By Capt. Christopher W. Piercy
Disclaimer: The views and opinions expressed or implied in this essay are those of the author and should not be construed as carrying the official sanction of the Department of Defense, Air Force, F-35 Joint Program Office, or other agencies or departments of the U.S. government.
In 2009 I commissioned into the Air Force as a Second Lieutenant and was assigned the Air Force Specialty Code (AFSC) 64P, which designated me as a Contracting Officer. As a Contracting Officer it is my responsibility to support the warfighter by acquiring the supplies, services, and weapons systems necessary to defeat our enemies and protect our citizens. It is also my responsibility to spend congressionally appropriated American tax dollars wisely and abstain from practices that result in fraud, waste, or abuse. I have served at Moody Air Force Base in Valdosta, GA, Camp Leatherneck in Helmand Province, Afghanistan, Incirlik Air Base in Adana, Turkey, and at the F-35 Joint Program Office in Arlington, VA. Most recently, I had the opportunity to participate in a Mid-Level Development Program at the Air Force’s Contracting Headquarters in the Pentagon. During this program, I met with Senate Armed Service Committee (SASC) Professional Staff Members (PSMs) in order to discuss the recently drafted fiscal year (FY) 2018 National Defense Authorization Act (NDAA). I also witnessed a weekly meeting of the Defense Acquisition Regulation (DAR) Council where updates to the Defense Federal Acquisition Regulation Supplement (DFARS) were being discussed and drafted for revision. It is during these two most recent experiences that I realized an opportunity for realistic and meaningful acquisition reform.
Each year the NDAA is drafted by Professional Staff Members (PSMs) with numerous competing interests, influences, and motivations. PSMs are frequently contacted by industry representatives and other non-government agencies with requests for changes to the law; some even submitting verbiage their organization would like to include in the next NDAA draft. Although PSMs have diverse backgrounds and impressive resumes, many lack extensive experience in Federal or Defense Acquisition. As a result of their lack of acquisition experience and outside-the-government influences, revisions and updates are made to the NDAA that are not in the best interest of the Government, the Department of Defense (DoD), the warfighter, or the tax payer. If the PSMs have specific questions for the DoD, they work through military Legislative Liaison personnel to staff questions through senior ranking military officers or defense officials. Through the inherent nature of staffing (or requiring multiple layers of review), answers can often be watered down to the most basic or vague response. Additionally, the staffing process takes time in order for multiple reviews to be conducted. The more detailed the response, the longer the delay. Also, questions do not always flow down to the working-level or appropriate subject matter expert(s), resulting in less than complete responses. Decisions are then made by PSMs with potentially inadequate, misleading, delayed, or outdated information.
Create a Defense Acquisition Consulting Team (DACT) to serve as advisors for the Armed Services Committee (HASC/SASC) Staffers during their drafting of the annual National Defense Authorization Act (NDAA). The team should consist of competitively selected working level employees with diverse experiences and backgrounds in government acquisition. It is recommended the group consist of technical experts in Program Management, Contracting, Finance, Legal, Logistics, and Engineering from each of the defense services. Team members should have a minimum of 10 years’ experience in their specialized fields with reputable track records of unwavering integrity and exceptional communication skills. It is also recommended each service send both military and civilian representation to enhance diversity of thought and experience. The consulting group would then be available on an as-needed basis to advise and assist PSMs as they develop and draft the NDAA. The DACT could research acquisition related topics for the PSMs and utilize their professional networks to gain additional insight into complex subjects.
The anticipated outcome of creating the Defense Acquisition Consulting Team is the creation of more favorable and executable Acquisition laws, regulations, and policies. Laws established in the NDAA drive changes to the DFARS and FAR. Per the DFARS Operating Guide (www.acq.osd.mil), the current estimated timeline for publishing a change to the DFARS is 12 months. Much of the 12 months is spent in DAR Council, Office of Federal Procurement Policy (OFPP), and Office of Management and Budget (OMB) review. During these reviews, acquisition professionals attempt to reconcile laws from the NDAA with current acquisition policies and procedures. In theory, if laws were drafted after consultation with the proposed DACT’s input, they would be more in-line with the concerns of the acquisition reviewers, leading to a more expeditious review process. The DACT’s feedback and advice could also prevent conflicting or inexecutable laws as well as laws or policies that would put government acquisition professionals at a severe disadvantage when negotiating or contracting with major defense corporations or contractors operating in expeditionary (or deployed) locations. DACT feedback to PSMs would also be dramatically faster than the current staffing processes. The increase in candid, accurate, and speedy information would likely increase trust and thereby strengthen relationships between the Department of Defense and Congress.
One example of an unfavorable update to the NDAA is Section 823 of the Senate Armed Services Committee’s proposed FY18 NDAA, “Limitation on Unilateral Definitization.”
For those that may not be familiar, a “unilateral definitization” is an action that can only take place after an Undefinitized Contract Action (UCA) has been issued. A UCA is when the Government authorizes a contractor to begin work based on a “Not to Exceed” dollar amount prior to reaching a negotiated agreement on the final price of a contract action with the contractor. UCAs are primarily used for urgent situations when work must begin immediately and cannot wait for a negotiation or contract award process to complete. However, after work begins the Government and contractor must continue the contracting process in order to negotiate a final price. If an agreement (or “definitization”) is met, definitization is considered “bilateral” (or mutual). However, if the Government and contractor cannot reach an agreement, the Government has the right per FAR 16.603-2(c)(3) to determine a reasonable price of the contract action without the contractor’s consent. This is referred to as a “Unilateral Definitization.” I witnessed a Unilateral Definitization while working at the F-35 Joint Program Office. After 14 months of good faith negotiations, a determination was made that it was in the best interest of the Government to unilaterally definitize a $6.1 Billion contract with Lockheed Martin Aeronautics Company for the Low Rate Initial Production (LRIP) Lot 9 purchase of 57 F-35 aircraft. The Program Office made the determination that all negotiation resources had been exhausted in an attempt to reach a mutual agreement with the sole-source contractor, and that the Government’s award determination was fair and reasonable for the scope of effort based on significant and thorough cost and pricing data. If the contractor disagreed with the Government’s assessment, they maintained the right per Disputes Clause 52.233-1 to appeal the Government’s decision. They did not appeal.
However, less than one year following this unilateral award decision, the Senate Armed Services Committee proposed the following verbiage in Section 823 of their FY18 NDAA draft:
The committee recommends a provision that would apply limitations and a notice and wait period to all undefinitized contractual actions of $50.0 million or greater. Such limitations would require that if an agreement is not reached on contractual terms, specifications, and price by a date certain, the contracting officer may not unilaterally definitize those terms, specifications, and price over the objection of the contractor until the head of the agency approves the definitization in writing, the contracting office provides the written approval to the contractor, and the head of the agency notifies the congressional defense committees of the approval. The contract modification unilaterally definitizing the action should not take effect until 60 calendar days after the congressional defense committees have been notified.
Unfortunately, should this proposed section of the NDAA become law, it would further delay the progress of an already lengthy acquisition process in order for political bureaucracy and influence to pressure contracting officers to accept deals they may not otherwise determine to be fair and reasonable. Such delays and pressures are not beneficial to the warfighter or the taxpayer. In the example of the F-35 unilateral award determination, an already 14 month negotiation would have been extended several additional months had the Section 823 language already been incorporated into law. Additionally, Program Office resources would have inevitably been applied to the drafting of additional justification documents and answering 60 days’ worth of questions from the agency head and defense committee members. Such strains on personnel resources would not only have resulted in delayed completion of the LRIP 9 efforts, but would have also hindered progress on other coinciding contract actions, such as ongoing LRIP 10 negotiations for an additional 92 F-35 aircraft.
Solution Applied to the Example Problem
In the case of the Section 823 Limitation on Unilateral Definitization example, I believe a DACT could have provided greater insight to SASC PSMs on the effects the recommended language will have on Acquisition professionals. By utilizing personal experiences, such as the F-35 example, the DACT could advise the PSMs on where processes are already sufficient and therefore have no need for additional oversights, and where they are inadequate and in need of improvement. The PSMs I spoke with during my Mid-Level Development Program experience explained how they are interested in acquisition reform and expediting lengthy procurement processes by removing unnecessary bureaucratic barriers. Yet, the Section 823 language contradicts their desired outcome by potentially adding unnecessary reviews that will further burden an already detailed acquisition structure designed to ensure fairness for both parties engaged in negotiations.
According to the SASC’s FY18 NDAA Executive Summary, “Congress has for the last 55 consecutive years passed the National Defense Authorization Act, which authorizes funding and provides authorities for the US military.” This is quite an amazing feat considering the political discord and divisiveness our country has often experienced during the same timeframe in history. To me, this success rate illustrates the importance we all place on National Defense regardless of political leanings. It also demonstrates the importance of unity. We simply accomplish more and are our best selves when we work together as a nation. It is in this same spirit of unity and collaboration that I recommend the creation of a Defense Acquisition Consulting Team. I believe such a team, when working alongside those on Capitol Hill, will develop more innovative, effective, and executable acquisition reforms than what has historically passed within the current framework. Greater reform will enable us all to better support the warfighter, protect our national treasures, and ultimately defend our nation and its sovereignty.
Capt. Christopher W. Piercy currently serves as an Acquisition Staff Officer, Air Force Installation Contracting Agency, Operating Location Air Combat Command (OL-ACC), Joint Base Langley-Eustis, Virginia. He supports the Air Force’s largest and most complex OL contracting portfolio by providing contract clearance reviews and policy oversight to 22 ACC contracting activities which award and administer $2.3 billion in contracts annually in support of global operations.
In October 2009, Capt. Piercy graduated from Officer Training School at Maxwell Air Force Base, Alabama and commissioned as a Second Lieutenant in the contracting career field. As a contracting officer, his duties included Flight Team Lead, Flight Commander, and Procurement Contracting Officer. Prior to his current position, Capt Piercy served as an Executive Officer for the Deputy Program Executive Officer at the F-35 Lightning II Joint Program Office in Arlington, Virginia where he coordinated worldwide travel, prepared official General Officer level correspondence, and interfaced with senior staff at the Department of Defense and other civilian and international military equivalent agencies.
In August 2011, Capt. Piercy deployed to Camp Leatherneck, Afghanistan as a Contingency Contracting Officer in support of Operation Enduring Freedom.
This article is a winner in the 2017 Maj. Gen. Harold J. “Harry” Green Awards for Acquisition Writing competition. A special supplement featuring the winning entries is online now, and will accompany the print version of the April – June 2018 issue of Army AL&T magazine. If you wish to be added to the magazine’s mailing list, subscribe online; if you’d like multiple subscriptions, please send an email to armyalt@ gmail.com.