Contents

• Introduction
• Comparison of House and Senate Bills
• House-Passed Version
• Senate-Passed Version

Introduction

For purposes of this analysis, CRS selected 35 sections of the House-passed version of FY2016 National Defense Authorization Act (H.R. 1735), and 47 sections of the Senate-passed version of FY2016 NDAA (also H.R. 1735) that appear closely linked to the respective committee's efforts to reform the acquisition system (excluding Sense of Congress).¹ Each section is identified as fitting into one (or more) of the following four overarching categories:

• 1. gathering information for future action,
• 2. streamlining the current process,
• 3. improving the effectiveness of the current process, and/or
• 4. improving the performance of the workforce (through recruitment, professional development, or empowering decision-making).

Comparison of House and Senate Bills

The acquisition reform sections of the House and Senate versions of the FY2016 NDAA have many similarities. More than half of the provisions in the Senate bill address the same issues found in the House bill. (See Appendix A, Table A-1 for analysis of the sections in the House bill that correspond to sections in the Senate bill.) In some sections, the language in each bill is virtually identical.² Despite these similarities, the bills have striking differences in length (the Senate version is longer), the philosophical approach taken to reform acquisitions, and the content of the bills.

Taken as a whole, the House bill was not intended to be a panacea for what ails defense acquisitions. Rather, it is intended to serve as an initial step in a multi-year, collaborative effort to improve acquisitions. As the committee's report states, " ... this bill is the first substantive step towards comprehensive reform, the committee recognizes that instituting lasting reform is a long-term, collaborative effort, and therefore, it looks forward to working with all key stakeholders to build upon this product."³ The bill requests more information than does its Senate counterpart. Viewed in this context, the House bill's effectiveness in improving defense acquisitions may depend less on the extent to which provisions of the bill make substantive changes to acquisitions, and more on the extent to which the bill sets forth a vision, and sets in motion a chain of events, that lead to comprehensive (and effective) acquisition reform in the future.

In contrast, the Senate bill takes a more sweeping and immediate approach to acquisition reform; by itself, the Senate bill would have a significant effect on defense acquisitions. One example of the differing approaches of the two bills is how each addresses the role of the military services in acquisitions. The House bill calls for the military services to submit a report to Congress on the role of service chiefs in the acquisition process (Section 802) and a report on how to link requirements, acquisitions, and budgeting (Section 801) within the respective services. In contrast, the Senate version calls for immediately implementing changes that would enhance the role of the military departments in acquisitions (Section 801), including designating service acquisition executives as the milestone decision authority for Major Defense Acquisition Programs (Section 843).

House-Passed Version

Two sections of H.R. 1735 as passed by the House (Sections 800 and 821) seek to articulate the guiding principles underlying the acquisition reform effort. As articulated, the House assumptions underpinning the acquisition reform efforts can be summarized as follows:

• 1. The Department of Defense (DOD) buys more goods and services than can be realistically supported by the defense budget;
• 2. Both DOD and Congress are complicit in pursuing acquisition strategies that downplay technical risk and underestimate cost (often without clearly defined and carefully thought out requirements);
• 3. The acquisition process is weighed down by too many rules, bureaucratic hoops, and outdated regulations, resulting in an acquisition process that is not agile enough, too risk averse, and takes too long to deliver; and
• 4. Past reform efforts have floundered, in part, because they failed to address the motivational and environmental factors in which they must be implemented.

The House bill does not directly address budget issues, focusing instead on various issues relating to the acquisition workforce, streamlining reporting and approval processes, tweaking the current acquisition system, and requesting information or analysis that can be used for future action. Of the sections in the House bill related to acquisition reform,⁴ approximately

• 25% seek to gather information by requiring reports or mandating reviews;
• 30% seek to streamline the acquisition process;
• 40% mandate changes to the system intended to improve the process; and
• 30% seek to improve the performance of the acquisition workforce through recruitment, development, training, retention, and/or empowering decision-making.⁵

Two of the more significant sections in the bill relate to workforce: Section 811, which would make permanent the Defense Acquisition Workforce Development Fund, and Section 812, which would create a dual-track career path in operational and acquisition disciplines for uniformed personnel. Also of note is Section 854, which would increase the Simplified Acquisition Threshold from $150,000 to $500,000.⁶ (To see how each section is categorized, see Appendix A, Table A-1.)

Senate-Passed Version

Of the sections in the Senate-passed version of H.R. 1376 that relate to acquisition reform, approximately

• 10% seek to gather information by requiring reports or mandating reviews;
• 40% seek to streamline the acquisition process;
• 30% mandate changes to the system intended to improve the process; and
• 40% seek to improve the performance of the acquisition workforce through recruitment, development, training, retention, and/or empowering decision-making.⁷

Like the House bill, the Senate bill extends the Defense Acquisition Workforce Development Fund and creates a dual-track career path for uniformed personnel, to encompass acquisitions. However, the Senate bill has other sections that, if enacted, would have a significant impact on defense acquisitions. Perhaps the most controversial and far reaching sections of the bill are those related to enhancing the role of the service Chiefs of Staff and the military departments in the acquisition process (Sections 801, 843, 849, and 851). As some analysts have pointed out, these sections

significantly reverse course on the direction of the last 30 years by altering the flow of acquisition authority established under the Goldwater-Nichols Act of 1986 and reducing the authority of the combatant commanders and the Joint Staff.⁸

Reversing course and giving the service chiefs more authority over acquisitions is precisely what some analysts and officials have called for, most notable John Hamre of the Center for Strategic and International Studies, and Army Chief of Staff General Ray Odierno.⁹ Many other analysts have taken the opposite view, and the Administration "strongly objects" to these provisions, arguing that if enacted, they would

significantly reduce the Secretary of Defense's ability—through the Under Secretary of Defense for Acquisition, Technology and Logistics USD(AT&L)—to guard against unwarranted optimism in program planning and budget formulation, and prevent excessive risk taking during execution—all of which is essential to avoiding overruns and costly delays.¹⁰

The Senate bill also seeks to create a new acquisition process for rapid prototyping and fielding of middle tier programs (Section 803), and has a number of sections that could have a significant effect on workforce policies (sections 847, 1101-1103). The Senate bill also calls for establishing a panel to conduct an in-depth analysis of the rules and regulations of the acquisition system, and to provide recommendations within two years of enactment of the bill (Section 808). A number of these sections seek to clarify accountability within the acquisition process. (To see how each section is categorized, see Appendix B, Table B-1.)

Appendix A. Sections in the House Bill Relating to Acquisition Reform

Table A-1 categorizes select sections of the House-passed H.R. 1735 into four overarching categories or goals:

• 1. Gathering information for future action,
• 2. Streamlining the current process,
• 3. Improving the effectiveness of the current process, and
• 4. Improving the performance of the workforce (through recruitment, professional development, or empowering decision-making).

Workforce is further identified by three subcategories:

• 1. Empowering the workforce/enabling decision-making,
• 2. Developing and improving the capabilities of the workforce, and
• 3. Recruitment/retention of the workforce.

Because sections 800 and 821 are Senses of Congress that articulate the intent of the acquisition reform effort, these sections are identified in Table A-1 as guiding principles.

Appendix B. Sections in the Senate Bill Relating to Acquisition Reform

Table B-1 categorizes select sections of the Senate-passed H.R. 1735 into four overarching categories or goals:

• 1. Gathering information for future action,
• 2. Streamlining the current process,
• 3. Improving the effectiveness of the current process, and
• 4. Improving the performance of the workforce (through recruitment, professional development, or empowering decision-making).

Workforce is further identified by four subcategories:

• 1. Empowering the workforce/enabling decision-making,
• 2. Developing and improving the capabilities of the workforce,
• 3. Recruitment/retention of the workforce, and
• 4. Establishing more accountability for certain personnel.

Footnotes