1.7 - WHY ACQUISITION REFORM NOW
In a 15 March 1994 memo, former Secretary of Defense William J. Perry promulgated his 9 February 1994 paper, Acquisition Reform - A Mandate For Change, to the senior leadership within the Department of Defense. In stating the problem and why change was necessary, Secretary Perry noted in his paper that, "The Post-Cold War era poses a new set of political, economic, and military security challenges for the United States: regional or limited conflicts; proliferation of weapons of mass destruction, both nuclear and non-nuclear; risks to its economic well-being; and the possible failure of democratic reform in the former Soviet Bloc and elsewhere. The President and Secretary of Defense are com-mitted to maintaining the U.S. military's edge over opponents. That means maintaining superior people, training, logistics, and weapons system technology — the advantage the U.S. now has that allows us to deter aggression, and to prevail quickly with minimum casualties when required to employ force. The President and Secretary of Defense are commit-ted to maintaining a lean, high-tech, agile, ready-to-fight military force during a time in which: the threats are changing and unpredictable; by Fiscal Year 1997 defense spending will have declined in real terms by over 40% from FY85; and advanced technology is increasingly available to the world."
Examples given in the acquisition reform paper of situations or processes
that justified "Acquisition Reform" in 1994, some of which still require work
in 1997, and beyond, include:
The foundation upon which
our national security strategy has been built was un-dergoing significant
The DoD procurement rules
that had prevented DoD from acquiring state-of-the-art commercial technology
and prevented full use best commercial practices.
The DoD policies that had
prevented the Department from buying from certain companies even when the
price was cheaper.
The years of contractor
and DoD staff work that had been needed to obtain policy waivers to allow
DoD to save procurement dollars.
The unwillingness of
contractors to incur the costs of complying with government unique and
costly contract terms in order to sell to DoD.
The DoD's excessively high
cost of doing business, a portion of which is due to telling contractors how
to do the job as opposed to providing performance specifications.
The practices within DoD
that prevented the rapid acquisition of commercial technology.
The failure of DoD to
consider life-cycle costs at all times.
The need to free up resources for
modernization while maintaining the DoD force structure and readiness
Former Secretary Perry indicated initiatives relative to these problems and many more had been addressed in recent years. He noted that Cost As an Independent Variable (CAIV) is essential to DoD surviving ever-decreasing budgets. He further stated that much remains to be done in terms of acquisition reform, particularly adjustments to restrictive laws relative to outsourcing. Therefore, re-engineering the acquisition process has been and will continue to be a high DoD priority. Acquisition processes must be able to respond to external changes. DoD faces new national security challenges, a drastically reduced budget, reduced influence in the marketplace, and technology that is changing faster than the system can respond; and that technology is available to the entire world. The point was made that we must design an acquisition system that can get out in front of these changes instead of reacting to them.