There is a need to shift to Time Certain Development and make “schedule” a Key Performance Parameter. Developmental programs must change their focus to deliver useful military capability within a specified time by making time the focus of the up front requirement statement.
Capabilities could be upgraded over time as technologies mature and operational requirements become clearer. Time Certain Development differs from prior attempts at valuing time to market, such as slow acquisition progress and spiral development in that a maximum number of years is mandated, the start and end dates are defined, and the driving factors like requirements, budget, source selection, etc. are revamped to support it.
While endorsement of Time Certain Development does not explicitly mention increasing the frequency of new programme starts, too long of time from Milestone A to production decision certainly implies the likelihood of new starts occurring more often than they have in recent decades.
The prospect of programme termination, should it fail to deliver on time, would also contribute to shorter development times and more frequent new starts. Shifting from cost-based to time-based metrics has other advantages. Time is easier to understand than cost and less subject to tricky ways of presenting costs.
A time-based approach to acquisition offers other advantages. Greater uncertainty about where the next fight may be, and where conflicts are to take place, is likely to be a dominant feature of the future security scenarios for decades to come. In such circumstances, committing to lengthy acquisition programmes risks fielding systems whose utility has been eroded by changes in capabilities and operational concepts
Lengthy acquisitions drive up programme costs and puts numbers ultimately procured in jeopardy due to growth in unit costs, and, because the new systems arrive later than expected, aging systems have to be retained in operational service longer than planned.
A time-based approach, if properly implemented, would mitigate these problems. In addition, by enabling DoD to field new systems more often than in the recent past, the force structure should, at any point in time, contain a richer mix of advanced systems, thereby making it more difficult for opponents to counter field capabilities.
Time-based acquisitions could also benefit the defense industrial base in several ways. While development times and the length of production runs would tend to decrease, more frequent new starts would benefit design teams and make losing a given competition less of a threat to a company survival, whether in specific product lines or the defense business in general.
DoD programme managers and contractor executives alike might well be more resistant to endless requirements changes because acceptance would endanger meeting schedule. Possible policies like banning major modifications during the first year after programme award might also reduce the amount of competition on both sides regarding requirements, budgets, and bids.
Studies of the defense industrial base indicate that major concerns exist about sustaining sufficient competition within the industrial base to encourage innovation and constrain costs. We are looking at ways to help keep the supply chain active, trying to replicate the open-mission systems approach to encourage competition among competitors and increase the number of companies that can develop for that system.
Some observers are concerned that not having competition throughout the life of a program means giving up the most effective means of controlling costs. Others believe that competition at least through prototype is critical to avoiding major developmental and production risks. Many are also concerned that dysfunctional competitive behavior is occurring because of the small number of major new programs.
For example, companies that have lost the competition for a major program have grown more inclined to contest the award and, as a result, delay the start of a program important to military effectiveness.
DoD would conduct a “deep dive” to find the “true cost” of the weapons systems. The effort would focus on delayering the supply chain and incentivizing second-tier suppliers onward to invest their own money to make production more efficient.
Its naïve to think that that’s not going to take a lot of time just to look through the information, but it’s a great aspiration. Prime contractors have come to an agreement allowing the company to make economic order quantity buys with an understanding of how it would recover the funding when the block buy contract is finalized. allow us to save a significant amount in savings, just by allowing our supply chain to aggregate their buy”
DoD is focusing on category management — a purchasing strategy that eliminates redundancies and streamlines processes. Every dollar we spend on something that we didn’t need to spend it on is one less dollar we have to spend somewhere else. So, that’s a major focus across everything we do.”
But the uncertainty of the defense budget presents a challenge to daily planning. One of the challenges we have is that in our business, sometimes the risk we accept we don’t see for years afterwards because it just takes a little bit longer for it to happen. New programs or initiatives are most vulnerable when anticipated funding fails to materialize. One of our goals is moving more dollars into funding for research and development.
Large companies, some of our big weapons system primes we’ve been in some stakeholder meetings and they say ‘we came to the institutes first because there was money, and if DoD is going to put money somewhere we’ll go see what’s going on. But we’re staying because of the connections and we’re getting access to our supply chain like never before. It’s really catalyzed conversations and organizational relationships, and is addressing technology problems like we’ve never seen before.
DoD adoption of time-based acquisitions would incentivise more companies to remain in the defense industry by offering new business opportunities more frequently than in the past, and would possibly attract commercial companies to the defense market.
“There are hundreds of projects that are in the queue that just need to have the time and energy put in. We got to a point where we ran out of money, but we didn’t run out of projects. So, we just took all the projects that were left over and we dropped them in the hopper at the beginning. Many suppliers say they have independently funded new cost-saving technologies and processes, even without Blueprint for Affordability money.
1. Reorient oversight and compliance practices from existing transactional approach to one that operates on a systemic basis
Utilize risk-based, materiality-driven approaches to auditing with increased reliance on approved contractor business systems and existing corporate financial oversight requirements e.g. quarterly/annual reporting to the maximum extent possible.
2. Streamlining acquisition process by tailoring oversight requirements to risk
These requirements should leverage systemic controls as much as possible. Also, DoD should establish cutoff dates for the submission of cost and pricing data, institute firm timelines for audit products and remove barriers to the utilization of long term agreements. DoD should reinforce its broad goal to reduce the time between solicitation release and contract award with specific performance metrics in areas such as timeliness of audits and the time it takes to definitize undefinitized contractual actions.
3. Establish an overarching DoD strategy for Intellectual Property
DoD needs a strategic approach to IP that fully considers acquisition practices, contractor business models and sustainment priorities.
4. Support and protect industry R&D efforts
The merit of each R&D project should be determined by its intent rather than its outcome, bearing no consequence for later contract offers. DoD should leverage existing incentives in the defense marketplace and focus solely on setting and communicating demand signals.
5. Unleash industry investment through contract terms and financing
DoD should immediately implement ongoing regulatory cases that promote performance-based payments over progress payments and incentivize DoD to swiftly definitize undefinitized contractual actions. Further, longer term contracts, in lieu of short periods of performance to increase generic competition, are needed to incentivise desired levels of industry investment. Competition is a means to acheive greater performance; competition for the sake of competition is counterproductive.
6. Promote mechanisms for DoD-industry communication throughout the lifecycle
Specifically, DoD should focus on the sharing of long-term technology roadmaps, threat information and opportunities for industry exchanges with operator communities.
7. Monitor and address the impact of commercial trade agreements and policies on the defense industrial base
DoD must have a voice in relevant reviews and decisions as a representative of the defense industrial base.
8. Utilize standards-based approaches and appropriate acquisition models to leverage new technologies
Static, regulation-based approaches will serve as a barrier to acquiring new technologies. Acquisition-as-a-service models and adoption of commercial standards in areas such as network security are examples of how this should be done.
9. Set clear guidance on responsibility for resiliency of key capabilities
Maintaining surge personnel, plant and facilities in case of conflict comes at a cost. DoD needs to develop clear guidance on how considerations for resiliency and for critical defense capabilities like hardened microelectronics, should be incorporated in source selection.
10. Incorporate workforce considerations into acquisition strategies and contracting decisions
Failing to do so increases costs to DoD and undermines industry resiliency and capacity to meet urgent needs. Companies lack the resources to go beyond local initiatives to fulfill their specific needs. DoD should support industry partners through messaging and stakeholder affairs efforts to highlight the ingenuity of defense workforce and available opportunities. Utilize the industrial base assessment as an opportunity to garner support for funding training programs and initiatives. Similarly, industry has a responsibility to continually promote and foster programs in support of training education and development separate businesses in a company.