Public AdministrationWritten evidence submitted by Lt Col Dan Ward, Duty Acquisitions Officer, US Air Force (PROC 04)

The Procurement process is neither the problem nor the solution:

The DoD acquisition process delivers both successes and failures.

Therefore the process is not a barrier to successful procurement nor is it to blame for failed procurements.

The way a process is executed matters more than the way it is documented.

The actual drivers of acquisition outcomes are the four Cardinal Virtues of Acquisition, combined with the True Goal:

The four Cardinal Virtues of Procurement are speed, thrift, simplicity and restraint:

Improve programmatic and operational outcomes, ie affordable gear that is available when needed and effective when used.

The True Goal is to deliver Affordable systems which are Available when needed and Effective when used.

1. The F-35 Joint Strike Fighter (JSF) program is over-budget and behind schedule to such a degree that Acting Undersecretary of Defense Frank Kendall called it “acquisition malpractice.” In contrast, the US Navy’s Virginia Class submarine program has delivered a series of highly effective nuclear-powered submarines early and under budget—in the case of the USS Mississippi, a year early and over $60M under budget.

2. Both programs were implemented under similar procurement policy environments and thus were subjected to similar processes. The stark difference in their outcomes suggests that the JSF’s problems cannot be entirely attributed to the ponderous acquisition process, nor can the Virginia’s success be credited to a process improvement initiative. The true roots of their results must reside elsewhere. No doubt the British system has similar stories as well.

3. Oceans of ink have been spilled on the topic of process improvement, and entire industries revolve around such concepts as “continuous process improvement.” Despite decades of process improvement attempts within the US Department of Defense, acquisition failures continue to be widespread. As J. Ronald Fox wrote in a Jan 2012 paper entitled Acquisition Reform: An Elusive Goal “The problems of schedule slippages, cost growth, and shortfalls in technical performance on defense acquisition programs have remained much the same…”

4. A report by the US Defense Business Board made a similar observation in April 2012, pointing out that projects “take longer, cost more, and deliver fewer quantities and capabilities than originally planned.” In fact, the DBB report quotes congressional testimony from 1982 on acquisition shortcomings and states the 30 year old testimony could be given today, verbatim, with no loss of accuracy. Of course, the US does not hold a monopoly in this area.

5. These results offer an interesting dichotomy. On the one hand, process improvement efforts have failed to address systemic problems. On the other hand, some acquisition programs manage to deliver top-shelf capabilities ahead of schedule and under budget. How can this be?

6. Because the same process delivers such widely divergent results, we must be open to the possibility that process is not the actual problem. And if process is not the problem, fixing the process must not be the solution. Perhaps reform energies ought to be directed elsewhere. Instead of spending resources on yet another round of procurement process improvements, it may be time to look deeper and examine the values which drive procurement decisions.

7. One key concept is that process does not truly dictate behavior. Even the most rigorously defined process can be interpreted and implemented in different ways, so while two programs may have to accomplish identical process steps, the way the programs take those steps may be worlds apart. In other words, the way a process is executed matters far more than the way it is designed, documented and diagrammed.

8. Yes, acquisition and procurement processes tend to be ponderous, slow and inefficient. In a word: broken. However, fixing them isn’t the answer. The US has been fixing our process for decades, to little avail. The good news is that even a broken process can be interpreted and implemented well, as the Virginia Class submarine program demonstrates.

9. Let’s look at a concrete example. Most government procurement processes begin when the government releases some type of Request For Proposals (RFP). This document explains to industry what sort of goods and/or services are being requested. Companies then respond by submitting Proposals. Despite the uniformity of these steps, there is great freedom in how to approach developing these documents. When the US Air Force released its RFP for the aircraft that would eventually become the F-16, it was 25 pages long. Proposals were limited to 50 pages.

10. Nothing in the procurement process required the F-16 team to insist on such brevity. The process simply said “you must release an RFP,” with no care as to whether it was 25 pages or 25,000, so long as it contained the necessary information. The F-16 Office chose to create a tightly focused document instead of a hopelessly convoluted one, and the results were fantastic. The resulting aircraft is on its way to 50 years of service and is still a dominant fighter in the air today. It begs the question as to whether any RFP should ever be longer than 25 pages.

11. Nothing prevents today’s procurement leaders on both sides of the pond from implementing comparable limits—not only on RFP’s and proposals, but across the board on all sorts of documents, presentations, designs, etc. As an additional data point, nothing in the current procurement process required the Pentagon’s latest brownie recipe to weigh in at 26 pages—one page more than the F-16’s RFP.

12. The F-16 team did not have a better process than any other military acquisition team. They simply had a preference for speed, thrift, simplicity and restraint—the Cardinal Virtues of Procurement. They expressed these virtues at every opportunity and applied them to each program artifact, from documentation to system architectures. Thus, the F-16 was developed in half the time and for half the cost of its predecessor, the F-15 Eagle. It is also physically half the size of the F-15. The reason for this difference has nothing to do with process and everything to do with priorities.

13. Following their example is simplicity itself. There is no need to recreate or deconstruct the procurement process, no need to fight endless bureaucratic battles over removing a particular step or layer of oversight that seems extraneous to one group of experts and essential to another. Instead of launching a major process improvement initiative, let us consider ways to comply with the current process without spending decades and billions to do so, by living according to the four virtues and using them to guide our decisions.

14. Another example might be informative. The American tax code is notoriously complex, so much so that in 2011, 95 million taxpayers used paid tax preparation experts rather than prepare their own. How much money they spent is a matter of some debate, with estimates ranging from $100B to $500B. Even the low estimate is quite a lot. Annual cries to simplify the tax code have failed to produce much in the way of progress. And yet, there is a way to make tax preparation easier, faster and less expensive for individual taxpayers. Companies like TurboTax provide low-cost online tools that help people determine how much they owe in a relatively rapid fashion.

15. It is important to understand that these companies did not rewrite the tax code or improve the official process for determining how much someone owes. They simply figured out a way to minimise the amount of time and effort involved in complying with the law. Their focus is on executing the process rather than “improving” it. Using clever automation and thoughtful design, they provide taxpayers with a simple, click-by-click roadmap through an otherwise bewildering forest and conveyed the benefits of expert advice without charging expert prices. Again, rather than rewrite the federal tax code (ie improve the process), TurboTax and other online tax software figured out a way to automate, simplify and accelerate the current process. Perhaps it is time to create TurboAcqs for the acquisition and procurement community.

16. Of course, it would be nice to see both the procurement policy and the tax codes get simplified, but this is a herculean task at which decades of intelligent, motivated people have consistently failed. Why anyone would expect the next reform effort to be different is beyond me. Thankfully, we have a more promising alternative. Virtually every instance of a successful procurement came about because the team focused on results and made the process work for them rather than spending time changing or fighting the process.

17. How does such a thing happen? How can we interpret and implement a broken process in such a way we reduce the cost, time and complexity involved? One key is to make sure all our decisions express the previously mentioned Cardinal Virtues of Procurement: speed, thrift, simplicity and restraint. The other key is to define a successful procurement as follows: delivering affordable solutions that are available when needed and effective when used.

18. The sentiments in the previous paragraph may sound like common sense, but there is nothing even remotely common about them. Large budgets, long schedules and high degrees of complexity are widely viewed as inevitable attributes of procurement programs. The Cardinal Virtues occasionally get lip service but more often are rejected—implicitly and explicitly—in favor of the Deadly Sins of Procurement: Complacency, Cynicism, Complexity, Selfishness, Fear, Apathy and Sloth. Note that the list of Sins is far longer than the list of Virtues—it is ever thus.

19. This means large budgets, long schedules and high degrees of complexity are frequently viewed as not only inevitable but even as desirable attributes. The Deadly Sins are treated as virtues. People act as if spending more time and money on something inherently improves its quality, or as if a highly complex item is superior to a simpler one. This is simply not the case. The data shows simpler, less expensive systems tend to outperform more complex, expensive systems.

20. Further, procurement programs often focus on goals other than delivering solutions which are affordable, available and effective. Instead, bureaucrats measure how much money has been spent compared with how much was supposed to be spent—and woe to the manager who underspends his budget! This creates some truly perverse incentives and discourages such subversive activities as delivering ahead of schedule or under budget. Other times a technical system is judged on whether or not it advances the state of the art rather than on whether we can afford to purchase, own and operate it, or whether its capabilities are aligned with actual operational needs. Unsurprisingly, aiming at the wrong goal means we end up in the wrong place.

21. Again, this is not an artifact of the process, policies or laws. Rather, it is the result of rejecting speed, thrift, simplicity and restraint, choosing instead to follow a different path in which procurement officials aim to solve problems by spending more time and money and making things more complicated. To be fair, nobody explicitly aims to deliver a system which is unaffordable, unavailable and ineffective. But by failing to define success in terms of affordable, available and effective, they implicitly aim to do exactly that. This idea is further examined in an article titled The Goal of Defense Acquisitions, which appeared in the Nov 2011 issue of Defense AT&L (http://www.dau.mil/pubscats/ATL%20Docs/nov_dec11/Ward.pdf)

22. In conclusion, the four Cardinal Virtues of Procurement should be recognised and embraced, then used to guide our behavior across the spectrum of procurement decision making, from organisational structure and procedures to technical architectures and documentation. At each decision point, procurement professionals generally have an opportunity to make things faster or slower, more complex or less complex. There are opportunities to spend less money or to spend more money. If speed, thrift, simplicity and restraint are our guiding stars, they will lead us towards delivering systems which are affordable, available and effective. And for what it’s worth, if we start truly embracing these virtues, then we have a hope of someday applying them to the process and policy as well. Not that we’ll need to, but we could if we were so inclined:

Final Note: The ideas expressed in this paper are built upon an acquisition framework called FIST (Fast, Inexpensive, Simple, Tiny). Further details about FIST are available in this article from the Armed Forces Journal: http://www.armedforcesjournal.com/2012/04/9772610

23. Lt. Col. Dan Ward is an active duty acquisitions officer in the US Air Force, currently stationed at Hanscom Air Force Base near Boston Massachusetts. The views expressed in this article are solely those of the author and do not reflect the official policy or position of the US Air Force or the US Government.

January 2013