Patching the Pentagon’s Procurement Problem
After the end of the Cold War, American policymakers constantly fretted about the uncertainty of the strategic landscape. Large-scale interventions in Iraq and Afghanistan largely suspended that debate for 14 years. Now, U.S. leaders are returning their attention to the nebulous multitude of threats – certain, probable, and possible – the nation faces.
Designing a force that accommodates uncertainty is an inherently difficult task. Some threats are consequential enough to warrant immediate and significant resource allocations – a conventional war against a peer adversary, for instance. Resources can also be split, hedged, and diversified to meet other threats. Yet resources are finite and can only be committed in so many ways. Not all possible threats can be imagined and planned for. The enemy only needs to exploit one underfunded area to gain an advantage over us. Thus, we should expect to be surprised by an unexpected or unimagined threat, as we were by insurgent use of improvised explosive devices (IEDs)in Iraq and Afghanistan.
Being surprised does not necessarily mean being caught unprepared, though. If the U.S. military expects to be surprised by such a threat, it can prepare by adapting. Our experiences in the past 14 years have proven that this is possible, but painful. The military adapted its training, doctrine, and operating concepts to fight in Iraq and Afghanistan. Regardless of whether or not those adaptations were timely or sufficient in the long run on the strategic level, they did show that the military adapted to address those unexpected adversaries.
Similar adaptation occurred in Pentagon procurement, but only to a limited degree. The Department of Defense and military services developed processes to rapidly acquire equipment to fill capability gaps identified by forces in the field. However, the demands for those capabilities ran contrary to the way the Department of Defense prefers to procure equipment and were only met after the intervention of senior leadership and Congress. To prepare the Pentagon’s procurement system to respond and adapt to threats more quickly in the future, we must learn from this recent experience and reform our approach to rapid acquisition.
The Old Imperative for Long-Term Procurement
Building an acquisition system capable of rapid procurement is easier said than done. The Pentagon’s system for allocating procurement resources is purposefully deliberate, conservative, and averse to rapid changes. The PPBE (Planning, Programing, Budgeting, and Execution) system that ranks priorities and allocates resources is explicitly designed to focus on long-term investments like the F-35, Joint Light Tactical Vehicle (JLTV), and other high-performance, fully-developed capabilities. When the PPBE process was conceived in 1962, this emphasis on long-term investments was essential. Competing with a nation-state adversary for an unknown duration and intensity was a new challenge for the United States. The PPBE system girded the nation for that marathon struggle by ensuring that resource allocations were linked to strategic goals consistently.
Additionally, the strategic environment at the time – the Cold War – compelled policymakers to closely scrutinize procurement decisions. Because the United States did not know how long or intensely it had to expend resources for defense, spending on inefficient and redundant systems needed to be minimized. This demanded analysis, such as cost estimates for the life of a weapon, greater oversight for developing requirements, and so on. Putting aside the question of effectiveness, this instinct for deliberation and long-term value was justifiable at the time.
The New Demand for More Responsive Procurement
Sixty years later, this once innovative system and its attendant processes have accumulated significant bureaucratic barnacles. Incumbent programs with huge sunk costs and poor performance are difficult to change. Matters are not helped by cost overruns and schedule slippages. Equipment is often procured too slowly, at too great a cost, and might not even work as advertised at times.
If the United States merely faced a nation-state foe that threatened its existence, the Pentagon could simply scrape off the bureaucratic barnacles. But this is not the case, and the number and variety of threats we face requires the Pentagon to do more than simply fix the procurement system as it exists today. The Department of Defense must also improve its ability to adapt to unexpected threats by shifting between long-term, deliberately developed procurement priorities and immediate solutions that to hedge against uncertainty.
The Pentagon’s rapid acquisition efforts of the past 14 years shows that is difficult, but possible to adapt and shift procurement resources. The struggle to counter improvised explosive devices (IEDs) is a prime example. The nation spent $17 billion dollars on IED jammers, $8 billion for MRAPs, and inestimable millions more for intelligence, surveillance, and reconnaissance (ISR) capabilities to stem the tide of blood, burned flesh, and flag-shrouded coffins that resulted from a failure to anticipate the threat. Some can debate the relative costs of those procurement choices and criticize wasteful and hasty expenditures that violate the principles of close scrutiny and oversight developed since the implementation of PPBE. However, the need for rapid response justifies the lack of deliberate analysis and the overall track record of the 30+ rapid acquisition organizations shows that the Pentagon is capable of adapting to surprise.
Doing Rapid Acquisition Better
Supplementing conventional acquisition with a rapid process can help the Department of Defense balance the need to procure large complex systems with the need to quickly respond to unexpected imperatives. . But first, the lessons the Pentagon learned in executing rapid acquisition over the past 14 years should be heeded. Three lessons in particular stand out: the need for stable funding, clear procedures, lucid articulation of requirements.
The first key to making this rapid acquisition system a reality is funding. Without the lifeblood of assured funding, this two-track system will be slow to react. Some rapid acquisition efforts (the MRAP program, the Army’s Rapid Equipping Force, and ISR platforms) were funded as separate line items and budget sub-activities in the past decade. Those line items should be consolidated. Current service rapid acquisition programs that rely on program officers cobbling together funding sources by robbing one program to pay for another need to have dedicated line items in the base procurement budget. With consistent funding for rapid acquisition programs, the Pentagon will be able to identify threats and begin reacting more quickly.
Second, rapid acquisition policies must be made stronger and clearer. While the current defense acquisition regulations contain guidance on when and how rapid acquisition programs should be initiated and paid for, more robust policies need to be promulgated. These policies should minimize the bureaucratic uncertainty that incentivizes cautious program officials to err towards the side of the conservative and deliberate procurement process. Additionally, the Pentagon should consolidate some of the many rapid acquisition organizations created in the past 14 years. A joint rapid acquisition office complimented by a smaller office for each service would strike the best balance between diversification and avoidance of redundancy.
Part of the argument against rapid acquisition is that those requesting new capabilities forget that resources are finite and single-use capabilities are less economical. To mitigate this tendency, the forces requesting must be given clearer guidance on when rapid acquisition requests are appropriate and how to articulate their requirements. An expansion of opportunities for rapid acquisition should be balanced with an effort to improve the judgment of those who will request rapid acquisition authority.
It is a very human thing to avoid unpleasant possibilities, but the Pentagon must be prepared to be surprised in some future conflict, just as it has before. At the same time, it must continue investing in basic capabilities for the long term. This requires the Pentagon to reform its procurement processes by supplementing its ability to make long-term investments with the ability to rapidly respond to unexpected needs. This rapid response capability has already been exercised in Iraq and Afghanistan. As Secretary of Defense Ash Carter pointed out, that experience should be institutionalized. Additionally, rapid acquisition may even serve as a way by which commercial innovations can be leveraged by the military by lowering the regulatory barriers to entry and lessening the consequences of failure. By institutionalizing rapid acquisition practices, the Pentagon can achieve a better balance in its investment priorities and mitigate the uncertainty and complexity of its strategic environment.
Jonathan P. Wong is a doctoral candidate at the Pardee RAND Graduate School and an assistant policy analyst at the nonprofit, nonpartisan RAND Corporation.
Image: DoD photo by Master Sgt. Ken Hammond, U.S. Air Force