Overview <ul><li>OSD </li></ul><ul><ul><li>Threats </li></ul></ul><ul><ul><li>Politics </li></ul></ul><ul><ul><li>Weapon S...
OSD “ The greatest strength of our armed forces is the initiative and adaptability of our  people.”  MILCOM 2006 Conferenc...
Threats “ What we do know is that the threats and challenges we face abroad in the first decade  of the 21 st  century wil...
Future Threats “ A consensus is emerging that U.S. forces should prepare for ‘hybrid’ war where they  may face unconventio...
Economy “ China’s central bank, the People’s Bank of China, praised Washington’s move [to take  over Freddie Mac and Fanni...
Partnerships The most important thing the military can do is prepare friends and allied nations to  defend and govern them...
Partnerships “ The Iraqi government is seeking to buy 36 advanced F-16 fighters…a move that could  help reduce its relianc...
Politics “ In my judgment, the Department today is overburdened with rules, regulations, and  legislation that limit effec...
Legislation “ There’s a trade-off between regulations [of the industrial base] and market forces  [that shape our industri...
Military Budget “ Wall Street's financial crisis and Congress's $700 billion rescue plan could take a toll on the Army's b...
Defense Spending
Defense Spending “ President Bush on Tuesday signed a sprawling stopgap spending bill to keep the  government running for ...
Weapon Systems “ What the department is seeking is timely synchronization and integrated delivery of  capabilities—and to ...
Cost “ In the year 2054, the entire defense budget will purchase just one aircraft.  The aircraft will have to be shared b...
Cost The causes leading to Augustine’s scenario.  “First flag officers want their weapon systems  to do everything.  Secon...
Research “ The greatest long-term threat to America, and to our close friends and allies, is falling behind in science and...
Current vs. Long-term Expenditures “ There is a deep bias in our budgeting system favoring current expenditures against lo...
Joint “ We have to maximize our dollars to do [joint] systems.  Each Service has a  different set of requirements.  When y...
Driver vs. receiver of technology “ The globalization of technology and production means that defense-funded programs no l...
AT&L “ We must have well-identified requirements, adequate funding and robust  processes utilized by trained personnel tha...
Acquisition Process “ But for those programs that do have cost and schedule growth, the biggest drivers are unstable requi...
“ At the strategic level, DOD’s processes for identifying warfighter needs,  allocating resources, and developing and proc...
Acquisition Process “ Growing evidence of the need to improve acquisition practices, program  management, and system engin...
“ DoD recently revised its policy and introduced several initiatives.  The revised policy, if implemented properly, could ...
IOC Technology Development Production & Deployment Operations &  Support FRP Decision Review FOC Materiel Solution Analysi...
Requirements Process “ The DOD is approving more new programs than fiscal resources can support. This problem is compounde...
Requirements Process “ Stop tinkering with requirements for weapons systems because such actions cause cost overruns and s...
Requirements Process “ To limit cost growth, the DOD should establish an early program baseline and  maintain it throughou...
$ Technology Maturity “ The GAO reported that of the programs assessed, only 15 percent entered  development with demonstr...
Technology Maturity I have expanded the use of Defense Support Teams who are made up of outside  world-class technical exp...
Agility “… If I tried to pull that through the current system, God only knows how long it would have taken.  The Army need...
Over Optimism “ Industry can also play a part and fuel overzealous advocacy if a low bid is  submitted to the government f...
Cost Estimating “ DOD acquisition programs fail because the Department continues to rely on  unreasonable cost and schedul...
Cost Estimating “… the environment and incentives that lead DOD and the military services to  overpromise on capability an...
Funding “ Funding instability on complex weapon systems causes renegotiation and re- baselining of the plans, schedule and...
Funding “ Under the capital funding concept, the Department guarantees a certain level  of funding for a fixed period of t...
Streamlined Acquisition “… the acquisition plan should include an outline for acquiring new capabilities In multiple, shor...
Oversight The GAO concluded that DOD policy provides for a series of early reviews  focused on the acquisition process.  U...
Oversight The DOD needs to make tough decisions -- which programs to pursue, and  more importantly, not pursue; make sure ...
Organization  “ The organization is only as good as the people you put in it”  28 March 2008 Ralph DiCicco, JR – Acting Di...
Inexperienced Workforce An inexperienced workforce coupled with high turnover rates can be significant contributors to cos...
Inexperienced Workforce  “ We are losing our competence as a government to be an effective buyer.”  1 March 2008 Dr. John ...
Organization  The current joint programs are not able to streamline the requirements process  across the Services.  For ex...
Work Force  “ We must help our people succeed through training and experience.”  18 April 2008 Hon. John J. Young, Jr.  US...
Inexperienced Workforce An inexperienced workforce coupled with high turnover rates can be significant contributors to cos...
Inexperienced Workforce  “ We are losing our competence as a government to be an effective buyer.”  1 March 2008 Dr. John ...
Experience Program Management is a profession just like any other profession, and it must have upward visibility and mobil...
Corporate Knowledge 20% of knowledge in an organization is information you can search for in  books, regulations or manual...
Knowledge Sharing The government needs to capture the knowledge in each program office and  establish a partnership with i...
Training “ We are increasing our use of just-in-time training.  DAU is deploying its “Core  Plus” concept that involves ad...
Certification “ I would hope that the DOD and Congress would accept certification and  credentialing by professional socie...
Tools The workforce of today is more capable than the workforce of 30 years ago  because of the tools employed in the work...
Work Force Challenge “ I think the challenge will be maintaining a trained work force.  Today there is a gap in engineerin...
Work Force Challenge “ The Department of Defense will face a worldwide civilian manning challenge in the near future, beca...
Industry   “ Change is relentless…I’d say in a single word ‘more’. We see more foreign ownership of U.S. assets…more expor...
Industry’s Role  “ I see industry’s role with the Government in 2025 to be an integrated solution  provider.” 2 May 2008 F...
Industrial Base Changes  “ Domestic mergers will start to decline as compared to the last two decades, but international m...
Industrial Base  “ Moving toward fewer competitors in each market, and moving towards a  European concept.  One company do...
Role of the Prime and  Sub-Prime Contractor  “ The shift is already underway with prime contractors and subprime contracto...
Global Economy “ The Department must be prepared for more global involvement in the  manufacturing of the components going...
Global Economy “ While the decision to buy European planes has proved politically unpopular among many, it follows a growi...
Industry’s Response  to Market Forces “ Industry supporting defense is reshaping itself to respond to significant  changes...
Conclusion “ Buy the right thing, the right way, with the right process.” 5 March 2008 General Lester L. Lyles (Ret) USAF ...
About the Author “ I believe the initiative, talent and adaptability of our government and industry  team will succeed in ...
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19 May 2009 -- Future Trend in Defense Acquisition

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Future Trends in Defense Acquisition presented for the Southbay NCMA Chapter, 19 May 2009

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  • The DoD acquisition enterprise is managed by a professional workforce made up of several functional career fields, but for the purposes of this chapter it will relate directly to the project management professional.
  • Future threats to the United States drive DoD’s acquisition process, but we do not do a good job of predicting the next threat, as is evidenced by our history, which shows that DoD prepares for the war just fought. Seventeen years ago, the United States was celebrating the end of the Cold War and the nation’s military posture was based on a known threat—the Soviet Union. The United States had a defensive policy to deter communist expansion. Conversely, today’s threat is the Global War on Terrorism. The United States must quickly respond and then project a threat posture anywhere in the world. Sep 2008, National Defense, NDIA’s Business and Technology Magazine by Matthew Rusling. At the Defense Department, there is much pressure to figure out what’s next after Iraq and Afghanistan. Will it be another counterinsurgency campaign? Or a conventional war against a modern industrialized nation? The future, according to military strategists and scholars, is likely to be somewhere in between. Opponents may not fall into the predictable categories of low-tech “irregular” combatants or technologically advanced military powers. A consensus is emerging that U.S. forces should prepare for “hybrid” wars where they may face unconventional fighters or insurgents, who are likely to be equipped with modern weapons and information technology. “Typically when you think of insurgents or non-regulated combatants, they will primarily be armed with small arms - explosives, rocket-propelled grenades, rifles, machine guns,” said Army Major General David A. Fastabend, director of strategy, plans and policy. “In a hybrid threat, your adversaries might also be armed with some high-ended weapons systems,” he said in an interview. A militia such as Lebanon’s Hezbollah is an oft-cited example of the type of enemy the United States will confront in the coming decades.
  • Another significant threat to the United States that is seldom mentioned is a weakened economy. The health of the U.S. economy is joined to the health of other countries’ economies by globalization. The need for the United States to maintain a strong economy is vital to third world countries since a recession in the United States could destabilize less developed regions. The defense budget and the U.S. economy are inextricably linked. Defense spending is related to a robust economy and a strong gross national product. The Soviet Union’s collapse was an economic collapse, not a military confrontation. A strong economy enables our strength and perhaps is our best means of defense. When the US sneezes the rest of the world catches a cold. In China on Monday, the U.S. Treasury’s takeover of FannieMae and Freddie Mac was front-page news. China’s banks sit on billions of dollars of the agencies’ debt securities. Chinese manufacturers, meanwhile, are keen to see the U.S. emerge from a housing crisis that has sapped spending power. China’s central bank, the People’s Bank of China, praised Washington’s move, noting that “America’s financial market influences the stability of the global economic an financial markets.” It added that “the U.S. government should conscientiously bear the responsibility of safegarding the stability of the financial market and protect the interests of investors.” By James T. Areddy, the Wall Street Journal 9 Sep 2008, U.S. Plan Serves as Template for China to Bolster Its Markets Mr. Michael Gass, Changes in threat environment: function of what percentage the nation allocates GOP to Defense Authorization. Need a strong economy. The underline collapse of a nation is their economy. (ex. Soviet Union). Next big threat: Core economy will predict our strength; the key is a strong “economic engine’, a nation’s security and good economic policy reduces adversaries.
  • In 2007, Gates stated, “We also need to be thinking about how to integrate our government’s capabilities in these areas, and then how to integrate government capabilities with those in the private sector, in universities, in other non-government organizations, with the capabilities of our allies and friends—and with the nascent capabilities of those we are trying to help.” Friday, 1 Aug 2008 USA Today, “The most important thing the military can do is prepare friends and allied nations to defend and govern themselves.” 2008 National Defense Strategy approved by Gates and released 31 July 08 by the Pentagon. For these reasons, arguably the most important military component of the struggle against violent extremists is not the fighting we do ourselves, but how well we help prepare our partners to defend and govern themselves. Friday, 5 Sep 2008 USA Today, Rice makes historic visit to Libya &amp;quot;The relationship has been moving in a good direction for a number of years now and I think tonight does mark a new phase,&amp;quot; Rice said Friday after a traditional Ramadan dinner — the evening meal that breaks the day&apos;s fast during the Muslim holy month — at Gadhafi&apos;s official Bab el-Azizia residence. It is the same compound hit by U.S. airstrikes in 1986 in retaliation for a deadly Libyan-linked terrorist attack in Germany. The attack killed Gadhafi&apos;s baby daughter. &amp;quot;We did talk about learning from the lessons of the past,&amp;quot; Rice said. &amp;quot;We talked about the importance of moving forward. The United States, I&apos;ve said many times, doesn&apos;t have any permanent enemies.&amp;quot; Rice is the highest-ranking American official to visit Libya in a half-century. The United States considers Gadhafi rehabilitated since the days when former U.S. President Ronald Reagan called him the &amp;quot;mad dog of the Middle East,&amp;quot; because of the Libyan&apos;s surprise decision in 2003 to renounce terrorism and give up weapons of mass destruction. His government has also agreed to resolve legal claims from the bombing of Pan Am Flight 103 and other alleged terror attacks that bore Libyan fingerprints. &amp;quot;Libya has changed, American has changed, the world has changed,&amp;quot; Foreign Minister Abdel-Rahman Shalgam said after a meeting with Rice. &amp;quot;Forget the past.&amp;quot;Rice&apos;s visit comes amid a surge in interest from U.S. companies, particularly in the energy sector, to do business in Libya, where European companies have had much greater access in recent years. Libya&apos;s proven oil reserves are the ninth largest in the world, close to 39 billion barrels, and vast areas remain unexplored for new deposits. Rex Reagan, The ultimate defense could well be economic alliances with countries such as China, India, Russia, etc. for the United States to inject domestic influences and to integrate U.S. interests to the greatest extend possible with those of Europe, Asia, Africa, and the Russian states…. Alliances with countries, previously thought undesirable, will be examined for further consideration.
  • The Wall Street Journal, 5 Sep 2008, Iraq seeks to Buy F-16s, by August Cole and Yochi J. Dreazen. The F-16 is one of the most widely exported fighters in the world. More than 4,400 have been built and are in service with 25 countries. The Israeli air force also operates F-16s, as do Jordan, Egypt, Turkey and UAE, Oman and Bahrain…The U.S. recently announced F-16 sales to Morracco and Romania. International Herald Tribune, US agrees to sell Israel bunker-busters, The Associated Press, Monday, September 15, 2008. Jerusalem: A U.S. plan to sell Israel 1,000 buster-bunker bombs could give it a powerful new weapon against enemies’ underground arsenals in Lebanon or the Gaza Strip, Israel military experts said Monday…In announcing the proposed $77 million deal, which would need Congressional approval, the U.S. Defense Department said the sale of the Boeing GU-39 smart bombs would be consistent with the U.S. interest of assisting Israel, “to develop and maintain a strong and ready self-defense capability.”
  • They passed the Goldwater-Nichols Department of Defense Reorganization Act of 1986, making the most sweeping changes to the Department of Defense (DoD) since its creation in 1947 by the National Security Act (NDU, 2008). The Goldwater-Nichols Act restructured the procurement process for the Services into a joint procurement process with joint implementation requirements. Just seven years later at “the last supper” held by then Secretary of Defense Les Aspin, former Deputy Secretary of Defense William Perry told leaders of industry the Cold War was a success. The United States had won and the peace dividend would mean a reduction in DoD procurement. The DoD could no longer support the diverse Defense Industrial Base. This led to the industrial downsizing of the 1990s, causing significant personnel losses across both government and industry, and a massive consolidation effort on the part of industry. The results of these two major events over the last two decades have led to the Defense Acquisition process we have today. Sen James Inhofe (OK) stated: The measure would “create and maintain jobs across America and sustain our military industrial base,” he said. “Investing in our Nation’s defense provides thousands of sustainable American jobs and provides for our national security at the same time. Experts estimate that each $1B in procurement sprending correlates to 6,500 jobs.” Inhofe added: “Major defense procurement programs are all manufactured in the United States with our aerospace industry alone employing 655,000 workers spread across 44 states. The U.S. shipbuilding industry supports more than 400,000 workers in 47 States.” Will lawmakers agree to cut Defense Department programs underr the current economic pressure when the same economic pressure demands that they preserve defense-related jobs in their districts?
  • Congressional legislation has direct control over the costs for defense weapon systems. Former Under Secretary of Defense for Acquisition, Technology and Logistics Dr. Jacques Gansler stated at an Industrial College of the Armed Forces symposium, “There’s a trade-off between regulations [of the industrial base] and market forces [that shape our industries], and we walk a narrow line between the two. I’m worried that perhaps we’re going too far now in the direction of regulation as a result of the reactions [to scandals, concerns about the integrity of the system]. The pendulum swings between these two positions on a cycle, if you consider the history of the industrial base” (ICAF, 2005). Missile Defense Agency Deputy for Acquisition Management Katrina Wahl reflected this same sentiment when she said, “Change is a constant struggle, but the process may not change into something better. We need to target opportunities that require Congressional relief.”* Both Gansler and Wahl are addressing the need to find a solution between the two extremes—deregulation and excessive regulation. The DoD will have legislative oversight; the question is to find the “sweet spot”—the right amount of legislation, focusing on the right areas of concern that can only be balanced by Congress. 3 June 2008, Secretary Young—The Defense Department needs to work with Congress on appropriate changes which can help DOD retain a highly capable acquisition team, recruit talented individuals from all levels of industry, and give the acquisition team greater flexibility to deliver technology and products to protect our Nation’s security. 30 May 2008 – The Air Force will award as many as three companies lucrative prime contract rights for A-10 integration work in response to a new policy dictated in the FY 2008 DAA. The law is aimed at promoting greater competition on indefinite delivery/indefinite quantity-type requirements where the Air Force cannot adequately describe the effort in advance. While it won’t eliminate all contracts with a single prime, it certainly pushes the agency away from adding additional work in a sole-source environment, but not necessarily for major weapon systems. “ Congress has a sense of history, continuity, big picture that the executive branch won’t have.” “Staffers from the Hill go to the Administration.” “Congress has long term view.” “Most devastating effect is change of Executive Administration.” Tom Bowler Working more closely with Congress has “big picture view” of any executive group (not a revolving door)”. Tom Bowler
  • With each new administration, national security priorities and policies are re-prioritized based on national security threats pertaining to economic, political or social events. National security decision making among policy makers determines the budget Congress authorizes for the Department of Defense. Currently, pressure to reduce the defense budget and defense programs continues seemingly unabated as entitlement programs and national debt expenditures consume more of the federal budget. Over the long run, this will undoubtedly affect the Department of Defense and its weapon systems of the future. Industry’s ability to deliver weapons systems are tied to the Federal budget/defense budget, and everything that affects that. Pressures on the Federal Budget adds pressure to the defense budget which in turn could cut shipbuilding in half. If this occurs, government could see a radical consolidation by industry or even shutting down of facilities. Tom Bowler Personnel costs account for about 2/3rds of all Pentagon and military spending, but there is little chancde that money budgeted for salaries, training, health care, and other benefits for military personnel and their families would be slashed while troops are fighting and dying in two wars. New York Times, 18 Feb 09, Shanker Culture shift: Reduced manning, reduces the number of people in danger (public is less tolerant of high death tolls) March 2, 2006, A Defense Budget Strategy for Winning the Long War, by Baker Spring , Backgrounder #1918 The Defense Budget: Where It Has Been, Where It Is Now As a nation at war, the U.S. is spending remarkably little on defense. This is particularly the case when defense spending is measured against the size of the economy or gross domestic product. For example, Department of Defense spending peaked at 34.5 per­cent of GDP during World War II. During the Korean War, it peaked at 11.7 percent of GDP. During Viet­nam, it peaked at over 8.9 percent of GDP. In FY 2005, Department of Defense expenditures were assessed at 3.9 percent of GDP. It may be argued that comparing today with World War II, Korea, and Vietnam is not appropri­ate as the nation looks at future defense expendi­tures because the current conflict with Islamic fascists is a long-term conflict and the others were discrete, high-intensity conflicts. However, the United States supported higher defense budgets throughout the decades-long Cold War, spending an average of almost 7.5 percent of GDP for national security functions during the period from FY 1948 to FY 1991. [4] Further, it is important to compare how defense has fared in the budget debates over the years with the major entitlement programs of Social Security, Medicare, and Medicaid. While defense spending has been relatively restrained, expenditures on these three major entitlement programs have been exploding. In FY 1962, these entitlement programs consumed 2.5 percent of GDP. By FY 2003, they consumed 8.3 percent of GDP. TREND #1: Unit man­power costs have been rising. TREND #2: Overall operational and support costs have been outpacing the amounts invested in modernization. TREND #3: Funding for researching and developing new weapons and equipment has outstripped funding for procurement of the same.
  • The Heritage Foundation Despite War Costs, Defense Spending Falls Below Historical Average At 4 percent of GDP, defense spending is 1.5 percentage points of GDP below the 45-year historical average and well below Cold War and Vietnam War levels. National Defense Spending as a Percentage of GDP, 1962-2007 http://www.heritage.org/research/features/BudgetChartBook/PDF/S8.pdf http://www.heritage.org/research/features/BudgetChartBook/fed-rev-spend-2008-boc-S8-Mandatory-Spending-Has-Increased.html
  • Future threats to the United States and the evolving political environment determine the type of weapon systems the Department of Defense develops. With a constrained defense budget, DoD can ill afford to invest in the research and development of aging technology. The Department of Defense needs to focus on a future military strategy based on information dominance. This is a shift from past single-use platform weapon systems, such as ships, planes, tanks or missiles to a system-of-systems approach (ICAF, 2005). With the system-of-systems approach, the DoD will purchase fewer highly sophisticated systems. Rex Reagan, a senior acquisition manager at BearingPoint, Inc., commented that with the system-of-systems approach, there will be improvements in commonality and inter-Service capability. “Multiple Services must be able to employ a weapon, system, material, or any service provided without pronounced adjustments or modifications.”* Dr. Gansler, Future emphasis will be the procurement of the systems of systems not platforms—in terms of how we specify what we want. Defining requirements for system of systems not nodes. Specify resource constraint, quantity, optimize system of systems would reduce overall costs. Trade-off considerations between performance costs and technology…most don’t get done that way. We don’t budget for the system-of systems approach. That needs to change. Ms. Stiller, Acq Reform, PMO procedures. Services are locked in and have no flexibility so no motivation to move money or work with other Services.
  • Augustine’s Laws, sixth edition by Normal R. Augustine “It should be pointed out to those who take solace in challenging the validity of the above extrapolation of the defense budget that, were a plot of the gross national product to have been used instead, the aforementioned singular event would have been delayed a mere 60 years. In this latter era the cost of aircraft will no longer be measured in dollars but a new unit will be introduced, the Gross National Product, or “GNP”, pronounced “nip”. Hence, an aircraft in the year 2100 will cost about half a nip.” Dr. John Wall of McDonnell Douglas has pointed out that this law demonstrates that all the military might of the U.S. will be concentrated into one grand vehicle in the latter half of the 21 st Century. But this is just the “Battlestar Galactica” which we all know so well, with perhaps a few smaller ships such as the USS Enterprise preceding it by 50 years or so. And in the mid-22 nd Century we find: Darth Vadar’s planet-size “Death Star!” One single grand fighting machine encompassing a whole nation—or perhaps a whole planet!”
  • Dr Jan P. Muczyk, On the Road Toward Confirming Augustine’s Predictions and How to Reverse Course, Dec 2007, Defense Acquisition Review Journal. The causes of the trends leading to Augustine’s tongue-in-check hyperbole are manifold, but easily understood. First, flag officers want their weapon systems to do everything. Second, they wish to make changes throughout the development cycle of the weapon system. To avoid cost escalation resulting from change orders, a “drop dead” date for change orders must be established and rigorously enforced. Third, the federal bureaucracy guarantees inefficiencies. For example, Inspectors General of the DOD routinely conclude that the DoD’s books are un-auditable and that the DoD cannot account for billions of dollars of assets. One estimate actually exceeds a trillion dollars (http://www.hiddenmysteries.org/news/america/usa/091501g.html). Fourth, there is a reluctance to purchase extant systems developed by other nations. For example, the Army was reluctant to purchase rocket-propelled grenade (RPG) countermeasures—for example, the Trophy Active Protection System developed by the Israelis—until pressured to do so. All four reasons escalate the cost of weapon system, compelling Congress to limit the budget for these expensive systems. As a result, the Defense Department reduces the number of units that it intends to buy to stay within the budget, thereby inflating the cost on a per-unit basis to astronomical proportions. The entire situation is exacerbated by the consolidation of defense contractors and Congressional pressure to buy American, both of which restrict competition. Little wonder then that DoD contract overruns are routine and of epidemic proportions. Secretary Young In several notes, I have asked the acquisition team to focus on reducing the cost of our weapon systems and platforms. We should never be satisfied with the cost of our systems. I ask each of you to take this approach, and I think it has been clearly advocated by Secretary Gates in recent speeches and media comments. In a recent article, the Deputy Director for Future Combat System Integration stated :if you look at the capability it brings. I don’ think the price is that bad.” I am not aware of any system that can legitimately take that attitude. In a meeting with me, a Missile Defense Agency manager was asked the current price of a THAAD system. He responded with the current price and that future prices will be higher. STOP ASSUMING AND GRANTINGAND SAYING THAT PRICES WILL AUTHOMATICALLY BE HIGHER. We must all work to lower prices. Indeed, I wish I had a dollar for every time I have heard the often repeated refrain that DOD will soon only be able to buy one ship and one airplane and one ground vehicle. In recent discussions about foreign weapon systems, it is clear that there are very good capabilities being produced at low costs. This is not something for us to ignore. This is not a call to underestimate development costs and understate procurement prices – exactly the opposite. Indeed, such actions have already seriously eroded our acquisition team credibility. However, I think there is almost no program which is a bargain. 13 Jun 2008 Dr. Gansler—UK, JSF is the last manned aircraft to be built. Australia will buy around the world, only a few things to do on their own. The US needs to think that way, and put the money into R&amp;D.
  • Former Deputy Secretary of Defense Dr. John J. Hamre, wrote, “There is a deep bias in our budgeting system favoring current expenditures against long-term expenditures. This bias is toward operations and against investment. Money that would have been set aside for research and development is going towards personnel and operations supporting the war in Iraq and Afghanistan.”* Ms. Katrina Wahl further elaborated that the DoD is eating its seed corn—its long lead seed corn—and if the DoD continues this engagement, it could potentially limit government and industry’s pursuit of new technological advancements.* George Guerra, “PEOs will be faced with ensuring that the products needed to adapt to 2025 are quality products, economical and produced using the latest and most advanced technology. As other nations progress and develop their technology base, it will be more challenging to the US to maintain its edge. PEOs will be faced with making those tough decisions that give us the edge we need.”
  • U.S. Army to Evaluate FCS Spinout One Follow-On: Sep 23, 2008 A full analysis of Spin Out 1, the first spate of the U.S. Army’s Future Combat System (FCS), will occur this fall and winter, with an eye toward follow-on versions… Among the FCS components is a joining program with the U.S. Navy, the Non-Line of Sight Launch System (NLOS-LS), which is undergoing test and evaluation by the Navy.
  • The DoD, once the driver of technology, has become a receiver of technology. Commercial sector developments have outpaced military development, forcing the military to work with industry to capture and use commercial developments, either as whole entities or components of larger systems. These commercial products pose security concerns because they have dual usage and were developed using open systems architectures. Lieutenant General Ted Bowlds, USAF, Commander, Electronic Systems Center, provided the micro-processor as an example. A platform’s mission computer will have its lineage traceable to a commercial processor, such as the Intel dual-core found in commercial laptops.* Unless Congress and DoD increase R&amp;D funding for long-term expenditures, the weapon systems of tomorrow will become dependent on commercial, dual-use products, which are equally available to our adversaries. Jun 2008 National Defense Steven D. Roemerman, CEO o Lone Star Aerospace of Dallas. The DOD product development community is becoming increasingly disconnected from mainstream technology. As an industry, we have stopped driving technology advances. We had hoped to become more connected to commercial technology, but the data suggest that we are becoming less connected…Aerospace and defense are becoming more dependent on non-defense technology, which is changing more rapidly than we can respond. At the same time, the defense sectors are becoming a relatively unimportant source of marketplace innovation. Los Angeles Times, 21 Jul 08 – Maj Gen Charles J. Dunlap Jr, USAF – A conflict against a technologically advanced power may be in the distant future. But, Dunlap argues that cutbacks in high-tech conventional weapon systems might embolden other countries to challenge the United States. Michael Gass, President and CEO of ULA, DOD needs are unique to other industries. Eventually, DOD will not be able to distinguish itself from anyone else even adversaries. Need to develop unique capabilities that have potential for re-investment. Dr. Hamre, I fear that we will continue to see a continued gap developing between defense industry and general industrial base…So I think we are likely to see defense industry become more of a hot-house industry, and to have more concentration in few companies.
  • The acquisition community has an adequate process in place. However, certain aspects of the process prevent it from working properly. One major disconnect illustrated by Deputy Under Secretary of the Air Force for Space Programs Gary E. Payton relates to the three distinct DoD acquisition areas, commonly referred to by acquisition practitioners as the “Big A.” The first element is the requirements generation and validation piece, which is designed to validate a requirement independent of cost and schedule. The second area is the actual acquisition of the weapon system. The last area is budgeting.* The DoD needs to redesign the “Big A” process to create a fully integrated and well-functioning system. Lieutenant General Lawrence P. Farrell, Jr., USAF (Ret.), President and CEO of the National Defense Industrial Association, believes one person should be held accountable for the acquisition process.* The Government Accountability Office (GAO) Report on Best Practices recommended that, “DoD establish a single point of accountability at the Department level, with the responsibility, authority and accountability for ensuring that portfolio management for weapon system investments is effectively implemented across the Department” (Sullivan, 2007).
  • Defense Management Challenges for the Next American President, by Ashton B. Carter, the chair of the International and Global Affairs faculty at Harvard Kennedy School. He was Assistant Secretary of Defense for International Security Policy in the Clinton administration. Quote from Dr. Carter’s article: Defense Management Challenges for the Next American President; 2008 published by Elsevier Limited on behalf of Foreign Policy Research Institute Boston Globe, 24 Feb 09—Dr. Carter has no professional ties to America’s arms makers or manufacturing industry, nor has he spent his career in government procurement. Instead,…Dr. Carter has been criticizing the Pentagon for buying too much armament it does not need, decrying what he calls a lack of discipline and “failure to take account of cost growth in weapon systems and defense services.” Dr. Carter called for a return to what he called “strategy clarity.” In other words, he wrote, “what kind of military does the United States need and why?”
  • The acquisition community has an adequate process in place. However, certain aspects of the process prevent it from working properly. One major disconnect illustrated by Deputy Under Secretary of the Air Force for Space Programs Gary E. Payton relates to the three distinct DoD acquisition areas, commonly referred to by acquisition practitioners as the “Big A.” The first element is the requirements generation and validation piece, which is designed to validate a requirement independent of cost and schedule. The second area is the actual acquisition of the weapon system. The last area is budgeting.* A Government Accountability Office report dated 3 March 2009, “Defense Acquisitions: DoD musts balance its resources and follow an incremental approach to acquiring weapon systems—again highlighted—“At a strategic level, DoDs processes for identifying warfighter needs, allocating resources, and developing and procuring weapon systems, which together define the departments overall weapon system investment strategy, are fragmented The DoD needs to redesign the “Big A” process to create a fully integrated and well-functioning system. Lieutenant General Lawrence P. Farrell, Jr., USAF (Ret.), President and CEO of the National Defense Industrial Association, believes one person should be held accountable for the acquisition process.* The Government Accountability Office (GAO) Report on Best Practices recommended that, “DoD establish a single point of accountability at the Department level, with the responsibility, authority and accountability for ensuring that portfolio management for weapon system investments is effectively implemented across the Department” (Sullivan, 2007).
  • The major differences between the 2003 and 2008 versions of the DoDI 5000.02 are: - The Materiel Development Decision (MDD) replaces the Concept Decision (CD). A MDD is required regardless of where the program intends to enter the acquisition process. NOTE: The arrows from User Needs/Technology Opportunities now point to the MDD at the extreme left: THIS DOES NOT MEAN THAT EVERY PROGRAM MUST ENTER AT THE MATERIEL SOLUTION ANALYSIS PHASE. This is illustrated better on chart 5. -The Materiel Solution Analysis Phase (MSA) replaces the Concept Refinement (CR) Phase . MSA is not “refinement” of the preferred solution(s) identified in the ICD. The JCIDS process no longer includes an Analysis of Materiel and Non-Materiel Alternatives. Non-materiel solutions will be handled IAW JCIDS; however, all analysis of alternative materiel solutions will be accomplished by the AoA during MSA. The MDA will approve the materiel solution at Milestone A. -Technology Development : This phase now includes a mandatory requirement for competitive prototyping of the system or key-system elements . A Preliminary Design Review (PDR) may be conducted for the candidate designs, and a PDR report will be provided to the MDA with recommended requirements trades. (The final CDD should contain trade-offs determined during the TD phase). -Engineering &amp; Manufacturing Development (EMD) replaces System Development and Demonstration (SDD). There is more emphasis on systems engineering and technical reviews. The two major efforts have been renamed. The PM must provide a PDR report, and must provide a Critical Design Review (CDR) report to the MDA (more on this later). A Post-CDR Assessment replaces the Design Readiness Review. The MDA will determine if the results of the CDR warrant continuing EMD to Milestone C. SE is much more robust throughout all phases, with mandatory technical reviews.
  • Within the requirements process are two components. The first is the DoD’s overall requirements generation and validation element addressed under “Big A.” The DoD is approving more new programs than fiscal resources can support. This problem is compounded by the highly complex and interdependent programs that are commanding larger budgets than past programs (GAO, 2007). 3 June 08, GAO—DOD’s portfolio of weapon system programs has grown at a pace that far exceeds available resources. From 1992-2007, the estimated acquisition costs remaining for major weapons programs increased almost 120%, while the annual funding provided for these programs only increased 57%. Current programs are experiencing, on average, a 21-month delay in delivering initial capability to the warfighter—often forcing DOD to spend additional funds on maintaining legacy systems. …. DOD must begin making better choices that reflect joint capability needs and match requirements with resources or the department will continue to experience poor acquisition outcomes.
  • The second component—the need for stable requirements—relates more directly to the acquisition process or “Little A.” Unless the DoD can get control of the requirements process, it will be difficult, if not impossible, to deliver affordable and effective weapon systems.
  • “ Additions or modification of requirements almost always lead to cost and schedule growth” (Meier, 2008). An example of a program suffering from uncontrolled requirements growth is the Space-Based Infrared System High (SBIRS-High). The SBIRS-High program was originally estimated at $3.2 billion in 1996, and then underfunded in 1997 with $2.6 billion. In March of 2002, the program escalated to $6.2 billion, which was primarily attributed to inadequately defining requirements up front and not controlling additional requirements (DoD, 2003). A current cost estimate for the program is now $10.64 billion (Smith, 2005). SBIRS, continues to face cost and schedule setbacks, delaying the first satellite launch by about a year, “which will likely increase the program’s overall delay to roughly seven years, said Cristina Chaplain, GAO’s director of acquisition and sourcing management. She testified before the Senate Armed Services strategic forces subcommittee on March 4, 2008. Rear Admiral William Hunter Hilarides, USN, Program Executive Officer for Submarines, provided a very simple mathematical example when he illustrated requirement changes during the different phases of development. He stated that the cost starts at $1 on the shop floor, it increases to $3 once the ship is completed but still on the shop floor, and escalates to $8 once the ship is in the water.* To limit cost growth, the DoD should establish an early program baseline and maintain it throughout the acquisition process (Meier, 2008). This means accepting less capability delivered more rapidly, as opposed to the 100 percent solution. Additionally, the government will have to get better at cancelling non-performing programs early on in the process. Nunn-McCurdy Breach on VH-71…According to Secretary Young, “Unfortunately and to my great dismay because I am part of it, I have to admit that the government and industry team did not understand the full scope and demands of [the program’s] requirements.” Costs for both increments of the VH-71 program have ballooned, Young said, with the price tag on the first increment escalating from $2.3 billion to $3.7 billion, and the second phase growing by $3 billion to $7.5 billion. Configuration Steering Boards (CSBs) I have directed the Military Departments to establish CSBs. My intent is to provide the program manager a forum for socializing changes that improve affordability and executability. Boards will be in place for every current and future ACAT 1 program and will review all proposed requirement changes, and any proposed significant technical configuration changes which potentially could result in cost and schedule changes. Boards are empowered to reject any changes, and are expected to only approve those where the change is deemed critical, funds are identified, and schedule impacts are truly mitigated. For example: The Navy decided to terminate the Extended Range Munition (ERM) contract after the CSB review because the effort on the ERM contract was not meeting the performance needs of the Department. The Department is now looking at other alternatives to satisfy the requirement. I require every acquisition team member to fully engage the Planning, Programming, Budgeting, and Execution (PPBE) process thus creating an avenue for program mangers to ensure they are funded to execute their responsibilities or alternatively descope their programs to match reduced budget levels.
  • The Future Combat Systems — manned and unmanned vehicles joined by a wireless network — is managed jointly by Boeing and Science Applications International. Its current overall cost — $159 billion — is exceeded among all Pentagon weapons programs only by Lockheed Martin&apos;s F-35 Joint Strike Fighter. Seattle Times, May 15, 2009; Boeing Contract &apos;Messed Up,&apos; Gates Says, By Tony Capaccio, Bloomberg News Another longstanding problem with the acquisition process is programs beginning development with immature technologies. The GAO reported that of the programs assessed, only 15 percent entered development with demonstrated high levels of technology maturity, causing many programs to experience significant growth in development cost. “ In the case of the Army’s Future Combat System, nearly 2 years after program launch and with $4.6 billion invested, only 1 out of the more than 50 critical technologies is considered mature, and the research and development cost estimate has grown by 48 percent” (Schinasi, 2005). Representative Heather A. Wilson (R-NM) advised, “Aim for only one miracle per program” (Taubman, 2007). Many technology issues are traced to attempts to push state-of-the-art technology into the acquisition process before it is mature. This results in cost and schedule growth as well as program cancellation (Meier, 2008). DoD should focus more on incremental development. The acquisition process needs more evolutionary steps versus quantum leaps in technology capability. An evolutionary product development process defines the individual increments on the basis of mature technologies and incorporates them into feasible designs that are matched with firm requirements. June 2, 2008 Young…This Nation had the chance to lead other Nation’s on some technology efforts because there was available funding to pursue innovative, cutting edge ideas – technology push in many cases. Our current budget processes and timelines seriously limit our ability to pace most nation-states and offer no prospect of pacing aggressive terrorist organizations.
  • Secretary Young, “I have issued policy requiring competitive, technically mature prototyping. My intent is to rectify problems of inadequate technology maturity and lack of understanding of the critical program development path. Prototyping employed at any level—component, subsystem, system—wherever provides the best value to the taxpayer.” For example, the Joint Light Tactical Vehicle (JLTV) is currently using competitive prototyping. The JLTV program will eventually provide our soldiers and Marines with a truck that combines the off-road mobility of a High Mobility Multipurpose Wheeled Vehicle (HMMWV) with protection approaching that of a Mine Resistance Ambush Protected (MRAP) vehicle. To do this, the Joint Program Office is having three separate teams of contractors compete to make multiple prototypes which will be rigorously tested. At the end of this competition, the best of these prototypes will proceed on to Systems Demonstration and Development having already proven that they have the technical maturity to satisfy the requirements in a timely and cost effective manner. Defense Support Teams (DSTs) To address the challenges of acquisition execution and assist both industry and DOD program managers, I have expanded the use of these teams who are made up of outside world-class technical experts to address our toughest program technical issues. I expect the teams to resolve emergent problems and help the Department successfully execute tough programs before problems develop. For example, the Net Enabled Command Capability (NECC) program benefitted from a DST that clarified the critical coordination points necessary to bring the Defense Information Support Agency, the Service acquisition authorities, and operational sponsors into a coherent approach balancing military needs, technology solutions, and funding requirements. A refocused NECC team demonstrated significant progress on developing actionable military need definitions and establishing a collaborative environment for design and testing of software application modules enabling elements of a joint command and control tool set.
  • Dr. Sanders, More agility allows for more responsive—do best prediction but not so lock step where it won’t be there in 10 years.
  • High Costs Lead Navy to Cancel Lockheed Coastal Vessel By Renae Merle Washington Post Staff Writer Friday, April 13, 2007; Page D04 The Navy cancelled the second of two ships to be built by Lockheed Martin yesterday, ending intense negotiations over the vessels&apos; growing price tags and continuing efforts to keep the cost of weapons programs under control. The decision comes three months after the Navy ordered the Bethesda defense contractor to stop work on the second coastal combat ship after finding that the first would cost $350 million to $375 million, more than 50 percent over its original price. Last month the Navy said Lockheed could save the ship from cancellation by agreeing to take on more of the financial risk, including picking up the tab for future cost overruns. But Navy officials have acknowledged that the program suffered from excessive optimism and a contract structure that did not encourage Navy or company officials to determine the real cost of the ships. The cost of the first ships from Lockheed and General Dynamics is now expected to exceed initial estimates by 50 to 75 percent. So far, General Dynamics&apos; version is still cheaper than Lockheed&apos;s, Navy officials have said, but if it breaches that threshold, General Dynamics could also be required to pick up some cost overruns.
  • Trend—Increasing demand for realistic cost estimates and performing to those metrics “cost realism”. Increasing demand for realistic cost estimating cost organization, Navy has to evaluate costs—get away from weights more costs more mentality. Tom Bowler Opening Statement of Senator Carl Levin, Senate Armed Services Committee Hearing on DOD Acquisition of Major Weapons Systems: Senator Levin, It will take a fundamental change n the structure and culture of the acquisition system to address this problem. For this reason, I believe that we need a Director of Independent Cost Assessment in the Department of Defense, with authorities and responsibilities comparable to those of the Director of Operational Test and Evaluation that we established 20 years ago. This new, independent office would review cost estimates on all major defense acquisition programs and develop its own independent cost estimates, to ensure that the information on which so many of our program and budget decisions are based is fair, unbiased, and reliable. I plan to offer an amendment to this this year’s defense bill, when it comes to the Senate floor, to establish this new office.” Senator Levin, “We don’t have to look very far to find examples. Over the last five years, unit costs on the Air Force’s largest acquisition program, the Joint Strike Fighter, have grown by almost 40 percent, costing us an extra $37 billion. Over the last three years, unit costs on the Army’s largest program, the Future Combat System, have grown by more than 45 percent, costing us an extra $40 billion. And last year, the Navy had to cancel the planned construction of two Littoral Combat Ships after the program cost doubled in just two years.” With regard to unrealistic cost and schedule estimates: the Navy initially established a goal of $220 million and a 2-year construction cycle for the two lead ships on the Littoral Combat Ship (LCS) program – goals that were completely inconsistent with the Navy’s historic experience in building new ships and with the complexity of the design required to make the program successful. As a result, program costs doubled and the Navy started to run out of money long before the ships were complete, forcing it to cancel follow-on ships.
  • Our work shows that acquisition problems will likely persist until DOD provides a better foundation for buying the right thing, the right way. This involves making tough decisions as to which programs should be pursued, and more importantly, not pursued; making sure programs are executable; locking in requirements before programs are ever started; and making it clear who is responsible for what and holding people accountable when responsibilities are not fulfilled. Moreover, the environment and incentives that lead DOD and the military services to overpromise on capability and underestimate costs in order to sell new programs and capture funding will need to change. Based in part on GAO recommendations and congressional direction, DOD has begun several initiatives that, if adopted and implemented properly, could provide a foundation for establishing sound, knowledge-based business cases for individual acquisition programs and improving outcomes.
  • When there are problems with oversight, requirements or technology maturity, cost growth is a natural occurrence. For a program to be successful, it must have stable funding. Unfortunately, as former Acting Director, Defense Contract Management Agency Keith Ernst described, DoD pays for poorly performing programs by expropriating funds from other programs. This type of action destabilizes the other programs and reduces the overall buying power of the defense dollar. This forces the military services to reduce planned quantities or capabilities in order to stay within a new, reduced budget. An example is the reduced number of the F-22A Raptors . * According to the GAO, “As costs escalated in the program, the number of aircraft the Air Force planned to buy was drastically reduced from 648 to 183” (Sullivan, 2007). Rising Joint Strike Fighter costs could put pressure on Defense budget by Greg Grant, govexec. GAO auditors said they anticipate further increases and schedule delays in the Joint Strike Fighter and a major program restructure seems inevitable. A soaring price tag likely will force the military to buy fewer of the new fighters. Due to late-maturing technologies and weight increases in the aircraft have slowed production and forced redesign, while difficulties in wing and final assembly phases meant that the first test aircraft required 35 percent more labor hours than planned. The cost to build and operate a fleet of Joint Strike Fighters is approaching $1 trillion. GAO 08-388 March 12, 2008 Additionally, Nicholas W. “Nick” Kuzemka, Vice President, Program Management Corporate Operating Excellence &amp; Program Management, Lockheed Martin Corporation, said funding instability on complex weapon systems causes renegotiation and re-baselining of the plans, schedule and integration. This has a ripple effect through the supply chain.*
  • 26 March 2009 General Support Ashton Carter, nominee for the top Pentagon weapons buyer post, yesterday endorsed the now two-and-a-half year old Pentagon experiment with capability portfolio management. &amp;quot;In general, I support the Capability Portfolio Management Initiative which . . . is intended to provide an enterprise-level, horizontal (cross-component) view of the Department to better balance and harmonize joint warfighter capability needs with capability development efforts,&amp;quot; he wrote in prepared answers &lt; http://www.insidedefense.com/secure/data_extra/pdf8/dplus2009_0810_2.pdf &gt; to advance questions from senators. &amp;quot;If confirmed, I will review the CPM construct to ensure it enables better-integrated and balanced advice across the full spectrum of capability needs to DOD senior leadership.&amp;quot; Outgoing acquisition czar John Young had some reservations about CPM, as Inside the Pentagon noted &lt; http:// www.insidedefense.com/secure/display.asp?docnum =PENTAGON-24-23-13&amp;f=defense_2002.ask &gt; last summer. In another prepared answer, Carter wrote it &amp;quot;may be appropriate&amp;quot; that he (or whoever ultimately gets the job) becomes a full member of the Joint Requirements Oversight Council, where the core membership currently is pretty much a services-only affair. J. David Patterson, principal deputy under secretary of defense (comptroller). House Oversight and Government Reform and National Security and Foreign Affairs Subcommittee. Hearing on “oversight of Defense Department Acquisitions: April 29, 2008 The Capital Funding Pilot Program is an example of ways the Defense Department (DOD) is working to establish a more stable budget environment. He spoke on a March GAO report that found 95 major weapons acquisition programs are nearly $300 Billion over original budget and 21 months late on average. Under the Capital Funding Pilot Program, the DOD guarantees a program a prescribed level of funding for a fixed period—from Milestone B, or system development and demonstration (SDD), through to initial operating capability (IOC). Funding is held at a guaranteed level by avoiding up and down adjustments until the project is delivered. When industry and program managers know what annual program funding will be provided at a predictable level, and that other aspects of the program—such as unfunded performance or requirement changes—are not allowed, there is an increasing probability that the program will be delivered on schedule and within budget. This capital funding concept will be applied to the Air Force’s Combat Search and Rescue replacement helicopter (after the effort under competition is established as a program of record), the Navy and Army’s Joint High Speed Vessel program, and the Army’s General Funds Enterprise Business System effort. Because these system are within the Defense Department’s current authorities, they can be implemented in the near team. To qualify for capital funding, programs must meet several criteria: each have a Technology Readiness Level of at least 6 at Milestone B; have “well understood funding profiles” from milestone B to IOC; not be used as a “Bill Payer” by the Services or DOD; and be “time-definite” programs. In addition, officials with the qualifying programs must provide bi-annual reports to Congress on cost and schedule and performance progress. Capital Funding programs will be cancelled “if they fail to meet established cost, schedule, and performance objectives three reviews in a row. This Capital Funding Pilot Program is co-sponsored by the under secretary of acquisition, technology, and logistics and the comptroller. He pointed out numerous studies found that the key elements of successful programs are program stability and funding predictability. Instability drives cost growth, schedule slippages, and in some cases, failure of the weapon system to perform as anticipated.
  • 26 March 2009 General Support Ashton Carter, nominee for the top Pentagon weapons buyer post, yesterday endorsed the now two-and-a-half year old Pentagon experiment with capability portfolio management. &amp;quot;In general, I support the Capability Portfolio Management Initiative which . . . is intended to provide an enterprise-level, horizontal (cross-component) view of the Department to better balance and harmonize joint warfighter capability needs with capability development efforts,&amp;quot; he wrote in prepared answers &lt; http://www.insidedefense.com/secure/data_extra/pdf8/dplus2009_0810_2.pdf &gt; to advance questions from senators. &amp;quot;If confirmed, I will review the CPM construct to ensure it enables better-integrated and balanced advice across the full spectrum of capability needs to DOD senior leadership.&amp;quot; Outgoing acquisition czar John Young had some reservations about CPM, as Inside the Pentagon noted &lt; http:// www.insidedefense.com/secure/display.asp?docnum =PENTAGON-24-23-13&amp;f=defense_2002.ask &gt; last summer. In another prepared answer, Carter wrote it &amp;quot;may be appropriate&amp;quot; that he (or whoever ultimately gets the job) becomes a full member of the Joint Requirements Oversight Council, where the core membership currently is pretty much a services-only affair. J. David Patterson, principal deputy under secretary of defense (comptroller). House Oversight and Government Reform and National Security and Foreign Affairs Subcommittee. Hearing on “oversight of Defense Department Acquisitions: April 29, 2008 The Capital Funding Pilot Program is an example of ways the Defense Department (DOD) is working to establish a more stable budget environment. He spoke on a March GAO report that found 95 major weapons acquisition programs are nearly $300 Billion over original budget and 21 months late on average. Under the Capital Funding Pilot Program, the DOD guarantees a program a prescribed level of funding for a fixed period—from Milestone B, or system development and demonstration (SDD), through to initial operating capability (IOC). Funding is held at a guaranteed level by avoiding up and down adjustments until the project is delivered. When industry and program managers know what annual program funding will be provided at a predictable level, and that other aspects of the program—such as unfunded performance or requirement changes—are not allowed, there is an increasing probability that the program will be delivered on schedule and within budget. This capital funding concept will be applied to the Air Force’s Combat Search and Rescue replacement helicopter (after the effort under competition is established as a program of record), the Navy and Army’s Joint High Speed Vessel program, and the Army’s General Funds Enterprise Business System effort. Because these system are within the Defense Department’s current authorities, they can be implemented in the near team. To qualify for capital funding, programs must meet several criteria: each have a Technology Readiness Level of at least 6 at Milestone B; have “well understood funding profiles” from milestone B to IOC; not be used as a “Bill Payer” by the Services or DOD; and be “time-definite” programs. In addition, officials with the qualifying programs must provide bi-annual reports to Congress on cost and schedule and performance progress. Capital Funding programs will be cancelled “if they fail to meet established cost, schedule, and performance objectives three reviews in a row. This Capital Funding Pilot Program is co-sponsored by the under secretary of acquisition, technology, and logistics and the comptroller. He pointed out numerous studies found that the key elements of successful programs are program stability and funding predictability. Instability drives cost growth, schedule slippages, and in some cases, failure of the weapon system to perform as anticipated.
  • There is a need for strong procedural oversight within the acquisition process. The GAO concluded that DoD policy provides for a series of early reviews focused on the acquisition process. Unfortunately, these reviews are often skipped or are not fully implemented (Sullivan, 2007). The GAO also reported that successful product developers ensure that a high level of knowledge is achieved at key junctures in development so resources and needs match, product design is stable, and the production processes are mature (Schinasi, 2005). The GAO concluded in its High-Risk Series, “DoD has written into policy an approach that emphasizes attaining a certain level of knowledge at critical junctures before managers agree to invest more money in the next phase of weapon system development. This knowledge-based approach results in evolutionary—that is incremental, manageable, predictable—development and inserts several controls to help managers gauge progress in meeting cost, schedule and performance goals” (GAO, 2007). GAO concluded that “DoD has not been employing the knowledge-based approach, discipline has been lacking, and business cases have not measured up” (GAO, 2007). There should be a more structured review of programs both prior to program approval and after program initiation that emphasizes fact-based decision making.* 3 June 08 testimony, I also require technical maturity of programs before program initiation (Milestone B). As you know, statue requires that Milestone Decision Authorities (MDA) certify that the technology in an MDAP is demonstrated in a relevant environment for Milestone B (or Key Decision Point B for space programs). I must also certify that the program demonstrates a high likelihood of accomplishing its intended mission. These are two of the ten criteria I certify. The Congress direction that the Defense Department ensure appropriate technical maturity at MS B was very helpful. I think the additional nine criteria add time and paperwork, and these criteria can conflict with making needed progress on developing tools for our warfighters. I have certified four MDAPs for MS B decisions and one MDAP for a KDP-B decision. The four programs receiving MSB decisions were the KC-X Tanker Replacement Program, the Joint Tactical radio—airborne &amp; Maritime/Fixed Station Program, the Mission Planning System (MPDS) Increment IV program, and the Broad Area Maritime Surveillance (BAMS) program. The KDP B certified was for Global Positioning System IIIA.
  • 6 Jun 2008 AT&amp;L Note: I would restate what I have said in earlier notes. First, hope is not a strategy. Second, you are not victims of the process. Take control of the processes to ensure you have an executable, funded, and manageable program. Be prepared to be held accountable for execution of your program. 18 April 2008 AT&amp;L Note: There are appropriate standards – we should meet them, not whine about them. Don’t let bureaucracy run your life and program. Only you have control of your principles/ethics and only you are responsible for your work. As I say at DAU, you are not a victim—be an empowered leader. GAO report---None of the weapon programs assessed this year had proceeded through system development meeting the best practices standards for mature technologies, stable design, and mature production processes---all prerequisites for achieving planned cost, schedule, and performance outcomes. In addition, only a small percentage of programs used two key systems engineering tools—preliminary design reviews and prototypes to demonstrate the maturity of the product’s design by critical junctures. This lack of disciplined systems engineering affects DOD’s ability to develop sound, executable business cases for programs. Our work shows that acquisition problems will likely persist until DOD provides a better foundation for buying the right thing, the right way. This involves making tough decisions as to which programs should be pursued, and more importantly, not pursued; making sure programs are executable; locking in requirements before programs are ever started; and making it clear who is responsible for what and holding people accountable when responsibilities are not fulfilled. Moreover, the environment and incentives that lead DOD and the military services to overpromise on capability and underestimate costs in order to sell new programs and capture funding will need to change. Based in part on GAO recommendations and congressional direction, DOD has begun several initiatives that, if adopted and implemented properly, could provide a foundation for establishing sound, knowledge-based business cases for individual acquisition programs and improving outcomes.
  • A review of the acquisition process indicates that it is the people that make all programs work. However, the last decade has brought significant changes within the acquisition workforce. To ensure a continued robust and vital workforce on into 2025, these changes need to be addressed. Workforce Mix The first area to address is the acquisition workforce mix. DoD currently has a mix of military, government civilians and contractors. The trick is to get the right mix of the three. Over the last decade, the acquisition workforce converted many military positions to government civilian positions, effectively severing the connection between the acquisition process and the end user. The military understands the use of a system and the requirements, so our military personnel must have operational as well as acquisition experience. The government civilian workforce provides stability, knowledge management and a technology base. We then need to balance our government workforce with that of the contractor workforce, using the contractors as shock absorbers with the ability to expand and contract to meet DoD’s needs. According to Acting Director, Air Force Acquisition Center of Excellence Ralph J. DiCicco, Jr., a prevailing concern among acquisition leaders is that the downsizing of the government workforce over the last decade has given contractors increased program management responsibilities along with inherently governmental functions. Unfortunately, the contractor has many of the same issues as the government relating to retaining experienced personnel.* Gansler summed it up best when he said the government needs to maintain the role of the manager and the contractor needs to maintain the role of the doer. * Former Comptroller General of the United States David M. Walker is also worried about the high percentage of contractors performing government-related work. He stated that, “Agencies need to consider developing a total workforce strategy to meet current and future human capital needs, and address the extent of contractor use and the appropriate mix of contractor and civilian and military personnel. I have also noted that identifying and distinguishing the responsibilities of contractors, civilians and military personnel are critical to ensure the contractor roles are appropriate” (Walker, 2008).
  • House Armed Service Subcommittee on Readiness, 11 March 2008: The problems originated in the 1980s as the Pentagon attempted to cash in on the post-Cold War “peace dividend” by reducing the size of its military and civilian forces. The drawdown of the agency’s contracting staff subsequently led to a less experienced workforce that was forced to manage increasingly complex contracts, particularly in recent years during the global war on terrorism. Lacking these core capabilities, the agency turned to the private sector. According to David M. Walker, former comptroller general, “ The closer contractor services come to supporting inherently governmental functions, the greater the risk of their influencing the government’s control over and accountability for decisions that may be based, in part, on contractor work. This may result in decisions that are not in the best interest of the government, and may increase vulnerability to waste, fraud and abuse.” Subcommittee Chairman Representative Soloman Ortiz, the problems could be exacerbated when agencies rely on lead system integrators to manage complex multibillion-dollar programs such as the Defense’s Future Combat Systems.” (Coast Guard -- Deep water)
  • 13 March 2009 AT&amp;L Note—There is broad agreement that we need to grow the acquisition workforce. The acquisition workforce has remained relatively flat since 2001 while the Defense Department budget for development and acquisition has increased 119%. However, this consensus will be lost if we cannot more precisely articulate the need for additional acquisition team members. We need to be more precise about how many people we need, why the people are needed, and what specific skills these people need to have. June 3 rd , 2008 Secretary Young—Current caps on management headquarters and past focused efforts on “shoppers” have seriously harmed the defense acquisition workforce. As government employees lived through these times, some of the most capable personnel left the government for the lucrative opportunities presented by industry. As the Defense Department’s procurement and research and development budgets have grown significantly since 2001, there has been no linkage to the personnel process or corresponding ability to hire government personnel. Indeed, several programs which I have recently reviewed that experienced cost and schedule problems cited a shortage of program office personnel as one of the contributing factors. I have recently asked the AT&amp; team to consider the use of personnel plans in conjunction with new major acquisition programs. However, these efforts will still face the constraints of management headquarters caps. The situation has driven the Defense Department to greater use of contractor personnel, a solution which has several deficiencies. However, it is necessary to have trained people to manage major acquisition programs spending significant tax dollars. It is unfair to expect flawless execution without adequate manpower.
  • DSB April 2009—A business plan will help to ensure better management and accountability of programs that tend to cross individual service lines. Joint programs such as intelligence, surveillance, and reconnaissance systems and communications capabilities, are critical to mission success. But these programs are typically not well managed in the acquisition process. The military services tend to give them low priority relative to their “own” programs that tend to be more platform-oriented. Each Service has its own acquisition process, resulting in duplication and inefficiency. The DoD may need to look at a type of joint “purple” workforce in acquisition, as opposed to each Service having its own acquisition workforce competing for DoD funding. This consolidation will be driven by a smaller workforce and a reduced DoD budget. According to Kuzemka, the current joint programs are not able to streamline the requirements process across the Services. For example, the Joint Strike Fighter Program Office has a Requirements Board where the different Services convene. However, after a joint decision has been made at this board, each of the Services is still required to go through their individual approval channels. He believes the acquisition process should shift towards a more integrated activity that will be more effective than today’s joint programs. The solution is to merge the approval channels for each Service, thereby developing one approval channel for all Services.* 3 Jun 08, GAO – DOD investment decisions continue to be dictated by the services who propose programs that overpromise capabilities and underestimate costs to capture the funding needed to start and sustain development programs. The transitory nature of leadership further undermines successful reform. To better ensure warfighter capabilities are delivered when needed and as promised, incentives must encourage a disciplined, knowledge-based approach, and a true partnership with shared goals must be developed among the department, the military services, the Congress and the defense industry. 18 Feb 08, James Gallagher, By 2025, I see a “purple suit” acquisition workforce for DOD. There is far too much competition, duplication and overhead in the process as we see it today. There is too much service parochialism. To survive, the acquisition community must consolidate. While there will still be a need for uniformed service members in the acquisition workforce, I see more opportunities for civilians; or, a true “ separate service” for uniformed members of the acquisition community. Members of the acquisition community should not have to compete with operators (airplane, tank or ship “drivers”) for promotion. One of the silliest things I have seen in recent years was the Air Force changing the name of program project offices to operational titles—wings, squadrons, etc.—so that the operators would understand the business. That is reversed, in my opinion. Keith Ernst, Joint-oriented, section 849, 854, 814 requirements that Congress have levied. Forcing agencies/services to develop joint policy/doctrine for managing ktr in theatre. Rather than having independent perspective—looking at more of a joint environment. Must have joint doctrine/policy critical to not have to relearn in the future. Current administration, clearly looking at not duplicating capablity. Shortage of defense funds will require a more joint perspective in developing and utilizing capability. Dr. Gansler, Institution resists change. You can buy a tank but if you don’t need a it, who cares.
  • 18 April 08 AT&amp;L note: We must help our people succeed through training and experience. For me, the bottom line is that you have to love your work and want to achieve the best results. I believe this exists in the acquisition team. We all get to develop world class technology, provide it to the warfighters who are prepared to risk their lives, and make a tangible contribution to the freedom and security that America enjoys. Take full advantage of the unique role and the incredible opportunities we all have to help this Nation. A major challenge to government as well as industry is attracting, training and maintaining intellectual capital. The downsizing of the 1990s resulted in the loss of an entire generation of program managers. This is true for the government program offices as well as the contractor. It will take at least 10 years to redevelop the workforce. To cultivate an experienced cadre of acquisition professionals, we must challenge and invest in program managers.
  • House Armed Service Subcommittee on Readiness, 11 March 2008: The problems originated in the 1980s as the Pentagon attempted to cash in on the post-Cold War “peace dividend” by reducing the size of its military and civilian forces. The drawdown of the agency’s contracting staff subsequently led to a less experienced workforce that was forced to manage increasingly complex contracts, particularly in recent years during the global war on terrorism. Lacking these core capabilities, the agency turned to the private sector. According to David M. Walker, former comptroller general, “ The closer contractor services come to supporting inherently governmental functions, the greater the risk of their influencing the government’s control over and accountability for decisions that may be based, in part, on contractor work. This may result in decisions that are not in the best interest of the government, and may increase vulnerability to waste, fraud and abuse.” Subcommittee Chairman Representative Soloman Ortiz, the problems could be exacerbated when agencies rely on lead system integrators to manage complex multibillion-dollar programs such as the Defense’s Future Combat Systems.” (Coast Guard -- Deep water)
  • 13 March 2009 AT&amp;L Note—There is broad agreement that we need to grow the acquisition workforce. The acquisition workforce has remained relatively flat since 2001 while the Defense Department budget for development and acquisition has increased 119%. However, this consensus will be lost if we cannot more precisely articulate the need for additional acquisition team members. We need to be more precise about how many people we need, why the people are needed, and what specific skills these people need to have. June 3 rd , 2008 Secretary Young—Current caps on management headquarters and past focused efforts on “shoppers” have seriously harmed the defense acquisition workforce. As government employees lived through these times, some of the most capable personnel left the government for the lucrative opportunities presented by industry. As the Defense Department’s procurement and research and development budgets have grown significantly since 2001, there has been no linkage to the personnel process or corresponding ability to hire government personnel. Indeed, several programs which I have recently reviewed that experienced cost and schedule problems cited a shortage of program office personnel as one of the contributing factors. I have recently asked the AT&amp; team to consider the use of personnel plans in conjunction with new major acquisition programs. However, these efforts will still face the constraints of management headquarters caps. The situation has driven the Defense Department to greater use of contractor personnel, a solution which has several deficiencies. However, it is necessary to have trained people to manage major acquisition programs spending significant tax dollars. It is unfair to expect flawless execution without adequate manpower.
  • Lt Gen Farrell stressed that program management is a profession just like any other profession, and it must have upward visibility and mobility. The Department must re-professionalize the program management career field by providing personnel with formal education and practical experience.* The best way to gain experience is to challenge the workforce by moving them from program to program and giving them growth opportunities to gain a broad experience base from a wide range of programs with increasing levels of responsibility. The greatest challenge to developing experienced program managers is the decrease in DoD weapon system procurement. One solution to this shortage is to rotate DoD program managers with program managers in other U.S. government agencies and industry and vice versa.
  • DoD and Industry must capture their corporate knowledge and include it in their standard business practices. According to William “Bill” Kaplan, Chief Knowledge Officer, Acquisition Solutions, 20 percent of the knowledge in an organization is information you can search for in books, regulations or manuals. The remaining 80 percent of the knowledge resides in experience, insight and lessons learned. This corporate knowledge is the why and how to do things, knowing what works and what doesn’t work. The cost associated with failing to capture and use our corporate knowledge is the expense of additional training and loss in productivity and competitive advantage. * To enhance knowledge transfer, a strong mentorship program should be implemented.
  • Allison Stiller, Deputy Assistant Secretary of the Navy, Research, Development, and Acquisition, Ship Programs, noted that the government needs to capture the knowledge in each program office and establish a partnership with industry to enhance and encourage knowledge sharing. There needs to be knowledge-sharing among the various Services and with industry to capitalize on lessons learned. This type of government-industry forum could initiate the joint or “purple” perspective.* 3 June 2008, Secretary Young, As part of our “knowledge sharing” initiatives, we are participating in the National Defense Industrial Association’s Committee on Program Management (ICPM). Under the auspices of the ICPM, we are teaming with industry to develop and expand the use of Program Startup Workshops to improve communication and clarify expectations up front. Within the Department, we have held Program Manager Forums that allow me and my senior staff to interact directly with program managers and to get their feedback on issues important to them. We have initiatives led by DAU to ensure our program managers have access to an array of tools and templates.
  • 3 June 2008, Secretary Young, -- Additionally, in accordance with the Fiscal Year (FY) 2007 National Defense Authorization Act (NDAA), we are instituting a requirements manager certification course developed in conjunction with the Joint Staff and Defense Acquisition University (DAU) to ensure that requirements are written with a better understanding of and appreciation for the needs of the acquisition process….excessive requirements are almost always a factor in the high cost and long timeliness for DOD development programs. There is currently a Continuous Learning Module – CLM 041 on Capabilities-Based Planning (approx. 4-6 hrs to compete) open to military, Government civilians, and Government Contractors. The second phase is a Distance Learning Module RQM 110 Core Concepts for Requirements Management 24-30 hours to complete 11 lessons on Requirements and 9 on acquisition for requirements managers. Two executive level concentrated courses for GO/FO/SES—the third phase is a 4.5 day resident course (TBD) senior decision meeting mid-April to commence development of this course. Currently 0-6s and below require currently the two online course to be completed to meet the training gate for certification. Core Plus The Core Plus construct was designed to advance the DoD AT&amp;L competency management model by providing a “roadmap” for the development of acquisition workforce members beyond the minimum certification standards required for their position. Core Plus Attributes Core Plus helps identify the right learning for the right development. It does this by connecting workforce members not only to their career field and level but also to their particular job assignment needs. Core Plus also identifies targeted training that relates to specific tasks in a given assignment type. As Core Plus matures, you can expect: • “ scrap learning,” i.e., wasted or irrelevant course content, to be minimized; • repetitive course content to be minimized; • the development of more well-rounded acquisition core coursework; • shorter functional courses required for certification; • an increase in modular course content; • an increase in courses targeted to workforce job assignments; and • more flexibility, focus, and guidance in the construction of Individual Development Plans (IDPs).
  • To ensure a steady stream of qualified personnel and increase collaboration among industry, educators and training institutes, the DoD should accept certification and credentialing by professional societies, such as Project Management Institute (PMI), National Contract Management Association (NCMA), and others as DoD equivalents. Accepting internationally established and recognized organizations and processes will reduce parochialism and duplication in the current system. I would hope that the DOD and Congress would accept certification and credentialing by professional societies (e.g. PMI, NCMA, etc.) as totally equivalent to the DOD methodology. There is too much parochialism and duplication by the DOD in accepting internationally established and recognized organizations and processes. James M. Gallagher The International Society of Logistics NCMA - National Contract Management Association
  • Tools To maximize the capabilities of a shrinking acquisition workforce, tools such as design software and office automation must be leveraged and increasingly emphasized. According to Payton, the workforce of today is more capable than the workforce of 30 years ago because of the tools employed in the work environment to make them more productive. He further commented that Air Force Academy cadets of today are more advanced as compared to when he was at the Academy pursuing the same degree. Cadets of today can build, launch and control satellites, and they will enter the workforce with these skills. The workforce will only continue to improve and become more productive over time.* With fewer highly skilled workers, DoD must tear down bureaucracy and build up efficiencies in its processes through the use of tools. Muellner stated that risk-management and systems engineering tools, along with networked communications, should enhance transparency of the acquisition process. This will provide a better understanding of intended and unintended consequences of resource and requirements changes. These tools allow full transparency and real-time reassessment of the risk profile.* Hilarides elaborated on his belief that modular designs are less people-intensive and result in rapid insertion of technology. By using three-dimensional design tools, the government can essentially operate weapon systems in virtual reality and verify that the design meets all the specification requirements prior to building.* The development of highly sophisticated simulations and wargaming will reduce costs and allow our weapon systems to be tested as a system-of-systems versus individual platforms. Hudson said we must get better at arranging and executing high-fidelity complex netted simulation scenarios, such as F-15s with AWACS, space assets and bombers. This allows the practice of scenarios that are difficult to arrange and expensive to conduct in a test environment. Mr. Michael Gass, President and CEO for the United Launch Alliance (ULA), 19 Feb 2008. Does not believe the aging workforce in Aerospace is necessarily going to be a challenge in 2025. The productivity of the new generation far exceeds that of the old generation. The new generation brings a lot more capability to the table. Encouraged through government/contractor investing money to send people back to school. Post-outreach degree “knowledge to expand core capability”
  • I think the challenges will be maintaining a trained work force. Today there is a gap in engineering trained resources. There is a 40-50 year old group and another group between 20-30. When the older group reaches retirement status, there could be a period of time where experienced resources are not available. In addition, more emphasis is needed to interest young people in pursuing a career in engineering”. Today, space technology has lost its luster for young engineers, who are drawn increasingly to companies like Google and Apple. Defense Experts say the entire acquisition system for space-based imagery technologies is in danger of breaking down.” Nov 11, 2007 Failure to Launch, In Death of Spy Satellite Program, Lofty Plans and Unrealistic Bids by Philip Taubman Ms. Stiller, competition within government and industry to attract, maintain human capital. The Coast Guard competes with the Navy lose to the private sector. There is in-fighting in the culture. The aging workforce is the Navy now, need to attract new folks in now. Bill Kaplan, In order to retain the workforce need to provide right tools, technologies and methods to be successful. Keith Ernst Engineers, limited by security clearances, those who will consider government work, leads to very small quantity Dr. Gansler – declining engineers and scientist will pose a significant problem in the future. Not trusting of foreigners, if half of the engineers/scientist in college are non-U.S. citizens it restricts recruitment opportunities with (security issues, export controls, ITAR provisions, etc). Seen a decline in China of students attending the U.S. schools, many have decided to attend in the UK because they are more accepting there unlike the US who allow them to graduate but force them to leave upon graduation. Increase the training and education budget, make it attractive to be a government employee. Rex Reagan There will always be demand for quality work force. The necessity for top scientists, engineers, managers, and technicians will remain at a premium. The main challenges will also include proper qualification and certification which will identify the verification of the human resources needed. Flexibility must be demonstrated by the Federal government and services. This flexibility will allow laws or rules that permit previously retired personnel (both civilian and military) to reenter the job market to serve on specific acquisitions or assignments, and then be allowed to exit that assignment. This will aid in keeping the investment on personnel at a minimum yet obtain the services of qualified personnel. … The greatest resource, that of the human element, will be sought by alternative methods: reverse retirements, short-term assignments, increased salaries to retain the top players.
  • “These young people are more diverse, introduce new and contemporary skills and are going to be our future leaders.” Jeanie Davis The problem was being addressed by expanding the Army’s intern programs, building the number of interns from 1,586 in 2007 to 2,500 by 2013. The Army also is developing leadership programs for recent college graduates.” Jan-Feb 2008, Defense AT&amp;L Magazine Janie Davis, Army Personnel Division
  • Acting Deputy Under Secretary of Defense for Industrial Policy Gary A. Powell said in a letter he sent to the U.S.–China Economic and Security Review Commission: DoD research, development, and acquisition, and associated policies and program decisions play the major role in guiding and influencing industry transformation by focusing market demand across a broad spectrum of industry segments to meet emerging and projected DOD requirements. First, the Department’s weapon system acquisition policies and decisions shape the technological and programmatic focus of industry. Second, decisions made on mergers and acquisitions involving defense firms continue to shape the financial and competitive structure of the industry. Third, DOD evaluations and assessments of sectors or specific industry issues help identify future budgetary and programmatic requirements. Finally, the Department incorporates industrial base policies into its acquisition regulation and strategies on an ongoing basis to promote competition and innovation (Powell, 2005). Industry is reshaping itself to respond to significant changes in military missions, acquisition processes and workforce. As illustrated by Kuzemka, three pillars of the acquisition process lead to flawless execution: funding stability, requirements stability and contractor/industry performance. Industry does not have control over funding or requirements stability. It only has control over the contractor/industry performance pillar of the acquisition process. If DoD can create a more stable environment, then industry can improve.*
  • Industry and government need to work hand in hand to define what the defense industrial base will be in 2025 and how they will work together. The relationship between the government and industry should shift from an adversarial relationship to a teaming partnership. It is imperative for government and industry to understand each other’s business models and have more open dialogue to exchange information. Industry must focus on the implementation of team strategy. The government will continue to rely on industry, both as the producer of sophisticated weapon systems and as a provider of services. With the shrinking defense budget and the reduction of new weapon systems, industry will have fewer weapon systems to design, develop and manufacture. “ The biggest challenge will be the degree of integration necessary within each system and among the systems. This will demand the government and industry to work together ensuring the systems are seamlessly integrated because the warfighters will need this degree of integration in the battlefield. If we fail to do this in the acquisition community, it will force warfighters to do it.”
  • The industrial base will reshape, consolidate and take on new entrants. Two factors are driving the changes—reduction in programs and fewer available defense dollars. This contraction will create more effective programs by eliminating duplication, and enhancing commonality and interoperability. This will mean less duplication, with fewer opportunities placing a downward constraint on the number of companies that can economically survive in the military procurement sector. Those companies that survive will make key strategic acquisitions. The companies able to respond to specific needs will be identified and targeted for mergers and acquisitions. Many companies will form teaming arrangements. The potential is real that the industrial base will have single suppliers for components. To ensure competition, the government may have to scrutinize future consolidation, teaming and partnership efforts to enhance innovation and prevent a single defense contractor situation.
  • European Aeronautic Defense and Space Company (EADS) 18 Feb 08, James M. Gallagher, PMP, President, Togra Associates. “ In the ‘50s, President Eisenhower talked about the military/industrial complex. It was with us then, is with us now, and will be with us in 2025. Is it bad or is it a way of doing business that we need to get smarter about? I think industry will continue to influence government—not in a bad way, but in a positive way. Of course, there is the “revolving door” of government employees going to the acquisition industry, and industry executives assuming high-level roles in the DOD acquisition community. I don’t see this changing, we need to work smarter, educate the congress on this concept, and look at it as a positive, rather than a negative influence on the acquisition process.” “The industrial base will change to meet the needs of the DOD. I see much more software and less hardware. Hardware will have a much different composure, and the industrial base will adapt to that need.”
  • Prime and sub-prime contractors will need to have seamless integration. Kuzemka commented that in order for the prime/sub-prime team to collaborate and communicate more effectively, common systems must be used. Currently, Northrop Grumman and Lockheed Martin have a tremendous amount of business with subcontractors, but each sub-vendor has its own system of tools and processes. The trend will be for the prime contractor’s systems and processes to be adopted by the sub-prime. However, when a prime contractor has key partners that are also prime contractors or large sub-prime contractors, it may be difficult to force those partners to adopt the prime contractor’s tools and processes, thus leading to interface issues. These issues cause a problem with timeliness, meshing of requirements data, configuration control, risk resolution, flow down of requirement changes, labor hours and overall performance. Over the next 15-20 years, the industry will move to greater integration of contractors, partially caused by consolidation of industry and more joint ventures.* The challenge with consolidation and joint partnerships is for the government to have visibility into sub-contractors’ performance. Missile Defense Agency Executive Director Dr. Patricia Sanders provided the following example: Lockheed Martin, Raytheon and BAE are all developing a different type of missile. However, they are all buying the same internal part from Honeywell. Honeywell is essentially providing a component that performs the same fit, form and function. The only difference is the magnitude of cost. Additionally, if an issue arises with the component, it may not be transparent to all the companies. This highlights that the prime contractors may be diverse; however, sub-vendors typically are not. Few primes are building those components for which they were originally contracted. Greater supply chain transparency is a prerequisite to understanding industrial base vulnerability.* There must be a balancing act for the DoD on how many primes and sub-primes can consolidate and partner to ensure there is not a compression of the vendor sub-tier base, narrowing the playing field and subsequent competition. Technology is created and innovation is achieved in the sub-prime and sub-tier vendor base.
  • The industrial base will continue to shrink, and concern that the supplier base may dwindle to a sole-source scenario is real and troubling. Globalization of the defense industrial base will apply the competitive force needed to ensure companies continue to innovate and strive for price reduction. Mr. Caponecchi said “The Department must be prepared for more global involvement in the manufacturing of the components going into weapon systems. This will require a major cultural shift in thinking about how to produce military hardware [coupled with] National Security concerns regarding the dependence on foreign suppliers for critical military components. However, this is the direction lean commercial manufacturing is taking us.” * The government must balance globalization with security and fair business practices. A fine line must separate legislative protectionism from globalization. There should be no barriers for overseas competitors who comply with U.S. laws, thus allowing for an open and fair playing field for all companies agreeing to procurement integrity, International Traffic and Arms Regulations (ITAR) and security requirements. Defense components are a relatively small portion of sales for U.S. defense contractors. Payton said the government comprises 7 percent of industry’s space business revenue and many of the subtiers are divesting from government contracts towards more profitable markets. The subtier components are bound by legislation such as ITAR that increases the cost of domestically manufactured products and disadvantages the U.S. supplier.* To remain competitive, U.S. firms must be allowed to expand and compete in the global marketplace. The United States must monitor export legislation that is detrimental to defense firms while ensuring security. Keith Ernst, commercial don’t want to be limited by export restrictions from performing government work/military work. Ability for private industry and defense products are such a small portion of sales, then export limitations. Dr. Gansler Buy America Act/Berry Amendment, laws and regulations need to change. In Iraq and Afghanistan we need to buy local (food, clothing), this captures the minds and hearts—helps their economy.
  • Wall Street Journal 5 March 2008, Pentagon Embattled over Tanker Decision In the past, defense industry officials in Europe had worried that a technology gap with the U.S. would widen. Europeans thought that by aligning more closely with U.S. partners, they could jump-start European innovation, in part because Washington has long spent more on defense procurement and military research and development. An example of the cooperation was Euro Hawk, a version of Northrop Grumman’s Global Hawk UAV, modified with equipment from EADS…Euro Hawk was palatable to the U.S. defense industry because it was based on a U.S. product. U.S. officials touted the Lockheed Martin Corp. – led F-35 Joint Strike Fighter…as another model of cooperation. … Other deals tested new models. Defense-electronics and missile giant Raytheon Company in 2001 established a ground-breaking joint venture with French counterpart Thales SA. The duo agreed to team up in third countries, but each would take the lead in its home country. BAE Systems PLC, formerly British Aerospace, is now one of the Pentagon’s largest suppliers following a string of U.S. acquisitions. Rolls-Royce PLC…supplies engines to many U.S. military planes and ships after its acquisition of a company in Indianapolis. Perhaps the biggest breakthrough came in January 2005 when the U.S. Navy selected a European-designed helicopter to serve as the next Marine One for the president. Lockheed Martine led the bid, which was based on a helicopter built by Italy’s Finmeccanica, SpA. Despite complaints from lawmakers in Connecticut, home to current Marine One chopper maker United Technologies Corp’s Sikorsky unit, the contract remained with Lockheed. The contract’s relatively small size, more than $6.1 billion, meant it didn’t become the lighting rod for politicians that the tanker deal has become.
  • “ Industry supporting defense is reshaping itself to respond to significant changes in military missions. Major defense firms are responding by reducing excess capacity, streamlining processes, and revamping supplier relationships.” —Acting Deputy Under Secretary of Defense for Industrial Policy Gary A. Powell--Letter to U.S.–China Economic and Security Review Commission, August 2005 According to Muellner, “Industry will respond to the market-driven environment. The days when a major company would “bet the farm” on a new design or major technology shift are gone. Wall Street rewards and punishes very rapidly, and long-term investment profiles are not highly rewarded. Industry is not likely to make significant long-term investments given the instability and return on investments offered by defense programs. Emerging technologies offer opportunities, but they will be matured in a risk-sharing environment across Industry, focusing more on near-term projects.”* Muellner further elaborated, “One area that should be addressed is the impact of emergent systems engineering tools that provide more transparency of risk profiles and risk-mitigation activities. These tools facilitate a more holistic approach to program management that includes the entire value-stream from the Requirer to the Acquirer to Industry to the Tester. All of these players must be involved with the activity from start to finish.”* Hudson added that industry’s use of modeling and simulation will improve their ability to produce products in the predicted time with the predicted performance. A benefit of this will be a reduction in the amount of hours the government must conduct operational testing and evaluation. The key is to develop a way to identify which tests can be replaced by modeling and simulation and which ones require an operational assessment. Kuzemka identified that the technical paradigms will evolve, leading to industry’s improved responsiveness and advancement along the curve of flawless execution. Industry will develop leading parametric indicators designed to highlight deficiencies and incorporate earned value management principles. This product will be superior to the current lagging indicator of the earned value system of today. All of this will enhance industry’s ability to deliver to government expectations.*
  • The Goldwater-Nichols Act (1986) was developed at a time when there were 20 prime contractors competing yearly for multiple new programs. There were large production runs of aircraft (585), combat vehicles (2,031), ships (24) and missiles (32,714). The threat was well known and DoD had stable strategic planning (DoD, 2006). Then in 1993, the famous “last supper” occurred and the defense industrial base that defeated the Soviet Union was reduced to six prime contractors competing for fewer and fewer programs each year. A reduction in the number of production runs for aircraft (188), combat vehicles (190), ships (8), and missiles (5,072) occurred. Now, the threat is unpredictable and world dynamics have changed due to globalization (DoD, 2006). We must resolve the obvious problems of a smaller and less experienced acquisition workforce, the deficiencies of the acquisition process, and adapt to a declining budget. Recognition of these problems is the first step to their solution; incorporating recommendations is the second. According to Lyles, the acquisition process can go one of two ways. It can get more bureaucratic and stringent or it can embrace solutions from various studies to improve the whole process. As you have seen in this presentation, Secretary Young has the taken actions that are key to AT&amp;L’s success.
  • 19 May 2009 -- Future Trend in Defense Acquisition

    1. 1. Presented by Major Michelle “Shelli” Brunswick Professor, Acquisition Management Future Trends in Defense Acquisition The views presented here do not represent those of the DOD or DAU.
    2. 2. Overview <ul><li>OSD </li></ul><ul><ul><li>Threats </li></ul></ul><ul><ul><li>Politics </li></ul></ul><ul><ul><li>Weapon Systems </li></ul></ul><ul><ul><li>Research </li></ul></ul><ul><li>AT&L </li></ul><ul><ul><li>Acquisition Process </li></ul></ul><ul><ul><li>Organization </li></ul></ul><ul><ul><li>Workforce </li></ul></ul><ul><li>Industry </li></ul><ul><ul><li>Industry’s Role </li></ul></ul><ul><ul><li>Industrial Base Changes </li></ul></ul><ul><ul><li>Prime and Sub-prime Contractor </li></ul></ul><ul><ul><li>Industry’s Response to Market Forces </li></ul></ul><ul><ul><li>Global Economy </li></ul></ul>
    3. 3. OSD “ The greatest strength of our armed forces is the initiative and adaptability of our people.” MILCOM 2006 Conference Gordon England – DEPSECDEF <ul><li>OSD </li></ul><ul><ul><li>Threats </li></ul></ul><ul><ul><li>Politics </li></ul></ul><ul><ul><li>Weapon Systems </li></ul></ul><ul><ul><li>Research </li></ul></ul>
    4. 4. Threats “ What we do know is that the threats and challenges we face abroad in the first decade of the 21 st century will extend well beyond the traditional domain of any single government agency.” Kansas State University Lecture, November 2007 Robert Gates - SECDEF <ul><ul><ul><ul><li>Future threats </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Weakened economy </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Partnerships </li></ul></ul></ul></ul>
    5. 5. Future Threats “ A consensus is emerging that U.S. forces should prepare for ‘hybrid’ war where they may face unconventional fighters or insurgents, who are likely to be equipped with modern weapons and information technology.” September 2008, National Defense Magazine
    6. 6. Economy “ China’s central bank, the People’s Bank of China, praised Washington’s move [to take over Freddie Mac and FannieMae], noting that ‘America’s financial market influences the stability of the global economic and financial markets’.” 9 September 2008, James, T. Areddy, The Wall Street Journal Our core economy enables our strength. One underlying cause of a nation’s collapse is an economic failure, an example is the Soviet Union. The key is a strong ‘economic engine’. 19 February 2008 Michael C. Gass President and CEO for United Launch Alliance
    7. 7. Partnerships The most important thing the military can do is prepare friends and allied nations to defend and govern themselves. National Defense Strategy, June 2008 “ &quot;We did talk about learning from the lessons of the past. We talked about the importance of moving forward. The United States, I've said many times, doesn't have any permanent enemies.&quot; Secretary of State Condoleezza Rice, 5 September 2008
    8. 8. Partnerships “ The Iraqi government is seeking to buy 36 advanced F-16 fighters…a move that could help reduce its reliance on U.S. airpower and potentially allow more American forces to withdraw…The F-16 is one of the most widely exported fighters in the world. More than 4,400 have been built and are in service with 25 countries.” 5 September 2008, The Wall Street Journal, August Cole and Yochi J. Dreazen “ The U.S. Defense Department said the sale of the Boeing GBU-39 smart bombs would be consistent with the U.S. interest of assisting Israel ‘to develop and maintain a strong and ready self-defense’.” International Herald Tribune, 15 September 2008 F-16 GU-39
    9. 9. Politics “ In my judgment, the Department today is overburdened with rules, regulations, and legislation that limit effectiveness.” Statement Before the House Armed Services Committee, June 2007 Gordon England – DEPSECDEF <ul><li>Congress authorizes the budget </li></ul><ul><li>Congressional legislation </li></ul>“ The Department strongly supports the improvements in the areas of defense acquisition and policy that are addressed in S. 454, the Weapon Systems Acquisition Reform Act of 2009 and in H.R. 2101, the Weapons System Reform Through Technical Knowledge and Oversight Act of 2009.” 12 May 2009 Secretary Ashton B. Carter, USD (AT&L)
    10. 10. Legislation “ There’s a trade-off between regulations [of the industrial base] and market forces [that shape our industries], and we walk a narrow line between the two. I’m worried that perhaps we’re going too far now in the direction of regulation as a result of reactions [to scandals, concerns about the integrity of the system]. The pendulum swings between these two positions on a cycle, if you consider the history of the industrial base.” ICAF, 2005 Dr. Jacques Gansler -- former Under Secretary for AT&L “ I don’t see government regulations being streamlined in any significant way in the years head. Industry is going global, yet our security procedures really discourage that.” 1 March 2008 Dr. John J. Hamre Former Deputy Secretary of Defense
    11. 11. Military Budget “ Wall Street's financial crisis and Congress's $700 billion rescue plan could take a toll on the Army's budget in the coming year.” 29 September 2008 <ul><li>Reduced budget </li></ul><ul><li>Reduced manpower </li></ul><ul><li>Increased entitlement </li></ul><ul><li>spending </li></ul><ul><li>Increased national debt </li></ul>Pete Geren – Secretary of the U.S. Army
    12. 12. Defense Spending
    13. 13. Defense Spending “ President Bush on Tuesday signed a sprawling stopgap spending bill to keep the government running for the next 12 months…The measure is dominated by $488 billion for the Pentagon, $40 billion the Homeland Security Department and $73 billion for veterans‘ programs and military base construction projects.” LA Times, 1 October 2008 “ I think what worries me is what kind of money are we going to be able to come up with under a new president. A new president is going to find that it’s easy to campaign and say what you want to do, but domestic demands are so high that it’s going to be very difficult not to cut defense.” Representative John Murtha, 27 February 2008 FCS Manned Vehicles VH-71 CSAR X
    14. 14. Weapon Systems “ What the department is seeking is timely synchronization and integrated delivery of capabilities—and to do it within projected costs and on schedule. The approach is to identify gaps and seams, to eliminate redundancies except by design, and to make sure that solutions are completely interoperable.” MILCOM 2006Conference Gordon England – DEPSECDEF <ul><li>Information </li></ul><ul><li>dominance </li></ul><ul><li>System-of-Systems </li></ul><ul><ul><li>Net-centric </li></ul></ul>
    15. 15. Cost “ In the year 2054, the entire defense budget will purchase just one aircraft. The aircraft will have to be shared by the Air Force and the Navy 3 ½ days each per week except for leap year, when it will be made available to the Marines for the extra day.” Augustine’s Law Number XVI Norman R. Augustine Chairman and Chief Executive Officer, Retired Lockheed Martin Corporation “ I wish I had a dollar for every time I have heard the often repeated refrain that DoD will soon only be able to buy one ship and one airplane and on ground vehicle. ” 13 Jun 2008 Hon. John J. Young, Jr. USD(AT&L)
    16. 16. Cost The causes leading to Augustine’s scenario. “First flag officers want their weapon systems to do everything. Second, the wish to make changes throughout the development cycle of the weapon system…Third, the federal Bureaucracy guarantees inefficiencies… Fourth, there is a reluctance to purchase extant systems developed by other nations.” December 2007 Hon. John J. Young, Jr. USD(AT&L) “ I continue to appeal to everyone to focus on lowering cost. Look for ways to modestly adjust specifications or requirements in order to lower cost without seriously impacting capability – remember it is your tax dollar that is helping pay for our systems . Further, We should want every dollar to buy the maximum amount of capability for the warfighter and the taxpayer. We are looking for elusive bargains.” 13 Jun 2008 Dr. Jan P. Muczyk Professor Emeritus of Management, Graduate School of Engineering and Management, AFIT
    17. 17. Research “ The greatest long-term threat to America, and to our close friends and allies, is falling behind in science and technology.” MILCOM 2006Conference Gordon England – DEPSECDEF <ul><li>Current expenditures vs. long-term expenditures </li></ul><ul><li>Driver of technology vs. receiver of technology </li></ul>
    18. 18. Current vs. Long-term Expenditures “ There is a deep bias in our budgeting system favoring current expenditures against long-term expenditures. This bias is towards operations and against investment. Money that would have been set aside for research and development is going towards personnel and operations supporting the war in Iraq and Afghanistan.” 1 March 2008 Dr. John J. Hamre Former Deputy Secretary of Defense The military must find a balance between conventional and irregular wars. Admiral Michael G. Mullen, Chairman of the Joint Chiefs Admiral Michael G. Mullen, Chairman of the Joint Chiefs
    19. 19. Joint “ We have to maximize our dollars to do [joint] systems. Each Service has a different set of requirements. When you can bring a joint system together to meet those requirements, it’s a pretty doggone good thing. Joint programs are not about politics or marketing, they give you capabilities.” 23 September 2008 Major General Charles Cartwright, Program Manager for Future Combat System Congress has levied joint-oriented requirements forcing agencies and Services to develop a joint policy and doctrine for managing contracts in theatre. We must have these joint documents so we don’t have to relearn lessons. A future shortage of defense funds will require a more joint perspective In developing and utilizing capability. 7 March 2008 Keith Ernst – former Acting Director, DCMA
    20. 20. Driver vs. receiver of technology “ The globalization of technology and production means that defense-funded programs no longer drive technology development in many areas, and in fact, commercial technology now leads DOD in many areas.” April 2009 “ A platform’s mission computer will have its lineage traceable to a commercial processor, such as the Intel dual-core found in commercial laptops.” 24 February 2008 Lt. Gen Ted Bowlds, USAF -- Commander ESC Defense Science Board—Creating a DOD Strategic Acquisition Platform
    21. 21. AT&L “ We must have well-identified requirements, adequate funding and robust processes utilized by trained personnel that can execute the program.” 7 March 2008 Keith Ernst – former Acting Director, DCMA <ul><li>ATL </li></ul><ul><ul><li>Acquisition Process </li></ul></ul><ul><ul><li>Organization </li></ul></ul><ul><ul><li>Work Force </li></ul></ul>
    22. 22. Acquisition Process “ But for those programs that do have cost and schedule growth, the biggest drivers are unstable requirements, immature technologies, and funding instability.” 3 June 2008 <ul><li>Acquisition Process </li></ul><ul><ul><li>Requirements Process </li></ul></ul><ul><ul><li>Technology Maturity </li></ul></ul><ul><ul><li>Agility </li></ul></ul><ul><ul><li>Over Optimism </li></ul></ul><ul><ul><li>Cost Estimating </li></ul></ul><ul><ul><li>Funding </li></ul></ul><ul><ul><li>Oversight </li></ul></ul>Hon. John J. Young, Jr. USD(AT&L)
    23. 23. “ At the strategic level, DOD’s processes for identifying warfighter needs, allocating resources, and developing and procuring weapon systems—which together define DOD’s overall weapon system investment strategy—are fragmented and broken.” 3 June 2008, GAO Acquisition Process
    24. 24. Acquisition Process “ Growing evidence of the need to improve acquisition practices, program management, and system engineering skills in both government and defense Industry.” 2008, Foreign Policy Research Institute Secretary Ashton B. Carter – USD AT&L “ What kind of military does the United States need and why?”
    25. 25. “ DoD recently revised its policy and introduced several initiatives. The revised policy, if implemented properly, could provide a foundation for developing individual acquisition programs with sound, knowledge-based business cases. The policy recommends the completion of key systems engineering activities establishes early milestone reviews, requires competitive prototyping, and establishes review boards to manage potential requirements changes to ongoing programs.” 3 March 2009 GAO New DoDI 5000.02
    26. 26. IOC Technology Development Production & Deployment Operations & Support FRP Decision Review FOC Materiel Solution Analysis Materiel Development Decision User Needs Technology Opportunities & Resources Defense Acquisition Management System - 2008 Program Initiation IOC Concept Refinement System Development & Demonstration Production & Deployment Operations & Support FRP Decision Review FOC Technology Development Program Initiation Design Readiness Review Concept Decision User Needs & Technology Opportunities Defense Acquisition Management Framework- 2003 Comparison of 2003 vs. 2008 Focus of major changes Engineering and Manufacturing Development Post-CDR Assessment PDR PDR or Post PDR Assessment B C B A C A
    27. 27. Requirements Process “ The DOD is approving more new programs than fiscal resources can support. This problem is compounded by the highly complex and interdependent programs that are commanding larger budgets than past programs.” 3 June 2008, GAO Big “A”
    28. 28. Requirements Process “ Stop tinkering with requirements for weapons systems because such actions cause cost overruns and schedule delays.” 30 July 2007 Little “A” Hon. John J. Young, Jr. USD(AT&L)
    29. 29. Requirements Process “ To limit cost growth, the DOD should establish an early program baseline and maintain it throughout the acquisition process.” Steven R. Meier, CIA, March 2008 Hon. John J. Young, Jr. USD(AT&L) Configuration Steering Boards will review all proposed requirement changes, and any proposed technical configuration changes which could impact cost and schedule. Boards can reject any changes. 3 June 2008
    30. 30. $ Technology Maturity “ The GAO reported that of the programs assessed, only 15 percent entered development with demonstrated high levels of technology maturity, causing many programs to experience significant growth in development cost.” 15 November 2005, GAO Incremental development vs quantum leaps FCS $159B
    31. 31. Technology Maturity I have expanded the use of Defense Support Teams who are made up of outside world-class technical experts to address our toughest program technical issues. 3 Jun 2008 Hon. John J. Young, Jr. USD(AT&L) “ I have issued policy requiring competitive, technically mature prototyping. My intent is to rectify problems of inadequate technology maturity and lack of understanding of the critical program development path.” 3 Jun 2008
    32. 32. Agility “… If I tried to pull that through the current system, God only knows how long it would have taken. The Army needs to be able to buy off-the-shelf hardware and adapt it for combat use quickly. The MRAP is a ‘perfect example’ of the model that should be adopted. The current system doesn’t conform to that.” March 2009 Transitioning from the traditional acquisition approach to a more agile acquisition approach which allows more flexibility due to the uncertainty of the future. More responsive—not locked into a product that may not be relevant in the future. 19 March 2008 Gen. Peter Chiarelli Army, Vice Chief of Staff Dr. Patricia Sanders Former, Executive Director for the Missile Defense Agency
    33. 33. Over Optimism “ Industry can also play a part and fuel overzealous advocacy if a low bid is submitted to the government for a large acquisition in order to capture the contract. Steven R. Meier, CIA, March 2008 “ Development costs for major acquisition programs are consistently under- estimated at program initiation by 30% to 40% in large part because the estimates are based on limited knowledge and optimistic assumptions about system requirements and critical technologies.” GAO, July 2008
    34. 34. Cost Estimating “ DOD acquisition programs fail because the Department continues to rely on unreasonable cost and schedule estimates, established performance expectations, insist on the use of immature technologies, and direct costly changes to program requirements, production quantities and funding levels in the middle of ongoing programs.” 3 Jun 2008 “ Government has to create or recreate a robust cost estimating organization.” 4 February 2008 Senator Carl Levin Chairman of Senate Armed Services Committee LCS JSF FCS Tom Bowler Vice President, Programs Bath Iron Works
    35. 35. Cost Estimating “… the environment and incentives that lead DOD and the military services to overpromise on capability and underestimate costs in order to sell new programs and capture funding will need to change.” GAO, 29 April 2008 “ DOD’s inability to allocate funding effectively to programs is largely driven by the acceptance of unrealistic cost estimates, and a failure to balance needs based on available resources.” GAO, July 2008
    36. 36. Funding “ Funding instability on complex weapon systems causes renegotiation and re- baselining of the plans, schedule and integration. This has a ripple effect through the supply chain.” 6 March 2008 Keith Ernst – former Acting Director, DCMA “ DOD pays for poorly performing programs by expropriating funds from other programs. This type of action destabilizes the other programs and reduces the overall buying power of the defense dollar.” 7 March 2008 Nick Kuzemka – VP, Program Management, Lockheed Martin F-22
    37. 37. Funding “ Under the capital funding concept, the Department guarantees a certain level of funding for a fixed period of time.” Hearing on “Oversight of Defense Department Acquisitions” 29 April 2008 J. David Patterson -- Principal Deputy Under Secretary of Defense (Comptroller) CSAR X JHSS GFEBS
    38. 38. Streamlined Acquisition “… the acquisition plan should include an outline for acquiring new capabilities In multiple, shorter-phased increments—referred to as block upgrade Acquisition made possible by incremental spiral development.” DSB April 2009 “ Streamlining means fewer but more experienced people, fewer committees, fewer reviews, and more effective and experienced leadership—which should lead to more efficient execution with less risk.” DSB April 2009 Defense Science Board –Creating a DOD Strategic Acquisition Platform CDD1 Technology Development DAB EMD Increment 1 Materiel Solution Analysis DAB DAB DAB JROC JROC JROC Gap Analysis ICD CPD1 JROC CDD2 JROC A Technology Development EMD Increment 2 CPD2 DAB DAB JROC CDD3 JROC Technology Development EMD Increment 3 CPD3 DAB . . . Joint Operating Concepts Joint Functional Concepts DAB A DAB A MDD Continuous Technology Development and Maturation AoA C B C B B DoD Strategic Guidance
    39. 39. Oversight The GAO concluded that DOD policy provides for a series of early reviews focused on the acquisition process. Unfortunately, these reviews are often skipped or are not fully implemented. March 2007 “ I must also certify that the program demonstrates a high likelihood of accomplishing its intended mission. These are two of the ten criteria I certify.” 3 June 2008 Hon. John J. Young, Jr. USD(AT&L) MPS IV Approved
    40. 40. Oversight The DOD needs to make tough decisions -- which programs to pursue, and more importantly, not pursue; make sure programs are executable; lock in requirements before programs are ever started; and make it clear who is responsible for what and hold people accountable when responsibilities are not fulfilled. 29 April 2008 “ Take control of the processes to ensure you have an executable, funded, and manageable program. Be prepared to be held accountable for execution of your program.” 6 June 2008 Hon. John J. Young, Jr. USD(AT&L)
    41. 41. Organization “ The organization is only as good as the people you put in it” 28 March 2008 Ralph DiCicco, JR – Acting Dir., AF/ ACE Top 100 Defense Contractors “ Agencies need to consider developing a total workforce strategy … address the extent of contractor use and the appropriate mix of contractor and civilian and military personnel…identifying and distinguishing the responsibilities of contractors, civilians and military personnel are critical to ensure the contractor roles are appropriate.” 11 March 2008
    42. 42. Inexperienced Workforce An inexperienced workforce coupled with high turnover rates can be significant contributors to cost and schedule growth on many DoD and Intelligence Community programs…March 2008 “ Many problems appear to be caused by the use of immature technology, requirements ‘creep’, or funding instability. Such problems, however, are really only symptoms of the lack of experienced judgment on the part of Department personnel who structure acquisition programs in a way that will almost certainly lead to failure.” April 2009 Defense Science Board—Creating a DOD Strategic Acquisition Platform
    43. 43. Inexperienced Workforce “ We are losing our competence as a government to be an effective buyer.” 1 March 2008 Dr. John J. Hamre -- former DEPSECDEF Hon. John J. Young, Jr. USD(AT&L) “ There is broad agreement that we need to grow the acquisition workforce. The Acquisition workforce has remained relatively flat since 2001 while the Defense Department budget for development and acquisition has increased by 119%... We need to be more precise about how many people we need, why the people Are needed, and what specific skills these people need to have.” 13 March 2009
    44. 44. Organization The current joint programs are not able to streamline the requirements process across the Services. For example, the JSF Program Office has a Requirements Board where the different Services convene. However, after a joint decision has been made, each Service is still required to go through their individual approval channels” 6 March 2008 Stove Pipes Nick Kuzemka – VP, Program Management, Lockheed Martin
    45. 45. Work Force “ We must help our people succeed through training and experience.” 18 April 2008 Hon. John J. Young, Jr. USD(AT&L) <ul><li>Workforce </li></ul><ul><ul><li>Experience </li></ul></ul><ul><ul><li>Corporate Knowledge </li></ul></ul><ul><ul><li>Knowledge Sharing </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Certification </li></ul></ul><ul><ul><li>Tools </li></ul></ul><ul><ul><li>Workforce Challenge </li></ul></ul>
    46. 46. Inexperienced Workforce An inexperienced workforce coupled with high turnover rates can be significant contributors to cost and schedule growth on many DoD and Intelligence Community programs. Steven R. Meier, CIA, March 2008 “ Many problems appear to be caused by the use of immature technology, requirements ‘creep’, or funding instability. Such problems, however, are really only symptoms of the lack of experienced judgment on the part of Department personnel who structure acquisition programs in a way that will almost certainly lead to failure.” DSB April 2009 Defense Science Board—Creating a DOD Strategic Acquisition Platform
    47. 47. Inexperienced Workforce “ We are losing our competence as a government to be an effective buyer.” 1 March 2008 Dr. John J. Hamre -- former DEPSECDEF “ There is broad agreement that we need to grow the acquisition workforce. The Acquisition workforce has remained relatively flat since 2001 while the Defense Department budget for development and acquisition has increased by 119%... We need to be more precise about how many people we need, why the people Are needed, and what specific skills these people need to have.” 13 March 2009 Hon. John J. Young, Jr. USD(AT&L)
    48. 48. Experience Program Management is a profession just like any other profession, and it must have upward visibility and mobility. The Department must re-professionalize the program management career field by providing personnel with formal education and practical experience. 19 February 2008 Lt . Gen Lawrence P. Farrell, Jr., USAF (Ret) -- President & CEO NDIA The greatest challenge to developing experienced program managers is the decrease in DOD weapon system procurement. One solution to this shortage is to rotate DOD program managers with program managers in other U.S. government agencies and industry and vice versa.
    49. 49. Corporate Knowledge 20% of knowledge in an organization is information you can search for in books, regulations or manual. The remaining 80% of the knowledge resides in experience, insight and lessons learned. This corporate knowledge is the why and how to do things, knowing what works and what doesn’t work. 12 February 2008 Colonel William S. “Bill” Kaplan, (ret) USAF, Chief Knowledge Officer, Acquisition Solutions Mentorship A single drop of water can send a ripple for miles; similarly a single idea, given at the right time, can help you for years to come.
    50. 50. Knowledge Sharing The government needs to capture the knowledge in each program office and establish a partnership with industry to enhance and encourage knowledge sharing. There needs to be knowledge sharing among the various Services and with industry to capitalize on lessons learned. 24 January 2008 Allison Stiller, Deputy Assistant Secretary of the Navy, Research, Development, and Acquisition, Ship Programs Hon. John J. Young, Jr. USD(AT&L) “ As part of our ‘knowledge sharing’ initiatives, we are participating in the National Defense Industrial Association’s Industrial Committee on Program Management.” … “We are teaming with industry to develop and expand the use of Program Startup Workshops to improve communication and clarify expectations up front.” 3 June 2008
    51. 51. Training “ We are increasing our use of just-in-time training. DAU is deploying its “Core Plus” concept that involves additional position-specific coursework for program mangers in specialty areas…We have initiatives led by DAU to ensure our program managers have access to an array of tools and templates. ” 3 June 2008 Hon. John J. Young, Jr. USD(AT&L) “ We are instituting a requirements manager certification course developed in conjunction with the Joint Staff and Defense Acquisition University to ensure that requirements are written with a better understanding of and appreciation for the needs of the acquisition process.” 3 June 2008 AT&L Knowledge Sharing System https://akss.dau.mil/default.aspx Program Manager's Toolkit http://www.dau.mil/pubs/misc/toolkit.asp
    52. 52. Certification “ I would hope that the DOD and Congress would accept certification and credentialing by professional societies (e.g. PMI, NCMA, etc.) as totally equivalent to the DOD methodology.” 18 February 2008 “ [The] organization will continue to be under the DAWIA credential and qualification community. Constant training will be paramount and increased collaboration among industry, educators, and training institutes will prevail in order to have a steady stream of qualified personnel.” 7 March 2008 James M. Gallagher, PMP President, Togra Associates Rex Reagan Manager at BearingPoint, Inc
    53. 53. Tools The workforce of today is more capable than the workforce of 30 years ago because of the tools employed in the work environment to make them more productive...The workforce will only continue to improve and become more productive with time. 27 March 2008 Secretary Gary E. Payton, Deputy Under Secretary of the Air Force for Space Programs Risk management and system engineering tools, along with networked communications, should enhance transparency of the acquisition process… and real-time reassessment of the risk profile. 27 February 2008 Simulations Wargaming Design Tools Office Automation Lt. Gen George Muellner (ret) USAF, former President, of Advanced Systems, IDS, Boeing
    54. 54. Work Force Challenge “ I think the challenge will be maintaining a trained work force. Today there is a gap in engineering trained resources…more emphasis is needed to interest young people in pursuing a career in engineering”. 10 February 2008 “ Central to these improvements is experienced personnel—in leadership, in the acquisition workforce, and, equally important, in the contractor base.” April 2009 Attract & Maintain Human Capital George Guerra -- VP HALE System, Northrop Grumman Corp. Defense Science Board—Creating a DOD Strategic Acquisition Platform
    55. 55. Work Force Challenge “ The Department of Defense will face a worldwide civilian manning challenge in the near future, because roughly 22% of its work force will reach retirement age within two years. We really will be in dire straits because of attrition” 13 March 2008 “ We launched the Federal Acquisition Intern Coalition, a government-wide recruitment, development, and retention campaign that promotes acquisition as a career of choice, and serves as a “one stop shop” for job seekers to find internship and career development opportunities.” 14 February 2008 Patricia Bradshaw, Deputy Undersecretary of Defense for Civilian Personnel Policy Desirable Forgiving Paul A. Denett – Administrator for Federal Procurement Policy
    56. 56. Industry “ Change is relentless…I’d say in a single word ‘more’. We see more foreign ownership of U.S. assets…more export from U.S. companies into the global marketplace…more global supply…more (international) partnering…the global threat and the nature of warfare are changing…” June 2005 Mark H. Ronald -- President and CEO, BAE Systems North America, Inc. <ul><li>Industry </li></ul><ul><ul><li>Industry’s Role </li></ul></ul><ul><ul><li>Industrial Base Changes </li></ul></ul><ul><ul><li>Role of the Prime & Sub-Prime </li></ul></ul><ul><ul><li>Contractor </li></ul></ul><ul><ul><li>Industry’s Response to Market Forces </li></ul></ul><ul><ul><li>Global Economy </li></ul></ul>
    57. 57. Industry’s Role “ I see industry’s role with the Government in 2025 to be an integrated solution provider.” 2 May 2008 Frederick C. Payne -- Corporate Director of Program Management for BAE Systems, Inc. “ The right direction is team-mate and partner with the government in delivering a capability.” 27 February 2008 Lt. Gen George Muellner (ret) USAF, former President, of Advanced Systems, IDS, Boeing
    58. 58. Industrial Base Changes “ Domestic mergers will start to decline as compared to the last two decades, but international mergers and acquisitions will increase.” 28 April 2008 Steve Goo -- VP, International Operations IDS, Boeing This will lead to the introduction of many non-traditional suppliers, who have not previously been associated with defense work…because of the increased use of commercial products and the reduction in resources for the development of unique military solutions. 24 February 2008 Lt. Gen Ted Bowlds, USAF -- Commander ESC
    59. 59. Industrial Base “ Moving toward fewer competitors in each market, and moving towards a European concept. One company does everything. If they are not competent you run the risk of not getting the product.” Our eagerness to consolidate companies has led to a lack of competition and innovation. Secretary Payton 27 March 2008 “ Importantly, DOD’s desire to acquire commercial systems should not be based on a presumption that commercial suppliers are interested in doing business with the Department. In fact, the onerous nature of government rules and requirements act as a deterrent to many potential suppliers. DOD needs to put Incentives in place to encourage commercial and foreign suppliers.” April 2009 Secretary Gary E. Payton, Deputy Under Secretary of the Air Force for Space Programs
    60. 60. Role of the Prime and Sub-Prime Contractor “ The shift is already underway with prime contractors and subprime contractors having close working relationships. Contractor teams will align themselves early on in the acquisition process with common goals and objectives, and they are willing to share the fee.” 10 Feb 2008 George Guerra -- VP HALE System, Northrop Grumman Corp. In order for the prime/sub-prime contractor teams to collaborate and communicate more effectively, common systems must be used…The trend will be for the prime contractor’s systems and processes to be adopted by the sub-prime. 6 Mar 2008 Nick Kuzemka – VP, Program Management, Lockheed Martin Transparency
    61. 61. Global Economy “ The Department must be prepared for more global involvement in the manufacturing of the components going into weapon systems. This will require a major cultural shift in thinking about how to produce military hardware [coupled with] National Security concerns.” 14 February 2008 “ The government comprises 7% of industry’s space business revenue and many of the subtiers are divesting from government contracts towards more profitable markets. The subtier components are bound by legislation such as ITAR that increases the cost of domestically manufactured products and dis- advantages the U.S. supplier.” 27 March 2008 Secretary Gary E. Payton, Deputy Under Secretary of the Air Force for Space Programs ITAR Buy America Col August J. Caponecchi (ret). USAF -- President Emeritus, Tactair Fluid Controls Inc. Defense Science Board—Creating a DOD Strategic Acquisition Platform
    62. 62. Global Economy “ While the decision to buy European planes has proved politically unpopular among many, it follows a growing stream of such deals.” The Wall Street Journal, 5 March 2008 “ Many government requirements (Berry Amendment, Naval Vessel Rules, ITAR, and others) directly contradict today’s design and manufacturing trends. The current rules significantly harm national security options by limiting DOD access to commercial and global technologies and allies’ markets.” April 2009 Col August J. Caponecchi (ret). USAF -- President Emeritus, Tactair Fluid Controls Inc. Euro Hawk F-35 Rolls-Royce PLC Marine One Defense Science Board—Creating a DOD Strategic Acquisition Platform
    63. 63. Industry’s Response to Market Forces “ Industry supporting defense is reshaping itself to respond to significant changes in military missions. Major defense firms are responding by reducing excess capacity, streamlining processes, and revamping supplier relationships.” Aug 2005 J. David Patterson -- Principal Deputy Under Secretary of Defense (Comptroller) The technical paradigms will evolve, leading to industry’s improved responsiveness and advancement along the curve of flawless execution…this will enhance industry’s ability to deliver to government expectations. 6 March 2008 Nick Kuzemka – VP, Program Management, Lockheed Martin
    64. 64. Conclusion “ Buy the right thing, the right way, with the right process.” 5 March 2008 General Lester L. Lyles (Ret) USAF -- former Commander, AFMC The acquisition process can go one of two ways. It can get more bureaucratic and stringent or it can embrace solutions from various studies to improve the whole process. 7 April 2008 Dr. Jacques Gansler -- former Under Secretary for AT&L
    65. 65. About the Author “ I believe the initiative, talent and adaptability of our government and industry team will succeed in providing an acquisition process that meets the demanding requirements of our ever changing world.” Major Brunswick, an Acquisition/Space Professional in the United States Air Force (USAF), is a Professor of Acquisition Management at Defense Acquisition University (DAU) and is Defense Acquisition Workforce Improvement Act (DAWIA) certified in Program Management Level III and a certified Space Professional Level II by the United States Air Force Space Professional Functional Authority. She attained her Project Management Professional (PMP) certification in 2002. She also holds Bachelor’s and Master’s degrees in Business Administration. Major Brunswick has served 23 years in the USAF. Prior to joining the DAU faculty, she was a Program Integrator at Defense Contract Management Agency (DCMA), where she led a multifunctional team on the Missile Defense Agency’s Space Tracking and Surveillance System. Before her assignment at DCMA, she participated in the Air Force Institute of Technology’s Education with Industry with the Boeing Corporation. She entered the acquisition career field with the Space and Missile Systems Center at Los Angeles Air Force Base, California, as a Project Manager and as a Test and Verification Project Officer for the Spacelift Range program. Major Brunswick has served one tour in Iraq with DCMA and a joint tour in Washington, D.C., with the Office for the Administrative Review of the Detention of Enemy Combatants under the authority of the Deputy Secretary of Defense. (E-mail address: [email_address] ) Major Michelle “Shelli” Brunswick, USAF -- Professor, Acquisition Management, DAU The views presented here do not represent those of the DOD or DAU.

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