Thinking Critically: Unleashing the Power of the Adaptive Acquisition Framework

JAN. 1, 2021 | An Interview With Kevin Fahey

Fahey has served as the Assistant Secretary of Defense for Acquisition since February 2018. He previously retired from the Senior Executive Service after serving as the Executive Director, System of Systems Engineering and Integration Directorate, Office of the Assistant Secretary of the Army (Acquisition, Logistics, and Technology); Program Executive Officer, Combat Support and Combat Service Support; and Program Executive Officer, Ground Combat Systems. Howard leads strategic communications for the Office of the Assistant Secretary of Defense for Acquisition. He has bachelor’s and master’s degrees from Georgetown University.

Mr. Fahey discusses with Matthew Howard of the Office of the Secretary of Defense the impact of recent acquisition reforms and the cultural shift required to continue building on its momentum. In addressing the new approach to the Defense Acquisition System, Mr. Fahey focuses on delivering capability at the speed of relevance.

Q. Last year saw the publication of the new DoD Directive 5000.01 as well as several supporting DoD Instructions. What is so important about these reforms and why will they have a lasting impact?

A. I retired from government in 2015 after a 34-year career, and I had no intention of coming back. However, some three years later, people convinced me that, if there was ever a time it would be possible to fundamentally change how the Department of Defense (DoD) does acquisition, that was the time. The Senate, then-Secretary of Defense James Mattis, and Under Secretary Ellen Lord were all aligned to better provide capabilities at the speed and time of relevance.

When I arrived on the job, Ms. Lord gave me clear guidance but also afforded me the flexibility to do what was required to meet her goal of getting people to think critically while being creatively compliant within an Adaptive Acquisition Framework (AAF). As I thought about that, particularly through the lens of my career-long experiences, it became clear that redesigning the 5000 series was the best way to execute.

DoD Directive 5000.01 is primarily about roles and responsibilities within the Defense Acquisition System. While updates reflect the split of the former Acquisition, Technology, and Logistics office into Acquisition and Sustainment and a separate Research and Engineering division, as well as the creation of the Chief Management Officer, the real transformation was DoD Instruction 5000.02. That policy formerly focused primarily on a checklist for carrying out major acquisition programs: Here was everything you could ever think of; and every other type of program should tailor out as appropriate. This created a culture of “what don’t I have to do” versus really thinking through what makes sense to do given the capability being developed. In many instances program managers (PMs) did things that were neither effective nor useful, but doing them was actually easier than tailoring them out. We wanted to create a policy that gave PMs the authority and responsibility to tailor in what is required.

The thought behind the new 5000.02 is to get folks to do the critical thinking, and that means figuring out exactly what needs to be done to deliver a capability at the speed of relevance. Six acquisition pathways address examples we’ve seen over the years: urgent requirements, the middle tier of acquisition, major programs, business systems, services, and software. Fundamentally, though, it’s not about picking a specific pathway and boxing yourself in. It’s about common sense decision making and thinking through what the right acquisition strategy looks like for the capability you’re developing. You could choose to follow no pathway at all, and that’s the beauty of this AAF.

In addition to DoD Instructions for each pathway, the other critical piece of the redesign is the emphasis on functional areas. Regardless of whether you’re doing a software acquisition, major acquisition, or anything in between, you still have to think about sustainment; no matter what you’re doing, you need to think about cybersecurity, disciplined systems engineering, test and evaluation, and so on. Just as that PM is doing the critical thinking to establish the right acquisition strategy, instructions for each functional area better enable the functional experts to help establish the right functional program to support the PM.

“You’re empowered; now you need to do the critical thinking.”

Q. You mentioned the notion of “critical thinking.” What does that term—and that mindset—mean?

A. When I first pitched my ideas for this new acquisition framework, many thought I had lost my mind. But as I tell people all the time, the worst thing you can do is surround yourself with people who are just like you and have the same background. The acquisition enterprise truly lucked out with Stacy Cummings and the herculean effort she led to make this transformation a reality.

Prior to becoming the Principal Deputy here in our office, Stacy was managing DoD’s electronic health records. Her background was in logistics—not acquisition—so when she arrived, she had no choice but to ask me the hard questions. It made both of our staffs uncomfortable because they all thought I was going to get mad or view it as pushing back; but it was exactly the opposite. The ideas that Ms. Lord and I had are 1,000 times better because Stacy was asking those questions. She forced us to think critically about our every decision in order to create best possible policy for the DoD, for our PMs, and for our Warfighters—it’s exactly the kind of critical thinking that the new Defense Acquisition System was designed for.

It’s all about asking the critical questions: the ones that are open-ended and not a matter of simple yes or no answers. When I have a discussion with someone, I’ll often actually argue what I don’t believe so that I can hear the other side and better understand the full scope of the decision. PMs have to be asking those questions as they think through their specific capability, its associated risks, and all the supporting functional areas.

I’ve told every PM who has ever worked for me, “You’re empowered; now you need to do the critical thinking.” I would ask them the hard questions, but as long as they kept me informed, I made sure they knew I would take the blame if they ran into problems. In the past, we’ve often created a risk averse culture: If something goes wrong, you’re going to be fired. We need to change that mentality.

If a PM is doing the right things and has done the critical thinking, leaders need to trust and support that PM—even if it’s not what they might do in the same situation. If the PM identified a risk and that risk was realized, we have to be able to say, “That’s OK. You did a good job.”

Q. How will these changes impact the acquisition workforce?

A. Ms. Lord has delegated most programs down to the military Services, which in turn have delegated a great deal of authority and responsibility down to the O-6 and O-5 levels. By delegating to the lowest level, that’s where you get innovation and are able to hold people accountable—but you can’t tell everybody what to do. While our intent with the AAF is to empower PMs with more flexibility, how do you train that?

At the micro level, we’re working to develop a course focused on critical thinking. In its Introduction to Special Operations Acquisition Course, the United States Special Operations Command (USSOCOM) dedicates a significant amount of instruction time to cognitive agility as a way to set the foundation for both the course and the acquisition career writ large. With the help of Jimmy Smith, the USSOCOM Acquisition Executive, we’re building off of their best practices and lessons learned to create a similar course for the AAF that’s really aimed at teaching our PMs how to think, not what to think.

At the macro level, we’re changing the way we train the acquisition workforce as a whole. Since the Department’s Acquisition Corps was initially established in the late 1980s, we’ve steadily built an extensive certification process for 20-plus career fields—but the focus was always on certification. We know people are certified, but are they truly qualified for the jobs we’re assigning them?

We’re still going to certify, but the idea is to cut back the amount of core training and get back to basics. Previously, we tried to teach everybody everything, and a great example is information technology (IT) acquisition. As part of their required training, every PM had to complete a class on IT acquisition. But not every PM is going to do IT acquisition! And for those that would, the training was probably insufficient in scope and detail and likely forgotten by the time the information was actually needed.

Instead, we’re focusing on the critical skills a program management shop needs while giving the workforce members what they truly need to know as they progress through their careers. In many instances, we had Level I, II, and III certifications; now we’re thinking more in terms of basic competencies for a journeyman or an expert with additional training at the time of need. You’re still going to learn how to be a PM regardless of whether you’re doing IT or services. But if you are doing IT or services, we’ll have specific, PhD-level DAU classes to train you at that time and ensure that you have the right credentials.

Q. Are there examples where these reforms are already making a difference in the DoD?

A. A program that has done really well is the Army Integrated Visual Augmentation System (IVAS), and that’s largely because the team is top notch. From engineering, to contracting, to sustainment, to industrial base evaluators, their people are doing the critical thinking—and doing it well.

People often think, “They’re doing middle tier of acquisition; they’re just winging it.” That couldn’t be further from the truth. I can’t emphasize enough that, to do what we’re asking people to do, you still have to do your due diligence. After the IVAS team conducted their second major prototype demonstration, they sat down with the contractor for five weeks for detailed planning on the rest of development.

When COVID-19 hit shortly after, the two parties didn’t have to be co-located because everyone already knew the inchstone plan to get to the next demonstration. Because of their diligence, the program is still on track to transition from a middle-tier prototyping to a middle-tier fielding within the next year. It’s a great example that, for all of the puzzle pieces—engineering, systems engineering, sustainment, and so on—detailed planning is more important to program delivery than ever before.

The DoD has been really supportive of IVAS as well, and a big part of that is the team’s openness with information and data. To a large extent, we’re taking advantage of a commercial product and militarizing it. One of the biggest challenges in doing so is cost and pricing—it’s not the typical process when we’ve historically paid for everything. Even in the cost and pricing, there are pieces proprietary to the contractor that we really have to think through to make sure we’re getting a fair and reasonable price when we make an award. It’s certainly a learning experience, but the Cost Assessment and Program Evaluation office has been working with both the PM and the contractor from the outset, and it’s a great example of the DoD coming together to develop the right strategy for the program.

Building a similar culture of data transparency across the DoD is critical. In the past, PMs haven’t liked sharing their data because we weren’t mature enough to handle that transparency—we ended up trying to do the PMs’ jobs for them. We have to get away from that mindset. Sure, we will use that data to hold PMs and the Services accountable, but we’re more focused on how we can help programs survive rather than beating them up because they aren’t going well. We want to employ that data to identify systemic problems in the Defense Acquisition System and inform the development of new policy or other tools. We’re getting better, and Congress has been a real supporter of our efforts.

Q. Can you discuss how the Defense Acquisition System and AAF are better postured to proactively address cybersecurity?

A. We’re laser-focused on ensuring a safe, secure, and resilient defense industrial base (DIB), and there are two pieces to that. First, how do we help PMs with supply chain risk management? We’re working with the Services—and in some instances directly with PMs—to develop common tools for better visibility into the second-, third-, and fourth-tier levels. Several prime contractors are also helping us throughout the development process.

Second, how do we ensure cybersecurity across the DIB? Again, Ms. Lord provided guidance on the end-state but allowed me to use my background in quality assurance to guide the direction of our efforts. Our previous requirements for industry were essentially “do the right thing,” and compliance was self-attested by each company. Taking a cue from what we did when we shifted from the Military Standard for quality to that of the International Standards Organization (ISO), how could we establish a self-correcting cybersecurity standard?

Today, industry itself has built an infrastructure to guarantee quality. Let’s say that you teach people how to do quality, or are a quality certifier. If folks are still not producing good quality, you’re not going to be employed very long. In essence, that infrastructure is self-enforcing and ensures that there are good trainers and certifiers throughout the supply chain. Our first major step in that direction is CMMC—the Cybersecurity Maturity Model Certification. Along with cost, schedule, and performance, security is foundational to acquisition and CMMC establishes a single, unified standard to measure a company’s ability to protect critical government information.

Many companies—especially small businesses—are concerned about the costs associated with CMMC implementation. Under Katie Arrington’s leadership, however, we’ve made it a priority to get constant feedback from industry throughout the development process, including how we train and assist during implementation. In many instances, industry will only need to attain the lower levels that include processes and practices that most people should be doing in their own homes. While it does become more expensive once you get to highest certification levels, when you look at the cost of the information we’re losing, it’s well worth it in the long run.

It’s imperative that we move fast, but we’re working with industry to move at a speed that makes sense. Unlike many Federal Acquisition Regulation rules, the CMMC requirement doesn’t go into effect full-blown on Day One but rather will be phased in over time. We’re taking the time to conduct pathfinders with industry partners to work through how requirements flow down beyond the primary level, see where we have issues, and correct them. Like ISO 9000, we expect full CMMC implementation to take about five years.

Katie has also done a remarkable job developing a supporting instruction to the 5000 series focusing on weapons system and infrastructure cyber-resiliency. From the time we conceptualize a capability to the time it’s demilitarized and retired, how do we ensure it’s cyber-secure? It starts with the requirements, and this new policy will outline how cyber must be addressed throughout the entirety of the acquisition process.

Most people don’t understand how hard it is to do policy in the DoD; it really has to be a collaborative effort between the Services and the Office of the Secretary of Defense. As Katie was finalizing the draft, just by luck the Executive Program Manager’s Course was under way at DAU, as was the Senior Acquisition Course at the Eisenhower School. In both instances, students asked questions about improving cybersecurity and weapon system resiliency—so we ended up sending them the draft.

Too often, you see policy being written by people who never seek input from those who have to implement it. This is a great example of how including the eventual practitioners in the development process will really make a difference in the final product. Whether Stacy Cummings, Katie Arrington, or Kim Herrington, the team has done a remarkable job involving all the stakeholders—be they internal or external—to produce meaningful reform.

Q. The DoD has generated a lot of momentum on the way we do business in acquisition. What’s next, and how do you foresee us building on that momentum?

A. When I began my career, we developed parts by creating one-dimensional Mylar drawings. Eventually we transitioned into 3D drawings and then model-based systems engineering, and I believe digital engineering is the next step in that evolution. Companies like SpaceX are pushing the boundaries in industry today, but when you look at the sophistication of many DoD systems, we’re going to be pushing the state-of-the-art on a lot of those digital engineering tools. It’s going to be a process, especially when it comes to establishing policy and documentation requirements. Are we going to direct the use of digital engineering for new programs? If so, how will we incentivize industry and ensure that the right tools are in place? These are the questions we’re beginning to think through, but we still have a lot of work to do.

Contracting is another major focus. Across DoD, we have unbelievable contracting officers, but they’ve often grown up in in a culture of “don’t do anything wrong.” We certainly don’t want them to do anything wrong, but Kim Herrington, John Tenaglia, and their team have done a wonderful job thinking through how we better use modeling and past experiences on certified cost and pricing. As we work to ensure a fair and reasonable price, what do our models say versus what industry models say? And just as with the overall acquisition program, how do you delegate authority and responsibility and what is the appropriate level to do so? Contracting is probably one of the areas training is most critical, and we continue to get better.

Finally, we must continue to drive the culture of tailoring in. I hate checklists because I believe it gets to the point where there’s no thinking involved. I’ve seen it firsthand with my involvement in programs I considered very successful. A few years after, you could see programs quite similar to mine that took our acquisition strategy and essentially did a word search. While it was a great acquisition strategy, it did not, for any number of reasons, fit the specific capability they were acquiring.

We have to get people away from, “That worked for that program,” to saying instead, “I’m delivering this capability.” While there is certainly still value in capturing lessons learned, the AAF is a framework, not a blueprint. It is a template to lead people through the critical thinking, not a checklist to get to a milestone. Chris O’Donnell and Dyke Weatherington have done a tremendous job instilling this mentality throughout some of the DoD’s most critical acquisition programs. As a result, we’re really beginning to see that enterprise shift in thinking. As we look to the future, culture is everything as we unleash the power of the AAF.

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