Directions for Defense

iven the government's propensity for placing bright but unprepared people in the most demanding of assignments, it was quite remarkable when Jacques Gansler landed the No. 3 post at the Pentagon. He was just too logical a choice. Philip Odeen, vice chairman of the Defense Science Board, who has worked with Gansler for more than 20 years on outsourcing, acquisition reform and defense support issues, says Gansler has "very clear ideas on the ways Defense can operate far more effectively."

Gansler has been thinking, talking and writing about defense issues for 40 years. His books have dealt with such topics as transforming DoD, affording defense and working with the defense industry. He spent five years at the Pentagon in the mid-1970s establishing policies for supplying the troops, and since then he has had a lengthy career in the private sector addressing defense-related matters.

A Government Business

As undersecretary of Defense for acquisition and technology, Gansler is responsible for almost 400,000 people, half of them acquisition and technology professionals. Their skills range from conducting medical research in military laboratories to the development and testing of multimillion-dollar weapon systems. His job is to see that acquisition reform is more than just an office designation at the Pentagon.

Gansler has been in his job for a little more than a year now. His Senate confirmation narrowly preceded the November 1997 introduction of the Defense Reform Initiative. This plan promised a revolution in department policies and
operations.

The vision remains the same today as when Gansler took office. "The basic problem is how to generate enough resources for modernizing current equipment and replacing it as needed, while also increasing combat capability," Gansler says. The way to achieve DoD's goals is by "reducing inefficiencies in support and infrastructure," he says. Maintaining readiness and improving tooth-to-tail ratios are goals any Defense leadership team can embrace. The difference is in the details.

Overall, the objective is to discard Cold War structures and practices and bring the department more in step with today's business world. Forty-five directives have been introduced to further this reform process. All are meant to change fundamentally how Defense conducts its business, with major elements of the plan in line with governmentwide acquisition reform efforts to streamline, simplify and focus on results. Key initiatives include partnering with industry, using information technology to modernize Defense's mammoth supply system, and relying on competitive sourcing to get the best deal for the government.

Boosting the Bottom Line

The goal is to bring industry and government closer together, recognizing the need for partnership in accomplishing DoD's mission and adopting commercial practices where they make sense. Moving more toward price-based rather than cost-based contracting is a prime example of shifting the paradigm.

On the supply front, where the Pentagon spends more than $80 billion a year, Gansler is looking to modern information systems to improve performance while significantly reducing costs. While just-in-time support may cause some jitters in a military commander, getting goods in what he describes as an "adequate" time both saves money and fills the need. Reducing the supply chain from 36 to four or five days makes for both happy customers and happy budgeteers.

A third element of Gansler's business reform agenda is the emphasis on competitive sourcing to streamline Defense operations. Identifying commercial-type activities and then using Office of Management and Budget guidelines to conduct a cost comparison between government and industry is nothing new. DoD has done more such comparisons than all other agencies combined.

OMB's Circular A-76 used to be known by the rubric "contracting out," implying the goal was to transfer work done by government employees to the private sector. By stressing the term "competitive sourcing," Gansler makes it clear that he's not concerned about who owns the activity. What counts is the improved performance as well as the savings of up to 40 percent that develop from the competition.

Gansler is pleased with the support he's received from all quarters on this agenda. Although recognizing that nothing changes overnight, his main frustration has been the time it has taken to get his leadership team assembled. With that team now in place, he needs an acquisition workforce in tune with this new agenda and willing to take the risks to make these reforms happen. Preparing that work- force is likely to be as challenging and as important as any other piece of this agenda. "The key to doing all of these things successfully is the education, career development and training of the acquisition workforce," Gansler says.

Allan V. Burman, a former Office of Federal Procurement Policy administrator, is president of Jefferson Solutions in Washington.