LAWLESS: Political Appointees, Acquisition Bureaucrats & Lawyers Ignore the Law

DOD senior political officials, military service Senior Procurement Executives (Senate confirmed officials), senior career acquisition officials, and their lawyers have in what seems almost a concerted manner refused to implement key Congressional directives embodied in statute.  They have ignored laws they do not like or understand and, almost religiously, implemented business-as-usual processes they do understand and apparently embrace.  To make matters worse, some have engaged in the creation of innovation theater, garnering praise for minor tweaks while wedded to a dysfunctional system that impedes synergistic relationships and hinders innovation.  Others have talked a good game but fallen short on performance.  The phrase Other Transactions (OT’s) are “just another tool in the toolbox” spews forth.  A similar ignorant statement is, “With top cover you can do almost anything with FAR” which was supplemented by an insistence that “the type of award instrument does not matter!”  If your mindset is limited to a single relationship, the buyer-seller relationship, you could almost make a case for those statements. These utterances and attitudes reflect a deference to the status-quo and a limited understanding of product/capability development and business arrangements outside of the federal bureaucratic process.  It is even worse than ignorance and apathy. Leadership, instead of doing the right thing, has chosen a path of lawlessness!

Quoted below are just some of the statutes that have been ignored, even undermined, over the past few years, in some cases decades.  The first (10 U.S. Code 2501) seems at such odds at the way DOD does business that some might doubt it is an accurate quote of law, some folks might react by thinking, “Congress can’t really have meant that.”

(b) Civil-Military Integration Policy.-The Secretary of Defense shall ensure that the United States attains the national technology and industrial base objectives set forth in subsection (a) through acquisition policy reforms that have the following objectives:

(1) Relying, to the maximum extent practicable, upon the commercial national technology and industrial base that is required to meet the national security needs of the United States.

(2) Reducing the reliance of the Department of Defense on technology and industrial base sectors that are economically dependent on Department of Defense business.

(3) Reducing Federal Government barriers to the use of commercial products, processes, and standards. (10 U.S. Code 2501(b)).

Yes, Congress means it!  In the most recent National Defense Authorization Act (NDAA) Chapter 148 of the title 10 U.S. Code is mentioned in several sections. Section 2501 is the capstone provision of Chapter 148. Section 2501 is specifically referenced in section 846 of NDAA 2021.  Among other things that section amends 10 U.S.C. 2440 which is in title 144 of the Code and addresses major weapons systems.  The civil-military integration policy is not meant for just marginal application.

In order to implement a policy promoting dual-use technologies, to which the provisions quoted above clearly apply, another provision in 10 U.S. Code 2371, that has been essentially ignored states:

(g) Education and Training.-The Secretary of Defense shall-

(1) ensure that management, technical, and contracting personnel of the Department of Defense involved in the award or administration of transactions under this section or other innovative forms of contracting are afforded opportunities for adequate education and training; and

(2) establish minimum levels and requirements for continuous and experiential learning for such personnel, including levels and requirements for acquisition certification programs. (added by sec. 863, NDAA 2018)

Immersed in the business of providing education and training on innovative contracting and business practices, Strategic Institute has significant insight into the state of education within DOD.  Over the years our team has hosted conferences, seminars, and in-house training under contract to DOD organizations.  Results have been checkered.  Many attendees go away from educational sessions and little change is seen in their organizations.  The students may be willing, but management fails to provide support.  Usually, newly acquired knowledge is set aside and most continue to perform in a business-as-usual shell.  This is contrasted by the success of organizations that develop curiosity, followed by research and significant additional education (this turns into leadership support), and information and best practice sharing among a community of like-minded professionals.  Notable in this regard is Naval Surface Weapons Center-Crane.  As one consortia manager said, “It is night and day between the teams that have taken Strategic Institute training and those who have not. The ones that have ‘get it’ and programs and projects advance with a lot less friction and trouble.”  It turns out, contrary to an opinion shared by a number of senior acquisition bureaucrats, education does indeed matter.

Misinformation about Other Transactions abounds in briefing materials and attempts at training conducted by some organizations.  In some cases, contracting organizations have solicited help from sources with little expertise in innovative contracting.  Thirty years after the original OT statue was introduced, much of the DOD acquisition community remains mired in ignorance and apathy.  It was reported that Air Force lawyers took the position that agreements under both section 2371 and 2371b could only be funded with research and development appropriations.  This view was specifically repudiated in the OSD Guide on Other Transactions. The rationale can be found in Appropriate Appropriations.

The same National Defense Authorization Act that required education and training, also contained this proviso that has been almost completely ignored except for outposts like the Defense Innovation Unit (DIU):

     SEC. 867. PREFERENCE FOR USE OF OTHER TRANSACTIONS AND EXPERIMENTAL AUTHORITY. In the execution of science and technology and prototyping programs, the Secretary of Defense shall establish a preference, to be applied in circumstances determined appropriate by the Secretary, for using transactions other than contracts, cooperative agreements, and grants entered into pursuant to sections 2371 and 2371b of title 10, United States Code, and authority for procurement for experimental purposes pursuant to section 2373 of title 10, United States Code. (NDAA 2018)

This requirement for establishing a preference is supportive of the industrial base policies in Chapter 148, U.S. Code and specifically the civil-military integration policy quoted above.  Moreover, there has long been recognition that this is needed.  Former Marine commandant Gen. Al Gray chaired the Dual-Use Research Project which concluded dual-use should be DOD’s preferred approach to conducting Science and Technology projects with innovative contracting approaches (Other Transactions) as the default approach (1996).  Even earlier the Defense Science Board task force on acquisition reform concluded “entire industry segments” for example “jet engines, microelectronics, software, and space systems can and should be procured and supported in a fully commercial environment” (1994).

In addition to scoffing at law, the business-as-usual community ignores its own acquisition regulation when it does not like what it says, “The primary purpose of contracted R&D programs is to advance scientific and technical knowledge and apply that knowledge to the extent necessary to achieve agency and national goals.”  R&D contracts are: “unlike contracts for supplies and services..” (FAR 35.002).  Property and services are what the Federal Acquisition Regulation (FAR) regulates (FAR Part 1).  Moreover, Procurement “Contracts shall be used only when the principal purpose is the acquisition of supplies or services for the direct benefit or use of the Federal Government (FAR 35.003). Like section 2501(b) of title 10 U.S. Code, bureaucrats have a difficult time believing the regulation means what it says.  They certainly have done little to comply.

One can only hope the incoming DOD leaders of the new Administration will insist on law being followed. Leadership is critical but significant changes in the attitude, education and qualities of the workforce are also needed.

See Appropriate Contractual Instruments for R&D.

written by Richard Dunn