[House Hearing, 111 Congress] [From the U.S. Government Printing Office] [H.A.S.C. No. 111-46] THE ACQUISITION WORKFORCE: MERELY A BUSINESS EXPENSE OR A FORCE MULTIPLIER FOR THE WARFIGHTER? __________ HEARING BEFORE THE OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE OF THE COMMITTEE ON ARMED SERVICES HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION __________ HEARING HELD APRIL 28, 2009 [GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT] ---------- U.S. GOVERNMENT PRINTING OFFICE 51-106 PDF WASHINGTON : 2010 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE VIC SNYDER, Arkansas, Chairman JOHN SPRATT, South Carolina ROB WITTMAN, Virginia LORETTA SANCHEZ, California WALTER B. JONES, North Carolina ELLEN O. TAUSCHER, California MIKE ROGERS, Alabama SUSAN A. DAVIS, California TRENT FRANKS, Arizona JIM COOPER, Tennessee CATHY McMORRIS RODGERS, Washington JOE SESTAK, Pennsylvania DOUG LAMBORN, Colorado GLENN NYE, Virginia DUNCAN HUNTER, California CHELLIE PINGREE, Maine Suzanne McKenna, Research Assistant Thomas Hawley, Professional Staff Member Trey Howard, Staff Assistant C O N T E N T S ---------- CHRONOLOGICAL LIST OF HEARINGS 2009 Page Hearing: Tuesday, April 28, 2009, The Acquisition Workforce: Merely a Business Expense or a Force Multiplier for the Warfighter?..... 1 Appendix: Tuesday, April 28, 2009.......................................... 31 ---------- TUESDAY, APRIL 28, 2009 THE ACQUISITION WORKFORCE: MERELY A BUSINESS EXPENSE OR A FORCE MULTIPLIER FOR THE WARFIGHTER? STATEMENTS PRESENTED BY MEMBERS OF CONGRESS Snyder, Hon. Vic, a Representative from Arkansas, Chairman, Oversight and Investigations Subcommittee...................... 1 Wittman, Hon. Rob, a Representative from Virginia, Ranking Member, Oversight and Investigations Subcommittee.............. 3 WITNESSES Assad, Shay D., Acting Deputy Under Secretary of Defense, Acquisition and Technology, U.S. Department of Defense......... 4 Needham, John K., Director, Acquisition and Sourcing Management, U.S. Government Accountability Office.......................... 9 Shackelford, Lt. Gen. Mark, USAF, Military Deputy to the Assistant Secretary of the Air Force, Acquisition, U.S. Department of the Air Force.................................... 8 Thompson, Lt. Gen. N. Ross, III, USA, Principal Military Deputy to the Assistant Secretary of the Army for Acquisition, Logistics and Technology and Director, Acquisition Career Management, U.S. Department of the Army........................ 6 Thomsen, James, Principal Civilian Deputy for the Assistant Secretary of the Navy, Research Development and Acquisition, U.S. Department of the Navy.................................... 7 APPENDIX Prepared Statements: Assad, Shay D................................................ 42 Needham, John K.............................................. 82 Shackelford, Lt. Gen. Mark................................... 74 Thompson, Lt. Gen. N. Ross III............................... 53 Thomsen, James............................................... 66 Snyder, Hon. Vic............................................. 35 Wittman, Hon. Rob............................................ 39 Documents Submitted for the Record: [There were no Documents submitted.] Witness Responses to Questions Asked During the Hearing: [There were no Questions submitted during the hearing.] Questions Submitted by Members Post Hearing: Mr. Franks................................................... 109 Ms. Sanchez.................................................. 109 Dr. Snyder................................................... 105 THE ACQUISITION WORKFORCE: MERELY A BUSINESS EXPENSE OR A FORCE MULTIPLIER FOR THE WARFIGHTER? ---------- House of Representatives, Committee on Armed Services, Oversight and Investigations Subcommittee, Washington, DC, Tuesday, April 28, 2009. The subcommittee met, pursuant to call, at 10:00 a.m., in room 2118, Rayburn House Office Building, Hon. Vic Snyder (chairman of the subcommittee) presiding. OPENING STATEMENT OF HON. VIC SNYDER, A REPRESENTATIVE FROM ARKANSAS, CHAIRMAN, OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE Dr. Snyder. The hearing will come to order. Good morning and welcome to the third, and the final, in a series of three hearings held by the Oversight and Investigations Subcommittee following up on several acquisition matters. Before we get started I want to recognize and welcome 50 International Fellows of the Naval War College who are in attendance at today's hearing. I say they are in attendance. I think they are actually divided up so that some who are in another room are going to swap out at some point because the hearing room is not big enough. That is why we moved to this hearing room, by the way. Welcome to all of you from the Naval War College International Fellows Program. We appreciate you being here. Incidentally, a professional military education is something that this subcommittee is very, very interested in, as is Chairman Skelton, and we have an ongoing study for the rest of this year that we are working on. Our first two hearings centered on acquisition and management issues in the Afghanistan and Iraq theaters of operation. Today's hearing is more broadly focused on the Department of Defense acquisition workforce. It is a timely topic. Acquisition reform is a high priority here in the Congress and in the executive branch. Chairman Skelton and Mr. McHugh introduced weapons system acquisition reform legislation this week. And they have established a special acquisition reform panel, led by our colleague Congressman Rob Andrews of Jersey. And both the President and Secretary Gates have also spoken about the critical need for acquisition reform. Speaker Pelosi has been very clear on the importance of saving tax dollars, as well as being sure our men and women in uniform and our military families get all the services they need. I think I was struck--probably the best summary I thought, Mr. Assad, was from your opening statement--and I am going to quote to you now--in which you say, ``The objective is straightforward: to ensure Department of Defense (DOD) has the right acquisition capability and capacity to produce best value for the American taxpayer and for the soldiers, sailors, airmen and marines who depend on the weapons, products, and services we buy.'' And that simple objective is what has led us here today, because a lot of us think we have got work to do. The acquisition workforce is at the heart of the acquisition system. No doubt there are the policies and the organizational structures that make up important parts of the defense acquisition system, but there are also the people; the engineers, cost estimators, systems engineers, contracting officers, program managers, contract specialists, quality assurance inspectors, logisticians, finance personnel, and auditors who carry out the acquisition function from start to finish. Working as a team, these members of the workforce are key players in both supporting the warfighter's needs and safeguarding the taxpayers' dollars. We are all familiar with the problems many of the major programs are facing in terms of substantial cost overruns, schedule delays, and problems with performance. As part of a larger package of reforms, Secretary Gates announced a plan to begin rebuilding the acquisition team to help address those problems. We think the Department already has many important tools for developing and managing the workforce. Congress has at times helped solve these problems, and Congress has at times helped create these problems. The Armed Services Committee has been very active in passing legislation to ensure that the Department attracts and maintains a professional high-quality acquisition workforce. This subcommittee's immediate predecessor, the House Armed Services Subcommittee on Investigations, in 1990 drafted the legislation in this area: the Defense Acquisition Workforce Improvements Act. On the other hand, Congress bears some responsibility for the current state of affairs because during the post-Cold War drawdown era, Congress mandated a series of reductions in the acquisition workforce, only to be followed by an era of increasing demands and dramatic growth in the Department's procurement budget after September 11th. In recent years we began recognizing a critical role played by the workforce and established the Acquisition Workforce Development Fund providing billions of dollars for the next several years for recruiting, retaining, and training the right people. We have provided expedited hiring authority to allow the Department to bring on qualified candidates quickly. We encouraged the Department to ensure that critical acquisition positions like program managers, cost estimators, and chief engineers are filled by government personnel. And we required the establishment of a career path, including general and flag- officer billets for military personnel in the acquisition field. We have lifted civilian personnel caps for acquisition positions. And we have given the Department the authority to in-source new work and bring back work that the Department previously outsourced. We look forward to hearing how these tools are helping. We also would like to hear how the Department and services plan to change from an institutional mind-set that in the past, due to the acquisition workforce, is merely performing an often arcane business function, to one that instead recognizes the critical and essential work that the acquisition workforce performs. When we talk about changing mind-sets, I believe that the change of mind-set also needs to occur in the Congress. We also need to be part of the changing mentality that recognizes the crucial role that is played by this acquisition workforce. The taxpayers depend on them, we depend on them, and our national security depends on them. Most importantly, our warfighters' lives and success literally depend on them, too. And I now would like to recognize Mr. Wittman. [The prepared statement of Dr. Snyder can be found in the Appendix on page 35.] STATEMENT OF HON. ROB WITTMAN, A REPRESENTATIVE FROM VIRGINIA, RANKING MEMBER, OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE Mr. Wittman. Thank you, Chairman Snyder. I appreciate your leadership in bringing this issue to the forefront. I also want to welcome our witnesses this morning. Thank you so much for joining us and taking your time out of your busy schedules to provide what I think is a very critical perspective on this issue of acquisition reform. All aspects of the defense acquisition system are receiving much attention these days. It seems to be the popular topic here on the Hill. And the President and the Secretary of Defense have made acquisition reform a priority. And the leaders of both the Senate Armed Services Committee and our own Chairman Skelton and Ranking Member McHugh of the House Armed Services Committee have introduced legislation to improve the system. And there is absolutely no question that any taxpayer- funded system expending more than $4 billion annually and employing thousands of people deserves continuous scrutiny. More importantly, though, the long history of armed conflict amply demonstrates that the combat force employing the most technologically advanced systems from long bows to gunpowder to stealth aircraft to the capability to rapidly deploy expert marksmen and their equipment from Virginia to the Indian Ocean usually prevails. And our national security demands that we have a well-funded, well-managed weapons acquisition system for our Armed Forces. Our focus today is not the system, but its most important element: its people. Any complex system requiring sound judgment, creativity, and financial prudence needs talented, motivated professionals. And what we are really doing is assembling a team of inventors, developing and packaging capabilities in ways heretofore unimagined, at taxpayer expense. It is extraordinarily difficult to produce any new capable weapons system, much less produce it on an exact schedule, to exacting performance standards, within an exact budget. As much as I would like to see more precision, we do need to trust good people to make reasonable decisions on this Nation's behalf. In that regard this committee has initiated several legislative measures in the last few years designed to strengthen the Department's acquisition workforce. We believe these changes are having a good effect, and are eager to hear your perspectives on this matter. Even so, we understand defense acquisition needs excellent employees and are happy to consider any further legislative changes that may be needed. Any systemic changes we have will have little real effect without a superb core of acquisition professionals to operate it. Gentlemen, I look forward to hearing your testimony today for you to give us your perspective on the things that we can do to make sure that our acquisition workforce has everything that it needs to perform this Nation's critical, critical duties. Thank you so much. Dr. Snyder. Thank you Mr. Wittman. [The prepared statement of Mr. Wittman can be found in the Appendix on page 39.] Dr. Snyder. Let me now introduce our witnesses. Mr. Shay Assad is the Director of Defense Acquisition Policy and Strategic Sourcing. He is the Acting Deputy Under Secretary of Defense for Acquisition and Technology. Lieutenant General Ross Thompson, Military Deputy, Assistant Secretary of the Army for Acquisition, Logistics and Technology. Mr. James Thomsen, the Principal Civilian Deputy, Assistant Secretary of the Navy of the Acquisition Workforce. Lieutenant General Mark Shackelford from the Air Force, Military Deputy, Office of the Assistant Secretary of the Air Force for Acquisition. It seems to me, General, that you got off easy on the nickname. Shack was pretty close for a fighter pilot. They didn't venture far from your given name. General Shackelford. Yes, sir. It is an easy one. Dr. Snyder. Mr. John Needham, Director of the Acquisition and Sourcing Issues, U.S. Government Accountability Office (GAO). Thank you all for being here. Mr. Assad, we will begin with you. We will put on the clock. And when you see the light goes red, it means five minutes have gone by. If you need to go longer than that, go longer than that, but I know members will have questions. Mr. Assad, we will begin with you. STATEMENT OF SHAY D. ASSAD, ACTING DEPUTY UNDER SECRETARY OF DEFENSE, ACQUISITION AND TECHNOLOGY, U.S. DEPARTMENT OF DEFENSE Mr. Assad. Mr. Chairman, with your permission I would like to include my written statement for the record. Dr. Snyder. Yes, sir. All your written statements will be made part of the record. Mr. Assad. Thank you. Chairman Snyder and members of the subcommittee, I want to thank you for the opportunity to appear before you and participate in today's hearing. At your request, I will address the overall state of the Defense acquisition workforce, both military and civilian. In the 1990s there was a significant decrease in the size of the acquisition workforce; 9/11 and ensuing events have led to a significant increase in acquisition workload. These factors have strained our current organic acquisition workforce capability. In 2001 the Department obligated $138 billion in contracts. And in 2008, obligations reached $396 billion. In contrast, the acquisition workforce decreased from a level of approximately 147,000 in 1998 to its present state of around 127,000. In 2006 we began the journey of assessing the capability and needs of our acquisition workforce. This has been and will continue to be an evolving process. However, the decisions that we have made regarding the growth of our workforce and the path that we are now on have been deliberate, thoughtful, and forward looking. On April 6, 2009, the Secretary of Defense announced his intention to significantly increase the capability and capacity of the Defense acquisition workforce by increasing the size of the workforce by 20,000 through the year 2015. This will restore our organic capability to its 1998 levels of approximately 147,000 and address longstanding shortfalls in the workforce. It is the first significant growth since the military buildup in the 1980s and the downsizing that occurred in the 1990s. This strategy increases the size of the workforce by 15 percent. We will add approximately 9,500 employees to our contracting, pricing, and contract oversight workforce, and 10,500 in program managers, engineers, quality control, logistics, and business management. This will create a better balance between our government workforce and contract or support personnel, and ensure that employees critical to perform inherently governmental functions do so. This strategy will increase and improve the Department's oversight capabilities, thereby ensuring that we get a better deal for the taxpayers, that we get what we pay for, we ferret out waste and assist in combat and contract fraud. The Defense Acquisition Workforce Development Fund provided by Congress is a key workforce enabler. Since enactment, significant resources have been targeted for improving the Defense acquisition workforce, and we very much thank this committee for supporting the Defense Acquisition Workforce Development Fund. Improvement initiatives are being deployed and are characterized in three major workforce categories: First, with regard to recruiting and hiring, hiring has started and is the primary focus of our strategy. In our 5-year plan, approximately 89 percent of the resources of the Defense Acquisition Workforce Development Fund will be used for hiring. Secondly, concerning retention and recognition, although present economic conditions are contributing to better retention it is essential to start now to implement a long-term retention strategy and talent management strategy as we go forward. Thirdly, in the area of training and development, certification requirements have exceeded the DAU's present capacity, and DAU must expand to meet this demand. Equally important is the capacity to meet future requirements resulting from increased hiring of interns, journeymen and highly qualified experts. There are also new and evolving training issues, such as expanded expeditionary contracting training, contracting officer representative training, and training for those who are not part of the acquisition workforce but who develop requirements. With regard to our military workforce we must ensure that our joint contracting workforce is properly sized and trained to meet the needs of contracting in a battlefield environment. The Army and Marine Corps have taken significant steps in terms of training, size, leadership development, and organization of their present and future contracting corps. We anticipate that the Navy's contracting capability will continue to be provided through its Supply Corps and its Civil Engineering Corps. In terms of contracting capability, we anticipate that the Air Force will continue to provide the largest and most significant capability among the uniformed services. The challenge for the Air Force is, and will be, to provide promotional opportunities for their capable acquisition and contracting community. The Secretary has established an overarching human capital strategy to mitigate the impact of past downsizing, increased workload, the aging workforce, and to create a better balanced multisector force. This is an unprecedented acquisition workforce growth initiative. Essential to improving acquisition outcomes is a properly sized, highly skilled, ethical and professional workforce. I believe this strategy is on target, and I look forward to working with you and keeping you apprised of our progress. Thank you, Mr. Chairman, and members of the subcommittee for your support. Dr. Snyder. Thank you Mr. Assad. [The prepared statement of Mr. Assad can be found in the Appendix on page 42.] Dr. Snyder. General Thompson. STATEMENT OF LT. GEN. N. ROSS THOMPSON, III, USA, PRINCIPAL MILITARY DEPUTY TO THE ASSISTANT SECRETARY OF THE ARMY FOR ACQUISITION, LOGISTICS AND TECHNOLOGY AND DIRECTOR, ACQUISITION CAREER MANAGEMENT, U.S. DEPARTMENT OF THE ARMY General Thompson. Chairman Snyder, Congressman Wittman, and distinguished members of the Subcommittee on Oversight and Investigations, thank you for the opportunity to discuss today the state of the Army acquisition workforce and our mutual efforts to ensure a strong and robust acquisition system. I am pleased to report that the Army is making steady progress in sustaining and growing an acquisition workforce that is focused on getting world-class products and services to our soldiers faster, while ensuring proper fiscal stewardship of the taxpayer dollars. Our plans are outlined in my written statement. Mr. Chairman, the Army acquisition workforce declined significantly in the last decade, while the workload and the dollars associated with that workload increased. At present, we have roughly 40,000 workforce members, 38,500 civilians, and about 1,600 military to perform the entire acquisition and contracting mission for the Army. While our workforce members are stretched, they continue to excel in meeting the challenges of their jobs. Their energy and enthusiasm result from the knowledge that their work is critically important to our soldiers in the field. Size, structure, training, and experience are critically important factors in developing a workforce that is better prepared to deal with the complexities of acquisition and contracting in the 21st century. Our current workforce initiatives highlight right-sizing development and recognition and retention incentives. Increased investment in our people, coupled with sufficient predictable investment in our programs will continue to give our soldiers the equipment, services and support they need for success on the battlefield. Before I conclude I want to point out that yesterday we discovered a factual error in my written statement. We provided the correct information to your staffers, and we will provide a revised statement for the record. This concludes my opening remarks, Mr. Chairman, I look forward to your questions. Dr. Snyder. Thank you, General. [The prepared statement of General Thompson can be found in the Appendix on page 53.] Dr. Snyder. Mr. Thomsen. STATEMENT OF JAMES THOMSEN, PRINCIPAL CIVILIAN DEPUTY FOR THE ASSISTANT SECRETARY OF THE NAVY, RESEARCH DEVELOPMENT AND ACQUISITION, U.S. DEPARTMENT OF THE NAVY Mr. Thomsen. Mr. Chairman, distinguished members of the subcommittee, I am Jim Thomsen. It is a privilege for me to appear before you here today, along with your fellow panel members, to discuss a very, very important topic of acquisition workforce. About eight months ago I was asked by the Secretary of the Navy to leave my post as the program executive officer for littoral warfare and move over to serve on the Department of Navy's staff for the service acquisition executive, Secretary Stackley, as his principal civilian deputy. Together with his principal military deputy, Vice Admiral Architzel, we serve as Secretary Stackley's military-civilian senior leadership team to address acquisition challenges. My particular focus, though, since I arrived on the scene just a few months ago, has been on resetting and rebalancing the Department of Navy's acquisition workforce, along with the team that we have in the Defense Acquisition Career Management Office in the Navy. That particularly includes technical workforce at our Naval Warfare Centers and Naval Research Lab, in addition to the business skills and sets that we have in our workforce. As you know, we didn't arrive at this place with our acquisition workforce overnight so it will take some time to reset the workforce in an appropriate way. Having said that, the people we have in our acquisition workforce today are outstanding in what they do every day. They truly do amazing work to produce the products that we produce. But they do need our help in strengthening the team to provide an even better set of outcomes in acquisition. We believe in the Department of Navy we have taken a number of steps to get out ahead of the problem, including a more thorough understanding of our workforce strengths and weaknesses, military and civilian, and identifying the critical gaps within each of our Materiel Commands. We do have a plan to grow the acquisition workforce, and it is consistent with the Office of the Secretary of Defense (OSD) workforce plan as well. In fact, we are doing so this year to build a workforce. So the recent actions taken by the Congress we believe will, in fact, reinforce our ability to address these gaps appropriately. The details are in the Department of the Navy written statement I provided. But, again, thank you for the opportunity to appear before you here today, and I look forward to addressing your questions. Thank you, Mr. Chairman. Dr. Snyder. Thank you. [The prepared statement of Mr. Thomsen can be found in the Appendix on page 66.] Dr. Snyder. General Shackelford. STATEMENT OF LT. GEN. MARK SHACKELFORD, USAF, MILITARY DEPUTY TO THE ASSISTANT SECRETARY OF THE AIR FORCE, ACQUISITION, U.S. DEPARTMENT OF THE AIR FORCE General Shackelford. Mr. Chairman, distinguished members of the subcommittee, thank you for the opportunity to address this subcommittee and to discuss Department of the Air Force's work to improve the capacity and capabilities of our acquisition workforce. I am confident that the Department's ongoing actions and those planned through the future years' defense program will improve the Department's ability to effectively execute the acquisition mission. I would like to take a few moments to touch on several of these efforts. In October 2008, Air Force leadership identified recapturing acquisition excellence as one of the top priorities that will shape Air Force-wide actions over the next three to five years as we address actions that strengthen people, processes, and policy. Developing, recapitalizing, and shaping our professional acquisition workforce is integral to acquisition excellence. To guide our efforts towards this vision, we partnered with Air Force acquisition functional leaders in the Acquisition Commands to develop an Air Force Human Capital Strategic Plan for the acquisition workforce, which was published in February of this year. This plan establishes a strategic vision for a professional acquisition workforce with the right number and mix of people, with the right education, training, skills and experience, to effectively and successfully perform the Air Force acquisition mission. We believe it is an excellent roadmap for guiding workforce development in support of acquisition excellence. The Department of the Air Force is fully committed to acquisition excellence and appreciates the efforts of the Congress to considerably improve our ability to develop and recapitalize our acquisition workforce. We are aggressively using the authorities resources provided in legislation. They are key enablers for our Workforce Strategic Plan. Again, I appreciate the opportunity to testify in front of you today and ask that the remainder of my statement be placed in the record. I look forward to your questions. Dr. Snyder. Thank you, General. [The prepared statement of General Shackelford can be found in the Appendix on page 74.] Dr. Snyder. And Mr. Needham. STATEMENT OF JOHN K. NEEDHAM, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE Mr. Needham. Thank you, Mr. Chairman, Ranking Member Wittman and members of the subcommittee. I appreciate the opportunity to discuss GAO's recent work on DOD's acquisition workforce. As the largest buying enterprise in the world, DOD spent $388 billion for goods and services in fiscal year 2008. The acquisition workforce, now numbering approximately 178,000 people, is DOD's key asset in obtaining value for the taxpayer. So building and sustaining it in the years ahead is critical. Doing this well requires quality information that will provide DOD the insight that it needs. My statement today focuses on the information limitations that DOD has on its acquisition workforce, as well as recent efforts it has taken to improve management and oversight of this workforce. I will also highlight some additional actions the Department could take to better ensure its workforce could fulfill DOD's mission and make the most of taxpayer dollars. First, DOD lacks information on contractor personnel. DOD recently began to collect such data and has determined that these contract workers comprise roughly a third of the acquisition workforce, a finding consistent with our own review of 66 program offices. While this is a start, we believe that DOD needs visibility into the reasons program offices use contractor personnel; because without this, the Department cannot determine if decisions to use contractors are appropriate and beneficial. We found decisions to use contractor personnel are often driven by factors such as quicker hiring times and civilian staffing limits, not the nature or the criticality of the work. Second, DOD lacks complete information on the skill sets of its in-house personnel and other information such as the size and composition of the acquisition workforce that is required to meet its many missions. Lacking this information not only skews analysis of workforce gaps but limits DOD's ability to make informed workforce allocation decisions and determine whether the total acquisition workforce that is both in-house and contracted personnel is sufficient to accomplish its mission. Recent and planned actions could begin to address many of these challenges that DOD faces in assessing and overseeing its workforce, its plans for hiring, recruiting, and retention activities. In addition, DOD plans to convert 11,000 contractor personnel to government positions and hire an additional 9,000 government personnel by 2015. Ensuring it has the capacity to acquire needed goods and services and monitor the work of its contractors rests on DOD's willingness to develop comprehensive information about contractor personnel, including the skill sets provided, the functions they perform, or the length of time for which they have been used. Without this information, DOD runs the risk of not having the right number and appropriate mix of civilian military and contractor personnel to manage its acquisitions. Furthermore, there needs to be guidance on the appropriate circumstance under which contractor personnel may perform acquisition work as well as tracking the implementation of this guidance. Without it, DOD runs the risk of not maintaining control over and accountability for mission-related policy and program decisions. What should DOD do? In our March 25, 2008 report we made several recommendations to the Secretary of Defense aimed at minimizing these risks. DOD generally concurred with the recommendations. And in taking steps to determine the number of contractor personnel in its acquisition workforce, it has already begun to address our first recommendation. However, the Department has noted that collecting information on contractor skill sets and length of service requires careful consideration. While we agree that moving forward will entail thoughtful deliberation, it is critical that the Department take action to obtain additional data on its contractor personnel in order to accurately identify and appropriately address its Air Force gaps. Secondly, DOD needs better insight into why program offices elect to use contractor personnel over in-house personnel. As I mentioned earlier, providing guidance that clarifies the appropriate circumstances under which contractors may perform acquisition work and then tracking the implementation of that guidance would go a long way toward increasing this insight. Finally, DOD must identify and update on an ongoing basis the number and skill sets of the total acquisition workforce the Department needs to fulfill its mission. As DOD moves forward with its plans to increase the size of the workforce over the next few years, having comprehensive information about the workforce it both has and needs is even more vital if it is to make effective decisions that create, and not diminish, the capacity to manage the largest and most complex buying activity in the world. Mr. Chairman, this concludes my statement. I would be happy to answer any questions you or any members of the subcommittee may have. [The prepared statement of Mr. Needham can be found in the Appendix on page 82.] Dr. Snyder. Thank you all for both your written and oral statements. We will now begin our questions. Mr. Wittman, we put ourselves on the five-minute clock, and so I will begin. And then we will go around to members and we will probably go, I suspect, three rounds or more this morning. Mr. Needham, I want to begin by asking you one specific question. You specifically talk about, I think it is on page 12 of your statement, about--on the chart--the drop from 2001 to 2008 in total acquisition personnel. I think most of us are familiar with what occurred post-Cold War in the 1990s. But the drop continued through 2001 to 2008. How did that come about? Mr. Needham. Well, that drop continued because they essentially had cut back through ceilings, personnel ceilings, and so forth. But they also began to meet that need through use of contractors, which is where our focus had been in this recent report we did, was on the use and the growth of those contractors and getting a sense of how big that contractor workforce is. We never had really a good picture of what that growth rate is, so we just had a picture of what the civilian and military side looked like in terms of its decline. Dr. Snyder. So while we saw this continued drop--I mean, it is not tremendously dramatic, but a time of, as you pointed out, big increases in the amount of contracted services and a lot of activity going on with the war on terrorism and the wars in Iraq and Afghanistan. This chart just demonstrates that a lot of the work was being done by a contracted-out force. Mr. Needham. Right. But we didn't have, again, the numbers to know that, to be able to identify, which has been an effort of Congress over the recent years to get that kind of documentation down. Dr. Snyder. I still find it surprising that the actual numbers have declined of personnel through that 2001 to 2008 period. I want to ask, I am going to ask this a little bit--I will not facetiously, I guess. There is not much humor, it doesn't seem to me, in an acquisition hearing, so I have got to find it the best I can. But it seems to me, knowing you watch these movies about prisoner of war (POW) camps, you know, the kind of tongue-in- cheek kind of stories, the coolest dude in the camp is always the acquisition guy, is the guy who can find the radio and the phony ID and the two pounds of sausage and whatever it is the commander thinks he needs. So you guys are the coolest dudes in the camp. Now, that is the mind-set I think that this panel has. The problem is how do we change the mind-set in such a way that we don't forget that you are the coolest dudes in the camp? What will happen 5 years from now, 8 years from now, 10 years from now when there will be another group of people sitting here who will start talking about, well, we have got to look at our tooth to tail ratio, and we look in the tail and we see these people that they are not really warfighters. We can get rid of these folks. How do you change the mind-set, and how well do you all think you are doing to change the mind-set, that we recognize without you all and the work of the people that you supervise, our military could literally come to a stop? I would like to go down the row. We are talking about the mind-set now, the culture, that you all work in. Mr. Assad. Mr. Assad. Mr. Chairman, I think it is in two perspectives. The first is the overall acquisition workforce. The reality is that the Secretary of Defense and Congress have been very supportive of now moving forward and doing some very positive things with our acquisition workforce. We are going to have to demonstrate to our Secretary and to the President and to you that the investment that you are going to make in that workforce is in fact going to pay off, that we are going to get better deals for the taxpayers, that we are going to conduct more robust oversight, that in fact when we encounter fraudulent activities we root them out and we deal with it. So it is going to be in the proof of the pudding over time as to whether or not the investment that the Secretary of Defense, the President and ultimately the Congress makes in this workforce will in fact pay off. We believe it will. In terms of the military, there is no doubt that we have seen our folks who have their boots on the ground, our soldiers, marines, airmen, and sailors, are performing in an incredible and outstanding way. But they are taxed in terms of their contracting capability, because we just don't have sufficient military resources to deal with contracting in a combat environment as it is presently envisioned. We will continue to have contractors who support our operational forces. So the need to have capable, competent professional military contracting officers is going to continue on. And I think, again, it will be in our demonstration to our leader, the Secretary of Defense, the President, as well as to Congress, that in fact the investment that you make in both the civilian and military workforce will in fact result in a more effective--and, frankly, get a better deal for the taxpayers than we presently have been. Dr. Snyder. General, I think what I will do, because the time is up, I think I am going to go to Mr. Wittman, and we are going to pick that up the next round. Mr. Wittman. Mr. Wittman. Thank you, Mr. Chairman. Gentlemen, thank you again. I wanted to direct a couple of questions, actually four in total, to both Mr. Assad and Mr. Needham. Secretary Gates, as you know, announced that he intends to add 9,000 personnel to the in-house acquisition workforce and to convert 11,000 acquisition-related contractor positions to government positions. And this will bring the in-house workforce back to where it was in 1998. Can you comment a little bit on why 1998 is a meaningful baseline, and will the workforce be overseeing a workload of comparable value or complexity, and do we know what the level of contractor support was in 1998? And if you could give us a little bit of background maybe on the analysis that you put forth to look at this 1998 baseline and the determinations you made as to why that is applicable today? Mr. Assad. Yes, sir. In terms of the contracting workforce, the 9,000, 9,500, professionals that we will be adding in that environment, what we did was we actually had some pretty detailed bottoms-up estimates in terms of what we needed at Defense Contract Management Agency, Defense Contract Audit Agency. We looked at each of the services in terms of their contracting capabilities, and we knew that in general that part of the workforce does not have a contractor segment associated with it. There are some organizations that do have contractors supporting those environments but they are very small. It is a much different picture. To give you an example, of that 52,000 contractors that we think, approximately 52,000, that support the acquisition workforce, somewhere between 500 and 700 support the contracting or contract oversight workforce, so it is a very small number. So in that particular case the way we looked at that workforce was really in terms of examining its capabilities. And we just completed it. It took us 18 months to complete probably the most comprehensive competency assessment of that workforce that has ever been done in Federal Government. That was created. Over 18,000 folks participated in that. And that was completed recently. So we have the information that we need to look at that part of the workforce in a very detailed way. In terms of the contractor workforce, we knew that we needed to change the mix of the workforce. We think that the total size of the workforce in general is adequate because we are getting the job done with our contractor contracting workforce. But what we needed to do was take a more, I think, realistic view of what we believe is inherently governmental and ensure that those functions are in fact being supported by Federal civilians and/or our military workforce. We needed to ensure that we have the engineering capability inherent within government so that we can provide the proper technical assessments to our contracting officers, so at the end of the day we get a better deal for the taxpayers and, in fact, we can conduct proper oversight. Going back to the 1998 levels, we simply use that as a measure of that really was the point, it was about a year or two before we began a significant increase in the workload of our workforce. So in reality, while we are going back to the 1987 level, we are adding more contracting folks in that environment. Mr. Wittman. Mr. Needham. Mr. Needham. We issued a number of reports at that period of time. A lot of the reforms that had started in the 1990s started to come to fruition in the 1990s. Mr. Assad's point, though, in terms of picking 1998, that was their reason. I know at the time when we were looking at this, that was a period where there had been a lot of effort at reinventing government, rethinking how processes are working and so forth, and a lot of changes had come about at that point. But that is the only insight that we have into that. Mr. Wittman. Thank you, Mr. Chairman. Dr. Snyder. Mrs. Davis for five minutes. Mrs. Davis. Thank you, Mr. Chairman, and thank you all for being here. I wanted to just pick up on that for a second. I think that we all know that we do best when we learn from our mistakes. And what I am wondering is, as we move forward, why there wasn't the pushback to some of those moves and whether or not our non-acquisition workforce was not in a position to really say, hey, wait a second, you know, we need some more help out here and the decisions that are being made are not helpful. I don't know if you would like to comment on that sir. Mr. Needham. Thank you. Representative Davis, if you will think back at that point, I think when a lot of the changes came about in the acquisition workforce, there was a feeling that the acquisition workforce was cumbersome, it got in the way of acquisitions; and that view, whether it was correct or incorrect, probably governed a lot of decisions. And I know that at the time there was a great deal of emphasis on outsourcing and using contractors. And there was a view that you were either going to save money or you were going to get it done more efficiently or you were going to be able to get the kinds of skills. What drove those decisions, though, were not key factors in terms of what the criticality of the workforce is, and that is what should be driving them: concerns about inherently governmental, concerns about cost and so forth. Mrs. Davis. I think what I am looking for is how we can read this in the future, then, if in fact there is an effort, a move to say, well, you know, we are okay now, now we can begin to cut back again; and whether--is it the governmental workforce that would be an indicator if you saw a drop in that at some point? Mr. Needham. What really needs to occur, and this is something that goes back to--GAO started writing about this in the 1970s--we need to have accurate descriptions of what the needs are. If you have a certain amount of a mission, what does that mission require in terms of all kinds of personnel, but especially with the acquisition and the kind of skill mix that you have. From there you then go back and then try to decide what kind of a mix you want. But you really need to focus on what the needs are and not let the budget drive it as much as what the real needs are. And if the needs exceed the budget, then there has to be some tradeoffs made at that point. Mrs. Davis. I appreciate that. In your report you seem to indicate that you had some problems getting information. Mr. Needham. Not that they weren't providing it. They just didn't have it. And in fact DOD over the past several years has been developing that kind of information that they need to have. And we are looking at that as they go forward. They have plans together. In fact, they just announced recently the 52,000 count they have for the acquisition support personnel that they have as contractors. Mrs. Davis. I wanted to just turn for a second to the non- acquisition community, and certainly to how in fact we may be training and educating people to appreciate the role of the contractors in contingency operations. Are we able to do that so that those commanders in the field, the field commanders, can really appreciate what is happening? Is that something important to do, and where are we in that specific role? General Thompson. Let me take a stab at answering that question. It is critically important that the non-acquisition personnel in DOD, both military and civilian, recognize the importance of the acquisition functions, not just contracting; it is all those acquisition career fields. And I will answer Congressman Snyder's question as to how do you change the mind-set. You have got to value and trust the people, it is that simple. If everything that they read is about how screwed up acquisition is, it begins to affect your mind-set after awhile. And so GAO and other audit agencies, Inspector General (IG) agencies, have got to not just find the things that are wrong, they have got to find the things that are right, and they have got to write about those and give people credit for doing the good things. It is like raising kids. If you criticize your kids every time they do something and never reinforce them with the positive things it is going to have a certain effect. And so you have got to value the people. We are training the non-acquisition members in the DOD, in particular in the Army, the commanders, to recognize their role in defining requirements. And when you buy something, whether that is a good or a service, the first thing you have got to do is what do you want to buy; define what it is, when do you want it, how much you are willing to pay? And there is a role to play in that. And the acquisition workforce has got to help them define those requirements in a clear way so when we go out and negotiate for that good or service, we get what they want and it meets their expectations. Mrs. Davis. Did you want to comment quickly? Mr. Thomsen. Just to add to that, ma'am, in the Department of Navy--it is a great point--is that we have really got to inculcate the culture of importance to acquisition and what we buy to the rest of the Department. One of the things that we have just initiated over the last really just six months is that the Department of Navy has executive business courses for all of their flag officers. The Marine Corps has the same thing for their general officers. We have made a very pointed, deliberate attempt--and we have--to meet in those classes and walk them through, soup to nuts, why acquisition is important and really why the acquisition workforce is important. The Department of Navy, the acquisition workforce, represents about eight percent of the total force, but in fact we really execute about 40 percent of the total obligation authority given to us by the Congress. So it is important enough that the rest of our Department of the Navy organization understand that. Now, we have started that process at the very top levels down through really the 2005 billets and then press that down through the rest of the enlisted rank. So it is a great point. And piling onto General Thompson's point, unless we can make sure that people recognize this throughout our organization, we are going to continue to get just less than enthusiastic support for the acquisition work that really is done by our great workforce. Mrs. Davis. Thank you. Thank you, Mr. Chairman. Dr. Snyder. Mr. Jones for five minutes. Mr. Jones. Mr. Chairman, thank you very much. And I want to thank each one of you at the table for your presentation. And some of us have been here, I was elected in 1994 so I have been here, sworn in in 1995. Mr. Assad, I appreciate your comments, and I will tell you why. It seems like every year--I have been on Armed Services for eight terms now, and not just talking about acquisition workforce, but any--I guess any segment of the services, any segment of the Department of Defense. I remember when Donald Rumsfeld came here before the Armed Services Committee in 2001, I guess, or whenever it was, and basically said that he was making a commitment that every dollar of the taxpayer was going to be protected. And I realize nothing is perfect in life. It is just not. But when I sit here and listen to the commitment that Secretary Gates--and I have great respect for Secretary Gates and his team, quite frankly, and I think we are very fortunate to have him and his team, and I look forward to his presentations in the weeks and months to come about his suggestions to make the military more efficient, to make the Department of Defense work even better. But I was sitting here thinking--and, Mr. Needham, this might really be--if there is any question in my rambling, it might come back to you. But I think David Walker 10, 12 years ago, made the statement that if you are really going to do anything meaningful at the Department of Defense, because of the size, the enormity, of the Department of Defense and the different agencies within and all the size of the machine, if I can put it that way, that if the Congress was going to ever be able to get a handle on how to make it more efficient, then you probably needed to appoint an individual who is qualified for the full term of a President. Of course, no President knows if he is going to be there four years or eight years, but assume an eight-year term and put this person in who has the qualifications to work within the system--it is not just one man, but he would have his people--to try to get a handle. I feel like today I have heard that obviously some recommendations made by GAO have been followed, some recommendations within the Department itself which have made things a little bit better. But the size of the whole Department--and we are talking about the acquisition workforce today--but all in all it seems like what I am hearing I have heard before. Now, some changes have been made. That is not a criticism. But it looks like to me you have got to have a major commitment by an administration. And even if that administration thinks they are going to be there eight years--I am not talking about the current administration--but if they think they are going to be there eight years, if they put this type of plan in place where this individual had the expertise with the commitment and the help of people within the military and outside the military that just think that the system needs to be reworked, is there any way to make it work better than what it is doing now with the current structure that we have, or will it continue to be a kind of hit-and-miss improvement? I just don't know how you get a handle on this unless you make some major decision by the Congress and the administration that you are going to have to make a six- or eight-year commitment to get the efficiency, or at least get it started in the direction of efficiency. And again, this is not a criticism. I have the greatest respect for the military and the Department of Defense, but are we going to continue to hear the same thing if we don't do something just really drastic? Mr. Needham. What Mr. Walker was talking about at the time was the idea of having a chief management officer for the Department. And really this came from looking at our analysis of the turnover among program managers. And we showed program managers where you might have one President and two Secretaries of Defense and you would have five program managers for a particular function. And it was maintaining continuity and focus at a high level that was irrespective of the political climate they were working in. They were basically concerned with the administration of the Department. That is something that still is something that we view not only for the Department of Defense but for the other departments as well. My own experience has been I have gone into meetings with Defense officials, and one program I was looking at was the purchase of commercial satellite services, and the program people turned over, the political people turned over, the military people turned over, but I had the same contractor all the way through. And it was something that--it was the only source of continuity we had as we dealt with them over a three- and-a-half-year period as we went back for more and more information. And that is probably the key thing, is keeping people in place so they can actually get some changes done. And I know there has been some thinking about that within DOD about kind of limiting the amount of turnover that does occur. Dr. Snyder. Mr. Franks for five minutes. Mr. Franks. Well, thank you, Mr. Chairman, and thank all of you. There is no way to ever express the appropriate gratitude for those of you that slog through the challenges to make sure that we are prepared in terms of personnel for whatever comes. I suppose in many ways that is the most critical job in the service. Not only does personnel equal policy, as they say, but the people that you choose to be in leadership roles and to carry out this Nation's defense is just an incredibly important job, and I commend you for it, as always. So I guess I probably would go ahead and just ask each of the services, the representatives of the services, beginning with you, General Thompson, among the ranks, your ranks of acquisition professionals, where do they feel and where do you feel the most pain? What is your greatest shortage in both numbers and expertise, what is your biggest challenge? General Thompson. The biggest challenge I think is being addressed by the plans to grow the size of the workforce. For the scope of the work, the complexity of the work today, the acquisition workforce, both military and civilian, needs to be larger. And the plans that we are putting in place across the DOD to do that I think will address that. There are 13 different acquisition career fields. It is not just program management and contracting and engineering, but there is business and cost estimating and life cycle logistics. And we have looked at the gaps in those workforce areas, and we have got the plans in place to grow the size of those different acquisition categories appropriately to be able to address the challenges and to be able to meet the requirements of the Army and to be able to meet the requirements of the Department of Defense. Mr. Franks. Thank you, sir. Mr. Thomsen, do you have any perspective? Mr. Thomsen. Yes, sir. Just like the Army, we have gone through a review of all of the 13 categories, and then some, to look at what our gaps and critical needs are. For us it is really in two areas, and arguably three. The first area is really in system engineering, not just engineering but really qualified system engineers. Why is that? Because we really believe in the Department of the Navy that we need to reclaim, if you will, much of the technical and cost trade space in the early parts of these programs, certainly pre-Milestone B, before you really award these large development contracts or reproduction contracts. So qualified system engineering is really number one. Number two is really in contracting officers, to make sure that we are reasonably healthy there, but we do need some growth in that area. And then, thirdly, is business and cost estimating. If I can go back to the first one, which if I team up my system engineers with necessary and requisite additions and cost estimating, I am going to be much better prepared to walk into both contract negotiations and really a milestone decision on behalf of the taxpayer whether we should buy this system or not. So I mentioned three, but two of them for sure we need in the front part of these programs. To understand the cost and technical trade space, to own it inside the government, with industry, not apart from industry, but with them, to really be peers with them before we enter these large contracts. Mr. Franks. General Shackelford. General Shackelford. Sir, thank you. When I get outside of the Washington environment and go see the Air Force's professional acquisition workforce, what I find is a great deal of enthusiasm for the work that they do and a great deal of pride in the products that they get out that help our warfighters. That said, they are very sensitive to the decline in the numbers of people that we have had during this time period that we have been discussing during the panel this morning. And they see, in terms of hope, the uniformed effort that is coming out of Congress, the Secretary of Defense, and Air Force leadership to go and do something about that now. The specific areas that, as we look at the acquisition workforce and would like to see greater numbers and better skills, would be contracting, cost estimators, cost analysts, as well as systems engineers. And those are the areas that we have targeted, both with the new accessions to the Defense Acquisition Workforce Develop Fund, as well as the hiring that we have going on right now to fill the vacant positions we have and to take advantage of the authorities that we already have. Mr. Franks. Thank you, General. Mr. Assad, I will try to squeeze in one more question here. I have a concern about the 73 percent of the Department's acquisition workforce who are baby boomers. I just slid in the narrow end of that. And you mentioned that your implementing an intern program is a key part of the strategy to balance and develop that experienced workforce. But 73 percent is a big number. And what other initiatives do you think may assist you in dealing with that dearth of experience that will certainly be coming? Mr. Assad. Mr. Congressman, we are looking at it in several different ways. The authority that Congress gave us in terms of our ability to hire under the Defense Acquisition Workforce Development Fund enables us not just to hire interns but to hire those at the intermediate level and highly qualified experts. And so each of the services is targeting a number of hires at both not just the intern level, but at the intermediate and senior level. The fact is that between levels of experience of about 7 and, let's say, 19 years, that is our biggest area where we have a shortfall. We are doing a great job of bringing interns in and, frankly, hiring people on the front end. So we are looking at it through how do we get some of the experienced workforce that, frankly, left our organizations and went into industry. Secondly, how do we look to retain some of those baby boomers that might have considered retirement but now are either reconsidering, how do we look at retired annuitants who can be a tremendous source of mentoring and assistance to our workforce as we grow it? There is no doubt that the bulk of our hiring is going to be in the intern side of the street. But on the other hand we are very comfortable, given what is happening in today's workforce environment, that there are a number of talented people out there who we can attract to the Federal acquisition workforce and then train them with the basic skill sets they have to be very effective in our world. Mr. Franks. Thank you, Mr. Chairman. I thank all of you very much. Dr. Snyder. Thank you, Mr. Franks. General Shackelford, I think the others have commented, I don't think you have commented specifically on the issue about the mindset. Do you want to add anything to the discussion? Mr. Shackelford. Yes, sir. As I mentioned, once we get outside of the Washington area, where the execution of acquisition goes on in the Air Force, I find just an incredible amount of enthusiasm amongst our people there. They are very proud of what they are doing. They see the effects of the products that they deliver to the Air Force in the war every day. That said, they would be the most sensitive people to this decline in the numbers of people and some of the atrophying of skills that have taken place over about the last 10 years or so. So they are the ones that are working under that burden. And they see the press, as was mentioned here, often couched in terms of what is broken and not what is really working well. The fact of the matter is that the far majority of the Air Force acquisition goes out and executes every day and does it extremely well, and that just doesn't get the press because it is successful. Their sensitivity to the numbers and the workload, though, is being tempered, I think, at this point, really with the interest that the Congress is showing in acquisition. The Secretary of Defense is taking it very seriously. The Air Force's secretary and chief of staff are taking this very seriously, to the point that they are making this one of the five top priorities of the Air Force. That is a source of great encouragement to them, because they see now that the leadership actually recognizes the problem and is wanting to do something about it. So, as we ride that wave out into the future through the hiring that is coming through the workforce development fund, as we look at the other things we are doing in the Air Force to recapture acquisition excellence, I think we are going to see a boost in terms of their enthusiasm as well as their performance. Dr. Snyder. And the issue, though, is it is not just their enthusiasm; it is the enthusiasm of everybody else, so that they will be valued and, you know, 18 years from now, if we have budget problems, they won't be the first people we look to cut and say, ``Oh, we can contract this out'' or something. But we just need the President and the Secretary of Defense just to say they are the coolest dudes in camp. That is all. I wanted to ask and maybe hear from the three service representatives, if you would talk briefly about the issue of career paths and where we are at with regard to general and flag officer billets and if the people coming into those fields that you all were mentioning sense that this is something that they can have a successful career in. I will start with you, General Thompson, and just go down the row. General Thompson. Sir, that is a great question. First, I would like to say thank you to the Congress for specifically authorizing the Army in the last authorization act an additional five general officer billets in the acquisition, specifically for contracting. You know, we have conducted two promotion boards this past fiscal year. The results have not yet been released. And I think when those results are released and the selections are approved by the Congress, you will see that we have done the right thing in selecting, you know, very qualified officers with contracting background to begin to put them in those critical billets. As the senior military acquisition official, I have responsibilities for managing that acquisition workforce in the Army. There are about 65 general officers and members of the Senior Executive Service that I specifically manage. And we have been able to, in the last year, in each of our Program Executive Offices (PEOs), we had--the PEO, who is the two-star general officer or the two-star equivalent Senior Executive Service (SES) that manages that portfolio of programs, we have been able to establish a flag-officer-level position, either SES or general officer (GO), in every one of those PEOs, so that there are two senior officials in every one of those 12 portfolios of programs in the Army. So I think that the young military and civilian acquisition professionals that come in see that this is a viable career path and that there is a way to get to the top of the pyramid, provided they do a good job in all of their assignments. And we have been able to increase the senior-level ranks appropriately, both for the general officers and for the members of the Senior Executive Service. Dr. Snyder. Mr. Thomsen. Mr. Thomsen. Yes, sir. Today we have about 25 percent of all of our flag billets in the Navy are actually AP billets--in other words, acquisition professional. We have about 180 Senior Executive Service members, like myself, that are in acquisition professional billets. So that is about half of all of our Senior Executive Service billets. So the line of sight to flag officer billets--and, in the Marine Corps case, there are also some general officer billets in acquisition now--but also in the civilian corps, we have about half those billets, of all of our billets, are acquisition. So the line of sight to that is pretty healthy, we think, and we think we have that about right. But the thing that really, I think--and we just looked at this this year in even more detail--is, what are the promotion rates, getting into these flag billets, apart from just acquisition? How does acquisition flag promotion rates really compare to non-acquisition? Actually, this past year, it was better than non- acquisition. So I think that is a pretty good indicator--we think we are in the right ballpark for that. I don't think we need to make any significant changes to it. So I think it is a pretty good sign we have it about right. Dr. Snyder. Mr. Shackelford, if you could briefly respond, and then we will go to Mr. Wittman. General Shackelford. Yes, sir. The Air Force has 27 general officer positions in acquisition, as well as--actually, 27 qualified acquisition general officers, as well as 87 SES acquisition qualified people. So we have a healthy pyramid that gets to those positions, with the exception, perhaps, of contracting, which we need to work on, and we recognize that. As part of this recapturing acquisition excellence, our chief and secretary have sent us off to go look at the acquisition corps within the Air Force and make an assessment of how we are doing in that pyramid in terms of promotion opportunities and bringing the right people with the right skills up through that process up into those senior positions. And so, they are looking at that right now in terms of the mix. They are the ones that make the choices for us as to where we put our general officer positions, for instance. But part of this review will determine how we do in terms of either plussing up the number of acquisition general officers or having SESs perform those duties based on what the senior leadership recognize as their needs. Dr. Snyder. Thank you. I misspoke. We will go to Mr. Sestak for five minutes. Mr. Sestak. Thank you, Mr. Chairman. General, first, thanks for coming to the district and helping us out up there. I appreciate it very much. General Shackelford. Yes, sir. My pleasure. Mr. Sestak. I am sorry I wasn't here earlier, but if I could ask, do you think one of the--the GAO report appeared to say that--for me, the key word was ``oversight.'' If I could ask more from a parochial experience, in the Navy, you have at Naval Sea Systems Command (NAVSEA) technical authorities responsibility. Is it really more that we don't have enough expertise within the contracting, towards the acquisition, the procurement? Or is it really more in the failure to have the proper oversight of this, for whomever executes it? Maybe an example might be how we had to put the LPD-17 out of a shipyard down there in the south and move it to somewhere else. Is the real word not ``how many'' or ``contracting'' or ``procurement,'' but ``oversight''? Mr. Thomsen. In a word, yes, sir. But it is a combination of things. I had mentioned earlier that, prior to these large contracts being awarded, we also believe in the Department we have to do a better job of really understanding the technical and cost trade space before we get to that point. But once the contract is awarded, post-award, whether it is a ship or a missile or anything else, oversight becomes critical. And so we have added--and I know you are familiar with this, Admiral--Supervisors of Shipbuilding, Conversion and Repair (SUPSHIPs), we have added some additional billets in cost-estimating, as well as EVM, or earned value management, of surveillance and oversight at those organizations. So it is critical for us that we do the upfront part well, better, and also as we get into the post-award phase that we really do this surveillance and the oversight part of this just as well. Mr. Sestak. Could I ask a second question? If it is oversight and even if it is procurement--I wasn't here for the previous questions, but to some degree we talk about our military acquisition force. Is it time to really look at whether the heft, the increase in this acquisition force should not come from the military? I mean, after all, we are trigger-pullers. And you take a commander or a lieutenant colonel and transfer him to the acquisition force, that is a different level of experience than if you took a civilian and transferred him or her to run a ship as a lieutenant commander or commander. Do you think we might be going about this the wrong way, of saying we need more military acquisition workforce? Because, by and large, they come over after not doing it very well--at all. Then, all of a sudden, they are an admiral and they are trying to run these programs. Maybe, could a possible better way of going about it be that the requirements side of the military reasserts, which since Goldwater-Nichols has not permitted it to do, its rightful oversight of the acquisition community in producing an effective, cost-efficient requirement? And that is where the military should reside as officers, not in the acquisition, if we change Goldwater-Nichols to merit that to happen, sir? Mr. Thomsen. Just a couple of comments on that. One of the things that we have put into place through the Secretary of the Navy this past year to really get at, I think, the heart of the question you had---- Mr. Sestak. And that would be open to anyone to answer. Mr. Thomsen [continuing]. Is a governance process that really circles back on the issue that you asked about. And that really is the integration of requirements and those officers that are coming from the field and landing in, for example, Office of the Chief of Naval Operations (OpNav) and operations billets there in OpNav and then what we do on the acquisition side. In other words, we have worked very hard in putting together a governance process that brings those together at the beginning to make decisions that are transparent and together between the acquisition and requirements phase. With regard to growing the acquisition workforce through the military vice--or maybe not vice, but in addition to what we are doing in the civilian side---- Mr. Sestak. But it is vice, to some degree. Every military guy is---- Mr. Thomsen. It is always a tradeoff, yes, sir. Really, our emphasis right now is not so much that, but making sure that we are bringing qualified officers, particularly in the unrestricted line officer corps (URL), bringing them out earlier and getting them into the acquisition business earlier so that we can have the best-qualified folks we can get. So, in a sense, we are adding to it on the URL side of the House. As you know, the supply corps officers, Civil Engineering Corps (CEC) and restricted line, are pretty much growing up through the acquisition workforce from the beginning. A lot of our focus has been on how do we improve and tweak and turn the knobs a little bit better on bringing forward some of our unrestricted line officers in the acquisition corps early to get that experience and not wait until they are here 25, you know, to come into the acquisition business. Dr. Snyder. Mr. Wittman for five minutes. Mr. Wittman. Thank you, Mr. Chairman. I want to direct these questions to Lieutenant General Thompson, Mr. Thomsen, and Lieutenant General Shackelford. In looking at the personnel that are going to be assigned to the services, it appears that about half of those new personnel will go to the service branches. I wanted to get some feel about what positions will be filled within that framework, where you see your critical gaps as they exist today, and a little bit about how you determine where your greatest needs exist. And I want to try to tie all those aspects together, so if I could get you to give us some perspective on that. General Thompson. Sir, yeah, similar to the answer that I gave before, we did do a gap analysis, if you will, across all the acquisition areas. The growth area that is the most significant is contracting, followed by systems engineering, program management, and then cost-estimating. And I think we have the numbers about right. We did a holistic assessment, looking at the programs that we have to run and the types of service contracts that we have to let, and determined high- grade, middle-grade, you know, interns, and new members of the workforce, what the right balance is. I think we have it about right. We will have to adjust it as we go, over time. I mean, the numbers for the Army are 5,435 conversions and new members of the acquisition workforce. If we don't need 5,435, we won't go up to that number. It is really looking at what the need is and having the right mix of military, civilian, and some contractors that are working in support of the acquisition function and swinging the pendulum back the other way. Mr. Assad. Sir, if I could just make a comment for a minute to give you a little bit more context in terms of what we are doing with the workforce. About 70 percent of the growth in the acquisition workforce will be in the engineering, oversight functions. It will not be in the contracting or pricing. About 30 percent of our growth is in contracting and pricing, about 70 percent program management, oversight, Defense Contract Management Agency (DCMA), Defense Contract Audit Agency (DCAA), and engineering capability. Less than 10 percent, in fact probably even less than that, is in the military side of the street. So this is primarily a civilian workforce growth initiative, and so there will not be a significant increase in the numbers of military officers in the acquisition community. Having said that, there is no doubt that we need to have battlefield commanders and acquisition professionals with their boots on the ground who understand--for example, in Iraq and Afghanistan, we have well over 200,000 contractors supporting our force. They need to know how to manage that force. They need to understand how it was contracted for and how it will be overseen. And so, there is an inherent capability that we need to have within the military services, especially as it relates to contracting in a combat environment. Mr. Thomsen. Congressman, yes, sir, a few things. Not unlike the Army or the Air Force, we have really gone through, first, really, our program offices, where most of our management pieces of our business is done. And it revealed a couple of things. One, without a doubt, was really---- Dr. Snyder. Would you pull your microphone a little closer? Mr. Thomsen. Yes, sir. It brought forward a couple of things. Really, some imbalances in our governmental workforce as opposed to what we have in contracting support services. For example, in some of our program offices, we had contractors serving in some of these billets upwards of around 60 percent. So I am pretty sure 60 percent isn't the right number. We are trying to figure out what the right number is, but we have gone through that process. Secondly, and one that I know you are familiar with, for example, at Dahlgren, which is one of our field activities, they have a very mature process that they go through that is based entirely on the demand signal, primarily from Department of Navy, Navy and Marine Corps, but also some of the other agencies, as well--they have some work there--very mature process to identify what their gaps are. We feel very comfortable--and, by the way, they represent about two-thirds of our acquisition workforce, if you take Dahlgren and some of the other field activities. So, in other words, we feel pretty good about that. We are also applying this model to the program offices. We do think we have some imbalances. All that said, again, it is really the three areas that I mentioned before: system engineering to really reclaim our knowledge space up front; and then business and cost-estimating the team up in the cost trade space; and then thirdly really is our contracting numbers, make sure that we have the right number for oversight and surveillance. General Shackelford. Yes, sir, if I could add briefly, last fall, as part of our internal assessment of where we stood in acquisition in the Air Force, we went out to the field and asked them how many folks they needed to get up to what they considered to be a healthy level. That has resulted in 2,062 positions, just over 1,800 of which are civilian, 291 officer and 11 enlisted, that we are going to flow in to our workforce over the next 3 years. There are others that are coming as part of the initiatives coming out of the Defense Department. They will be going, targeted to those product centers for execution of programs. And, as I mentioned, contracting, cost-estimating, and systems engineering are the heavy hitters. Mr. Wittman. Thank you, Mr. Chairman. Dr. Snyder. Mrs. Davis for five minutes. Mrs. Davis. Thank you. You mentioned the acquisition experience in the field and how important that is. I wonder if you could focus on Afghanistan for a second and how confident you are that we have the contracting and logistics expertise in Afghanistan as we flow in troops and personnel and, obviously, equipment. General Thompson. Ma'am, the general officer that is over there now as the head of the Joint Contracting Command for Iraq and Afghanistan is Brigadier General Bill Phelps; just got over there in February and took command. He recognizes the very significant challenge of trying to execute a deliberate, planned drawdown in Iraq consistent with the administration policies and a deliberate increase in our footprint in Afghanistan. He has come back to the Department, and we are working across the Department right now to increase the size of the Joint Contracting Command with both military and civilian members to be able to handle that balancing act over the next year or so. And so, we are working, based on his assessment, to source an increase of about 53, I think is the exact number, military and civilian contracting professionals to be able to deal with that surge into Afghanistan, also at the same time balancing the drawdown in Iraq. And so the commander on the ground that has that responsibility, working both for General Odierno and General McKiernan, the two commanders on the ground, is pretty confident that, if he gets that increased help, he will be able to balance that. And we are watching that very, very closely. Mrs. Davis. Is there an area particularly in addition to a number of the issues that you have raised in terms of the gaps that we--you know, three months from now when we are sitting here in committee, what do you think is the most likely thing that we might hear that is needing assistance? General Thompson. I don't have an answer on one area that I think is going to come up. I think if we do this right, we shouldn't have any major issues or, you know, things that hit the press that are not going right. And so, we have learned some lessons, and we have taken those lessons to heart on, you know, the surge into Kuwait and Iraq over the last seven years. And we are using all those lessons learned. You know, the things we talked about earlier today, ma'am, about training the non-acquisition workforce, the operational commanders, to understand their critical role in defining requirements and their critical role in helping us manage the delivery of those, primarily, services in the theater with not just the acquisition workforce and the contracting officers but also the contracting officer representatives, who ensure that the delivery of that service happens as it is contracted for. Mrs. Davis. Does anybody else want to comment on that? General Shackelford. Ma'am, if I could, the Air Force supports approximately 70 percent of the military contracting manpower positions in that joint command in Afghanistan and Iraq. The good news is they are doing a marvelous job, and they are in high demand. The bad news is, it has driven that community into what we call a one-to-one dwell ratio, where their time at home equals their time deployed, which is leading us towards pursuing a retention bonus for those officers. Our enlisted people already have a bonus to help them with the retention. But the other point there is, those are the same people that, at home, would be doing the work of contracting. So that is part of this. In terms of numbers of contracting people, we have a low-density, high-demand workforce, one that has skills that are useable on the outside. We would like to keep as many as we could; we would like to get more so that we can just robust that entire community. Mrs. Davis. One of the things I was pleased--and I think, Mr. Assad, you mentioned this--the need to bring in mentors, people who have had great experience in contracting acquisition, who have left, perhaps with the economy have an interest in coming back, but that they may not be available in the war theater in the same way that they would be in other communities. And I am just wondering, to the extent that--it seems to me that we get so much more work, in many ways, developing expertise from interns when they have support personnel around them who are really playing a very active role. I don't know what those numbers are, if they are even near what they could be, given the situation that we are in. But would you like to comment on that and whether or not we are actually able to get them out in the field at all? Mr. Assad. Well, I think, for the most part, what we are looking at right now as part of a lesson learned are those activities that presently are being done by our uniformed forces on the ground that could, in fact, be done in the rear to support the contracting that is taking place on the ground. And so, one of the things we are looking at is, how do we get more civilian participation, even if it is in the rear, to support the contracting that is being done on the ground? And I think that we are moving towards a more effective mix of--and the Army has especially been looking at that, in terms of its experience in Kuwait, of doing more contracting in the rear. So we are looking at that now as we go forward to ensure that General Shackelford is correct, which is why the Army is increasing its contracting capability in its uniform services, to, frankly, give a little relief to the Air Force as we look forward. Mrs. Davis. Thank you. Thank you, Mr. Chairman. Dr. Snyder. We are letting Mr. Sestak play catch-up here, so Mr. Sestak for five minutes. Mr. Sestak. Thank you. I have been playing catch-up my whole life. Could I follow up on that? I have to agree with you, the importance of the contractors out there. I think it might have been a GAO study, but I can't remember, that I read about a year ago that made a recommendation that our war colleges--and I can't remember if we still have junior and senior ones--that we might, on the longer-term sustainability of this need, much like we train our warriors when they go forward how to shoot a gun if they are going to be--or manage a company, they should manage contractors, should there be a course, not just at the Industrial War College but all of them, that helps imbue our officers with that kind of knowledge? Should we legislate something like that? Mr. Assad. Well, I am not sure we need to legislate it. We are moving in that direction. And I think, you know, in terms of making sure that our senior, middle, and our field-grade officers get more exposure to understanding what they are going to have to deal with in the battle space as it relates to contractors, how to manage that workforce. Mr. Sestak. So, for example, Capstone, where every new flag officer might have a junior---- Mr. Assad. Yes, sir. Mr. Sestak. Can I ask--were you going to comment, sir? General Thompson. Yes, sir. The only thing I would say is we have looked at all of the course content in the Army, and I agree with Mr. Assad, I am not sure it is something we need to legislate. But we have put, in 18 non-acquisition courses, we have put course content in there to talk about the important role of contracting and setting requirements. And similar to the Navy and the Air Force, I mean, all three of the services have senior executive courses where the importance of business principles and, you know, learning how to operate the very large enterprises that we have---- Mr. Sestak. Right. But the Navy does not have--and there are 12,000 naval personnel on the ground in Iraq on the ground, some of them managing contracts, oversight, has any course at the war college, where it is mandatory you have to have some experience at a junior officer level--lieutenant commander, commander--on this. So maybe leveling to make sure everybody is the same might not be a bad idea why. GAO, if I could ask this one question again. I am taken with what I think is the proper effort to give heft or to the ability for oversight in the acquisition community. But I am still taken with the process that somehow it seems as though you might put more people out there on the acquisition side, but how well they are overseen or driven by the requirements side has always seemed, to me, a disconnect. I will always remember the Chief of Naval Operations going to the Assistant Secretary of Acquisition of the Navy in years past and almost asking what they thought of some requirement. Does that need to change, or am I wrong on this? Have you looked at it? Is this your area? Mr. Needham. No, I have not looked at that particular issue, in terms of the personnel in terms of the oversight and the role they play. The one issue that we were focusing on here in this effort was trying to get--what is DOD measuring and looking at and counting? And one of the things they could not get or did not have was the contracting officers representative, who is often a technical program person, who is overseeing the contractor. We have no real clear picture of how many of those are, what their training and skills are, and so forth. That is one area we saw as a need. Mr. Sestak. All right. I can remember studies being done within the service, and no one ever knew how many contracts. And we couldn't--two years of trying to grab it in the Navy, and we could never get that final number of how many contractors we had. Well, thanks. I am just also taken--I think this hearing is great, and I think the need for more technical authorities in all oversight is tremendous. I just hope that eventually we look at the process of how the emphasis upon the civilian acquisition oversight in years past, Goldwater-Nichols, led to some of the requirements being, ``Give as it is, we got it from here, don't bother us again.'' Thank you. Dr. Snyder. General Thompson, in your written statement, on your first page, you refer to the period from 2003 to 2005. You say, ``From 2003 to 2005, as a result of downsizing of the acquisition workforce in the 1990s, there were not enough acquisition professionals to handle all the Army's acquisition programs and contract missions.'' Why did you take 2003 to 2005? Was that just because of the tremendous activity that was going on, due to the overseas operations? What was the magical about looking at that picture? General Thompson. Yes, sir, we picked that particular period because that was when the large surge of activity into Iraq, in particular. And, as a result of that, we ended up with some seams in the system, where we had a number of people that were investigated, in some cases prosecuted. And so we had some negative things happen then, you know, that primarily the reason was there was just not enough people to deal with the large surge in workload. Dr. Snyder. Got you. On page two, I need to ask a basic question here, you talk about, ``We must reform how and what we buy, meaning a fundamental overhaul of our approach to procurement, acquisition, and contracting.'' I think you are using those three terms there as terms of art. I think probably on this side of the table we interchange a lot of terms and probably in our public discussions interchange all of these terms. Do each of those terms have a precise meaning for you, ``procurement,'' ``acquisition,'' and ``contracting''? General Thompson. I look at ``acquisition'' as the overarching term. And we all operate within an acquisition system. Contracting is a subset of the acquisition system, and the procurement is a subset of that. So the overarching term is ``acquisition.'' Dr. Snyder. Is ``acquisition.'' Good. Thank you. Mr. Thomsen, you had talked about this earlier, about the science and engineering. You say, ``We must increase our business skills and rebuild our science and engineering depth that has been significantly reduced over the last 10 to 15 years.'' I want you to amplify more, if you would, on the science, what you see as a lack of science depth within the Navy. In specific, what are you talking about? Mr. Thomsen. Yes, sir, as I mentioned before, about two- thirds of our acquisition workforce is actually in, I will call it, the field. In other words, they are not here in Washington, D.C. They are outside the Beltway in places like Crane, Indiana; San Diego, California; Newport, Rhode Island; Panama City, Florida; et cetera--Dahlgren. Right up the road, actually, in Carderock, Maryland, there is a naval research lab--or, excuse me, David Taylor Naval Ship Research Center there. Naval Research Lab is right across the river; it is inside the Beltway. That is where most of our science and engineering talent resides. If you go back to 1990, depending on which one of those you pick, but in general we have reduced those organizations by about 40 to 45 percent. That is a lot of scientists and engineers that we have allowed to go out the door in Department of Navy. And that is very much connected to what I said before about our desire to want to reclaim that technical and cost trade space up front. Those are the individuals that turn in, eventually, to system engineers. In fact, it doesn't take them that long because they are actually getting their hands on some of the systems that we buy and that we build. We think it is critical that we rebuild appropriately--not necessarily a hiring bonanza, but a deliberate rebuilding of that part of our workforce in a way that is going to support our strategy, which, again, is focused on the system engineering aspects. In Department of Navy, we rely on those organizations to support not just the program offices but to also work very, very closely with industry. So, for example, we have a requirement, all of us do, to really move to ensure that we don't have a Lead Systems Integrator (LSI) situation in the future. We are not lead systems integrators. We need to be our own lead systems integrators prior to these large contract orders. Well, in order to do that, we have to have the right scientists and the right engineers working with industry, to be a peer of industry, so that when we get to the negotiating and contract table we are speaking the same language and we understand each other. Dr. Snyder. Mr. Needham, in your statement, on the third page, you cite one case study where you say, ``In our case study, we found that one Army component was paying between 17 and 27 percent more, on average, for contractor personnel working as contract specialists than for its government employees, who were doing equivalent work.'' Of course, that is contrary to probably what has been discussed a lot in the last decade and a half or so. That is one case study. Do you think that generalizes the fact that outsourcing a lot of that actually ends up costing us more? Mr. Needham. Again, there is no data on this, Mr. Chairman. We did that particular case study to begin to try to get a handle on this. We have done some work at NASA looking at the same question. And we have been trying to, kind of, identify what is the cost-beneficial ratio here. And there really is no--there is no information. And, in fact, it is not often evaluated. One of the issues--we surveyed 66 program offices. And I think, of the ones that responded, there were 13 that said they looked at cost. Only one considered cost as an issue when deciding whether or not--in terms of their contractor workforce, in terms of deciding the mix that you would have, was looking at the cost. And that is not often done. And it is hard to do. And the only place that it is ever really done is on the A-76 process, and that has such a tiny proportion of the procurement dollars that go to that, where they do an actual cost comparison between the civilian workforce and the contractor workforce. But there is very little data. I put that in the statement because it was work we did a year ago when we started to look at this whole issue. And it is an important one that you raise. Dr. Snyder. Mr. Wittman, anything else? General Thompson. Mr. Congressman, can I give you a little data but sort of a little philosophy there, as well? Dr. Snyder. Sure. General Thompson. If the size of the workforce is such that you need X number of people and it is an enduring mission, it is cheaper over the long run to do it with a government workforce member. We have started down the path of insourcing some of the things that we had contracted out, when we look at, ``It is an enduring mission; I need that many people to do that job.'' And, on average, we have saved about $50,000 per every conversion that we have made from a contractor doing that job to a member of the government workforce doing that job, you know, trying to look at apples-to-apples comparison on burden costs, you know, retirement benefits, et cetera. But if you are going to do it for the long haul and it is not just a temporary situation where I need to contract to get something done and then I no longer need those people, it is cheaper to do with the government workforce. Dr. Snyder. Mr. Assad, you mentioned both in your discussion here and your written statement about--I think it was in response to Mr. Wittman, about baby boomers retiring, about annuitants. Are there any specific legislative changes that are hampering your ability to get the annuitants that you want? Or do you have everything you need, as far as ability to recruit? Mr. Assad. Mr. Chairman, I believe, in general, we have what we need. Congress has given us a great deal of flexibility, especially recently, in terms of dealing with hiring our acquisition workforce. So I think we have the tools that we need to execute this smartly. Dr. Snyder. One of you mentioned conflict-of-interest provisions with regard to stockholdings. Was that you, Mr. Assad? I don't remember who it was. Oh, it was in an article, that is right. It was in John Young's newspaper article today, about the issue of, at certain levels of hiring, that acquisition personnel have to divest themselves of certain investments. Is that a factor in your hiring? Is that an insurmountable problem for some people or not? Mr. Assad. It depends. In general, no. But, as you get to more senior folks who may have been with companies for a significant period of time, they usually have--and, frankly, are older, they usually have investments. And, frankly, if they are going to come into the workforce, they need to divest of those things so that there isn't a conflict of interest. Dr. Snyder. Mr. Assad, are you--or any of you--are you aware of any specific legislative changes that you are wanting now? Are you more apprehensive about any legislative changes that may come? Mr. Assad. No, sir, I think we are in pretty good shape. We are presently working with our personnel in the human resources community to see if there is anything else that we might be able to suggest to the committee that we need. But I think, in general, we think we have the tools we need. Dr. Snyder. Mr. Wittman, anything further? We appreciate you being with us today. We appreciate the work you are doing. Please pass on to all the folks that do your work that I think they are the coolest dudes in the Western Hemisphere. Thank you all. We are adjourned. [Whereupon, at 11:40 a.m., the subcommittee was adjourned.] ======================================================================= A P P E N D I X April 28, 2009 ======================================================================= PREPARED STATEMENTS SUBMITTED FOR THE RECORD April 28, 2009 ======================================================================= [GRAPHIC(S) NOT AVAILBLE IN TIFF FORMAT] ======================================================================= QUESTIONS SUBMITTED BY MEMBERS POST HEARING April 28, 2009 ======================================================================= QUESTIONS SUBMITTED BY DR. SNYDER Dr. Snyder. Congress directed the Department to set a goal of having certain critical acquisition functions for major acquisition programs and major automated information systems, like program and deputy program managers, chief engineers, systems engineers, and cost estimators be government personnel. Where do we stand with respect to that congressional direction? What challenges are you facing? Will Secretary Gates' proposal to grow and restore the acquisition workforce address this issue? If so, in what respect? If not, how is the Department going to reach this goal? Mr. Assad. The Secretary of Defense announced plans to revitalize the Defense acquisition workforce by significantly increasing its organic size by approximately 20,000 federal employees. As part of the Secretary's growth strategy, a high priority is to ensure that all inherently governmental functions are performed by government employees and that a sufficient organic acquisition workforce capability is available to fill critical acquisition positions. The Secretary's growth strategy includes in-sourcing acquisition support functions. To further ensure a successful outcome, the Department incorporated the positions identified by Congress in our DOD acquisition Key Leadership Position construct, and added the lead contracting officer to the list. These Key Leadership Positions will receive increased monitoring to establish a pool of qualified candidates to fill these Key Leadership Positions. The above efforts support meeting congressional direction that critical acquisition functions be performed by qualified government personnel. DOD's progress will be reported in the Defense Acquisition Workforce Human Capital Report. This report will combine various reporting requirements as part of a consolidated report to be delivered in July 2009. Dr. Snyder. It appears that most of the FY 2008 Defense Acquisition Workforce Development Fund initiatives are aimed at hiring new personnel. Training appears to account for a much smaller amount. Aren't there areas of training in need of funding? One of the things the subcommittee has heard is that there's very little, if any, training or professional-level coursework for services contracting. Are there any efforts underway to address that? Mr. Assad. Top DOD acquisition training priorities include ensuring training capacity for the planned growth of the defense acquisition workforce, improving workforce certification levels, reinvigorating certification standards, and continuing improvements to training resources that support workforce performance. Training initiatives are being deployed by DOD Components to address leadership and other Component-specific skill/competency requirements. Examples of Component-specific initiatives include the Army Contracting Lab and Army Acquisition Basic Course; and the Navy Acquisition Boot Camp, Navy Acquisition Hot Topics Course, and various executive leadership training. Air Force initiatives include expansion of attendance at its Air Force Institute of Technology Mission Ready Contracting Officer Course, the Intermediate Project Management Course, Acquisition Leadership Challenge Program Course, and the Air Force Fundamentals of Acquisition Management Course. We agree that services contracting training needs continued emphasis and improvement. The Defense Acquisition University (DAU) has created the Learning Center of Excellence for Service Acquisition. The center provides a dedicated, integrating focus on developing an in- depth body of training and learning assets to improve DOD's execution of service requirements. DAU has developed a classroom course, ACQ 265 Mission Focused Services. This is an interactive, case based course that targets a broad range of the acquisition workforce. It focuses on developing performance based requirements and business strategies and has been available since 2007. DAU has also developed Service Acquisition Workshops (SAWs). The workshops provide just-in-time, hands-on, training early in the requirements process. The team training includes major stakeholders--the customer, program manager, contracting officer, Contracting Officers Representative (COR), and other personnel. The DOD Service Acquisition Mall (SAM) is another initiative that provides on-line access to best-in-class practices for acquiring services. SAM will be organized by standard Federal Product Service Codes and contain training material and tools for developing performance based service requirements. Initial operational capability for SAM is planned for the end of September 2009. Other examples of new acquisition-related training include expanded expeditionary training, Contracting Officer Representative training, and requirements training for the ``Big A'' workforce. This also includes improved and expanded training for contract specialists and pricing personnel; international cooperation training; expanded program management training; source selection and risk management training improvements; new curricula development for high impact, emerging acquisition needs; and other job enhancing learning assets. DOD will also complete an enterprise-wide competency assessment of the acquisition workforce to identify gaps and improve both training and human capital planning. The above initiatives reflect DOD's commitment and action to ensure increased training capacity and to create a comprehensive learning environment that has the right learning assets available at the employee's learning point-of-need. The Defense Acquisition Workforce Development Fund, made possible by the Congress, is enabling DOD to significantly improve acquisition training capability, to include in the area of services contracting. Dr. Snyder. Last year's authorization legislation required the establishment of a career path for military personnel that assures that we attract highly talented individuals who will have opportunity for promotion and advancement. We also required that general and flag officer billets be reserved for the acquisition career path and that there are adequate numbers of military personnel active in acquisition to ensure proper functioning and to make sure we have the military personnel we need to conduct contingency contracting. Can you comment on how your Service will meet these requirements? How many of the general/flag officer acquisition billets are for contracting positions? General Thompson. The Army has a robust process that attracts and accesses highly talented military personnel into the Army Acquisition Corps. This past year we established an earlier accession point for military acquisition officers and NCOs to enable them to begin their acquisition careers up to two to three years earlier. This provides for increased availability of Army acquisition personnel and more time to develop and apply their expertise. We have also issued career guidance to restrict military contracting professionals from serving in theater until they have a minimum of one year of contracting experience within the United States. In addition, the established career paths for military acquisition professionals in the Army Acquisition Corps ensure that the highest caliber officers and NCOs enter, develop, and remain in the right positions in the acquisition workforce. The career path includes a robust command opportunity for acquisition and contracting officers (to include GO opportunities) and the development of qualified contingency contracting personnel. Army officers and NCOs currently receive training, experience, and acquisition certification in five Acquisition Career Fields (ACFs): Program Management; Contracting; Systems, Planning, Research, Development and Engineering-Systems Engineering; Information Technology; and Test & Evaluation. As mission and career development needs dictate, officers are assigned to the five career fields at the Field Grade ranks, and NCOs belong to the 51C (Contracting) ACF. Army Section 852 funding initiatives also assist us in attracting and recruiting new acquisition personnel. This includes offering Student Loan Repayment opportunities and Special Duty Assignment Pay for NCOs. Section 503(a) of the National Defense Authorization Act (NDAA) for Fiscal Year 2009 (FY09) authorized five additional General Officer billets in the Active Component with the requirement that they have significant contracting experience. As of April 2009, the Army selected one additional acquisition General Officer (GO) and will select more this year until the five billets are filled. The GO selected is a Brigadier General who is the Commander of the recently established Expeditionary Contracting Command. The Army had already established the two-star U.S. Army Contracting Command as part of AMC and the one-star Mission & Installation Contracting Command--both billets are presently filled by experienced members of the Senior Executive Service until new GOs are selected. The two remaining billets are the Military Deputy for Contracting in the U.S. Army Corps of Engineers (USACE) and an acquisition (contracting) GO in the Office of the Assistant Secretary of the Army for Acquisition, Logistics and Technology (ASAALT) in the Office of the Deputy Assistant Secretary for Procurement (DASA(P)). Dr. Snyder. Last year's authorization legislation required the establishment of a career path for military personnel that assures that we attract highly talented individuals who will have opportunity for promotion and advancement. We also required that general and flag officer billets be reserved for the acquisition career path and that there are adequate numbers of military personnel active in acquisition to ensure proper functioning and to make sure we have the military personnel we need to conduct contingency contracting. Can you comment on how your Service will meet these requirements? How many of the general/flag officer acquisition billets are for contracting positions? Mr. Thomsen. The Department of the Navy actively manages our military workforce career path requirements. Over the past two years, we have revised some military community career paths to meet anticipated shortfalls in the pipeline for experienced acquisition professionals in order to fill our most critical acquisition positions, including Program Managers, Program Executive Officers, and contracting officers. The Department's military acquisition leadership is most effective when staffed with a carefully calibrated mix of warfare communities including Marine Corps operational and Navy Unrestricted Line Officers (Aviation, Surface and Submarine communities), Restricted Line Officers (Engineering Duty Officers, Aerospace Engineering Duty Officers, Aerospace Maintenance Duty officers) , and Staff Corps (Supply Corps and Civil Engineering Corps). Due to the demands on operational forces, we have faced challenges providing our officers with needed acquisition experience early in their career pipelines. As a result, the Naval Aviation community has proposed a refinement to their acquisition professional career path which will provide Aviators with hands-on acquisition experience years earlier in their careers. The Surface Warfare Officer community initiated similar changes to their career path structure to ensure earlier acquisition experience. The Department's Restricted Line and Supply Corps communities have been effective in ensuring a robust acquisition career path that yields highly experienced and qualified Acquisition Professionals. The Marine Corps established a Military Occupational Specialty for Acquisition Management Professionals. Officers in this specialty are typically assigned to critical acquisition positions that provide senior leadership for ground equipment and/or weapons systems programs. This prepares them for future program management and executive officer assignments. At the end of Fiscal Year 2008, Department of the Navy had a total of 72 Flag Officer/General Officer acquisition billets, with 40 Flag or General Officers filling those billets. Of those 40 Flag and General Officers, five were in contracting. The number of Flag Officer/General Officer billets allows for flexibility in assigning of Flag Officers and General Officers in areas of greatest need. At the end of Fiscal Year 2008, the Department of the Navy had approximately 1,200 military officer contracting billets. Navy construction contracting capability resides in the Civil Engineer Corps. Navy logistics material and major weapons systems acquisition contingency contracting capability resides in the Supply Corps. Within the Marine Corps, contracting is a separate specialty that contains 30 officers and 120 enlisted billets aligned to the operational forces to support the Marine Corps' contingency operations. Marine Corps Officers earn the contracting specialty as secondary specialty with a primary specialty in a related field, such as logistics, supply or financial management, and become contracting officers after completing acquisition training. The majority of the contracting officers within the Marine Corps are highly experienced civilians throughout the supporting establishment and at Marine Corps Systems Command. Dr. Snyder. Can you please describe how your Service is conducting its inventory of services contacts? The Army seems to be the farthest along in this effort. Are you using the Army's work as a model? If not, why wouldn't that make sense? Mr. Thomsen. In accordance with the phased implementation schedule detailed in the May 16, 2008 Deputy Under Secretary of Defense for Acquisition and Technology memo regarding NDAA FY08 Section 807, the Department of the Navy (DON) is developing, and will deliver, a prototype inventory list for review and approval in FY09. In response to Section 807, the DON has developed a methodology to compile the FY 08 inventory of services contracts. The DON methodology uses existing data repositories and databases (the Standard Procurement System and the Federal Procurement Data System--Next Generation) to electronically capture discretely identified contracts and related data elements, specifically those required under Section 807. This captured data is used to electronically generate the required Section 807 data reports. One of the contract data categories required under Section 807, the number of full-time contractor employees or equivalents (FTE) on each service contract, is not directly captured by the DON data systems. DON has developed, and received Defense Procurement and Acquisition Policy's approval for, a statistical sampling approach to report the number of FTEs in the inventory. From a statistically-significant sample, DON calculates an average FTE figure from weighted average labor rates and using a defined algorithm then calculates the number of FTEs on each services contract. DON's review of the Army's Contractor Manpower Reporting System revealed that the systems used by DON (referenced above) would be incompatible with the Army-designed system due to different internal data base structures required by DON to meet the scheduled reporting requirements of Section 807. Dr. Snyder. Last year's authorization legislation required the establishment of a career path for military personnel that assures that we attract highly talented individuals who will have opportunity for promotion and advancement. We also required that general and flag officer billets be reserved for the acquisition career path and that there are adequate numbers of military personnel active in acquisition to ensure proper functioning and to make sure we have the military personnel we need to conduct contingency contracting. Can you comment on how your Service will meet these requirements? How many of the general/flag officer acquisition billets are for contracting positions? General Shackelford. The Air Force deliberately develops acquisition professionals according to well defined career path models which serve as a guide for developing both military officers and civilians through assignments, education, and training. These career models define career paths to greater rank and responsibility within the acquisition workforce. The development of acquisition workforce members is enhanced by the use of Career Field Development Teams consisting of senior leadership from within each Career Field. Using the published acquisition career path models as a guide, the Acquisition Development Teams provide individuals developmental guidance ``vectoring'' them on paths of progression and opportunity in the acquisition workforce. The Development Teams also nominate officers and civilians for service schools (developmental education), and identify military candidates for command leadership positions within the acquisition workforce. The Air Force has also established career field management and force development functional responsibility at the Headquarters Air Staff level to provide strategic direction to the career fields, and oversight of the Developmental Team process. The Air Force relies on a large pool of military contracting officers in order to meet Air Force and a fair share of joint, contingency contracting deployments. Today the Air Force maintains the Department of Defense's largest deployable contracting force and is filling the bulk of the contingency contracting and contract administration deployment requirements in Iraq and Afghanistan. The current operations tempo generated by the wars in Iraq and Afghanistan has made the contracting career field one of the most deployed career fields in the Air Force. Air Force leadership recognizes the threat the current ops tempo poses to the retention of the contracting force and has initiated numerous efforts to ensure the workforce remains the backbone of the contingency contracting mission. One of the recent efforts is to evaluate the need for a Critical Skills Retention Bonus for contracting officers in targeted year groups and grades. This effort has been underway for some time and, pending OSD and corporate Air Force approval, is targeted to formally roll out in the 2009 fiscal year. The Air Force acquisition workforce also has a contingent of enlisted personnel within the contracting career field. These Airmen serve in key positions throughout the Air Force in the operational and contingency contracting communities and are also developed in concert with the needs of the Air Force. The development of this invaluable resource is addressed both within the enlisted force and within the contracting community to ensure the right quality and numbers of contracting NCOs are retained for the Air Force contracting mission. The Air Force codes and tracks all General Officer billets in the acquisition workforce for use in development and succession planning, and to ensure the best qualified leaders are identified to fill these key leadership positions. The Air Force currently has 22 General Officer acquisition billets, and 27 acquisition-qualified General Officers including 1 contracting-qualified General Officer. The Air Force currently has no General Officer contracting positions. The 6 senior Contracting positions in the Air Force are Senior Executive Service (SES) positions. The Air Force's most senior leadership continually reviews General Officer requirements against General Officer authorizations to ensure the number of General Officer billets in acquisition continue to be properly balanced with total Air Force requirements. Dr. Snyder. Can you please describe how your Service is conducting its inventory of services contracts? The Army seems to be the farthest along in this effort. Are you using the Army's work as a model? If not, why wouldn't that make sense? General Shackelford. To fulfill the Section 807 reporting requirements for June 09, the Air Force has pulled contract-specific data from the Contracting Business Intelligence Service (CBIS) system supplemented by a manual data call and mathematical calculation for other required elements. The Army's Section 807 submittal was based on data from their Contractor Management Reporting System, a data system which the Army began implementing several years ago. The Air Force has had no equivalent system capturing the number of full-time contractor equivalents because of our use of performance-based service contracting as required by the Office of Federal Procurement Policy, whereby the focus is on outcomes not on the number of contractor personnel required to achieve the outcome. It is our understanding that Defense Procurement and Acquisition Policy (DPAP) is looking at a possible department-wide solution for the future, leveraging the lessons learned from the contractor reporting requirements of the 2009 American Reinvestment & Recovery Act. ______ QUESTIONS SUBMITTED BY MR. FRANKS Mr. Franks. Mr. Assad, in your best estimation, with the increase of 20,000 personnel through the year 2015, taking into consideration training, experience, and the graduated departure of our existing workforce, what would you project as a ``get well'' date where we start to see the benefits of this plus-up initiative? Mr. Assad. As has been stated by the Secretary of Defense, there is no silver bullet. However, we are already seeing the benefits as a result of improved and expanded training investments made in Defense Acquisition University. Hiring has started, morale is up, and we are getting great feedback from the defense acquisition community. We have added resources to the Defense Contract Audit Agency (DCAA) and they have hired over 100 people. DCAA is already seeing benefits of added audit capacity which is providing additional data for our senior acquisition leaders. As for a specific get well date relative to improved acquisition outcomes, the results will not change overnight. However, we believe the strategy is right and the successful employment of these workforce initiatives is a leading indicator for improving acquisition outcomes. Mr. Franks. Mr. Assad, with the plan to significantly increase the size of the acquisition workforce, it has been said that with a large shortfall that already exists within the DOD coupled with stiff competition from the private sector that the Defense Department might find it difficult to attract the best and brightest to their ranks. Do you agree with this statement? What plans does the department have to recruit and retain quality acquisition professionals? Mr. Assad. No. I do not agree. I believe the Department of Defense is well positioned to attract high quality candidates to become members of the defense acquisition workforce. The Administration's leadership, the top-down driven strategy of the Secretary of Defense, and the strong support of Congress are enabling the most significant increase in growth of the defense acquisition workforce ever undertaken. The challenges we have are internal and related to administrative processes associated with establishing positions and the length of time to hire and to get onboard new personnel. We are actively working through initiatives to resolve these issues. The support we have received from Congress (e.g., Expedited Hiring Authority) have been very beneficial. We are encouraged and believe we will solve these issues. The Department is implementing a robust employee retention and talent management strategy to retain acquisition workforce employees with expert knowledge in critical and shortage skill areas. These employees include individuals filling Key Leadership Positions (KLPs) such as program managers, engineers, senior contracting officers, life cycle logisticians, cost estimators, etc. (especially those in ACAT I and ACAT II programs) and other personnel possessing special expertise that is hard to find or retain. We are confident that we will be successful. ______ QUESTIONS SUBMITTED BY MS. SANCHEZ Ms. Sanchez. I have received a number of reports stating that contracts are awarded to contractors and subcontractors whose products do not meet the original performance specification. How could a production contract award be made based on a product that did not meet the original performance specification? Is there a set process, and if so, what is the process contractors/subcontractors have to go through in order to ensure that their products are meeting the performance specifications indicated by the Department? How is the Department ensuring that performance specification testing is rigorous enough so that our service members are not exposed to defective products? General Thompson. Contracts should not be awarded to contractors and subcontractors whose products do not meet the original performance specification. If the contractor has not met the original performance specification then the contract should be terminated. Delineated in the Federal Acquisition Regulation (FAR) Subpart 9.2, is a set process that ensures contractor/subcontractor products meet Department of the Army performance specifications. The formal and structured process includes the testing and examination of products for compliance with contract requirements. Upon completion of the Government's evaluation and subsequent determination that the products meet the qualification requirements, the agency places that product on an approved list. Only contractors with products on the approval list may compete for contract award. Since this process is more restrictive, in the interest of promoting full and open competition, it is used only when necessary and only after the head of the agency, or his designee, prepares a written justification. For those products whose qualification requirements do not fall under this Subpart, the contracting officer relies upon the requiring activity technical expert to ensure that the performance specifications meet the government's needs. The Department, through its contracting function, specifies contract quality requirements based on product complexity and criticality. We vigorously audit conformance to contract quality requirements. Contract quality requirements include product attributes at the component and end-item levels, as well as those (contractor) management controls necessary to assure quality. These controls apply to all work affecting quality such as ordering of materials, fabrication, assembly, inspection and testing (in-process and final), and delivery. Additionally, all acquisition programs require a Test and Evaluation Master Plan, which describes what testing is required, who will perform the testing, what resources will be needed, and what the requirements are for evaluation. The Commanding General, U.S. Army Test and Evaluation Command is responsible for assessing program effectiveness, suitability, and survivability (or progress towards achieving these) during each phase in the life-cycle. Assessments or evaluations, conducted by the system evaluator (including the safety confirmation), will support materiel release actions for new procurement, reprocurements, and system changes. Ms. Sanchez. Currently, the Lead System Integrators (LSIs) and Prime Contractor oversight is limited because of the downsizing of the DOD acquisition workforce. What progress has DOD made in rebuilding its acquisition workforce, and how will this impact LSIs? What are the impediments for DOD in this regard? General Thompson. The Army is making significant progress in identifying acquisition workforce requirements that will be increased through many avenues. We are actively recruiting new employees, in- sourcing contractor positions to civilians, and are working with the personnel community to identify new opportunities to pilot to streamline the hiring process. In-sourcing is being identified as a result of an Army-wide review of contractor support positions. This review will provide the analytical underpinnings to ensure the Army has a proactive, executable strategy for in-sourcing. Due to restrictions on the use of LSIs, the Program Manager, Future Combat Systems will continue to transition the System of Systems engineering and integration tasks to the government with the assistance of a prime contractor in FY10. Given the time required to acquire the skills and conduct additional formal and experiential training to make these personnel effective, the transition is not expected to be complete until 2013. There are challenges in moving forward. The process to grow the acquisition workforce will require formulation of concept plans, with subsequent review and approval of the spaces and the funding. There are also limitations in available skilled personnel, since a fair amount of program experience is required to prepare a systems engineer, for example. On the job practical experience is required to truly be qualified. Given the limited number of true developmental programs currently in the Army, the number of individuals getting opportunities for this experiential piece is limited. The Army will expand the developmental opportunities as we grow the acquisition workforce. Ms. Sanchez. I have received a number of reports stating that contracts are awarded to contractors and subcontractors whose products do not meet the original performance specification. How could a production contract award be made based on a product that did not meet the original performance specification? Is there a set process, and if so, what is the process contractors/subcontractors have to go through in order to ensure that their products are meeting the performance specifications indicated by the Department? How is the Department ensuring that performance specification testing is rigorous enough so that our service members are not exposed to defective products? Mr. Thomsen. Contract awards made upon a competitive source selection will meet the RFP performance specification. Proposals that are assessed as not meeting the requirements of the RFP are considered deficient and are deemed unawardable. However, during the performance of the awarded contract, particularly development contracts, changes to the specification may result due to technical, schedule, cost and or budgetary issues. These issues are not unusual for major weapons systems contracts. Even within this environment, contractors are not allowed to deviate from any Critical Performance Parameters called out in the specification. Contractors may only propose to deviate from lesser parameters which do not affect usability or safety. These deviations must be identified and justified. Consequently, due to the trade-off analysis employed during development, the follow-on production contract's performance specification may be somewhat different from what was originally envisioned when the development contract was awarded. Production contracts normally include a requirement for the contractor to submit a production test plan and test procedures for Government approval. This serves as the basis for the contractor to demonstrate compliance with the contract's specification requirements, which is required before Government acceptance and/or payment. The Department ensures performance testing is sufficiently rigorous by first requiring a program manager to have an over-arching Test & Evaluation Master Plan (TEMP) approved by the Milestone Decision Authority (MDA) prior to obtaining approval to start production. Secondly, requirements specified in the Capability Production Document (CPD) set the acceptable thresholds and desired objectives used in the TEMP for performance measures to be demonstrated during developmental and operational testing. Programs must complete a series of development-level testing; achieve Government-required Technology Readiness Levels; conduct technical specifications demonstrations; and perform operational assessment for programs on the OSD OT&E oversight list. The foregoing results and satisfactory program health at Milestone C inform the MDA's decision to proceed with Low-Rate Initial Production (LRIP) articles to support Initial Operational Test and Evaluation (IOT&E). The MDA's subsequent Full-Rate Production Decision Review (FRPDR) requires the Government Independent Operational Test Agency to report on Operational Effectiveness and Suitability. Finally, each production contract requires every item offered for delivery to be subjected to various tests, witnessed by the Government, to ensure contract performance specification compliance, prior to Government acceptance.