November 14, 2014
From Overreaction to Finesse
Better Buying Power may depend on human capital the Pentagon yet lacks.
By James Hasik
Frank Kendall, the Pentagon's chief weapons buyer, said this week that his staff has “overreacted” at times to his guidance on improving outcomes and affordability. As Defense Industry Daily put it, this has caused some "tension with the defense industry amid the onset of tighter budgets.” Back in September, during his Better Buying Power (BBP) 3 roll-out speech at the Center for Strategic and International Studies, Kendall specifically admitted how “I know that LPTA is still of concern.” Reflexive use of a lowest-price, technically acceptable contract award criterion is just part of the problem. Mastering the difference between judicious supplier management and overzealous implementation of BBP can require some serious classroom time and on-the-job training. And that’s why the acquisition workforce’s recent self-assessment is quite so disturbing.
In its survey of "What Defense Personnel Really Think About the Acquisition Process,” Government Executive reported this Veterans Day that 63 percent of acquisition staff are “not at all confident” in BBP “to resolve major defense acquisition problems”. Notably, that rate is considerably worse than the 49 percent of all respondents to the survey. Moreover, large minorities of the government’s people either “disagreed" or "strongly disagreed" that their colleagues had the skills in contract management (40.1%), product support (36.4%), program management (38.5%), and engineering and technology (29.5%) to do their jobs. Thus we have twin problems: a workforce that isn’t inspired by its leader’s policy, and that doesn’t think it has the skills to carry it out anyway.
At that speech at the CSIS, Kendall expressed particular enthusiasm about work at the Institute for Defense Analyses under David Nicholls that has found evidence that incentives matter more to contract performance than whether the deal would be awarded on a price or cost-basis. As DID noted yesterday, one former chief of rapid acquisition for the Defense Department thinks that intellectual property disputes between government and industry “are best addressed through dialogue on a case-by-case basis and not through further regulation.” The basics of running a procurement program are the 101 level of supply chain management. The economic concepts needed for crafting contract incentives and intellectual property regimes can be considerably harder to teach.
Issues like these arose at a recent recent roundtable discussion that the Atlantic Council hosted with André Gudger, the Pentagon’s new industrial policy chief, and a wide group of representatives of the defense industry. The goal was air some of those tensions and discuss potential solutions. Several industrialists, including those with past government service, presaged the survey findings with complaints about the education of that workforce they’ve known for decades. Thus the leadership, the suppliers, and the staff themselves all agree: the government’s workforce doesn’t have the managerial sophistication to carry out the strategy. With so many billions at stake in military procurement annually, is it not time for a thorough overhaul of its educational curriculum, standards, and requirements?
James Hasík is a senior fellow at the Brent Scowcroft Center on International Security.