Political Aerodynamics: Technical Decisions in a Political World, Why the Acquisition System

SCHOOL YEAR CSC AY 1995

Political Aerodynamics: Technical Decisions in a Political World,
Why the Acquisition System Cannot be Reformed.
CSC 1995
SUBJECT AREA - Strategic Issues
Political Aerodynamics: Technical Decisions in a Political World,
Why the Acquisition System Cannot be Reformed.
by
Major Gary E. Slyman
Conference Group 10
l2 April l995
Executive Summary
Title: Political Aerodynamics: Technical Decisions in a Political
World, Why the
Acquisition System Cannot Be Reformed.
Author: Major Gary E. Slyman, United States Marine Corps
Thesis: To accomplish acquisition reform requires major reformation in
the
political process of the system.
Background: The purpose of the weapons acquisition system in the United
States is the purchase of arms for the maintenance of national security. Very
few have been pleased with acquisition system's results, making it the focus of
numerous reform attempts. Implementation of the many reforms still have failed
to achieve the desired goals.
This brief study attempts to answer why the reforms have failed. It
does this by
looking at acquisition reform recommendations, from five studies, and
their
implementation over the last decade. It also attempts to gain an
explanation for the reform failures. The study draws the conclusion that for
reform to work, it must alter the system's susceptibility to manipulation by
special interests. Reform must include changing the role and relationship of
Congress and the military in the acquisition process.
Without modifying this relationship, the acquisition system is
incapable of
reformation. Incapable, because its structure today allows the system
to do much more than buy weapons for national security. It is a social program
that keeps businesses afloat, maintains local economies, provides subsidies to
certain businesses, and keeps politicians in office. There are too many special
interests served by the current system to gain a viable constituency for
reform. Everyone wants reform until it negatively affects them. Until reform
strikes at the heart of the problem, which is political intervention, and
focuses
on national security for the long term, the country will continue to
muddle through the weapons procurement process.
Recommendation: Reform into an integrated system, the Planning,
Programming, and
Budgeting System, the requirement generation process, and the Life
Cycle Management Process. These reforms must include more interaction between
the military and Congress in the early phases of the procurement of weapons
systems.
CONTENTS
EXECUTIVE SUMMARY i
INTRODUCTION 1
THE THREE DIMENSIONS OF ACQUISITION 2
HISTORIC ACQUISITION 3

Historic Examples 3

REFORM ATTEMPTS 5

Implementation of
Reforms 8
Insights on Implementation
of Reforms 14

CONCLUSIONS l5

Politics and Other Interests
in Acquisition 17
RECOMMENDATIONS l9

APPENDIX A: THE STUDIES RECOMMENDATIONS 23

Packard Commission Study
Recommendations 23

Defense Organization Study
Recommendations 25
Senate Armed Services
Committee Study 27

Defense Management Review 29

National Performance Review 3O

NOTES 32

BIBLIOGRAPHY 34

Political Aerodynamics: Making Technical Decisions in
a Political World,
Why the Acquisition System Cannot
be Reformed.

Introduction
He who dies with the most toys wins! To some it seems
that this is the United
States weapons procurement policy. From the Civil War
until now, few have been happy with the weapons procurement system. The
military complains the system is incapable of keeping pace with technology.
Taxpayers and Congressmen, cry the system is full of fraud, waste, and abuse,
while accusing the military of "gold-plating" weapons. Contractors
complain of low profits, lack of freedom in exploiting technology, and that
they are victims of continually changing requirements. How is it possible that
a system so mired in controversy has produced such high tech weaponry? Its
products make the United States the sole remaining superpower. Yet, there is
still the demand for major reforms in the system.
Numerous reform attempts have failed to accomplish the
desired results. The truth is; to reform acquisition requires a transformation
of the politics affecting the process.
The United States adheres to civilian control of the military. Congress,
by the Constitution, has the task of raising and maintaining the Nation's Armed
Forces. Therefore, to achieve genuine
reform, requires the reformation of all areas of the process, including
Congress. The flaw of acquisition reform has been the failure to effectively
reform the political process. We will explore and back up this conclusion with
the
remainder of this study.

The Three Dimensions of Acquisition

Acquisition has three dimensions; technical, military,
and political. The
technical dimension is the transformation of technology into weapons.
Militarily, the weapons are
to ensure national security. The political
dimension is the use of tax
dollars for their procurement.2
The technical and military
dimensions are the areas the acquisition community should focus the majority of
its effort. Their efforts should focus on research in technical areas to meet
military requirements. The military dimension deals with the end product's
use--security of the United States and its allies.
The last dimension is the
political dimension. Thomas McNaugher, an analyst of the acquisition system,
divides the political dimension into two parts, access and accountability.
Access, ensures the public a fair opportunity to compete for acquisition
dollars, while accountability ensures each tax dollar is properly spent. Access
has created the unique defense sector economy, built on a foundation of
monopolies, subsidies, lack of competition, and a market where the government
is the customer and the regulator.
Accountability, has created
the bureaucratic organization to regulate the system. Acquisition dollars are
to enhance national security not to ensure jobs, or the economic health of a
portion of the country. However, their expenditure has had this social
consequence and its realization has influenced many decisions on defense
spending.
Historic acquisition

Historically, the goals of acquisition have remained
constant--efficient procurement of effective, easily supported weapons. The
evolution of the weapons procurement system has produced the large, slow,
overregulated bureaucratic process now in place. However, the unresponsiveness of the system, in times of crises,
has always been temporarily repaired. If the reparations made during the crises
have common characteristics, are they applicable today, or were they only
applicable to the time frame that they were applied? We will examine several
historic cases and draw the common characteristics from each.
Historic Examples
As far
back as the Civil War there is documentation of weapons acquisition
problems. In Milletts' For the Common Defense, he
talks of how the Union was
overwhelmed by the Army's rapid expansion. The
government's inability to produce the required supplies forced it to turn to
private industry for a solution. A lax administration, with few controls on
procurement, had the result of massive profiteering and a logistical system
full of corruption and shortages. The replacement of this system, with a
centralized logistical effort was implemented by then Secretary of War Stanton.
Once the system was in place, industry responded so successfully that the Union
was able to discontinue foreign purchases, and surpluses became the rule. The
results of Congressional investigations, into the fraud and profiteering, were
laws to regulate
contracting. This was the birth of the bureaucracies
in place today.3
The entry
of the United States into World War I was marked by a shortage of men and
material, requiring a rapid expansion of the country's industry and economy.
Government acquisition was characterized by decentralized control with little
strategic planning. Though armed with the technical knowledge to deal with
wartime expansion, the government ignored it. The United States attempted to
mobilize without regulating or expanding the economy. To meet the war demands,
the War Department shifted its public bidding of contracts to contracts
negotiated with sole-source suppliers on a cost-plus-fix-fee basis. However, it
would not take the needed steps of: (l) suspending antitrust laws,
(2) providing strategic direction, or (3) setting of
priorities for war industries, all which would have increased productivity. The
government was forced to provide centralized control in several critical areas
such as; food, fuel, railroads, and shipping. Those areas performed better than
other sectors, but as a whole, the American economy did not respond well to it
mobilization during World War I.4
For its
entry into World War II, the United States' mobilization policy was to be one
of minimal government regulation and intervention. The government issued
cost-plus-fixed-profit contracts to reduce the risk assumed by industry.
Additionally, the contracts included incentives for early delivery, provided
tax write offs for plant expansions, and suspended antitrust legislation. This
left the war mobilization in the hands of business, creating shortages in many
areas. To finally solve the shortage problems, the administration formed a
number of agencies to oversee and centrally control acquisition. The agencies
made determinations on the allocation of scarce raw materials and set
priorities for development in accordance with the Joint Chiefs of Staff and the
President.5
The common characteristics to
expedite weapons procurement and meet the
demands of wartime expansion were: (1) government
centralizing control and setting priorities based on the military requirements,
(2) lifting some restrictions on contracting, and (3) the government accepting
some of the risks inherent to developing weapons. If these are the traits of
success in a crisis, have the current reformers identified the same traits to
always be part of the process? A further look into reform attempts will answer
those questions.
Reform attempts
Since the
formation of the Department of Defense in l949, eight government
commissioned studies have addressed government and
acquisition reform.6 There have also
been a number of privately funded examinations of the process. Few of the
studies solely address acquisition, but integrate acquisition reform as a major
component of overall military or government reform and reorganization.
Congress' response has been the passing of legislation to enact study recommendations.
Since l983, the following major procurement reform bills have been passed:
. Department of Defense
Authorization Act
. Competition in Contracting
Act
. Defense Procurement Reform
Act of l9S4
. Small Business and Federal Procurement Competition
Enhancement Act of
1984

. Defense Procurement Improvement Act of l985

. Goldwater-Nichols Department of Defense
Reorganization Act

. Defense Acquisition Improvement Act of l986

. Defense Acquisition Workforce Improvement Act of
l99l

·
National Defense Authorization Acts,
Fiscal Years l988 through 1994
. Federal Acquisition and Streamlining Act of l994

We will
examine five studies. The first two of the reform studies undertaken in the
l98O's are of particular interest, because of their scope and the prominence of
the participants. One private study initiated in l983 called the Defense
Organization Project, was sponsored by the Center for Strategic and
International Studies of Georgetown University (CSLS).7 The most prominent government study began
in l985, with the establishment of a Blue Ribbon Commission on Defense
Management, commonly known as the Packard Commission. Both sought overall
reform within the Department of Defense (DoD).

A third
study was conducted in l985, by the Senate Armed Services Committee, and a
fourth, in l989, to examine the implementation of the Packard Commission
recommendations, called the Defense Management Review (DMR). The fifth is the
current administration's study called, the National Performance Review (NPR).
The
Packard Commission and the Defense Organization authors include former
Secretaries of Defense, Joint Chiefs, future
Secretaries of Defense, industry leaders, and legislators.8 Each study was an examination of the
military as a whole and addressed better ways of executing the department's
duties. We will investigate only the portions affecting DoD acquisition.
The
recommendations of the Packard Commission and the Senate Armed Services
Study were enacted into legislation by the l986
Goldwater-Nichols Act. Those items not requiring legislation were implemented
by National Security Decision Directive 2l9.
Much of
the DMR was enacted by policy decisions of the Secretary of Defense. The
similarities among the five studies' recommendations and conclusions are
astounding. Many recommendations are
identical. A condensed list of all five of the studies recommendations
affecting the Department of Defense acquisition is in Appendix A. The following
matrix is a synopsis of the recommendations.
By
summarizing the recommendations in broad terms several messages become clear:
(l) streamline and simplify the acquisition process and the organization; (2)
stabilize programs through multiyear procurements; (3) increase competition in
the process, making maximum use of commercial products; and (4) develop a
professional acquisition corps. In the budget area, the studies call for a
biennial budget integrated with long range plans, using expected resources as
the basis of both the plan and the budget.
A
reexamination of the historic cases from the beginning of our study, provide
the following solutions: (1) centralized control and setting of priorities, (2)
lifting restrictions on contracting, and (3) letting the government share some
of the risk in the development of weapons systems. The conclusions are close
parallels to recommendations from the latest studies. Multi-year procurements,
and integrated long range plans parallels centralized control and setting of
priorities. Increased competition and greater use of commercial products
directly conforms to lifting restrictions on contracting and loosely fits the
government sharing the development risks. The characteristics required for
success years ago still holds today. But, have those characteristics been
successfully implemented with the reforms?
Implementation of Reforms
Identification of a problem is simple, implementing the change to
correct it is very difficult. Many changes require congressional action,
through legislation, to institute. The Reagan administration very aggressively
sought implementation of the Packard reforms. So much so, that after receiving
an interim report in February l986, the President enacted many of them through
National Security Decision Directive 2l9. The remainder were implemented by the
Goldwater-Nichols Act of l986.
The
resulting implementation by the Department of Defense was far from the
expectations of the Commission. A Government
Accounting Office study in l989 reports the military services did not achieve
the Commission's objectives in (l) creating short unambiguous chains of
command, (2) decentralizing program execution by increasing program managers
authority, (3) reducing the reporting and reviewing layers, and (4) reducing
the number of acquisition personnel. The primary impediments to their
implementation were unique interpretations of the Commission's recommendations
by each service and overall resistance to change.9
The
implementation of the first Under Secretary of Defense for Acquisition did not
provide the full authority of the acquisition system as intended, resulting in
his resignation after less than a year.10 In fact, it took the issuing of the
DoD 5OOO Series instructions, almost five years later, to fully implement the
four-tiered reporting structure (Figure l) recommended by the Commission The
Directives also attempted to standardize Acquisition policy and directives.
The
establishment of this chain was the first step in streamlining, by centralizing
control and decentralizing execution. The Undersecretary of Defense for
Acquisition is known as the Defense Acquisition Executive. Each service now has
an Acquisition Executive. Under each Service Acquisition Executive, are a
number of Program Executive Officers (PEOs), whom manage Program Managers (PM).
Program Managers can be responsible for one large program, or several smaller
ones.
Reforms
have left the Planning, Programming, and Budgeting System (PPBS)
intact as a very complex process. Although PPBS is
considered one system, in reality it is three. They are connected at specific
points by several documents with a different person responsible for each part.
Planning, the responsibility of the Under Secretary of Defense for Policy
includes: the planning process from the President's National Security Strategy,
the National Military Strategy, to the generation of the Defense Planning
Guidance (DPG), which provides broad fiscal guidance. Programming, the
responsibility of the Assistant Secretary of Defense for Program Analysis and
Evaluation, takes the DPG and develops a strategic plan for future years by
generating the Program Objective
Memorandum (POM). A POM for each service documents every program and
the
projected funding levels for five years.
Finally, budgeting, the responsibility of
the DoD Comptroller, is the determination of dollars to individual line items.
The budget cycle starting with the POM, is updated by the services with Budget
Estimates Submissions (BES). The office of the Secretary of Defense holds
hearings to review the submissions. Program Budget Decisions PBD), document the
approval of the submissions for inclusion in the President's Budget. This is a
brief, simplified explanation of the process that is graphically depicted in
Figure 2. The
Department of Defense, in fiscal year l989, began
using a two year budget submission cycle, however, Congress is still enacting
an annual budget. The biennial budget in DoD saves the man years involved in
producing the budget annually. In the off years, updates to the budget are
submitted.
Requirements are generated to address deficiencies, through a document
called a Mission Need Statement (MNS) (Figure 3). Once validated by the Joint
requirements Oversight Council (JROC), the MNS serves as the governing document
for an acquisition program to enter the Life Cycle Management Process, the
title for the defense acquisition system. A program in the Life Cycle
Management Process goes through five phases, meeting specific requirements at the
conclusion of each phase. For the largest programs, the JROC validates the
requirement at each phase. This process is event driven, where each system
passes through phases ending in milestone decisions (Figure 3). Each phase
requires adequate funding to ensure the program is
executable throughout development. The budget, however, is a calendar driven
process. A program delay can cause the event driven program, to be out of synch
with the calendar driven budget. This forces major budget revisions and program
adjustments to ensure a program remains executable.
Insights on Implementation of Reforms
In light
of the process just described, it appears many of the recommendations have been
successfully implemented. The acquisition system now has a shortened chain of
command, with a smaller overall organization. Programs are based on
requirements from the users, validated by the JROC, with realistic estimates of
the resources that will be available to execute the programs. Cost estimates by
an independent group, ensure the validity of the data at major milestone
reviews, and the Department of Defense submits a consolidated budget based on
realistic inputs.
Reform and
streamlining is occurring, although it is not at the desired pace or magnitude.
Rules are being simplified, burdensome specifications are being repealed, and
the acquisition force is being educated. Defense acquisition is making use of
commercial technology to save money, time, and gain a technological advantage.
In general, the system is moving towards a centrally controlled, decentrally
executed system with fewer restrictions. All of these reforms are improving the
system, but not to the extent required for desired. Insight into the real
problems of acquisition comes from examining the reform
recommendations not implemented.
The
recommendations that only meager or token efforts have been taken to
implement, fall in the categories of, increased
competition or the budget. The institution of the biennial budget and the
modification of the PPBS to a more integrated system are the most glaring
deficiencies. The reason--they are the most politically sensitive. The budget
and the system creating it is where the power of the acquisition system lies.
By instituting a biennial budget, Congress is giving away its control of the
military and its ability to influence specific special interests. Increasing
competition requires modification of the defense industrial base to a more
market based system. This requires dismantling
the "monopoly type" relationships in place today.

Conclusions

The
obvious conclusions from this study are: (l) the problems with the acquisition
system have been very well identified (many times over), (2) the implementation
of reforms have failed to significantly change acquisition, and (3) it is a
very difficult and slow process to implement reforms. Another, not so obvious,
conclusion is that the recommendations implemented are treating the symptoms of
the procurement problem. Though treatment of the symptoms is essential,
treatment of the disease will make the symptoms disappear. The disease is,
weapons procurement is a political process that is accomplishing considerably
more than acquiring weapons. It has become a social program that has jobs,
economies, special interests, and votes all tied to it.
That is
why the implementation of significant reforms has not taken place on the
Planning, Programming, and Budgeting System. It is not in the best interests of
many to reform acquisition. However, it is in their interest to give the
impression of reform. Consequently, military and technical decisions are driven
by politics, not national security concerns. Reform will remain an impossible
abstract until all the players are willing to accept their role in the process,
and focus on national security.
Congress,
in particular, has not accepted its responsibility in the process. The United
States adheres to the principle of civilian control of the military. Congress
is charged in the Constitution with raising and maintaining the Armed Forces
with the President as Commander in Chief This arrangement strikes a balance of
power within the government. The military is an extension of policy for the
State, existing to aid in obtaining policy objectives. Presidential control of
the military is spelled out in law. The control Congress exerts is through the
execution of the annual budget. Acquisition dealings with the military require
clear political objectives, to easily translate into military objectives. The
political objectives in the current acquisition system are more than national
security.
Politics and Other Interests in Acquisition
The many
threats to the United States' vital interests has never been, nor is now easily
quantifiable. In deterring a threat, we face the question of how a threat to
our vital interests translates into a military capability? The money spent to
develop that capability must then be justified. On the economic side, it is
difficult to measure the return on the defense investment. There must be the
justification of any money spent against the opportunity cost of domestic
spending. In peacetime, this is a daunting task.
By
examining acquisition's three dimensions, technical, military, and political,
it is apparent the technical and military dimensions are relatively manageable.
Militarily, threats to national security require definition and the development
of requirements to counter them. The priority, severity, and volatility of the
threats are open to political interpretations, which complicate the threat
evaluation. Since threat evaluation is a subjective process with monetary
implications, anyone who perceives an interest in the outcome imbeds themselves
in the debate. However, once defined and accepted, the military requirements of
how high, how fast, and how big then becomes a technical problem. The technical
solution is the conversion of a requirement into a weapons system within the
given constraints. The political dimension is the determination of the funding
level, the contracting to ensure fair access, and the
accountability of the funding. This dimension is subject to continual tinkering
to support competing interests.
In the
current budget climate, one would think cuts in the defense budget would be
welcome, particularly if the military determined the programs were no longer
needed for national defense. However, Congressmen are stepping forward to
defend more or continued spending, without regard for national security, if it
is in their district. A recent Washington Post article highlights the politics
of the acquisition system:
The show of parochialism suggested the extent to which
national security
legislation serves as a form of public works funding
at a time of decreasing federal largess in other areas. Although defense
spending always has been a crucial source of funds to many communities and
companies, it has become an even more common justification in a post Cold War
world in which the strategic rationale for defense projects is often fuzzy.14
The
Secretary of Defense has made the decision to terminate an Air Force aircraft
improvement program because the work was duplicative with a capability
currently in the Navy. Senator D'Amato from New York is fighting that cut,
$27.8 million this year from a multiyear program totaling $l billion.
Why--because the main contractors are in his state. This decision affects his
state in the areas of large business, jobs, and possibly his votes. It does,
however, reduce the defense budget, reduce duplication of capabilities, downsizes
the Air Force, and is not required for national security.15
Senator
Conrad from South Dakota is requesting that trailer procurement continue in his
state in fiscal year '95, despite the Army reaching its inventory goal.
Additionally, he wants to ensure the use $15 million dollars remaining from the
trailer procurement to pay the same company on a minority set aside contract to
build more trailers. Senator Bond from
Missouri wants the continuation of an aircraft modernization program in his state,
which the Army determined was not required.16
This is an
accepted and encouraged process. Look at the interests served in the above
examples. First, big business, which a congressman is fighting to keep large
companies in his state viable: second the workers, by maintaining jobs and
small minority businesses, through the establishment of special contracts:
third, possibly the Air Force or Army who may have been directed to cancel the
programs from the DoD level under duress: lastly, the Congressman, who in the
eyes of their constituency, did what was required of them. The loser in every case is the United States
taxpayers, they are not receiving a return on their national defense dollar. The focus of the system, because of the
ability to intervene politically, is only on short term goals.
For real
reform there must be a constituency, someone who wants it. Why would any of the participants in the
above examples want the system reformed?
The current system has allowed big businesses to act as monopolies,
small and minority businesses to receive preferential treatment, special
interests to intervene in the process, and the military to make it almost
impossible to cancel a program. By
enacting real reform, special interests will be impotent to short circuit the
system. The current method of muddling
through reforms protects all involved from being adversely affected.
Recommendations
There are four
recommendations from this brief study:
. Continue with the reforms underway.
. Implement a review of the top down reforms from a
bottom up perspective. This
is to ensure
the accomplishment of the desired goals to the lowest level.
. Reform the PPBS, the requirement generation process,
and Life Cycle Management
Process into
a more integrated system. This must include Congressional
involvement
at the initiation of a program.
. Increase competition where possible in the defense
sector.
These
reforms are worthy and must continue. The rewriting and simplification of the
Defense Federal Acquisition Regulations, and the passage of the Federal
Acquisition and Streamlining Act improves many contracting practices. This act
modifies laws allowing the use of commercial equipment and commercial practices
in defense acquisition. The continuation of the DAWIA program to build a
professional acquisition corps is a necessity and making great progress. The
simplification and deletion of many military specifications will relieve many
man-hours of needless work. Though they do not solve the root cause of the
acquisition problem, all the mentioned reforms are desperately needed.
It is
recommended that an evaluation of the implementation of these top down reforms,
be made from the lowest levels of the process. Eliminating military
specifications is useless, if contract specialists must write new
specifications with each contract.
Simplified regulations at the DoD level are useless if each service,
followed by each organization in the chain of command, imposes increasingly
restrictive regulations on its users. To be effective, top level studies also
need more involvement of workers from the lowest levels, not just policy makers
from the top.
The
Secretary of Defense has appointed a Deputy Under Secretary for Defense for
Acquisition Reform to mange and focus the reform process. This type of
commitment by the Secretary of Defense is a prerequisite for progress. This
commitment needs to come from the Administration and Congress as well. Changes
need vigorous implementation, as was seen with the Packard recommendations,
execution was weak, with more form over substance. Initiating change in a
bureaucratic organization is very difficult, requiring strong leadership from
the top and persistence.
To solve
the ultimate political problems requires radical changes in the execution of
acquisition at the highest levels of government and the military. There needs
to be the acceptance that weapons procurement is for national security only and
that it is an expensive proposition. Congress must accept the fact that it is
responsible for the procurement process and DoD is executing that process. The
military must accept the fact that Congress is in charge of acquisition. The
golden rule applies here--he who has the money rules, and Congress has the
money. In the procurement process the only area where Congress and DoD formally
interact is in the execution of the budget. Although,
there is also the argument, considerable interaction
occurs when Congress does not approve of a program's progress. As it stands
today, DoD spends an inordinate amount of time on Capitol Hill justifying
programs.
The
specific recommendation is to reform, into an integrated system, the PPBS,
requirement generation, and the Life Cycle Management Process. The system in
place allows too much finger pointing and rejection of responsibility for the
problems. Congress has the role of oversight once the majority of the decisions
are made. The reformation must allow for detailed Congressional involvement at
the initiation of the procurement and budget development process. This will
make Congress and DoD both responsible and accountable to each other and to the
country for weapons acquisition. As it is today, Congress is responsible and
holds DoD accountable. Early involvement in the decision-making process
precludes intrusive involvement later. This is a major cultural change for
the military--to include politicians in the process
from the beginning, as well as an acceptance of who is responsible for the
military.
The final
recommendation is to increase competition in weapons programs to
create more of a market economy. The defense and
commercial markets are very
different. In many areas, it is impossible to create
market conditions. However, there are areas capable of operating in a market
environment, such as the electronics and software industries. In those areas,
competition needs to be carried out as long as possible to take advantage of
benefits created by competition: better technology, efficient production, and
low overhead. Extending competition will require more spending in the research
and
development phases to reap the benefits in production.
The defense industry is a "pay me now, or pay me later business." The
United States has paid millions of dollars to modify and improve systems pushed
into production prematurely. Spending the money in the research and development
phases to get it right would have saved that money. Weapons procurement is an
expensive business.
The
desired end state for weapons acquisition, is a market-based, competitive,
defense industry that responds to the military's. The integration of the Life
Cycle Management Process and a budget process must take place, with multiyear
procurements for stable programs as the standard. Getting there from here is a difficult
process, but the United States can ill afford to maintain the status quo. The
military must take the lead, forcing Congress and the Executive Branch to mold
the current systems into a workable integrated process.
Appendix A: The Studies
Recommendations
Packard Commission Study Recommendations
The
Packard Commission focused on what the common characteristics were of
successful businesses and projects and came up with
the following six: (l) clear and short command channels, (2) stability, (3)
limited reporting requirements, (4)small professional staffs, (5)
communications with users, and (6) the ability to prototype and test.17 The following paragraphs summarize the
recommendations of the Commission.
a.
On organization and procedures, to establish
an Under Secretary of Defense for Acquisition and a Service Acquisition
Executive for each service. To have each Service Acquisition Executive to
appoint Program Executive Officers to manage a number of programs. Lastly to
recodify federal procurement laws into a simple single statue and reduce the
number of acquisition personnel.18
b. On the
use of technology to reduce cost, high priority use of prototypes to demonstrate technology and
improve cost estimates. The use of prototypes for early operational testing and
informal competition in the research and development phase. The competition is
to emphasize ideas and technology rather then cost. Further use of the Defense
Advanced Research Projects Agency (DARPA) to prototype and examine technology on
high-risk, high payoff technology.19
c. In balancing cost and performance the
recommendations were to restructure a Joint Requirements and Management Board
(JMRB), chaired by the Under Secretary of Defense (Acquisition) and the Vice
Chairmen of the Joint Chiefs of Staff. The board will oversee all joint and
major Service programs as well as defining weapons requirements for
development.20
d. To stabilize programs, the
institutionalization of baselining and expansion of multiyear procurements for
high-priority systems. The baseline is an agreement between the Program
Manager, the Program Executive Officer and the Defense Acquisition Executive on
the program cost, schedule, and performance. Multiyear procurement is to
request Congress to fund for more than one year of production21
e. Expansion of the use of
commercially developed products. To reduce cost and take advantage of the
commercial economies of scale by using "commercial off the shelf"
(COTS) products. The Department of Defense should develop custom items only
when commercial products will not meet the military requirements.22
f. Modify the Federal law to
allow for the increase use of commercial style competition.
g. Clarify the need for
technical data rights. This allows the government to acquire the required data
rights to develop and maintain systems while still protecting the private
sector's proprietary rights. Companies retaining propriety rights encourages
innovation as private investment that will benefit the government.
h. Enhance and improve the
quality of acquisition personnel. To establish an education criteria and
personnel management system to serve as the basis for
professionalism in the acquisition career path.23
i. Improve the capability for
industrial mobilization. The President through the National Security Council
establish an industrial responsiveness policy to support national
emergencies.24
In the
area of budgeting the Packard Commission had several recommendations
that were tied to overall defense and national
security strategic planning, Remembering the study was addressing the defense
establishment as an interrelated whole. In summary the Commission recommended
the establishment of a process for defense planning. It would start with the
statement of national security objectives and priorities from the executive
branch. Considering these objectives, the President would issue a provisional
five year budget. In response the Chairman of the Joint Chiefs of Staff would
prepare a
broad military options to meet the national objectives.
The options would address trade offs based on operational concepts and the
established budget levels. The president would select one of the options
presented and the associated budget level, The Department of Defense would then
develop a five year defense plan and two year budget conforming to the
President's selection.25
The specific budget
recommendation is:
The institution of a biennial budget process with a five year
defense plan that it is based on. The Congress should authorize and appropriate
for two years. The second year is for review of program execution where
required.

Defense Organization Study Recommendations
The
Defense Organization Study examined the Department of Defense as whole
just as the Packard Commission did. The study group
made the assumption that for
reform to be effective, it must touch all elements of
the defense establishment.
Understanding that in order to implement reforms they
require broad based support, the authors moderated their recommendations accordingly.26
In the
area of acquisition the study identified three problem areas, inadequate
planning and selection process, instability in programs and budgets, and the
lack of market incentives throughout the acquisition process.27
The recommendations:
a. To develop a long range
capital investment plan for the Department of
Defense. The plan will be integrated and address
allocation of resources in broad mission categories. The plan would be updated
annually. It will serve as a guide to link long range acquisition plans to
strategic objectives.
b. To review the budget
request on a biennial basis. Internal to the services establish a contract to
set cost, schedule, and performance baselines. Allowing the baseline to include
reserves for uncertainties.
c. To establish market
incentives, promote competition between contractors
throughout the life of the
program. Allow contractors to increase profit margins when costs fall.
Encourage services to reinvest cost savings in increased quantities or improved
performance of the weapon system.
d. Enhance career
opportunities and training for acquisition managers.
e. Establish unit cost as a
primary criterion in the initial design of a weapon.28
In the
planning, programming, and budgeting arena the recommendations were:29
a. Expand the
responsibilities of the Under Secretary of Defense for Policy to ensure program
and resource decisions reflect mission-oriented planning.
b. The Chairman and his Joint
Staff should be charged with preparing force
recommendations constrained by realistic budget
estimates.
c. Merging the programming
and budgeting process that retains program and
mission orientation while
establishing relevant budget inputs.
d. Implement a fourth step,
evaluation into the process to link objectives to actual performance.

Senate Armed Services Committee Study
This
particular study was undertaken to address the overall organization and
decision making process of the Department of Defense. Four problem areas were
identified. The first was insufficient connection between national military
strategy and the formulation of military requirements. Second, the lack of
commonality of military systems and subsystems between services. Third, the
weak management and general resistance to joint programs. The last was lack of
effective coordination between services on acquisition policies and
practices.30

The
specific recommendations by problem area were:
a. Enhance the role of the role of Joint Staff
in the formulation and assessment of requirements
b. Create
a formal structure to promote communications between services to
enhance opportunities for common utilization. Or,
provide the Under Secretary of
Defense for Research and Engineering with a staff to
act as an advocate for utilization of common equipment.
c. Urge
the Secretary of Defense to use existing budget authority to ensure
financial commitments to joint programs.
d. Urge
the Secretary of Defense to use existing authority to require where
appropriate common acquisition policies and practices
by the Services.

In the
budget area the study identified seven shortfalls. They are ineffective
strategic planning, an insufficient relationship between strategic and fiscal
constraints, absence of realistic fiscal guidance, deemphasis on the output
side of defense planning, the inability of the Joint Staff to make meaningful
programmatic inputs, insufficient attention to execution, and PPBS is too long,
complex and unstable. The following are the recommendations. The below
recommendations address all the areas of deficiency.31
a.
Diminish the focus on resource decisions and strengthen the focus on mission
orientation to include establishing an interactive strategic planning process
b. Require
that the Joint Strategic Planning Document reflect fiscal constraints.
c. Expand the IPPBS to include for execution
and oversight.
d. Reissue
strategic planning documents less frequently and merge the
programming and budgeting phase of PPBS.

Defense Management Review
The
Defense Management Review (DMR) is the Secretary of Defense's plan to
fully implement the Packard Commission
recommendations, improve the defense
acquisition system, and improve the management of DoD
resources. The results of the DMR were recommendations and direction to
implement the changes. The results from the DMR are:
a.
Direction to the Service Secretaries to implement clear command channels. Assignment of a Service Acquisition
Executive, Program Executive Officers (PEO's), Program Managers (PM's), and
reorganization of Systems and Materiel Commands.
b. To
improve stability in programs the recommendation to change the law
regarding the 10% saving threshold for multiyear
procurements. Additionally maintain Program Managers in positions for four
years or completion of a milestone phase.
c. To reduce reporting requirements, the
Secretary of Defense chartered a team to review all regulatory guidance of the
in the acquisition process.
d. Develop
a plan for the establishment of a dedicated corps of officers in each Service
as full-time career acquisition specialists. For civilians the recommendation
for legislation to establish an alternative pay system for acquisition
employees.
e.
Elimination of acquisition management layers by at least l5 percent. The
consolidation of all DoD contract administration
services under the new Defense Contract Management Agency (DCMA)
f. To
improve communications with users, the Secretary of Defense will with the Chairman
of the Joint Chiefs of Staff (CJCS) review all program deficiencies with the
possibility of necessitating a new program. Additionally, the Joint
Requirements Oversight Council will maintain a continuous role in validating of
performance goals program baselines.
g. To
improve the system development process the Defense Acquisition Board
(DAB) review process will be restructured, ensuring
more exacting requirements are met as program progresses. The Under Secretary
of Defense, Acquisition will have a broad mandate to encourage more
competition, technically driven prototyping, and use of commercial
technologies.
h.
Recommended legislation to improve commercial-style buying practices, to
take advantage of cost savings.
i. Recommended the
implementation of laws to implement a contractor review
process.
j. Recommended legislation
to allow for expanded education opportunities
for acquisition personnel.
National Performance Review
The
National Performance Review (NPR) is the Clinton Administration's attempt at
government reform, Its goal to reinvent government. This effort is refers not
only to DoD but the entire federal government. The recommendations of the NPR
regarding the DoD acquisition process follow:
a.
Simplify the procurement process by
rewriting federal regulations--shifting from rigid rules to guiding principles
b.
Increase the authority of federal agencies for the purchase of information
technology, including hardware, software, and services
c. Simplify
the procurement process by allowing agencies to buy where they want, and
testing a fully 'electronic marketplace.
d. Allow
agencies to make purchases under $100,000 through simplified purchase
procedures
e. Rely
more on the commercial marketplace.
f. Bring
federal procurement laws up to date.
g. Reframe
acquisition policy.
h.
Authorize multi-year contracts.
i. Improve
Workforce
In the budget area the report had the following recommendations:
a.
Institute biennial budgets and appropriations
b. Allow
agencies to roll over 5O percent of what they do not
spend on internal operations during a fiscal year
c. The
President should begin the budget process with an executive budget
resolution, setting broad policy priorities and
allocating funds by function for each agency.
Notes
1 The idea for the title is
taken from Major Dan Lyons, IJSMCR, Cherry Point, North Carolina.
2 Thomas L. McNaugher, New
Weapons Old Politics: America's Military
Procurement Muddle (Washington D.C.: The Brookings Institute l 989),
10.-il
3 Allan R Millet,., Peter
Maslowski, , For the Common Defense: A Military History of the United States of
America (New York, The Free Press, l9B4), 2l4-2l8
4 Millet, 333-337
5 Millet, 4O8-4l4
6 The Commissions are: The
Hoover Commission (l949), The Hoover Commission
l955), The Fitzhugh Commission (l969), the Commission on Government
Procurement (l972), The Carlucci Initiatives (l98l), The Grace Commission
(l982), The Packard Commission (l986), The Defense Management Report (l989).
7 Barry M. Blechman II and
William J. Lynn, Toward a More Effective Defense: Report of the Defense
Organization Project, (Cambridge Massachusetts: Ballanger Publishing), xi
8 The Packard Commission was
made up of David Packard, Robert Barrow,
Nicholas Brady, Louis Cabot, Frank Carlucci, William Clark, Barber
Conable, Jr., Paul Groman, Carla Jills, James Hollaway, III, William Perry,
Charles Pilliod, Jr., Brent Scowcroft, Herbert Stein, and R. James Woolsey.
The Defense Organization Study Steering Committee consisted of: Philip
A. Odeen,
Andrew J. Goodpastor, Melvin R. Laird, Les Aspin, Norman R. Augustine,
Barry M,
Blechman, William K, Brehm, William S, Cohen, Edwin A. Deagle, Robert
F. Ellsworth, Jacques S. Gansler, Newt Gingrich, Samuel P. Huntington, David C.
Jones, Nancy L. Kassebaum, Edward C. Meyer, Sam Nunn, William J. Perry, Donald
B. Rice, Alice M. Rivlin, Thomas B. Ross, William Y. Smith, Samuel S. Stratton,
Harry S. Train, Togo D. West, Jr., John P. White, R. James Woolsey, and William
J. Lynn.
9 Government Accounting
Office, Acquisition Reform: A Report on the
Implementation of the Packard Commission Recommendations, (Washington
D.C., l
November l989 National Security Affairs Division, GAO/NSIAD-9O-2l,3-4.
10 Government Accounting
Office, Acquisition Reform: A Report on the
Implementation of the Packard Commission Recommendations, (Washington
D.C., l
November l989), National Security Affairs Division,
GAOINSIAD-9O-2l,3-4.
11 Introduction to Defense
Acquisition Management 2nd Edition, (Fort Belvoir Va: Defense Systems
Management College Press, l 993), l 2
12 Introduction to Defense
Acquisition Management 2nd Edition, (Fort Belvoir Va: Defense Systems
Management College Press, l 993), 22.
13 Introduction to Defense
Acquisition Management 2nd Edition, (Fort Belvoir Va: Defense Systems
Management College Press, l993) 26
l4 Walter Pincus and Dan
Morgan, "Pork Barrel Hitches Ride on Pentagon Train"
Washington Post, 23 March l995, Sec A8.
15 Walter Pincus and Dan
Morgan, Sec A8
16 Walter Pincus and Dan
Morgan, Sec A8
17 Blue Ribbon Commission on
Defense Management, A Quest for Excellence, Final Report to the President, June
l986, 5O-5 l
18 Blue Ribbon Commission
52-55
l9 Blue Ribbon Commission
55-57
2O Blue Ribbon Commission 57
21 Blue Ribbon Commission
59-6O
22 Blue Ribbon Commission
6O-6l
23 Blue Ribbon Commission 66
24 Blue Ribbon Commission 7O
25 Blue Ribbon Commission xix

26 Barry M Blechman. H, and
William J. Lynn, Toward a More Effective Defense:
Report of the Defense Organization Project, (Cambridge Massachusetts,
Ballanger
Publishing Co l98S), x-xi
27 Barry M. Blechman II and
William J. Lynn, 3 l
28 Barry M. Blechman LI and
William I. Lynn, 37
29 Barry M. Blecbman H and
William J. Lynn, 37
30 U.S. Congress, Senate,
Staff Report to the Committee on Armed Services United States Senate, Defense Organization:
The Need for Change, October l6, l9S5, 99th Cong., 1st sess., S. Prt. 99-S6,
Committee Print, 55l-552
3l U.S. Congress, Senate,
Staff Report to the Committee on Armed Services United States Senate, Defense
Organization: The Need for Change, October l6, l98S, 99th Cong., 1st sess., S.
Prt. 99-86, Committee Print, 52G-529
32 National Performance
Review: From Red Tape to Results I-S-S
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