assessment and evaluation of the difference between the cost that american taxpayers pay for goods and services and the quality of what we receive and this is the section of our work that is focusing on a individuals in charge of procurement the number of people and the quality of the skill sets of people they need to get that job done in an effective way from the very outset we are extremely appreciative of the men and women who are working for the department of defense in the area of procurement we think that they are dedicated public servants who have been given a massive job to do in many cases overwhelmed by the scope of that job and i just want to make it very clear from the outset that i am in no way critical of the level of preparation certain level of commitment and the level of performance of the men and women working in that area we thank them and commend them for their work if anything numbers are compelling from two thousand and one to two thousand and eight the department of defense purchases of goods and services more than double now is about three hundred eighty eight billion dollars a year the number of employee somewhere between one hundred twenty six thousand and one hundred twenty nine thousand government personnel significant increase over that period of time outsourcing some of this work in contracting with outside individuals to help the department of defense manage the procurement process it's interesting that i think that there are no hard and fast accurate data on employees government to what extent should this work be done by people who are employed by independent contractors who are employed by the federal government by what criteria should we make those i think it's self evident that there are some functions that are so highly specialized that they lend themselves to contracting out there are others that are not so highly specialized and probably that they should be performed by federal employees legislators are line drawers we do our job well we draw the line in the right place we don't do our job well we draw the line in the wrong place this is an area where a line very much does need to be drawn so this morning that we have three very distinguished efforts to create those skill sets our personnel and our contractors and then finally the right balance between federal employees and contractors in achieving the optimal level of contract review  fix it while congress has taken recent actions to help restore the acquisition workforce there's much more to be done that's why we're here today for example it's not enough to simply grow the force what specific skills they need  results as well requirements and budget personnel currently are part of the acquisition workforce which is one of the findings from the two thousand defense acquisition before which given the critical role they play how do all of these communities working to work together look back thank you very much without objection the opening statement any member of the panel will be included in the record i'm going to proceed by introducing the three witnesses reading a brief biography i think you're all veterans of this process on the hill and would remind you the way that we work is without objection your written statements are a part of the record of the hearing we ask you to synopsize your written statements and about a five minute oral summary and then we're going to go to april third two thousand and six as director he is responsible for all acquisition and procurement policy matters in the department of defense he serves as the principal advisor to the undersecretary defense for acquisition technology and  stics and the defense acquisition board on acquisition and procurement strategies for all major weapon systems programs major automated information systems programs and services acquisitions before assuming this thousand and four he graduated with distinction from the us naval academy in one thousand nine hundred seventy two tours of duty aboard u s navy destroyers and one recognition as the outstanding junior officer in the naval district he then served as a naval procurement officer at the naval sea systems command he's received numerous federal service awards including the secretary of defense medal for exceptional civilian service sector defense medals for staff for plans and programs headquarters u s air force here in washington he was responsible for planning programming and manpower activities within the corporate air force and for integrating the air force's future plans and requirements to support national security objectives and military strategy previous positions included vice commander air force materiel command at the right patterson air force base in ohio and deputy director of the defense logistics agency in arlington general farrel is a graduate of the air force academy with a b s in engineering an m b a from auburn university is other education the national war college in the harvard program for executives in national budget professor scooter received his bachelor's degree from rice university his j d from the college of william and mary is master of laws with highest honors from the george washington university and he is of the national contract management association a member of the board of advisors a certified professional contracts manager and serves on the board of directors of the roundtable we really appreciate the time of each of the three of you this morning your statements are excellent they've been entered into the record and we begin mr assad with your oral testimony thank you mr chairman good morning chairman andrews and members of the panel thank you for the opportunity to participate in today's discussion on the acquisition workforce major element of d o d s acquisition reform act as is revitalizing the defense acquisition workforce on april sixth the secretary of defense announced his intention to significantly improve the capability and the capacity of the defense acquisition workforce by increasing its size by approximately twenty thousand as part of this initiative the department plans to in approximately ten thousand contractor support personnel positions and ensure that critically critical and inherently governmental functions operate by government employees i'd like to address a few areas of particular interest to the committee the first is the hiring process planned increases to the second will be planned increases to acquisition functions other than contracting program management tenure and the defense contracting and procurement acquisition competency initiative first of all hiring process hiring authorities and resources and processes are improving but there is a lot of work to be done hiring hiring is a difficult and oftentimes very slow process in the department of defense that needs improvement our objective is to hire the best qualified personnel upholding and supporting the merit principals and meeting government wide statutory and policy objectives we believe the competitive process helps ensure we are considering the best qualified to support the acquisition mission the second is increases in acquisition functions other than contracting with regard to the logistics professional workforce we've grown from approximately eleven thousand in two thousand and one to around fourteen thousand today some of that growth was simply re categorizing logistics professionals into their proper categories of acquisition management initial planning indicate that we're going to grow that workforce another seven thousand nine hundred over the next five years and in addition you expressed a concern regarding logistics management certification i dat indicates that seventy percent of the fourteen thousand acquisition logistics professionals are accredited and forty five percent meet or exceed their positions certification requirements recent testimony from each of the senior service acquisition leaders cited building a strong engineering capability as a high priority we're forecasting that systems engineering career field will grow by about twenty eight hundred employees through two thousand and fifteen this will be no small feat the requirement for which is for systems engineering professionals throughout the country is an extremely demanding field and this will be a challenge for us with regard to program management tenure the department views tenure as a key element of program stability and how our latest availability survey data indicates the average tenure program managers across the department is about twenty four months an expected tenure of twenty forty two months we're going to continue to monitor tenure as well as take actions to ensure that our program managers are in fact in place for the full forty two month tours with regard to competency an area that is particular interest to me is a defense acquisition competency initiative by october two thousand and ten the department will have updated competency models concluded all assessments and taken action to ensure we are addressing major competency gaps across the hundred twenty five thousand or so members of the defense acquisition workforce i look forward to working with the panel and keeping your prized of our progress with regard to the secretar acquisition workforce growth initiative and it's a pleasure to be here today to participate in this discussion thank you very much mr assad general feral you recognize morning mr chairman thank you very much is known to be here my statement is submitted i'll make a few points and respond to your questions first of all work for shaping we see that an industry is a subset of the health of the defense industrial base or a lot of other elements to that and among them are going to say sion manufacturing capital investment process and competition so this is one element of a much larger problem we know that is concerned as well as we just heard with the program to convert twenty thousand positions ten thousand positions from industry  hire another ten thousand to do forty one hundred twenty two and that's going to be a steep hill to climb it will take us back to one thousand nine hundred forty seven thousand that's probably not a bad number but it's a complex task it's not just in sourcing because the real questions are what are the skills you need where the holes where are the skills where you go to get the skills what's the priority for getting that and as mr assad has just said systems engineering is probably one of the number one skills we need bring in program management contract cost estimate with the objective of making a good buyer and right now there's some question is whether or not in all cases deity's able to do that but it's a deliberate process  sometimes you just have to step back and say where do you go and buy experienced people to bring into this you just can't buy people you have to grow up so it's going to be a deliberate process the current workforce is in some crisis with the overruns that you've just talked about cost and schedule but the biggest problem we think is the fifty percent retirement the next five years with a fifty percent retirement you put that up against the fact that we don't have enough science technology engineering and math skills in the industry today in our schools aren't producing enough we think the future doesn't look good because of those two things but we think you need to carefully consider the criteria of goodness that is how  recruit train and retain these people and we think you can do a little bit better and hiring people maybe if you do some direct hiring some authority for direct hiring and revisit veteran preferences especially those veterans with engineering skills you need to take a look at pay performance career progression and promotion and make sure that you pay and promote people based upon their contribution to the outcome not time and service and then there's the issue of to  detail on the battlefield details a good measure of efficiency but it's not a good measure of efficiency when you're hiring a professional so if we can have a million people back here in d c and we can send one soldier one airman to the battlefield to do the job that's good so we shouldn't be concerned about the number of people we're bringing in we need to bring in enough people to do the job right now mr assad's gotten him and tori on going we haven't seen those numbers yet in st we're very interested to see him but we think we ought to insist a quality proud as an outcome of that is one of the thing we need to do and that's to look at inherently governmental definition oh and b has been mandated by the president come out by thirty september right now we think the way inherently governmental definition is applied is dysfunctional we need to tighten it up so what do we need to do government and a straight need to bring pursue this as a partnership and work together because it's not just a government problem it's also a problem in industry because if the government solving its problems creates a problem in industry and then we don't move forward so we need a balanced solution a collaborative solution recognizing that both sides have needs thank you s general thank you for your testimony professor welcome chairman andrews ranking member conaway members of the panel i really appreciate the opportunity to discuss the d o d acquisition workforce issue it seems to me that the empirical case demonstrating that  significant congressional assistance as representative conaway pointed out has started the acquisition workforce now for two decades that case seems to be compelling at the micro level what's much more difficult is figuring out how many people in which specific skill sets must be hired i can continue to study those things over time and those need will continue to change but for now i have a rather simple conclusion and that is d o d should endeavor to go out and attempt to hire train and deploy every qualified professional available in the marketplace and simultaneously they should engage in an aggressive large scale professional development program to prepare talented young people to become the government future business managers now more specifically with all due respect  mr assad who i think is doing as good a job as he can and situation d o d s articulated plan which will restore the acquisition workforce to nine hundred ninety eight levels by two thousand and fifteen is not only too slow but it aspires to far too little among other things the nine hundred ninety eight benchmark ignores that the lion's share of the one nine hundred ninety s congressionally mandated reductions in the acquisition workforce were before nine hundred ninety eight second as you pointed out chairman and we've seen explosive growth in both german spending in this decade you pointed out the dollars increase by two hundred percent but we're talking about growth at five times the rate of inflation with an already diminished workforce we've seen dramatic changes in how  what the government buys the older members of the workforce were brought into higher goods with fixed price contracts today we're buying services we're flexible vehicles and services require completely different modes of oversight we've talked about the looming retirement crisis and no matter how much we're taught how much hiring we do in the next few years it won't be enough to keep up with that moreover this isn't just a d o d problem it's a government wide problem and d o d s efforts will be hampered because a civilian agencies will continue to covet and hire away many talented people from d o d just as the private sector does so lots and lots of hiring needs to be done at a more macro level what's frustrating is the d o d and to some extent the government as a whole has steadfastly rejected the fundamental refrain that an ounce of prevention is worth a pound of cure there always seems to be money and resources available for oversight and punishing bad actors there never seems to be enough money available to get the people who will do the planning and get us good contracts in advance so we can avoid some of these problems i think from a leadership standpoint i think that for too long d o d has delegated these acquisition workforce issues to the defense acquisition universe which is proven slow risk averse and insufficiently potent to alter the behavior we've also far too often seen negative signals from the white house rather than supporting the acquisition workforce with mere rhetoric they continued to distract them with for example new policies on social all social policies and protect women and a not very good focus on receiving value for money the other thing is i think we simply have to make the profession more attractive we have to tone down the anti contractor rhetoric and we also need to make clear to the public how important these contractors are for literally everything the defense department does both in terms of goods and in services i think that the civil service in the m based recruitment process remains too cumbersome and it's impenetrable in the private sector at the entry level on the colleges on the college campuses and in the business schools students have no idea what excellent opportunities there are to service the government business managers and we need to change that i agree with general farrell that what we really need to do is aggressively start growing talent for the long term i think to be more aggressive despite its limited size the veterans administration acquisition academy is a wonderful model for a hands on holistic results oriented program but i think what we need to be thinking about is something maybe bringing together some aspects of co op programs are o t c scholarship  military funded legal and medical training but see if we can go out and get young people give them to wish and benefits rotational assignments and promotion opportunities like those of the presidential management fellows program now finally you asked me to comment on the proliferation of private sector support and the performance of acquisition functions for the short term particularly given the five year horizon that we've talked about for rebuilding the acquisition workforce the government has no choice but to continue to rely heavily on the private sector for acquisition function on this i find d o d s insourcing plants ill conceived overly optimistic and not calculated to address the ultimate need but the government faces a choice they can either rely on the private sector for acquisition support or the very good work at the oversight committee did on this issue in a hearing in april which kind of pave the way for us i want to let the record reflect we appreciate their efforts how many contract private wanted to buy a very elaborate piece of software that would integrate around the world and you had to determine whether to in source or outsource the contract oversight how would you derive that decision from contracting oversight fundamentally is done by government employees and so the marine corps systems command would be responsible for buying that particular piece of equipment the issue that we have associated with contract oversight so that sort of presumes that the people you have would have the skill set to oversee such a contract you have enough of them you just keep it in house isn't there also a qualitative assessment of whether the  employees have the skill set to do the oversight absolutely and i think that we have done within the department frankly some of the most sophisticated and in depth competency modeling that's been done in this industry with regard to acquisition and contracting professionals will have all of our acquisition professionals through their competency modeling by the end of two thousand and ten actually running the contracting shops throughout the country they went through the competency modeling themselves and then we sat for three days and determined the standards myself included as to  training and educating people who do procurement i think there's a number of different models but i think that the main thing that we see differently is the basic what i would call cradle to grave professional development approach for example if we were to merely distinguish between the way that the defense department grow and grows in office or from the way that they deal with procurement professionals in the civilian side i think we see a rather dramatic difference we look for a high standard recruiting not they don't make necessarily what their peers make on the outside senior positions but i think in the intermediate ranks in the junior ranks we're very competitive and frankly  just good compensation but incentives make the private sector dramatically more and this is becoming a more and more critical area or oversight is it systems engineering was probably a fairly exotic field twenty years ago it's absolutely essential today if i'm reading this correctly standard for the exam is the minimum level of qualifications that you need to get into it and every ten fifteen years they go through that assessment of what should that group know in order to get over that bar  you have an inventory of what you ought to have versus what that team is m p s we know right now where we're pretty much through the contracting group which is one of the largest systems engineering they'll be the next on and that enables us to understand what are the gaps and we understand very well we know exactly what kinds of skills we're very much in short supply of for example pricing we know that that's an issue within the department  we just put out a call for three hundred positions that we're going to hire a pricing and we just closed that that request for hire and we have five thousand applications for those three hundred jobs  is really at the forefront in terms of utilizing that particular process and they've brought i think we've brought about four five hundred people on board this year using expedited hiring authorities and we've only had thirteen suggesting is that we were able to respond to people who were looking for jobs and in sufficient enough time that they accepted the positions inside yeah we want to come to work for the government we only have thirteen folks who  e thank you the chair recognizes mr cooper thank you mr chairman professor skinner could you describe to us and more detail some of the inadequacies of the defense acquisition university and why they  don't measure up to the b a acquisition university system i think there's two separate issues i think my most specific criticism is da you is that when confronted with this issue to some extent they have taken the issue and i approach i think it's perfectly rational from one standpoint that study study study figure out all the answers and then go about solving it but we have known about this issue for more than a decade and it seems to me that da you had more than enough information years ago to start saying we will continue to study but we have critical needs it did not take sophisticated research to understand that we didn't have enough contracting officer representatives managing service contracts on the ground in iraq and afghanistan i didn't have to do research to tell you that but we now have empirical evidence demonstrating that the shortfall was staggering and this is similar and we can get we can go through the list of the things we've talked about program managers systems engineers pricing experts we can take any individual category i agree with you we do not know yet the exact number but i know that at the current rate we're not going to have enough by two thousand and fifteen i know we don't have them today and i know we didn't have three years ago either the v a thing i mentioned it simply because it's a holistic approach which is focused far more on growing the next generation rather than going out into the marketplace and trying to find the solution i think we need to do that but i am not convinced the marketplace can meet all of our needs nor do i believe it will fill a gap or deal with the pending retirements once the economy recovers so i think we need to be doing simultaneously both i agree with all of those people that say we should be chasing the tell in the marketplace but we need to grow the next generation because we haven't done it for a generation congressman if i could make a comment about it it was not be a huge responsibility to assess the size of the workforce that responsibility less at the un secretary defense for acquisition technology and logistics for the rest that are off base in the service acquisition executives with regard to the capability of  there is no corporate university in this country that can equal the capability of the training that they bring to the employees of the department of defense it's not even close i mean there is no defense contractor who has any training program that is even remotely close to the service that provides to its federal employees so i just want to clear that up on the struck by the university tends to study things to death and not get the action and results that the warfighter unaids you say that of mr assad that the defense acquisition university is incomparable and better than anything in the corporate world and is sounds like state of the art and then professor skinner has saying that basically they're not even as good as the v a acquisition system and they're buying hospital supply you know it's probably the most decorated most recognized corporate acquisition university in the country over the last five to seven years what i'm saying is you is not responsible for the to grow a future workforce bringing in literally tens of people a year so it's very difficult to compare their scope with you and i fully appreciate what mr assad is saying that the head of  possibly two hundred but at the end of the day he has been the point person for this right sizing the acquisition workforce and whether we want to point the finger at alloa whether we want to point to you i want to just make the simple point that we did not need to wait until congress lost patience to begin rebuilding the acquisition work on the stake of all we've seen it coming there's no surprises here we've been too slow number about sixty five seventy thousand in defense acquisition right now i think in terms of folks that may be within retirement age in five years what's the total number one hundred twenty seven two hundred nine hundred seventy nine two hundred eighty five thousand when you talk about the integrated acquisition workforce with contractors that's a fairly significant number and i think we're saying now that that number may have to ask the question do we have people that are the right people that are doing this do we have to make some hard decisions here i think mr congressman first of all with regard to the size i think we've got a pretty good idea of the size and we're satisfied that we're about where we want to go is going to address a lot of the issues that we have within the department you make a very good point and that is to assess properly assess the mix of talent that we have we know that there are some specific areas where we have to grow makes from going from a contractor supported capability into more of an inherent capability i'll take the example of marine engineering we know with for example within the navy the navy specifically is targeting in its growth strategy the growth of marine engineers that we need to regain our shipbuilding marine capability in terms of being able to conduct proper oversight and understanding what's going on with our with our marine industry we know that in the army for example they want to make some very specific growth in terms of program managers and so there are areas that we can go through pretty good detail and say these are specifically by service where we're going to grow the people that we're going to grow we know exactly what we're doing in terms of the number of contracting officers that we want to increase where we want the one crease the talent level that we want to  have so i'm not at all here saying that the twenty thousand folks that we think we need to go over the next five years is insufficient i believe it should be sufficient based on what we know today i can tell you that  this is no small task trying to hire twenty thousand people over five years this is going to be you know we'll do it and i'm very confident we can do it but it's going to take some time and  you know you need to be able to look at this and i'll call in and out of our five year horizon and we get to about year two or three if we need to adjust this one way up or down we'll be prepared to do it but i think we've got a very good plan that's executable that services understand what they want to do and how they want to do it and that we can move forward and i'm satisfied that the size of the workforce in terms of its government employees with the addition to making will be an ample and capable workforce bringing in some of its article expertise that is currently done by contract and i think that's just a i'm having a lot of difficulty where to draw that line because when you bring somebody in say that has a great deal of technical expertise in a kind of finite area  and maybe you would contract maybe they got really six months of work on a project so where do you draw the line in terms of what's routine and what's not i think that historically as we're examining our  contract the workforce we're doing that we're actually we're actually looking at well how long are we actually had these contract employees working in this organization i mean is this truly a search capability and if it is that absolutely should be contracted out but if it's a long term requirement and need and it's an inherent capability that we want to have those are the kinds of decisions that we're making to say we need those to be government employees example because as a general rule they're experienced in the government likes them they feel like they get good service from them and they've got a pretty good policy so that there's no conflicts of interest because they only work for the government but we're talking about a firm that over the last three fiscal years is taking in about thirty five million dollars a year performing fundamental acquisition work for the government so it's just one barometer there's other firms out doing their own there's a fair number of them some example of the fact that we've got a pretty significant need one of the other things that i think frankly scares me a little bit about the reach and depth of acquisition solutions is how they not only provide so many valuable services to our acquisition community but they are establishing themselves as fundamental source of knowledge management and acquisition as well and i think this is less true for the defense department than many of the other government agencies but for many professionals today the place they go for answers first is the how would any of you how would you define quantitative terms the number of systems engineers that we need today to properly manage the procurement that we're doing part a and then part b how far short of that do we fall right now how many systems or years do we need how many we have we have approximately and i'll get to the pursuit of but my recollection is thirty seven thousand or so engineers including our systems engineers we want to hire twenty eight hundred over the next five years we think our services believe that that is sufficient because we do a lie on it and do  and do you to lie systems engineering capability from the industrial workforce and we don't want to stop that because for the very reason of the congressman mentioned we may have a one year task that needs to be done or a very specific tasks that need specific types of skills we can contract that out and we will what we what we're looking for precisely right now we have a loss of some very skills that we about for the record the exact number on an annual basis but it's about six thousand anyone on the panel disagree with that assertion as to that number is the goal i don't know what the number is but we ought to responsibility or a lead systems integrator you might assume that the government doesn't have enough systems engineers or expert pricing people to do that job general i think you're touching on a question and i want to know the answer to  position to quantify on the number but it is quite clear based on what the general research shows what we're hearing both from the program office but also specifically from the private sector that this is a huge hole i think it's great they're taking aggressive approach but i think they need to do both i think they need to bring in the senior people but they need to grow and i think this is an encouraging answer but one obvious finding is that there is this huge hole let me shift ground for my final question the committee is very interested in much more emphasis on the requirement process in procurement we've learned in our work thus far that a lot of the problems that metastasized later in the process grow from  requirements process we don't think things through well enough we don't have the right kind of requirement design to what extent do you think that procurement professionals should be involved in the requirements process and not simply jump in later on what do you think about that and i think that there has to be a handoff a well in the stored in an integrated handoff between the requirements generators and the acquisition professionals and in the earlier we can get into that process in terms of understanding what the was a really needs and frankly that's where systems engineers come into play is understanding what is the right solution to address the wa requirement but there should be some discipline in the process so therefore there has to be a healthy tension between the acquisition professionals on the one hand and the operators who are staying in requirement on the other and there needs to be somebody at the top more measured approach and one of the things that we need to reinstitute that we walked away from the block development which says that the first thing coming off the line doesn't have all of the unobtainium in it it's kind of  thousand to get the warfighter the requirements generators together with the acquisition folks pre milestone we really have a solution and we understand what your requirement is seven or eight months to hire somebody and died at hiring authority we can get a man in ninety days that's pretty good i mean you know they know upfront that they're going to be hired that's the important thing is that uncertainty of someone who's looking for a least cost most effective one i've seen in the last generation was vice president al gore gave away hammers on frames and worked pretty darn well didn't cost very much people love the pat on the head money i think that's part of it but i also think we can do more with from when they do the job force do we understand which is which we do and i certainly don't want to enter into made at all mr congressman that we're not getting good value from the contractors that are working for us in general they do a good job general tightening up what you mean by tightening up i don't know which way that tightening with very loose definition and separate cation at all there are also some spent outside i've got a paper here that we did a national industrial action which we provided for your staff and paper goes provide the united states government excellent value for money and i spend a lot of time traveling on the work around the world working with other governments on the procurement systems we have the best procurement system in the world will be a terrific value for money and the end of the day we can take any individual example if i were to just give you one quick one the public believes deep in their heart that kellogg brown and root has done a bad job of the log contract that's wrong i believe that a generation from now military history may reflect that the law can contract is the most significant advance in military history ever never has a military had the ability to project so much potency and sustainability around the world with such speed mr assad mentioned surgical this is a remarkable model and the public has absolutely no idea because they're focused on people we need to bring into government highly technical skill guys we're going to and source things we should not in source what i call the arms and legs business the arms and legs business people carry in saying delivering things performing basic logistics functions believe we do mr congressman we have about twenty two hundred force personnel uniformed air force personnel who are in the contract in question if you will we have another we've got a pretty good mix of military we're focusing our military capability primarily on supporting the battlefield and that's where it needs to be  we need acquisition program at program managers who are capable of managing major weapons systems when in terms of doing the actual logistics and contracting support itself our soldiers  going to mention the our development programs we have an outstanding development program in the air force in terms of growing its acquisition professionals the marine corps has recently over the last two years completely restored and revitalized its acquisition professional management curricula and their development program for marine officers and marine enlisted it's very impressive so i think we're in pretty good shape with regard to what we need the army is going to have a challenge over the next four or five years they're continuing to grow they have a good idea of the number that they need they're not there but they have a plan to get the e thank you i'd like to thank my colleagues and thank the panel for excellent work here this morning i think the committee is very much focused not on quantitative questions have the very best procurement system from the point of view of the uniformed personnel and the taxpayer and then figure out the skill sets necessary to achieve that and then work the quantity out from there i think we have a great opportunity in the budget committee commitment that the secretary of defense has made to fill out the workforce but i think it's our responsibility it's incumbent upon us to take full advantage of that opportunity and make sure that we give mr assad and his