Putting that Match to the DFARs and the Rest—Some Comparison to Commercial Procurement Policy

This week a panel of the US Defense Business Board released its report to the defense secretary on what he should do about the 4,878 pages of procurement regulations governing acquisition (procurement to we commercially-minded folk) in his department. The advice from the chairman, Arnold Punaro, was pretty blunt: put a match to it, and start from scratch.

The people on the DBB's team have been around the problem long enough to have strong views. Punaro is a retired reserve major general of the USMC who spent ten years as a VP at SAIC after about thirty working as former federal senator Sam Nunn's right-hand man on military matters. Former Pentagon comptroller Dov Zakheim, William Phillips (who runs KPMG's federal advisory practice), and a platoon of retired regular four-stars made up the rest. They quoted congressional testimony back in 1982 by Alice Rivlin, then director of the CBO, that military procurement already had been a mess for decades, though better in the 1970s than in the 1950s and '60s. It's hard to actually measure whether it's better or worse now, but I'm yet to find someone who thinks that it's markedly better. So bad do things seem that they're now recommending the nuclear option.

Sydney Friedberg of AOL Defense covered the question earlier in the week, and separately some time ago reported comments by Jacques Gansler, the former under secretary for acquisition, technology, and logistics (effectively the Pentagon's head buyer) on his view of dusting the whole thing from orbit. Fearing what might come next, he "certainly would not start out by scrapping everything; you'd have nine months of nothing, and that would be dangerous."

As I wrote in the comments section below Sydney's article, I find this a dim view of the procurement bureaucracy by its former boss. Perhaps he's right that they'd all be administratively paralyzed by the sudden loss of that monumental rule book. Perhaps they literally wouldn't know what to do next. If so, then maybe the famous American sociologist Robert Merton had a point when he infamously wrote that bureaucrats had "deformed personalities." But I'd like to think not.

Rather, I'd like to think that at least some of them have learned something, other than simple rules-compliance, at the Defense Acquisition University, the Industrial College of the Armed Forces, the Naval Postgraduate School, the Air Force Institute of Technology, the various war colleges, and maybe even in the odd MBA program about how to run a procurement organization. I'd like to think that they actually know something about how to write an RFP, evaluate bids, monitor suppliers, and cut checks. I'd like to think, that is, that they don't all need to be fired. After all, we're talking about the basics of supply chain management that are taught in any decent business or industrial engineering program, and there are quite of few of those in the US. If the USD AT&L needs some fresh and enthusiastic talent, I'll be happy to recommend some people we have here at the University of Texas: they're bright and too young to yet be jaded.

This is not to say that policy is unimportant. The problem, as Punaro et alia make clear, is that 4,878 pages of policy inordinately gum up the process, contributing to the mismatch between 15-year development programs and 18-month technology cycles. The only thing worse, that is, than a 4,878-page manual that no one reads is a 4,878-page manual that people actually try to read. Even the flow chart that the DAU provides for assistance is totally unreadable, and routinely the subject of jokes in the blogosphere. I, for one, would not want my business process to be considered laughable.

That's why I so much liked the intent behind former USD AT&L Ashton Carter's 2010 Better Buying Power memorandum—at seventeen pages, it was readable strategy for anyone in the organization. It's why I rather like that his successor, Frank Kendall, is planning an update for next month, adjusting the strategy given the past two years of experience. This is command guidance recognizable by a marine general: I want to be in Baghdad in three weeks; make this happen for me. Follow the intent, not the letter; focus on the product, not the process.

What's needed, though, in addition to actionable strategy, is some sensible process—not the unworkable morass of paper current on the shelf. Dov specifically recommends zero-basing the regulations: working line-by-line, with a "rebuttable presumption" of deletion, unless an efficiency-enhancing reason can be identified meriting retention. That's sounds good, even if a team of a hundred might literally need months to do that. Between AT&L, the FFRDCs, and the KPMGs of the world, assuredly those troops could be found.

Or, they really could just start from scratch—after all, there are countess decent procurement manuals floating around top-notch procurement organizations worldwide. They could Boeing how it's done there. Or Toyota. Or General Electric. These are companies that build complex products using complex supply chains, under serious competitive pressure, and somehow their people actually turn out to be trustworthy. To guide their work, it seems to me that something less than 100 pages should be feasible—and readable. Sure, we'll be told that "defense is different," and that it just can't be done that way. And admittedly, military procurement is very challenging. But I argue that's why less written regulation is needed: solving problems of that level of challenge (think about the Apollo program) requires creativity, not DFARs nano-management.

Of course, as Punaro notes, for this to work the people in procurement would actually need to be held accountable for the failures. They'd actually need, that is, to be fired for the serious, serial screw-ups. They'd need to be evaluated on their judgement, and not just their compliance. And as Colin Clark, Sydney's editor at AOL Defense answered me, there are those in the US Congress who so crave oversight, irrespective of its value, that they might not sit for such a radical change. Perhaps they'd launch another Obamacare maneuver, rushing through 4,878 pages of ill-considered legislation without a meaningful debate. Perhaps the Democrats would ignore the more salient accomplishments of their efforts in the 1990s to "reinvent government"; perhaps the Republicans would forget their mantra about government operating "more like a business".

But I find that scant reason not to try, unless the political appointees are so venal that they prefer the go-along, get-along comfort of E-Ring offices to actual leadership. For unless the USD AT&L and his people actually try to roll back this mess, no one should expect improvement. It's not possible within such a system.

Jim Hasík [email protected] +1-512-299-1269

Comments

[Dave Foster]

Fabulous, Jim. Highly pertinent.

My money is on more rounds of tweaks, supposed efficiency and streamlining moves, and more process on top of an maybe once in a while in place of existing process. The USG is a process-loving beast. But I'm just old and cynical. Maybe some of the kahuna types will import you and some of your UT colleagues. Could only be for the best.

S/F,

[Upandaway]

Or...

Instead of companies, you could look at other countries which has procurement systems which actually work. This would take you out of the anglo-saxon sphere however, I am pretty sure there are no good examples to be had there. The UK, Canada and Australia are as bad or worse as the USA.

Swedish FMV for example has been awarded the best place to work in Sweden four years in a row.* An exceptionally competent organization which has had a great deal to do with the continued existance and relevance of the Swedish defense industry.

But I doubt it would work in the US. After all, the problem is that "the powers that be" (anyone who prospers in the current environment) don't really want clear rules and competent technocrats.

They want processes that are complicated and technocrats who do what they're told. These are easier to dominate and manipulate.

*(says three times in the link. But they won the next year again.)
http://www.fmv.se/sv/Nyheter-och-press/Nyheter-fran-FMV/FMV-ar-basta-arbetsgivaren/

[James Hasik]

Tack så mycket! That's a great suggestion. I know some people at the FMV, and once assisted with some advisory work there. And while I've seen a more than a few comparative transnational government procurement studies, most have been more about the external politics than the internal processes. Moreover, I've encountered plenty of Americans in this business who blithely assume that it's at least as bad overseas. Having worked a bit with just the FMV, I have at least one counterexample.