We almost entitled this article, “CWC Hears Good Suggestions from Reasonable People, is Bewildered”—but somehow we refrained from non value-added snark. Seriously, we hope the CWC Commissioners were listening intently when Jacques Gansler was speaking during the CWC hearing on April 25, 2011.

“Who’s Jacques Gansler?” we hear you asking. Well, children, the Honorable Dr. Gansler was the Under Secretary for Defense (Acquisition, Technology, and Logistics) from 1997 to 2001, and is largely credited (in our minds, at least) with making some of the key improvements to DOD acquisition management during his tenure. Since then, he’s Chaired a couple of important Commissions on behalf of the DOD, and his 1989 book, Affording Defense, is still worth reading today.

What we liked about Dr. Gansler’s testimony before the CWC was that it was informed based on his years of experience at the helm of DOD during the period of post-FASA transformation. It was reasonable, it was nuanced, and his criticism of the CWC’s recommendations was delivered a heck of a lot more diplomatically that we would have been able to do. (See our rant on the same topic, here.)

Dr. Gansler’s testimony was so well-done that we want to ignore the testimony of the GAO guy, the DOD IG guy, and the two SIGAR guys, and simply focus on what Dr. Gansler had to say. We shall quote as follows—

• The first time I testified before your Commission, in September 2010, the focus of our discussion was the government’s acquisition workforce. Today, I will emphasize this same topic, as I believe that people are the key to success. In fact, in both studies I will discuss today, three threads exist: the acquisition workforce, the leadership of that workforce, and the contractors they manage. At heart, these studies recognize the importance of contractors as partners in achieving the Department’s mission, and identify ways to ensure the government is strategically positioned to operate within this enduring business model, by empowering its acquisition workforce and by creating positive incentives for its contractors to achieve higher and higher performance at lower and lower costs.

• In a world where more than 50 percent of the ‘total force’ in Iraq and Afghanistan is contractors, contracting has an impact that cannot be a secondary consideration: it must be front and center—embedded in military planning, education, and training; and led and managed by a cadre of civilian and military professionals. … the acquisition workforce is pivotal if we are to solve these challenges. … DoD has an extremely dedicated corps of acquisition people. The problem is they are understaffed, overworked, under-trained, under-supported, and, I would argue, most importantly, under-valued. A combination of acquisition workforce reductions and spending increases has taken its toll. Particularly alarming, and of great concern to us, was the fact that, despite about a seven-fold workload increase from the 1990s to present, and the greater complexity and urgency of contracting in the intense contingency environment, the civilian and military contracting workforce has been declining.

• … contractors are important force multipliers. We cannot forget their value. They enable military personnel to focus on mission-essential tasks. Over time, each of the Services has outsourced tasks previously performed by personnel in uniform. Outsourcing tasks that are not inherently governmental has significantly increased overall military effectiveness, and it has done so at significant savings to the taxpayer. To add to the contractor value proposition: these resources come to the Department ready-trained, and can be flexibly engaged and released to address surge needs, as they come and go. [Emphasis in original.]

• … DoD has an enduring need for more well-trained, motivated, and experienced government contracting personnel. Without those baseline resources, the Department cannot meet the wartime need. To put this in perspective, at the time of our Commission’s analysis, there were about 270,000 contractors in the Iraq and Afghanistan theater—more than half the total force. Yet, the Army was not ‘training (including exercises) or educating as we fight;’ that is, incorporating the reality of contractors. Beyond training, of course, the Department needs experienced government people to manage contractors and to conduct the inherently-governmental functions. [Emphasis in original.]

• The [Defense Science Board’s] task force also found that the Department’s good intentions to improve competition for services have led to unintended, adverse consequences. While one of the benefits of competition is lower prices, strategies favoring low price over best value, or fixed-price over time-and-materials contracts, may create more problems than they solve. Not only might the government be jeopardizing its ability to get the best solution, it might actually be increasing prices: a fixed-price contract in the services arena in particular it may lead to higher costs, as contractors accommodate additional risk associated with this contract type. Similarly, the recent trend to award service contracts (or even goods) on the basis of ‘Low Bid, Technically Acceptable,’ often results in lower quality and higher long-term costs (compared to ‘Best Value’ awards). Or, as another example, requiring competition on all awards has significantly reduced the incentive to submit new ideas as unsolicited proposals. And while the bid protest process is a hallmark of our competitive procurement system, we can significantly hamper desired results if we permit, without penalty, protest actions lacking substance.

• By using a commercial approach, including commercial terms and conditions, the government could tap premium talent and proven goods from firms that would otherwise be deterred by the government’s standard approach to acquisition. We are now 17 years beyond the 1994 passage of the Federal Acquisition Streamlining Act, and faced with the reality that application of FAR Part 12 principles has been problematic for services: only 18 percent of DoD’s services are sourced using commercial practices. The entry barriers remain the same: concerns over intellectual property and data rights, cost-accounting requirements, profit and overhead policies—to name just a few.

• Within the acquisition community, DoD currently lacks program managers with strong experience in portfolio-specific services, and new hires with contracting experience in these areas also lag. The functional personnel managing large service contracts lie outside the acquisition community. (These are the Contracting Officer’s Representatives (CORs) with the substantive knowledge of the area under contract.) This means they are not subject to relevant defense acquisition workforce training. Even within the acquisition community, a robust shared body of knowledge for services contracting is lacking. While the Defense Acquisition University (DAU) does have a Services Acquisition Center of Excellence, its staff represents a tiny portion (about 1 percent) of the overall DAU faculty numbers; and there are few services-based case studies being taught—despite the fact that services constitute the majority of DoD’s buys. And, while training is minimal, so too are the career opportunities: the current culture and incentives drive good people to product acquisition programs—or to avoid acquisition altogether.

• [The CWC’s Second Interim Report to Congress] covers incredibly salient topics. On first blush, it appears to do so through a lens that, from the very outset, is aimed at minimizing the important role contractors play: the subtitle ‘Correcting over-reliance on contractors in contingency operations’ conveys an impression that DoD should reduce the role of contractors. In reality, contractors play an essential role in contingency operations. The government’s focus should not be on decreasing contractors, but instead on ensuring they are performing appropriate functions, and then properly managing them. As I have previously stated, contractor services can offer significant savings (e.g., the Congressional Budget Office found contractors could perform weapon system maintenance for 90 percent less than organic performance of this function), provide a flexible means to address support needs, and offer immediate support through ready-trained individuals. So, while your main title rightly identifies risk as a considerable issue, the subtitle is open to misinterpretation. [Emphasis in original.] My opinion on the title reflects my general comments on your second interim report, which fall into two areas of concern regarding contractors (1) too great an emphasis on punishments and (2) an absence of value recognition.

• … the focus on punishments, like suspension and debarment, comes at the expense of incentives. Missing is a discussion of creating incentives to reward outstanding performance, such as awarding contractors with follow-on work, if they achieve higher performance at lower costs. Your second interim report contains an entire section on competition policy improvements, urging increased competition. This gave me pause: what is the purpose of forcing competition, regardless of the results achieved? I strongly believe in the value of competition (to get higher performance at lower costs); but if the threat of future competition is enough to get those desired results, then competition should not always be mandated. Rather, it should be required if the desired results are not achieved. The incentive for achieving desired results is the follow-on award. [Emphasis in original.]

• … I encourage your Commission to seek out a balance in your final report, which is due this summer. A balanced discussion of the two issues I raise—reward and recognition, over punishment and sub-optimization—will go a long way toward creating the systemic improvements our troops deserve. We cannot discount that contractors are an important force multiplier; instead, we must build the capability and infrastructure to manage this reality. Clearly, there are many important actions (legislative, regulatory, policy, practices, and so forth) where your Commission can play a valuable role. In any of these actions, I see the key issues as getting the right people (government and industry) and in creating positive incentives for these individuals to get what the warfighters need, when they are needed—with outstanding performance and at low cost. This can be done; and it must be done. The men and women serving our nation in harm’s way deserve no less. [Emphasis in original.]

Amen, brother! We hope the CWC Commissioners will listen to this voice of reason ….