Yesterday the Project on Government Oversight (POGO) sent a letter to the Under Secretary of Defense for Acquisition, Technology & Logistics (AT&L), Dr. Ashton B. Carter, urging him to support the intent of the recently passed Weapon Systems Acquisition Reform Act to create strong regulations against organizational conflicts of interest in systems engineering and technical assistance (SETA) contracts. This provision was one of several that POGO — along with National Taxpayers Union (NTU), Taxpayers for Common Sense (TCS), and U.S. Public Interest Research Group (U.S. PIRG) — highlighted as essential principles for reforming defense procurement. As we noted last May:
Independent analysis is key to ensuring that DoD decision makers are given unbiased, accurate information upon which to base program decisions...We urge you to include the “Organizational Conflict of Interest” provision that explicitly defines the minimum regulations to be enacted that will preclude contractors from advising the Department of Defense on weapons systems and then developing them.
The Aerospace Industries Association (AIA), among others in industry, has testified that the Pentagon should be "flexible" when it comes to organizational conflicts of interest (OCIs). But in our letter, we point out that the Defense Science Board Task Force on Defense Industrial Structure for Transformation said that preventing these organizational conflicts of interest would help the Pentagon "optimize" its capabilities. From our letter:
Contractors have long insisted that they have sufficient firewalls in place to ensure independence, but the Task Force soundly refuted this. When this conflict occurs, they wrote, "the result creates more classic OCIs, based on bias, impaired objectivity, and informal anomalies...not inherently resolvable through firewalls or similar mitigations."
Antonie Boessenkool at Defense News (subscription-only) reports that the Pentagon does not think it will have exact rules on conflicts by the 270-day deadline required by the new law. But in the mean time, last week the Pentagon's Acquisition Chief has issued a 20 page memo on implementation of the reform law.
Wonkiness below the jump:
One of the most immediate ramifications with the new directive is that critical cost growth must be treated much more seriously by the Pentagon. But among the other policy impacts of the Pentagon's new Directive-Type Memorandum (DTM) are:
- Giving the Director of Cost Assessment and Program Evaluation, rather than the Milestone Decision Authority (MDA) charged with approving a program's entry into the next phase of acquisition, the authority to approve Analyses of Alternatives study guidance. The MDA will still direct initiation of this analysis.
- All major defense acquisition programs (MDAPs) will discuss competition strategy throughout the life of a program in far more detail;
- Increased discussion of maintenance and sustainment strategy as part of acquisition strategies and plans;
- Required competitive prototyping as a statutory requirement for MDAPs, unless waived due to program lifecycle costs or this requirement otherwise thwarting the ability of the Pentagon to meet critical national security objectives;
- Increased requirements for independent cost estimates;
- Placing the authority to review and approve developmental tests within test and evaluation strategy and test and evaluation master plans under the recently reestablished Director of Developmental Test and Evaluation rather than the Under Secretary of AT&L;
- The Deputy Under Secretary of AT&L will also no longer be responsible for reviewing and approving Systems Engineering Plans, but instead the task will go to the Director of Systems Engineering;
- A new official tasked with heading up Performance and Root Cause Analysis, responsible for assessing "the extent to which the level of program cost, schedule, and performance relative to established metrics is likely to result in the timely delivery of a level of capability to the warfighter";
- Independent reviews, conducted by the Director of Defense Research and Engineering (DDR&E), to determine the maturity of major defense acquisition program's technologies prior to Milestone B certification. The DDR&E will also develop standards to measure and assess the maturity of critical technologies and integration risk;
- A requirement for Preliminary Design Reviews before a program receives Milestone B approval, and an assessment using this review during the Milestone B review process.
-- Mandy Smithberger
Update: Jen Dimascio at Politico reports on a recent example of precisely the kind of conflict of interest the Weapon Systems Acquisition Reform Act seeks to prevent. Following a tip on the Defense Hotline, the Department of Defense Inspector General (DoD IG) found that SAIC served as the primary contractor for advisory and assistance services for the Army's Future Combat Systems, even though SAIC was also serving (along with Boeing) as the Lead System Integrators for system development and demonstration. The IG found that the Army and Director of Operational Test and Evaluation (DOT&E) "did not exercise the good judgment and sound discretion needed to prevent the existence of conflicting roles that might bias a contractor’s judgment or provide it an unfair competitive advantage." While the IG has yet to issue a report for the public, POGO has acquired the For Official Use Only executive summary of the Inspector General report, found here.
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