This Is No Way to Fix Defense Acquisition

As recently reported by Charlie Clark and others, the administration is threatening to veto the Senate Armed Services Committee’s version of the 2017 defense authorization bill. Not surprisingly, the veto threat is driven by debate over the closure of Guantanamo, relations with Cuba, and other widely debated public issues. But there is also a significant organizational proposal in the committee’s bill that the administration opposes as well—specifically, provisions that would do away with the current position of Undersecretary of Defense for Acquisition, Technology and Logistics and divide most of the associated responsibilities between a new assistant secretary for research and engineering and a new undersecretary for management and support (more commonly known as the Chief Management Officer, or CMO).

The proposal is largely driven by committee chairman Sen. John McCain, who, for years, has made no secret of his belief that AT&L has become a primary cause of program delays and cost overruns. Last summer, in a forum hosted by the U.S. Chamber of Commerce in which I had the opportunity to participate, the Arizona Republican excoriated the department’s leadership, and AT&L in particular, for becoming what he believes is a bureaucratic albatross that stifles innovation and efficiency. And after seeking last year to shift more major systems responsibility to the military services, this year he has come back with an even more dramatic proposal.

It is hard to argue with some elements of Sen. McCain’s views. Few who have worked in or with the department would argue with the suggestion that we have seen regression from some of the most important reforms of the 1990s along with a significant increase in reporting and approval processes, or that despite the admonitions of both the undersecretary and the Secretary of Defense, the internal AT&L bureaucracy has too often been a significant barrier to progress.

But it’s far from that simple. For one thing, much of the growth in the bureaucratic process can be traced to congressional pressure. Moreover, the barriers to innovation and efficiency come just as often from other parts of the department, including the audit, budget, and legal communities, the military services, and yes, Congress.

In addition, the Senate proposal would create an odd construct that could, by definition, actually make things worse. The new research and engineering position is modeled after the former undersecretary for research and engineering (the predecessor to AT&L). Yet, what evidence is there that the old model was any more progressive or dynamic? Further, the whole idea of the AT&L position was to place, in one senior official’s hands and organization, lifecycle responsibility for major programs. Thus, while the committee may not believe that AT&L is functioning effectively, there is little evidence that the logic behind its creation was wrong; the real issue is how to improve its performance.

Finally, the idea of moving responsibility to the new CMO raises a whole other set of organizational and execution questions. Having worked in the department, the idea of one individual having responsibility for both the department’s vast and complex operations (for which the CMO was originally conceived) as well as the production and support of tens of billions of dollars in major systems, seems to me a real overreach. The skills, knowledge, disciplines and demands of the twin roles are so different that they largely defy effective combination. And the potential for disruptive organizational disconnects between the secretariat and the military services is very real.

Ironically, the bill includes other positive provisions that do speak to the real issue: management, workforce, and the acquisition process itself. There are limited but important provisions regarding alternative workforce training and development. There are provisions to increase reliance on commercial practices, commercial buying authorities, even commercial accounting models. Some stakeholders are legitimately concerned about the potential creation of an expanded, separate class of vendors who are not subject to the same rules as everyone else. That would be a huge mistake. But if the concept were modified to create a more open aperture through which any qualified company is able to compete, it would represent both an important reversal of some of the regression we have witnessed and a real step toward truly improving and modernizing the defense (and hopefully broader government) acquisition system.

There are many problems, and problematic components, in the current AT&L. But tossing the baby out with the bath water is rarely the right answer. Instead, we would likely do better by intensely focusing on the core issues, the wide range of causes of those problems, and what can be done to fix them. In the end, what matters most is what one does to truly improve management, open the door to innovation, and drive better outcomes. Shuffling deck chairs may make a strong statement but it is not clear that it will result in the changes we need.