Defense Acquisition Reform: Background, Analysis, and Issues for Congress

Summary

The Department of Defense (DOD) relies extensively on contractors to equip and support the U.S. military in peacetime and during military operations, obligating more than $300 billion on contracts in FY2013.

Congress and the executive branch have long been frustrated with waste, mismanagement, and fraud in defense acquisitions and have spent significant resources attempting to reform and improve the process. These frustrations have led to numerous efforts to improve defense acquisitions. Since the end of World War II, every Administration and virtually every Secretary of Defense has embarked on an acquisition reform effort. Yet despite these efforts, cost overruns, schedule delays, and performance shortfalls in acquisition programs persist.

A number of analysts have argued that the successive waves of acquisition reform have yielded only limited results due in large part to poor workforce management. Most reports have concluded that the key to good acquisitions is having a sufficiently sized and talented acquisition workforce and giving them the resources, incentives, and authority to do their job. Yet most of the reform efforts of the past decades have not sought to fundamentally and systematically address these workforce-related issues.

Significant changes to the national security and industrial landscape in recent years, including consolidation of the defense industrial base and the increasing complexity of weapon systems, have led many analysts to call for a renewed effort to improve the acquisition process.

Historically, eras of budgetary restraint have been associated with the pursuit and implementation of acquisition reform. Against the current backdrop of the Budget Control Act of 2011 and declines in defense spending, the stage may be set for a renewed effort to significantly improve defense acquisitions. Other factors contributing to a sense among analysts that the time may be ripe for reform include recent experiences in Iraq and Afghanistan and the increasing availability of data to drive decisions.

In recent years, DOD has taken a number of steps to improve the process by which it buys goods and services, including

rewriting the regulatory structure that governs defense acquisitions;

launching the Better Buying Power and Better Buying Power II initiatives aimed at improving the productivity of the acquisition system and the industrial base;

improving the use of data to support decision making; and

establishing a team to develop a legislative proposal aimed at simplifying the laws and regulations governing defense acquisitions.

Many analysts believe that what DOD can do on its own to improve acquisitions can only go so far—that significant, effective, and lasting acquisition reform will occur only with the active participation of Congress. Congress has been critical to advancing acquisition reform; such efforts as establishing the Federal Acquisition Regulation, creating Defense Acquisition University, streamlining acquisition regulations, and enacting the Goldwater-Nichols Act were the result of congressional action.

Oversight issues for Congress include the extent to which the Weapon System Acquisition Reform Act of 2009 (P.L. 111-23) and the various DOD initiatives are having a positive effect on acquisitions, whether current reform efforts are sufficient to address concerns related to the acquisition workforce, and what additional steps, if any, Congress can take to further the effort to improve defense acquisitions.