DoD finalizing major rewrite of acquisition guidance

Reworked guidance is the first update to key Defense Department instruction since 2008. Internal attempt to streamline the system is leading department official...

Pentagon officials are “very close” to finishing their work on an overhaul of the official guidebook to DoD’s byzantine acquisition system, and the process led them to the conclusion that they need Congress’ help to help unwind a cumbersome maze of laws that have been layered on through decades of well-intentioned reform efforts.

The document in question is officially known as DoD Instruction 5000.02 — the key collection of guidance that describes the military acquisition process. Frank Kendall, the undersecretary of defense for acquisition, logistics and technology, has been working on a revamped version for months.

“I’ll be out very soon,” he said Thursday at the Center for Strategic and International Studies. “It’s going to emphasize tailoring even more than previous editions did. And we show people multiple models of how you can structure an acquisition program depending upon what the product is. You know, at the end of the day, the way you structure the program to develop, produce and field the product depends on what the product is and what it takes to get that job done. There’s a logic and a flow that has to be consistent with what you’re trying to accomplish. And it’s definitely not a one-size-fits-all business. We do a large range of different types of things.”

That tailored approach to acquisition is consistent with the messages in the current Better Buying Power effort Kendall’s office has been leading in DoD, emphasizing that the department’s own professionals need to use their judgment to structure the right acquisition vehicle and contract type for the right job. The latest version came with the tagline: “A guide to help you think.”

Kendall says the rewrite of the instructions was needed, in part, because of several recent laws Congress has passed imposing new requirements on DoD acquisition managers. And reworking the document from scratch led his office to the conclusion that those recent legislative changes were just one more layer on a system that’s been growing in complexity for decades.

“There’s a section at the front of the 5000.2 which basically lays out what the acquisition system is, what the program structures look like, what the major decision points are and so on. And then there’s a series of tables that have all those statutory compliance requirements and those tables go on and on and on. And the reason they’re there and the reason there’s so much is because of a large body of statutes that have passed over the years covering acquisition,” he said. “So if you’re a major acquisition program, if you’re a major automated systems program, if you’re a business program, if you’re an IT program, you have a whole set of rules that you have to follow. And, then, of course, we add on to that a few other things such as urgent needs and how we respond to those. So what is needed, frankly, is for me to go back and take a look at all the things, essentially, that we’ve done since Goldwater-Nichols was passed that have piled on somewhat independently and made our program managers’ lives incredibly complex and simplify that.”

So, in parallel with the rewrite of DoD’s own rules, Kendall’s office has begun working to identify areas of federal law that need to be changed in order to make the acquisition process more manageable. It’s being led by his former chief of staff, Andrew Hunter.

“And I want to work closely with the Hill on this. I think this is not something we ought to do in isolation,” Kendall said. “We don’t want to throw everything out and start over, but we do want to take that body of law and look at what’s being accomplished by it or attempted to be accomplished by it and simplify it so that program managers have a much clearer, more easily understood body of requirements that they have to follow. And that’s not going to be a quick and easy job. It’s going to take us several more months, at least.”

Meanwhile, Congress itself is at the beginning of a new examination of the defense acquisition system. In late October, the House Armed Services Committee held the first hearing in what it says will be a “long-term effort” to examine and reform the system. That push is being led by the committee’s vice chairman, Texas Republican Mac Thornberry.

Back inside the department, Kendall said DoD is taking some new concrete steps to meet one of the seven goals of the Better Buying Power initiative: increasing the professionalism of the acquisition workforce. He says he’s just approved a directive that will create a new system of professional qualification boards that will certify that the most important leaders in the acquisition process are up to the task at hand.

“They’ll be looking at our senior people — our people who will be asked to take on what we call key leadership positions, like program manager, deputy program manager, chief engineer, chief contracting officer, chief support official in the program, logistics support person, program support person — those people that make or break the success of a program on the government side,” he said. “And what we’re going to have is a system of joint boards that look at the qualifications of these people and give them sort of the stamp of approval that they are ready to take on a key leadership position. It’s going to be a mixture of real life experience, education, training, as well as some references from some of the senior people that those people have worked with. And I think doing this across the department is going to strengthen, overall, the level of profession we have in that workforce. This will initially be a discriminator among people. But as we get it more in place, I think it’s going to become a necessity for people who want to occupy those positions to be certified or qualified by the boards we’re setting up.”

As to the current budget environment, Kendall says there are a lot of reasons to worry about how modernization programs will fare over the next few years. Last fiscal year, DoD was able to shield most of its acquisition programs from cancellation by spending down their pre- planned management reserve funds, using leftover money from 2012 and pushing current requirements into 2014.

“We deferred a lot of work, presumably, into fiscal 2014. But that was assuming sequestration went away, and now there’s no money in FY ’14 to do that deferred work. And in fact, we have to take — if sequestration stays in place — over $50 billion out in FY 14. So, we’re operating under a continuing resolution. We’re trying to constrain our spending, even though right now, sequestration has not been implemented for ’14 — that doesn’t happen till January. We’re operating at a rate which we hope is consistent with sequestration as much as possible so that we don’t have the kind of problem we had last year,” he said. “One of the things that last year’s situation forced on us when we did not lower our rate early was the furloughs of the civilian workforce last summer, which we have every hope and every intention of not having to repeat. But that being the case, we’ve got to get this spending down now. We can’t wait until January. We’ve got to lower it now.

Otherwise, we’re just setting up a bill for ourselves, particularly in the readiness accounts further on.”

Kendall said he has already had to slow down decisions to move ahead with major programs, and DoD is currently obligating funds at a rate that assumes both sequestration and a fiscal 2013 continuing resolution will stay in place into the indefinite future.


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