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i 

58–103 2010

[H.A.S.C. No. 111–127] 

EXPERT PERSPECTIVES ON MANAGING 

THE DEFENSE ACQUISITION SYSTEM 

AND THE DEFENSE ACQUISITION 

WORKFORCE 

HEARING 

BEFORE THE

PANEL ON DEFENSE ACQUISITION REFORM 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

FEBRUARY 25, 2010 
(II) 

PANEL ON DEFENSE ACQUISITION REFORM 

ROBERT ANDREWS, New Jersey, Chairman 

JIM COOPER, Tennessee 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

K. MICHAEL CONAWAY, Texas 

DUNCAN HUNTER, California 

MIKE COFFMAN, Colorado 

ANDREW HUNTER, Professional Staff Member 

JOHN WASON, Professional Staff Member 

MEGAN HOWARD, Staff Assistant 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2010 

Page 

HEARING: 

Thursday, February 25, 2010, Expert Perspectives on Managing the Defense 

Acquisition System and the Defense Acquisition Workforce ............................ 1 

APPENDIX: 

Thursday, February 25, 2010 ................................................................................. 19 

THURSDAY, FEBRUARY 25, 2010 

EXPERT PERSPECTIVES ON MANAGING THE DEFENSE ACQUISITION 

SYSTEM AND THE DEFENSE ACQUISITION WORKFORCE 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Andrews, Hon. Robert, a Representative from New Jersey, Chairman, Panel 

on Defense Acquisition Reform ........................................................................... 1 

Conaway, Hon. K. Michael, a Representative from Texas, Ranking Member, 

Panel on Defense Acquisition Reform ................................................................ 2 

WITNESSES 

Augustine, Norman R., Chairman, Task Force on Defense Acquisition Law 

and Oversight, Business Executives for National Security .............................. 2 

Flynn, Joseph, National Vice President, American Federation of Government 

Employees, AFL–CIO .......................................................................................... 6 

Schooner, Steven L., Co–Director of the Government Procurement Law Program, George Washington University Law School ............................................ 4 

APPENDIX 

PREPARED STATEMENTS: 

Andrews, Hon. Robert ...................................................................................... 23 

Augustine, Norman R. ...................................................................................... 27 

Conaway, Hon. K. Michael .............................................................................. 26 

Flynn, Joseph .................................................................................................... 56 

Schooner, Steven L. .......................................................................................... 49 

DOCUMENTS SUBMITTED FOR THE RECORD: 

Improvement in Weapon Systems Acquisition by David Packard, July 

31, 1969 .......................................................................................................... 71 

Remarks on Acquisition Workforce Professionalism, Training, Motivation, 

and Incentives by Norman R. Augustine .................................................... 73 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

[There were no Questions submitted during the hearing.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 

(1) 

EXPERT PERSPECTIVES ON MANAGING THE DEFENSE 

ACQUISITION SYSTEM AND THE DEFENSE ACQUISITION WORKFORCE 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, DEFENSE ACQUISITION REFORM PANEL, Washington, DC, Thursday, February 25, 2010. 

The panel met, pursuant to call, at 7:59 a.m., in room 2261, Rayburn House Office Building, Hon. Robert Andrews (chairman of the 

panel) presiding. 

OPENING STATEMENT OF HON. ROBERT ANDREWS, A REPRESENTATIVE FROM NEW JERSEY, CHAIRMAN, PANEL ON 

DEFENSE ACQUISITION REFORM 

Mr. ANDREWS. Good morning, ladies and gentlemen. Thank you 

for your attendance. I would like to thank my colleagues on the 

panel for their attendance as well. 

In order to hear as much from our witnesses as we can this 

morning, Mr. Conaway and I are going to have very brief opening 

statements. 

He has a very busy day, and I am participating in the health 

care summit today at the Blair House, so I want to not walk into 

the middle of it late. I think that would be a little bit of a problem, 

so—succinctly, we have reached the decisionmaking point of our 

venture here, where we are beginning to put together our report 

to the American people and to the Congress and the full committee. 

And the purpose of today’s hearing is to hear experts and leaders 

from three perspectives on procurement reform and workforce development, a perspective from those who have led businesses that 

have achieved in that area. 

Norm Augustine is someone who not only has led great companies but is now the leader of an organization of leaders of great 

companies who have tried to contribute and have contributed to 

our national debate very positively and constructively. 

Professor Steven Schooner is a returnee to our panel. He gave us 

very valuable insight early in our process, and he is back to help 

us today. 

And Mr. Joe Flynn is national vice president of the American 

Federation of Government Employees. We know we will only succeed if the men and women who are committed to the institutions 

and agencies succeed. 

And so we want to be sure that our report is inclusive and takes 

into account those who know best the procurement process, the 

men and women who work with it. 

So we welcome the witnesses. 
2 

At this point I am going to yield to my friend, the senior Republican on the panel, Mr. Conaway. 

[The prepared statement of Mr. Andrews can be found in the Appendix on page 23.] 

STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE FROM TEXAS, RANKING MEMBER, PANEL ON DEFENSE 

ACQUISITION REFORM 

Mr. CONAWAY. Thanks, Mr. Chairman. 

Gentlemen, welcome. Glad to have you here this morning. And 

as the chairman stated, we are not past the point of good ideas. We 

are still looking for good ideas even though we do have a draft of 

the document. It looks pretty good. 

Nothing is perfect, and so any input that you give us this morning is going to be much appreciated. 

And with that, Mr. Chairman, I yield back. 

[The prepared statement of Mr. Conaway can be found in the Appendix on page 26.] 

Mr. ANDREWS. Thank you. 

And again, so we can hear more substance from the witnesses, 

I am going to forego the usual reading of the biographies. We know 

and respect all three of you and appreciate the contributions you 

have made. 

I think you know from the rules here that your written statements, without objection, are being made part of the record of the 

hearing. We would ask you to give us a five-minute-or-so synopsis 

of your written statement. And then we are going to proceed to 

interaction with the members of the panel. 

So, Mr. Augustine, welcome. It is good to have you with us. 

STATEMENT OF NORMAN R. AUGUSTINE, CHAIRMAN, TASK 

FORCE ON DEFENSE ACQUISITION LAW AND OVERSIGHT, 

BUSINESS EXECUTIVES FOR NATIONAL SECURITY 

Mr. AUGUSTINE. Mr. Cooper, members of the panel, we appreciate the opportunity to share with you some of BENS’, the Business Executives for National Security, some of our thoughts on defense acquisition. 

As you probably know, BENS is an organization made up of 

mostly former business executives, mostly from the commercial sector, some from the defense sector, who came together 28 years ago 

to offer advice to the government on areas where we may have any 

particular expertise. 

Last year it was my privilege to chair the BENS task force on 

acquisition, and in July we issued a report which you, I believe, 

have a copy, that we offered 25 specific recommendations that we 

believe would improve the acquisition process. 

Today I would, in my five minutes, like to make just a few comments that I personally believe summarize the challenges that the 

process of acquisition still faces, and I appreciate your submitting 

—or including my written testimony in the record. 

I would call to your attention as part of it an attachment that 

describes a canonical acquisition program gone wrong, and it is derived from my—goodness, 50 years, I guess, in this business. And 

it is a pretty good summary of why things go wrong. 
3 

Secondly, I would like to provide for the record, just so that your 

committee will have it available if you don’t, Dave Packard’s 1969 

statement which is closely reflective of what we have included in 

our BENS report, and I will provide that for the record. 

Mr. ANDREWS. Without objection, it will be considered in the 

record. 

[The information referred to can be found in the Appendix on 

page 71.] 

Mr. AUGUSTINE. Thank you very much. It was my privilege to 

work for Dave in those days, and I think he understood this process better than most anybody I have met since that time. 

Individuals participating in the defense acquisition process, of 

course, have a particularly great fiduciary responsibility. 

Not only do they take care of many billions of dollars of public 

money but, perhaps more importantly, the lives of our soldiers, 

sailors, airmen, marines, and coast guardsmen depend on how well 

they do their job. And in fact, the very survival of our country could 

depend upon that. 

It has been my experience, having worked 10 years in government and the rest in the private sector, that the individuals in the 

defense acquisition process are in large part, overwhelming part, 

extremely dedicated, able people. Nonetheless, as you know, dissatisfaction with the defense acquisition process is rampant in all 

quarters. 

The process is complex, as you know. It revolves around 15-year 

programs and 5-year plans and 3-year managements, 2-year Congresses, 18-month technologies, 1-year budgets and thousands of 

pages of regulations and laws. It is complex. 

But you know, despite the serious shortcomings, it is still noteworthy that the equipment and services provided by our acquisition 

process remain the envy of most of the world’s military forces. 

But we can do better. We can do much better. Perhaps the best 

summary I have seen over the years of the failing of the acquisition 

process comes from Gil Fitzhugh’s 1970 Blue Ribbon Task Force in 

which they said that everyone is responsible for everything, and no 

one is responsible for anything. I think that vividly summarizes the 

challenge that we face. 

Today we have a large number of individuals, about 125,000 people—I calculate that to be the equivalent of 7 Army divisions—running the acquisition process. In a few areas, we need additional 

people, particularly in contracting and systems engineering and 

program management. 

On the other hand, I would point out that adding, say, 10,000 

people each with 1 year’s experience is different from adding 500 

people with 20 years experience. 

And when I compare my experience in industry with government 

at any given level, the biggest difference is not the talent level or 

the commitment level. It is the experience that is relevant to the 

job that is being conducted. 

Unfortunately, the government’s hiring and employment practices make it very difficult to attract and keep the sort of talent 

that the government needs to conduct these difficult programs. 

I would also note that the United States no longer possesses the 

dominant position it once held with respect to technological leader-
4 

ship. That certainly has an impact on how we manage the defense 

acquisition process. 

U.S. firms have also moved much of their manufacturing capability abroad. And while I believe you could probably build an economy based on a service sector, I don’t think you could win wars 

with purely a service sector. 

I would also note that the talent base within the U.S. is withering, particularly in engineering and science and mathematics. 

Two-thirds of the Ph.D.s that are granted in engineering today 

from U.S. engineering schools go to foreign individuals, many of 

whom are now returning home. 

During this period of burgeoning technology that we have been 

living in, astoundingly, the number of U.S. citizens studying engineering has dropped 20 percent. The number getting Ph.D.s has actually dropped 35 percent. 

The report that BENS has prepared offers a series of recommendations which I won’t repeat at this point in order to keep 

my comments short. 

I would note that the great irony is that Secretary Gates and his 

colleagues, I am sure, would prepare a quite comparable report. 

There is no great secret, I think, in terms of the nature of the problem we face. 

I would just close with a quote from Dave Packard that I heard 

him make many times while I had the privilege of testifying alongside him over the years. He made the comment that we all know 

what needs to be done. The question is why aren’t we doing it. 

And so let me, on behalf of my colleagues at BENS, particularly 

the members of the committee I chaired, thank you for this opportunity to share our views. 

[The prepared statement of Mr. Augustine can be found in the 

Appendix on page 27.] 

Mr. ANDREWS. Thank you. And I think what binds us together 

on this panel is that we do want to do what needs to be done and 

not just talk about it. And your contribution is very welcome and 

appreciated. 

Professor Schooner, welcome back to the panel. We value your 

participation as well. 

STATEMENT OF STEVEN L. SCHOONER, CO–DIRECTOR OF THE 

GOVERNMENT PROCUREMENT LAW PROGRAM, GEORGE 

WASHINGTON UNIVERSITY LAW SCHOOL 

Mr. SCHOONER. Well, good morning. And I appreciate the opportunity to again discuss Department of Defense’s (DOD) pressing 

need to invest in the acquisition workforce. As this group knows, 

the empirical case that DOD’s workforce has been starved for a 

couple decades is now compelling. So that is the easy thing. 

This is obviously clear with regard to contracting officers and 

contract specialists but, as Norm pointed out, particularly acute 

with regard to program managers, systems integration, systems engineering, and those needs will need to be addressed. 

I think that the one thing that is very important for us to focus 

on today is the Defense Department is now on record saying they 

are going to add 20,000 new people in a couple different ways over 

the next 4 years. 
5 

And I think what we need to keep in mind is it is great that they 

have at least begun the discussion, but we are talking about numbers that are too low and we are talking about an evolution that 

is simply too slow. 

Just a number of reasons why 20,000 people by 2015 won’t get 

the job done is the 1998 benchmark is fundamentally flawed. 1998 

is at the end of a decade after which the congressionally mandated 

workforce cuts had been in place. 

There has been explosive procurement spending in the last decade. Procurement increased in the Defense Department five times 

the rate of inflation in the last decade. 

The dominance of service contracts today has totally changed the 

post-award contract management burden that DOD has to share. 

We have a looming retirement crisis. We tend to describe the acquisition workforce today as a bathtub effect. We have lots of senior people, lots of junior people, basically nothing in the middle, 

and we need to do something about that as well. 

In addition, what has basically happened over the last 15 years 

is because of the workforce problem, we have failed to effectively 

implement almost every significant acquisition reform that has 

been promulgated either by Congress or by the Administration. 

The other thing to keep in mind is as DOD grows, this is not just 

DOD’s problem. It is a government-wide problem. So as DOD finds 

people, trains them, and integrates them, they are going to start 

losing those people to the other agencies that have exactly the 

same problems and have historically taken highly-skilled DOD acquisition workers rather than train them themselves. 

Now, Norm mentioned that right now the workforce that is available, the marketplace, is saturated with people who would love to 

come work for the government. 

But the civil service and the Office of Personnel Management 

(OPM) hiring process is flawed. It is burdensome. And the overall 

level of awareness of these opportunities on the nation’s college and 

university campuses is inadequate. 

But at the end of the day, I think one of the most important 

things for us to keep in mind today is simply hiring people will not 

end this conversation. 

There is every reason to be pessimistic that even if DOD can hire 

all these people, they lack the vision, the institutions and the determinations to properly train, allocate, mentor, incentivize, develop and, over time, retain all of these new professionals. 

I mean, there is a number of encouraging signs. If you look at 

the model at the Veterans Administration Acquisition Academy— 

granted, a very small model—it is a wonderful holistic approach to 

addressing some of these concerns. 

And there is a wonderful bill that has been introduced by Senators Collins, McCaskill and Bennett. I think it is S. 2901, Acquisition Workforce Improvement Act—again, a nice holistic approach. 

But it is going to take major change for DOD to actually be able 

to manage all of these people. Leadership is a problem. I think we 

have every reason to be skeptical at this point of DOD’s newfound 

commitment to investing in the acquisition workforce. 

They have delegated this problem too long to the Defense Acquisition University. It is underfunded. It is overly conservative. It has 
6 

been slow, risk-averse, and it is not sufficiently potent to solve the 

problems. 

I think that the message that we are getting from the White 

House very recently from the new Office of Federal Procurement 

Policy (OFPP) Administrator, Dan Gordon, is very encouraging. 

Time will tell whether he has actually been empowered to do anything about these things. 

But I guess I want to close with one really significant point here. 

And that is we have got to do something about the pervasive anticontractor rhetoric that we hear, because it colors the public’s perception of contractors and the acquisition profession. 

There is more truth than there should be behind the black 

humor in Jack Gansler’s popular new moniker for the current environment, which he calls the ‘‘global war on contractors.’’ 

Look. Let’s be clear. A successful procurement regime does depend on high standards of integrity and compliance. But the currently pervasive corruption-control focus stifles creativity and encourages mechanical rule-adherence, timidity, and risk-averse behavior by our acquisition professionals. 

If, in fact, the government aspires to recruit, inspire and retain 

tens of thousands of new professionals, the government surely has 

an interest in communicating the importance to every government 

mission of effectively managing the government’s business partners, its vendor and supplier base, or simply its contracts. 

So ultimately, any prospective investment in the DOD workforce, 

whether it is the numbers, the skills or the morale of our purchasing officials that will reach huge—will reap huge dividends 

over time. It is going to be good for the taxpayer. It is going to be 

good for the warfighter. It has got to be done. 

Thank you again for the opportunity to share these thoughts, 

and I would be glad to answer questions later. 

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

Mr. ANDREWS. Professor, we look forward to that. Thank you 

very, very much. 

Mr. Joe Flynn is the American Federation of Government Employees (AFGE) District 4 National Vice President. He is new to 

our panel but certainly not new to these issues. He has over 40 

years experience as an AFGE activist and officer, holding numerous positions. 

And it is very much our pleasure to have you with us this morning, Mr. Flynn. Welcome. 

STATEMENT OF JOSEPH FLYNN, NATIONAL VICE PRESIDENT, 

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, 

AFL–CIO 

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

Once again, thank you very much, and I really appreciate the opportunity to appear before you today, especially since the National 

Security Personnel System (NSPS) has been repealed. Thank you 

all for that very nice gift to DOD employees. 

AFGE vigorously opposed NSPS from its conception until its repeal. The original NSPS included provisions to eliminate collective 

bargaining rights for DOD employees, eliminate employee rights to 
7 

independent adjudication of severe disciplinary actions including 

termination. These anti-union, anti-worker provisions were repealed in the 2008 National Defense Authorization Act (NDAA). 

And last year, following evaluations, the so-called pay for performance scheme for NSPS employees was repealed. 

NSPS was tainted. It was a flawed system. And it clearly created 

a poisonous atmosphere, destroying collective bargaining, federal 

union and employee rights and protections. 

Things that we do in the future—I would urge the members of 

the panel to make sure that these colossal mistakes are not repeated. 

Despite much rhetoric to the contrary, there are alternatives, 

and I would like to go back to the General Schedule (GS). The General Schedule pay system is simple. It is transparent. It is flexible. 

And it is particularly adept at rewarding high performance 

among employees when proper funding is available. And that is the 

key, Mr. Chairman. Proper funding. 

Within grade step increases, quality step increases, individual 

performance bonuses—are all designed to promote individual excellence. 

Two additional constructs of the GS system are the best at motivating employees. First, we have what is known as career ladders, 

which allow an employee to progress from one grade to the next as 

part of the position for which they were hired and for which they 

competed. 

For example, an employee may begin working for an agency in 

a position which has a career ladder of GS–5, moves to a GS–7, to 

a GS–9, culminating in the journeyman grade of a GS–11. 

The career ladder is similar to pay banding, except that under 

the career ladder the criteria for advancement are known and understood by the employee and his supervisor. 

If the GS–5 employee applies himself and achieves the performance standards required, then he progresses to the GS–7. If he 

then achieves the performance standards for the GS–7, he progresses to the GS–9, up to the journeyman level of the GS–11. 

The career ladder gives tremendous incentive to the employee to 

work hard and dedicate himself to the agency’s mission. It assures 

that he will not find himself at a dead end. 

Along with career ladders, merit promotion, which occurs when 

an employee is eligible for and promoted to a different job at a 

higher grade rate—these are posted for all to see, and people are 

hired for these positions following a competition based on merit. 

This is not only transparent and honest, but a promotion is very 

public recognition of an individual’s performance. 

The market elements of the GS system are based on pay studies 

and job matches done by the Labor Department’s Bureau of Labor 

Statistics. The data are discussed in joint committee meetings with 

Office of Management and Budget (OMB), OPM, Department of 

Labor (DOL), AFGE, and other unions. All employees receive the 

same national raise and a locality raise based on the regional labor 

market. 

AFGE has successfully negotiated numerous contracts with performance bonuses, gainsharing. During the mid 1990s, AFGE and 

DOD engaged in a successful 5-year demonstration project called 
8 

PACER SHARE, which made changes in organizational structure, 

created a new classification system and implemented gain sharing 

and a different performance appraisal system. 

I would like to emphasize, Mr. Chairman, that all these changes 

were conducted through collective bargaining agreements. 

AFGE is working with the Office of Personnel Management as it 

explores options to enhance and improve the GS system. 

We are discussing changes to simplify the appraisal process so 

that there are generally three categories of employees—those who 

are in good standing, those who are superstars, and those who are 

not performing at an acceptable level. AFGE has negotiated contracts with just these sorts of systems and the results have been 

extremely favorable. 

There is agreement between the employees and managers that 

the system is fair. It involves less tedious and often less pointless 

paperwork which, in turn, allows employees and their supervisors 

to focus on the work of the agency. 

Mr. Chairman, I realize how pervasive the perception is that the 

federal workforce is full of incompetents who are showing up late, 

if they show up at all, doing virtually nothing at all—all day long 

and yet collecting a paycheck. 

Mr. Chairman, I can tell you that my experience—it is just not 

that way. Nobody believes more strongly than AFGE that where we 

have these types of employees that they need to be dealt with in 

a serious manner. 

It is important that hard-working rank-and-file employees are 

not forced to take up the slack for those who are intentionally unproductive. And AFGE certainly—certainly—does not want to have 

those types of employees in the workforce. 

AFGE routinely negotiates contracts which simplify and expedite 

appeals for adverse personnel actions. The grievance arbitration 

process included in our contracts is transparent, impartial, and 

swift. 

In conclusion, Mr. Chairman, in addition to our ongoing dialogue 

with OPM, AFGE is eager to work with DOD management to improve the performance management system as well as the hiring 

systems. And in that regard, we are working with OPM to try to 

streamline the hiring process. 

Mr. Chairman, that concludes my presentation, and I look forward to any questions you may have. 

[The prepared statement of Mr. Flynn can be found in the Appendix on page 56.] 

Mr. ANDREWS. Mr. Flynn, thank you very much. 

We will proceed with the questioning. 

Mr. Augustine, I was very much in agreement with your statement that you can’t fight a war or defend a country with just service industries. I think that is very important, which implies the 

issue of how we create stability in our industrial base. 

One of the ways that the panel has looked at is the encouragement of more multiyear contracting and procurement so that our 

manufacturers have a better degree of predictability. 

As you well know, the risk of that approach is that you can wind 

up tamping down competition by giving, you know, one vendor too 

many years where it doesn’t have to compete. 
9 

What suggestions do you have for us as to how we can strike the 

right balance between multiyear contracting that promotes a stable 

or growing industrial base but promotion of effective competition to 

protect quality and the taxpayer? 

Mr. AUGUSTINE. Well, you point to a true dilemma, and there is 

substantial savings to be had through multiyear contracting—at 

least the programs I have been involved with, that has been the 

case. 

At the same time, I think you have to distinguish between programs with large volume, if you will—very large programs where 

you might—and we also have to distinguish whether we are talking 

about service programs or production programs, too. 

Mr. ANDREWS. Yes. 

Mr. AUGUSTINE. But where there is a sufficient volume of effort, 

that you perhaps can keep two organizations involved. Unfortunately, that is very often not the case, and so when you do go to 

these long-term contracts, you pay a price. 

But as I say, my experience has been that you are well ahead 

to go to multiyear procurements in terms of cost, in terms of learning on the part of the supplier. And if it is something, you know, 

where you can afford to have another firm in the background, that 

is a useful thing to do. Unfortunately, I don’t think you can always 

do that. 

Mr. ANDREWS. Professor Schooner, I want to ask you a different 

question. I think you are justifiably alarmed about unfair criticism 

of contractors, painting with a broad brush, where the small minority who are doing something wrong taint the image of the vast majority who are doing something right. 

Can you give us an example of a rule or practice that you think 

leads to the kind of timidity and lack of creativity that you cite in 

your testimony? 

Mr. SCHOONER. I think maybe more than anything else, if we 

were just to take an example and look at the messages that we are 

seeing from the Defense Contract Audit Agency (DCAA) right 

now—historically, DCAA, when they found problems, their goal or 

their aspiration was to work with contractors to resolve the problems. 

The message that they are getting today, the risk-averse approach, is rather than solve the problems, it is to refer them to 

criminal investigative units. That is not going to get the government more value for money. It doesn’t solve problems. It just leads 

to openly hostile relationships. And it is fundamentally problematic. 

Mr. ANDREWS. Do you think that there have been too many instances where there have been criminal referrals? 

Mr. SCHOONER. I think that it is—it is always hard to say that 

we shouldn’t be prosecuting criminals. I don’t think there is any 

question about that. I think—— 

Mr. ANDREWS. Very hard to say that. 

Mr. SCHOONER. Right. But let’s take the more proactive approach. There always seems to be enough money for Inspectors 

General and auditors, but there never seems to be enough money 

to proactively avoid the problems in the first place. 
10 

This is what we learned in kindergarten—an ounce of prevention 

is worth a pound of cure. If we had invested the kind of resources 

up front in Iraq and Afghanistan in contracts professionals that we 

invested after the fact in auditors and Inspectors General—look at 

the size of the Special Inspector General for Iraq Reconstruction 

(SIGIR) and the Special Inspector General for Afghanistan Reconstruction (SIGAR). These are huge organizations. 

Mr. ANDREWS. Right. 

Mr. SCHOONER. Had we had contracting offices of that size at the 

beginning, we wouldn’t have the criminals and the problems that 

we are dealing with now. So this is all about dealing with these 

problems proactively. 

Mr. ANDREWS. You are right, and the panel’s mission, in large 

part, is that—I will say when the next deployment occurs not if, 

because there always is another one—that we have in place a system that could learn the lessons of Iraq and Afghanistan and prevent the problems that we have had. 

We, frankly, don’t want any more deployments, but we live in the 

world of reality and expect that we will have them. 

Mr. SCHOONER. Could I also just add one very brief thing? 

Mr. ANDREWS. Just briefly, if you would, because I want to be 

sure the other members get time. 

Mr. SCHOONER. I think that the point that Norm made is a very 

good one about dealing with long-term contracts. But again, one of 

the other things—if we can build up the acquisition workforce, we 

can put better incentives in the long-term contracts. 

We can use incentive and award fees so that the contractor has 

significant incentive to perform well and disincentives to perform 

badly. Once again—— 

Mr. ANDREWS. I do think that is a creative way to solve the dilemma that I posed in my question, I agree with you, which is not 

so much a matter, I think, of the number of professionals we have, 

but the quality of their training and the sufficiency of their motivation and incentive, which gets me to Mr. Flynn’s point. 

I was very pleased—first of all, I appreciate your active involvement in our effort, and I was very pleased to read on page seven 

your position on finding fair evaluative mechanisms that could put 

employees into categories of good standing, superstars, and those 

not performing at acceptable level. 

How many of these contracts, if you know, have you been involved in negotiating across the country thus far? 

Mr. FLYNN. I would say that that type of system—you would find 

in the previous Veterans Affairs (VA) contracts, the Social Security 

contract, the Medicare contract. I am not—I don’t believe very 

many DOD units have—— 

Mr. ANDREWS. How old are the contracts in Social Security, 

Medicare, VA, do you know? How long have they been in effect? 

Mr. FLYNN. A good number of years, Mr. Chairman. 

Mr. ANDREWS. We would be interested—I would just ask the 

staff to—and invite the panel as well—to collect some data on how 

they have worked out in those agencies, to see what the assets and 

liabilities of going about that is, because I do think that it is refreshing to hear your testimony that you are actively involved in 
11 

looking for a solution to this problem of proper motivation and fair 

treatment of people that are part of our team. 

[The information referred to can be found in the Appendix on 

page 73.] 

Mr. ANDREWS. Well, thank you. 

And I would turn now to Mr. Conaway for his questions. 

Mr. CONAWAY. I think I am—between Mr. Flynn and Professor 

Schooner—well, first off, what happens to the folks who are underperforming? 

Mr. FLYNN. Well, the agency has three recourses. One is to reassign them, demote them, or terminate them, and in my experience, 

they have moved for the termination. The other two options usually 

are not considered—— 

Mr. CONAWAY. So they don’t hand them off to somebody else? 

Okay. If you could include that in the information. 

There is a story today that a high school in Rhode Island fired 

every teacher today because the school had just the most dramatically dreadful results of kids coming out—and then they go back 

and re-hire the few goods ones—whatever. 

But, Mr. Flynn, if—why hasn’t that professional workforce that 

you guys represent fixed these problems? 

Mr. FLYNN. You mean the underachiever, Mr.—— 

Mr. CONAWAY. No, no. 

Mr. FLYNN [continuing]. Conaway? 

Mr. CONAWAY. I mean the whole—all the—we hear about the acquisition deal if everything is great under the GS scheme and all 

those things work perfectly, then why has that cadre of professionals not fixed the problems that we are talking about from 1969 

through today? 

Mr. FLYNN. From my perspective, Mr. Chairman, there are a couple of things. Number one is question of staffing. Clearly, they have 

not had enough people to do the job, and the workload has continued to go up. 

The second piece is that, again, in my opinion, whether you are 

ordering guns or butter, the process is pretty much the same. But 

yet if you go to the different agencies, there is quite a bit of disparity in terms of grade levels. 

And I don’t know if that is because—it is not necessarily because 

of the classification system. It is just that decisions that individual 

agencies are making in terms of what they want to pay salary-wise 

for those services. 

Mr. CONAWAY. Yes. 

Professor, your thoughts? I mean, you are—part of it—you both, 

Mr. Augustine and Mr. Schooner, talked about the impediments to 

hiring seasoned veterans into the system and how difficult that 

is—any thoughts on how we blend the two, because we obviously 

want to protect people from unfair treatment. 

But by the same token, we want to fire the folks who aren’t 

doing the job they are supposed to be doing. 

Mr. SCHOONER. I think as a premise, I just want to clarify one 

thing. It is actually remarkable what the existing acquisition workforce has been able to do over the course of the last two decades. 

If you take any publicly available metric for how you would staff 

a procurement organization, the government is so woefully under-
12 

staffed it is breathtaking. But we continue to have the best acquisition regime on the planet. 

We have wonderful weapons. We have terrific support for our 

troops. I mean, again, even with all the criticism, if I just use the 

example of the Logistics Civil Augmentation Program (LOGCAP) 

contract, never before in the history of the planet has a military 

been able to project such potency, lethality, and sustainability anywhere on the globe with contractor support. 

It is incomprehensible how many troops we can move and how 

well supported they are when they fight, and that is because we 

have an effective contract in place. 

It has problems at the margin, there is no question, but the 

amazing thing is that the government is able to do all of the things 

it needs to do because it relies on contract support. And a very 

thinly capitalized acquisition workforce every day does amazing 

things for the government. 

Now, I think the much larger issue is that we literally spent a 

couple of decades dealing with the classic tooth to tail mix. And 

there were strong messages from Congress and from the Administration that we needed a smaller military and therefore we should 

focus on trigger pullers, not shoppers. That was the Duncan Hunter message for many, many years. 

Well, now we are paying the price for that. We don’t have enough 

people to manage all the contractors that the government must 

have every day. But again, I think the important thing to take 

away from this—the people that we have—they may not be perfect. 

They may never have been trained appropriately. And we may 

not have been able to implement all of the policies. But they are 

doing a remarkable job given the resources they have been given. 

Mr. CONAWAY. Your observations on one other thing. We have 

got the program managers and folks who actually are evaluated 

based on how well the things that they do supervise do. 

Is there a scheme that says, ‘‘All right, let’s put in place an evaluation system that evaluates them separate and apart from the results of what they are trying to get done,’’ so that you are looking 

at evaluation of the system itself—you have got a system that is 

supposed to work, and it has got to evaluate the—whether or not 

the contractor or the delivery system is working. 

But do we properly evaluate the folks for how the—even though 

their program may fail, that may not be a reflection on them. It 

may be a reflection on something else. So are they evaluated properly? 

Mr. SCHOONER. We should have Norm weigh in on this, too. But 

on program managers, I think one of the most important things— 

I think we all agree that we can have better incentive schemes for 

program managers. 

But if you were going to isolate one problem you have to solve 

at the Defense Department with regard to the program manager 

workforce, it is that you got to leave them in place and let them 

manage the programs. 

The last time that I was here with a senior DOD official, they 

were bragging about the fact that program manager retention was 

up to 23 months on a program. That is incomprehensible. 
13 

In the private sector people spend professional lifetimes guiding 

programs to success. Until we can do that, we will not be able to 

achieve what we need done in terms of program management. 

And I am sure Norm has stuff to add on that, too. 

Mr. AUGUSTINE. If I might, I would just add that in the private 

sector, we generally—if I might use an analogy to bull riding and 

the rodeo, you get your scores based on two things. One is how well 

you do, and one is how hard the bull bucked. 

And if you have an easy job and do a great piece of work, you 

don’t get that much credit. And so I think you can distinguish. 

I would also, if I might, just add a footnote that with the exception of a few areas, I don’t think the answer is to add more people. 

The answer is to have more experienced people in the job they are 

in. And the experience needs to be relevant to the job they are 

doing. 

If I might quote Dave Packard again, who I think so highly of, 

it used to trouble him greatly that we would bring the commander 

of a destroyer flotilla who had done a terrific job at sea, and put 

them in charge of the F–111 program. And they would ruin their 

career and usually ruin the program. 

It wasn’t fair to them. It wasn’t fair to the program. It wasn’t fair 

to the taxpayer. And it sure wasn’t fair to the future pilots. And 

I think that is part of our problem today, that we put people in jobs 

that they are just not equipped to handle. 

Mr. CONAWAY. Thank you, Mr. Chairman. 

Mr. ANDREWS. Thank you very much. 

Mr. Cooper is recognized. 

Mr. COOPER. Thank you, Mr. Chairman. 

How do we keep program managers in place for longer than 23 

months? What steps are required to do that? 

Mr. SCHOONER. This is all about leadership and incentives. Now, 

I mean, to some extent, you could argue—and again, I think Norm 

just suggested it before. 

There is a perception particularly in the military organizations 

that in order to have a program moving forward you need someone 

with lots of color on their chest to come in so that they can project 

leadership and they can make the good sale up here on the Hill so 

that the funding keeps going on. 

But at the end of the day, what the private sector does much better than the government on this is they develop the right talent 

within their fields and respect people within those fields. So the 

message isn’t that I need to take a warfighter and turn them into 

a program manager so that it looks like my program has leadership. 

We need to value the people who come up through the organization, and then we need to incentivize them to stay by basically developing them so that they can rise up and be important contributors to the system. It is a totally different cultural approach. 

And I can assure you, in the private sector, the program managers who are the civilian or the private sector equivalent with 

whom the Defense Department program managers deal every day 

are incentivized completely differently and are far more 

incentivized to have those programs succeed than their government 

counterparts. 
14 

We can solve these problems. 

Mr. COOPER. So is the problem, in order to appeal to Congress, 

turning a warfighter into a program manager? Or is the real problem that that temporary program manager really wants to go back 

to being a warfighter very quickly, so he or she doesn’t stay in that 

position very long? 

Mr. SCHOONER. I think it is actually a combination of both. But 

I can just tell you a quick anecdote. As a former Department of 

Justice litigator, I never represented a program manager in a deposition who didn’t tell me in advance that he or she was never given 

the opportunity to attend the Defense Systems Management College program management course before they took over the program, because they just didn’t have time. 

So if the marquee course for preparing program managers is 

something that does not merit the time of the successful kind of 

people we want to put in charge of the programs, we have got a 

pretty big disconnect going on there. 

Mr. COOPER. What would be an appropriate minimum period of 

time for a program manager to—— 

Mr. AUGUSTINE. May I try to address that one? 

Mr. COOPER. Sure. 

Mr. AUGUSTINE. The practice in the industrial world, which I 

think is reasonably good in this area, is not to keep a program 

manager in place based on time but, rather, on the phase of the 

program. 

And a person who may be a very good program manager in a development program probably isn’t a very good program manager in 

the production program, or in the original tooling program, or in 

the prototype phase. 

We used to in our company refer to—we had bear catchers, bear 

skinners, and people who liked to sit around the campfire and talk 

about bears, and—— 

[Laughter.] 

And we—so I think the important thing is to leave people in 

place from one phase of a program to the next phase so that you 

have somebody who is equipped. 

Mr. COOPER. In service records, is their service as a program 

manager linked to the overall success, or lack thereof, of the program, or is that just a temporary assignment? You check your ticket, punch your ticket and then move on? 

Mr. AUGUSTINE. I think that is another major difference. In the 

private sector, to succeed as a program manager, which is a really 

tough job, is probably one of the best ways to move up in an organization. 

In the government, the first thing you want to do is get out of 

program management and get out into a foxhole. 

Mr. COOPER. Because that is the best way to be promoted. 

Mr. AUGUSTINE. Absolutely. And of course, that brings up the 

whole question, should you have civilian program managers instead of military program managers, which is a major debate in its 

own right. 

Mr. COOPER. Which side do you come down on on that debate? 

Mr. AUGUSTINE. By and large, on the military program manager. 

Mr. COOPER. Because they are able to follow through? 
15 

I have been worried that while after Goldwater-Nichols we had 

joint warfighting, we still don’t have joint procurement, and sometimes parochial interest can prevail. 

Mr. AUGUSTINE. That is true. 

Mr. COOPER. What should we do about that? 

Mr. AUGUSTINE. Well, you are talking about a cultural issue, and 

usually the way to deal with cultural issues like that—and this is 

probably very hard to do in the military; maybe not in the civilian 

part of procurement—but is to move people around so they have to 

live in the different elements. 

They don’t view themselves as—but I guess the joint assignments are that way, to a degree, that you don’t view yourself as 

coming from one element of an organization but, rather, have experience broadly. 

Mr. COOPER. I see my time has expired, Mr. Chairman. Thank 

you. 

Mr. ANDREWS. Well, we are glad you got to the ‘‘bare’’ essentials 

there with—— 

[Laughter.] 

Mr. AUGUSTINE. I apologize for that, Mr. Chairman. 

Mr. ANDREWS. No, I apologize for that. [Laughter.] 

Mr. Coffman is recognized. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

Mr. Augustine, one point that Mr. Cooper raised I want to go 

into, and that is we have often discussed the challenges of military 

program managers and the fact that it is an assignment for them. 

And if they are a naval officer, they want to go back into the 

fleet. If they are a ground commander in the Army or the Marine 

Corps, you know, they want to return back to a command, because 

at the end of the day that is going to get them promoted. 

And I know we have done some work inside the Armed Services 

Committee, I know in the Seapower and Expeditionary Forces Subcommittee, to—I think the—there was a shipbuilding program 

where we insisted that there be one military program manager for 

the duration of the program. I don’t know how that is going to affect that individual’s career. 

But could you go into more detail as to why you think it is important to have military versus civilian program managers? Because 

certainly, the military could always—is always going to be there to 

have input into the program as it progresses. 

Mr. AUGUSTINE. Well, you touch on a very difficult issue, and as 

I said, I come out rather narrowly on the side of the military program manager. 

And I do that in part because we are building equipment for the 

military. The military understands the system. Also, they will have 

much more, I think, respect and much more impact in dealing with 

a military organization. 

Also, frankly, it is very easy to get rid of a military program 

manager who is not performing. It is very difficult to get rid of a 

civilian program manager in the government if they are not performing. And I have been—had the misfortune of having to try to 

do both. There is a big difference. 
16 

I think the key is not so much whether you wear a uniform or 

not, but whether you have been given the opportunity to really be 

experienced. 

And we do have people—we have a Chaplain’s Corps, we have 

the Judge Advocate Generals (JAG), where those people understand they will probably never be Chief of Staff or Chief of Naval 

Operations (CNO). But they know if they do their job well, they can 

move to the top of their organization, which is viewed as a very important thing. 

Somehow we haven’t conveyed that in the acquisition area, partly, as has been pointed out, acquisition is viewed as when anything 

goes wrong, it must be for criminal intent. 

Mr. COFFMAN. You mentioned a concern about, and I share your 

concern about, the declining industrial base in the United States. 

And certainly, we can go into a lot of reasons for that—tax, regulatory policies and things like that. 

But let’s focus on one specific issue, in that some of the contractors have mentioned to me the limitations in terms of their ability 

to export their technologies that they develop, that other countries 

don’t have those restrictions. 

And have we gone simply too far on those restrictions, and we 

need to loosen them up so that our industrial base has a broader 

market than just the United States Defense Department? 

Mr. AUGUSTINE. I think that is absolutely the case. Most of our 

export regulations were written many, many years ago in a world 

where we controlled the technology—— 

Mr. COFFMAN. Okay. 

Mr. AUGUSTINE [continuing]. Where you really could build a border around the country, neither of which are true today. 

Mr. COFFMAN. Okay. 

Mr. AUGUSTINE. I would commend you—I chaired a Commerce 

Department study on this about a year ago, and I would commend 

that to you. 

Mr. COFFMAN. Okay. 

Mr. AUGUSTINE. Also one by General Scowcroft. 

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

And, Mr. Chairman, I just want to say that that is something 

that—you know, I know it is sort of off—it may be a little off the 

reservation of what the committee—but I think it is something that 

we ought to look at. 

Mr. ANDREWS. If the gentleman would yield, I don’t think it is 

off the reservation. 

Mr. COFFMAN. Okay. 

Mr. ANDREWS. I think it is an excellent point, that there are both 

national security and economic aspects to the export control debate. 

And of course, the economic concerns are implicitly a national security concern as well. 

The obvious national security concern is we don’t want to share 

sensitive intelligence with someone who may not be friendly to us. 

But the other national security concern is that if intelligent export 

policy helps to sustain our industrial base, it improves our national 

security. 

And I think that is something we really should address in our 

report. 
17 

I would like to thank the witnesses and actually impose upon 

them another duty, if I could. Mr. Conaway and I appreciate the 

efforts of the staff, which has done an extraordinarily good job in 

creating a draft report that summarizes our work and makes recommendations. 

That draft report was distributed to the members of the panel 

yesterday. The members of the panel will be meeting next week to 

review it and hone it. And Mr. Coffman and I had a discussion earlier today. I would note to the staff members of the other panel 

present, more suggestions are absolutely welcome. That is why it 

is called a draft. 

But we would like to give you that draft report, the three of you, 

so that you would then have a homework assignment of taking a 

look at it and giving us some input. The panel is going to meet in 

a business session next week to review the draft. 

We are then going to have public circulation of the draft and another hearing of the panel where we are going to have Defense Department and other witnesses comment on it. But we would welcome your specific comments as well as we go forward. 

I think the perspectives that you have given us here today are 

very valuable. What we have learned in our year working on this 

is that the superficial questions are rather easily answered. But 

when you get below the superficial level, these are very complex 

issues. But I do think they are solvable issues. 

One recurring theme has been leadership and the quality of the 

workforce. I think we have heard today from all three witnesses 

that if you make the proper investment in experience and skill, if 

you motivate and reward experienced and skilled people, if you empower them to do the things that need to be done, we can make 

improvements that would then turn the whole system around. 

The other lesson that I think we have learned is that when you are purchasing $300 billion a year worth of goods and services 

apart from major weapons systems, almost $300 billion a year, everything ranging from cases of water to elaborate pieces of software, that one size most assuredly does not fit all. 

And we certainly will not be rendering a report that suggests 

that one procurement system or one set of rules is the way to do 

this. 

I will tip our hand a little bit and tell you that my own bias is 

that more rules and more proscriptive mandates from the Congress 

is—we are just going to exacerbate the problem, not solve it. 

And so what we are looking for—to do here, a way to do—is to 

give intelligent principles and concepts, then put in place intelligent, experienced people to execute those concepts, and then reward them when they do. 

And I think if I could summarize what we are going to propose, 

that is about it. So if we can do that with your good graces, we 

would like that. So I would invite you to take a look at the draft 

report. It will be publicly available soon. And we would welcome 

your input. 

Mr. Conaway, did you have any closing comments? 

Ladies and gentlemen, thank you. 

With that, the hearing is adjourned. 

[Whereupon, at 8:48 a.m., the panel was adjourned.] 

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