Former Pentagon Acquisitions Chief Belittles Reorg Plan

Just days after the Pentagon delivered a congressionally mandated plan for reorganizing its acquisitions management, the ex-undersecretary whose job the plan would disassemble gave the reform a thumbs-down.

Frank Kendall, until January the Obama administration-appointed Defense undersecretary for acquisition, technology and logistics, went on the WJLA “Government Matters” Sunday TV show to say the plan is “not a step forward.”

As required under the 2017 National Defense Authorization Act, planners on Aug. 1 sent Congress a report proposing that the Pentagon improve innovation and exploitation of technology by breaking up the job of the undersecretary for acquisition, technology, and logistics into two positions: one undersecretary for research and engineering and another for acquisition and sustainment.

The plan also would weave into the org chart a chief management officer newly empowered to address business processes. And it would revamp obligations for previously independent offices to report, for example, to the new undersecretary for research and engineering. These offices included  the Strategic Capabilities Office, the Missile Defense Agency, the Defense Advanced Research Projects Agency and the Defense Innovation Unit-Experimental.

The changes would require the approval of Congress, which has also tasked the Pentagon with cutting 25 percent of its headquarters staff. If approved, they would be implemented by Feb. 1, 2018.

The reorganization “provides a once in a generation opportunity to improve how the department is organized and operates,” the report said. The problem the Pentagon hopes to solve is that “in the course of its existence, USD(AT&L) has grown in size and complexity, largely as a result of the accrual of additional responsibilities, the impacts of additional legislation, the increase in complexity of major weapon systems, and the assumption of increased oversight responsibilities over the services.”

Long urged by Senate Armed Services Committee Chairman John McCain, R-Ariz., and House counterpart Rep. Mac Thornberry, R-Texas, “This new organization refocuses the Office of the Secretary of Defense’s principal role from program oversight to that of directing major department investments to ensure integrated, technically superior capability that consistently outpaces the threat.”

But Kendall, now on the board of Leidos Holdings Inc., said the plan “in its essence breaks up an office I think was functioning very well and recreates a situation we had before 1986,”  a reference to the Goldwater-Nichols reforms that streamlined the chain of command to bring the individual military services under the Joint Chiefs. “I was in the Defense Department at that time,” he noted. “The Packard Commission recommended going to a single head to oversee acquisitions. Leadership always matters, but organizations do matter as well,” Kendall continued. This new plan means “going back to an organization that demonstrably failed at that time.”

Kendall faulted the plan for “breaking up the unity of command and breaking up the centrality of effort for acquisition across the department.” The subsequent relationships between the new chief management officer, the two new undersecretaries and the services are unclear, he added, jabbing the services for being too “optimistic” in the past about acquisitions coming in within budget. The new authorities will be “partly on the basis of personalities, and partly on the basis of the organization. I don’t want to see the services getting conflicting directions from different undersecretaries, but it’s almost inevitable,” he said. “They will find the route of least resistance and do whatever it is they prefer.”

A chief concern, Kendall added, is “breaking up the life cycle of our products between different authorities so the technology and risk reduction at the earlier phases are under a different person than is responsible for putting them into production.”

Still, Kendall said, the Trump administration will have open options for making the arrangement work, adding, “You can overcome bad organization with good leaders.”

McCain on Aug. 2 released a statement calling the report “an important step toward improving the defense acquisition system and implementing the significant reforms that Congress has enacted in the past two years. For too many years, the defense acquisition system has taken too long, cost too much, and produced too little, while America's military technological advantage continues to erode. Congress has shown that we will not tolerate business as usual, with tens of billions of dollars wasted on weapons that deliver too late, or never deliver at all.”

He commended newly arrived Deputy Defense Secretary Patrick Shanahan, who, meeting with reporters just as the report was released, said meeting Congress’ deadline for the report was his top priority.

David Berteau, president and CEO of the 400-contractor Professional Services Council, who once worked for Kendall at the Pentagon, said, “Nothing is doomed to failure, but some things are harder than others.”

The plan’s prospects for new efficiencies and innovation will depend on three questions, he told Government Executive: “Will it actually enhance the performance of the contract process at the front end of designing and developing major systems that cost less on a better schedule?  Will it actually increase the speed and depth of research and bring new technology? And will management sustain the technology to get things done?” which is what affects contractors the most.

If any one of those three demonstrated progress, the plan might prove to have been worth it, Berteau said. “The real problem in acquiring weapons systems and information technology is that we spend twice as much on sustainment and operation as we do on getting them in the first place. There’s little incentive up-front to reduce legacy system costs, and this new structure could increase visibility and attention being paid to those issues.”