Dan Chenok / File
In their report titled “Eight Actions to Improve Defense Acquisition,” authors Jacques Gansler and William Lucyshyn outline eight recommended actions intended to improve the results of acquisition programs, and, at the same time, strengthen the industrial base:
Use appropriate forms of competition during all phases of acquisition
Improve the effectiveness of indefinite delivery/indefinite-quantity contracts.
Use a best value tradeoff selection strategy for complex and most high-knowledge-content work.
Use cost-reimbursable contracts for system development.
Remove barriers to buying commercial products and to dual-use industrial operations.
Where possible, reduce the government monopoly through public/private competitions (on non-inherently governmental work).
Work to realize the benefits of globalization, both economic and security.
Recruit and retain a world-class acquisition workforce.
Acquisition reform is at the forefront of multiple conversations across government and industry. In this context, it is imperative that strategies and decisions going forward be based on sound analysis of trends over time. In that context, my organization — the IBM Center for The Business of Government – has just released a new report that provides recommendations to improve acquisition at the Department of Defense.
The report, titled “Eight Actions to Improve Defense Acquisition,” is by Jacques Gansler and William Lucyshyn, who currently teach at the University of Maryland; in addition, Gansler led Department of Defense acquisition (as well as technology and logistics) programs during the Clinton Administration, and Lucyshyn brings great experience as a director of research at the Defense Advanced Research Projects Agency.
The authors note that DoD has made numerous attempts to reform its acquisition system over the last 50 years, but that these and similar have produced only modest improvements. Additionally, during the last decade, DoD’s acquisitions also experienced a major shift: of approximately $400 billion spent on contracts in FY 2011, more than half was spent on services. However, rules, policies, and practices are based primarily on buying goods, which have different needs for acquisitions from services.
In addition, recent events involving acquisition of information technology by HHS and other agencies involved in the implementation of the Affordable Care Act have reinforced the need to look for practical ways to improve how agencies buy services.
Gansler and Lucyshyn write that given current and prospective fiscal conditions, there is likely to be increased interest in innovative strategies that maximize the effectiveness and efficiency of DoD’s investments in order to meet operational requirements and modernization needs. Moreover, growing costs will require difficult choices for DoD just to maintain the status quo. Consequently, DoD must spend every dollar with the objective of getting the best value.
Given the current focus on acquisition across DoD and civilian agencies, addressing acquisition reform in a strategic and coordinated manner is imperative. In that light, this new report also addresses a concern that complying with multiple acquisition initiatives at once can lead agencies to lose sight of the real intent—to improve performance with the dollars available—and instead focus on achieving zero deviation from the detailed acquisition guidance. This can results in less likelihood that any individual initiative will produce the desired effects.
While the report centers on acquisition in the Department of Defense (DoD) because of its dominant size in the federal budget, the eight proposed actions apply to civilian agencies as well. The authors emphasize the urgency of acquisition reform in DoD given budgetary constraints and security challenges, finding that “DoD will need to gain every possible efficiency, while resisting the temptation to buy defense on the cheap.”
This report builds on two other recent IBM Center reports – “Controlling Federal Spending by Managing the Long Tail of Procurement,” and “A Guide for Agency Leaders on Federal Acquisition: Major Challenges Facing Government”– to set forth a clear and timely set of perspective to help the government improve acquisition, while saving costs. We hope that these reports will assist government executives in effectively addressing acquisition challenges.
Dan Chenok is the executive director of the IBM Center for The Business of Government. He has held multiple government positions, including service as OMB's SES Executive in charge of IT policy and budgeting.