Incoming: Will Government and Industry Ever Get It Right?

February 1, 2016
By Lt. Gen. Michael Basla, USAF (Ret.)

One of today’s leading topics of discussion is the government-industry relationship. Simply put, will we ever get it right? I now have had the chance to look at this question from both sides of the fence, and the picture is no prettier from the industry vantage point.

We have a huge communication challenge between government and industry. It impedes the ability of both camps to achieve their goals and puts mission success at constant risk. Government needs the right goods and services, acquired at a fair price, to accomplish its objectives. Companies want to deliver goods and services in a way that delights their customers and makes a fair profit for their investments and risk. Unfortunately, the results too often leave one or both factions with regrets. Imprudent implementation of policies and poor practices that restrict, rather than guide, collaboration often are at fault.

The idea of open communication channels and shared risks and rewards for public-private engagement is not new. Since I began my military career in the late 1970s, I have witnessed several attempts at acquisition reform. Despite these efforts, much is left to be desired.

While the conversation continues, the stakes increase. The country is carrying greater debt and must find ways to reduce it. Global competition is putting greater pressure on our industries and the jobs they represent. Technology is changing faster, and adversaries now operate on cycles that mandate a more nimble response. Mission requirements demand a smart, responsive acquisition model that supports much more effective government and industry engagement while preserving public trust.

We need more face-to-face conversation. A big gap exists between an appropriate level of communication and what actually occurs. Lawyers and acquisition experts on both sides advise against direct engagement for fear of tainting the acquisition process, but this is exacerbating the problem. Ensuring that a mutually acceptable, pre-established set of rules for direct dialogue is defined and understood is a must.

We need a winnowing process that supports open competition upfront and then lends itself to more substantive discussions among a downselected field of industry representatives and the right government counterparts.

As an industry representative, I need to hear straight from the operators charged with mission accomplishment so I can understand their greatest challenges and optimize investment dollars to meet them. Government operators, on the other hand, need an unfiltered understanding of what industry can do, the approximate costs and a realistic timetable for delivery. To maintain an honest playing field in industry, these factors should be incentivized and used as evaluation criteria for follow-on pursuits. This type of accountability will improve the quality of goods and services while bringing down costs.

Governing practices should ensure that parties on both sides who start the process together cross the finish line together. This will lead to fewer changes, deeper trust and an improved team outlook that includes shared goals and ownership.

The government’s lowest price technically acceptable (LPTA) acquisition strategy poses another set of challenges. While the goal of acquiring minimally acceptable goods and services at the lowest price makes sense, the outcomes often do not.

As a government leader, I frequently saw contract awards that did not cover minimally acceptable needs. This led to change orders, budget overruns and—even worse—unmet expectations. Too often, the losers were those left with the responsibility to accomplish the mission. Such unacceptable consequences could have been avoided through the upfront engagement I advocate.

Recently, lower profit margins have squeezed certain segments of the defense industry out of the market, leading to more consolidation. This means shrinking competition, which likely will have the opposite effect of the LPTA intent. Less competition usually leads to higher prices. The LPTA strategy should be limited to acquisitions that make the most sense: say, for certain hardware, commercial off-the-shelf software and other commodities.

Closer coordination, better communication and stronger partnerships will help all parties control costs and deliver true best value. Government planners need to understand the cost of delays. When they publish schedules that continuously are pushed to the right, industry is forced to spend more on proposals and benched staff than originally planned. This increase in the cost of doing business eventually is passed on to government. We need strict discipline to maintain the timelines posted for all phases of the acquisition process.

Every player in the process must be focused on common criteria for success. Risks and rewards should be shared by all. Government should incorporate innovation as a requirement in acquisitions to benefit from improved effectiveness, and industry should be rewarded for delivering efficiencies.

The desire and need to improve the way government acquires capabilities and the manner industry delivers them is not new. Finding opportunities to improve and establishing incentives for doing so must be the focus of all interested parties. The future of our national security depends on our getting it right.

Lt. Gen. Michael Basla, USAF (Ret.), the former chief of information dominance and chief information officer of the U.S. Air Force, is the senior vice president of Advanced Solutions for L-3 National Security Solutions.

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Great article, but unfortunately we will never get it right. Our system is designed as a low pass filter in the form of multiple bureaucratic entities which are incentivised to say "no"... We either rebasline our federal government iaw the original intent/verbiage of our Constitution or we continue our Machiavellian attempts at success. One desirable outcome would be to fail more quickly as we try new things.

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