[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 111-46]
THE ACQUISITION WORKFORCE: MERELY A BUSINESS EXPENSE OR A FORCE
MULTIPLIER FOR THE WARFIGHTER?
__________
HEARING
BEFORE THE
OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
APRIL 28, 2009
[GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT]
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Washington, DC 20402-0001
OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE
VIC SNYDER, Arkansas, Chairman
JOHN SPRATT, South Carolina ROB WITTMAN, Virginia
LORETTA SANCHEZ, California WALTER B. JONES, North Carolina
ELLEN O. TAUSCHER, California MIKE ROGERS, Alabama
SUSAN A. DAVIS, California TRENT FRANKS, Arizona
JIM COOPER, Tennessee CATHY McMORRIS RODGERS, Washington
JOE SESTAK, Pennsylvania DOUG LAMBORN, Colorado
GLENN NYE, Virginia DUNCAN HUNTER, California
CHELLIE PINGREE, Maine
Suzanne McKenna, Research Assistant
Thomas Hawley, Professional Staff Member
Trey Howard, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2009
Page
Hearing:
Tuesday, April 28, 2009, The Acquisition Workforce: Merely a
Business Expense or a Force Multiplier for the Warfighter?..... 1
Appendix:
Tuesday, April 28, 2009.......................................... 31
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TUESDAY, APRIL 28, 2009
THE ACQUISITION WORKFORCE: MERELY A BUSINESS EXPENSE OR A FORCE
MULTIPLIER FOR THE WARFIGHTER?
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Snyder, Hon. Vic, a Representative from Arkansas, Chairman,
Oversight and Investigations Subcommittee...................... 1
Wittman, Hon. Rob, a Representative from Virginia, Ranking
Member, Oversight and Investigations Subcommittee.............. 3
WITNESSES
Assad, Shay D., Acting Deputy Under Secretary of Defense,
Acquisition and Technology, U.S. Department of Defense......... 4
Needham, John K., Director, Acquisition and Sourcing Management,
U.S. Government Accountability Office.......................... 9
Shackelford, Lt. Gen. Mark, USAF, Military Deputy to the
Assistant Secretary of the Air Force, Acquisition, U.S.
Department of the Air Force.................................... 8
Thompson, Lt. Gen. N. Ross, III, USA, Principal Military Deputy
to the Assistant Secretary of the Army for Acquisition,
Logistics and Technology and Director, Acquisition Career
Management, U.S. Department of the Army........................ 6
Thomsen, James, Principal Civilian Deputy for the Assistant
Secretary of the Navy, Research Development and Acquisition,
U.S. Department of the Navy.................................... 7
APPENDIX
Prepared Statements:
Assad, Shay D................................................ 42
Needham, John K.............................................. 82
Shackelford, Lt. Gen. Mark................................... 74
Thompson, Lt. Gen. N. Ross III............................... 53
Thomsen, James............................................... 66
Snyder, Hon. Vic............................................. 35
Wittman, Hon. Rob............................................ 39
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
[There were no Questions submitted during the hearing.]
Questions Submitted by Members Post Hearing:
Mr. Franks................................................... 109
Ms. Sanchez.................................................. 109
Dr. Snyder................................................... 105
THE ACQUISITION WORKFORCE: MERELY A BUSINESS EXPENSE OR A FORCE
MULTIPLIER FOR THE WARFIGHTER?
----------
House of Representatives,
Committee on Armed Services,
Oversight and Investigations Subcommittee,
Washington, DC, Tuesday, April 28, 2009.
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2118, Rayburn House Office Building, Hon. Vic Snyder
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. VIC SNYDER, A REPRESENTATIVE FROM
ARKANSAS, CHAIRMAN, OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE
Dr. Snyder. The hearing will come to order. Good morning
and welcome to the third, and the final, in a series of three
hearings held by the Oversight and Investigations Subcommittee
following up on several acquisition matters.
Before we get started I want to recognize and welcome 50
International Fellows of the Naval War College who are in
attendance at today's hearing. I say they are in attendance. I
think they are actually divided up so that some who are in
another room are going to swap out at some point because the
hearing room is not big enough. That is why we moved to this
hearing room, by the way.
Welcome to all of you from the Naval War College
International Fellows Program. We appreciate you being here.
Incidentally, a professional military education is something
that this subcommittee is very, very interested in, as is
Chairman Skelton, and we have an ongoing study for the rest of
this year that we are working on.
Our first two hearings centered on acquisition and
management issues in the Afghanistan and Iraq theaters of
operation. Today's hearing is more broadly focused on the
Department of Defense acquisition workforce. It is a timely
topic.
Acquisition reform is a high priority here in the Congress
and in the executive branch. Chairman Skelton and Mr. McHugh
introduced weapons system acquisition reform legislation this
week. And they have established a special acquisition reform
panel, led by our colleague Congressman Rob Andrews of Jersey.
And both the President and Secretary Gates have also spoken
about the critical need for acquisition reform. Speaker Pelosi
has been very clear on the importance of saving tax dollars, as
well as being sure our men and women in uniform and our
military families get all the services they need.
I think I was struck--probably the best summary I thought,
Mr. Assad, was from your opening statement--and I am going to
quote to you now--in which you say, ``The objective is
straightforward: to ensure Department of Defense (DOD) has the
right acquisition capability and capacity to produce best value
for the American taxpayer and for the soldiers, sailors, airmen
and marines who depend on the weapons, products, and services
we buy.''
And that simple objective is what has led us here today,
because a lot of us think we have got work to do. The
acquisition workforce is at the heart of the acquisition
system. No doubt there are the policies and the organizational
structures that make up important parts of the defense
acquisition system, but there are also the people; the
engineers, cost estimators, systems engineers, contracting
officers, program managers, contract specialists, quality
assurance inspectors, logisticians, finance personnel, and
auditors who carry out the acquisition function from start to
finish.
Working as a team, these members of the workforce are key
players in both supporting the warfighter's needs and
safeguarding the taxpayers' dollars. We are all familiar with
the problems many of the major programs are facing in terms of
substantial cost overruns, schedule delays, and problems with
performance.
As part of a larger package of reforms, Secretary Gates
announced a plan to begin rebuilding the acquisition team to
help address those problems. We think the Department already
has many important tools for developing and managing the
workforce. Congress has at times helped solve these problems,
and Congress has at times helped create these problems.
The Armed Services Committee has been very active in
passing legislation to ensure that the Department attracts and
maintains a professional high-quality acquisition workforce.
This subcommittee's immediate predecessor, the House Armed
Services Subcommittee on Investigations, in 1990 drafted the
legislation in this area: the Defense Acquisition Workforce
Improvements Act.
On the other hand, Congress bears some responsibility for
the current state of affairs because during the post-Cold War
drawdown era, Congress mandated a series of reductions in the
acquisition workforce, only to be followed by an era of
increasing demands and dramatic growth in the Department's
procurement budget after September 11th.
In recent years we began recognizing a critical role played
by the workforce and established the Acquisition Workforce
Development Fund providing billions of dollars for the next
several years for recruiting, retaining, and training the right
people. We have provided expedited hiring authority to allow
the Department to bring on qualified candidates quickly. We
encouraged the Department to ensure that critical acquisition
positions like program managers, cost estimators, and chief
engineers are filled by government personnel. And we required
the establishment of a career path, including general and flag-
officer billets for military personnel in the acquisition
field.
We have lifted civilian personnel caps for acquisition
positions. And we have given the Department the authority to
in-source new work and bring back work that the Department
previously outsourced. We look forward to hearing how these
tools are helping.
We also would like to hear how the Department and services
plan to change from an institutional mind-set that in the past,
due to the acquisition workforce, is merely performing an often
arcane business function, to one that instead recognizes the
critical and essential work that the acquisition workforce
performs.
When we talk about changing mind-sets, I believe that the
change of mind-set also needs to occur in the Congress. We also
need to be part of the changing mentality that recognizes the
crucial role that is played by this acquisition workforce. The
taxpayers depend on them, we depend on them, and our national
security depends on them. Most importantly, our warfighters'
lives and success literally depend on them, too. And I now
would like to recognize Mr. Wittman.
[The prepared statement of Dr. Snyder can be found in the
Appendix on page 35.]
STATEMENT OF HON. ROB WITTMAN, A REPRESENTATIVE FROM VIRGINIA,
RANKING MEMBER, OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE
Mr. Wittman. Thank you, Chairman Snyder. I appreciate your
leadership in bringing this issue to the forefront. I also want
to welcome our witnesses this morning. Thank you so much for
joining us and taking your time out of your busy schedules to
provide what I think is a very critical perspective on this
issue of acquisition reform.
All aspects of the defense acquisition system are receiving
much attention these days. It seems to be the popular topic
here on the Hill. And the President and the Secretary of
Defense have made acquisition reform a priority. And the
leaders of both the Senate Armed Services Committee and our own
Chairman Skelton and Ranking Member McHugh of the House Armed
Services Committee have introduced legislation to improve the
system. And there is absolutely no question that any taxpayer-
funded system expending more than $4 billion annually and
employing thousands of people deserves continuous scrutiny.
More importantly, though, the long history of armed
conflict amply demonstrates that the combat force employing the
most technologically advanced systems from long bows to
gunpowder to stealth aircraft to the capability to rapidly
deploy expert marksmen and their equipment from Virginia to the
Indian Ocean usually prevails. And our national security
demands that we have a well-funded, well-managed weapons
acquisition system for our Armed Forces.
Our focus today is not the system, but its most important
element: its people. Any complex system requiring sound
judgment, creativity, and financial prudence needs talented,
motivated professionals. And what we are really doing is
assembling a team of inventors, developing and packaging
capabilities in ways heretofore unimagined, at taxpayer
expense. It is extraordinarily difficult to produce any new
capable weapons system, much less produce it on an exact
schedule, to exacting performance standards, within an exact
budget. As much as I would like to see more precision, we do
need to trust good people to make reasonable decisions on this
Nation's behalf.
In that regard this committee has initiated several
legislative measures in the last few years designed to
strengthen the Department's acquisition workforce. We believe
these changes are having a good effect, and are eager to hear
your perspectives on this matter. Even so, we understand
defense acquisition needs excellent employees and are happy to
consider any further legislative changes that may be needed.
Any systemic changes we have will have little real effect
without a superb core of acquisition professionals to operate
it.
Gentlemen, I look forward to hearing your testimony today
for you to give us your perspective on the things that we can
do to make sure that our acquisition workforce has everything
that it needs to perform this Nation's critical, critical
duties. Thank you so much.
Dr. Snyder. Thank you Mr. Wittman.
[The prepared statement of Mr. Wittman can be found in the
Appendix on page 39.]
Dr. Snyder. Let me now introduce our witnesses. Mr. Shay
Assad is the Director of Defense Acquisition Policy and
Strategic Sourcing. He is the Acting Deputy Under Secretary of
Defense for Acquisition and Technology. Lieutenant General Ross
Thompson, Military Deputy, Assistant Secretary of the Army for
Acquisition, Logistics and Technology. Mr. James Thomsen, the
Principal Civilian Deputy, Assistant Secretary of the Navy of
the Acquisition Workforce. Lieutenant General Mark Shackelford
from the Air Force, Military Deputy, Office of the Assistant
Secretary of the Air Force for Acquisition. It seems to me,
General, that you got off easy on the nickname. Shack was
pretty close for a fighter pilot. They didn't venture far from
your given name.
General Shackelford. Yes, sir. It is an easy one.
Dr. Snyder. Mr. John Needham, Director of the Acquisition
and Sourcing Issues, U.S. Government Accountability Office
(GAO). Thank you all for being here.
Mr. Assad, we will begin with you. We will put on the
clock. And when you see the light goes red, it means five
minutes have gone by. If you need to go longer than that, go
longer than that, but I know members will have questions.
Mr. Assad, we will begin with you.
STATEMENT OF SHAY D. ASSAD, ACTING DEPUTY UNDER SECRETARY OF
DEFENSE, ACQUISITION AND TECHNOLOGY, U.S. DEPARTMENT OF DEFENSE
Mr. Assad. Mr. Chairman, with your permission I would like
to include my written statement for the record.
Dr. Snyder. Yes, sir. All your written statements will be
made part of the record.
Mr. Assad. Thank you. Chairman Snyder and members of the
subcommittee, I want to thank you for the opportunity to appear
before you and participate in today's hearing. At your request,
I will address the overall state of the Defense acquisition
workforce, both military and civilian.
In the 1990s there was a significant decrease in the size
of the acquisition workforce; 9/11 and ensuing events have led
to a significant increase in acquisition workload. These
factors have strained our current organic acquisition workforce
capability.
In 2001 the Department obligated $138 billion in contracts.
And in 2008, obligations reached $396 billion. In contrast, the
acquisition workforce decreased from a level of approximately
147,000 in 1998 to its present state of around 127,000.
In 2006 we began the journey of assessing the capability
and needs of our acquisition workforce. This has been and will
continue to be an evolving process. However, the decisions that
we have made regarding the growth of our workforce and the path
that we are now on have been deliberate, thoughtful, and
forward looking.
On April 6, 2009, the Secretary of Defense announced his
intention to significantly increase the capability and capacity
of the Defense acquisition workforce by increasing the size of
the workforce by 20,000 through the year 2015. This will
restore our organic capability to its 1998 levels of
approximately 147,000 and address longstanding shortfalls in
the workforce. It is the first significant growth since the
military buildup in the 1980s and the downsizing that occurred
in the 1990s.
This strategy increases the size of the workforce by 15
percent. We will add approximately 9,500 employees to our
contracting, pricing, and contract oversight workforce, and
10,500 in program managers, engineers, quality control,
logistics, and business management. This will create a better
balance between our government workforce and contract or
support personnel, and ensure that employees critical to
perform inherently governmental functions do so. This strategy
will increase and improve the Department's oversight
capabilities, thereby ensuring that we get a better deal for
the taxpayers, that we get what we pay for, we ferret out waste
and assist in combat and contract fraud.
The Defense Acquisition Workforce Development Fund provided
by Congress is a key workforce enabler. Since enactment,
significant resources have been targeted for improving the
Defense acquisition workforce, and we very much thank this
committee for supporting the Defense Acquisition Workforce
Development Fund.
Improvement initiatives are being deployed and are
characterized in three major workforce categories:
First, with regard to recruiting and hiring, hiring has
started and is the primary focus of our strategy. In our 5-year
plan, approximately 89 percent of the resources of the Defense
Acquisition Workforce Development Fund will be used for hiring.
Secondly, concerning retention and recognition, although
present economic conditions are contributing to better
retention it is essential to start now to implement a long-term
retention strategy and talent management strategy as we go
forward.
Thirdly, in the area of training and development,
certification requirements have exceeded the DAU's present
capacity, and DAU must expand to meet this demand.
Equally important is the capacity to meet future
requirements resulting from increased hiring of interns,
journeymen and highly qualified experts. There are also new and
evolving training issues, such as expanded expeditionary
contracting training, contracting officer representative
training, and training for those who are not part of the
acquisition workforce but who develop requirements.
With regard to our military workforce we must ensure that
our joint contracting workforce is properly sized and trained
to meet the needs of contracting in a battlefield environment.
The Army and Marine Corps have taken significant steps in
terms of training, size, leadership development, and
organization of their present and future contracting corps. We
anticipate that the Navy's contracting capability will continue
to be provided through its Supply Corps and its Civil
Engineering Corps.
In terms of contracting capability, we anticipate that the
Air Force will continue to provide the largest and most
significant capability among the uniformed services. The
challenge for the Air Force is, and will be, to provide
promotional opportunities for their capable acquisition and
contracting community.
The Secretary has established an overarching human capital
strategy to mitigate the impact of past downsizing, increased
workload, the aging workforce, and to create a better balanced
multisector force. This is an unprecedented acquisition
workforce growth initiative. Essential to improving acquisition
outcomes is a properly sized, highly skilled, ethical and
professional workforce. I believe this strategy is on target,
and I look forward to working with you and keeping you apprised
of our progress.
Thank you, Mr. Chairman, and members of the subcommittee
for your support.
Dr. Snyder. Thank you Mr. Assad.
[The prepared statement of Mr. Assad can be found in the
Appendix on page 42.]
Dr. Snyder. General Thompson.
STATEMENT OF LT. GEN. N. ROSS THOMPSON, III, USA, PRINCIPAL
MILITARY DEPUTY TO THE ASSISTANT SECRETARY OF THE ARMY FOR
ACQUISITION, LOGISTICS AND TECHNOLOGY AND DIRECTOR, ACQUISITION
CAREER MANAGEMENT, U.S. DEPARTMENT OF THE ARMY
General Thompson. Chairman Snyder, Congressman Wittman, and
distinguished members of the Subcommittee on Oversight and
Investigations, thank you for the opportunity to discuss today
the state of the Army acquisition workforce and our mutual
efforts to ensure a strong and robust acquisition system.
I am pleased to report that the Army is making steady
progress in sustaining and growing an acquisition workforce
that is focused on getting world-class products and services to
our soldiers faster, while ensuring proper fiscal stewardship
of the taxpayer dollars. Our plans are outlined in my written
statement.
Mr. Chairman, the Army acquisition workforce declined
significantly in the last decade, while the workload and the
dollars associated with that workload increased. At present, we
have roughly 40,000 workforce members, 38,500 civilians, and
about 1,600 military to perform the entire acquisition and
contracting mission for the Army.
While our workforce members are stretched, they continue to
excel in meeting the challenges of their jobs. Their energy and
enthusiasm result from the knowledge that their work is
critically important to our soldiers in the field. Size,
structure, training, and experience are critically important
factors in developing a workforce that is better prepared to
deal with the complexities of acquisition and contracting in
the 21st century.
Our current workforce initiatives highlight right-sizing
development and recognition and retention incentives. Increased
investment in our people, coupled with sufficient predictable
investment in our programs will continue to give our soldiers
the equipment, services and support they need for success on
the battlefield.
Before I conclude I want to point out that yesterday we
discovered a factual error in my written statement. We provided
the correct information to your staffers, and we will provide a
revised statement for the record.
This concludes my opening remarks, Mr. Chairman, I look
forward to your questions.
Dr. Snyder. Thank you, General.
[The prepared statement of General Thompson can be found in
the Appendix on page 53.]
Dr. Snyder. Mr. Thomsen.
STATEMENT OF JAMES THOMSEN, PRINCIPAL CIVILIAN DEPUTY FOR THE
ASSISTANT SECRETARY OF THE NAVY, RESEARCH DEVELOPMENT AND
ACQUISITION, U.S. DEPARTMENT OF THE NAVY
Mr. Thomsen. Mr. Chairman, distinguished members of the
subcommittee, I am Jim Thomsen. It is a privilege for me to
appear before you here today, along with your fellow panel
members, to discuss a very, very important topic of acquisition
workforce. About eight months ago I was asked by the Secretary
of the Navy to leave my post as the program executive officer
for littoral warfare and move over to serve on the Department
of Navy's staff for the service acquisition executive,
Secretary Stackley, as his principal civilian deputy. Together
with his principal military deputy, Vice Admiral Architzel, we
serve as Secretary Stackley's military-civilian senior
leadership team to address acquisition challenges.
My particular focus, though, since I arrived on the scene
just a few months ago, has been on resetting and rebalancing
the Department of Navy's acquisition workforce, along with the
team that we have in the Defense Acquisition Career Management
Office in the Navy. That particularly includes technical
workforce at our Naval Warfare Centers and Naval Research Lab,
in addition to the business skills and sets that we have in our
workforce.
As you know, we didn't arrive at this place with our
acquisition workforce overnight so it will take some time to
reset the workforce in an appropriate way. Having said that,
the people we have in our acquisition workforce today are
outstanding in what they do every day. They truly do amazing
work to produce the products that we produce. But they do need
our help in strengthening the team to provide an even better
set of outcomes in acquisition.
We believe in the Department of Navy we have taken a number
of steps to get out ahead of the problem, including a more
thorough understanding of our workforce strengths and
weaknesses, military and civilian, and identifying the critical
gaps within each of our Materiel Commands. We do have a plan to
grow the acquisition workforce, and it is consistent with the
Office of the Secretary of Defense (OSD) workforce plan as
well. In fact, we are doing so this year to build a workforce.
So the recent actions taken by the Congress we believe
will, in fact, reinforce our ability to address these gaps
appropriately. The details are in the Department of the Navy
written statement I provided. But, again, thank you for the
opportunity to appear before you here today, and I look forward
to addressing your questions. Thank you, Mr. Chairman.
Dr. Snyder. Thank you.
[The prepared statement of Mr. Thomsen can be found in the
Appendix on page 66.]
Dr. Snyder. General Shackelford.
STATEMENT OF LT. GEN. MARK SHACKELFORD, USAF, MILITARY DEPUTY
TO THE ASSISTANT SECRETARY OF THE AIR FORCE, ACQUISITION, U.S.
DEPARTMENT OF THE AIR FORCE
General Shackelford. Mr. Chairman, distinguished members of
the subcommittee, thank you for the opportunity to address this
subcommittee and to discuss Department of the Air Force's work
to improve the capacity and capabilities of our acquisition
workforce. I am confident that the Department's ongoing actions
and those planned through the future years' defense program
will improve the Department's ability to effectively execute
the acquisition mission.
I would like to take a few moments to touch on several of
these efforts. In October 2008, Air Force leadership identified
recapturing acquisition excellence as one of the top priorities
that will shape Air Force-wide actions over the next three to
five years as we address actions that strengthen people,
processes, and policy. Developing, recapitalizing, and shaping
our professional acquisition workforce is integral to
acquisition excellence.
To guide our efforts towards this vision, we partnered with
Air Force acquisition functional leaders in the Acquisition
Commands to develop an Air Force Human Capital Strategic Plan
for the acquisition workforce, which was published in February
of this year. This plan establishes a strategic vision for a
professional acquisition workforce with the right number and
mix of people, with the right education, training, skills and
experience, to effectively and successfully perform the Air
Force acquisition mission. We believe it is an excellent
roadmap for guiding workforce development in support of
acquisition excellence.
The Department of the Air Force is fully committed to
acquisition excellence and appreciates the efforts of the
Congress to considerably improve our ability to develop and
recapitalize our acquisition workforce. We are aggressively
using the authorities resources provided in legislation. They
are key enablers for our Workforce Strategic Plan.
Again, I appreciate the opportunity to testify in front of
you today and ask that the remainder of my statement be placed
in the record. I look forward to your questions.
Dr. Snyder. Thank you, General.
[The prepared statement of General Shackelford can be found
in the Appendix on page 74.]
Dr. Snyder. And Mr. Needham.
STATEMENT OF JOHN K. NEEDHAM, DIRECTOR, ACQUISITION AND
SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Needham. Thank you, Mr. Chairman, Ranking Member
Wittman and members of the subcommittee. I appreciate the
opportunity to discuss GAO's recent work on DOD's acquisition
workforce. As the largest buying enterprise in the world, DOD
spent $388 billion for goods and services in fiscal year 2008.
The acquisition workforce, now numbering approximately 178,000
people, is DOD's key asset in obtaining value for the taxpayer.
So building and sustaining it in the years ahead is critical.
Doing this well requires quality information that will
provide DOD the insight that it needs. My statement today
focuses on the information limitations that DOD has on its
acquisition workforce, as well as recent efforts it has taken
to improve management and oversight of this workforce.
I will also highlight some additional actions the
Department could take to better ensure its workforce could
fulfill DOD's mission and make the most of taxpayer dollars.
First, DOD lacks information on contractor personnel. DOD
recently began to collect such data and has determined that
these contract workers comprise roughly a third of the
acquisition workforce, a finding consistent with our own review
of 66 program offices. While this is a start, we believe that
DOD needs visibility into the reasons program offices use
contractor personnel; because without this, the Department
cannot determine if decisions to use contractors are
appropriate and beneficial. We found decisions to use
contractor personnel are often driven by factors such as
quicker hiring times and civilian staffing limits, not the
nature or the criticality of the work.
Second, DOD lacks complete information on the skill sets of
its in-house personnel and other information such as the size
and composition of the acquisition workforce that is required
to meet its many missions. Lacking this information not only
skews analysis of workforce gaps but limits DOD's ability to
make informed workforce allocation decisions and determine
whether the total acquisition workforce that is both in-house
and contracted personnel is sufficient to accomplish its
mission.
Recent and planned actions could begin to address many of
these challenges that DOD faces in assessing and overseeing its
workforce, its plans for hiring, recruiting, and retention
activities. In addition, DOD plans to convert 11,000 contractor
personnel to government positions and hire an additional 9,000
government personnel by 2015.
Ensuring it has the capacity to acquire needed goods and
services and monitor the work of its contractors rests on DOD's
willingness to develop comprehensive information about
contractor personnel, including the skill sets provided, the
functions they perform, or the length of time for which they
have been used. Without this information, DOD runs the risk of
not having the right number and appropriate mix of civilian
military and contractor personnel to manage its acquisitions.
Furthermore, there needs to be guidance on the appropriate
circumstance under which contractor personnel may perform
acquisition work as well as tracking the implementation of this
guidance. Without it, DOD runs the risk of not maintaining
control over and accountability for mission-related policy and
program decisions.
What should DOD do? In our March 25, 2008 report we made
several recommendations to the Secretary of Defense aimed at
minimizing these risks. DOD generally concurred with the
recommendations. And in taking steps to determine the number of
contractor personnel in its acquisition workforce, it has
already begun to address our first recommendation. However, the
Department has noted that collecting information on contractor
skill sets and length of service requires careful
consideration.
While we agree that moving forward will entail thoughtful
deliberation, it is critical that the Department take action to
obtain additional data on its contractor personnel in order to
accurately identify and appropriately address its Air Force
gaps.
Secondly, DOD needs better insight into why program offices
elect to use contractor personnel over in-house personnel. As I
mentioned earlier, providing guidance that clarifies the
appropriate circumstances under which contractors may perform
acquisition work and then tracking the implementation of that
guidance would go a long way toward increasing this insight.
Finally, DOD must identify and update on an ongoing basis
the number and skill sets of the total acquisition workforce
the Department needs to fulfill its mission. As DOD moves
forward with its plans to increase the size of the workforce
over the next few years, having comprehensive information about
the workforce it both has and needs is even more vital if it is
to make effective decisions that create, and not diminish, the
capacity to manage the largest and most complex buying activity
in the world.
Mr. Chairman, this concludes my statement. I would be happy
to answer any questions you or any members of the subcommittee
may have.
[The prepared statement of Mr. Needham can be found in the
Appendix on page 82.]
Dr. Snyder. Thank you all for both your written and oral
statements. We will now begin our questions.
Mr. Wittman, we put ourselves on the five-minute clock, and
so I will begin. And then we will go around to members and we
will probably go, I suspect, three rounds or more this morning.
Mr. Needham, I want to begin by asking you one specific
question. You specifically talk about, I think it is on page 12
of your statement, about--on the chart--the drop from 2001 to
2008 in total acquisition personnel. I think most of us are
familiar with what occurred post-Cold War in the 1990s. But the
drop continued through 2001 to 2008. How did that come about?
Mr. Needham. Well, that drop continued because they
essentially had cut back through ceilings, personnel ceilings,
and so forth. But they also began to meet that need through use
of contractors, which is where our focus had been in this
recent report we did, was on the use and the growth of those
contractors and getting a sense of how big that contractor
workforce is. We never had really a good picture of what that
growth rate is, so we just had a picture of what the civilian
and military side looked like in terms of its decline.
Dr. Snyder. So while we saw this continued drop--I mean, it
is not tremendously dramatic, but a time of, as you pointed
out, big increases in the amount of contracted services and a
lot of activity going on with the war on terrorism and the wars
in Iraq and Afghanistan. This chart just demonstrates that a
lot of the work was being done by a contracted-out force.
Mr. Needham. Right. But we didn't have, again, the numbers
to know that, to be able to identify, which has been an effort
of Congress over the recent years to get that kind of
documentation down.
Dr. Snyder. I still find it surprising that the actual
numbers have declined of personnel through that 2001 to 2008
period. I want to ask, I am going to ask this a little bit--I
will not facetiously, I guess. There is not much humor, it
doesn't seem to me, in an acquisition hearing, so I have got to
find it the best I can.
But it seems to me, knowing you watch these movies about
prisoner of war (POW) camps, you know, the kind of tongue-in-
cheek kind of stories, the coolest dude in the camp is always
the acquisition guy, is the guy who can find the radio and the
phony ID and the two pounds of sausage and whatever it is the
commander thinks he needs. So you guys are the coolest dudes in
the camp.
Now, that is the mind-set I think that this panel has. The
problem is how do we change the mind-set in such a way that we
don't forget that you are the coolest dudes in the camp? What
will happen 5 years from now, 8 years from now, 10 years from
now when there will be another group of people sitting here who
will start talking about, well, we have got to look at our
tooth to tail ratio, and we look in the tail and we see these
people that they are not really warfighters. We can get rid of
these folks.
How do you change the mind-set, and how well do you all
think you are doing to change the mind-set, that we recognize
without you all and the work of the people that you supervise,
our military could literally come to a stop?
I would like to go down the row. We are talking about the
mind-set now, the culture, that you all work in. Mr. Assad.
Mr. Assad. Mr. Chairman, I think it is in two perspectives.
The first is the overall acquisition workforce. The reality is
that the Secretary of Defense and Congress have been very
supportive of now moving forward and doing some very positive
things with our acquisition workforce.
We are going to have to demonstrate to our Secretary and to
the President and to you that the investment that you are going
to make in that workforce is in fact going to pay off, that we
are going to get better deals for the taxpayers, that we are
going to conduct more robust oversight, that in fact when we
encounter fraudulent activities we root them out and we deal
with it. So it is going to be in the proof of the pudding over
time as to whether or not the investment that the Secretary of
Defense, the President and ultimately the Congress makes in
this workforce will in fact pay off. We believe it will.
In terms of the military, there is no doubt that we have
seen our folks who have their boots on the ground, our
soldiers, marines, airmen, and sailors, are performing in an
incredible and outstanding way. But they are taxed in terms of
their contracting capability, because we just don't have
sufficient military resources to deal with contracting in a
combat environment as it is presently envisioned. We will
continue to have contractors who support our operational
forces. So the need to have capable, competent professional
military contracting officers is going to continue on.
And I think, again, it will be in our demonstration to our
leader, the Secretary of Defense, the President, as well as to
Congress, that in fact the investment that you make in both the
civilian and military workforce will in fact result in a more
effective--and, frankly, get a better deal for the taxpayers
than we presently have been.
Dr. Snyder. General, I think what I will do, because the
time is up, I think I am going to go to Mr. Wittman, and we are
going to pick that up the next round. Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman. Gentlemen, thank you
again.
I wanted to direct a couple of questions, actually four in
total, to both Mr. Assad and Mr. Needham. Secretary Gates, as
you know, announced that he intends to add 9,000 personnel to
the in-house acquisition workforce and to convert 11,000
acquisition-related contractor positions to government
positions. And this will bring the in-house workforce back to
where it was in 1998.
Can you comment a little bit on why 1998 is a meaningful
baseline, and will the workforce be overseeing a workload of
comparable value or complexity, and do we know what the level
of contractor support was in 1998? And if you could give us a
little bit of background maybe on the analysis that you put
forth to look at this 1998 baseline and the determinations you
made as to why that is applicable today?
Mr. Assad. Yes, sir. In terms of the contracting workforce,
the 9,000, 9,500, professionals that we will be adding in that
environment, what we did was we actually had some pretty
detailed bottoms-up estimates in terms of what we needed at
Defense Contract Management Agency, Defense Contract Audit
Agency. We looked at each of the services in terms of their
contracting capabilities, and we knew that in general that part
of the workforce does not have a contractor segment associated
with it. There are some organizations that do have contractors
supporting those environments but they are very small. It is a
much different picture.
To give you an example, of that 52,000 contractors that we
think, approximately 52,000, that support the acquisition
workforce, somewhere between 500 and 700 support the
contracting or contract oversight workforce, so it is a very
small number.
So in that particular case the way we looked at that
workforce was really in terms of examining its capabilities.
And we just completed it. It took us 18 months to complete
probably the most comprehensive competency assessment of that
workforce that has ever been done in Federal Government. That
was created. Over 18,000 folks participated in that. And that
was completed recently. So we have the information that we need
to look at that part of the workforce in a very detailed way.
In terms of the contractor workforce, we knew that we
needed to change the mix of the workforce. We think that the
total size of the workforce in general is adequate because we
are getting the job done with our contractor contracting
workforce. But what we needed to do was take a more, I think,
realistic view of what we believe is inherently governmental
and ensure that those functions are in fact being supported by
Federal civilians and/or our military workforce. We needed to
ensure that we have the engineering capability inherent within
government so that we can provide the proper technical
assessments to our contracting officers, so at the end of the
day we get a better deal for the taxpayers and, in fact, we can
conduct proper oversight.
Going back to the 1998 levels, we simply use that as a
measure of that really was the point, it was about a year or
two before we began a significant increase in the workload of
our workforce. So in reality, while we are going back to the
1987 level, we are adding more contracting folks in that
environment.
Mr. Wittman. Mr. Needham.
Mr. Needham. We issued a number of reports at that period
of time. A lot of the reforms that had started in the 1990s
started to come to fruition in the 1990s. Mr. Assad's point,
though, in terms of picking 1998, that was their reason. I know
at the time when we were looking at this, that was a period
where there had been a lot of effort at reinventing government,
rethinking how processes are working and so forth, and a lot of
changes had come about at that point. But that is the only
insight that we have into that.
Mr. Wittman. Thank you, Mr. Chairman.
Dr. Snyder. Mrs. Davis for five minutes.
Mrs. Davis. Thank you, Mr. Chairman, and thank you all for
being here. I wanted to just pick up on that for a second. I
think that we all know that we do best when we learn from our
mistakes. And what I am wondering is, as we move forward, why
there wasn't the pushback to some of those moves and whether or
not our non-acquisition workforce was not in a position to
really say, hey, wait a second, you know, we need some more
help out here and the decisions that are being made are not
helpful. I don't know if you would like to comment on that sir.
Mr. Needham. Thank you. Representative Davis, if you will
think back at that point, I think when a lot of the changes
came about in the acquisition workforce, there was a feeling
that the acquisition workforce was cumbersome, it got in the
way of acquisitions; and that view, whether it was correct or
incorrect, probably governed a lot of decisions. And I know
that at the time there was a great deal of emphasis on
outsourcing and using contractors. And there was a view that
you were either going to save money or you were going to get it
done more efficiently or you were going to be able to get the
kinds of skills.
What drove those decisions, though, were not key factors in
terms of what the criticality of the workforce is, and that is
what should be driving them: concerns about inherently
governmental, concerns about cost and so forth.
Mrs. Davis. I think what I am looking for is how we can
read this in the future, then, if in fact there is an effort, a
move to say, well, you know, we are okay now, now we can begin
to cut back again; and whether--is it the governmental
workforce that would be an indicator if you saw a drop in that
at some point?
Mr. Needham. What really needs to occur, and this is
something that goes back to--GAO started writing about this in
the 1970s--we need to have accurate descriptions of what the
needs are. If you have a certain amount of a mission, what does
that mission require in terms of all kinds of personnel, but
especially with the acquisition and the kind of skill mix that
you have. From there you then go back and then try to decide
what kind of a mix you want. But you really need to focus on
what the needs are and not let the budget drive it as much as
what the real needs are. And if the needs exceed the budget,
then there has to be some tradeoffs made at that point.
Mrs. Davis. I appreciate that. In your report you seem to
indicate that you had some problems getting information.
Mr. Needham. Not that they weren't providing it. They just
didn't have it. And in fact DOD over the past several years has
been developing that kind of information that they need to
have. And we are looking at that as they go forward. They have
plans together. In fact, they just announced recently the
52,000 count they have for the acquisition support personnel
that they have as contractors.
Mrs. Davis. I wanted to just turn for a second to the non-
acquisition community, and certainly to how in fact we may be
training and educating people to appreciate the role of the
contractors in contingency operations. Are we able to do that
so that those commanders in the field, the field commanders,
can really appreciate what is happening? Is that something
important to do, and where are we in that specific role?
General Thompson. Let me take a stab at answering that
question. It is critically important that the non-acquisition
personnel in DOD, both military and civilian, recognize the
importance of the acquisition functions, not just contracting;
it is all those acquisition career fields.
And I will answer Congressman Snyder's question as to how
do you change the mind-set. You have got to value and trust the
people, it is that simple. If everything that they read is
about how screwed up acquisition is, it begins to affect your
mind-set after awhile. And so GAO and other audit agencies,
Inspector General (IG) agencies, have got to not just find the
things that are wrong, they have got to find the things that
are right, and they have got to write about those and give
people credit for doing the good things. It is like raising
kids. If you criticize your kids every time they do something
and never reinforce them with the positive things it is going
to have a certain effect. And so you have got to value the
people.
We are training the non-acquisition members in the DOD, in
particular in the Army, the commanders, to recognize their role
in defining requirements. And when you buy something, whether
that is a good or a service, the first thing you have got to do
is what do you want to buy; define what it is, when do you want
it, how much you are willing to pay? And there is a role to
play in that. And the acquisition workforce has got to help
them define those requirements in a clear way so when we go out
and negotiate for that good or service, we get what they want
and it meets their expectations.
Mrs. Davis. Did you want to comment quickly?
Mr. Thomsen. Just to add to that, ma'am, in the Department
of Navy--it is a great point--is that we have really got to
inculcate the culture of importance to acquisition and what we
buy to the rest of the Department.
One of the things that we have just initiated over the last
really just six months is that the Department of Navy has
executive business courses for all of their flag officers. The
Marine Corps has the same thing for their general officers. We
have made a very pointed, deliberate attempt--and we have--to
meet in those classes and walk them through, soup to nuts, why
acquisition is important and really why the acquisition
workforce is important.
The Department of Navy, the acquisition workforce,
represents about eight percent of the total force, but in fact
we really execute about 40 percent of the total obligation
authority given to us by the Congress. So it is important
enough that the rest of our Department of the Navy organization
understand that.
Now, we have started that process at the very top levels
down through really the 2005 billets and then press that down
through the rest of the enlisted rank. So it is a great point.
And piling onto General Thompson's point, unless we can
make sure that people recognize this throughout our
organization, we are going to continue to get just less than
enthusiastic support for the acquisition work that really is
done by our great workforce.
Mrs. Davis. Thank you. Thank you, Mr. Chairman.
Dr. Snyder. Mr. Jones for five minutes.
Mr. Jones. Mr. Chairman, thank you very much. And I want to
thank each one of you at the table for your presentation. And
some of us have been here, I was elected in 1994 so I have been
here, sworn in in 1995.
Mr. Assad, I appreciate your comments, and I will tell you
why. It seems like every year--I have been on Armed Services
for eight terms now, and not just talking about acquisition
workforce, but any--I guess any segment of the services, any
segment of the Department of Defense. I remember when Donald
Rumsfeld came here before the Armed Services Committee in 2001,
I guess, or whenever it was, and basically said that he was
making a commitment that every dollar of the taxpayer was going
to be protected. And I realize nothing is perfect in life. It
is just not. But when I sit here and listen to the commitment
that Secretary Gates--and I have great respect for Secretary
Gates and his team, quite frankly, and I think we are very
fortunate to have him and his team, and I look forward to his
presentations in the weeks and months to come about his
suggestions to make the military more efficient, to make the
Department of Defense work even better.
But I was sitting here thinking--and, Mr. Needham, this
might really be--if there is any question in my rambling, it
might come back to you. But I think David Walker 10, 12 years
ago, made the statement that if you are really going to do
anything meaningful at the Department of Defense, because of
the size, the enormity, of the Department of Defense and the
different agencies within and all the size of the machine, if I
can put it that way, that if the Congress was going to ever be
able to get a handle on how to make it more efficient, then you
probably needed to appoint an individual who is qualified for
the full term of a President. Of course, no President knows if
he is going to be there four years or eight years, but assume
an eight-year term and put this person in who has the
qualifications to work within the system--it is not just one
man, but he would have his people--to try to get a handle.
I feel like today I have heard that obviously some
recommendations made by GAO have been followed, some
recommendations within the Department itself which have made
things a little bit better. But the size of the whole
Department--and we are talking about the acquisition workforce
today--but all in all it seems like what I am hearing I have
heard before.
Now, some changes have been made. That is not a criticism.
But it looks like to me you have got to have a major commitment
by an administration. And even if that administration thinks
they are going to be there eight years--I am not talking about
the current administration--but if they think they are going to
be there eight years, if they put this type of plan in place
where this individual had the expertise with the commitment and
the help of people within the military and outside the military
that just think that the system needs to be reworked, is there
any way to make it work better than what it is doing now with
the current structure that we have, or will it continue to be a
kind of hit-and-miss improvement?
I just don't know how you get a handle on this unless you
make some major decision by the Congress and the administration
that you are going to have to make a six- or eight-year
commitment to get the efficiency, or at least get it started in
the direction of efficiency.
And again, this is not a criticism. I have the greatest
respect for the military and the Department of Defense, but are
we going to continue to hear the same thing if we don't do
something just really drastic?
Mr. Needham. What Mr. Walker was talking about at the time
was the idea of having a chief management officer for the
Department. And really this came from looking at our analysis
of the turnover among program managers. And we showed program
managers where you might have one President and two Secretaries
of Defense and you would have five program managers for a
particular function. And it was maintaining continuity and
focus at a high level that was irrespective of the political
climate they were working in. They were basically concerned
with the administration of the Department. That is something
that still is something that we view not only for the
Department of Defense but for the other departments as well.
My own experience has been I have gone into meetings with
Defense officials, and one program I was looking at was the
purchase of commercial satellite services, and the program
people turned over, the political people turned over, the
military people turned over, but I had the same contractor all
the way through. And it was something that--it was the only
source of continuity we had as we dealt with them over a three-
and-a-half-year period as we went back for more and more
information. And that is probably the key thing, is keeping
people in place so they can actually get some changes done. And
I know there has been some thinking about that within DOD about
kind of limiting the amount of turnover that does occur.
Dr. Snyder. Mr. Franks for five minutes.
Mr. Franks. Well, thank you, Mr. Chairman, and thank all of
you. There is no way to ever express the appropriate gratitude
for those of you that slog through the challenges to make sure
that we are prepared in terms of personnel for whatever comes.
I suppose in many ways that is the most critical job in the
service. Not only does personnel equal policy, as they say, but
the people that you choose to be in leadership roles and to
carry out this Nation's defense is just an incredibly important
job, and I commend you for it, as always.
So I guess I probably would go ahead and just ask each of
the services, the representatives of the services, beginning
with you, General Thompson, among the ranks, your ranks of
acquisition professionals, where do they feel and where do you
feel the most pain? What is your greatest shortage in both
numbers and expertise, what is your biggest challenge?
General Thompson. The biggest challenge I think is being
addressed by the plans to grow the size of the workforce. For
the scope of the work, the complexity of the work today, the
acquisition workforce, both military and civilian, needs to be
larger. And the plans that we are putting in place across the
DOD to do that I think will address that.
There are 13 different acquisition career fields. It is not
just program management and contracting and engineering, but
there is business and cost estimating and life cycle logistics.
And we have looked at the gaps in those workforce areas, and we
have got the plans in place to grow the size of those different
acquisition categories appropriately to be able to address the
challenges and to be able to meet the requirements of the Army
and to be able to meet the requirements of the Department of
Defense.
Mr. Franks. Thank you, sir. Mr. Thomsen, do you have any
perspective?
Mr. Thomsen. Yes, sir. Just like the Army, we have gone
through a review of all of the 13 categories, and then some, to
look at what our gaps and critical needs are. For us it is
really in two areas, and arguably three.
The first area is really in system engineering, not just
engineering but really qualified system engineers. Why is that?
Because we really believe in the Department of the Navy that we
need to reclaim, if you will, much of the technical and cost
trade space in the early parts of these programs, certainly
pre-Milestone B, before you really award these large
development contracts or reproduction contracts. So qualified
system engineering is really number one.
Number two is really in contracting officers, to make sure
that we are reasonably healthy there, but we do need some
growth in that area.
And then, thirdly, is business and cost estimating. If I
can go back to the first one, which if I team up my system
engineers with necessary and requisite additions and cost
estimating, I am going to be much better prepared to walk into
both contract negotiations and really a milestone decision on
behalf of the taxpayer whether we should buy this system or
not.
So I mentioned three, but two of them for sure we need in
the front part of these programs. To understand the cost and
technical trade space, to own it inside the government, with
industry, not apart from industry, but with them, to really be
peers with them before we enter these large contracts.
Mr. Franks. General Shackelford.
General Shackelford. Sir, thank you. When I get outside of
the Washington environment and go see the Air Force's
professional acquisition workforce, what I find is a great deal
of enthusiasm for the work that they do and a great deal of
pride in the products that they get out that help our
warfighters.
That said, they are very sensitive to the decline in the
numbers of people that we have had during this time period that
we have been discussing during the panel this morning. And they
see, in terms of hope, the uniformed effort that is coming out
of Congress, the Secretary of Defense, and Air Force leadership
to go and do something about that now.
The specific areas that, as we look at the acquisition
workforce and would like to see greater numbers and better
skills, would be contracting, cost estimators, cost analysts,
as well as systems engineers. And those are the areas that we
have targeted, both with the new accessions to the Defense
Acquisition Workforce Develop Fund, as well as the hiring that
we have going on right now to fill the vacant positions we have
and to take advantage of the authorities that we already have.
Mr. Franks. Thank you, General.
Mr. Assad, I will try to squeeze in one more question here.
I have a concern about the 73 percent of the Department's
acquisition workforce who are baby boomers. I just slid in the
narrow end of that. And you mentioned that your implementing an
intern program is a key part of the strategy to balance and
develop that experienced workforce. But 73 percent is a big
number. And what other initiatives do you think may assist you
in dealing with that dearth of experience that will certainly
be coming?
Mr. Assad. Mr. Congressman, we are looking at it in several
different ways. The authority that Congress gave us in terms of
our ability to hire under the Defense Acquisition Workforce
Development Fund enables us not just to hire interns but to
hire those at the intermediate level and highly qualified
experts. And so each of the services is targeting a number of
hires at both not just the intern level, but at the
intermediate and senior level.
The fact is that between levels of experience of about 7
and, let's say, 19 years, that is our biggest area where we
have a shortfall. We are doing a great job of bringing interns
in and, frankly, hiring people on the front end. So we are
looking at it through how do we get some of the experienced
workforce that, frankly, left our organizations and went into
industry.
Secondly, how do we look to retain some of those baby
boomers that might have considered retirement but now are
either reconsidering, how do we look at retired annuitants who
can be a tremendous source of mentoring and assistance to our
workforce as we grow it? There is no doubt that the bulk of our
hiring is going to be in the intern side of the street. But on
the other hand we are very comfortable, given what is happening
in today's workforce environment, that there are a number of
talented people out there who we can attract to the Federal
acquisition workforce and then train them with the basic skill
sets they have to be very effective in our world.
Mr. Franks. Thank you, Mr. Chairman.
I thank all of you very much.
Dr. Snyder. Thank you, Mr. Franks.
General Shackelford, I think the others have commented, I
don't think you have commented specifically on the issue about
the mindset. Do you want to add anything to the discussion?
Mr. Shackelford. Yes, sir. As I mentioned, once we get
outside of the Washington area, where the execution of
acquisition goes on in the Air Force, I find just an incredible
amount of enthusiasm amongst our people there. They are very
proud of what they are doing. They see the effects of the
products that they deliver to the Air Force in the war every
day.
That said, they would be the most sensitive people to this
decline in the numbers of people and some of the atrophying of
skills that have taken place over about the last 10 years or
so. So they are the ones that are working under that burden.
And they see the press, as was mentioned here, often couched in
terms of what is broken and not what is really working well.
The fact of the matter is that the far majority of the Air
Force acquisition goes out and executes every day and does it
extremely well, and that just doesn't get the press because it
is successful.
Their sensitivity to the numbers and the workload, though,
is being tempered, I think, at this point, really with the
interest that the Congress is showing in acquisition. The
Secretary of Defense is taking it very seriously. The Air
Force's secretary and chief of staff are taking this very
seriously, to the point that they are making this one of the
five top priorities of the Air Force. That is a source of great
encouragement to them, because they see now that the leadership
actually recognizes the problem and is wanting to do something
about it.
So, as we ride that wave out into the future through the
hiring that is coming through the workforce development fund,
as we look at the other things we are doing in the Air Force to
recapture acquisition excellence, I think we are going to see a
boost in terms of their enthusiasm as well as their
performance.
Dr. Snyder. And the issue, though, is it is not just their
enthusiasm; it is the enthusiasm of everybody else, so that
they will be valued and, you know, 18 years from now, if we
have budget problems, they won't be the first people we look to
cut and say, ``Oh, we can contract this out'' or something. But
we just need the President and the Secretary of Defense just to
say they are the coolest dudes in camp. That is all.
I wanted to ask and maybe hear from the three service
representatives, if you would talk briefly about the issue of
career paths and where we are at with regard to general and
flag officer billets and if the people coming into those fields
that you all were mentioning sense that this is something that
they can have a successful career in.
I will start with you, General Thompson, and just go down
the row.
General Thompson. Sir, that is a great question.
First, I would like to say thank you to the Congress for
specifically authorizing the Army in the last authorization act
an additional five general officer billets in the acquisition,
specifically for contracting.
You know, we have conducted two promotion boards this past
fiscal year. The results have not yet been released. And I
think when those results are released and the selections are
approved by the Congress, you will see that we have done the
right thing in selecting, you know, very qualified officers
with contracting background to begin to put them in those
critical billets.
As the senior military acquisition official, I have
responsibilities for managing that acquisition workforce in the
Army. There are about 65 general officers and members of the
Senior Executive Service that I specifically manage. And we
have been able to, in the last year, in each of our Program
Executive Offices (PEOs), we had--the PEO, who is the two-star
general officer or the two-star equivalent Senior Executive
Service (SES) that manages that portfolio of programs, we have
been able to establish a flag-officer-level position, either
SES or general officer (GO), in every one of those PEOs, so
that there are two senior officials in every one of those 12
portfolios of programs in the Army.
So I think that the young military and civilian acquisition
professionals that come in see that this is a viable career
path and that there is a way to get to the top of the pyramid,
provided they do a good job in all of their assignments. And we
have been able to increase the senior-level ranks
appropriately, both for the general officers and for the
members of the Senior Executive Service.
Dr. Snyder. Mr. Thomsen.
Mr. Thomsen. Yes, sir. Today we have about 25 percent of
all of our flag billets in the Navy are actually AP billets--in
other words, acquisition professional. We have about 180 Senior
Executive Service members, like myself, that are in acquisition
professional billets. So that is about half of all of our
Senior Executive Service billets.
So the line of sight to flag officer billets--and, in the
Marine Corps case, there are also some general officer billets
in acquisition now--but also in the civilian corps, we have
about half those billets, of all of our billets, are
acquisition. So the line of sight to that is pretty healthy, we
think, and we think we have that about right.
But the thing that really, I think--and we just looked at
this this year in even more detail--is, what are the promotion
rates, getting into these flag billets, apart from just
acquisition? How does acquisition flag promotion rates really
compare to non-acquisition?
Actually, this past year, it was better than non-
acquisition. So I think that is a pretty good indicator--we
think we are in the right ballpark for that. I don't think we
need to make any significant changes to it. So I think it is a
pretty good sign we have it about right.
Dr. Snyder. Mr. Shackelford, if you could briefly respond,
and then we will go to Mr. Wittman.
General Shackelford. Yes, sir. The Air Force has 27 general
officer positions in acquisition, as well as--actually, 27
qualified acquisition general officers, as well as 87 SES
acquisition qualified people. So we have a healthy pyramid that
gets to those positions, with the exception, perhaps, of
contracting, which we need to work on, and we recognize that.
As part of this recapturing acquisition excellence, our
chief and secretary have sent us off to go look at the
acquisition corps within the Air Force and make an assessment
of how we are doing in that pyramid in terms of promotion
opportunities and bringing the right people with the right
skills up through that process up into those senior positions.
And so, they are looking at that right now in terms of the
mix. They are the ones that make the choices for us as to where
we put our general officer positions, for instance. But part of
this review will determine how we do in terms of either
plussing up the number of acquisition general officers or
having SESs perform those duties based on what the senior
leadership recognize as their needs.
Dr. Snyder. Thank you.
I misspoke. We will go to Mr. Sestak for five minutes.
Mr. Sestak. Thank you, Mr. Chairman.
General, first, thanks for coming to the district and
helping us out up there. I appreciate it very much.
General Shackelford. Yes, sir. My pleasure.
Mr. Sestak. I am sorry I wasn't here earlier, but if I
could ask, do you think one of the--the GAO report appeared to
say that--for me, the key word was ``oversight.''
If I could ask more from a parochial experience, in the
Navy, you have at Naval Sea Systems Command (NAVSEA) technical
authorities responsibility. Is it really more that we don't
have enough expertise within the contracting, towards the
acquisition, the procurement? Or is it really more in the
failure to have the proper oversight of this, for whomever
executes it?
Maybe an example might be how we had to put the LPD-17 out
of a shipyard down there in the south and move it to somewhere
else.
Is the real word not ``how many'' or ``contracting'' or
``procurement,'' but ``oversight''?
Mr. Thomsen. In a word, yes, sir. But it is a combination
of things.
I had mentioned earlier that, prior to these large
contracts being awarded, we also believe in the Department we
have to do a better job of really understanding the technical
and cost trade space before we get to that point.
But once the contract is awarded, post-award, whether it is
a ship or a missile or anything else, oversight becomes
critical. And so we have added--and I know you are familiar
with this, Admiral--Supervisors of Shipbuilding, Conversion and
Repair (SUPSHIPs), we have added some additional billets in
cost-estimating, as well as EVM, or earned value management, of
surveillance and oversight at those organizations.
So it is critical for us that we do the upfront part well,
better, and also as we get into the post-award phase that we
really do this surveillance and the oversight part of this just
as well.
Mr. Sestak. Could I ask a second question? If it is
oversight and even if it is procurement--I wasn't here for the
previous questions, but to some degree we talk about our
military acquisition force. Is it time to really look at
whether the heft, the increase in this acquisition force should
not come from the military?
I mean, after all, we are trigger-pullers. And you take a
commander or a lieutenant colonel and transfer him to the
acquisition force, that is a different level of experience than
if you took a civilian and transferred him or her to run a ship
as a lieutenant commander or commander.
Do you think we might be going about this the wrong way, of
saying we need more military acquisition workforce? Because, by
and large, they come over after not doing it very well--at all.
Then, all of a sudden, they are an admiral and they are trying
to run these programs.
Maybe, could a possible better way of going about it be
that the requirements side of the military reasserts, which
since Goldwater-Nichols has not permitted it to do, its
rightful oversight of the acquisition community in producing an
effective, cost-efficient requirement? And that is where the
military should reside as officers, not in the acquisition, if
we change Goldwater-Nichols to merit that to happen, sir?
Mr. Thomsen. Just a couple of comments on that.
One of the things that we have put into place through the
Secretary of the Navy this past year to really get at, I think,
the heart of the question you had----
Mr. Sestak. And that would be open to anyone to answer.
Mr. Thomsen [continuing]. Is a governance process that
really circles back on the issue that you asked about. And that
really is the integration of requirements and those officers
that are coming from the field and landing in, for example,
Office of the Chief of Naval Operations (OpNav) and operations
billets there in OpNav and then what we do on the acquisition
side.
In other words, we have worked very hard in putting
together a governance process that brings those together at the
beginning to make decisions that are transparent and together
between the acquisition and requirements phase.
With regard to growing the acquisition workforce through
the military vice--or maybe not vice, but in addition to what
we are doing in the civilian side----
Mr. Sestak. But it is vice, to some degree. Every military
guy is----
Mr. Thomsen. It is always a tradeoff, yes, sir.
Really, our emphasis right now is not so much that, but
making sure that we are bringing qualified officers,
particularly in the unrestricted line officer corps (URL),
bringing them out earlier and getting them into the acquisition
business earlier so that we can have the best-qualified folks
we can get. So, in a sense, we are adding to it on the URL side
of the House.
As you know, the supply corps officers, Civil Engineering
Corps (CEC) and restricted line, are pretty much growing up
through the acquisition workforce from the beginning. A lot of
our focus has been on how do we improve and tweak and turn the
knobs a little bit better on bringing forward some of our
unrestricted line officers in the acquisition corps early to
get that experience and not wait until they are here 25, you
know, to come into the acquisition business.
Dr. Snyder. Mr. Wittman for five minutes.
Mr. Wittman. Thank you, Mr. Chairman.
I want to direct these questions to Lieutenant General
Thompson, Mr. Thomsen, and Lieutenant General Shackelford.
In looking at the personnel that are going to be assigned
to the services, it appears that about half of those new
personnel will go to the service branches. I wanted to get some
feel about what positions will be filled within that framework,
where you see your critical gaps as they exist today, and a
little bit about how you determine where your greatest needs
exist.
And I want to try to tie all those aspects together, so if
I could get you to give us some perspective on that.
General Thompson. Sir, yeah, similar to the answer that I
gave before, we did do a gap analysis, if you will, across all
the acquisition areas. The growth area that is the most
significant is contracting, followed by systems engineering,
program management, and then cost-estimating. And I think we
have the numbers about right. We did a holistic assessment,
looking at the programs that we have to run and the types of
service contracts that we have to let, and determined high-
grade, middle-grade, you know, interns, and new members of the
workforce, what the right balance is.
I think we have it about right. We will have to adjust it
as we go, over time. I mean, the numbers for the Army are 5,435
conversions and new members of the acquisition workforce. If we
don't need 5,435, we won't go up to that number. It is really
looking at what the need is and having the right mix of
military, civilian, and some contractors that are working in
support of the acquisition function and swinging the pendulum
back the other way.
Mr. Assad. Sir, if I could just make a comment for a minute
to give you a little bit more context in terms of what we are
doing with the workforce.
About 70 percent of the growth in the acquisition workforce
will be in the engineering, oversight functions. It will not be
in the contracting or pricing. About 30 percent of our growth
is in contracting and pricing, about 70 percent program
management, oversight, Defense Contract Management Agency
(DCMA), Defense Contract Audit Agency (DCAA), and engineering
capability. Less than 10 percent, in fact probably even less
than that, is in the military side of the street. So this is
primarily a civilian workforce growth initiative, and so there
will not be a significant increase in the numbers of military
officers in the acquisition community.
Having said that, there is no doubt that we need to have
battlefield commanders and acquisition professionals with their
boots on the ground who understand--for example, in Iraq and
Afghanistan, we have well over 200,000 contractors supporting
our force. They need to know how to manage that force. They
need to understand how it was contracted for and how it will be
overseen. And so, there is an inherent capability that we need
to have within the military services, especially as it relates
to contracting in a combat environment.
Mr. Thomsen. Congressman, yes, sir, a few things.
Not unlike the Army or the Air Force, we have really gone
through, first, really, our program offices, where most of our
management pieces of our business is done. And it revealed a
couple of things. One, without a doubt, was really----
Dr. Snyder. Would you pull your microphone a little closer?
Mr. Thomsen. Yes, sir.
It brought forward a couple of things. Really, some
imbalances in our governmental workforce as opposed to what we
have in contracting support services. For example, in some of
our program offices, we had contractors serving in some of
these billets upwards of around 60 percent. So I am pretty sure
60 percent isn't the right number. We are trying to figure out
what the right number is, but we have gone through that
process.
Secondly, and one that I know you are familiar with, for
example, at Dahlgren, which is one of our field activities,
they have a very mature process that they go through that is
based entirely on the demand signal, primarily from Department
of Navy, Navy and Marine Corps, but also some of the other
agencies, as well--they have some work there--very mature
process to identify what their gaps are. We feel very
comfortable--and, by the way, they represent about two-thirds
of our acquisition workforce, if you take Dahlgren and some of
the other field activities.
So, in other words, we feel pretty good about that. We are
also applying this model to the program offices. We do think we
have some imbalances.
All that said, again, it is really the three areas that I
mentioned before: system engineering to really reclaim our
knowledge space up front; and then business and cost-estimating
the team up in the cost trade space; and then thirdly really is
our contracting numbers, make sure that we have the right
number for oversight and surveillance.
General Shackelford. Yes, sir, if I could add briefly, last
fall, as part of our internal assessment of where we stood in
acquisition in the Air Force, we went out to the field and
asked them how many folks they needed to get up to what they
considered to be a healthy level. That has resulted in 2,062
positions, just over 1,800 of which are civilian, 291 officer
and 11 enlisted, that we are going to flow in to our workforce
over the next 3 years.
There are others that are coming as part of the initiatives
coming out of the Defense Department. They will be going,
targeted to those product centers for execution of programs.
And, as I mentioned, contracting, cost-estimating, and systems
engineering are the heavy hitters.
Mr. Wittman. Thank you, Mr. Chairman.
Dr. Snyder. Mrs. Davis for five minutes.
Mrs. Davis. Thank you.
You mentioned the acquisition experience in the field and
how important that is. I wonder if you could focus on
Afghanistan for a second and how confident you are that we have
the contracting and logistics expertise in Afghanistan as we
flow in troops and personnel and, obviously, equipment.
General Thompson. Ma'am, the general officer that is over
there now as the head of the Joint Contracting Command for Iraq
and Afghanistan is Brigadier General Bill Phelps; just got over
there in February and took command. He recognizes the very
significant challenge of trying to execute a deliberate,
planned drawdown in Iraq consistent with the administration
policies and a deliberate increase in our footprint in
Afghanistan.
He has come back to the Department, and we are working
across the Department right now to increase the size of the
Joint Contracting Command with both military and civilian
members to be able to handle that balancing act over the next
year or so. And so, we are working, based on his assessment, to
source an increase of about 53, I think is the exact number,
military and civilian contracting professionals to be able to
deal with that surge into Afghanistan, also at the same time
balancing the drawdown in Iraq.
And so the commander on the ground that has that
responsibility, working both for General Odierno and General
McKiernan, the two commanders on the ground, is pretty
confident that, if he gets that increased help, he will be able
to balance that. And we are watching that very, very closely.
Mrs. Davis. Is there an area particularly in addition to a
number of the issues that you have raised in terms of the gaps
that we--you know, three months from now when we are sitting
here in committee, what do you think is the most likely thing
that we might hear that is needing assistance?
General Thompson. I don't have an answer on one area that I
think is going to come up. I think if we do this right, we
shouldn't have any major issues or, you know, things that hit
the press that are not going right.
And so, we have learned some lessons, and we have taken
those lessons to heart on, you know, the surge into Kuwait and
Iraq over the last seven years. And we are using all those
lessons learned.
You know, the things we talked about earlier today, ma'am,
about training the non-acquisition workforce, the operational
commanders, to understand their critical role in defining
requirements and their critical role in helping us manage the
delivery of those, primarily, services in the theater with not
just the acquisition workforce and the contracting officers but
also the contracting officer representatives, who ensure that
the delivery of that service happens as it is contracted for.
Mrs. Davis. Does anybody else want to comment on that?
General Shackelford. Ma'am, if I could, the Air Force
supports approximately 70 percent of the military contracting
manpower positions in that joint command in Afghanistan and
Iraq. The good news is they are doing a marvelous job, and they
are in high demand. The bad news is, it has driven that
community into what we call a one-to-one dwell ratio, where
their time at home equals their time deployed, which is leading
us towards pursuing a retention bonus for those officers. Our
enlisted people already have a bonus to help them with the
retention.
But the other point there is, those are the same people
that, at home, would be doing the work of contracting. So that
is part of this. In terms of numbers of contracting people, we
have a low-density, high-demand workforce, one that has skills
that are useable on the outside. We would like to keep as many
as we could; we would like to get more so that we can just
robust that entire community.
Mrs. Davis. One of the things I was pleased--and I think,
Mr. Assad, you mentioned this--the need to bring in mentors,
people who have had great experience in contracting
acquisition, who have left, perhaps with the economy have an
interest in coming back, but that they may not be available in
the war theater in the same way that they would be in other
communities.
And I am just wondering, to the extent that--it seems to me
that we get so much more work, in many ways, developing
expertise from interns when they have support personnel around
them who are really playing a very active role. I don't know
what those numbers are, if they are even near what they could
be, given the situation that we are in.
But would you like to comment on that and whether or not we
are actually able to get them out in the field at all?
Mr. Assad. Well, I think, for the most part, what we are
looking at right now as part of a lesson learned are those
activities that presently are being done by our uniformed
forces on the ground that could, in fact, be done in the rear
to support the contracting that is taking place on the ground.
And so, one of the things we are looking at is, how do we
get more civilian participation, even if it is in the rear, to
support the contracting that is being done on the ground? And I
think that we are moving towards a more effective mix of--and
the Army has especially been looking at that, in terms of its
experience in Kuwait, of doing more contracting in the rear.
So we are looking at that now as we go forward to ensure
that General Shackelford is correct, which is why the Army is
increasing its contracting capability in its uniform services,
to, frankly, give a little relief to the Air Force as we look
forward.
Mrs. Davis. Thank you.
Thank you, Mr. Chairman.
Dr. Snyder. We are letting Mr. Sestak play catch-up here,
so Mr. Sestak for five minutes.
Mr. Sestak. Thank you. I have been playing catch-up my
whole life.
Could I follow up on that? I have to agree with you, the
importance of the contractors out there. I think it might have
been a GAO study, but I can't remember, that I read about a
year ago that made a recommendation that our war colleges--and
I can't remember if we still have junior and senior ones--that
we might, on the longer-term sustainability of this need, much
like we train our warriors when they go forward how to shoot a
gun if they are going to be--or manage a company, they should
manage contractors, should there be a course, not just at the
Industrial War College but all of them, that helps imbue our
officers with that kind of knowledge? Should we legislate
something like that?
Mr. Assad. Well, I am not sure we need to legislate it. We
are moving in that direction. And I think, you know, in terms
of making sure that our senior, middle, and our field-grade
officers get more exposure to understanding what they are going
to have to deal with in the battle space as it relates to
contractors, how to manage that workforce.
Mr. Sestak. So, for example, Capstone, where every new flag
officer might have a junior----
Mr. Assad. Yes, sir.
Mr. Sestak. Can I ask--were you going to comment, sir?
General Thompson. Yes, sir. The only thing I would say is
we have looked at all of the course content in the Army, and I
agree with Mr. Assad, I am not sure it is something we need to
legislate. But we have put, in 18 non-acquisition courses, we
have put course content in there to talk about the important
role of contracting and setting requirements.
And similar to the Navy and the Air Force, I mean, all
three of the services have senior executive courses where the
importance of business principles and, you know, learning how
to operate the very large enterprises that we have----
Mr. Sestak. Right. But the Navy does not have--and there
are 12,000 naval personnel on the ground in Iraq on the ground,
some of them managing contracts, oversight, has any course at
the war college, where it is mandatory you have to have some
experience at a junior officer level--lieutenant commander,
commander--on this. So maybe leveling to make sure everybody is
the same might not be a bad idea why.
GAO, if I could ask this one question again. I am taken
with what I think is the proper effort to give heft or to the
ability for oversight in the acquisition community. But I am
still taken with the process that somehow it seems as though
you might put more people out there on the acquisition side,
but how well they are overseen or driven by the requirements
side has always seemed, to me, a disconnect.
I will always remember the Chief of Naval Operations going
to the Assistant Secretary of Acquisition of the Navy in years
past and almost asking what they thought of some requirement.
Does that need to change, or am I wrong on this? Have you
looked at it? Is this your area?
Mr. Needham. No, I have not looked at that particular
issue, in terms of the personnel in terms of the oversight and
the role they play.
The one issue that we were focusing on here in this effort
was trying to get--what is DOD measuring and looking at and
counting? And one of the things they could not get or did not
have was the contracting officers representative, who is often
a technical program person, who is overseeing the contractor.
We have no real clear picture of how many of those are, what
their training and skills are, and so forth. That is one area
we saw as a need.
Mr. Sestak. All right. I can remember studies being done
within the service, and no one ever knew how many contracts.
And we couldn't--two years of trying to grab it in the Navy,
and we could never get that final number of how many
contractors we had.
Well, thanks. I am just also taken--I think this hearing is
great, and I think the need for more technical authorities in
all oversight is tremendous. I just hope that eventually we
look at the process of how the emphasis upon the civilian
acquisition oversight in years past, Goldwater-Nichols, led to
some of the requirements being, ``Give as it is, we got it from
here, don't bother us again.''
Thank you.
Dr. Snyder. General Thompson, in your written statement, on
your first page, you refer to the period from 2003 to 2005. You
say, ``From 2003 to 2005, as a result of downsizing of the
acquisition workforce in the 1990s, there were not enough
acquisition professionals to handle all the Army's acquisition
programs and contract missions.''
Why did you take 2003 to 2005? Was that just because of the
tremendous activity that was going on, due to the overseas
operations? What was the magical about looking at that picture?
General Thompson. Yes, sir, we picked that particular
period because that was when the large surge of activity into
Iraq, in particular. And, as a result of that, we ended up with
some seams in the system, where we had a number of people that
were investigated, in some cases prosecuted. And so we had some
negative things happen then, you know, that primarily the
reason was there was just not enough people to deal with the
large surge in workload.
Dr. Snyder. Got you.
On page two, I need to ask a basic question here, you talk
about, ``We must reform how and what we buy, meaning a
fundamental overhaul of our approach to procurement,
acquisition, and contracting.'' I think you are using those
three terms there as terms of art. I think probably on this
side of the table we interchange a lot of terms and probably in
our public discussions interchange all of these terms.
Do each of those terms have a precise meaning for you,
``procurement,'' ``acquisition,'' and ``contracting''?
General Thompson. I look at ``acquisition'' as the
overarching term. And we all operate within an acquisition
system. Contracting is a subset of the acquisition system, and
the procurement is a subset of that. So the overarching term is
``acquisition.''
Dr. Snyder. Is ``acquisition.'' Good. Thank you.
Mr. Thomsen, you had talked about this earlier, about the
science and engineering. You say, ``We must increase our
business skills and rebuild our science and engineering depth
that has been significantly reduced over the last 10 to 15
years.''
I want you to amplify more, if you would, on the science,
what you see as a lack of science depth within the Navy. In
specific, what are you talking about?
Mr. Thomsen. Yes, sir, as I mentioned before, about two-
thirds of our acquisition workforce is actually in, I will call
it, the field. In other words, they are not here in Washington,
D.C. They are outside the Beltway in places like Crane,
Indiana; San Diego, California; Newport, Rhode Island; Panama
City, Florida; et cetera--Dahlgren. Right up the road,
actually, in Carderock, Maryland, there is a naval research
lab--or, excuse me, David Taylor Naval Ship Research Center
there. Naval Research Lab is right across the river; it is
inside the Beltway.
That is where most of our science and engineering talent
resides. If you go back to 1990, depending on which one of
those you pick, but in general we have reduced those
organizations by about 40 to 45 percent. That is a lot of
scientists and engineers that we have allowed to go out the
door in Department of Navy. And that is very much connected to
what I said before about our desire to want to reclaim that
technical and cost trade space up front.
Those are the individuals that turn in, eventually, to
system engineers. In fact, it doesn't take them that long
because they are actually getting their hands on some of the
systems that we buy and that we build.
We think it is critical that we rebuild appropriately--not
necessarily a hiring bonanza, but a deliberate rebuilding of
that part of our workforce in a way that is going to support
our strategy, which, again, is focused on the system
engineering aspects.
In Department of Navy, we rely on those organizations to
support not just the program offices but to also work very,
very closely with industry. So, for example, we have a
requirement, all of us do, to really move to ensure that we
don't have a Lead Systems Integrator (LSI) situation in the
future. We are not lead systems integrators. We need to be our
own lead systems integrators prior to these large contract
orders. Well, in order to do that, we have to have the right
scientists and the right engineers working with industry, to be
a peer of industry, so that when we get to the negotiating and
contract table we are speaking the same language and we
understand each other.
Dr. Snyder. Mr. Needham, in your statement, on the third
page, you cite one case study where you say, ``In our case
study, we found that one Army component was paying between 17
and 27 percent more, on average, for contractor personnel
working as contract specialists than for its government
employees, who were doing equivalent work.''
Of course, that is contrary to probably what has been
discussed a lot in the last decade and a half or so. That is
one case study. Do you think that generalizes the fact that
outsourcing a lot of that actually ends up costing us more?
Mr. Needham. Again, there is no data on this, Mr. Chairman.
We did that particular case study to begin to try to get a
handle on this. We have done some work at NASA looking at the
same question. And we have been trying to, kind of, identify
what is the cost-beneficial ratio here. And there really is
no--there is no information. And, in fact, it is not often
evaluated.
One of the issues--we surveyed 66 program offices. And I
think, of the ones that responded, there were 13 that said they
looked at cost. Only one considered cost as an issue when
deciding whether or not--in terms of their contractor
workforce, in terms of deciding the mix that you would have,
was looking at the cost.
And that is not often done. And it is hard to do. And the
only place that it is ever really done is on the A-76 process,
and that has such a tiny proportion of the procurement dollars
that go to that, where they do an actual cost comparison
between the civilian workforce and the contractor workforce.
But there is very little data. I put that in the statement
because it was work we did a year ago when we started to look
at this whole issue. And it is an important one that you raise.
Dr. Snyder. Mr. Wittman, anything else?
General Thompson. Mr. Congressman, can I give you a little
data but sort of a little philosophy there, as well?
Dr. Snyder. Sure.
General Thompson. If the size of the workforce is such that
you need X number of people and it is an enduring mission, it
is cheaper over the long run to do it with a government
workforce member.
We have started down the path of insourcing some of the
things that we had contracted out, when we look at, ``It is an
enduring mission; I need that many people to do that job.''
And, on average, we have saved about $50,000 per every
conversion that we have made from a contractor doing that job
to a member of the government workforce doing that job, you
know, trying to look at apples-to-apples comparison on burden
costs, you know, retirement benefits, et cetera.
But if you are going to do it for the long haul and it is
not just a temporary situation where I need to contract to get
something done and then I no longer need those people, it is
cheaper to do with the government workforce.
Dr. Snyder. Mr. Assad, you mentioned both in your
discussion here and your written statement about--I think it
was in response to Mr. Wittman, about baby boomers retiring,
about annuitants.
Are there any specific legislative changes that are
hampering your ability to get the annuitants that you want? Or
do you have everything you need, as far as ability to recruit?
Mr. Assad. Mr. Chairman, I believe, in general, we have
what we need. Congress has given us a great deal of
flexibility, especially recently, in terms of dealing with
hiring our acquisition workforce. So I think we have the tools
that we need to execute this smartly.
Dr. Snyder. One of you mentioned conflict-of-interest
provisions with regard to stockholdings. Was that you, Mr.
Assad? I don't remember who it was. Oh, it was in an article,
that is right. It was in John Young's newspaper article today,
about the issue of, at certain levels of hiring, that
acquisition personnel have to divest themselves of certain
investments.
Is that a factor in your hiring? Is that an insurmountable
problem for some people or not?
Mr. Assad. It depends. In general, no. But, as you get to
more senior folks who may have been with companies for a
significant period of time, they usually have--and, frankly,
are older, they usually have investments. And, frankly, if they
are going to come into the workforce, they need to divest of
those things so that there isn't a conflict of interest.
Dr. Snyder. Mr. Assad, are you--or any of you--are you
aware of any specific legislative changes that you are wanting
now? Are you more apprehensive about any legislative changes
that may come?
Mr. Assad. No, sir, I think we are in pretty good shape. We
are presently working with our personnel in the human resources
community to see if there is anything else that we might be
able to suggest to the committee that we need. But I think, in
general, we think we have the tools we need.
Dr. Snyder. Mr. Wittman, anything further?
We appreciate you being with us today. We appreciate the
work you are doing. Please pass on to all the folks that do
your work that I think they are the coolest dudes in the
Western Hemisphere.
Thank you all. We are adjourned.
[Whereupon, at 11:40 a.m., the subcommittee was adjourned.]
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A P P E N D I X
April 28, 2009
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
April 28, 2009
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[GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT]
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QUESTIONS SUBMITTED BY MEMBERS POST HEARING
April 28, 2009
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QUESTIONS SUBMITTED BY DR. SNYDER
Dr. Snyder. Congress directed the Department to set a goal of
having certain critical acquisition functions for major acquisition
programs and major automated information systems, like program and
deputy program managers, chief engineers, systems engineers, and cost
estimators be government personnel. Where do we stand with respect to
that congressional direction? What challenges are you facing? Will
Secretary Gates' proposal to grow and restore the acquisition workforce
address this issue? If so, in what respect? If not, how is the
Department going to reach this goal?
Mr. Assad. The Secretary of Defense announced plans to revitalize
the Defense acquisition workforce by significantly increasing its
organic size by approximately 20,000 federal employees. As part of the
Secretary's growth strategy, a high priority is to ensure that all
inherently governmental functions are performed by government employees
and that a sufficient organic acquisition workforce capability is
available to fill critical acquisition positions. The Secretary's
growth strategy includes in-sourcing acquisition support functions. To
further ensure a successful outcome, the Department incorporated the
positions identified by Congress in our DOD acquisition Key Leadership
Position construct, and added the lead contracting officer to the list.
These Key Leadership Positions will receive increased monitoring to
establish a pool of qualified candidates to fill these Key Leadership
Positions. The above efforts support meeting congressional direction
that critical acquisition functions be performed by qualified
government personnel. DOD's progress will be reported in the Defense
Acquisition Workforce Human Capital Report. This report will combine
various reporting requirements as part of a consolidated report to be
delivered in July 2009.
Dr. Snyder. It appears that most of the FY 2008 Defense Acquisition
Workforce Development Fund initiatives are aimed at hiring new
personnel. Training appears to account for a much smaller amount.
Aren't there areas of training in need of funding? One of the things
the subcommittee has heard is that there's very little, if any,
training or professional-level coursework for services contracting. Are
there any efforts underway to address that?
Mr. Assad. Top DOD acquisition training priorities include ensuring
training capacity for the planned growth of the defense acquisition
workforce, improving workforce certification levels, reinvigorating
certification standards, and continuing improvements to training
resources that support workforce performance. Training initiatives are
being deployed by DOD Components to address leadership and other
Component-specific skill/competency requirements. Examples of
Component-specific initiatives include the Army Contracting Lab and
Army Acquisition Basic Course; and the Navy Acquisition Boot Camp, Navy
Acquisition Hot Topics Course, and various executive leadership
training. Air Force initiatives include expansion of attendance at its
Air Force Institute of Technology Mission Ready Contracting Officer
Course, the Intermediate Project Management Course, Acquisition
Leadership Challenge Program Course, and the Air Force Fundamentals of
Acquisition Management Course.
We agree that services contracting training needs continued
emphasis and improvement. The Defense Acquisition University (DAU) has
created the Learning Center of Excellence for Service Acquisition. The
center provides a dedicated, integrating focus on developing an in-
depth body of training and learning assets to improve DOD's execution
of service requirements. DAU has developed a classroom course, ACQ 265
Mission Focused Services. This is an interactive, case based course
that targets a broad range of the acquisition workforce. It focuses on
developing performance based requirements and business strategies and
has been available since 2007. DAU has also developed Service
Acquisition Workshops (SAWs). The workshops provide just-in-time,
hands-on, training early in the requirements process. The team training
includes major stakeholders--the customer, program manager, contracting
officer, Contracting Officers Representative (COR), and other
personnel. The DOD Service Acquisition Mall (SAM) is another initiative
that provides on-line access to best-in-class practices for acquiring
services. SAM will be organized by standard Federal Product Service
Codes and contain training material and tools for developing
performance based service requirements. Initial operational capability
for SAM is planned for the end of September 2009.
Other examples of new acquisition-related training include expanded
expeditionary training, Contracting Officer Representative training,
and requirements training for the ``Big A'' workforce. This also
includes improved and expanded training for contract specialists and
pricing personnel; international cooperation training; expanded program
management training; source selection and risk management training
improvements; new curricula development for high impact, emerging
acquisition needs; and other job enhancing learning assets. DOD will
also complete an enterprise-wide competency assessment of the
acquisition workforce to identify gaps and improve both training and
human capital planning.
The above initiatives reflect DOD's commitment and action to ensure
increased training capacity and to create a comprehensive learning
environment that has the right learning assets available at the
employee's learning point-of-need. The Defense Acquisition Workforce
Development Fund, made possible by the Congress, is enabling DOD to
significantly improve acquisition training capability, to include in
the area of services contracting.
Dr. Snyder. Last year's authorization legislation required the
establishment of a career path for military personnel that assures that
we attract highly talented individuals who will have opportunity for
promotion and advancement. We also required that general and flag
officer billets be reserved for the acquisition career path and that
there are adequate numbers of military personnel active in acquisition
to ensure proper functioning and to make sure we have the military
personnel we need to conduct contingency contracting. Can you comment
on how your Service will meet these requirements? How many of the
general/flag officer acquisition billets are for contracting positions?
General Thompson. The Army has a robust process that attracts and
accesses highly talented military personnel into the Army Acquisition
Corps. This past year we established an earlier accession point for
military acquisition officers and NCOs to enable them to begin their
acquisition careers up to two to three years earlier. This provides for
increased availability of Army acquisition personnel and more time to
develop and apply their expertise. We have also issued career guidance
to restrict military contracting professionals from serving in theater
until they have a minimum of one year of contracting experience within
the United States.
In addition, the established career paths for military acquisition
professionals in the Army Acquisition Corps ensure that the highest
caliber officers and NCOs enter, develop, and remain in the right
positions in the acquisition workforce. The career path includes a
robust command opportunity for acquisition and contracting officers (to
include GO opportunities) and the development of qualified contingency
contracting personnel. Army officers and NCOs currently receive
training, experience, and acquisition certification in five Acquisition
Career Fields (ACFs): Program Management; Contracting; Systems,
Planning, Research, Development and Engineering-Systems Engineering;
Information Technology; and Test & Evaluation. As mission and career
development needs dictate, officers are assigned to the five career
fields at the Field Grade ranks, and NCOs belong to the 51C
(Contracting) ACF.
Army Section 852 funding initiatives also assist us in attracting
and recruiting new acquisition personnel. This includes offering
Student Loan Repayment opportunities and Special Duty Assignment Pay
for NCOs.
Section 503(a) of the National Defense Authorization Act (NDAA) for
Fiscal Year 2009 (FY09) authorized five additional General Officer
billets in the Active Component with the requirement that they have
significant contracting experience. As of April 2009, the Army selected
one additional acquisition General Officer (GO) and will select more
this year until the five billets are filled. The GO selected is a
Brigadier General who is the Commander of the recently established
Expeditionary Contracting Command. The Army had already established the
two-star U.S. Army Contracting Command as part of AMC and the one-star
Mission & Installation Contracting Command--both billets are presently
filled by experienced members of the Senior Executive Service until new
GOs are selected. The two remaining billets are the Military Deputy for
Contracting in the U.S. Army Corps of Engineers (USACE) and an
acquisition (contracting) GO in the Office of the Assistant Secretary
of the Army for Acquisition, Logistics and Technology (ASAALT) in the
Office of the Deputy Assistant Secretary for Procurement (DASA(P)).
Dr. Snyder. Last year's authorization legislation required the
establishment of a career path for military personnel that assures that
we attract highly talented individuals who will have opportunity for
promotion and advancement. We also required that general and flag
officer billets be reserved for the acquisition career path and that
there are adequate numbers of military personnel active in acquisition
to ensure proper functioning and to make sure we have the military
personnel we need to conduct contingency contracting. Can you comment
on how your Service will meet these requirements? How many of the
general/flag officer acquisition billets are for contracting positions?
Mr. Thomsen. The Department of the Navy actively manages our
military workforce career path requirements. Over the past two years,
we have revised some military community career paths to meet
anticipated shortfalls in the pipeline for experienced acquisition
professionals in order to fill our most critical acquisition positions,
including Program Managers, Program Executive Officers, and contracting
officers. The Department's military acquisition leadership is most
effective when staffed with a carefully calibrated mix of warfare
communities including Marine Corps operational and Navy Unrestricted
Line Officers (Aviation, Surface and Submarine communities), Restricted
Line Officers (Engineering Duty Officers, Aerospace Engineering Duty
Officers, Aerospace Maintenance Duty officers) , and Staff Corps
(Supply Corps and Civil Engineering Corps). Due to the demands on
operational forces, we have faced challenges providing our officers
with needed acquisition experience early in their career pipelines. As
a result, the Naval Aviation community has proposed a refinement to
their acquisition professional career path which will provide Aviators
with hands-on acquisition experience years earlier in their careers.
The Surface Warfare Officer community initiated similar changes to
their career path structure to ensure earlier acquisition experience.
The Department's Restricted Line and Supply Corps communities have
been effective in ensuring a robust acquisition career path that yields
highly experienced and qualified Acquisition Professionals. The Marine
Corps established a Military Occupational Specialty for Acquisition
Management Professionals. Officers in this specialty are typically
assigned to critical acquisition positions that provide senior
leadership for ground equipment and/or weapons systems programs. This
prepares them for future program management and executive officer
assignments.
At the end of Fiscal Year 2008, Department of the Navy had a total
of 72 Flag Officer/General Officer acquisition billets, with 40 Flag or
General Officers filling those billets. Of those 40 Flag and General
Officers, five were in contracting. The number of Flag Officer/General
Officer billets allows for flexibility in assigning of Flag Officers
and General Officers in areas of greatest need.
At the end of Fiscal Year 2008, the Department of the Navy had
approximately 1,200 military officer contracting billets. Navy
construction contracting capability resides in the Civil Engineer
Corps. Navy logistics material and major weapons systems acquisition
contingency contracting capability resides in the Supply Corps.
Within the Marine Corps, contracting is a separate specialty that
contains 30 officers and 120 enlisted billets aligned to the
operational forces to support the Marine Corps' contingency operations.
Marine Corps Officers earn the contracting specialty as secondary
specialty with a primary specialty in a related field, such as
logistics, supply or financial management, and become contracting
officers after completing acquisition training. The majority of the
contracting officers within the Marine Corps are highly experienced
civilians throughout the supporting establishment and at Marine Corps
Systems Command.
Dr. Snyder. Can you please describe how your Service is conducting
its inventory of services contacts? The Army seems to be the farthest
along in this effort. Are you using the Army's work as a model? If not,
why wouldn't that make sense?
Mr. Thomsen. In accordance with the phased implementation schedule
detailed in the May 16, 2008 Deputy Under Secretary of Defense for
Acquisition and Technology memo regarding NDAA FY08 Section 807, the
Department of the Navy (DON) is developing, and will deliver, a
prototype inventory list for review and approval in FY09.
In response to Section 807, the DON has developed a methodology to
compile the FY 08 inventory of services contracts. The DON methodology
uses existing data repositories and databases (the Standard Procurement
System and the Federal Procurement Data System--Next Generation) to
electronically capture discretely identified contracts and related data
elements, specifically those required under Section 807. This captured
data is used to electronically generate the required Section 807 data
reports.
One of the contract data categories required under Section 807, the
number of full-time contractor employees or equivalents (FTE) on each
service contract, is not directly captured by the DON data systems. DON
has developed, and received Defense Procurement and Acquisition
Policy's approval for, a statistical sampling approach to report the
number of FTEs in the inventory. From a statistically-significant
sample, DON calculates an average FTE figure from weighted average
labor rates and using a defined algorithm then calculates the number of
FTEs on each services contract.
DON's review of the Army's Contractor Manpower Reporting System
revealed that the systems used by DON (referenced above) would be
incompatible with the Army-designed system due to different internal
data base structures required by DON to meet the scheduled reporting
requirements of Section 807.
Dr. Snyder. Last year's authorization legislation required the
establishment of a career path for military personnel that assures that
we attract highly talented individuals who will have opportunity for
promotion and advancement. We also required that general and flag
officer billets be reserved for the acquisition career path and that
there are adequate numbers of military personnel active in acquisition
to ensure proper functioning and to make sure we have the military
personnel we need to conduct contingency contracting. Can you comment
on how your Service will meet these requirements? How many of the
general/flag officer acquisition billets are for contracting positions?
General Shackelford. The Air Force deliberately develops
acquisition professionals according to well defined career path models
which serve as a guide for developing both military officers and
civilians through assignments, education, and training. These career
models define career paths to greater rank and responsibility within
the acquisition workforce. The development of acquisition workforce
members is enhanced by the use of Career Field Development Teams
consisting of senior leadership from within each Career Field. Using
the published acquisition career path models as a guide, the
Acquisition Development Teams provide individuals developmental
guidance ``vectoring'' them on paths of progression and opportunity in
the acquisition workforce. The Development Teams also nominate officers
and civilians for service schools (developmental education), and
identify military candidates for command leadership positions within
the acquisition workforce. The Air Force has also established career
field management and force development functional responsibility at the
Headquarters Air Staff level to provide strategic direction to the
career fields, and oversight of the Developmental Team process.
The Air Force relies on a large pool of military contracting
officers in order to meet Air Force and a fair share of joint,
contingency contracting deployments. Today the Air Force maintains the
Department of Defense's largest deployable contracting force and is
filling the bulk of the contingency contracting and contract
administration deployment requirements in Iraq and Afghanistan. The
current operations tempo generated by the wars in Iraq and Afghanistan
has made the contracting career field one of the most deployed career
fields in the Air Force. Air Force leadership recognizes the threat the
current ops tempo poses to the retention of the contracting force and
has initiated numerous efforts to ensure the workforce remains the
backbone of the contingency contracting mission. One of the recent
efforts is to evaluate the need for a Critical Skills Retention Bonus
for contracting officers in targeted year groups and grades. This
effort has been underway for some time and, pending OSD and corporate
Air Force approval, is targeted to formally roll out in the 2009 fiscal
year.
The Air Force acquisition workforce also has a contingent of
enlisted personnel within the contracting career field. These Airmen
serve in key positions throughout the Air Force in the operational and
contingency contracting communities and are also developed in concert
with the needs of the Air Force. The development of this invaluable
resource is addressed both within the enlisted force and within the
contracting community to ensure the right quality and numbers of
contracting NCOs are retained for the Air Force contracting mission.
The Air Force codes and tracks all General Officer billets in the
acquisition workforce for use in development and succession planning,
and to ensure the best qualified leaders are identified to fill these
key leadership positions. The Air Force currently has 22 General
Officer acquisition billets, and 27 acquisition-qualified General
Officers including 1 contracting-qualified General Officer. The Air
Force currently has no General Officer contracting positions. The 6
senior Contracting positions in the Air Force are Senior Executive
Service (SES) positions. The Air Force's most senior leadership
continually reviews General Officer requirements against General
Officer authorizations to ensure the number of General Officer billets
in acquisition continue to be properly balanced with total Air Force
requirements.
Dr. Snyder. Can you please describe how your Service is conducting
its inventory of services contracts? The Army seems to be the farthest
along in this effort. Are you using the Army's work as a model? If not,
why wouldn't that make sense?
General Shackelford. To fulfill the Section 807 reporting
requirements for June 09, the Air Force has pulled contract-specific
data from the Contracting Business Intelligence Service (CBIS) system
supplemented by a manual data call and mathematical calculation for
other required elements. The Army's Section 807 submittal was based on
data from their Contractor Management Reporting System, a data system
which the Army began implementing several years ago. The Air Force has
had no equivalent system capturing the number of full-time contractor
equivalents because of our use of performance-based service contracting
as required by the Office of Federal Procurement Policy, whereby the
focus is on outcomes not on the number of contractor personnel required
to achieve the outcome. It is our understanding that Defense
Procurement and Acquisition Policy (DPAP) is looking at a possible
department-wide solution for the future, leveraging the lessons learned
from the contractor reporting requirements of the 2009 American
Reinvestment & Recovery Act.
______
QUESTIONS SUBMITTED BY MR. FRANKS
Mr. Franks. Mr. Assad, in your best estimation, with the increase
of 20,000 personnel through the year 2015, taking into consideration
training, experience, and the graduated departure of our existing
workforce, what would you project as a ``get well'' date where we start
to see the benefits of this plus-up initiative?
Mr. Assad. As has been stated by the Secretary of Defense, there is
no silver bullet. However, we are already seeing the benefits as a
result of improved and expanded training investments made in Defense
Acquisition University. Hiring has started, morale is up, and we are
getting great feedback from the defense acquisition community. We have
added resources to the Defense Contract Audit Agency (DCAA) and they
have hired over 100 people. DCAA is already seeing benefits of added
audit capacity which is providing additional data for our senior
acquisition leaders. As for a specific get well date relative to
improved acquisition outcomes, the results will not change overnight.
However, we believe the strategy is right and the successful employment
of these workforce initiatives is a leading indicator for improving
acquisition outcomes.
Mr. Franks. Mr. Assad, with the plan to significantly increase the
size of the acquisition workforce, it has been said that with a large
shortfall that already exists within the DOD coupled with stiff
competition from the private sector that the Defense Department might
find it difficult to attract the best and brightest to their ranks. Do
you agree with this statement? What plans does the department have to
recruit and retain quality acquisition professionals?
Mr. Assad. No. I do not agree. I believe the Department of Defense
is well positioned to attract high quality candidates to become members
of the defense acquisition workforce. The Administration's leadership,
the top-down driven strategy of the Secretary of Defense, and the
strong support of Congress are enabling the most significant increase
in growth of the defense acquisition workforce ever undertaken. The
challenges we have are internal and related to administrative processes
associated with establishing positions and the length of time to hire
and to get onboard new personnel. We are actively working through
initiatives to resolve these issues. The support we have received from
Congress (e.g., Expedited Hiring Authority) have been very beneficial.
We are encouraged and believe we will solve these issues.
The Department is implementing a robust employee retention and
talent management strategy to retain acquisition workforce employees
with expert knowledge in critical and shortage skill areas. These
employees include individuals filling Key Leadership Positions (KLPs)
such as program managers, engineers, senior contracting officers, life
cycle logisticians, cost estimators, etc. (especially those in ACAT I
and ACAT II programs) and other personnel possessing special expertise
that is hard to find or retain. We are confident that we will be
successful.
______
QUESTIONS SUBMITTED BY MS. SANCHEZ
Ms. Sanchez. I have received a number of reports stating that
contracts are awarded to contractors and subcontractors whose products
do not meet the original performance specification. How could a
production contract award be made based on a product that did not meet
the original performance specification? Is there a set process, and if
so, what is the process contractors/subcontractors have to go through
in order to ensure that their products are meeting the performance
specifications indicated by the Department? How is the Department
ensuring that performance specification testing is rigorous enough so
that our service members are not exposed to defective products?
General Thompson. Contracts should not be awarded to contractors
and subcontractors whose products do not meet the original performance
specification. If the contractor has not met the original performance
specification then the contract should be terminated.
Delineated in the Federal Acquisition Regulation (FAR) Subpart 9.2,
is a set process that ensures contractor/subcontractor products meet
Department of the Army performance specifications. The formal and
structured process includes the testing and examination of products for
compliance with contract requirements. Upon completion of the
Government's evaluation and subsequent determination that the products
meet the qualification requirements, the agency places that product on
an approved list. Only contractors with products on the approval list
may compete for contract award. Since this process is more restrictive,
in the interest of promoting full and open competition, it is used only
when necessary and only after the head of the agency, or his designee,
prepares a written justification. For those products whose
qualification requirements do not fall under this Subpart, the
contracting officer relies upon the requiring activity technical expert
to ensure that the performance specifications meet the government's
needs.
The Department, through its contracting function, specifies
contract quality requirements based on product complexity and
criticality. We vigorously audit conformance to contract quality
requirements. Contract quality requirements include product attributes
at the component and end-item levels, as well as those (contractor)
management controls necessary to assure quality. These controls apply
to all work affecting quality such as ordering of materials,
fabrication, assembly, inspection and testing (in-process and final),
and delivery. Additionally, all acquisition programs require a Test and
Evaluation Master Plan, which describes what testing is required, who
will perform the testing, what resources will be needed, and what the
requirements are for evaluation. The Commanding General, U.S. Army Test
and Evaluation Command is responsible for assessing program
effectiveness, suitability, and survivability (or progress towards
achieving these) during each phase in the life-cycle. Assessments or
evaluations, conducted by the system evaluator (including the safety
confirmation), will support materiel release actions for new
procurement, reprocurements, and system changes.
Ms. Sanchez. Currently, the Lead System Integrators (LSIs) and
Prime Contractor oversight is limited because of the downsizing of the
DOD acquisition workforce. What progress has DOD made in rebuilding its
acquisition workforce, and how will this impact LSIs? What are the
impediments for DOD in this regard?
General Thompson. The Army is making significant progress in
identifying acquisition workforce requirements that will be increased
through many avenues. We are actively recruiting new employees, in-
sourcing contractor positions to civilians, and are working with the
personnel community to identify new opportunities to pilot to
streamline the hiring process. In-sourcing is being identified as a
result of an Army-wide review of contractor support positions. This
review will provide the analytical underpinnings to ensure the Army has
a proactive, executable strategy for in-sourcing. Due to restrictions
on the use of LSIs, the Program Manager, Future Combat Systems will
continue to transition the System of Systems engineering and
integration tasks to the government with the assistance of a prime
contractor in FY10. Given the time required to acquire the skills and
conduct additional formal and experiential training to make these
personnel effective, the transition is not expected to be complete
until 2013.
There are challenges in moving forward. The process to grow the
acquisition workforce will require formulation of concept plans, with
subsequent review and approval of the spaces and the funding. There are
also limitations in available skilled personnel, since a fair amount of
program experience is required to prepare a systems engineer, for
example. On the job practical experience is required to truly be
qualified. Given the limited number of true developmental programs
currently in the Army, the number of individuals getting opportunities
for this experiential piece is limited. The Army will expand the
developmental opportunities as we grow the acquisition workforce.
Ms. Sanchez. I have received a number of reports stating that
contracts are awarded to contractors and subcontractors whose products
do not meet the original performance specification. How could a
production contract award be made based on a product that did not meet
the original performance specification? Is there a set process, and if
so, what is the process contractors/subcontractors have to go through
in order to ensure that their products are meeting the performance
specifications indicated by the Department? How is the Department
ensuring that performance specification testing is rigorous enough so
that our service members are not exposed to defective products?
Mr. Thomsen. Contract awards made upon a competitive source
selection will meet the RFP performance specification. Proposals that
are assessed as not meeting the requirements of the RFP are considered
deficient and are deemed unawardable. However, during the performance
of the awarded contract, particularly development contracts, changes to
the specification may result due to technical, schedule, cost and or
budgetary issues. These issues are not unusual for major weapons
systems contracts. Even within this environment, contractors are not
allowed to deviate from any Critical Performance Parameters called out
in the specification. Contractors may only propose to deviate from
lesser parameters which do not affect usability or safety. These
deviations must be identified and justified. Consequently, due to the
trade-off analysis employed during development, the follow-on
production contract's performance specification may be somewhat
different from what was originally envisioned when the development
contract was awarded.
Production contracts normally include a requirement for the
contractor to submit a production test plan and test procedures for
Government approval. This serves as the basis for the contractor to
demonstrate compliance with the contract's specification requirements,
which is required before Government acceptance and/or payment.
The Department ensures performance testing is sufficiently rigorous
by first requiring a program manager to have an over-arching Test &
Evaluation Master Plan (TEMP) approved by the Milestone Decision
Authority (MDA) prior to obtaining approval to start production.
Secondly, requirements specified in the Capability Production Document
(CPD) set the acceptable thresholds and desired objectives used in the
TEMP for performance measures to be demonstrated during developmental
and operational testing. Programs must complete a series of
development-level testing; achieve Government-required Technology
Readiness Levels; conduct technical specifications demonstrations; and
perform operational assessment for programs on the OSD OT&E oversight
list. The foregoing results and satisfactory program health at
Milestone C inform the MDA's decision to proceed with Low-Rate Initial
Production (LRIP) articles to support Initial Operational Test and
Evaluation (IOT&E). The MDA's subsequent Full-Rate Production Decision
Review (FRPDR) requires the Government Independent Operational Test
Agency to report on Operational Effectiveness and Suitability. Finally,
each production contract requires every item offered for delivery to be
subjected to various tests, witnessed by the Government, to ensure
contract performance specification compliance, prior to Government
acceptance.
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