Defense industry hopes Thornberry can break Pentagon's acquisition reform backlog

By Tony Bertuca  / April 16, 2019

Defense industry advocates say they are waiting for the Pentagon to implement more than 150 acquisition reform measures passed into law several years ago, and they hope new legislation being drafted by House Armed Services Committee Ranking Member Mac Thornberry (R-TX) will do something to break up the bureaucratic logjam.

Wes Hallman, senior vice president for policy at the National Defense Industrial Association, said he hopes Thornberry can hold "the executive branch's feet to the fire."

"There's a lot of frustration," Hallman said.

Thornberry has said he will release two bills next month -- one focused on getting the Pentagon to implement various reform measures passed by Congress, and another intended to make it easier for small, innovative businesses to participate in the defense contracting process.

The existing backlog, Hallaman said, is especially hard on small businesses, the intended beneficiaries of many reform measures included in the past three defense authorization bills.

For example, he said, one reform would extend from three years to five years the evaluation period used to determine when a small business transitions to a mid-sized one and can no longer bid on contracts intended for small businesses.

"Small business is mom and pop and apple pie," he said. "Those small businesses are never the easy button for contracting officers."

David Berteau, president and chief executive of the Professional Services Council, said he has been working on or around acquisition reform for the past 40 years and applauded Thornberry for doing something Congress rarely does -- returning to reform legislation to ensure it is actually implemented.

"I don't think we've ever had a backlog as big as the one we had last year," Berteau said.

Along with using an already cumbersome rule-making process that requires public comment periods and other lengthy administrative oversight, Berteau said the Defense Department must also contend with unintended consequences of an executive order President Trump signed in January 2017, mandating government agencies eliminate two regulations for every new rule being implemented.

The so-called "two-for-one" executive order, he said, has made the process "abnormally long."

Berteau said acquisition program managers should not be relied upon to interpret laws passed by Congress. Rather, he said, those laws should be codified in the proper guidance documents and disseminated to acquisition officials so they can be aware of the new regulations and train their staffs.

John Luddy, vice president for national security policy at the Aerospace Industries Association, said although the "two-for-one" executive order was "well-intended" and has helped streamline government regulation, it has also impeded regulations meant to help defense contractors.

"It had the side effect of slowing down the regular process," he said. "We are concerned about the backlog."

Luddy said the failure to implement so many acquisition-related measures serves as further proof that the process badly needed reform to begin with.

"It's a clear case of the bureaucracy not catching up with the strategy," he said.

Meanwhile, a congressional staffer said part of Thornberry's legislative effort would focus on ensuring the implementation of past intellectual property reforms supported by the defense industry.

For example, the Fiscal Year 2018 National Defense Authorization Act required DOD to establish a department-wide intellectual property policy and a new workforce focused on IP issues.

Though the Army has established an IP policy the department may use as a template for a broader policy, the work required by the FY-18 NDAA remains incomplete.

Defense industry advocates also said the Pentagon's inability to implement congressional reforms is having a chilling effect on new recommendations being offered by the Section 809 panel, named for the section in the FY-16 NDAA that created it.

Hallman of NDIA said he does not see "a lot of enthusiasm" among lawmakers to pursue bold acquisition measures until they can gauge the impact of past reforms.

Berteau of PSC said “the backlog of unimplemented reforms . . . makes it fuzzy to be able to tell what to do next.”

Luddy of AIA said he hopes Thornberry's new bills can re-focus the department, but also noted how the lack of progress has led to increased skepticism.

"People kind of roll their eyes now," he said.