“BREAKING DEFENSE” By By John Ferrari
“The Goldwater-Nichols Act of 1986 , best known for reforming the combatant commands, also restructured defense acquisition. This created the system that we have today, breaking three things in the process.”
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“It’s often said that the definition of insanity is doing the same thing over and over again but expecting a different result. In this particular case, the Defense Innovation Board (DIB) has recently suggested that Congress should create a new undersecretary position: an Undersecretary of Defense for International Industrial Cooperation.
This new position would pull in elements dealing with international defense industrial cooperation from across the undersecretaries of research and engineering and acquisition and sustainment, in effect adding another office to a portfolio that was split only six years ago. Similarly, the recent announcement to create an office to integrate space acquisition is probably just another bureaucratic layer.
At some point, one would hope people would figure out that reorganizing the deck chairs on the Titanic does not prevent it from hitting the iceberg.
The typical Pentagon reaction to any problem is to create more Pentagon offices to exert more control, which is the opposite of how startups and small businesses operate. The reason small businesses and startups have difficulty penetrating defense procurement has nothing to do with their ability to navigate the physical confines of the Pentagon staff. It has everything to do with how DoD procures items.
Over the past forty-years, we’ve continued to have procurement failures ranging from the F-35 program, Navy shipbuilding, and the Army starting and stopping programs with nothing to show for them. And if that is not bad enough, recent wars in Ukraine and the Middle East have shown that our industrial base capacity cannot supply what’s required for an extended war, our war stocks are woefully inadequate, and we have lost our space superiority to firms like Starlink.
Given the scale and scope of these challenges, spending the next five years reshuffling the proverbial deck chairs at the Pentagon is more than likely to zap the institutional energy away from actually trying to fix the problem. So, what needs to be done?
Some might trace the failures of defense procurement back to the Goldwater-Nichols Act of 1986. This law, best known for reforming the combatant commands, also restructured defense acquisition. It did so by taking this function away from the uniformed military leadership, where it was mostly embedded within the service logistics organizations, and moving it under the control of the Secretary of Defense’s political leadership team. This created the system that we have today, breaking three things in the process.
First, it disconnected the requirements and acquisition processes. Both have grown apart over the past forty years and both sides now just blame each other for each and every failure. The distrust that exists on the requirement side has caused them to ask for the moon with each and every new program, while the acquisition side accepts the requirement and then fails to deliver.
The second and even more important disconnect is that it created a “principal-agent” problem. Under the old system, the political leadership was tasked with overseeing acquisitions within the military departments. Now, thanks to Goldwater-Nichols, the political leadership is tasked with executing the acquisition process as well. It’s impossible to both oversee and execute a program, meaning there’s effectively zero oversight other than the perennial GAO reports documenting failure after failure. This lack of oversight has meant that Congress has become the oversight agency, using its limited bandwidth to demand ever more detailed reports and instituting many more controls.
Third, Goldwater-Nichols and subsequent decisions emphasized joint programs. This led to a lack of competition within the services, in effect forcing the Pentagon to contract-to-monopoly, while at the same time believing that efficiency could lead to effectiveness. Prior to the reforms of 1986, the process of creative destruction was alive and well in the Pentagon as the services competed with each other to procure weapons (think the Army’s “big five”), leading to smaller winner-take-all programs and greater innovation.
Rather than just creating two new Pentagon offices that in the end will do what all other Pentagon offices do (stifle innovation and hold meetings) let’s do something different. There are three, admittedly difficult and far-reaching changes, that need to happen.
First, the acquisition organizations should be returned back to the uniformed military leadership. The political leadership should then be empowered and required to provide meaningful oversight and accountability. The Navy has no problem relieving commanders who ground their ships, but somehow there’s no accountability when a program runs aground.
Second, the PPBE Commission’s budget reform recommendations should be implemented. Congress has used the budget as a cudgel to enforce oversight of acquisition programs and all this has done is make the process worse.
Third, prohibit joint programs. The Joint Strike Fighter is a disaster and has destroyed our fighter industrial base. Instead of joint programs, the services should develop their own systems, ensuring they meet interoperability and logistical standards. Smaller and more frequent procurements will better enable small businesses and startups to compete.
None of this will be easy. After 40 years, the owners of the current system have built very large moats to protect their authorities and resources. Given that, it is highly unlikely that the Pentagon’s political leadership will recommend to Congress that it should devolve its own authority. It will instead probably require Congress to move this forward. Prospects for that are slim, however, as Congress usually acts only after we have a national disaster.
Let’s hope it doesn’t take losing a war to China before we decide to do something different.”
Retired US Army Maj. Gen. John G. Ferrari is a senior nonresident fellow at AEI. Ferrari previously served as a director of program analysis and evaluation for the service
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