The U.S. Department of Defense is in the process of reorganizing its acquisition enterprise, as directed by the 2017 National Defense Authorization Act. Congress and the DoD intend this reorganization to promote innovation in the department, speeding development of advanced technologies to maintain and extend U.S. technological superiority into the future. The reorganization has a good chance of achieving this goal; however, by divorcing the technology development organization from the acquisition organization, the planned split runs the risk of exacerbating an existing challenge — the difficulty inherent in turning promising, nascent technologies into full-rate production programs delivered to the war fighter.
The reorganization will divide the current undersecretariat for acquisition, technology and logistics, or AT&L, into two new undersecretariats: research and engineering, or R&E, to serve as the chief technology officer; and acquisition and sustainment, or A&S, to serve as the chief acquisition officer.
R&E will set the technology agenda for the DoD, focusing on maintaining and extending U.S. forces’ technological advantage over potential adversaries. A&S will oversee the acquisitions process, focusing on program cost and schedule performance. Crucially, A&S will retain responsibility for logistics policy, enabling the organization to take a holistic view of the cost of a system over its entire life cycle. However, A&S will have a lesser role in direct oversight of acquisitions that AT&L has had in the past, due to the 2016 NDAA’s devolution of significant acquisition authority to the armed services.
The Pentagon’s new acquisition plan creates almost a dozen new offices.
Congress intends for these two organizations to have distinct institutional cultures. By design, R&E will adopt a risk-taking culture and A&S will operate with a much lower risk profile. R&E will be allowed to fail, an extreme rarity in the Department of Defense. But for R&E to pursue innovative approaches and advanced technologies, the department must accept that not all ventures succeed. Alternatively, A&S will seek to drive down risk in full-rate production programs to the absolute minimum, so that programs deliver on cost and schedule and perform as intended. These conflicting cultures are intended to create a healthy tension in the department that will result in a more optimal risk posture.
There is a lot of goodness in this reorganization plan. Splitting the current AT&L organization will facilitate creation of the two distinct institutional cultures described above. It will also enable the department to recruit talent specific to either the R&E or A&S portfolio, which require very different skill sets. On the whole, the reorganization has a good chance of succeeding in its goal to elevate the pursuit of advanced technologies while sustaining emphasis on cost, schedule and performance of full-rate production acquisition programs.
However, there is at least one potential pitfall. The planned AT&L split will place oversight responsibility for development of advanced technologies and procurement of those technologies in separate organizations. Doing so could compound the existing challenges of turning a promising technology into a full-rate production program, colloquially known as the Valley of Death.
Several factors conspire to create the Valley of Death. For example, let’s say the department has identified a new technology and everyone agrees it is a worthy investment. Even under these circumstances, it can take years just to secure the funding required to turn an idea or even a prototype into a production program. In the current tight fiscal environment, funding new programs means cutting existing programs, which is always bureaucratically challenging. And with new start programs as rare as they are, due to both fiscal constraints and seemly endless continuing resolutions, the DoD is very reluctant to take a risk on a new idea.
Under the current AT&L organization, the undersecretary oversees both the technology development and acquisition portfolios. As a result, she is positioned to know what is coming down the pipeline, plan accordingly and advocate early in the budget process for a new and promising technology. Splitting AT&L into R&E and A&S increases the chasm between technology development and production by dividing these responsibilities between two separate undersecretariats, making it more difficult for DoD leadership to shepherd projects through this Valley of Death.
Ellen Lord says that her organizational chart may not be fully completed by the time the AT&L changeover happens and that her direct contact with industry might become more rigid than her predecessors.
There are a couple different ways the department could guard against this outcome. For example, both the department and Congress are exploring middle-tier acquisition approaches. These approaches leverage technology demonstrations and prototypes to drive down technical risk before entering full-rate production using tools like Other Transaction Authority. Doing so helps bridge the gap between a promising technology and a full-rate production program by maturing technology and developing initial concepts of operation before committing to a major acquisition program.
The deputy secretary of defense could also step into the void that the AT&L split may create by ensuring that R&E and A&S remain integrated and focused on turning new technologies into mature procurement programs. Doing so is essential to meeting the goal of the reorganization: maintaining and extending U.S. forces’ technological advantage in the face of increasing competition.
Susanna V. Blume is a fellow in the Defense Strategies and Assessments program at the Center for a New American Security.