Two years into a efficiency drive, acquisition leaders are pushing ahead with the original details and goals — like mandated affordability caps — and adding new ones, like built-in exportability of defense technology at the design stage.
As contractors and suppliers in the U.S. defense industrial base see a future of shrinking defense spending, they are looking to sell to customers abroad. It’s hard enough finding new customers, but there is the additional hurdle of U.S. export control laws for defense technologies.
In implementing this feature of the ongoing Better Buying Power (BBP) initiative, some programs are being considered as pilots to test the concept, including the Navy’s Next Generation Jammer.
BBP was started about two years ago. What the Pentagon announced Nov. 13 as BBP 2.0 has a new category — building up the acquisition workforce and injecting cost-consciousness into its culture, as well as more bullet points. This is, according to acquisitions chief Frank Kendall, because defense acquisition is a complicated business with many areas where improvements can take place.
The current details and direction of the initiative represent fixes for what wasn’t working and improvements based on experience and input from program managers and industry.
Kendall stresses affordability caps as something that will be required in all programs from the start, and enforced through the earliest stages. Ignoring affordability helped doom the Marines’ Expeditionary Fighting Vehicle because its prohibitive costs were discovered too late, he says. The program was terminated without ever fielding a unit.
BBP is a good plan, Kendall says, and the department is committed to it. But there is something on the horizon that could wipe out all its benefits: the budget penalty known as sequestration, which would double the cuts already mandated by last year’s Budget Control Act (BCA) if a budget meeting the BCA caps is not passed by Jan. 2, 2013.
Defense Department planners made a budget that met BCA caps, but if the sequestration penalty kicks in, “it’s absolutely devastating,” Kendall says. “It would be counter to everything we’ve been doing the past three years [of efficiency initiatives].”
“Cuts, in general, tend to drive you to inefficiencies,” he says, such as reduced quantities and schedule slowdowns. Defense officials could manage the additional cuts, he says, but this would call for a major reconsideration of programs and priorities in current budget plans.