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If Defense Acquisition Was Perfect

J. David Patterson formerly Comptroller for the Defense Department and the head of one of many past commissions looking at ways to improve defense acquisition programs with an idea of saving money in the defense budget. It was published in the Federal Times yesterday. In this article he makes the good point that saving money by canceling programs "wholesale" is not good economic policy and may not make the best sense. There are savings to be found in operation and maintenance funds and if the fighting winds down in Iraq and Afghanistan the requirement for that kind of money may be lessened too.

Mr. Patterson then lays out three reforms that will make acquisition better and programs more affordable. One is to fix the development schedule to a certain amount of time. The program cannot have requirement changes until after entering service. The budget for a program should be set over a period of years and fully funded. Biannual program reviews will be held and if three in a row are failed cancel the program. Finally the requirements for the program will be frozen at contract award and remain frozen until operational capability is met which ties in with the first reform.

In a perfect world these would all be good reforms. Freezing the requirements and limiting the time available to develop the program should save money. The problem programs run into is that after development starts the military adds requirements or testing is more difficult then planned which stretches the schedule. This requires more money over more time. Fixing the budget would also help as right now Congress budgets on an annual basis and a program's funding may fluctuate year-to-year as the schedule moves around or money is needed for higher priorities. A steady, planned funding stream will help stabilize a program. In the long run this will save money.

Unfortunately the Department of Defense doesn't develop new weapons in a perfect world. A program may experience test failures. For a complicated system like missile defense tests are complicated, expensive and use test articles such as missiles that cost a great deal themselves and are not available in large numbers. This means that in order to advance a program must redo the test and at a cost in time and money. Every month that a program continues there is a cost to the government so if the schedule lengthens then the program costs more.

Congress budgets annually based on a two year plan submitted by the department. The budget documents also shows spending out for the next five years. Programs funding are first ranked within each service and then by the Department of Defense. The President's Office of Management and Budget (OMB) also looks at all funding and makes decision. Ultimately Congress adjusts each individual program's plan. If there are issues with a program's performance it may see its funding adjusted to spread it out over a longer time or because an event has to be repeated. The Service or Administration may take money to pay for a program that is more important. These kind of instabilities may lead to a new program not being ready on the originally scheduled date.

The goal of freezing requirements may be the one that is most reachable. The latest rewrite of Defense Instruction on acquisition wants each specific increment of a program to have its own set of requirements. If there are further or newer ones they are done as a new increment. This will become its own acquisition program which is managed separately. By not allowing new objectives to be inserted after development starts it is easier to remain on schedule and cost.

These proposals are eminently sensible in many ways but also highly impractical. The current DoD and Congressional management of the defense budget does not allow for a steady funding stream. Changes in political majorities also lead to major changes in goals, objectives and funding. It is also not realistic to expect a program to meet its schedule and cost with any failures or development issues. Many times a program may have failures early but ultimately be successful if it can be stuck with long enough.

Mr. Patterson will also not be the last to suggest these kind of reforms and they are always worth while considering. It would take some major changes to the politics of America, though, to make them. The issue with the new Gulfstreams for the Air Force alone illustrates this.

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