Is there a program management crisis in DOD?

Even the most brief skim of the recent GAO report on the Air Force's tanker contract leaves one wondering what could have led to so many major mistakes on a procurement.

It's as if the tanker program has been cursed from the day it began. In 2004, a former Air Force official and Boeing's CFO went to jail over conflicts of interest on the contract, and the Air Force was forced to re-open bidding.

But if you ask analysts who watch the procurement process, the Air Force's problems on this contract are hardly a surprise. "It kind of points to a systemic problem in the Department of Defense," said Wayne Plucker, an analyst at Frost and Sullivan, when I spoke to him about the project's woes. "It's certainly not peculiar to the air force, but certainly the Air Force has a big part of the problem."

Arasj Ardalan, the manager of Federal opportunity research at analyst firm Input, agrees that it's a DOD-wide problem, and says that it's reflective of procurement problems in other Federal agencies as well, including "the [General Services Administration]'s Alliant program."

The problem may be, in part, a symptom of the wave of retirements hitting the DOD's civilian ranks. Plucker points to the wave of retirement of program managers and contracting experts over the past decade "to the point now where more of the process is handed over to the contractors, and less scrutiny is done by the departments themselves."

The brain drain was the focus of a recent New York Times story which highlighted both the dwindling ranks of skilled engineers within DOD and the dearth of new engineers seeking employment with the military. The article cited the wage gap between tech and financial sector employers and the government as a major factor--as private employers offer nearly double the entry-level salary that graduates get on average from DOD.

But Plucker also faults previous leadership at DOD, though he won't name names. "There's been some past leadership that I won't say encouraged freelancing, but kind of indicated that we needn't follow the rules quite as strictly, we need to get this program on the road. And that's affected how they deal with things."

The impact of the Air Force tanker contract problems is going to be felt across all development and procurement programs at DOD, and especially at the Air Force. Most of the folks I've spoken to believe that unless there's some real effort to reform how projects are handled, Congress will force the DOD's hand with even more oversight and scrutiny.

"Simply put, the Air Force can't live with another [problem like the tanker program]," said Plucker. "Otherwise they're going to have congressional scrutiny that the Air Force can't stand."

There are a number of bright spots, however. As we found in our coverage of the JTRS program,  JPEO JTRS--run out of Navy's SPAWAR in San Diego, has dramatically improved its management. Plucker points to JTRS as an example of the Navy's increasing leadership role in joint procurement. "You're seeing some executive management of programs paassed to the navy from the air force, because the Navy is all of a sudden providing adult leadership that the air force and to some degree the army has not," he said.

Posted by Sean Gallagher on Jun 23, 2008 at 8:12 AM