Historians, military officers, and most other people know that the Wright Brothers epic first flight of a powered, piloted aircraft took place in 1903. Many also know that in World War I, the Great War of 1914-1918, several nations produced a variety of reconnaissance, bombing, and fighter aircraft flown in combat. Some were flown by American pilots but none of the aircraft were American made. How, in just a few years, did America’s unique position as the world aviation technology leader shrink to being a recipient of foreign made aircraft? More particularly, how does this relate to Other Transactions (OTs)?
First, lest we get mired in details of this analogy, let’s dismiss some non-issues. There was patent litigation between the Wrights and Glenn Curtiss (the Wrights won). That had little impact on the Wrights demonstrating their inventions in 1905 and following years. The Army’s procurement process caused some delay in the first flight demonstration in a military context. The Wrights were not initially selected for award of the contract for the Army’s first airplane but compared to today the contract award came in record time. The one page contract they eventually received was a model of simplicity (a framed copy once adorned the office walls of many procurement shops). The problem was with the bureaucracy that embraced the Wright’s invention.
Aviation was in the hands of the Aeronautical Division of the Signal Corps. To that bureaucracy the airplane had certain characteristics superior to a balloon, but its job was the same – observation – that was the mission. The job of today’s government procurement bureaucracy is buying goods and services through a highly regulated purchasing system. Just as Signal Corps bureaucrats saw aviation through the prism of observation, many procurement practitioners view their mission through a highly limiting prism. This is not surprising since the first duty of a contracting officer is compliance with the myriad regulations and policies of that system (FAR 1.602-1 (b)).
The purpose of this analogy is to point out that DOD, the military departments and defense agencies (we might include other government agencies) have put the wrong people in charge of Other Transactions (OTs). This should be obvious but apparently is not, hence the balloon/airplane analogy. There were individuals in the Signal Corps who had the vision to see the potential of the airplane, but they were immersed in a bureaucracy that stifled that vision. There are individuals who have the potential to perform well in a freedom of contract environment, but that environment does not exist in most procurement offices. The procurement bureaucracy specializes in knowing and following the complex of rules applicable to procurement, the vast majority of which do not apply to OTs. Rather than compliance with the rules governing the highly-regulated FAR purchasing system, OTs focus on projects that support mission accomplishment (goals); at least they should.
The DOD OT Guide says that an OT agreements officer need not be a warranted FAR contracting officer. However, it allows organizations with acquisition authority to impose their own rule. Virtually all require that an OT “agreements officer” be a warranted FAR contracting officer. The choice to impose this requirement not only makes no sense but is counter-productive. To focus OTs on projects and mission accomplishment, the person with a mission to accomplish and the associated budget should be in charge. Legal and contracting offices are there to support the project office in accomplishing the mission not to rule over the project office. In DOD the hierarchy of who is in charge is often upside down.
DOD’s dysfunctional acquisition system was highlighted long ago by the Packard Commission and more recently by Eric Schmidt when he chaired the Defense Business Board. Focus on the mission, projects and the project manager. Provide necessary administrative help by assembling a team to support the project manager including legal and contracting disciplines. Let’s stand development projects right side up. Create a streamlined process by utilizing existing contracting authorities Congress has provided – sections 4021, 4022 and 4023 of title 10 U.S. Code among them.
For organizations too enamored with business-as-usual to abandon an “agreements officer must be a warranted contracting officer,” there are useful intermediate steps to be taken. Recognize the importance of the program, project, or technical manager (agreement officer’s representative). The PM should be involved in negotiating the OT agreement especially in crafting the vision statement, performance work statement, and milestone events. The PM, not the contracting office representative, should have the authority to approve substantive agreement changes and milestone payments.
If DOD and the U.S. Government more broadly wants to be prepared for the challenges of an uncertain future it needs to be innovative. The most important innovation that can be embraced immediately is business process reform. Congress has provided the tools. Starting with reform of contracting processes, innovation is not only possible but imperative. Success in reforming contracting processes will provide the impetus for other needed reforms. Budget and personnel are high on the list.