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Naval Postgraduate School Acquisition Research Program

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Acquisition governance currently confronts two problems: the growing size and complexity of systems-of-systems capabilities and the limited effectiveness of existing governance models to ensure the on-cost and on-schedule delivery of those capabilities. The Center for Strategic and International Studies (CSIS) is engaging in research on systems-of-systems acquisition governance best practices that could help the defense acquisition community overcome some of these problems. This report provides the results of several case studies illustrating the challenges of complex systems-of-systems acquisitions. It characterizes how existing acquisition governance models fall short of meeting the challenges of complex systems-of-systems acquisition, and offers five best-practice themes meant to address those challenges based on the results of CSIS research and interviews with stakeholders in the acquisition community. Finally, it concludes that the attributes most critical to success in complex acquisition efforts are level of organizational focus, decision-making authority, and enforcement.

Over the last decade, Department of Defense (DoD) spending on service contracts more than doubled in constant terms, from $90 billion in 2000 to $183 billion in 2012. Policy-makers have recently attempted to reduce or even reverse this trend, in part by emphasizing instead the in-sourcing of work performed under services contracts. Over the last three years, CSIS has worked to develop a more systematic framework for guiding sourcing decisions for services contracts within the DoD, which would have broader implications for the whole universe of budget-based decisions within the DoD. Towards that purpose, this paper analyzes the stated motivations, implementation strategies, and guiding analytical underpinnings for previous outsourcing efforts and for the currently ongoing in-sourcing initiative. It then assesses current and previous DoD methodologies for guiding sourcing decisions, highlighting the individual strengths and shortcomings of these methodologies. The third section of the paper presents an analysis of public sector sourcing decisions in the wider context of economics and business management, to provide broader conceptual insights for more informed determinations on these sourcing decisions. The final section analyzes recently updated DoD cost estimating guidance and discusses drawing on object class code data as a potential data source for cost estimation., Acquisition Research Program Sponsored Report Series.

Over the last decade, Department of Defense (DoD) spending on service contracts more than doubled in constant terms, from $90 billion in 2000 to $183 billion in 2012. Policy makers have recently attempted to reduce or even reverse this trend, in part by emphasizing instead the in-sourcing of work performed under services contracts. Over the last three years, the Center for Strategic and International Studies (CSIS) has worked to develop a more systematic framework for guiding sourcing decisions for services contracts within the DoD which would have broader implications for the whole universe of budget-based decisions within the DoD. Towards that purpose, this paper analyzes the stated motivations, implementation strategies, and guiding analytical underpinnings for previous outsourcing efforts and for the currently ongoing in-sourcing initiative. It then assesses current and previous DoD methodologies for guiding sourcing decisions, highlighting the individual strengths and shortcomings of these methodologies. The third section of this paper analyzes public sector sourcing decisions in the wider context of economics and business management, to provide broader conceptual insights for more informed determinations on these sourcing decisions. All of this research is being used to develop a repeatable, verifiable, data-driven methodology to guide sourcing decisions, which will be presented in the final report of this project., Published in the Proceedings of the Tenth Annual Acquisition Research Symposium: Creating Synergy for Informed Change -- Contract Management, p379-398. Sponsored by the Naval Postgraduate School, Graduate School of Business and Public Policy, Monterey, CA.

Acquisition governance currently confronts two problems: the growing size and complexity of systems-of-systems capabilities and the limited effectiveness of existing governance models to ensure the on-cost and on-schedule delivery of those capabilities. The Center for Strategic and International Studies (CSIS) is engaging in research on systems-of-systems acquisition governance best practices that could help the defense acquisition community overcome some of these problems. This report provides an update on the progress of that effort. It reviews the evolution of acquisition governance models throughout the history of U.S. defense acquisition, characterizes the ways in which those models fall short of meeting the challenges of complex systems-of-systems acquisition, and offers preliminary observations on best practices to overcome those challenges based on the results of CSIS research to date. That research to date includes two new case studies: Future Combat Systems (FCS) and Maritime Domain Awareness (MDA). The research is continuing beyond this interim report. The final report will reflect additional work and incorporate more case studies., Published in the Proceedings of the Tenth Annual Acquisition Research Symposium: Creating Synergy for Informed Change -- System of Systems Management, p639-652. Sponsored by the Naval Postgraduate School, Graduate School of Business and Public Policy, Monterey, CA.

The research presented in this report was supported by the Acquisition Research Program of the Graduate School of Business & Public Policy at the Naval Postgraduate School. To request defense acquisition research, to become a research sponsor, or to print additional copies of reports, please contact any of the staff listed on the Acquisition Research Program website (www.acquisitionresearch.net).

The research presented in this report was supported by the Acquisition Research Program of the Graduate School of Business & Public Policy at the Naval Postgraduate School. To request defense acquisition research, to become a research sponsor, or to print additional copies of reports, please contact any of the staff listed on the Acquisition Research Program website (www.acquisitionresearch.net).

The first goal of this research is to analyze trends in Department of Defense (DoD) services contract actions from 1990-2011 for the DoD overall and for individual DoD components (Army, Navy, Air Force, and other); by area of defense services contract action; and by level of competition, type of contract, and type of funding mechanism. The second goal is to analyze the composition of the industrial base supporting DoD service contracts by using a breakdown of the defense services industrial base into small, medium, and large companies, and by identifying the top 20 defense services companies (by total dollars obligated) for the DoD overall and for each DoD component (Army, Navy, Air Force, and other). Six categories of services serve as the foundation for this analysis: Information and communications technology (ICT) services; Professional, administrative, and management services (PAMS); Research and development (R&D) Equipment-related services (ERS); Facility-related services and construction (FRS&C) services; and Medical services. The Federal Procurement Data System (FPDS) is the primary data source for this project, supplemented with the Bloomberg government contract database and verified with the USASpending.gov query tool. This annotated brief presents the preliminary findings of this research, and covers only the years of 2000-2011 for the DoD overall. The presentation includes 14 briefing charts., Presented at the Naval Postgraduate School Annual Acquisition Research Symposium (9th) held in Monterey, CA on 16-17 May 2012. Published in the Proceedings of the Naval Postgraduate School Annual Acquisition Research Symposium (9th), v2 p43-58, 2012.

Private companies rely on cash raised from capital markets to finance their operations, including expenditures on long-term assets (such as facilities and equipment), independent research and development (IRAD), and retirement of old debt. Capital markets play a role in shaping the depth and breadth of the U.S. defense industry and the capabilities it has to offer, as well as in the cost of these capabilities to the Department of Defense. This paper presents interim findings of research on defense companies' access to capital markets. The research is ongoing, and a final version, including policy recommendations, will be presented at the May 2012 Naval Postgraduate School Annual Acquisition Symposium., Presented at the Naval Postgraduate School's 8th Annual Acquisition Research Symposium, 10-12 May 2011, Seaside, CA. U.S. Government or Federal Rights License MBA Professional Report

Cost and time overruns in Major Defense Acquisition Programs (MDAPs) have become a high-profile problem attracting the interest of Congress, government, and watchdog groups. According to the GAO, the 98 MDAPs from FY2010 collectively ran $402 billion over budget and were an average of 22 months behind schedule since their first full estimate. President Obama's memorandum on government contracting of 4 March 2009 also highlighted this issue. This paper presents findings of research on the root causes of cost and schedule delays for 92 MDAPs active in 2010 and 12 cancelled programs. The results do not establish causality but they do indicate multiple notable correlations. Inaccurate cost estimates are responsible for the strongest correlation with net cost growth changes and are associated with 40% of the accumulated cost overruns. In addition, the start year has little impact on the compound annual growth rate of cost overruns. This suggests that relatively better performance of newer programs may prove illusionary as programs age. Finally, fixed price contracts appear to have relatively smaller overruns, although this may tell us more about which programs are likely to receive fixed price contracts rather than what effect fixed price contracts may have on program performance., Presented at the Naval Postgraduate School's 8th Annual Acquisition Research Symposium, 10-12 May 2011, Seaside, CA. U.S. Government or Federal Rights License MBA Professional Report.

Private companies rely on cash raised from capital markets to finance their operations, including expenditures on long-term assets (such as facilities and equipment), independent research and development (IRAD), and retirement of old debt. Capital markets play a role in shaping the depth and breadth of the U.S. defense industry and the capabilities it has to offer, as well as in the cost of these capabilities to the Department of Defense. This paper presents interim findings of research on defense companies'' access to capital markets. The research is ongoing, and a final version, including policy recommendations, will be presented at the May 2012 Naval Postgraduate School Annual Acquisition Symposium.

Cost and time overruns in Major Defense Acquisition Programs (MDAPs) have become a high-profile problem attracting the interest of Congress, government, and watchdog groups. According to the GAO, the 98 MDAPs from FY2010 collectively ran $402 billion over budget and were an average of 22 months behind schedule since their first full estimate. President Obama''s memorandum on government contracting of 4 March 2009 also highlighted this issue. This paper presents findings of research on the root causes of cost and schedule delays for 92 MDAPs active in 2010 and 12 cancelled programs. The results do not establish causality but they do indicate multiple notable correlations. Inaccurate cost estimates are responsible for the strongest correlation with net cost growth changes and are associated with 40% of the accumulated cost overruns. In addition, the start year has little impact on the compound annual growth rate of cost overruns. This suggests that relatively better performance of newer programs may prove illusionary as programs age. Finally, fixed price contracts appear to have relatively smaller overruns, although this may tell us more about which programs are likely to receive fixed price contracts rather than what effect fixed price contracts may have on program performance.

Cost and time overruns in Major Defense Acquisition Programs (MDAPs) have become a high-profile problem attracting the interest of Congress, government and watchdog groups. According to the GAO, the 96 MDAPs from FY2008 collectively ran $296 billion over budget and were an average of 22 months behind schedule. President Obama's memo on government contracting of 4 March 2009 also highlighted this issue. This paper presents interim findings of research on the root causes of cost growth and schedule delays for MDAPs. The paper analyzes a series of variables -- namely, realism of baseline program cost estimates, government management and oversight, quantity and schedule changes, the role of prime contractors and lead military services, extent of competition, and contract structure -- to determine what factors might contribute to the observed cost overruns in the execution of MDAPs. The research draws on four primary data sources: Selected Acquisition Reports (SARs), Federal Procurement Data System (FPDS), and Department of Defense Budget Documents. This research is ongoing and will incorporate the 2010 SAR data. The final findings and policy recommendations will be presented at the May 2011 Naval Post Graduate School annual Acquisition Symposium. The presentation includes 11 briefing charts., Published in the Proceedings of the Seventh Annual Acquisition Research Symposium, Acquisition Research: Creating Synergy for Informed Change, v1 p12-24, 30 April 2010. Presented at the Annual Acquisition Research Symposium (7th), Acquisition Research: Creating Synergy for Informed Change, held in Monterey, CA on 12-13 May 2010. The original document contains color images.

'Dieser Beitrag verwendet das Bureaucratic-Politics-Paradigma zur Analyse von Forschungs- und Entwicklungsprogrammen des militärischen Sektors. Gegenstand der Untersuchung sind einschlägige Forschungs- und Entwicklungsprogramme in den USA und Israel sowie daraus ableitbare Schlussfolgerungen für die Europäische Union, wo gegenwärtig Bestrebungen zur Initiierung militärischer F&E-Programme auf Gemeinschaftsebene stattfinden. Das Bureaucratic-Politics-Paradigma ist ein tauglicher Ausgangspunkt zum besseren Verständnis politischer Prozesse der Innovation im Bereich nationaler Sicherheit: Es liefert einen systematischen Rahmen zur Erklärung, wie verschiedenen Elemente des Regierungssystems in einem politischen System, in welchem politische Macht bewusst fragmentiert und über eine große Anzahl von Akteuren verteilt ist, zu Entscheidungen kommen. Vor diesem Hintergrund kommt der Beitrag zu dem Schluss, dass politische Entscheidungsfindung im Bereich militärischer F&E-Investitionen auf einem Kompromiss zwischen unterschiedlichen Positionen verschiedener politischer Interessen, unter anderem im Bereich der staatlichen Bürokratie, basiert. Positionen der politischen Spitze steuern die Aktivitäten unterschiedlicher Elemente der Verwaltung einerseits zu einem gewissen Grad, andererseits werden diese nicht automatisch und eins zu eins in Maßnahmen umgesetzt. Zur Implementierung von F&E-Policies im Sinn ihrer Planung sind andauernde Verhandlungen und Wieder-Verhandlungen zwischen politischen Amtsträgern, der Bürokratie, dem Militär, der Industrie und anderen externen Interessengruppen notwendig.' (Autorenreferat), 'This article employs the bureaucratic politics paradigm to analyse defence research and development (R&D) programs. It uses this paradigm to analyse the defence R&D policies of two countries - the United States and Israel - and to make recommendations for the European Union, which is currently initiating defence R&D efforts at the European level. The bureaucratic politics paradigm is useful for understanding the politics of innovation activities related to national security, since it offers a systematic framework for explaining how different elements in government make decisions in political systems where power is intentionally fragmented and dispersed among a multitude of actors. Using this paradigm, the article concludes that the political rationale for defence R&D investment involves a compromise between different positions held by various policy stakeholders, including different elements within the bureaucracy. While decisions made by political leaders will steer and guide the actions of bureaucracies, they are not automatically translated into accomplishments. For defence R&D policy to be implemented as it was formulated, continuous negotiations and re-negotiations between politicians, bureaucrats, the military, industry and other external interest groups are needed.' (author's abstract)