Interview: Frank Kendall, US DoD Acquisition Chief By Paul McLeary and Vago Muradian, Defense News, September 22, 2014 Frank Kendall, US defense undersecretary for acquisition, technology and logistics, oversees hundreds of billions of dollars in procurement programs. On Sept. 19 he unveiled the first draft of his Better Buying Power 3.0 initiative that seeks to push the Pentagon and industry to collaborate more on projecting future needs and meeting them through closer collaboration. The new guidance implements Better Buying Power initiatives developed by Kendall and his predecessor, Ashton Carter. Q. The first Better Buying Power focused on finding efficiencies, and 2.0 was to foster reliance on leadership. DoD, Congress and industry all have to cooperate to make the idea work. How do you incentivize this dramatic and radical change? A. I don’t regard it as dramatic and radical change. It’s a shift in emphasis. There’s more continuity than change between the different versions of Better Buying Power. We’re making progress on some of the things we started in Better Buying Power 1.0 and 2.0, but there’s still plenty of work to be done there. Because of concerns about technological superiority and what’s happening to the United States in terms of its technological superiority in the world, because of [Deputy Defense Secretary] Bob Work’s emphasis on an offset strategy, which is consistent with the interest in technology, innovation and technological superiority, plus the budget situation. And then what’s happening in the world in general, the threats that we face. So that’s kind of motivated us to shift our emphasis towards the product side, which is in the things that we’re building that we’re bringing to the hands of the war fighter, and in particular, getting advanced technology into the hands of the war fighter more quickly. Q. But how do you incentivize change? In one recent address, you said the services had handed in their budgets, which included a lot of things that are more emotionally driven than empirically driven. A. I think the services are doing the best they can with their perspectives on the situation that they have to face. They’re trying to create a balance between near-term readiness, the size of the force, and modernization. I tend to be focused more on modernization, although I care a great deal about the other parts as well. I think we’ve been relatively comfortable for decades now about our technological superiority in the world relative to other powers. That’s changing and we have to take it seriously. I think there’s a growing recognition that we have to be better at getting advanced technology products out and better capabilities out in shorter cycle times. Q. Industry plays a key role in this as well. A. Industry is responding to the budget situation and to the incentives that we’ve put before industry. I’m frankly less worried about industry if we provide strong financial incentives. Define, for example, best value in a way which allows industry to bid in a way which is well-informed and gives them an incentive to give us a better product, a higher performing product; then the industry will respond. And I’m not terribly worried about that. What has happened over time with concepts like affordability constraints, affordability caps, and should-cost analysis, we have had to be very consistent and persistent to get through to our workforce exactly what we intended with those. Q. Some of this will require legislative changes. How can you ensure Congress is an ally in this change process? A. Congress has been an ally in a lot of this. We have been working under Better Buying Power 2.0 on some legislative changes, which would simplify our lives, keep the original intent that some of the statutes in place have, but also give us more flexibility and remove some of the overhead burden associated with implementing the loss. On the House side, Congressman [Mac] Thornberry, Congressman [Adam] Smith and others, and on the Senate side, Senator [Carl] Levin and Senator [John] McCain [have supported] cutting costs. We’re working together with the Hill on this. Q. In identifying the specific areas of offsets, how do you build a better buying power that is going to drive innovation in line with the national security strategy? A. There’s a general need to move technology more quickly and effectively and to push technology forward. So while our investments are constrained now, there are some things we can do if we prioritize that will accomplish that goal in general. The areas we’re looking at in the technological offset strategy include things like autonomy, unmanned systems in [different] domains, ways to extend our range capabilities so we can operate and generate effects and generally control forces farther away. Q. One issue you have brought up is that by 2020, some of the unsustainability issues of the current model really come to a head. Expensive platforms like aircraft carriers and space systems fall into this category. In what other areas do you sense that this is a problem? A. The proliferation of accurate missiles — either cruise or ballistic missiles — is troubling. Advances in electronic warfare are troubling in some areas. Cyber is a continuing, emerging problem. So we’re going to be looking at experimentation and some novel ways of doing business. Money is incredibly tight and the uncertainty of sequestration makes that even worse because it’s a much more difficult environment to plan in. Despite that, we need to put resources into concepts that’ll move us forward and position us better for the future. There is a big affordability problem coming in the 2020s. We have a lot of capital assets that are wearing out. And our current budgets that we see are simply inadequate to meet the needs in the ’20s, and we’re going to have to do something about that. Q. There are some in industry who feel that they haven’t been consulted about this strategy or that it will be imposed on them. What do you have to say to them? A. I think industry should be excited about 3.0. I think our advantage in the marketplace globally as well as in the US has a lot to do with technological superiority. It has to do with quality, basically. And I think for the government to be incentivizing industry to go build better products will put them in a better position in the marketplace in general. We’re not asking industry to make investments we think aren’t wise or aren’t warranted. We want to tell industry more clearly what has value to us so they’ll be able to bid more intelligently, so they’ll be able to make their own technology investment decisions more intelligently. I think those are all positive. We maintain a very strong dialogue with industry. So I think that our openness to a dialogue is quite good and continuing. Q. The defense industrial scene is dramatically changing. You have traditional suppliers that are very good at big systems integration, and then you’ve got the Amazons and the Googles who are participating in this space. How do you manage these sorts of competitions? A. I think it’s terrific to have market entrants like this. We’re looking for places where a more commercial-like model works for the government and we’re happy to embrace that. We’ve done that on radios, for example, where industry on its own realized that it could more quickly than the government provide products to us and be competitive. And when that happens, we’re happy to change our acquisition strategies and go in a direction that’s more accommodating to what the industry has done. There are a few things that will be in any edition of Better Buying Power. One is emphasis on competition. Another is an emphasis on cost because we want people to try and attack the cost structure as much as possible. Another will be affordability, something that we think is very important in making sure we don’t start things that we can’t afford. Q. You’ve said that these offset cycles used to be much easier to coordinate with industry and to do long-range planning. What did you mean? A. We looked back at a set of studies done in the mid-1970s. Essentially, at that time you could just tap people you knew who were very talented, bring them in, put them together on a joint team with the government, and not go through all the processes of vetting people and worrying about conflict of interest and so on. It essentially was the assumption that management understood those conflicts and would discount for them if necessary. It was much easier for ideas to move around, easier for people to work together. We’re going to comply, obviously, with the constraints that we have today, but we will still work with industry. We will still get industry’s inputs so that we have that expertise available to us, but it won’t be quite as collaborative a way as it would have been historically. I want to reach out to industry for ideas through concept definitions. That’s one of the things we put into 3.0. Q. Corporate independent research and development (IRAD) is about $4.5 billion dollars a year, but often very little of that is focused strategically on the long term. How do you get private companies to change how they use those resources? A. I’m looking at the IRAD now. At one time it was a very highly regulated activity. We went to a much more laissez-faire activity in the ’90s. What I’ve been looking at more recently ...is clearly focused on nearer-term return, some on longer-term return, some small fraction of it is on base technologies. I’ve been meeting with some of the companies to look at the projects that they’re funding and to hear from them why they’re choosing certain directions. And once I have that data, then we’ll decide where we want to go.
Posted on: Wed, 24 Sep 2014 13:44:08 +0000
Trending Topics
Recently Viewed Topics
© 2015