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i 

25–836 2018

[H.A.S.C. No. 115–43] 

INITIAL FINDINGS OF THE SECTION 809 

PANEL: SETTING THE PATH FOR 

STREAMLINING AND IMPROVING 

DEFENSE ACQUISITION 

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MAY 17, 2017 
(II) 

COMMITTEE ON ARMED SERVICES 

ONE HUNDRED FIFTEENTH CONGRESS

WILLIAM M. ‘‘MAC’’ THORNBERRY, Texas, Chairman 

WALTER B. JONES, North Carolina 

JOE WILSON, South Carolina 

FRANK A. LOBIONDO, New Jersey 

ROB BISHOP, Utah 

MICHAEL R. TURNER, Ohio 

MIKE ROGERS, Alabama 

TRENT FRANKS, Arizona 

BILL SHUSTER, Pennsylvania 

K. MICHAEL CONAWAY, Texas 

DOUG LAMBORN, Colorado 

ROBERT J. WITTMAN, Virginia 

DUNCAN HUNTER, California 

MIKE COFFMAN, Colorado 

VICKY HARTZLER, Missouri 

AUSTIN SCOTT, Georgia 

MO BROOKS, Alabama 

PAUL COOK, California 

JIM BRIDENSTINE, Oklahoma 

BRAD R. WENSTRUP, Ohio 

BRADLEY BYRNE, Alabama 

SAM GRAVES, Missouri 

ELISE M. STEFANIK, New York 

MARTHA MCSALLY, Arizona 

STEPHEN KNIGHT, California 

STEVE RUSSELL, Oklahoma 

SCOTT DESJARLAIS, Tennessee 

RALPH LEE ABRAHAM, Louisiana 

TRENT KELLY, Mississippi 

MIKE GALLAGHER, Wisconsin 

MATT GAETZ, Florida 

DON BACON, Nebraska 

JIM BANKS, Indiana 

LIZ CHENEY, Wyoming 

ADAM SMITH, Washington 

ROBERT A. BRADY, Pennsylvania 

SUSAN A. DAVIS, California 

JAMES R. LANGEVIN, Rhode Island 

RICK LARSEN, Washington 

JIM COOPER, Tennessee 

MADELEINE Z. BORDALLO, Guam 

JOE COURTNEY, Connecticut 

NIKI TSONGAS, Massachusetts 

JOHN GARAMENDI, California 

JACKIE SPEIER, California 

MARC A. VEASEY, Texas 

TULSI GABBARD, Hawaii 

BETO O’ROURKE, Texas 

DONALD NORCROSS, New Jersey 

RUBEN GALLEGO, Arizona 

SETH MOULTON, Massachusetts 

COLLEEN HANABUSA, Hawaii 

CAROL SHEA–PORTER, New Hampshire 

JACKY ROSEN, Nevada 

A. DONALD MCEACHIN, Virginia 

SALUD O. CARBAJAL, California 

ANTHONY G. BROWN, Maryland 

STEPHANIE N. MURPHY, Florida 

RO KHANNA, California 

TOM O’HALLERAN, Arizona 

THOMAS R. SUOZZI, New York 

(Vacancy) 

ROBERT L. SIMMONS II, Staff Director 

ALEXIS LASSELLE ROSS, Professional Staff Member 

DOUGLAS BUSH, Professional Staff Member 

BRITTON BURKETT, Clerk 
(III) 

C O N T E N T S 

Page 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Thornberry, Hon. William M. ‘‘Mac,’’ a Representative from Texas, Chairman, 

Committee on Armed Services ............................................................................ 1 

WITNESSES 

Lee, Deidre, Chair, Section 809 Panel, Former Administrator for the Office 

of Federal Procurement Policy, Former Director, Defense Procurement and 

Acquisition Policy; William LaPlante, Commissioner, Section 809 Panel, 

Former Assistant Secretary of the Air Force for Acquisition; Charlie E. 

Williams, Jr., Commissioner, Section 809 Panel, Former Director of Defense 

Contract Management Agency; Joseph W. Dyer, Commissioner, Section 809 

Panel, Former Chief Operating Officer and Chief Strategy Officer, iRobot 

Corporation, Former Commander, Naval Air Systems Command ................... 2 

APPENDIX 

PREPARED STATEMENTS: 

Smith, Hon. Adam, a Representative from Washington, Ranking Member, 

Committee on Armed Services ..................................................................... 41 

DOCUMENTS SUBMITTED FOR THE RECORD: 

Advisory Panel on Streamlining and Codifying Acquisition Regulations, 

Section 809 Panel Interim Report, May 2017 ............................................. 45 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

[There were no Questions submitted during the hearing.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 

(1) 

INITIAL FINDINGS OF THE SECTION 809 PANEL: SETTING THE PATH FOR STREAMLINING AND IMPROVING 

DEFENSE ACQUISITION 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, DC, Wednesday, May 17, 2017. 

The committee met, pursuant to call, at 10:02 a.m., in room 

2118, Rayburn House Office Building, Hon. William M. ‘‘Mac’’ 

Thornberry (chairman of the committee) presiding. 

OPENING STATEMENT OF HON. WILLIAM M. ‘‘MAC’’ THORNBERRY, A REPRESENTATIVE FROM TEXAS, CHAIRMAN, COMMITTEE ON ARMED SERVICES 

The CHAIRMAN. Committee will come to order. 

The purpose of today’s hearing is to receive the initial findings 

from the Section 809 Panel. Now, as members may remember, in 

the fiscal year 2016 NDAA [National Defense Authorization Act] 

we created an advisory panel under, appropriately, section 809 to 

review acquisition regulations and make recommendations for 

streamlining and improving defense acquisition process, and also to 

advise us on improving our defense technological advantage. 

We are pleased to welcome four of the commissioners here today 

to report on the interim findings of that panel. I understand that 

the panel has—was, due to no fault of its own, delayed in getting 

started, partly because of the Department. But all members have 

before them an interim report dated May 2017 that, in my opinion 

at least, does a very good job of explaining the problems and where 

we are. 

I think my favorite sentence is where the report says, ‘‘The way 

the Department of Defense buys what it needs to equip its warfighters is from another era.’’ None of us can afford to have that 

situation continue because the era we are in is dangerous enough, 

and it is not stopping to wait on us. 

We are pleased to have, as I say, four of the commissioners with 

us today. 

Before turning to them, I will yield to the distinguished acting 

ranking member, Mr. Carbajal, for any comments he would like to 

make. 

Mr. CARBAJAL. Thank you, Mr. Chair. 

I don’t have any comments, but I would like, without objection, 

to submit Ranking Member Adam Smith’s testimony into the 

record. And I have a few questions for later on. 

[The prepared statement of Mr. Smith can be found in the Appendix on page 41.] 

The CHAIRMAN. Without objection, so ordered. 
2 

Let me welcome our witnesses today. We have Ms. Deidre Lee, 

who is the chair of the Section 809 Panel; Mr. William LaPlante; 

Mr. Charlie Williams, Jr.; Mr. Joseph Dyer. Each of them have impressive backgrounds that are helpful, I think, for this purpose. 

Members have more complete bios in front of them. 

We, again, appreciate the work you all have done so far and the 

work that you will do in the months to come. 

Ms. Lee, we will yield to you for any comments you would like 

to make. 

And, ma’am, if you would—and put that microphone right in 

front of your face. 

That works better. Thank you. 

STATEMENTS OF DEIDRE LEE, CHAIR, SECTION 809 PANEL, 

FORMER ADMINISTRATOR FOR THE OFFICE OF FEDERAL 

PROCUREMENT POLICY, FORMER DIRECTOR, DEFENSE 

PROCUREMENT AND ACQUISITION POLICY; WILLIAM LAPLANTE, COMMISSIONER, SECTION 809 PANEL, FORMER ASSISTANT SECRETARY OF THE AIR FORCE FOR ACQUISITION; 

CHARLIE E. WILLIAMS, JR., COMMISSIONER, SECTION 809 

PANEL, FORMER DIRECTOR OF DEFENSE CONTRACT MANAGEMENT AGENCY; JOSEPH W. DYER, COMMISSIONER, SECTION 809 PANEL, FORMER CHIEF OPERATING OFFICER AND 

CHIEF STRATEGY OFFICER, IROBOT CORPORATION, FORMER COMMANDER, NAVAL AIR SYSTEMS COMMAND 

Ms. LEE. Thank you, sir. 

Chairman Thornberry, Ranking Member Carbajal, thank you, on 

behalf of the 18 commissioners, for the opportunity to present the 

809 Panel’s interim report. I will give an opening statement, and 

then we have the other commissioners who will hear—will answer 

your questions, and we will all try to answer your questions and 

respond to you. 

Since the panel’s first meeting we have heard from the men and 

women who work as professionals in the defense acquisition system; those who support the Department in industry, including 

those who have yet to do business with the Department; those who 

study the system in think tanks and academia; and those who provide leadership and oversight in Congress. We sincerely thank all 

of those who have offered their thoughts to us and welcome others 

to reach out and contribute. 

Through these conversations themes have emerged, and these 

themes are the foundation for the panel’s work going forward. We 

know that mission must come first. We have to value time. The 

system needs to be simplified. And another—probably more discussion later—we need to decriminalize the commerce. 

We have learned that there are barriers to entry doing business 

with the government. Some are small, while too many others are 

large, complex, and time-consuming. 

We have learned that there are out-of-date regulations that have 

served their purpose and today only serve as drag on the system. 

We have learned that protests, or the fear of protests, makes a 

slow, cautious contract process. We have learned that there is a lot 

of flexibility in the system and we need to be systemically confident 

enough to use it. 
3 

We have learned that we fail to adequately distinguish between 

those systems that are multi-decade platforms and those that have 

a short technology life. 

And we note that the pace of innovation in America is the hare, 

while we wish and act as if it is the tortoise. There are too many 

unique policies, exceptions, thresholds, and reviews for acquisition 

to be timely at a fair price to the taxpayer. 

These complexities prevent our trusted, qualified personnel from 

making decisions at the appropriate level and create barriers for 

our access to new technologies when industry cannot even fathom 

how to engage. 

The 809 Panel is working toward a system that puts trust in our 

professionals to do the right thing at the right time, and empowers 

them to make appropriate risks and to be able to make an honest 

mistake. Oversight is important, but not to the degree that it punishes many for the acts of a few and creates more burdensome 

costs and expends more precious time than can ever be recovered. 

Some businesses—especially small businesses—hesitate to engage in commerce with the government because they fear minor, 

unintentional mistakes may result in criminal charges, hefty fines, 

and damaged reputations. For many, including some of the—on the 

cutting edge of technology, the benefits of doing business with the 

government are insufficient to offset the potential downsides. 

Companies should not have to invest time and money just figuring out how to do business with the government. Wouldn’t it be 

better if instead they could focus all of their resources on innovation, trying new technologies, establishing new thinking, and encouraging transformative ideas? 

We are at a critical inflection point. The geostrategic challenges 

the U.S. are facing is—are not lessening. In order to continue to 

ensure our technological dominance on the battlefield, we need an 

organization that is capable of looking past how it has always been 

done and how it can be done—to how it can be done. 

We must be agile enough to respond to rapidly evolving threats 

and fast enough to develop and deliver new capabilities within the 

arc of emerging threat. Let’s design for the 22nd century in the beginning of the 21st. 

Reforming DOD [Department of Defense] acquisition is a most 

admired problem, and we are not the first to consider it. Dozens 

of reform efforts precede this panel, and in order to move past 

tweaking around the edges of the system as it exists today, we 

have charged ourselves with being bold yet actionable, and you will 

see those reports in our subsequent report. 

Our interim report illustrates the demand for change. It provides 

just a small example of a level of detail that will accompany our 

recommendations. 

In the supplemental, the case studies illustrated may seem 

minor, but as we all know, hundreds of minor combined with major 

changes make a difference. No recommendation is too small nor too 

large. Let me say that again: No recommendation is too small and 

no recommendation is too bold. 

We look forward to continuing to engage the community and welcome thoughts and recommendations on areas of improvement. We 

are hearing a lot from industry, from people in the community, and 
4 

we appreciate their input and are considering all those recommendations. 

As laid out in the written report, we are committed to recommending a system that will adapt at the speed of changing world, 

leverage the dynamic defense marketplace, allocate resources effectively, simplify acquisition, and enable the workforce. Our tagline 

is, ‘‘Bold, simple, and effective.’’ 

And we are today releasing our interim report, and as you know, 

it is on our website and our team has put it on a QR code and 

are—so this is how we are releasing the report and it is available 

for everyone. So we present our interim report to you today and we 

anticipate your questions. 

Thank you. 

[The Section 809 Panel Interim Report can be found in the Appendix on page 45.] 

The CHAIRMAN. Thank you. I will just say, everything you just 

said is consistent with and, I think, supportive of the emphasis 

that this committee has put on acquisition reform over the last 2 

years: the imperative for us to act. And we made some significant 

changes, as you know, but I don’t think any of us believe that we 

have done enough or fixed the problem. And that is part of the reason this panel was created, and we look forward to your further— 

to your recommendations and to your final report. 

I might just mention that tomorrow I will introduce a—some further proposed changes, and I do that about a month before we 

mark up our bill so that everybody can comment. And I certainly 

invite the panel as a whole or individual members of the panel to 

make comments, suggestions, especially if you think we are headed 

in the wrong direction for the bill that I will introduce tomorrow 

in anticipation of further reform. 

Let me just start out with a question for each of you, because 

each of you has in the past served in the government or—in either 

civilian, military capacity. And just for a little perspective, is it 

worse now than it has been in the past? 

Ms. LEE. Yes, sir. 

The CHAIRMAN. And we can’t go on too long here, but just for 

each of you, can you describe how much worse? Can you give me 

a couple sentences on why you think it is worse? 

I mean, what is—you said this is an inflection point. Why is this 

an inflection point? What is the imperative of acting now? 

Dr. LAPLANTE. So I would start by just saying, as the committee 

knows, that our technological superiority has been eroding. We 

have been all, unfortunately, watching this for the past decade, 

whether it is in cyber, weapon systems, air dominance, space, EW 

[electronic warfare]. It has just been consciously eroding right in 

front of us. 

While we are doing as much as we can the traditional way—the 

industrial way, Mr. Chairman—doing things like studying for analysis of alternatives for 3 years before we decide what to do on 

something, our peer adversaries don’t seem to be doing that. They 

are not studying things. They are fielding things. 

And what seems to be happening to us is our ability to deliver 

things quickly to the warfighter, other than through workarounds, 
5 

like the MRAPs [Mine-Resistant Ambush Protected vehicles] or 

other ways we have done it, is worse than it has ever been. 

Mr. WILLIAMS. Yes, Mr. Chairman. I would note that in order to 

achieve this necessary advancement in technology it is going to require a significant amount of collaboration across industry and 

DOD. 

And unfortunately, I would suggest to you that today the trust 

factor across the table isn’t what it used to be. And I think as a 

result of that we create a tremendous amount of risk-adverse attitudes; we create a tremendous amount of oversight. And that burdens the system down such that you don’t have the collaboration 

across the table necessary to ensure that we get to the right collaborative solution. 

Mr. DYER. Mr. Chairman, thanks for the question. And we commend the progress that the panel has made and your leadership, 

sir. But much more does need to be done. 

As Mr. LaPlante—Dr. LaPlante indicated, it is the erosion of 

dominance that worries some of us the most. And a return to dominance needs to come from high-tech, innovative, nontraditional 

companies that have become reluctant to do business with us either because of the complexity or because of greener fields being 

found elsewhere. 

The CHAIRMAN. Well, that is the other question I want to ask before yielding to other members. I hear anecdotal evidence—I hear 

directly from people who—companies, especially small but some big 

companies, who say, ‘‘We all made a business decision that it is not 

worth doing business with the Department of Defense anymore.’’ 

Based on what you all can tell so far, is that a real problem that 

we have to confront? 

Mr. WILLIAMS. I will speak to that, Mr. Chairman. 

I happen to be a part of a sub-team that is looking specifically 

at the area of barriers to entry. And we have talked to a lot of companies that are interested in doing business with the Department 

but choose not to, companies that do business with the government 

but yet are challenged by the processes. 

And so the answer is yes, this is a huge and significant challenge. The challenge gets into very simple things like how long it 

takes the government to make a decision simply about whether or 

not it wants to proceed with a requirement, the fact that the government goes out and announces its intent and companies put together proposal teams and things of that nature, and it takes then 

the government a long time to get back to them. And companies 

can’t carry that. 

If that is a problem for a large industry, imagine what it causes 

for the smaller companies who are often out there on the leading 

edge of technology advancements. 

Dr. LAPLANTE. I would add, just as a small example, when I was 

the Air Force assistant secretary we pulled the data and found out 

it took us 18 months to go from initial RFP [request for proposal] 

to award of a sole source contract—18 months. 

Now, if you remove the foreign military sales it still is about a 

year. 

So if you are a small company and that is even from when the 

final RFP drops to when you are potentially going to get the money 
6 

for a sole source in a year, you know, you can just imagine how 

hard that is. And I know one of my other colleagues has direct experience. 

Mr. DYER. Mr. Chairman, I will tell you a story from personal 

experience, if I may. I retired in 2003 as the commander of the 

Naval Air Systems Command down in southern Maryland. I was 

the Navy’s senior acquisition uniformed person at that time. 

I went to work in Boston building robots with the iRobot Corporation, first as the president of their defense unit and later as 

the corporate COO [chief operating officer] and then chief strategy 

officer. 

iRobot was a company that spun out of MIT [Massachusetts Institute of Technology]. It is exactly the kind of company that I feel 

we need most: experts in autonomy, artificial intelligence, man-machine interface. 

But in my trips to Wall Street representing the interest of the 

company, one of my analyst friends took me to lunch one day and 

said, ‘‘Joe, you have to get iRobot out of the defense business. It 

is killing your stock price.’’ 

And I countered by saying, ‘‘What about the importance of 

DARPA [Defense Advanced Research Projects Agency] and the investment in leading-edge technology? What about the stability that 

sometimes comes from the defense industry? Or what about this, 

or what about that? What about patriotism?’’ 

And his response was, appreciating that the requirements for 

corporate officers is to attend to the interest of their investors, he 

says, ‘‘Joe, what is it about capitalism you don’t understand?’’ 

His point, sir, was that profits are limited by weighted guidelines. It is something of maximum of around 13 percent. The call 

on data rights and intellectual property, the crown jewels of the 

company—these things send you away. 

There are just greener fields that companies like iRobot feel better represent the interest of the investors. And last year, sir, iRobot 

divested their defense business. 

The CHAIRMAN. Thank you. 

Mr. Carbajal. 

Mr. CARBAJAL. Thank you, Mr. Chair. 

And thank you, to the commissioners that are here today to 

share with us a little bit about their interim report. 

My question is, every administration and virtually every Secretary of Defense since World War II has embarked on an acquisition reform effort, yet we still face significant challenges. What will 

this panel recommend that will be different to ensure a lasting impact that you have already started identifying? Because if not, this 

is going to be yet another exercise and 10 years from now we are 

going to be at the same place again. 

So I think despite looking at the whole system, it is really identifying those particular recommendations that are going to help take 

a different approach. 

Ms. LEE. Excellent point, and I think that is what we are trying 

to say in our interim report is there is an imperative, as has been 

discussed here. We have to be more agile, more responsive. We cannot continue in the mode that we are progressing. 
7 

So the environment is right. You in the Congress are interested. 

Your staff has been incredibly helpful and supportive. I think that 

is helping us from setting that up. 

And then the other thing that our supplemental is, what we plan 

to give to you that is different than so many of the other excellent 

reports in front of us, are that level of detail. And that is why we 

did the supplement, to show you that we are going to actually give 

you marked-up language of the recommendation. Obviously the recommendation is still yours to decide on, but we are trying to give 

you data-driven, actionable recommendations so you can look at 

those. 

We also have some very bold recommendations that will come 

out later that will impact some particular constituencies and there 

will be some hard decisions to make significant changes for us to 

move on and modernize this acquisition system. 

Bill. 

Dr. LAPLANTE. I would add a different—maybe a slightly different perspective, because the question you ask is the question all 

of us ask when we get asked to put our precious time into another 

acquisition reform study. I have a different view, which is—I have 

changed my mind over the years. 

I will give you an example. I think reform—what reform is needed at one time is different depending on the age. I will back up to 

2009 when the Weapons Acquisition Reform Act was put in place, 

WSARA, as some people call it. 

That had some very good reforms in it. It required an independent cost estimate at the beginning of programs, for example. 

It codified how to do analysis of alternatives. 

And actually, if you—one argument, if you look at the cost performance of the major weapon systems over the past 6, 7 years, I 

think a lot of us have seen and the data shows that the cost growth 

is actually lower than it has ever been. It did help some things. 

While all that was going on, the world is changing very rapidly. 

And I think the problem today as I see it—and it is driven by this 

technology threat and the change in the technology—is the commercial world practices have moved totally beyond the industrial 

model that we said that the DOD uses. 

So I will just give one example: software development. In DOD 

we spec out a software problem, a software system—a ground control station for satellites, for example. We get the requirements 

honed perfectly, then we translate them into a system spec, we 

issue an RFP, and then we give the award, and then we hold the 

contractor accountable to cost performance schedule. It is typically 

scheduled for 5 years and it will take 7 and it will go over budget. 

We all know that. 

The commercial world developing software has left that waterfall 

model 20 years ago. The idea that Google develops software and 

then deploys it is wrong. They develop software every day. 

Facebook drops hundreds of releases every day. 

The idea that you would even spec out in detail the requirements 

of something 5 years from now is laughed at by fast-moving commercial software developers. They say, ‘‘No, you never get it right. 

You gotta be able to go fast, go in short sprints, and if you make 

a mistake you get back on track.’’ 
8 

So if you look at the way our system is set up, it is set up for 

the old model. And so that is an example of why we need reform 

now is because the world has changed and we have to adjust to 

that. 

Mr. DYER. Congressman, one of the things the panel is doing, I 

think to gain some new insight, one of our eight teams are looking 

not just at problem programs but taking a far-too-unique look at 

programs that succeed and asking why, and seeing if there are 

common themes of experience, training, approach, culture that can 

be applied across the DNA of other programs, and we can take a 

reverse look of saying, ‘‘This is what you should do,’’ as opposed to 

perhaps a history where DOD has said primarily, ‘‘This is what you 

cannot do.’’ 

Mr. CARBAJAL. Thank you. My last question is the interim report 

recommends DOD spend its resources more efficiently and effectively in all types of acquisitions, including the procurement of lowdollar goods. Does the Department overpay for commercial off-theshelf, also known as COTS, items? 

Mr. WILLIAMS. Yes, Congressman. I would say that the panel has 

not looked at and taken on the job of looking at the pricing of commercial items, so we aren’t prepared to offer an opinion on whether 

or not commercial items are overpriced. 

What I think we are suggesting here is that often when we look 

at these reform efforts we are simply focused on large-dollar procurements. We are focused on big programs. 

The problem in the system often relates to all these non-complex 

efforts in procurement and services. When you look at the equation, 

you know, 80 percent of the dollars are spent on 20 percent of the 

actions, but there are 80 percent of these actions that are really 

critical to the Department being successful, and we have to pay attention to those just as well. 

In the report we talk a lot about clearing the underbrush. There 

is a whole lot of stuff in the underbrush that affects how we get 

work done, and so I think we are simply saying that in the area 

of commercial, in the area of services across the spectrum of everything that the Department acquires, we have to pay attention because each piece makes up the big picture. 

Dr. LAPLANTE. We always have to remind people that services— 

Department buys services from everything from cutting the lawn to 

launching our most precious national security payloads into space. 

Department spends probably more on services still than on major 

weapons acquisition program. 

Mr. CARBAJAL. Thank you very much. Mr. Chairman, I yield 

back. 

The CHAIRMAN. It definitely spends more. Something like 53 percent of everything that is on contract is services, not weapons and 

equipment. 

Mr. Cook. 

Mr. COOK. Thank you very much, Mr. Chairman. 

I want to thank the chairman for doing this. And this is going 

to be very, very tough to get done and I appreciate the panel working on this. 

And it is a lot of frustration for me and a lot of other people, and 

I am a historian by trade, I guess, military by trade. And you go 
9 

back and you—the system we have right now, I swear to God we 

would have lost World War II. 

We do not have the luxury of waiting that long to bring new 

weapons systems online. I was out at Fort Irwin the past week, 

which is in my district. Perhaps one of the greatest training areas 

of all. 

And one of the days was live fire, but the first day was cybersecurity. I met with these young soldiers and they are talking about 

some of the things that they were doing off the shelf and they are 

making changes. 

Now, remember, I am an infantry guy. I am just a dumb marine, 

and I really am, and they are talking about space-age stuff, and 

they are doing it right then and there. 

And I am saying, ‘‘God, why can’t you be in charge of the whole 

system?’’ And I understand that is not feasible, and contracts and 

everything else. 

And I asked them about it and they said, ‘‘Time,’’ and they said 

the same thing that you said. We don’t have the luxury. 

You know, the changes are made. You know, when I was in Vietnam they were making changes. That was 50 years ago and it 

seems like it was taking forever. Even then some of the systems 

coming online were flawed, not correct, and took forever to get 

there. 

And here we are now. We don’t have that luxury. I am going to 

be leaving here. I am going to have a brief on the T–14 and the 

T–90, the improvements to some of these systems today. It just 

gets so depressed. 

So I think this is a great first step. We have gotta change this 

and we have gotta change it now, whether we go back in history, 

whether we look at how the Israelis change. Why do they change 

so quickly? Because they won’t survive as a country if they don’t. 

So the stakes are enormous, and if we don’t get it right then, you 

know, my original reason for coming to Congress—and that was, 

you know, the military and veterans—I have failed. I have failed 

miserably. 

Now, you guys and gal, you have a tremendous amount of expertise and I appreciate what you are doing. And I am going to be the 

junkyard dog just saying we gotta cut through the red tape, and 

we have gotta get it done, and we gotta get it done now. And we 

have no excuses anymore. 

So I have vented, and I appreciate the chairman. I will drink 

some more coffee and go back to my office, and I yield back. 

The CHAIRMAN. Venting appreciated. 

Mr. Garamendi. 

Mr. GARAMENDI. I want to thank you for the panel discussion 

and for, obviously, a very, very important issue. 

It seems to me that there are at least—that in analyzing this acquisition you need to put into various categories the kind of acquisitions we are talking about. We just discussed a moment ago services and then major acquisition of airplanes, or whatever. 

With regard to the latter, I recall a hearing we had in the naval 

subcommittee last—2 weeks ago in which the littoral combat ship 

came up. And the fundamental argument made by the Navy and 

by the defense industry was, ‘‘Well, we gotta continue to produce 
10 

another 20 of these ships that serve really no good purpose and, 

by the way, will probably be sunk at the very first shot that will 

be fired and don’t have much utility, but we need to do it because 

we need to keep the defense base working.’’ 

Now, that is a policy question that we need to address here. So 

you got those kinds of issues. 

When you get down to other issues, there are the public policy 

questions. I could probably mention the issue of greenhouse gas 

emissions and the consumption of fuel oil, or fuel—the Defense Department being the single largest consumer of petroleum products 

in the world. So should there be a policy question put on the Defense Department dealing with conservation, or moving away from 

fuel to green energy technologies? 

How do those kind of policy issues come into play in the issue 

of defense acquisition strategy? Should we simply abandon these 

policy issues, which do, seem to me, provide some brake on the rapidity of a contract going forward or the continuation of a previous 

program? 

What is your recommendation? You make recommendations here 

about policies that get in the way. Should some of those policies remain in the way? 

Ms. LEE. I think that will obviously be an end decision for this 

body. We were going to—what our plan is to look at all of these 

and, as we all know, individually each one has a constituency, has 

a value, and probably a very good purpose. Cumulatively they are 

clogging the system. 

So I think it is going to be a very difficult question to say, you 

know, what are the priorities? Our report says mission first. We 

will offer up some recommendations to you all to a very challenging 

decision is what is that balance? 

Mr. WILLIAMS. I would offer, Congressman, that the critical question here is the question of mission and the purpose of the system. 

And I believe if we start there, we start with mission first, that the 

system that the Department has to use for acquisition is focused 

on ensuring it can accomplish its mission, and we evaluate these 

various policy questions along that continuum, and I think it will 

allow us to have a way to think these things through. 

I don’t think anyone has reached any conclusion as to what is 

good, what is bad, what is problematic, but to Ms. Lee’s point, the 

accumulation of these things together put extreme pressure on the 

system and cause many, many hurdles for the acquisition community to have to go through to get to that mission result. 

Dr. LAPLANTE. I will give an example of maybe one or two policies that make perfect sense from a certain aspect of public policy 

but actually can maybe have a collateral impact you may not understand. One is competition, the CICA [Competition in Contracting Act] thing, which is that—the assumption being that whenever 

you can, you do competition. Makes perfect sense and all that. 

To the extent that, getting at what my colleague said in her 

opening, the fact that we are worried about protests so much during either the RFP release or the award, bend over backwards, do 

competition when there is an obvious quick solution ready to go by 

just going sole source because it hits—gets the mission, there is a 
11 

very big reluctance to do it because of, understandably, because of 

the pressure to do competition. 

So again, you have to say, is it—what is better for the mission? 

We do have waivers in the system that allow seniors to waive 

and say, ‘‘I am going to do sole source for national security.’’ My 

experience in recent years is they are very reluctant to use them 

because of the scrutiny it gets. 

So that is an example where you can see both sides of the argument, and it is the cumulative effect of all of these policy issues. 

Another one is small business. Small business is a very important thing for the country. We all get that. But that is something 

that plays a big role in our deliberations as we put acquisition 

strategies together because we know we are going to be looked at 

for our small business numbers. 

And so those are two examples of good, well-understood policy 

things, but their impact on acquisition. 

Mr. GARAMENDI. Thank you. Yield back. 

The CHAIRMAN. Mr. Knight. 

Mr. KNIGHT. Thank you, Mr. Chair. And I will echo Colonel 

Cook: I appreciate the chairman for doing this. This is long overdue. 

So I am going to—I am not going to vent because I can’t do what 

Colonel Cook did, but I am going to bring up a few things. 

So I firmly believe that the country is risk aversive, and I think 

that that has stifled us in many of the things that we have tried 

to do. The F–22, F–23 program went through a 50-month culmination to get to a first flight program. I mean, it was a perfect example of how you get to stifling America’s growth. 

And now we have the F–22 and we have gone through a great 

program, even though Congress cut that short way before I was 

here. It is a perfect example of what we shouldn’t do. 

The Century Series fighter system was built in the 1950s—all of 

them in about 9 years. We put out the F–100 to the F–106 in about 

9 years. 

How we could do that and then we move to the fifth generation 

and it took 50 months to the first flight just boggles me. 

But my questions are a little bit anecdotal because we all get to 

talk to Vietnam vets and we all get to talk to our vets and our warriors who are in the field. 

I talked to some the other day who used an unmanned system 

that was on the ground and they were doing it for IEDs [improvised explosive devices]. And I looked at the controller they were 

using. They were using an Xbox controller. And I said, ‘‘Why are 

you using that?’’ 

And they said, ‘‘It works better. It just works better.’’ 

And I said, ‘‘Well, it is not as durable.’’ 

And he said, ‘‘No, it is definitely not as durable, but you know 

what? I went over and I bought this thing for $29, and if it breaks 

I buy another one for $29.’’ 

So those kinds of things, you know, how much we act with the 

people in the field who are actually doing the chore I think is most 

important. 

I think Dr. LaPlante brought up a big part, and that is maybe 

SBIR [Small Business Innovation Research] and STTR [Small Bus-
12 

iness Technology Transfer]. If we are going to get the cutting edge 

it might not be from the big companies. It will probably be from 

the smaller companies. And if we don’t kind of push forward those 

types of programs, like STTR and SBIR, then we might not ever 

see them. 

So, get to my questions here. Contracts across the board—and I 

have talked to many different companies that work either in the— 

in Navy contracts or Air Force contracts or so on and so forth, and 

they say that the contracts are not the same—the basic contract, 

not the full-blown, but kind of the basic DD214 base sheet. 

Is that something that we can make across the board so that 

when these contracts come up—and maybe not a contract like, you 

know, a new bomber or a new fighter or something, but these contracts that are coming out with the Navy, that it looks like the Air 

Force one or it looks like the Army contract so that they know how 

to fill this out? They might not know how to fill out sections 2 

through 4 million, but they know how to fill out the face sheet. 

Ms. LEE. We have certainly heard from a good number of people 

that the complexity is daunting, especially for small businesses. So 

this kind of links to the policy question and the underbrush question as we are looking—in fact, in our report at the end there is 

a kind of a list of questions that we are asking ourselves and pursuing, but one of those is how do we simplify this so people aren’t 

spending all their time figuring out how to do business with them? 

And as Mr. Williams said, the barriers to entry team found 

from—I will let him speak on it, but some of the people said, ‘‘We 

just cannot afford, from a time standpoint, to invest the time that 

it requires to figure out how to do business with you guys when 

someone else will pick us up just like that and we can actually, you 

know, market our product or service.’’ 

And so we recognize that somehow that ability to enter quickly 

and to simplify our process has got to be primary. And one of the 

questions we are asking—talk about buttons that might be hot 

here—is: Is competition in the 21st century aligned with the Competition in Contracting Act? 

In 1984, competition was way different, and yet now how our environment works, every day you can look online and see prices 

change and products change and updates and technology available. 

Not in our system you can’t. 

Mr. WILLIAMS. Mr. Congressman, I would just offer that certainly 

consistency has its place, clearly across those smaller-dollar types 

of acquisitions. I think what we have to think through is balancing 

between perfect consistency and the flexibility that you want a contracting officer to have to go out and strike the deal that is available to them on that particular day to be able to achieve mission 

results. 

So clearly there are two sides to that question, and I think as 

we think this through we have to look at what you achieve and 

how much you can achieve through that consistency. Because having come from the Defense Contract Management Agency, where 

we administer contracts across the industry, it is extremely important and valuable to us to not go from one contract issued by the 

Navy and another contract issued by the Air Force and they look 

completely different at the same contractor. 
13 

So that is important, but we also don’t want to lose the opportunity to have the flexibility necessary based on the deal that is 

needed. 

Mr. KNIGHT. And I appreciate it. My time has run out. Thank 

you, Mr. Chair. I yield back. 

The CHAIRMAN. Mr. Veasey. 

Mr. VEASEY. Thank you, Mr. Chairman. 

I was hoping that you would be able to elaborate a little more 

on the defense industrial base company mergers you mentioned in 

your report on page 10 and how those are going to affect DOD acquisitions in the future. 

Dr. LAPLANTE. I mean, I can say a few words. 

You have seen all the charts that have—probably over the years 

that show the number of companies in the defense base and how 

they have collapsed. We are sort of at a point now, for example, 

where we are—we really have one major fighter line in the country, 

with another one we are keeping alive every year as a country. I 

mean, we sort of have one guy that builds fighters for us, largely. 

We are trying to keep another one in. 

I mean, that is pretty—that is something to watch, right? How 

did we end up in that situation? 

Another one is vertical lift. All these places you look and you see 

we are one merger or acquisition away from sort of having all our 

eggs—you know, that company does all our ships, that company 

does all our fighters, that one does all our tankers. And so at the 

big—even at the big prime it is a big concern that we have. 

And I know it has been in the past couple of years there has 

been discussion about, you know, the way that M&A [mergers and 

acquisitions] is analyzed by the executive branch, they look very 

much more at a tactical issue: Does it directly cause, you know, 

something today, as opposed to look two steps ahead and say, 

‘‘Well, maybe this acquisition today doesn’t cause a problem, but 

the next one combined with this one, you have one—only one contractor to build this.’’ 

So it is something we are very concerned about but we, I think, 

note in the report that this is—we think this is going to continue. 

The pressure is going to continue. 

Mr. WILLIAMS. I would only add that I think this gets back to 

the recognition that the entire defense industrial complex is completely different than it was, and so when we started off discussing 

the fact that we are dealing with a Cold War-era acquisition system, that system today doesn’t reflect the fact or deal with the fact 

that we have 70 percent of major programs work often is in the 

subcontract and the supply chain, not at the prime. Our system 

still thinks of it as at the prime level, and tearing those barriers 

down and understanding that is very important in being able to be 

agile in the system. 

Ms. LEE. And in our report we have dubbed that the ‘‘dynamic 

defense marketplace’’ to try to explain how these sands are all 

shifting and the work is done at different levels by—in a very different format. 

Mr. DYER. Congressman, it is not just the companies that are 

merging and leaving the business; it is the lack of input of new 
14 

companies coming in willing to aggressively do business with us. It 

ties back to this question of contracts, of policies, of fairness. 

In my last company we did not have a defense business unit. 

And I had the opportunity to build one from a green field. We were 

required to do major programs of record to have CMMI [Capability 

Maturity Model Integration] level three, the software management 

process, to have earned value management, to have AS 9100, to 

have all these process requirements, which I will tell you every one 

of them in and of themselves made us a better company. But as 

our chairman, Ms. Lee, says, the integral of all those together was 

stifling for a nontraditional company. 

I kept track of a company that at that point in time was doing 

less than $100 million a year, and the cost of laying in all those 

processes to do program of record business was between $35 million and $40 million. You just can’t afford it. 

Mr. VEASEY. Well, thank you very much. 

And also your report recommends that the Department align its 

resources more carefully in this constrained budget environment 

that we are living in and we have all heard a lot about. And you 

include in your recommendation critical consideration of the Department’s use of contracted services, and I was hoping that you 

could elaborate a little bit more on the potential inefficiencies in 

the Department’s spending for contracted services. 

Mr. WILLIAMS. Yes, I think this goes back to the point we were 

making earlier. First of all, recognizing the fact that, you know, 

dollars spent on services has gone beyond what we spend on products, and all too often we forget to think through the services process. 

From a budgetary perspective, what we have to think through is 

also aligning the budget with the services and the contracted services that it requires. So as you go through a contract cycle and 

budgets change and ebb and flow, that doesn’t line up well with the 

services that are needed if contractors are not sure that they are 

going to have the resources or the budget to continue that contract 

and they have to start thinking about how they lay people off. 

And as you turn around then and switch back and say, ‘‘I still 

need that work,’’ the contractors may have let those people go; they 

may not be available at the time. And so we have to ensure that 

the budgetary processes that we use in support of services support 

the labor needs that the contractors have to ensure that they have 

the right workforce in place. 

It is those kinds of inefficiencies that challenge the service contracting community. 

Mr. VEASEY. Thank you. Thank you, Mr. Chairman. Yield back. 

The CHAIRMAN. Mr. Gaetz. 

Mr. GAETZ. Thank you, Mr. Chairman. 

I am looking at page 24 and 25 of your report where we speak 

to the mission and its interaction with some of the other social objectives that are occasionally injected into the acquisitions process, 

and I am hoping that members of the panel can elaborate on the 

extent to which this drains away from the focus on the necessary 

innovations and actions that the warfighter needs to be prepared 

when they are downrange. 
15 

Dr. LAPLANTE. Well, I would start by saying—just telling a personal anecdote. Right before I became the assistant secretary I 

spent a day with the acquisition university folks and they were 

briefing the 5000 and how acquisition works. And I would say, 

‘‘Well, what about all the stuff we had to do during the wars to go 

around the system to deliver counter-IED capability, you know, 

where we had to basically throw that system out and go around it?’’ 

They said, ‘‘Yes, that is because this is a peacetime system.’’ 

So I think you are hitting the point, and this is the point that 

the panel is hitting by the mission focus. If you actually ask yourself to do the mission and we are essentially at war, what are the 

things that are nice-to-haves and what are the things that are essential, and are our priorities straight, including on these good-todo social things? 

And so I think one of the reasons that we are looking at this 

CICA the chairman brought up is because we are looking at that 

foundational precept that competition is, by nature, good. 

Mr. GAETZ. Is it the position of anyone on the panel that having 

our providers and contract partners comply with one-dollar coins 

instead of paper currency enhances the mission for the warfighter? 

Ms. LEE. Sir, we selected these couple of very simple, small examples to demonstrate the underbrush. This is a sampling of what 

is in there, and so what happens, talking about time and labor and 

complexity, is every single acquisition has to look at these kind of 

things and say, ‘‘Yes, that has gotta be in there.’’ 

And then the contractor has to respond: Okay, have I done that? 

Do I have a program for accepting dollar coins? Do I have a program? What kind of review is done? What kind of reporting do I 

have to do? 

We specifically selected these very small examples and then, also 

using our supplemental, are showing you exactly how we think it 

would have to be marked up to either eliminate the requirement 

for the Department of Defense or to make a decision to eliminate 

it government-wide. And we submit to you there are dozens if not 

hundreds like this, and we are going to submit that package to you 

and there is going to be some policy decisions in that. 

Dr. LAPLANTE. Suffice to say, we did not select that example because we thought it was a great example of public policy. 

Mr. GAETZ. Yes. Mr. Chairman, I—given the day, I think in my 

district I have the privilege to represent some of the most 

warfighters in the country in a congressional district, and I can’t 

say I have ever interacted with any that say that their readiness 

is enhanced or their safety is enhanced as a consequence of a contractor utilizing one-dollar coins. 

In technology and in innovation we see in this country so many 

additives and attributes that have come from small and mediumsized companies sufficiently nimble to be able to innovate and meet 

needs in the corporate space and in any other spaces. When we 

have to have such draconian compliance with these sort of bizarre 

social objectives that have been woven into our acquisition process, 

do we crowd out some of the innovation opportunities that would 

be created by those who maybe don’t have a compliance department to write a texting-while-driving policy, or recycled-paper policy, or any of these other ridiculous examples that you have cited? 
16 

Mr. WILLIAMS. We absolutely do, Congressman. As we talk to 

particularly the smaller companies on the leading edge of technology, those are the challenges that they present. They don’t have 

the capability to put together the oversight structures and compliance structures that are necessary to meet some of those requirements and it keeps them out of the business. 

Dr. LAPLANTE. I will just add to—Admiral Dyer referred to this 

in his example with iRobot. The government is also really clumsy 

about IP, intellectual property, and small business. We don’t really—and small startups. They should be scared of us. 

Mr. GAETZ. Thank you, Chairman. I yield back. 

The CHAIRMAN. Mr. Brown. 

Mr. BROWN. Thank you, Mr. Chairman. 

When we talk about mission first in the acquisition process, you 

know, I understand sort of, you know, how do we ensure that we 

are acquiring the goods and services in the most cost-effective and 

efficient and timely manner so that our service men and women 

are ready to fight tonight, tomorrow, and in the next decade, and 

the focus is on, you know, really efficient and effective acquisition 

to meet the needs of the warfighter. 

I think that, you know, I mean, I would certainly argue that that 

is an important mission. I commend you for your focus in taking 

on this responsibility. 

We have other missions that are larger and yet related. The gentleman from California, in his question, talked about energy conservation. That certainly is essential for our national security. 

I think that small business inclusion, particularly given that 

small businesses often—offer up and develop some of the most innovative technological solutions for our warfighters, so ensuring 

that that secondary public policy that you mentioned on page 24 

is promoted. It may be secondary, but I hope it is not a distant second because these are important public policies that go directly to 

our national security and supporting our warfighters. 

So my question is—and you comment on that as—on that, but 

also, just in terms of small business inclusion, there are a number 

of areas where small businesses have challenges. You mentioned a 

few. 

One was knowledge of the contracting process, but there is also 

the lack of monitoring in agencies, including the DOD, of subcontracting plans. There is often a lack of access by small businesses 

to contracting officials. There is contract bundling that often is an 

obstacle to small businesses, and a number of others. 

Could you comment on what specifically you are looking at and 

what you may be anticipating, in terms of recommendations to increase small business inclusion in the DOD acquisition process? 

Ms. LEE. Yes, sir. We certainly have heard from a good number 

of small businesses, and have invited them and will continue to do 

so, and in fact, are going to meet with the SBA [Small Business 

Administration] on some issues. 

But what we have heard is time and simplicity, that we are torturous in our process, and for these small companies they just cannot hang on that long and spend time and effort and money and 

dollars and lose other opportunities. So one of the things that certainly is going to benefit small businesses is more respect for time. 
17 

The other thing is the simplicity. Not that they are not sophisticated, because they absolutely are, but having to hire a whole staff 

just to execute things that really don’t deliver the mission is not 

efficient for them and is very difficult for them, and actually their 

competitors, larger business, can do that. So it probably puts them 

at a disadvantage. 

So we think those are at least two things that are going to significantly help small businesses. We are looking at SBIR, STTR. 

We are also looking at possibly some opportunities where small 

businesses with—would have some technology opportunities unique 

to the Department, and I know that the others may want to comment on that. 

Mr. WILLIAMS. Yes, Congressman. I think what is really critical 

here is to think about how we can better utilize small businesses 

to achieve that mission, connecting them to the mission in terms 

of technology needs and advancements in the Department’s warfighting capabilities. So that is one of the things that we have really focused on, not just awarding dollars for dollars’ sake, but ensuring that we connect small businesses to the mission. 

We are paying attention, as Ms. Lee said, to the SBIR program, 

STTR program. We are very focused on ensuring that small businesses have access, that they know how to get in, that they know 

who to communicate, that they understand and can get to understanding those requirements that are coming down the line. 

They tell us that they just struggle connecting the dot between 

what they offer and the Department of Defense, and so we are 

looking at that very closely. 

Mr. BROWN. Just a quick follow-up, I apologize. But how about 

on contract bundling? Have you seen anything there? Is there any 

comments you have on whether we need to further unbundle contracts? 

Mr. WILLIAMS. I haven’t specifically seen any comments on that, 

and we haven’t looked at it yet but that doesn’t mean that we 

won’t. 

Dr. LAPLANTE. And I just want to add on to my colleague here. 

The report actually points out that, Congressman, a point you 

made about the connection that small business and technology is 

not a nice-to-have policy, but it actually, done right, is essential for 

our technological superiority. We can’t be technically superior unless we tap into those folks. 

So that is an example of something which the—where the policy 

itself can be very much aligned with what we are trying to do. 

Mr. DYER. Congressman, just a comment on SBIRs. Many companies in Boston and Rockville, around the country, have gotten their 

start on SBIRs. I look at it as the government’s venture fund. 

And one of the interesting pieces of that: We are willing to accept 

failure in the SBIR arena. Companies can stretch far, reach for a 

brass ring; if they don’t make it they still profit and they still get 

up and try again. That is a facet we don’t really have in a lot of 

the rest of our acquisition business. 

Mr. BROWN. Thank you, Mr. Chairman. 

The CHAIRMAN. Mr. Hunter. 

Mr. HUNTER. Thanks, Mr. Chairman. Thank you, panel, for being 

here. I guess two questions. 
18 

One, talk to us a little bit about putting somebody in charge of 

anything. It seems what we have done in Congress is said, ‘‘Because people screw up’’—which people do, including us and everybody—‘‘we are going to take the personal responsibility element out 

of acquisition and create so many steps and milestones that no one 

has to take responsibility for anything,’’ as opposed to saying, ‘‘This 

guy with his Ph.D. is great on space robots; we are going to put 

him in charge of putting us ahead of our peer competitors in space 

robots,’’ or any other example on those high-end weapon systems. 

Talk about putting just somebody in charge, because that is—in 

the past 50 years that is one way that we have done a lot of our 

great stuff is by putting one person in charge and saying, ‘‘You just 

do it. And you can fail and try again and fail and try again, but 

we are going to put it on you to get it right.’’ 

Dr. LAPLANTE. One of the things that I think is really clear that 

comes up all the time is we say we have a program manager, PEO 

[program executive officer], SAE [service acquisition executive] 

chain of command, but certainly there are so many people and 

forces that can influence things that are not in that chain of command that don’t have any accountability. 

As my old colleague in—when I was in the Pentagon, Heidi 

Shyu—my former colleague—used to say as the acquisition executive for the Army, in industry the program manager is the bus 

driver to get from A to B and everybody on the bus is to help get 

them from A to B, whether human resources, engineering, contracting. When the bus goes in the ditch everybody gets out and 

puts the bus back on the road because it is everybody who is in 

it. 

In the DOD those people all in the back of the bus have their 

own steering wheel, their own brake, they don’t have an accelerator, and when the bus goes in the ditch the SWAT team comes 

and shoots out the windows and kneecaps the bus driver. Why? Because there is money to take it. 

So this idea of putting people in charge and holding them accountable—and more importantly, people who are not accountable 

should not be interfering—is very, very important to what we— 

what has to be done. 

Mr. HUNTER. What specific recommendations—are you going to 

have specific recommendations? And how many layers can you cut 

out of the process in DOD if you put somebody in charge of let’s 

say big systems, big programs? 

Ms. LEE. We are certainly looking at that as far as what is causing this, and we have seen in some cases that it appears to be functional authorities that perhaps are not appropriately placed and 

how—and that is where I think one of our teams, what does go 

right, is going to see some of the things of how that interaction is 

successful. 

Mr. DYER. Congressman Hunter, your comment about someone 

in charge I think links back to the question earlier of, is it harder 

now or easier? It is harder. And the erosion of authority, power, by 

the program manager is perhaps a most important part of the 

equation. 

Mr. HUNTER. Okay. The second question I have here with the 

last 2 minutes: A lot of these issues arise in the military. 
19 

For instance, the Army pistol, which you guys talk about, that— 

you know, what a joke: 10 years just to put out your requirements 

for a handgun is just stupid. The Distributed Common Ground System—billions and billions of dollars when they could have used 

commercial sources to do a lot of that. 

Those are both Army programs. I am not going to pick on the 

Army, but those are—those—the Army acquisition program, and I 

am sure the other services, too, is what I would like to term a ‘‘selflicking ice cream cone.’’ They exist to write things for themselves 

so they can do more things for themselves to do more things for 

themselves, ad nauseam. 

That happens in DOD too, but that—the Army pistol issue was 

not a DOD acquisition issue, it was an Army issue. The Distributed 

Common Ground System was not a DOD issue, it was an Army 

issue. 

Are you guys going to make recommendations on the services? 

And are you going to be service-centric, meaning are you going to 

say, ‘‘Here are problems with the Air Force, here are problems with 

the Army, Navy’’? Marine Corps just buys other people’s stuff so 

that is different for the most part. But are you going to make those 

recommendations, too? 

Ms. LEE. Our focus is certainly on acquisition, so as they impact 

that, but we are not at this point doing a restructuring look at the 

Department. I think, in fact, that this committee has submitted 

some direction to the Department to make some changes themselves. 

So what we are looking at is where that would touch and impact 

acquisition in our charter. 

Mr. HUNTER. Okay. All right. Thank you all very much. Mr. 

Chairman, I yield back. 

The CHAIRMAN. Ms. Hanabusa. 

Ms. HANABUSA. Thank you, Mr. Chairman. And, Mr. Chairman, 

I do thank you for this hearing. It is unfortunate that I don’t believe people really recognize the significance of our acquisition process. 

I have always felt that the problem with how we operate, especially in recent years, is that we actually set the policy through acquisition, and that it is very unfortunate because our acquisition is 

so delayed. That is why in your report, beginning on page 2 when 

you recount that in the last 50 years there have been more than 

100 reports, studies on how DOD acquires goods and services, and 

then you do say—and you quote a 1986 Packard Report that talks 

about a commonsense approach. But, you know, these things have 

been around for a very long time and we haven’t moved forward. 

We mentioned SBIR. It was this body, by the way—and I was 

privileged to sit on a panel which looked at, quote, the—really the 

difficulties in doing business with the defense industry, and it was 

from the small business perspective. And one of the issues that was 

raised there was SBIR was not authorized, and it was through the 

NDAA that it got reauthorized and I think it is up pretty soon. 

We look at what Mr. Dyer talked about, which I have always 

been a fan of DARPA, but it all comes back to one area. As you 

look at this and you look forward, how are you going to interface 

the FAR [Federal Acquisition Regulation], which is really the gov-
20 

erning document for everyone, and what we need, I believe, in 

terms of the flexibility of addressing the policy that we are going 

to set for the defense industry through acquisition? 

How are you going to do that unless you are potentially looking 

at an exemption from many of the provisions of the FAR and developing a whole acquisition process that is relevant to the defense industry in order to give it the flexibility that we talk about? 

Ms. Lee. 

Ms. LEE. We have certainly looked at that. In fact, our listing of 

teams in the report, we have a team that is called ‘‘Reg to Statute 

Baseline,’’ so we have a team of people that are actually going 

through, and it is a torturous meeting—anyone is welcome to attend—where they go through the FAR section by section and trace 

it back to the origin. We have found some very interesting things, 

some things that are in the 1947 vintage, et cetera, that remain in 

the regulation. And for each section they are making recommendations on what can be eliminated, streamlined. 

And in some cases those policies—to your point exactly—they are 

riding on how we spend money in the acquisition system. But probably if they are that important a policy can be accomplished another way, not necessarily in this system. 

So we are working through that, and that will be part of our report is this plethora of activities that are, in fact, influencing the 

way people do business. 

Ms. HANABUSA. But if you don’t wipe it out almost—I am not advocating for it; I am just saying that if you don’t wipe it out, so 

people doing business with the defense industry can go to one set 

of guidelines that has the preemptive power over others, you are 

going to have—I think what Mr. LaPlante was talking about—this 

whole problem with small business—or was it Mr. Williams—small 

business trying to figure this out. And they have such a difficulty 

doing that. 

It is not only the acquisition. It is the compliance part of it later. 

That is also very difficult. 

So my problem in listening to how we are going to change the 

acquisition process is the whole gamut. And what I want to hear— 

and you have only got another year to do this—is how radical a 

change does this body need to expect? Because if we—if you give 

us something in a year that is extremely radical, we are not going 

to be able to make the change. 

I love the concept of being able to do this in a DARPA type of 

format. I think that would be absolutely the greatest things we can 

do. 

But the only way we get there is if you actually propose that we 

may have to eliminate or preempt the whole acquisition process 

that is defense-related from the rest of FAR. 

Ms. LEE. That has certainly been discussed. We have actually 

had some people recommend starting from fresh baseline. What 

that does bring is some complexities because, as you know, the 

FAR applies government-wide so that would be—now you are a 

company that wants to do business with DOD but now there are 

new rules for both. 

So we have certainly looked at that and we have had some recommendations. We have some possibilities on how to give you some 
21 

information in a more—more regular intervals, and I do think 

there will be some very difficult decisions to make. 

Ms. HANABUSA. Thank you, Mr. Chair. My time is up. I yield 

back. 

The CHAIRMAN. Thank you. 

Mr. Gallagher. 

Mr. GALLAGHER. Thank you, Mr. Chairman. Can I dig into that 

a little more, or related topic? Excuse me. 

I want to thank you all for your work and joining us here today. 

I was especially impressed by the urgency of your conclusion. You 

wrote, ‘‘The time for superficial conversation and insubstantial 

changes to regulations and statutes has passed. The Section 809 

Panel has no interest in putting patches on a broken system. We 

intend to take a big bite into real change rather than just nibble 

around the edges. To do otherwise is to put our military’s mission 

and our Nation’s safety and security at risk.’’ 

I couldn’t agree more, and I applaud you for saying it in such 

clear language. And I look forward to working with my colleagues 

on the committee and under the chairman’s leadership to advance 

big and bold reforms. 

In recent years we have seen both the Defense Business Board 

and a lot of think tank experts call for zero-basing the defense acquisition system. This procedure would essentially hold that all acquisition regulations are guilty until proven innocent that their 

benefits outweigh their costs. 

And I know you are still in the interim stages of your investigation, but can you talk a little bit more about that and how seriously 

you are looking at zero-basing? And in your professional estimation, would a—such a wholesale change be practically possible? 

Ms. LEE. I think anything is possible. It is do we have the will 

and commitment? And one of the things that happens as we dig 

through, you know, the Federal—there is this belief by some that 

say, ‘‘Oh, you know, the Department did that to themselves.’’ 

And what we are finding is there is a spectrum here. That is why 

we are chasing back every regulation. And it is very detailed, as 

where is the source? Where is the origin? 

And as you see in our supplemental, on those little, tiny examples, even those little examples we had to go all the way back to 

a statute or an executive order to say, ‘‘In order to change it in the 

regulation this source document must also be changed.’’ And so we 

are providing that information so that it actually can be acted 

upon. 

Some of our prior reports would say, ‘‘Go make this happen,’’ but 

without the due diligence to make it happen it is very difficult. 

So yes, we have talked about baselining. It is not only the Federal Acquisition Regulation; for the Department of Defense it is 

also the 5000 regulation, which, as you know again, is governing 

to our particularly major weapon systems acquisitions, but that is 

one of our findings. 

We seem to like to use that huge, one-size-fits-all on everything 

and that is part of the problem. No decision is made yet, but we 

have discussed that perhaps we have segmented buys, these—you 

know, where these long-term platforms do require a great deal of 

diligence, a great deal of commitment, but some of this other tech-
22 

nology we should be doing like this. And when you apply this same 

process to that, neither one benefits appropriately. 

Dr. LAPLANTE. I would just add to the—our chair’s comment, to 

her credit, the chair—and—is that the way the panel is working is 

it is working simultaneously with the big concept ideas, the be bold 

part. But we know being bold and vague doesn’t help too much. So 

while we are being bold at the concept level and reevaluating fundamental assumptions going back decades, we also have this team 

that our chairwoman said is actually going to prepare to go back 

and do line-by-line through the regulations to make the changes or 

recommendations and go back to the sources. 

So we give to you-all—do that work for you. So it is the simultaneously—you have to really do both. 

Mr. DYER. Mr. Congressman, I will preface this by saying we 

don’t know the answer yet, but one of the areas of research is do 

successful programs succeed because they are walks, because they 

are experts in the FAR and how to get through the wickets? Or are 

they just more courageous in their culture in using the freedoms 

that are allowed within an existing system? Which works best? 

And I think that will inform the question of zero-basing versus 

more freedom or more see room. 

Mr. GALLAGHER. Okay. Well, by the time I ask my next question 

and you answer I will have exceeded my time, so in deference to 

the chairman I won’t do that. 

I would just say that—maybe because I am new and not yet 

jaded, but I think you have a lot of allies here when it comes to 

embracing bold reform, and so I encourage you to continue down 

that path and hopefully we can muster up the will power you referenced to be a partner in that. 

And so, Mr. Chairman, I yield. 

The CHAIRMAN. Ms. Shea-Porter. 

Ms. SHEA-PORTER. Thank you. And thank you, Mr. Chairman, for 

having this hearing. It is incredibly important. 

First I wanted to make a comment. 

Mr. Dyer, I was very disturbed but I heard before from a CEO 

[chief executive officer] the kind of statement that you made when 

they said, ‘‘What is it about capitalism that you don’t understand?’’ 

And I was thinking, well, we wouldn’t have capitalism if we didn’t 

have this great democracy. 

And I am wondering where—as I asked my friend who is a CEO, 

and I was talking to him about parts and outsourcing, et cetera, 

and the concerns, and he said, ‘‘Well, I have to answer to stockholders.’’ 

And I said to him, ‘‘Well, do you have an office of patriotism?’’ 

And so you touched on that. So how deep a problem is this? Have 

we, like, lost our sense that while the profit is very important—obviously, people need to have profit—have we lost our sense of also 

responsibility and the patriotism? I mean, you are standing here as 

patriots and saying, you know, we need to clean this up, and I 

agree with you. But I have had 6 years on this committee and this 

is a fairly familiar conversation that we are having right now. 

So I just wanted to put that out there and see if anybody wanted 

to comment on that. Do we need to have a discussion, a revisit, a 

review of, you know, who we are and why we are doing this? 
23 

Mr. DYER. Well, it is an important question, but it is an issue 

of erosion of dominance and timing. I think American companies— 

high-tech companies—if they believe we are in a genuine extremis, 

if in a World War II kind of a situation, as Congressman Russell 

mentioned, I am absolutely confident they will lay aside everything 

else and come to the support of the Nation in a very patriotic 

sense. 

The problem, though, is the time constant of being prepared 

today for an erosion of dominance and the time we will have to 

harness that patriotism. Companies that are on their way to being 

publicly traded companies benefit by operating as a public company 

before they go there. We would benefit by operating as a warfighting acquisition community before we have to do it. 

Mr. WILLIAMS. Congresswoman—— 

Ms. LEE. Go ahead—— 

Well, I would also like to just mention one of the things in our 

report that is a sensitive subject is the balance of oversight. You 

notice that I use a term that makes everybody uncomfortable, 

which is the—we need to decriminalize commerce. 

We many times go into agreements expecting that there is something nefarious about a company who actually wants to be treated 

fairly, is concerned about their reputation, wants to make a fair 

product and profit, but yet if they make one little mistake or they 

don’t sign up—I mean, some recent decisions where every certification is subject to treble damages, companies sit back and say, 

‘‘Wait. I don’t know if I can do this because of the reputational risk 

and the very onerous application of remedy for something that 

might be—that certainly is unintentional and may be monitored.’’ 

So I think that is a contributor and certainly I think—— 

Ms. SHEA-PORTER. That is a fair comment. And maybe we need 

to have this discussion and bring in these companies and sit and 

talk about all of this and what the needs are in a different setting. 

And I have one last question: We—our procurement technical assistance program. I am excited about these young new companies 

with their emerging technology, et cetera, but I know it is difficult. 

Are we utilizing this? Are they utilizing this enough? Are they 

aware of it? Are we making sure they are aware of it? 

Mr. WILLIAMS. Congresswoman, we are looking exactly at that 

question. In fact, as we think about our small business issues and 

things of that matter—that nature, we want to understand just exactly what you are asking. So we have got a group of folks who are 

going to go out and spend some time with PTACs [Procurement 

Technical Assistance Centers] and understanding how much involved and what they are doing to connect small businesses to the 

Department. 

Ms. SHEA-PORTER. Right. So because safety and our security is 

a responsibility for all of us, and so thank you very much for the 

work that you are doing. And I yield back. 

The CHAIRMAN. Mr. Bridenstine. 

Mr. BRIDENSTINE. Thank you, Mr. Chairman. And thank you, to 

our panel, for the great work you are doing on behalf of our country. 

I wanted to share with you one of my concerns in the acquisition 

process. It starts when requirements are generated, and then we 
24 

look through all the different ways to fill those requirements, and 

in many cases there is a commercial service that could be purchased but it only meets 95 percent of the requirements, and so 

since it doesn’t meet 100 percent of the requirements we end up 

immediately moving to a program where the government is purchasing, owning, and operating an entire system to meet really 

what is only 5 percent that commercial off-the-shelf can’t provide 

as a service. And, of course, that adds costs, complexity, time, effort, and challenges. 

And I see this especially in space-based communications. There 

is a lot of opportunity for us to lease capacity from commercial operators to change the way we do acquisitions of space-based communications. 

But you also see it—and I know, Dr. LaPlante, you and I have 

talked in the past about avionics modernization in aircraft, and I 

am not going to bring up the C–130 at all today. 

But I will tell you, you know, we see it when we need to do a 

modernization of a cockpit and there are commercial off-the-shelf 

capabilities and then there is this MILSPEC and we have to meet 

a very specific military specification that, you know, has all these 

requirements for heat and vibration and all these hardened kind 

of capabilities. And then you look at the aircraft that this avionics 

modernization is going to go into and it is a trainer, a T–1, for example, which is not going to be flying into combat at all. 

But we see these kind of programs where there is a 95 percent 

solution. And sometimes we add requirements that aren’t necessary, and other times if we just included commercial off-the-shelf 

in the process ahead of time they could save us a ton of money and 

a ton of time and they could do things—I know one of the things 

I advocate for is for the protected tactical waveform, but that is one 

example of a lot of different opportunities, if we can involve commercial off-the-shelf ahead of time we can ultimately save time and 

money. 

And I would like to hear your feedback on these things. 

Dr. LAPLANTE. I will start by saying I think you are hitting a key 

point. There is a type of analysis—it is going to sound very bureaucratic, but called cost capability analysis. It is really monetizing requirements, basically saying—to your point about, ‘‘This is going to 

cost you to get 95 percent; to get to 100 percent is going to double 

the cost. Okay, do you really want to do that?’’ 

That analysis, what I just—monetizing requirements generally 

does not happen. If it does happen it is not done robustly because 

we tend to have these serial processes where the requirements get 

finished, they get stamped, they get released, and then the acquisition people roll up their sleeves and start working. 

No. They should have gone back and forth on this monetization. 

The other piece, I think, which you would appreciate: It should 

be transparent. It should be public as best as possible, including 

the industry, how much these requirements are costing. Because 

then people will say, ‘‘Really? You are really going to double the 

cost of that just for that last 5 percent?’’ And I think that piece is 

not done. 

And there are pilots being done around. We did one in the Air 

Force when I was there on EPAWSS [Eagle Passive Active Warn-
25 

ing Survivability System] for F–15. I recommend you look at it. We 

had one lieutenant or captain in the Air Force probably saved—he 

saved us a ton of money by just going back to ACC [Air Combat 

Command] and saying, ‘‘Look how much more this is costing for 

this requirement.’’ And they said, ‘‘Oh, okay. Never mind.’’ 

So this is really important. 

Mr. BRIDENSTINE. And in many cases what you find in these programs where you are trying to finish that last 5 percent, we come 

to the end of the useful life of one satellite program and now in 

order to maintain that extra 5 percent, whether it is protection or 

some other kind of capability that is necessary for the military but 

not necessarily for—necessary for commercial, we enter into an entirely new military, you know, government-purchased, governmentowned, government-operated system when it is not necessary if we 

would just include commercial in what we were trying to accomplish to begin with. 

Some of the folks that I have talked to have described it as the 

‘‘tyranny of the program of record,’’ where you finish one program 

of record and you go on to the next program of record without looking at what are all the options available to us. And I know that 

is what the analysis of alternatives kind of process is all about, but 

I don’t think that always that is as utilized as it ought to be, as 

you articulated just now. 

So with that, Mr. Chairman, I thank you for the time. I yield 

back. 

The CHAIRMAN. Thank you. Mr. Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. And thank you, to all 

the witnesses, for being here and for the report, which, again, really is a serious analysis of the challenge that we face. 

I represent southeastern Connecticut, which a few years ago we 

celebrated the 60th anniversary of the launch of the Nautilus, and 

the story of Hyman Rickover, Admiral Rickover, in terms of how 

he basically went around the Navy and the Pentagon to bring to 

fruition. It was a 5-year gap in time from the first lightbulb that 

was powered by nuclear power to the launch of the Nautilus. 

Inside the Navy they were telling him it would take 75 years before they would ever see a nuclear-powered vessel and, again, he 

actually went to Congress to find ways to get around the, you 

know, the Pentagon sort of bureaucracy. 

And, you know, looking at the path forward at the end of your 

report in terms of just, you know, ideas that you are looking at in 

terms of thinking bold and moving forward, how can Congress sort 

of help with that? 

I mean, other than, you know, obviously, I am sure the chairman 

who is so passionate about this is going to do what he can to authorize, but, you know, obviously that story, which is probably 

going to never be repeated again—maybe not—but, you know, Congress really was a very big sort of player in terms of an advance 

that I think has really stood the test of time. I mean, our Navy 

still, I think, you know, surpasses in terms of capability because of 

that incredible genius and determination, you know, that took 

place 60-some-plus years ago. 
26 

So I don’t know if you have any sort of comments about, you 

know, ways this branch of government can sort of, you know, kind 

of help sort of goose the process. 

Mr. WILLIAMS. Yes, Congressman. I think your question speaks 

to as we put together a set of bold recommendations, how do we 

make sure that they are fully implemented to achieve the success 

that we collectively believe is important? And I think there is a series of things that have to go on. 

Obviously within the Department there has to be a phenomenal 

change in management activity established and we have to inculcate this kind of thinking philosophically into our training programs. 

I think the Congress has to provide the sort of stick-to-itiveness 

from sort of an independent perspective, you know, of even 

thought, you know, there needs to be a continual, ongoing, independent authority that looks at, are we actually implementing the 

way that the Congress believes these kinds of recommendations 

should be implemented? Because typically what seems to happen 

is as we go through administrations and changes of cycles people 

lose priorities and they refocus and we start to get away from 

things that we collectively believed were important before we even 

put them in place or—and can understand whether or not they 

make a difference. 

So I think there are some efforts that can put—be put together 

to help us get down the road and make these things effective. 

Mr. DYER. Congressman, there are similar stories today of tremendous success at great speed, but they are from Amazon and 

from Facebook and from Google. America knows how to do this. We 

just need to make it attractive to do it for the common good. 

Dr. LAPLANTE. And I would have to say, I just credit this committee and the chairman of this committee for your steady attention on this. It is making a big, big difference. It is. It is a hard 

slog, you know, it is a hard slog. 

The other thing I really commend doing—and I think this committee has done this over the years—stick to root cause. Treat the 

underlying disease, not the symptoms. That is one thing we are always asking ourselves. 

But again, I think to Admiral Dyer’s point, you guys all know 

you go out to the Valley and you sit down with Facebook, Google, 

and the companies, and you look at what they are doing and you 

say, ‘‘We can still do this stuff. It is just we gotta be doing it in 

the government.’’ 

The CHAIRMAN. Mr. Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. I would like to thank 

the witnesses for joining us today. 

Dr. LaPlante, I want to begin with you. I recently had a meeting 

with the CEO of one of the most successful defense contractors in 

the world and I asked him what goes into a successful contract. 

And he outlined three items: requirement stability, financial stability, and execution. 

And I wanted to get your perspective. Obviously through the acquisition process in the Air Force you have seen a lot through the 

years. Give me your perspective: What do we do to address the first 
27 

item he points out, which is requirement stability? How do we push 

out requirement creep? 

And you have spoken a little bit about that but I want to get a 

little more specific in your ideas about how that can happen. 

Dr. LAPLANTE. Yes. Actually, I think my experience in the last 

3 years when I was in the Pentagon, for the big weapon systems 

programs I didn’t see requirements creep. You know, the cliche ́ is 

that the four-star comes running in and pounds on your desk and 

says, ‘‘Oh, never mind. I don’t want the fighter to do this; I want 

it to do that.’’ That doesn’t happen. 

In fact, if you look at the bomber, what is now called the B–21, 

those requirements—they were classified requirements, mostly— 

were signed out by Robert Gates, Secretary of Defense, in 2011 and 

they remained completely unchanged to this day. And that was 

really important for this industry because what industry will tell 

you is, finalize your requirements, get it to us early, don’t change 

them, and give us stability in funding and we will execute to it. 

The only addition I would make, which is something that I am 

still struggling with and I know the panel is struggling with, is the 

commercial companies that are moving fast don’t pretend that they 

are going to know all the requirements when they start something 

fast. 

Mr. WITTMAN. Right. 

Dr. LAPLANTE. So I think there are some activities with technology that you have to have a much more give-and-take on requirements as you build it, sort of the discussion we were just having with Congressman Bridenstine. 

But I think for the big weapons platforms it is exactly right. 

What industry hates is they hate the fact that you are modifying 

the requirements a month before you drop the RFP. They say, 

‘‘Wait a second. I can’t invest.’’ 

So that is really hard. And it takes discipline not to change requirements. 

In fact, in the tanker—the tanker is a fixed-price contract—my 

job and the job of the Air Force was never change the requirement. 

Not once. And so far they have managed to do that. So it is very 

important. 

Mr. WITTMAN. Is there more we can do up front with certain elements in the industry in the RDT&E [research, development, test, 

and evaluation] to say, ‘‘Give us your thoughts and ideas about 

what we can accomplish’’? 

And obviously within the Pentagon there needs to be a baseline 

about what the needs are, but as Mr. Bridenstine spoke about too, 

it is a matter of, you know, what can you do quickly and what can 

you do most cost-effectively not just in the acquisition process but 

also the life cycle? 

And if you can take an off-the-shelf technology, many times, you 

know, value, life-cycle cost, all are much, much better in that realm 

than something that is driven to 100 percent requirement. 

Dr. LAPLANTE. Right. I believe very strongly that you have to do 

the kind of work that we were discussing with Congressman 

Bridenstine very early before you get the big acquisition. You go 

back and forth and say, ‘‘What can be done commercially? What 

can be done? Can we go back and forth?’’ 
28 

That has to be transparent, as I said, with industry. 

The interesting thing is in the Pentagon you are discouraged 

from doing that because you are interacting with industry while 

you are forming the requirements. And people used to ask me, 

‘‘Well, isn’t industry going to steer your—the requirements to their 

solution?’’ You know, I said, ‘‘Well, of course they are going to but 

let’s at least be transparent about it. Let them be an advocate for 

their solution.’’ 

But that has all gotta be done at the very beginning. And then 

once you are done then you don’t change the requirements. 

Mr. WITTMAN. I agree. 

Mr. Williams, let me ask a little bit different track question. Give 

me your perspective on the use of incremental funding, especially 

for larger programs where we expend dollars over a number of 

years and being able to leverage the most out of the dollars that 

we allocate in any one year. Give me your perspective on that. 

Mr. WILLIAMS. It is absolutely critical. I mean, that gives us the 

funding flexibility that we need as we look across the years. I 

mean, this question of how we think about requirements and the 

changes that need to occur across the technology space as it goes 

forward requires that we are able to fund contracts based on the 

need as it exists and as it changes. 

We all too often get stuck in a requirements set, particularly in 

the high-tech community where things are changing rapidly, and 

the nature of the funding, the incremental approach would be critical to allowing us to do that in a more flexible way. 

Mr. WITTMAN. Very good. Admiral Dyer, any thoughts about requirements creep or incremental funding? 

Mr. DYER. I am often asked, after having spent a long career in 

defense acquisition and then in my corporate world, ‘‘What are the 

differences?’’ 

You have, I think, touched one of the primary differences that I 

observe, and that is the ability to—for commercial industry to sit 

down with suppliers, to have a discussion about what technology 

can bring to the need that the company has. And that is an intense 

dialogue that arrives at an understanding of requirements and contract much earlier and much faster than we do it in government. 

Why is it hard for us in government? I always suck wind through 

my teeth when I say this, but we are so worried about the appearance of fairness that sometimes we act not in the best interest of 

the Nation. 

Mr. WITTMAN. Very good. Thank you, Mr. Chairman. I yield 

back. 

The CHAIRMAN. Mr. Wilson, 

Mr. WILSON. Thank you, Mr. Chairman. And, Chair Lee and fellow commissioners, thank you very much for your thoughtful report—interim report. We appreciate your dedication and hard 

work. 

And, Madam Chair, led by Chairman Mac Thornberry the House 

Armed Services Committee has been concerned about the cumbersome and time-consuming acquisition process that has hindered 

the Department’s ability to get innovative technology to the warfighter quickly enough to make a difference. In your view, is the 

Department competitive in getting the best technology to the war-
29 

fighter in the theater, and do you have any recommendations to expedite? 

Ms. LEE. That certainly is a thrust of our report. 

My concern, as we have heard from many of the members here, 

is we do have a very powerful military. We don’t want to in any 

way, shape, or form belittle what has been accomplished. But what 

we are saying is the environment has changed so substantially that 

that era and that approach needs to be modernized to address the 

emerging and changing threat and the changing dynamic marketplace. 

I think time is critical, and we have got to figure out a way to 

do these things much more quickly. 

Mr. WILSON. And I wish you well because in my National Guard 

service we work with communications, the SINCGAR [Single Channel Ground and Airborne Radio] system. And it certainly occurred 

to me, as—even as a JAG [Judge Advocate General] officer, that we 

could do better, and with more advanced technology. And so I look 

forward to your recommendations particularly on communications. 

And, Secretary LaPlante, the report indicated the growing and 

changing global defense marketplace where companies are no 

longer dependent on the Department of Defense for contracts and 

parts for major systems are sometimes built all over the world. 

Specifically, the report references the F–35 is produced in part by 

eight foreign nations. 

Is your view that all components should be manufactured in the 

United States, or is multinational manufacturing helpful while securing our technological advantage? And keeping in mind, too, that 

the F–35 multinational manufacturer creates an international market. 

Dr. LAPLANTE. Yes, that is a—it is a great question. 

I think it was just the other day that the first F–35 was built 

in Italy was just rolled out, if I remember right, and it is going to 

be produced, I believe, also in Japan. So yes, there is—the international aspect of the F–35 program is a huge strength of the program, frankly. 

It is a huge strength for multiple reasons. One is we want our 

allies and partners to be buying the airplane because it is the best 

airplane in the world for that kind of plane, and we are going to 

fight with them. We certainly don’t want them to go to other people. 

I was going to the airshows; I know some of you go to these 

airshows. Was at the last one I went to as assistant secretary was 

Dubai. The Chinese push of their military equipment there was 

very strong. They had their replica of the F–35, the J–31; they had 

their version of the MQ–9. 

You know, they were—so it is very clear we don’t want other 

countries to buy their stuff; we want it to buy the F–35. So it is 

a strength of the F–35. 

The question that you are getting at, which is the risk equation, 

which is the supply chain risk, and do we have an understanding 

of the supply chain and its global origins. I think where technology 

is going, without getting too technical here, the idea of having a 

root of trust in, for example, our hardware, regardless of where it 

is developed, is something that we as technologists have to give 
30 

everybody because we are at a point even in cellular communications just in this country where the root of trust of the cellular 

communications may be produced in China. 

So it is a much bigger issue than just with the military, and I 

think the technical solution to it is understand the supply chain, 

understand how the root of trust is ensured, meaning how do we 

understand the sanctity of what has been done or not to that supply chain. That is not easy, but I think the answer of pulling everything back in and not having F–35s produced globally is not the 

right answer. 

Mr. WILSON. And I appreciate particularly the concern of security 

of maintaining, that indeed what is produced is not copied by some 

other country that might come to mind. 

And for Commissioners Williams and Dyer, your interim report 

indicates that DOD asked if it could dictate terms to the industry, 

driving many companies not to be a part of the defense market. 

Can you elaborate on what DOD can do to change this pattern? 

Mr. WILLIAMS. Yes. I think we have to look particularly at the 

oversight structure that is involved in managing and supporting 

contracts. The whole issue of compliance centered around audit requirements, and pricing, and things of that nature is robust opportunity because when you think about the timeframe that it takes 

and the amount of resources that industry has to bring to bear to 

meet those compliance requirements, it often keeps them from 

wanting to do business or giving them the ability to do business 

with the Department. 

That is one of the things we hear consistently as we talk to companies out there who want to do business but have chosen not to. 

Mr. WILSON. Thank you very much. 

Mr. DYER. Congressman Wilson, I should mention especially for 

you, sir, that the panel is well-led, and as you may or may not 

know, our chairperson, Ms. Lee, is from South Carolina. So I just 

wanted to point that out. 

Mr. WILSON. That should have been brought up first. I can’t believe it. I always count on the chairman to bring up important 

issues. Thank you very much. 

[Laughter.] 

Mr. DYER. Sir, in answer to your question, we have to facilitate 

a conversation between high-tech nontraditional industry and 

DOD. You and I recently have discussed the role that consortia 

may be able to provide in terms of bringing in refreshed R&D [research and development], to expand the base, and to find those 

kinds of successes that we see at Amazon, Google, et cetera, and 

bring them back into DOD. 

The CHAIRMAN. Ms. Stefanik. 

Ms. STEFANIK. Thank you, Mr. Chairman. Thank you, to our witnesses, for being here today. 

In today’s economy the pace of technological advancements is 

growing exponentially, and in the interim report it—you write, 

quote—‘‘The acquisition process must be agile enough to respond to 

rapidly evolving threats and fast enough to develop and deliver 

new capabilities within the arc of emerging threats.’’ And my particular interest is in the area of the cyber domain. 
31 

Could you discuss the reform measures you have identified that 

better achieve this agile system to respond to emerging threats specifically in the cyber domain? 

Dr. LAPLANTE. I don’t know if the commission has weighed in yet 

on cyber. I will give you some of my own views that are not—the 

commission hasn’t done it, but the others can chime in. 

Let’s talk about the—what makes it hard for somebody who is 

trying to do damage to you with cyber. What makes it hard for 

them? 

Couple things. One, if you are changing all the time—if I am putting out, you know, hundreds of versions of Google every 2 days, 

or Facebook, whatever, for whatever reason I am doing it, that has 

gotta be hard on an attacker, number one. 

The other is heterogeneity, meaning things are different. We 

tend to, for economies of scale, make things the same. 

I think those two design principles—speed, which is already happening anyway in the commercial world, constant development, 

constant change, constant pushing—literally software pushed out 

overnight, and then look at the design and heterogeneity. I think 

those key aspects of design will keep us ahead in cyber because the 

benefits we get from the Facebooks and the Googles and our mobile 

apps is great for society. It brings with it risks, but we have to 

manage it into our system. 

And so I think that is a key point for cyber. 

Ms. LEE. And I think what we also see in our report, there is a 

mismatch between that ability to constantly change when we want 

to well-meaning, you know, have this process where it is full and 

open, everybody can propose. That takes time and really impacts 

the ability to be flexible and make those changes. 

So we are asking ourselves not specifically from cyber—although 

we have looked at from a technology standpoint—is there a better 

way to have a competitive underpinning but a much more flexible 

response? 

Dr. LAPLANTE. That is part of another activity. I have been looking at this, and just to add to that, I think it is Google says that 

they change half their software every month. Now, what ‘‘change’’ 

means—maybe small change, big change. Cars are pushing software out overnight, okay? 

So the idea that we could move into a system, could you imagine 

pushing out continuously software globally to the F–35 mission systems? People shudder at that. 

On the other hand, for lots of reasons, including security, that 

may be where we need to go. That certainly is where the commercial world is going. 

Ms. STEFANIK. Just to follow up, Dr. LaPlante, you talked 

about—and Ms. Lee—you spoke about how you are not specifically 

looking at cyber or haven’t yet as part of—it wasn’t included in this 

interim report. I think that is really important. 

In my capacity as chairwoman of the Emerging Threats Subcommittee, Cyber Command falls under our jurisdiction, and acquisition reforms, we need to look critically on what our proposals are 

and how they would impact cyber because, as I said, the pace of 

development is much more rapid and we need to ensure that we 

are investing in our cyber readiness, in our cyber defenses. 
32 

So a year from now I am hopeful that you can have a specific 

response related to cyber. 

Any comments? I would like to get your feedback on that. 

Ms. LEE. We will certainly put it on our list here and see how 

to best go about that. 

Ms. STEFANIK. Okay. Thank you, Ms. Lee. 

Ms. LEE. Look forward to working with you on it. 

Dr. LAPLANTE. I would also commend—there is some great work 

that is being done by the Defense Science Board on cyber, and they 

are—and I would also get this committee to look at that, including 

the resiliency of our weapon systems on all these issues. Whether 

this panel gets to it, I leave it to our chair. 

But we appreciate the concern. Obviously cyber is at the top of 

all of our minds. 

Ms. STEFANIK. Okay. Thank you. I yield back. 

The CHAIRMAN. Mr. Russell. 

Mr. RUSSELL. Thank you, Mr. Chairman. And thank you for this 

great report, but it is really on us collectively to do something 

about it. 

I guess, you know, as I look at the threats, powerful nations with 

economies that have a totalitarian type of system, they can streamline acquisition very quickly. The only way we will be able to leverage and stay ahead is through our innovation. 

And yet, we have seen 300—by your own report—300 primes now 

reduced to 5 mega-primes. We see an archaic system where small 

businesses that really aren’t small anymore, leveraging our rules 

where they are a $2 billion to $3 billion company, and they are still 

taking small business incentives. I haven’t figured out how they do 

that. 

And as I look at the funding of concepts with no real delivery. 

You have small companies out there that are doing incredible innovation but, you know, a mega-prime will step in and, ‘‘Well, for 

$200 million we will come up with a concept and a plan and we 

will get back to you,’’ and often those dollars will get siphoned off. 

Mid-sized companies, the few that remain, are investing their 

own venture capital and they are putting their investment and innovation in, and then when they come to the table with fantastic 

ways to leverage the future, we have the simplified acquisition program, which is no longer simplified, and then our FARs. You know, 

my own thinking is we need to throw out all of the FARs, just 

throw them all out, and then make the case for which ones need 

to go back in instead of the other way around, and I think we 

might be better served. 

But with regard to incentives, I was caught in your report where 

you say, ‘‘Without changing this mentality of incentives we will 

never have reform occur.’’ And I agree with that. 

And on that note, the Defense Innovation Unit Experimental, 

that is something that we have seen some amazing things happen 

from. You know, I think of these innovative smaller companies that 

gave us the Predator, the OCAS [Obstacle Collision Avoidance] system, I mean, things that are totally changing in how we fight and 

deal with future threats. 
33 

Would you all speak to the DIUx program? Because there has, 

you know, been kind of the—it has been vogue to try to want to 

crush that, and I would like your opinion on that. 

Dr. LAPLANTE. I will just say a few words about it. I don’t know 

if the panel is—or the commission is looking specifically at DIUx. 

What the commission is looking at, which will hopefully answer 

your question, is things that DUIx is trying. And so anybody who 

is trying the following, we commend them because it is experimentation. 

What they are doing is they are trying things like other transactional authority. Remember earlier we were talking about how 

hard it is to do contracting? 

Mr. RUSSELL. Right. 

Dr. LAPLANTE. Well, the DUIxes, both out in California and in 

Boston, and maybe the other one, too, is trying to get people on 

contract sometimes within weeks and using the authorities that 

they have. And just by doing that alone they are providing a huge 

value and learning the lessons for it. 

So I would commend any activity—and I think the committee 

would—any activity that the Department has that is trying these 

experiments of using existing authorities to do things differently or 

faster. 

And I could turn it over to my colleagues for other comments. 

Mr. WILLIAMS. Congressman, we have spoken to DIUx a little 

bit, and they are doing some tremendous things and they are taking advantage of authorities that exist to allow them to move fast. 

OTs [Other Transactions] are one example. 

The question that I think is important for all of us is why aren’t 

we able to do that in other parts of the Department? You know, 

why do you have to have these sort of specialized groups to do 

that? 

And I think that is the root question here because obviously one 

organization is limited in its capabilities and what it can do, and 

we need to think that through. I think DIUx, working with the 

services, you know, obtain funding to go acquire things that the 

services need, but you have to ask yourself, why do the services 

need to turn it over to DIUx? Why aren’t they able to do that themselves? 

Mr. RUSSELL. Yes. I couldn’t agree more. And I think, you know, 

when we have a national emergency we see things like the Rapid 

Fielding Initiative, DIUx, these different programs that meet the 

emergency, where industry, as you have all commented on, in 

leveraging their off-the-shelf technologies, it is like, ‘‘Well, okay, 

how could we harden that?’’ Or better yet, how could we adapt our 

systems, you know? 

And the warriors out there in the field, they figure out how to 

do that stuff all the time. And I guess, you know, I am heartened 

to hear you say that and I would hope, Mr. Chairman, that as we 

look into the future on contracting reform we don’t kill the nascent 

systems that really help us get to that. 

And then I am very interested, Ms. Lee, in some of these FAR 

eliminations, and I hope you will let us reach out to your office because we will have an axe in hand and drop amendments. So I 

hope to be contacting you. 
34 

Thank you, Mr. Chairman. 

Ms. LEE. We look forward to that. Thank you. 

The CHAIRMAN. Ms. Lee, we really hadn’t talked about timing. I 

mentioned at the beginning that through no fault of the commission you all kind of got off to a slow start. What are you looking 

at now? 

Ms. LEE. Mr. Chairman, thank you for acknowledging that. We 

did get a slow start and we very much appreciate the 2017 NDAA 

where you clarified that we are an independent panel and that, in 

fact, the panel had the authority to use 5 U.S.C. [United States 

Code] 3161, which we needed in order to hire our staff and also to 

accept industry volunteers, or volunteers. So that has been very 

fruitful. 

However, we—even though we were sworn in in August of 2016 

we couldn’t hire any of our small staff until December of 2016, and 

so we got internet in March and had quite a celebration over that. 

So that is a very long way of saying we would like to have 2 full 

years to do our work, and so with a start in about the, you know, 

January timeframe, we would like very much to go to January of 

2019 to give our report. I think that aligns with your calendar. 

We are discussing some possibility of some interim supplemental 

reports, and then the other thing would be however long you would 

want us to be available after that to take your actions and to do 

additional work. 

The CHAIRMAN. Well, we certainly want to work with you on it. 

Obviously we want to take advantage of this gathering of expertise 

that you have assembled on the commission. At the same time, I 

think we feel the same sense of urgency that you all have so eloquently expressed here today. 

So you want to get it right but you also want to push out boldly, 

and so we want to work with you on timing. My personal opinion 

is that maybe some interim reports help because that gives us 

some meat to work with while you continue to work on the other 

items. 

Ms. LEE. Thank you, Mr. Chairman. We would also really like— 

I would like to acknowledge the Army has been very helpful, forthcoming with detailees and help. 

We are working with the other services and we are also working 

a little on the budget challenge. So those are the challenges that 

remain before us. 

The CHAIRMAN. Well, I would just say in general that I am incredibly encouraged by the last 2 hours. I have heard the same 

things that you all have referenced, that, ‘‘Oh, just another study 

on acquisition. Everybody has tried. You are beating your head 

against the wall.’’ 

Number one, I don’t think any of us can accept what we have 

today because we know we can’t defend the country that way. But 

secondly, I am really impressed each of you bring particular expertise based on your experience in various places in the system, and 

you feel that urgency and can bring your expertise to bear with an 

urgency to get it fixed. 

So, you know, I know we will never have a perfect system, but 

on the other hand, I am very encouraged. And you could tell from 

the questions on both sides of the aisle, there are members of this 
35 

committee that are just as determined as you all are to work to 

make this better. And I think together, with your work product, 

our continued efforts, we definitely can. 

And so I want to thank you for what you have done so far, being 

here for the—today, the interim report, and especially for the work 

that you are going to do in the future. 

Hearing stands adjourned. 

[Whereupon, at 11:50 a.m., the committee was adjourned.] 

A P P E N D I X 

MAY 17, 2017 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

MAY 17, 2017 

(41) 

House Armed Services Committee 

Ranking Member Adam Smith Opening Remarks 

Full Committee Hearing on "Initial Findings of the Section 809 Panel: 

Setting the Path for Streamlining and Improving Defense Acquisition" 

May 17,2017 

Today's hearing on the interim report of the Advisory Panel on 

Streamlining and Codifying Acquisition Regulations, also known as the 

"Section 809 Panel," provides the committee with a reminder of the 

importance of thoughtful improvements of the Department of Defense's 

acquisition system. As the panel's interim report notes, the world is catching 

up with us on research & development spending, we face at least two "peer 

competitor" nations in terms of many high-end military capabilities, and 

technology is changing at such a pace that the DOD is challenged to keep up, 

let alone lead, on these issues. While the DOD continues to procure generally 

excellent equipment, its process for doing so can be far better. 

However, as we all seek to streamline the acquisition system, we 

should not lose sight of two things. First, we need to be very careful about 

adding any more process or bureaucracy to a system already drowning in 

both. The 809 Panel's interim report makes it clear that additive legislation 

may not be the path to success. The second thing is the need to retain basic 

good-government policies, such as competition whenever possible, ensuring 

accurate cost estimates, and thorough testing of systems. While I strongly 

support efforts to cut away unproductive red tape, I am wary of going too far 

and ending up in a place where we are buying systems based on under-thetable deals that cost too much and aren't tested to ensure they actually work 

as promised. The DOD has been there before and it resulted in the acquisition 

system we have now. We should not repeat those mistakes. What I hope the 

Section 809 Panel can do today and in the panel's final report is help us sort 

through and cut away unnecessary things while preserving the critical "crown 

jewels" of effective government oversight along the way. Given the threats 

we face and the rapid pace of technology we can't afford to get this wrong. 

DOCUMENTS SUBMITTED FOR THE RECORD 

MAY 17, 2017 

(45) 

[Note: Intentionally blank report pages ii, 26, 36, and 50, as well as back cover pages, were 

not included in this reproduction of the Section 809 Panel Interim Report.] 

Advisory Panel on 

Streamlining and Codifying 

Acquisition Regulations 

Section 809 Panel Interim Report 

May 2017 
46 

Members of the Advisory Panel on Streamlining and 

Codifying Acquisition Regulations 

The Honorable Deidre A. Lee, Chair 

Mr. David G. Ahern 

Maj Gen Casey D. Blake, USAF 

Mr. Elliott B. Branch 

The Honorable Allan V. Burman 

Mr. David A. Drab kin 

VADM Joseph W. Dyer, USN (Ret.) 

Ms. Cathleen D. Garman 

Ms. Claire M. Grady 

BG Michael D. Hoskin, USA 

The Honorable William A. LaPlante 

Maj Gen Kenneth D. Merchant, USAF (Ret.) 

Mr. David P. Metzger 

Dr. Terry L. Raney 

Maj Gen Darryl A. Scott, USAF (Ret.) 

LTG N. Ross Thompson III, USA (Ret.) 

Mr. Laurence M. Trowel 

Mr. Charlie E. Williams, Jr. 
47 

Advisory Panel on 

Streamlining and Codifying 

Acquisition Regulations 

Section 809 Panel Interim Report 

May 2017 
48 

The Section 809 Panel is pleased to submit the enclosed interim report. 

The Department of Defense spends nearly $300 billion annually acquiring systems, goods, 

and services in support of the nation's defense. A successful acquisition system is critical to 

providing warfighting and defense capability. 

Section 809 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114-

92), as amended by Section 863(d) of the National Defense Authorization Act for Fiscal Year 

2017 (Public Law 114-328), established an independent Advisory Panel on Streamlining and 

Codifying Acquisition Regulations-the Section 809 Panel. By statute, the panel was formed 

to 

Review the acquisition regulations applicable to the Department of Defense with a view 

toward streamlining and improving the efficiency and effectiveness of the Defense 

acquisition process and maintain defense technology advantage and 

Make recommendations for the amendment or repeal of such regulations that the panel 

considers necessary to 

establish and administer appropriate buyer and seller relationship in the 

procurement system, 

improve the functioning of the acquisition system, 

ensure the continuing financial and ethical integrity of defense procurement 

programs, 

protect the best interests of the Department of Defense, and 

eliminate any regulations that are unnecessary for the above purposes. 

To date, the 18 panel commissioners have organized into working groups focused on key 

challenges facing decision-makers in Congress and DoD with respect to the defense 

acquisition system. Commissioners and panel professional staff are looking at all aspects of 

that system to enhance DoD's agility to acquire what it needs to meet threats posed by a 

more fluid geopolitical environment, promote cost savings without shortchanging 

readiness, and simplify an antiquated system wedded to practices that challenge the 

workforce and push away marketplace innovators. 

Commissioners and panel staff have already met with more than 200 government and 

industry representatives to discuss new approaches to defense acquisition. Outreach 

includes not just meeting with acquisition leaders, practitioners, and marketplace 

representatives, but also communication with the larger interested public through an active 

web presence and direct in-person interaction. 
49 

Although the Section 809 Panel is just beginning its work, the focus of our efforts is to 1mt 

mission first and recognize the importance of timciiucss in the face of a rapidly evo1ving threat. 

The Section 809 com1nissioncrs and professional staff look forward to hearing from you we 

move tovvard developing con1prehensive reform proposals ·with actionable recommendations for 

statutory and regulatory changes. 

Sincerely, 

Deidre Lee 

Chair, Section 809 Panel 
50 

Table of Contents 

List of Figures ....•.••........••...•.•........•...•.•.•.......•••••••...•.......•..•.••......•..••..•.....•....•. vi 

List of Tables ..••.•.•.........•....••..........••.••.............•..............•.•.••...............••.........•. vi 

Acronym List ...••.•...............••.............•..............••.•.............•..•............................ vi 

EXECUTIVE SUMMARY ..................................................................................... 1 

The Demand for Fundamental Change ...................................................................... 2 

The Interim Report .............................................................................................. 4 

ADAPT AT THE SPEED OF A CHANGING WORLD ...................................................... 5 

The Nature of the Strategic Threat .......................................................................... 6 

Technology and Innovation .........•.•............••.•..............•............................••........... 7 

LEVERAGE THE DYNAMIC DEFENSE MARKETPLACE ................................................. 9 

Changes to the Defense Industrial Base ................................................................... 10 

An Evolving Marketplace ..................................................................................... 11 

The Growing Global Marketplace ........................................................................... 12 

New Relationships ............................................................................................. 14 

ALLOCATE RESOURCES EFFECTIVELY ................................................................. 15 

Erosion of U.S. Defense Spending-Advantage ............................................................ 16 

Effective Expenditures ....................................................................................... 19 

SIMPLIFY ACQUISITION ................................................................................... 21 

Unnecessarily Complex System ............................................................................. 22 

Mission Must Come First ...................................................................................... 24 

ENABLE THE WORKFORCE .............................................................................. 27 

lncentivize Effective Decision-Making ..................................................................... 28 

Authority and Accountability ................................................................................ 30 

Support the Workforce ....................................................................................... 31 

THE PATH FORWARD ..................................................................................... 33 

APPENDICES ••..••..•••••.••.••••••••••••.•........•••.•••••••••••..•..•...•.•.•••.•.•.•••••••••.•...•••.•.• 37 

Appendix A: Enabling Legislation ........................................................................... 38 

Appendix B: Panel Activities ................................................................................ 40 

Appendix C: Panel Teams .................................................................................... 46 

Appendix D: Communication with the Panel.. ........................................................... 48 

Appendix E: Professional Staff .............................................................................. 49 

v 
51 

LIST OF FIGURES 

Figure 1. U.S. R&D Spending ~ 1961 to 2013 (FY2009 USD) ...••••••••........•.•.••••........••.•••••........ 17 

Figure 2. Gross Domestic Expenditures on R&D ~ 1995 to 2015 .......•.......•..•.............•..••••....... 18 

Figure 3. Acquisition Strategy Schedule · Actual. .....•.............••••.............••........................ 31 

LiST OF TABLES 

Table 1. FAR Part 52.301 FAR Matrix Solicitation Provisions and Contract Clauses by Principal 

Type and Purpose of Contract ....•...•••..........•..•••.........••..••••.............••••............•...... 23 

ACRONYM LIST 

vi 

ABCT 

DFARS 

DoD 

ECSS 

ERK 

FAR 

FY 

FYDP 

GAO 

JLTV 

MRAP 

NOAA 

OECD 

OMB 

R&D 

RDT&E 

RFP 

SAP 

USD 

UTC 

Armored Brigade Combat Team 

Defense Federal Acquisition Regulation Supplement 

Department of Defense 

Expeditionary Combat Support System 

Electronic Record Keeping 

Federal Acquisition Regulation 

Fiscal Year 

Five Year Defense Plan 

Government Accountability Office 

Joint Light Tactical Vehicle 

Mine-Resistant Ambush Protected 

National Defense Authorization Act 

Organisation for Economic Cooperation and Development 

Office of Management and Budget 

Research and Development 

Research, Development, Test, and Evaluation 

Request for Proposals 

Simplified Acquisition Procedures 

U.S. Dollars 

United Technologies Corporation 
52 
53 

THE DEMAND FOR FUNDAMENTAL 

CHANGE 

The Section 809 Panel was established by 

Congress in the National Defense 

Authorization Act (NDAA) for Fiscal Year (FY) 

2016 to address a fundamental problem: The 

way the Department of Defense (DoD) buys 

what it needs to equip its warfighters is from 

another era, one in which the global strategic 

landscape was entirely different. Today the 

United States' ability to maintain technological, 

military, and econon1ic superiority is being 

challenged because its adversaries are rapidly 

modernizing their militaries with an eye 

toward exploiting U.S. vulnerabilities and 

negating traditional U.S. advantages.' DoD has 

not fully adjusted to the pace of this 

environment, nor has it adjusted to a 

marketplace that bears no resemblance to that 

of just a few decades ago. 

In short, both the strategic and marketplace 

realities, as described in this report, require a 

degree of agility that DoD is not currently able 

to deliver. The nation's strategic needs must 

drive the business model, not the other way 

around. 

In the last 50 years, there have been more than 

100 reports, studies, and analyses of how DoD 

acquires goods and services. From these 

reports, the lesson learned is clear: Tinkering 

and incremental approaches to acquisition 

reform have not provided the necessary results 

and are especially ineffective in today's rapidly 

changing environment. In fact, incremental 

approaches have exacerbated problems with 

the acquisition system by adding more layers of 

sign off, mountains of paperwork, and 

hundreds of additional regulations. DoD must 

implement bold approaches and bold solutions 

to produce true reform. 

The Section 809 Panel's Objectives 

From its beginning, the Section 809 Panel's 

overarching objective has been to make 

recommendations that, if adopted, will enable 

DoD to more consistently buy what it needs in 

a timely and cost-effective manner-whether 

that be commercial items,. information 

technology, services, weapon systems, or the 

fu 11 range of tools and equipment on which 

warfighters depend. 

For the purposes of this report, the acquisition 

system-which is conditioned by statute, 

regulations, executive orders, directives, 

policies, and procedures-is the overall process 

by which DoD buys goods and services. The 

process includes requirements, budgeting. 

production, testing, deployment, and 

sustainment. 

The acquisition system, when viewed as a 

whole, creates obstacles to getting the needed 

equipment and services because it makes DoD 

an unattractive customer to large and s1nall 

firms with innovative, state-of-the-art solutions. 

The system creates additional impediments 

because suffocating bureaucratic requirements 

make the pace at which it proceeds simply 

unacceptable in today' s rapidly changing 

technological environment. DoD must replace 

this system, designed for buying equipment for 

the Cold War, with one that takes advantage of 

technologies and methodologies available in 

the current marketplace. Essential equipment 

needed on the ground may be either 

unavailable to the department or egregiously 

1 John McCain, Restoring American Power: Recommendations for the FY 2018- FY 2022 Defense Budget, accessed January 27, 2017, 

https:/ /www. m cca!n. senate .gov f pub I i c/ _ ca che/f!les/2 5bff0ec -481 e-466a-843f -68ba5 619e6d8/ restoring-american-power-7. pdf. 

2 
54 

tardy, leading to genuine threats to the nation's 

security. DoD does not have the luxury to wait. 

These ideas are not new. The 1986 Packard 

Report made a similar point. 

Excellence in defense management cannot be 

achieved by the numerous management layers, 

large staffs, and countless regulations in place 

today. It depends ... on reducing all of these by 

adhering closely to basic, common sense 

principles: giving a few capable people the 

authority and responsibility to do their job, 

maintaining short lines of communication, and 

holding people accountable for results. 2 

As compared to 1986, there are far more layers 

at DoD, to include even larger staffs, and too 

many regulations to count. The inescapable 

conclusion when viewing DoD acquisition as a 

whole, due to no one's intentions or actions in 

particular, is that process wins out over results. 

In addition, too frequently ancillary public 

policy objectives, often driven by statutes or 

executive orders, receive equal or greater 

priority than mission. 

Data-Driven, Actionable 

Recommendations 

The Section 809 Panel final report will provide 

specific, data-driven recommendations that, if 

implemented, will do the following: 

Enable DoD to be more adaptable in the face 

of a rapidly changing threat environment. 

• Make DoD a more attractive customer in the 

new, dynamic defense marketplace. 

• Enable DoD to use scarce resources allocated 

to procurement more efficiently. 

• Simplify the acquisition process so goods 

and services can be purchased in a timely 

manner without unnecessary burden. 

• Encourage and incentivize the workforce to 

make sound, mission-driven decisions. 

The Section 809 Panel's recommendations will 

focus both on streamlining the process and 

putting forth new approaches that adopt 

techniques from the way private-sector 

business is conducted in the 21st century. These 

recommendations will form a method of 

buying that is simple, understandable, and easy 

to execute and that results in timely, costeffective acquisition. 

Section 809 Panel commissioners and staff 

already have spoken to high-level 

representatives from dozens of con1panics, 

including those that sell to DoD, those that do 

not but would like to, and even those that will 

not consider competing for contracts. The 

message is clear: A process that features 

excessive layers, tremendous amounts of 

paperwork, and timeframes that do not fit the 

wav most firms do business is off-putting to 

fir~s in the marketplace. DoD must develop 

the ability to be a savvy customer in the rea]-

world marketplace, so it is able to purchase the 

technology and equipment it needs. 

Its enabling legislation requires the Section 809 

Panel to report findings by August 2018. By 

that time, the panel will make recommendations that comprehensively strip away the 

regulatory underbrush that hampers the 

department's ability to maintain a competitive 

advantage in the face of the country's enemies. 

In addition, the panel will put forth 

2 President's Blue Ribbon Commission on Defense Management, A Quest for Excellence, Final Report to the President, accessed April17, 

2017, 

http:/ /usacac.army .mi!/cac2/CSI/docs/Gorman/06 _Retired/Ol_Retired_1985 _90/07 _86_PackardCommission_Fina1Report/01_PackardCo 

mmission_Fina!Report.pdf. 

3 
55 

recommendations, supported by specific 

statutory and regulatory impletnenting 

language, to change the way the department 

approaches the marketplace in its efforts to 

purchase the whole range of goods and services 

needed to equip its warfighters. As it stands, 

the process has left the acquisition workforce 

stymied in its good faith efforts to deliver the 

right goods in a timely manner. Although 

change is never easy, and at times it can be 

painfu 1, the status quo is unacceptable. 

THE INTERIM REPORT 

This interim report sets forth the Section 809 

Panel's framework for the need for acquisition 

reform. This framework, addressed in the five 

main sections of the report, will guide the 

panel's future work and recommendations. 

Adapt at the Speed of a Changing World 

The United States is operating in a global 

environ1ncnt that is n1orc fluid, more 

interconnected, and faster evolving than at any 

point in history. To adapt to this reality, the 

acquisition process must be agile enough to 

respond to rapidly evolving threats, and fast 

enough to develop and deliver new capabilities 

within the arc of emerging threats. 

Leverage the Dynamic Defense 

Marketplace 

The defense industrial base has changed, and to 

maintain technological advantage, DoD 

increasingly must leverage the commercial 

marketplace. To be successful in this broader 

marketplace requires a fundamental change in 

the DoD-commercial relationship. DoD must 

becon1e an attractive customer with which 

commercial firms want to do business. This 

need requires DoD to be a more sophisticated 

4 

buyer that is responsive to market dynamics, 

company interests, and the greater economic 

landscape. 

Allocate Resources Effectively 

The U.S. military faces multiple threats posed 

by increasingly capable adversaries and 

uncertain domains of warfare. It also contends 

with constrained defense budgets. To n1ore 

effectively and efficiently allocate resources, 

DoD must better align and coordinate how it 

budgets, sets requirements, and acquires what 

it needs, to include not only major weapon 

systems, but also the services and low-dollar 

items that make up more than half of DoD 

contract spending. 

Simplify Acquisition 

Some of the regulations and statutes governing 

defense acquisition are outdated or no longer 

applicable and should be amended or repealed 

to make the system more effective and efficient, 

and expand the number of companies willing to 

do business with DoD. 

Enable the Workforce 

The current acquisition laws and regulations 

are overly complex, difficult to understand and 

implement, and contain requirements that 

result in people making suboptimal decisions 

and being risk-averse. DoD needs an 

acquisition system that is simple, 

understandable, and executable by people 

operating in an environment that c1npowcrs 

and incentivizcs them to make decisions that 

lead to positive outcomes. 
56 

5 
57 

The United States is operating in a global 

environment that is more fluid, more 

interconnected, and faster evolving than at any 

point in history. To adapt to this new reality, 

the acquisition process must be agile enough to 

respond to rapidly evolving threats and fast 

enough to develop and deliver new capabilities 

within the arc of emerging threats. 

DoD needs an acquisition systetn that can shift 

and adapt as quickly as the strategic landscape. 

As former Chairman of the Joint Chiefs General 

Martin Dempsey wrote in the 2015 National 

Military Strategy, "Today's global security 

environment is the n1ost unpredictable I have 

seen in 40 years of service." 3 DoD's acquisition 

system must be capable of nimbly moving 

among, or simultaneously pursuing, 

fundamentally different capabilities on 

different timelines. For example, the system 

1nust accommodate, at the same tin1e, 

delivering tninc-resistant ambush protected 

(MRAP) vehicles to support ongoing 

operations, developing and acquiring cyber 

warfare capabilities, and fostering the cuttingedge capabilities of the future. The faster 

technology changes, the more flexible 

acquisition must be. 

THE NATURE OF THE STRATEGIC 

THREAT 

With respect to U.S. security, the geopolitical 

landscape has been generally stable. For the 

first few decades of the 20th century, the lens 

through which the strategic threat was viewed 

focused on Europe. For nearly 50 years after 

World War II, the strategic threat emanated 

from a Cold War perspective, which was 

followed by a period after the 1991 Soviet 

collapse when U.S. military and economic 

dominance remained relatively unchallenged. 

Currently, the emergence of peer competitors, 

midtier regional adversaries, and nons tate 

actors capable of threatening U.S. interests and 

lives has created an unstable geopolitical 

landscape:t These adversaries are learning how 

to offset traditional U.S. military advantages. 

Russia and China have embarked on rapid 

modernization efforts and are aggressively 

challenging U.S. interests around the world and 

testing U.S. resolve, alliances, and military 

capabilities.5 At the same time, nonpeer 

adversaries are becoming more capable and 

lethal as advanced military hardware becmnes 

n1ore accessible and innovative technologies 

with military applications become more 

abundant, cheap, and available. 

The United States must now contend with 

potential adversaries that are not just rising 

global powers but also are important trading 

partners. These adversaries threaten areas of 

vital strategic importance for the United States, 

as well as its allies and partners that have 

shared interest and values.6 The threats are 

more numerous, geographically diverse (or, in 

the case of non state actors or cyber warfare, 

3 Joint Chiefs of Staff, The National Military Strategy of the United States of America: The United States Military's Contribution to National 

Security, accessed April 17, 2017, http:/ /www.jcs. mii/Portals/36/Documents/Publications/2015 _National_Military _Strategy .pdf. 4 General James Mattis, Senate Armed Services Committee Nomination Hearing Statement, accessed April24, 2017, 

https:/ /www .armed-servkes.senate.gov /imo/media/doc/Mattis_ 01-12-17 .pdf. 5 Dmitri Trening, "The Revival of the Russian Military: How Moscow Reloaded," Foreign Affairs, May/June 2016, 

https:/ /www .foreignaffalrs.com/articles/russia-fsu/2016-04-18/revival-russian-military. Department of Defense, Annual Report to 

Congress: Military and Security Developments Involving the People's Republic of China 2016, accessed April17, 2017, 

https:/ /www.defense.gov/Portals/1/Documents/pubs/2016%20China%20Military%20Power%20Report.pdf. 5 The State of the World: Hearing before the U.S. House of Representatives Committee on Armed Services, 115th Cong. (2017), (statement 

of David H. Petraeus), accessed April 17, 2017, http:/ /docs.house.gov/Committee/Ca!endar/ByEvent.aspx?EventiD=105509. 

6 
58 

potentially without a geographic location), and 

unpredictable-' New threats emerge faster, and 

different threats require fundamentally 

different, and often multivariate, responses8 All 

of these factors have combined to create a 

world where the geopolitical strategic 

environment is more fluid, complex, and 

unpredictable than ever.9 

TECHNOLOGY AND INNOVATION 

The technology of warfare had remained static 

for extended periods, punctuated by short 

bursts of innovation-driven development of 

new warfare technologies and capabilities, such 

as gunpowder, ironclad ships, combustion 

engines, airpowcr, and drones. The current 

acquisition system is predicated on a more 

stable and predictable context instead of 

today's dynamic environment with constantly 

changing and emerging technology. 

For example, the 3V,-inch floppy disk, 

introduced in 1987, held a mere 1.44 MBW Just 

30 years later, it was replaced by the 1 TB flash 

drive, which can house 1nore information than 

728,177,000 floppy disksn Like storage 

capacity, con1puting power is increasing 

quickly as well. The processing power of an 

iPhone 6 is 120,000,000 times faster than the 

computers used to put a 1nan on the n1oon. 12 

Technology innovation also enabled the U.S. 

military to go from its first use of the Predator 

unmanned autonomous vehicle for surveillance 

in battle in 1995 to the weaponized Predator by 

2001." 

Technological innovation in the late 20th and 

early 21st centuries was a catalyst for the 

current speed of weapons development.'' DoD 

is now in a period during which the time a 

particular technology is a dominant force on the 

battlefield is getting increasingly shorter, 

disruptive technologies are emerging at a faster 

pace, and these technologies are more widely 

dispersed. DoD has benefited from disruptive 

technologies and been able to incorporate these 

innovations, from nctccntric warfare to 

unmanned vehicles. 15 To fully incorporate 

existing and future technologies requires 

organizational shifts that will allow DoD to 

7 H.R. McMaster, "Harbingers of Future War: Implications for the Army with Lieutenant General H.R. McMaster" (presentation at Center 

for Strategic and International Studies, May 4, 2016), accessed April17, 2017, https://www.csis.org/events/harbingers-future-warimplications-army-!ieutenant-general-hr-mcmaster. 

8 Department of Defense, Quadrennial Defense Review 2014, accessed April 17,2017, 

http:/ I archive. defense .gov I pu bs/20 14 _Quadrennia I_ Defense_ Review. pdf. 

9 Council on Foreign Affairs, Preventive Priorities Survey: 2017, accessed February 3, 2017, http://www.cfr.org/conf!ictassessment/preventive-priorities-survey-2017/p38562. Department of Defense, Quadrennial Defense Review 2014, accessed April17, 

2017, http:/ /archive.defense.gov/pubs/2014_ Quadrenniai_Defense_Review .pdf. 10 "Floppy Disk: Background," McGill College, accessed Aprill8, 2017, 

http://cs.mcgi!!.ca/""rwest/wikispeedia/wpcd/wp/f/Fioppy _disk.htm. 11 "How Many Floppy Disks Can You Fit in a Terabyte?" Landmark Technologies, accessed April18, 2017, 

https:/ /www.lmktec.co.uk/blog/how-many-f!oppy-disks-can-you-fit-terabyte. 12 "Your Smart phone is Millions of Times More Powerful Than A!! of NASA's Combined Computing in 1969," ZME Science, accessed 

March 16,2017, http://www.zmescience.com/research/technology/smartphone-power-compared-to-apollo-432/. 13 John David Blom, Unmanned Aerial Systems: A Historical Perspective (Fort Leavenworth, KS: Combat Studies Institute Press, 2010), 93, 

107. 

14 Committee on Homeland and National Security of the National Science and Technology Council, A 21st Century Science, Technology, 

and Innovation Strategy for America's National Security, accessed Apri117, 2017, 

http:/ /www.defenseinnovationmarketp!ace.miljresources/Nationai_Security _ ST _Strategy_ 2016 _FINALPDF. 15 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry: A New Strategic 

Approach to Military-Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/fi!es.cnas.org/documents/CNAS-ReportFutureFoundry-final.pdf. 

7 
59 

access and incorporate them faster than 

potential competitors. 16 

In a world with rapidly changing technology, 

time is a valuable resource that must not be 

taken for granted. It is difficult to predict what 

capabilities DoD will need 5 to 10 years from 

now-biotechnology, nanotechnology, artificial 

intelligence, robotics, or a new technology area 

not even known today. It also is unclear on 

what plane the military will conduct warfaretraditional battlefields, space, cyberspace, or 

some other domainY The current acquisition 

system lacks the agility needed to adapt to new 

paradigms. 

Achieving technological dominance is not 

simply a matter of developing and acquiring 

the most advanced technology. Deputy 

Secretary of Defense I{obert Work has 

emphasized that it also requires "operational 

and organizational constructs" that allow DoD 

to interact with new technologies and 

effectively integrate them into a strategic 

framework. 18 As Chairman of the Joint Chiefs of 

Staff Gen. Joseph Dunford stated, "Keeping 

pace with the speed of war means changing the 

way we approach challenges, build strategy, 

make decisions and develop leaders." 19 Systems 

and capabilities must be developed, deployed, 

and integrated into operations within the arc of 

the threat, not after the threat has passed or 

after DoD has spent billions of dollars on 

technologies or capabilities that already are 

obsolete or will be obsolete by the time they are 

deployed. The private sector now drives much 

of the technological innovation, which makes it 

difficult for DoD to keep pace.20 

Although making the acquisition system 

operate faster would help to a degree, it is not 

enough. The acquisition process, including 

requirements definitions and budgeting, must 

be flexible enough to deliver the needed 

capabilities. Instead of being so rigid and 

convoluted, the acquisition system should be 

shaped to fit the required capabilities. Such a 

process n1ay require multiple acquisition 

pathways that can be tailored to specific 

requirements and tirneframes, depending on 

whether the need is to prototype new systems; 

buy commercial off-the-shelf items; or modify 

off-the-shelf technologies into deployable, 

limited-production programs.21 

16 Barry Watts, Center for Strategic and Budgetary Assessments, The Maturing Revolution in Military Affairs, accessed April17, 2017, 

http:/ /csbaonline.org/uploads/documents/2011.06.02~Maturing-Revolution~!n-Military-Affairsl.pdf. 

17 Department of Defense, Quadrennial Defense Review 2014, accessed Aprill7, 2017, 

http:/ 1 archive. d efense.gov j pu bs/20 14 _Quadrennia I_ Defense_ Review. pdf. 18 Sydney J. Freedberg, Jr., "Air Force Leading Way to 3rd Offset: Bob Work," Breaking Defense, September 21,2016, 

http:/ /breakingdefense.com/2016/09/air-force-ops-centers-lead-way-to-3rd-offset-bob-work/. 19 Jim Garamone, "Dunford: Speed of Military Decision-Making Must Exceed Speed of War," DoD News, January 31,2017, 

https:/ /www .defense.gov/News/ Article/ Artide/1066045/dunford-speed-of-military-decision-making-must-exceed-speed-of-war/, 2° Committee on Homeland and National Security of the National Science and Technology Council, A 21st Century Science, Technology, 

and Innovation Strategy for America's National Security, accessed Aprll17, 2017, 

http:/ jwww.defenseinnovationmarketplace.mil/resources/Nationai_Security _ST _Strategy_ 2016 _FINAL.PDF. 

21 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry: A New Strategic 

Approach to Military-Technical Advantage, accessed April17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS-ReportFutureFoundry-final.pdf. 

8 
60 
61 

The nature of the defense industrial base has 

changed, necessitating a fundamental change in 

the relationship between DoD and the 

commercial marketplace. For the purposes of 

the Section 809 Panel's work, this report will 

refer to the broader marketplace as the dynamic 

defense marketplace. To successfully leverage the 

dynamic defense marketplace, the department 

must become a savvy, attractive customer with 

which firms want to do business. This need 

requires DoD to be a more sophisticated 

buyer-one that understands and is responsive 

to market dynamics, company interests, and the 

greater economic landscape. 

CHANGES TO THE DEFENSE 

INDUSTRIAL BASE 

The defense acquisition system is primarily 

predicated on a post-World War II conception 

of the global economy, commercial 

marketplace, and management practices that no 

longer holds true.22 The era of the traditional 

defense industrial base is over. 1l1e number of 

firms exclusively manufacturing defense 

products in the United States is declining, and 

the firms that are defense-oriented are relying 

more on subcontractors. 23 DoD increasingly 

turns to and relies on a marketplace of boutique 

defense companies and nondefense firms 

defined not by the industrial age but by the 

technologies, services, or unique capabilities 

they provide.24 

The traditional defense industrial basemanufacturing companies that primarily 

operate in the defense sector-has diminished 

substantially. According to DoD, the last major 

defense downturn in the late 1980s and early 

1990s resulted in more than 300 prime 

contractors, platform providers, and subtier 

companies merging to form the five mega-primes 

of today: Boeing, Lockheed Martin, Northrop 

Grumman, Raytheon, and General Dyna1nics.25 

Defense industry senior executives believe 

defense mergers and acquisitions will accelerate 

through the end of the decade, with more 

consolidation still to come.26 One factor driving 

this trend is that the defense sector is less 

robust than in the past. In the 1960s, the 

Fortune 100 included 15 defense firms that 

represented 30 percent of the revenue for the 

group." In 2017, the Fortune 100 includes only 

four defense firms, representing barely 

3 percent of the revenue for the group. 28 

n Defense Business Board, Innovation: Attracting and Retaining the Best of the Private Sector, accessed April18, 2017, 

http://dbb.defense.gov/Portals/35/Documenls/Reports/2014/DBB-FY14-02·1nnovatlon%20report%20%28final%29.pdf. 

21 Andrew Hunter, Center for Strategic and International Studies, Defense Acquisition Trends 2015: Acquisition in an Era of Budget 

Uncertainty, accessed April 18,2017, https://defense360.csis.orgjacquisition-and-beyond/. 24 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry: A New Strategic 

Approach to Military-Technical Advantage, accessed April17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS-ReportFutureFoundry-finaLpdf. 

25 Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, Annual industrial Capabilities: Report to Congress 

for 2015, accessed April18, 2017, http://www.acq.asd.mil/mibp/resources/2015%20AIC%20RTC%2010-03·16%20-

%20Public%20Undassified.pdf. 

16 "Defense Outlook 2017: A Global Survey of Defense-Industry Executives," John Dowdy and Elizabeth Oakes, McKinsey and Companyaccessed Apri I 18, 20 17, http://www. mckinsey .com/industries/ aerospace-and-defense/ our -insights/defense-outlook-2017 -a-globalsurvey-of -defense ·industry-executives. 

27 Thomas Davis, "The Incredible Shrinking Defense Industrial Base," SIGNAL Magazine, June 16, 2015, 

http://www .afcea .org/ content/?q=Biog-incred ible-shri nking ·defense-industria 1-base. 28 "Fortune SOO list," Fortune.com, accessed April 24, 2017, http://beta.fortune.com/fortuneSOO/!ist. 

10 
62 

One of these companies, Boeing, receives less 

than half of its revenue from Do0.29 Many 

companies that previously focused primarily on 

the defense market are now diversifying their 

client base, turning to nondefense clients for 

revenue. 30 

AN EVOLVING MARKETPLACE 

The dynamic defense marketplace is vastly 

different from the defense-centric marketplace 

of the past in which DoD could set the rules of 

acquisition. To effectively benefit from and 

compete in the dynamic defense marketplace, 

DoD must understand where it fits into the 

current business environment and adapt to this 

new reality. DoD needs to be a more 

sophisticated buyer, one that understands 

market dynamics, interests of companies 

(including cash flow, profit motive, and 

opportunity costs), and the broader economy. 

One of the challenges presented by DoD's 

increasing reliance on the commercial market is 

n "Boeing: Products & Business Segments," AeroWeb, accessed April 24, 

its limited influence in that market. DoD no 

longer dominates many sectors that it once did. 

For example, although DoD previously 

accounted for more than 90 percent of all 

U.S. semiconductor purchases, by 1990, 

purchases throughout the entire U.S. goven1-

ment represented less than 2 percent of the 

global market." Today, that market share has 

dropped to less than 0.5 percent of all 

semiconductors made in the world. 32 DoDfinanced R&D is playing a less important role 

in innovation and development, which further 

diminishes DoD's influence. In 1960, federal 

defense-related R&D accounted for an 

estimated 49 percent of all R&D expenditures in 

the United States, and 35 percent of G-7 

cxpenditures. 33 By 2013, federal defense-related 

spending was just 16 percent of U.S. R&D 

expenditures and 9 percent of those within the 

G-7. 14 

Given DoD's diminishing influence in the 

current marketplace, many companies have 

little incentive to accommodate the long lead 

30 Thomas Davis, "The Incredible Shrinking Defense Industrial Base," SIGNAL Magazine, June 16, 2015, 

http://www.afcea.org/content/?q"'Biog~incredible-shrinking-defense-industrial-base. 

31 Falan Yinug, Semiconductor Industry Association (SIA), email to Section 809 Panel, March 6, 2017. 

J2tbid. 

31 1n 1960, U.S. federal R&D spending, as reported by OMB in unadjusted dollars, was $5.9 bit!ion for defense and $1.4 bi!tion for 

nondefense; see OMB, Table 9.7, Summary of Outlays for the Conduct of Research and Development: 1949-2017, accessed April 24,2017, 

https:/ /obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2017 /assets/hist09z7.xls. In 1960, estimated U.S. nonfederal 

R&D spending, as reported by the National Science Board in unadjusted do!!ars, was $4.8 billlon; see "Appendix Table 4-6: U.S. R&D 

Expenditures, by Source of Funds and Performing Sector: 1953·2013," National Science Foundation, National Science Board, Science & 

Engineering Indicators 2016, accessed April 24, 2017, https:/ /www.nsf.gov/statistlcs/2016/nsb20161/uploads/1/7 /at04·06.pdf. Non·U.S. 

G-7 spending in 1960 is extrapolated from Graham R. Mitchell, The Global Context for U.S. Technology Policy, U.S. Department of 

Commerce, accessed April18, 2017, https:/ /usa.usembassy.de/etexts/tech/nas.pdf. The non· U.S. G-7 countries at the time included 

Canada, the United Kingdom, France, Italy, Japan, and West Germany (now Germany). According to the report, the United States 

accounted for 70.6 percent of R&D expenditures from these countries-which, extrapolating based on the OMB and NSB figures cited 

above, produces an unadjusted do!!ar total of about $5.0 bi!!ion. 

34 !n 2013, U.S. federal R&D spending, as reported in unadjusted dollars, was $71.1 billion for defense and $61.4 billion for nondefense. 

See OMB, Table 9.7, Summary of Outlays for the Conduct of Research and Development: 1949-2017, accessed April 24, 2017, 

https:/ /obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2017 /assets/hist09z.7 .xis. The estimated U.S. nonfedera! R&D 

spending in 2013 is extrapolated from data published by the Organisation for Economic Cooperation and Development, which reported 

$433.2 billion in U.S. R&D spending in 2013-indicating $300.8 billion in nonfederal R&D spending. See "Main Science and Technology 

Indicators, Gross Domestic Spending on R&D- Total, MiUion U.S. Do11ars, 1981- 2021,"0ECD, accessed April 24, 2017, 

http://stats.oecd.org. The 2013 data on R&D spending by non-U.S. G-7 countries is also provided in the OECD database: $24.6 billion for 

Canada, $54.0 billion for France, $94.8 bi11ion for Germany, $26.1 bi11ion for Italy, $153.5 bi11ion for Japan, and $39.0 bi11ion for the UK. 

11 
63 

times, restrictive contract terms, and onerous 

regulations associated with government 

contracting. The market for small arms 

illustrates this point well. In the United States 

alone, small arms companies produce more 

handguns in one month than the Army ·will buy 

in the next 25 years.3s 

In 2005, the U.S. military set out to choose a 

new handgun to replace the decades-old M9 

Beretta pistol.J'· After 10 years of developing 

and rewriting requirements, the Army issued a 

request for proposal (RFP) to industry in the 

fall of 2015. Even after 10 years, the Army did 

not identify key requirements, such as caliber 

or the specific ammunition for the new 

handgun." The Army's first draft RFP exceeded 

350 pages, not counting 23 attachments. ;s The 

paperwork alone added an estimated $15 

million or 20 percent to procurement cost.:>9 

Some in industry balked at the process and 

complexity for a simple handgun purchase. For 

example, Ruger, a leading handgun 

manufacturer, chose not to compete due to the 

administrative costs to comply with the 

rcquirements.4o 

THE GROWING GLOBAL 

MARKETPLACE 

DoD increasingly relies on companies operating 

in a fluid global economic ecosystem, marked 

by mergers, acquisitions, spinoffs, joint 

ventures, outsourcing, and combinations. 

Boutique firms, with both corporate and 

government clients, may bid on defense 

contracts one year and not the next. 41 Boeing 

and Lockheed Martin competed fiercely on the 

F-35 joint Strike Fighter program, yet partnered 

on the Long Range Strike-Bomber program, 

and Bell Helicopter partnered with Boeing on 

the V-22 Osprey helicopter, yet competed 

against Boeing for the Army's Future Vertical 

Lift program of helicopter modernization.42 

35 United States Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Firearms Commerce in the United States: 

Annual Statistical Update 2014, accessed April 24,2017, https://www.atf.gov/fi!e/3336/download. 36 Commerce Business Daily, Joint Combat Pistol Solicitation, accessed April 24,2017, http://www.cbdnet.com/index.php/search/show/893436. Loren Data's FBO Daily, Joint Combat Pitol (JPC) System, accessed April 24, 2017, 

http:/ /www.fbodaily.com/archive/2005/12-December /04-Dec-2005/FB0-00943889.htm. Federal Business Opportunities, Joint Combat 

Pistol (JPC) System, accessed April 24, 2017, 

https://www.fbo.gov/index?s=opportunity&mode=form&id=9f67b094636a104ae0bd1068f6ca672a&tab=core& cview=l. 37 Rowan Scarborough, "Army Misfires on Pistol Upgrade Effort, Confuses Gun Makers with Complex Requireme~ts," Washington Times, 

October 28, 2015, http:/ /www.washingtontimes.com/news/201S/oct/28/army-misfires-on-pistol-upgrade-effort-confuses-gu/. 

38 Jbid. Former Secretary of Defense Robert Gates, when asked about the difficulty in buying a new handgun, commented how senior 

leaders of the military should be asked, "why has it taken you guys 10 years? This is absurd .... Why is it a 350~page RFP? It's a handgun, 

for God's sake." The Future of Defense Reform: Hearings before the U.S. Senate Committee on Armed Services, Session 1, 114th Cong., 

( 2015), accessed https://www .gpo.gov /fdsys/ pkg/CHRG-114shrg20923/ pdf /CHRG-114shrg20923. pdf. 

3s Rowan Scarborough, "Army Misfires on Pistol Upgrade Effort, Confuses Gun Makers with Complex Requirements," Washington Times, 

October 28, 2015, http://www.washingtontimes.com/news/201S/oct/28/army-misfires-on-pistol-upgrade-effort-confuses-gu/. 40 Jahner, Kyle, "McCain slams Army's wasteful plan for a new service pistol," Army Times, October 29, 2015, 

https://www.armytimes.com/story/military/careers/army/2015/10/29/mccain-army-trade-blows-over-handgun-replacementprogram/74834518/. 

41 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry: A New Strategic 

Approach to Military-Technical Advantage, accessed April17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS-ReportF utu reFound ry-fina I. pdf. 

42 Alex Lockie, "Boeing Smells Blood in the Water and is Coming for Lockheed Martin's F-35 Business," Business Insider, March 31, 2017, 

http://www. busi nessi nsider .com/boei ng-vs-lockheed-martin-f -18-adva need-super -hornet-f-35c-navy-20 17-3. Andrew Clevenger and Lara 

Seligman, "Boeing Protests Northrop's Long-Range Strike Bomber Contract," Defense News, November 6, 2015, 

http:/ /www.defensenews.com/story/defense/2015/11/08/boeing-protests-northrops-!ong-range-strike-bomber-contract/75225206/. 

Ryan Mass, "Bell-Boeing Contracted for V-22 Sustainment and Upgrade Planning," UP/, February 15, 2017, http:/ /www.upi.com/DefenseNews/2017/02/15/BeH-Boeing-contracted-for-V-22-sustainment-and-upgrade-planning/6321487191850/ and Jen Judson, "Joint Multi12 
64 

A number of these companies, and their 

employees, are not dependent on DoD for 

future revenue or growth. They flow in and out 

of the defense-contracting world at multiple 

tiers and in different combinations. This fluid 

ecosystem of companies is the hallmark of the 

new globalized economy in which the defense 

industrial base is not, in fact, a stable base of 

defense-oriented industrial companies. It is 

instead a constantly shifting group of 

companies that align and realign for temporary 

periods to deliver integrated capabilities.-n 

During the wars in Iraq and Afghanistan, DoD 

relied extensively on contractors to provide 

such critical wartime support as force 

protection, fuel delivery and storage, 

transportation of troops and equipment, 

translation services, and construction and 

maintenance of facilities. Contractors 

performing these vital services, most of whom 

were foreign, sometimes outnumbered the U.S. 

military personnel in Iraq and Afghanistan.44 

The globalized nature of the current defense 

industry also extends to manufacturing and 

supporting weapons systems. The F-35 Joint 

Strike Fighter, the U.S. military's latest fifthgeneration fighter, is being built in Texas, 

japan, and Italy.'' 1l1e F-35 supply chain 

consists of more than 300,000 parts 

manufactured by 1,400 suppliers around the 

world.""' Among the nations that produce F-35 

parts, eight foreign nations have at least 

10 major suppliers for F-35 production." The 

F-35 is not an isolated example. Today, nearly 

every major U.S. military weapon system 

contains foreign parts.-m 

The global and integrated nature of the 

dynamic defense marketplace, in which DoD 

now does business, necessitates that DoD no 

longer rely solely on purely U.S.-based 

companies, or unilaterally dictate to, or control 

decisions by, its suppliers. Consider the 

example of Sikorsky Aircraft Corporation, 

which manufactures the military's UH-60 

helicopter (and many of its derivatives and 

modified aircraft), as well as helicopters to 

transport the president of the United States. 

Sikorsky had been a long-time subsidiary to 

United Technologies Corporation (UTC) until 

2015 when UTC, at the time one of the top 

10 defense companies in the world,49 sold 

Sikorsky, a helicopter manufacturer. 50 The 

$9 billion purchase of Sikorsky by Lockheed 

Martin required regulatory approval from 

multiple national and international jurisdictions 

Role Demonstrators in Race to Starting Line," Defense News, April28, 2016, http://www.defensenews.com/story/defense/showdaily/aaaa/2016/04/28/joint~mu!ti-role-demonstrators-race-starting-line/83611932/. 

43 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry: A New Strategic 

Approach to Military-Technical Advantage, accessed April17, 2017, https:/ /s3.amazonaws.com/files.cnas.org/documents/CNAS~ReportFutureFoundry-finaLpdf. 

44 Commission on Wartime Contracting in Iraq and Afghanistan, Transforming Wartime Contracting.· Controlling Costs, Reducing Risks, 

accessed April18, 2017, 

https:/ /cybercemetery.unt.edu/archive/cwc/20110929213820/http:/ /www.wartimecontracting.gov/docs/CWC_FinaiReport-lowres.pdf. 45 "Building the F-35: Combining Teamwork and Technology," Lockheed Martin, accessed April18, 2017, 

https://www.f35.com/about/life-cyde/production. 

46 lbid. 47 Lockheed Martin Government Relations, email to Section 809 Pane!, March 11,2017. 

48 Jacques Gansler, "Acquisition Challenges to Provide More For Less," AFCEA Defense Acquisition Modernization Symposium {August 5, 

2014), accessed Apri118, 2017, http://www .afcea.org/events/modernization/14/documents/GanslerAcquisitionChanges.pdf. 4

g "Top 100 for 2016," Defense News, accessed April18, 2017, http://peop!e.defensenews.com/top-100/. 

50 lewis Krauskopf, "With Sikorsky Sale Done, United Technologies Eyes Acquisitions," Reuters, July 20, 2015, 

http:/ /www.reuters.com/artide/sikorsky-ma-unitedtechnologies-idUSUN10019H20150720. 

13 
65 

including Japan, South Korea, and even 

China.51 

NEW RELATIONSHIPS 

To maintain technological dominance, DoD 

must expand beyond the traditional defense 

industrial base and its own internal R&D 

efforts. The consolidating defense industrial 

base, DoD's limited influence in the commercial 

marketplace and in R&D, and the changes to 

the global economy require DoD to actively tap 

the commercial marketplace. Leveraging this 

marketplace, however, is not easy when, in 

many instances, DoD needs the commercial 

market more than the commercial market needs 

DoD. According to Paul Francis, a former 

managing director at Government 

Accountability Office (GA0), 52 

Commercial investrnent in R&D mrw dwa~fs 

DoD's by several factors. DoD still needs to 

sponsor defense-unique R&D. But the real gain 

will be the extent to which it can take advantage 

of the vast R&D going 011 in the private sector. 

The answer is not to spend our way out of it. 

DOD has to find a way to adapt to new 

relationships ·with the commercial sector. 

DoD and Congress have not fully adjusted to 

this reality. Too often DoD acts as if it can 

dictate terms to industry, driving many 

companies to opt out of the defense market.53 

Company representatives have told the Section 

809 Panel that their organizations have decided 

not to do business with DoD because of overly 

complex federal laws and DoD-specific 

regulations. DoD should adapt its acquisition 

processes-which are conditioned by statute, 

regulations, executive orders, directives, 

policies, and procedures-to industry 

approaches, rather than expecting companies to 

accommodate DoD. 

51 Andrea Sha!al, "Lockheed Says U.S. Approves Its $9 Billion Takeover of Sikorsky," Reuters, September 24, 2015, 

http:/ /www.reuters.com/artide/us-sikorsky-m-a-lockheed-idUSKCNOR01FN20150924. 52 Paul Francis, former managing director, Government Accountability Office, email to Section 809 Panel, April 6, 2017. 53 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry: A New Strategic 

Approach to Military- Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS-ReportFutureFoundry-fina!.pdf. Andrew Hunter, Center for Strategic and International Studies, Defense Acquisition Trends 2015: Acquisition in 

an Era of Budget Uncertainty, accessed April 18, 2017, https:/ /defense360.csis.org/acquisition-and-beyond/. 

14 
66 

15 
67 

The U.S. military faces multiple threats posed 

by increasingly capable adversaries and 

uncertain domains of warfare. [t also contends 

with constrained defense budgets. 54 DoD 

cannot afford to be tied to processes that waste 

limited resources that could be invested in 

capabilities, readiness, force structure, or other 

requirements. 55 To more effcctiveJy and 

efficiently allocate resources, DoD must better 

align and coordinate how it budgets, sets 

requirements, and acquires what it needs, to 

include not only major weapons systems, but 

also the services and low-dollar items that 

make up more than half of DoD contract 

spending.s6 

EROSION OF U.S. DEFENSE 

SPENDING-ADVANTAGE 

The United States has the largest military 

budget in the world, but other countries are 

closing the gap. From 2000 to 2015, adjusted for 

inflation, DoD spending increased about 

40 percent. 57 During that period, the military 

budget of China reportedly quintupled." 

In the same period, Russia and Saudi Arabia 

(which have military budgets on par with one 

another) both about tripled their military 

spending. 59 According to SIPRI's data (all in 

2014 USD), Russian military spending increased 

from $29 billion in 2000 to $91 billion in 2015-

more than a 200 percent increase. Saudi 

54 John McCain, Restoring American Power: Recommendations for FY 2018-2022 Defense Budget, accessed January 27,2017, 

https:/ /www .mccain.senate.gov/public/ _ cache/files/25bff0ec-481e-466a-843f -68ba5619e6d8/restoring-american-power-7 .pdf. 

55 Office of the Under Secretary of Defense (ComptroUer)/Chief Financial Officer, United States Department of Defense Fiscal Year 2015 

Budget Request Overview, March 2014, accessed April 19, 2017, 

http:/ /comptroUer.defense.gov/Portals/45/Documents/defbudget/fy2015/fy2015 _Budget_ Request_ Overview _Book.pdf. John McCain, 

America's Most Wasted: Indefensible $13 Billion Spent on Incapable Ships, Bad-Behaving Pentagon Employees, African Rats & More, 

accessed Apr!! 19, 2017, https:/ /www.mccain.senate.gov/public/ _ cache/fHes/9f435670-9a18-4362-9ff0-294540a13cb7 /americas-mostwasted-i ndefe nsible-12 -19-16. pdf. 

56 Based on Section 809 Panel analysis of FY 2016 Federal Procurement Data System data, using product and service code definitions: As 

of April21, 2017, service and R&D contract obligations for FY 2016 were reportedly $149.6 billion, or 50.2 percent of all contract 

obligations. "Federal Procurement Data System- Next Generation," General Services Administration, accessed April 21,2017, 

https://www.fpds.gov. General Services Administration, Federal Procurement Data System Product and Service Codes Manual, August 

2015 Edition, accessed April 21, 2017, https://www.fpds.gov/downloads/top_requests/PSC_Manuai_FY2016_0ct1_2015.pdf. 

Also see Congressional Research Service, "Defense Acquisitions: How and Where DOD Spends and Reports Its Contracting Dollars," 

accessed April 21, 2017, https:/ /fas.org/sgp/crs/natsec/R44010.pdf, and Center for Strategic and International Studies, Defense 

Acquisition Trends, 2016: The End of the Contracting Drawdown, accessed April21, 2017, https://csis-prod.s3.amazonaws.com/s3fspublic/publication/170309 _Eilman_AcquisitionTrends2016_ Web.pdf?EOHx.4yzTSKOdaa9FMLs3KStHUSriOSQ. 

57 National defense outlays for FY2015, as calculated by OMB, were $590 bi!!lon ($607 biiHon in FY2017 USD). Outlays for FY2000 were 

$294 billion ($434 billion in FY2017 USD). See national defense outlays at "Office of Management and Budget Historical Tables, 

Table 3.2-0utlays by Function and Subfunction: 1962-2021," National Archives and Records Administration, accessed March 3, 2017, 

https:/ /obamawhitehouse.archives.gov/omb/budget/Historica!s. See inflation adjustments at Department of Defense, National Defense 

Budget Estimates for FY2017, Table 5-1: Deportment of Defense and Selected Economy-Wide Indices ("Total Department of Defense" 

deflators used for calculations), accessed March 3, 2017, http:/ /comptrol!er.defense.gov/Budget-Materials. 58 "SIPRI Military Expenditure Database," Stockholm International Peace Research Institute, accessed March 3, 2017, 

https:/ /www.sipri.org/databases/milex. Officially, the Chinese military spending figure for 2015 (including both central government and 

local governments) was about $140 billion. The Department of Defense's 2016 report on China-related military developments provides 

an estimated figure of $180 billion, and an estimate from the Stockholm International Peace Research Institute (SIPRI) puts the figure at 

$214 bi!llon. The 400 percent increase between 2000 to 2015 is based on SIPRI's reported figures {a !I in constant 2014 USD) of $43 billion 

in 2000 and $214 billion in 2015-an increase of 396 percent. 

59 "SIPRI Military Expenditure Database," Stockholm International Peace Research Institute, accessed March 3, 2017, 

https:/ /www.sipri.org/databases/milex. 

16 
68 

spending increased from $30 billion to 

$85 billion-about a 180 percent increase.'" 

over the course of the Five Year Defense Plan 

(FYDP), there will be a 7.1 percent decrease of 

RDT&E spending from FY 2017 to FY 2021." 

Trends within the U.S. defense budget are 

squeezing funding available for acquisition, 

R&D, and force structure.'" In its FY 2017 

budget submission, DoD emphasized efforts to 

protect the investments in research, development, test, and evaluation (RDT&E) to ensure 

the U.S. maintains its technological edge.62 The 

Center for Strategic and Budgetary 

Assessments (CSBA) projects, however, that 

Although DoD R&D spending growth is 

slowing, R&D investments by private industry 

and foreign nations are increasing substantially. 

Between 1960 and 2013 defense spending on 

R&D doubled (adjusted for inflation), yet 

nondefense U.S. government R&D spending 

-----------------------------'"'·"'"**'* 111 Federal defense 1111 Federal nondefense Nonfederal 

Source: Federal spending from Office of Management and Budget, Table 9.7-Summary of Outlays for the Conduct of Research 

and Development: 1949-2017, https:/ /obamawhitehouse.archives.gov/omb/budget/Historica!s. Nonfedera! spending based on 

"All Performers" R&D spending minus "Federal Total" R&D spending, from National Science Board, Science & Engineering 

Indicators 2016, Appendix Table 4-6, https:/ /www. nsf.gov/statistics/2016/nsb20161/uploads/1/7 /at04-06.pdf. 

Figure 1. U.S. R&D Spending -1961 to 2013 (FY2009 USD) 

60 Ibid. 61 Department of Defense, Defense Budget Priorities and Choices, Fiscal Year 2014, Accessed April 24,2017, 

http:/ I archive. defense .gov I pubs/Defense Budget Pri oritiesChoicesFisca I Yea r20 14. pdf. 67 Department of Defense, Defense Budget Overview February 2016, accessed April 24, 2017, 

http:/ /comptro!ler.defense.gov/Portals/45/Documents/defbudget/fy2017 /FY2017 _Budget_ Request_ Overview_Book.pdf. 63 Katherine Blakely, Analysis of the FY2017 Defense Budget and Trends in Defense Spending, Center for Strategic and Budgetary 

Assessments, accessed April 24, 2017, http:/ /csbaonline.org/up!oads/documents/CSBA6196-2017-Budget-Analysis_PRINT.pdf, 34. 

17 
69 

increased more than sevenfold.6'

1 This combined 

federal spending has been dwarfed by an 

elevenfold increase in all other U.S. spending 

on R&D (which includes the private sector, 

universities, and nonprofit organizations).65 

U.S. R&D investment growth rates have fallen 

behind those of peer competitors. China has 

increased its R&D expenditures at a rapid pace 

to become the second-largest funder of R&D 

among nations.66 Between 1995 and 2015, 

U.S. annual R&D investment increased in 

unadjusted-dollar terms by an estimated 

87 percent. 67 During the same period, R&D 

investment (both privately and publicly 

funded) increased in Russia by about 

160 percent and in China by more than 

2,000 percent."" The United States remains the 

world's single largest Iunder of R&D, spending 

23 percent more than the next highest Iunder 

~ 

$500 II! USA EU-28 Ill China Russia 

~ $450 

~ 2$400 

0 

~ $350 

:5 

iE $300 

"' $250 

$200 

$150 

$100 

$50 

Source: Chart generated using information from "Gross domestic spending on R&D," Organisation for Economic Cooperation 

and Development, https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm, accessed March 13,2017. 

Figure 2. Gross Domestic Expenditures on R&D- 1995 to 2015 

64 "Office of Management and Budget Historical Table 9.7, "Summary of Outlays for the Conduct of Research and Development: 1949-

2017," National Archives and Records Administration, accessed April 24, 2017, 

htt ps:// oba mawhitehouse .arch ives.gov I om b /budget/H istoricals. 65 Nonfederal spending data from National Science Foundation, National Science Boord, Science & Engineering Indicators 2016, Appendix 

Table 4-6: Science & Engineering Indicators 2016, accessed April 24, 2017, 

https://www .nsf.gov/statistics/2016/nsb20161/up!oads/1/7/at04-06.pdf. 66 "Gross Domestic Spending on R&D," Organisation for Economic Cooperation and Development, accessed Apri117, 2017, 

htt ps :/I data. oecd .org/ rd/ gross-domestic ~spend i ng~on- r-d. htm . 67 1bid. 68 !bid. For similar conclusions, see "Science & Engineering Statistics 2016," National Science Foundation, accessed April17, 2017, 

https:/ /www .nsf.gov/statistics/2016/nsb20161/#/data. 

18 
70 

(China) in 2015; however, the Organisation for 

Economic Cooperation and Development 

(OECD) has predicted China's R&D spending 

will exceed that of the United States around 

2019.69 

DoD cannot rely on outspending competitors 

and industry in R&D. Other countries arc 

closing the technology gap by acquiring and 

adapting products available in world markets, 

conducting industrial espionage and 

intellectual property theft, and pursuing 

focused R&D. If DoD is to maintain a 

technological and readiness edge, it must more 

efficiently and effectively deploy its resources. 

Every dollar counts. 

EFFECTIVE EXPENDITURES 

DoD could garner more from its funds if it 

functioned in a flexible system that allowed 

more effective resource allocation. An 

opportunity cost arises each time DoD makes a 

spending choice that could have been invested 

in developing other capabilities, delivering 

more units, or funding other critical 

requirements. In some cases, DoD spent billions 

on major programs it never fielded. 70 One 

example is the Air Force's Expeditionary 

Combat Support System (ECSS) information 

technology (IT) system, for which a billion 

dollars were spent, with no useful results, 

before the program was cancelled. 71 The issue is 

not cancelling a program. Poor programs may 

need to be cancelled, but in such cases, the 

decision should happen earlier and before 

spending so much money. 

Requirements, budgeting, and acquisition 

strategies that are not aligned and coordinated 

can cost billions of dollars. The Army is 

planning to acquire 180 Armored MultiPurpose Vehicles, 45 MJ Abrams and 92 M2 

Bradleys annually for the Armored Brigade 

Combat Team (ABCT) program over the next 

few decades.72 Under current contractual 

production rates, the combined annual baseline 

per-unit cost within the ABCT program is 

$19.5 million. If the Army acquired vehicles at 

the rate of two brigades annually, however, the 

production efficiencies would save 

approximately $11 billion during the life of the 

prograrn.73 

69 "China headed to overtake EU, US in science & technology spending, OECD says,"Organisation for Economic Co-operation and 

Development, accessed February 24, 2017, http:/ /www.oecd.org/newsroom/china-headed-to-overtake-eu-us-in-sclence-technologyspendlng.htm. Organisation for Economic Co-operation and Development, OECD Science, Technology, and Industry Outlook 2014, 

accessed April 24, 2017, http;/ /www.keepeek.com/Digita!-Asset-Management/oecd/sdence-and-technology /oecd-science-technologyand-ind ustry-outl oo k-2014 _ sti _outlook-20 14-en#page4. 

70 Patrick Clowney, Jason Dever, and Steven Stu ban, "Department of Defense Acquisition Program Terminations: Analysis of 11 Program 

Management Factors," Defense Acquisition Research Journal, 23, no. 3 (2016): 298-328. 71 The Air Force's Expeditionary Combat Support System (ECSS), a program to develop an integrated enterprise resource planning solution 

to manage global logistics, was cancelled after spending $1.1 billion over 8 years (from 2004 to 2012), without ever being deployed. Chris 

Kanaracus, "Air Force scraps massive ERP project after racking up $18 in costs," Computerworld, Nov 14, 2012, accessed April 24, 2017, 

http://www.computerworld.com/artide/2493041/it-careers/air-force-scraps-massive-erp-project-after-racking-up--1b-in-costs.html. 

According to an Army report, between 1996 and 2010, the Army directed more than $1 billion each year to programs that were 

eventually canceled. For a 6-year period (2004-2010) 35-42 percent of the Army's annual development test and evaluation funding was 

spent on canceled programs; 2010 Army Acquisition Review, Army Strong: Equipped, Trained, and Ready: Final Report of the 2010 Army 

Acquisition Review, accessed April24, 2017, http://breakingdefense.sites.breakingmedia.com/wpconte nt/ uploads/ sites/3/20 11/07/213465 .pdf. 72 U.S. Army Program Executive Office- Ground Combat Systems, email to Section 809 Panel, March 29,2017. 

73 !bid. Under current program guidelines, the annual baseline costs for the ABCT program are $3.5 million for AMPVs, $13 m!llion for 

M1s and about $3 million for Brad!eys. Under a two-brigade purchasing system, annual baseline costs would decline for each vehicle to 

19 
71 

When alignment and coordination occur, DoD 

may see cost savings. For example, the Joint 

Light Tactical Vehicle (JL TV) is a joint Army 

and Marine Corps program that provides 

vehicles capable of performing multiple 

n1ission roles. According to the Army, the 

program's innovative acquisition approach 

resulted in a total cost savings of $11.3 billion 

and cost avoidance of $17billion." The JLTV 

acquisition strategy was built around 

• consistent engagement with industry, other 

potential DoD customers (e.g., Air Force, 

Navy, Special Operations Command), and 

potential foreign military sales customers; 

• a source selection approach that 

incorporated a tiered evaluation of proposals 

that allowed for negotiations based on 

potential contractors' ability to meet key 

systems attributes; and 

• an evolutionary process that allowed for 

timely delivery as capabilities matured. 75 

This t1cxible approach enabled DoD to be a 

more sophisticated buyer and to gain more 

capabilities within budget constraints. 

$3.2 million foAMPVs, $8.8 million for M1s and about $1.9 million for Bradleys. Acquisition targets are currently presumed to be 2,897 

AMPVs, 1,700 M1s and 2,668 Bradleys during the !lfe of the ABCT program. 

74 "Dollars & Sense," Army AL&T, 117, April-June 2012, 117, accessed April 17, 2017, http://asc.army.mil/web/wpcon tent/ up!oads/2013 /04/ army_ a I_ t _magazine_ Final_ April-J u ne20 12. pdf. 75Joint Program Office Joint Light Tactical Vehicle, Joint Light Tactical Vehicle (JLTV) Acquisition Strategy Report for Milestone C, Version 

VS.AS, accessed April 17,2017, https://www.dodtechipedia.mil (requires DoD Common Access Card login). 

20 
72 

21 
73 

Some of the regulations and statutes governing 

defense acquisition are outdated or no longer 

applicable. Others resulted from past 

acquisition reforms intended to improve the 

systen1. Successive waves of acquisition reform 

have added rules and regulations that 

produced the unintended consequence of 

adding to the existing mass of regulations and 

statutes." The complexity of the system of 

regulations adds cost, and potentially creates a 

barrier to entry for firms contemplating 

engaging in business with DoD. 77 Some 

industry representatives have stated that 

amending or repealing such regulations and 

statutes could save money, improve the system, 

and expand the number of companies willing to 

do business with the federal government." 

UNNECESSARILY COMPLEX SYSTEM 

Federal contracting is governed by the Federal 

Acquisition Regulation (FAR) and, specific to 

defense, the Defense Federal Acquisition 

Regulation Supplement (DFARS). These 

requirements govern such issues as 

• how DoD solicits, negotiates, awards, and 

administers contracts; 

• what costs DoD will reimburse and how 

contractors must account for those costs to 

be reimbursed; 

• the type of accounting systems used by 

contractors; and 

how contractors must comply with such 

rules as Inaintaining a drug-free workplace, 

and other public policy goals. 79 

Many have posited that the sheer number and 

complexity of the statutes, regulations, 

executive orders, directives, policies, and 

procedures impede the acquisition process, 

reducing speed and efficiency by adding time, 

complexity, and cost to the process.80 

The Section 800 Panel81 sought to address such 

inefficiencies, with goals of reducing 

administrative costs, improving opportunity for 

small businesses, promoting efficiencies and 

economy in contracting, and avoiding 

unnecessary burdens for agencies and 

contractors for acquiring small-dollar 

requirements."' One of the Section 800 Panel's 

recommendations increased the threshold for 

Simplified Acquisition Procedures (SAP). As 

the Simplified Acquisition Threshold continued 

to increase, the procurements that could use 

SAP increased in complexity. 

76 Business Executives for National Security, Getting to Best: Reforming the Defense Acquisition Enterprise, A Business Imperative for 

Change from the Task Force on Defense Acquisition Law and Oversight, July 2009, accessed Apri! 17,2017, 

https:/ /www .bens.org/document.doc ?id=44. 77 Office of the Under Secretary of Defense, Acquisition, Technology, and Logistics, Eliminating Requirements Imposed on Industry Where 

Costs Exceed Benefits, Washington, DC, 2015, accessed April17, 2017, http://www.acq.osd.mil/fo/docs/EI!minating-Requirementslmposed-on-lndustry-Study-Report-2015.pdf. 

78 Brian O'Keefe, "The Red Tape Conundrum: How the Wrong Kind of Regulation Is Strangling Business-And What To Do About It," 

Fortune, November 1, 2016, http://fortune.com/red-tape-business-regulations/. 79 Federal Government Contract Overview, Find Law for Legal Professionals, accessed AprH 17,2017, http://corporate.findlaw.com/lawlibrary/federal-government-contract-overview.html. 

BD William Lucyshyn, "The New Acquisition Reform Effort: Back to the Future," Defense News, December 6, 2016, accessed April 27, 2017, 

http:/ /www.defensenews.com/artides/the-new-acquisition-reform-effort-back-to~the"future. 

81 The Section 800 Panel, formally known as the DOD Acquisition Law Advisory Panel, was established pursuant to Section 800 of the 

1991 National Defense Authorization Act. 82 DOD Acquisition Law Advisory Panel, Streamlining Defense Acquisition Law, Executive, Summary: Report of the DOD Acquisition Law 

Advisory Panef, accessed April 24, 2017, http:/ /www.dtic.mil/get-tr-doc/pdf?ADo:o:ADA264919. 

22 
74 

According to the FAR Clause Matrix, 431 

clauses may apply to SAP contract 

solicitations-more than time and materials 

contracts, which are generally considered more 

risky to the government." Contracting officers 

must review and determine the applicability of 

344 required if applicable and 76 optional clauses 

based on their understanding of the 

requirements. As one contracting officer told 

the Section 809 Panel, it is time to "put 

'simplified' back in simplified procurements."8' 

Burdensome document requirements slow the 

system and create hurdles for program 

management offices. For example, before 

getting to the final RFP for information 

technology services, buyers must complete 

12 mandatory documents, requiring hundreds 

of pages of research and many hours of 

contractor consultation. ss 

Table 1. FAR Part 52.301 FAR Matrix- Solicitation Provisions and 

Contract Clauses by Principal Type and Purpose of Contract 

22 330 

20 

t6 

13 lt6 

23 

22 

Total 

375 

334 

334 

Source: "FAR 52.301, Solicitation Provisions and Contract Clauses," https:/ /www.acquisition.gov/far/htmi/52_301Matrix.html. 

83 Federal Acquisition Regulation 52.301, "Solicitation provisions and contract clauses (Matrix)," accessed April 17, 2017, 

https:/ /www.acquisition.gov/far /htmi/52~301Matrix.htm!. 

8

" Army contracting officers, round table conversation with Section 809 Panel professional staff, November 14, 2016. 85 U.S. Army, "Acquisition Strategy Schedule Analysis and Lessons Learned," provided to Section 809 Panel professional staff via email, 

January 18,2017. 
75 

MISSION MUST COME FIRST 

When a commercial company is buying goods 

and services for its business, it focuses the deal 

on ruhat it is buying. When DoD buys, it must 

focus not only on what, but also how it will buy 

goods and services and how the seller will 

operate. 

A number of statutes and regulations promote 

public policy goals. Some of the public policies 

promoted in the FAR or defense-specific 

regulations are intended to support the mission 

of DoD. Examples of such regulations include 

those aimed at preserving a domestic supply of 

critical defense articles and those aimed at 

promoting DoD's access to innovative 

technologies developed by small businesses. 

Other public policy requirements do not 

directly support DoD's mission, but focus on 

how contractors operate. Taken individually, 

these statutes and regulations promote laudable 

public policies, while imposing marginal cost. 

Taken together, however, these requirements 

add substantial cost, as well as complexity, 

bureaucracy, and time, to the acquisition 

process-cost that DoD may no longer be able 

to afford when weighed against the public 

benefits. 

Public policy requirements must be assessed to 

determine whether the costs, including time, 

outweigh the benefits to industry, government, 

and, in some cases, the regulations' intended 

beneficiaries. To support such an effort, the 

FAR should be amended to emphasize that the 

primary goal of the acquisition process is to 

support the agency mission, and that 

promoting public policy objectives is a 

secondary goal of the process. 

24 
76 

25 
77 

27 
78 

DoD needs an acquisition system that is simple, 

understandable, and executable by people 

operating in an environment that empowers 

and incentivizes them to make good decisions. 

Defense acquisition is a human activity 

dependent on the judgments, considerations, 

interests, and decisions of people operating in 

the real world. Regardless of how impressive 

policy initiatives look on paper, or how 

effective the acquisition system is in theory, the 

ultimate effectiveness and efficiency of defense 

acquisition depends on and is determined by 

the people who are responsible for all phases of 

acquisition.86 

People respond to prevailing norms and the 

culture in which they operate. Teams that are 

highly motivated, given a clear vision, properly 

empowered, and provided the right tools and 

training can achieve trctnendous results.87 A 

workforce that is sent conflicting messages, 

incentivized to make decisions that lead to 

suboptimal outcomes, mired in bureaucracy, 

and overburdened by complex and stifling 

regulations will succumb to the mixed 

messages they receive.ss 

Current statutes and regulations are overly 

complex and difficult to understand and 

implement, promote risk-averse behavior, and 

encourage decisions that produce suboptimal 

results. Former Secretary of Defense Robert 

Gates goes further by stating, "Fundamental to 

bureaucratic culture is risk avoidance: It is 

almost always safer for the public bureaucratand too often the business bureaucrat as wellto say no than yes. In a public environment of 

exposes, recrimination, faultfinding, and 

investigations both by officials and by the 

media, not acting is usually safer than actingespecially if the action involves something new 

or different. "IN 

INCENTIVIZE EFFECTIVE 

DECISION-MAKING 

Often, the incentives in the acquisition process 

encourage people to make decisions that result 

in suboptimal outcomes.90 Without changing 

the incentives, appreciable improvement in 

86 Blue Ribbon Defense Panel, Department of Defense, Report to the President and the Secretary of Defense on the Department, 94, 

accessed April24, 2017, file:///D:/User/My%20Documents/Downloads/AD0766055.pdf. A 2014 compilation of expert views on 

acquisition reform published by the Senate Committee on Homeland Security and Governmental Affairs (Permanent Subcommittee on 

Investigations) identified four themes, two of which deal exclusively with the acquisition workforce. According to the report "Nearly half 

of the experts feel that cultural change is required while over two-thirds believe improving incentives for the acquisition workforce is 

necessary for reform ... Two-thirds of the contributors feel that training and recruiting of the acquisition workforce must be improved." 

See U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations, 

Defense Acquisition Reform: Where Do We Go From Here?, A Compendium of Views by Leading Experts, 2nd sess., 113th Cong., (2014) 

(staff-prepared report), accessed April24, 2017, file:/ I /D:/User/My%20Documents/Downloads/REPORT%20-

%20DEFENSE%20ACQUJS!TION%2DREFORM-A%20Compendium%20of%20Views%20(10-2-14)1.pdf. 

87 Chris McGoff, "The Primes," (Hoboken: John Wiley and Sons, 2012). 

88 Len Schlesinger and Charlie Kiefer, "When Your Boss Gives You Conflicting Messages," Harvard Business Review, November 27, 2014, 

https:/ /hbr.org/2014/11/when-your-boss-gives-you-conf!icting-messages. 

89 Robert M. Gates, A Passion for Leadership: Lessons on Change and Reform from Fifty Years of Public Service, (New York: Alfred Knopf, 

2016), 16. 90 J. Ronald Fox, Defense Acquisition Reform 1960-2009: An Elusive Goof (Washington, D.C.: Center of Military History, 2011), 197-199. 

Department of Defense, Defense Acquisition Performance Assessment Report, 5, accessed April 24,2017, 

http:/ /www.afei.org/research/Documents/DoD%20Documents/DAPA-Report-web _Jan2006.pdf. See Business Executives for National 

Security, Getting to Best: Reforming the Defense Acquisition Enterprise: A Business Imperative for Change from the Task Force on Defense 

Acquisition Law and Oversight, 3, accessed April24, 2017, https://www.bens.org/document.doc?id"'44. 

28 
79 

defense acquisition is unlikely to occur.91 The 

thousands of decisions made every day by 

people at the operational level play a critical 

role in detern1ining acquisition outcmnes. These 

critical decisions extend beyond the acquisition 

workforce to those who are part of the greater 

acquisition process, such as individuals 

responsible for requirements, budgets, and 

human resources.92 

Processes such as developing requirements, 

contracting, making investments, or obligating 

n1oney are often driven not by a sound business 

case, but by arbitrary deadlines and outside 

pressures. As one program manager noted, the 

general rule of thumb is not to plan to sign new 

contracts in the first 3 months of a fiscal year (to 

guard against effects of continuing resolutions) 

or the last 3 months of a fiscal year (to guard 

against unexpected delays beyond the control 

of the program that may result in expiration of 

funds or DoD pulling back money for failing to 

meet obligation benchmarks). 

Agencies that find themselves with funds at the 

end of the fiscal year may then rush to spend 

these funds. The greatest amount of spending 

occurs in the last month of the fiscal year, with 

an especially prominent spike in the final week. 

In the last week of FY 2016, for instance, DoD 

contract obligations were about 3.5 times 

greater than the annual weekly average.93 This 

so-called use it or lose it mentality-which could 

be associated with spending categories (colors of 

money) in appropriations law, OMB 

apportionment processes, or internal DoD 

decision-making-represents inefficient 

allocation of limited DoD resources.'14 

Both written rules and performance norms 

incentivize making decisions that lead to 

suboptimal outcomes. Senior defense officials, 

both past and current, acknowledge that 

program advocates have strong incentives to 

underestimate progrmn acquisition costs. 

Contractors sometimes use unrealistically low 

cost estimates to win contracts; program 

representatives use low estimates to argue for 

approval of the system against competing 

systems.95 Such optimism in cost, schedule, and 

performance often leads to cost overruns, 

n J. Ronald Fox, Defense Acquisition Reform 1960-2009: An Elusive Goal (Washington, D.C.: Center of Military History, 2011), 190. This 

point was reiterated in Secretary Frank Kendall's guidance on implementing the Better Buying Power initiatives, which stated "Policies 

and processes are of !itt!e use without acquisition professionals who are experienced, trained, and empowered to apply them effectively. 

At the end of the day, qualified people are essential to successful outcomes and professionalism, particularly in acquisition leaders, drives 

results more than any policy change." Implementation Directive for Better Buying Power 2.0- Achieving Greater Efficiency and 

Productivity in Defense Spending, Memorandum from Office of the Under Secretary of Defense (2013). 92 Robert F. Hale, Center for Strategic and Budgetary Assessments, Promoting Efficiency in the Department of Defense: Keep Trying, Be 

Reafistic, 20, accessed April 24, 2017, http:/ /csbaon!ine.org/uploads/documents/2002.01.25-DoD-Efficlency.pdf. 93 Based on Section 809 Panel professional staff analysis of daily DoD data from Federal Procurement Data System, https:/ /fpds.gov. 

94 Former DoD Comptroller Robert Hale wrote in September 2016 that "year-end spending pays for lower-quality and lower-priority 

projects.'' See Robert Ha!e, "Why DoD's Year-End Spending Needs to Change," Breaking Defense, September 23, 2016, 

http:/ /breakingdefense.com/2016/09/why-dods-year-end-spending-needs-to-change. A 2013 study found that for recent U.S. 

government information technology contracting projects, there was a statistically significant correlation between funding obligated at the 

very end of the fiscal year and comparatively low quality of project outcomes. See Jeffrey B. Liebman and Neale Mahoney, National 

Bureau of Economic Research, Do Expiring Budgets Lead to Wasteful Spending? Evidence from Federal Procurement, accessed April 24, 

2017, http://www .nber.org/papers/w19481.pdf. 95 This state of affairs has existed for decades. In 1981, Frank C. Carlucci, deputy secretary of defense at the time, testified that low cost 

estimates "are fueled by optimistic contractor proposals to win competitions and program managers who want to see their programs 

funded." Almost 30 years later, John Young, then-under secretary of defense for acquisition, technology, and logistics echoed this 

sentiment, stating "The enterprise will often pressure acquisition teams and industry to provide low, optimistic estimates to help start 

programs." See: House of Representatives Armed Services Committee: Hearings, Sess. 1, 97th Cong. , 1st Sess., Volume 11, 1981. Op. Cit. 

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schedule slips, and capability gaps or 

shortfalls% One example is the Navy's Littoral 

Combat Ship. GAO found, "Ships were not 

delivered quickly to the fleet at low cost. Rather 

cost, schedule, and capability expectations 

degraded over time. In contrast, a sound 

business case would have balanced needed 

resources-time, money, and technical 

knowledge-to transform a concept into the 

desired product."<J7 Incentives are needed that 

promote more candor in presenting programs 

to Congress and senior leaders in DoD. 

AUTHORITY AND ACCOUNTABILITY 

Authority and accountability are critical 

clements in building an effective workforce. 

According to the Packard Report, "We must 

give acquisition personnel more authority to do 

their jobs. If we make it possible for people to 

do the right thing the first time and allow them 

to use their common sense, then we believe that 

the Department can get by with far fewer 

people."" Without authority, even the most 

skilled and incentivized professionals cannot 

effectively run and manage acquisition. 

Many regulations can remove or dilute 

authority and accountability. Regulations that 

dictate contract type can deprive acquisition 

personnel of the discretion needed to get the 

best deal for the government. Additionally, the 

management structure and decision-making 

process within DoD are too bureaucratic and 

encumbered by numerous layers of review. 

Successive reviews do not necessarily add 

substantive value, but they do add time to the 

process and add to the number of people who 

can say no or influence a program, including 

people who do not have a stake in the outcome 

of the acquisition. Because nobody holds actual 

authority to manage a program, there is no one 

to hold accountable. The Quadrennial Defense 

Review Independent Panel concluded, "The 

fundamental reason for the continued 

underperformance in acquisition activities is 

fragmentation of authority and accountability for 

performance. " 99 

The process for reviewing and approving an 

acquisition strategy can exceed the time it takes 

to create the strategy. In one instance, the time 

to review, adjudicate, and approve the 

acquisition strategy for an Army enterprise 

P- 883, 1086 John J. Young, Jr., Reasons for Cost Changes for Selected Major Defense Acquisition Programs (MDAPs), Memorandum, 

January 30, 2009. 96 See: House of Representatives Armed Services Committee.· Hearings, Sess. 1, 97th Cong. John J. Young, Jr., Reasons for Cost Changes for 

Selected Major Defense Acquisition Programs (MDAPs), Memorandum, January 30, 2009. The Navy estimated the cost of the CVN~78 at 

$10.5 billion-an optimistically low number that matched the budget cap set by Congress rather than reflecting the more realistic 

estimate provided by the shipbuilder, which was 22 percent higher. The Navy now estimates the procurement costs at $12.9 billion. See 

Pau! l. Francis, Government Accountability Office, Ford Class Aircraft Carrier: Poor Outcomes Are the Predictable Consequences of the 

Prevalent Acquisition Culture, accessed Aprll 24, 2017, http:/ /www.gao.gov/assets/680/672877.pdf. Ronald O'Rourke, Congressional 

Research Service, Navy Ford (CVN+78) Class Aircraft Carrier Program: Background and Issues for Congress, accessed April 24,2017, 

https:/ /fas.org/sgp/crs/weapons/RS20643.pdf. 

'37 PaulL. Francis, Government Accountability Office, Littoral Combat Ship and Frigate: Congress Face with Critical Acquisition Decisions, 

accessed April14, 2017, http:/ /www.gao.gov/assets/690/681333.pdf. 

g8The Packard Report, for example, stated "We must give acquisition personnel more authority to do their jobs. If we make it possible for 

people to do the right thing the first time and a!!ow them to use their common sense, then we believe that the Department can get by 

with far fewer people." President's Blue Ribbon Commission on Defense Management, 1986 Packard Commission Report on Defense 

Management, accessed April 24,2017, http://www.documentdoud.org/documents/2695411-Packard-Commission.html. 

gg U.S. Institute for Peace, "The QDR in Perspective: Meeting America's National Security Needs in the 21st Century: The Final Report of 

the Quadrennial Defense Review Independent Panel, 85, accessed April 24, 2017, 

https :/ /www. us i p. org/ sites/ defau It/files/ qd r I qd rreport. pdf. 

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81 

resource planning progran1 took more than 6 

months-longer than the time it took to create 

all 383 pages that comprised the acquisition 

strategy and required supporting documents 

(see Figure 3). In another example, the process 

of getting to the full deployment decision for 

the Army's global combat support system 

required a total of 33 documents, amounting to 

1,076 pages for the main documents and 17,604 

pages for annex documents-a final product 

that was more than 14 times the length of 

Tolstoy's War and Peace, but not as well written. 

Altogether, this documentation took 1,853 

calendar days (more than 5 years) to 

comp1ete. 1()() 

The acquisition process must be simple, 

understandable, and executable to support a 

culture that promotes good outcomes. Such a 

culture includes ensuring that people are given 

12 Documents 

{383 Total Pages) 

clear authority to make decisions and arc held 

responsible for the consequences of the 

decisions they make. 

SUPPORT THE WORKFORCE 

One of the n1ost important ingredients to 

achieve acquisition reform is a transformation 

in the culture of DoD and Congress. Rules and 

regulations alone, however, can no more foster 

the right cu ]lure than legislation can force good 

management. The workforce of today 

understands the message that has been sent to 

it through multiple layers of bureaucratic 

review, budget cuts, hiring freezes, salary 

freezes, furloughs, continuing resolutions, 

damning congressional hearings, and press 

releases and speeches castigating government 

workers as overpaid and underperfon11ing. 

TimemCalendi!!Days 

Source: U.S. Army PEO/AES!P, "Acquisition Strategy Schedule Analysis and Lessons Learned," Army-produced PowerPoint 

presentation, August 2014. 

Figure 3. Acquisition Strategy Schedule -Actual 

100 U.S. Army (n.d.}, "Army Acquisition, Logistics, and Technology Documentation Deep Dive," Army-produced PowerPolnt presentation. 

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82 

All these events exact a toll on the morale of the 

acquisition workforce. At some point people, 

motivated by their desire to serve the country 

and the men and women defending it, feel 

frustrated in their efforts to make a difference 

and do not feel empowered with respect to 

work processes. 101 The workforce deserves a 

better system. 

Working for government should be lauded, not 

denigrated. The United States and the people 

who dedicate their careers to serving it deserve 

better. Congress and the administration must 

take a leadership role in challenging people to 

aspire to public service, making government 

service a career that attracts the best and 

brightest the country has to offer. 

101 Office of Personnel Management, 2016 Federal Employee Viewpoint Survey, accessed Apr!! 19,2017, https://www.fedview.opm.gov/. 

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33 
84 

Although the current acquisition system has 

produced success, it cannot consistently deliver 

what DoD needs given the speed of change in 

the new dynamic defense marketplace. As the 

Section 809 Panel explores ways to forge a 

modem acquisition system, it will put forth 

recommendations that will address the root 

causes of systemic acquisition problems, rather 

than just their symptoms. 

DoD's focus must be on mission readiness and 

performance results. The current acquisition 

system is designed to achieve too many 

competing ancillary good policies, sacrificing 

innovationw2 and technological dominance yet 

adding complexity, cost, and time. We are 

asking BOLD questions that will guide us in the 

path forward: 

• What are the characteristics that make 

programs successful, and how can these best 

practices be replicated? 

• What is the effect of the clarity and quality of 

the requirements description in the buying 

process? 

• Is there a right balance between performance 

results and policy initiatives? What is the 

cost/value of social policies, and can they be 

achieved through other means? 

• What complexities can be eliminated from 

buying? 

• Does fiscal fluidity affect buying? 

rm What barriers discourage new ideas and 

discourage new entrants from transacting 

with DoD? 

• What can be done to systematically 

eliminate outdated, unclear, or peripheral 

requirements in DoD regulations, poHcies 

and practices, as well as federal law? 

Is competition in the 21st century aligned 

with the Competition in Contracting Act? 

• How does DoD better access the commercial 

market as a savvy buyer? 

m How well does the protest process serve 

government and industry? 

What is the role of small business, and what 

is the most effective way to support small 

businesses in the United States? 

• What data are needed, what are collected, 

and how are they used? 

• Which oversight/approval requirements 

bring value, and which ones take away 

value? 

' How can DoD accelerate decision-making to 

buy quicker? 

The Section 809 Panel is committed to 

proposing recmnn1endations to Inake the 

acquisition system more responsive, innovative, 

and cost effective. The time for superficial 

conversation and insubstantial changes to 

regulations and statutes has passed. The global 

threat is rapidly changing, the relevance of the 

unique defense industrial base is waning, the 

processes for acquisition are no ]anger efficient 

or effective, and implen1enting these processes 

is left to a workforce that is mired in constricted 

thinking and risk aversion. 

102 Frank Kendall, Getting Defense Acquisition Right (Fort Belvoir, VA: Defense Acquisition University Press, 2017). 

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85 

The Section 809 Panel has no interest in putting 

patches on a broken system. Our 

recommendations will be crafted to create a 

new way of doing business that will be flexible 

enough to respond to current and future needs. 

In addition, it will incentivize innovation, 

creativity, and risk-taking, shaping a flexible 

acquisition workforce that delivers the desired 

outcomes. We intend to take a big bite into real 

change, rather than just nibble around the 

edges. To do otherwise is to put our military's 

mission and our nation's safety and security at 

risk. 

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86 

37 
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APPENDIX A: ENABLING LEGISLATION 

Section 809 ofthe National Defense Authorization Actfor Fiscal Year 2016 (Public Law 114-

92), as amended hy section 863(d) of the National Defense Authorization Act for Fiscal Year 

2017 (Public Law 114-328), provides: 

SEC. 809. ADVISORY PANEL ON STREAMLINING AND CODIFYING 

ACQUISITION REGULATIONS. 

(a) ESTABLISHMENT.-The Secretary of Defense shall establish an independent advisory 

panel on streamlining acquisition regulations. The panel shall be supported by the Defense Acquisition 

University and the National Defense University, including administrative support. 

(b) Ml'MBERSHJ P.~The panel shall be composed of at least nine individuals who are 

recognized experts in acquisition and procurement policy. In making appointments to the advisory 

panel, the Under Secretary shall ensure that the members of the panel reflect diverse experiences in 

the public and private sectors. 

38 

(c) DUTIES.- The panel shall-

(1) review the acquisition regulations applicable to the Department of Defense with a 

view toward streamlining and improving the efficiency and effectiveness of the defense 

acquisition process and maintaining defense technology advantage; and 

(2) make any recommendations for the amendment or repeal of such regulations that 

the panel considers necessary, as a result of such review, to--

(A) establish and administer appropriate buyer and seller relationships 

in the procurement system; 

(B) improve the functioning of the acquisition system; 

(C) ensure the continuing financial and ethical integrity of defense 

procurement programs; 

(D) protect the best interests of the Department of Defense; and 

(E) eliminate any regulations that are unnecessary for the purposes 

described in subparagraphs (A) through (D). 

(d) ADMINISTRATIVE MATTERS.-

(1) IN GENERAL-The Secretary of Defense shall provide the advisory panel 

established pursuant to subsection (a) with timely access to appropriate information, data, 

resources, analysis, and logistics support so that the advisory panel may conduct a thorough and 

independent assessment as required under such subsection. 

(2) lNAPPLICAI3lLlTY OF FA CA.-The requirements of the Federal Advisory 

Committee Act (5 U.S. C. App.) shall not apply to the advisory panel established pursuant 

to subsection (a). 

(3) AlJTl-IORITlES.-The panel shall have the authorities provided in section 3161 

of title 5. United States Code. 

(e) REPORT.-

( 1) PANEL REPORT.-·-Not later than two years after the date on which the Secretary 

of Defense establishes the advisory panel, the panel shall transmit a final repmi to the 

Secretary. 
88 

(2) ELEMENTS.-The final report shall contain a detailed statement of the findings 

and conclusions of the panel, including-

( A) a history of each current acquisition regulation and a 

recommendation as to whether the regulation and related law (if applicable) 

should be retained, modified, or repealed; and 

(B) such additional recommendations tor legislation as the panel 

considers appropriate. 

(3) INTERIM REPORTS.--(A) Not later than 6 months and 18 months after the date of 

the enactment of this Act [Nov. 25, 2015], the Secretary of Defense shall submit a report to or 

brief the congressional detense committees on the interim findings of the panel with respect to 

the elements set forth in paragraph (2). 

(B) The panel shall provide regular updates to the Secretary of Defense for purposes 

of providing the interim reports required under this paragraph. 

( 4) FINAL REPORT-Not later than 30 days after receiving the final report of the 

advisory panel, the Secretary of Defense shall transmit the final report, together with such 

comments as the Secretary detennines appropriate, to the congressional defense committees. 

(f) DEFENSE ACQUISITION WORKFORCE DEVELOPMENT FUND SUPPORT.--The 

Secretary of Defense may use amounts available in the Department of Defense Acquisition Workforce 

Development Fund established under section 1705 of title 10, United States Code, to support activities 

of the advisory panel under this section. 

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89 

APPENDIX B: PANEL ACTIVITIES 

Monthly Full-Panel Meetings 

to Improving 

Defense Acquisition and Maintaining Defense 

Acquisition of the Future (AOF) 

Chamber of Commerce and Professional 

Services Council) 

Expert Presentations to the Panel 

40 

BG Martin Corp. 

Susan Warshaw Ebner, ABA Public Contract Law 

• Dina Jeffers, Deputy Secretary of the Army, Procurement 

• Scott Arney, Project on Government Oversight 

Brian Collins, Business Executives for National Security 

(BENS) 

Susan Maybaumwisniewski, BENS 

111 Mandy Smithberger, Center for Defense Information 

I 

Chris Gunderson, U.S. Air Force 

• Louis Kratz, Lockheed Martin Corp. 

Lt Gen F-35 Executive 

• VADM David Johnson, Principal Military Deputy 

• Frank Kendall, Former USD, AT&L 

• Gary Bliss, OUSD (AT&L) 
90 

Studies (CSIS) 

• Melissa Dalton, CSIS 

• Ben FitzGerald, Center for a New American Security (CNAS) 

Commercial Buying • James Steggall, AlA 

• Janice Muskopf, AFMC 

• Joseph Fengler, AlA 

!!II Jon Etherton. Etherton & Associates 

• Paul Milenkowic, ACC-NJ, Picatinny Arsenal 

• Bill McNally, NASA 

• Tyler Merkeley, HHS, BARDA 

• Tim Applegate, DARPA 

Policies on Defense Acquisitions 

• Donna Huneycutt, Wittenberg Weiner Consulting 

Semi-Monthly Stakeholder Meetings 

~------~-----------~~~in Langst~~---- PSC Research on DoD Task Order Awards • Alan Chvotkin, Professional Services Council (PSC) 

Made Under IDIQ Contracts • Matthew Taylor, Professional Services Council (PSC) 

IDIQ Discussion • Jeff Koses, GSA, Office of Government-wide Policy 

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91 

Software in the DoD: Impediments and 

Effectively 

Software Concerns in DoD Acquisition: The 

Opportunity Presented by Agile Development 

Cloud and IT Acquisition Policy: 

42 

• Lou Kerestesy, ACT-lAC 

• Eileen Wrubel, Software Engineering Institute, CMU 

• Alyssa LeSage, Software Engineering Institute, CMU 

• Richard Beutel, Cyrrus Analytics 
92 

Unnecessary 

~ureaucratic Obstacles to DoD Acquisitions 

The Highly Regulated Federal Purchasing 

System: Implications and Alternatives 

Team Meetings/Interviews 

(lSC)A2 

Aerospace Industries Association 

AFCEA 

Air Force Materiel Command 

Allen Federal Business Partners 

Richard Dunn, Strategic Institute for Innovation in 

Government Contracting 

Amazon Business, Public Policy, and Web Services 

ANG Budget Division Chief 

Anser 

Army Tank and Automotive Command (TACOM) 

ASN (RDA), DASN Unmanned 

Ausco, Inc. 

BAE 

Bain Capital 

BMNT Partners 

Boeing 

Booz Allen Hamilton 

Buchanan & Edwards 

Coalition for Government Procurement 

Cpacket Networks 

Cyber Security Strategies, LLC 

Cymmetria 

DARPA, Contracts Management Office 

DAU 

DCode42 

Defense Contract Management Agency 

Defense Logistics Agency 

Deloitte 

Department of Commerce 

Department of Energy 

DFJ Venture 

DHHS, Biomedical Advanced Research and Development Authority (BARD A) 

D!Ux 

DoD Military and Industrial Base Policy 

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93 

44 

DSMC 

Etherton & Associates 

ForgeRock 

GAO, Acquisitions and Sourcing Management Office 

General Dynamics 

GSE Dynamics 

Hack4Defense 

Harvard Kennedy School of Bus 

HcartFlow 

Heritage Foundation 

HQDA/DASAP 

Info Reliance 

Information Systems Security Association 

Integrated Dual Use Commercial Companies (!DCC) 

Invensense 

!TAPS 

jLT Speciality USA 

johnson & johnson, Government Business Compliance 

Leidos 

Lockheed Martin 

Microsoft 

MITRE 

NASA Contracts and Grants Policy and Office of Procurement 

NDU/USCG 

NGC 

NOAA 

NRI Secure Technologies 

NSTXL 

Nyotron 

OASN(FM&C), FMB 

OFPP 

OPNAV,N9 

OSD-Comptroller 

Phillips Screw Company 

Precision Gear 

Prevalent 

Procurement Technical Assistance Center- Maryland and Virginia 

QCWare 

Raytheon 

Sandia National Laboratories 

Section 813 Panel 

Senator Collins Staff 

Sevatec 
94 

sss 

Symantec 

Telefonica 

U.S. Army Contracting Command 

U.S. Army Corps of Engineers 

United Technologies 

University of Illinois at Urbana-Champaign; School of Information Sciences 

USD(AT&L), DPAP 

Varonis 

WING Venture Capital 

Wittenberg-Weiner Consulting 

Yaniv Strategies 

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95 

APPENDIX C: PANEL TEAMS 

46 

FAR to Statute Baseline 

Team 1 is reviewing the acquisition regulations and statutes applicable to DoD to 

develop recommended changes or deletions that support timely acquisition of 

systems, services, and solutions supporting DoD mission. This effort includes a focus 

on recommendations to maintain the DoD's technological advantage and enhance 

access to emerging technologies. 

Streamlined Procurement Process 

Team 2 is researching options for substantially streamlining noncomplex acquisitions 

of less than $15 million. Although the current acquisition system generally treats 

$1 million contracts the same as $1 billion contracts, the team is considering ways to 

enable DoD to meet its acquisition needs for smaller contracts. 

Commercial Buying 

Team 3 is focused on simplifying DoD's commercial buying practices to enable the 

department to have greater access to companies not currently selling to the 

department, and to be more adaptable and agile in its acquisition process. 

Barriers to Entry 

Team 4 is focused on removing regulatory, cultural, or bureaucratic barriers to entry 

to the DoD marketplace in an effort to attract companies interested in conducting 

business with DoD that have not done so previously. The team seeks ways to 

restructure DoD's business models support and maintain and increase technological 

dominance. 

Characteristics of Successful Programs 

Team 5 is identifying the attributes and qualities common to successful programs, 

with an eye toward techniques, tools, and practices that can be widely employed. The 

team will make recommendations for best practices, regulations, and statutes. 
96 

IT Acquisition 

Team 6 is investigating how to best streamline the information technology (IT} 

acquisition process as DoD modernizes its use of IT, with a specific focus on defense 

business systems and IT services. The ultimate goal is to increase use of commercial 

best practices and business processes, delivering capability faster and keeping DoD's 

technology current and supportable. 

Budget 

Team 7 is considering the broader budgeting process in DoD-how you get money 

and how you spend it. The team aims to arrive at recommendations that will optimize 

budgeting policy and processes to maintain military technological superiority through 

the efficient flow of resources in the acquisition system. 

Streamlining Regulations 

Team 8 is identifying defense acquisition regulations that are no longer necessary. 

The team is packaging together comprehensive ideas that would substantially 

streamline the acquisition process. 

Cost Accounting Standards 

Team 9 is reviewing the administrative and accounting requirements of cost 

accounting standards (CAS), along with exemptions from CAS and thresholds for 

applying CAS to contracts. The team will make recommendations aimed at eliminating 

unnecessary or outdated requirements, increasing clarity, reducing administrative 

costs, and providing a consistent and fair basis of accounting for CAS-covered 

contracts. 

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97 

APPENDIX D: COMMUNICATION WITH THE PANEL 

Website 

The Section 809 Panel seeks feedback from the diverse group of stakeholders that have interest in issues 

related to defense acquisition, including DoD officials, rne1nbers of the DoD acquisition workforce at all 

levels, service members, industry officials from both large and s1nall businesses, and U.S. citizens. 

The panel offers two avenues for offering feedback on its website at https:/ /section809panel.org. 

Stakeholders can submit general comments and questions about the Section 809 Panel by choosing the 

General Comments option under the Contact Us tab. Stakeholders who would like to suggest 

recommendations for the panel can do so by choosing the Recommendations option under the Contact Us 

tab. 

Members of the public and media may attend open sessions at Section 809 Panel meetings. Information 

about upcoming meetings is available on the panel's website. 

News Clips 

The Section 809 Panel publishes a daily news clips publication that highlights current articles related to 

defense acquisition. Each business day the panel publishes the clips to its web site. Those interested in 

having the daily clips emailed to them should contact Katie Cook at katie.cook«Ddau.mil. 

Social Media 

For information related specifically to the panel, stakeholders can follow the Section 809 Panel on 

Twitter (<iDSection809Panel) or Linked In (Section 809 Panel). 

Public Information 

Organizations interested in hosting panel members for speaking engagements and media outlets 

interested in publishing or broadcasting items about the commission should contact Shayne Martin at 

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Æ