The Department of Defense has new guidance out that will unravel its byzantine acquisition system by incorporating the latest Better Buying Power principles. Undersecretary for Acquisition, Technology and Logistics Frank Kendall says building those principles into policy was the reason he updated Instruction 5000.02.

“I’ve seen about a dozen different versions of 5000.02 in my career and they essentially all do the same thing in slightly different ways,” Frank Kendall told Federal News Radio’s Francis Rose.

The new version of 5000.02 clears up how to structure an acquisition program’s lifecycle, depending on what is being acquired and the factors that influence how that acquisition takes place.

The update provides a number of different models that are product related, whether the product is software or hardware intensive. It also provides a model for rapid acquisition in which the urgency of the need is the driving factor in how the program is structured.

“The idea is to make it clear to people that they should start with careful thought about the job that has to be done and then lay out the program consistent with that job and the nature of the product, which is a bit of a deviation from past versions that had one model that people tried to force their programs into basically,” Kendall said.

These changes give DoD a number of options for improved implementation of the Better Buying Power Initiative. One aspect focuses on affordability analysis.

“Essentially, this is long-term capital planning, where people have to assess whether future budgets will support a product or not and what level of funding or cost they are going to be able to bear as they get into production and sustainment,” Kendall said. “So, we’re implementing that Better Buying Power guidance very directly in 5000.02.”

The revamped 5000.02 also focuses on the concept of “should cost,” in which program managers look carefully at their cost structures, so that they can understand where there are opportunities to reduce costs.

Another goal of the updated document is to strengthen the relationship between requirements and acquisition.

“We’ve added a decision point into the process from previous versions where the requirements are defined and then are used to guide the rest of the involvement,” Kendall said. “That was missing from the previous iteration. We also emphasized the use of configuration steering boards, which are really boards of both acquirers and requirers that have to meet together to look at priorities and do cost tradeoffs and make smart decisions about what features to have in a product. So, there are a number of ways in which Better Buying Power can be infused into this version of 5000.02.”

Cutting costs is a fundamental responsibility

Much of what Better Buying Power is trying to accomplish is making managers more cost-conscious, so that they understand cutting costs is a fundamental responsibility.

“I go back a long ways in the Defense Department, and I think there’s always been this sense that you were going to be punished if you didn’t spend all your money,” Kendall said. “We want people to feel that if they don’t spend all their money, if they divert it to higher priorities for the department or for the service or even if they return funds to the Treasury, that’s a positive thing. We have not done that, I think, historically.”

Kendall acknowledged that the entire chain of command needs to support this approach in order for it to succeed. To that end, DoD is looking for ways to recognize cost-saving efforts by project managers.

“The rewards that we give out now are really recognizing cost control, predominately” he said. “So, recognition, professional advancement, things like that are things that we can do. We have limited capability to give people financial incentives in government.”

As Kendall was putting together this version of 5000.02, he realized that a large and complicated body of law had built up governing all of DoD’s programs. Although a lot of good laws were passed since Goldwater-Nichols was enacted, such as the Weapons System Acquisition Reform Act of 2009, a more coherent body of law needs to be put in place that simplifies the lives of program managers so they can focus on what they really need to be doing.

Kendall assigned his former chief of staff, Andrew Hunter, to put together a list of legislative suggestions on how to simplify the body of law covering the DoD program requirements. A former Hill staffer, Hunter has been on both sides of the issue.

“Andrew’s got the task to put together a team which will be across the department, basically, and come back with a legislative proposal that we could submit for next fall,” Kendall said. “We’ll be working closely on the Congress with this. There are some efforts that we’d like to be closely aligned with on the Hill to do some acquisition reform in the next cycle and hopefully we can do this together. I think there’s a huge potential there to make some progress and do something that will benefit everyone.”

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