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Monday, January 12, 2015

Cultural change is a procurement problem, too

Attacking the root of the problem in DoD acquisitions by Alex Haber, a business analyst in the national security practice at Censeo Consulting Group.
Policy changes may be limited in their ability to drive improvements in cost, schedule and performance. Many of the root causes of the chronic underperformance in defense acquisition stem from the culture that exists around who is buying. As such, results from policy changes alone without a cultural overhaul will inevitably fall short of the mark.

The list of human capital problems in the acquisition community begins with a misguided incentive structure. Few institutionalized benefits exist for edging away from the DoD 5000.02 Acquisition Lifecycle– the elaborate roadmap that directs DoD purchasing. In the words of a 25-year Air Force veteran with significant budgetary experience, acquisition officers are encouraged to focus on the “near rocks” (immediate challenges) and lean on reliable—though potentially sub-optimal—strategies. Locking in on the status quo can only serve to smother technological innovation and suppress adaptive business practices.

This issue is compounded by both internal and external misperceptions about the acquisition process. A 30-year Navy officer noted bluntly that some active duty personnel avoid or quickly seek to move out of acquisition assignments since they do not look at buying goods as the work of a warfighter. Additionally, a former Army Program Manager complained that legislators on the Hill appropriate dollars to DoD acquisition hubs without knowing “how the sausage is made."

The acquisition function’s relationship with industry is another pain point that policy changes cannot easily cure. As my former Navy colleague remarked, DoD acquisition leaders and their partners in industry use similar language in handling acquisition activities, but often mean different things. For example, a DoD-generated ‘should-cost’ modeling exercise on a particular program doesn’t decompose cost components with the granularity and analytic rigor that industry uses when conducting a similar exercise. A dollar is a dollar no matter how it is spent, yet the different ways that government and private industry evaluate cost leads to communication breakdowns and inefficiencies.

Going further, the Pentagon continues to commit substantial financial and human resources to internal Research & Development efforts even as procurement specialists habitually look first to private industry to meet their technology and management needs. DoD-wide policy can certainly nudge the department’s procurement arms in the direction of healthier, more efficient relationships with their suppliers. However, organic partnerships will only truly evolve when leaders in the acquisitions community start re-examining this dynamic and better articulating roles and responsibilities to industry on their own, program-specific terms.

To go back to incentives, the emphasis for rank-and-file procurement specialists is on designing briefings, not developing technological capability. In some cases, colleagues in the Pentagon have heard of acquisition managers presenting nearly 80 separate briefings to over 100 people… on a single program in a single year! Already restricted by weighty procedural obligations, a distressing trend of budgetary uncertainty and the resulting focus on the execution year alone further limits the procurement function’s ability to exercise foresight and creative thought.

If Ashton Carter can inspire a new wave of cultural norms along these lines, broad-based acquisition reform might actually amount to more than just a bureaucratic Band-Aid.

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