The Pentagon should focus on simplifying the acquisition process while increasing the number of companies that can compete for contracts, according to recommendations from a congressional panel report released Tuesday.
The House Armed Services Committee's Panel on Business Challenges in the Defense Industry unveiled its 44 recommendations on how the government can improve the business environment after roughly six months of hearings, field forums and research.
"Without some longer-term vision for the defense industrial base from the Pentagon, given the future restrictions on the budget, we could face a period where you start to see this defense industrial base begin to wither away," Rep. Rick Larsen, D-Wash., the panel's ranking minority member, said Wednesday at a news conference. "These businesses may not go away, they'll just go do something else and lose their capability to work with the Pentagon because it's just too much work."
The report takes into account ongoing efforts at the Defense Department to improve communications with businesses, Larsen said.
"Some of those recommendations are a mix of things that we'd like to see that we don't think they're doing well enough, and some of those are a reflection of support for the things the Pentagon's doing," he said.
The seven-member panel outlined steps to reduce barriers to entry for small contractors, a process that faces significant hurdles, said Cord Sterling, vice president for legislative affairs at the Aerospace Industries Association.
"They want greater diversification, they want to be able to go into these small companies, but the cost associated with doing business with the government with all of the regulatory burdens and, quite frankly, the risk that goes along with doing business with the federal government, makes it very difficult to do so," he said. "You've got to truly reform the acquisition process, not add more acquisition rules and regulations on."
The 121-page report targets five areas for change: defense industrial base policy, small-business encouragement, acquisition reform, the "valley of death" facing new technologies, and contractor regulations and requirements. The panel recommended:
• Developing a long-term industrial base strategy.
• Implementing techniques that could improve communication between contractors and DoD.
• Increasing DoD's small-business contracting targets.
• Requiring an independent assessment of contracting performance.
• Increasing and improving the acquisition workforce.
• Developing a DoD technology strategy to guide industry investment.
• Updating acquisition laws and regulations.
The report's suggestions for increasing and improving the acquisition workforce, a common theme repeated by industry executives in recent years, recognize the lack of experience among acquisition officers, said Rep. Bill Shuster, R-Pa., the panel's chairman.
"I think that maybe program managers are more risk averse than they were 10 years ago," Shuster said. "Part of that is that the folks over there, they're losing people, so you're getting new people, and new people coming on a job, as with any job, you're a little bit timid in what you do."
The report itself cited performance issues. "In its work, the panel concluded that the defense acquisition workforce has struggled to manage and execute programs in the midst of challenges in acquiring and retaining a professionally certified and competent defense acquisition workforce," it said. "The panel notes that just as it takes many years to develop a military leader capable of commanding at the senior ranks of the operational force, it takes a similar amount of time to develop an acquisition professional with the knowledge, skills, and experience needed to manage large defense acquisition efforts."
Sterling said the workforce problems can be traced back to staff reductions that have yet to be fully reversed. "There were years where they drew it down so much that they do need to rebuild that," he said. "You've got a system where they need to strengthen their acquisition workforce."
Industrial base policy, another large component of the report, also needs to be addressed because of the issues with a dwindling contracting community, Shuster said.
"The defense industrial base has been shrinking and shrinking to fewer and fewer companies," he said. "The idea is to have a strategy out there so that you can have an array of companies that can compete for this stuff."
Even a general outline is better than playing a guessing game, Sterling said. "If you can at least have a general idea of where the department is going, that's better than catch as catch can."