Acquisition reform and modernization

Gilbert F. Decker, Assistant Secretary of the Army for Research, Development and Acquisition, has worked effectively and with great determination to lead the Army's acquisition and procurement reform efforts and to make sure that U.S. Army soldiers have the best equipment available. The Army's dedicated advocate of Army modernization, he has steadfastly emphasized that today's modernization is tomorrow's readiness.

During its Winter Symposium in Orlando, Fla., in February, AUSA presented an award for distinguished service to Mr. Decker "for his contributions to the nation, to the Army and to AUSA." The award citation notes that Mr. Decker has for the past three years "been instrumental in developing and coordinating agendas for A USA Symposia and Annual Meetings and has worked closely with the Army Staff, Army major commands and the Association to foster a better understanding and working relationship between the Army and defense industry counterparts."

Mr. Decker has submitted his resignation and expects to leave the Pentagon this spring. ARMY Editor Mary Blake French interviewed him to get his insights on today's and tomorrow's Army from the perspective of his years as Assistant Secretary as well as his lifelong involvement with the Army and the defense industry.

Q. What do you consider your greatest accomplishment as Assistant Secretary of the Army for RD&A?

A. I think in a broad sense it's the acceptance of our major acquisition reform and business practice reformsDr. [William J.] Perry's emphasis on acquisition reformbusiness reform-and his backing, total agreement among the Service acquisition executives. We are already seeing some significant savings in a number of our acquisition programs with no sacrifice in quality for the soldiers. That's what I came here to do. That lured me to the job, and I think we have made some great strides there, and I think that's the area that I am most proud of.

Q. It looks like there is a serious commitment to acquisition reform that will continue.

A. I believe there is. I really believe that everybody is pleased. The Chief of Staff is pleased with what we've done. He pushes us to do more, and we have good people in the Acquisition Corps along with the Army Materiel Command folks who believe in what we are doing. We have it institutionalized. But big bureaucracy has a way of taking on a life of its own, so somebody needs to watch that.

Q. Some of our readers don't fully understand the impact of defense mergers on Army acquisition. How do they change the picture?

A. In terms of their effects on our total acquisition process and what we buy and how we buy, I think in general and up to a point the mergers will have a positive effect. Future, overhead and general administrative costs with the merged companies will be reduced significantly In fact, the companies must and do agree to these reductions in cost as part of the approval of the merger process. At the same time we really don't want to see defense industry mergers reach a point where there is no competition, even if their overhead costs are reduced. We don't want to see them get to a point where there's no competition in any significant application sector such as missiles, aircraft, ground combat vehicles and so forth, or for any significant technology areas. That's what we have to guard against, and so far it has not been a problem. It could become one with continued mergers.

Q. You recently mentioned some pretty disastrous scenarios that could have become a modernization nightmare. They were averted, but do you think they might happen in the future? If so, could they be avoided next time around?

A. They can be avoided, I believe, even with the overall declining resources. As you probably are aware, in the downsizing and budget reductions of the defense establishment overall, readiness and quality of life of the force stayed as the major priorities and I think that was very proper, and, so, during all that downsizing when there was a crunch point or some budget wasn't as big as we had envisioned it would be, the modernization accounts were the bill payers. Part of the problem in being the bill payer was the lack of a long-term bill-paying plan that could be stabilized. We get jerked around during a budget year three or four times for quick and rapid bills that have been identified. One way to avoid this kind of disaster would be for this establishment-that is, the Army and the other Services, as well as OSD-to stablize the modernization budget, and not change it except in a dire emergency or if there is poor performance on a program.

Q. Do you have real confidence this could happen? The track record is terrible.

A. It is not good so far. It certainly was appreciated by Dr. Perry in the last year he was here. It was unquestionably understood by Dr. [Paul G.] Kamenski, who is now leaving. It is a major issue in the modernization and infrastructure part of the Quadrennial Defense Review. I believe from what I've read, not through personal knowledge, but from what I've read in the newspapers, that Secretary [William S.] Cohen is very concerned about modernization. As he begins to understand that instability from short term to short term on given programs hurts worse than just fixing the lower budget and keeping it, I think there is going to be a realization that we've got to stop jerking modernization around. We've certainly cried about it enough.

Q. How can the Army achieve the long-term investment in modernization that you've repeatedly explained is the key to future readiness?

A. We have to cease using modernization accounts, individual program accounts and modernization as a whole, as the short-term bill payers when some thing we need to think about comes up. Stability of each modernization program throughout its critical development and early procurement phases is absolutely essential in importance to the absolute dollar funding. If they took a lower funding level and kept it stable, we would adjust to that level and we'd have a more efficient program, but to have one plan over a five-year period and be jerked around the second year of the period costs us a lot of money. So we (the

Army) have to convince OSD and OMB [Office of Management and Budget] to stabilize the budget guidance for the modernization programs and the PPBS [Planning, Programming and Budget System] and to preclude internal changes which keep jerking us around annually and within given budget years. I think the only organization within DoD that has an in-depth understanding of what this instability causes us in the real cost of modernization is the [Office of the] Under Secretary of Defense for Acquisition. I think Congress has been even more understanding than the Pentagon has on this basic issue because they gave us permission for more multiyear programs than we used to have, but if we can just get the budget stable and keep it stable for the critical programs, I think we can do a lot better.

Q. What can AUSA do to help the Army get more support for its modernization efforts?

A. Well I think first-and AUSA does a good job of this-is to clearly study and understand the Army's modernization strategy and its priorities and why they're established that way. AUSA is doing a good job of that; just keep on top of it. Second, I think AUSA can publicize to its membership-military personnel, individuals and industry-what these needs and priorities are and urge its membership to push DoD, Congress and the public to support these needs. Third, I think AUSA can provide very good advice and support to the Army in its streamlining and reform efforts.

Q. What do you think the outcome of the Quadrennial Defense Review will be?

A. Let me address that in a broad sense. I don't think there is honestly any small backroom set of preconceived conclusions that already have been developed that anticipate the outcome and that they're going to massage the QDR to fit. I really don't believe that. I think the various panels, the strategy panel, the infrastructure panel, the modernization panel and all the others, that are studying the issues are really trying to do a bottom-up, topdown look at the real facts as they exist. Once it's integrated, there will be some conclusions drawn. I think probably those conclusions will be about as objective as you can expect from an institution like this. Having said that, I don't know how, no matter what conclusions they come up with -whether it's reduce force structure, change modernization, reduce infrastructure-I don't see any scenario that would lead to an increase of any significance in the defense budget. We're going to have budget constraints and eventually the QDR is going to have some pretty strong recommendations, but they will probably have to get packaged inside these budget constraints. I'm not quite sure how that's going to happen, so it may cause us to change emphasis and cause changes in force structure. It may recommend those things, but if the recommendations taken together don't fit within the defense budget today, give or take a few percent, it will get packaged that way anyway

Q. Should the Army increase its attention to post acquisition costs?

A. Absolutely, the operations support cost, the life cycle cost after fielding of systems and equipment are just killing us-for a lot of reasons-and when we talk about acquisition reform and what we have achieved, we're really talking about that part of acquisition that relates to early requirements, the R&D if any are needed-buying the system and fielding it-and that's what we've been reforming and we've made great progress on, as I said earlier. After it's fielded, the apparatus sustainment, which is not only multifarious, but also old, unwieldy and based on Cold War techniques, [needs improvement]. There has to be a reform movement for post acquisition phases just as there was for acquisition. So far, post acquisition reform has not reached that proportion of change.

Q. Is there anything more on life cycle reduction that you want to emphasize?

A. This is very sensitive and very political but I think we truly need to be able, in general-not in every single case-to look hard at where we can be outsourcing. I believe we hide too much behind a movement that says "But, oh my goodness, if we have an emergency or a real war, what if the industry isn't there to support?" The industry will always be there to support, not on the battlefield, but in such highly expensive processes as maintenance depot and things like that and right now we have great resistance to really make the best business decisions. That's an area that would gain us a lot. Meanwhile, we can do a lot for ourselves such as modernization through spares, which means don't buy the same spare all the time. We need to make some major changes in the process.

Q. Now how much of acquisition and research can be funded from savings realized through efficiencies?

A. In the area of research, development and acquisition, we're already getting visibility. If we could realize the initiatives during the research and acquisition phases of every program we have, compared to what that same set of programs was costing three or four years ago, we're probably looking at two, two and a half billion dollars a year savings out of what would have been maybe a 12 billion dollar budget for modernization. I'm trying to give you some relative numbers.

We're down now to about ten and a half billion but we're still getting most of the programs done. We've only killed one major program and that was the armored gun system and otherwise-and we're not just salami slicingwe are seeing those efficiencies, so we did some studies. DoD sponsored the Coopers and Lybrand study, and the Army sponsored a Peat Marwick study on cost drivers and the acquisition process that did not contribute greatly, relative to the amount that was being spent. It was like a functional analysis based on their studies-we could see 20 to 30 percent savings.

We're already starting to see about 10 to 15 percent, so I think we're talking three to four billion dollars a year compared to what we would have had to spend if we had bought the same stuff before, and I think we're already seeing that. If we removed the barriers, addressed the post delivery life-cycle sustainment efforts with the same rigor with which we've tried to address acquisition, made solid business decisions on outsourcing, and changed our internal process accordingly, I think we could see 3 to 5 billion dollars a year savings and beyond from what we're spending today.

Q. The money hasn't gone back where the savings actually occurred, has it?

A. There are two ways to view that. If you look at what we are doing today for the budget in modernization, including the congressional plus-ups that we've gotten in the last two years, and if you look at the value of what we're buying, I believe at this point in our history of acquisition reform we would be needing about another billion to a billion and a half dollars a year to do what we are doing today. We've done some studies on that with a cost analysis group, so the budgets were reduced to where they are and we're still buying what we're buying. Had we not made the acquisition reform, we would be buying less, so in that sense we managed to fill more of our needs at a lesser price. And that's pretty well documented. We probably could have seen more money in the modernization budget and bought even more, except for some of the bill paying that has gone on inside the Pentagon-not just Congresswhich has gone to other accounts such as readiness and operations and maintenance. We've seen some of our potential savings migrate there but the fact is we are getting a much bigger bang for the buck, compared to what it would have cost us. We have good documentation on this. Q. The 1997 Strategic Assessment explains the wisdom of the full spectrum force as opposed to other possible plans of actions. I understand it is the path the Army has chosen, but what if its expense pushes the United States to pursue the recapitalized force or the accelerated RMA [revolution in military affairs] force instead?

A. This is really a political Commander in Chief (meaning the President), congressional, and essentially a U.S. public question. If the Army is to continue to carry out the total spectrum of missions that we are seeing now, in the last three or four years and continuing into the future, and must be prepared for the regional conflict-ranging from full-up local war to the low-intensity conflicts, to humanitarian operations, to civil disturbances and to stability operations like Bosnia-then we have to have an Army with a dominant capability in each of these kinds of missions. If it's barely adequate, you're going to do the mission poorly. If it is a warfare mission, you might win but you're going to have a lot more casualties. So this notion of dominance in the entire spectrum is vital.

We taught ourselves in Desert Storm that if you are going to commit to active hostility, and that's a presidential decision, that you damn sure want to get in there and win in a hurry. If you're going to go to Bosnia, you want to execute the entire mission efficiently and squarely and have it done correctly. If we commit low morale, poorly trained troops with lousy equipment, we'll generate mission failure or we'll spill a lot of blood, so we either have to reduce the spectrum or really rethink the defense budget priorities. That's an oversimplification but I don't think you can have it both ways. So if you pursue the recapitalized force, that's another way of stating that you're going to give modernization a greater percentage of the budget-assuming they're not able to add anymore money to the total budget. That of course leaves lesser monies to support the size of the force and to keep it ready. You may have to accept force reductions and, therefore, you may not be able to carry out the full spectrum of missions. I think there are going to have to be some tough issues decided. QDR is supposed to get to the heart of all these things.

Q. How would you compare the Army of 1997 with the Army as you knew it in 1958 when you were commissioned as a second lieutenant?

A. I came in the Army in November of '58 with an ROTC commission. I accepted a Regular Army commission at that time, and the Army was in a trough. The active hostilities in Korea had ceased five or six years earlier. In '58, '59 and '60, Vietnam only had a few military advisors, and there were no U.S. hostilities going on. Eastern European communism obviously led by the Soviet Union was perceived as a big threat and worrisome but mostly because of a major nuclear threat. In '58, relatively speaking, defense and Army budgets were low, training funds were down, many of the ROTC graduates, a sizable number then, were only being brought into active duty for about six months and then sent back to the reserves because there was no room for them in the active Army. So it was kind of a flat, I wouldn't say poorly trained [force], but less than dominant, in terms of what we talked about earlier. If you ask what would have happened if our forward deployed forces in Europe and Korea had really been attacked at that time, my guess is we might have held our own but we would have had a hell of a struggle and we would have seen a lot of casualties, so it might have been a repeat of the Korea of 1950. And the R&D and acquisition process was sluggish with a few exceptions, so that was a dormant period. Then we went through Vietnam; that led to another flat Army afterward and a lot of demoralization. And now if we jump all the way ahead to 1997, it has been about five or six years since our last major war, which was Desert Storm, but the Army isn't sluggish. There has been an intense, devoted military leadership dedication to training and morale and readiness. Today, as we speak, our equipment is superb and I believe we are still dominant. But technology turnover in general is fast and eventually we are going to see peer competitors on the battlefield if we don't keep up with the technology turnover. Now the Army, the eighth largest army in the world, is the best in all respects. In 2005+, if we don't keep modernization up to speed, I'm not so sure. On a point-topoint comparison, I think the Army of '97 is far more ready to be what it needs to be than was the Army of '58.

Q. Were you given advice when you took this job?

A. No, not in the explicit sense from a predecessor. I had a lot of counsel and I had lots of support, some of which could be termed as good advice from the people here. But you have to keep in mind when I came in-let me go back to January of '93 when the inauguration of the first term of this administration came inshortly after that until November, there was not an Army Secretary, there was not an Army under secretary and there certainly weren't any assistants, so in November Secretary [Togo D.] West [Jr and Under Secretary [Joe R.] Reeder finally got sworn in. During that whole period there was no one in this job as Assistant Secretary for Research, Development and Acquisition. I was sworn in in April. Although I had been selected for nomination in January, the actual nomination was after that. During this period of tendered nomination, I was able to come in and get briefed as long as I didn't act as if I was going to have this job. So during that period there was no one except the active folks that had been around from a previous administration to pass along advice, but I had some fortunate experiences in my career that helped. I spent six years on active duty in the Army and 24 years in the active Reserve. I was in the defense industry a great deal of my career and I've known Bill Perry for a long time, and I watched the procurement system from the industry side. I was on the Army Science Board for six years and did studies and really had a feeling of where there were stilted business processes. It does not take a rocket scientist to know how bottled up and cumbersome our acquisition system had become. Couple this with what you hope you were accomplishing in business and trying to run business to make it efficient. You can make it hard if you want to or you can make it clean and simple, and say here's the right way to do things and just bore on with it, and that's the approach that I took. I said you don't have to have an 800-page study on each decision. You need about one or two briefings; then you know what will work. Will there be problems when you do it? Yes, but it's the right thing to do, so let's do it. When you talk about streamlining RFPs [requests for proposals], streamlining contract decisions-are there problems? Yes, but we're so bound up by them; let's take the risk. If you let yourself get bound up with having to run every little last square inch of the process, you'll never change anything.

Q. What are your plans for the future?

A. I don't have any specific plans. I have decided that I don't want to go back and run a company, or be the head person. I've done that three times in my career and I need a break. I am talking to several companies about some board positions and doing some strategic management consulting and staying active that way. I'd like to get back on one of the science advisory boards here in the building so I can stay connected to defense things. But I want to stay involved; I like industry and I like business. I think I can contribute to four or five companies if I get on their boards and work with them. I do want to stay involved here on the science boards in whatever capacities I can.

Q. Are there other things you would like to add or any further advice you have for members of AUSA about things they can do? I heard you talking during AUSA's Winter Symposium in Orlando, Fla., about the potentially serious problems in the out-years and the number of people who don't have any military background or any comprehension of what some of these things mean in terms of the future of the Army. I thought you might have a word or two more on the subject.

A. I did cover the notion of making sure that AUSA really understands the Army's priorities and understands why they're there. Energizing the membership to carry the mail is important. AUSA can help us by pointing out to a lot of members of Congress, particularly the young ones coming along, who have never been in the military, why the Army needs the things it does. We need more help educating new members of Congress and keeping them informed.

Q. What advice would you give to your successor?

A. I think first you have to build good communications with the green suit leadership and the Secretary leadership. Be bold. Without question on this job you can't avoid taking into account the political effects when you're considering acquisition reform, sustainment reform, modernization and all the things we're pursuing. Even with that, I would say don't chicken out on pursuing the right thing for the Army and the taxpayer. Push hard for stabilization of the modernization budget where we get budgets fixed over a few years and try to maintain them. As I mentioned earlier, push the system hard for reform and reform the sustainment and support system for post acquisition of equipment and systems. And maybe most important, don't let the acquisition reform initiatives that we've achieved today backslide.

Copyright Association of the United States Army Apr 1997
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