Thursday, July 10, 2014

Kendall: Initiative Aids DoD Acquisitions Culture Change

By Claudette Roulo
DoD News, Defense Media Activity

WASHINGTON, July 10, 2014 – The undersecretary of defense for acquisition, technology and logistics told Congress today that numerous attempts to improve the acquisitions process over the years have had little discernible impact.

“The evidence, in terms of major program costs and schedule slips, shows very little statistical change,” Frank Kendall told members of the House Armed Services Committee.

Three conclusions, he said, can be drawn from this fact.

“The first is that fixing defense acquisition isn't as easy as a lot of people seem to think it is,” Kendall said.

A second possibility, he said, is that the department hasn’t been patient or tenacious enough with acquisition policies.

“We don't always leave policies in place long enough to find out if they work or not,” the undersecretary said. “The frequent rotation of leadership -- particularly political appointees and career military people -- makes it hard to sustain initiatives long enough to determine if they are succeeding or not.”

Lastly, it’s possible that the department has been focused on the wrong things, he said.

“Defense acquisition is a human endeavor. And my view is that we may have focused too much on organizational structures, processes, compliance with policy and oversight mechanisms, and not enough on providing people with the skills and incentives they need to succeed,” Kendall said.

But, he added, with the introduction four years ago of the Better Buying Power initiatives, the acquisitions process is showing signs of progress.

Better Buying Power is “an approach of continuous incremental improvement based on pragmatism and evidence,” the undersecretary said.

“I can report to you today that after four years, I believe we are seeing changes for the better,” Kendall told committee members. “And I'm encouraged that organizations, like the GAO, agree with that conclusion.”

Acquiring cutting-edge weapon systems is a complex job, he said.

“It requires getting every one of hundreds of decisions right in an environment where the real incentive systems are not always aligned with the goal of increased efficiency,” the undersecretary said.

When there is uncertainty about future budgets, as there is currently, planning becomes excessively difficult, he said.

Better Buying Power initiatives, Kendall said, are particularly beneficial in a constrained fiscal environment, when every dollar spent on one program could mean dollars are cut from some other program.

“The Better Buying Power approach identifies areas of acquisition where the greatest good can be achieved and tries to attack those opportunities,” he said. “As we learn from our experience, we periodically make adjustments and bring in new ideas. We reject ideas that don't work.”

This is a pragmatic, incremental approach that stretches across the entire acquisitions program, Kendall said. From setting affordability caps to constrain program costs to developing strong contractual incentives to reduce to a focus on the professionalism of the department's acquisition workforce, it’s hard, detailed work, he added.

“It takes time, constancy of purpose, and tenacity to be effective. I don't believe there is any other way to achieve lasting improvement,” the undersecretary said.

The changes in defense acquisitions aren’t just procedural -- they’re also cultural, Kendall told the committee.

“Academic business literature suggests that two things are necessary to effect major change in an organization; a period of four or five years of sustained commitment by senior leadership -- and a crisis,” he said. “I'm trying to supply the leadership. And the budget situation is supplying the crisis.”

Against this backdrop, the undersecretary said he is working to transition the acquisitions workforce from a culture that values spending to one that values controlling costs.

“In government, the built-in incentive system is to spend one's budget so that funds are not rescinded or reduced in subsequent budgets,” he said. “Many of the Better Buying Power initiatives are intended to reverse the situation.”

The second cultural transformation is to eliminate the check-the-box, or school-solution approach to acquisition, Kendall said.

The defense acquisitions culture should be based on “professionalism, sound business and technical analysis, and most of all, critical thinking,” he said.

“The vast array of product and service types the department buys makes this a necessity,” the undersecretary added.

“One-size-fits-all rules are not the right answer for our acquisition problems, and cannot substitute for the effective professional judgments that are needed for success in defense acquisition,” Kendall said. “I do believe we are making progress, but I also believe we have ample room for additional improvement.”

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