Defense acquisition faces uncertain future
Tight budgets and evolving requirements leave DOD acquisition uncertain
- By Amber Corrin
- Jan 11, 2011
The military has always enjoyed a certain degree of autonomy, but it is not immune from the economic uncertainties that face the government and country. With the federal budget in a state of flux, Defense Department officials and others are asking some tough questions about the future of contracting at DOD.
Many of the questions center on how and what DOD must buy to do its job — and how to pay for it.
DOD officials are already looking for $100 billion in savings and efficiencies in the next five years, and major programs and systems are on the chopping block. But the rapidly changing nature of warfare complicates decisions about what to cut.
The way DOD spends its money has been evolving for some time, and now more than 60 percent of acquisition costs go to services rather than more traditional expenditures, such as weapons, said Jacques Gansler, former undersecretary of Defense for acquisition, technology and logistics and now a professor at the University of Maryland. He spoke as part of a panel of experts convened by Compusearch last month to discuss the future of government acquisition.
That percentage includes increased spending on IT, another area that is undergoing radical reform. Tanks and major weapons programs are largely on their way out. High technology and mobile, tactical communications are in. They aren’t cheap, though, and they require research and development that must compete for dwindling funds.
Adversaries are becoming smarter, faster and more agile, and a massive DOD is struggling to change course and adapt to the new terrain with fewer resources. Specifically, DOD can expect only 1 percent annual growth in its budget — or even less.
“In the future, we’re going to look back at the good old days when 1 percent growth was possible,” said Elliott Branch, executive director of acquisition and logistics management at the Office of the Assistant Secretary of the Navy and another participant in the panel discussion in December.
Some experts say DOD must emulate the rest of the United States in these lean times and narrow its priorities.
“We need to focus on one requirement: What do we really need to buy?” said panel member Deidre Lee, former director of procurement and acquisition policy at DOD and now executive director of compliance at Fluor. “Otherwise, we’re going to be buying a whole bunch of the wrong things really quick.”
Part of that refocusing on truly critical requirements could mean taking a step back to see the bigger picture, Branch said.
“We have in DOD a sense of urgency in what we buy — and well we should, in some cases,” he said. “But on the other hand, we have 13 times the tonnage of the next biggest Navy, and they’re our friends. We have air power unequaled. My question is what drives the urgency surrounding [a program such as the costly, long-running F-35 Joint Strike Fighter] when we have a chance to step back. We are addicted to speed, to rapid deployment, instead of getting out the right technologies.”
Another major issue in defense spending is the contracting process. Some officials argue that it could be improved by better practices, rules and procedures.
“There is constant tension between oversight and contracting,” said Francis Spampinato, director of acquisition and contracting at the Federal Aviation Administration. “There has to be oversight, but we have to let people do their jobs, and we have to be realistic with the oversight process.”
Spampinato added that contracting officers need to be able to use their discretion, and he called for hiring and training specialists in IT contracting so they can better understand the nuances.
Branch countered that more oversight is necessary but not in its existing form. “We need more mentorship and less oversight,” he said. “I’m not sure that’s happening.”
In addition, the deployment of technology and weapons must be improved, the panelists said. Although getting critical tools to troops on the ground is absolutely necessary, it must be done judiciously, they agreed.
In fact, the shrinking coffers could paradoxically be a boon for defense acquisition.
“Money is the enemy of innovation,” Branch said. “We can achieve the goals of the organization while protecting the interests of the taxpayer. The two are not mutually exclusive.”
Amber Corrin is a staff writer covering military networks for Defense Systems.