The Defense Business Board has another great presentation, this one on Innovation – Attracting and Retaining the Best of the Private Sector.
They highlight that DoD needs both sustaining and disruptive innovation. Sustaining innovation tends to be “top down”, addressing known problems with contracted and independent R&D. Disruptive innovation tends to be “bottom up”, the source of major breakthroughs from non-traditional, self-funded development.
They found DoD has a closed system that discourages innovation. From components that are hard wired into programs to a vertically integrated supply chain restricting competition.
The unintended consequences of budget reduction actions will hurt future innovation. Cost focus via LPTA reduces staff and technical quality discouraging industry investments in innovations.
DoD lacks sufficient understanding of business operating models and drivers of innovation. The fundamental business imperative is to increase earnings per share. Profit is the lifeblood of the capitalist system and is risk calibrated.
They also summarized the slow acquisition process has 7-10 year platform cycle vs. 18 month Moore’s Law technology cycle. The development curriculum for DoD acquisition workforce is inadequate.
The DBB lays out eight recommendations:
- Establish FAR Part 12 as default procurement method for non-platform acquisitions
- Require adoption of modular approach to new mission-essential platforms
- Rebalance policies on Intellectual Property
- Remedy unintended consequences of budget reduction actions
- Provide clear and consistent senior-level messaging of DoD goals and policies
- Systemize and mandate DoD workforce education as condition for promotion
- Simplify DoD internal processes and policies: ensure consistent long-term leadership
- Re-examine industry structure and incentives from standpoint of future DoD needs
A final series of factoids: The market cap of Apple, Exxon-Mobil, Google, and Walmart each exceed the entire defense industry. Apple could buy nearly the entire defense industry today with their cash on hand.
So what are you thoughts on the DBB Innovation report? I believe they go beyond the standard acquisition reform report and identify some key recommendations acquisition executives could implement today. Which findings or recommendations resonate with you most?
There are two absolutely conflicting priorities in acquisition reform: maximizing efficiency — which requires giving acquisition officials more freedom and minimizing mistakes — which requires imposing tighter control.
Almost always the second trumps the first.
It’s the only enterprise in the world that would spend millions
to prevent the fraud of pennies.
-Former DoD Undersecretary for Acquisitions Ken Krieg
Frank Kendall, Acting Under Secretary of Defense, AT&L spoke at the Center for Strategic and International Studies (CSIS) on The Acquisition Implications of the DoD Strategic Guidance and the FY2013 Budget.
See the full transcript here.
With physicist and former Harvard faculty member Ashton Carter moving up to be the next Deputy Secretary of Defense, the Hill and others report there’s a three-way race to replace him as the Pentagon’s Acquisition chief.
My money is on Frank Kendall, who has spearheaded most of the Better Buying Power Initiatives and is well respected across the Pentagon and acquisition community. With ADM James Winnefeld nomination for VCJCS, there may be a reluctance to elevate another Navy executive. Yet this is Washington where anything goes.
Patrick Thibodeau has an interesting piece in Computerworld Top general says Defense Department IT in ‘Stone Age’ where he summarizes Hoss’ comments at FOSE.
Cartwright cited problems with proprietary systems that aren’t connected to anything else and are unable to quickly adapt to changing needs. “We have huge numbers of data links that move data between proprietary platforms — one point to another point,” he said.
Modifying hardware “takes forever,” and even modifying software can take an enormous amount time, the general said. “If you want to open up the operational flight software in an airplane, think something along the lines of five years and at least $300 million just to open it up and close it, independent of what you want to try to do to improve it,” Cartwright said. “We’ve got to find ways to do that better and more efficiently inside the Department of Defense for sure.”
He also highlighted Vivek Kundra’s concerns
“The same IT contractors keep getting government business not because they are necessarily providing the best technology, but because they understand the procurement system. He described it as almost an “IT cartel” within federal IT.”
The DoD “is unable to keep pace with the rate of IT innovation in the commercial marketplace,” according to the House committee report. “By way of example, the private sector is able to deliver capabilities and incrementally improve on those initial deliveries on a 12-to-18-month cycle; defense IT systems typically take 48-60 months to deliver.”
Amber Corrin authored a similar summary for FCW and added from Cartwright’s remarks:
Faster acquisition methods are needed to counter an improvised explosive device threat that tends to evolve on a 30-day cycle or a seven-year process for replacing the Humvee, he said. He praised the incremental approach to acquisition used for the Predator unmanned aerial vehicle, pointing to that program as a model for development and deployment of military systems. He said that the first instantiation of the Predator has had three iterations, each integrating new technologies.
Cartwright said that the cyber domain is promising for the U.S., but that it is critical to get it right early. “The Cyber Command and the military cyber components are part of a new structure integrated across many disciplines,” he said. “But we can’t isolate cyberspace the way space was [when it was established as an operational domain]. This is too important for our nation.” He also stressed the importance of the new DoD Strategy for Operating in Cyberspace, noting that it serves as a basic framework from which the department – and broader government – can use and build on. “The cyber strategy is an iterative framework to take us forward in cyber…it’s going to evolve, there’s no doubt about it,” he said.
The DoD and Federal Government are losing two great IT leaders with Gen Cartwright and Vivek Kundra moving on. Hopefully new leaders emerge to advance and expand their vision to overhaul IT Acquisition, integrating new innovative models.
Five years ago the Intel Community underwent a series of initiatives to transform their enterprise and create a culture of collaboration. The Pentagon would be wise to develop similar plans to modernize the defense enterprise.
In 2007, then DNI Michael McConnell created a series of initiatives designed to build the foundation for increased cooperation and reform of the Intelligence Community. His plan, dubbed “100 Day Plan for Integration and Collaboration” focused on efforts to enable the IC to act as a unified enterprise in a collaborative manner. It focused on six enterprise integration priorities:
- Create a Culture of Collaboration
- Foster Collection and Analytic Transformation
- Build Acquisition Excellence and Technology Leadership
- Modernize Business Practices
- Accelerate Information Sharing
- Clarify and Align DNI’s Authorities
The 100 Day Plan was meant to “jump start” a series of initiatives based on a deliberate planning process with specific deadlines and measures to ensure that needed reforms were implemented. The 500 Day Plan, which started in August 2007, was designed to accelerate and sustain this momentum with an expanded set of initiatives and broader IC participation.
If anyone can offer insight into the effectiveness of these initiatives, sharing lessons learned and best practices I would love to learn more about them.