Acquisition Talk

In this episode of Programmed to Fail, we explore how accounting costs do not reveal the value being generated in the production process and cannot be used, on their own, as a guide for specific choices. Cost is not an objective reality, particularly to those who know the vagaries of cost accounting. Instead, our view of cost depends on subjective use value and is related to the term opportunity cost, or the next-best choice foregone. This chapter reveals that for defense acquisition to truly understand weapons value and leverage the power of commercial markets, it needs to shift away from its obsession with financial metrics. This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

In this episode of Programmed to Fail, we discuss the integral role of rivalrous competition in the discovery of knowledge and the growth of technology. It finds that policy maker's dreams about single best plans and pre-coordinating service behavior to avoid duplication, competition, and overlap is a false economy, one that stamps out the true creative potential of the American people and harms national security. Competition not only regulates incentives by prospect of punishment and reward. Just as importantly, the competitive process solves critical problems of knowledge. In fact, competition is most important under the presence of uncertainty. Planners cannot know what is optimal outside the process in which alternative courses of action are developed, brought into competition, and evaluated. Friedrich Hayek described how “In sporting events, examinations, the awarding of government contracts, or the bestowal of prizes for poems, not to mention science, it would be patently absurd to sponsor a contest if we knew in advance who the winner would be.” The information on which sports team performs better, or which project plan provides the most value, is only discovered in the process of competition. Otherwise, the rivalry is wasteful if one could reliably pre-determine the winner. Dynamic competition results in the emergence of complex patterns of economic behavior, and consequently, technological growth. It is very different from the type of competition taught in economic textbooks or practiced in defense management. In economics, we are told about “perfect” competition, a concept which relies on bizarre assumptions of complete information and product homogeneity. In defense, we are told that contracts are awarded “competitively,” even when solutions are pre-specified and the contractors who buy-in get bailed-out. While officials in the Department of Defense have often talked about the benefits of competition, the policies they’ve pursued continually run counter to the one real condition necessary for competitive forces to occur: free entry. Contrary to traditional wisdom, the history of defense acquisition has shown that the advertisement and open bid process does not provide assurance of free entry. When government is the only buyer, free entry requires an organization designed for pluralism. This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

In this episode, we take a look at the history of the the defense innovation process and compare it to processes in Western Europe and the Soviet Union. It also discusses the origins of the 5000-series regulations for acquisition and the stage-gate theory of development. It includes a case study on the Lightweight Fighter program which provided DoD the F-16 and F-18 fighter aircraft, and traces how their success was an unlikely outcome that required the dogged intervention of John Boyd and the fighter mafia, demonstrating how difficult non-consensual innovation can be in the Department of Defense. This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at AcquisitionTalk.com

In this episode, we explore how the Department of Defense radically broke from liberal traditions and American values by installing a Soviet-style process called the Planning, Programming, Budgeting System, or PPBS. It is not a coincidence that progress in military technologies dramatically slowed down over the course of the 1960s and 1970s. This is a direct implication of the PPBS which took decisions out of the hands of people closest to the work and rose the status of unaccountable bureaucrats aligned with comptrollers, accountants, economists, and analysis. There has been a growing recognition of the need to reform the industrial age PPBE process so that the United States can outpace peer-competitors like China and Russia in military technology. Senator Jack Reed said of PPBE, “It is likely too slow and cumbersome to meet many of DoD’s requirements to adopt new technologies in a rapid, agile manner.” Representative Adam Smith said, “We’ve got to give the Pentagon greater flexibility in terms of moving money around so that they’re not locked into a two-year or five-year cycle.” Former Representative Mac Thornberry wrote how “Today’s rapid innovation and technological change renders our industrial age approach to funding obsolete” The fiscal year 2022 national defense authorization act created a congressional commission to investigate reform of the PPB system. The commission has a hefty duty for it is the first major review of the resourcing system since the Jackson Committee hearings of the late 1960s. They are tasked with analyzing the extensive timelines, new and agile budgeting methods, how other agencies and countries resource programs, and make recommendations. This episode of Programmed to Fail provides an important economic backdrop to the adoption of the Planning, Programming, Budgeting System, a system that continues to dominate how money flows and weapons are resourced today, and why it must be reformed. This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at AcquisitionTalk.com

Welcome to a special series on the acquisition talk podcast that gives you an audiobook tour of my research project titled, Programmed to Fail: The Rise of Central Planning in Defense Acquisition 1945 to 1975. I’m Eric Lofgren of the Baroni Center for Government Contracting at George Mason University. You can find this book for free and over 1,300 blog posts on my website, AcquisitionTalk.com. In this episode, we take a look at the history of the unification of the armed forces under a single Department of Defense. Even today, we hear calls for the elimination of duplication, competition, and overlap between the military services. Proponents believe that military affairs can be brought into a state of perfection. But could you imagine if the government decided that only IBM could build computers, only Ford could build cars, and only AT&T could provide telecommunications? It’s pretty clear that innovation would have been stopped in its tracks. The following provides an overview of two chapters: first, how calls for centralization resulted in unification of the armed forces, and second, the seeds of program budgeting which was intended to be the administrative tool of centralized decision makers. This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at AcquisitionTalk.com

Welcome to a special series on the acquisition talk podcast that gives you an audiobook tour of my research project titled, Programmed to Fail: The Rise of Central Planning in Defense Acquisition 1945 to 1975. I’m Eric Lofgren of the Baroni Center for Government Contracting at George Mason University. You can find this book for free and over 1,300 blog posts on my website, https://AcquisitionTalk.com. This series traces the rise of the modern system for acquiring weapons between 1945 and 1975. It documents how pluralistic methods of market-like competition were replaced by industrial era concepts of top-down control. Technology developments became treated like reproducible goods moving down an assembly line. More decisions were consumed by an overly centralized bureaucracy obsessed with perfection on paper rather than experimentation and rapid scaling of what works. This series argues that failure is built into modern defense acquisition. Attempts to detail financial plans by program output has corrupted the decision-making process. Hundreds of requirements are levied from all corners of the bureaucracy. Dozens of approvals are required to authorize funds. Years pass before the program can proceed, and once it does, plans become locked-in for five, ten, or twenty years into the future. The programming aspect of the budget is the ultimate source of rigidity in acquisition. Hence, the series title Programmed to Fail. This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

Eric Lofgren and Matt MacGregor chat about the week's newsworthy headlines the world of military acquisition. This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

At the 2022 GMU-DAU annual conference, the Undersecretary of Defense for Research and Engineering (USD R&E) Heidi Shyu joined us to discuss her priorities, approaches, and challenges. The audio has been republished on the Acquisition Talk podcast for your listening convenience. GMU senior fellow Shay Assad was the special interviewer, the former Director of Defense Procurement and Acquisition Policy. 0:50 - Remembering Ash Carter 3:45 - Making an impact in national security 4:30 - Integrating wargaming and physics simulation 6:10 - Rapid Defense Experimentation Reserve (RDER) 10:45 - Defining tech transition 15:30 - Creating a SAP umbrella with allies/partners 20:10 - USD R&E collaboration with A&S 23:50 - Budgeting challenges, hurry up and wait 28:30 - Digital engineering for all new ACAT Is 32:20 - Venture capital and the APFIT program 36:20 - R&E's impact on the JROC (requirements) 41:30 - Industry dialogues, 14 priority areas 46:30 - Workforce and Smart Scholar program 49:20 - Impact of continuing resolutions This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

On Monday, December 12, the Baroni Center for Government Contracting held a webinar to discuss a recent report on how funding flexibility can help bridge the valley of death in defense acquisition. The discussion was republished to the Acquisition Talk podcast for your listening convenience. I was pleased to have insights from three leaders in this space: - James Ruocco, Director of Air Platforms and Weapons, in the Office of the Assistant Secretary of Defense for Acquisition; - Katie Wheelbarger, Vice President of Global Program Support at Lockheed Martin; and - Elaine McCusker, Senior Fellow at the American Enterprise Institute and former Acting Undersecretary of Defense (Comptroller). Tons of great audience questions throughout. The discussion ranged across some key topics including: - How the Department of Defense (DoD) is managing integrated acquisition portfolios to help drive decision making and close capability gaps - Efforts by DoD to close gaps in joint all-domain command and control and quickly target specific instances of interoperability or kill chains such as connecting an F-35 sensor with a HIMARS firing solution - Ideas to create flexible tech insertion lines, mitigate inefficiencies resulting from continuing resolutions, and increase transparency and trust between DoD and Congress This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

I was pleased to have Colin Carroll join me on the Acquisition Talk podcast to discuss the acquisition of machine learning in the Department of Defense. He is the Director of Government Relations at Applied Intuition, a company that enables autonomous vehicles through simulation development and validation. Before that, Colin had a number of positions including Chief Operating Officer at the JAIC, mission Integration Lead for Project Maven, and 10 years of active service in the Marine Corps. 2:30 -Project Maven started with Bob Work and 10 slides 6:30 - Everyone in the Pentagon's in the fight 10:30 - There's not yet an urgency like in 2009 with MRAP 12:30 - How JAIC operations differed from Project Maven 15:00 - DoD autonomy programs often have zero data 17:00 - How to structure AI/ML programs in DoD 19:00 - The Joint Common Foundations is no more 24:40 - Most DoD's data is owned by industry 27:00 - DoD is buying brittle AI/ML models 29:00 - Competing with GOTS software 31:00 - Separating HW acquisition from SW 37:00 - DoD's $2B AI/ML spending estimate likely high 42:00 - We don't win by reforming SBIR 59:20 - The buzzword of JADC2 1:05:16 - The idea behind Title 10 failed 1:09:50 - Force Design 2030 and the future fight 1:20:10 - How to build a defense team at a tech company This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

Ellen Lord and Michael Brown joined me at the 2022 Conference hosted by George Mason University and Defense Acquisition University to discuss PPBE Reform. Ellen Lord is Vice Chair of the Commission on PPBE Reform and former USD A&S, while Mike Brown is a Partner at Shield Capital and Visiting Scholar at the Hoover Institute, just recently finishing up as Director of the Defense Innovation Unit.

The Undersecretary for Acquisition & Sustainment (USD A&S) Bill LaPlante joined us at the 2022 Conference hosted by George Mason University and Defense Acquisition University. He was on fire and dropped a ton of amazing insights, so I had to republish the audio to the podcast. I'll link to the video when it's up, but you'll get to listen to it here first. Bill LaPlante touches a number of important areas. The outline of the discussion is below. 2:30 - Production really matters 3:30 - Minimum sustaining rate 4:50 - HIMARS produced in a converted diaper factory 5:50 - In the past, DoD stopped production on HIMARS, Mark 48 torpedo, and Tomahawk 6:45 - In 70 years of demos, DoD has not gotten hypersonics into production 7:50 - DoD was bad at prototyping until MTAs and OTAs 8:30 - Don't tell me it's got AI and quantum, don't drop DevSecOps -- production at scale 9:20 - If something blew up in INDOPACOM next week, what does DoD have in quantity? 10:30 - Null Program found it takes 4 years for DoD to produce nothing 11:15 - Tech bros aren't helping much in Ukraine 12:45 - RFPs, source selections, money -- that's what matters 14:30 - FFRDCs get paid to write a paper that finds when quantity goes down, price goes up (duh!) 15:00 - Predicts that Congress will put billions into production lines 15:30 - M777, HIMARS, Stinger all have obsolescence issues 17:30 - National Armaments Directors from 45 partner countries meet to coordinate 18:30 - Industry won't invest without demand signal because DoD left them "holding the bag" in the past 18:45 - Supply chain issues in microelectronics, solid rocket motors, actuators, rare earth magnets 19:15 - Allies must not only be interoperable, but interchangeable 20:00 - Industry must be forced into interchangeability, like MOSA, because it lowers barriers to entry 20:30 - Take advantage of allied non-recurring development, like on E-7 Wedgetail 21:30 - US weapon production lines opening in Japan and Australia is a key deterrent 22:45 - Outsourcing production was a bad idea, dev & prod must be co-located 23:45 - Japan strategically kept rare earth processing capacity 26:00 - In JADC2, latency matters, link budgets matter 27:40 - Services working together very well on JADC2 28:30 - JTRS architecture was flawed from first principles, no one caught it 29:00 - Service oriented architecture was wrong for things like GPS OCX 32:30 - $50B spent on MTA, $2B for SWP (and another $8B in POM) 33:15 - MTA, SWP, BA 8 are small slivers compared to traditional acquisition 34:15 - Cycle time from Milestone B to C has not increased since 1960s, still 5-7 years 35:40 - Definition of success: production, relevant in high-end fight, and DOTMLPF 36:15 - Derek Tournear and SDA on path to do something remarkable 36:45 - Conventional Prompt Strike MTA may be first hypersonic in production next year 37:00 - Not many MTA successes in production yet 37:30 - OTAs not good for large weapon systems where DoD needs data rights 40:30 - Requirements, PPBE, and acquisition report up different chains, not synced 40:00 - How Air Force RCO decisions are made at the top, quickly 41:30 - RCO model doesn't scale to entire DoD, senior lead attention limited 42:20 - PEOs must be able to trade requirements and money in year of execution 42:30 - Cool if PPBE commission could make PPBE agile 44:15 - Appropriators won't want to give DoD flexibility 44:30 - Without PPBE reform, DoD is doing a "Poor Man's" version of portfolio management 46:25 - Remembering the late Ash Carter 47:00 - Acquisition community was not at war until 2009 47:30 - Creation of the Senior Integration Group (SIG) 51:30 - Bipartisan support for national security 52:40 - DoD response to inflation 53:00 - Believes suppliers are hurt by inflation, but no data yet 55:30 - Expects CPIF contracts will slip due to inflation 57:30 - Competition changes behavior, no question 57:50 - Little difference between classified info on Ukraine and public news 58:40 - Acquisition is fun