By Margaret Compton TACOM LCMC Public AffairsMarch 29, 2011
The U.S. Army TACOM Life Cycle Management Command's Deputy to the Commander Mike Viggato hosted a visit by Undersecretary of Defense for Acquisition, Technology, and Logistics, Dr. Ashton Carter March 25.
Carter and his principal deputy, Frank Kendall are currently visiting all military major acquisition centers and commands to talk with leaders and acquisition, logistics and technology professionals about the "Better Buying Power Efficiency Initiative."
Earlier in the day Dr. Carter was a keynote speaker at the Small Business Procurement Summit at Detroit's Cobo Hall.
Besides the large number of workforce in attendance, the presentation was also attended by retired Maj. Gen. Bruce MacDonald, Michigan Civilian Aide to the Secretary of the Army and the Assistant Secretary of the Army for Acquisition, Logistics & Technology, Dr. Malcolm R. O'Neill. Most of the TACOM LCMC senior leaders were also on hand to hear about Acquisition's new direction.
Carter began his address by thanking the TACOM LCMC for everything they do every day for the Soldier and the country.
He explained what the reasoning was behind the guidance roadmap that the Secretary of Defense Robert Gates began to develop 18 months ago. Gates anticipated that the defense budget needs wouldn't go down, but that in fact we would have to function better without increases in the budget.
Because the Acquisition arm spends billions a year on contracting goods and services, Gates recognizes that we have to get better value for our dollars. These matters are made more difficult with the ongoing continuing resolution issue. "We don't know where we'll get appropriations at this point," Carter said. He expressed his understanding of the current budget situation. "Your frustration is shared by me and the Secretary of Defense."
Describing the mandate to deliver better value to the taxpayer and warfighter Carter said we have to "do more without more." "This is nothing new to you, you do it every day," he said.
The initiative, put together by Carter and O'Neill, is regarded as best practice and is expected to be followed. "We'll back you up," he promised.
Carter elaborated on the key points of the guidance roadmap which are:
-Target Affordability and Control Cost Growth
-Incentivize Productivity & Innovation in Industry
-Promote Real Competition
-Improve Tradecraft in Services Acquisition
-Reduce Non-Productive Processes and Bureaucracy
"Affordability is needed," he said. Can't get started until you can prove that what you have will be good long term. No more "bridges to nowhere."
Regarding the hard work of systems engineering Carter said to ask, "What's driving cost in this design' What can I relax without compromising military requirements'"
He said most of our money goes to things already started. We have to look at things underway, and ask what it will cost and what it should cost, (what should we be paying). "We have to manage with a lower number."
Carter expressed the need for productivity growth. "Something that is better than last year and cost less, is the goal," he said. We can't do it the old way when the cost would go up. Cost estimates should come down.
"Incentives are aligned with our principle objectives," he continued. We expect PMs to have a competitive spirit strategy, to anticipate outcomes regarding contractor non-performance."
"We want to do better at acquiring services. We should reduce non-productive processes and bureaucracy."
Being mindful of what we impose on contractors is critical according to Carter. "So if you ask them to do something unnecessary you will be the one to pay for it." Our message to industry is that we're changing and they have to change also. Let market forces work but there will be limits to what we will allow. We are the customers after all and we want financially efficient contracts."
"Secretary Gates is adamant about watching costs. He's on the right point, we need to get out of our own way and tackle these problems," Carter emphasized.
Sharing his attitude and philosophy Carter said, "The defense industry makes our systems and we manage them. Their financial health is a national asset, the quality that we get them to produce makes our military the greatest in the world. It's in our interest that contractors be healthy and perform."
"None of this means anything without good people," he said. Without skill and quality we're sunk. We are improving in every way including training," he said.
More of Carters guidance brought out in the Q&A session was to exercise contract waivers. "Don't let them tell you it will take three months to complete an audit." The heart of a contract is incentives built into the contract. Think carefully about the incentives," he advised.
Carter said the number one job is to support the current fight. "We want to make our force all it can be so we have to get effective as fast as possible," he stressed.
The desired goal according to Carter is an open system that keeps competition and intellectual property control over the core of the program. "You probably have more intellectual property control over data rights than you are aware of, he told the audience. All interfaces are in your control, you manage who approaches your interface. A lot of our folks don't know how to do it, we're training folks now," he said.
Acquisition professionals working on contracts should ask for the breakdown of the work to ensure they have the right incentives to get what they need from the contractor.
Carter concluded his address by thanking everyone and above all the military. "You know you're doing something important. Only we have that, a great motivation for people to come into our business. You go home every night knowing how you've helped, it's very satisfying."
On behalf of TACOM LCMC Commander, Maj. Gen. Kurt Stein, his deputy Mike Viggato presented Dr. Carter with a 2-Star Note.
(Editor's Note: In a recent interview with Army AL&T Magazine Senior Editor Margaret C. Roth, the Assistant Secretary of the Army, Dr. Malcolm R. O'Neill elaborated on contract incentives. "One of the things we decided in this incentives drill is that, while there are some exceptions, the ultimate goal would be to have as many contracts as possible be fixed price, with an incenA,A!tive. In other words, we're going to give you $300,000 to do this, and if you come back a month early, we'll give you $100,000 to do it in 2 months, as opposed to doing it in 3 months-that kind of thing. So the incentive structure is a big area. Services and type of conA,A!tract are the two areas where I would look for the most savings.)