WASHINGTON — The Pentagon’s acquisition office is on track to devolve into two new entities on Feb.1, but the layout of the new offices may look different than expected, said Ellen Lord, undersecretary of defense for acquisition, technology and logistics (AT&L).
Lord, speaking to reporters at the annual AUSA conference on Oct. 11, warned that the organizational chart might not be fully completed by the time the changeover happens and stated that her direct contact with industry might become more rigid than her predecessors.
“I don’t know that there will be 100 percent changeover because it’s a process, not an event, but we’re already starting to take steps towards understanding what the work is we do, what the work is we want to do and how to best do that,” Lord said to Defense News.
“So I think we’ll have at least an 80 percent solution that we can speak to Congress and everyone else about. We owe some responses back to them before going public with that, but we’re very much underway getting that going,” she said.
The 2017 National Defense Authorization Act required the Pentagon to split AT&L into two organizations. The first, the undersecretary of research and engineering (R&E), will focus on developing future technologies. The second, which Lord is expected to be reconfirmed for come Feb. 1, is the undersecretary for acquisition and sustainment (A&S), will have a day-to-day focus on existing systems.
On Aug. 2, the Pentagon delivered its preliminary plan for the reorganization. At the time, Deputy Secretary of Defense Patrick Shanahan offered support for the layout but acknowledged that changes may come as both he and Lord were barely in office by the time the plan had to be presented to Congress.
Asked last week whether changes could be coming to the organizational roadmap, Lord said she and Shanahan have been discussing the plan on a weekly basis and working on potential alterations.
“We are evolving our thinking. I don’t think it will look exactly like that. I think notionally its correct,” she said. “What we’re trying to do is drive most of the risk into the R&E side, experimenting lots of iterations early on so we can get to the A&S side. We are much more confident about what the solutions are and what they’ll cost.”
The final AT&L head did give some insights into her thinking during a panel event at AUSA, explaining that her initial thoughts are that the “sustainment” part of the acquisition system has suffered despite being about 70 percent of the costs for the department.
To deal with that, Lord wants the A&S organization to think about what architectures are needed, long term before a Request for Proposal is ever released to industry.
“We have all these systems [that must] communicate together. We have to be able to share data. We have to be able to rely on that data,” she said. “So I think what acquisition and sustainment can do is get back to what are those standards, what are those architectures, so that we can have our services working together on the battlefield along with our allies and partners, as well.”
For the R&E organization, Lord said her biggest goal is to make sure the various “Islands of Excellence” scattered throughout the department are lining up with the national priorities that will be pronounced in the upcoming national defense review.
“We want to keep all the independent spirt and all the personalities, if you will, of the different organizations. But I don’t think we have enough time, and we don’t have as many dollars as we need, to have these unaligned” with each other, she said.
Although not spelled out, that may be a hint from Lord that any tinkering she does to the AT&L reorganization will not involve moving the Defense Innovation Unit-Experimental (DIUx) or Strategic Capabilities Office (SCO) up the reporting chain. Currently, both offices report directly to the secretary of defense, but under the most recent AT&L plan, they would fall under the assistant secretary of defense for advanced capabilities, itself a spot under the R&E job.
More broadly, Lord is launching a series of pilot programs to try and reduce the time for getting companies on contract by 50 percent, an ambitious goal she admitted would require buy-in from industry.
To that end, she has set up a schedule of regular events with key industry partners, and aside from those scheduled events, Lord said, “I’ve decided that other than for extraordinary reasons, I’m not taking many one-on-one meetings with industry.”
Those come in two forms. The first is large meetings with industry, facilitated by trade groups like the Aerospace Industries Association and National Defense Industrial Association, which will feature executives from small, medium and large firms. Those will occur four times a year, with Lord explaining, “I want to look at suppliers from a portfolio point of view and not just get caught up in each program.”
The second is a series of direct dialogues between executives from the top six defense firms and people from her office. Those will happen once a month, with each of the big six coming in twice a year. Although she did not name those companies, the top six defense firms are Lockheed Martin, Boeing, Raytheon, General Dynamics, Northrop Grumman and L3, according to the annual Defense News Top 100 List.
One company Lord will not be working closely with is Textron, which she left to take the AT&L job.
Asked during the panel about the ethics constraints she is operating under, Lord indicated she would not be able to make a ruling on any competitions Textron is involved with for two years, including ones where the company is a partner, such as the Bell Boeing V-22. (Bell is a Textron subsidiary.)
“This is an incredibly thorough process in terms of ethics agreements, and everyone in my front office — the schedulers, everybody — knows every stock I ever owned, every job I ever had and what I can’t be involved with,” Lord said. “And the last thing I want to do is compromise the department, so I am very, very sensitive of that.”
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.