May 6, 2006 -- Defense Secretary Robert Gates has presented the White House with a new plan to reform the military's weapons acquisition enterprise, identifying 25 initiatives aimed at eliminating cost and schedule delays from the requirements generation and procurement process and marking the start of what may be his most ambitious undertaking yet as Pentagon chief.
The new plan is outlined in a previously unreported 10-page report Gates sent the White House on April 6, along with his recommendations for the fiscal year 2010 budget. His goal, he writes, is to create a more nimble system that develops weapons based on proven technologies and predictable costs -- and only when the total price tag is “in alignment with the value of the capability produced.”
“The document addresses the initiatives we have successfully institutionalized, as well as future opportunities for reform,” Gates wrote in the Aug. 6 memo to James Jones, President Obama's national security adviser. InsideDefense.com reviewed a copy of the memo and the plan.
The plan outlines efforts to bolster the acquisition workforce; apply new practices to improve the development of weapon programs already in the pipeline; and adopt new policies to ensure that future programs deliver on promised capability, cost and schedule.
Significantly, Gates intends to carry forward and expand efforts begun during the Bush administration to give combatant commanders more influence in shaping the investment decisions of the military services, a domain heretofore largely controlled by the service chiefs.
The plan also marks the first explicit embrace by the Obama administration of capability portfolio management, which gives select combatant commanders teamed with civilian leaders unprecedented influence over a wide range of capabilities -- including some new weapons systems -- that the Army, Air Force, Navy and Marine Corps develop.
This endorsement of capability portfolio management comes as the Pentagon begins the Quadrennial Defense Review, a sweeping assessment of the military designed to produce a new investment plan that signals the growing influence of operational commanders in steering decisions on how to spend tens of billions of dollars on new weapons.
The goal behind capability portfolio management is the facilitation of cross-service assessments of weapon systems and force structure that permit DOD leaders to better balance strategic risks and make capability trade-offs among the services.
“DOD has created a capability portfolio management system through which portfolio managers can de-conflict systems in being, in development, and proposed,” Gates’ plan states. “This de-confliction can lead to identification of duplication and appropriate prioritization of gap-filling solutions and more efficient use of increasingly constrained resources.”
While drawing up the Pentagon's six-year investment plan last year, the Defense Department directed the services -- in the classified Guidance for the Development of the Force (GDF) -- to consider where programs might be cut within one of the nine capability areas that span the entire military enterprise.
“The first issuance of the GDF focused on within-portfolio trades, but more must be done,” Gates’ plan states. “In the future, the department must balance within and across capability portfolios to better align to budget constraints and warfighing needs, based on warfighter capability prioritization. Further, the department must consider 'make or buy' decisions -- development and production of systems or the purchase of services that provide the needed capabilities.”
Another significant component of the plan advanced by Gates calls for assigning a single service the responsibility for providing a particular capability. This is aimed at ensuring two or more branches of the armed forces are not developing separate weapon systems to counter the same threat.
The Defense Department “may have to invest more in the future-oriented program of one service and less in that of another service -- particularly when both programs were conceived with the same threat in mind,” states the plan. The Pentagon will continue a pilot concept -- “joint task assignment” -- that aims to “clearly establish responsibility for emerging tasks -- operational and force development and identify the resources to support those tasks up-front before resources” are executed, it continues.
On April 7, Gates told reporters he believes programs owned by different services that provide commanders very similar capabilities will be prime candidates for termination in the next round of adjustments to the Pentagon's investment plans (DefenseAlert, April 7).
The collection of initiatives in the plan he advanced a day earlier are aimed at addressing “the full range of issues” associated with acquisition and requirements reform, as well as with process, organization, behavior and workforce -- subjects that have been the focus of numerous blue-ribbon panels and legislative provisions over the past few decades, as Gates notes.
“Notwithstanding the management changes that have been implemented over time, there continue to be system issues that challenge the department's efforts to reform these processes,” the plan states. “Important among these is that acquisition and budget priorities often change from defense secretary to defense secretary, administration to administration, and Congress to Congress -- making a stable long-term procurement strategy on which we can accurately base budget costs difficult, if not impossible.”
Still, the plan says the Pentagon is “committed” to improvements that will “deliver the needed capability at acceptable performance levels and rates and to be better stewards of the taxpayer's dollar.”
Addressing the acquisition workforce, the plan cites “strong agreement that DOD must act now to recruit, hire, develop retain and sustain” a new pool of procurement experts, noting that the “target size” of a larger workforce “has not been determined.”
This expansion of the acquisition corps will allow for the Pentagon to implement another component of the plan: paring back DOD’s reliance on private contractors. “This will allow DOD to better address inherently governmental functions and ensure DOD has appropriate oversight of all contracting and acquisition activities,” it states.
The plan also includes a number of initiatives designed to address the root causes of program instability, including immature technology, inadequate cost estimates and unstable requirements.
Among these is the objective to improve communications with the Pentagon's main weapons suppliers and to align profitability with performance. “The department is moving away from time and materiel and award-fee contracting and instead is emphasizing the use of objective incentives tied to delivered performance, be it technical, schedule or cost,” states the plan. “The intent is to create an environment where the contractor is rewarded for meeting contract requirements but is not rewarded for performance failure.”
The plan says that difficulties with the weapons acquisition system and requirements-generation process “will not be resolved in the short term” and “require constant vigilance and priority treatment by Department leadership over an extended period.” -- Jason Sherman
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