Is Levin-McCain Bill the Right Path?

Congress is awash in acquisition reform, as it was the last time a Democrat was elected president. The House Armed Services Committee created a seven-member acquisition reform panel on March 6. The week before that, Sens. Carl Levin and John McCain -- the top two lawmakers on the Senate Armed Services Committee - unveiled a new bill intended to bolster the acquisition system. Robbin Laird, a defense consultant with a wide practice, wonders whether acquisition reform serves the country or may saddle it with aging and technically inferior weapons.

The Acquisition Reform Challenge
The Levin-McCain bill deals with an important problem, getting control over costs and reforming the acquisition process. But what must be remembered is simply that acquisition is about buying kit for the warrior and ensuring that the US has the best-equipped military in the world. Better processes by themselves to not yield better acquisition; focus on process by itself. We do not want to replicate in DoD what has happened to the nuclear power industry; we have process; we have no new physical plant.

And the US needs to foster innovation, which enables the warfighter to be ahead of the game. I do not see in the bill an approach which ensures that innovation is funded, and new programs prioritized for the reshaping of US forces. Cost containment is not difficult when making decisions about already developed and manufactured kit; what is significantly more difficult is funding new kit and ensuring that proper trade-offs are made between capabilities and costs for the inclusion of new kit into the force structure.

And the core problem raised by the bill is where will the acquisition and systems engineering talent come from which is to staff the government in monitoring contracts and managing programs. Program mangers need to be empowered to be able to make trade-offs between capabilities and costs. And the idea of a cost “tsar” in the Pentagon makes sense only if trade-offs between capabilities and costs can be considered.

I think there is a significant difference between developed and already manufactured kit and new programs when framing acquisition reform. For existing kit, cost containment is largely a function of a steady buying process by the government facilitated by long-term production contracts. In contrast, for new programs, there is a need to fund growth possibilities to determine the trade space among options for development, which provide more or less capability for the warfighter.

Perhaps for new programs, it would be sensible to put in place an initial cost package with realistic growth built in; at program launch, projected maturity points would be established at which time trade-offs between capabilities and costs would be determined. Put simply, development would funded through a date certain; at that point the Program Manager would frame trade-offs and identify off ramps whereby growth beyond acceptable cost would mandate making production choices.

If the first approach is the only real option, there will be no significant development and breakthrough opportunities for the US military. And the policy of change being advocated by the President surely should not exclude the breakthrough innovations, which have enabled American military superiority. We certainly do not want to buy weapons based on our understanding of technology circa 2009; if we do so we will fund a military mausoleum.

Cost containment is important; but fielding an effective force is at least as important. Determining the trade-offs between the two is really the challenge for acquisition reform.

And here a change in the focal point of the oversight czar suggested in the bill could make a very significant contribution to shaping a more effective acquisition and development process. The bill calls for the establishment of a "director of independent cost assessment" who would examine the cost of weapons. Rather than reproducing much of what already occurs in AT and L and with the Cost Analysis Group (CAG), it would be better to ask the new director and his staff, at least in part, to assess the capabilities trade-offs of new programs and to help shape a decision-making process where cost and capabilities trade-offs could be better understood.

In the current climate of “lynch mob” or “populist” procurement in which any program over cost is suspect, establishing an analytical center with professional competence able to be part of the public debate is crucial. Perhaps the new office could hire a professional staff, which could function along the lines of the very professional, and highly missed Office of Technology Assessment. This office for those not old enough to miss it provided high quality reports informing the public and policy debate about technology choices and options. An orgy of cost debates will miss the point.

DoD needs to sort through current and developmental options to ensure the mix of what is right for now and prepares the future. In today’s world the future is already part of the present. Favoring mature manufactured products which can be priced in today’s dollars with accuracy may seem a good bargain, but will prove to be a proof of the old adage “a penny wise and a pound foolish.”

Robbin Laird is an international defense consultant who served on the National Security Council staff of both the Reagan and Carter administrations.