Hot Topics at the National Defense Industrial Association’s Integrated Program Management Division (NDIA-IPMD)
For those of you who did not attend, or who have a passing interest in what is happening in the public sphere of DoD acquisition, the NDIA IPMD meeting held last week was a great importance. Here are the highlights.
Electronic Submission of Program Management Information under the New Proposed DoD Schema
Those who have attended meetings in the past, and who read this blog, know where I stand on this issue, which is to capture all of the necessary information that provides a full picture of program and project performance among all of its systems and subsystems, but to do so in an economically feasible manner that reduces redundancy, reduces data streams, and improves timeliness of submission. Basic information economics state that a TB of data is only incrementally more expensive–as defined by the difference in the electricity generated–as a MB of data. Basic experience in IT management demonstrates that automating a process that eliminates touch labor in data production/validation improves productivity and speed.
Furthermore, if a supplier in complex program and project management is properly managing–and has sufficient systems in place–then providing the data necessary for the DoD to establish accountability and good stewardship, to ensure that adequate progress is being made under the terms of the contract, to ensure that contractually required systems that establish competency are reliable and accurate, and to utilize in future defense acquisition planning–should not be a problem. We live in a world of 0s and 1s. What we expect of our information systems is to do the grunt work handling ever large systems in providing information. In this scenario the machine is the dumb one and the person assessing the significance and context of what is processed into intelligence is the smart one.
The most recent discussions and controversies surrounded the old canard regarding submission at Control Account as opposed to the Work Package level of the WBS. Yes, let’s party like it’s 1997. The other issue was whether cumulative or current data should be submitted. I have issues with both of these items, which continue to arise like bad zombie ideas. You put a stake in them, but they just won’t die.
To frame the first issue, there are some organizations/project teams that link budget to control account, and others to work package. So practice is the not determinant, but it speaks to earned value management (EVM).The receiving organization is going to want the lowest level for reporting where there is foot-and-tie to not only budget, but to other systems. This is the rub.
I participated in an still-unpublished study for DoD that indicated that if one uses earned value management (EVM) exclusively to manage that it doesn’t matter. You get a bit more fidelity and early warning at the work package level, but not much.
But note my conditional.
No one exclusively uses EVM to manage projects and programs. That would be foolish and seems to be the basis of the specious attack on the methodology when I come upon it, especially by baby PMs. The discriminator is the schedule, and the early warning is found there. The place where you foot-and-tie schedule to the WBS is at the work package level. If you are restricted to the control account for reporting you have a guessing game–and gaming of the system–given that there will be many schedule activities to one control account.
Furthermore, the individual reviewing EVM and schedule will want to ensure that the Performance Measurement Baseline (PMB) and the Integrated Master Schedule (IMS) were not constructed in isolation from one another. There needs to be evidence that the work planned under the cost plan matches the work in time.
Regarding cumulative against current dollar submission the issue is one of accuracy. First, consecutive cumulative submissions require that the latest figure be subtracted from the last, which causes round-up errors–which are exacerbated if reporting is restricted to the control account level. NDIA IPMD had a long discussion on the intrinsic cumulative-to-cumulative error at a meeting last year, which was raised by Gary Humphreys of Humphreys & Associates. Second, cumulative submissions often hide retroactive changes. Third, to catch items in my second point, one must execute cross checks for different types of data, rather than getting a dump from the system of record and rolling up. The more operations and manipulation made to data, the harder it becomes to ensure fidelity and get everyone to agree on one trusted source, that is, in reading off of the same page.
When I was asked about my opinion on these issues, my response was twofold. First, as the head of a technology company it doesn’t matter to me. I can handle data in accordance with the standard DoD schema in any way specified. Second, as a former program management type and as an IT professional with an abiding dislike of inefficient systems, the restrictions proposed are based on the limitations of proprietary systems in use by suppliers that, in my opinion, need to be retired. The DoD and A&D market is somewhat isolated from other market pressures, by design. So the DoD must artificially construct incentives and an ecosystem that pushes businesses (and its own organizations) to greater efficiency and innovation. We don’t fly F-4s anymore, so why continue to use IT business systems designed in 1997 that are solely supported by sunk-cost arguments and rent seeking behavior?
Thus, my recommendation was that it was up to the DoD to determine the information required to achieve their statutory and management responsibilities, and it is up to the software solution providers to provide the, you know, solutions that meet them.
I was also asked if I agreed with another solution provider to have the software companies have another go at the schema prior to publication. My position was consistent in that regard: we don’t work the refs. My recommendation to OSD, also given that I have been in a similar position regarding an earlier initiative long the same lines back when I wore a uniform, is to explore the art of the possible with suppliers. The goals are to reduce data streams, eliminate redundancy, and improve speed. Let the commercial software guys figure out how to make it work.
Current projection is three to four weeks before a final schema is published. We will see if the corresponding documentation will also be provided simultaneously.
DCMA EVAS – Data-driven Assessment and Surveillance
This is a topic for which I cannot write without a conflict of interest since the company that is my day job is the solution provider, so I will make this short and sweet.
First, it was refreshing to see three Hub leads at the NDIA IPMD meeting. These are the individuals in the field who understand the important connection between government acquisition needs and private industry capabilities in the logistics supply chain.
Second, despite a great deal of behind-the-scenes speculation and drama among competitors in the solution provider market, DCMA affirmed that it had selected its COTS solution and that it was working with that provider to work out any minor issues now that MIlestone B has been certified and they are into full implementation.
Third, DCMA announced that the Hubs would be collecting information and that the plan for a central database for EVAS that would combine other DoD data has been put on hold until management can determine the best course for that solution.
Fourth, the Agency announced that the first round of using the automated metrics was later this month and that effort would continue into October.
Fifth, the Agency tamped down some of the fear related to this new process, noting that tripping metrics may simply indicate that additional attention was needed in that area, including those cases where it simply needed to be documented that the supplier’s System Description deviated from the standard indicator. I think this will be a process of familiarization as the Hubs move out with implementation.
DCMA EVAS, in my opinion, is a significant reform of the way the agency does business. It not only drives process and organizational improvement within the agency by eliminating uneven and arbitrary determinations of contract non-compliance (as well as improvements in data management), but opens a dialogue regarding systems improvement, driving similar changes to the supplier base.
NDAA Section 804
There were a couple of public discussions on NDAA Section 804 which, if you are not certain what it is, should go to this link. Having kept track of developments in the NDAA for this coming fiscal year, what I can say is that the final language of Section 804 doesn’t say what many think it says when it was in draft.
What it doesn’t authorize is a broad authority to overrule other statutory requirements for government accountability, oversight, and reporting, including the requirement for earned value management on large programs. This statement is supported by both OSD speakers that addressed the issue in the meeting.
The purpose of Section 804 was to provide the ability to quickly prototype and field new technologies in the wake of 911, particularly as it related to identifying, tracking, and preventing terrorist acts. But the rhetoric behind this section, which was widely touted by elected representatives long before the final version of the current NDAA had been approved, implied a broader mandate for more prosaic acquisitions. My opinion in having seen programs like this before (think Navy A12 program) is that, if people use this authority too broadly that we will be discussing more significant issues than a minor DCMA program that ends this blog post.
Thus, the message coming from OSD is that there is no carte blanche get-out-of-jail card for covering yourself under Section 804 and deciding that lack of management is a substitute for management, and that failure to obtain timely and necessary program performance information does not mean that it cannot be forensically traced in an audit or investigation, especially if things go south. A word to the wise, while birds of a feather catch cold.
The Department of Defense has been undergoing reorganization and the old Office of the Undersecretary of Defense for Acquisition, Technology, and Logistics (OUSD (AT&L) has been broken up and reassigned largely to a new Undersecretary of Defense for Acquisition and Sustainment (USD (A&S).
As a result of this reorganization there were other points indicated:
a. Day-to-day program management will be pushed to the military services. No one really seems to understand what this means. The services already have PMOs in place that do day-to-day management. The policy part of old AT&L will be going intact to A&S as well as program analysis. The personnel cuts that are earmarked for some DoD departments was largely avoided in the reorganization, except at the SES level, which I will address below.
b. Other Transaction Authority (OTA) and Section 804 procurements are getting a lot of attention, but they seem ripe for abuse. I had actually was a member of a panel regarding Acquisition Reform at the NDIA Training and Simulation Industry Symposium held this past June in Orlando. I thought the focus would be on the recommendations from the 809 panel but, instead, turned out to be on OTA and Section 804 acquisitions. What impressed me the most was that even companies that had participated in these types of contracting actions felt that they were unnecessarily loosely composed, which would eventually impede progress upon review and audit of the programs. The consensus in discussions with the audience and other panel members was that the FAR and DFARS already possessed sufficient flexibility if Contracting Officers were properly trained to know how to construct such a requirement and still stay between the lines, absent a serious operational need that cannot be met through normal acquisition methods. Furthermore, OTA SME knowledge is virtually non-existent. Needless to say, things like Nunn-McCurdy and new Congressional reporting requirements in the latest NDAA still need to be met.
c. The emphasis in the department, it was announced, would also shift to a focus on portfolio analysis, but–again–no one could speak to exactly what that means. PARCA and the program analysis personnel on the OSD staffs provide SecDef with information on the entire portfolio of major programs. That is why there is a DoD Central Repository for submission of program data. If the Department is looking to apply some of the principles in DoD that provide flexibility in identifying risks and tradeoffs across, then that would be most useful and a powerful tool in managing resources. We’ve seen efforts like Cost as an Independent Variable (CAIV) and other tradeoff methods come and go, it would be nice if the department would reward the identification of programmatic risk early and often in program go/no-go/tradeoff/early production decisions.
d. To manage over $7 trillion dollars of program PARCA’s expense is $4.5M. The OSD personnel made this point, I think, to emphasize the return on investment in their role regarding oversight, risk identification, and root cause analysis with an eye to efficiency in the management of DoD programs. This is like an insurance policy and a built-in DoD change agent. But from my outside reading, there was a move by Representative Mac Thornberry, who is Chairman of House Armed Services, to hollow out OSD by eliminating PARCA and much of the AT&L staffs. I had discussions with staffs for other Congressional members of the Armed Services Committee when this was going on, and the cause seemed to be that there is a lack of understanding to the extent that DoD has streamlined its acquisition business systems and how key PARCA, DCMA, and the analysis and assessment staffs are to the acquisition ecosystem, and how they foot and tie to the service PEOs and PMOs. Luckily for the taxpayer, it seems that Senate Armed Services members were aware of this and took the language out during markup.
Other OSD Business — Reconciling FAR/DFARS, and Agile
a.. DoD is reconciling differences between overlapping FAR and DFARS clauses. Given that DoD is more detailed and specific in identifying reporting and specifying oversight of contracts by dollar threshold, complexity, risk, and contract type, it will be interesting how this plays out over time. The example given by Mr. John McGregor of OSD was the difference between the FAR and DFARS clauses regarding the application of earned value management (EVM). The FAR clause is more expansive and cut-and-dried. The DFARS clause distinguishes the level of EVM reporting and oversight (and surveillance) that should apply based on more specific criteria regarding the nature of the program and the contract characteristics.
b. The issue of Agile and how it somehow excuses using estimating, earned value management, risk management, and other proven program management controls was addressed. This contention is, of course, poppycock and Glen Alleman on his blog has written extensively about this zombie idea. The 809 Panel seemed to have been bitten by it, though, where its members were convinced that Agile is a program or project management method, and that there is a dichotomy between Agile and the use of EVM. The prescient point in critiquing this assertion was effectively made by the OSD speakers. They noted that they attend many forums and speak to various groups about Agile, and that there is virtually no consensus about what exactly it is and what characteristics define it, but everyone pretty much recognizes it as an approach to software development. Furthermore, EVM is used today on programs that at least partially use Agile software development methodology and do so very effectively. It’s not like crossing the streams.
Gary Bliss, PARCA – Fair Winds and Following Seas
The blockbuster announcement at the meeting was the planned retirement of Gary Bliss, who has been and is the Director of PARCA, on 30 September 2018. This was due to the cut in billets at the Senior Executive Service (SES) level. He will be missed.
Mr. Bliss has transformed the way that DoD does business and he has done so by building bridges. I have been attending NDIA IPMD meetings (and under its old PMSC name) for more than 20 years. Over that time, from when I was near the end of my uniformed career in attending the government/joint session, and, later, when I attended full sessions after joining private industry, I have witnessed a change for the better. Mr. Bliss leaves behind an industry that has established collaboration with DoD and federal program management personnel as its legacy for now and into the future.
Before the formation of PARCA all too often there were two camps in the organization, which translated to a similar condition in the field in relation to PMOs and oversight agencies, despite the fact that everyone was on the same team in terms of serving the national defense. The issue, of course, as it always is, was money.
These two camps would sometimes break out in open disagreement and expressed disparagement of the other. Mr. Bliss brought in a gentleman by the name of Gordon Kranz and together they opened a dialogue in meeting PARCA’s mission. This dialogue has continued with Mr. Kranz’s replacement, John McGregor.
The dialogue has revolved around finding root causes for long delays between development and production in program management and to recommend ways of streamlining processes and eliminating impediments, to root out redundancy, inefficiency, and waste throughout the program and project management supply chain, and to communicate with industry so that they understand the reasons for particular DoD policies and procedures, to obtain feedback on the effects of those decisions and how they can implemented to avoid arbitrariness, and to provide certainty to those who would seek to provide supplies and services to the national defense–especially innovative ones–in defining the rules of engagement. The focus was on collaborative process improvement–and it has worked. Petty disputes occasionally still arise, but they are the exception to the rule.
Under his watch Mr. Bliss established a common trusted data stream for program management data, and forged policies that drove process improvement from the industrial base through the DoD program office. This was not an easy job. His background as an economist and his long distinguished career in the public service armed him well in this regard. We owe him a debt of gratitude.
We can all hope that the next OSD leadership that assumes that role will be as effective and forward leaning.
Final Thoughts on DCMA report revelations
The interest I received on my last post on the DCMA internal report regarding the IWMS project was very broad, but the comments that I received expressed some confusion on what I took away as the lessons learned in my closing paragraphs. The reason for this was the leaked nature of the reports, which alleged breaches of federal statute and other administrative and professional breaches, some of a reputational nature. They are not the final word and for anyone to draw final conclusions from leaked material of that sort would be premature. But here are some initial lessons learned:
Lesson #1: Do not split requirements and game the system to fall below financial thresholds to avoid oversight and management approval. This is a Contracts 101 issue and everyone should be aware of it.
Lesson #2: Ensure checks and balances in the procurement process are established and maintained. Too much power, under the moniker of acquisition reform and “flexibility”, has given CIOs and PMs the authority to make decisions that require collaboration, checks, and internal oversight. In normative public sector acquisition environments the end-user does not get to select the contractor, the contract type, the funding sources, or the acquisition method involving fair and open competition–or a deviation from it. Nor having directed the procurement, to allow the same individual(s) to certify receipt and acceptance. Establishing checks and balances without undermining operational effectiveness requires a subtle hand, in which different specialists working within a matrix organization, with differing chains of command and responsibility, ensure that there is integrity in the process. All members of this team can participate in planning and collaboration for the organizations’ needs. It appears, though not completely proven, that some of these checks and balances did not exist. We do know from the inspections that Contracting Officer’s Representatives (CORs) and Contracting Officers’s Technical Representatives (COTRs) were not appointed for long-term contracts in many cases.
Lesson #3: Don’t pre-select a solution by a particular supplier. This is done by understanding the organization’s current and future needs and putting that expression in a set of salient characteristics, a performance work statement, or a statement of work. This document is authored to share with the marketplace though a formalized and documented process of discovery, such as a request for information (RFI).
Lesson #4: I am not certain if the reports indicate that a legal finding of the appropriate color of money is or is not a sufficient defense but they seem to. This can be a controversial topic within an organization and oftentimes yields differing opinions. Sometimes the situation can be corrected with the substitution of proper money for that fiscal year by higher authority. Some other examples of Anti-deficiency Act (ADA) violations can be found via this link, published by the Defense Comptroller. I’ve indicated from my own experience how, going from one activity to another as an uniformed Navy Officer, I had run into Comptrollers with different opinions of the appropriate color of money for particular types of supplies and services at the same financial thresholds. They can’t all have been correct. I guess I am fortunate that over 23 years–18 of them as a commissioned Supply Corps Officer* and five before that as an enlisted man–that I never ran into a ADA violation in any transaction in which I was involved. The organizations I was assigned to had checks and balances to ensure there was not a statutory violation which, I may add, is a federal crime. Thus, no one should be cavalierly making this assertion as if it were simply an administrative issue. But everyone in the chain is not responsible, unless misconduct or criminal behavior across that chain contributed to the violation. I don’t see it in these reports.Systemic causes require systemic solutions and education.
Note that all of these lessons learned are taught as basic required knowledge in acquisition classes and in regulation. I also note that, in the reports, there are facts of mitigation. It will be interesting to see what eventually comes out of this.