Amidst Turmoil, Pentagon Persists On Acquisition Reform: Ellen Lord

By PAUL MCLEARY

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PENTAGON: One constant in the abrupt transition from outgoing Defense Secretary Jim Mattis to his deputy, soon to be acting secretary, Patrick Shanahan? The grueling, technical, but crucial business of acquisition reform. For all their differences, Pentagon technocrats, House Democrats, Senate Republicans, and even President Trump can all agree that the Defense Department needs to do a better job of buying weapons.

Yes, there will be a new defense secretary in 2019 — perhaps more than one — but with only weeks left until the 2020 budget drops and with a number of critical Pentagon reforms already well underway, civilian leaders in the building say they’re putting their heads down and simply pushing forward. Speaking to a small group of reporters just before the dramatic events that lead to Mattis’ unexpected exit at the end of the year, undersecretary for acquisition Ellen Lord said that she’s planning a top-to-bottom rewrite of the building’s byzantine acquisition rules.

“One of my key objectives is to rewrite 5000.02,” she said. That’s Defense Instruction 5000.2, the massive acquisition manual that instructs Pentagon program managers and the defense industry how to walk through the laborious process of buying everything from stealth fighters to software, guns to butter.

“We have, right now, this huge, complicated acquisition process that we encourage our acquisition professionals to tailor to their needs,” Lord explained. “We are going to invert that approach and take a clean sheet of paper and write the absolute bare minimum to be compliant in 5000.02, and encourage program managers and contracting officers to add to that as they need for specific programs.”

Ellen Lord

What’s a “bare minimum”? Lord thinks her staff can get the volume down to “a couple page outline” that guides managers through the legal requirements while giving them room to creatively tailor contracts to the needs of a particular program.

“I want everyone to be compliant, but I want people to be very thoughtful and only use what they need,” she said.

Shanahan will no doubt bring a different style to the SecDef’s office when he officially takes over Jan 1st, but the substance shouldn’t change when it comes to defense reform. That’s because Shanahan was already responsible for running the Pentagon day-to-day in its business processes, modernization efforts, and organizational restructuring. Meanwhile Mattis looked outwards as the Pentagon’s public face, selling policy positions to the White House, Congress, and foreign partners. Yes, Mattis made “reform the Department” one of the three pillars of his National Defense Strategy, but in practice he focused on the other two pillars, “build a more lethal force” and “strengthen alliances,” flying across the globe to reassure allies.

Now, rewriting the rules is unlikely to slash long procurement times in the short run, since the changes are still months away and will take months more to trickle down to the management level and start being implemented. Lord’s office has also shed its direct oversight of all but a handful of programs over the past two years, giving the services the power to more closely manage their own acquisitions — another major reform whose consequences have yet to be fully felt.

As of December, Lord said, she maintains oversight of only nine of 89 major defense programs:

the Army’s Integrated Air and Missile Defense (IAMD) program;

the Navy’s Littoral Combat Ship (LCS) and Columbia-class nuclear missile submarine;

the Air Force’s Evolved Expendable Launch Vehicle (EELV), the OCX Next Generation Operational Control System, and recapitalization of presidential aircraft;

and, on multi-service programs, the F-35 Joint Strike Fighter, the Ballistic Missile Defense System, and Chemical Demilitarization-Assembled Chemical Weapons Alternatives.

The F-35 completed airframe testing In mid-September 2018

As a prelude to the larger acquisition reform effort, Lord said she’s looking at the increased use of unconventional OTA contracts (short for Other Transaction Authorities) as “sort of a warmup.” Pentagon officials can use OTAs to speed up the acquisition process for critical, time-sensitive needs or for buying things that aren’t traditionally on the Pentagon’s menu, or for which there’s not a clear requirement. Lord’s office has already released a handbook on how the use OTAs, and is looking to do more in 2019.

One way to nudge the use of OTAs along is by doing more rapid prototyping, she said, something the Department wants to focus on next year.

The Pentagon is already moving out on a program of putting modified commercial gear into the field for rapid prototyping drills, and plans to grow the number of such projects from the current 10 to about 50 in 2019. “We’re taking systems that are commercially available and perhaps need a little modification, or defense systems that need a modicum of modification to make them appropriate for the war fighter,” Lord said. “We’ll write the detailed policy coming up early next year.”