“IT SHOULD BE POSSIBLE TO EXPLAIN THE LAWS OF PHYSICS TO A BARMAID.”
“IT SHOULD BE POSSIBLE TO EXPLAIN THE LAWS OF PHYSICS TO A BARMAID.”
Law No. 1: Acquisition Policy will “re-reform” every couple of years and eventually come back to Ground Zero after 20 years.
Figure 1 provides evidence of major historical events shaping acquisition policy since 1981. It includes so many events and reforms that it is hard to fit them into one, readable chart. These were just the major events and do not include every policy change. While the chart stops at the year 2017, consider the changes since then. Just in the last three years, we have a new acquisition framework, broader use of new authorities such as middle tier of acquisition and other transaction agreements, and a complete paradigm shift in how we acquire software capabilities. If history teaches us anything, we have to be resilient and adaptive to apply new policy and methods. The pace of change continues to accelerate, which means that acquisition professionals must be continuous learners and be willing to embrace change.
Law No. 2: If you work in acquisition long enough, you will revisit the same issues at least three times with different people.
This law needs no explanation. If you have more than 25 years’ of acquisition experience, you understand. If not, wait a few years. Issues such as the best type of contract for development, reducing cycle time, streamlining the bureaucracy, use of commercial processes, and reforms to reduce wasteful spending keep coming back. Refer to Law No. 1 for evidence.
Law No 3: Plan for and expect contract cost growth (but partake in moderation).
Cost growth is one of the most common metrics to assess the performance of acquisition programs. We see cost growth as a basis for allegations of mismanagement, calls for reform, root cause studies, and repeated congressional interaction to explain the cause and corrective actions. Figure 2 illustrates the basic cost growth conundrum.
As the Figure 2 shows, there is only a very small opportunity to achieve a cost underrun (or a bullseye of hitting the target cost) in any given incentive or cost type contract. This is simple math and probability theory. Since the typical development effort involves new designs of complex weapons systems with advanced technologies that must operate in extreme environments, should it be a surprise that contract costs will likely exceed the initial target? Does that reflect a poor outcome? Probably not.
The winning contractor may have purposely underbid in hopes of winning the development contract based on price competition. The company return on investment comes later with production and sustainment. Even in a sole-source environment, where contractors can price the work more conservatively, it will be a challenge to hit the target or achieve an underrun. Additionally, there can be excessive optimism at the start of development in attempting to sell the program as affordable and achievable.
The lesson from this law suggests it is best to plan and budget for some reasonable cost growth over the initial contract target and then manage the expectations of stakeholders. The costs above target are often a worthwhile investment so long as they stay within affordability goals. Do not expect miracles when it comes to cost performance on any given contract. Plan for the likely cost outcome, which will often exceed the target!
Law No. 4: Saving money costs too much.
To be clear, we must continually look for opportunities to find inefficiencies and save costs. But the reality suggests there is no free lunch. When we take costs out of a program, something must go. For example, the cost reductions could include reduced content, less performance, smaller staffs, or lower quality.
I worked with a program team a few years back that was doing a great job of delivering new software capabilities to its users. This team was looking for ways to save money internally to its program office operations and was struggling to find meaningful savings. Cutting internal operations costs would impact the ability to deliver the new software releases, many of which were providing significant productivity enhancements that saved the Warfighter significant time and resources. Any internal savings would be minimal compared to the customer’s savings. As the British proverb states, don’t be “penny wise, pound foolish.”
Our financial processes can also have unintended consequences. One danger involves offering up part of your budget so others can use it before the appropriation availability expires. This might occur if you determine that you can execute the program this year with less than the full budget. As a result, oversight officials are likely to propose that you live with reduced budgets going forward. Instead of being offered a reward or incentive for finding efficiencies, the program manager (PM) is punished for doing the right thing!
On the other hand, the appropriation availability also incentivizes PMs to award contracts early in the fiscal year to meet execution goals. If this execution lags, the funds will often be pulled to enable funding for other programs that can execute before Congress cuts the Department of Defense (DoD) budget. This incentive to award contracts early can come at the expense of negotiating greater savings and greater value that might be possible under more flexible rules.
Law No. 5: Any acquisition group greater than six people is not a team but an audience.
The Integrated Product Team (IPT) is the foundation for organizing acquisition teams. Since it is difficult and time consuming to manage a large group, a small, capable team should be the norm. Some studies show that the optimal team size ranges from five to seven people. Appropriate staff can augment and support the core team as needed, but the core team must remain small.
Consider the advice of Kelly Johnson, renowned Lockheed Martin engineer who ran the original Skunkworks Organization that designed aircraft such as the SR-71 and U-2. This law has stood the test of time, for Johnson began his engineering career in the 1930s. As one of his 14 Rules and Practices, he stated: “The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people (10% to 25% compared to the so-called normal systems).” Kelly Johnson, (Rule 2 of 14). See Kelly’s 14 Rules.
Law No. 6: The 80 percent solution is really a gold-plated system in disguise.
The 80 percent solution embodies the concept of cost-performance trade-offs and finding the “knee in the cost curve.” Figure 3 illustrates how additional capability performance comes at a price. Common wisdom in our program-centric acquisition model suggests PMs should seek the knee in the cost curve. The “knee” represents that point at which development costs start to climb rapidly for little additional performance (depicted as the 80 percent solution). Gold plated is slang for adding additional, expensive, and unnecessary capability adds features.
Given the DoD system of systems dependencies, mission engineering, the internet of things, interoperability, multi-domain operations, and many other factors related to how acquisition of a single program fits into the big architecture, we should consider the broader context.
For example, what if the minimum performance is all that is really needed? Why should we spend anything more when we have so many other budget demands? How much longer is the deployment schedule with the additional performance? Can we add the additional performance later when new technology will make it easier and more cost-effective? Is the additional performance unnecessary as the system environment and threat change? These are just some of the questions related to the 80 percent solution concept and why something less like a 50 percent solution may be a better alternative at an enterprise level.
In addition to a deep knowledge of the system technical baseline, PMs need to understand the mission domain of the capability requirements and the operational context associated with it. This will enable greater collaboration to help the Warfighter and other key stakeholders make informed decisions.
Do not accept the conventional trade-space “illusion” at face value without a full understanding of the system and operational mission implications. With tight resources, a 50 percent solution at lower cost and faster deployment may be the best approach.
Law No. 7: The best acquisition strategy starting point is a blank page.
A simple, easy-to-follow checklist can be a great tool. Whether a recipe, maintenance procedure, or assembling a new piece of furniture, checklists help us ensure that we do everything and in the right order. Unfortunately for the checklist aficionados, the acquisition profession has so many “gray” areas where there is no single right answer. Acquisition professionals must use good judgment and analytical skills to develop sound plans and make informed decisions.
The traditional tailoring model starts with a list of everything possible and then relies on professional judgement to tailor out requirements. It can be much easier to leave everything in, versus justifying why we took something out. Starting with a blank page does not mean that we ignore all the relevant information and regulations that may apply to your program. On the contrary, it suggests being more familiar with that information so we can apply requirements in a more effective manner. This sounds like tailoring-in as part of the Adaptive Acquisition Framework.
Critical thinking is the enabler to help the team sort through all the applicable requirements and objectively form a judgment based on facts, risks, opportunities, and assumptions. This thinking may require creativity and exploration of new possibilities to assess different alternatives. Starting with a blank page helps us to resist the temptation to do it the same old way we did it before and to break into new thought patterns. Critical thinking is challenging and requires practice but can also be rewarding as you develop new solutions and overcome barriers to success.
Law No. 8: Excessive Process Focus Leads to “Self-Licking Ice Cream Cones.”
This law relates to the debate of process versus product emphasis. Organizations can become too process focused, to the detriment of delivering good products. An overly zealous process focus can result in compliance regimes that exist solely to ensure that we follow the rules. It can also stifle innovation and creativity.
We often think of process rigor as a good thing. The idea is to ensure that we develop good processes and then follow them. A self-licking ice cream cone is slang for a self-perpetuating system or entity that has no purpose other than to sustain itself.
Years ago, a senior staff engineer accused my team of not following standard engineering processes within our portfolio of primarily commercial products. My chief engineer and other functional experts had to defend our team’s tailored processes that fully complied with the spirit and intent of the engineering process but looked different from those of the rest of the organization. And the processes looked different because many of the requirements did not apply to non-developmental items. Applying many of these unnecessary efforts would waste time and money. This fiasco culminated with an independent inspection group audit of our team’s processes. The audit team awarded the team an outstanding unit recognition, highlighting proactive engagement and rapid delivery of warfighting capabilities.
Beware of overreliance on process. In the words of Thomas Schranz, chief executive officer and co-founder of computer software company Blossom “Good companies manage Engineering, great companies manage Product.”
Law No. 9: PPBE really means “Plan for Protracted Budget and Enactment.”
The Planning, Programming, Budgeting, and Execution (PPBE) process has been a mainstay for resource allocation in defense acquisition. The PPBE process originated in the 1960s under former Secretary of Defense Robert McNamara. While it uses a logical flow that aligns resources to strategy and priorities, many criticize it as being too cumbersome, inflexible, and bureaucratic for today’s environment.
Flexibility and speed are imperatives for effective resource allocation. The lead time for new program investments in PPBE, including large modifications to existing programs, typically is 18 to 24 months from the time of a validated requirement. The requirements validation process also can have a long lead time, especially for complex weapon systems. The lead time can then grow longer if Congress does not pass an appropriations bill in October, since new start programs are not typically authorized under a continuing resolution authority. Add up all these durations and it may be several years before the DoD can even begin to respond to new technologies, threats, and requirements.
Put another way, it is really challenging to execute rapid and flexible acquisition without rapid and flexible funding.
Law No. 10: Early logistics planning is like the national debt: No one cares now because the pain comes later.
This law is a serious matter. While we know how important logistics is to life-cycle costs and system readiness, how many programs did we terminate or deny a development milestone approval due to poor sustainment engineering and planning? While I know of several programs deferring their full-rate production decision because of poor suitability results in operational testing, that is too late in the system acquisition process.
One of my first jobs in acquisition was to improve reliability of a communications system that had to incorporate significant design and manufacturing process changes to resolve its problems. This not only added significant costs but delayed the operational capability. I saw firsthand what happens with lack of reliability and quality emphasis in the early design and manufacturing development. We must learn to care much earlier and use the tools we have to avoid poor sustainment outcomes.
Laws of science are subject to change. As we gather more data and learn more, we refine our knowledge. The same applies to laws of acquisition. As we adopt new methods, we will learn and improve. If you have relevant evidence regarding these 10 laws, please share with me so I can either validate or revise accordingly.
Ten laws can only address a handful of the acquisition conundrums that many will encounter. The tile of this article (“Brian’s Laws Part I”) suggest that more will follow. Part II is coming soon—definitely before the year 2050!
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