[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]




 
                         [H.A.S.C. No. 113-113]

                    CASE STUDIES IN DOD ACQUISITION: 
                           FINDING WHAT WORKS

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             JUNE 24, 2014


                                     
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                      COMMITTEE ON ARMED SERVICES
                      
                    One Hundred Thirteenth Congress

            HOWARD P. ``BUCK'' McKEON, California, Chairman

MAC THORNBERRY, Texas                ADAM SMITH, Washington
WALTER B. JONES, North Carolina      LORETTA SANCHEZ, California
J. RANDY FORBES, Virginia            MIKE McINTYRE, North Carolina
JEFF MILLER, Florida                 ROBERT A. BRADY, Pennsylvania
JOE WILSON, South Carolina           SUSAN A. DAVIS, California
FRANK A. LoBIONDO, New Jersey        JAMES R. LANGEVIN, Rhode Island
ROB BISHOP, Utah                     RICK LARSEN, Washington
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN KLINE, Minnesota                MADELEINE Z. BORDALLO, Guam
MIKE ROGERS, Alabama                 JOE COURTNEY, Connecticut
TRENT FRANKS, Arizona                DAVID LOEBSACK, Iowa
BILL SHUSTER, Pennsylvania           NIKI TSONGAS, Massachusetts
K. MICHAEL CONAWAY, Texas            JOHN GARAMENDI, California
DOUG LAMBORN, Colorado               HENRY C. ``HANK'' JOHNSON, Jr., 
ROBERT J. WITTMAN, Virginia              Georgia
DUNCAN HUNTER, California            COLLEEN W. HANABUSA, Hawaii
JOHN FLEMING, Louisiana              JACKIE SPEIER, California
MIKE COFFMAN, Colorado               RON BARBER, Arizona
E. SCOTT RIGELL, Virginia            ANDREE CARSON, Indiana
CHRISTOPHER P. GIBSON, New York      CAROL SHEA-PORTER, New Hampshire
VICKY HARTZLER, Missouri             DANIEL B. MAFFEI, New York
JOSEPH J. HECK, Nevada               DEREK KILMER, Washington
JON RUNYAN, New Jersey               JOAQUIN CASTRO, Texas
AUSTIN SCOTT, Georgia                TAMMY DUCKWORTH, Illinois
STEVEN M. PALAZZO, Mississippi       SCOTT H. PETERS, California
MO BROOKS, Alabama                   WILLIAM L. ENYART, Illinois
RICHARD B. NUGENT, Florida           PETE P. GALLEGO, Texas
KRISTI L. NOEM, South Dakota         MARC A. VEASEY, Texas
PAUL COOK, California                TULSI GABBARD, Hawaii
JIM BRIDENSTINE, Oklahoma
BRAD R. WENSTRUP, Ohio
JACKIE WALORSKI, Indiana
BRADLEY BYRNE, Alabama

                  Robert L. Simmons II, Staff Director
                Lynn Williams, Professional Staff Member
                        Spencer Johnson, Counsel
                           Aaron Falk, Clerk
                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2014

                                                                   Page

Hearing:

Tuesday, June 24, 2014, Case Studies in DOD Acquisition: Finding 
  What Works.....................................................     1

Appendix:

Tuesday, June 24, 2014...........................................    43
                              ----------                              

                         TUESDAY, JUNE 24, 2014
          CASE STUDIES IN DOD ACQUISITION: FINDING WHAT WORKS
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

McKeon, Hon. Howard P. ``Buck,'' a Representative from 
  California, Chairman, Committee on Armed Services..............     1
Sanchez, Hon. Loretta, a Representative from California, 
  Committee on Armed Services....................................     2

                               WITNESSES

Lamb, Dr. Christopher J., Deputy Director of the Institute for 
  National Strategic Studies, National Defense University........     9
Lambert, Hon. Brett, Senior Fellow, National Defense Industrial 
  Association....................................................     3
McGrath, Hon. Elizabeth (Beth), Former Deputy Chief Management 
  Officer, U.S. Department of Defense............................     8
O'Rourke, Ronald, Specialist in Naval Affairs, Congressional 
  Research Service...............................................     5
Venlet, VADM David J., USN (Ret.), Former Program Executive 
  Officer for F-35 and NAVAIR Commander, U.S. Navy...............     7

                                APPENDIX

Prepared Statements:

    Lamb, Dr. Christopher J......................................   102
    Lambert, Hon. Brett..........................................    50
    McGrath, Hon. Elizabeth (Beth)...............................    93
    McKeon, Hon. Howard P. ``Buck''..............................    47
    O'Rourke, Ronald.............................................    61
    Sanchez, Hon. Loretta........................................    49
    Venlet, VADM David J.........................................    80

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    Mr. Forbes...................................................   127
    Ms. Tsongas..................................................   128
    Mrs. Walorski................................................   136
    Mr. Wittman..................................................   132
          CASE STUDIES IN DOD ACQUISITION: FINDING WHAT WORKS

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                            Washington, DC, Tuesday, June 24, 2014.
    The committee met, pursuant to call, at 10:03 a.m., in room 
2118, Rayburn House Office Building, Hon. Howard P. ``Buck'' 
McKeon (chairman of the committee) presiding.

    OPENING STATEMENT OF HON. HOWARD P. ``BUCK'' MCKEON, A 
 REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED 
                            SERVICES

    The Chairman. The committee will come to order. Good 
morning. As most of you know, I have asked our Vice Chairman 
Mac Thornberry to lead a long-term effort to streamline 
management of Department of Defense [DOD] by eliminating 
unnecessary overhead and reducing the complexity of the 
regulatory environment.
    I have also asked him to take a hard look at how we can 
make some lasting improvements in the way that DOD sets 
requirements and acquires things to meet those requirements. We 
have all heard the quote--``Those who cannot remember the past 
are condemned to repeat it.'' This is something that we have 
done over and over, but I am confident this time it is going to 
be perfect.
    Perhaps there is no better example of this futility than 
defense acquisitions where the same efforts, reform efforts, 
have been tried again and again for more than 70 years. I want 
to break this cycle of failed acquisition reform by learning 
from those that traveled down this path before. That is what 
this hearing is about.
    We have asked our witnesses to present some case studies of 
their choosing not ours, that based on their experience, they 
feel are good examples of what is working in DOD acquisitions 
and what is not. I invite all Members to tread outside their 
committee lanes and ask questions about any of the cases 
studies, even programs that you are not familiar with. So no 
question is a bad question.
    The great folks we have here before us today have worked on 
a variety of programs and we appreciate the breadth of their 
experience. We have with us today the Honorable Brett Lambert 
who recently left his post as a Deputy Assistant Secretary for 
Manufacturing and Industrial Base Policy and is now with the 
National Defense Industrial Association.
    We also have Mr. Ron O'Rourke, who most of you here know, 
from the Congressional Research Service. Additionally, we have 
Vice Admiral David Venlet, Retired--did I say that correctly--
who during his service with the Navy worked on many major 
acquisitions programs to include the F-18 and the Joint Strike 
Fighter. Now, I understand that you are just basically short 
time removed from that but your experience, sir, will be 
invaluable.
    Next, we have the Honorable Beth McGrath who recently 
served as DOD's Deputy Chief Management Officer where she had 
responsibility for DOD's business systems.
    And last but not least we have Dr. Christopher Lamb who is 
currently Deputy Director for Institute for National Strategic 
Studies at the National Defense University. Prior to that post, 
he served as the Deputy Assistant Secretary of Defense for 
Resources and Plans where he had oversight of requirements, 
acquisition, and resource allocation matters for the Under 
Secretary of Defense for Policy. I welcome all of you and thank 
you for your service, this is a very good panel for this 
subject. We really appreciate and value your expertise.
    Ms. Sanchez.
    [The prepared statement of Mr. McKeon can be found in the 
Appendix on page 47.]

   STATEMENT OF HON. LORETTA SANCHEZ, A REPRESENTATIVE FROM 
            CALIFORNIA, COMMITTEE ON ARMED SERVICES

    Ms. Sanchez. Thank you, Mr. Chairman.
    And once again, thank you to the panel for being with us 
today. We appreciate it. As you know--first of all, Mr. 
Chairman, thank you for holding this hearing, I know that there 
are quite a few number of Members who are very concerned about 
the acquisition process.
    And as you know, we have been trying to work on this gosh, 
since I got to the Congress, and I am sure since you got to the 
Congress to try to figure out how we get all of this done. 
Acquisition is incredibly important especially in a time of 
limited resources, which you and I know we are facing and 
continue to face.
    So, in order to do our missions more effectively, our men 
and women have to be trained up but they also have to be 
equipped well and they need to have those defense systems and 
they have to have cutting-edge defense systems. We want to have 
that innovation that we need. And so, the insight that you will 
provide us on how the acquisition system is working or not 
working, what we can do to change it, et cetera, I think, is 
incredibly important.
    I think that we can learn from some of the mistakes that 
have been made. Certainly, sitting here and sitting as the 
ranking member on Air Tactical, I have had my frustrations with 
major programs; F-35 for example, two or three programs that we 
have now completely cut out without having a system available 
to our men and women who are working very hard out there to 
keep us safe.
    So, I think we need to invest the knowledge that we gained 
from some of those mistakes and some of those acquisitions that 
just didn't happen. And at the same time I am also worried 
about the industrial base, worried about the innovation base 
because as a Californian I see so much of that, of those 
engineers and others who get pulled into software development 
and pixels and gosh, you know little games that people play on 
their personal devices, et cetera.
    So, I think it is incredibly important, you know, what does 
the acquisition process look like? How do we use the money 
effectively? How do we really get something for the money that 
we are spending? How do we improve contractor performance? And 
I believe that our witnesses have extensive experience in all 
of this.
    So, I am really looking forward to see this and also, as 
the budget for defense has begun to shrink with respect to 
future systems in particular, Mr. Chairman, I think that some 
of the primes try to take more of the work inside. And so, one 
of the things we see is that our smaller and medium-size 
businesses are getting less contracts or are really not being 
asked to compete or they are not being used.
    And that is where a lot of the innovation for the future 
comes from because a small and medium-size business can 
maneuver so much quicker than a larger staid company. So, you 
know, I want to see--I want to try to figure out how do we 
continue to include small business, minority businesses, 
incredibly important because they really are the place where 
Americans, most Americans work.
    And all of these issues are based around this whole issue 
of the acquisition process. So, I am very interested in this 
topic. Thank you for holding it and interested to hear from our 
witnesses.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Sanchez can be found in the 
Appendix on page 49.]
    The Chairman. We have five witnesses, so normally in this 
committee, we don't watch the clock too much until we get to 
the Members' questions and then we are very strict. But I would 
really ask if you could keep your opening comments to the 5 
minutes, it will give us more time for the Members to be able 
to ask the questions that they really want to get to. And then 
that gives you a chance to expound on the things that you have 
to cover with us, so I would appreciate it if you do that.
    Let's start with Mr. Lambert.

   STATEMENT OF HON. BRETT LAMBERT, SENIOR FELLOW, NATIONAL 
                 DEFENSE INDUSTRIAL ASSOCIATION

    Mr. Lambert. Thank you very much, Mr. Chairman. In my brief 
comments before you today, I will focus on discussing the 
underlying trends that produce acquisition successes and 
failures on a broad scale. Metaphorically speaking, I believe 
acquisition reform should focus less on individual silver 
bullets and more on creating and sustaining silver mines and 
best practices identified over time and under varying 
conditions.
    The industrial base upon which we rely is comprised of an 
extremely diverse set of companies that provide both goods and 
services directly and indirectly to the military. References to 
``The Industrial Base'' that imply some monolithic entity are 
analytically unuseful.
    The defense industrial base incorporates companies of all 
shapes and sizes, from the world's largest public companies to 
sole proprietorships to garage start-ups. Some companies deal 
directly with the Federal Government, but a vast majority act 
as suppliers, subcontractors, and service providers in a value 
chain that leads to prime contractors and is often based in far 
off lands or even in ``the cloud.''
    In the coming years, the Department will increasingly 
purchase from what I call the ``millennial industrial base'' 
which will be more global, more commercial, and more 
financially complex. This reality is truer today than it was 
yesterday, and will be truer tomorrow than it is today.
    The millennial industrial base will also be marked moving 
forward more by system disposability and refreshment than 30-
year life cycles and we must have an acquisition process that 
can keep pace. The emerging millennial industrial base is also 
evolutionary, where Moore's Law is more important than 
Milestones, and Metcalfe's Law is more vital to our national 
security than MILSPECs [military specifications].
    Increasingly, the millennial industrial base will also rely 
on technologies that were not developed in the United States. 
Also, like the commercial marketplace, our supply chain, 
particularly at the lower tiers, will include firms from 
countries that are not our closest allies. The commercial and 
global nature of the millennial industrial base is one the 
Department has begun to recognize in policy more so than in 
practice.
    This change is profound and disruptive. When it comes to 
acquisition, the Department continues to assume it is the dog, 
not the tail of any particular market. For some markets that is 
still correct. For an increasing number, it is not. As I have 
noted, the Department relies on an Industrial Age policies and 
procedures that often hinder it from acquiring the best 
Information Age technologies. In many cases, this results more 
from culture than from policy.
    For example, FAR [Federal Acquisition Regulations] Part 12 
already enables the Department to buy advanced commercial 
systems and services but it is far too often bypassed in favor 
of the more established and comfortable government-unique 
source selection policies of FAR Part 15. The only barrier to 
entry for many innovative firms seeking to offer their best 
technologies is often the acquisition skill set and confidence 
of informed government customers.
    To a large extent, the millennial industrial base also 
embraces the Department's pursuit of Better Buying Power. 
Nowhere is the Department more likely to find improved 
productivity, innovation, cost controls, and competition than 
in the base that leverages global and commercial best 
practices.
    The Better Buying Power initiative seeks to accentuate and 
leverage all of the best aspects the millennial industrial base 
has to offer and it should be encouraged to continue at all 
levels of the Department, most notably in the training and 
retention of the skilled acquisition workforce.
    Another advantage of embracing the millennial industrial 
base to the Department is burden sharing in research and 
development. Today's debate rages over the role of IRAD in 
defense innovation. But this single acronym too often conflates 
Independent Research and Development and Internal Research and 
Development.
    Independent R&D [research and development] are funds 
provided by the taxpayer to defense companies at the rate of 
over $4 billion a year. There are many good reasons for these 
expenditures and I support them all. It is a good program.
    Internal R&D, on the other hand, as every non-defense 
company understands it, is self-directed and unreimbursed with 
the goal of investing in capabilities that have a clearly 
articulated return on the research and development investment. 
As the Department increasingly leverages the commercial 
marketplace, Internal R&D may likely become a greater source of 
innovation than Independent R&D.
    It may be helpful, moving forward, to simply distinguish 
the two pools of resources and refer to ``Independent R&D'' as 
``Reimbursable R&D,'' which is in effect is what it is. The 
Department would then be better able to distinguish, as will 
shareholders of public companies, the dramatic increases in 
IR&D driven by the millennial industrial base that are not 
taxpayer funded yet may yield significant results for the 
warfighter if private investments are able to develop into 
goods and services the warfighter requires. That said, access 
to the shareholder-funded innovation can only effectively be 
leveraged when careful and fair consideration is given to the 
ultimate control and use of intellectual property.
    In conclusion, there is not, as I have said before, a 
silver bullet for the real and perceived shortcomings of the 
Defense Acquisition System. In my opinion, the single greatest 
asset over time comes back to the people. How talented are 
they? How well are they trained? How empowered are they to make 
the necessary call on any one procurement action, and how are 
they rewarded for thinking and not just acting?
    To be successful, that workforce must embrace the 
millennial industrial base as the future of defense 
acquisition. How we can enable our people to recognize and 
leverage this reality is a challenge both this committee and 
Department must face in the coming years.
    As I have said, our daughters and sons should never enter a 
fair fight and to ensure that, we all must embrace both the 
opportunities and challenges of this emerging industrial base.
    Thank you.
    [The prepared statement of Mr. Lambert can be found in the 
Appendix on page 50.]
    The Chairman. Thank you.
    Mr. O'Rourke.

  STATEMENT OF RONALD O'ROURKE, SPECIALIST IN NAVAL AFFAIRS, 
                 CONGRESSIONAL RESEARCH SERVICE

    Mr. O'Rourke. Chairman McKeon, Ranking Member Sanchez, 
distinguished members of the committee, thank you for the 
opportunity to appear before you today to testify on case 
studies in what works in DOD acquisition. Mr. Chairman, with 
your permission, I would like to submit my written statement 
for the record and summarize it here briefly.
    The Chairman. All of your written statements will be 
included in the record in total, without objection, so ordered.
    Mr. O'Rourke. As requested, my testimony focuses on Navy 
acquisition, and I selected seven case studies as examples of 
what works. The first is nuclear propulsion which is under the 
direction of Naval Reactors. The Navy's success since the 1950s 
in procuring and safely operating scores of nuclear-powered 
ships and in developing a succession of reactor designs using 
fuel cores with increasingly long lives can be considered a 
major success story.
    Naval Reactors' success can be attributed in part to its 
administrative setup, which provides Naval Reactors with a 
clear and focused mission, clear and total responsibility and 
accountability for implementing that mission, a director with a 
high rank and a long term of office, centralized control of the 
program's industrial base and suppliers, and a fairly flat 
organizational structure with an in-house staff that is fully 
knowledgeable in the technology that it acquires from its 
contractors.
    Naval Reactors' success can also be attributed to its 
operational philosophy, which is characterized by, among other 
things, a focus on technical excellence, rigorous quality 
control, comprehensive procedures and procedural compliance, 
careful selection of personnel, and rigorous and continuous 
training of those personnel.
    The second example is the Virginia-class submarine program 
which has reduced cost while increasing capability and is 
delivering boats ahead of schedule. The program's success can 
be attributed to, among other things, achieving a higher degree 
of design completion prior to the start of construction than 
was true for previous submarine programs, establishing 
operational requirements that were not overly ambitious, using 
technologies developed for previous submarine classes, sharing 
production best practices between the two submarine 
shipbuilders, and achieving production efficiencies through the 
use, with congressional approval, of multiyear procurement and 
block buy contracting.
    The third example is the Acoustic Rapid COTS [Commercial-
Off-the-Shelf] Insertion program for upgrading the acoustic 
signal-processing capabilities of existing Navy submarines. 
This open architecture program permits the Navy to upgrade the 
capabilities of existing submarines at much less cost than the 
previous closed architecture approach.
    The fourth example is the Aegis Ballistic Missile Defense 
program, which has achieved the largely successful test flight 
record against increasingly challenging targets. The program's 
success can be attributed in part to its use of the Aegis 
community's longstanding incremental development philosophy 
known as ``Build a little, test a little, learn a lot.''
    The fifth example is the Mobile Landing Platform or MLP 
shipbuilding program which modified the design of an existing 
commercial oil tanker to produce an MLP at a cost that was less 
than half the estimated cost of the new design concept the Navy 
had been looking at.
    The sixth example is the use of Profit Related to Offers, 
or PRO Bidding, in the DDG-51 destroyer program which has 
enabled the Navy to continue using competition between the two 
DDG-51 shipyards during years of relatively low production 
rates.
    And the seventh example is the Navy's increasing use in 
recent years of multiyear procurement and block buy contracting 
which amounts to a significant change, some might say a quiet 
revolution, in Navy ship and aircraft acquisition and which has 
enabled Congress and the Navy to procure more ships and 
aircraft for a given amount of money.
    Lessons learned for Navy shipbuilding that have emerged 
over the years include the following seven points: First, get 
the operational requirements for the program right up front and 
manage risk by not trying to do too much in the program.
    Second, impose cost discipline up front and use realistic 
price estimates.
    Third, minimize design/construction concurrency.
    Fourth, use a contract type that is appropriate for the 
amount of risk involved, and structure its terms to align 
incentives with desired outcomes.
    Fifth, properly supervise construction work.
    Sixth, provide stability for industry in part by using, 
where possible, multiyear procurement or block buy contracting.
    And seventh, maintain a capable government acquisition 
workforce that understands what it is buying.
    Identifying these lessons isn't the hard part. Most if not 
all of these points have been cited for years. The hard part is 
living up to them without letting circumstances lead program 
execution efforts away from these guidelines.
    Mr. Chairman, this concludes my statement. Thank you, 
again, for the opportunity to testify, and I will look forward 
to the committee's questions.
    [The prepared statement of Mr. O'Rourke can be found in the 
Appendix on page 61.]

 STATEMENT OF VADM DAVID J. VENLET, USN (RET.), FORMER PROGRAM 
   EXECUTIVE OFFICER FOR F-35 AND NAVAIR COMMANDER, U.S. NAVY

    Admiral Venlet. Chairman McKeon, Ms. Sanchez, and 
committee, thank you for the invitation to appear with this 
panel. Mankind has always lived in a world of constrained 
resources, in our personal, professional, and national lives. 
Optimization of these constrained resources is what produces 
outcomes that are useful and enduring.
    Specific actions in specific areas are called for to 
ideally improve the opportunity to achieve better outcomes. It 
is a long road. Three places need improved outcomes.
    The first is making the programs underway perform better. 
The second is to only start and pursue the right programs. The 
third is removing waste in the infrastructure and the process.
    Things to do for better outcomes are different for each 
one. I am here today to do what I can to help you based on my 
exposure to and participation in a large number of programs, of 
successes, disappointments and undeniably confrontation with 
failure.
    Specific program case studies would yield the non-specific 
program insights in my written submission. Non-specific here is 
not meant to avoid specific program criticism but to focus on 
causes and hopefully effective things to do for better outcomes 
for every program now and in the future.
    I hope to bring focus on ideas to attain the external 
result, the right capability delivery for effective national 
defense. We need to focus on people doing acquisition in both 
government and industry. The goal is to create an increasing 
population of people who have demonstrated commitment to the 
practice of fundamentals, transparency, and realism at all 
levels of career progression. That will produce better 
outcomes.
    It is a long road and forces abound that suppress workers 
from embracing these as life habits. This attention to people 
is the heart of the matter for getting to a state of dependably 
better performing programs.
    I look forward to your questions and our discussion.
    [The prepared statement of Admiral Venlet can be found in 
the Appendix on page 80.]
    The Chairman. Thank you.
    Ms. McGrath.

STATEMENT OF HON. ELIZABETH (BETH) MCGRATH, FORMER DEPUTY CHIEF 
         MANAGEMENT OFFICER, U.S. DEPARTMENT OF DEFENSE

    Ms. McGrath. Good morning, Mr. Chairman, Ms. Sanchez, 
members of the committee.
    The Chairman. Will you pull the mic right up?
    Ms. McGrath. Yes. Is this better? Great. Thank you. I was 
about to say how much I appreciate the opportunity to return 
and testify this morning and be part of this panel and provide 
my perspective on achieving meaningful and lasting reform in 
the Department of Defense acquisition process and how we can 
operate more effectively and efficiently on behalf of the 
American taxpayer.
    As mentioned, until recently, I served as the Deputy Chief 
Management Officer for the Department of Defense. In that 
capacity I assisted the Secretary and the deputy in drafting 
strategies and implementing plans aimed at streamlining 
business operations including business information technology 
programs.
    While at the Department, we did manage to make some steps 
toward a more efficient acquisition model, yet today DOD 
continues to experience software development projects that fail 
to meet scheduled deadlines or promised cost estimates.
    In today's environment, tolerance for cost overruns and 
missed deadlines is in short supply. The budgets for IT 
[information technology] will be tight for the foreseeable 
future and no agency has the money or time to waste. I believe 
the tools exist to develop mission critical software projects 
that meet specifications both functional and aimed to achieve 
both the costs and schedule.
    Project teams need to think creatively and work more 
collaboratively to achieve these effects. How the government 
defines clear, measurable results is critical for both the 
Department of Defense and industry. There are benefits for all 
parties involved in executing efficient acquisition programs.
    In my time today, I will focus on three areas of potential 
reform and revision that I believe are essential to future IT 
cost efficiency and operational success. First is the increased 
use of prototypes. Prototype functionality should be shared 
with users as soon as possible after they discuss what they 
want and need from the system that can spark changes in the 
requirements and priorities and they need to understand what it 
is they are looking for from an operational perspective and 
have a better sense for their requirements and as they see the 
functionality.
    Frequent incremental releases early in the process keep the 
project fresh and users continually engaged. Each release is a 
checkpoint to measure progress against expectation of mission 
stakeholders. And keep in mind the earlier in the development 
cycle corrections are made the cheaper they are.
    Second is the use of strong program managers and 
information technology professionals. The program manager must 
keep the project focused on outcomes and he or she must work 
very closely with the functional leaders throughout the 
program.
    The project manager guides the development and adherence to 
sound, standards-based practices to avoid risks. Both the 
program manager and functional lead need to be intimately 
involved and understand the planned features of the system, 
again, with a clear focus on what the business outcomes are 
intended.
    Third is the flexibility in the contracting process. 
Between prototyping and delivering releases, change orders will 
occur in the contract type. We need to make sure that we have a 
mechanism in place where the communication between industry and 
the government and our contracting practices enable these 
changes to happen because things change throughout the life 
cycle of a program and the contract structure needs to be able 
to handle those changes, again, focused on the business 
outcomes.
    The acquisition process is dynamic and complex. Any 
effective and workable solution must consider a wide number of 
factors in a diverse group of stakeholders. Building a 
comprehensive acquisition model relies on valuable input from 
the Pentagon, the individual services, industries, and 
certainly the Members of Congress.
    That level of engagement is vital. We must continue to 
search for ways to instill new innovative and efficient 
techniques in the process. I look forward to working with this 
committee in the months ahead and being able to report 
additional gains in the quest for greater efficiency, increased 
effectiveness, and further agility.
    Thank you very much for the opportunity to be here today, 
and I look forward to our discussion.
    [The prepared statement of Ms. McGrath can be found in the 
Appendix on page 93.]
    The Chairman. Thank you.
    Dr. Lamb.

 STATEMENT OF DR. CHRISTOPHER J. LAMB, DEPUTY DIRECTOR OF THE 
  INSTITUTE FOR NATIONAL STRATEGIC STUDIES, NATIONAL DEFENSE 
                           UNIVERSITY

    Dr. Lamb. Mr. Chairman and members of the committee, thank 
you for the opportunity to be here to share my views on what 
works and what doesn't in defense acquisition. It is an honor 
to be here.
    In the written testimony, I offer several examples of 
acquisition successes and failure, but I focus primarily on the 
mine-resistant, ambush-protected vehicle program, otherwise 
known as MRAPs.
    The fielding of MRAPs is a noteworthy case that features 
both major performance failures and successes. I believe the 
MRAP case helps substantiate some insights about Pentagon 
management of acquisition that is noteworthy. For example, the 
flexibility to manage programs differently, depending on 
circumstances, is critically important. And irregular warfare 
is a prime example in that regard.
    Efficient and effective acquisition is not possible without 
reform of other associated Department of Defense processes, 
particularly the requirements process in my estimation. Senior 
leaders I believe who are frustrated with Pentagon processes 
are increasingly inclined to jettison disciplined defense 
analyses in favor of intuitive and impressionistic 
decisionmaking, which I think would be a mistake.
    My testimony was offered from the perspective of a mid-
level career official. But I thought in my oral testimony here 
today it might be useful to look at things or try to look at 
things from the point of view of the Secretary of Defense.
    This kind of thought experiment is actually relatively easy 
because Secretary Gates has spoken extensively on his 
experience with the MRAPs. In his memoirs, I think he makes it 
clear that he decided to intervene decisively to make the MRAPs 
the Pentagon's number one acquisition priority for moral 
reasons. He believed America should do everything possible to 
protect the volunteers it sends to war, especially from the 
improvised explosive devices [IEDs] that were responsible for 
the large majority of our casualties.
    His bottom-line rejoinder in his memoirs to those who still 
contend that MRAPs were an unnecessary expense was that they 
should, quote--``talk to the countless troops who survived 
because they were riding in an MRAP.''
    Our research at the National Defense University agrees with 
Secretary Gates' moral calculus, but also argues that MRAPs 
made sense for economic, operational, and political reasons as 
well. Economically, MRAPs cost less than replacing and caring 
for the casualties from the IEDs. In terms of operational 
strategy, they were completely consistent with our approach to 
counterinsurgency in Iraq. And, politically, the MRAPs help 
shore up public support for the war effort and signal to the 
enemy that we would do whatever it took to prevail.
    Even so, in his candid memoirs, Secretary Gates reports 
some unusual facts about his experience with the MRAP 
decisionmaking process. First, it was an accident that he 
stumbled upon a journalist's report that alerted him to the 
MRAP issue and inclined him to investigate it.
    Second, not a single senior official, civilian or military, 
supported his proposal for a crash program to buy MRAPs. Third, 
after he decided to institutionalize the lesson he learned from 
the MRAP in the form of a better balance between warfighting 
and irregular warfare capabilities in his national defense 
strategy, he precipitated, quote--``a rebellion from all the 
senior uniformed leaders in the Pentagon.'' Ultimately, he says 
he had to water down his strategic guidance.
    These fascinating facts raise some important questions I 
believe. For example, do we want a decisionmaking system that 
requires happenstance to bring to the Secretary's attention a 
highly effective, but expensive and controversial option for 
defeating the enemy's most lethal weapon?
    Why was it that not a single senior official could see the 
merits to the MRAP, but the Secretary, this committee at that 
time and many Senators, and experts in the Department and 
outside the Pentagon could see the benefits?
    What does it tell us when a leader as competent as 
Secretary Gates has to water down his own strategic guidance 
for the benefit of consensus? What are the implications of 
that?
    Answers to these questions are contained in my written 
testimony. But, to summarize, service organizational cultures 
disincline the Pentagon to field capabilities for irregular 
warfare that compete with established warfighting programs. 
Also, the productivity of the Pentagon acquisition system is 
inextricably linked to and limited by other Pentagon processes, 
which tells us something about the scope of needed reform I 
think. But, most importantly, I believe the MRAP case 
highlights a fundamental problem or challenge for the Pentagon, 
which is its inability to make tradeoffs between competing 
objectives that are essential for mission success, but that 
come at the expense of some interest group. This is just as 
true for acquisition programs as it is for defense strategy on 
the whole.
    Let me close by again citing Secretary Gates. He concludes, 
reviewing the MRAP experience, that we can't assign 
responsibility for this unfortunate state of affairs because, 
quote--``in every case, multiple independent organizations were 
involved and no single one of them had the authority to compel 
action by the others.''
    How can we hold anyone responsible when many organizations 
can put their foot on the brake, stop or delay action, but no 
one, not even the Secretary, consistently can generate desired 
outcomes? Secretary Gates went on to suggest we are all 
responsible for the system we have and its performance. It took 
a committee effort to build a system that can frustrate the 
clear choices about relative risk and it will take a team 
effort to change it.
    It is my understanding that that is the committee's intent. 
And I applaud the House Armed Services Committee efforts to 
take on this daunting challenge. And I thank you for the 
opportunity to make a contribution to your deliberations.
    Thank you.
    [The prepared statement of Dr. Lamb can be found in the 
Appendix on page 102.]
    The Chairman. Thank you very much.
    I think this is going to be a huge, monumental task. I 
think you each pointed out things that are very, very much a 
part of the culture. And we are just talking about defense, but 
this is much, much broader. It is throughout our whole country. 
We brought in so much bureaucracy, so much red tape, rules, 
regulations.
    When my dad was a young man, he wanted to go into business 
for himself. He was working for a company where he sold meat 
off of a truck to stores and restaurants during the day and he 
saved up money and he bought a used fish truck. He and my mom 
worked all weekend cleaning to try to get the smell of the fish 
out of the truck and then, early Monday morning, he was 
downtown Los Angeles, went to some places that he knew and had 
contacts and friends. This was early during the Second World 
War.
    And he was able to buy enough meat to fill up his truck and 
then he went out and started and tried to sell it. He worked 
door to door to door. And his truck was not refrigerated. He 
had to sell the meat that day or he was out of business. 
Finally, he got to a place late in the afternoon, a guy took 
everything he had. And that started him in his business.
    There is no way a person could do that today. There are so 
many rules, regulations, licenses, things that you have to, 
hoops that you have to jump through before you could get 
something off the ground. So this is not just defense.
    I mean, we just have a law in California, it looks like 
they are debating about overturning tenure for teachers. We 
understand, we know what--I was on a school board for 9 years. 
We had a teacher one night that was caught by the vice squad 
for indecent exposure, some other things; we couldn't fire him. 
I mean, this is, over the years, we have put layer upon layer 
of things that make it much more difficult to get anything 
done.
    I am reading about World War II. We built 80,000 airplanes 
in 1 year. This year, we will build, hopefully, fixed-wing and 
helo-manned aircraft, 341. We were, during World War II, 
building a tank every 3 hours. We built more tanks in 15 months 
than the Germans built during the whole war. We unleashed a 
huge, some, now, refer to it as a ``military-industrial 
complex,'' but because of that and because of our people, we 
were able to win two major wars at the same time on opposite 
sides of the world.
    Today, we have made things so complicated that for--what 
have we been working on? An air tanker, for 15 years. We don't 
have one yet.
    I tell the story about the Pentagon that was built in 1 
year during World War II. And, right now, we could not build it 
because I am sure there would be some--it is in a swamp and 
there would be some species that would stop us. But, say, we 
got through all of the NEPA [National Environmental Policy Act] 
and all the court cases and went through all of that and 
finally started to build it. World War II would be over, Korea 
would probably be over, and Vietnam would probably be over for 
a week that we could get a Pentagon built. We cannot live 
forever under this kind of circumstance.
    I was talking to a CEO [chief executive officer] of a 
company. And he said he had over 200 government workers in just 
one of his plants watching everything they did. And he had to 
hire 200 people to answer all of their questions. I said, ``You 
know, if we didn't have the 200 there from the government, you 
didn't have to have the 200 and you probably couldn't steal 
enough to pay for what we were paying to make sure you didn't 
steal.''
    So, some way, we have to get--I don't know how we are going 
to do this. But the Marine Expeditionary Vehicle, we spent, 
what, $6 billion in 20 years and finally decided it was too 
expensive. How do we make those decisions earlier? How do we 
cut through the regulations, the bureaucracy, decisionmaking to 
where an MRAP could be delivered as soon as we find out all of 
the problems we have with IEDs?
    We put all of our efforts in that and make it happen 
instead of--I understand we have 10,000 attorneys in the DOD. 
Now, we have a few up here, too. And I have nothing against the 
attorneys, but I think they are trained to delay things or to 
stop things.
    You may be attorneys. I don't know. But, someway, I am 
hoping with your expertise and with Mac's abilities and this 
committee in the next few years we can, some way, cut through 
at least in defense the ability to get things done quicker, 
more efficiently. Yes, we have to be very good stewards of the 
taxpayers' money, but, you know, delaying these things or 
cutting them off--the B-2 was built in my district. It was on 
full production when I first ran for Congress. It was supposed 
to be 130 aircraft. We spent $40 billion on R&D. We finally 
built 21 planes--crashed 1, we now have 20. So you take the $40 
billion and spread it over the 130 that we were supposed to 
build or you spread it over the 21 that we actually built, you 
get a different cost to that plane.
    Well, they stopped production, made Northrop cut up the 
tools to be sure we would never build another one. And, now, we 
are investigating building another long-range penetrating 
bomber. We understand we need about 100. You know, this is 
lunacy.
    So I don't have a question. I just had to spout off. But I 
think that this is the biggest problem facing us because if we 
find ourselves in another place where we need to build 
something fast, we have tied our hands.
    So I am hoping that we will have the questions that will 
draw this out. And I am hoping that you will work closely with 
Mac and the committee over the coming years to lend your 
expertise just to, first, list the problems and then, 
systematically through legislation or fiat or whatever, however 
way we can do it, start eliminating all of the barriers to 
being more streamlined, more efficient, more cost conscious, 
and more focused on getting things done.
    Thank you.
    Ms. Sanchez.
    Ms. Sanchez. Thank you, Mr. Chairman.
    So I have some specific questions to ask the panel. I want 
to ask you about JROC--for those who don't know, the Joint 
Requirements Oversight Council--which, of course, the Congress 
instituted so that we would ensure that the same types of 
things weren't happening in each of the different services and 
that we wouldn't have this redundancy going on between the 
services.
    So it appears to me at least that JROC has taken on a life 
of its own. Sometimes, just to get through the process can take 
more than a year. And that is adding time to a particular 
situation. And it also seems to me, under JROC, that they don't 
want to pick winners and losers and so, you know, things get 
through and then there is still this--they are still usually 
saying yes to everything and so we not only have added time to 
the equation, but we have redundancy going on.
    I know that is not what we decided as a Congress. That is 
not why we put it together, but it seems to be that that is 
what is going on at least from my standpoint. So I would like 
to ask each member of the panel: Do you think that the--what do 
you think of the JROC process? And is it worth the time and the 
money? And does it effectively mitigate the pitfalls of stove-
type acquisition process? And should we continue with it? If we 
redid it so that it would go back to its original intent of 
what it was supposed to do, how would the Congress do that?
    Anybody want to take a crack at that?
    Ms. McGrath. So I am happy to start. My perspective however 
will be slightly different, given the sort of business, 
information technology.
    A few years ago, the Department knew it needed a place to 
vet and discuss broad-level enterprise IT business 
requirements. And JROC was not the place. JROC was particularly 
focused on the national security mission, really the 
warfighting aspects of the Department. And so, frankly, from my 
perspective, we needed a place like the JROC to have the 
enterprise discussion on business requirements so that we 
didn't have redundancies of capabilities and so we could create 
a more integrated environment.
    And so, broadly stated, sort of the aspects and benefits of 
the JROC were lacking in the business space, and so we did 
establish that to ensure, as I mentioned, not to have 
duplication across the enterprise. And that is only, say, in 
the last couple of years, but it has proven very valuable, I 
believe, as was the intent of the JROC process, to understand 
the enterprise perspective, how everyone played in a particular 
engagement. We are mirroring those same, you know, attributes 
in the business conversations.
    So, from that perspective, I can say it is certainly 
beneficial, although we are mirroring JROC and not specific to 
the JROC. And I think without it, you will end up with 
duplication and lack of interoperability across the business.
    Ms. Sanchez. And when you work through that process from 
the software and technology standpoint, does it take you a year 
to get to the endgame of, yes, we need this, no, we don't need 
this? I mean, what is the timeline on something like that?
    Ms. McGrath. Well, again, it is, you know--I will say the 
cultural part of even establishing the conversation was very 
difficult because people were accustomed to having the 
flexibility to do their own things and, when we said, no, no, 
you are part of a larger ecosystem, you need to bring it in and 
really document why do you need what you need or what business 
outcomes are you trying to get, you know, to achieve then, I 
think the more prepared organizations were, the shorter the 
timeline took.
    But I will also say that the cultural change, people 
weren't prepared to answer the questions. They were very 
focused on their specific organization and what they were doing 
and not really looking at the enterprise. And so I think the 
more you have done your homework and really analyze why, you 
know, your mission needs, then the faster it will take because 
you have done your homework and you are prepared and you 
understand.
    Ms. Sanchez. Okay.
    Admiral.
    Admiral Venlet. I found--I make brief reference to the JROC 
in my written statement. I also used the word ``optimization'' 
when I began. You have--the chairman talked about complex 
systems that we are requiring and reaching for. We write very 
tall requirements for the things that we need for very good 
reasons. We want the warfighter to have the best individual 
value.
    And when we write down those requirements, we have this 
wonderful organization called Operational Test [and Evaluation] 
that tests what we write down about those requirements. And 
when the performance for various reasons is, either through 
unfortunate choices in design or surprises or things that you 
discover when you reach for high capability, that report may 
come out and you are short of some of those very tall 
requirements. We get pretty agitated when we believe we can't 
abide those.
    We need--you need somebody to be what I would call the 
``chief officer of good enough.'' And, please, don't 
misunderstand me. I am not talking about dumbing down the 
requirements for our warfighters' needs. But when resources are 
constrained due to time, due to an operational threat that 
doesn't appear with regard to any schedule, you have to account 
for the appearance of a threat, the lack of further resources. 
And those are very difficult decisions.
    I believe the creation of the JROC was meant to do that. I 
found my appearance before the JROC and my interaction with 
them to be that--to be a source to do that. I believe the 
current leadership has a very good view to push back on 
programs. I found that in my personal experience. So, if not 
the JROC--I personally believe, I would continue the JROC. But 
if not, then you need somebody to play that role to serve as 
secretaries, to serve as chiefs or empowered to make those 
difficult decisions. But that would be my view.
    Ms. Sanchez. Anybody else with respect to the JROC? Any 
different experience on there?
    Yes?
    Dr. Lamb. Well, I just would add, piggyback a little back 
on what the admiral said, and make the following observation.
    If the JROC was going to be equipped to make decisions 
between competing requirements and which would best serve the 
warfighter, you would need an analytic structure in place that 
would allow you to fairly compare alternatives at all levels, 
all the way down to making trades in key performance parameters 
on major platforms, all the way up to operational concepts, 
what is the best way to do a forced entry overseas, what is our 
concept for that and what programs and platforms, as such, to 
best plug into that?
    So, if I have to sacrifice speed, endurance, or some other 
attribute over here, maybe I can compensate for it over here. 
That is I think what people intended to see happening on the 
JROC, but which typically does not happen. And you ask, ``Well, 
why does that not happen?'' And my answer would be because 
people would be surprised to know how lacking we are in 
transparency in the Department about data, about the modeling, 
about the assumptions.
    It is very hard to get a fair comparison between 
alternatives. So, if you are the Secretary of Defense or you 
are sitting on the JROC, somebody can come forward with an 
analysis of the F-22, for example, and say, ``Well, we really 
need far fewer given our needs,'' and another person with 
another study based on other data will come forward and reach 
exactly the opposite conclusion. And if you are the Secretary 
of Defense, you must be saying to yourself, ``That is not very 
helpful decisionmaking support.''
    And that is why in my written testimony I said, if we 
really want to empower the Secretary or somebody below the 
Secretary like the JROC to help make this kind of tradeoffs, we 
need a much more robust joint analytics system. People don't 
understand that the Pentagon has a very small amount of 
analytic talent and resources dedicated to joint analysis and 
huge amounts devoted to the services.
    That is not necessarily bad if everyone keeps everything 
transparent. But that is not the way things work today.
    Ms. Sanchez. So, following up on that Doctor, because I 
think this is a very--I mean, we sit here and we are trying--we 
are making tradeoffs. I mean, we are making tradeoffs based on 
money more or less in this committee and because we are having 
to given the situation that we have right now. But it would 
nice to be able to make tradeoffs based on needs.
    And what you are saying to me is that each service has a 
whole bunch of people looking at needs and analyzing that and 
seeing what they need, but, when we go to the SECDEF [Secretary 
of Defense] or we go to that office and they are trying to make 
these tradeoffs, they have very few people who may even have 
that information from other places or be able to analyze to 
make those tradeoffs.
    What would you say would be the--would you say maybe put, 
we take some of that analytic and put it and make a broader 
analytic in the Office of the Secretary and we take it out of 
those individual services? I mean, how--practically, how would 
you address what you just said you thought needed to happen?
    Dr. Lamb. Well, actually we have written something about 
that at the National Defense University. And I think a lot of 
people would say it is not politically feasible. But we made a 
recommendation for a system that would produce joint data for 
joint operational concepts with joint modeling that would help 
make alternatives transparent and make the consequences of one 
path or another much more readily accessible to senior 
decisionmakers.
    But you would have to redo the way the Pentagon currently 
does its analysis of requirements today. It is not--we don't 
have that much analytic talent and we tend to reserve what 
analytic talent we have in the joint field to operational-level 
campaign analysis. So there would be a lot that would have to 
change about the politics and the procedures for making that 
kind of talent available to people in a position of joint 
responsibility for example.
    Ms. Sanchez. Great.
    Thank you, Mr. Chairman. I will yield back. I have other 
questions. I will submit them for the record.
    Mr. Thornberry [presiding]. I thank the gentlelady.
    And then I, again, appreciate all the witnesses being here. 
I think you could tell from the chairman's remarks the 
frustration that exists not just in Congress, but in industry 
and many folks in the Pentagon on this subject. And I think you 
can tell from the excellent questions of Ms. Sanchez that this 
is a bipartisan concern and bicameral concern. The Senate is 
just as interested in trying to make this better as we are.
    In Mr. O'Rourke's statement, he listed seven things that 
basically lessons learned from naval shipbuilding, kind of the 
things we know--get the requirements straight, you know, impose 
cost discipline up front, minimize concurrency, et cetera.
    My question to, I guess, all of you is, Do you agree that 
we know what works and, if we know what works, why are we not 
able to follow it and get those results?
    Mr. O'Rourke. I could start on this since you are keying 
off my testimony. My answer would be that I think we know some 
of what works and, for some defense sectors, we may know more 
of what works than in others. I think in terms of services or, 
perhaps, in the IT area, they are earlier on the learning 
curve.
    Shipbuilding has had a long time to figure out what its 
lessons are. And so I think sector by sector, the answer to 
that question may vary somewhat. So my bottom-line answer is 
that, at least in shipbuilding, we know a lot of what works. 
And the challenge isn't identifying the lessons. It is living 
up to them.
    Mr. Lambert. I would add to that that on the sector by 
sector there are very, very different lessons that we learn 
among each. And, unfortunately, we often try to apply the 
similar lessons across the board in our procurement. When you 
buy, you spend a billion, a little over $1 billion a day, that 
is very difficult to do particularly as we are acquiring more 
advanced programs and systems.
    Secretary Lynn, Deputy Secretary Lynn, used to use the 
example that Apple envisioned and then sold an iPad within 18 
months, and it takes us 24 to get a budget. So we are never 
going to be up to that par, but I think that it does come back 
to people, it comes back to training our people and equipping 
our people with the skill sets that they need to be better 
negotiators but also take advantage of the policies that are 
already in place. So in many cases it is more about culture 
then it is about regulation.
    Ms. McGrath. I would just echo the cultural aspect of it, 
and although the information technology is evolving over time, 
the process has not kept up with the way the technology 
evolves. We went from a coding organization to an acquiring 
commercial-off-the-shelf capability, yet the workforce is not 
trained to actually, I think, effectively buy the commercial-
off-the-shelf capability.
    So I think the training and the acquisition workforce, and 
not just the people who are the program managers but those who 
have the mission need, if you will, the business requires, they 
need to understand that they have also skin in the game, and it 
is not just the acquisition workforce because they are the ones 
who need to understand what it is they are trying to achieve 
from a business outcome perspective, married with a really 
astute program manager, and then a contract acquisition 
strategy that really serves the Department. And so, really, the 
contracting officer also has, I believe, a very strong role to 
play, one that has to make sure that he or she is aligned with 
the outcomes that the Department is trying to achieve.
    And so, it is not just one person, it is at least three, if 
not more who need both accountability and responsibility in a 
successful IT program.
    Admiral Venlet. Sir, I would add and draw attention to a 
Center for Naval Analyses report in 2009 on the F-18 Super 
Hornet development program.
    You would find some of the characteristics for aviation 
that Mr. O'Rourke referred to in shipbuilding, that I don't 
believe we are in an environment that that could not be 
repeated. And RAND has written several reports about programs, 
good and bad as well. But if I could go back to the analysis 
point really quick, I wanted to just say that CAPE [Cost 
Assessment and Program Evaluation] in OSD [Office of the 
Secretary of Defense] was created by the Weapon Systems 
Acquisition Reform Act.
    I believe that is a respectable analysis body for OSD. 
Above all, the services, and I found that as a representative 
of a program they would analyze my program without direct 
interaction from me. And I believe that had a proper balance of 
supporting decisionmakers.
    But there is a dynamic that the analysis capability that 
resides in services brings forward reasonable consequence 
illumination, I am trying to say, you know, for decisionmakers. 
But there are forces in the cry for speed, do it faster, do it 
less, that actually suppress some of those sound fundamentals 
that come forward in those offerings and analysis outcomes.
    Mr. Thornberry. Okay. That is helpful. I appreciate all 
your answers and there is a lot more follow-up to do.
    Ms. Gabbard.
    Ms. Gabbard. Thank you very much, Mr. Chairman.
    My question is about the Enterprise Resource Planning 
systems. In 2012 the DOD IG [Inspector General] examined six 
systems that it determined would be critical to meeting the 
Pentagon's legal deadlines surpassing a financial audit. And it 
found that all six were years behind schedule, with each of 
them having exceeded their original life-cycle cost estimates.
    So to Ms. McGrath, what do you think are the most revealing 
indicators of future success or failure of an Enterprise 
Resource Planning system? And in your view is the DOD 
implementing a management monitoring system that can capture 
these indicators at an early enough stage?
    Ms. McGrath. Thank you for the question.
    The Department has really, I will say, learned a lot over 
the last few years with regard to implementation of the 
Enterprise Resource Planning or ERP systems. I think when we 
first embarked upon the path we didn't understand the costs and 
implication of customization of these systems. And so, our 
folks would make the system sort of either do the things in the 
way they executed them today, or didn't understand both the 
cost in schedule implications or change.
    And so, we have learned that lesson, I believe, across the 
Department. And so, customizations aren't happening, I will 
have to say the way they used to. And I think they are, really 
the cost of customizing ERPs is well known by many.
    I can say, however, that we too are learning how to 
implement ERPs more effectively. I mentioned in my answer to 
the last question around understanding the business of defense. 
Each one of the functional leaders who runs a particular 
business area, be it a supply chain, human resources, or 
financials, needs to understand how they do what they do, the 
business process they execute, and also then how the IT, the 
ERP in this case enables them to achieve the business outcomes.
    Without that understanding it does not matter what IT 
system you are trying to implement. It won't achieve the 
business outcome. And so, I really think the discussion needs 
to take place longer, I will say upfront in the acquisition 
program prior to going to a contract award, so that the 
Department writ large understands the business environment, 
what it is trying to achieve before we, you know, embark upon 
an IT system.
    And again, most of what DOD does in the business space is 
commercial-off-the-shelf procurement and I would--and as I 
mentioned in my last response the workforce really needs to be 
trained on how do you acquire and configure commercial 
capabilities as opposed to what we do today in the acquisition 
process. The training isn't focused, I don't think, enough on 
how to enable a better implementation.
    Ms. Gabbard. A few of you have mentioned, Mr. O'Rourke 
mentioned the unique nature of the sector-by-sector 
differences, the different lessons learned, and how they are 
not uniformly applicable across the board.
    And I am wondering specifically with the IT acquisition, if 
that reform can be done on its own, or if in your view it 
should be done as a part of the larger overall DOD acquisition 
reform?
    Ms. McGrath. From my perspective, I think I probably live 
the most in this space, but I certainly welcome any comments 
that my fellow panel members have.
    I believe IT--so we implemented a policy a few years ago, 
very focused on business IT, called the Business Capabilities 
Lifecycle. And that was aimed at IT is different from major 
defense acquisition programs. And I think that is true.
    Ms. Gabbard. Absolutely.
    Ms. McGrath. Now DOD 5000, however, is the bible for the 
Defense Department. And so, having something separate confused 
people. And so, I think the release of the latest 5000, the 
interim guidance that was published in November of 2013, embeds 
the IT in the business discussion in that broader construct, 
which I think is the right thing.
    It does, however, I think need to take one step further and 
say--and then therefore you do these things differently, and 
then really train our IT folks, our program managers on IT very 
specifically. And I do think it is different, I think it should 
be embedded. Again, it is the bible. The 5000 is the bible. But 
I do think, also it has the opportunity to move faster than 
perhaps some of the other aspects of acquisition.
    Ms. Gabbard. Thank you.
    Mr. O'Rourke.
    Mr. O'Rourke. Just to add to that there is also the related 
issue of how to pursue hardware acquisition programs that 
happen to have a very large software component to them. And 
that increasingly is the case. Part of the answer to that, that 
DOD is pursuing, that the Navy is pursuing in its programs is 
to move toward more open architecture approaches to the 
integration of software into their weapon system platforms.
    I mentioned the Acoustic Rapid COTS Insertion program, that 
is an open architecture approach for improving legacy signal-
processing on our attack submarines. Also in the Aegis world, 
the Aegis program started as a closed proprietary system. The 
Navy is moving to modularize and make it open architecture.
    Ms. Sanchez earlier asked about how do we get small 
business involved? Open architecture is one approach that can 
make it easier and lower the barriers for small business to 
become involved. And in fact in the Acoustic Rapid COTS 
Insertion program, a number of businesses have been brought 
into that effort as a result of the open architecture approach 
including several small businesses.
    So in addition to the larger question that Ms. McGrath was 
talking about, about IT systems on their whole there is also 
this related issue of how to handle IT in the context of what 
is essentially or more fundamentally a hardware acquisition 
effort. And open architecture can be part of that solution.
    Ms. Gabbard. Great. Thank you.
    Thank you, Mr. Chairman.
    Mr. Thornberry. Thank you.
    Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman. I would like to thank 
our witnesses for joining us today. I want to begin by looking 
at the present system and understanding that where we need to 
go I believe is simplifying it, putting more power in the hands 
of people, not complicating process, also making sure that we 
provide additional accountability and authority to improve 
decisionmaking, and to make sure that the outcome is best 
value. Now with low-priced technically acceptable I think there 
are some challenges faced with that.
    What can Congress do to achieve those outcomes, 
simplifying, putting faith back into people and the 
decisionmaking process, holding them accountable but also 
giving them authority and providing best value in the 
decisionmaking process?
    Love to get your thoughts on that.
    Mr. Lambert, we will start with you.
    Mr. Lambert. Well, I think you hit it on the head about 
giving and empowering the acquisition workforce. They also need 
to be trained.
    And to simplifying the barriers, I can tell you a day did 
not go by while I was in the Pentagon where I did not hear from 
somebody in the industry trying to offer a product or service 
to the government. You know, half the time we may have actually 
needed it. But there were, the barriers to entry were just too 
great. And has been said here 5000 is the bible, you know, it 
is the Old Testament.
    And it really does, you do need to open the ability, 
particularly, I think, in the IT sector which is moving so 
fast, for commercial companies to share their capabilities. 
That leads you to a series of greater reforms, again, about 
culture and training, but also about intellectual property 
rights and the protection of those property rights. At the very 
same time that the Department is trying to obtain more 
commercial activity and more commercial technology it is also 
placing increasing burdens on that commercial capability from 
an IT perspective. So all of these have to fit hand in glove 
and work together to reform the system.
    Mr. Wittman. Thank you.
    Mr. O'Rourke.
    Mr. O'Rourke. I guess I would say four things. First, if 
you want an example of a relatively simple statement that 
provides clear and focused mission, absolute cradle-to-grave 
authority and responsibility and accountability, without using 
too many words you can look at the Executive order that 
essentially codified the mode of operations for Naval Reactors. 
And that Executive order has now been placed into the U.S. Code 
in the form of a note to one of the provisions in the U.S. 
Code.
    So that is a model that can be looked at as an example of 
how to do something strong and powerful to achieve success in a 
focused mission area without using a lot of words and a lot of 
regulations, although of course there are regulations that fall 
out underneath.
    Three other things. First, both industry and DOD at this 
point appear to agree that streamlining is possible. And in 
fact Under Secretary Kendall has said, ``We do not need more 
rules, in fact I believe we have too many already.'' And he has 
already said he has a team of his own people that apparently is 
working with congressional staff to put together a streamlining 
proposal to see what can be done to take out some of these 
provisions and go to a more simplified structure.
    Once you do that I think the challenge is to prevent the 
re-growth of that system incrementally over time through the 
addition of new provisions year after year after year. And to 
do that, one thing we may consider focusing on more is when we 
have a proposal for a new rule or regulation, right now we tend 
to focus in assessing the merits of that proposal on the 
proposal itself. And we don't tend to focus on how that 
proposal might interact with rules and regulations that already 
exist, or how it might add to the total burden of rules and 
regulations.
    So when new proposals come forward to what to do in defense 
acquisition we should consider looking at them not only in 
isolation by themselves, but how they would impact the total 
accumulation of rules and regulations. And it seems to me we 
haven't been looking at it from that broader perspective.
    And then one final thing, a lot of the rules and 
regulations we put into place are in my view attempts to try 
and get at second-best solutions because we are not able or 
willing to try and reexamine the more basic going-in 
conditions, what I refer to as the underlying political economy 
that characterizes a lot of defense acquisition efforts.
    And so, as we go ahead with defense acquisition reform or 
improvement we should pay attention to whether we are trying to 
attack the symptoms or whether we are, in fact, trying to focus 
on the underlying causes because a lot of the time it seems to 
me we are going after the symptoms and not the underlying 
causes.
    Mr. Wittman. Admiral Venlet.
    Admiral Venlet. I believe the causes for our discontent 
with the performance in the acquisition system are not--they do 
not lie in the laws and regulation. You need to look at what--
that is something to do, but it's underlying decisions that are 
made that try to respond for the years of acquisition reform 
pressures that cry for speed. Do this faster, do this cheaper. 
And that pressure on it has an unintended consequence of 
suppressing the practice of good, sound fundamentals and 
realism.
    When you are going for those complex capabilities you are 
going to have discovery and rework in your program. But if you 
don't, if you want to write an aggressive schedule and budget 
aggressively, that denies that or is blind to that you are 
allowing, you know, rework and failure to waltz right into the 
program.
    So when you look at your contemplation of laws to write, 
please look at them through the lens of what are the unintended 
consequences this might cause, and please do not suppress the 
workforce's application of sound fundamentals, transparency, 
and realism in the schedules they create and the budgets they 
create.
    There is a natural tension there between the constrained 
resources. But I believe reasoned people who can have those 
discussions can deal with those. And I will stop there.
    Mr. Wittman. Very good.
    Thank you, Mr. Chairman.
    Mr. Thornberry. Thank you. Since we have five witnesses I 
am not being too heavy on the gavel to give everybody a chance 
to get something in.
    Mrs. Davis.
    Mrs. Davis. Thank you, Mr. Chairman. And this really is 
important. I ran into it all the time in San Diego.
    You know, we are looking at what hinders, what helps, 
obviously the Congress plays a role in that, and I would like 
to get to that in a second. But in thinking about small 
business and innovation a few years ago we did--we had really a 
real strong look, I think--and I think you participated in Mr. 
Chairman and Mr. Skelton, I know, and Mr. Conaway.
    And one of the issues that we raised is this bundling issue 
between the big contracts and essentially the smaller guys. And 
what I remember is that we had to really water down that 
language in order to get it accepted. And I don't know all the 
ins and outs of that, I wasn't on the committee. But today that 
continues to be a problem, even though people will say, well, 
you know, we are dealing with it a little bit better.
    And I think you mentioned that certainly among in IT we are 
perhaps dealing with it a little bit better. But as I 
understand it, one of the problems is who is the prime? And for 
some small businesses they would prefer and could be the prime 
and have greater autonomy, but the system is not set up to do 
that, so we really don't allow some of the smaller businesses 
who could do that to come forward.
    Could you--is that right, and how do we deal with that? And 
where do you think some of this problem lies?
    Mr. Lambert. I can take--and a lot of that is----
    Mrs. Davis. And I know culture is a part of it----
    Mr. Lambert. Culture is a part of it. But it is more 
fundamental than culture. I used to refer to it as this is the 
Valley of Death in Silicon Valley of getting the technical 
milestones. But in the Department we have something called--
that I started to call the Summit of Death. You have a great 
idea, you are a small company and you want to sell it to the 
Department, and the Department has a stated need. But you don't 
have the processes or procedures in place.
    So the first thing you do is hire consultants and then you 
may hire some retired former military officers or officials. 
Then you will find a prime or a contract vehicle, you will pay 
a 10 to 15 percent tribute to that company because they have 
the procedures in place. Then you might spend the capital on 
getting it certified--or an accounting system. And then you can 
become a prime contractor.
    That may take 2 years. There has been absolutely no 
development probably in your product because you spend all your 
money trying to become the prime contractor. And yet our system 
continues, in essence, to reward both how we deal with small 
businesses in my view, and how we keep small companies from 
accessing the marketplace. We continue to focus on that 
process, tweaking it along the edges.
    I think that there are some examples in other countries, 
the U.K. [United Kingdom] in particular has some innovative 
ways to get small businesses into production development right 
away. I think it is worth taking a look at some of those 
practices to see if they might be replicated here.
    Mrs. Davis. Anybody else want to comment on that? Is it a 
big problem?
    Ms. McGrath. I would add to Mr. Lambert. I think it depends 
on where you sit, if you think it is a big problem, because----
    Mrs. Davis. If you are a large company I don't think it is 
a problem.
    Ms. McGrath. If you are a large company you might not think 
it is a big problem, you might feel that with the LPTA [lowest 
price technically acceptable], that the pendulum has actually 
swung in the other direction. And so, I think that there are 
anecdotal stories that exist on, you know, throughout the 
spectrum, and I really think that it would behoove us, and I 
think I mentioned this in my written statement, to actually get 
some data behind what is happening in the space.
    You know, is it having detrimental impact or not? And I 
think without data you will continue to have anecdotal stories, 
you know, rule of the day. And I really believe that having a 
fact-based discussion around, you know, what is the impact, 
because I think everyone would agree that there is space in 
place for big, small--there needs to be----
    Mrs. Davis. There should be----
    Ms. McGrath. Yes, you know, better, quicker engagement 
between inter-governmental----
    Mrs. Davis. Where do you see that coming from? Where do you 
see that kind of work coming from? Is that something that the 
Congress needs to necessarily sneak in a report because I think 
we have tried to do that.
    Ms. McGrath. Actually I think that there are multiple 
organizations that could do the study, from the National 
Academy of Public Administration to GAO [Government 
Accountability Office], to some of the industry councils. I 
think there is interest across the councils to put sort of the 
data on the table. I think there would be great support for it.
    Mrs. Davis. If I could bring up--in the last discussion 
that we had and I think it is a good one in terms of the 
interactions and whether it is almost like with pharmaceutical 
products, you know, that you should know the interaction before 
you move forward. And yet that is not happening. That surprises 
me a little bit, that people aren't having that discussion. And 
Congress obviously as a stakeholder in this plays a role in 
addition to DOD and the industry.
    So what advice can you give us in terms of how we make sure 
that that process takes place so we are not creating more 
unintended consequences than we need to?
    Mr. Lambert. I will just say, again, in my experience, 
this--the committee in particular, but also on the--we had a 
very good working relationship with the staffs. And there were 
many times where there was a lot of back and forth that I 
thought was very productive and always found it to be very 
supportive. I think the dialogue is very important----
    Mrs. Davis. But is that happening today?
    Mr. Lambert. In my experience from my little window in the 
Department it was happening on a regular basis with both this 
committee staff and the relevant Senate committee staffs.
    Mrs. Davis. Still, okay.
    Mr. Lambert. Yes.
    Mrs. Davis. Anybody else?
    Dr. Lamb. What I would say in response to your question 
would be that it would be important for the committee to focus 
on the distinction between what really amounts to helpful 
oversight and unhelpful micromanagement. I mean, if you try to 
get your mind around that, it is a useful exercise.
    I was thinking about some of the comments made about World 
War II and our production system. And we did produce a huge 
volume of material in short order and the American industry was 
good at that. It wasn't all of the quality that we wanted.
    I was reading the book called ``Unbroken'' not too long 
ago, and it was about a naval aviator that went down in the 
Pacific. And the author was saying that our rafts that 
accompanied the aircraft at that time disintegrated in pretty 
short order because the wrong assumption had been that they 
would be picked up quickly, but in fact you had to float for 
weeks in the Pacific often to have a chance to be recovered by 
a submarine or whatnot.
    When I think of my father who was in the submarine service 
and we equipped him and his sailors, fellow sailors, with 
torpedoes that were as much a danger to them often as they were 
to the enemy.
    So we all want a streamlined process but we don't want to 
throw the baby out with the bathwater. You know, there are some 
good oversight procedures currently in the system that ensure 
that what we actually deliver at the end of the day is pretty 
good. It comes in late and way over cost typically. So that is 
what we are trying to combat there, but you don't--you want to 
be alert, I think, to what is actually helpful oversight.
    And my bottom line on that is that the people who are in a 
position to make the oversight decisions have to have a 
reasoned basis for their comparison of alternatives. If it is 
just a personal impression or perspective, maybe even 
prejudice, that they inject into the system below them, that is 
unhelpful micromanagement. But if they can see the broader 
picture and they have a data and an analytic process that lays 
it out as clearly as possible and the rest is good judgment 
based on experience, you are more likely to get the products 
you wanted at the end of the day.
    Mrs. Davis. Thank you.
    Mr. Thornberry. I thank the gentlelady.
    Ms. Walorski.
    Mrs. Walorski. Thank you, Mr. Chairman. And thank you to 
our guests for being here.
    It has been said that one significant challenge to 
acquisition is a lack of relationships and basic trust between 
industry and the decisionmakers, and the Pentagon, and 
Congress. I did a little quick survey in my district, knowing 
in my State, I am from Indiana, so we have large defense 
contractors, and we have very small defense contractors.
    And I was so excited that we were actually going to do this 
hearing and start looking at this process, so I called some of 
our smaller--and I have heard consistently for the 18 months 
that I have been here from every contractor that we have used, 
the need, the need, the need. But when I talked to them it 
still comes down to this basic issue of trust.
    So I guess my first question is, I got to believe that 
exists because they don't trust the players at the table. 
Secondly my question is--so that is my first question. My 
second one is do you look at things being worse today or better 
when it comes to the issue of trust because in my world it 
seems like it is worse. And then what can be done to help build 
those relationships in trust because it is not all about the 
technical nuances. It can't be. It has to be about this big 
breach of trusting who is at the table. So I just kick that out 
to everyone.
    And Mr. Lambert, you alluded to just in your last answer, 
so I suppose you are tracking with the same thing here?
    Mr. Lambert. I am and I will say that it--over 10 years of 
year-to-year budget growth, there was a lot of dialogue that 
used to go on between the Department and the industry that just 
stopped because you didn't need to have dialogue.
    When you had a program, even if it was hemorrhaging money 
you just cauterized the wound with more money. So that 
discussion really started to pick up again as we saw the 
decline coming because it was needed. And trust had evaporated. 
And largely that trust evaporated, in my view, because the 
defense procurement process is the only process in the world 
that the closer you get to making an acquisition from a 
company, the less you can talk to them.
    Mrs. Walorski. That is right.
    Mr. Lambert. And that causes mistakes on both parties. They 
make false assumptions, both parties make false assumptions.
    So, you know, trying to go back to the days of whether it 
is The Phantom Works or The Skunk Works where you integrated or 
embedded government individuals with the companies I think is 
one step and I know Mr. Kendall is pursuing that idea. But I 
think the final--the answer to the final question is you just 
have to have more dialogue.
    We will not always agree but we in the Department try to 
institute very high-level dialogue with both the industries 
association and individual companies. And we found that to be 
quite helpful because we learned things, as the testimony of 
Dr. Lamb about the MRAP, we learned things from companies 
directly that we would not have learned from our own support 
personnel.
    Mrs. Walorski. Anybody else?
    Ms. McGrath. Yes, I would love to echo Mr. Lambert's 
comments around the trust-based relationship and the closer we 
come to actually award the--you know, the less we actually 
speak to industry.
    You know, I think I have mentioned many, many people, I 
feel like we have forgotten we are on the same team in terms of 
trying to achieve, you know, an outcome. The government is 
allowed to contract because they need help to do something, 
either, you know, build a major defense acquisition program, 
buy a service, you know, deliver IT for some of the back office 
work. And I do think that we need to find a way to enable 
meaningful dialogue between industry and government throughout 
the process and be flexible enough on the--with the contract 
to, let's just say to allow for changes to happen. Things 
happen during an acquisition----
    Mrs. Walorski. And let me ask you this, when you say we 
need to allow, does that mean that Congress has to come in and 
set up even more rules and more bureaucracy, or is there a 
way--is it actually possible in 2014 to say that we can 
actually reduce bureaucracy in something as large as the 
defense industry, is that possible?
    Ms. McGrath. I personally don't believe that additional 
legislation is needed to allow greater communication between 
the government and industry.
    Mrs. Walorski. Can we shrink the bureaucracy and actually 
make that happen? Is that possible? Or are we talking the field 
of dreams here?
    Ms. McGrath. No, I don't think it is field of dreams and I 
am absolutely looking through an IT lens, so really the, you 
know, what happens today and what the government can learn from 
industry to Mr. Lambert's point about, you know, we have 
companies doing all kinds of really cool IT capabilities, 
developing them daily and we want to enable a process by which 
the government writ large can bring those into government so we 
are more commercial-like.
    Mrs. Walorski. Good.
    Admiral Venlet. The word ``risk averse'' gets used a lot, 
you know, the government program managers are too risk averse 
and that closes down competition. One of the reasons they're 
risk averse is the heavy influence for fairness in competition, 
you know, in advance of an acquisition.
    So, I am agreeing with the speakers here it is that tension 
and that balance between fairness for industry and yet the need 
to communicate so clearly that industry really knows what you 
want, because in that balance for competition that suppresses 
that communication, industry has to guess more, wonder more, 
and I think it hinders their opportunity to give proposals that 
are more useful to the Department.
    So, if you could--I would maybe point you to Federal 
acquisition regulations of FAR that speak so heavily to 
fairness and competition that if there isn't some way to 
relieve that pressure that allows the government officials to 
have that broader communication.
    Mrs. Walorski. I am out of time. I am sorry. I appreciate 
you all being here. Thank you, Mr. Chairman.
    Mr. Thornberry. Now, Mr. O'Rourke, I think it is great 
discussion if you want to.
    Mrs. Walorski. Okay. Go ahead.
    Mr. Thornberry. Yes, please go ahead.
    Mrs. Walorski. Thank you.
    Mr. O'Rourke. I will state it pretty briefly: trust breaks 
down when problems fall apart and problems fall apart a lot of 
the time because we didn't get the requirements clear upfront.
    And so in terms of the dialogue that was being spoken of 
earlier, a lot of that is government and industry working 
together to set realistic requirements and to have clear 
understanding of who is responsible for what.
    That process can be long and involved, sometimes there can 
be some tension and frustration in it, but if you invest that 
time upfront to get the requirements right, then you put the 
program into a condition where it is less likely to fall apart 
and cause a breakdown in that trust.
    So, the investment upfront in discussions, some of which 
can be a little bit difficult, they are not always happy 
discussions but it is an investment in the future success of 
the program that can then if it does succeed build trust rather 
than eradicate it.
    Dr. Lamb. I am sorry, I would like to say just one thing in 
response to your point of trust. I think it is an excellent 
point, you know, all high organizational performance is based 
ultimately on trust, but I think you are right on target there 
and I think there are two things that have to happen in that 
regard.
    In my written testimony, one of the things I pointed out 
was I participated in efforts to train and equip a foreign 
military force, the Bosnian forces. And when we started out we 
used the typical defense contract vehicle which is 270 pages of 
very elaborate prose, et cetera.
    But when we realized we were going to do this to the 
private sector everyone quickly got rid of everything that 
wasn't necessary or clarifying, it was reduced to 30 pages.
    That is important, not just from the point of view of 
efficiency, but in terms of trust, if you labor under those 270 
pages with those abstract, difficult to understand clauses that 
you can be hung on at any point, you are not going to--it makes 
it very hard for program managers to trust the system will be 
fair to them.
    So, I think in going the direction of the committee seems 
to be interested in rescinding some of that labyrinth is very 
helpful, but point two is inside the Pentagon to--for people to 
think there is going to be a fair competition there has to be 
the basis for comparison.
    If we held a race among the five people at this desk and 
each of us said, well, I will run my quarter mile on my track 
and radio in the results, we won't do it on a common track 
where the comparison is easy, there would be probably some 
trust issues that would arise. And that is essentially how 
decisionmaking happens to the Pentagon today.
    Mrs. Walorski. I appreciate it. Thank you, Mr. Chairman.
    Mr. Thornberry. Thank you. Dr. Wenstrup.
    Dr. Wenstrup. Thank you, Mr. Chairman. Dr. Lamb, I was 
particularly taken with some of the comments that you related 
to us, shared with us about the struggle with the MRAP and--
that Secretary Gates went through.
    I served in Iraq and believe me I saw a huge difference 
between the MRAP and the other vehicles we were using such as 
Humvees and I was grateful when they came because it became, it 
was far greater to award someone a Combat Action Badge than an 
amputation or a TBI [traumatic brain injury] or worse yet a 
loss of life.
    And so, what intrigued with that is I am just curious what 
the discussions had to be like and what were we prioritizing 
here, were we working towards a budget, were we working towards 
a strategy, were we working towards a mission and really what 
became the priority? Because as someone who was there, you 
know, you could see the huge value of this, right?
    You want to get your troops from point A to point B, you 
want to get them there alive. And this is what this provided so 
much more so that there could--if there was even any question 
it just bothers me or concerns me. And so, if you could 
elaborate on that, I would appreciate it through that process.
    Dr. Lamb. Yes, there is one thing about the MRAP case, is 
it may be one of the best documented acquisition cases in 
history. There have been a lot of Inspector General reports, 
insider exposees, and good analyses have been done on it. So, 
it is a very rich area and there is a lot to be said about 
that.
    We have a monograph on the issue that I could share with 
you. But in short, one thing I would say in response to what 
you said is it was crystal clear to the people in the field 
that these would be valuable. But in fairness to everyone 
involved in the Pentagon, there are lots of difficult judgment 
calls you have to make that at the end of the day are going to 
affect lives, including what do I--what do I allocate in the 
way of resources for near-term requirements versus long-term 
requirements.
    So, you know, it is pay me today or pay me later if I don't 
well equip the force of the future as well. And there are other 
programs. This program was to me was manifest that it had value 
and for a lot of people it was manifest, but there are good 
arguments that could be made.
    Actually, Secretary Gates I thought did a nice job of 
reviewing many of the arguments that were thrown at him as to 
why ultimately it didn't make sense. But I think if you look at 
each of the arguments that came from the naysayers that we 
don't need this, we will be out too soon, we won't be able to 
deliver them on time, they are not consistent with the way we 
want to do counterinsurgency. All these arguments break down 
but they are understandable from the point of view of the 
person that was making them and where they sit and what their 
responsibilities were.
    So, it took one level up to look at the thing more broadly 
and say, no, we need these regardless of those near-term costs. 
And that was hard for the Pentagon to do, in fact, it is 
stunning that, I think Secretary Gates commented, no single 
military or civilian official--you ask yourself, now why would 
that be the case that no one would support it. Well, each one 
of them had a set of responsibilities that were too narrow. If 
you look at it that way it took somebody who was really trying 
to look at it from the warfighter's point of view in the field 
and care about the entire effort in Iraq.
    Why are these things so important for the entire 
warfighting effort in Iraq and it went--it went way beyond 
simply saving life and limb although that is critical. If you 
looked at it from that broader perspective you would have 
concluded with Secretary Gates not only do we have a moral 
calculus that says we must get these to our troops as fast as 
possible, but the system gave us a 2-year delay in making that 
decision, it lost 2 years.
    You would have concluded on just the moral calculus alone 
that we needed to do that. But beyond that, as Senators and 
Congressman I think in this very room pointed out, it cost more 
to replace the people inside the Humvees and care for them and 
their wounds than it did to field the MRAP. So that for the 
person that was running the tactical wheeled vehicles program 
you would think this is going to be a big detriment to my 
program, it is going to delay what I am supposed to be doing.
    So, it got down to a breadth of perspective issue and that 
is why I think you really have to look at internal Pentagon 
processes if you ultimately want to fix the problem.
    Dr. Wenstrup. Well, I appreciate you sharing that little 
bit of history if you will and I appreciate Secretary Gates 
having that broader vision because it is true, you know, 
everyone has got their lane and they are staying within that 
lane and someone has got to bring this big picture together and 
he did that.
    So, what did we take away from that, were we able to make 
some changes in our acquisition process as we go forward so 
that we can have a better perspective and a broader view?
    Dr. Lamb. That is actually, that is the bottom line of my 
testimony is I don't think we have learned from that and 
changed the way the system makes decisions today and that is 
unfortunate.
    We can't rely on the Secretary of all Defense to intervene 
personally. He doesn't have the bandwidth; towards the end of 
his memoirs he says, well, once MRAPS were off my plate, I 
could turn to one or two other issues that were of import. You 
have to be able to have the system more routinely make these 
kinds of reasoned judgments and get to the right answers.
    So, it is not interesting or it could be boring to look at 
process and yet you have to go inside the walls of the Pentagon 
and see how those processes really work if you want a better 
acquisition system at the end of the day.
    Dr. Wenstrup. Well, I look forward to continuing on with 
some of your perspective on how we can make that better in the 
future.
    Thank you, I yield back, unless anyone else would care to 
comment.
    Mr. Thornberry. I appreciate the gentleman's questions, 
having lived through that I can also testify that it was this 
committee pushing every step of the way on those MRAPs plus the 
Secretary which overcame that resistance, which is interesting 
because the Secretary of Defense and this committee cannot do 
that with every decision that comes up. And so that is why I 
think the gentleman's questions are so relevant.
    Mr. Nugent.
    Mr. Nugent. Thank you, Mr. Chairman, it--Mr. Lamb, the 
conversation that you had with Dr. Wenstrup was striking from 
the fact that it appears that the Pentagon and we--I have only 
been on this committee almost 2 years now, but it appears that 
the conversation a lot of times doesn't really focus on the 
warfighter, it focuses on I guess the real long-term view of 
what we need to have equipment-wise.
    And sometimes I think we tend to forget that there are 
actual people that are put in harm's way, and I have three sons 
that have made this a responsibility of theirs in their service 
of the country.
    So, as it relates to Gates and the MRAPs and you said you 
don't think the Pentagon has learned from that particular 
example. Why do you think that is--I mean do we just fall back 
into what is comfortable?
    Dr. Lamb. Well, I think the important distinction here is 
between near term versus long term and irregular warfare versus 
warfighting. Most of the Pentagon processes are geared up to 
provide the force of the future with the equipment and the 
concepts, et cetera it needs.
    But I can assure you when you have a real war going on all 
the warriors in the Pentagon are very focused on it. And if you 
look back to the first Gulf War, a large warfighting, force-on-
force maneuver warfighting effort, we pushed so much material 
forward to Kuwait, it was infamously called ``The Mountain of 
Iron.'' We couldn't use it all, and we had to at great expense, 
you know, haul a lot of it back.
    In fact, looking at it in the rearview mirror, we said, 
Hey, maybe we pushed so much stuff there that we opened up 
risks for ourselves on the Korean Peninsula or elsewhere in the 
world. We weren't thinking straight. We were so intent on 
getting everything humanly possible to the warfighter forward.
    So I don't think it is a reluctance of the Pentagon and the 
leaders in the Pentagon to want to equip the warfighter. In 
this case, it was the difference between, you know, equipping 
for a warfighting effort and for irregular warfare.
    And the core competency, the culture of the Pentagon is to 
be ready for the big one because there is more at stake there. 
But as Secretary Gates pointed out, we do those relatively 
infrequently compared to these other irregular efforts. And, as 
he said in his memoirs, ``I just wanted a little more balance. 
I wasn't trying to, you know, radically alter how we allocate 
resources in the Pentagon. I just wanted a little bit more 
balance,'' and the system stymied him effectively. I think that 
is a telltale anecdote.
    Mr. Nugent. And what I see in the testimony that comes 
before us, we just had a lot of discussion about the A-10, the 
retirement of the A-10 versus what the Air Force and the 
Pentagon are saying that it can provide close air support. We 
just saw what happened with close air support. When it is 
dropped from 30,000 feet, it is not close air support, and we 
lost troops because of that.
    The Pentagon, and I understand they have X amount of 
resources, but it would appear that, you know, in talking to 
the guys that actually have benefited from having an A-10 
overhead, slow and accurate, their voice has been lost in all 
this. And so how do you get that back into the acquisition 
process?
    Dr. Lamb. Well, historically, slower flying prop-driven 
aircraft or aircraft like the A-10 are better in irregular 
warfare because you need a lot more precision and you need long 
loiter times. And that is not something again that, 
historically, our Air Force wants to invest in. And so there is 
an element of the warfighting versus irregular warfare element 
to the A-10, although the A-10 packs quite a wallop. There 
could be an argument about whether that is the most 
discriminate means to put at the disposal of troops in close 
contact with irregular forces.
    But, you know, that kind of shows----
    Mr. Nugent. But it also goes towards not just irregular 
forces, but, I mean, with a--when you go back to the first 
Iraqi war, it does work well. I mean, obviously, if you can 
control the airspace and deny, which we have the ability to do 
with our fast movers, shouldn't we have a diverse----
    Dr. Lamb. In my own personal opinion, I don't claim to be 
an expert on that acquisition program. I am an A-10 fan, but I 
think----
    Mr. Nugent. Well, all the soldiers that I talked to, and 
they are all over the place, would support that. But from an 
acquisition standpoint, and, you know, we don't want to insert 
ourselves necessarily in every acquisition aspect of it. But 
how do we help the Pentagon make good choices?
    And, one, I will tell you is the fact in regards to, you 
know, our carrier strike groups, but then, more importantly, 
the amphib assault capability that we are losing dramatically. 
When we had, you know, General Amos come and speak to us and 
talk about those amphibs as really the Swiss Army Knife. And we 
are losing that capability rapidly.
    How would we move forward? Not to micromanage, but how do 
we move forward? Do we do it by law just like we do with the 
carrier strike group, we have to have X amount? Do we do the 
same thing with our amphibs?
    And, Mr. O'Rourke.
    Mr. O'Rourke. Just a couple of points--one is the committee 
already and the Congress as a whole does have a mechanism in 
place to do that. And that is to listen to the COCOMs 
[combatant commanders], the regional combatant commanders, 
because, in the short-term, long-term spectrum that was 
discussed earlier, it is the COCOMs who have responsibility for 
voicing the near-term requirements, what they need today to do 
their job during the time that they have in office.
    And that is supposed to act as a counterweight against a 
system that, otherwise, might be too heavily oriented toward 
the longer-term future, as the Navy acquisition can be because 
it takes so long to design and build ships and the ships 
operate and intend to operate for decades--so, bringing the 
COCOMs up to testify, as this committee does and the others do, 
that is part of it and listening to what they say.
    The other thing is that the extent to which different parts 
of DOD may hear or not hear from the people at the tip of the 
spear can vary depending on operational circumstances. The Navy 
is a deploying force. It is forward-deployed every day in 
international waters. It is mixing it up with the naval and 
other forces of other countries and getting real-world 
interaction experience that then does form the basis for 
comments that come back that create urgent operational needs or 
near-term operational needs.
    So, to some degree, because the naval services, the Navy 
and the Marine Corps collectively are a forward-deployed force 
on a day-to-day basis, that also tends to mitigate against this 
problem of not hearing from the people in the field. Because 
they are an operating service, they are getting that feedback 
from people who are engaged in real-world operations every day 
in international waters and international airspace.
    Mr. Nugent. Thank you for your comments.
    Mr. Chairman, I thank you for your indulgence.
    Mr. Thornberry. I thank the gentleman.
    Mr. Bridenstine.
    Mr. Bridenstine. Thank you, Mr. Chairman.
    I would like to, first of all, start by saying that 
Chairman McKeon made a very important point when he talked 
about how rapidly we were able to acquire weapon systems in 
World War II. And, clearly, we seem to have lost that 
capability significantly.
    And I know this body has worked on that, some of the weapon 
systems that we have already been talking about in this 
hearing. There are challenges though with rapid acquisition 
programs that create long-term interoperability challenges. And 
I can give you some--a real quick example is space systems.
    So, you know, the Department of Defense has been purchasing 
military satellite communications [MILSATCOM] capabilities for 
a long time. We found ourselves in war in Afghanistan and Iraq. 
We didn't have the capacity required, so we very quickly 
started using DISA, the Defense Information Systems Agency, to 
rapidly purchase using OCO [Overseas Contingency Operations] 
funds, rapidly purchase capacity airborne. And, now, it is a 
good amount of our capacity is that the Department of Defense 
uses commercial satellite communications [COMSATCOM].
    Now, that could be a good thing, it could be a bad thing. 
The challenge here for the warfighter is interoperability. 
Commercial satellite communications use different spectrum. 
They use C-band, Ku-band. MILSATCOM uses X-band, Ka-band. You 
have also got different waveforms. You have got challenges with 
encryption, with frequency-hopping, anti-jam capabilities. All 
of these challenges that present themselves where terminals--
whether it is a UAV [unmanned aerial vehicle] or a warfighter 
on the ground--terminals, some are able to work with, you know, 
MILSATCOM and the others were able to work with COMSATCOM.
    And so we have this interoperability challenge where you 
can only use certain systems in certain parts of the planet and 
other systems can only be used in other parts of the planet. 
And then, of course, each system requires different training 
and different capabilities, so there is an interoperability 
issue here that I think is detrimental in some cases.
    And the challenge here was we had to very rapidly acquire 
satellite capacity and we had to do it, you know, using an 
agency that historically hasn't been purchasing satellite 
capacity--namely, DISA.
    Are there other areas in the Department of Defense where--
and the investment required from us going forward in order to 
align these capabilities, once again, whether it is providing 
some kind of encryption and anti-jam on the terminals for 
COMSATCOM or some kind of just expanded capacity of MILSATCOM, 
the right answer, quite frankly, is unknown at this point, but 
there is going to be a heavy investment involved whatever the 
answer is. And it all started from an idea where we didn't have 
enough capacity at the right time.
    Are there other areas in the Department of Defense where 
this is going to present a challenge in the future where this 
body is going to have to make decisions to invest huge amounts 
of money because we rapidly expanded capacity to respond to 
combatant commanders in the field?
    Mr. Lambert. I would just say from the acquisition area 
that I saw, it was quite effective. I think where we could have 
done better is examining earlier on the concepts of hosted 
payload, open architecture systems which were mentioned here is 
a key. All of those will contribute to us taking advantage of 
commercial capabilities and assets. But if we continue to go 
down a path that is just a MILSPEC [military specification] and 
where a bandwidth is basically a free good in many cases for 
the actual user, then I think we are going to continue to run 
into problems in that area.
    The other areas of the rapid equipping force I think were 
quite successful. And my only concern would be we lose some of 
those lessons as we draw down our forces in the two conflicts.
    Mr. Bridenstine. In your opinion, sir, is it possible to do 
rapid acquisition of MILSATCOM through the Space and Missile 
System Center? How fast can the Department of Defense acquire 
satellite capabilities indigenously apart from utilizing 
COMSAT--commercial satellite communications?
    Mr. Lambert. I don't know the specifics, but I know the 
specific cultures. And I could tell you that one would be 
demonstrably longer than the other.
    Mr. Bridenstine. And I guess that is the point I am trying 
to make is that there needs to be an effort I think within the 
space realm to figure out what the right solution is. And, 
certainly, I think commercial satellite communications is going 
to be a big piece of that. The challenge is to get the 
interoperability capable so that our warfighters can actually 
be as lethal as possible at the right time at the right place 
in the world.
    Thank you so much.
    Mr. Thornberry. I thank the gentleman.
    Ms. McGrath, may I follow up on that for just a second 
because the gentleman from Oklahoma was talking about satellite 
communications. It seems to me what he was talking about though 
applies to all sorts of IT. We need something. We need to get 
it quick. But it has got to work with everything else we have. 
So do you think there are sufficient mechanisms within the 
Department for the sort of interoperability on IT of all sorts?
    Ms. McGrath. So I think, as I mentioned earlier, in 
particular the business IT is lagging a bit behind, although I 
think the rapid nature of technology really is a forcing 
function to get the Department to ensure that it is thinking 
holistically across the enterprise. As I mentioned, in terms of 
establishing a body, a JROC-like body for, in particular, 
business IT to ensure that we have the ability to communicate, 
is critical.
    We have thousands of business IT systems in the Department 
of Defense and they are not interoperable. That is not new 
news, but it is something that we are very much focused on in 
terms of achieving or establishing standards, not only the--you 
know, data standards, but the way we communicate and 
interoperate between the systems.
    But if you don't think about it, it doesn't naturally 
happen, which is the point that you are making. And I would say 
that a body needs to own the big picture and make decisions 
about, you know, what is in it and how do the things in it 
communicate and who has got responsibility and accountability 
for their respective pieces?
    And so I would say, yes, the scenario applies to all of IT. 
And, again, I can speak most specifically about the business 
space. We recognize it as a gap. The culture challenge however 
is--cannot be understated. People are incented and focused in 
their respective areas not only just the--you know, the 
component of the organization, be it a defense agency or a 
military department, but then the specific business area, you 
know, be it procurement or financial.
    And so there are many, many I will just say cross-
organizational boundaries that must be overcome. And I would 
always say to folks that, you know, we need to lift up and look 
out across the enterprise. We all participate in this ecosystem 
and we have to understand our roles and responsibilities. And 
part of it is understanding, again, how do you fit within the 
overall ecosystem, how do you enable the outcome you want to 
achieve, be it communications or, you know, a financial 
transaction, whatever it is. It is a bigger conversation, so I 
think there is definitely progress to be made.
    Mr. Thornberry. It sounds like you are somewhat similar to 
Dr. Lambert in that somebody has got to look at this whole big 
picture and make these tradeoffs. And that is--we started out 
with Ms. Sanchez asking about JROC, which is kind of supposed 
to do that at least for some things. And so this issue of 
getting the requirements right, making those tradeoffs seems to 
be a recurring theme, which is a challenge for us.
    Mr. Lambert, let me go back. Kind of related to this. You 
talked in your opening statement about a millennial industrial 
base. Ms. McGrath makes the point that we got to buy more 
commercial IT. That opens up security questions in my mind. So 
we are going to buy IT from around the world, we are going to 
have it integrated and make sure it is interoperable with 
everything that we do at the Department, how do we know there 
are not backdoor bugs in it?
    Mr. Lambert. Now, it is an excellent question. And it is 
one of the--I think the largest, one of the largest challenges 
the Department will face. We have already faced it. And we 
faced it on two fronts. Whether we recognize officially that we 
have a global defense industrial base, in reality it is true. 
Most of the components, particularly in IT systems, are not 
made in the United States anymore and they are made primarily 
for commercial purposes. That includes some of the components 
on our most sophisticated weapon systems and space systems.
    And there are--when we discover false parts or counterfeit 
parts, that is typically done--a large majority of those are 
done for criminality purposes. They are not done for nefarious 
purposes. But there are some that have been discovered that 
were nefarious. And there are famous case studies of that. So 
that is a part of the Department's challenge. And this 
committee's challenge frankly is to better understand that 
supply chain, which is why the government undertook the sector-
by-sector, tier-by-tier effort is to help us map through that 
supply chain and understand where the vulnerabilities were deep 
in that supplier base.
    Prime contractors have a pretty good understanding, much 
better than they did 4 years ago, of their own supply chains 
and vulnerabilities and they are addressing them as quickly as 
they can. But the Department needs to work more closely with 
those primes but also the smaller subs [subcontractors] in the 
IT field to address that issue.
    Mr. Thornberry. Okay.
    Mr. O'Rourke, you have mentioned several times Naval 
Reactors. It is--as I think of defense-related organizations, 
it is actually the epitome of efficient, well-run, accomplish 
their mission. We have nuclear ships that can go in any port in 
the world pretty much and everybody has confidence they will do 
what they are asked to do.
    Now, you know, part of that we can all trace back to its 
founding with Admiral Rickover and the rigorous requirements of 
interviewing every person which, you know, that culture again 
has transferred along.
    You mentioned that their mission statement, sure, maybe 
that can apply--the question I keep coming back to, are there 
other elements of Naval Reactors that we can learn from and 
apply to other organizations or is it such a unique creature 
because of its founding, because of what it deals with, that 
really it is, just kind of stands on its own.
    Mr. O'Rourke. I think there are other elements. One would 
be cradle-to-grave responsibility which already has been 
applied to parts of the defense establishment other than Naval 
Reactors. Something similar to that exists within the Strategic 
Systems Programs Office that does the submarine-launched 
ballistic missiles for the Navy. They have pretty much cradle-
to-grave responsibility, as well.
    And there is one other thing about Naval Reactors which can 
be and has already been applied to other parts of the defense 
establishment and that is they have a long tenure in office for 
their very high-ranking director.
    And what that means is that person knows they are going to 
be around. They will still be in office several years from now 
to be held personally accountable for the results of the 
decisions that they make, at least the decisions they make in 
their earlier years in office.
    And I did highlight that in my testimony as an option for 
the committee to consider because the idea that you will be 
held personally accountable for your decisions can be a 
powerful conditioning element for how people undertake the way 
that they do their jobs.
    By contrast, people who do not have long tenures in office 
may feel less risk that they will face a situation of being 
held accountable for the results of their decisions because 
those results in many cases will not become manifest until 
years later after their terms in office are over.
    And I have attended more than one congressional hearing 
about defense acquisition programs that have not gone well 
where the key point in the hearing came well, who was 
responsible for that. And the answer came back from the witness 
stand, ``Well, it was our predecessors,'' one or two 
generations removed.
    And let me tell you, that brings the hearing to a complete 
halt because what can the Members do with it at that point. It 
seems to me that the ability to hold somebody personally 
accountable for the results of their decisions and their 
knowledge that they will be in that situation is a powerful 
conditioning element to how they undertake the way that they go 
about their job.
    So, extending tenures of office in program offices is 
something that can be applied and to some degree already has. 
Naval Reactors is probably the most outstanding example of that 
but there is no reason in my view why that option shouldn't at 
least be considered for application in certain other parts of 
the defense establishment as well.
    Mr. Thornberry. Okay, Admiral, it is coming to you now. 
Because it transitions naturally--in the report that Mr. 
Kendall sent out a week or two ago, he had a correlation on his 
charts about longevity of the program manager versus program 
performance. And kind of their bottom-line conclusion is just a 
correlation that there wasn't really a relationship.
    And yet my instinct goes where Mr. O'Rourke's was, that if 
you are going to be there you can be held accountable for your 
decisions. If it rotates every couple of years, how do you ever 
go back?
    I would be interested in your view on that and then I would 
be interested also in your view on lessons learned from the 
Joint Strike Fighter program as we often read, the most 
expensive acquisition system in the history of the country.
    Admiral Venlet. I would say amen to everything Mr. O'Rourke 
said about Naval Reactors and I would add this one point in 
addition to tenure of leadership, is the enduring persistent 
presence of sound systems engineering that has been able to be 
preserved through all of the efforts that acquisition reform 
brought around the Department.
    So, how does that connect to tenure of other acquisition 
officials? I think it depends; it is something in between 
there. There is the balance between how long somebody has to 
live a life. I mean, you take a person and then you make them 
head of Naval Reactors for 8 years. You know, there is a limit 
to what you can do and still have somebody aspire to have a job 
and still aspire for progression at some point.
    So, is it 8 years? Probably not 8 years. Is it more than, 
more than 2? Yes. We get into the pressures due to board, the 
timing of promotion boards that meet and career milestones to 
attain so somebody can make O-5, O-6, and above.
    That tends to--you want to give people a breadth of 
experience and yet a depth of experience, so how do you achieve 
both? And I would mentor officers that I worked with over my 
career, you need to stay long enough in a job so that you can 
genuinely be involved in the messy attributes of it and have, 
you know, up to your elbows in mistakes and problems and not 
just flit because you are trying to get breadth. You have to be 
long enough for depth.
    For me, depth at the working level up was a minimum of 2 
years, desired 3 and 4. I think when you get selected for--to 
be in charge or in command of a major program, 4 years; 4 years 
is not--now, I have to admit, did I spend 4 years in any one of 
my career jobs, no, I did not.
    But the length of time it is--there was a comment earlier 
about, you know, that alluded to do officials care about the 
warfighter enough or do they care about their narrow sphere of 
influence. I did spend enough time walking the floors of 
industry on many, many programs that I personally hold the view 
that the people working in industry on these programs have as 
deep a patriotic concern for the warfighter as anybody in the 
Defense Department or here.
    They are the ones that are raising that generation that is 
going to volunteer to serve and use that equipment, so they do 
care. So, if they care, if we care, what is in between? And I 
would offer that it is the pressures of the rush.
    When we see a threat coming, we see pressures of budgets. 
We have those constrained resources. We got to make decisions, 
so okay, I want to do it all. I need the rapid acquisition. I 
need the rapid capability for this urgent threat and yet I need 
the capital equipment, the carrier, the submarine, the bomber, 
the satellites.
    I believe the system has shown that there are examples that 
it does do both. When you properly apply those sound systems 
engineering fundamentals, when you want to go fast, you don't 
skip those tricky little questions. You need leadership that 
has experience and the spine to say, ``Wait a minute, let's 
answer those tricky little systems engineering questions. We 
could pre-answer them upfront to go fast.''
    That is how we go fast. We don't skip them. When you skip 
them you open yourselves up, so it is the tenure of leaders 
needs to--it is the length of time in leadership or is it the 
length of time that they spent in difficult jobs growing up to 
be that leader that gives them the judgment and the wisdom to 
make the right decisions when they are there.
    Mr. Thornberry. Mr. Lamb, does this longer tenure, does 
that deal with the culture issue that you talked about? Does 
that--I mean, does it help?
    Dr. Lamb. You know, in my view, a longer tenure for program 
managers would make sense but to me it is not the essential 
issue. One of the things that I have noticed in some of the 
research written over the past 2 years is just how hard 
government servants will work when they think they can actually 
produce results.
    Some of it we have done some studies on interagency teams 
and even for relatively short tenures of a couple of years when 
people are properly empowered and see that they can make a 
difference they will work 24/7/365. It is not the typical image 
of government service that people have but in fact we are all 
human beings that serve in government just like people in 
private industry.
    And when you see you can make a difference, that is what 
counts, I think. So, I have to believe and I am not as expert 
as the other people sitting at this table about the acquisition 
system per se but I have to believe that it is the weight of 
the regulations and the second-guessing that lead to this risk-
averse culture and make it difficult to make sharp decisions on 
key performance parameters and programs that tend to make them 
slide to the right and have the cost buildup. That more than 
just a simple issue of tenure or rewards.
    Mr. Thornberry. It sounds to me like, and I am not trying 
to put words in you all's mouth, but it kind of goes back to 
something Mr. Wittman was talking about trying to empower the 
people to make decisions and then also hold them accountable, 
that gets better results but it also makes for a better system.
    Kind of on a related note, we established the Defense 
Acquisition Workforce Development Fund to try to help develop 
acquisition workforce. It is the kind of thing that you don't 
see the payoff for some time to come, but I was wondering if 
anybody has an opinion about whether that is on the right 
track, whether you think we are improving the acquisition 
workforce, at least their skills, understanding that if they 
still operate in a system that does not reward those skills, 
they are going to, you know, follow whatever the incentives 
are.
    But does anybody have an opinion about whether that is 
helpful yet or can you tell.
    Mr. Lambert. My experience is in the brief time it was in 
place when I was there it was tremendously helpful. And I--
people would often that wished to complain about the process 
would say that, you know, 50 percent of our acquisition 
workforce has 5 years of experience or less.
    I think that is a great opportunity to train them on next-
generation systems, next-generation capabilities, and then how 
the commercial market is moving. I think that is one of the 
most important programs throughout the Department, it is 
Department-wide.
    And I can't, you know, first of all thank the committee 
enough for supporting it because I do think that we are 
starting to see the results. But as you indicated we won't 
likely see those results for 3 or 4 or even more years as we 
train these people up. But it is a great opportunity to train 
the new people that are coming into the system.
    Ms. McGrath. I would just add--I would echo Mr. Lambert's 
comments about the benefit of the workforce. My worry would 
also be around the retention of those individuals, so there is 
training them and then ensuring that we have got the proper 
incentives in place so that we retain them because if it is all 
bad news then it is a tough environment to work in.
    And so, I think it is trying to achieve the right balance 
of highlighting progress that has been made on programs, to 
ensure that we have got the right incentives to maintain the 
workforce because if it is all bad news all the time, that is a 
really tough environment.
    Mr. Thornberry. Which also relates back to something the 
admiral just said, if you want somebody to stay in the job 4 or 
5 or 6 years then you got to have the incentives to retain them 
and also the mechanisms for promotion even if they are staying 
in the same job.
    And that is part of the reason, I think, a lot of this goes 
beyond what we think of as the normal acquisition regulations. 
It goes back to those incentives and so forth. If there are no 
other questions of--the gentleman from Colorado?
    Mr. Lamborn. Thank you and this has been very interesting. 
I only was able to catch the tail end because I was in another 
committee earlier. But I would like to just back up a step and 
ask more of a broad philosophical question and how that relates 
to acquisitions and that has to do with the civilian oversight 
of the military.
    It is interesting I sometimes hear people in the military 
or retired from the military complain, maybe even resent the 
fact that they are so specialized and have such a depth of 
knowledge especially in certain areas, no one can know 
everything, of course.
    And then they come and talk to committees on the Hill where 
no one knows anywhere near what they know about that particular 
area and yet the Constitution has set it up where the civilian 
oversees the military. And there is just a friction there 
sometimes.
    And yet, from the examples you have given, there are times 
when the Department of Defense needs to be overridden and 
whether it is--we see the bigger picture here in Congress, or 
whatever it is or maybe it was a 51-49 decision, not a 100 to 
0. It was a very close call and they just happened to, you 
know, be on the wrong side of what Congress wanted to do.
    But it could have gone either way. So, how should we best 
leverage our role as civilian overseers of admittedly the very 
specialized and highly trained and effective, and I totally 
respect the Department of Defense specialists over in the 
Pentagon.
    And, Admiral, maybe you would be a good person to address 
this one.
    Admiral Venlet. I don't mean to sound glib but I believe 
the Constitution got it right, okay? And my appeal to you from 
my appearance to briefing professional staffs on both sides to 
appearing before committees is work very hard in your oversight 
role and ask very tough questions that go beyond just local 
interests because the three areas that I said in my opening 
statement that need addressing, programs that exist, running, 
work better.
    That second one, you know, only start and pursue the right 
programs. I believe you have a role that is very important 
there at challenging the military leadership in the 
requirements generation. Are you sure that is the right system 
to pursue? I don't have any examples to offer you because that 
would be pretty delicate right now and I just don't have 
current knowledge.
    But I think that is my answer to your question that says 
work harder not that you are not working hard forgive me for 
implying that, I didn't mean to. But really focus on are you 
sure that is the right--so, how do you have the knowledge to 
know? Well, that is where the staffs have to interact with 
those analysis groups that do exist within the services and get 
armed with that background information.
    And then it does go back to trust. There is that level of 
trust. I think trust is earned based on past performance and 
past relationships.
    Mr. Lamborn. Anyone else to add to that?
    Mr. O'Rourke. I think another step or an additional thing 
to keep in mind building on the admiral's comments is to try to 
close the loop on accountability, because if there are bad 
results but no one is held accountable or there are no 
consequences for that, the message sent back to the system is 
that perhaps the same thing can happen in future. So, try to 
close the accountability.
    And that is why I talked about terms of office because if 
someone isn't around long enough to be confronted with the 
results of their decisions some of which can take years to 
become manifest then that can make it a lot more difficult to 
close that accountability loop.
    It can be done with their successors but in a lot of cases 
there is no substitute for personal responsibility in those 
matters.
    Mr. Lambert. I would just add again that I think we are all 
saying the same thing, that a lot of it comes back to people. 
But one very different way of doing business again coming from 
over 20 years in the industry and then in the government, in 
the government if you don't do a good job most people would 
just leave you alone.
    You know, in private industry, you try to promote maybe 10 
percent of your workforce, try to help 80 percent get promoted, 
and the rest of the 10 just were not going to work out. My 
experience in the Department is that is not the ratio. It is--
so, you have really good people that you want to promote and 
you want to demonstrate that you want promote them and retain 
them.
    You have other people that you need to work very hard to 
get up to that 10 percent but then you do have some that just 
cannot or will not perform and the inability to act on those 
individuals, I think, is a challenge that we all face in 
management inside the Department.
    Ms. McGrath. I would echo the last comment, spending 25 
years in the Department of Defense most of which as a career 
civil servant, it is very difficult to make changes in the 
workforce that need to be made. And I would also--echoing Mr. 
O'Rourke's comments around accountability, I think we need to 
define not only what is the requirement but what does success 
look like so we know whether or not collectively we are 
actually achieving the goals that we want. So, the definition 
of success coupled with the accountability, I think, is really 
important.
    Dr. Lamb. My thought on this would be that it boils down to 
one word--homework. If you had a series of case studies on 
successful congressional oversight, I think what you would find 
is that someone in the committee, the chairman, people on the 
committee were sensing something wasn't right. There was enough 
prima facie evidence that something wasn't right.
    They dug, the answers didn't seem to make sense in the 
broader perspective. They dug more, they dug more on Goldwater-
Nichols, on ODIN, on MRAPs, on not taking at face value that we 
couldn't get the up-armored Humvee kits to the field as fast as 
people were telling them. In all those cases, members of this 
committee and staff made a big difference by just continuing to 
dig until they thoroughly understood the circumstances. And 
then presented the broad base perspective saying why can't we 
do this. We are going to do this. And it is just that simple.
    Mr. Lamborn. Well, thank you all so much and thank you, Mr. 
Chairman, for the hearing.
    Mr. Thornberry. Oh, I thank the gentleman from Colorado. I 
think that is a perfect way to end because it is not just about 
what we try to encourage the Pentagon or industry to do, it is 
about what we do ourselves. We play a key role in our oversight 
function under the Constitution and I think that is part of the 
solution to improving our acquisition system.
    You all have been terrific. Thank you very much for all of 
your insights you have shared with us today as well as all that 
you have all contributed to the country. We will feel free to 
abuse you further by asking more questions and following up.
    So with that, the hearing stands adjourned.
    [Whereupon, at 12:12 p.m., the committee was adjourned.]


      
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                            A P P E N D I X

                             June 24, 2014

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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             June 24, 2014

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[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    
      
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             June 24, 2014

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                   QUESTIONS SUBMITTED BY MR. FORBES

    Mr. Forbes. What, specifically, should be done to leverage modeling 
and simulation in the early stages of acquisition to ensure mission/
operational relevance for new capabilities and continued mission/
operational relevance of existing capabilities?
    Mr. Lambert. In the early stages of acquisition, relevance for new 
capabilities can be investigated using mission-level simulations to 
estimate the effectiveness of new systems in their intended operational 
environment. The specific simulations to be used will depend on the 
specific missions of the new system--for example, the Extended Air 
Defense Simulation (EADSIM) is a well-established simulation to explore 
system effectiveness for air and missile defense systems. A recent 
study performed by the Modeling & Simulation Committee of NDIA's 
Systems Engineering Division identified approximately two dozen mission 
types for which there exist mission-level simulations.
    In the early stages of the acquisition of new capabilities, only 
estimates of the performance of a new system are available, very often 
expressed as Key Performance Parameters (KPPs) and Key System 
Attributes (KSAs). These performance estimates are used as inputs to 
mission-level simulations. Other key inputs to these mission-level 
simulations are similar performance estimates for threat and friendly 
systems, representations of the natural and man-made environments in 
which the new system will operate, and representative scenarios in 
which the new system will be used. To ensure the credibility of the 
results of these simulations, it is important that all system 
performance estimates, environment representations, and scenarios have 
been validated, preferably by real data, or through examination by 
subject matter experts where real data is not available.
    For existing capabilities, similar mission-level simulations can be 
used to examine their continued operational relevance. In this case, 
performance estimates of new threat systems and potential new scenario 
representations are key to estimating the effectiveness of existing 
systems in the new threat environment and potential new system 
employment strategies.
    Mr. Forbes. What standing and available advanced prototyping and/or 
system integration lab capability exists within the services for 
material developers to conduct early and often simulation based (live, 
virtual and constructive) integration and assessments of their system 
developments prior to developmental and operational tests?
    Mr. Lambert. The conceptual design of systems should be generated 
through model based systems engineering (MBSE) using tools such as the 
FACT (Framework for Assessing Cost & Technology) trade-space 
exploration framework developed by Marine Corps Systems Command. MBSE 
based on validated models for performance (KPP), cost (procurement, and 
lifecycle sustainment) and RM&A (reliability, maintainability, and 
availability) generates a range of potential system designs that can 
then be processed through a tool such as the Army Research Lab's EASE 
(Executable Architecture for Systems Engineering) to produce parametric 
representations of the design for use in analytical simulations such as 
Storm or OneSAF.
    Using the representation of fully articulated engineering designs 
for a future system/platform in analytical models allows them to be run 
against validated threat scenarios of future enemies with future threat 
weapon systems. The results of these analyses comparing a wide variety 
of proposed system designs can identify where investments and trades 
should be made in the pre-Milestone A phase of an acquisition program. 
Far more insight into the operational value of a system design can be 
obtained by better use of MBSE before ``bending metal'' to build a 
prototype. Building a prototype of the wrong design (e.g. the EFV or 
FCS platforms) can waste years and billions of dollars on a major 
acquisition programs that should have been validated first in 
simulation.
    Mr. Forbes. What, specifically, should be done to leverage modeling 
and simulation in the early stages of acquisition to ensure mission/
operational relevance for new capabilities and continued mission/
operational relevance of existing capabilities?
    Dr. Lamb. What operational-level modeling and simulation we do in 
support of acquisition programs occurs early on to justify the program 
start. There is a tendency to exaggerate the achievable program 
attributes and promise leap ahead capabilities in order to build 
support for the program. Even so, frequently this modeling and 
simulation in support of the analysis of program alternatives is done 
quite well. From my point of view the problem is that the modeling and 
simulation of the program capabilities within a broader operational 
concept largely ends there. What we need to do is maintain this kind of 
modeling and simulation effort to support program management through 
later milestone decisions, exploring the relative value of alternative 
performance attributes as the program moves forward.
    In addition, these analytic efforts should be more ``joint'' and 
more transparent. If other sources of analytic expertise could 
investigate alternative ways of achieving operational objectives using 
the same scenarios, operating concepts, data, analytic methods, and 
metrics the results would be comparable and helpful to both the program 
manager and senior decision makers. Without these common, essential 
precursors to good analysis provided in a timely fashion so that 
results are comparable and replicable, senior leaders cannot usefully 
evaluate alternatives and their consequences. Some believe it would 
cost too much to provide the analytic foundation for decision support 
but just the opposite is the case.
    As I have noted elsewhere, each year, the Pentagon spends untold 
amounts on analytic support that cannot be harnessed in support of 
senior leader strategic decision-making. ``The situation is so bad that 
the Pentagon occasionally pays contractors to study past studies in 
hopes of finding a baseline of authoritative knowledge on a subject. 
Invariably the answer comes back that the results from many years of 
expensive studies are not transparent, comparable, or consistent and 
cannot be explained.'' * This trend, more pronounced in recent decades 
according to some, ensures a lot of analytic resources are wasted. It 
would be more efficient to convert some of this spending into a 
coherent, joint analytic foundation for comparable studies that support 
good acquisition program management.
---------------------------------------------------------------------------
    * Christopher J. Lamb and Irving Lachow. Reforming Pentagon 
Strategic Decisionmaking. Washington, D.C.: Institute for National 
Strategic Studies, National Defense University, 2006.
---------------------------------------------------------------------------
    Mr. Forbes. What standing and available advanced prototyping and/or 
system integration lab capability exists within the services for 
material developers to conduct early and often simulation based (live, 
virtual and constructive) integration and assessments of their system 
developments prior to developmental and operational tests?
    Dr. Lamb. I am not competent to describe the Service advanced 
prototyping and simulation capabilities currently available.
    I will say that I am inclined to think we need more of such 
capabilities if they were configured to stimulate competition. I was a 
big supporter of the Office of Force Transformation, which used 
advanced prototyping and simulation to experiment on better 
alternatives to existing programs. Initially it enjoyed insider status, 
received senior leader protection, and had enough resources to 
contribute realistic prototypes. It challenged existing orthodoxy and I 
thought made significant contributions. It was an irritant as it was 
meant to be, but a productive one with small costs. Because it 
challenged the status quo it was eventually disbanded, which I believe 
was unfortunate.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MS. TSONGAS
    Ms. Tsongas. Congress funds most acquisition programs one year at a 
time; however, DOD acquisition is planned for several years out and 
contracts often last for much more than a year. Thus, there are 
situations where we in Congress make decisions that completely disrupt 
the funding profile of a particular program, causing uncertainty for 
the program managers and the contractors. How much does this funding 
uncertainty affect the ability of program managers to effectively do 
their jobs? Would you suggest a different method for funding 
acquisition programs, such as multi-year appropriations for major 
programs?
    Mr. Lambert. Funding instability can have serious and negative 
impacts on program efficiency. Programs that are early in the design or 
production phase benefit significantly from a steady, sufficient, and 
predictable line of funding, which makes it possible for program 
managers to address challenges posed by the immaturity of a program's 
technology, integrated design, or manufacturing. Mr. Kendall has 
recommended a management reserve to account for some of these 
challenges, and multi-year funding would similarly shield program 
managers from unpredictable swings in appropriated funds. A sudden 
lapse in funding may mean paying a contractor just to keep a program in 
``warm storage,'' and a sudden spike in funding may mean accepting 
significant technology, design, or production risks to expend the funds 
in the allotted timeframe. Both scenarios lead to waste in a program.
    The challenge to implementing either solution is in asking the 
Congress to set aside its own funding prerogatives in the name of 
efficiency, a challenge that is heightened whenever individual program 
managers make decisions that seem unwise in hindsight or that Congress 
calls into question for some reason, and which were enabled by 
additional flexibility granted by Congress. Nevertheless, to the extent 
that Congress will provide funding stability to program managers, more 
efficient programs are likely to result.
    Ms. Tsongas. A few of you mentioned incentives for acquisitions 
personnel during your opening statements. Unfortunately this has been a 
common theme for many years. Nearly all of the major comprehensive DOD 
Acquisition reviews throughout the years have stated the exact same 
thing; DOD does not provide the right incentives to its acquisition 
workforce. What incentives can Congress or the Defense Department put 
in place that would strengthen the DOD's acquisition system?
    Mr. Lambert. Misaligned incentives are easy to identify but 
devilishly difficult to fix. Unfortunately the solution is not as 
simple as putting new incentives in place, but requires addressing the 
conflict between incentives already in existence. These conflicting 
incentives begin with our constitutional form of government, which 
deliberately sets the branches of government at odds with each other, 
and proceed from there. This basic misalignment of incentives is the 
root cause of many of the misaligned incentives within the acquisition 
process.
    Take, for example, the milestone approval process mandated by 10 
U.S.C. 2366a and 2366b. The Congress established milestone 
certification requirements because it decided that insufficient 
attention was paid to these functional areas during program design and 
development. Yet, because of how a large bureaucracy operates, the 
Milestone Decision Authority is not in a position to independently 
certify that the program manager has met each of these requirements; 
instead, he or she relies on the advice of staff experts responsible 
for each functional area. A review by each of these experts adds delay 
to the program, and some experts may recommend changes that are 
beneficial to their functional area but harm the program as a whole. 
Although the program manager may consider these changes unwise, he or 
she may nevertheless carry them out to secure milestone approval. The 
program manager's incentive is to see the program make progress, and 
the experts' incentives are to make sure their functional areas are 
addressed as they see fit.
    The basic problem is that these experts have sway over a program's 
progress without being held accountable for it. While eliminating 
milestone decision reviews would fix these misaligned incentives, it 
would not necessarily improve outcomes. (If the earlier process was 
superior, why did Congress create the milestone review process in the 
first place?) So we should ask: what review process would align both 
sides' incentives?
    One option might be to reverse the milestone process to force 
functional experts to seek milestone disapproval rather than forcing 
the program manager to seek milestone approval. In such a scenario, the 
functional expert would make his or her case to the Milestone Decision 
Authority whose incentive is for program progress and success. Ideally, 
this process would bring the program manager's, Milestone Decision 
Authority's, and functional expert's incentives into alignment, each 
with skin in the game.
    Ms. Tsongas. Congress funds most acquisition programs one year at a 
time; however, DOD acquisition is planned for several years out and 
contracts often last for much more than a year. Thus, there are 
situations where we in Congress make decisions that completely disrupt 
the funding profile of a particular program, causing uncertainty for 
the program managers and the contractors. How much does this funding 
uncertainty affect the ability of program managers to effectively do 
their jobs? Would you suggest a different method for funding 
acquisition programs, such as multi-year appropriations for major 
programs?
    Mr. O'Rourke. Navy program managers that I meet with state that 
year-to-year funding instability due to things such as continuing 
resolutions (CRs), sequesters, and congresssional marks on requested 
funding levels (and combinations of these things) can cause program-
execution challenges. Similarly, shipbuilding industry officials state 
that stable year-to-year funding is an important contributor to 
program-execution success. Navy and shipbuilding industry officials 
from time to time express a desire for more stable year-to-year 
funding--a desire that Congress understands, but which can be in 
tension with Congress' desire to maintain and exercise year-to-year 
control over appropriations, which is a core congressional power.
    One means of helping to achieve greater year-to-year stability in 
programs is to use multiyear procurement (MYP) and block buy 
contracting, which are two forms of multiyear contracting that can be 
used in defense acquisition programs on a case-by-case basis, with 
congressional approval. The Navy is making substantial use of MYP and 
block buy contracting in its ship and aircraft acquisition programs. 
MYP and block buy contracting are discussed in some detail in a CRS 
report. Another potential mechanism for achieving a greater degree of 
year-to-year funding stability would be to use advance appropriations, 
which can be thought of as a legislatively locked in form of 
incremental funding. Under incremental funding, Congress must take a 
positive action each year to approve each year's funding increment for 
the procurement of a given end item. In contrast, under advance 
appropriations, each year's funding increment happens automatically, 
unless Congress takes a positive action to stop it. DOD from time to 
time has requested the use of advance appropriations for shipbuilding 
or other acquisition programs. In shipbuilding at least, these requests 
have been turned down by Congress, in no small part because the use of 
advance appropriations is viewed as being in tension with maintaining 
year-to-year congressional control over appropriations. Traditional 
(i.e., single-year) full funding, incremental funding, and advance 
appropriations are discussed in some detail in a CRS report.
    Ms. Tsongas. A few of you mentioned incentives for acquisitions 
personnel during your opening statements. Unfortunately this has been a 
common theme for many years. Nearly all of the major comprehensive DOD 
Acquisition reviews throughout the years have stated the exact same 
thing; DOD does not provide the right incentives to its acquisition 
workforce. What incentives can Congress or the Defense Department put 
in place that would strengthen the DOD's acquisition system?
    Mr. O'Rourke. As one contribution to this discussion, my 
observation of Navy and other DOD acquisition programs over the last 30 
years gives me the impression that long terms of office for program 
officials can be a key contributor to achieving success in defense 
acquisition programs. Program officials with long terms of office 
understand that they will still be in office years from now, and 
consequently that they will be held personally accountable for the 
results of decisions they make (at least those they make during their 
earlier years in office). By contrast, officials with shorter terms of 
office face less risk of being held personally accountable for the 
results of their decisions, because those results may not become 
manifest until after their terms in office are complete. Indeed, they 
might even feel an incentive to make decisions that achieve what they 
view as near-term success for a program (such as getting a program 
started), even if those decisions increase the program's risk of 
experiencing execution problems later.
    The Navy's nuclear propulsion program and the Aegis development 
effort, both of which are generally considered as areas of acquisition 
success, were run during their formative years by officials (Admiral 
Hyman Rickover and Rear Admiral Wayne Meyer, respectively) who had long 
tenures in office. The term of office for Admiral Rickover's 
successors, as mentioned earlier, is eight years. In contrast, I have 
attended program-oversight hearings in recent years (such as those on 
cost growth in the LCS program or problems in the Coast Guard's 
Integrated Deepwater Systems program, to cite two examples) where the 
witnesses stated that the problems experienced by programs, while 
regrettable, resulted from decisions made by their predecessors. These 
contrasting experiences suggest that Congress might consider exploring 
options for lengthening the terms of office for some defense 
acquisition program officials well beyond the four years or so that 
many top program officials currently serve.
    Ms. Tsongas. Congress funds most acquisition programs one year at a 
time; however, DOD acquisition is planned for several years out and 
contracts often last for much more than a year. Thus, there are 
situations where we in Congress make decisions that completely disrupt 
the funding profile of a particular program, causing uncertainty for 
the program managers and the contractors. How much does this funding 
uncertainty affect the ability of program managers to effectively do 
their jobs? Would you suggest a different method for funding 
acquisition programs, such as multi-year appropriations for major 
programs?
    Admiral Venlet. Congressional funding of acquisition appropriately 
supports your oversight duties and does not adversely affect program 
managers. Beneficial balance results from healthy tension in the 
review.
    The fret concerning uncertainty primarily derives from over-
programming due to lack of realism in department resource planning. 
Industry contributes to this as much as department resourcing 
decisions.
    Review of program performance and adjustments to funding drive 
accountability by the department and should not be changed.
    Congressional oversight focused upon administration requests for 
new start programs is the place to apply focus on resource realism and 
only starting the right programs with the right resources. I speak more 
on this in my submitted written statement.
    Multi-year funding for procurement should be used to bring the 
benefit of lower price where it is defendable and auditable.
    Ms. Tsongas. A few of you mentioned incentives for acquisitions 
personnel during your opening statements. Unfortunately this has been a 
common theme for many years. Nearly all of the major comprehensive DOD 
Acquisition reviews throughout the years have stated the exact same 
thing; DOD does not provide the right incentives to its acquisition 
workforce. What incentives can Congress or the Defense Department put 
in place that would strengthen the DOD's acquisition system?
    Admiral Venlet. Throughout my career in uniform, and I firmly 
believe all civilian and uniform personnel presently in acquisition, 
work and live with no angst about incentives other than duty and 
commitment to providing the capability and reliability Soldiers, 
Airmen, Sailors and Marines expect to succeed in their missions and 
return safely to their loved ones.
    Proposals and continued inquiry about incentives are fundamentally 
misplaced. This is not a serious factor in acquisition program 
performance and will provide no fruitful contribution to external 
program performance results. My submitted written statement addresses 
more productive examination and focus on people. We need to build a 
greater presence in the workforce of commitment to fundamentals, 
transparency and realism. It is a long road to raise such a generation. 
There are no shortcuts.
    Ms. Tsongas. Congress funds most acquisition programs one year at a 
time; however, DOD acquisition is planned for several years out and 
contracts often last for much more than a year. Thus, there are 
situations where we in Congress make decisions that completely disrupt 
the funding profile of a particular program, causing uncertainty for 
the program managers and the contractors. How much does this funding 
uncertainty affect the ability of program managers to effectively do 
their jobs? Would you suggest a different method for funding 
acquisition programs, such as multi-year appropriations for major 
programs?
    Ms. McGrath. [The information was not available at the time of 
printing.]
    Ms. Tsongas. A few of you mentioned incentives for acquisitions 
personnel during your opening statements. Unfortunately this has been a 
common theme for many years. Nearly all of the major comprehensive DOD 
Acquisition reviews throughout the years have stated the exact same 
thing; DOD does not provide the right incentives to its acquisition 
workforce. What incentives can Congress or the Defense Department put 
in place that would strengthen the DOD's acquisition system?
    Ms. McGrath. [The information was not available at the time of 
printing.]
    Ms. Tsongas. As you mentioned in your opening statement, the 
ability to rapidly assess needs and field new technologies is critical 
for IT and cyber. Many program managers and area experts discuss the 
need for ``flexibility'' beyond a traditional multi-year, sometimes 
multi-decade, weapon systems acquisition. However, when you start 
drilling down on what ``flexibility'' really means, there is not a lot 
of clarity. Can you describe what flexibility in cyber/IT acquisition 
means to you and what it looks like? In order to do these things, what 
types of authorities does the DOD need from Congress to realize that 
type of flexibility? It is widely believed that the commercial sector 
leads and drives advancements in IT/cyber acquisition and that DOD 
could improve by adopting proven commercial practices, processes, and 
policies. What is one specific example of a commercial practice you 
feel could be beneficial to the Department of Defense?
    Ms. McGrath. [The information was not available at the time of 
printing.]
    Ms. Tsongas. Congress funds most acquisition programs one year at a 
time; however, DOD acquisition is planned for several years out and 
contracts often last for much more than a year. Thus, there are 
situations where we in Congress make decisions that completely disrupt 
the funding profile of a particular program, causing uncertainty for 
the program managers and the contractors. How much does this funding 
uncertainty affect the ability of program managers to effectively do 
their jobs? Would you suggest a different method for funding 
acquisition programs, such as multi-year appropriations for major 
programs?
    Dr. Lamb. Funding uncertainty arising from larger political 
forces--unrelated to program or defense goals--complicates acquisition 
performance and is a risk factor that should be minimized.
    However, it is important to note that funding consistency and 
variation are not intrinsically good or bad. Depending on the type of 
contract and its provisions, program managers need the flexibility to 
withhold, reduce, advance and increase funding to maximize program 
performance. Funding adjustments based on compelling analyses that 
demonstrate other programs can offer some or all of the same 
capabilities more efficiently and effectively are also justified. In 
such cases it would just be necessary to accurately account for the 
penalties and other inefficiencies associated with reducing or 
terminating the program. Hence, the goal should not be insulating the 
program funding stream from all variation, but rather from interruption 
by extraneous factors unrelated to the performance of our military 
forces.
    Thus, in order to further acquisition performance I would favor 
multi-year appropriations for major programs as part of a larger reform 
package designed to increase flexibility and accountability for program 
managers while decreasing the risks of program interruption by 
extraneous political forces.
    Ms. Tsongas. A few of you mentioned incentives for acquisitions 
personnel during your opening statements. Unfortunately this has been a 
common theme for many years. Nearly all of the major comprehensive DOD 
Acquisition reviews throughout the years have stated the exact same 
thing; DOD does not provide the right incentives to its acquisition 
workforce. What incentives can Congress or the Defense Department put 
in place that would strengthen the DOD's acquisition system?
    Dr. Lamb. The gist of my testimony was the argument that programs 
are not currently managed in light of their contribution to a broader 
operational concept, but that they should be.
    Program managers ought to be encouraged to adjust key performance 
parameters consistent with mission needs that are repeatedly evaluated 
to account for the contributions other programs and capabilities can 
make toward successful execution of the operational concept. If the 
program is not meeting one performance parameter for reasons beyond 
anyone's control, the program manager could relax this requirement and 
compensate with greater capability from other program attributes or 
from separate programs that contribute to the execution of the 
operational concept. The point would be to manage the program for a 
maximum contribution to the operational concept(s) within budget and 
time limitations.
    This approach assumes there would be enough analytic clarity about 
the operational concept to inform the program manager's decision-
making. It also assumes the program manager is provided the right 
personal performance incentives. We would want the program manager to 
devote his or her attention to managing their program to success as 
defined by the broader operational concept and not necessarily as 
defined by his or her parent organization or previous chain of command. 
Program managers need an incentive to do this. Simply stated, the 
program manager's likelihood of promotion must be based on good 
performance as defined by those who execute the operational concept. 
RAND made a similar observation about program manager tenure and 
acquisition performance: ``A fundamental conflict exists between what 
military officers need to do to be promoted and their tenure as program 
managers. Unless these two objectives are connected so that lengthy 
tenure in a program can be advantageous for promotion, it is unlikely 
that these tenure policies will consistently yield positive results.'' 
* The same point is true more generally about incentives for managing 
an acquisition program so that it makes the maximum contribution to an 
operational concept within time and budget constraints.
---------------------------------------------------------------------------
    * Mark V Arena, Irv Blickstein, Abby Doll, Jeffrey A. Drezner, 
Jennifer Kavanagh, Daniel F. McCaffrey, Megan McKernan, Charles P. 
Nemfakos, Jerry M. Sollinger, Daniel Tremblay, and Carolyn Wong. 
Management Perspectives Pertaining to Root Cause Analyses of Nunn-
McCurdy Breaches: Program Manager Tenure, Oversight of Acquisition 
Category II Programs, and Framing Assumptions. RAND, 2013: 105.
---------------------------------------------------------------------------
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. WITTMAN
    Mr. Wittman. What can Congress do to simplify the defense 
acquisitions process while empowering program managers with more 
responsibility and authority?
    Mr. Lambert. Yours is the fundamental question of acquisition 
reform. To get the process started, Congress should look first at where 
it can remove and reduce requirements, reports, and paperwork it has 
mandated in the past. To fix the defense acquisition system, one must 
first understand it, and no one does because of its complexity. 
Simplicity alone will not fix the problems of defense acquisition, but 
it may make it easier for us to identify problems in order to fix them. 
At the very least, simplicity will reduce the process costs involved in 
acquisition. Yet making these reductions will not be easy, since each 
was put in place by a Member of Congress who may believe they are 
worthwhile and necessary to improve acquisition outcomes.
    Take, for example, the milestone approval process mandated by 10 
U.S.C. 2366a and 2366b. The Congress established milestone 
certification requirements because it decided that insufficient 
attention was paid to these functional areas during program design and 
development. Yet, because of how a large bureaucracy operates, the 
Milestone Decision Authority is not in a position to independently 
certify that the program manager has met each of these requirements; 
instead, he or she relies on the advice of staff experts responsible 
for each functional area. A review by each of these experts adds delay 
to the program, and some experts may recommend changes that are 
beneficial to their functional area but harm the program as a whole. 
Although the program manager may consider these changes unwise, he or 
she may nevertheless carry them out to secure milestone approval. The 
program manager's incentive is to see the program make progress, and 
the experts' incentives are to make sure their functional areas are 
addressed as they see fit.
    The basic problem is that these experts have sway over a program's 
progress without being held accountable for it. While eliminating 
milestone decision reviews would fix these misaligned incentives, it 
would not necessarily improve outcomes. (If the earlier process was 
superior, why did Congress create the milestone review process in the 
first place?) So we should ask: what review process would align both 
sides' incentives?
    One option might be to reverse the milestone process to force 
functional experts to seek milestone disapproval rather than forcing 
the program manager to seek milestone approval. In such a scenario, the 
functional expert would make his or her case to the Milestone Decision 
Authority whose incentive is for program progress and success. Ideally, 
this process would bring the program manager's, Milestone Decision 
Authority's, and functional expert's incentives into alignment, each 
with skin in the game.
    Mr. Wittman. How should the LPTA acquisition strategy evolve to 
ensure that the DOD is achieving the best value over a program's 
complete lifecycle?
    Mr. Lambert. A recent GAO report on the use of LPTA source 
selection concluded that DOD contracting officers were properly using 
LPTA, yet it also concluded that the use of LPTA as a source selection 
method had increased by 10 percent over the period of review. LPTA is a 
proper source selection method only when the requirements are firmly 
established with no likelihood of value distinctions between product 
offerings. It is not an appropriate source selection method when two 
offerings may present a substantially different value.
    Yet LPTA is increasing in popularity as a source selection method. 
The reason is two-fold: first, because the defense budget is in decline 
and therefore cost receives more emphasis in source selection, and 
second, because cost is an objective method of source selection that is 
difficult to contest in the event of an award protest, while value 
almost always includes a subjective element that is more likely to 
receive scrutiny.
    Given the GAO's conclusion that LPTA is being properly used, it may 
be challenging to alter DOD's approach to LPTA in the near term. In the 
longer term, reducing the cost pressure that DOD contracting officers 
face and making reasonable improvements to the protest process are 
likely to reduce the prevalence of LPTA as a source selection method.
    Mr. Wittman. What can Congress do to simplify the defense 
acquisitions process while empowering program managers with more 
responsibility and authority?
    Mr. O'Rourke. Again drawing on my experience in tracking Navy 
acquisition programs, one option that the committee may wish to 
consider would be to examine, as a possible model to follow, the terms 
of Executive Order 12344 of February 1, 1982, which establishes the 
broad, cradle-to-grave authorities and responsibilities of the Naval 
Nuclear Propulsion Program (aka Naval Reactors), an office whose work 
over the years can be considered a major acquisition success story. 
This executive order, which is codified as a note at 50 U.S.C. 2511, 
contains a total of about 915 words.
    Another option would be to deemphasize regulation that attempts to 
direct DOD acquisition toward better outcomes without fundamentally 
challenging the going-in conditions I outline my prepared statement, 
and put more emphasis on acquisition strategies that attempt to change 
these going-in conditions. One possibility for doing that would be to 
make greater use of overlap between programs across time. Under this 
approach, the existing system for filling a mission need (call it 
System A) would remain in production (with spiral development 
improvements as needed) until the new system that is being developed 
(System B) is fully ready to enter production. At that point, 
production would be cut over from System A to System B, and System B 
would remain in production until it appears that a still-newer design 
(System C) might be more cost effective in performing the mission. 
System B, however, would continue in production until System C is fully 
ready to enter production. And so on.
    Under this approach, the system currently in development (System B) 
would face greater competition in its earlier years from the 
predecessor system (System A), as well as competitive pressures in its 
later years from a downstream successor (System C). At any one point, 
only one system is being developed, and only one is being produced. But 
as System B is being developed, it needs to perform well to earn the 
right to enter production, and during the years it is being produced, 
it needs to perform well to dissuade DOD officials for as long as 
possible from initiating a System C effort. The point at which System B 
is to enter production, and the total number of System B units produced 
over time, are not set in stone, but rather determined by the success 
of the System B program.
    Under this approach, there would be less emphasis on identifying 
precise future dates for starting and stopping production of platforms 
and systems, and less emphasis on planned total production quantities 
(which often prove illusory). There would be more emphasis on readiness 
for production, and more flexibility regarding production cutover 
dates. There would also be more emphasis on annual production rates and 
their relationship to supporting planned force structure over the long 
run, and on the ability of programs to achieve necessary annual 
production rates within budget constraints. The idea that a program can 
be helped by clearing the decks of all possible competition (i.e., 
shutting down production of the existing system so as to clear the path 
for the new program) would be deemphasized, and an alternative idea--
that a program is best helped (i.e., kept strong) by keeping it in 
competition longer against competing solutions for meeting the mission 
need--would instead be employed.
    Some of the Navy's quantitatively larger shipbuilding programs are 
in effect treated this way, which is why, in discussing these programs, 
there tends to be less focus on total planned production quantities and 
more focus on annual production rates.
    This proposed approach might not make sense for certain defense 
acquisition efforts, depending on the circumstances of those efforts. 
And this approach is by no means perfect--it has its own drawbacks, and 
ways could likely be found to attempt to game such a system. Among many 
other things, there would continue to be, for example, a question as to 
who determines when a program is fully ready to enter production, and 
how that determination is made. But it is an option that might be 
considered for some defense acquisition efforts.
    Mr. Wittman. How should the LPTA acquisition strategy evolve to 
ensure that the DOD is achieving the best value over a program's 
complete lifecycle?
    Mr. O'Rourke. Mechanisms for achieving best value over a program's 
complete lifecycle include, among other things, using competition where 
possible through much or all of that lifecycle (as opposed to using it 
only for awarding the initial production contract), aligning contract 
incentives with desired outcomes, and maintaining an adequately sized 
and trained acquisition workforce.
    Mr. Wittman. What can Congress do to simplify the defense 
acquisitions process while empowering program managers with more 
responsibility and authority?
    Admiral Venlet. This question contains two distinct issues that do 
not necessarily flow from one to the other.
    First I believe program managers presently enjoy fully adequate 
responsibility and authority for their scope of duties and career 
experience level. I never found any process complexity that reduced 
real responsibility. There exist process requirements that get blamed 
for reducing authority, but such a complaint most often is a failure to 
recognize value added sound fundamentals, an attempt to avoid 
transparency or a detour from realism in planning, budgeting and 
resourcing.
    I would point the attention of Congress to department 
organizational structures and repeated appearances of offices that do 
not add true value to the planning and execution of programs. The 
presence of assessment support to every acquisition executive level has 
grown such that their attempt to do assessment consumes too much time, 
energy, focus and money in the actual management of programs. Oversight 
is necessary and value added, I do not debate; however, there is an 
abundance of assessors that require answering on behalf of senior 
officials that in actuality becomes mostly opinion based and makes no 
difference to real outcomes--the external results of the program.
    The Weapons Systems Acquisition Reform Act of 2009 got it right by 
accepting Defense Science Board and GAO recommendations for emphasis on 
systems engineering (Title 1 Section 101) and adequate developmental 
testing (Section 102). However, it reacted in the only way legislative 
force finds outlet by creating new additional assessing offices at the 
OSD level, when the practitioners of these fundamentals exist within 
well-developed technical systems commands. Directors of Systems 
Engineering and Developmental Test and Evaluation, specifically, cannot 
add assistance in their field to improve any program outcome. They 
become advocates for healthy infrastructure in their fields and 
admirably so, but their attempts to assess programs for the Defense 
Acquisition Official injects more non value added exercise of review, 
inquiry and reporting system than their advocacy benefit adds.
    The excellent professionals in these offices are faced with 
searching how to bring their talents to bear for program benefit and 
they find all they have available is assessment, which further intrudes 
upon program execution focus.
    The value added alternative to these two offices is asking Service 
Acquisition Officials to: 1. Ensure the technical systems commands that 
already report to them provide a proper talent supply to programs. 
(Defense Acquisition Workforce Fund, Section 852, is one small part. 
Institutional and Working Capital Fund resources that enable sustaining 
adequate technical specialties in support of programs are also 
necessary.) 2. Provide necessary resourcing and support of laboratory 
and range infrastructure. 3. Provide a competency-aligned support to 
programs with enabling technical conscience accountability to program 
executive officers and program managers.
    Mr. Wittman. How should the LPTA acquisition strategy evolve to 
ensure that the DOD is achieving the best value over a program's 
complete lifecycle?
    Admiral Venlet. A request for proposal that states technical and 
cost are approximately equal or only slightly differentiated is often 
found within a stated best value strategy solicitation. That evaluation 
weighting and criteria reduce what is intended as a best value 
solicitation to be in fact lowest price technically acceptable.
    Approval authorities for releasing RFPs to industry must look for 
this mixed signal and eliminate it. It persists today in many 
solicitations and drives industry proposal behavior to reduce technical 
performance capability to win with lowest price.
    This is a downward capability spiral that is not in the best 
interest of the government. This applies to solicitations for both 
services and hardware systems.
    The government has to weigh and value capability and performance in 
some proportion over cost to enable industry to distinguish and 
differentiate their offerings. This is a fundamental to enabling 
evaluation of a proposal for true best value instead of simply lowest 
cost.
    Mr. Wittman. What can Congress do to simplify the defense 
acquisitions process while empowering program managers with more 
responsibility and authority?
    Ms. McGrath. [The information was not available at the time of 
printing.]
    Mr. Wittman. How should the LPTA acquisition strategy evolve to 
ensure that the DOD is achieving the best value over a program's 
complete lifecycle?
    Ms. McGrath. [The information was not available at the time of 
printing.]
    Mr. Wittman. What can Congress do to simplify the defense 
acquisitions process while empowering program managers with more 
responsibility and authority?
    Dr. Lamb. I favor a thorough review of statutory and regulatory 
requirements as they apply to major defense acquisition programs. The 
goal would be to eliminate all unnecessary, ambiguous, contradictory 
and unhelpful restrictions on program management that undermine 
efficiency and effectiveness. In addition, Congress would need to 
intervene in Service promotion practices to ensure that program 
managers are rewarded if they deliver a program on time and within 
budget with attributes that make the greatest contribution to overall 
military capability. For joint programs the Services cannot objectively 
make this kind of assessment and should not be allowed to do so.
    Mr. Wittman. How should the LPTA acquisition strategy evolve to 
ensure that the DOD is achieving the best value over a program's 
complete lifecycle?
    Dr. Lamb. I am not competent to provide a detailed answer to this 
question. However, I would like to share two quick observations.
    After my oral testimony I was contacted by a businessman whose 
company produces analytic software that optimizes management of usage, 
maintenance and repair cycles for capital-intensive equipment. His 
claim was that better analysis of enterprise asset management could 
save millions and even billions of dollars over the life cycle of 
defense acquisition programs. He asserted that some of the same 
bureaucratic behaviors I mentioned in my testimony often prevent the 
use of such analytics. For example, existing organizational cultures 
sometimes incline those managing established programs to maintain large 
costly inventories of spare parts rather than use analytic processes to 
assess actual usage rates and deliver spare parts accordingly. In other 
words, there are few incentives for achieving savings through supply 
chain management and significant sanctions for taking risk in this area 
at the expense of mission readiness. I do not do research in this area 
and do not know whether the empirical record would support these 
assertions but I believe the topic merits investigation.
    More generally, I agree with those who argue that the merits of a 
``lowest price technically acceptable'' approach depend on 
circumstances such as the clarity of program requirements, technical 
risk, past contractor performance, and other variables.* My inclination 
would be to allow program managers the flexibility to structure 
contracts as they think best consistent with program objectives and 
then hold them accountable for outcomes.
---------------------------------------------------------------------------
    * Robert Nichols, ``Myth-Busting the LPTA Conundrum,'' The 
Government Contractor (12/18/2013).
---------------------------------------------------------------------------
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MRS. WALORSKI
    Mrs. Walorski. Many have made attempts to improve the way the DOD 
acquisition system functions over the years. What do you think are the 
``lessons learned'' of previous acquisition reform efforts, 
particularly in terms of pitfalls to avoid or best practices to follow? 
What advice do you have for us in negotiating the obstacles to reform?
    Mr. Lambert. The primary lesson that we have yet to learn is that 
acquisition cannot be ``reformed'' as we have conceived of reform in 
the past. The idea that there is a silver bullet we have not yet 
discovered, and that Congress can simply pass a bill and fix all the 
problems of defense acquisition has proved to be a fantasy. Instead, to 
achieve meaningful acquisition improvement, the Pentagon and Congress 
both need to commit to a slow and steady long-term process enabled by 
enlightened and patient oversight, modest legislative change, reduction 
in paperwork and process requirements, and sufficient funding.
    To get the process started, Congress should look first at where it 
can remove and reduce requirements, reports, and paperwork it has 
mandated in the past. To fix the defense acquisition system, one must 
first understand it, and no one does because of its complexity. 
Simplicity alone will not fix the problems of defense acquisition, but 
it may make it easier for us to identify problems in order to fix them. 
At the very least, simplicity will reduce the process costs involved in 
acquisition. Yet making these reductions will not be easy, since each 
was put in place by a Member of Congress who may believe they are 
worthwhile and necessary to improve acquisition outcomes.
    Mrs. Walorski. Many have made attempts to improve the way the DOD 
acquisition system functions over the years. What do you think are the 
``lessons learned'' of previous acquisition reform efforts, 
particularly in terms of pitfalls to avoid or best practices to follow? 
What advice do you have for us in negotiating the obstacles to reform?
    Mr. O'Rourke. A summary of lessons learned for Navy shipbuilding, 
reflecting comments made repeatedly by various sources over the years, 
includes the following:
      Get the operational requirements for the program right up 
front. Manage risk by not trying to do too much in the program, and 
perhaps seek a 70%-to-80% solution. Achieve a realistic balance up 
front between requirements and estimated costs.
      Impose cost discipline up front. Use realistic price 
estimates, and consider not only development and procurement costs, but 
life-cycle operation and support (O&S) costs.
      Minimize design/construction concurrency by developing 
the design to a high level of completion before starting construction 
and by resisting changes in requirements (and consequent design 
changes) during construction.
      Use a contract type that is appropriate for the amount of 
risk involved, and structure its terms to align incentives with desired 
outcomes.
      Properly supervise construction work. Maintain an 
adequate number of properly trained Supervisor of Shipbuilding 
(SUPSHIP) personnel.
      Provide stability for industry, in part by using, where 
possible, MYP or block buy contracting.
      Maintain a capable government acquisition workforce that 
understands what it is buying, as well as the above points.
    Identifying these lessons is not the hard part--most if not all 
these points have been cited for years. The hard part is living up to 
them without letting circumstances lead program-execution efforts away 
from these guidelines. An additional observation is that in recent 
years there have been, through legislation and internal DOD 
initiatives, numerous changes and adjustments to DOD's acquisition 
system. These changes and adjustments have all been well-intentioned, 
and many of them no doubt have helped improve acquisition outcomes. But 
they have also had the effect of not leaving DOD's acquisition system 
in any one configuration for very long.
    The continuously evolving features of DOD's acquisition system can 
complicate the task of identifying what works and what does not work in 
DOD acquisition, because no one configuration of the system is tested 
for very long, an individual program can be implemented across several 
versions of DOD's acquisition system, and a service's collection of 
programs at any given moment can include programs initiated under 
various versions. This situation might suggest a need for careful 
consideration in determining the reasons for acquisition outcomes. As 
another observation, consider an acquisition program that has most or 
all of the following features:
      The item being acquired is considered a must-have item 
for the customer.
      The program for acquiring it is largely sheltered from 
international competition, and perhaps also sheltered, to some degree 
at least, from domestic competition.
      The program proposes to procure the end item in question 
at a relatively low annual production rate, reducing the potential room 
for making further reductions in that rate.
      The industrial base producing the item is considered 
critical and will not be allowed to go out of business.
    If one were to describe such a program to an economist, the 
economist might reply that the program would be inherently vulnerable 
to problems in areas such as cost control, schedule adherence, and 
production quality, because these going-in conditions can send a 
message to industry that less-than-stellar performance in executing the 
program would not create much risk of losing the work or going out of 
business. Much of the regulation of DOD acquisition can be viewed as an 
attempt to direct DOD acquisition toward better outcomes without 
fundamentally changing going-in conditions such as these, which 
together might be thought of as forming the underlying political 
economy of some (perhaps many) DOD acquisition programs. Regulation 
that attempts to direct DOD acquisition toward better outcomes without 
fundamentally challenging going-in conditions such as these might be 
viewed as treating symptoms rather than underlying causes.
    Mrs. Walorski. Many have made attempts to improve the way the DOD 
acquisition system functions over the years. What do you think are the 
``lessons learned'' of previous acquisition reform efforts, 
particularly in terms of pitfalls to avoid or best practices to follow? 
What advice do you have for us in negotiating the obstacles to reform?
    Admiral Venlet. I have written about this in an article submitted 
for a Senate print on acquisition reform this summer and in my 
submitted written statement for this committee.
    Lessons learned reveal to me the insatiable hunger for something 
``new'' to keep pursuing more program with less resources always leads 
to departures from sound fundamentals, departures from transparency and 
departures from realism in expectations, planning and resourcing.
    My advice is to hold department programmers and acquisition 
leadership accountable for realism in requests for program starts. If 
you are left with gaps in national security needs, you should resist 
forcing more program into constrained budgets and look to enable a 
national economy that adequately supports the program needed.
    Mrs. Walorski. Many have made attempts to improve the way the DOD 
acquisition system functions over the years. What do you think are the 
``lessons learned'' of previous acquisition reform efforts, 
particularly in terms of pitfalls to avoid or best practices to follow? 
What advice do you have for us in negotiating the obstacles to reform?
    Ms. McGrath. [The information was not available at the time of 
printing.]
    Mrs. Walorski. Many have made attempts to improve the way the DOD 
acquisition system functions over the years. What do you think are the 
``lessons learned'' of previous acquisition reform efforts, 
particularly in terms of pitfalls to avoid or best practices to follow? 
What advice do you have for us in negotiating the obstacles to reform?
    Dr. Lamb. In the case of acquisition reform, my impression is that 
previous efforts have failed in two key respects. First, too many 
reforms have layered on additional reporting requirements or ambiguous 
restrictions that give the appearance of addressing a past 
disappointment without actually increasing the likelihood of preventing 
future ones. Second, past reform efforts define the problem too 
narrowly. In past decades it might have been more common to discover 
acquisition failures due to narrow technical lapses, such as poor 
manufacturing processes or inadequate testing. Career acquisition 
experts could speak to that issue with more authority. However, my 
impression is that in recent decades we have delivered high-quality 
products to our forces, but not quickly or at affordable cost. Gold-
plating a system makes sense if the criteria for success are key 
performance parameters that promise a leap forward in capability. When 
the field of vision is broadened to evaluate the program in terms of 
its contribution to executing operational concepts upon future 
battlefields, the value of that particular program and its signature 
attributes comes more sharply into focus and it is easier to ascertain 
the best value for the defense dollar. With respect to navigating 
obstacles to acquisition reform success, I would say the most important 
point to keep in mind is the critical need to investigate and define 
the problem extremely well. Many reformers conduct a superficial 
analysis of the problem they are addressing and define it in terms of 
their preferred solution (i.e. ``the problem is the absence of my 
desired solution'').
    Another obstacle to success is crippling compromise. Many reformers 
would rather succeed than be right. They reason some reform is better 
than no reform and define their problem and solution within the bounds 
of the politically possible, even if doing so fatally compromises the 
efficacy of the proposed reform measures. It is better to postpone 
reform than impose requirements that do not actually solve the core 
problem. This sounds self-evident, but it is surprising how often we 
succumb to pressure to act even when there is little or no reason to 
believe doing so will solve the problem.

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