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In addition, the defense acquisition decision process is so flawed and excessively bureaucratic that it, too, should be replaced completely by a new process that would enable capital asset investment analysis of alternatives, decision making and execution in a much shorter period of time, involving far fewer participants, and in synchronicity with a long-range planning and accrual budgeting process that places emphasis on performance rather than input and process variables. The system, as it operates presently, is an incredible and wasteful triumph of process over substance. Also, we wish to observe that if we really want to run the DoD like a business (i.e., using smart business practices) the best way to accomplish this goal is to make it a business— through increased contracting of all essentially non-governmental functions to the private sector. In our view, so much of what the DoD acquisition and contracting bureaucracy does (and does badly) could and should be performed entirely outside of government. However, full exploration of these proposals must and will be made in other papers, the research for which is ongoing as we complete writing this document. 1 Some might argue that the milpers and O&M accounts should be kept in a modified PPBE-like process. We have no problem with this idea, but divorced of capital asset decisions, keeping PPBE as a budgeting system seems overly bureaucratic. What system the remaining DoD accounts should use is another good topic of inquiry with the basic question being what kind of system serves a set of accounts (one of which is highly stable—milpers, civpers in O&M) and one (O&M) which is relatively stable at the topline, but riddled with within-year adjustments and shot with pork and Congressionalinterest items not requested by the DoD. The authors wish to acknowledge the valuable contribution to this paper made by Sean Donohue and Lina Downing, students in the Graduate School of Business and Public Policy at the Naval Postgraduate School. = ==================^Åèìáëáíáçå=oÉëÉ~êÅÜW=òb^qfkd=pvkbodv=clo=fkclojba=è^kdb====- 221 - = =
REFERENCES Bierman Jr., H., & Smidt, S. (1980). The capital budgeting decision (5 th ed.). New York: MacMillan Publishing Co., Inc. Boudreau, M. (2005, May). Acquisition Conference presentation. Second Annual Acquisition Research Symposium (May 18-19, 2005). Monterey, CA: Naval Postgraduate School. California state administrative manual (n.d). Retrieved March 15, 2005 from http://sam.dgs.ca.gov/default.htm. Cooper, W., Morgan, R., Redman, A., & Smith, M. (2002). Capital budgeting models: Theory vs. practice, 26(1/2). Retrieved May 8, 2005 from http://proquest.umi.com/pqdweb?index=0&did=636769801&SrchMode=1&sid=2&Fm t=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1130189677&clientI d=11969. Executive summary. (2005, December). Defense acquisition performance assessment, p. 10. Fixed asset. Definition. Retrieved from http://www.investorwords.com Drury, C., & Tayles, M. (1997). The misapplication of capital investment appraisal techniques. Management Decision, 35(2). Retrieved July 17, 2005 from http://proquest.umi.com/pqdweb?index=0&did=117543017&SrchMode=1&sid=1&Fm t=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1130188340&clientI d=11969. General Accounting Office (GAO). (1998). Executive Guide: Leading practices in capital decision making. Retrieved September 12, 2005 from http://www.gao.gov/archive/1998/ai98110.pdf. General Accounting Office (GAO). (2005). Capital financing. Potential benefits of capital acquisition funds can be achieved through simpler means. Retrieved September 12, 2005 from http://www.gao.gov/new.items/d05249.pdf. GAO. (2005, November). Best practices: Better support of weapon system program managers needed to improve outcomes. GAO report to the subcommittee on Readiness and Management Support, Committee on Armed Services, US Senate. GAO-06-110. Graham, J., & Campbell, H. (2002). How do CFOs make capital budgeting and capital structure decisions? [Electronic Version]. Journal of Applied Corporate Finance, 15, 8-23. Retrieved July 23, 2005 from http://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P76_How_doCF Os.pdf. Harris, J. (1982). Computer modeling. Healthcare Financial Management: Journal of the Healthcare Financial Management Association, 36(6), 10-18. = ==================^Åèìáëáíáçå=oÉëÉ~êÅÜW=òb^qfkd=pvkbodv=clo=fkclojba=è^kdb====- 222 - = =
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Author(s) Title Publisher Issue Dat
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The research presented at the sympo
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Preface and Acknowledgements Those
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The NPS A Team Rear Admiral James B
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4 th Annual Acquisition Research Sy
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PANEL -- IMPLEMENTING AN OPEN SYSTE
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Plenary Panel - Acquisition Reform
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In May 1996, Rear Adm. Hamilton bec
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Panel - Enhancing Collaborative Cap
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Collaborative IT Tools Leveraging C
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Group’s Perceived Usefulness Grou
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diagnose collaborative capacity enc
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Organization A Problem Interagency
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Incentives - Collaboration as a pre
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Two other frequently cited barriers
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Panel - Analytic Approaches to Shap
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Discussant: Michael McGrath - Deput
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Panel - Strategic Sourcing Wednesda
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Abstract In this paper, we examine
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support from the taxpayer. A key co
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etc. (Figure 1) (Kraljik, 1983). Vi
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that companies adopted a strategic
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Benchmarking Industry According to
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80% 70% 60% 50% 40% 30% 20% 10% 0%
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initiatives. In efforts to reduce s
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eduction goals. Also, in the same m
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Conclusion The DoD is struggling to
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Gabbard, E. G. (2004, April). Strat
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Staff. (2005, December 8). Hacket r
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Panel - Implementing RFID in the De
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What Is the Right RFID for Your Pro
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Introduction The evolution and appl
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Literature Review RFID technology w
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The reader is a device used to coll
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Active tags sometimes have sensors
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An RFID network with open architect
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Passive tag application: Railcar ta
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This system has lowered the risk of
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Because of the temperature-induced
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Thereafter, through a process of tr
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to be read at a few inches by an op
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RFID technology has even enhanced s
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The Costs of RFID operation An RFID
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• Abandonment: The ability to aba
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Fleisch, E., & Tellkamp, C. (2005).
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Williams, D. (2005, August 4). Pres
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logistics systems from the military
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Panel - Transforming the DoD Acquis
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upon the best knowledge and practic
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cost, this form appears to be the m
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access to, and conducted his analys
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organizational problems surface thr
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Change in analytic framework. Burea
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As we look at the effort to change
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interpretation or narrative. What
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common construction. Rather, sense-
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There will be a temptation for acto
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modeling suite. The key comparison
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This model provides us also with th
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here, particularly if the organizat
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organization identified through pri
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Levitt, R.E., Thomsen, J., Christia
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BACKGROUND To an extent, we are add
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Concept Refinement Concept Decision
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some subset of commercial “best p
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transforms the value of a public-se
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We also assume that since the gover
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Of course, we know in reality that
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CONCLUSIONS The acquisition of publ
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Panel - Issues in Acquisition and P
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To What Extent are DoD Activities C
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NAVSUP Data Call (2003 and 2004) FI
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exemption from a particular regulat
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time in the procurement schedule, a
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should be fully supported by applic
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example, federal government, state
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ADR Techniques Traditional litigati
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out the top three with 25.7% of res
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It is a consensus building, public
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Investigative Question 1—Conclusi
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Question 3b: Did the ADR process us
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suited than another to resolution.
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Investigative Question 7: Barriers
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customer, and each of these service
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Panel -- Implementing an Open Syste
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Open Systems and Modular Open Syste
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procurement planning phase include
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procurement documents and specific
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system technical architecture requi
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These evaluation factors are tradit
Page 183 and 184: In the Cost Reimbursement contract
Page 185 and 186: technical, schedule, and past perfo
Page 187 and 188: Developing Performance Based Requir
Page 189 and 190: The DoD Performance Specification d
Page 191 and 192: due to many of the reasons presente
Page 193 and 194: even if there were ten other upgrad
Page 195 and 196: software developers can employ when
Page 197 and 198: Conducting this analysis will be as
Page 199 and 200: integration of “best of breed”
Page 201 and 202: Reform of Budgeting for Acquisition
Page 203 and 204: 350000 300000 250000 200000 150000
Page 205 and 206: In fact, the disagreement between t
Page 207 and 208: Functional Area Analysis D O T M L
Page 209 and 210: Though many in Washington blame the
Page 211 and 212: In response to an open-ended questi
Page 213 and 214: CAPITAL BUDGETING IN THE DoD AND TH
Page 215 and 216: investment. Full funding also helps
Page 217 and 218: c. Functional Requirements If it is
Page 219 and 220: 4. Budgeting Phase of Capital Progr
Page 221 and 222: private firm, one can combine the t
Page 223 and 224: 4. Acceptance of a project using th
Page 225 and 226: Another disadvantage of the payback
Page 227 and 228: Another guideline is that firms mus
Page 229 and 230: This concept has remained consisten
Page 231 and 232: purchases. Also, the Office of Mana
Page 233: CONCLUSIONS The current practices o
Page 237 and 238: Ratnam, G. (2005, December 12). Big
Page 239 and 240: Brian C. Payne, Captain Instructor
Page 241 and 242: A Transactions Cost Economics (TCE)
Page 243 and 244: SECTION 1: INTRODUCTION This report
Page 245 and 246: SECTION 2: REVIEW OF TRANSACTION CO
Page 247 and 248: cooperative agreements, but since t
Page 249 and 250: characteristic that defines many ou
Page 251 and 252: The added risk faced by military co
Page 253 and 254: J) Some Empirical Evidence On the w
Page 255 and 256: unproductive bargaining and influen
Page 257 and 258: also include the costs of internal
Page 259 and 260: N) Results from a Bargaining-game M
Page 261 and 262: efforts to screen for reliability a
Page 263 and 264: Program Managers lead Program (Proj
Page 265 and 266: Table 2. Research, Development, Tes
Page 267 and 268: To minimize transaction costs for t
Page 269 and 270: A recent initiative to accommodate
Page 271 and 272: Technical complexity within a syste
Page 273 and 274: As briefly introduced above in Sect
Page 275 and 276: Table 5. Typical Contract Type by P
Page 277 and 278: multiyear procurements and other ty
Page 279 and 280: Alpha Contracting reduces procureme
Page 281 and 282: SECTION 4: SYNTHESIS AND CONCLUSION
Page 283 and 284: Finally, DoD contracting practice w
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Productive Effort Parameters Unprod
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f. Operational Significance. (added
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enchmarks, and the like. Elements T
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Cooter, R., Marks, S., & Mnookin, R
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Nissen, M. E. (1997). JSOW alpha co
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Development of Measures of Success
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of acquisition practitioners to all
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Attributes of Good Metrics. Certain
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Center ACEs were from separate loca
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unique. Every interview transcript
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appropriate. However, when asked if
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they are receiving in their attempt
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forcing each activity and report to
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Force Space Command System Program
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corporate Air Force acquisition ini
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Hayes, B. Measuring Customer Satisf
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Pope, K. Measuring the Effect of th
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Using KVA and Real Options Analysis
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Estimating Return on Investment and
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This research project gathered info
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“I have determined that the curre
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On Budget Allocation to Increase Op
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Panel - Perspectives in Program Man
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Best Practices: Better Support of W
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When Should You Terminate Your Own
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- Management activities, expenditur
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RF COMMUNICATIONS DIVISION ROCHESTE
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REQUIREMENT HF MANPACK TACSAT VHF/F
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Figure 4. System Components INTEGRA
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My best technical experts would spe
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“JULIE-GATE” The program was st
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All agreed it was finally over, and
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A short time later, the world waite
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some of NASA’s Mars probes) or if
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managing systems with tipping point
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The second example of tipping point
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Although the plant did not begin co
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snt - add-new-tasks strength {work
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einforcing loop. We show how, throu
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there is no more project backlog. F
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Frac requiring rework (Frw ) 1.0 0.
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Total Backlog as a Fraction of Inti
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provide opportunities for improveme
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divided into avoiding tipping point
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The horizontal axis of Figure 14 re
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Total Backlog Total Backlog/Initial
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deadline and ensuring that it is re
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unrealistic due to drastic changes
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Kharbanda, O., & Pinto, J. (1996).
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Panel - Service Contracting Thursda
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Managing the Services Supply Chain
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include professional, administrativ
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Service Characteristics and their I
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given stage is made dependent on th
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contracted effort. The procurement
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Construction, Repair and Maintenanc
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The second phase of the procurement
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human capital. This is partially du
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for the contracting of services wil
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Yet a RAND study of the Army showed
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services, the Army appears to have
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(janitorial) services, food service
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Each requirement organization provi
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Brown, S. W., Gummesson, E. Edvards
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Gronroos, C. (1982). Strategic mana
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What Works Best when Contracting fo
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Panel - Earned Value Management Thu
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Measuring Uncertainty in Earned Val
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level of rate-of-change and the abs
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But, if the widget is only half com
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so more rapidly in environments cha
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Impending Task Delays (ITD) can be
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with: v: In the Fisher model, it re
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In discrete time form, the estimati
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Thus, various types of delay such a
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Entropy The uncertainty (non-specif
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Panel - Contractors in Support of M
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Contractors Supporting Military Ope
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drivers and other historical refere
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Another factor driving toward incre
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number of highly experienced Blackw
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Unity of command is one of the prin
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was reimbursed for expenses actuall
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principles, such as unity of comman
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aircraft involved in re-supply miss
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President Cheney) has apparently ma
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modest proposals for incremental ch
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In July 1937, the “China Incident
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President Roosevelt’s assistant,
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Pilots of the Flying Tigers receive
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was larger than the marine aid stat
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Merchant vessels kept Britain in th
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The final vignette involves Charles
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contract (Wake Island pre-war). In
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purposes continues to be the “leg
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Going to War with Defense Contracto
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Abstract This paper reports on an e
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Table 1: Factor loadings and alpha
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depict causal relationships tested
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work-related experience than younge
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Discussion and conclusion On averag
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2003 - 2006 Sponsored Acquisition R
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NPS-PM-04-017 Matthews, David. The
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Technical Reports NPS-GSBPP-03-003
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