Army Report Highlights Need for More Contracting Officers

A recently released review of the U.S. Army's acquisition process reveals that the service must invest in more acquisition personnel and better training to help address failed weapons programs and their associated costs. Arresting staggering cost increases is an important objective for the Army, but Congress's current obsession with deficit reduction may become the greatest impediment to saving taxpayer dollars.

Ordered by Secretary of the Army John McHugh, the "2010 Army Acquisition Review" (the review) tasked Gilbert Decker, a former assistant secretary of the Army for research, development and acquisition, and retired Army Gen. Louis Wagner, formerly of the Army Materiel Command, to chair the six-member panel. The group's charge was to provide "a blueprint for actions" achievable in the near term "to improve the efficiency and effectiveness of the Army acquisition process."

Reforming the service's contracting process is essential, as the Army's ability to design, construct, and field vital weapons has steadily broken down over the last two decades. Indeed, the Army has terminated 22 major weapons programs over the last 20 years, with 15 of those terminations occurring since 2001. Since 1996, the Army has spent at least $1 billion per year on programs that it has eventually cancelled; that number spiked to at least $3 billion annually in 2004.

Like the Department of Defense's (DOD) inefficient contracting process, as well as the other service branches' acquisition troubles, one may trace the Army's contracting problems to the end of the Cold War and the Pentagon's attempts to cash in on the era's so-called peace dividend. Not only were defense contractors encouraged to merge in an effort to increase efficiencies among the nation's industrial base, but DOD also dismissed large portions of its contracting staff and encouraged the service branches to do the same – all while eying a world without the Soviet Union.

Fast forward two decades and the anticipated contracting efficiencies have never materialized, as six industry giants have gobbled up most of the competition within the world of defense contracting, increasing costs and creating a vicious cycle of dependency where contractors are "too big to debar." The dramatic loss of acquisition personnel, as the review observes, has caused erosion among "requirements and acquisition core competencies," which are in "urgent need of repair." This has forced the Pentagon, along with the service branches, to turn back to contractors to perform tasks that either military or civilian government personnel used to perform.

The review tersely notes, "The Army needs a critical mass of analytical talent," and, specifically, must increase the number of qualified "systems engineers, operations and cost analysts, and contracting officers, particularly those in uniform." The panel also noted with concern "the growing number of contractors performing 'gray area' and what would appear to be inherently governmental jobs" because of this lack of internal talent.

Much of the increased use of contractors has occurred since 2001 with the introduction of the so-called "Global War on Terror" (GWOT) and the associated explosion of both defense spending and overall government contract spending. As the review points out, during this time, the Army has not seen a "significant increase in the number of authorized civilian analysts" and has witnessed "a decrease of 55 [percent] of authorized military analysts." More work for a decreasing acquisition labor force has translated into an increased reliance on contractors.

One risk to the proposed reforms are the current wars in Iraq and Afghanistan and the Army's resultant focus on what the review refers to as "force generation," which means that top brass are less concerned with making long-term investments in contracting staff than with funneling resources toward immediate combat-related functions. Former Secretary of Defense Robert Gates' 2010 announcement of the Pentagon's goal to convert as much as three percent of spending from “tail” to “tooth,” or from support services to combat forces, in an attempt to forestall defense cuts, does not bode well for the review's recommendations.

That focus will only intensify, as Congress' current fascination with austerity – despite repeated efforts to protect defense spending – will likely affect the Army's acquisition reform objectives, even if overall defense spending is not reduced. As the review notes, "If the past is any prologue, Army research, development and acquisition budgets will be reduced as force structure, training and quality of life are given higher priority." The Pentagon's statement in 2010 that it would end an insourcing initiative undertaken for less than a year, despite perennial evidence that bringing acquisition functions in-house is less costly, only bolsters this assumption.

In response to the review, the Army announced that it would hire an additional 1,885 contracting personnel. It is unclear, however, whether the announced additions were wholly new or simply part of the already planned 5,385 acquisition personnel DOD slated for the Army to receive through the aforementioned abandoned plan to add 20,000 contracting staff through a combination of insourcing and new hires by 2015.

It is important that the Army, and to a larger degree the Pentagon and federal government, take this study seriously, because, as the review mentions, "[t]he overall military acquisition workforce ... has declined by 19 [percent] since 1994 despite the acquisition budget more than doubling," which is indicative of the entire federal contracting process. Unless overall contract spending significantly decreases – and there is no indication that it will – the Army, Pentagon, and federal government need to adequately plan for how to shore up their insufficient acquisition staffs.

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