Congress Passes New Weapon Systems Acquisition Reform Act of 2009
On May 22, President Obama signed into law the Weapon Systems Acquisition Reform Act of 2009 (Pub. L. 111-23), legislation designed to improve the cost and schedule estimating, system management and development of major weapon systems by the Department of Defense (DoD). The bill that became the Act (S. 454) was introduced February 23, 2009 by Senators Levin and McCain, chairman and ranking member of the Senate Armed Services Committee. A companion bill was introduced in the House shortly thereafter (H.R. 2101). The conference agreement bill passed both the House of Representatives and the Senate unanimously, 411-0 and 95-0, respectively. Upon signing the Act, President Obama cited the need to end the "waste and inefficiency" in the contracting process. The Act is notable as much for its speed of passage and bipartisan support as for the significance of the reforms it would work on the acquisition process.
The Weapon Systems Acquisition Reform Act was designed to address several perceived problems currently associated with weapon systems acquisition. These include: 1) DoD’s reliance on unreasonable cost and schedule estimates; 2) the Department’s insistence on unrealistic performance expectations; 3) the use of immature technologies which must be modified often during development; and 4) the commonplace adoption of changes to program requirements, production quantities, and funding levels during ongoing programs.1 Generally, the Act responds to these problems by building more discipline, oversight and transparency into the planning and requirements process.
Key provisions of the legislation include the following:
Sec. 101 Director of Cost Assessment and Program Evaluation--This section establishes a new, Senate-confirmed position of Director of Cost Assessment and Program Evaluation, which would report directly to the Secretary of Defense. This new position essentially replaces the cost estimation and analysis functions Cost Analysis Improvement Group of the Office of Program Analysis and Evaluation.
Sec. 102 Directors of Developmental Test and Evaluation and Systems Engineering--This section re-establishes the positions of Director of Developmental Test and Evaluation and Director of Systems Engineering, both of which are subordinate to the Undersecretary of Defense for Acquisition, Technology and Logistics. These offices would be required to issue joint guidance and submit reports on systems engineering and developmental testing. In combination with sections 103 and 104, which impose requirements related to performance assessments and technological maturity, the Act seeks to ensure that design problems are understood and addressed early in the acquisition process.
Sec. 201 Cost, Schedule, and Performance Trade-Offs--This section requires the development of mechanisms to ensure that trade-offs among cost, schedule and performance objectives are made as a part of the process for developing program requirements. The goal here is to avoid the problem of committing programs to what Defense Secretary Gates has called “exquisite” program requirements2, which result in either unaffordable cost growth or schedule slippage, or both.
Sec. 202 Strategies to Ensure Competition--This section requres the Secretary of Defense to ensure that there is competition, or the option for competition, at both the prime and subcontract levels in a major defense acquisition. It also lists 10 measures that can be used to ensure competition. This section also specifies ways in which the Secretary shall ensure fair and objective make-buy decisions by prime contractors.
Sec. 203 Competitive Prototyping--This section requires the modification of acquisition guidance so that the acquisition strategy for each Major Defense Acquisition Program (MDAP) provides for competitive prototypes before Milestone B approval, with limited waiver authority and review of waivers by GAO. Section 204 further requires the identification and addressing of systemic problems before Milestone B approval, while programs are still in the technology development phase.
Sec. 206 Critical Cost Growth in MDAPs--This section represents Congress’ effort to “put teeth” in the Nunn-McCurdy approach of limiting program cost growth in major acquisition programs.3 The Act establishes a presumption of program termination and the requirement for continuing program review and certification to Congress if the program is not terminated following the breach. This provision addresses the perception in Congress that under current law it is too easy to continue programs that experience excessive cost growth.
Sec. 207 Organizational Conflicts of Interest--This section requires the Secretary of Defense to promulgate regulations within nine months of the law’s enactment that provide uniform guidance and increase the stringency of organizational conflict of interest requirements levied on MDAP contractors. This provision responds to a finding of the Defense Science Board4 that many systems engineering firms have been acquired by large prime contractors, creating the potential that different business units of the same firm can end up with service and product contracts in the same program, a situation in which the potential for bias and lack of objectivity exists.
Overall, the Weapon Systems Acquisition Reform Act of 2009 aims to ensure that problems are diagnosed and adjustments are made in the acquisition process before cost overruns, technical problems or schedule delays reach such criticality that program viability is threatened. The Act targets acquisition programs at the point of concept refinement, technology development and requirements definition, rather than when programs reach the system development phase. The conscious effort to force trade-offs between cost, schedule and performance is a clear reaction to the perception in Congress that the budget, acquisition and requirements processes are not now rationally connected. Time will tell whether these and the other constraints imposed by the Act provide meaningful improvement in how DoD acquires its weapon systems.
1 155 Cong. Rec. S. 5684 (daily ed. May 20, 2009) (Statement of Senator Levin).
2 See, e.g., Greg Jaffe and Shailagh Murray, Gates Seeks Sharp Turn in Spending, Wash. Post, Apr. 7, 2009, at A1.
3 A "Nunn-McCurdy" unit cost breach occurs when a Major Defense Acquisition Program experiences an increase of at least 15% in Program Acquisition Unit Cost (PAUC) or Average Procurement Unit Cost (APUC) above the unit costs in the current acquisition program baseline or 25% above the original program baseline. See National Defense Authorization Act for Fiscal Year 1983, sec. 1107 (Pub. L. 97-252) (1982), codified as amended at 10 USC 2433.
4 Report of the Defense Science Board Task Force on Defense Industrial Structure for Transformation, July 2008, at 22.
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