Pentagon’s Ginman reflects on four decades in Defense procurement

Richard Ginman, one of the most influential figures in defense acquisition for nearly a decade, decided to call it a career late last month, and pointed to major advances in DoD’s acumen in executing contracts in war zones and for services as points of pride during his latest tour in the Pentagon, where he served most recently as the director of Defense Procurement and Acquisition Policy (DPAP).

On the other hand, an awful lot has stayed the same over the 42 years Ginman has spent in the defense procurement world, he said in an interview a few days before his retirement ceremony.

Richard Ginman
“Federal contracting is always going to be different from commercial contracting. One, I’m required to compete; commercial industry isn’t. Two, I’m required to tell everyone exactly how I’m going to run the competition and then do exactly what I said I was going to do. And three, there’s a right to protest. Those things have been in place since 1947,” Ginman said in a wide-ranging exit interview on Federal News Radio’s On DoD. “Yes, we’ve done some reforms along the way and every year’s defense authorization bill has a new little twist in it, but the basic underlying methodology of how we do our jobs really has not changed that much. Do you understand what you’re buying? Do you have a plan in place? Are you executing that plan? Are you documenting it? If you can answer those fundamentals, you’ll do just fine.”

And so when Ginman and Shay Assad, now the director of Defense Pricing, assumed leadership roles in DPAP eight years ago, one of their first moves was to reinstate the nuts-and-bolts training course both of them took at Fort Lee, Virginia, in the early 1970s. What’s now called CON 090 in the Defense Acquisition University’s curriculum is a requirement for all of the department’s new contracting officers, though the topic of study these days is the Federal Acquisition Regulation. Back then it was the Armed Services Procurement Regulation.

“Shay and I both thought the one month we spent learning the ASPR was some of the best training we’d ever had, and it still sticks with us today,” Ginman said.

During Ginman’s tenure, there has been a widespread and concerted effort — both by the Pentagon and by Congress — to build the department’s acquisition workforce, both in quantity and quality. He said that DoD has always, by and large, had a highly- professional cadre of procurement personnel, but there were some skill sets that had atrophied over the years and needed to be rebuilt, such as in the area of pricing.

“A lot of what we buy is just commercial goods — about $60 billion a year. But that leaves me with $225 billion that’s not commercial, and I need the ability to price,” he said. “So over the last three or four years, we’ve revamped all of the pricing courses at DAU. When I went through in the ’70s, you actually had to take a math test before you were allowed into the pricing courses. We’re going back to that level of rigor.”

The Defense Acquisition Workforce Development Fund (DAWDF), which Congress established in 2009, let the department begin a bounce-back from some of the severe shortfalls it suffered in the wake of widespread workforce cutbacks in the 1990s. In DAWDF’s first few years, DoD hired 8,300 new contracting officers, pricing specialists, systems engineers and auditors. But there is significant concern inside the Pentagon that the latest round of defense austerity will reverse those gains.

“Numbers matter,” Ginman said. “The Defense Contract Management Agency and the Defense Contract Audit Agency in particular have had substantial plus-ups. I hope as we go through this downsizing that we will not take those organizations back to where they were. At the end of the day, putting contracts in place is easy. It’s the management of those contracts that’s hard. You need good data to make sure you’re paying appropriate costs and that you’re getting what your contract called for. DCAA and DCMA have had significant roles in that, and we’ve made substantive strides.”

Like his boss, DoD Under Secretary for Acquisition, Technology and Logistics Frank Kendall — who famously posted a plaque outside his office door reading, “In God we trust, all others bring data” — Ginman said he is a firm adherent to the philosophy that policy decisions ought to be based on the gathering and reporting of reliable metrics, perhaps owing to his 30 years as a Navy supply corps officer.

“I grew up an in environment where the things you inspect tend to get results, and the things you ignore tend to get forgotten,” he said.

And in a handful of cases, such as the department’s statistics on how every service component and defense agency is doing on competition, the data is not just gathered for internal use, but released publicly on a quarterly basis. The Pentagon wants to leverage that information to correct its weaknesses with regard to adequate competition and in service contracting.

“I’m a big fan of checklists and data reports. So we have a variety of reports that come out and say, ‘Here’s how you’re doing,’ If we put it out there, people will pay attention to it.”

The White House affirmed Ginman’s zeal for data transparency when in July 2012, President Barack Obama named him as the chairman of the Government Accountability and Transparency Board, the governmentwide successor to the widely-praised Recovery Act panel, which oversaw and reported spending under the 2009 stimulus bill.

Within his own department, Ginman said a greater focus on data has led to at least some concrete policy shifts. The first two editions of a new annual factbook, titled “Performance of the Defense Acquisition System,” led policymakers to conclude that incentive-fee contracts are one of the few provable factors that lead to better deals for the government. So in the latest iteration of the Pentagon’s Better Buying Power initiative, DoD is now encouraging its contracting officers to use them — as long as they make sense for a given business deal.

However virtuous the idea of data transparency might be, within the Defense Department, putting the principle to good use is limited by the fact that the department’s business processes and technology systems still prevent it from passing an independent audit. The Pentagon has promised to change that by 2017, but for now, it’s still impossible in many cases track how a dollar goes into one end of the DoD budget and turns into a product or service on the other side.

“If somebody comes in and points to a chair, we need to be able to show them which contract and appropriation it came from, show them a receipt and whose property book it’s on,” Ginman said. “We have made some great strides in the course of the last four or five years in being able to answer those kinds of questions, but we have a long way to go.”

“Progress, but a long way to go” also sums up the Government Accountability Office’s view of the overall defense contracting apparatus. DoD contract management has been on GAO’s high risk list since 1990, the first year the list was issued.

GAO retained Defense contract management alongside 31 other broad governmentwide areas of concern when it issued its latest version last month, but said that DoD had made significant inroads on the five specific metrics the office examines to determine if a specific area is “high-risk.”

Gene Dodaro, the U.S. Comptroller General, said he’s fully satisfied that DoD has the necessary leadership commitment to eventually graduate from the list, and that the department has made some progress toward the other factors: necessary resources, a documented action plan, monitoring and demonstrated progress. GAO also removed one contract management subcategory after having concluded that DoD was doing an adequate job of routinely choosing the proper contract type for a given procurement.

Ginman said he was glad to see the GAO recognition and had hoped that the office would also remove one other subcategory — service acquisition — from the list. (It did not).

In the end though, defense procurement has always been a somewhat risky business, Ginman said.

“I suspect contract management will remain on the high risk list forever,” he said. “There are 60 some-odd elements that have been identified, and we’ve worked off about 56 of them so far. We’re going to continue to focus on this, but it’s a journey, not a single gee-whiz solution. DCMA manages well over $1 trillion in contracts. To think that we’re not going to have some issues along the way would be a mistaken view.”

Ginman said he does not intend to disappear from the defense acquisition business. Besides doing outside volunteer work, he said he would enthusiastically participate in peer reviews of program managers’ acquisition strategies, if asked.

“I hope to be a ‘special government employee’. That’s got a nice ring to it,” he said. “I’ve spent my days lately at the 50,000-foot strategic level. The peer review is an opportunity to actually sit down with a contracting officer and a program manager with real money and an actual project they need to deliver.”

DoD has not yet named a permanent replacement for Ginman. In the near term, Navy Rear Adm. Althea Coetzee, DPAP’s principal deputy director, will lead the office.

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