The Twelfth Annual Gilbert A. Cuneo Lecture The Origins and Development of the Federal Acqumitim Streamlining Act

• Author: The Honorable Jeff Bingaman
• Pages: 03

I. Introduction

General Gray, Colonel Graves, members of the faculty, and participants in the symposium, I am honored that The Judge Advocate General's School has asked me to present the Twelfth Annual Gilbert A. Cuneo Lecture Gilbert Cuneo not only bad a distmguahed career as a procurement attorney in both the public and private sectors, he also actively promoted continuing legal education in the procurement field as a means of providing for continuous improvement in the law This lecture was endowed in his name with the goal of furthering healthy cooperation between government and the private sector in the fieid of federal acquisition policy.

Today, I wili address the origins and development of the Federal Acquisition Streamlining Act of 1894-ieglslation that embodies the spirit of the Cuneo Lecture by removing many of the barriers that have inhibited government-industry cooperation on acquisition policy matters. First, 1 will discuss the impact of the streamlining movement on the legislative process. Second, I will descnbe the activities that led to the establishment of the Advisory Panel on Streamlining and Codifying the Acquisition Laws-the "Section 800" Panel. Finally, 1 will discuss the events that resulted in the successful enactment of the Federal Acquisition Streamlining Act

JEFF BINOAHAP

'

11 The Impact of rhe Streamimmng Movement

If you hare not had the opportunity to read the first Cuneo Lecture by John E. Cavanagh-which was published in rhe May 1984 issue of The A m y Loeyer-I urge you to do so. Mr Cavanagh outlined the major changes that had taken place m the procurement process dunng the late 1970s and early 198Os, which reflected a growing adversarial relationship between the governmenr and its contractors Citing a report bg the Defense Science Board, Mr. Cava-nagh noted that increased regulator) requirements had established deterrents that prevented smaller companies from pursuing defense busmess. Those firms that chose to participate in government procurements experienced increased costs as a result of these requirements

Unlike Some critics who simply denounce government regula- tmn. Mr. Cavanagh recognized that in a democracy that depends on the willingness of taxpayers to fund government procuremenrr, some degree of regulation and oversight will always be necessav What he advocated was a more careful review of acquisition procedures to remove or alter the regulations that unduly promoted adversarial relationships and that inhibited a more cooperative approach A5 I will discuss in mg remarks, nearly a decade mould pass. however, before such a review was undertaken by an advisory panel established under ie&atmn initiated by the Senate Armed Senses Committee.

At first, Yr Caianagh's call for greater cooperation seemed like a lost cn in the woods. Although Congress was extremely generous m funding defense programs dunng the 198Os, that generosity was accompanied by an unprecedented level of scrutiny. Congressional involvemen1 m defense procurements-which is our consritutional responsibility under rhe Consarution'-extended beyond concern about specific weapons systems and into detailed concern with the acquisition process At rimes. it seemed that even publicized incident of fraud. waste. or abuse-real or percened-was accompanied by a legislative fu.

While much of the attention was warranted and overdue the cumulative impact of these intense efforts to regulate the acquisi tmn process often was overlooked Over time, those of us who followed defense procurement policy in Congress-partsularly an the Armed Services Committee-studied with concern the ~ssues raised

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by Mr. Cavanagh and others about the adverse impact of overreguiation an the health of the defense industrial and technology base.

111. Legislative Development of Acquisition Streamlining Initiatives

In 1987, at the beginning of the IOlst Congress, the Senate Armed Services Committee, under the leadership of Senator SamNun", established a new subcommittee-the Subcommittee on Defense Industry and Technologpas the SUCC~SSOI to the Acquisition Policy Subcommittee. The responsibilities of the new Subcommittee included oversight of the defense industrial base and the technology base, as well as defense acquisition policy. I was pleased to serve as the first chairman of the new Subcommittee. The Ranking Minority Member was Senator Phil Gramm of Texas-who you no doubt will be hearing more of in the next year!

In 1987, we conducted a comprehensive review of defense acquisition policy, during which we received testimony from leading government officials, the defense industry, academic experts, and the oversight community.3 In our report accompanying the National Defense Authorization Act for Fiscal Years 1988 and 1989, we took note of evidence "suggesting that the procurement system is suffer-mg from regulatory overload as a resuit of the number and scape of recent regulatory and lemsiative changes."4 We also noted that while the individual actions "may well have been taken in B good-faith effort to address a specific acquisition policy problem, , , in combination these actions may produce a serious adverse impact on innovation and risk taking."< Our report called on the Department of Defense (DOD) "to identify promptly any statutory provisions that have a negative impact on innovatiod's

In addition to seeking DOD proposals, the Subcommittee established an Industry Advisory Group in August 1987, consisting of thirteen senior defense industry officials. led by John Rittenhouse, Senior Vice President of General Electric's RCA Aerospace and Defense Group The Advisory Group, which was asked "to identify those aspects of the acquisition process that stifle Innovation, drain good talent away from defense industries, and threaten our techna-

*S REP 110. 57, IOOthCong , lit Sesi. 13 (1887)

logical and industrial lead;" produced twenty issue papers, focussing pnmanly on ways to streamline and simplify the acquisition process On Februav- 5. 1988, the Subcommittee released the Advisory Committee's Report along with illustrative leasiative lan-guage, in an effort to stimulate broad discussion of these issues during the Committee's 1988 oversight heanngs.9

Although we were hopeful that our activities aauld encourage the DOD to submit a comprehensive streamlining proposal, the DOD proposed changes ~n only five statutes as part of its 1988 legislative package.10 In testimony before the Subcommittee, the Under Secretary of Defense for Acquisition, Robert Costeilo, acknowledged his frustration in attempting to develop an acquismon reform agenda, and described the DOD's iegMative proposals as "pabium.' 11

In our report on the Xatmnai Defense Authorization Act for Fiscal Year 1989, the Armed Services Committee identified several themes underscoring the need for acquisition streamlining:

[Tlhe acquisition process is beset by cumbersome and contradictory policies that act as a disincentive to innovation and produce delay m fielding new weapons systems.

[T]o achieve significant savings m defense expenditures the DOD must focus its attention on costs, which . . wii require a rigorous review of nonvalue added regulations and acquisition practices

[Glavernment and industry must work together to foster a sense of trust and confidence in an environment that establishes clear lines of responsibility and firm pro cedures for accountability

[Alcqu~sitionchanges often have been justified in terms of

addressing isolated elements of procurement policy without regard to the system-wide impact of such changes

[T]he acquisition system LS suffering from regulator). overload as a resuit of the demanding task of implementing numerous iegislatne and internal changes in recent years As a consequence, managers must spend excesnve time

'See 5 REP \-ri 326 100th Cang , 26 Sess 12 (I9871 lhereinafter S REP VI

Semites 100th Cang PdSerr , pf 7. at 661-729 (1985)

fri hdriran Group ape sei forth m id 81 301 630

'Sei rd a 6 6 8 The Subcommittee's hearmas on rhe 1ssuei raised bi the lndui

o.%~ id a? 311 '-Id

revising and disseminating procedural changes, to the detriment of their ability to manage their prosams l2

The Committee expressiy noted Its disappointment that the DOD had not responded to the Committee's repeated encouragement to submit legislation that would "reduce the complexity of the acquiatmn system "13 As a result, the Committee initiated legislation, which ultimately was enacted into law, requiring the Under Secretary of Defense for Acquisition to prepare a report on the simplification and streamiimng of acquisition procedures, including identification of statutory impediments to timely fielding of new systems, innovation, and cost-effectivenesi."

Despite this invitation to submit a comprehensive reform proposal, the DOD produced a report which the Armed Services Committee subsequently descnbed as "insubstantial and incomplete '115

The report recommended only twelve statutory changes, failed to set forth specific legislative proposals, and provided virtually no justification or supporting analysis for the proposed changes. The report's deficiencies meant that it could not provide an adequate basis for legislative changes, particularly in light of the skepticism about acquisition simpiification that accompanied the revelations of fraud accompanying the "111 Wind" procurement scandal

The Committee was encouraged by the emphasis an acquisition reform promised by the Defense Management Review (DMR) initiated by Secretary of Defense Dick Cheney in 1989, but expressed concern that "the proposals therein, like those of the Packard Commission, consist pnmarily of broad principles which can be furthered--or frustrated-in the implementation process." 16

Events over the next year increased the Committee's frustration over the DOD's unwillingness to take the initiative in developing a comprehensive acquisition reform package. The 111 Wind scandal had resulted in...