WASHINGTON — A new push by US Senate Armed Services Committee Chairman Sen. John McCain to increase the armed services' authorities to manage major weapon programs could weaken the power of the Pentagon's top acquisition office.
The move comes as Frank Kendall, undersecretary of defense for acquisition, technology and logistics (AT&L), is in the midst of a series of Better Buying Power initiatives to reshape the Pentagon's sprawling acquisition system.
The upper chamber's version of the 2016 defense policy bill, the first under the Arizona Republican's control, contains language that would shift to the service chiefs, secretaries and acquisition executives program management authorities now held by the AT&L.
The biggest changes McCain is proposing — with the SASC's overwhelming backing — would make the service acquisition executives the milestone decision authority for non-joint weapon programs transferred to or started under service control.
While there could be negative impact on Kendall's authority, Mackenzie Eaglen, an analyst with the American Enterprise Institute, notes that may not be a bad thing.
"I would argue the undersecretary has too much power," Eaglen said. "I think it's healthy for the system to get more buy-in from the service chiefs by bringing them more into the process and giving them more power. It's very likely that it will ultimately weaken the undersecretary for AT&L's authority and standing, but to what degree is an open question."
A committee aide defended the move, saying lawmakers were not taking aim at Kendall or his office. Instead, the aide framed the change as one that allows OSD-level acquisition officials to focus on big-picture strategy.
"This would allow AT&L to focus on greater potential returns on investment," the aide said. "It really would free him up to go back to the role of Harold Brown or Bill Perry when they were the DDR&E [Director of Defense, Research and Engineering] to think about how do we develop the technology that will help us maintain technological dominance."
The idea is to "decentralize" the management of major weapon programs, the aide said. "One person cannot do it all."
A big part of that measure, dubbed by McCain as a "major reform bill," involves provisions aimed at keeping each service chief and secretary better informed about program progress and problems. The goal, the aide said, is to make those senior officials "more accountable" for their weapon programs, including seeing "a small number" of major acquisition programs eventually transferring to service control.
The legislation seeks to give the armed services key incentives: Execute your program without major cost breaches and you get more control and say over its annual budget. If the services fail to manage major weapon programs without substantial cost increases — known as a Nunn-McCurdy breach — the Pentagon acquisition executive would have a decision to make: take over the program or cancel it.
"I would say this bill doesn't make the service chief the program manager," the aide said. "What it would do is require service chiefs to have a greater role in developing military programs."
The aide said SASC's proposals are aimed at speeding the time it takes to field — or reach a decision to cancel — a major US weapon program. The panel believes 10 years is too long.
"We've optimized a Cold War system," the aide said. "The problem is, we're not facing a Soviet Union that's also doing 20-year development cycles. I don't think the enemies we're facing are going to take that long to innovate."
To proponents of McCain's language, clearing AT&L's plate could help the development of the "Third Offset," particularly when it comes to bringing in new companies from outside the defense sector. It allows that broader view, which should in turn lead to quicker technological development.
Byron Callan, an analyst with Capital Alpha Partners, called that aspect of the plan "a concrete manifestation of how SASC, at least, seems to be bolstering a lot of the DoD Innovation Initiative."
Increasing Responsibility for Services
The idea of handing more acquisition power to the service chiefs was met with mixed reactions.
Andrew Hunter, director of the Defense Industrial Initiatives Group at CSIS and a previous director for DoD's Joint Rapid Acquisition Cell, appreciates McCain's goal of streamlining bureaucracy in the system, but worries that "the medicine is not a cure for the disease."
His concerns center on the potential erosion of offices like the Pentagon's Office of Cost Analysis and Program Evaluation that were strengthened under reforms from 2009 to provide more oversight to the services.
"The quantity of material coming at OSD would be so limited by these changes that those offices will wither away," he said. "You also create a situation where everything under AT&L management is troubled programs. It creates weird dynamics."
And, Hunter said, the services already play a major role in acquisition programs.
"The program management really is with the services now," Hunter argued. "The program managers, the PEOs, they all live within the service reporting chain. It's not like there is this incredible divide now where things are 100 percent service-run or AT&L run. At the base of the system, the services already have the lead."
But former Deputy Defense Secretary John Hamre, now the president, CEO and Pritzker Chair of the Center for Strategic & International Studies, believes the services have a larger role to play.
"In today's system, the undersecretary for acquisition, technology and logistics and his or her staff is consumed by a massive machine generating small but urgent activities every day," Hamre wrote. "Returning the service chiefs to the chain of command will not only correct a serious defect in Goldwater-Nichols, but substantially boost the prospects for [Secretary of Defense Ash Carter's] 'third offset' strategy, permitting Undersecretary Frank Kendall to focus on what is truly important, while the service chiefs assume their responsibility for acquisition performance."
Steve Grundman, principal of Grundman Advisory and Lund Fellow at the Atlantic Council, noted there are other benefits to such a shift, even if it costs AT&L some responsibility.
"The work of undersecretary of AT&L ultimately involves bringing three things into coherence: requirements, system performance, and cost and budgets," Grundman explained, adding that the service chiefs are perfectly positioned to help balance those three aspects. "Those chiefs could help balance those three imperatives and end up being an ally of the acquisition executives.
"This would almost certainly diminish the nominal and statutory authority of AT&L, not to mention the service acquisition executives," he noted. "But there is at least the promise of getting something good in return for the tradeoff, because that work is very difficult and even the undersecretary of AT&L could use some powerful players like the service chiefs to achieve that coherence."
In a statement, Kendall appeared lukewarm on the idea of giving the service chiefs more acquisition responsibility through the NDAA.
"The service chiefs already play an extremely important role in defense acquisition," he said. "The secretary of defense testified that further empowering the service chiefs in the acquisition process in a balanced, appropriate manner would be a welcome reform. I believe there are numerous ways to do this without statutory changes and look forward to working with the committee on efforts to improve the performance of the acquisition system."
Crafting bill language, of course, doesn't make it a law. McCain still must advance the measure.
If the full Senate signs on, McCain and House Armed Services Committee Chairman Rep. Mac Thornberry, R-Texas, would have to negotiate compromise language.
Although a Thornberry spokesman did not respond to a request for comment by press time, the HASC chairman notably did not include parts of his stand-alone acquisition reform bill that pitched a bigger role for the service chiefs — after Kendall publicly objected. McCain's proposed reforms appear to go further than would those crafted by Thornberry, potentially setting up a major issue for a House-Senate conference committee should the Senate approve McCain's bill later this year.
A Senate aide said "conversations are occurring" between staffers of the committees, and McCain and Thornberry are expected to meet to hash out acquisition reform differences.
However, Eaglen doesn't see the two men at loggerheads.
"I think Thornberry is off in a different direction. I don't think they conflict. So both will probably survive largely intact."
By John T. Bennett, Aaron Mehta & Vago Muradian