Campaign Promises

Cabinet/Departments -> Defense -> Acquisition Reform

Acquisition ReformGrade
The Promise: "Require the Pentagon to develop a strategy for figuring out when contracting makes sense and when it doesn't, rather than continually handing off governmental jobs to well-connected companies."
When/Where: Obama Campaign Document "A 21st Century Military for America" dated 11/26/07.
Status:Obama signed an executive order on 03/04/09, calling for an examination of federal contracts.

The Government Accountability Office (GAO) issued its report #11-192 in 01/11 entitled "Further Action Needed to Better Implement Requirements for Conducting Inventory of Service Contract Activities."

The above GAO report indicated that as of FY2009, the Pentagon, its agencies and military departments employed 766.6K full time contractor employees at an estimated cost of $140.4B, an amount that went up to an estimated $200B in FY2010.

On 11/22/11, the Pentagon issued its plan for near- and long-term documenting of the number of full-time contractor employees it and its agencies and military departments employ as mandated by the Department of Defense and Full Year Continuing Appropriations Act of 2011 (Public Law 112-10).

As of end-CY2016, more than 26% or 268K of the 1.014M personnel working in the Pentagon's back-office bureaucracy (i.e. acquisition, supply & logistics, property management, human resources, etc.) were contractor personnel.

This promise was for the Pentagon to develop a "strategy." That was done.

This promise was fulfilled.
The Promise: "Each major defense program will be reevaluated in light of current needs, gaps in the field, and likely future threat scenarios in the post 9/11 world"
When/Where: Obama Campaign Document "A 21st Century Military for America" dated 11/26/07.
Status:With the key word being "reevaluated", OMB document "Terminations, Reductions, and Savings" released 05/06/09 supported promise fulfillment.

But these efforts did not address the over-arching intent of this promise. The Quadrennial Defense Review (QDR) was mandated by Congress to look forward 20 years in the areas of threat assessment, military strategy, force structure, and long-term defense budget plans.

The first QDR presented by the Obama Administration to Congress on 02/01/10 along with the President's FY2011 budget proposal failed to meet many of the statutory requirements (i.e. did not address risks associated with current funding and capability shortfalls) and failed to provide a 20-year roadmap.

Four years later, faced with the realities of sequestration, the 2014 QDR reported that the Department of Defense had "capped and cancelled billions of dollars in programs that were inefficient and under-performing. As a result of a 2011 Secretary of Defense-led efficiency review, the Department realized five-year savings of $150 billion. In 2012, the Department identified another $60 billion in planned reductions over five years, with an additional $35 billion in 2013."

The promised reevaluation resulted in cancellation of the F-35 Joint Strike Fighter alternative F-136 engine programs as well as the F-22 Raptor Program after the 187th unit was delivered in 05/12. These are two significant examples.

This promise was fulfilled.
The Promise: "Establish transparency standards for military contractors...create the reporting requirements, accounting, and accountability needed for good governance and actual money savings with contracting."
When/Where: Obama Campaign Document "A 21st Century Military for America" dated 11/26/07.
Status:Legislation entitled "Transparency and Accountability in Military and Security Contracting Act of 2007" was introduced by then-Senator Barack Obama on 02/16/07. This initiative got nowhere. Since then, the "Weapon Systems Acquisition Reform Act of 2009" was signed into law by President Obama on 05/22/09. This act reformed the way DoD contracts for and purchases major weapon systems to mitigate waste and cost overruns in defense contracts, but fell short of establishing transparency standards for military contractors.

On 05/13/10, the Civilian Agency Acquisition and the Defense Acquisition Regulations (DAR) Councils tasked the Defense Department, the General Services Administration (GSA) and NASA to assist in determining how best to amend the Federal Acquisition Regulation (FAR) to enable the posting of federal contract actions "...without compromising contractors' proprietary and confidential commercial or financial information."

This transparency effort was designed to promote efficiency in government contracting through an open acquisition process and improve federal spending accountability consistent with the Administration's memorandum entitled "Transparency and Open Government..." dated 01/29/09.

The proposed amendment to the Federal Acquisition Regulation (FAR) resulting from the above effort was withdrawn on 02/10/11 because the DoD, GSA and NASA concluded that existing acquisition systems provided sufficiently transparent information, available to the public on contracting entity web sites, pertaining to contract solicitations/actions, terms and conditions, etc. Sensitive information is also potentially available to the public through applications under the Freedom of Information Act (FOIA).

On 04/07/10, the Defense Department issued its "Open Government Plan." This plan, updated on 08/31/12 as "DoD Open Government Plan Version 2.1," announced the creation of a new "Defense Collaborative Service" to replace the "Defense Connect Online" program. A long term goal of this service is "to have all Departmental collaboration tools, capabilities and activities evolve to be based on common published enterprise standards; interoperable across the variety of internet protocol based communication environments."

Further, former Defense Secretary Gates issued stringent acquisition reform objectives in 09/14/10 by announcing 20 changes in defense purchasing procedures. Among these changes, the Defense Department aims to provide preferential treatment to contractors with good cost-control records and requires more competitive bidding for service contracts.

Another positive step toward promise fulfillment was the 04/22/11 memo issued by the Under Secretary of Defense (Acquisition, Technology and Logistics) that implements "Will-Cost and Should Cost" management designed to drive productivity improvements into acquisition programs during contract negotiations and throughout program execution and sustainment. Savings are to be identified through any of three methods: bottoms-up estimates, identification of cost reductions from "will-cost" estimates, and use of competitive contracting and contract negotiations to identify "should-cost" savings. The first "should-cost" progress report from five each Air Force, Army and Navy program offices were provided to the Pentagon by 11/01/11.

Progress has also been made in the contractor cost control area such as the publication of Defense Federal Acquisition Regulations Supplement (DFARS) Notice 20111220 on 12/20/11 that updates guidelines for monitoring "the policies, procedures, and practices used by contractors to control direct and indirect costs related to Government business."

All of the above, coupled with improved adherence to Earned Value Management (EVM) principles are indicators that significant promise fulfillment progress is being made toward realizing savings through the defense contracting process.

However, since exact transparency standards have not yet been published, we consider that tangible progress has been made toward promise fulfillment.
The Promise: "...will...Enact a program of market incentives and sanctions for Pentagon reward companies that perform well and come in under budget, while punishing firms that fail to perform as originally hired."
When/Where: Obama Campaign Document "A 21st Century Military for America" dated 11/26/07.
Status:The Weapon Systems Acquisition Reform Act of 2009 (Public Law 111-23) was signed by President Obama on 05/22/09. This bill did not specifically address incentives for or sanctions against defense contractors.

The Commission on Wartime Contracting estimated in 09/11 that over $60B in government contract spending was wasted or lost since CY2002 in Afghanistan and Iraq, approximately 20% of the $206B of U.S. taxpayer money spent in those war efforts at that time. An additional 9% was lost due to fraud, according to the Commission.

On the reward side, the Pentagon's Principal Deputy Undersecretary for Acquisition, Technology and Logistics, Mr. Frank Kendall, introduced a new "Superior Supplier Incentive Program" on 07/18/11. Under this program, DoD contracting officers will be empowered to set contract terms that recognize businesses that demonstrate superior performance in delivering quality products and services to the warfighter. In addition, companies that demonstrate aggressive subcontract management, cost containment, and on-time delivery practices will be recognized. Recognition will be in the form of favorable progress payments, special award fee pools, and other advantages.

On 03/02/12, the DOD published DFAR Rule 2012-D017 "Debarment as Ground for Termination for Default" as one of the means to address the punishment of firms that fail to perform as originally contracted.

This promise was fulfilled.
The Promise: "...will...Restore the government's ability to manage contracts, by rebuilding our contract officer corps."
When/Where: Obama Campaign Document "A 21st Century Military for America" dated 11/26/07.
Status:Since CY2006, when the DoD "contract officer corps" had a total of 27,748 personnel, declines in manpower (to 26,838 in CY2007 and 25,680 in CY2008) exacerbated the DoD's ability to manage its balooning contracting requirements.

On 04/06/09, the Secretary of Defense announced plans to grow the entire acquisition workforce by 20,000 personnel by FY2015 -- 10,000 new federal employees and 10,000 contractor positions converted to federal positions. Of the 10,000 new federal positions, 5,600 were projected to be additions to the Defense Contracting career field.

As of 06/10, 3,400 new contracting officers had been hired and 1,400 contractor positions had been converted to federal positions. Together, this exceeded by 1,300 the FY2010 goal of 3,500 for new hires and conversions. Success of this program will be hindered as experienced contracting officer retirements will likely peak around CY2018. By then, in-coming contracting officer interns will not likely have gained the experience needed to make a meaningful dent in contracting workloads.

Nonetheless, there has been a steady increase in the number of contracting officers since the FY2007-FY2008 downward trend reflected above. In CY2009, the contracting segment of the Defense Acquisition Workforce consisted of 23,752 civilian and 3,903 military personnel for a total of 27,655 contracting personnel. In FY2010, the total was 29,792 and in FY2011 the number had risen to 30,327.

The DOD's contracting officer corps is on a restoration path as promised.
The Promise: "As part of it overall defense reforms, Obama administration will prioritize fixing the naval acquisitions system."
When/Where: Obama Campaign Document "A 21st Century Military for America" dated 11/26/07.
Status:Navy Secretary Ray Mabus outlined the Navy's acquisition reform approach on 05/05/10 at the Navy League's Sea-Air-Space symposium just outside of Washington, D.C. The five principles of the Navy's acquisition reform effort were (1) clearly identify requirements, (2) raise the bar on contract performance, (3) rebuild the acquisition workforce, (4) support the industrial base, and (5) make every single dollar count. He gave the examples of the P-8 Poseidon maritime patrol aircraft, the SSN-774 Virginia-class submarine, and the T-AKE-1 Lewis and Clark class dry cargo ships as programs that are meeting benchmarks such as getting increased benefits from learning curves and, with time, reducing unit costs. He vowed that he would not hesitate to cancel Navy programs that do not meet his baseline goals of 'on time and on budget'.

Secretary Mabus also stated that Navy acquisition professionals will be "going through every contract line by line to make sure the terms of those contracts make sense for what they are meant to do, and are fair to the contractor and the government." The U.S. Navy is implementing its plan to clean up its acquisiton processes in conjunction with the over-arching "Weapon Systems Acquisition Reform Act of 2009" that was signed into law by President Obama on 05/22/09.

To that end, the U.S. Navy published its "Acquisition and Capabilities Guidebook" (SECNAV M-5000.2) on 05/09/12 for operation of the Defense Acquisition System and the Joint Capabilities Integration and Development System.

This promise was fulfilled.