Quotes
We have drawn pertinent quotes from articles, reports, testimonies, and other publications to illustrate the issues surrounding the DOD acquisition system and the use of COTS products. You may also submit additional quotes to the DCVC for posting on this page.
Importance & issues of DoD using readily available and proven capabilities
“For IT systems that increase functionality on 18 month cycles, that acquisition system fails the warfighter miserably. There are some statistics related to the performance of IT programs within this process that are telling:
• Only 16 percent of all IT projects complete on time and on budget.
• 31 percent are cancelled before completion.
• The remaining 53 percent are late and over budget, with the typical cost growth exceeding the original budget more than 89 percent.
• Of the IT projects that are completed, the final product contains only 61 percent of the originally specified features.”
- The Defense Acquisition Reform Panel Chairman Rob Andrew’s Opening Statement Thursday, July 9, 2009.
“There are some examples where the weapons systems have successfully embraced the commercial technology. …We have a submarine combat system that is based on commercial technology. … Eighty percent of the software in that system is commercially procured and the program has a lab-like environment, the program office that they’ve been running for almost ten years now, that watches over the commercial industry and follows commercial industry when one of those components is upgraded they bring the piece in and test it and make sure that it’ll do what it says it’ll do and has all the right requirements for our environment and when it gets the green light then they plan on which submarine it’ll go in next and then they orchestrate that whole process.” - Timothy Harp, Deputy Assistant Secretary of Defense for Command, Control, and Communications, Intelligence, Surveillance, Reconnaissance and Information Technology Acquisition, written testimony to the Defense Acquisition Reform Panel on July 9, 2009.
“We need to re-bias the system away from the 99% solution more toward the 80% solution that can be achieved in a definable period of time.” - William Lynn, Deputy Secretary and Chief Management Officer in the Department of Defense, oral testimony to the House Armed Services Committee, May 6, 2009.
“Buying commercial or commercially derived systems (either domestic or foreign) presents a significant opportunity for the Department of Defense. The globalization of technology and production means that defense-funded programs no longer drive technology development in many areas, and in fact, commercial technology now leads DOD in many areas. As a result, many advanced capabilities are available on the commercial market and offer and important option for supplying U.S. forces. While a military system designed from the bottom up can deliver a total solution to an identified capability, the goal of commercial or commercially derived systems is to acquire an ’80 percent’ solution that can be fielded rapidly and at a much lower cost and risk.” – Report of the Defense Science Board, Creating a Strategic DOD Acquisition Platform, April 2009.
“The ability of the defense acquisition process to produce the best military equipment at the best value for the taxpayers is dependent on several important factors – a strong industrial base, a rational and flexible acquisition process, well-defined requirements, budget realism, stable procurement plans, and a well-trained and experienced acquisition workforce.” - Marion Blakey, President and CEO, Aerospace Industries Association, written testimony to the House Armed Services Strategic Forces Subcommittee on April 30, 2009.
“There are some examples where the weapons systems have successfully embraced the commercial technology. …We have a submarine combat system that is based on commercial technology. … Eighty percent of the software in that system is commercially procured and the program has a lab-like environment, the program office that they’ve been running for almost ten years now, that watches over the commercial industry and follows commercial industry when one of those components is upgraded they bring the piece in and test it and make sure that it’ll do what it says it’ll do and has all the right requirements for our environment and when it gets the green light then they plan on which submarine it’ll go in next and then they orchestrate that whole process.” - Timothy Harp, Deputy Assistant Secretary of Defense for Command, Control, and Communications, Intelligence, Surveillance, Reconnaissance and Information Technology Acquisition, oral testimony to the Defense Acquisition Reform Panel on July 9, 2009.
“Commercially developed information technology tends to advance quickly, and it has been difficult to plan for advances in these technologies through the normal planning and budget process.” - Defense Science Board, Enabling Joint Force Capabilities, 7. Page 19 GAO-06-211 GIG Investment.
“’The Defense Department needs to set up a parallel structure to deal with these unconventional threats.’ To be successful, the Pentagon has to break away from the culture that aims for ‘perfect’ technology and learn how to incorporate ‘good enough’ technology into weapon systems and training.” – Charles McLaughlin, Innosight executive and Army Special Forces reservist quoted from DefenseWatch by Sandra I. Erwin, “Defense Stifles Innovation Despite Urgent War Needs,” July 2006.
“The organizational change required to facilitate ‘commercial off-the-shelf’ (COTS) acquisition has been sluggish and problematic... the organizational barriers that have hindered the DOD aerospace transformation from a ‘design and build’ acquisition philosophy to COTS [include]: misaligned reward systems, entrenched networks, and historical precedent.” - Dr. Sally J.F. Baron, Journal of Public Procurement, Vol. 4, Issue 2, 182-209, 2004.
“This [advanced commercial technology] has required a profound change in the way the Defense Department does business with industry, and the way it supports R&D. First and most important, the department can no longer support a unique defense industry isolated from commercial industry. During the 1980s, for example, the Defense Department spent years and more than a billion dollars developing a family of defense-unique desktop computers, but by the time the military development cycle was completed, these computers were obsolete and were incompatible with the standards evolving in the commercial computer industry.” - The Honorable William Perry, Preventive Defense, page 198, 1999.
Root Causes of IT Acquisition Issues: Incentives are the Key to Change
“On the process side, we are attempting to realign the contract process and the fee structure so that it rewards performance to a greater degree than it does today, so that our contractor base is going to be very responsive to how we set up our fee structure and if we’re able to do it in a way so that it rewards performance and a kind of performance we want I think we will see change in that regard and see it quite quickly.” - William Lynn, Deputy Secretary and Chief Management Officer in the Department of Defense, oral testimony to the House Armed Services Committee, May 6, 2009.
“Since profit is the prime motivation for companies, participants suggested that DOD set up incentives that meet the best interests of industry based on the maturity of the market and government based on the need for the technology and best value for cost.” Government Accountability Office Forum Highlights: Managing the Supplier Base in the 21st Century, March 2006 (GAO-05-533SP).
“Unlike typical hardware acquisition, Information Technology is perhaps the most inherently modular capability that exists within the DoD and therefore remains viable for competition throughout its life cycle. However, this has too often been stifled since past information technology programs have followed the hardware-centric paradigm of gathering requirements to create a single large acquisition program and solicitation. This model incentivizes design of unique, proprietary systems that precludes taking full advantage of commercial technology and keeping pace with the dynamics of the IT industry.” - Timothy Harp, Deputy Assistant Secretary of Defense for Command, Control, and Communications, Intelligence, Surveillance, Reconnaissance and Information Technology Acquisition, written testimony to the Defense Acquisition Reform Panel, July 9, 2009.
“Program managers are not empowered to make go or no-go decisions, have little control over funding, cannot veto new requirements, have little authority over staffing, and are frequently changed during a program’s development. Consequently, DOD officials are rarely held accountable for these poor outcomes, and the acquisition environment does not provide the appropriate incentives for contractors to stay within cost and schedule targets, making officials strong enablers of the status quo.” - Statement of Gene L. Dodaro Acting Comptroller General of the United States, Thursday, March 12, 2009.
“In fiscal year 2005, DOD obligated nearly $10 billion for professional, administrative, management support, and other services under time-and-materials contractsundefinedcontracts that are high risk for the government because they provide no profit incentive to the contractor for cost control or labor efficiency. As such, their use is supposed to be limited to cases where no other contract type is suitable and specific approvals are obtained. However, DOD frequently failed to provide such justification, and GAO’s findings indicated the contracts were often used for expediency…. Use of inappropriate contract types, in addition to other factors, can result in DOD not obtaining the best value for its contract spending. Finally, failure to provide adequate oversight makes it difficult to identify and correct poor contractor performance in a timely manner…. To demonstrate longstanding nature of these problems, we first identified DOD contract management as a high-risk issue in 1992.” 1 REFERENCE: GAO, High-Risk Series: An Update, GAO-09-271 (Washington, D.C.: January 2009).
- Statement of John Hutton, Director, Acquisition and Sourcing Management and William Solis, Director, Defense Capabilities and Management – GAO Testimony, Thursday, April 23, 2009.
“In December 2005, we reported that DOD, in using award fee contracts, routinely engaged in practices that did not hold contractors accountable for achieving desired acquisition outcomes.18 These practices included evaluating contractors on award-fee criteria not directly related to key acquisition outcomes; paying contractors a significant portion of the available fee for what award-fee plans describe as “acceptable, average, expected, good, or satisfactory” performance; and giving contractors at least a second opportunity to earn initially unearned or deferred fees. As a result, DOD had paid an estimated $8 billion in award fees on contracts in our study population, regardless of whether acquisition outcomes fell short, met, or exceeded DOD’s expectations. As such, we recommended that DOD improve its use of fees by specifically tying them to acquisition outcomes in all new award- and incentive-fee contracts, maximizing contractors’ motivation to perform, and collecting data to evaluate the effectiveness of fees.”- Statement of John Hutton, Director, Acquisition and Sourcing Management and William Solis, Director, Defense Capabilities and Management – GAO Testimony, Thursday, April 23, 2009.
“The current culture encourages and rewards based on budget and organizational size. In this environment saving time by re-using software would reduce their budgets (and thus their prestige) and entail collaboration with a software community of practice, rather than status as sole master of their program domain.” -Open Technology Development Roadmap Plan, April 2006, J.C. Herz, Mark Lucas, John Scott. Office of Security Review, Department of Defense, Cleared for Open Publication, June 7, 2006, p. 9.
"DoD's design and [build] acquisition methods are ill-suited to keep pace with accelerating shifts in technology, particularly software and information technology (IT). Consequently, DoD finds itself behind the curve in software, leading to upward spiraling in IT costs, obsolescent systems, and the loss of agility for commanders on the ground." Office of Security and Review, April 2006, by J.C. Herz, Mark Lucas and John Scott.
“DOD has paid billions and awarded incentive fees regardless of acquisition outcomes.” – U.S. Senator John Ensign, Committee Hearing on Improving Contractor Incentives transcript, April 5, 2006.
“The Pentagon has been a leading developer of cutting-edge technology... but at the same time, it has created self-defeating mechanisms that quash innovation and fail to capitalize on available opportunities.” – DefenseWatch by Sandra I. Erwin, “Defense Stifles Innovation Despite Urgent War Needs,” July 2006.
“It is tough for small contractors to push technologically advanced products through the Pentagon approval process.” – Clearing Pentagon Hurdles by Michael Fabey, Defense News, June 12, 2006.
Market Research is vital to efficacy of acquisition planning
“Up front planning and knowledge of industrial base capabilities are critical to success, in order to enable informed and meaningful trade-offs between (a) less ambitious capabilities that can be made available more quickly at lower cost and (b) capabilities that rely on greater leaps in technology but that are also harder to define, involve greater risk, take longer to deploy and are more costly.” - Marion Blakey, President and CEO, Aerospace Industries Association, written testimony to the House Armed Services Strategic Forces Subcommittee on April 30, 2009.
"Two recent audits from the Department of Defense Inspector General (DoD IG) found that of the $217 million spent under 117 awards reviewed, 116 lacked acquisition planning or market research.” DoD IG Report No. D-2007-007, “FY 2005 Purchases Made Through the General Services Administration,” Oct. 30, 2006, at 1-4 (general discussion of the issue); DoD IG Report No. D-2007-032, “Report on FY 2005 DoD Purchases Made Through the Department of Treasury,” Dec. 8, 2006, at 32 (specific statistics cited).
“The Panel [Acquistion Advisory Panel] also [sees] a need for a central source of market research information comparable to that maintained by private companies.” Marcia Madsen, Chair Acquisition Advisory Panel, Feb. 2007.
“Specific to the GSA Federal Supply Schedules program, the Panel recommended a new services schedule for information technology that would require competition at the task order level.” Marcia Madsen, Chair Acquisition Advisory Panel, Feb. 2007.
Database needed for DoD to easily access readily available, proven capabilities
“The current lack of visibility into the supply chain complicates efforts to maintain a strong supplier base. To better manage the multi-tier supplier base, participants suggested that DOD improve efforts to collect data on the lower tiers of the supply chain. . . Commercial sector leads innovation in telecommunications, software, and information systems, increasing the need for DOD to find means to access this technology. . . Increasing pressure should be applied to acquisition staff to allow integration of new technologies into programs.” Government Accountability Office Forum Highlights: Managing the Supplier Base in the 21st Century, Mar. 2006 (GAO-05-533SP).
“We recommended that the General Services Administration (GSA) establish such a capability to monitor services acquisitions by government and commercial buyers, collect information on private sector transactions that is publicly available, as well obtain information on government transactions, and make this information available government-wide.” Marcia Madsen, Chair Acquisition Advisory Panel, Feb. 2007
“Even small aerospace software development projects ($750k or less, with 6 people) have a 55% chance of “success,” which they defined as being on-time, on-budget, and with all features as originally planned. Larger projects have even lower success rates, to the point where $10M projects with 500 people have a zero percent chance of being “successful”.” - The Standish Group research 1999-2004.
“Every line of local code is a stovepipe.” -General Meyerose speaking at the Armed Forces Communication & Electronics Association; printed in SIGNAL, No More Business as Usual, by Henry S. Kenyon, February 13, 2006.
“The Department of Defense, the government’s and the nation’s largest and single IT customer, fell from ‘green’ to ‘red’ on competitive sourcing in the Office of Mangement and Budget rating system this year.” - Competitive Sourcing: Is Government Moving Forward or Backward? By Joe Tasker, Senior Vice President, Government Affairs, ITAA, November 30, 2006.
Today and well into the foreseeable future, DoD will rely on the private sector to provide much of the leadership in developing technologies. Thus, the Department has embarked upon an effort to… tap the results of innovations developed in the private sector… This “quiet revolution” will take advantage of science and technology and continue to provide U.S. forces with technical superiority. – Quadrennial Defense Review Report, September 30, 2001.
Engineering and scientific workforce issues
“Finally, it must be pointed out that a professional, knowledgeable, well-qualified acquisition workforce benefits not only its DOD and military department customers, but private sector contractors as well. Better defined requirements, improved cost estimating, and full knowledge of the contracting process should lead to improved contractor performance – and frankly, fewer press headlines.” - Testimony of Defense Acquisition Reform Panel Chairman Rob Andrews, Tuesday, July 21, 2009.
“Over the last two decades, the critical skills of personnel in the areas of program management and engineering have atrophied. …Today, the Space and Intelligence community face challenges with an aging workforce and low recruitment, resulting in adequate junior and middle management for the future….” - Josh Hartman, Senior Advisor to the Under Secretary of Defense (Acquisition, Technology & Logistics), written testimony to the House Armed Services Strategic Forces Subcommittee on April 30, 2009.
“Today, the subject matter competencies required for successful enterprise IT system acquisition are too often missing in government managers responsible for program execution. Skills in program administration are confused with skills in operational process design and/or skills in IT. … Within the Department, IT expertise is scarce and the competition for talent is increasing.” - Ronald Kerber, member of the Defense Science Board, written testimony to the Defense Acquisition Reform Panel, July 9, 2009.
“Our work, however, has repeatedly identified problems with the practices DOD uses to acquire services. Further, an overarching issue that impacts DOD’s ability to properly manage its growing acquisition of services is having an adequate workforce with the right skills and capabilities.”5 REFERENCE: GAO, Department of Defense: Additional Actions and Data Are Needed to Effectively Manage and Oversee DOD’s Acquisition Workforce, GAO-09-342 (Washington, D.C.: Mar. 25, 2009). - Statement of John Hutton, Director, Acquisition and Sourcing Management and William Solis, Director, Defense Capabilities and Management – GAO Testimony, Thursday, April 23, 2009.
“Advanced training in natural sciences and engineering is becoming widespread, eroding the U.S. advantage…. The rising number of Chinese-trained engineers is similarly striking, especially in contrast with declining numbers of U.S. engineering graduates (figure O-49)… virtually all of the recent U.S. growth reflected rising proportions of degrees to non-U.S. citizens: more than half in engineering and computer science and nearly 45% in the physical sciences. In contrast, China's growth was most marked after 1993 and its growth rates after 2000 were especially high. Over the course of the entire period, China surpassed numerous other countries in doctorate production, and the U.S.-China difference is narrowing.” - National Science Foundation's Division of Science Resources Statistics (SRS) under the guidance of the National Science Board (Board), Science and Engineering Indicators 2008. http://www.nsf.gov/statistics/seind08/c0/c0s5.htm.
Industry-wide some 19% of employees are eligible for retirement, yet Department of Education suggests US colleges and universities are only producing about 62,000 engineering BAs a year – fewer than the visual and performing arts graduates and that hasn’t grown in a decade. The looming tech talent shortfall will have an impact far beyond any single firm or sector. Science and engineering aren’t just crucial for national security, they’re critical for economic growth.” - The Battle For Brainpower by Robert J. Stevens, President & CEO of Lockheed Martin, Wall Street Journal, Apr. 19, 2006.
The current federal acquisition workforce significantly lacks the new business skills needed to act as contract managers and not as contract processors. - Government Accountability Office (GAO) Forum Highlights: Managing the Supplier Base in the 21st Century, Mar. 2006 (GAO-05-533SP).
Support the warfighter, taxpayer, and national security
“Global War on Terror is asymmetric in nature and creating demand for different systems such as non-lethal weapons that may be based on existing commercial products and technologies. Current operations are creating the need to translate technologies into fielded systems rapidly. . . As the defense supplier base has consolidated into a few prime contractors, competition has been reduced. As a result, cost containment is more difficult. . . Pervasive fear of failure has discouraged government procurement employees from taking the risks necessary to maximize quality and minimize cost and has created a mindset that considers not failing a measure of success. . . This emphasis on limiting supplier profit could ultimately result in higher costs to the taxpayer if the supplier lacks the incentives to deliver the highest quality product or service at the lowest cost.” - Government Accountability Office (GAO) Forum Highlights: Managing the Supplier Base in the 21st Century, Mar. 2006 (GAO-05-533SP).
“It is remarkable that the world of contractors and subcontractors is so murky that we can’t get to the bottom of this [Blackwater case], and the Defense Department doesn’t seem to be sure what’s going on….But the impacts of contracting waste go beyond just dollars and cents…This experience tells them that the taxpayer dollars never reached the security personnel on the ground. They believe that the money for protective equipment took a backseat to the multiple layers of contractor profits.” - Rep. Henry Waxmen, Chairman, Committee on Oversight and Government Reform. Hearing on Reliance on Private Military Contractors in Iraq Reconstruction, February 7, 2007.
"The acquisition challenges of national security space are critical from both a fiscal and operational context. The successful use of space is essential for our national security and economic well-being. Future budgets for national security space are slated to increase by nearly 40 percent over the next four years. We cannot continue to tolerate continued cost overruns and schedule delays. The system must be fixed, and there are solutions that will take us a long way toward that goal." - U.S. Rep. Terry Everett, Military Aerospace Technology Online, April 19 2006.
“Congress recognizes the need for transformation, but believes it must include the reevaluation of our business practices... If left unchecked, the status quo will put our national security at risk.” - U.S. Rep. Terry Everett, Aviation Week, May 30, 2005.
“The problem is that the Pentagon has jammed big-dollar projects through this ‘other transaction authority’ (OTA), and many of the beneficiaries have been the giants that dominate the defense business [rather than the smaller, more efficient suppliers for which the OTA is intended.]” – Stealth Spending at the Pentagon, by Eamon Javers, BusinessWeek, May 15, 2005.
“Congress recognizes the need for transformation, but believes it must include the reevaluation of our business practices... If left unchecked, the status quo will put our national security at risk.” - U.S. Rep. Terry Everett, Aviation Week, May 30, 2005