Procurement Reform Must be Government Priority, Gates Tells Senate

By Jim Garamone
American Forces Press Service

Jan. 27, 2009 - One of the main challenges facing the Defense Department is how the department acquires goods and services and manages the taxpayers' money, Secretary Robert M. Gates told the Senate Armed Services Committee today. "A risk-averse culture, a litigious process, parochial interests, excessive and changing requirements, budget churn and instability and sometimes adversarial relationships" within the Defense Department and with other parts of government have now made acquisition reform a priority, Gates told the senators.

The secretary said defense officials must make the difficult procurement choices beginning with President Barack Obama's fiscal 2010 defense budget request.

"President Obama will present his budget later this spring," Gates told the committee. "One thing we have known for many months is that the spigot of defense spending that opened on 9/11 is closing. Two major campaigns ongoing, the economic crisis and resulting budget pressures will force hard choices on this department."

He noted that any necessary changes "should avoid across-the-board adjustments, which inefficiently extend all programs."

Now is the time to move forward, Gates said. The current situation is "one of those rare chances ... to critically and ruthlessly separate appetites from real requirements, those things that are desirable in a perfect world from those things that are truly needed in light of the threats America faces, and the missions we are likely to undertake in the years ahead," he said.

Gates said resolving the department's acquisition problems will take time.

"I have no illusions that all of this will be solved while I am at the Pentagon," Gates told the committee. "Indeed, even if I am somewhat successful on the institutional side, the benefits of these changes may not be visible for years. My hope, however, is to draw a line, and from here forward make systemic progress to put the department on a glide path for future success."

Gates said all services are feeling the effects of a small set of expensive weapons programs that have had repeated and unacceptable problems with requirements, schedule, cost and performance.

This is not a revelation, he said. Since the end of World War II, almost 130 studies have addressed procurement problems. While there is no "silver-bullet" solution, he said, "I do believe we can make headway. And we have already begun addressing these issues."

The department has begun to purchase systems at more efficient rates for the production lines. Gates said he believes defense officials can combine budget stability and order rates that take advantage of economies of scale to lower costs.

The old expression "close enough for government work" must take on new meaning, Gates said. "We will pursue greater quantities of systems that represent the 75 percent solution instead of smaller quantities of 99 percent exquisite systems," said he explained.

Procurement needs to become as joint as the fighting force, he said.

"While the military's operations have become very joint, and impressively so, budget and procurement decisions remain overwhelmingly service-centric," he said. "To address a given risk, we may have to invest more in the future-oriented program of one service and less in that of another, particularly when both programs were conceived with the same threat in mind."

Part of that is the need to freeze requirements on programs at contract award and write contracts that incentivize proper behavior, Gates said.

"I feel that many programs that cost more than anticipated are built on an inadequate initial foundation," said he told the Senate panel. "I believe the department should seek increased competition, use of prototypes – including competitive prototyping – and ensure technology maturity so that our programs are ready for the next phases of development."

The department also must have enough personnel with the right skills to shepherd acquisitions forward, he said.

"Over the past eight years, for example, the Department of Defense has operated with an average percentage of vacancies, in key acquisition positions, ranging from 13 percent in the Army to 43 percent in the Air Force," he said.

The wars in Afghanistan and Iraq have exposed the underlying flaws in the Pentagon bureaucracy, Gates said, noting that he has tried to correct those problems.

"I've spent the better part of the last two years focused on the wars we are fighting today, and making sure that the Pentagon is doing everything possible to ensure that America's fighting men and women are supported in battle and properly cared for when they come home," Gates said.

Gates said institutional priorities and cultural preference must be re-ordered. The bureaucracy still is "largely arranged to plan for future wars, to prepare for a short war, but not to wage a protracted war," he said.

"The challenge we face," he told the senators, "is how well we can institutionalize the irregular capabilities gained and means to support troops in the theater that have been, for the most part, developed ad hoc and funded outside the base budget."

Gates said the department must close a yawning gap between the way the defense establishment supports current operations and the way it prepares for future conventional threats.

"Our wartime needs must have a home and enthusiastic constituencies in the regular budgeting and procurement process," he said. "Our procurement and preparation for conventional scenarios must, in turn, be driven more by the actual capabilities of potential adversaries, and less by what is technologically feasible given unlimited time and resources."

Sometimes, he said, that means fielding weapons or technology quickly, even if its full potential has yet to be realized.

"The problem is there are two different mentalities involved," he explained. "The one is the typical culture in the Defense Department, which is 99-percent, exquisite solutions over a five- or six- or 10-year period, and the other is a 75-percent solution in weeks or months. And people approach problem-solving in very different ways when they have that different kind of experience. We've got to figure out how to be able to walk and chew gum at the same time.

He cited the obstacles he had to overcome to get mine-resistant, ambush-protected vehicles and more intelligence, surveillance and reconnaissance assets into the combat theater quickly.

"The question I keep coming back to is, why did I have to go outside the regular Pentagon bureaucracy in order to build MRAPs and to get additional ISR?" the secretary said. "We need to figure out a way where that happens within the institution and where there are institutional supporters of getting that kind of thing done in a prompt and timely way."