Rep. Mac Thornberry

The Pentagon acquisition system has gotten so bad that it is undermining the nation’s military and literally obstructing modernization efforts, a panel of independent advisers told the House Armed Services Committee today.

Representatives of the congressionally-mandated “809 panel” painted an alarming picture of the state of defense procurement.

The panel delivered an interim report to the committee a day before HASC Chairman Rep. Mac Thornberry is scheduled to unveil his own procurement reform proposal. Thornberry’s first question to the panel: Are things worse now than they were in the past? The answer was a resounding ‘yes.’

Bill LaPlante

Former Air Force procurement chief Bill LaPlante (a Cub’s fan) said it has been obvious for years that DoD has failed to adapt to the realities of the modern world. “Our technological superiority has been eroding,” LaPlante told the committee. “We have seen that over the past decade. … In space, cyber, air superiority, it has been eroding right in front of us.” The panel’s report chastises the Pentagon’s acquisition bureaucracy for holding on to antiquated practices that date back to the Cold War, when the U.S. Defense Department was a beacon of innovation and had an impressive monopoly on advanced technology.

There is no sense of urgency even as other countries modernize their militaries and close the gap with the United States, said LaPlante: “Our adversaries are not studying things, they are building things.” Innovation at DOD, meanwhile, is “worse than it’s ever been.”

Deidre Lee

Panel Chair Deidre Lee, a former director of defense procurement and acquisition policy, said the group does not intend to deliver yet another reform proposal to add to the huge stack of studies that Washington has produced over the past decades. Speaking with reporters after the hearing, she said she hopes “people will gasp” (emphasis added) when they see the panel’s final recommendations.

The panel will provide detailed guidance to the Pentagon on how to simplify defense contracting and to encourage innovative tech companies to work with the military. The Pentagon, Lee said, has built barriers around the defense market that keep the best and brightest away. By excessively emphasizing oversight and compliance with regulations, the government has unwittingly “criminalized commerce,” Lee said. Contractors should play by the rules, she said, but government procurement has gone too far in the direction of being a “gotcha, punitive” system.

The panel was sharply critical of the Pentagon wasting money on legacy technology. Even with a budget of $300 billion a year for equipment and services, the bulk of defense equipment today is outdated and does not benefit from the rampant innovation happening in the civilian economy.

“There is an imperative,” said Lee. “We have to be more agile, more responsive.” Thornberry said the panel’s conclusions are consistent with what he has heard from businesses that have deliberately chosen to not work with the Pentagon.

Charlie Williams, former director of the Defense Contract Management Agency, said he worries that the defense industry is becoming too segregated and isolated from the larger technology ecosystem. Not having a vibrant supplier base “is a huge challenge” for DOD, he said.

The panel’s report notes that the defense industry as we know it is rapidly shrinking while the “game changing” technological advances are happening outside the defense sector. The Pentagon seems oblivious to these trends, putting the U.S. military at risk. it says.

The 809 panel, in an ironic twist, has not moved as quickly as it had hoped in developing its proposal. The members were sworn in in August 2016, but because of administrative delays, didn’t get going full speed until March. Lee asked Thornberry to extend the panel’s deadline for its final report until January 2019, although she insisted they would submit interim proposals between now and then. The 18 commissioners include the nation’s top procurement experts. They brag that they collectively have 350 years of government procurement experience.

Thornberry told reporters after the hearing that he was “encouraged” by what he heard from the panel, and that he hopes it will bring a “sense of urgency” in DOD procurement, as opposed to the usual cynical attitude that “we’ve tried tried everything, and we keep beating our heads against the wall” while nothing ever changes.

The HASC procurement reform bill Thornberry plans to unveil tomorrow acknowledges that “we can’t fix everything in one bill,” he said. “We have to eat this elephant one bite at a time. What you’ll see tomorrow is consistent what what this panel described.”