Kaminski Gives Acquisition Reform Report

Paul G. Kaminski, undersecretary of defense for acquisition and technology, spoke to reporters during a Pentagon news conference on Acquisition Reform Week, March 17-21. He used the meeting to give a progress report on DoD's efforts in the field.

"Our vision is to be the smartest, most efficient, most responsive buyer and buyer of best value goods and services to meet the warfighters' needs," Kaminski said.

He said the DoD acquisition reform effort has already saved the department billions of dollars, but much remains to be done. He said DoD is like a long-distance runner started well and now needs to maintain a fast, steady pace.

"We're well into the race, but I think there's much more to do," he said. DoD now must get costs down and keep them down, and cut the time it takes to field new systems, Kaminski said. DoD must also look at trade-offs when and where they make sense.

"We ... must be willing to trade off minor reductions and requirements for significant reductions in costs when those trades are available to us, and industry must work with us to identify such opportunities," he said.

Kaminski stressed acquisition reform is a team effort. Overall, DoD and the defense industry must work together. At the practical level, teams include warfighters, tacticians, acquisition specialists, testers, simulation experts, industry representatives and doctrine specialists. He cited the team effort with the Army's Force XXI initiative. One portion of Force XXI is software development. The team concept the Army has in place has cut development from two-to-five years to two-to-six months.

Another initiative Kaminski praised was the Navy's Smart Ship program. This program is a team effort of the Navy lab at Carderock, Md., and the crew of the Aegis cruiser USS Yorktown.

"In a six-month period, we will develop -- together with the crew -- a set of prototype systems to be fielded," Kaminski said. "Those systems then go out to sea trials with the crew; trouble reports, problems, opportunities for improvement come back; and we have a chance to make another iteration."

Smart Ship is looking at 47 major prototype systems that have the potential to reduce crew size by 20 percent, he said.

Other focus areas include the single process initiative. Under this, DoD scaled back or eliminated military specifications and went with commercial applications wherever possible. While this worked well with new contracts, old contracts were still encumbered by milspecs. DoD and the companies went through old contracts and proposed changes -- hundreds were accepted. Kaminski said this is working well at the prime contractor level and must be carried to subcontractors.

DoD has also adopted many private industry practices. One is prime vendor contracts. In commodities such as food, pharmaceuticals and medical supplies, DoD contracts with a prime vendor for a region. When a cook in a mess hall in Fort Anywhere needs to order -- usually 24 to 48 hours in advance -- he does so from a price list. The supplier ships directly to the mess hall. DoD does not store the food nor have to use transportation assets. The same goes for medical supplies.

DoD still has problems in acquisition reform, and one is acquisition program stability. "We have not been making our year-to-year predictions on procurement," Kaminski said.

Last fiscal year, for example, DoD's procurement prediction for this year was $3 billion high. The department must stretch out procurement to make up the shortfall. He estimated for every dollar DoD takes out of start-up costs for a program, the department must put in $3 before the program is done.

"This is an effort we are taking on in a big way through the Quadrennial Defense Review," he told reporters.

Pilot programs point the way for acquisition reform, he said. He pointed to the Joint Direct Attack Munition program as one example. The program essentially changes "dumb" bombs into "smart" bombs. Under the old milspecs system it cost $42,000 per bomb. Using innovation acquisition tactics and eliminating milspecs where practical the new cost per bomb is $14,000.

Finally, Kaminski spoke about the acquisition work force. The work force is dropping as the investment budget drops. "Today, our work force has been taken down by a little more than 30 percent over where it was at its peak," he said. "We expect to be taking it down to about 50 percent of where it was at its peak."

But small only works if it's better, Kaminski said. DoD must pay more attention to the quality, education and continuous training of the acquisition work force, he said. The department must encourage acquisition specialists to try new ideas and not punish them when they don't work out. Finally, he said, the department must encourage communications among acquisition professionals.

"I believe we are now really making fundamental changes to the environment and the culture," Kaminski said. "We still yet have a lot to do."