[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 111-127]
EXPERT PERSPECTIVES ON MANAGING
THE DEFENSE ACQUISITION SYSTEM
AND THE DEFENSE ACQUISITION
WORKFORCE
__________
HEARING
BEFORE THE
PANEL ON DEFENSE ACQUISITION REFORM
OF THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
FEBRUARY 25, 2010
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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Washington, DC 20402-0001
PANEL ON DEFENSE ACQUISITION REFORM
ROBERT ANDREWS, New Jersey, Chairman
JIM COOPER, Tennessee K. MICHAEL CONAWAY, Texas
BRAD ELLSWORTH, Indiana DUNCAN HUNTER, California
JOE SESTAK, Pennsylvania MIKE COFFMAN, Colorado
Andrew Hunter, Professional Staff Member
John Wason, Professional Staff Member
Megan Howard, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2010
Page
Hearing:
Thursday, February 25, 2010, Expert Perspectives on Managing the
Defense Acquisition System and the Defense Acquisition
Workforce...................................................... 1
Appendix:
Thursday, February 25, 2010...................................... 19
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THURSDAY, FEBRUARY 25, 2010
EXPERT PERSPECTIVES ON MANAGING THE DEFENSE ACQUISITION SYSTEM AND THE
DEFENSE ACQUISITION WORKFORCE
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Andrews, Hon. Robert, a Representative from New Jersey, Chairman,
Panel on Defense Acquisition Reform............................ 1
Conaway, Hon. K. Michael, a Representative from Texas, Ranking
Member, Panel on Defense Acquisition Reform.................... 2
WITNESSES
Augustine, Norman R., Chairman, Task Force on Defense Acquisition
Law and Oversight, Business Executives for National Security... 2
Flynn, Joseph, National Vice President, American Federation of
Government Employees, AFL-CIO.................................. 6
Schooner, Steven L., Co-Director of the Government Procurement
Law Program, George Washington University Law School........... 4
APPENDIX
Prepared Statements:
Andrews, Hon. Robert......................................... 23
Augustine, Norman R.......................................... 27
Conaway, Hon. K. Michael..................................... 26
Flynn, Joseph................................................ 56
Schooner, Steven L........................................... 49
Documents Submitted for the Record:
Improvement in Weapon Systems Acquisition by David Packard,
July 31, 1969.............................................. 71
Remarks on Acquisition Workforce Professionalism, Training,
Motivation, and Incentives by Norman R. Augustine.......... 73
Witness Responses to Questions Asked During the Hearing:
[There were no Questions submitted during the hearing.]
Questions Submitted by Members Post Hearing:
[There were no Questions submitted post hearing.]
EXPERT PERSPECTIVES ON MANAGING THE DEFENSE ACQUISITION SYSTEM AND THE
DEFENSE ACQUISITION WORKFORCE
----------
House of Representatives,
Committee on Armed Services,
Defense Acquisition Reform Panel,
Washington, DC, Thursday, February 25, 2010.
The panel met, pursuant to call, at 7:59 a.m., in room
2261, Rayburn House Office Building, Hon. Robert Andrews
(chairman of the panel) presiding.
OPENING STATEMENT OF HON. ROBERT ANDREWS, A REPRESENTATIVE FROM
NEW JERSEY, CHAIRMAN, PANEL ON DEFENSE ACQUISITION REFORM
Mr. Andrews. Good morning, ladies and gentlemen. Thank you
for your attendance. I would like to thank my colleagues on the
panel for their attendance as well.
In order to hear as much from our witnesses as we can this
morning, Mr. Conaway and I are going to have very brief opening
statements.
He has a very busy day, and I am participating in the
health care summit today at the Blair House, so I want to not
walk into the middle of it late. I think that would be a little
bit of a problem, so--succinctly, we have reached the
decisionmaking point of our venture here, where we are
beginning to put together our report to the American people and
to the Congress and the full committee.
And the purpose of today's hearing is to hear experts and
leaders from three perspectives on procurement reform and
workforce development, a perspective from those who have led
businesses that have achieved in that area.
Norm Augustine is someone who not only has led great
companies but is now the leader of an organization of leaders
of great companies who have tried to contribute and have
contributed to our national debate very positively and
constructively.
Professor Steven Schooner is a returnee to our panel. He
gave us very valuable insight early in our process, and he is
back to help us today.
And Mr. Joe Flynn is national vice president of the
American Federation of Government Employees. We know we will
only succeed if the men and women who are committed to the
institutions and agencies succeed.
And so we want to be sure that our report is inclusive and
takes into account those who know best the procurement process,
the men and women who work with it.
So we welcome the witnesses.
At this point I am going to yield to my friend, the senior
Republican on the panel, Mr. Conaway.
[The prepared statement of Mr. Andrews can be found in the
Appendix on page 23.]
STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE FROM
TEXAS, RANKING MEMBER, PANEL ON DEFENSE ACQUISITION REFORM
Mr. Conaway. Thanks, Mr. Chairman.
Gentlemen, welcome. Glad to have you here this morning. And
as the chairman stated, we are not past the point of good
ideas. We are still looking for good ideas even though we do
have a draft of the document. It looks pretty good.
Nothing is perfect, and so any input that you give us this
morning is going to be much appreciated.
And with that, Mr. Chairman, I yield back.
[The prepared statement of Mr. Conaway can be found in the
Appendix on page 26.]
Mr. Andrews. Thank you.
And again, so we can hear more substance from the
witnesses, I am going to forego the usual reading of the
biographies. We know and respect all three of you and
appreciate the contributions you have made.
I think you know from the rules here that your written
statements, without objection, are being made part of the
record of the hearing. We would ask you to give us a five-
minute-or-so synopsis of your written statement. And then we
are going to proceed to interaction with the members of the
panel.
So, Mr. Augustine, welcome. It is good to have you with us.
STATEMENT OF NORMAN R. AUGUSTINE, CHAIRMAN, TASK FORCE ON
DEFENSE ACQUISITION LAW AND OVERSIGHT, BUSINESS EXECUTIVES FOR
NATIONAL SECURITY
Mr. Augustine. Mr. Cooper, members of the panel, we
appreciate the opportunity to share with you some of BENS', the
Business Executives for National Security, some of our thoughts
on defense acquisition.
As you probably know, BENS is an organization made up of
mostly former business executives, mostly from the commercial
sector, some from the defense sector, who came together 28
years ago to offer advice to the government on areas where we
may have any particular expertise.
Last year it was my privilege to chair the BENS task force
on acquisition, and in July we issued a report which you, I
believe, have a copy, that we offered 25 specific
recommendations that we believe would improve the acquisition
process.
Today I would, in my five minutes, like to make just a few
comments that I personally believe summarize the challenges
that the process of acquisition still faces, and I appreciate
your submitting --or including my written testimony in the
record.
I would call to your attention as part of it an attachment
that describes a canonical acquisition program gone wrong, and
it is derived from my--goodness, 50 years, I guess, in this
business. And it is a pretty good summary of why things go
wrong.
Secondly, I would like to provide for the record, just so
that your committee will have it available if you don't, Dave
Packard's 1969 statement which is closely reflective of what we
have included in our BENS report, and I will provide that for
the record.
Mr. Andrews. Without objection, it will be considered in
the record.
[The information referred to can be found in the Appendix
on page 71.]
Mr. Augustine. Thank you very much. It was my privilege to
work for Dave in those days, and I think he understood this
process better than most anybody I have met since that time.
Individuals participating in the defense acquisition
process, of course, have a particularly great fiduciary
responsibility.
Not only do they take care of many billions of dollars of
public money but, perhaps more importantly, the lives of our
soldiers, sailors, airmen, marines, and coast guardsmen depend
on how well they do their job. And in fact, the very survival
of our country could depend upon that.
It has been my experience, having worked 10 years in
government and the rest in the private sector, that the
individuals in the defense acquisition process are in large
part, overwhelming part, extremely dedicated, able people.
Nonetheless, as you know, dissatisfaction with the defense
acquisition process is rampant in all quarters.
The process is complex, as you know. It revolves around 15-
year programs and 5-year plans and 3-year managements, 2-year
Congresses, 18-month technologies, 1-year budgets and thousands
of pages of regulations and laws. It is complex.
But you know, despite the serious shortcomings, it is still
noteworthy that the equipment and services provided by our
acquisition process remain the envy of most of the world's
military forces.
But we can do better. We can do much better. Perhaps the
best summary I have seen over the years of the failing of the
acquisition process comes from Gil Fitzhugh's 1970 Blue Ribbon
Task Force in which they said that everyone is responsible for
everything, and no one is responsible for anything. I think
that vividly summarizes the challenge that we face.
Today we have a large number of individuals, about 125,000
people--I calculate that to be the equivalent of 7 Army
divisions--running the acquisition process. In a few areas, we
need additional people, particularly in contracting and systems
engineering and program management.
On the other hand, I would point out that adding, say,
10,000 people each with 1 year's experience is different from
adding 500 people with 20 years experience.
And when I compare my experience in industry with
government at any given level, the biggest difference is not
the talent level or the commitment level. It is the experience
that is relevant to the job that is being conducted.
Unfortunately, the government's hiring and employment
practices make it very difficult to attract and keep the sort
of talent that the government needs to conduct these difficult
programs.
I would also note that the United States no longer
possesses the dominant position it once held with respect to
technological leadership. That certainly has an impact on how
we manage the defense acquisition process.
U.S. firms have also moved much of their manufacturing
capability abroad. And while I believe you could probably build
an economy based on a service sector, I don't think you could
win wars with purely a service sector.
I would also note that the talent base within the U.S. is
withering, particularly in engineering and science and
mathematics. Two-thirds of the Ph.D.s that are granted in
engineering today from U.S. engineering schools go to foreign
individuals, many of whom are now returning home.
During this period of burgeoning technology that we have
been living in, astoundingly, the number of U.S. citizens
studying engineering has dropped 20 percent. The number getting
Ph.D.s has actually dropped 35 percent.
The report that BENS has prepared offers a series of
recommendations which I won't repeat at this point in order to
keep my comments short.
I would note that the great irony is that Secretary Gates
and his colleagues, I am sure, would prepare a quite comparable
report. There is no great secret, I think, in terms of the
nature of the problem we face.
I would just close with a quote from Dave Packard that I
heard him make many times while I had the privilege of
testifying alongside him over the years. He made the comment
that we all know what needs to be done. The question is why
aren't we doing it.
And so let me, on behalf of my colleagues at BENS,
particularly the members of the committee I chaired, thank you
for this opportunity to share our views.
[The prepared statement of Mr. Augustine can be found in
the Appendix on page 27.]
Mr. Andrews. Thank you. And I think what binds us together
on this panel is that we do want to do what needs to be done
and not just talk about it. And your contribution is very
welcome and appreciated.
Professor Schooner, welcome back to the panel. We value
your participation as well.
STATEMENT OF STEVEN L. SCHOONER, CO-DIRECTOR OF THE GOVERNMENT
PROCUREMENT LAW PROGRAM, GEORGE WASHINGTON UNIVERSITY LAW
SCHOOL
Mr. Schooner. Well, good morning. And I appreciate the
opportunity to again discuss Department of Defense's (DOD)
pressing need to invest in the acquisition workforce. As this
group knows, the empirical case that DOD's workforce has been
starved for a couple decades is now compelling. So that is the
easy thing.
This is obviously clear with regard to contracting officers
and contract specialists but, as Norm pointed out, particularly
acute with regard to program managers, systems integration,
systems engineering, and those needs will need to be addressed.
I think that the one thing that is very important for us to
focus on today is the Defense Department is now on record
saying they are going to add 20,000 new people in a couple
different ways over the next 4 years.
And I think what we need to keep in mind is it is great
that they have at least begun the discussion, but we are
talking about numbers that are too low and we are talking about
an evolution that is simply too slow.
Just a number of reasons why 20,000 people by 2015 won't
get the job done is the 1998 benchmark is fundamentally flawed.
1998 is at the end of a decade after which the congressionally
mandated workforce cuts had been in place.
There has been explosive procurement spending in the last
decade. Procurement increased in the Defense Department five
times the rate of inflation in the last decade.
The dominance of service contracts today has totally
changed the post-award contract management burden that DOD has
to share.
We have a looming retirement crisis. We tend to describe
the acquisition workforce today as a bathtub effect. We have
lots of senior people, lots of junior people, basically nothing
in the middle, and we need to do something about that as well.
In addition, what has basically happened over the last 15
years is because of the workforce problem, we have failed to
effectively implement almost every significant acquisition
reform that has been promulgated either by Congress or by the
Administration.
The other thing to keep in mind is as DOD grows, this is
not just DOD's problem. It is a government-wide problem. So as
DOD finds people, trains them, and integrates them, they are
going to start losing those people to the other agencies that
have exactly the same problems and have historically taken
highly-skilled DOD acquisition workers rather than train them
themselves.
Now, Norm mentioned that right now the workforce that is
available, the marketplace, is saturated with people who would
love to come work for the government.
But the civil service and the Office of Personnel
Management (OPM) hiring process is flawed. It is burdensome.
And the overall level of awareness of these opportunities on
the nation's college and university campuses is inadequate.
But at the end of the day, I think one of the most
important things for us to keep in mind today is simply hiring
people will not end this conversation.
There is every reason to be pessimistic that even if DOD
can hire all these people, they lack the vision, the
institutions and the determinations to properly train,
allocate, mentor, incentivize, develop and, over time, retain
all of these new professionals.
I mean, there is a number of encouraging signs. If you look
at the model at the Veterans Administration Acquisition
Academy--granted, a very small model--it is a wonderful
holistic approach to addressing some of these concerns.
And there is a wonderful bill that has been introduced by
Senators Collins, McCaskill and Bennett. I think it is S. 2901,
Acquisition Workforce Improvement Act--again, a nice holistic
approach.
But it is going to take major change for DOD to actually be
able to manage all of these people. Leadership is a problem. I
think we have every reason to be skeptical at this point of
DOD's newfound commitment to investing in the acquisition
workforce.
They have delegated this problem too long to the Defense
Acquisition University. It is underfunded. It is overly
conservative. It has been slow, risk-averse, and it is not
sufficiently potent to solve the problems.
I think that the message that we are getting from the White
House very recently from the new Office of Federal Procurement
Policy (OFPP) Administrator, Dan Gordon, is very encouraging.
Time will tell whether he has actually been empowered to do
anything about these things.
But I guess I want to close with one really significant
point here. And that is we have got to do something about the
pervasive anti-contractor rhetoric that we hear, because it
colors the public's perception of contractors and the
acquisition profession.
There is more truth than there should be behind the black
humor in Jack Gansler's popular new moniker for the current
environment, which he calls the ``global war on contractors.''
Look. Let's be clear. A successful procurement regime does
depend on high standards of integrity and compliance. But the
currently pervasive corruption-control focus stifles creativity
and encourages mechanical rule-adherence, timidity, and risk-
averse behavior by our acquisition professionals.
If, in fact, the government aspires to recruit, inspire and
retain tens of thousands of new professionals, the government
surely has an interest in communicating the importance to every
government mission of effectively managing the government's
business partners, its vendor and supplier base, or simply its
contracts.
So ultimately, any prospective investment in the DOD
workforce, whether it is the numbers, the skills or the morale
of our purchasing officials that will reach huge--will reap
huge dividends over time. It is going to be good for the
taxpayer. It is going to be good for the warfighter. It has got
to be done.
Thank you again for the opportunity to share these
thoughts, and I would be glad to answer questions later.
[The prepared statement of Mr. Schooner can be found in the
Appendix on page 49.]
Mr. Andrews. Professor, we look forward to that. Thank you
very, very much.
Mr. Joe Flynn is the American Federation of Government
Employees (AFGE) District 4 National Vice President. He is new
to our panel but certainly not new to these issues. He has over
40 years experience as an AFGE activist and officer, holding
numerous positions.
And it is very much our pleasure to have you with us this
morning, Mr. Flynn. Welcome.
STATEMENT OF JOSEPH FLYNN, NATIONAL VICE PRESIDENT, AMERICAN
FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO
Mr. Flynn. Thank you, Mr. Chairman. Thank you very much.
Once again, thank you very much, and I really appreciate the
opportunity to appear before you today, especially since the
National Security Personnel System (NSPS) has been repealed.
Thank you all for that very nice gift to DOD employees.
AFGE vigorously opposed NSPS from its conception until its
repeal. The original NSPS included provisions to eliminate
collective bargaining rights for DOD employees, eliminate
employee rights to independent adjudication of severe
disciplinary actions including termination. These anti-union,
anti-worker provisions were repealed in the 2008 National
Defense Authorization Act (NDAA).
And last year, following evaluations, the so-called pay for
performance scheme for NSPS employees was repealed.
NSPS was tainted. It was a flawed system. And it clearly
created a poisonous atmosphere, destroying collective
bargaining, federal union and employee rights and protections.
Things that we do in the future--I would urge the members
of the panel to make sure that these colossal mistakes are not
repeated.
Despite much rhetoric to the contrary, there are
alternatives, and I would like to go back to the General
Schedule (GS). The General Schedule pay system is simple. It is
transparent. It is flexible.
And it is particularly adept at rewarding high performance
among employees when proper funding is available. And that is
the key, Mr. Chairman. Proper funding.
Within grade step increases, quality step increases,
individual performance bonuses--are all designed to promote
individual excellence.
Two additional constructs of the GS system are the best at
motivating employees. First, we have what is known as career
ladders, which allow an employee to progress from one grade to
the next as part of the position for which they were hired and
for which they competed.
For example, an employee may begin working for an agency in
a position which has a career ladder of GS-5, moves to a GS-7,
to a GS-9, culminating in the journeyman grade of a GS-11.
The career ladder is similar to pay banding, except that
under the career ladder the criteria for advancement are known
and understood by the employee and his supervisor.
If the GS-5 employee applies himself and achieves the
performance standards required, then he progresses to the GS-7.
If he then achieves the performance standards for the GS-7, he
progresses to the GS-9, up to the journeyman level of the GS-
11.
The career ladder gives tremendous incentive to the
employee to work hard and dedicate himself to the agency's
mission. It assures that he will not find himself at a dead
end.
Along with career ladders, merit promotion, which occurs
when an employee is eligible for and promoted to a different
job at a higher grade rate--these are posted for all to see,
and people are hired for these positions following a
competition based on merit. This is not only transparent and
honest, but a promotion is very public recognition of an
individual's performance.
The market elements of the GS system are based on pay
studies and job matches done by the Labor Department's Bureau
of Labor Statistics. The data are discussed in joint committee
meetings with Office of Management and Budget (OMB), OPM,
Department of Labor (DOL), AFGE, and other unions. All
employees receive the same national raise and a locality raise
based on the regional labor market.
AFGE has successfully negotiated numerous contracts with
performance bonuses, gainsharing. During the mid 1990s, AFGE
and DOD engaged in a successful 5-year demonstration project
called PACER SHARE, which made changes in organizational
structure, created a new classification system and implemented
gain sharing and a different performance appraisal system.
I would like to emphasize, Mr. Chairman, that all these
changes were conducted through collective bargaining
agreements.
AFGE is working with the Office of Personnel Management as
it explores options to enhance and improve the GS system.
We are discussing changes to simplify the appraisal process
so that there are generally three categories of employees--
those who are in good standing, those who are superstars, and
those who are not performing at an acceptable level. AFGE has
negotiated contracts with just these sorts of systems and the
results have been extremely favorable.
There is agreement between the employees and managers that
the system is fair. It involves less tedious and often less
pointless paperwork which, in turn, allows employees and their
supervisors to focus on the work of the agency.
Mr. Chairman, I realize how pervasive the perception is
that the federal workforce is full of incompetents who are
showing up late, if they show up at all, doing virtually
nothing at all--all day long and yet collecting a paycheck.
Mr. Chairman, I can tell you that my experience--it is just
not that way. Nobody believes more strongly than AFGE that
where we have these types of employees that they need to be
dealt with in a serious manner.
It is important that hard-working rank-and-file employees
are not forced to take up the slack for those who are
intentionally unproductive. And AFGE certainly--certainly--does
not want to have those types of employees in the workforce.
AFGE routinely negotiates contracts which simplify and
expedite appeals for adverse personnel actions. The grievance
arbitration process included in our contracts is transparent,
impartial, and swift.
In conclusion, Mr. Chairman, in addition to our ongoing
dialogue with OPM, AFGE is eager to work with DOD management to
improve the performance management system as well as the hiring
systems. And in that regard, we are working with OPM to try to
streamline the hiring process.
Mr. Chairman, that concludes my presentation, and I look
forward to any questions you may have.
[The prepared statement of Mr. Flynn can be found in the
Appendix on page 56.]
Mr. Andrews. Mr. Flynn, thank you very much.
We will proceed with the questioning.
Mr. Augustine, I was very much in agreement with your
statement that you can't fight a war or defend a country with
just service industries. I think that is very important, which
implies the issue of how we create stability in our industrial
base.
One of the ways that the panel has looked at is the
encouragement of more multiyear contracting and procurement so
that our manufacturers have a better degree of predictability.
As you well know, the risk of that approach is that you can
wind up tamping down competition by giving, you know, one
vendor too many years where it doesn't have to compete.
What suggestions do you have for us as to how we can strike
the right balance between multiyear contracting that promotes a
stable or growing industrial base but promotion of effective
competition to protect quality and the taxpayer?
Mr. Augustine. Well, you point to a true dilemma, and there
is substantial savings to be had through multiyear
contracting--at least the programs I have been involved with,
that has been the case.
At the same time, I think you have to distinguish between
programs with large volume, if you will--very large programs
where you might--and we also have to distinguish whether we are
talking about service programs or production programs, too.
Mr. Andrews. Yes.
Mr. Augustine. But where there is a sufficient volume of
effort, that you perhaps can keep two organizations involved.
Unfortunately, that is very often not the case, and so when you
do go to these long-term contracts, you pay a price.
But as I say, my experience has been that you are well
ahead to go to multiyear procurements in terms of cost, in
terms of learning on the part of the supplier. And if it is
something, you know, where you can afford to have another firm
in the background, that is a useful thing to do. Unfortunately,
I don't think you can always do that.
Mr. Andrews. Professor Schooner, I want to ask you a
different question. I think you are justifiably alarmed about
unfair criticism of contractors, painting with a broad brush,
where the small minority who are doing something wrong taint
the image of the vast majority who are doing something right.
Can you give us an example of a rule or practice that you
think leads to the kind of timidity and lack of creativity that
you cite in your testimony?
Mr. Schooner. I think maybe more than anything else, if we
were just to take an example and look at the messages that we
are seeing from the Defense Contract Audit Agency (DCAA) right
now--historically, DCAA, when they found problems, their goal
or their aspiration was to work with contractors to resolve the
problems.
The message that they are getting today, the risk-averse
approach, is rather than solve the problems, it is to refer
them to criminal investigative units. That is not going to get
the government more value for money. It doesn't solve problems.
It just leads to openly hostile relationships. And it is
fundamentally problematic.
Mr. Andrews. Do you think that there have been too many
instances where there have been criminal referrals?
Mr. Schooner. I think that it is--it is always hard to say
that we shouldn't be prosecuting criminals. I don't think there
is any question about that. I think----
Mr. Andrews. Very hard to say that.
Mr. Schooner. Right. But let's take the more proactive
approach. There always seems to be enough money for Inspectors
General and auditors, but there never seems to be enough money
to proactively avoid the problems in the first place.
This is what we learned in kindergarten--an ounce of
prevention is worth a pound of cure. If we had invested the
kind of resources up front in Iraq and Afghanistan in contracts
professionals that we invested after the fact in auditors and
Inspectors General--look at the size of the Special Inspector
General for Iraq Reconstruction (SIGIR) and the Special
Inspector General for Afghanistan Reconstruction (SIGAR). These
are huge organizations.
Mr. Andrews. Right.
Mr. Schooner. Had we had contracting offices of that size
at the beginning, we wouldn't have the criminals and the
problems that we are dealing with now. So this is all about
dealing with these problems proactively.
Mr. Andrews. You are right, and the panel's mission, in
large part, is that--I will say when the next deployment occurs
not if, because there always is another one--that we have in
place a system that could learn the lessons of Iraq and
Afghanistan and prevent the problems that we have had.
We, frankly, don't want any more deployments, but we live
in the world of reality and expect that we will have them.
Mr. Schooner. Could I also just add one very brief thing?
Mr. Andrews. Just briefly, if you would, because I want to
be sure the other members get time.
Mr. Schooner. I think that the point that Norm made is a
very good one about dealing with long-term contracts. But
again, one of the other things--if we can build up the
acquisition workforce, we can put better incentives in the
long-term contracts.
We can use incentive and award fees so that the contractor
has significant incentive to perform well and disincentives to
perform badly. Once again----
Mr. Andrews. I do think that is a creative way to solve the
dilemma that I posed in my question, I agree with you, which is
not so much a matter, I think, of the number of professionals
we have, but the quality of their training and the sufficiency
of their motivation and incentive, which gets me to Mr. Flynn's
point.
I was very pleased--first of all, I appreciate your active
involvement in our effort, and I was very pleased to read on
page seven your position on finding fair evaluative mechanisms
that could put employees into categories of good standing,
superstars, and those not performing at acceptable level.
How many of these contracts, if you know, have you been
involved in negotiating across the country thus far?
Mr. Flynn. I would say that that type of system--you would
find in the previous Veterans Affairs (VA) contracts, the
Social Security contract, the Medicare contract. I am not--I
don't believe very many DOD units have----
Mr. Andrews. How old are the contracts in Social Security,
Medicare, VA, do you know? How long have they been in effect?
Mr. Flynn. A good number of years, Mr. Chairman.
Mr. Andrews. We would be interested--I would just ask the
staff to--and invite the panel as well--to collect some data on
how they have worked out in those agencies, to see what the
assets and liabilities of going about that is, because I do
think that it is refreshing to hear your testimony that you are
actively involved in looking for a solution to this problem of
proper motivation and fair treatment of people that are part of
our team.
[The information referred to can be found in the Appendix
on page 73.]
Mr. Andrews. Well, thank you.
And I would turn now to Mr. Conaway for his questions.
Mr. Conaway. I think I am--between Mr. Flynn and Professor
Schooner--well, first off, what happens to the folks who are
underperforming?
Mr. Flynn. Well, the agency has three recourses. One is to
reassign them, demote them, or terminate them, and in my
experience, they have moved for the termination. The other two
options usually are not considered----
Mr. Conaway. So they don't hand them off to somebody else?
Okay. If you could include that in the information.
There is a story today that a high school in Rhode Island
fired every teacher today because the school had just the most
dramatically dreadful results of kids coming out--and then they
go back and re-hire the few goods ones--whatever.
But, Mr. Flynn, if--why hasn't that professional workforce
that you guys represent fixed these problems?
Mr. Flynn. You mean the underachiever, Mr.----
Mr. Conaway. No, no.
Mr. Flynn [continuing]. Conaway?
Mr. Conaway. I mean the whole--all the--we hear about the
acquisition deal if everything is great under the GS scheme and
all those things work perfectly, then why has that cadre of
professionals not fixed the problems that we are talking about
from 1969 through today?
Mr. Flynn. From my perspective, Mr. Chairman, there are a
couple of things. Number one is question of staffing. Clearly,
they have not had enough people to do the job, and the workload
has continued to go up.
The second piece is that, again, in my opinion, whether you
are ordering guns or butter, the process is pretty much the
same. But yet if you go to the different agencies, there is
quite a bit of disparity in terms of grade levels.
And I don't know if that is because--it is not necessarily
because of the classification system. It is just that decisions
that individual agencies are making in terms of what they want
to pay salary-wise for those services.
Mr. Conaway. Yes.
Professor, your thoughts? I mean, you are--part of it--you
both, Mr. Augustine and Mr. Schooner, talked about the
impediments to hiring seasoned veterans into the system and how
difficult that is--any thoughts on how we blend the two,
because we obviously want to protect people from unfair
treatment.
But by the same token, we want to fire the folks who aren't
doing the job they are supposed to be doing.
Mr. Schooner. I think as a premise, I just want to clarify
one thing. It is actually remarkable what the existing
acquisition workforce has been able to do over the course of
the last two decades.
If you take any publicly available metric for how you would
staff a procurement organization, the government is so woefully
understaffed it is breathtaking. But we continue to have the
best acquisition regime on the planet.
We have wonderful weapons. We have terrific support for our
troops. I mean, again, even with all the criticism, if I just
use the example of the Logistics Civil Augmentation Program
(LOGCAP) contract, never before in the history of the planet
has a military been able to project such potency, lethality,
and sustainability anywhere on the globe with contractor
support.
It is incomprehensible how many troops we can move and how
well supported they are when they fight, and that is because we
have an effective contract in place.
It has problems at the margin, there is no question, but
the amazing thing is that the government is able to do all of
the things it needs to do because it relies on contract
support. And a very thinly capitalized acquisition workforce
every day does amazing things for the government.
Now, I think the much larger issue is that we literally
spent a couple of decades dealing with the classic tooth to
tail mix. And there were strong messages from Congress and from
the Administration that we needed a smaller military and
therefore we should focus on trigger pullers, not shoppers.
That was the Duncan Hunter message for many, many years.
Well, now we are paying the price for that. We don't have
enough people to manage all the contractors that the government
must have every day. But again, I think the important thing to
take away from this--the people that we have--they may not be
perfect.
They may never have been trained appropriately. And we may
not have been able to implement all of the policies. But they
are doing a remarkable job given the resources they have been
given.
Mr. Conaway. Your observations on one other thing. We have
got the program managers and folks who actually are evaluated
based on how well the things that they do supervise do.
Is there a scheme that says, ``All right, let's put in
place an evaluation system that evaluates them separate and
apart from the results of what they are trying to get done,''
so that you are looking at evaluation of the system itself--you
have got a system that is supposed to work, and it has got to
evaluate the--whether or not the contractor or the delivery
system is working.
But do we properly evaluate the folks for how the--even
though their program may fail, that may not be a reflection on
them. It may be a reflection on something else. So are they
evaluated properly?
Mr. Schooner. We should have Norm weigh in on this, too.
But on program managers, I think one of the most important
things--I think we all agree that we can have better incentive
schemes for program managers.
But if you were going to isolate one problem you have to
solve at the Defense Department with regard to the program
manager workforce, it is that you got to leave them in place
and let them manage the programs.
The last time that I was here with a senior DOD official,
they were bragging about the fact that program manager
retention was up to 23 months on a program. That is
incomprehensible.
In the private sector people spend professional lifetimes
guiding programs to success. Until we can do that, we will not
be able to achieve what we need done in terms of program
management.
And I am sure Norm has stuff to add on that, too.
Mr. Augustine. If I might, I would just add that in the
private sector, we generally--if I might use an analogy to bull
riding and the rodeo, you get your scores based on two things.
One is how well you do, and one is how hard the bull bucked.
And if you have an easy job and do a great piece of work,
you don't get that much credit. And so I think you can
distinguish.
I would also, if I might, just add a footnote that with the
exception of a few areas, I don't think the answer is to add
more people. The answer is to have more experienced people in
the job they are in. And the experience needs to be relevant to
the job they are doing.
If I might quote Dave Packard again, who I think so highly
of, it used to trouble him greatly that we would bring the
commander of a destroyer flotilla who had done a terrific job
at sea, and put them in charge of the F-111 program. And they
would ruin their career and usually ruin the program.
It wasn't fair to them. It wasn't fair to the program. It
wasn't fair to the taxpayer. And it sure wasn't fair to the
future pilots. And I think that is part of our problem today,
that we put people in jobs that they are just not equipped to
handle.
Mr. Conaway. Thank you, Mr. Chairman.
Mr. Andrews. Thank you very much.
Mr. Cooper is recognized.
Mr. Cooper. Thank you, Mr. Chairman.
How do we keep program managers in place for longer than 23
months? What steps are required to do that?
Mr. Schooner. This is all about leadership and incentives.
Now, I mean, to some extent, you could argue--and again, I
think Norm just suggested it before.
There is a perception particularly in the military
organizations that in order to have a program moving forward
you need someone with lots of color on their chest to come in
so that they can project leadership and they can make the good
sale up here on the Hill so that the funding keeps going on.
But at the end of the day, what the private sector does
much better than the government on this is they develop the
right talent within their fields and respect people within
those fields. So the message isn't that I need to take a
warfighter and turn them into a program manager so that it
looks like my program has leadership.
We need to value the people who come up through the
organization, and then we need to incentivize them to stay by
basically developing them so that they can rise up and be
important contributors to the system. It is a totally different
cultural approach.
And I can assure you, in the private sector, the program
managers who are the civilian or the private sector equivalent
with whom the Defense Department program managers deal every
day are incentivized completely differently and are far more
incentivized to have those programs succeed than their
government counterparts.
We can solve these problems.
Mr. Cooper. So is the problem, in order to appeal to
Congress, turning a warfighter into a program manager? Or is
the real problem that that temporary program manager really
wants to go back to being a warfighter very quickly, so he or
she doesn't stay in that position very long?
Mr. Schooner. I think it is actually a combination of both.
But I can just tell you a quick anecdote. As a former
Department of Justice litigator, I never represented a program
manager in a deposition who didn't tell me in advance that he
or she was never given the opportunity to attend the Defense
Systems Management College program management course before
they took over the program, because they just didn't have time.
So if the marquee course for preparing program managers is
something that does not merit the time of the successful kind
of people we want to put in charge of the programs, we have got
a pretty big disconnect going on there.
Mr. Cooper. What would be an appropriate minimum period of
time for a program manager to----
Mr. Augustine. May I try to address that one?
Mr. Cooper. Sure.
Mr. Augustine. The practice in the industrial world, which
I think is reasonably good in this area, is not to keep a
program manager in place based on time but, rather, on the
phase of the program.
And a person who may be a very good program manager in a
development program probably isn't a very good program manager
in the production program, or in the original tooling program,
or in the prototype phase.
We used to in our company refer to--we had bear catchers,
bear skinners, and people who liked to sit around the campfire
and talk about bears, and----
[Laughter.]
And we--so I think the important thing is to leave people
in place from one phase of a program to the next phase so that
you have somebody who is equipped.
Mr. Cooper. In service records, is their service as a
program manager linked to the overall success, or lack thereof,
of the program, or is that just a temporary assignment? You
check your ticket, punch your ticket and then move on?
Mr. Augustine. I think that is another major difference. In
the private sector, to succeed as a program manager, which is a
really tough job, is probably one of the best ways to move up
in an organization.
In the government, the first thing you want to do is get
out of program management and get out into a foxhole.
Mr. Cooper. Because that is the best way to be promoted.
Mr. Augustine. Absolutely. And of course, that brings up
the whole question, should you have civilian program managers
instead of military program managers, which is a major debate
in its own right.
Mr. Cooper. Which side do you come down on on that debate?
Mr. Augustine. By and large, on the military program
manager.
Mr. Cooper. Because they are able to follow through?
I have been worried that while after Goldwater-Nichols we
had joint warfighting, we still don't have joint procurement,
and sometimes parochial interest can prevail.
Mr. Augustine. That is true.
Mr. Cooper. What should we do about that?
Mr. Augustine. Well, you are talking about a cultural
issue, and usually the way to deal with cultural issues like
that--and this is probably very hard to do in the military;
maybe not in the civilian part of procurement--but is to move
people around so they have to live in the different elements.
They don't view themselves as--but I guess the joint
assignments are that way, to a degree, that you don't view
yourself as coming from one element of an organization but,
rather, have experience broadly.
Mr. Cooper. I see my time has expired, Mr. Chairman. Thank
you.
Mr. Andrews. Well, we are glad you got to the ``bare''
essentials there with----
[Laughter.]
Mr. Augustine. I apologize for that, Mr. Chairman.
Mr. Andrews. No, I apologize for that. [Laughter.]
Mr. Coffman is recognized.
Mr. Coffman. Thank you, Mr. Chairman.
Mr. Augustine, one point that Mr. Cooper raised I want to
go into, and that is we have often discussed the challenges of
military program managers and the fact that it is an assignment
for them.
And if they are a naval officer, they want to go back into
the fleet. If they are a ground commander in the Army or the
Marine Corps, you know, they want to return back to a command,
because at the end of the day that is going to get them
promoted.
And I know we have done some work inside the Armed Services
Committee, I know in the Seapower and Expeditionary Forces
Subcommittee, to--I think the--there was a shipbuilding program
where we insisted that there be one military program manager
for the duration of the program. I don't know how that is going
to affect that individual's career.
But could you go into more detail as to why you think it is
important to have military versus civilian program managers?
Because certainly, the military could always--is always going
to be there to have input into the program as it progresses.
Mr. Augustine. Well, you touch on a very difficult issue,
and as I said, I come out rather narrowly on the side of the
military program manager.
And I do that in part because we are building equipment for
the military. The military understands the system. Also, they
will have much more, I think, respect and much more impact in
dealing with a military organization.
Also, frankly, it is very easy to get rid of a military
program manager who is not performing. It is very difficult to
get rid of a civilian program manager in the government if they
are not performing. And I have been--had the misfortune of
having to try to do both. There is a big difference.
I think the key is not so much whether you wear a uniform
or not, but whether you have been given the opportunity to
really be experienced.
And we do have people--we have a Chaplain's Corps, we have
the Judge Advocate Generals (JAG), where those people
understand they will probably never be Chief of Staff or Chief
of Naval Operations (CNO). But they know if they do their job
well, they can move to the top of their organization, which is
viewed as a very important thing.
Somehow we haven't conveyed that in the acquisition area,
partly, as has been pointed out, acquisition is viewed as when
anything goes wrong, it must be for criminal intent.
Mr. Coffman. You mentioned a concern about, and I share
your concern about, the declining industrial base in the United
States. And certainly, we can go into a lot of reasons for
that--tax, regulatory policies and things like that.
But let's focus on one specific issue, in that some of the
contractors have mentioned to me the limitations in terms of
their ability to export their technologies that they develop,
that other countries don't have those restrictions.
And have we gone simply too far on those restrictions, and
we need to loosen them up so that our industrial base has a
broader market than just the United States Defense Department?
Mr. Augustine. I think that is absolutely the case. Most of
our export regulations were written many, many years ago in a
world where we controlled the technology----
Mr. Coffman. Okay.
Mr. Augustine [continuing]. Where you really could build a
border around the country, neither of which are true today.
Mr. Coffman. Okay.
Mr. Augustine. I would commend you--I chaired a Commerce
Department study on this about a year ago, and I would commend
that to you.
Mr. Coffman. Okay.
Mr. Augustine. Also one by General Scowcroft.
Mr. Coffman. Thank you, Mr. Chairman. I yield back.
And, Mr. Chairman, I just want to say that that is
something that--you know, I know it is sort of off--it may be a
little off the reservation of what the committee--but I think
it is something that we ought to look at.
Mr. Andrews. If the gentleman would yield, I don't think it
is off the reservation.
Mr. Coffman. Okay.
Mr. Andrews. I think it is an excellent point, that there
are both national security and economic aspects to the export
control debate. And of course, the economic concerns are
implicitly a national security concern as well.
The obvious national security concern is we don't want to
share sensitive intelligence with someone who may not be
friendly to us. But the other national security concern is that
if intelligent export policy helps to sustain our industrial
base, it improves our national security.
And I think that is something we really should address in
our report.
I would like to thank the witnesses and actually impose
upon them another duty, if I could. Mr. Conaway and I
appreciate the efforts of the staff, which has done an
extraordinarily good job in creating a draft report that
summarizes our work and makes recommendations.
That draft report was distributed to the members of the
panel yesterday. The members of the panel will be meeting next
week to review it and hone it. And Mr. Coffman and I had a
discussion earlier today. I would note to the staff members of
the other panel present, more suggestions are absolutely
welcome. That is why it is called a draft.
But we would like to give you that draft report, the three
of you, so that you would then have a homework assignment of
taking a look at it and giving us some input. The panel is
going to meet in a business session next week to review the
draft.
We are then going to have public circulation of the draft
and another hearing of the panel where we are going to have
Defense Department and other witnesses comment on it. But we
would welcome your specific comments as well as we go forward.
I think the perspectives that you have given us here today
are very valuable. What we have learned in our year working on
this is that the superficial questions are rather easily
answered. But when you get below the superficial level, these
are very complex issues. But I do think they are solvable
issues.
One recurring theme has been leadership and the quality of
the workforce. I think we have heard today from all three
witnesses that if you make the proper investment in experience
and skill, if you motivate and reward experienced and skilled
people, if you empower them to do the things that need to be
done, we can make improvements that would then turn the whole
system around.
The other lesson that I think we have learned is that when
you are purchasing $300 billion a year worth of goods and
services apart from major weapons systems, almost $300 billion
a year, everything ranging from cases of water to elaborate
pieces of software, that one size most assuredly does not fit
all.
And we certainly will not be rendering a report that
suggests that one procurement system or one set of rules is the
way to do this.
I will tip our hand a little bit and tell you that my own
bias is that more rules and more proscriptive mandates from the
Congress is--we are just going to exacerbate the problem, not
solve it.
And so what we are looking for--to do here, a way to do--is
to give intelligent principles and concepts, then put in place
intelligent, experienced people to execute those concepts, and
then reward them when they do.
And I think if I could summarize what we are going to
propose, that is about it. So if we can do that with your good
graces, we would like that. So I would invite you to take a
look at the draft report. It will be publicly available soon.
And we would welcome your input.
Mr. Conaway, did you have any closing comments?
Ladies and gentlemen, thank you.
With that, the hearing is adjourned.
[Whereupon, at 8:48 a.m., the panel was adjourned.]
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A P P E N D I X
February 25, 2010
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February 25, 2010
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DOCUMENTS SUBMITTED FOR THE RECORD
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