The State of the Defense Acquisition System, 2024

The State of the Defense Acquisition System, 2024 Chairman Hirono, Ranking Member Sullivan, and other distinguished members of the subcommittee, I would like to thank you for the opportunity to testify this morning on the state of the Department of Defense’s (DOD) acquisition system, to include recent changes to the acquisition system, especially those made in response to congressional direction. The defense acquisition system works as well as can be expected given the many, and oftentimes conflicting, mandates it must meet in law, executive orders, regulation, and policy. With enough time, the system can eventually provide demonstrated capability to the warfighter, account for the expenditure of taxpayer dollars, and guard against corruption. The acquisition workforce is stressed and overworked but is committed to complying to the best of their ability with all required mandates. The system is neither efficient nor cost effective, but it is for the most part fair and deliberate. Still, DOD’s legacy acquisition system is too slow to be competitive and is only incrementally innovative. The industrial base and the overarching defense acquisition system (research, development, acquisition, contracting, requirements, budget, and logistics) have been optimized for a peacetime cadence after 30 years without a great power competition or conflict. This limited threat environment and a false assumption that US defense technological dominance will continue to exist has crowded out the importance of time in terms of decision-making, process, and innovation. The Pentagon has rapidly fallen behind the commercial sector and is in danger of falling behind our adversaries. Commercial industry continues to move at the speed of Moore’s law while DOD acquisition moves at the speed of its outmoded linear processes and bureaucracy. Commercial innovation is in the process of revolutionizing defense and now dominates 11 of the 14 technologies that DOD has identified as critical to its future. [1]  Even in the three areas that DOD has identified as defense-specific, there is a significant commercial interest and future application, just as was the case with defense-specific space technology decades ago.  As the threat changes, our acquisition system must be flexible enough to adapt to disruptive new technology trends in real time. In 2015, shocked by the invasion of Crimea and the militarization of the South China Sea, then SASC Chairman McCain saw that the threat was indeed changing and that the US needed new acquisition tools to meet it. It has been almost 9 years since this Committee passed the first McCain-sponsored reforms that provided alternatives to the one-size fits-all, time-consuming, defense acquisition system. DOD was given the tools to not only move fast with non-traditional sources of innovation, but to quickly hire the acquisition workforce necessary to implement a time-based commercially equivalent acquisition approach.  Removing non-commercial requirements and going around bureaucratic processes were at the heart of these acquisition reforms. Production Other Transaction Authority (OTA), Middle Tier of Acquisition (MTA), expanded authorities to contract with commercial and non-traditional contractors, flexible funding accounts, and the ability to hire Highly Qualified Experts (HQE) were all put in place by Congress in anticipation of emerging technology trends and a more taxing security environment.  Despite these reforms designed to elevate speed and the importance of time in acquisition by creating alternative acquisition pathways around the Pentagon’s peacetime acquisition system, progress so far has been marginal at best. Without embracing the changes championed by this Committee in the past to speed acquisition time, DOD will not be capable of meeting the threats of the future. [1] Jaspreet Gill, “Pentagon’s ‘Glaring Weakness’: Bureaucracy Hampering Commercial Tech Adoption,” Breaking Defense, April 7, 2022, https://breakingdefense.com/2022/04/pentagons-glaring-weakness-bureaucracy-hampering-commercial-tech-adoption/ and https://www.cto.mil/usdre-strat-vision-critical-tech-areas/                 Read the full testimony to the