Pentagon acquisition reorg is all about ending culture of fear of failure

For the Defense Department to recapture its broad technological advantage over the rest of the world, it can’t be afraid to fail once in a while.

Under that specific direction from Congress, the Pentagon detailed a plan to shake-up its Acquisition, Technology and Logistics (AT&L) office in the Office of Secretary of Defense with two main goals in mind: Accelerate the development and acquisition of cutting edge technology, and change the mindset of those buying, developing and managing technology.

To that end, DoD announced it will create a new Undersecretary of Defense for Research and Engineering (USD(R&E)) and a new Undersecretary of Defense for Acquisition and Sustainment (USD(A&S)) and offered its first detailed description of how it plans to use the newly-created position of chief management officer.

“In order to deliver new and needed capability to the warfighter, USD(R&E) will take risks while pushing the technology ‘envelope,’ testing and experimenting and being willing and allowed to fail when appropriate,” the report stated. “Once technological and integrated solutions have been identified and matured, USD(A&S) will minimize further risk, as necessary to ensure the needed capability is delivered and sustained in the most timely and cost-effective manner possible. The fact that the two organizations most integral to the delivery of effective and sustainable systems and services approach risk from such different perspectives reinforces special challenges.”

The goal of the R&E office is to drive innovation and accelerate the advancement of the military’s warfighting capability. Meanwhile, A&S will work closely with R&E to deliver “proven technology” to warfighters more quickly and affordably.

“This new organization refocuses the Office of the Secretary of Defense’s (OSD) principal role from program oversight to that of directing major department investments to ensure integrated, technically superior capability that consistently outpaces the threat,” the report stated. “This focus allows USD(R&E) to better advise the Secretary and DoD on key investments to retain technical superiority based on the analytical rigor and understanding of risk associated with these technologies. This also establishes USD(R&E) as the knowledgeable expert in sources of technology throughout the world — forming the basis of strategic alliances with our allies.”

The acceptance of the risk and not being afraid to fail needs to flow down to the acquisition workforce as well. DoD stated in the report that it has to stop teaching a “regimented process such as the DoD instruction 5000.02,” and train acquisition workers to be critical thinkers, understand risk management and be flexible in their decision making.

Acquisition workers also should work “with the warfighters to evaluate trades pursuant to delivering capability. Focus on ‘what is the requirement’ must change to ‘what capability is needed,’” the report stated. “This requires a culture change and the reeducation of our workforce. This is a significant cultural shift that must be continually reinforced with risk tolerance and the move away from a perceived ‘zero risk’ mentality.”

Andrew Hunter, a senior fellow in the International Security Program and director of the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies (CSIS), said in an interview on the Federal Drive with Tom Temin that the two new organizations balance each other well.

“I think they have done a good job of folding functions into the R&E that belong there or that can further the mission of the R&E. They made that a slightly larger organization than I was anticipating based on some of the rumors and signals that looked like were out there,” Hunter said. “What will be crucial in how this works is ensuring when these two offices really have marching orders from the Secretary of Defense based on a new national security strategy, based on whatever the department decides to do with what the last administration called the Third Offset strategy to focus on innovation is make sure the form here follows the function. These structures align with that mission. Since we don’t yet have total clarity on those issues, this is a really good start toward that effort.”

Hunter added that these two undersecretaries must be able to work well together because to achieve the R&E goals and mission, the support from A&S will be crucial.

Evolution of the CMO

As for the CMO, DoD is moving this role out of the deputy secretary’s office and creating a new organization to focus on business operations.

“The structure of the organization is a modest part of this renewal,” the report stated. “Accompanying the restructure is explicit action to shift the business operations of the department to enterprise services. This shifts from the current military department and defense agency ‘stovepipes’ to a whole of DoD alignment. This shift not only reduces the cost of business operations, but also increases the leverage of the department in the marketplace. Achieving this outcome requires creating the means and mechanisms to drive change and alignment of the senior leadership of the department.”

DoD expects all of this restructuring to happen over the next 18 months.

In the 2017 Defense Authorization bill, lawmakers instructed the Pentagon to review and identify a recommended organizational and management structure that creates these new offices and evolves the CMO. DoD had to submit a final report to Congress by Aug. 1.

Initially, DoD officials pushed back against the idea of restructuring its acquisition offices, but reversed course and submitted to Congress a two-page letter signaling their intent to complete one of the largest restructuring efforts the military has seen in decades.

With the plan in place, DoD said it will take a “clean sheet” approach to creating R&E and addressing what it believes is its most pressing challenge — restoring the technical overmatch of the U.S. armed forces.

“The USD(R&E) is envisioned to be a lean organization staffed by subject matter experts uniquely qualified to simplify and govern the myriad processes (traditional and non-traditional) associated with identifying, selecting, resourcing, designing, developing, and demonstrating the high-end architectures and associated technologies critical to our warfighting effectiveness,” the report stated. “The Strategic Intelligence Analysis Cell will first be established in order to inform investments in the current DoD Budget Planning and Programming phases to point the department immediately toward the most urgent technology needs and opportunities.”

The R&E organization also will include two assistant secretaries, one for research and technology and the other for advanced capabilities.

At the same time, DoD will transfer the Defense Innovation Unit-Experimental (DIUx), the Strategic Capabilities Office (SCO), the Defense Advanced Research Projects Agency (DARPA), the Defense Science Board and the Missile Defense Agency under the R&E organization.

Acquisition and Sustainment’s role

“ASD(Research & Technology) will ensure the DoD technical infrastructure, engineering and scientific capabilities, and S&T resources are aligned to the Defense investment strategy,” the report stated. “Likewise, the ASD(Advanced Capabilities) will be established early in order to: (1) establish a department capability for Joint Mission Engineering that analyzes and recommends technologies that eliminate or disrupt adversary kill chains or, alternatively, that deliver superior Blue Force kill chains; and (2) implement new methods, policies and alternate acquisition pathways that rapidly move innovative technologies and prototypes that prove their ability to meet the warfighter’s needs from the lab to the field.”

The new Acquisition and Sustainment office will have three assistant secretaries: Acquisition, sustainment and nuclear, chemical and biological defense programs.

Hunter said the research and acquisition offices must be tied closely together for DoD to achieve the changes it wants.

“Keep in mind that both officials are sitting on top of a structure where most of the action is happening with the services. A big part of the job here will be to influence the Army, [Department of} Navy and Air Force,” Hunter said. “If there is any sense that two officials are at cross purposes with each one another, then neither can be remotely effective.”

Hunter said the new structure abolishes the Integrated Product Teams (IPT) leads, which focused on space and intelligence, tactical warfare systems and IT acquisition, and folded it into one deputy assistant secretary to oversee the service’s management of milestone reviews.

The CMO transformation likely will take the longest and may have the biggest impact across the DoD in terms of day-to-day operations.

“The department will move toward more use of enterprise services to conduct business operations. Focusing on delivering enterprise services ensures the department more synergy in planning and executing business operations, while reducing the cost of those operations,” the report stated. “In the course of effecting these reforms, the department anticipates significant change in the structure of organizations across the DoD will occur over time. We expect that some organizations will not exist, or will not exist in their current form. Therefore, the department will proceed with time-phased changes to its organizational structure. While the department can determine the initial organizational structure of the CMO to begin the process, subsequent organizational changes will evolve in response to decisions the department makes about how to deliver DoD enterprise services. At end state, the department will establish enterprise service provider organizations that will be accountable for service delivery and performance, but will not be part of the CMO organization.”

DoD will create a Program Executive Officer for IT Business Systems to lead the effort toward enterprise systems. DoD says it expects to launch enterprise services around:

• Creating a single instance of civilian personnel system;
• Completing the deployment of a single rating system for General Schedule employees;
• Connecting DoD inventory systems into a business intelligence layer; and
• Assessing the ability to accelerate deployment of enterprise medical management system and restructure IT support to medical systems to reduce overall cost.

The Pentagon said all of this reorganization will happen while it still plans to reduce management headquarters staff by 25 percent.

“Further adjustments (up or down) will be assessed as DoD stands up these two new USD organizations, re-engineers its requirements, acquisition and business processes consistent with the objectives of the new organization, and implements other departmental reform initiatives,” the report stated.

In the report, DoD also puts a finer point on the new role its chief information officer will play going forward.

“The responsibilities for ‘policy, oversight and guidance for the architecture and programs related to the networking and cyber defense architecture of the department’ as required by section 902 in the 2017 NDAA should reside with the DoD CIO,” the report stated.

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