Confusion over “lowest price, technically acceptable” contracts have rendered the Pentagon’s acquisition workforce “brutalized” by critics and the press who mistake shrinking defense budgets for a lack of ambition for innovation, a top acquisition official said Thursday.
Katrina McFarland, assistant Defense secretary for acquisition and past president of the Defense Acquisition University, said “Low-cost, technically acceptable is good when appropriate, but shouldn’t be used to achieve innovation.” Her “very junior-level” acquisition workforce has a learning curve when it comes to taking the next step toward value added in contracts, McFarland told several hundred industry and government executives at a conference titled “Agility, Velocity and Service Excellence” sponsored by the General Services Administration, the Homeland Security Department and the American Council for Technology-Industry Advisory Council.
Seeking industry input on how to prioritize Defense spending on weapons and information technology, McFarland gave a capsule history of how the acquisition workforce in the 1990s was cut by 20 percent to “reap the peace dividend,” and how, following the 9/11 terrorist attacks, the civilian force was then flush with money and focused more on “pushing product out the door to the warfighter. We weren’t focused on honing business skills or maintaining a good customer-provider relationship,” she said. “We were a bad customer.”
An injection of money by Congress in 2008 allowed planners beginning in 2010 to assemble 53 experts from agencies and industry and boil down 325 proposed initiatives to 23, which eventually resulted in the Pentagon’s pair of Better Buying Power initiatives. These include rewards and incentives for the workforce, McFarland noted, including the first-ever visits to contractor sites by deputy and undersecretaries to explain “from the horse’s mouth” the distinctions between low-cost contracts, value-added innovations and affordability in the context of the long-term costs of ownership of a system. “Instead of beating the workforce about the ears, it is a guide to help you think,” she said. If the workforce doesn’t understand low-cost technically acceptable, it will fumble around a bit,” she added, telling the business representatives, “if [acquisition] people ask questions and say this is not logical, do not stop them,” for this is how risks are taken that succeed.
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