“The Pentagon’s new acquisition plan creates almost a dozen new offices, in what the department hopes will be a streamlined organization better able to manage the needs of today while developing the technologies of tomorrow.
On Aug. 1, the department delivered to Congress its plan for devolving the undersecretary of defense for acquisition, sustainment and technology, or AT&L, into two smaller organizations — the undersecretary of defense for research and engineering, or USDR&E, and the undersecretary of defense for acquisition and sustainment, or USDA&S.
Those changes are required to be implemented by Feb. 1, 2018.
Among the notable changes, three quasi-independent offices — the Strategic Capabilities Office, the Defense Innovation Unit Experimental and the Defense Advanced Research Projects Agency — will be folded two levels under the USDR&E, while a new analysis cell will be set up to drive how the Pentagon invests its money for the future.
The Missile Defense Agency will also be rolled under the USDR&E, at a time when the Trump administration has made missile defense a priority for the department.
It is important to remember this is just the Pentagon’s plan, and in many cases the document is purposefully vague about details. Congress will still have its say and could make wholesale changes to the structure.
However, in reading the document, it appears the Pentagon took to heart the guidance in boththe 2016 and 2017 versions of the National Defense Authorization Act, which contained major reforms championed by both Sen. John McCain, R-Ariz., and Rep. Mac Thornberry, R-Texas, the chairmen of their respective committees.
In addition to the breakup of AT&L, the report focuses on what should be the responsibilities of the new chief management officer. By admission of the report itself, the CMO layout will continue to evolve in the future as the Pentagon itself changes and as offices transform.
As currently envisioned, the CMO will have six ”reform leaders” who will oversee changes to logistics and supply chain; real property; community services; human resources; health care; and a broader performance management reform leader, who will be responsible to work with the CMO and deputy secretary to establish “a process for routinely managing the progress of the functional reforms and IT business system deployments against the plan using those goals and other measures.”
It also creates a program executive for IT business systems, with the express goal of bringing down the number of individual IT systems across the department and streamlining them.
One item left unanswered in the report — where the current assistant secretary of defense for energy, installations and environment office ends up. That could be placed in either the USDA&S bucket or in the CMO’s office.
“The Pentagon is scheduled to deliver its new acquisition structure to Congress, a major step toward redesigning how the building researches and procures equipment.
The 2017 National Defense Authorization Act instructed the Pentagon to devolve the undersecretary of acquisition, technology and logistics, or AT&L, into two separate jobs: undersecretary for acquisition and sustainment, or A&S; and a new undersecretary for research and engineering, or R&E, essentially a chief technology officer.
Those changes are expected to be in place by Feb. 1, 2018.
Congress purposefully allowed time for the Department of Defense to come up with its own road map on how the split should occur, which the department is supposed to deliver to Capitol Hill on Aug 1.
Sources say there were discussions about delaying that delivery, in order to allow newly installed Deputy Secretary of Defense Patrick Shanahan a chance to weigh in. However, all indications are that the department intends to hit its Tuesday deadline.
It is important to note that this report will not be the final say in the issue. Its purpose is to inform Congress of how the department will split the duties of AT&L and the broad organizational strategy, but does not need to detail the nuts and bolts of currently shared services. That also means that Shanahan and Ellen Lord, the longtime Textron executive-turned-AT&L nominee who may be confirmed this week, will have a chance to continue to give input going forward.
An interim, two-page memo to Congress was delivered March 1, which contained few details about how the building is approaching the question of devolving AT&L into the new offices.
Congress, meanwhile, is trying to balance out how to give senior leaders a chance to weigh in and making sure the DoD meets the Feb. 1 deadline. And while the report will be happily received in Congress, there is skepticism about what the DoD will actually deliver and how closely it will hew to Congress’ vision of how the new structure should look.
Bill Greenwalt, a longtime defense acquisition expert who spent two years as a staffer on the Senate Armed Services Committee where he had a central role crafting McCain’s acquisition changes, emphasized that the Pentagon’s thoughts are recommendations and that Congress will have final say.
“I think it will be a back and forth between the Congress and administration in terms of how to make this work,” he told Defense News. “The key thing for Congress is R&E should be driving innovation. A&S should be providing the oversight structure. The boxes shouldn’t be transferred around, it should be a cultural shift.”
SCO, DIUx likely folded under R&E
While the majority of the changes to the AT&L structure will entail a reshuffling of offices already under central control, there are two notable offices that may be brought in house, whether they desire it or not.
The Strategic Capabilities Office, or SCO, and the Defense Innovation Unit Experimental, or DIUx, were two pet projects of former Secretary of Defense Ash Carter. The SCO is focused on finding innovative solutions to near-term challenges, while DIUx is charged with creating ties between the DoD and the commercial technology sector.
Notably, both offices have existed as quasi-independent entities. DIUx actually started as a report inside the AT&L structure before being relaunched a year ago following a lack of progress in its mission; it then became a direct report to Carter. The SCO, meanwhile, was created by Carter during his time as deputy secretary of defense and was formally introduced to the world by Carter during the fiscal 2017 budget rollout.
With Carter gone and Congress seeking to improve innovation inside the building, there is pressure from the Hill to see those groups folded into the new R&E portfolio. In a May 18 interview, Mary Miller, acting assistant secretary of defense for research and engineering, said SCO and DIUx “would naturally fit in the USDR&E, that’s the intent.”
“If we set this undersecretary up as we believe we will, as we’re hoping this turns out to be and it will be a select-in to this whole new culture we’re establishing, we don’t need to have special groups that were set up just to be different, because that will be the undersecretary mission,” Miller said during the interview.
Greenwalt said that if the Pentagon crafts the R&E spot “right,” groups like DIUx, SCO, the various rapid capabilities offices and perhaps the Defense Advanced Research Projects Agency should all fall under its control.
When it was pointed out to him that regardless what the Pentagon says, Congress could step in and demand those groups fall under R&E’s control, Greenwalt smiled. “Right. That’s the back and forth,” he said. ”We’ll have to see how it works.”
Greenwalt isn’t the only one who thinks those outside groups should come inside. Frank Kendall, whose tenure of four-plus years as AT&L ended with the Obama administration, believes that for the R&E spot to work, it must include all the research groups scattered around the department.
“It would have basic research, 6.1, 6.2 and 6.3, it would have DARPA, it would have SCO and DIUx, it would have the existing office that does experimentation,” Kendall said in April, adding that he had provided that recommendation to Deputy Secretary of Defense Bob Work.
Andrew Hunter, an analyst with the Center for Strategic and International Studies, noted that the Senate clearly has been leaning toward putting SCO, DIUx and DARPA into the R&E portfolio. But that may be an imperfect fit, he warned.
“DARPA, by mandate, deals with that leap-ahead tech, 6.1, 6.2, 6.3 work, research that is early stage. Once it gets to prototypes, that’s no longer DARPA territory. SCO is on the other end,” Hunter said. “Both have a fit in the R&E position. But it seems the department is heading towards having R&E have more of an early stage focus, so they might come to a different answer.”
While the future of the R&E office is uncertain, the A&S job appears to be more stable — in part because its leadership seems intact.
Lord, the former Textron executive, has already gone through a confirmation hearing for the AT&L job, during which she reaffirmed she would be sliding over to A&S once the AT&L office goes away in February.
The Senate’s version of this year’s defense authorization bill would require Lord to be reconfirmed for the A&S job, but given how little headwind she faced in her confirmation hearing, the assumption is she would easily be reconfirmed for the new title.
Which brings up the question of who her counterpart would be. It is understandable that no names have been put forth for the job, as the White House and Pentagon have been focused on filling existing roles, plus the R&E job does not exist. But waiting too long to put forth a nominee could have “risk,” Hunter said.
“You might not be able to get the quality person you want because of how it is cast. The earlier you name a person, the more they have a chance to shape the structure of the office,” he added. “However you slice the piece, what used to be one really powerful job is now two jobs, each of which is slightly less powerful — so how appealing are they for someone who wants to put their stamp on the future?”