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89–506 2015

[H.A.S.C. No. 113–113] 

CASE STUDIES IN DOD ACQUISITION: 

FINDING WHAT WORKS 

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JUNE 24, 2014 
(II) 

COMMITTEE ON ARMED SERVICES 

ONE HUNDRED THIRTEENTH CONGRESS

HOWARD P. ‘‘BUCK’’ MCKEON, California, Chairman 

MAC THORNBERRY, Texas 

WALTER B. JONES, North Carolina 

J. RANDY FORBES, Virginia 

JEFF MILLER, Florida 

JOE WILSON, South Carolina 

FRANK A. LOBIONDO, New Jersey 

ROB BISHOP, Utah 

MICHAEL R. TURNER, Ohio 

JOHN KLINE, Minnesota 

MIKE ROGERS, Alabama 

TRENT FRANKS, Arizona 

BILL SHUSTER, Pennsylvania 

K. MICHAEL CONAWAY, Texas 

DOUG LAMBORN, Colorado 

ROBERT J. WITTMAN, Virginia 

DUNCAN HUNTER, California 

JOHN FLEMING, Louisiana 

MIKE COFFMAN, Colorado 

E. SCOTT RIGELL, Virginia 

CHRISTOPHER P. GIBSON, New York 

VICKY HARTZLER, Missouri 

JOSEPH J. HECK, Nevada 

JON RUNYAN, New Jersey 

AUSTIN SCOTT, Georgia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

RICHARD B. NUGENT, Florida 

KRISTI L. NOEM, South Dakota 

PAUL COOK, California 

JIM BRIDENSTINE, Oklahoma 

BRAD R. WENSTRUP, Ohio 

JACKIE WALORSKI, Indiana 

BRADLEY BYRNE, Alabama 

ADAM SMITH, Washington 

LORETTA SANCHEZ, California 

MIKE MCINTYRE, North Carolina 

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 

DAVID LOEBSACK, Iowa 

NIKI TSONGAS, Massachusetts 

JOHN GARAMENDI, California 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

COLLEEN W. HANABUSA, Hawaii 

JACKIE SPEIER, California 

RON BARBER, Arizona 

ANDRE ́ CARSON, Indiana 

CAROL SHEA-PORTER, New Hampshire 

DANIEL B. MAFFEI, New York 

DEREK KILMER, Washington 

JOAQUIN CASTRO, Texas 

TAMMY DUCKWORTH, Illinois 

SCOTT H. PETERS, California 

WILLIAM L. ENYART, Illinois 

PETE P. GALLEGO, Texas 

MARC A. VEASEY, Texas 

TULSI GABBARD, Hawaii 

ROBERT L. SIMMONS II, Staff Director 

LYNN WILLIAMS, Professional Staff Member 

SPENCER JOHNSON, Counsel 

AARON FALK, Clerk 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2014 

Page 

HEARING: 

Tuesday, June 24, 2014, Case Studies in DOD Acquisition: Finding What 

Works .................................................................................................................... 1 

APPENDIX: 

Tuesday, June 24, 2014 ........................................................................................... 43 

TUESDAY, JUNE 24, 2014 

CASE STUDIES IN DOD ACQUISITION: FINDING WHAT WORKS 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

McKeon, Hon. Howard P. ‘‘Buck,’’ a Representative from California, Chairman, Committee on Armed Services .................................................................. 1 

Sanchez, Hon. Loretta, a Representative from California, Committee on 

Armed Services ..................................................................................................... 2 

WITNESSES 

Lamb, Dr. Christopher J., Deputy Director of the Institute for National Strategic Studies, National Defense University ....................................................... 9 

Lambert, Hon. Brett, Senior Fellow, National Defense Industrial Association . 3 

McGrath, Hon. Elizabeth (Beth), Former Deputy Chief Management Officer, 

U.S. Department of Defense ................................................................................ 8 

O’Rourke, Ronald, Specialist in Naval Affairs, Congressional Research Service .......................................................................................................................... 5

Venlet, VADM David J., USN (Ret.), Former Program Executive Officer for 

F–35 and NAVAIR Commander, U.S. Navy ...................................................... 7 

APPENDIX 

PREPARED STATEMENTS: 

Lamb, Dr. Christopher J. ................................................................................. 102 

Lambert, Hon. Brett ......................................................................................... 50 

McGrath, Hon. Elizabeth (Beth) ..................................................................... 93 

McKeon, Hon. Howard P. ‘‘Buck’’ .................................................................... 47 

O’Rourke, Ronald .............................................................................................. 61 

Sanchez, Hon. Loretta ...................................................................................... 49 

Venlet, VADM David J. .................................................................................... 80 

DOCUMENTS SUBMITTED FOR THE RECORD: 

[There were no Documents submitted.] 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

[There were no Questions submitted during the hearing.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Mr. Forbes ......................................................................................................... 127 

Ms. Tsongas ...................................................................................................... 128 

Mrs. Walorski ................................................................................................... 136 

Mr. Wittman ..................................................................................................... 132 

(1) 

CASE STUDIES IN DOD ACQUISITION: 

FINDING WHAT WORKS 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, DC, Tuesday, June 24, 2014. 

The committee met, pursuant to call, at 10:03 a.m., in room 

2118, Rayburn House Office Building, Hon. Howard P. ‘‘Buck’’ 

McKeon (chairman of the committee) presiding. 

OPENING STATEMENT OF HON. HOWARD P. ‘‘BUCK’’ MCKEON, 

A REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED SERVICES 

The CHAIRMAN. The committee will come to order. Good morning. 

As most of you know, I have asked our Vice Chairman Mac Thornberry to lead a long-term effort to streamline management of Department of Defense [DOD] by eliminating unnecessary overhead 

and reducing the complexity of the regulatory environment. 

I have also asked him to take a hard look at how we can make 

some lasting improvements in the way that DOD sets requirements 

and acquires things to meet those requirements. We have all heard 

the quote—‘‘Those who cannot remember the past are condemned 

to repeat it.’’ This is something that we have done over and over, 

but I am confident this time it is going to be perfect. 

Perhaps there is no better example of this futility than defense 

acquisitions where the same efforts, reform efforts, have been tried 

again and again for more than 70 years. I want to break this cycle 

of failed acquisition reform by learning from those that traveled 

down this path before. That is what this hearing is about. 

We have asked our witnesses to present some case studies of 

their choosing not ours, that based on their experience, they feel 

are good examples of what is working in DOD acquisitions and 

what is not. I invite all Members to tread outside their committee 

lanes and ask questions about any of the cases studies, even programs that you are not familiar with. So no question is a bad question. 

The great folks we have here before us today have worked on a 

variety of programs and we appreciate the breadth of their experience. We have with us today the Honorable Brett Lambert who recently left his post as a Deputy Assistant Secretary for Manufacturing and Industrial Base Policy and is now with the National Defense Industrial Association. 

We also have Mr. Ron O’Rourke, who most of you here know, 

from the Congressional Research Service. Additionally, we have 

Vice Admiral David Venlet, Retired—did I say that correctly—who 

during his service with the Navy worked on many major acquisi-
2 

tions programs to include the F–18 and the Joint Strike Fighter. 

Now, I understand that you are just basically short time removed 

from that but your experience, sir, will be invaluable. 

Next, we have the Honorable Beth McGrath who recently served 

as DOD’s Deputy Chief Management Officer where she had responsibility for DOD’s business systems. 

And last but not least we have Dr. Christopher Lamb who is currently Deputy Director for Institute for National Strategic Studies 

at the National Defense University. Prior to that post, he served 

as the Deputy Assistant Secretary of Defense for Resources and 

Plans where he had oversight of requirements, acquisition, and resource allocation matters for the Under Secretary of Defense for 

Policy. I welcome all of you and thank you for your service, this is 

a very good panel for this subject. We really appreciate and value 

your expertise. 

Ms. Sanchez. 

[The prepared statement of Mr. McKeon can be found in the Appendix on page 47.] 

STATEMENT OF HON. LORETTA SANCHEZ, A REPRESENTATIVE 

FROM CALIFORNIA, COMMITTEE ON ARMED SERVICES 

Ms. SANCHEZ. Thank you, Mr. Chairman. 

And once again, thank you to the panel for being with us today. 

We appreciate it. As you know—first of all, Mr. Chairman, thank 

you for holding this hearing, I know that there are quite a few 

number of Members who are very concerned about the acquisition 

process. 

And as you know, we have been trying to work on this gosh, 

since I got to the Congress, and I am sure since you got to the Congress to try to figure out how we get all of this done. Acquisition 

is incredibly important especially in a time of limited resources, 

which you and I know we are facing and continue to face. 

So, in order to do our missions more effectively, our men and 

women have to be trained up but they also have to be equipped 

well and they need to have those defense systems and they have 

to have cutting-edge defense systems. We want to have that innovation that we need. And so, the insight that you will provide us 

on how the acquisition system is working or not working, what we 

can do to change it, et cetera, I think, is incredibly important. 

I think that we can learn from some of the mistakes that have 

been made. Certainly, sitting here and sitting as the ranking member on Air Tactical, I have had my frustrations with major programs; F–35 for example, two or three programs that we have now 

completely cut out without having a system available to our men 

and women who are working very hard out there to keep us safe. 

So, I think we need to invest the knowledge that we gained from 

some of those mistakes and some of those acquisitions that just 

didn’t happen. And at the same time I am also worried about the 

industrial base, worried about the innovation base because as a 

Californian I see so much of that, of those engineers and others 

who get pulled into software development and pixels and gosh, you 

know little games that people play on their personal devices, et 

cetera. 
3 

So, I think it is incredibly important, you know, what does the 

acquisition process look like? How do we use the money effectively? 

How do we really get something for the money that we are spending? How do we improve contractor performance? And I believe 

that our witnesses have extensive experience in all of this. 

So, I am really looking forward to see this and also, as the budget for defense has begun to shrink with respect to future systems 

in particular, Mr. Chairman, I think that some of the primes try 

to take more of the work inside. And so, one of the things we see 

is that our smaller and medium-size businesses are getting less 

contracts or are really not being asked to compete or they are not 

being used. 

And that is where a lot of the innovation for the future comes 

from because a small and medium-size business can maneuver so 

much quicker than a larger staid company. So, you know, I want 

to see—I want to try to figure out how do we continue to include 

small business, minority businesses, incredibly important because 

they really are the place where Americans, most Americans work. 

And all of these issues are based around this whole issue of the 

acquisition process. So, I am very interested in this topic. Thank 

you for holding it and interested to hear from our witnesses. 

Thank you, Mr. Chairman. 

[The prepared statement of Ms. Sanchez can be found in the Appendix on page 49.] 

The CHAIRMAN. We have five witnesses, so normally in this committee, we don’t watch the clock too much until we get to the Members’ questions and then we are very strict. But I would really ask 

if you could keep your opening comments to the 5 minutes, it will 

give us more time for the Members to be able to ask the questions 

that they really want to get to. And then that gives you a chance 

to expound on the things that you have to cover with us, so I would 

appreciate it if you do that. 

Let’s start with Mr. Lambert. 

STATEMENT OF HON. BRETT LAMBERT, SENIOR FELLOW, 

NATIONAL DEFENSE INDUSTRIAL ASSOCIATION 

Mr. LAMBERT. Thank you very much, Mr. Chairman. In my brief 

comments before you today, I will focus on discussing the underlying trends that produce acquisition successes and failures on a 

broad scale. Metaphorically speaking, I believe acquisition reform 

should focus less on individual silver bullets and more on creating 

and sustaining silver mines and best practices identified over time 

and under varying conditions. 

The industrial base upon which we rely is comprised of an extremely diverse set of companies that provide both goods and services directly and indirectly to the military. References to ‘‘The Industrial Base’’ that imply some monolithic entity are analytically 

unuseful. 

The defense industrial base incorporates companies of all shapes 

and sizes, from the world’s largest public companies to sole proprietorships to garage start-ups. Some companies deal directly with 

the Federal Government, but a vast majority act as suppliers, subcontractors, and service providers in a value chain that leads to 
4 

prime contractors and is often based in far off lands or even in ‘‘the 

cloud.’’ 

In the coming years, the Department will increasingly purchase 

from what I call the ‘‘millennial industrial base’’ which will be more 

global, more commercial, and more financially complex. This reality 

is truer today than it was yesterday, and will be truer tomorrow 

than it is today. 

The millennial industrial base will also be marked moving forward more by system disposability and refreshment than 30-year 

life cycles and we must have an acquisition process that can keep 

pace. The emerging millennial industrial base is also evolutionary, 

where Moore’s Law is more important than Milestones, and 

Metcalfe’s Law is more vital to our national security than 

MILSPECs [military specifications]. 

Increasingly, the millennial industrial base will also rely on technologies that were not developed in the United States. Also, like 

the commercial marketplace, our supply chain, particularly at the 

lower tiers, will include firms from countries that are not our closest allies. The commercial and global nature of the millennial industrial base is one the Department has begun to recognize in policy more so than in practice. 

This change is profound and disruptive. When it comes to acquisition, the Department continues to assume it is the dog, not the 

tail of any particular market. For some markets that is still correct. 

For an increasing number, it is not. As I have noted, the Department relies on an Industrial Age policies and procedures that often 

hinder it from acquiring the best Information Age technologies. In 

many cases, this results more from culture than from policy. 

For example, FAR [Federal Acquisition Regulations] Part 12 already enables the Department to buy advanced commercial systems and services but it is far too often bypassed in favor of the 

more established and comfortable government-unique source selection policies of FAR Part 15. The only barrier to entry for many innovative firms seeking to offer their best technologies is often the 

acquisition skill set and confidence of informed government customers. 

To a large extent, the millennial industrial base also embraces 

the Department’s pursuit of Better Buying Power. Nowhere is the 

Department more likely to find improved productivity, innovation, 

cost controls, and competition than in the base that leverages global and commercial best practices. 

The Better Buying Power initiative seeks to accentuate and leverage all of the best aspects the millennial industrial base has to 

offer and it should be encouraged to continue at all levels of the 

Department, most notably in the training and retention of the 

skilled acquisition workforce. 

Another advantage of embracing the millennial industrial base to 

the Department is burden sharing in research and development. 

Today’s debate rages over the role of IRAD in defense innovation. 

But this single acronym too often conflates Independent Research 

and Development and Internal Research and Development. 

Independent R&D [research and development] are funds provided by the taxpayer to defense companies at the rate of over $4 
5 

billion a year. There are many good reasons for these expenditures 

and I support them all. It is a good program. 

Internal R&D, on the other hand, as every non-defense company 

understands it, is self-directed and unreimbursed with the goal of 

investing in capabilities that have a clearly articulated return on 

the research and development investment. As the Department increasingly leverages the commercial marketplace, Internal R&D 

may likely become a greater source of innovation than Independent 

R&D. 

It may be helpful, moving forward, to simply distinguish the two 

pools of resources and refer to ‘‘Independent R&D’’ as ‘‘Reimbursable R&D,’’ which is in effect is what it is. The Department would 

then be better able to distinguish, as will shareholders of public 

companies, the dramatic increases in IR&D driven by the millennial industrial base that are not taxpayer funded yet may yield significant results for the warfighter if private investments are able 

to develop into goods and services the warfighter requires. That 

said, access to the shareholder-funded innovation can only effectively be leveraged when careful and fair consideration is given to 

the ultimate control and use of intellectual property. 

In conclusion, there is not, as I have said before, a silver bullet 

for the real and perceived shortcomings of the Defense Acquisition 

System. In my opinion, the single greatest asset over time comes 

back to the people. How talented are they? How well are they 

trained? How empowered are they to make the necessary call on 

any one procurement action, and how are they rewarded for thinking and not just acting? 

To be successful, that workforce must embrace the millennial industrial base as the future of defense acquisition. How we can enable our people to recognize and leverage this reality is a challenge 

both this committee and Department must face in the coming 

years. 

As I have said, our daughters and sons should never enter a fair 

fight and to ensure that, we all must embrace both the opportunities and challenges of this emerging industrial base. 

Thank you. 

[The prepared statement of Mr. Lambert can be found in the Appendix on page 50.] 

The CHAIRMAN. Thank you. 

Mr. O’Rourke. 

STATEMENT OF RONALD O’ROURKE, SPECIALIST IN NAVAL 

AFFAIRS, CONGRESSIONAL RESEARCH SERVICE 

Mr. O’ROURKE. Chairman McKeon, Ranking Member Sanchez, 

distinguished members of the committee, thank you for the opportunity to appear before you today to testify on case studies in what 

works in DOD acquisition. Mr. Chairman, with your permission, I 

would like to submit my written statement for the record and summarize it here briefly. 

The CHAIRMAN. All of your written statements will be included 

in the record in total, without objection, so ordered. 

Mr. O’ROURKE. As requested, my testimony focuses on Navy acquisition, and I selected seven case studies as examples of what 

works. The first is nuclear propulsion which is under the direction 
6 

of Naval Reactors. The Navy’s success since the 1950s in procuring 

and safely operating scores of nuclear-powered ships and in developing a succession of reactor designs using fuel cores with increasingly long lives can be considered a major success story. 

Naval Reactors’ success can be attributed in part to its administrative setup, which provides Naval Reactors with a clear and focused mission, clear and total responsibility and accountability for 

implementing that mission, a director with a high rank and a long 

term of office, centralized control of the program’s industrial base 

and suppliers, and a fairly flat organizational structure with an inhouse staff that is fully knowledgeable in the technology that it acquires from its contractors. 

Naval Reactors’ success can also be attributed to its operational 

philosophy, which is characterized by, among other things, a focus 

on technical excellence, rigorous quality control, comprehensive 

procedures and procedural compliance, careful selection of personnel, and rigorous and continuous training of those personnel. 

The second example is the Virginia-class submarine program 

which has reduced cost while increasing capability and is delivering boats ahead of schedule. The program’s success can be attributed to, among other things, achieving a higher degree of design 

completion prior to the start of construction than was true for previous submarine programs, establishing operational requirements 

that were not overly ambitious, using technologies developed for 

previous submarine classes, sharing production best practices between the two submarine shipbuilders, and achieving production 

efficiencies through the use, with congressional approval, of 

multiyear procurement and block buy contracting. 

The third example is the Acoustic Rapid COTS [Commercial-Offthe-Shelf] Insertion program for upgrading the acoustic signal-processing capabilities of existing Navy submarines. This open architecture program permits the Navy to upgrade the capabilities of existing submarines at much less cost than the previous closed architecture approach. 

The fourth example is the Aegis Ballistic Missile Defense program, which has achieved the largely successful test flight record 

against increasingly challenging targets. The program’s success can 

be attributed in part to its use of the Aegis community’s longstanding incremental development philosophy known as ‘‘Build a 

little, test a little, learn a lot.’’ 

The fifth example is the Mobile Landing Platform or MLP shipbuilding program which modified the design of an existing commercial oil tanker to produce an MLP at a cost that was less than half 

the estimated cost of the new design concept the Navy had been 

looking at. 

The sixth example is the use of Profit Related to Offers, or PRO 

Bidding, in the DDG–51 destroyer program which has enabled the 

Navy to continue using competition between the two DDG–51 shipyards during years of relatively low production rates. 

And the seventh example is the Navy’s increasing use in recent 

years of multiyear procurement and block buy contracting which 

amounts to a significant change, some might say a quiet revolution, 

in Navy ship and aircraft acquisition and which has enabled Con-
7 

gress and the Navy to procure more ships and aircraft for a given 

amount of money. 

Lessons learned for Navy shipbuilding that have emerged over 

the years include the following seven points: First, get the operational requirements for the program right up front and manage 

risk by not trying to do too much in the program. 

Second, impose cost discipline up front and use realistic price estimates. 

Third, minimize design/construction concurrency. 

Fourth, use a contract type that is appropriate for the amount 

of risk involved, and structure its terms to align incentives with desired outcomes. 

Fifth, properly supervise construction work. 

Sixth, provide stability for industry in part by using, where possible, multiyear procurement or block buy contracting. 

And seventh, maintain a capable government acquisition workforce that understands what it is buying. 

Identifying these lessons isn’t the hard part. Most if not all of 

these points have been cited for years. The hard part is living up 

to them without letting circumstances lead program execution efforts away from these guidelines. 

Mr. Chairman, this concludes my statement. Thank you, again, 

for the opportunity to testify, and I will look forward to the committee’s questions. 

[The prepared statement of Mr. O’Rourke can be found in the Appendix on page 61.] 

STATEMENT OF VADM DAVID J. VENLET, USN (RET.), FORMER 

PROGRAM EXECUTIVE OFFICER FOR F–35 AND NAVAIR COMMANDER, U.S. NAVY 

Admiral VENLET. Chairman McKeon, Ms. Sanchez, and committee, thank you for the invitation to appear with this panel. 

Mankind has always lived in a world of constrained resources, in 

our personal, professional, and national lives. Optimization of these 

constrained resources is what produces outcomes that are useful 

and enduring. 

Specific actions in specific areas are called for to ideally improve 

the opportunity to achieve better outcomes. It is a long road. Three 

places need improved outcomes. 

The first is making the programs underway perform better. The 

second is to only start and pursue the right programs. The third 

is removing waste in the infrastructure and the process. 

Things to do for better outcomes are different for each one. I am 

here today to do what I can to help you based on my exposure to 

and participation in a large number of programs, of successes, disappointments and undeniably confrontation with failure. 

Specific program case studies would yield the non-specific program insights in my written submission. Non-specific here is not 

meant to avoid specific program criticism but to focus on causes 

and hopefully effective things to do for better outcomes for every 

program now and in the future. 

I hope to bring focus on ideas to attain the external result, the 

right capability delivery for effective national defense. We need to 

focus on people doing acquisition in both government and industry. 
8 

The goal is to create an increasing population of people who have 

demonstrated commitment to the practice of fundamentals, transparency, and realism at all levels of career progression. That will 

produce better outcomes. 

It is a long road and forces abound that suppress workers from 

embracing these as life habits. This attention to people is the heart 

of the matter for getting to a state of dependably better performing 

programs. 

I look forward to your questions and our discussion. 

[The prepared statement of Admiral Venlet can be found in the 

Appendix on page 80.] 

The CHAIRMAN. Thank you. 

Ms. McGrath. 

STATEMENT OF HON. ELIZABETH (BETH) MCGRATH, FORMER 

DEPUTY CHIEF MANAGEMENT OFFICER, U.S. DEPARTMENT 

OF DEFENSE 

Ms. MCGRATH. Good morning, Mr. Chairman, Ms. Sanchez, 

members of the committee. 

The CHAIRMAN. Will you pull the mic right up? 

Ms. MCGRATH. Yes. Is this better? Great. Thank you. I was about 

to say how much I appreciate the opportunity to return and testify 

this morning and be part of this panel and provide my perspective 

on achieving meaningful and lasting reform in the Department of 

Defense acquisition process and how we can operate more effectively and efficiently on behalf of the American taxpayer. 

As mentioned, until recently, I served as the Deputy Chief Management Officer for the Department of Defense. In that capacity I 

assisted the Secretary and the deputy in drafting strategies and 

implementing plans aimed at streamlining business operations including business information technology programs. 

While at the Department, we did manage to make some steps toward a more efficient acquisition model, yet today DOD continues 

to experience software development projects that fail to meet scheduled deadlines or promised cost estimates. 

In today’s environment, tolerance for cost overruns and missed 

deadlines is in short supply. The budgets for IT [information technology] will be tight for the foreseeable future and no agency has 

the money or time to waste. I believe the tools exist to develop mission critical software projects that meet specifications both functional and aimed to achieve both the costs and schedule. 

Project teams need to think creatively and work more collaboratively to achieve these effects. How the government defines clear, 

measurable results is critical for both the Department of Defense 

and industry. There are benefits for all parties involved in executing efficient acquisition programs. 

In my time today, I will focus on three areas of potential reform 

and revision that I believe are essential to future IT cost efficiency 

and operational success. First is the increased use of prototypes. 

Prototype functionality should be shared with users as soon as possible after they discuss what they want and need from the system 

that can spark changes in the requirements and priorities and they 

need to understand what it is they are looking for from an oper-
9 

ational perspective and have a better sense for their requirements 

and as they see the functionality. 

Frequent incremental releases early in the process keep the 

project fresh and users continually engaged. Each release is a 

checkpoint to measure progress against expectation of mission 

stakeholders. And keep in mind the earlier in the development 

cycle corrections are made the cheaper they are. 

Second is the use of strong program managers and information 

technology professionals. The program manager must keep the 

project focused on outcomes and he or she must work very closely 

with the functional leaders throughout the program. 

The project manager guides the development and adherence to 

sound, standards-based practices to avoid risks. Both the program 

manager and functional lead need to be intimately involved and 

understand the planned features of the system, again, with a clear 

focus on what the business outcomes are intended. 

Third is the flexibility in the contracting process. Between prototyping and delivering releases, change orders will occur in the contract type. We need to make sure that we have a mechanism in 

place where the communication between industry and the government and our contracting practices enable these changes to happen 

because things change throughout the life cycle of a program and 

the contract structure needs to be able to handle those changes, 

again, focused on the business outcomes. 

The acquisition process is dynamic and complex. Any effective 

and workable solution must consider a wide number of factors in 

a diverse group of stakeholders. Building a comprehensive acquisition model relies on valuable input from the Pentagon, the individual services, industries, and certainly the Members of Congress. 

That level of engagement is vital. We must continue to search for 

ways to instill new innovative and efficient techniques in the process. I look forward to working with this committee in the months 

ahead and being able to report additional gains in the quest for 

greater efficiency, increased effectiveness, and further agility. 

Thank you very much for the opportunity to be here today, and 

I look forward to our discussion. 

[The prepared statement of Ms. McGrath can be found in the Appendix on page 93.] 

The CHAIRMAN. Thank you. 

Dr. Lamb. 

STATEMENT OF DR. CHRISTOPHER J. LAMB, DEPUTY DIRECTOR OF THE INSTITUTE FOR NATIONAL STRATEGIC STUDIES, NATIONAL DEFENSE UNIVERSITY 

Dr. LAMB. Mr. Chairman and members of the committee, thank 

you for the opportunity to be here to share my views on what 

works and what doesn’t in defense acquisition. It is an honor to be 

here. 

In the written testimony, I offer several examples of acquisition 

successes and failure, but I focus primarily on the mine-resistant, 

ambush-protected vehicle program, otherwise known as MRAPs. 

The fielding of MRAPs is a noteworthy case that features both 

major performance failures and successes. I believe the MRAP case 

helps substantiate some insights about Pentagon management of 
10 

acquisition that is noteworthy. For example, the flexibility to manage programs differently, depending on circumstances, is critically 

important. And irregular warfare is a prime example in that regard. 

Efficient and effective acquisition is not possible without reform 

of other associated Department of Defense processes, particularly 

the requirements process in my estimation. Senior leaders I believe 

who are frustrated with Pentagon processes are increasingly inclined to jettison disciplined defense analyses in favor of intuitive 

and impressionistic decisionmaking, which I think would be a mistake. 

My testimony was offered from the perspective of a mid-level career official. But I thought in my oral testimony here today it 

might be useful to look at things or try to look at things from the 

point of view of the Secretary of Defense. 

This kind of thought experiment is actually relatively easy because Secretary Gates has spoken extensively on his experience 

with the MRAPs. In his memoirs, I think he makes it clear that 

he decided to intervene decisively to make the MRAPs the Pentagon’s number one acquisition priority for moral reasons. He believed America should do everything possible to protect the volunteers it sends to war, especially from the improvised explosive devices [IEDs] that were responsible for the large majority of our casualties. 

His bottom-line rejoinder in his memoirs to those who still contend that MRAPs were an unnecessary expense was that they 

should, quote—‘‘talk to the countless troops who survived because 

they were riding in an MRAP.’’ 

Our research at the National Defense University agrees with 

Secretary Gates’ moral calculus, but also argues that MRAPs made 

sense for economic, operational, and political reasons as well. Economically, MRAPs cost less than replacing and caring for the casualties from the IEDs. In terms of operational strategy, they were 

completely consistent with our approach to counterinsurgency in 

Iraq. And, politically, the MRAPs help shore up public support for 

the war effort and signal to the enemy that we would do whatever 

it took to prevail. 

Even so, in his candid memoirs, Secretary Gates reports some 

unusual facts about his experience with the MRAP decisionmaking 

process. First, it was an accident that he stumbled upon a journalist’s report that alerted him to the MRAP issue and inclined him 

to investigate it. 

Second, not a single senior official, civilian or military, supported 

his proposal for a crash program to buy MRAPs. Third, after he decided to institutionalize the lesson he learned from the MRAP in 

the form of a better balance between warfighting and irregular 

warfare capabilities in his national defense strategy, he precipitated, quote—‘‘a rebellion from all the senior uniformed leaders in 

the Pentagon.’’ Ultimately, he says he had to water down his strategic guidance. 

These fascinating facts raise some important questions I believe. 

For example, do we want a decisionmaking system that requires 

happenstance to bring to the Secretary’s attention a highly effec-
11 

tive, but expensive and controversial option for defeating the enemy’s most lethal weapon? 

Why was it that not a single senior official could see the merits 

to the MRAP, but the Secretary, this committee at that time and 

many Senators, and experts in the Department and outside the 

Pentagon could see the benefits? 

What does it tell us when a leader as competent as Secretary 

Gates has to water down his own strategic guidance for the benefit 

of consensus? What are the implications of that? 

Answers to these questions are contained in my written testimony. But, to summarize, service organizational cultures disincline 

the Pentagon to field capabilities for irregular warfare that compete with established warfighting programs. Also, the productivity 

of the Pentagon acquisition system is inextricably linked to and 

limited by other Pentagon processes, which tells us something 

about the scope of needed reform I think. But, most importantly, 

I believe the MRAP case highlights a fundamental problem or challenge for the Pentagon, which is its inability to make tradeoffs between competing objectives that are essential for mission success, 

but that come at the expense of some interest group. This is just 

as true for acquisition programs as it is for defense strategy on the 

whole. 

Let me close by again citing Secretary Gates. He concludes, reviewing the MRAP experience, that we can’t assign responsibility 

for this unfortunate state of affairs because, quote—‘‘in every case, 

multiple independent organizations were involved and no single 

one of them had the authority to compel action by the others.’’ 

How can we hold anyone responsible when many organizations 

can put their foot on the brake, stop or delay action, but no one, 

not even the Secretary, consistently can generate desired outcomes? Secretary Gates went on to suggest we are all responsible 

for the system we have and its performance. It took a committee 

effort to build a system that can frustrate the clear choices about 

relative risk and it will take a team effort to change it. 

It is my understanding that that is the committee’s intent. And 

I applaud the House Armed Services Committee efforts to take on 

this daunting challenge. And I thank you for the opportunity to 

make a contribution to your deliberations. 

Thank you. 

[The prepared statement of Dr. Lamb can be found in the Appendix on page 102.] 

The CHAIRMAN. Thank you very much. 

I think this is going to be a huge, monumental task. I think you 

each pointed out things that are very, very much a part of the culture. And we are just talking about defense, but this is much, 

much broader. It is throughout our whole country. We brought in 

so much bureaucracy, so much red tape, rules, regulations. 

When my dad was a young man, he wanted to go into business 

for himself. He was working for a company where he sold meat off 

of a truck to stores and restaurants during the day and he saved 

up money and he bought a used fish truck. He and my mom 

worked all weekend cleaning to try to get the smell of the fish out 

of the truck and then, early Monday morning, he was downtown 
12 

Los Angeles, went to some places that he knew and had contacts 

and friends. This was early during the Second World War. 

And he was able to buy enough meat to fill up his truck and then 

he went out and started and tried to sell it. He worked door to door 

to door. And his truck was not refrigerated. He had to sell the meat 

that day or he was out of business. Finally, he got to a place late 

in the afternoon, a guy took everything he had. And that started 

him in his business. 

There is no way a person could do that today. There are so many 

rules, regulations, licenses, things that you have to, hoops that you 

have to jump through before you could get something off the 

ground. So this is not just defense. 

I mean, we just have a law in California, it looks like they are 

debating about overturning tenure for teachers. We understand, we 

know what—I was on a school board for 9 years. We had a teacher 

one night that was caught by the vice squad for indecent exposure, 

some other things; we couldn’t fire him. I mean, this is, over the 

years, we have put layer upon layer of things that make it much 

more difficult to get anything done. 

I am reading about World War II. We built 80,000 airplanes in 

1 year. This year, we will build, hopefully, fixed-wing and helomanned aircraft, 341. We were, during World War II, building a 

tank every 3 hours. We built more tanks in 15 months than the 

Germans built during the whole war. We unleashed a huge, some, 

now, refer to it as a ‘‘military-industrial complex,’’ but because of 

that and because of our people, we were able to win two major 

wars at the same time on opposite sides of the world. 

Today, we have made things so complicated that for—what have 

we been working on? An air tanker, for 15 years. We don’t have 

one yet. 

I tell the story about the Pentagon that was built in 1 year during World War II. And, right now, we could not build it because 

I am sure there would be some—it is in a swamp and there would 

be some species that would stop us. But, say, we got through all 

of the NEPA [National Environmental Policy Act] and all the court 

cases and went through all of that and finally started to build it. 

World War II would be over, Korea would probably be over, and 

Vietnam would probably be over for a week that we could get a 

Pentagon built. We cannot live forever under this kind of circumstance. 

I was talking to a CEO [chief executive officer] of a company. 

And he said he had over 200 government workers in just one of his 

plants watching everything they did. And he had to hire 200 people 

to answer all of their questions. I said, ‘‘You know, if we didn’t 

have the 200 there from the government, you didn’t have to have 

the 200 and you probably couldn’t steal enough to pay for what we 

were paying to make sure you didn’t steal.’’ 

So, some way, we have to get—I don’t know how we are going 

to do this. But the Marine Expeditionary Vehicle, we spent, what, 

$6 billion in 20 years and finally decided it was too expensive. How 

do we make those decisions earlier? How do we cut through the 

regulations, the bureaucracy, decisionmaking to where an MRAP 

could be delivered as soon as we find out all of the problems we 

have with IEDs? 
13 

We put all of our efforts in that and make it happen instead of— 

I understand we have 10,000 attorneys in the DOD. Now, we have 

a few up here, too. And I have nothing against the attorneys, but 

I think they are trained to delay things or to stop things. 

You may be attorneys. I don’t know. But, someway, I am hoping 

with your expertise and with Mac’s abilities and this committee in 

the next few years we can, some way, cut through at least in defense the ability to get things done quicker, more efficiently. Yes, 

we have to be very good stewards of the taxpayers’ money, but, you 

know, delaying these things or cutting them off—the B–2 was built 

in my district. It was on full production when I first ran for Congress. It was supposed to be 130 aircraft. We spent $40 billion on 

R&D. We finally built 21 planes—crashed 1, we now have 20. So 

you take the $40 billion and spread it over the 130 that we were 

supposed to build or you spread it over the 21 that we actually 

built, you get a different cost to that plane. 

Well, they stopped production, made Northrop cut up the tools to 

be sure we would never build another one. And, now, we are investigating building another long-range penetrating bomber. We understand we need about 100. You know, this is lunacy. 

So I don’t have a question. I just had to spout off. But I think 

that this is the biggest problem facing us because if we find ourselves in another place where we need to build something fast, we 

have tied our hands. 

So I am hoping that we will have the questions that will draw 

this out. And I am hoping that you will work closely with Mac and 

the committee over the coming years to lend your expertise just to, 

first, list the problems and then, systematically through legislation 

or fiat or whatever, however way we can do it, start eliminating all 

of the barriers to being more streamlined, more efficient, more cost 

conscious, and more focused on getting things done. 

Thank you. 

Ms. Sanchez. 

Ms. SANCHEZ. Thank you, Mr. Chairman. 

So I have some specific questions to ask the panel. I want to ask 

you about JROC—for those who don’t know, the Joint Requirements Oversight Council—which, of course, the Congress instituted 

so that we would ensure that the same types of things weren’t happening in each of the different services and that we wouldn’t have 

this redundancy going on between the services. 

So it appears to me at least that JROC has taken on a life of 

its own. Sometimes, just to get through the process can take more 

than a year. And that is adding time to a particular situation. And 

it also seems to me, under JROC, that they don’t want to pick winners and losers and so, you know, things get through and then 

there is still this—they are still usually saying yes to everything 

and so we not only have added time to the equation, but we have 

redundancy going on. 

I know that is not what we decided as a Congress. That is not 

why we put it together, but it seems to be that that is what is 

going on at least from my standpoint. So I would like to ask each 

member of the panel: Do you think that the—what do you think 

of the JROC process? And is it worth the time and the money? And 

does it effectively mitigate the pitfalls of stove-type acquisition 
14 

process? And should we continue with it? If we redid it so that it 

would go back to its original intent of what it was supposed to do, 

how would the Congress do that? 

Anybody want to take a crack at that? 

Ms. MCGRATH. So I am happy to start. My perspective however 

will be slightly different, given the sort of business, information 

technology. 

A few years ago, the Department knew it needed a place to vet 

and discuss broad-level enterprise IT business requirements. And 

JROC was not the place. JROC was particularly focused on the national security mission, really the warfighting aspects of the Department. And so, frankly, from my perspective, we needed a place 

like the JROC to have the enterprise discussion on business requirements so that we didn’t have redundancies of capabilities and 

so we could create a more integrated environment. 

And so, broadly stated, sort of the aspects and benefits of the 

JROC were lacking in the business space, and so we did establish 

that to ensure, as I mentioned, not to have duplication across the 

enterprise. And that is only, say, in the last couple of years, but 

it has proven very valuable, I believe, as was the intent of the 

JROC process, to understand the enterprise perspective, how everyone played in a particular engagement. We are mirroring those 

same, you know, attributes in the business conversations. 

So, from that perspective, I can say it is certainly beneficial, although we are mirroring JROC and not specific to the JROC. And 

I think without it, you will end up with duplication and lack of 

interoperability across the business. 

Ms. SANCHEZ. And when you work through that process from the 

software and technology standpoint, does it take you a year to get 

to the endgame of, yes, we need this, no, we don’t need this? I 

mean, what is the timeline on something like that? 

Ms. MCGRATH. Well, again, it is, you know—I will say the cultural part of even establishing the conversation was very difficult 

because people were accustomed to having the flexibility to do their 

own things and, when we said, no, no, you are part of a larger ecosystem, you need to bring it in and really document why do you 

need what you need or what business outcomes are you trying to 

get, you know, to achieve then, I think the more prepared organizations were, the shorter the timeline took. 

But I will also say that the cultural change, people weren’t prepared to answer the questions. They were very focused on their 

specific organization and what they were doing and not really looking at the enterprise. And so I think the more you have done your 

homework and really analyze why, you know, your mission needs, 

then the faster it will take because you have done your homework 

and you are prepared and you understand. 

Ms. SANCHEZ. Okay. 

Admiral. 

Admiral VENLET. I found—I make brief reference to the JROC in 

my written statement. I also used the word ‘‘optimization’’ when I 

began. You have—the chairman talked about complex systems that 

we are requiring and reaching for. We write very tall requirements 

for the things that we need for very good reasons. We want the 

warfighter to have the best individual value. 
15 

And when we write down those requirements, we have this wonderful organization called Operational Test [and Evaluation] that 

tests what we write down about those requirements. And when the 

performance for various reasons is, either through unfortunate 

choices in design or surprises or things that you discover when you 

reach for high capability, that report may come out and you are 

short of some of those very tall requirements. We get pretty agitated when we believe we can’t abide those. 

We need—you need somebody to be what I would call the ‘‘chief 

officer of good enough.’’ And, please, don’t misunderstand me. I am 

not talking about dumbing down the requirements for our 

warfighters’ needs. But when resources are constrained due to 

time, due to an operational threat that doesn’t appear with regard 

to any schedule, you have to account for the appearance of a threat, 

the lack of further resources. And those are very difficult decisions. 

I believe the creation of the JROC was meant to do that. I found 

my appearance before the JROC and my interaction with them to 

be that—to be a source to do that. I believe the current leadership 

has a very good view to push back on programs. I found that in 

my personal experience. So, if not the JROC—I personally believe, 

I would continue the JROC. But if not, then you need somebody to 

play that role to serve as secretaries, to serve as chiefs or empowered to make those difficult decisions. But that would be my view. 

Ms. SANCHEZ. Anybody else with respect to the JROC? Any different experience on there? 

Yes? 

Dr. LAMB. Well, I just would add, piggyback a little back on what 

the admiral said, and make the following observation. 

If the JROC was going to be equipped to make decisions between 

competing requirements and which would best serve the warfighter, you would need an analytic structure in place that would 

allow you to fairly compare alternatives at all levels, all the way 

down to making trades in key performance parameters on major 

platforms, all the way up to operational concepts, what is the best 

way to do a forced entry overseas, what is our concept for that and 

what programs and platforms, as such, to best plug into that? 

So, if I have to sacrifice speed, endurance, or some other attribute over here, maybe I can compensate for it over here. That 

is I think what people intended to see happening on the JROC, but 

which typically does not happen. And you ask, ‘‘Well, why does that 

not happen?’’ And my answer would be because people would be 

surprised to know how lacking we are in transparency in the Department about data, about the modeling, about the assumptions. 

It is very hard to get a fair comparison between alternatives. So, 

if you are the Secretary of Defense or you are sitting on the JROC, 

somebody can come forward with an analysis of the F–22, for example, and say, ‘‘Well, we really need far fewer given our needs,’’ 

and another person with another study based on other data will 

come forward and reach exactly the opposite conclusion. And if you 

are the Secretary of Defense, you must be saying to yourself, ‘‘That 

is not very helpful decisionmaking support.’’ 

And that is why in my written testimony I said, if we really want 

to empower the Secretary or somebody below the Secretary like the 

JROC to help make this kind of tradeoffs, we need a much more 
16 

robust joint analytics system. People don’t understand that the 

Pentagon has a very small amount of analytic talent and resources 

dedicated to joint analysis and huge amounts devoted to the services. 

That is not necessarily bad if everyone keeps everything transparent. But that is not the way things work today. 

Ms. SANCHEZ. So, following up on that Doctor, because I think 

this is a very—I mean, we sit here and we are trying—we are making tradeoffs. I mean, we are making tradeoffs based on money 

more or less in this committee and because we are having to given 

the situation that we have right now. But it would nice to be able 

to make tradeoffs based on needs. 

And what you are saying to me is that each service has a whole 

bunch of people looking at needs and analyzing that and seeing 

what they need, but, when we go to the SECDEF [Secretary of Defense] or we go to that office and they are trying to make these 

tradeoffs, they have very few people who may even have that information from other places or be able to analyze to make those tradeoffs. 

What would you say would be the—would you say maybe put, we 

take some of that analytic and put it and make a broader analytic 

in the Office of the Secretary and we take it out of those individual 

services? I mean, how—practically, how would you address what 

you just said you thought needed to happen? 

Dr. LAMB. Well, actually we have written something about that 

at the National Defense University. And I think a lot of people 

would say it is not politically feasible. But we made a recommendation for a system that would produce joint data for joint operational 

concepts with joint modeling that would help make alternatives 

transparent and make the consequences of one path or another 

much more readily accessible to senior decisionmakers. 

But you would have to redo the way the Pentagon currently does 

its analysis of requirements today. It is not—we don’t have that 

much analytic talent and we tend to reserve what analytic talent 

we have in the joint field to operational-level campaign analysis. So 

there would be a lot that would have to change about the politics 

and the procedures for making that kind of talent available to people in a position of joint responsibility for example. 

Ms. SANCHEZ. Great. 

Thank you, Mr. Chairman. I will yield back. I have other questions. I will submit them for the record. 

Mr. THORNBERRY [presiding]. I thank the gentlelady. 

And then I, again, appreciate all the witnesses being here. I 

think you could tell from the chairman’s remarks the frustration 

that exists not just in Congress, but in industry and many folks in 

the Pentagon on this subject. And I think you can tell from the excellent questions of Ms. Sanchez that this is a bipartisan concern 

and bicameral concern. The Senate is just as interested in trying 

to make this better as we are. 

In Mr. O’Rourke’s statement, he listed seven things that basically lessons learned from naval shipbuilding, kind of the things we 

know—get the requirements straight, you know, impose cost discipline up front, minimize concurrency, et cetera. 
17 

My question to, I guess, all of you is, Do you agree that we know 

what works and, if we know what works, why are we not able to 

follow it and get those results? 

Mr. O’ROURKE. I could start on this since you are keying off my 

testimony. My answer would be that I think we know some of what 

works and, for some defense sectors, we may know more of what 

works than in others. I think in terms of services or, perhaps, in 

the IT area, they are earlier on the learning curve. 

Shipbuilding has had a long time to figure out what its lessons 

are. And so I think sector by sector, the answer to that question 

may vary somewhat. So my bottom-line answer is that, at least in 

shipbuilding, we know a lot of what works. And the challenge isn’t 

identifying the lessons. It is living up to them. 

Mr. LAMBERT. I would add to that that on the sector by sector 

there are very, very different lessons that we learn among each. 

And, unfortunately, we often try to apply the similar lessons across 

the board in our procurement. When you buy, you spend a billion, 

a little over $1 billion a day, that is very difficult to do particularly 

as we are acquiring more advanced programs and systems. 

Secretary Lynn, Deputy Secretary Lynn, used to use the example 

that Apple envisioned and then sold an iPad within 18 months, and 

it takes us 24 to get a budget. So we are never going to be up to 

that par, but I think that it does come back to people, it comes 

back to training our people and equipping our people with the skill 

sets that they need to be better negotiators but also take advantage 

of the policies that are already in place. So in many cases it is more 

about culture then it is about regulation. 

Ms. MCGRATH. I would just echo the cultural aspect of it, and although the information technology is evolving over time, the process has not kept up with the way the technology evolves. We went 

from a coding organization to an acquiring commercial-off-the-shelf 

capability, yet the workforce is not trained to actually, I think, effectively buy the commercial-off-the-shelf capability. 

So I think the training and the acquisition workforce, and not 

just the people who are the program managers but those who have 

the mission need, if you will, the business requires, they need to 

understand that they have also skin in the game, and it is not just 

the acquisition workforce because they are the ones who need to 

understand what it is they are trying to achieve from a business 

outcome perspective, married with a really astute program manager, and then a contract acquisition strategy that really serves the 

Department. And so, really, the contracting officer also has, I believe, a very strong role to play, one that has to make sure that 

he or she is aligned with the outcomes that the Department is trying to achieve. 

And so, it is not just one person, it is at least three, if not more 

who need both accountability and responsibility in a successful IT 

program. 

Admiral VENLET. Sir, I would add and draw attention to a Center for Naval Analyses report in 2009 on the F–18 Super Hornet 

development program. 

You would find some of the characteristics for aviation that Mr. 

O’Rourke referred to in shipbuilding, that I don’t believe we are in 

an environment that that could not be repeated. And RAND has 
18 

written several reports about programs, good and bad as well. But 

if I could go back to the analysis point really quick, I wanted to 

just say that CAPE [Cost Assessment and Program Evaluation] in 

OSD [Office of the Secretary of Defense] was created by the Weapon Systems Acquisition Reform Act. 

I believe that is a respectable analysis body for OSD. Above all, 

the services, and I found that as a representative of a program they 

would analyze my program without direct interaction from me. And 

I believe that had a proper balance of supporting decisionmakers. 

But there is a dynamic that the analysis capability that resides 

in services brings forward reasonable consequence illumination, I 

am trying to say, you know, for decisionmakers. But there are 

forces in the cry for speed, do it faster, do it less, that actually suppress some of those sound fundamentals that come forward in 

those offerings and analysis outcomes. 

Mr. THORNBERRY. Okay. That is helpful. I appreciate all your answers and there is a lot more follow-up to do. 

Ms. Gabbard. 

Ms. GABBARD. Thank you very much, Mr. Chairman. 

My question is about the Enterprise Resource Planning systems. 

In 2012 the DOD IG [Inspector General] examined six systems that 

it determined would be critical to meeting the Pentagon’s legal 

deadlines surpassing a financial audit. And it found that all six 

were years behind schedule, with each of them having exceeded 

their original life-cycle cost estimates. 

So to Ms. McGrath, what do you think are the most revealing indicators of future success or failure of an Enterprise Resource Planning system? And in your view is the DOD implementing a management monitoring system that can capture these indicators at an 

early enough stage? 

Ms. MCGRATH. Thank you for the question. 

The Department has really, I will say, learned a lot over the last 

few years with regard to implementation of the Enterprise Resource Planning or ERP systems. I think when we first embarked 

upon the path we didn’t understand the costs and implication of 

customization of these systems. And so, our folks would make the 

system sort of either do the things in the way they executed them 

today, or didn’t understand both the cost in schedule implications 

or change. 

And so, we have learned that lesson, I believe, across the Department. And so, customizations aren’t happening, I will have to say 

the way they used to. And I think they are, really the cost of customizing ERPs is well known by many. 

I can say, however, that we too are learning how to implement 

ERPs more effectively. I mentioned in my answer to the last question around understanding the business of defense. Each one of the 

functional leaders who runs a particular business area, be it a supply chain, human resources, or financials, needs to understand how 

they do what they do, the business process they execute, and also 

then how the IT, the ERP in this case enables them to achieve the 

business outcomes. 

Without that understanding it does not matter what IT system 

you are trying to implement. It won’t achieve the business outcome. 

And so, I really think the discussion needs to take place longer, I 
19 

will say upfront in the acquisition program prior to going to a contract award, so that the Department writ large understands the 

business environment, what it is trying to achieve before we, you 

know, embark upon an IT system. 

And again, most of what DOD does in the business space is commercial-off-the-shelf procurement and I would—and as I mentioned 

in my last response the workforce really needs to be trained on how 

do you acquire and configure commercial capabilities as opposed to 

what we do today in the acquisition process. The training isn’t focused, I don’t think, enough on how to enable a better implementation. 

Ms. GABBARD. A few of you have mentioned, Mr. O’Rourke mentioned the unique nature of the sector-by-sector differences, the different lessons learned, and how they are not uniformly applicable 

across the board. 

And I am wondering specifically with the IT acquisition, if that 

reform can be done on its own, or if in your view it should be done 

as a part of the larger overall DOD acquisition reform? 

Ms. MCGRATH. From my perspective, I think I probably live the 

most in this space, but I certainly welcome any comments that my 

fellow panel members have. 

I believe IT—so we implemented a policy a few years ago, very 

focused on business IT, called the Business Capabilities Lifecycle. 

And that was aimed at IT is different from major defense acquisition programs. And I think that is true. 

Ms. GABBARD. Absolutely. 

Ms. MCGRATH. Now DOD 5000, however, is the bible for the Defense Department. And so, having something separate confused 

people. And so, I think the release of the latest 5000, the interim 

guidance that was published in November of 2013, embeds the IT 

in the business discussion in that broader construct, which I think 

is the right thing. 

It does, however, I think need to take one step further and say— 

and then therefore you do these things differently, and then really 

train our IT folks, our program managers on IT very specifically. 

And I do think it is different, I think it should be embedded. Again, 

it is the bible. The 5000 is the bible. But I do think, also it has 

the opportunity to move faster than perhaps some of the other aspects of acquisition. 

Ms. GABBARD. Thank you. 

Mr. O’Rourke. 

Mr. O’ROURKE. Just to add to that there is also the related issue 

of how to pursue hardware acquisition programs that happen to 

have a very large software component to them. And that increasingly is the case. Part of the answer to that, that DOD is pursuing, 

that the Navy is pursuing in its programs is to move toward more 

open architecture approaches to the integration of software into 

their weapon system platforms. 

I mentioned the Acoustic Rapid COTS Insertion program, that is 

an open architecture approach for improving legacy signal-processing on our attack submarines. Also in the Aegis world, the Aegis 

program started as a closed proprietary system. The Navy is moving to modularize and make it open architecture. 
20 

Ms. Sanchez earlier asked about how do we get small business 

involved? Open architecture is one approach that can make it easier and lower the barriers for small business to become involved. 

And in fact in the Acoustic Rapid COTS Insertion program, a number of businesses have been brought into that effort as a result of 

the open architecture approach including several small businesses. 

So in addition to the larger question that Ms. McGrath was talking about, about IT systems on their whole there is also this related issue of how to handle IT in the context of what is essentially 

or more fundamentally a hardware acquisition effort. And open architecture can be part of that solution. 

Ms. GABBARD. Great. Thank you. 

Thank you, Mr. Chairman. 

Mr. THORNBERRY. Thank you. 

Mr. Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. I would like to thank 

our witnesses for joining us today. I want to begin by looking at 

the present system and understanding that where we need to go 

I believe is simplifying it, putting more power in the hands of people, not complicating process, also making sure that we provide additional accountability and authority to improve decisionmaking, 

and to make sure that the outcome is best value. Now with lowpriced technically acceptable I think there are some challenges 

faced with that. 

What can Congress do to achieve those outcomes, simplifying, 

putting faith back into people and the decisionmaking process, 

holding them accountable but also giving them authority and providing best value in the decisionmaking process? 

Love to get your thoughts on that. 

Mr. Lambert, we will start with you. 

Mr. LAMBERT. Well, I think you hit it on the head about giving 

and empowering the acquisition workforce. They also need to be 

trained. 

And to simplifying the barriers, I can tell you a day did not go 

by while I was in the Pentagon where I did not hear from somebody in the industry trying to offer a product or service to the government. You know, half the time we may have actually needed it. 

But there were, the barriers to entry were just too great. And has 

been said here 5000 is the bible, you know, it is the Old Testament. 

And it really does, you do need to open the ability, particularly, 

I think, in the IT sector which is moving so fast, for commercial 

companies to share their capabilities. That leads you to a series of 

greater reforms, again, about culture and training, but also about 

intellectual property rights and the protection of those property 

rights. At the very same time that the Department is trying to obtain more commercial activity and more commercial technology it 

is also placing increasing burdens on that commercial capability 

from an IT perspective. So all of these have to fit hand in glove and 

work together to reform the system. 

Mr. WITTMAN. Thank you. 

Mr. O’Rourke. 

Mr. O’ROURKE. I guess I would say four things. First, if you want 

an example of a relatively simple statement that provides clear and 

focused mission, absolute cradle-to-grave authority and responsi-
21 

bility and accountability, without using too many words you can 

look at the Executive order that essentially codified the mode of operations for Naval Reactors. And that Executive order has now 

been placed into the U.S. Code in the form of a note to one of the 

provisions in the U.S. Code. 

So that is a model that can be looked at as an example of how 

to do something strong and powerful to achieve success in a focused 

mission area without using a lot of words and a lot of regulations, 

although of course there are regulations that fall out underneath. 

Three other things. First, both industry and DOD at this point 

appear to agree that streamlining is possible. And in fact Under 

Secretary Kendall has said, ‘‘We do not need more rules, in fact I 

believe we have too many already.’’ And he has already said he has 

a team of his own people that apparently is working with congressional staff to put together a streamlining proposal to see what can 

be done to take out some of these provisions and go to a more simplified structure. 

Once you do that I think the challenge is to prevent the regrowth of that system incrementally over time through the addition 

of new provisions year after year after year. And to do that, one 

thing we may consider focusing on more is when we have a proposal for a new rule or regulation, right now we tend to focus in 

assessing the merits of that proposal on the proposal itself. And we 

don’t tend to focus on how that proposal might interact with rules 

and regulations that already exist, or how it might add to the total 

burden of rules and regulations. 

So when new proposals come forward to what to do in defense 

acquisition we should consider looking at them not only in isolation 

by themselves, but how they would impact the total accumulation 

of rules and regulations. And it seems to me we haven’t been looking at it from that broader perspective. 

And then one final thing, a lot of the rules and regulations we 

put into place are in my view attempts to try and get at secondbest solutions because we are not able or willing to try and reexamine the more basic going-in conditions, what I refer to as the underlying political economy that characterizes a lot of defense acquisition efforts. 

And so, as we go ahead with defense acquisition reform or improvement we should pay attention to whether we are trying to attack the symptoms or whether we are, in fact, trying to focus on 

the underlying causes because a lot of the time it seems to me we 

are going after the symptoms and not the underlying causes. 

Mr. WITTMAN. Admiral Venlet. 

Admiral VENLET. I believe the causes for our discontent with the 

performance in the acquisition system are not—they do not lie in 

the laws and regulation. You need to look at what—that is something to do, but it’s underlying decisions that are made that try to 

respond for the years of acquisition reform pressures that cry for 

speed. Do this faster, do this cheaper. And that pressure on it has 

an unintended consequence of suppressing the practice of good, 

sound fundamentals and realism. 

When you are going for those complex capabilities you are going 

to have discovery and rework in your program. But if you don’t, if 

you want to write an aggressive schedule and budget aggressively, 
22 

that denies that or is blind to that you are allowing, you know, rework and failure to waltz right into the program. 

So when you look at your contemplation of laws to write, please 

look at them through the lens of what are the unintended consequences this might cause, and please do not suppress the 

workforce’s application of sound fundamentals, transparency, and 

realism in the schedules they create and the budgets they create. 

There is a natural tension there between the constrained resources. But I believe reasoned people who can have those discussions can deal with those. And I will stop there. 

Mr. WITTMAN. Very good. 

Thank you, Mr. Chairman. 

Mr. THORNBERRY. Thank you. Since we have five witnesses I am 

not being too heavy on the gavel to give everybody a chance to get 

something in. 

Mrs. Davis. 

Mrs. DAVIS. Thank you, Mr. Chairman. And this really is important. I ran into it all the time in San Diego. 

You know, we are looking at what hinders, what helps, obviously 

the Congress plays a role in that, and I would like to get to that 

in a second. But in thinking about small business and innovation 

a few years ago we did—we had really a real strong look, I think— 

and I think you participated in Mr. Chairman and Mr. Skelton, I 

know, and Mr. Conaway. 

And one of the issues that we raised is this bundling issue between the big contracts and essentially the smaller guys. And what 

I remember is that we had to really water down that language in 

order to get it accepted. And I don’t know all the ins and outs of 

that, I wasn’t on the committee. But today that continues to be a 

problem, even though people will say, well, you know, we are dealing with it a little bit better. 

And I think you mentioned that certainly among in IT we are 

perhaps dealing with it a little bit better. But as I understand it, 

one of the problems is who is the prime? And for some small businesses they would prefer and could be the prime and have greater 

autonomy, but the system is not set up to do that, so we really 

don’t allow some of the smaller businesses who could do that to 

come forward. 

Could you—is that right, and how do we deal with that? And 

where do you think some of this problem lies? 

Mr. LAMBERT. I can take—and a lot of that is—— 

Mrs. DAVIS. And I know culture is a part of it—— 

Mr. LAMBERT. Culture is a part of it. But it is more fundamental 

than culture. I used to refer to it as this is the Valley of Death in 

Silicon Valley of getting the technical milestones. But in the Department we have something called—that I started to call the Summit of Death. You have a great idea, you are a small company and 

you want to sell it to the Department, and the Department has a 

stated need. But you don’t have the processes or procedures in 

place. 

So the first thing you do is hire consultants and then you may 

hire some retired former military officers or officials. Then you will 

find a prime or a contract vehicle, you will pay a 10 to 15 percent 

tribute to that company because they have the procedures in place. 
23 

Then you might spend the capital on getting it certified—or an accounting system. And then you can become a prime contractor. 

That may take 2 years. There has been absolutely no development probably in your product because you spend all your money 

trying to become the prime contractor. And yet our system continues, in essence, to reward both how we deal with small businesses in my view, and how we keep small companies from accessing the marketplace. We continue to focus on that process, tweaking it along the edges. 

I think that there are some examples in other countries, the U.K. 

[United Kingdom] in particular has some innovative ways to get 

small businesses into production development right away. I think 

it is worth taking a look at some of those practices to see if they 

might be replicated here. 

Mrs. DAVIS. Anybody else want to comment on that? Is it a big 

problem? 

Ms. MCGRATH. I would add to Mr. Lambert. I think it depends 

on where you sit, if you think it is a big problem, because—— 

Mrs. DAVIS. If you are a large company I don’t think it is a problem. 

Ms. MCGRATH. If you are a large company you might not think 

it is a big problem, you might feel that with the LPTA [lowest price 

technically acceptable], that the pendulum has actually swung in 

the other direction. And so, I think that there are anecdotal stories 

that exist on, you know, throughout the spectrum, and I really 

think that it would behoove us, and I think I mentioned this in my 

written statement, to actually get some data behind what is happening in the space. 

You know, is it having detrimental impact or not? And I think 

without data you will continue to have anecdotal stories, you know, 

rule of the day. And I really believe that having a fact-based discussion around, you know, what is the impact, because I think everyone would agree that there is space in place for big, small— 

there needs to be—— 

Mrs. DAVIS. There should be—— 

Ms. MCGRATH. Yes, you know, better, quicker engagement between inter-governmental—— 

Mrs. DAVIS. Where do you see that coming from? Where do you 

see that kind of work coming from? Is that something that the Congress needs to necessarily sneak in a report because I think we 

have tried to do that. 

Ms. MCGRATH. Actually I think that there are multiple organizations that could do the study, from the National Academy of Public 

Administration to GAO [Government Accountability Office], to 

some of the industry councils. I think there is interest across the 

councils to put sort of the data on the table. I think there would 

be great support for it. 

Mrs. DAVIS. If I could bring up—in the last discussion that we 

had and I think it is a good one in terms of the interactions and 

whether it is almost like with pharmaceutical products, you know, 

that you should know the interaction before you move forward. And 

yet that is not happening. That surprises me a little bit, that people aren’t having that discussion. And Congress obviously as a 
24 

stakeholder in this plays a role in addition to DOD and the industry. 

So what advice can you give us in terms of how we make sure 

that that process takes place so we are not creating more unintended consequences than we need to? 

Mr. LAMBERT. I will just say, again, in my experience, this—the 

committee in particular, but also on the—we had a very good working relationship with the staffs. And there were many times where 

there was a lot of back and forth that I thought was very productive and always found it to be very supportive. I think the dialogue 

is very important—— 

Mrs. DAVIS. But is that happening today? 

Mr. LAMBERT. In my experience from my little window in the Department it was happening on a regular basis with both this committee staff and the relevant Senate committee staffs. 

Mrs. DAVIS. Still, okay. 

Mr. LAMBERT. Yes. 

Mrs. DAVIS. Anybody else? 

Dr. LAMB. What I would say in response to your question would 

be that it would be important for the committee to focus on the distinction between what really amounts to helpful oversight and 

unhelpful micromanagement. I mean, if you try to get your mind 

around that, it is a useful exercise. 

I was thinking about some of the comments made about World 

War II and our production system. And we did produce a huge volume of material in short order and the American industry was good 

at that. It wasn’t all of the quality that we wanted. 

I was reading the book called ‘‘Unbroken’’ not too long ago, and 

it was about a naval aviator that went down in the Pacific. And 

the author was saying that our rafts that accompanied the aircraft 

at that time disintegrated in pretty short order because the wrong 

assumption had been that they would be picked up quickly, but in 

fact you had to float for weeks in the Pacific often to have a chance 

to be recovered by a submarine or whatnot. 

When I think of my father who was in the submarine service and 

we equipped him and his sailors, fellow sailors, with torpedoes that 

were as much a danger to them often as they were to the enemy. 

So we all want a streamlined process but we don’t want to throw 

the baby out with the bathwater. You know, there are some good 

oversight procedures currently in the system that ensure that what 

we actually deliver at the end of the day is pretty good. It comes 

in late and way over cost typically. So that is what we are trying 

to combat there, but you don’t—you want to be alert, I think, to 

what is actually helpful oversight. 

And my bottom line on that is that the people who are in a position to make the oversight decisions have to have a reasoned basis 

for their comparison of alternatives. If it is just a personal impression or perspective, maybe even prejudice, that they inject into the 

system below them, that is unhelpful micromanagement. But if 

they can see the broader picture and they have a data and an analytic process that lays it out as clearly as possible and the rest is 

good judgment based on experience, you are more likely to get the 

products you wanted at the end of the day. 

Mrs. DAVIS. Thank you. 
25 

Mr. THORNBERRY. I thank the gentlelady. 

Ms. Walorski. 

Mrs. WALORSKI. Thank you, Mr. Chairman. And thank you to 

our guests for being here. 

It has been said that one significant challenge to acquisition is 

a lack of relationships and basic trust between industry and the decisionmakers, and the Pentagon, and Congress. I did a little quick 

survey in my district, knowing in my State, I am from Indiana, so 

we have large defense contractors, and we have very small defense 

contractors. 

And I was so excited that we were actually going to do this hearing and start looking at this process, so I called some of our smaller—and I have heard consistently for the 18 months that I have 

been here from every contractor that we have used, the need, the 

need, the need. But when I talked to them it still comes down to 

this basic issue of trust. 

So I guess my first question is, I got to believe that exists because they don’t trust the players at the table. Secondly my question is—so that is my first question. My second one is do you look 

at things being worse today or better when it comes to the issue 

of trust because in my world it seems like it is worse. And then 

what can be done to help build those relationships in trust because 

it is not all about the technical nuances. It can’t be. It has to be 

about this big breach of trusting who is at the table. So I just kick 

that out to everyone. 

And Mr. Lambert, you alluded to just in your last answer, so I 

suppose you are tracking with the same thing here? 

Mr. LAMBERT. I am and I will say that it—over 10 years of yearto-year budget growth, there was a lot of dialogue that used to go 

on between the Department and the industry that just stopped because you didn’t need to have dialogue. 

When you had a program, even if it was hemorrhaging money 

you just cauterized the wound with more money. So that discussion 

really started to pick up again as we saw the decline coming because it was needed. And trust had evaporated. And largely that 

trust evaporated, in my view, because the defense procurement 

process is the only process in the world that the closer you get to 

making an acquisition from a company, the less you can talk to 

them. 

Mrs. WALORSKI. That is right. 

Mr. LAMBERT. And that causes mistakes on both parties. They 

make false assumptions, both parties make false assumptions. 

So, you know, trying to go back to the days of whether it is The 

Phantom Works or The Skunk Works where you integrated or embedded government individuals with the companies I think is one 

step and I know Mr. Kendall is pursuing that idea. But I think the 

final—the answer to the final question is you just have to have 

more dialogue. 

We will not always agree but we in the Department try to institute very high-level dialogue with both the industries association 

and individual companies. And we found that to be quite helpful 

because we learned things, as the testimony of Dr. Lamb about the 

MRAP, we learned things from companies directly that we would 

not have learned from our own support personnel. 
26 

Mrs. WALORSKI. Anybody else? 

Ms. MCGRATH. Yes, I would love to echo Mr. Lambert’s comments around the trust-based relationship and the closer we come 

to actually award the—you know, the less we actually speak to industry. 

You know, I think I have mentioned many, many people, I feel 

like we have forgotten we are on the same team in terms of trying 

to achieve, you know, an outcome. The government is allowed to 

contract because they need help to do something, either, you know, 

build a major defense acquisition program, buy a service, you 

know, deliver IT for some of the back office work. And I do think 

that we need to find a way to enable meaningful dialogue between 

industry and government throughout the process and be flexible 

enough on the—with the contract to, let’s just say to allow for 

changes to happen. Things happen during an acquisition—— 

Mrs. WALORSKI. And let me ask you this, when you say we need 

to allow, does that mean that Congress has to come in and set up 

even more rules and more bureaucracy, or is there a way—is it actually possible in 2014 to say that we can actually reduce bureaucracy in something as large as the defense industry, is that possible? 

Ms. MCGRATH. I personally don’t believe that additional legislation is needed to allow greater communication between the government and industry. 

Mrs. WALORSKI. Can we shrink the bureaucracy and actually 

make that happen? Is that possible? Or are we talking the field of 

dreams here? 

Ms. MCGRATH. No, I don’t think it is field of dreams and I am 

absolutely looking through an IT lens, so really the, you know, 

what happens today and what the government can learn from industry to Mr. Lambert’s point about, you know, we have companies 

doing all kinds of really cool IT capabilities, developing them daily 

and we want to enable a process by which the government writ 

large can bring those into government so we are more commerciallike. 

Mrs. WALORSKI. Good. 

Admiral VENLET. The word ‘‘risk averse’’ gets used a lot, you 

know, the government program managers are too risk averse and 

that closes down competition. One of the reasons they’re risk 

averse is the heavy influence for fairness in competition, you know, 

in advance of an acquisition. 

So, I am agreeing with the speakers here it is that tension and 

that balance between fairness for industry and yet the need to communicate so clearly that industry really knows what you want, because in that balance for competition that suppresses that communication, industry has to guess more, wonder more, and I think it 

hinders their opportunity to give proposals that are more useful to 

the Department. 

So, if you could—I would maybe point you to Federal acquisition 

regulations of FAR that speak so heavily to fairness and competition that if there isn’t some way to relieve that pressure that allows the government officials to have that broader communication. 

Mrs. WALORSKI. I am out of time. I am sorry. I appreciate you 

all being here. Thank you, Mr. Chairman. 
27 

Mr. THORNBERRY. Now, Mr. O’Rourke, I think it is great discussion if you want to. 

Mrs. WALORSKI. Okay. Go ahead. 

Mr. THORNBERRY. Yes, please go ahead. 

Mrs. WALORSKI. Thank you. 

Mr. O’ROURKE. I will state it pretty briefly: trust breaks down 

when problems fall apart and problems fall apart a lot of the time 

because we didn’t get the requirements clear upfront. 

And so in terms of the dialogue that was being spoken of earlier, 

a lot of that is government and industry working together to set 

realistic requirements and to have clear understanding of who is 

responsible for what. 

That process can be long and involved, sometimes there can be 

some tension and frustration in it, but if you invest that time upfront to get the requirements right, then you put the program into 

a condition where it is less likely to fall apart and cause a breakdown in that trust. 

So, the investment upfront in discussions, some of which can be 

a little bit difficult, they are not always happy discussions but it 

is an investment in the future success of the program that can then 

if it does succeed build trust rather than eradicate it. 

Dr. LAMB. I am sorry, I would like to say just one thing in response to your point of trust. I think it is an excellent point, you 

know, all high organizational performance is based ultimately on 

trust, but I think you are right on target there and I think there 

are two things that have to happen in that regard. 

In my written testimony, one of the things I pointed out was I 

participated in efforts to train and equip a foreign military force, 

the Bosnian forces. And when we started out we used the typical 

defense contract vehicle which is 270 pages of very elaborate prose, 

et cetera. 

But when we realized we were going to do this to the private sector everyone quickly got rid of everything that wasn’t necessary or 

clarifying, it was reduced to 30 pages. 

That is important, not just from the point of view of efficiency, 

but in terms of trust, if you labor under those 270 pages with those 

abstract, difficult to understand clauses that you can be hung on 

at any point, you are not going to—it makes it very hard for program managers to trust the system will be fair to them. 

So, I think in going the direction of the committee seems to be 

interested in rescinding some of that labyrinth is very helpful, but 

point two is inside the Pentagon to—for people to think there is 

going to be a fair competition there has to be the basis for comparison. 

If we held a race among the five people at this desk and each 

of us said, well, I will run my quarter mile on my track and radio 

in the results, we won’t do it on a common track where the comparison is easy, there would be probably some trust issues that 

would arise. And that is essentially how decisionmaking happens 

to the Pentagon today. 

Mrs. WALORSKI. I appreciate it. Thank you, Mr. Chairman. 

Mr. THORNBERRY. Thank you. Dr. Wenstrup. 

Dr. WENSTRUP. Thank you, Mr. Chairman. Dr. Lamb, I was particularly taken with some of the comments that you related to us, 
28 

shared with us about the struggle with the MRAP and—that Secretary Gates went through. 

I served in Iraq and believe me I saw a huge difference between 

the MRAP and the other vehicles we were using such as Humvees 

and I was grateful when they came because it became, it was far 

greater to award someone a Combat Action Badge than an amputation or a TBI [traumatic brain injury] or worse yet a loss of life. 

And so, what intrigued with that is I am just curious what the 

discussions had to be like and what were we prioritizing here, were 

we working towards a budget, were we working towards a strategy, 

were we working towards a mission and really what became the 

priority? Because as someone who was there, you know, you could 

see the huge value of this, right? 

You want to get your troops from point A to point B, you want 

to get them there alive. And this is what this provided so much 

more so that there could—if there was even any question it just 

bothers me or concerns me. And so, if you could elaborate on that, 

I would appreciate it through that process. 

Dr. LAMB. Yes, there is one thing about the MRAP case, is it may 

be one of the best documented acquisition cases in history. There 

have been a lot of Inspector General reports, insider expose ́s, and 

good analyses have been done on it. So, it is a very rich area and 

there is a lot to be said about that. 

We have a monograph on the issue that I could share with you. 

But in short, one thing I would say in response to what you said 

is it was crystal clear to the people in the field that these would 

be valuable. But in fairness to everyone involved in the Pentagon, 

there are lots of difficult judgment calls you have to make that at 

the end of the day are going to affect lives, including what do I— 

what do I allocate in the way of resources for near-term requirements versus long-term requirements. 

So, you know, it is pay me today or pay me later if I don’t well 

equip the force of the future as well. And there are other programs. 

This program was to me was manifest that it had value and for a 

lot of people it was manifest, but there are good arguments that 

could be made. 

Actually, Secretary Gates I thought did a nice job of reviewing 

many of the arguments that were thrown at him as to why ultimately it didn’t make sense. But I think if you look at each of the 

arguments that came from the naysayers that we don’t need this, 

we will be out too soon, we won’t be able to deliver them on time, 

they are not consistent with the way we want to do 

counterinsurgency. All these arguments break down but they are 

understandable from the point of view of the person that was making them and where they sit and what their responsibilities were. 

So, it took one level up to look at the thing more broadly and say, 

no, we need these regardless of those near-term costs. And that 

was hard for the Pentagon to do, in fact, it is stunning that, I think 

Secretary Gates commented, no single military or civilian official— 

you ask yourself, now why would that be the case that no one 

would support it. Well, each one of them had a set of responsibilities that were too narrow. If you look at it that way it took somebody who was really trying to look at it from the warfighter’s point 

of view in the field and care about the entire effort in Iraq. 
29 

Why are these things so important for the entire warfighting effort in Iraq and it went—it went way beyond simply saving life and 

limb although that is critical. If you looked at it from that broader 

perspective you would have concluded with Secretary Gates not 

only do we have a moral calculus that says we must get these to 

our troops as fast as possible, but the system gave us a 2-year 

delay in making that decision, it lost 2 years. 

You would have concluded on just the moral calculus alone that 

we needed to do that. But beyond that, as Senators and Congressman I think in this very room pointed out, it cost more to replace 

the people inside the Humvees and care for them and their wounds 

than it did to field the MRAP. So that for the person that was running the tactical wheeled vehicles program you would think this is 

going to be a big detriment to my program, it is going to delay 

what I am supposed to be doing. 

So, it got down to a breadth of perspective issue and that is why 

I think you really have to look at internal Pentagon processes if 

you ultimately want to fix the problem. 

Dr. WENSTRUP. Well, I appreciate you sharing that little bit of 

history if you will and I appreciate Secretary Gates having that 

broader vision because it is true, you know, everyone has got their 

lane and they are staying within that lane and someone has got 

to bring this big picture together and he did that. 

So, what did we take away from that, were we able to make 

some changes in our acquisition process as we go forward so that 

we can have a better perspective and a broader view? 

Dr. LAMB. That is actually, that is the bottom line of my testimony is I don’t think we have learned from that and changed the 

way the system makes decisions today and that is unfortunate. 

We can’t rely on the Secretary of all Defense to intervene personally. He doesn’t have the bandwidth; towards the end of his memoirs he says, well, once MRAPS were off my plate, I could turn to 

one or two other issues that were of import. You have to be able 

to have the system more routinely make these kinds of reasoned 

judgments and get to the right answers. 

So, it is not interesting or it could be boring to look at process 

and yet you have to go inside the walls of the Pentagon and see 

how those processes really work if you want a better acquisition 

system at the end of the day. 

Dr. WENSTRUP. Well, I look forward to continuing on with some 

of your perspective on how we can make that better in the future. 

Thank you, I yield back, unless anyone else would care to comment. 

Mr. THORNBERRY. I appreciate the gentleman’s questions, having 

lived through that I can also testify that it was this committee 

pushing every step of the way on those MRAPs plus the Secretary 

which overcame that resistance, which is interesting because the 

Secretary of Defense and this committee cannot do that with every 

decision that comes up. And so that is why I think the gentleman’s 

questions are so relevant. 

Mr. Nugent. 

Mr. NUGENT. Thank you, Mr. Chairman, it—Mr. Lamb, the conversation that you had with Dr. Wenstrup was striking from the 

fact that it appears that the Pentagon and we—I have only been 
30 

on this committee almost 2 years now, but it appears that the conversation a lot of times doesn’t really focus on the warfighter, it focuses on I guess the real long-term view of what we need to have 

equipment-wise. 

And sometimes I think we tend to forget that there are actual 

people that are put in harm’s way, and I have three sons that have 

made this a responsibility of theirs in their service of the country. 

So, as it relates to Gates and the MRAPs and you said you don’t 

think the Pentagon has learned from that particular example. Why 

do you think that is—I mean do we just fall back into what is comfortable? 

Dr. LAMB. Well, I think the important distinction here is between 

near term versus long term and irregular warfare versus warfighting. Most of the Pentagon processes are geared up to provide the 

force of the future with the equipment and the concepts, et cetera 

it needs. 

But I can assure you when you have a real war going on all the 

warriors in the Pentagon are very focused on it. And if you look 

back to the first Gulf War, a large warfighting, force-on-force maneuver warfighting effort, we pushed so much material forward to 

Kuwait, it was infamously called ‘‘The Mountain of Iron.’’ We 

couldn’t use it all, and we had to at great expense, you know, haul 

a lot of it back. 

In fact, looking at it in the rearview mirror, we said, Hey, maybe 

we pushed so much stuff there that we opened up risks for ourselves on the Korean Peninsula or elsewhere in the world. We 

weren’t thinking straight. We were so intent on getting everything 

humanly possible to the warfighter forward. 

So I don’t think it is a reluctance of the Pentagon and the leaders 

in the Pentagon to want to equip the warfighter. In this case, it 

was the difference between, you know, equipping for a warfighting 

effort and for irregular warfare. 

And the core competency, the culture of the Pentagon is to be 

ready for the big one because there is more at stake there. But as 

Secretary Gates pointed out, we do those relatively infrequently 

compared to these other irregular efforts. And, as he said in his 

memoirs, ‘‘I just wanted a little more balance. I wasn’t trying to, 

you know, radically alter how we allocate resources in the Pentagon. I just wanted a little bit more balance,’’ and the system stymied him effectively. I think that is a telltale anecdote. 

Mr. NUGENT. And what I see in the testimony that comes before 

us, we just had a lot of discussion about the A–10, the retirement 

of the A–10 versus what the Air Force and the Pentagon are saying 

that it can provide close air support. We just saw what happened 

with close air support. When it is dropped from 30,000 feet, it is 

not close air support, and we lost troops because of that. 

The Pentagon, and I understand they have X amount of resources, but it would appear that, you know, in talking to the guys 

that actually have benefited from having an A–10 overhead, slow 

and accurate, their voice has been lost in all this. And so how do 

you get that back into the acquisition process? 

Dr. LAMB. Well, historically, slower flying prop-driven aircraft or 

aircraft like the A–10 are better in irregular warfare because you 

need a lot more precision and you need long loiter times. And that 
31 

is not something again that, historically, our Air Force wants to invest in. And so there is an element of the warfighting versus irregular warfare element to the A–10, although the A–10 packs quite 

a wallop. There could be an argument about whether that is the 

most discriminate means to put at the disposal of troops in close 

contact with irregular forces. 

But, you know, that kind of shows—— 

Mr. NUGENT. But it also goes towards not just irregular forces, 

but, I mean, with a—when you go back to the first Iraqi war, it 

does work well. I mean, obviously, if you can control the airspace 

and deny, which we have the ability to do with our fast movers, 

shouldn’t we have a diverse—— 

Dr. LAMB. In my own personal opinion, I don’t claim to be an expert on that acquisition program. I am an A–10 fan, but I 

think—— 

Mr. NUGENT. Well, all the soldiers that I talked to, and they are 

all over the place, would support that. But from an acquisition 

standpoint, and, you know, we don’t want to insert ourselves necessarily in every acquisition aspect of it. But how do we help the 

Pentagon make good choices? 

And, one, I will tell you is the fact in regards to, you know, our 

carrier strike groups, but then, more importantly, the amphib assault capability that we are losing dramatically. When we had, you 

know, General Amos come and speak to us and talk about those 

amphibs as really the Swiss Army Knife. And we are losing that 

capability rapidly. 

How would we move forward? Not to micromanage, but how do 

we move forward? Do we do it by law just like we do with the carrier strike group, we have to have X amount? Do we do the same 

thing with our amphibs? 

And, Mr. O’Rourke. 

Mr. O’ROURKE. Just a couple of points—one is the committee already and the Congress as a whole does have a mechanism in place 

to do that. And that is to listen to the COCOMs [combatant commanders], the regional combatant commanders, because, in the 

short-term, long-term spectrum that was discussed earlier, it is the 

COCOMs who have responsibility for voicing the near-term requirements, what they need today to do their job during the time 

that they have in office. 

And that is supposed to act as a counterweight against a system 

that, otherwise, might be too heavily oriented toward the longerterm future, as the Navy acquisition can be because it takes so 

long to design and build ships and the ships operate and intend to 

operate for decades—so, bringing the COCOMs up to testify, as this 

committee does and the others do, that is part of it and listening 

to what they say. 

The other thing is that the extent to which different parts of 

DOD may hear or not hear from the people at the tip of the spear 

can vary depending on operational circumstances. The Navy is a 

deploying force. It is forward-deployed every day in international 

waters. It is mixing it up with the naval and other forces of other 

countries and getting real-world interaction experience that then 

does form the basis for comments that come back that create urgent operational needs or near-term operational needs. 
32 

So, to some degree, because the naval services, the Navy and the 

Marine Corps collectively are a forward-deployed force on a day-today basis, that also tends to mitigate against this problem of not 

hearing from the people in the field. Because they are an operating 

service, they are getting that feedback from people who are engaged in real-world operations every day in international waters 

and international airspace. 

Mr. NUGENT. Thank you for your comments. 

Mr. Chairman, I thank you for your indulgence. 

Mr. THORNBERRY. I thank the gentleman. 

Mr. Bridenstine. 

Mr. BRIDENSTINE. Thank you, Mr. Chairman. 

I would like to, first of all, start by saying that Chairman 

McKeon made a very important point when he talked about how 

rapidly we were able to acquire weapon systems in World War II. 

And, clearly, we seem to have lost that capability significantly. 

And I know this body has worked on that, some of the weapon 

systems that we have already been talking about in this hearing. 

There are challenges though with rapid acquisition programs that 

create long-term interoperability challenges. And I can give you 

some—a real quick example is space systems. 

So, you know, the Department of Defense has been purchasing 

military satellite communications [MILSATCOM] capabilities for a 

long time. We found ourselves in war in Afghanistan and Iraq. We 

didn’t have the capacity required, so we very quickly started using 

DISA, the Defense Information Systems Agency, to rapidly purchase using OCO [Overseas Contingency Operations] funds, rapidly 

purchase capacity airborne. And, now, it is a good amount of our 

capacity is that the Department of Defense uses commercial satellite communications [COMSATCOM]. 

Now, that could be a good thing, it could be a bad thing. The 

challenge here for the warfighter is interoperability. Commercial 

satellite communications use different spectrum. They use C-band, 

Ku-band. MILSATCOM uses X-band, Ka-band. You have also got 

different waveforms. You have got challenges with encryption, with 

frequency-hopping, anti-jam capabilities. All of these challenges 

that present themselves where terminals—whether it is a UAV 

[unmanned aerial vehicle] or a warfighter on the ground—terminals, some are able to work with, you know, MILSATCOM and the 

others were able to work with COMSATCOM. 

And so we have this interoperability challenge where you can 

only use certain systems in certain parts of the planet and other 

systems can only be used in other parts of the planet. And then, 

of course, each system requires different training and different capabilities, so there is an interoperability issue here that I think is 

detrimental in some cases. 

And the challenge here was we had to very rapidly acquire satellite capacity and we had to do it, you know, using an agency that 

historically hasn’t been purchasing satellite capacity—namely, 

DISA. 

Are there other areas in the Department of Defense where—and 

the investment required from us going forward in order to align 

these capabilities, once again, whether it is providing some kind of 

encryption and anti-jam on the terminals for COMSATCOM or 
33 

some kind of just expanded capacity of MILSATCOM, the right answer, quite frankly, is unknown at this point, but there is going to 

be a heavy investment involved whatever the answer is. And it all 

started from an idea where we didn’t have enough capacity at the 

right time. 

Are there other areas in the Department of Defense where this 

is going to present a challenge in the future where this body is 

going to have to make decisions to invest huge amounts of money 

because we rapidly expanded capacity to respond to combatant 

commanders in the field? 

Mr. LAMBERT. I would just say from the acquisition area that I 

saw, it was quite effective. I think where we could have done better 

is examining earlier on the concepts of hosted payload, open architecture systems which were mentioned here is a key. All of those 

will contribute to us taking advantage of commercial capabilities 

and assets. But if we continue to go down a path that is just a 

MILSPEC [military specification] and where a bandwidth is basically a free good in many cases for the actual user, then I think 

we are going to continue to run into problems in that area. 

The other areas of the rapid equipping force I think were quite 

successful. And my only concern would be we lose some of those 

lessons as we draw down our forces in the two conflicts. 

Mr. BRIDENSTINE. In your opinion, sir, is it possible to do rapid 

acquisition of MILSATCOM through the Space and Missile System 

Center? How fast can the Department of Defense acquire satellite 

capabilities indigenously apart from utilizing COMSAT—commercial satellite communications? 

Mr. LAMBERT. I don’t know the specifics, but I know the specific 

cultures. And I could tell you that one would be demonstrably 

longer than the other. 

Mr. BRIDENSTINE. And I guess that is the point I am trying to 

make is that there needs to be an effort I think within the space 

realm to figure out what the right solution is. And, certainly, I 

think commercial satellite communications is going to be a big 

piece of that. The challenge is to get the interoperability capable 

so that our warfighters can actually be as lethal as possible at the 

right time at the right place in the world. 

Thank you so much. 

Mr. THORNBERRY. I thank the gentleman. 

Ms. McGrath, may I follow up on that for just a second because 

the gentleman from Oklahoma was talking about satellite communications. It seems to me what he was talking about though applies 

to all sorts of IT. We need something. We need to get it quick. But 

it has got to work with everything else we have. So do you think 

there are sufficient mechanisms within the Department for the sort 

of interoperability on IT of all sorts? 

Ms. MCGRATH. So I think, as I mentioned earlier, in particular 

the business IT is lagging a bit behind, although I think the rapid 

nature of technology really is a forcing function to get the Department to ensure that it is thinking holistically across the enterprise. 

As I mentioned, in terms of establishing a body, a JROC-like body 

for, in particular, business IT to ensure that we have the ability 

to communicate, is critical. 
34 

We have thousands of business IT systems in the Department of 

Defense and they are not interoperable. That is not new news, but 

it is something that we are very much focused on in terms of 

achieving or establishing standards, not only the—you know, data 

standards, but the way we communicate and interoperate between 

the systems. 

But if you don’t think about it, it doesn’t naturally happen, which 

is the point that you are making. And I would say that a body 

needs to own the big picture and make decisions about, you know, 

what is in it and how do the things in it communicate and who has 

got responsibility and accountability for their respective pieces? 

And so I would say, yes, the scenario applies to all of IT. And, 

again, I can speak most specifically about the business space. We 

recognize it as a gap. The culture challenge however is—cannot be 

understated. People are incented and focused in their respective 

areas not only just the—you know, the component of the organization, be it a defense agency or a military department, but then the 

specific business area, you know, be it procurement or financial. 

And so there are many, many I will just say cross-organizational 

boundaries that must be overcome. And I would always say to folks 

that, you know, we need to lift up and look out across the enterprise. We all participate in this ecosystem and we have to understand our roles and responsibilities. And part of it is understanding, again, how do you fit within the overall ecosystem, how 

do you enable the outcome you want to achieve, be it communications or, you know, a financial transaction, whatever it is. It is a 

bigger conversation, so I think there is definitely progress to be 

made. 

Mr. THORNBERRY. It sounds like you are somewhat similar to Dr. 

Lambert in that somebody has got to look at this whole big picture 

and make these tradeoffs. And that is—we started out with Ms. 

Sanchez asking about JROC, which is kind of supposed to do that 

at least for some things. And so this issue of getting the requirements right, making those tradeoffs seems to be a recurring theme, 

which is a challenge for us. 

Mr. Lambert, let me go back. Kind of related to this. You talked 

in your opening statement about a millennial industrial base. Ms. 

McGrath makes the point that we got to buy more commercial IT. 

That opens up security questions in my mind. So we are going to 

buy IT from around the world, we are going to have it integrated 

and make sure it is interoperable with everything that we do at the 

Department, how do we know there are not backdoor bugs in it? 

Mr. LAMBERT. Now, it is an excellent question. And it is one of 

the—I think the largest, one of the largest challenges the Department will face. We have already faced it. And we faced it on two 

fronts. Whether we recognize officially that we have a global defense industrial base, in reality it is true. Most of the components, 

particularly in IT systems, are not made in the United States anymore and they are made primarily for commercial purposes. That 

includes some of the components on our most sophisticated weapon 

systems and space systems. 

And there are—when we discover false parts or counterfeit parts, 

that is typically done—a large majority of those are done for criminality purposes. They are not done for nefarious purposes. But 
35 

there are some that have been discovered that were nefarious. And 

there are famous case studies of that. So that is a part of the Department’s challenge. And this committee’s challenge frankly is to 

better understand that supply chain, which is why the government 

undertook the sector-by-sector, tier-by-tier effort is to help us map 

through that supply chain and understand where the vulnerabilities were deep in that supplier base. 

Prime contractors have a pretty good understanding, much better 

than they did 4 years ago, of their own supply chains and vulnerabilities and they are addressing them as quickly as they can. But 

the Department needs to work more closely with those primes but 

also the smaller subs [subcontractors] in the IT field to address 

that issue. 

Mr. THORNBERRY. Okay. 

Mr. O’Rourke, you have mentioned several times Naval Reactors. 

It is—as I think of defense-related organizations, it is actually the 

epitome of efficient, well-run, accomplish their mission. We have 

nuclear ships that can go in any port in the world pretty much and 

everybody has confidence they will do what they are asked to do. 

Now, you know, part of that we can all trace back to its founding 

with Admiral Rickover and the rigorous requirements of interviewing every person which, you know, that culture again has 

transferred along. 

You mentioned that their mission statement, sure, maybe that 

can apply—the question I keep coming back to, are there other elements of Naval Reactors that we can learn from and apply to other 

organizations or is it such a unique creature because of its founding, because of what it deals with, that really it is, just kind of 

stands on its own. 

Mr. O’ROURKE. I think there are other elements. One would be 

cradle-to-grave responsibility which already has been applied to 

parts of the defense establishment other than Naval Reactors. 

Something similar to that exists within the Strategic Systems Programs Office that does the submarine-launched ballistic missiles 

for the Navy. They have pretty much cradle-to-grave responsibility, 

as well. 

And there is one other thing about Naval Reactors which can be 

and has already been applied to other parts of the defense establishment and that is they have a long tenure in office for their very 

high-ranking director. 

And what that means is that person knows they are going to be 

around. They will still be in office several years from now to be 

held personally accountable for the results of the decisions that 

they make, at least the decisions they make in their earlier years 

in office. 

And I did highlight that in my testimony as an option for the 

committee to consider because the idea that you will be held personally accountable for your decisions can be a powerful conditioning element for how people undertake the way that they do 

their jobs. 

By contrast, people who do not have long tenures in office may 

feel less risk that they will face a situation of being held accountable for the results of their decisions because those results in many 
36 

cases will not become manifest until years later after their terms 

in office are over. 

And I have attended more than one congressional hearing about 

defense acquisition programs that have not gone well where the 

key point in the hearing came well, who was responsible for that. 

And the answer came back from the witness stand, ‘‘Well, it was 

our predecessors,’’ one or two generations removed. 

And let me tell you, that brings the hearing to a complete halt 

because what can the Members do with it at that point. It seems 

to me that the ability to hold somebody personally accountable for 

the results of their decisions and their knowledge that they will be 

in that situation is a powerful conditioning element to how they 

undertake the way that they go about their job. 

So, extending tenures of office in program offices is something 

that can be applied and to some degree already has. Naval Reactors is probably the most outstanding example of that but there is 

no reason in my view why that option shouldn’t at least be considered for application in certain other parts of the defense establishment as well. 

Mr. THORNBERRY. Okay, Admiral, it is coming to you now. Because it transitions naturally—in the report that Mr. Kendall sent 

out a week or two ago, he had a correlation on his charts about longevity of the program manager versus program performance. And 

kind of their bottom-line conclusion is just a correlation that there 

wasn’t really a relationship. 

And yet my instinct goes where Mr. O’Rourke’s was, that if you 

are going to be there you can be held accountable for your decisions. If it rotates every couple of years, how do you ever go back? 

I would be interested in your view on that and then I would be 

interested also in your view on lessons learned from the Joint 

Strike Fighter program as we often read, the most expensive acquisition system in the history of the country. 

Admiral VENLET. I would say amen to everything Mr. O’Rourke 

said about Naval Reactors and I would add this one point in addition to tenure of leadership, is the enduring persistent presence of 

sound systems engineering that has been able to be preserved 

through all of the efforts that acquisition reform brought around 

the Department. 

So, how does that connect to tenure of other acquisition officials? 

I think it depends; it is something in between there. There is the 

balance between how long somebody has to live a life. I mean, you 

take a person and then you make them head of Naval Reactors for 

8 years. You know, there is a limit to what you can do and still 

have somebody aspire to have a job and still aspire for progression 

at some point. 

So, is it 8 years? Probably not 8 years. Is it more than, more 

than 2? Yes. We get into the pressures due to board, the timing of 

promotion boards that meet and career milestones to attain so 

somebody can make O–5, O–6, and above. 

That tends to—you want to give people a breadth of experience 

and yet a depth of experience, so how do you achieve both? And I 

would mentor officers that I worked with over my career, you need 

to stay long enough in a job so that you can genuinely be involved 

in the messy attributes of it and have, you know, up to your elbows 
37 

in mistakes and problems and not just flit because you are trying 

to get breadth. You have to be long enough for depth. 

For me, depth at the working level up was a minimum of 2 

years, desired 3 and 4. I think when you get selected for—to be in 

charge or in command of a major program, 4 years; 4 years is not— 

now, I have to admit, did I spend 4 years in any one of my career 

jobs, no, I did not. 

But the length of time it is—there was a comment earlier about, 

you know, that alluded to do officials care about the warfighter 

enough or do they care about their narrow sphere of influence. I 

did spend enough time walking the floors of industry on many, 

many programs that I personally hold the view that the people 

working in industry on these programs have as deep a patriotic 

concern for the warfighter as anybody in the Defense Department 

or here. 

They are the ones that are raising that generation that is going 

to volunteer to serve and use that equipment, so they do care. So, 

if they care, if we care, what is in between? And I would offer that 

it is the pressures of the rush. 

When we see a threat coming, we see pressures of budgets. We 

have those constrained resources. We got to make decisions, so 

okay, I want to do it all. I need the rapid acquisition. I need the 

rapid capability for this urgent threat and yet I need the capital 

equipment, the carrier, the submarine, the bomber, the satellites. 

I believe the system has shown that there are examples that it 

does do both. When you properly apply those sound systems engineering fundamentals, when you want to go fast, you don’t skip 

those tricky little questions. You need leadership that has experience and the spine to say, ‘‘Wait a minute, let’s answer those tricky 

little systems engineering questions. We could pre-answer them upfront to go fast.’’ 

That is how we go fast. We don’t skip them. When you skip them 

you open yourselves up, so it is the tenure of leaders needs to— 

it is the length of time in leadership or is it the length of time that 

they spent in difficult jobs growing up to be that leader that gives 

them the judgment and the wisdom to make the right decisions 

when they are there. 

Mr. THORNBERRY. Mr. Lamb, does this longer tenure, does that 

deal with the culture issue that you talked about? Does that—I 

mean, does it help? 

Dr. LAMB. You know, in my view, a longer tenure for program 

managers would make sense but to me it is not the essential issue. 

One of the things that I have noticed in some of the research written over the past 2 years is just how hard government servants will 

work when they think they can actually produce results. 

Some of it we have done some studies on interagency teams and 

even for relatively short tenures of a couple of years when people 

are properly empowered and see that they can make a difference 

they will work 24/7/365. It is not the typical image of government 

service that people have but in fact we are all human beings that 

serve in government just like people in private industry. 

And when you see you can make a difference, that is what 

counts, I think. So, I have to believe and I am not as expert as the 

other people sitting at this table about the acquisition system per 
38 

se but I have to believe that it is the weight of the regulations and 

the second-guessing that lead to this risk-averse culture and make 

it difficult to make sharp decisions on key performance parameters 

and programs that tend to make them slide to the right and have 

the cost buildup. That more than just a simple issue of tenure or 

rewards. 

Mr. THORNBERRY. It sounds to me like, and I am not trying to 

put words in you all’s mouth, but it kind of goes back to something 

Mr. Wittman was talking about trying to empower the people to 

make decisions and then also hold them accountable, that gets better results but it also makes for a better system. 

Kind of on a related note, we established the Defense Acquisition 

Workforce Development Fund to try to help develop acquisition 

workforce. It is the kind of thing that you don’t see the payoff for 

some time to come, but I was wondering if anybody has an opinion 

about whether that is on the right track, whether you think we are 

improving the acquisition workforce, at least their skills, understanding that if they still operate in a system that does not reward 

those skills, they are going to, you know, follow whatever the incentives are. 

But does anybody have an opinion about whether that is helpful 

yet or can you tell. 

Mr. LAMBERT. My experience is in the brief time it was in place 

when I was there it was tremendously helpful. And I—people 

would often that wished to complain about the process would say 

that, you know, 50 percent of our acquisition workforce has 5 years 

of experience or less. 

I think that is a great opportunity to train them on next-generation systems, next-generation capabilities, and then how the commercial market is moving. I think that is one of the most important 

programs throughout the Department, it is Department-wide. 

And I can’t, you know, first of all thank the committee enough 

for supporting it because I do think that we are starting to see the 

results. But as you indicated we won’t likely see those results for 

3 or 4 or even more years as we train these people up. But it is 

a great opportunity to train the new people that are coming into 

the system. 

Ms. MCGRATH. I would just add—I would echo Mr. Lambert’s 

comments about the benefit of the workforce. My worry would also 

be around the retention of those individuals, so there is training 

them and then ensuring that we have got the proper incentives in 

place so that we retain them because if it is all bad news then it 

is a tough environment to work in. 

And so, I think it is trying to achieve the right balance of highlighting progress that has been made on programs, to ensure that 

we have got the right incentives to maintain the workforce because 

if it is all bad news all the time, that is a really tough environment. 

Mr. THORNBERRY. Which also relates back to something the admiral just said, if you want somebody to stay in the job 4 or 5 or 

6 years then you got to have the incentives to retain them and also 

the mechanisms for promotion even if they are staying in the same 

job. 
39 

And that is part of the reason, I think, a lot of this goes beyond 

what we think of as the normal acquisition regulations. It goes 

back to those incentives and so forth. If there are no other questions of—the gentleman from Colorado? 

Mr. LAMBORN. Thank you and this has been very interesting. I 

only was able to catch the tail end because I was in another committee earlier. But I would like to just back up a step and ask more 

of a broad philosophical question and how that relates to acquisitions and that has to do with the civilian oversight of the military. 

It is interesting I sometimes hear people in the military or retired from the military complain, maybe even resent the fact that 

they are so specialized and have such a depth of knowledge especially in certain areas, no one can know everything, of course. 

And then they come and talk to committees on the Hill where no 

one knows anywhere near what they know about that particular 

area and yet the Constitution has set it up where the civilian oversees the military. And there is just a friction there sometimes. 

And yet, from the examples you have given, there are times 

when the Department of Defense needs to be overridden and 

whether it is—we see the bigger picture here in Congress, or whatever it is or maybe it was a 51–49 decision, not a 100 to 0. It was 

a very close call and they just happened to, you know, be on the 

wrong side of what Congress wanted to do. 

But it could have gone either way. So, how should we best leverage our role as civilian overseers of admittedly the very specialized 

and highly trained and effective, and I totally respect the Department of Defense specialists over in the Pentagon. 

And, Admiral, maybe you would be a good person to address this 

one. 

Admiral VENLET. I don’t mean to sound glib but I believe the 

Constitution got it right, okay? And my appeal to you from my appearance to briefing professional staffs on both sides to appearing 

before committees is work very hard in your oversight role and ask 

very tough questions that go beyond just local interests because the 

three areas that I said in my opening statement that need addressing, programs that exist, running, work better. 

That second one, you know, only start and pursue the right programs. I believe you have a role that is very important there at 

challenging the military leadership in the requirements generation. 

Are you sure that is the right system to pursue? I don’t have any 

examples to offer you because that would be pretty delicate right 

now and I just don’t have current knowledge. 

But I think that is my answer to your question that says work 

harder not that you are not working hard forgive me for implying 

that, I didn’t mean to. But really focus on are you sure that is the 

right—so, how do you have the knowledge to know? Well, that is 

where the staffs have to interact with those analysis groups that 

do exist within the services and get armed with that background 

information. 

And then it does go back to trust. There is that level of trust. 

I think trust is earned based on past performance and past relationships. 

Mr. LAMBORN. Anyone else to add to that? 
40 

Mr. O’ROURKE. I think another step or an additional thing to 

keep in mind building on the admiral’s comments is to try to close 

the loop on accountability, because if there are bad results but no 

one is held accountable or there are no consequences for that, the 

message sent back to the system is that perhaps the same thing 

can happen in future. So, try to close the accountability. 

And that is why I talked about terms of office because if someone 

isn’t around long enough to be confronted with the results of their 

decisions some of which can take years to become manifest then 

that can make it a lot more difficult to close that accountability 

loop. 

It can be done with their successors but in a lot of cases there 

is no substitute for personal responsibility in those matters. 

Mr. LAMBERT. I would just add again that I think we are all saying the same thing, that a lot of it comes back to people. But one 

very different way of doing business again coming from over 20 

years in the industry and then in the government, in the government if you don’t do a good job most people would just leave you 

alone. 

You know, in private industry, you try to promote maybe 10 percent of your workforce, try to help 80 percent get promoted, and the 

rest of the 10 just were not going to work out. My experience in 

the Department is that is not the ratio. It is—so, you have really 

good people that you want to promote and you want to demonstrate 

that you want promote them and retain them. 

You have other people that you need to work very hard to get 

up to that 10 percent but then you do have some that just cannot 

or will not perform and the inability to act on those individuals, I 

think, is a challenge that we all face in management inside the Department. 

Ms. MCGRATH. I would echo the last comment, spending 25 years 

in the Department of Defense most of which as a career civil servant, it is very difficult to make changes in the workforce that need 

to be made. And I would also—echoing Mr. O’Rourke’s comments 

around accountability, I think we need to define not only what is 

the requirement but what does success look like so we know whether or not collectively we are actually achieving the goals that we 

want. So, the definition of success coupled with the accountability, 

I think, is really important. 

Dr. LAMB. My thought on this would be that it boils down to one 

word—homework. If you had a series of case studies on successful 

congressional oversight, I think what you would find is that someone in the committee, the chairman, people on the committee were 

sensing something wasn’t right. There was enough prima facie evidence that something wasn’t right. 

They dug, the answers didn’t seem to make sense in the broader 

perspective. They dug more, they dug more on Goldwater-Nichols, 

on ODIN, on MRAPs, on not taking at face value that we couldn’t 

get the up-armored Humvee kits to the field as fast as people were 

telling them. In all those cases, members of this committee and 

staff made a big difference by just continuing to dig until they thoroughly understood the circumstances. And then presented the 

broad base perspective saying why can’t we do this. We are going 

to do this. And it is just that simple. 
41 

Mr. LAMBORN. Well, thank you all so much and thank you, Mr. 

Chairman, for the hearing. 

Mr. THORNBERRY. Oh, I thank the gentleman from Colorado. I 

think that is a perfect way to end because it is not just about what 

we try to encourage the Pentagon or industry to do, it is about 

what we do ourselves. We play a key role in our oversight function 

under the Constitution and I think that is part of the solution to 

improving our acquisition system. 

You all have been terrific. Thank you very much for all of your 

insights you have shared with us today as well as all that you have 

all contributed to the country. We will feel free to abuse you further by asking more questions and following up. 

So with that, the hearing stands adjourned. 

[Whereupon, at 12:12 p.m., the committee was adjourned.] 

A P P E N D I X 

JUNE 24, 2014 

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QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

JUNE 24, 2014 

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QUESTIONS SUBMITTED BY MR. FORBES 

Mr. FORBES. What, specifically, should be done to leverage modeling and simulation in the early stages of acquisition to ensure mission/operational relevance for 

new capabilities and continued mission/operational relevance of existing capabilities? 

Mr. LAMBERT. In the early stages of acquisition, relevance for new capabilities can 

be investigated using mission-level simulations to estimate the effectiveness of new 

systems in their intended operational environment. The specific simulations to be 

used will depend on the specific missions of the new system—for example, the Extended Air Defense Simulation (EADSIM) is a well-established simulation to explore 

system effectiveness for air and missile defense systems. A recent study performed 

by the Modeling & Simulation Committee of NDIA’s Systems Engineering Division 

identified approximately two dozen mission types for which there exist mission-level 

simulations. 

In the early stages of the acquisition of new capabilities, only estimates of the performance of a new system are available, very often expressed as Key Performance 

Parameters (KPPs) and Key System Attributes (KSAs). These performance estimates are used as inputs to mission-level simulations. Other key inputs to these 

mission-level simulations are similar performance estimates for threat and friendly 

systems, representations of the natural and man-made environments in which the 

new system will operate, and representative scenarios in which the new system will 

be used. To ensure the credibility of the results of these simulations, it is important 

that all system performance estimates, environment representations, and scenarios 

have been validated, preferably by real data, or through examination by subject 

matter experts where real data is not available. 

For existing capabilities, similar mission-level simulations can be used to examine 

their continued operational relevance. In this case, performance estimates of new 

threat systems and potential new scenario representations are key to estimating the 

effectiveness of existing systems in the new threat environment and potential new 

system employment strategies. 

Mr. FORBES. What standing and available advanced prototyping and/or system integration lab capability exists within the services for material developers to conduct 

early and often simulation based (live, virtual and constructive) integration and assessments of their system developments prior to developmental and operational 

tests? 

Mr. LAMBERT. The conceptual design of systems should be generated through 

model based systems engineering (MBSE) using tools such as the FACT (Framework 

for Assessing Cost & Technology) trade-space exploration framework developed by 

Marine Corps Systems Command. MBSE based on validated models for performance 

(KPP), cost (procurement, and lifecycle sustainment) and RM&A (reliability, maintainability, and availability) generates a range of potential system designs that can 

then be processed through a tool such as the Army Research Lab’s EASE (Executable Architecture for Systems Engineering) to produce parametric representations 

of the design for use in analytical simulations such as Storm or OneSAF. 

Using the representation of fully articulated engineering designs for a future system/platform in analytical models allows them to be run against validated threat 

scenarios of future enemies with future threat weapon systems. The results of these 

analyses comparing a wide variety of proposed system designs can identify where 

investments and trades should be made in the pre-Milestone A phase of an acquisition program. Far more insight into the operational value of a system design can 

be obtained by better use of MBSE before ‘‘bending metal’’ to build a prototype. 

Building a prototype of the wrong design (e.g. the EFV or FCS platforms) can waste 

years and billions of dollars on a major acquisition programs that should have been 

validated first in simulation. 

Mr. FORBES. What, specifically, should be done to leverage modeling and simulation in the early stages of acquisition to ensure mission/operational relevance for 

new capabilities and continued mission/operational relevance of existing capabilities? 
128 

* Christopher J. Lamb and Irving Lachow. Reforming Pentagon Strategic Decisionmaking. 

Washington, D.C.: Institute for National Strategic Studies, National Defense University, 2006. 

Dr. LAMB. What operational-level modeling and simulation we do in support of acquisition programs occurs early on to justify the program start. There is a tendency 

to exaggerate the achievable program attributes and promise leap ahead capabilities 

in order to build support for the program. Even so, frequently this modeling and 

simulation in support of the analysis of program alternatives is done quite well. 

From my point of view the problem is that the modeling and simulation of the program capabilities within a broader operational concept largely ends there. What we 

need to do is maintain this kind of modeling and simulation effort to support program management through later milestone decisions, exploring the relative value of 

alternative performance attributes as the program moves forward. 

In addition, these analytic efforts should be more ‘‘joint’’ and more transparent. 

If other sources of analytic expertise could investigate alternative ways of achieving 

operational objectives using the same scenarios, operating concepts, data, analytic 

methods, and metrics the results would be comparable and helpful to both the program manager and senior decision makers. Without these common, essential precursors to good analysis provided in a timely fashion so that results are comparable 

and replicable, senior leaders cannot usefully evaluate alternatives and their consequences. Some believe it would cost too much to provide the analytic foundation 

for decision support but just the opposite is the case. 

As I have noted elsewhere, each year, the Pentagon spends untold amounts on 

analytic support that cannot be harnessed in support of senior leader strategic decision-making. ‘‘The situation is so bad that the Pentagon occasionally pays contractors to study past studies in hopes of finding a baseline of authoritative knowledge 

on a subject. Invariably the answer comes back that the results from many years 

of expensive studies are not transparent, comparable, or consistent and cannot be 

explained.’’ * This trend, more pronounced in recent decades according to some, ensures a lot of analytic resources are wasted. It would be more efficient to convert 

some of this spending into a coherent, joint analytic foundation for comparable studies that support good acquisition program management. 

Mr. FORBES. What standing and available advanced prototyping and/or system integration lab capability exists within the services for material developers to conduct 

early and often simulation based (live, virtual and constructive) integration and assessments of their system developments prior to developmental and operational 

tests? 

Dr. LAMB. I am not competent to describe the Service advanced prototyping and 

simulation capabilities currently available. 

I will say that I am inclined to think we need more of such capabilities if they 

were configured to stimulate competition. I was a big supporter of the Office of 

Force Transformation, which used advanced prototyping and simulation to experiment on better alternatives to existing programs. Initially it enjoyed insider status, 

received senior leader protection, and had enough resources to contribute realistic 

prototypes. It challenged existing orthodoxy and I thought made significant contributions. It was an irritant as it was meant to be, but a productive one with small 

costs. Because it challenged the status quo it was eventually disbanded, which I believe was unfortunate. 

QUESTIONS SUBMITTED BY MS. TSONGAS 

Ms. TSONGAS. Congress funds most acquisition programs one year at a time; however, DOD acquisition is planned for several years out and contracts often last for 

much more than a year. Thus, there are situations where we in Congress make decisions that completely disrupt the funding profile of a particular program, causing 

uncertainty for the program managers and the contractors. How much does this 

funding uncertainty affect the ability of program managers to effectively do their 

jobs? Would you suggest a different method for funding acquisition programs, such 

as multi-year appropriations for major programs? 

Mr. LAMBERT. Funding instability can have serious and negative impacts on program efficiency. Programs that are early in the design or production phase benefit 

significantly from a steady, sufficient, and predictable line of funding, which makes 

it possible for program managers to address challenges posed by the immaturity of 

a program’s technology, integrated design, or manufacturing. Mr. Kendall has recommended a management reserve to account for some of these challenges, and 

multi-year funding would similarly shield program managers from unpredictable 

swings in appropriated funds. A sudden lapse in funding may mean paying a con-
129 

tractor just to keep a program in ‘‘warm storage,’’ and a sudden spike in funding 

may mean accepting significant technology, design, or production risks to expend 

the funds in the allotted timeframe. Both scenarios lead to waste in a program. 

The challenge to implementing either solution is in asking the Congress to set 

aside its own funding prerogatives in the name of efficiency, a challenge that is 

heightened whenever individual program managers make decisions that seem unwise in hindsight or that Congress calls into question for some reason, and which 

were enabled by additional flexibility granted by Congress. Nevertheless, to the extent that Congress will provide funding stability to program managers, more efficient programs are likely to result. 

Ms. TSONGAS. A few of you mentioned incentives for acquisitions personnel during 

your opening statements. Unfortunately this has been a common theme for many 

years. Nearly all of the major comprehensive DOD Acquisition reviews throughout 

the years have stated the exact same thing; DOD does not provide the right incentives to its acquisition workforce. What incentives can Congress or the Defense Department put in place that would strengthen the DOD’s acquisition system? 

Mr. LAMBERT. Misaligned incentives are easy to identify but devilishly difficult to 

fix. Unfortunately the solution is not as simple as putting new incentives in place, 

but requires addressing the conflict between incentives already in existence. These 

conflicting incentives begin with our constitutional form of government, which deliberately sets the branches of government at odds with each other, and proceed from 

there. This basic misalignment of incentives is the root cause of many of the misaligned incentives within the acquisition process. 

Take, for example, the milestone approval process mandated by 10 U.S.C. 2366a 

and 2366b. The Congress established milestone certification requirements because 

it decided that insufficient attention was paid to these functional areas during program design and development. Yet, because of how a large bureaucracy operates, 

the Milestone Decision Authority is not in a position to independently certify that 

the program manager has met each of these requirements; instead, he or she relies 

on the advice of staff experts responsible for each functional area. A review by each 

of these experts adds delay to the program, and some experts may recommend 

changes that are beneficial to their functional area but harm the program as a 

whole. Although the program manager may consider these changes unwise, he or 

she may nevertheless carry them out to secure milestone approval. The program 

manager’s incentive is to see the program make progress, and the experts’ incentives are to make sure their functional areas are addressed as they see fit. 

The basic problem is that these experts have sway over a program’s progress 

without being held accountable for it. While eliminating milestone decision reviews 

would fix these misaligned incentives, it would not necessarily improve outcomes. 

(If the earlier process was superior, why did Congress create the milestone review 

process in the first place?) So we should ask: what review process would align both 

sides’ incentives? 

One option might be to reverse the milestone process to force functional experts 

to seek milestone disapproval rather than forcing the program manager to seek 

milestone approval. In such a scenario, the functional expert would make his or her 

case to the Milestone Decision Authority whose incentive is for program progress 

and success. Ideally, this process would bring the program manager’s, Milestone Decision Authority’s, and functional expert’s incentives into alignment, each with skin 

in the game. 

Ms. TSONGAS. Congress funds most acquisition programs one year at a time; however, DOD acquisition is planned for several years out and contracts often last for 

much more than a year. Thus, there are situations where we in Congress make decisions that completely disrupt the funding profile of a particular program, causing 

uncertainty for the program managers and the contractors. How much does this 

funding uncertainty affect the ability of program managers to effectively do their 

jobs? Would you suggest a different method for funding acquisition programs, such 

as multi-year appropriations for major programs? 

Mr. O’ROURKE. Navy program managers that I meet with state that year-to-year 

funding instability due to things such as continuing resolutions (CRs), sequesters, 

and congresssional marks on requested funding levels (and combinations of these 

things) can cause program-execution challenges. Similarly, shipbuilding industry officials state that stable year-to-year funding is an important contributor to programexecution success. Navy and shipbuilding industry officials from time to time express a desire for more stable year-to-year funding—a desire that Congress understands, but which can be in tension with Congress’ desire to maintain and exercise 

year-to-year control over appropriations, which is a core congressional power. 

One means of helping to achieve greater year-to-year stability in programs is to 

use multiyear procurement (MYP) and block buy contracting, which are two forms 
130 

of multiyear contracting that can be used in defense acquisition programs on a caseby-case basis, with congressional approval. The Navy is making substantial use of 

MYP and block buy contracting in its ship and aircraft acquisition programs. MYP 

and block buy contracting are discussed in some detail in a CRS report. Another 

potential mechanism for achieving a greater degree of year-to-year funding stability 

would be to use advance appropriations, which can be thought of as a legislatively 

locked in form of incremental funding. Under incremental funding, Congress must 

take a positive action each year to approve each year’s funding increment for the 

procurement of a given end item. In contrast, under advance appropriations, each 

year’s funding increment happens automatically, unless Congress takes a positive 

action to stop it. DOD from time to time has requested the use of advance appropriations for shipbuilding or other acquisition programs. In shipbuilding at least, 

these requests have been turned down by Congress, in no small part because the 

use of advance appropriations is viewed as being in tension with maintaining yearto-year congressional control over appropriations. Traditional (i.e., single-year) full 

funding, incremental funding, and advance appropriations are discussed in some detail in a CRS report. 

Ms. TSONGAS. A few of you mentioned incentives for acquisitions personnel during 

your opening statements. Unfortunately this has been a common theme for many 

years. Nearly all of the major comprehensive DOD Acquisition reviews throughout 

the years have stated the exact same thing; DOD does not provide the right incentives to its acquisition workforce. What incentives can Congress or the Defense Department put in place that would strengthen the DOD’s acquisition system? 

Mr. O’ROURKE. As one contribution to this discussion, my observation of Navy and 

other DOD acquisition programs over the last 30 years gives me the impression that 

long terms of office for program officials can be a key contributor to achieving success in defense acquisition programs. Program officials with long terms of office understand that they will still be in office years from now, and consequently that they 

will be held personally accountable for the results of decisions they make (at least 

those they make during their earlier years in office). By contrast, officials with 

shorter terms of office face less risk of being held personally accountable for the results of their decisions, because those results may not become manifest until after 

their terms in office are complete. Indeed, they might even feel an incentive to make 

decisions that achieve what they view as near-term success for a program (such as 

getting a program started), even if those decisions increase the program’s risk of experiencing execution problems later. 

The Navy’s nuclear propulsion program and the Aegis development effort, both of 

which are generally considered as areas of acquisition success, were run during 

their formative years by officials (Admiral Hyman Rickover and Rear Admiral 

Wayne Meyer, respectively) who had long tenures in office. The term of office for 

Admiral Rickover’s successors, as mentioned earlier, is eight years. In contrast, I 

have attended program-oversight hearings in recent years (such as those on cost 

growth in the LCS program or problems in the Coast Guard’s Integrated Deepwater 

Systems program, to cite two examples) where the witnesses stated that the problems experienced by programs, while regrettable, resulted from decisions made by 

their predecessors. These contrasting experiences suggest that Congress might consider exploring options for lengthening the terms of office for some defense acquisition program officials well beyond the four years or so that many top program officials currently serve. 

Ms. TSONGAS. Congress funds most acquisition programs one year at a time; however, DOD acquisition is planned for several years out and contracts often last for 

much more than a year. Thus, there are situations where we in Congress make decisions that completely disrupt the funding profile of a particular program, causing 

uncertainty for the program managers and the contractors. How much does this 

funding uncertainty affect the ability of program managers to effectively do their 

jobs? Would you suggest a different method for funding acquisition programs, such 

as multi-year appropriations for major programs? 

Admiral VENLET. Congressional funding of acquisition appropriately supports your 

oversight duties and does not adversely affect program managers. Beneficial balance 

results from healthy tension in the review. 

The fret concerning uncertainty primarily derives from over-programming due to 

lack of realism in department resource planning. Industry contributes to this as 

much as department resourcing decisions. 

Review of program performance and adjustments to funding drive accountability 

by the department and should not be changed. 

Congressional oversight focused upon administration requests for new start programs is the place to apply focus on resource realism and only starting the right 
131 

programs with the right resources. I speak more on this in my submitted written 

statement. 

Multi-year funding for procurement should be used to bring the benefit of lower 

price where it is defendable and auditable. 

Ms. TSONGAS. A few of you mentioned incentives for acquisitions personnel during 

your opening statements. Unfortunately this has been a common theme for many 

years. Nearly all of the major comprehensive DOD Acquisition reviews throughout 

the years have stated the exact same thing; DOD does not provide the right incentives to its acquisition workforce. What incentives can Congress or the Defense Department put in place that would strengthen the DOD’s acquisition system? 

Admiral VENLET. Throughout my career in uniform, and I firmly believe all civilian and uniform personnel presently in acquisition, work and live with no angst 

about incentives other than duty and commitment to providing the capability and 

reliability Soldiers, Airmen, Sailors and Marines expect to succeed in their missions 

and return safely to their loved ones. 

Proposals and continued inquiry about incentives are fundamentally misplaced. 

This is not a serious factor in acquisition program performance and will provide no 

fruitful contribution to external program performance results. My submitted written 

statement addresses more productive examination and focus on people. We need to 

build a greater presence in the workforce of commitment to fundamentals, transparency and realism. It is a long road to raise such a generation. There are no 

shortcuts. 

Ms. TSONGAS. Congress funds most acquisition programs one year at a time; however, DOD acquisition is planned for several years out and contracts often last for 

much more than a year. Thus, there are situations where we in Congress make decisions that completely disrupt the funding profile of a particular program, causing 

uncertainty for the program managers and the contractors. How much does this 

funding uncertainty affect the ability of program managers to effectively do their 

jobs? Would you suggest a different method for funding acquisition programs, such 

as multi-year appropriations for major programs? 

Ms. MCGRATH. [The information was not available at the time of printing.] 

Ms. TSONGAS. A few of you mentioned incentives for acquisitions personnel during 

your opening statements. Unfortunately this has been a common theme for many 

years. Nearly all of the major comprehensive DOD Acquisition reviews throughout 

the years have stated the exact same thing; DOD does not provide the right incentives to its acquisition workforce. What incentives can Congress or the Defense Department put in place that would strengthen the DOD’s acquisition system? 

Ms. MCGRATH. [The information was not available at the time of printing.] 

Ms. TSONGAS. As you mentioned in your opening statement, the ability to rapidly 

assess needs and field new technologies is critical for IT and cyber. Many program 

managers and area experts discuss the need for ‘‘flexibility’’ beyond a traditional 

multi-year, sometimes multi-decade, weapon systems acquisition. However, when 

you start drilling down on what ‘‘flexibility’’ really means, there is not a lot of clarity. Can you describe what flexibility in cyber/IT acquisition means to you and what 

it looks like? In order to do these things, what types of authorities does the DOD 

need from Congress to realize that type of flexibility? It is widely believed that the 

commercial sector leads and drives advancements in IT/cyber acquisition and that 

DOD could improve by adopting proven commercial practices, processes, and policies. What is one specific example of a commercial practice you feel could be beneficial to the Department of Defense? 

Ms. MCGRATH. [The information was not available at the time of printing.] 

Ms. TSONGAS. Congress funds most acquisition programs one year at a time; however, DOD acquisition is planned for several years out and contracts often last for 

much more than a year. Thus, there are situations where we in Congress make decisions that completely disrupt the funding profile of a particular program, causing 

uncertainty for the program managers and the contractors. How much does this 

funding uncertainty affect the ability of program managers to effectively do their 

jobs? Would you suggest a different method for funding acquisition programs, such 

as multi-year appropriations for major programs? 

Dr. LAMB. Funding uncertainty arising from larger political forces—unrelated to 

program or defense goals—complicates acquisition performance and is a risk factor 

that should be minimized. 

However, it is important to note that funding consistency and variation are not 

intrinsically good or bad. Depending on the type of contract and its provisions, program managers need the flexibility to withhold, reduce, advance and increase funding to maximize program performance. Funding adjustments based on compelling 

analyses that demonstrate other programs can offer some or all of the same capabilities more efficiently and effectively are also justified. In such cases it would just 
132 

* Mark V Arena, Irv Blickstein, Abby Doll, Jeffrey A. Drezner, Jennifer Kavanagh, Daniel F. 

McCaffrey, Megan McKernan, Charles P. Nemfakos, Jerry M. Sollinger, Daniel Tremblay, and 

Carolyn Wong. Management Perspectives Pertaining to Root Cause Analyses of Nunn-McCurdy 

Breaches: Program Manager Tenure, Oversight of Acquisition Category II Programs, and Framing Assumptions. RAND, 2013: 105. 

be necessary to accurately account for the penalties and other inefficiencies associated with reducing or terminating the program. Hence, the goal should not be insulating the program funding stream from all variation, but rather from interruption 

by extraneous factors unrelated to the performance of our military forces. 

Thus, in order to further acquisition performance I would favor multi-year appropriations for major programs as part of a larger reform package designed to increase 

flexibility and accountability for program managers while decreasing the risks of 

program interruption by extraneous political forces. 

Ms. TSONGAS. A few of you mentioned incentives for acquisitions personnel during 

your opening statements. Unfortunately this has been a common theme for many 

years. Nearly all of the major comprehensive DOD Acquisition reviews throughout 

the years have stated the exact same thing; DOD does not provide the right incentives to its acquisition workforce. What incentives can Congress or the Defense Department put in place that would strengthen the DOD’s acquisition system? 

Dr. LAMB. The gist of my testimony was the argument that programs are not currently managed in light of their contribution to a broader operational concept, but 

that they should be. 

Program managers ought to be encouraged to adjust key performance parameters 

consistent with mission needs that are repeatedly evaluated to account for the contributions other programs and capabilities can make toward successful execution of 

the operational concept. If the program is not meeting one performance parameter 

for reasons beyond anyone’s control, the program manager could relax this requirement and compensate with greater capability from other program attributes or from 

separate programs that contribute to the execution of the operational concept. The 

point would be to manage the program for a maximum contribution to the operational concept(s) within budget and time limitations. 

This approach assumes there would be enough analytic clarity about the operational concept to inform the program manager’s decision-making. It also assumes 

the program manager is provided the right personal performance incentives. We 

would want the program manager to devote his or her attention to managing their 

program to success as defined by the broader operational concept and not necessarily as defined by his or her parent organization or previous chain of command. 

Program managers need an incentive to do this. Simply stated, the program manager’s likelihood of promotion must be based on good performance as defined by 

those who execute the operational concept. RAND made a similar observation about 

program manager tenure and acquisition performance: ‘‘A fundamental conflict exists between what military officers need to do to be promoted and their tenure as 

program managers. Unless these two objectives are connected so that lengthy tenure 

in a program can be advantageous for promotion, it is unlikely that these tenure 

policies will consistently yield positive results.’’ * The same point is true more generally about incentives for managing an acquisition program so that it makes the 

maximum contribution to an operational concept within time and budget constraints. 

QUESTIONS SUBMITTED BY MR. WITTMAN 

Mr. WITTMAN. What can Congress do to simplify the defense acquisitions process 

while empowering program managers with more responsibility and authority? 

Mr. LAMBERT. Yours is the fundamental question of acquisition reform. To get the 

process started, Congress should look first at where it can remove and reduce requirements, reports, and paperwork it has mandated in the past. To fix the defense 

acquisition system, one must first understand it, and no one does because of its complexity. Simplicity alone will not fix the problems of defense acquisition, but it may 

make it easier for us to identify problems in order to fix them. At the very least, 

simplicity will reduce the process costs involved in acquisition. Yet making these reductions will not be easy, since each was put in place by a Member of Congress who 

may believe they are worthwhile and necessary to improve acquisition outcomes. 

Take, for example, the milestone approval process mandated by 10 U.S.C. 2366a 

and 2366b. The Congress established milestone certification requirements because 

it decided that insufficient attention was paid to these functional areas during program design and development. Yet, because of how a large bureaucracy operates, 
133 

the Milestone Decision Authority is not in a position to independently certify that 

the program manager has met each of these requirements; instead, he or she relies 

on the advice of staff experts responsible for each functional area. A review by each 

of these experts adds delay to the program, and some experts may recommend 

changes that are beneficial to their functional area but harm the program as a 

whole. Although the program manager may consider these changes unwise, he or 

she may nevertheless carry them out to secure milestone approval. The program 

manager’s incentive is to see the program make progress, and the experts’ incentives are to make sure their functional areas are addressed as they see fit. 

The basic problem is that these experts have sway over a program’s progress 

without being held accountable for it. While eliminating milestone decision reviews 

would fix these misaligned incentives, it would not necessarily improve outcomes. 

(If the earlier process was superior, why did Congress create the milestone review 

process in the first place?) So we should ask: what review process would align both 

sides’ incentives? 

One option might be to reverse the milestone process to force functional experts 

to seek milestone disapproval rather than forcing the program manager to seek 

milestone approval. In such a scenario, the functional expert would make his or her 

case to the Milestone Decision Authority whose incentive is for program progress 

and success. Ideally, this process would bring the program manager’s, Milestone Decision Authority’s, and functional expert’s incentives into alignment, each with skin 

in the game. 

Mr. WITTMAN. How should the LPTA acquisition strategy evolve to ensure that 

the DOD is achieving the best value over a program’s complete lifecycle? 

Mr. LAMBERT. A recent GAO report on the use of LPTA source selection concluded 

that DOD contracting officers were properly using LPTA, yet it also concluded that 

the use of LPTA as a source selection method had increased by 10 percent over the 

period of review. LPTA is a proper source selection method only when the requirements are firmly established with no likelihood of value distinctions between product offerings. It is not an appropriate source selection method when two offerings 

may present a substantially different value. 

Yet LPTA is increasing in popularity as a source selection method. The reason is 

two-fold: first, because the defense budget is in decline and therefore cost receives 

more emphasis in source selection, and second, because cost is an objective method 

of source selection that is difficult to contest in the event of an award protest, while 

value almost always includes a subjective element that is more likely to receive 

scrutiny. 

Given the GAO’s conclusion that LPTA is being properly used, it may be challenging to alter DOD’s approach to LPTA in the near term. In the longer term, reducing the cost pressure that DOD contracting officers face and making reasonable 

improvements to the protest process are likely to reduce the prevalence of LPTA as 

a source selection method. 

Mr. WITTMAN. What can Congress do to simplify the defense acquisitions process 

while empowering program managers with more responsibility and authority? 

Mr. O’ROURKE. Again drawing on my experience in tracking Navy acquisition programs, one option that the committee may wish to consider would be to examine, 

as a possible model to follow, the terms of Executive Order 12344 of February 1, 

1982, which establishes the broad, cradle-to-grave authorities and responsibilities of 

the Naval Nuclear Propulsion Program (aka Naval Reactors), an office whose work 

over the years can be considered a major acquisition success story. This executive 

order, which is codified as a note at 50 U.S.C. 2511, contains a total of about 915 

words. 

Another option would be to deemphasize regulation that attempts to direct DOD 

acquisition toward better outcomes without fundamentally challenging the going-in 

conditions I outline my prepared statement, and put more emphasis on acquisition 

strategies that attempt to change these going-in conditions. One possibility for doing 

that would be to make greater use of overlap between programs across time. Under 

this approach, the existing system for filling a mission need (call it System A) would 

remain in production (with spiral development improvements as needed) until the 

new system that is being developed (System B) is fully ready to enter production. 

At that point, production would be cut over from System A to System B, and System 

B would remain in production until it appears that a still-newer design (System C) 

might be more cost effective in performing the mission. System B, however, would 

continue in production until System C is fully ready to enter production. And so on. 

Under this approach, the system currently in development (System B) would face 

greater competition in its earlier years from the predecessor system (System A), as 

well as competitive pressures in its later years from a downstream successor (System C). At any one point, only one system is being developed, and only one is being 
134 

produced. But as System B is being developed, it needs to perform well to earn the 

right to enter production, and during the years it is being produced, it needs to perform well to dissuade DOD officials for as long as possible from initiating a System 

C effort. The point at which System B is to enter production, and the total number 

of System B units produced over time, are not set in stone, but rather determined 

by the success of the System B program. 

Under this approach, there would be less emphasis on identifying precise future 

dates for starting and stopping production of platforms and systems, and less emphasis on planned total production quantities (which often prove illusory). There 

would be more emphasis on readiness for production, and more flexibility regarding 

production cutover dates. There would also be more emphasis on annual production 

rates and their relationship to supporting planned force structure over the long run, 

and on the ability of programs to achieve necessary annual production rates within 

budget constraints. The idea that a program can be helped by clearing the decks 

of all possible competition (i.e., shutting down production of the existing system so 

as to clear the path for the new program) would be deemphasized, and an alternative idea—that a program is best helped (i.e., kept strong) by keeping it in competition longer against competing solutions for meeting the mission need—would instead be employed. 

Some of the Navy’s quantitatively larger shipbuilding programs are in effect treated this way, which is why, in discussing these programs, there tends to be less focus 

on total planned production quantities and more focus on annual production rates. 

This proposed approach might not make sense for certain defense acquisition efforts, depending on the circumstances of those efforts. And this approach is by no 

means perfect—it has its own drawbacks, and ways could likely be found to attempt 

to game such a system. Among many other things, there would continue to be, for 

example, a question as to who determines when a program is fully ready to enter 

production, and how that determination is made. But it is an option that might be 

considered for some defense acquisition efforts. 

Mr. WITTMAN. How should the LPTA acquisition strategy evolve to ensure that 

the DOD is achieving the best value over a program’s complete lifecycle? 

Mr. O’ROURKE. Mechanisms for achieving best value over a program’s complete 

lifecycle include, among other things, using competition where possible through 

much or all of that lifecycle (as opposed to using it only for awarding the initial production contract), aligning contract incentives with desired outcomes, and maintaining an adequately sized and trained acquisition workforce. 

Mr. WITTMAN. What can Congress do to simplify the defense acquisitions process 

while empowering program managers with more responsibility and authority? 

Admiral VENLET. This question contains two distinct issues that do not necessarily flow from one to the other. 

First I believe program managers presently enjoy fully adequate responsibility 

and authority for their scope of duties and career experience level. I never found 

any process complexity that reduced real responsibility. There exist process requirements that get blamed for reducing authority, but such a complaint most often is 

a failure to recognize value added sound fundamentals, an attempt to avoid transparency or a detour from realism in planning, budgeting and resourcing. 

I would point the attention of Congress to department organizational structures 

and repeated appearances of offices that do not add true value to the planning and 

execution of programs. The presence of assessment support to every acquisition executive level has grown such that their attempt to do assessment consumes too 

much time, energy, focus and money in the actual management of programs. Oversight is necessary and value added, I do not debate; however, there is an abundance 

of assessors that require answering on behalf of senior officials that in actuality becomes mostly opinion based and makes no difference to real outcomes—the external 

results of the program. 

The Weapons Systems Acquisition Reform Act of 2009 got it right by accepting 

Defense Science Board and GAO recommendations for emphasis on systems engineering (Title 1 Section 101) and adequate developmental testing (Section 102). 

However, it reacted in the only way legislative force finds outlet by creating new 

additional assessing offices at the OSD level, when the practitioners of these fundamentals exist within well-developed technical systems commands. Directors of 

Systems Engineering and Developmental Test and Evaluation, specifically, cannot 

add assistance in their field to improve any program outcome. They become advocates for healthy infrastructure in their fields and admirably so, but their attempts 

to assess programs for the Defense Acquisition Official injects more non value added 

exercise of review, inquiry and reporting system than their advocacy benefit adds. 
135 

The excellent professionals in these offices are faced with searching how to bring 

their talents to bear for program benefit and they find all they have available is 

assessment, which further intrudes upon program execution focus. 

The value added alternative to these two offices is asking Service Acquisition Officials to: 1. Ensure the technical systems commands that already report to them provide a proper talent supply to programs. (Defense Acquisition Workforce Fund, Section 852, is one small part. Institutional and Working Capital Fund resources that 

enable sustaining adequate technical specialties in support of programs are also necessary.) 2. Provide necessary resourcing and support of laboratory and range infrastructure. 3. Provide a competency-aligned support to programs with enabling technical conscience accountability to program executive officers and program managers. 

Mr. WITTMAN. How should the LPTA acquisition strategy evolve to ensure that 

the DOD is achieving the best value over a program’s complete lifecycle? 

Admiral VENLET. A request for proposal that states technical and cost are approximately equal or only slightly differentiated is often found within a stated best 

value strategy solicitation. That evaluation weighting and criteria reduce what is intended as a best value solicitation to be in fact lowest price technically acceptable. 

Approval authorities for releasing RFPs to industry must look for this mixed signal and eliminate it. It persists today in many solicitations and drives industry proposal behavior to reduce technical performance capability to win with lowest price. 

This is a downward capability spiral that is not in the best interest of the government. This applies to solicitations for both services and hardware systems. 

The government has to weigh and value capability and performance in some proportion over cost to enable industry to distinguish and differentiate their offerings. 

This is a fundamental to enabling evaluation of a proposal for true best value instead of simply lowest cost. 

Mr. WITTMAN. What can Congress do to simplify the defense acquisitions process 

while empowering program managers with more responsibility and authority? 

Ms. MCGRATH. [The information was not available at the time of printing.] 

Mr. WITTMAN. How should the LPTA acquisition strategy evolve to ensure that 

the DOD is achieving the best value over a program’s complete lifecycle? 

Ms. MCGRATH. [The information was not available at the time of printing.] 

Mr. WITTMAN. What can Congress do to simplify the defense acquisitions process 

while empowering program managers with more responsibility and authority? 

Dr. LAMB. I favor a thorough review of statutory and regulatory requirements as 

they apply to major defense acquisition programs. The goal would be to eliminate 

all unnecessary, ambiguous, contradictory and unhelpful restrictions on program 

management that undermine efficiency and effectiveness. In addition, Congress 

would need to intervene in Service promotion practices to ensure that program managers are rewarded if they deliver a program on time and within budget with attributes that make the greatest contribution to overall military capability. For joint 

programs the Services cannot objectively make this kind of assessment and should 

not be allowed to do so. 

Mr. WITTMAN. How should the LPTA acquisition strategy evolve to ensure that 

the DOD is achieving the best value over a program’s complete lifecycle? 

Dr. LAMB. I am not competent to provide a detailed answer to this question. However, I would like to share two quick observations. 

After my oral testimony I was contacted by a businessman whose company produces analytic software that optimizes management of usage, maintenance and repair cycles for capital-intensive equipment. His claim was that better analysis of enterprise asset management could save millions and even billions of dollars over the 

life cycle of defense acquisition programs. He asserted that some of the same bureaucratic behaviors I mentioned in my testimony often prevent the use of such analytics. For example, existing organizational cultures sometimes incline those managing established programs to maintain large costly inventories of spare parts rather than use analytic processes to assess actual usage rates and deliver spare parts 

accordingly. In other words, there are few incentives for achieving savings through 

supply chain management and significant sanctions for taking risk in this area at 

the expense of mission readiness. I do not do research in this area and do not know 

whether the empirical record would support these assertions but I believe the topic 

merits investigation. 

More generally, I agree with those who argue that the merits of a ‘‘lowest price 

technically acceptable’’ approach depend on circumstances such as the clarity of program requirements, technical risk, past contractor performance, and other vari-
136 

* Robert Nichols, ‘‘Myth-Busting the LPTA Conundrum,’’ The Government Contractor (12/18/ 

2013). 

ables.* My inclination would be to allow program managers the flexibility to structure contracts as they think best consistent with program objectives and then hold 

them accountable for outcomes. 

QUESTIONS SUBMITTED BY MRS. WALORSKI 

Mrs. WALORSKI. Many have made attempts to improve the way the DOD acquisition system functions over the years. What do you think are the ‘‘lessons learned’’ 

of previous acquisition reform efforts, particularly in terms of pitfalls to avoid or 

best practices to follow? What advice do you have for us in negotiating the obstacles 

to reform? 

Mr. LAMBERT. The primary lesson that we have yet to learn is that acquisition 

cannot be ‘‘reformed’’ as we have conceived of reform in the past. The idea that 

there is a silver bullet we have not yet discovered, and that Congress can simply 

pass a bill and fix all the problems of defense acquisition has proved to be a fantasy. 

Instead, to achieve meaningful acquisition improvement, the Pentagon and Congress 

both need to commit to a slow and steady long-term process enabled by enlightened 

and patient oversight, modest legislative change, reduction in paperwork and process requirements, and sufficient funding. 

To get the process started, Congress should look first at where it can remove and 

reduce requirements, reports, and paperwork it has mandated in the past. To fix 

the defense acquisition system, one must first understand it, and no one does because of its complexity. Simplicity alone will not fix the problems of defense acquisition, but it may make it easier for us to identify problems in order to fix them. At 

the very least, simplicity will reduce the process costs involved in acquisition. Yet 

making these reductions will not be easy, since each was put in place by a Member 

of Congress who may believe they are worthwhile and necessary to improve acquisition outcomes. 

Mrs. WALORSKI. Many have made attempts to improve the way the DOD acquisition system functions over the years. What do you think are the ‘‘lessons learned’’ 

of previous acquisition reform efforts, particularly in terms of pitfalls to avoid or 

best practices to follow? What advice do you have for us in negotiating the obstacles 

to reform? 

Mr. O’ROURKE. A summary of lessons learned for Navy shipbuilding, reflecting 

comments made repeatedly by various sources over the years, includes the following: 

• Get the operational requirements for the program right up front. Manage risk 

by not trying to do too much in the program, and perhaps seek a 70%-to-80% 

solution. Achieve a realistic balance up front between requirements and estimated costs. 

• Impose cost discipline up front. Use realistic price estimates, and consider not 

only development and procurement costs, but life-cycle operation and support 

(O&S) costs. 

• Minimize design/construction concurrency by developing the design to a high 

level of completion before starting construction and by resisting changes in requirements (and consequent design changes) during construction. 

• Use a contract type that is appropriate for the amount of risk involved, and 

structure its terms to align incentives with desired outcomes. 

• Properly supervise construction work. Maintain an adequate number of properly 

trained Supervisor of Shipbuilding (SUPSHIP) personnel. 

• Provide stability for industry, in part by using, where possible, MYP or block 

buy contracting. 

• Maintain a capable government acquisition workforce that understands what it 

is buying, as well as the above points. 

Identifying these lessons is not the hard part—most if not all these points have 

been cited for years. The hard part is living up to them without letting circumstances lead program-execution efforts away from these guidelines. An additional observation is that in recent years there have been, through legislation and 

internal DOD initiatives, numerous changes and adjustments to DOD’s acquisition 

system. These changes and adjustments have all been well-intentioned, and many 

of them no doubt have helped improve acquisition outcomes. But they have also had 

the effect of not leaving DOD’s acquisition system in any one configuration for very 

long. 

The continuously evolving features of DOD’s acquisition system can complicate 

the task of identifying what works and what does not work in DOD acquisition, be-
137 

cause no one configuration of the system is tested for very long, an individual program can be implemented across several versions of DOD’s acquisition system, and 

a service’s collection of programs at any given moment can include programs initiated under various versions. This situation might suggest a need for careful consideration in determining the reasons for acquisition outcomes. As another observation, 

consider an acquisition program that has most or all of the following features: • The item being acquired is considered a must-have item for the customer. • The program for acquiring it is largely sheltered from international competition, 

and perhaps also sheltered, to some degree at least, from domestic competition. • The program proposes to procure the end item in question at a relatively low 

annual production rate, reducing the potential room for making further reductions in that rate. • The industrial base producing the item is considered critical and will not be allowed to go out of business. 

If one were to describe such a program to an economist, the economist might reply 

that the program would be inherently vulnerable to problems in areas such as cost 

control, schedule adherence, and production quality, because these going-in conditions can send a message to industry that less-than-stellar performance in executing 

the program would not create much risk of losing the work or going out of business. 

Much of the regulation of DOD acquisition can be viewed as an attempt to direct 

DOD acquisition toward better outcomes without fundamentally changing going-in 

conditions such as these, which together might be thought of as forming the underlying political economy of some (perhaps many) DOD acquisition programs. Regulation that attempts to direct DOD acquisition toward better outcomes without fundamentally challenging going-in conditions such as these might be viewed as treating symptoms rather than underlying causes. 

Mrs. WALORSKI. Many have made attempts to improve the way the DOD acquisition system functions over the years. What do you think are the ‘‘lessons learned’’ 

of previous acquisition reform efforts, particularly in terms of pitfalls to avoid or 

best practices to follow? What advice do you have for us in negotiating the obstacles 

to reform? 

Admiral VENLET. I have written about this in an article submitted for a Senate 

print on acquisition reform this summer and in my submitted written statement for 

this committee. 

Lessons learned reveal to me the insatiable hunger for something ‘‘new’’ to keep 

pursuing more program with less resources always leads to departures from sound 

fundamentals, departures from transparency and departures from realism in expectations, planning and resourcing. 

My advice is to hold department programmers and acquisition leadership accountable for realism in requests for program starts. If you are left with gaps in national 

security needs, you should resist forcing more program into constrained budgets and 

look to enable a national economy that adequately supports the program needed. 

Mrs. WALORSKI. Many have made attempts to improve the way the DOD acquisition system functions over the years. What do you think are the ‘‘lessons learned’’ 

of previous acquisition reform efforts, particularly in terms of pitfalls to avoid or 

best practices to follow? What advice do you have for us in negotiating the obstacles 

to reform? 

Ms. MCGRATH. [The information was not available at the time of printing.] 

Mrs. WALORSKI. Many have made attempts to improve the way the DOD acquisition system functions over the years. What do you think are the ‘‘lessons learned’’ 

of previous acquisition reform efforts, particularly in terms of pitfalls to avoid or 

best practices to follow? What advice do you have for us in negotiating the obstacles 

to reform? 

Dr. LAMB. In the case of acquisition reform, my impression is that previous efforts 

have failed in two key respects. First, too many reforms have layered on additional 

reporting requirements or ambiguous restrictions that give the appearance of addressing a past disappointment without actually increasing the likelihood of preventing future ones. Second, past reform efforts define the problem too narrowly. In 

past decades it might have been more common to discover acquisition failures due 

to narrow technical lapses, such as poor manufacturing processes or inadequate 

testing. Career acquisition experts could speak to that issue with more authority. 

However, my impression is that in recent decades we have delivered high-quality 

products to our forces, but not quickly or at affordable cost. Gold-plating a system 

makes sense if the criteria for success are key performance parameters that promise 

a leap forward in capability. When the field of vision is broadened to evaluate the 

program in terms of its contribution to executing operational concepts upon future 

battlefields, the value of that particular program and its signature attributes comes 

more sharply into focus and it is easier to ascertain the best value for the defense 
138 

dollar. With respect to navigating obstacles to acquisition reform success, I would 

say the most important point to keep in mind is the critical need to investigate and 

define the problem extremely well. Many reformers conduct a superficial analysis 

of the problem they are addressing and define it in terms of their preferred solution 

(i.e. ‘‘the problem is the absence of my desired solution’’). 

Another obstacle to success is crippling compromise. Many reformers would rather 

succeed than be right. They reason some reform is better than no reform and define 

their problem and solution within the bounds of the politically possible, even if 

doing so fatally compromises the efficacy of the proposed reform measures. It is better to postpone reform than impose requirements that do not actually solve the core 

problem. This sounds self-evident, but it is surprising how often we succumb to 

pressure to act even when there is little or no reason to believe doing so will solve 

the problem. 

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