Systems Engineering in Acquisition Strategy: Change Needed

1994

The authors acknowledge the financial support for this research made available by the Lean Aircraft Initiative at MIT sponsored jointly by the US Air Force and a group of aerospace companies. All facts, statements, opinions, and conclusions expressed herein are solely those of the authors and do not in any way reflect those of the Lean Aircraft Initiative, the US Air Force, the sponsoring companies (individually or as a group), or MIT. The latter are absolved from any remaining errors or shortcomings for which the authors take full responsibility. brought to you by CORE View metadata, citation and similar papers at core.ac.uk provided by DSpace@MIT Many in and out of government believe that the weapons acquisition process is in need of reform. They argue that our weapons cost too much, frequently miss their promised performance targets, and rarely proceed according to their intended schedules. A long series of official studies of those failings have produced literally hundreds of proposals for reform, many of which have been implemented. But the belief remains that the acquisition process is in need of further reform. Here we review the major acquisition studies of the past and the underlying causes of the continual search for, and frustration of, reform. This review is a preliminary step toward policy recommendations for acquisition reform, but no such recommendations are offered here. Six reports command our attention. They are the ones commissioned directly by the President or the Congress with the goal of system-wide reform. Dozens of others have been produced, but most of these are quite limited in scope, are technically focused, or are confined to a single system or service. The six reports are the first and second Commissions on the Organization of the Executive Branch of the Government (First and Second Hoover Commission), the President's Blue Ribbon Defense Panel (Fitzhugh Commission), the Commission on Government Procurement, the President's Private Sector Survey on Cost Control (Grace Commission), and the President's Blue Ribbon Commission on Defense Management (Packard Commission). 1 Complaints about the government acquisition system fall into a few general categories. One, there have long been complaints about cost. The government is generally seen as paying too much either due to its own ineptitude or exploitative contractors. Two, regardless of whether costs are high or low, there are complaints about the quality of the weapons procured by the government. The traditional charge is 1 These six reports are reproduced in facsimile form in the House of Representatives' Armed Services Committee Defense Acquisition: Major U.S. Commission Reports (1949-1988) (Washington, DC: Government Printing Office, 1988). that contractors are selling substandard items to the government. Recently, complaints about quality have focused on problems with high-technology weapons systems, as critics have raised questions about reliability, failure to meet established performance goals, and a range of "mission definitions" questions. Three, since the 1940s there have been concerns about the length of time it take the government to procure items. Complaints range from the effects of overly-complex regulations, which make buying even low cost items a drawn-out and expensive process, to the decade-long design cycles of military aircraft. In sum, whenever the government buys anything, critics claim it pays too much and is likely to be stuck with shoddy goods, which it also never gets on time. The federal procurement system is very well studied. Most of the reviews have focused on weapons acquisition, and virtually all major studies have at least touched on defense-related issues. Many of these studies have been limited to single systems or are on a single, often quite technical, aspect of the procurement system. The sheer volume of these reports makes it impractical to examine each of them, despite the innovative approaches some represent. Here, with but brief exception, we focus on the most broadly-oriented reports, each of which was created with a Presidential or Congressional mandate. These reports illustrate both the change and the significant continuity in thinking about acquisition reform in the years since the Second World War. Branch of the Government, popularly known and hereafter cited as the first Hoover Commission, which reported in 1949. 2 The first Hoover Commission spent relatively little time examining defense procurement, being more interested in addressing the role of 2 The Commission on the Organization of the Executive Branch of the Government, The National Security Organization (Washington, DC: Government Printing Office, 1949). the Secretary of Defense and general questions of what the overarching structure of the American military should be. The second Hoover Commission, which shared the same formal sponsorship and direction, reopened in 1955. 3 It examined the defense procurement process in greater depth, although it was primarily concerned with achieving efficiencies in the purchase of commodity goods, such as soap or mops, rather than reviewing how advanced weapons systems were produced. The second Hoover Commission is notable in conceiving the administration of the Defense Department as if it were a large corporation rather than a military organization. This mode of thinkingadopting commercial practices for the government -has been a nearly pervasive feature of subsequent acquisition reform plans. There were no major reports on acquisition reform for fifteen years after the second Hoover Commission. The primary causes of this dearth of critical thought seems to have been the presence of Robert McNamara as Secretary of Defense. McNamara took the approach of a manager of a large American business, as he once was at Ford, and attempted to apply it to the Defense Department. In essence, the critics were in control. Relevant to acquisition, Total Package Procurement (TPP) was the most wellknown of the McNamara innovations. TPP involved offering weapon contractors the entire procurement early in the development cycle for a fixed price, the total package. This system quickly became untenable as a number of major programs exceeded projected budgets, threatening their prime contractors with bankruptcy and the military with the total loss of the expected weapons. Secretary McNamara also launched a concerted campaign to reduce "unnecessary" duplication in acquisition, from belt buckles to fighter planes. The most well known effort along these lines became known as the TFX controversy, a project to acquire the F-111 for the Air Force and the Navy. It 3 The Commission on the Organization of the Executive Branch of the Government, Business Organization of the Department of Defense (Washington, DC: Government Printing Office, 1955). was in the resulting environment of civil-military, contractor-government conflict that the next round of acquisition reform reports began to appear. 4 In 1970 the Blue Ribbon Defense Panel, known as the Fitzhugh Commission, reported. 5 The Fitzhugh Commission was the first detailed examination of the weapons development process by an independent, government-sponsored panel. As such, it offered a number of recommendations for changing the development strategies the services followed. In contrast to the two Hoover Commissions, the Fitzhugh Commission spent little time on commodity items or joint purchasing, instead focusing firmly on weapons systems. The Fitzhugh Commission was also the first major report to address the political environment of defense acquisition, if only in a limited way with a warning that Congress was developing a tendency to micromanage the Defense Department.

ippa.org

Centre for Policy Research on Science and …, 2005

Journal of Policy Analysis and Management, 1999

The Journal of Cost Analysis, 1989

REPORT DOCUNIENTATION PAGE Unclassified _______________________ .a EC~jkiT rr %)--',r I O~N ,:u H R I T j ) ~.'RdL itN ,AiALAC1Ii.: y (if kr.ý)A DEOCLA-SF),CýArON DOWNGRAOiN6 SCrMEDULE Approved for public release 4 PERFORMING 0RIjAN.14ArI0N REPORT NUM8ERIS MONITORING ORiiANIZATION RLPORT NuNN3E'(S) NTS-54-89-01 6a. NAME OF PERFORMING ORGANIZATION 6o OFFICE SYM8OL 2a NAME OF MONITORIN~G ORGANIZATION Department of Defense Procurement Policy Reform: An Evolutionary Perspective* William Gates An important factor in assessing federal procurement policy reform is understanding the environment in which these reforms must be implemented. This paper will describe the Department of Detense (DOD) environment by tracing the history of DOD procurement reforms. After describing this evolution, patterns from past reforms and their implications for the future will be discussed. Procurement policy involves several elements. At one extreme are the detailed procurement regulations embodied in the Federal Acquisition Regulations (FAR) and in the various Service directives and instructions. At the other extreme are the global policy issues, such as military strategy and the perceived threat, that indirectly influence the procurement enviro:iment. The middle ground includes general procurement procedures and guidelines. This paper will focus on the middle ground, including the shortcomings of the process as perceived by the participants and the reforms recommended to correct these shortcomings. The starting point for this analysis is the late 1940s. Dissatisfaction with defense procurement undoubtedly existed before this time. However, the late 1940s is a logical starting point. The Office of the Secretary of Defense (OSD) and DOD were both formed in the late 1940s, to integrate and coordinate the Services. Defense procurement was one important aspect of DOD's responsibilities. In addition, thee wasn't really a defense industry before the late 1940s. Weapons procurement did not require long lead times and there was no imminent threat to the U.S. homeland. Therefore, the U.S. had sufficient time to convert commercial manufacturing facilities to military production when needed. When, the U.S. became the first line of defense in Europe, and weapon technologies became increasingly complex and distinct from commercial technologies, the U.S. began developing a defense-related industrial capability. Considering this background, this study will describe the history of DOD procurement reforms from the late 1940s to the present. More specifically, procurement reforms will be grouped into several eras: early DOD (1947-1960), McNamara (1961-1969), Packard (1969-1972), OMB Circular A-109 (1976), Carlucci (1980-1983), Congressional initiatives (1983-1985), and the Packard Commission (1986). In each era, the discussion will consider the perceived problems, perceived causes, symptoms, recommendations, ard actions. After examining these reforms, recurring patterns observed in past reforms will be discussed.

Policy Studies Journal, 1985

2002

SSRN Electronic Journal, 2015

The concept of cherry-picking is discussed further later below. 16 Recital 2 of the Directive. 17 Also, the same in the context of Article 31 of the Directive. 18 Commission's Communication on Pre-commercial procurement: Driving innovation to ensure sustainable high quality public services in Europe, Brussels COM (2007) 799 final, p. 5. 19 Commission's Communication on Pre-commercial procurement: Driving innovation to ensure sustainable high quality public services in Europe, Brussels COM (2007) 799 final, p.5. 20 The Wilkinson Report, Report of the Independent Expert Group lead by DTIconducted for DG RTD, 'Public Procurement for research and innovation: Developing procurement practices favourable to research and innovation' September 2005 p. 5. 21 Commission's Communication on Pre-commercial procurement: Driving innovation to ensure sustainable high quality public services in Europe, Brussels COM (2007) 799 final, p. 7.

2018

The defense acquisition system has been the source of intense scrutiny and calls for reform for over four decades. This research is to examine the contributions of Systems Theory to enhance prospects related to acquisition reform. Systems Theory offers a set of principles, laws, and concepts that explain the behavior of complex systems. Although the acquisition system and constituent programs have been critiqued and examined from multiple perspectives, they have never been the subject of exploration from Systems Theory. Recent advances in Systems Theory have identified 83 different potential system pathologies that can result in degraded system performance or outright failure. System pathologies have been previously defined (Keating & Katina, 2012) as "a circumstance, condition, factor, or pattern that acts to limit system performance, or lessen system viability, such that the likelihood of a system achieving performance expectations is reduced."Following a brief introduct...