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The More Things Change………..

Truth or Perception?

Barney Klehman

Director of Contracting, Missile Defense Agency

Presentation To NCMA – Pikes Peak Chapter

22 October 2009

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Some Applicable Quotes………

“No job is too difficult to do for the person who doesn’t have to do it himself.”

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Another Quote

“Those who ignore the lessons of history are doomed to repeat it.”

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Another Quote

“Insanity is doing the same thing over and over, and expecting different results.”

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Another Quote

“The search for a scapegoat is the easiest of all hunting expeditions.”

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Another Quote

“All politics are local.”

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Another Quote

“Better, Faster, Cheaper.”

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One Last Quote

“Everything goes in cycles.”

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Questions to Ponder

• How should we judge how well the defense acquisition “business” is doing?

• How do we actually judge how well defense acquisition is doing?

• Is there really a problem? If so, how bad is it?

• Is it a problem that everyone really wants to fix?

• Is it a problem that actually can be fixed? If so, what would it take to fix it?

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MDA/DACLots of Changes Over the Years

• The Armed Services Procurement Act of 1947 established modern defense acquisition. How much has really changed in the last 62 years?

• ASPR, DAR, FAR, Revised Agency Regulations• Competition in Contracting Act (CICA)• Federal Acquisition and Streamlining Act (FASA)• Federal Acquisition and Reform Act (FARA)

• Breaking news: we still have huge overruns, schedule slips, and performance issues!!!

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A Question

What do we usually do when we identify a problem that needs to be fixed?

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The Answer

• We charter a panel to investigate and make recommendations to fix “the problem.”

• 1972 – Commission on Government Procurement

• 1986 – Blue Ribbon Commission on Defense Management (Packard Commission)

• 2009 – Task Force on Defense Acquisition Law and Oversight (Bus Execs for Natl Security)

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Results of the Committee Reports

• Virtually all of the recommendations from the COGP (1972) and Packard Commission (1986) were adopted by Congress and/or DOD

• We now have more programs, larger overruns, longer schedule slips, more acquisition personnel, and more oversight - than ever!

• What went wrong?

• What can we do about it?13

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The “Usual Suspects”• Ambitious and/or changing requirements • Immature technologies w/impatient customers• Desire to acquire the “whole ball of wax”• Budget fluctuations – “rob Peter to pay Paul”• Lack of flexibility in funding• Lack of contingency funding• High risk tolerance w/optimistic forecasting• Inaccurate cost estimating• Zero tolerance for failure• The result: massive bureaucracy and oversight

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Some of the Constraints• Parochial Interests

– Congressional control and oversight– Congressional protection of constituencies– DOD control and oversight – the “OSD Mafia”– Service/agency unwillingness to give up programs– Warfighter “near-term” perspective– Acquisition community long-term perspective– Socioeconomic pressures and accountability– Short-term accountability of Program Managers – Industry objectives/accountability to shareholders– Press/public zero tolerance

• Result: misalignment, discord, lack of trust15

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The Current Environment

• Less and less tolerance for any mistakes– More oversight (internal and external)– More restrictions, less authority, more approvals reqd

• More budget pressure on Defense– Economy– Less % of GDP, but less discretionary funds available– Competing priorities (health, infrastructure, etc)

• More adversarial relationships developing– Internal govt (DCAA, Acquisition Offices, OSD)– Govt and Industry (going back to the early 1980s?)

• Bottom line: it’s always the “other guy’s” fault16

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Are We Really Serious?• Tough choices have to be made

– We can’t have everything, even though we want it– Everyone probably has to give up something– There could be significant consequences

• Americans are optimists- “it’ll work out……”• We only get serious when a real crisis occurs

– Do we have a real crisis? Do most of us feel that way?– Do all the constituencies really feel that way?– How late is too late? Are we already there?– What happens if we don’t do anything?– What happens if we do?

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MDA/DACAre We Kidding Ourselves?

• Traditional U.S. advantages are disappearing– Technology edge– Cost efficiency– Human Resource availability– Worldwide competition is increasing rapidly– We can’t rest on our laurels

• Everyone’s priorities have merit

• But who is really accountable?

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The BENS Panel Solution• Address the problem holistically

– All interests must be accounted for– Tradeoffs must be identified and negotiated

• Consequences must be identified if not willing to “deal”

• Change the trust scenarios– More delegated authority– More tolerance for uncertainty – can’t figure it all out– Less tolerance for risk uncertainty – the big stuff– Assume everyone is trying to do the right thing

• 37 years of band-aid solutions haven’t been the answer – is it time to try something else?

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References• 2009 - Business Executives for National Security, “Getting to Best:

Reforming the Defense Acquisition Enterprise” www.bens.org/mis_support/Reforming%20the%20Defense.pdf

• 1986 - “A Formula for Action: A Report to the President on Defense Acquisition by the President’s Blue Ribbon Commission on Defense Management “ (aka The Packard Commission)

• 1972 - Report of the Commission on Government Procurement

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Some Final Questions

“We all know what needs to be done. The question is, why aren’t we doing it?”

(David Packard)

• Do we really know what needs to be done?

• If so, why aren’t we doing it?21