5 Questions with Sen. John McCain on Defense Acquisition Reform and Drinking with Deng

July 8, 2015

This is the latest installment of our 5 Questions series, in which we feature an expert, practitioner, or leader answering — you guessed it — five questions on a topic of current relevance in the world of defense, security, and foreign policy. Well, four of the questions are topical. The fifth is about booze. We are War on the Rocks, after all.

We’re joined this week by Sen. John McCain (R-AZ), the Chairman of the Senate Armed Services Committee.

1. Thanks for joining me, Senator McCain. Your defense acquisition reform efforts are creating some headlines and tensions. What are you trying to accomplish here? Which parts of your reform proposals are being misinterpreted by the media and critics?

Thank you for inviting me to participate, Ryan. And thanks to you and the War on the Rocks team for creating a forum for some of the most substantive discussion and debate on foreign policy and national security issues.

Acquisition reform has been a perennial topic in defense circles for years. We’re wasting billions of dollars, often times on programs that never become operational. But America’s broken defense acquisition system is not just a budgetary scandal. It’s a national security crisis.

America’s military technological advantage is eroding — and fast. Over the last decade, our adversaries have invested heavily in modernizing their militaries with a focus on anti-access and area denial technologies designed specifically to counter American military strengths. Our adversaries are building weapon systems while we shuffle paper. If we continue with business as usual, I fear the United States could lose its military technological advantage altogether.

We have to create a 21st-century acquisition system agile and nimble enough to meet the challenges of a globalized information age. The Senate’s defense authorization bill marks the beginning of a multi-year process to change the acquisition system to be more open to next-generation technologies that can enable the United States to outpace its adversaries. We take steps to hold senior leaders in the Pentagon accountable for results, utilize alternative pathways to speed acquisition of critical national security capabilities, streamline regulations and acquisition processes, and improve the acquisition workforce.

Another area we are focused on is improving access to non-traditional and commercial sources of innovation. To give our military the capabilities it needs to defend the nation, the Department of Defense must be able to access innovation in areas such as cyber, robotics, data analytics, miniaturization, and autonomy, innovation that is much more likely to come from Silicon Valley than Washington. Unfortunately, our broken acquisition system, with its complex regulation and stifling bureaucracy, has led many commercial firms to choose not to do business with the Defense Department, or to limit their engagement in ways that prevent the department from accessing the critical technologies that these companies have to offer.

The Senate plan incentivizes commercial innovation by removing barriers to new entrants into the defense market. By adopting commercial buying practices, we make it easier for non-traditional firms to do business with the Pentagon. Our plan also ensures businesses are not forced to cede intellectual property developed at their own expense to the government. Taken together with proposals to cut unnecessary regulation, expand rapid acquisition authorities, and open alternative acquisition pathways, I believe the Senate plan would be a major step toward creating an acquisition system that enables the Department of Defense to take advantage of the best minds, firms, and technologies that America has to offer.

2. One of the key parts of your reforms involves empowering the services. How will these reforms tighten the link between responsibility and accountability for programs to the services? We seem to always end up asking the service chiefs the key questions, despite having taken away program management from their leadership portfolio.

We have to demand accountability for results. Two years ago, I asked the chief of naval operations who was responsible for $2.4 billion in cost overruns on the USS Gerald R. Ford aircraft carrier. He had no answer. In today’s vast acquisition bureaucracy, where personnel and project managers cycle through rapidly, everyone is accountable, and no one is accountable.

Our acquisition reforms give greater authority to the military services to manage their own programs, and enhance the role of the service chiefs in the acquisition process. In exchange for greater authority, the bill demands accountability and creates new mechanisms to deliver it. Services chiefs, service secretaries, service acquisition executives, and program managers would sign up to binding management, requirement, and resource commitments. We created new incentives for the services to deliver programs on time and on budget. If military services fail to manage a program effectively, they will lose authority and control over that program. And they will be assessed an annual cost penalty on their cost overruns, with those funds directed towards a rapid prototyping fund under the control of the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) that will support acquisition risk reduction efforts across the department.

3. The White House does not seem too keen on the acquisition reforms you are pushing forward. Why is that? Did you try to work with the White House and the Pentagon on these issues?

The Pentagon is actually in strong agreement with many of our reforms. But the central concern seems to be around the decision we made to transfer milestone decision authority for a limited set of programs to the services. Some fear this would reduce the secretary of defense’s ability — through AT&L — to guard against unwarranted optimism in program planning and budget formulation. This concern is misplaced.

To the contrary, new incentives and real penalties imposed on the services in our plan are designed to put some of this optimism in check. As I said, under our plan, the services will pay for acquisition failures by paying a penalty on cost overruns and surrendering control of mismanaged programs to AT&L. Moreover, nothing in the Senate plan overrides the requirement to use better cost estimates from the Office of Cost Assessment and Program Evaluation (CAPE). Nothing would change the role of the Director of Operational Test and Evaluation (DOT&E).

Unwarranted optimism is indeed a plague on acquisition, but there is certainly no monopoly of that in the services. This happens with disturbing regularity under the current system, including in numerous examples when AT&L has backed overly optimistic service cost positions. The difference is that our plan will hold those responsible for these decisions accountable for the results.

4. Do you have any concerns about the lack of focus in the so-called third offset strategy, which is meant to preserve and advance America’s military technological edge? It seems to encompass everything from cyber to drones to 3D printing to countering anti-access/area denial against foes as diverse as China, terrorists, Iran, Russia, and insurgents. Is the third offset strategy too diffuse?

As you point out, we have heard a lot about various “offset strategies” over the past year for addressing the multiple competitors the United States now faces. Our nation’s success in generating the offset strategies of the 1950s and 1970s benefited from a singular focus on the challenge of the Soviet Union. Today we don’t have the luxury of scoping our military to just one potential adversary or military problem: We face a much more complex security environment.

To be successful today, we need to be prepared to call into question the assumptions that have guided our planning over the past three decades. It is difficult for any bureaucracy to shift direction. But given the investments China, Russia, and others are making, we cannot afford to invest in a military that is just a better version of the one that won the Gulf War in 1991.

We need to fundamentally reorganize our forces to maximize a new set of enduring warfighting advantages for the coming decades. In the coming year, our committee intends to review each of the major defense acquisition programs and its related industrial base to determine whether they are sufficient and appropriate to meet developing national security challenges. This review will take nothing for granted and will evaluate each program, both qualitatively and quantitatively, in the broader context of the roles, missions, requirements, and other capabilities of the armed services, as well as emerging technologies that could significantly alter previous assumptions underpinning the current programs of record. The committee’s future budgetary decisions will be based on the outcome of this strategic review. I believe it is possible to embark upon a new period of sustained military innovation today if the Department of Defense, the military services, and industry can be aligned towards this goal.

5. You have met with many leaders around the world over the years. What is your favorite drinking story with a foreign leader?

In 1978, I escorted several U.S. senators on a trip to Asia as the Navy’s Senate liaison. When we visited Beijing, we attended a reception in the Great Hall of the People with Deng Xiaoping. Deng was walking around the reception encouraging the American visitors to toast and take a drink with him. After a while, I realized that Deng had been drinking water the whole time. It wasn’t long before Deng was by far the most sober man in the room.

 

Ryan Evans is the editor-in-chief of War on the Rocks.

 

Photo credit: ResoluteSupportMedia