Pentagon unveils latest acquisition crusade

The Pentagon acquisition chief unveiled Better Buying Power 2.0 as he's the latest to pursue massive changes to fix the military's acquisition architecture.

The Pentagon’s top acquisition official is fed up with how long it takes the military to develop vehicles, weapons and equipment. He wants to improve efficiency, yank out bureaucracy, build up the military’s acquisition workforce and make it easier for U.S. defense companies to sell to international customers.

Frank Kendall, undersecretary for acquisition, technology and logistics, laid out his plans to accomplish these lofty goals under Better Buying Power 2.0 — the Defense Department’s weapon buying guidance. It’s certainly  not the first time a Pentagon acquisition chief has made bold statements demanding change to an acquisition system that’s roundly criticized inside and outside the military.

“I’m very unhappy, I’ll put it that way, with how long it takes us to get products to the field. It’s taking much too long, as far as I’m concerned.  And I’m — I’m having several efforts underway to try to understand what the root cause of that is,” Kendall said Tuesday in the Pentagon press room.

Kendall’s predecessor, Deputy Defense Secretary Ash Carter, tried to fix military acquisition in 2010 when he unveiled Better Buying Power 1.0. Two years later, the Pentagon’s largest acquisition program is still very much in doubt as the head of the Joint Striker Program called the Pentagon’s relationship with Lockheed Martin the worst he’s ever seen. For large weapons programs, the Pentagon still overruns on development costs by close to 30 percent.

“One of the things I’m motivated by is the remarkable constancy of our poor performance,” Kendall said.

Kendall discussed making sweeping changes in a 36-point plan that makes up Better Buying Power 2.0. Many are repeats from the first version, but there have been some changes.

Kendall is backing off the push he and Carter made for fixed price contracts back in 2010. Fixed price contracts have a place in low rate production, but he worries too many acquisition officials see it as a magic bullet to cure all acquisition development ailments.

“People thought that that had become the right kind of contract to use for almost everything. And that wasn’t what we wanted. We wanted people to use FPI [fixed price incentives] more in certain situations, and in particular for low rate production,” Kendall said.

Kendall knows Congress will not like this move. Lawmakers often point to fixed price contracts as a victory for the Pentagon. The Air Force’s fixed price tanker contract is seen as an example to follow for other major acquisition programs. The Pentagon acquisition chief knows he may have created his own monster on Capitol Hill.

“I’ve been very clear with the people on the Hill who are enthusiasts for fixed price. I don’t think it’s a panacea. It certainly shifts risks to industry, but there’s inherent risk in most development programs and I think we need to balance that,” Kendall said.

The tanker program should not serve as the rule, Kendall explained. A fixed price contact worked with the tanker program because it had firm requirements, mature technology, rich bidders, experienced defense companies, and a business case to succeed, Kendall said.

Kendall took aim at a significant early phase of any major weapons develop program — the technology development phase. The point of the TD phase is to reduce risk by building prototypes ahead of the engineering  and manufacturing development phase of a program.

The Pentagon launched a study that examined the TD phases of ten programs to include the high profile Joint Air to Ground Missile, Ground Combat Vehicle, Joint Light Tactical Vehicle and Nett Warrior programs. Kendall found that industry and military officials had stopped removing risk.

“Industry wasn’t trying to reduce risk. Industry was trying to win the EMD phase and get into a sole-source position for production. That was their motivation. It was obvious that that is not unreasonable for that to be their motivation,” he said. “It wasn’t our motivation. Our motivation was to get risk out so we’d have the right bidder come in and win the EMD phase.”

Kendall does want to help a defense industry worried about their future as the Pentagon prepares to sustain massive cuts to its budget that could reach $1 trillion in cuts over the next decade. Defense leaders have told Kendall they will need to be more competitive in international markets to stay afloat. The open spigot of U.S. defense dollars is closing.

“In the current climate, with budgets kind of around the world coming down, frankly, for defense spending, industry is looking to do foreign sales more than ever to help keep their base healthy,” Kendall said.

In response, the military’s acquisition force will make exportability a priority early in design phases of certain programs. Anti-tamper characteristics will be built into the beginning of programs opposed to waiting until the end, Kendall said.

Congress has already approved the start to a pilot program to improve exportability for the Air Force Three Dimensional Expeditionary Long-Range Radar and the Navy’s Next-Generation Jammer. Kendall said these programs could be the first of many if the pilot goes well.

Kendall feared the department will not reach its full potential until it does a better job at improving the professionalism of the military’s acquisition workforce. He said the Pentagon must do a better job at rewarding those who succeed and punishing those who fail while leaving room for officials to make mistakes.

“We have a lot of very professional people, but we can be better, and we can have a deeper bench,” he said.

He recognized the challenges that programs face when program managers often spend only two or three years at a certain assignment. Salary freezes have made the military’s job even harder trying to keep acquisition professionals working for the military and not fleeing to defense companies.

“Frankly, I think that there’s no more important legacy that any of us as managers can have than to leave behind a stronger workforce than the one we inherited,” Kendall said.