When Doing More With Less Is Not a Good Idea

The Commission on Wartime Contracting in Iraq and Afghanistan always does good work so its recent hearing, held Sep. 16, on "The Contingency Acquisition Workforce: What is needed and how do we get there?" merits reading, if only to better understand the state of governmental oversight of contractors.

Let's go straight to the prepared statements. From the opening statement of CWC Co-Chairman Christopher Shays:

When you consider that the Department of Defense spent $384 billion on contracts in 2009 more than double the level of 2001 while its organic acquisition workforce actually declined, you are forced to suspect that opportunities for waste, fraud, and abuse have multiplied. Many acquisition outrages could be avoided or at least mitigated by a more effective federal acquisition workforce in general.

Our focus at this hearing, however, is more specifically the contingency acquisition workforce. That bureaucratic-sounding phrase simply means that we are talking about the federal civilian and military folks who define requirements, procure goods and services, manage contracts, and provide oversight and accountability in support of contingency operations.
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What may be the simplest aspect of the acquisition workforce sheer numbers is already receiving attention. The DoD Strategic Human Capital Plan Update published in April 2010 describes initiatives intended to add 20,000 Defense acquisition personnel by 2015. That would bring the department's total acquisition workforce to 147,000. That is a laudable increase, but one that would still lag the growth in acquisition activity and only slightly exceed the personnel count of 1998.

Since that DoD plan update was released, Secretary of Defense Gates has spoken forcefully to his department on the need to recognize looming pressures on DoD appropriations and to achieve $100 billion of savings over the next five years. To his credit, Secretary Gates said he will not look to the acquisition workforce for cutbacks. But adequate funding will undoubtedly remain a challenge. The defense acquisition workforce currently stands at about 133,000 people, about 11 percent military and 89 percent civilian. That sounds like a lot of people until you notice that DoD also deals with 1.4 million active-duty, 846,000 Guard and Reserve, and 752,000 civilian personnel in non- acquisition jobs. So the DoD acquisition workforce is only about 4 percent of all the people connected with the department. And nobody disagrees that we need more of them especially since more effective acquisition can produce some of the savings that Secretary Gates demands.
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Here's the bottom line. The U.S. military has often stated that "Money is a weapons system," and has invoked that statement to emphasize the importance of good stewardship of taxpayer funds. Without a fully trained and operational acquisition workforce, however, our money will be a weapons system turned against us in the form of waste, fraud, and abuse that erodes morale, undermines missions, and betrays taxpayers. That is why the Commission considers this hearing so important.

Statement of Jacques S. Gansler, Ph.D. University of Maryland. Gansler chaired the Commission on Army Acquisition and Program Management in Expeditionary Operations, released in October 2007, popularly known as the Gansler report, which was scathing in its critique of U.S. Army acquisition and management programs, including contracting problems plaguing Operation Iraqi Freedom and Operation Enduring Freedom.

In 2007, our Commission recommended an increase in Army contracting personnel authorizations, both military and civilian. We recommended an increase of just under 2,000 people, which is a 38 percent increase, relative to the total people currently in the Army contracting career field, but only 70 percent of the 1990 levels, despite the increased workload that today's professionals face. (In 1990, the Army had approximately 10,000 people in contracting. The Army lowered this level to 5,500 following the Congressional mandate to reduce the acquisition workforce, and has remained relatively constant since then.

Yet, both the number of contract actions (workload) and the dollar value of procurements (an indicator of complexity) have dramatically increased in the past decade.) Three years later, in April 2010, the Army testified to the Wartime Commission that it has a five-year plan to grow Army contracting by 1,650 positions. Our Commission understands that growing the acquisition workforce cannot be accomplished overnight, but the pace at which the Army has approached this challenge makes acquisition appear to be of precarious value to the organization. While the Army is taking positive steps to grow its contracting personnel, it is not clear that there is sufficient momentum to make this timely.

The Army is the DoD "Executive Agent" for contracting in Iraq and Afghanistan. For the first time since the creation of a theater contracting command, an Army General Officer, Brigadier General Camille Nichols, is leading the command, which was previously led by the other Services first by the Air Force with a 2-Star General, then by the Navy with a 1-Star Admiral. But even with BG Nichols in place, the Army is unable to fill military or civilian contracting billets, in either quantity or qualifications, in her Joint Manning Document. As of today, both the Air Force and Navy have been able to staff 100 percent of their respective contracting command staffing requirements, whereas the Army has only met 80 percent of its personnel commitment (after its commitment was reduced to reflect the Army's inability to staff Army positions). This continues to create a strain on the other Services, particularly the Air Force.

Further, in accordance with its Section 849 report to Congress, the Army is to assume responsibility for contingency contract administration services in 2012, to ensure the acknowledged need for contract administration in theater occurs. Due to resource shortfalls, the Army subsequently determined its resources would not be ready for this mission until 2015. This means that DCMA continues to bear an Army load, straining its own mission. I cannot help but view these resourcing struggles in direct relationship to the unfilled General Officer positions, particularly that on the Army staff. Army contracting is still under civilian leadership, which, while exemplary, is not at the table with military officers making mission decisions. As we stated in our report, if the Army is serious about its commitment to support the expeditionary mission, it must channel more Soldiers to the contracting field, and they must do so rapidly and at an earlier point in their military careers.

A further concern about Army resource readiness is the immediate and ongoing need for contracting officer's representatives (CORs) for contract oversight. While the Department has done much to train and pre-identify CORs, the challenge of rapid unit turnover and mission change to stability operations, with its concomitant troop withdrawal, makes CORs an ongoing area of concern. Although tactical units are now out of Iraq, contracts remain. And with those withdrawing troops went technical expertise to oversee contract performance. Among the solutions being explored, we trust that the Department is examining the role the reserve component might play in providing continuity and professionalism. The importance of contract administration cannot be overstated - and we need a cadre of professionals to give it the attention it deserves.

Statement of Daniel I. Gordon, Administrator, Federal Procurement Policy Office of
Management and Budget:

From 2001 to 2008, contract spending more than doubled to over 500 billion dollars, while the size of the acquisition workforce - both civilian and defense - remained relatively flat.

This inattention to the workforce resulted in increased use of high-risk contracting practices and insufficient focus on contract management, as well as the especially troubling phenomenon of agency dependence on contractors to support the acquisition function.
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Reducing Risk

-- Between FY 2000 and FY 2008, spending on high-risk contracts increased significantly, at least in part as a result of having an insufficient workforce to develop clear requirements, conduct rigorous market research, and structure contracts to promote competition. During that timeframe:

-- Contracts awarded without competition increased from $73 billion to $173 billion, and procurements that were open to competition, but generated only one bid, also increased from $14 billion to $67 billion.

Spending on cost-reimbursement contracts increased from $71 billion to $135 billion, while spending on time and material (T&M) and labor hour (LH) contracts increased from $8 billion to $29 billion.

Statement of Mark D. Shackelford Military Deputy, Office of the Assistant Secretary of the Air Force for Acquisition

The Air Force Contracting career field is stretched beyond its limits and our personnel, whether deployed or remaining at home station, are experiencing the strains over an extended period of time. The Air Force is filling the Department of Defense's wartime contracting mission by providing more than 80 percent of the joint contingency contracting individual augmentees. As a result, our contracting personnel are currently at a 1:1 dwell, meaning they are deployed for six months and stationed at home for six months. This 1:1 dwell rate is the highest operational tempo in the Air Force, and the contracting contingency personnel have sustained this rate since 2008 after being formally re-postured. The Office of the Secretary of Defense, Defense Policy and Procurement (OSD (DPAP)) determined fair share allocations for contingency contracting officers to be 29 percent Air Force, 57 percent Army, 6 percent Navy, and 8 percent Marine Corps. If the Air Force continues at this current level of contingency support, we risk overstressing our military contracting workforce, and will experience retention problems that will negatively impact mission stability at home station and our ability to support U.S. Central Command (CENTCOM) missions.

The bottom line is that the government has hired more auditors in the three years since the Gansler report came out. Yet it needs to hire more, a lot more.

That would help explain, as the Washington Post reported yesterday, why the Army is planning over the next five years to move in house more than 4,000 acquisition jobs that are currently performed by contractors as part of a larger effort to bolster its buying workforce, service officials said last week.