On 8 November 2018, Lieutenant General (Retired) N. Ross Thompson came to The Judge Advocate General’s Legal Center and School to give the Cuneo Lecture during the contract and fiscal law symposium. Below are his remarks.
Thank you to The Judge Advocate General’s Legal Center and School for inviting me to talk with you today and share some thoughts on the perennial topic of acquisition reform. I will take this opportunity to offer some advice as well, and what you do with that advice is entirely up to each one of you.
I want to recognize Lieutenant Colonel Alan Apple and Major Andy Bowne from the Contract and Fiscal Law Department for helping facilitate the logistics to make my visit here possible. Andy also helped the Section 809 Panel with some of its research by writing a paper on “other transaction authorities” that is going to be included in our volume 3 report.
Lieutenant Colonel Sam Kidd had a chance to talk with you yesterday, and I will do my best to not cover the same ground. It has been a pleasure to work with Sam as the general counsel for the 809 Panel. Sam is one of the extremely talented staff members supporting the 809 Panel, either full time or part time, on loan from one of the services or agencies, on loan from industry, or in some cases doing pro bono work to support the important work of the 809 Panel.
I will talk about three topics today: why is the work of the 809 Panel so important?; what are the criteria the 809 Panel uses to grade its work?; and what is the most important topic area, in my opinion, on which the Panel will make recommendations? I will leave time at the end to answer questions on any of the 809 topics that may be of interest.
Why is the work of the Panel so important?
Speed, innovation, defense industrial base expansion—all are critical to turn inside the decision cycle of our adversaries.
There is no denying that we are now in a period of great power competition. 1989-2014—twenty-five years of U.S. economic and military dominance, then Russia invades Crimea and Ukraine, China begins to assert territorial claims in the South China Sea, and cyberattacks begin to increase in frequency and consequence.
Given the turmoil in the international security environment, there are many big national security challenges. For example, competing with great powers while avoiding great-power war; deterring and responding to both old and new means of strategic attack—new cyberattacks daily; managing the continued destabilization, disintegration, and reintegration of the Greater Middle East at a lower, sustainable strategic cost; contending with nuclear-armed minor powers; restoring conventional overmatch—battle network/guided munitions with Russia, China, and other adversaries now having second offset capabilities that we dominated for twenty-five years; operating in newly or more hotly contested operational domains—space, cyberspace, electromagnetic, near space (hypersonics, 100-320,000 feet); and preparing for and withstanding a looming technological tidal wave. As legal professionals, you must understand the basics of the technology to be effective advisors to the Department of Defense (DoD) leadership.
The world is in the midst of rapid, unprecedented technological change, to include: advanced computing (e.g., quantum, deep neural networks) leading to artificial intelligence (AI); AI and big data leading to machine learning; machine learning leading to increasingly capable autonomous systems and robots; AI/big data/machine learning and additive manufacturing leading to an AI-driven fourth industrial revolution; genomics and synthetic biology leading to advances both good and bad; and nanotechnology, material sciences, and additive manufacturing leading to new means of production and sustainment.
This tidal wave will sweep away older ways of doing business and bring with it the prospect for new military-technical revolutions. Because most of these new technologies derive primarily from the commercial sector and are dual use, the competitive landscape will be much more level and dynamic than in the past. Given the breadth of these key national security challenges, the DoD must first and foremost improve its institutional resilience, flexibility, and adaptability. This is the why of the current period of acquisition reform. These challenges are both inter-related and complex, and they will present themselves in an equally complex security environment. The next twenty-five years will likely be a time of unexpected events, unexpected technical developments, and fast followers. Operational and technological surprise is likely to be endemic, and operational advantage will likely be fleeting.
An important, if not the most important, aspect of this preparation is recruiting, training, and retaining the right talent. The competition for talent will be especially intense with the private sector, and even with our strategic competitors. This will be expensive. The DoD is suffering from a “triple whammy.” (1) DoD equipment is run-down after seventeen continuous years at war. (2) The Department is still recovering from the effects of sequestration and successive Balanced Budget Acts and dealing with nine straight years of continuing resolutions prior to this year, fiscal year (FY) 2019 (continuing resolutions are a topic you will see addressed in the 809 Panel Volume III report). (3) Operations and maintenance costs rise faster than the rate of inflation.
I was the Army programmer for two assignments as the deputy and the principal. Dollars count to make things happen. The programmatic response to these challenges are the need to: rebuild joint force readiness; recapitalize the nuclear triad ($1.3-1.4 trillion); dominate cyberspace and the electromagnetic spectrum; prepare to fight and win in space, not just support from space; pursue advanced technologies, especially AI and improved autonomy; develop new operational concepts and organizational constructs—not just hardware and software, but the way we organize and deploy forces; and develop a lethal, agile, and resilient force posture and employment—smaller, dispersed, resilient, adaptive bases that are energy-independent.
Artificial intelligence and improved autonomy will likely see the greatest aggregate investment. Called out as a “key capability”: “the Department will invest broadly in military application of autonomy, artificial intelligence, and machine learning, including rapid application of commercial breakthroughs, to gain competitive military advantages.”1 Our great power competitors recognize the importance of AI and improved autonomy and are striving for first mover advantage, especially China. The AI-autonomy race will define great power military competition much like the nuclear race defined the Cold War. An op-ed in the Washington Post yesterday proposed the need for an AI czar.2 Investments in advanced technologies will be in addition to modernization spending, which have been depressed since the Budget Control Act.
All of the programmatic investment should be focused on capability, not more capacity. We must focus on force quality before attempting increases in force quantity. Force structure is incredibly expensive, and there is an opportunity cost to having more force structure than you need.
What are the criteria the 809 Panel uses to grade its work?
The Section 809 Panel has identified five essential attributes that should be inherent in tomorrow’s outcome‐based acquisition system.
Criteria #1: Competitive and Collaborative
The number of companies competing for defense contracts is declining. Industry experts forecast that acquisitions and mergers in the defense market segment will continue and exacerbate the decline in competition. A report by the Center for Strategic and International Studies that was released in January 2018 indicated a substantial decline has occurred in the number of “first‐tier prime vendors” between 2011 and 2015. The number of small businesses registered to do business with the federal government fell by more than 100,000 companies, and the number of DoD contract actions for small business decreased by approximately 70% from FY 2011 to FY 2014.
The traditional defense industrial base is dramatically changing shape. Consequently, the DoD must be able to operate in a dynamic marketplace in which it wields less influence. The Section 809 Panel’s research has shown that companies for which the DoD is not a primary customer either struggle to understand the DoD’s acquisition system or decide not to conform to its transaction rules. These companies are often unwilling to engage in time‐consuming, tedious, competitive processes, and they do not plan their transactional calculus around meeting extraneous and irrelevant contractual requirements. In extreme cases, delays in the award of contracts caused by prolonged process requirements have put some companies out of business—a problem especially acute among small businesses and technology innovators. The DoD’s current approach to administering competition by predetermining a set of defined specifications and requirements is too slow and limits opportunities for new entrants into the defense marketplace.
The range of potential solutions available to the DoD to solve its warfighting challenges is artificially constrained by a rigid requirements process. The nation’s adversaries are not spending years “studying analysis of alternatives,” but are focusing on quickly fielding new capabilities and solutions to their own operational and strategic challenges. The Section 809 Panel will recommend ways to modify competitive procedures, irrespective of the acquisition dollar value, by recognizing that competition takes place in certain market segments. An open market adaptation to the current forms of acceptable DoD competitive processes could preclude any need for further competition. Ideally, a reconfigured competition model could integrate more use of value analysis (such as valuing the cost avoided due to the DoD not having to develop a capability itself), to assess price reasonableness at the transactional level.
Changing the DoD’s competitive procedures to compete solutions to problems, rather than assess a company’s ability to meet detailed technical specifications, is an avenue for systemic change. Using such an approach, the DoD could give warfighters greater input into the process by leveraging their first‐hand experience to articulate problems and select the best solutions put forth by industry. Changing the character of competition in such a way could shift the DoD away from spending extensive time defining and validating requirements, to using more challenge‐based competitions or taking advantage of available market solutions to quickly develop and field new capabilities.
The DoD’s current approach to acquisition does not foster meaningful collaboration with the private sector or within the DoD itself. The DoD’s acquisition workforce fears that communication with industry may result in punishment. This concern undermines the DoD’s ability to work with industry as a true partner. An inability or unwillingness to collaborate with industry results in the DoD lacking awareness of the full range of available potential solutions; creates barriers for nontraditional contractors to enter the defense marketplace; and results in the DoD acquiring suboptimal products, services, and solutions. The DoD must foster collaborative partnerships across the entire marketplace to accomplish its mission today and in the future.
Criteria #2: Adaptive and Responsive
This shift has already begun in a major way, using a variety of waivers and tailored processes; for example, by tailoring DoD Instruction 5000.02,3 middle tier acquisition authorities, and use of other transaction authorities. Program success that relies on intervention by the DoD’s most senior leadership is not scalable to the majority of DoD acquisitions. Acquisition by exception is neither a scalable nor a cost‐effective model, and when the process does not take full advantage of the marketplace, it is still neither fully adaptive nor responsive. To demonstrate adaptability and responsiveness, the DoD needs to create an organization that is malleable and at times decentralized. Leaders and the workforce as a whole must be empowered and trusted to make quick decisions; policies and procedures must constantly evolve; and truly cross‐functional teams must be incentivized to solve problems collaboratively without coming to the Pentagon to make every big decision.
The Section 809 Panel recommends building similar models to those with demonstrated success in the DoD, such as SOFWERX and Hacking for Defense, to scale such approaches across DoD’s acquisition system. This is a major focus for all the Service Acquisition Executives today.
Criteria #3: Transparent
Transparency in DoD acquisition is essential to promoting competition and collaboration, as well as ensuring the trust of the American people. In the context of acquisition, transparency has entwined meanings—one being visibility of relevant information to buyers and sellers in the marketplace about requirements and transactional outcomes, and the other being access to accurate data necessary for proper oversight. The DoD struggles to create an environment in which transparency in acquisition for either purpose is valued as a critical element of success. The U.S. military is one of the most trusted institutions in the United States today. It is imperative that tomorrow’s defense acquisition system maximizes transparency to bolster and maintain that trust. The 809 Panel has some important recommendations on data analysis and data architecture.
Criteria #4: Time Sensitive
Time has to become a more valued attribute of the acquisition life cycle. Anecdotes and data abound about the excessive lead time experienced for delivering products and services to the warfighter; the slow processes drive business and healthy market competition away from the DoD. The prolonged length of an acquisition by the DoD indicates the existence of two problematic issues: a workforce culture beholden to process over mission and a system that lacks incentives to quantify lost opportunity and manpower costs. The current DoD acquisition workforce culture emphasizes and rewards process‐driven behavior for which time becomes of secondary or tertiary value, yet there is little in the acquisition literature to prove that valuing time means sacrificing regulation or safeguards. Valuing time comprises balancing speed with the due diligence appropriate for a given acquisition.
Criteria #5: Allows for Trade-Offs
Allowing for trade‐offs gives the DoD the flexibility required to obtain optimal results. It is not always feasible to implement any or all of the above attributes simultaneously. When urgency requires immediate delivery, for example, the DoD may be willing to forgo competition altogether. Allowing for trade‐offs empowers informed decision‐making during any given acquisition.
What is the most important topic area on which the Panel will make recommendations?
The answer is, of course, the acquisition workforce! As I already mentioned, the way the DoD buys what it needs to equip its warfighters is from another era, one in which the global strategic landscape was entirely different.
Congress charged the 809 Panel with reshaping the DoD acquisition system into one that is bold, simple, and effective. This requires more than rule changes. The Panel’s existing reports to Congress identified the DoD acquisition workforce as a pivotal factor in the success of acquisition reform. “The ultimate effectiveness and efficiency of defense acquisition depends on, and is determined by, the people who are responsible for all phases of acquisition.”4 Accordingly, the Panel concluded it should address the workforce in its analysis and recommendations. United States national security relies on harnessing the efforts of “the innovative and the inventive, the brilliant and the bold”5 in the service of the nation.
The Panel issued three overarching recommendations in its June 2018 Volume 2 report to Congress for improving the management of the DoD acquisition workforce: (1) amend the framework of hiring authorities to maximize hiring flexibility for critical skill gaps, (2) convert a temporary personnel system (Acquisition Demo) to a permanent, mandatory system for all of the acquisition workforce, and (3) ensure the Defense Acquisition Workforce Development Fund is properly funded and managed in order to guarantee its benefits for the acquisition workforce indefinitely.6 These recommendations intend to ensure that the DoD will possess the tools and the resources necessary to continuously improve its acquisition workforce. But tools and resources alone aren’t enough to guarantee acquisition workforce members’ success.
The Panel’s outreach to stakeholders in the DoD and the private sector confirmed that career development needed to be a focus of its recommendations. In their eyes, a reshaped future acquisition workforce would likely consist of an open career development model that could include experience in both the government and the private sector. They also agreed that if the DoD is to achieve its ambitions for the acquisition workforce, it will need to prepare and develop its workforce members differently. The question was how?
How should the DoD develop its acquisition workforce (AWF) from the time an AWF member enters the workforce until he or she separates or retires? What occupational qualifications and competency measures should the DoD implement for each member to facilitate his or her career progression and development? How do AWF members know what skills they need, and what key work experiences they should pursue to meet their goals? Do AWF members possess enough specific domain knowledge (i.e., specialized discipline) and concrete experience to fulfill their responsibilities properly? Is the DoD identifying, cultivating, and elevating the AWF member with the most talent and the greatest potential? Do those members enjoy a perspective that is broad enough to interact with the private sector successfully? How can the DoD guarantee that AWF members’ skills and development needs are evaluated based upon measurable competencies and not just on academic course participation and time in a position?
Volume 3 recommendations in January 2019 focus precisely on these types of workforce development issues. The Panel proposes changes to the DoD’s career development framework for AWF members around three crucial aspects of career development: professional certifications, functional area career paths and competencies, and public-private exchange programs.
The current three-level certification system, established in response to the Defense Acquisition Workforce Improvement Act (DAWIA), has been a central feature in the professionalization of the DoD AWF over the past three decades. Today, most AWF members have four-year college degrees and meet minimum time requirements in an “acquisition-related position” for their career fields. However, DAWIA implementation falls short by not linking certification levels to occupational qualifications that AWF members can demonstrate on the job. The Panel recommends that the DoD modernize the certification process to emphasize professional skills that are transferable across the government and industry by relying more on professional certifications and by focusing on a defined set of occupational qualifications connected to positions.
Specifically, the Panel recommends amending the DAWIA to require professional certifications based on nationally or internationally recognized standards as the baseline, where possible. This will allow both the DoD and industry to adopt a common body of knowledge, improve communication and collaboration between the two, increase the applicant pool, and further raise the professionalism of the AWF.
Some examples of professional certification programs using the American National Standards Institute (ANSI) procedures are:
- The National Contract Management Association (NCMA) is currently carrying the NCMA Contract Management Standard through the ANSI-approved standards process. The ANSI Accredited Standards Developer designation enables NCMA to advance the contract management profession by accrediting standards and certification programs.
- The Project Management Institute Project Management Professional Certification scheme is accredited by the ANSI against the International Organization for Standardization (ISO) 17024. The ISO 17024 standard includes vigorous requirements for examination development and maintenance and for the quality management systems for continuing quality assurance.
- The National Society of Professional Engineers licensure and qualification program is third-party-accredited by the Accreditation Board for Engineering and Technology, Inc.
The Panel also recommends eliminating the statutory mandate for twenty-four hours of business credit for contracting and auditing AWF members. Since most AWF members now have four-year degrees, the Panel believes it is no longer necessary to mandate specific disciplines’ education requirements in law, and the DoD should have latitude to hire candidates with other degrees, like data analytics. In fact, specific credit requirements may hinder hiring managers’ ability to choose the right person for a job.
Functional Area Career Paths and Competencies
Department of Defense AWF members can spend their entire careers without the benefit of a comprehensive functional area career path to guide their career development. The Panel recommends the DoD create career paths in each functional area that would include technical competencies, key work experiences, leadership, and other “soft skills,” in addition to education and training. Doing so will provide guidance for AWF members and their supervisors so they can become proactive stewards of their careers. Career paths would provide members and their supervisor’s guidance to help determine what each member needs to be successful in their careers. Career paths not only illustrate career possibilities to members, they are also necessary to ensure that qualified members are available to fill positions that require particular qualifications to accomplish a unit’s mission. An illustrative long-range career path would include jobs of increasing complexity, responsibility, accountability, management, and leadership opportunities. They describe the occupational qualifications (i.e., education, training, and competencies) and key work experiences7 required to advance. Career advancement does not mean “race to the top;” rather, it’s growing skills to enhance mission success and fulfill the members’ aspirations.
The Panel recommends changes in statute and guidance to require competency models with proficiency standards that include technical and non-technical skills for the AWF. Task competencies are methods for a member to demonstrate individual tasks or task elements specific to the member’s current position to qualify the member in “an observable, measurable pattern of knowledge, abilities, skills, and other characteristics that individuals need to perform work roles or occupational functions successfully.”8 Task competencies assist the member’s development by using specific mission-related tasks and requiring supervisor feedback in order to identify any training gaps. Each AWF member should be observed by a more senior acquisition professional for each task competency using a proficiency standard at each stage in their career. Competencies may be gained through education, training, or experience. Proficiency standards are distinct formal descriptions of levels of expertise within a competency that describe the member’s ability to execute a task successfully and are used as an occupational qualification measure. Consider the analogy of aircraft pilots. New cadet-pilots are gradually introduced to increasingly complex skills under the guidance of instructor pilots (IPs). The IP must observe the cadet successfully perform a skill or maneuver to specific standards before certifying that the cadet can move on to learn new skills. Only when the cadet has demonstrated to the IP that they can handle the aircraft without supervision are they allowed to solo.
When veteran pilots move to a different aircraft, or return to flying after an extended period away, they go through the same process. Although they may not have to recertify on basic flight principles, they have to demonstrate to a flight examiner who is experienced and current in the particular aircraft that they are qualified to fly that type of aircraft safely. Similarly, members should demonstrate task competencies at the required proficiency standard for a particular job to a more senior AWF member who is qualified and experienced in those skills in order to be considered qualified to perform duties requiring those skills.
Competency models with proficiency standards will not only help AWF members manage their professional development better, they will permit employers to better match candidates to jobs. Proficiency standards would show how a member actually demonstrates the job tasks, and to what level of proficiency, rather than just cataloging how many years a member has held an acquisition position. By knowing what proficiency is expected of them in the future, the member and their supervisors can plan how to fulfill their development needs when creating their individual development plans. At the military department/DoD agency or unit level,9 hiring activities would have a method to effectively qualify a member using a set of competencies, so they can effectively determine the person’s “fit” for the next job. Competencies should be vested in individuals and individuals should be matched to missions, instead of having static occupations define both.
Public-Private Exchange Programs
The relationship between the acquisition workforce in the DoD and its counterpart in the private sector is a critical element in the success of the defense acquisition system. It is important that the DoD AWF members and private sector AWF members understand each other’s processes, attitudes, and objectives. Public-private exchange programs (PPEPs) are a valuable tool for the DoD to utilize in order to foster such understanding. If implemented properly, PPEPs can form a cornerstone of the DoD’s efforts to engage with the private sector. However, the DoD has struggled to successfully develop a broad-based, two-way PPEP that would involve all functional disciplines in the AWF.
The problem is not political. There is widespread support among DoD officials and Congress for PPEPs. However, the DoD has been unable to create a broad-based two-way exchange program despite its genuine desire to do so.
For example, the Office of the Secretary of Defense (OSD) manages a Title 5 exchange program called Training with Industry, the Army also has a Training with Industry program, and the Air Force has an Education with Industry program. While these programs have achieved some success in placing DoD AWF members in industry, none of these programs provide a two-way exchange, and because the OSD-led program is open to all DoD civilian workforce members, the number of opportunities for AWF members is very small.
A successful two-way PPEP between the public and private sectors would be valuable for the DoD and industry alike. However, structural disincentives undermine support for PPEPs among three critical stakeholders: (1) the DoD employing offices object to relinquishing members without the budgetary or personnel flexibility to backfill their positions during their period of assignment; (2) AWF members do not believe that completing a PPEP assignment will provide a tangible benefit to their careers; and (3) private sector companies fear that sending their workforce members to the DoD could create a risk for Organizational Conflict of Interest (OCI) complaints that may jeopardize chances for future contract awards.
The Panel recommendations for AWF PPEPs are designed to overcome these disincentives by: (1) providing employing offices with statutory budgetary and personnel flexibilities to support it; (2) offering incentives for DoD AWF members that participate (i.e., classify PPEPs as “key work experiences” along career paths); and (3) eliminating the risk of OCI complaints that are based solely on private sector workforce member assignment to the DoD by establishing in statute that an OCI cannot be created for a private sector company simply by a company workforce member’s participation in the AWF PPEP, in and of itself.
All of the Section 809 Panel’s workforce recommendations address current problems in acquisition workforce policy directly, and offer concrete solutions to overcome them. As rapid transformation of the defense acquisition sector continues, the DoD will require a professional, talented, experienced, and broad-minded workforce to succeed on the warfighter’s behalf. The Panel possesses the utmost confidence that the DoD can develop a workforce, built upon the dedication and passion of its members, to regain and maintain the technical dominance upon which our national security relies.
In summary, we talked about 3 topics: (1) Why acquisition reform? Because we are in great power competition; (2) What are the critical attributes to measure success?; (3) Workforce—people must be valued to lead the necessary change to today’s Defense Acquisition System.
You have an extraordinary opportunity to help protect the lives of service members, contribute to better warfighting capabilities, and contribute in a major way to your agency’s mission outcomes—whether you are in the DoD or another department of government. You have to go outside your comfort zone and take a risk in every sense of the word. To expand what you thought you were capable of doing when it comes to leadership, responsibility, agility, selfless service, and above all, courage, to challenge the status quo—policy, regulation, and statute. Who is better able to do that than those in the audience today? I wish you all the very best as you return to leadership positions or assume leadership positions in the future. You have the challenge of making things happen and making things work! TAL
1. Douglas C. Lovelace Jr., 147 Terrorism: Commentary on Security Documents 67 (2018).
2. David Ignatius, China’s Application of AI Should Be a Sputnik Moment for the U.S. But Will It Be?, Wash. Post (Nov. 6, 2018), https://www.washingtonpost.com/opinions/chinas-application-of-ai-should-be-a-sputnik-moment-for-the-us-but-will-it-be/2018/11/06/69132de4-e204-11e8-b759-3d88a5ce9e19_story.html.
3. U.S. Dep’t of Def., Instr. 5000.02, Operation of the Defense Acquisition System (31 Aug. 2018).
4. Advisory Panel on Streamlining and Codifying Acquisition Regulations, Section 809 Panel Interim Report, May 2017, at 26 (May 2017), https://section809panel.org/wp-content/uploads/2017/05/Sec809Panel_Interim-Report_May2017_FINAL-for-web.pdf.
5. Lovelace Jr., supra note 1, at 30.
6. 2 Report of the Advisory Panel on Streamlining and Codifying Acquisition Regulations, Section 809 Panel, Section 2 (June 2018), https://section809panel.org/wp-content/uploads/2019/01/Sec809Panel_Vol2-Report_JUN2018_012319.pdf.
7. For purposes of this recommendation, the Panel defines “key work experiences” as interactions inside and outside of government that foster professional development and career broadening (e.g., rotational assignments, temporary assignments, managerial and leadership experience, defense joint/service/agency collaboration, or simulation/exercise engagement).
8. U.S. Dep’t of Def., Instr. 1400.25, Volume 250, DoD Civilian Personnel Management System: Civilian Strategic Human Capital Planning (SHCP) 21 (7 June 2016).