Crenshaw Consulting Associates
Business Advice with Integrity
I just published an OpEd piece in American Military News after looking at the FY 2019 DoD Budget again. I can’t believe we aren’t asking for more Tomahawk Land Attack Missiles. The Reason? We are going to build a new Land Attack Missile by 2028…..that’s around 10 years folks! Any bets on a 2028 delivery? Anyone? Bueller? Anyone? Anyway, I think the piece says it all, so I invite you to read it. Here’s the link to the article…..Closing the Tomahawk Line is Risky Business.
Here is an Op Ed piece that I did which appeared in The Hill this morning in support of the Trans Pacific Partnership (TPP) trade agreement. I welcome your comments.
I just finished reading this article concerning the Air Force waiting for things to break in their shore 
infrastructure instead of doing preventative maintenance. My first thought was, “I sure hope that doesn’t include nukes!!!” From what I can tell from the article, maybe yes, maybe no. So that has me a little worried. But there were several other things about that article that worried me.
First, it said that the Services only submitted about 80% of what they needed for facilities maintenance because they wanted to put priority on training and operations instead of maintaining their buildings. I believe the idea was to fix things as they fail. Who wants to be in a building that might “fail”? Not me. I’m puzzled as to why they wouldn’t ask for everything needed since the money for such things comes from different appropriations than training and operations. By the way, they got all that they asked for which leaves me wondering what would have happened if they asked for what they really needed.
Second, what makes them think there’s going to be any more money in the out-years to make things right? If we are deferring maintenance, then it stands to reason that it’s only going to cost more to fix next year. We already know that money is not going to be there. Personally, I’m not so sure about jumping on an elevator in an Air Force building knowing that it hasn’t been maintained and the threshold for them to do any maintenance on it is me getting stuck between floors. I’d also be careful about walking around on an AFB if I were you. You never know when something above might “fail.”
By the way, this is not just an Air Force problem. Here is a similar article about Navy facilities and infrastructure. Stunningly, it says that of the 13 barracks at NAS Oceana, 10 of them are rated substandard. What happened to taking care of our number one asset….our Sailors. And we only asked for 80% of the money to fix them??
Thirdly, one Commander in the article is worried that money for repair is so short, that even when things break there will not be enough money to fix them. Little wonder, since they only asked of 80% of what they needed. I suppose they are hoping for some sort of natural disaster so they can go in for supplemental funding to fix everything.
Once something happens, there will be a feeding frenzy at the supplemental trough to fix not only what was damaged by said disaster, but also stuff that was damaged by neglect. What a world!
Finally, it says that the Air Force is not planning on returning to “full spectrum readiness” (whatever that means) until 2023. That must mean they have a plan….but since when has any service been able to stick to a plan more than a couple of years???? Heck, in the Navy, we change the 30 Year Shipbuilding plan just about every year!
As for the using maintenance dollars to buy readiness, I thought that is what the Overseas Contingency money was supposed to do. Remember the almost $60 Billion in OCO for 2016? So even as a former practitioner of the mystical and black art of Defense budgeting, I just can’t figure out why we didn’t ask for all the money we needed to maintain our infrastructure in “war fighting condition.” 
After all, especially in the Air Force, their bases are where they fight wars from…It’s analogous to the Navy’s ships. I guess the old saying that the Air Force only builds runways after the O”Club, golf course, pool, commissary and exchange are built isn’t true anymore. I guess now is should be, “If it ain’t broke, don’t fix it. If its broke, good luck getting it fixed!”
I recall reading an article not long after the Berlin Wall fell which said the conditions in East German bases were puzzling. The barracks the soldiers were living in were barbaric…..but just across the street, the tanks, personnel carriers, trucks, artillery and lots of other weapons were sitting in pristine condition in air conditioned splendor. This is what happens when we value things over people. Hey, recruiting is at an all time high. We could probably stand a few people jumping ship anyway. Why not skimp on their facilities so that we can continue to pay for the cost overruns of the JSF and other out-of-control acquisition programs?
On the other hand, I suppose you could say that this problem is yet another symptom of the need for another round of BRAC. Good luck with that!
Oh, by the way, no facilities were damaged in the writing of this article.
What’s up with that kooky title? Well that’s how all your email coming from outside the “dot mil” domain appears to those inside…As if they are somehow more secure? I guess this is an attempt to highlight emails coming from us pogues outside the secure boundaries of DoD email and to alert those on the inside that there is danger in communicating outside the domain….
Personally, I would like all their outgoing email to be marked [DoD Source] so I can choose not to read some of the mountains of stuff that comes out from them…Like the DoD media reports that give us a detailed “Readout of SecDef meeting with the Dali Lama” and the like (See the News section of this web site). I don’t think I have ever finished one of those “Readouts”, because frankly, there’s nothing of substance in them. Does anyone outside the Pentagon really care?(and I’m pretty sure only a very select few inside do) That’s a candidate for [DoD Source] marking so I can avoid it. And yet, some GS-15 is probably making a lot of money producing them. There’s also the de rigueur morning DoD press reports of the wildly successful strikes against ISIL targets conducted by our forces overnight. Yet another candidate to be marked [DoD Source]. I guess I have just become overwhelmed by all the happy talk to the point that I just don’t have confidence that everything I read is really “true.”
Now hold on there you DoD buckaroos!!!!! I’m not saying that what you put out is not “True”, but I think we can all agree that words can be put together is a way that while they are true, they may not be “truthful.” I put on an occasional seminar on Ethical Decision Making and in that class I discuss some points concerning “truth.” 
Perhaps the most famous seeker of a definition of truth was Pontius Pilate when he asked, “What is truth?” He didn’t get an answer to his question then and the answer to his question has been debated for centuries. In my previous article , Sigh-ber, I touched upon the wisdom of always being completely truthful so I won’t jump into that morass again. But is always just telling happy truth, and ignoring some of the bad news, being completely truthful? I think not. I recall during one session on the Hill when I was asked if we had fully funded the ship maintenance requirement I replied, “Yes Sir. We have fully funded the ship maintenance line to 75% of the requirement!” True enough! Anyway, I digress.
I am somehow offended that DoD chooses to mark my email as [Non-DoD Source]. I suppose I should be grateful that they deign to open my “insecure” emails. Given the thousands of emails folks receive in the Pentagon, my guess is that they will all become desensitized to that phrase and will ignore it. But……if someone ever clicks on a [Non-DoD Source] email and causes some sort of bot or bug or worm or virus to be introduced into that bastion of security, the “dot mil” domain, the Cyber-police will descend upon them for ignoring the [Non DoD Source] warning. I am sure the cyber-Dons within DoD are correct when they believe that this sort of thing can’t happen from within the “dot mil” domain….But somehow I still see echos of Bradley Mannings, Ed Snowdens and a lot of others who had inside access, that could care less about [Non DoD Source], because they were a [DoD Source]!
PS. My N8 former self can help but wonder how much it cost to mark all non DoD email as [Non DoD Source].
It’s been a while since I opined on matters I know little about…so I thought I would continue that tradition by putting out a few thoughts about all things cyber. No doubt you have all heard about cyber-xxxxx until you are becoming immune to the cries of “Danger Will Robinson.”
And that is a real problem because cyber crime, cyber snooping, cyber intrusion, cyber war, and all manner of other things is perhaps the most significant challenge to the well-being of the good ole US of A in this century, IMHO. I’ve attended a series of meetings and had a couple of events in my personal life that have caused me to think a lot about this problem. But they way, I don’t claim ownership of any of these ideas. I have heard them in a variety of places from a variety of people. I just wrote them down in one place.
Nothing chafes me more than getting my credit card rejected, and then finding out that my credit card company has detected the unauthorized use of my card and I must get a new one. That’s when I realize just what a poor job I have done in protecting myself….I even have a spreadsheet now with all the web sites that I have to visit to update my credit card number. It has web addresses, user names, account numbers and passwords all laid out so I can spend about two hours on line changing them all…..Am I the only one with this problem??? I’ve started trying to put everything on line through PayPal, but who’s to say that won’t be hacked next?
Think about all the bad things that have happened due to cyber crime in the last year or so…..Target gets hacked, the Joint Staff email system is fried, the Pentagon Food Court is penetrated, the OPM debacle. 
BTW I just got my ( less than timely) letter last week from OPM informing me that all the information on my SF86’s was compromised….that’s efficiency for you!!! (No wonder they got hacked if the timeliness of their notification is any indication of their expertise) How long has it been since we all knew about the OPM fandango???? And yet…..no one has gone to jail on the criminal side and no one has been fired or disciplined ….for any of those things. And I’ve got to say that in the case of OPM, it seems to me the cure is worse than the disease….Let me get this straight…..I get free monitoring for a couple of years and all I have to do is enter in all the personal information they couldn’t keep secure anyway…They want me to enter driver’s license number, bank account numbers, credit card numbers….What kind of idiot do they think I am? They gooned it up once……and most likely will goon it up again…There’s no way I’m putting all that info into anything that has anything to do with OPM or the US Government, for that matter…( Isn’t the lowest bidder providing most of the government’s security packages?). They should just ask the Chinese or the Russians for my info, since they apparently already have it………but I digress.
As I have been thinking about cyber security and listening to the experts over the past few months, it has dawned on me that this is a problem like no other we have ever encountered. And that means it’s going to require some very innovative and unconventional thinking to fix it (and thus the perfect reason why DoD shouldn’t be in charge). Moreover, this problem is much too serious to be given to the techies to manage. This is far too important to keep in the IT closets of government and corporate America. Management and leadership must know this stuff cold and be intimately involved every day, in every way. Why do I say that? Here are a few unique aspects to the problem:
So there are just a few reasons why cyber-related problems are unlike any we have tackled before. No great revelations here and sadly no solutions. But I contend that to get to the solution, we must first understand the problem we are fixing. I don’t think we are anywhere near understanding the extent, nature or consequences of living in a world where everything is connected. To my way of thinking, we have too much of a good thing and that can be bad thing. I am reminded of a discussion I once had with a prospective bridegroom when I was a marriage mentor. We were talking about the special relationship between married couples….no secrets, everything open and above board…Then I remembered that sometimes openness and honesty may not always be the best policy when it comes to marriage….I made that mistake early on in our marriage…..I recall coming home just weeks into our wedded life and passing on the blueberry pie the lovely Mrs. Crenshaw has spent many hours preparing (after attending classes all day). “Just so you know, I don’t like blueberry pie,” I said. Some four-two years later I regret that moment of honesty every day!!!!!!!!!!
That WW II message was sent by Admiral Nimitz to Admiral Halsey in support of Admiral Thomas C. Kinkaid, Commander of landing forces seizing the island of Leyte in the Pacific. Admiral Halsey had fallen for the Japanesse ruse, diverting most of his carriers and battleships 
supporting the invasion to chase the Japanese decoy Northern Force, leaving Admiral Kincaid’s forces in the lurch. Famously, however, when the message was delivered to Halsey, the phrase “the world wonders” was added by mistake. Halsey took it to be an insult, creating bad blood between the two. There are some pretty funny accounts about “Bull” Halsey blowing his top when he read the message. Here is the actual message:
I just returned from the annual American Society of Military Comptrollers (ASMC) Professional Development Institute (PDI) in New Orleans. It was an outstanding opportunity to learn about the state of the art in the DoD budget and accounting. Well done to Executive Director Al Runnels and his staff!!! This year I reckon there was north of 2000 folks from throughout the DoD Financial Management profession….Army, Air Force, Office of the Secretary of Defense, Defense Agencies and even the US Coast Guard. Leadership and rank-and-file throughout DoD, from the Honorable Mike McCord, the Undersecretary of Defense (Comptroller) on down, gathered to consult, confer and otherwise hobnob with their fellow budget wizards. In fact, I dare say that most of the senior Financial Management leadership from the services and defense agencies was there. There was only one thing missing: the Navy.
Yep, that’s right. The Navy chose not to participate. Given that every other service, defense agency, and the OSD staff decided it was important to send their people, I can only assume that either the Navy thought that its people (personnel in DoD speak) didn’t need the training offered at the PDI or that despite the need for training, barring their attendance was the safer or smarter move. So the Navy and USMC financial managers sat on the sidelines while the remainder of their counterparts in DoD heard for Mr. McCord; the Honorable Jamie Morin, Director of CAPE; Mark Reger, the Deputy Comptroller of the United States and numerous other senior officials. They attended required FM certification training, attended workshops, participated in a whole day of service-specific training and conducted community service projects. In the interest of accuracy, there were a handful of Navy folks there, but only if they were actually presenting a workshop or receiving a national-level award.
Why did the Navy choose not to participate? Well, it is true that in recent years “conventions” and other large-scale events have come under scrutiny because of some very bad decisions made by some not-so-good leaders. But checks and balances were put into place to ensure legitimacy and need before approving such meetings. All organizations in DoD went through the same process of evaluation. The PDI was not given “blanket approval” by DoD and thus the leadership in each organization had to make the call on whether or not to send its people to this valuable training. Obviously, Navy leadership uniquely decided this PDI was not in accordance with applicable rules and regulations and thus elected not to send its people. Now those of you who are not familiar with the world of financial management might wonder why a PDI is needed. Here’s the scoop:
Most DoD financial managers are required to receive about 40 hours of continuing professional education annually. Those who have achieved the coveted Certified Defense Financial Manager (your humble author among them) are required to take 40 hours annually to retain their certification. In addition, the DoD recently introduced a financial certification program aimed at increasing the professionalism of the FM workforce. It’s a tiered program with each level requiring specific courses delivered by qualified personnel. Once a certain level of qualification is reached, there is a continuing education requirement similar to those above. The highly specialized training required for the various certification levels is offered at the PDI, along with a variety of accredited courses that count toward annual training requirement. I’m not quite sure how many hours it would be possible to knock out at the PDI, but it’s somewhere in the neighborhood of 20. That’s half the annual requirement!
To make sure people actually attend the training, they are individually scanned in and out of training sessions and only given credit if they attend the entire session. Each day begins at 07:00AM with breakfast and training sessions go on throughout the day until 4:40 PM. Believe me, that’s a long day and I have yet to figure out a way to “beat the system” so I have to sit through the classes all day to get credit. It’s not exactly a cake walk. You can be sure people are actually getting the training.
Enough of that. And now for the gorilla in the room: Yes, it’s in New Orleans, but there’s no escaping the fact that PDI attendees are sequestered (I just had to use that word) for a good nine hours a day….No zooming up and down Bourbon Street, no clowns wandering around, no $26 cupcakes…it’s all business during extended working hours. (This shouldn’t be surprising since it’s basically run by accountants, for accountants). By the way, what’s the difference between an introverted accountant and an extroverted accountant? The extroverted accountant looks at your shoes when he talks to you….Badda-Booom!
So I mentioned earlier that maybe the reason the Navy leaders chose not to send Navy and Marine Corps people to this training is that they don’t need it. Well, you would be wrong if you made that assumption. I attended a session where the current numbers of people certified by service was presented and the Navy was just a sliver in the pie chart while all other services were big, fat pie slices just like your grandmother would serve. So the Navy needs the training above all and they are obviously not getting it elsewhere. In fact, given the workload of Financial Managers these days, it is really hard to find the time to take on-line courses. Oh sure, there are on-line courses….and they are good for filling some portion of the requirement, but no matter what you say, nothing beats real-time, classroom training to allow for substantial interchange between students and instructors. Would you rather have your dentist fulfill his annual professional training staring at the PC at home while drinking a martini or attending a gathering of dental professionals with an opportunity to talk to pioneers of the latest in the dental art and exchange views and techniques with his/her peers? When he/she says “Good thing I saw how to put in this implant on You Tube”, how would you feel?? or how about this: “Oh yeah…..since you have to put in a 10 hour day at the office, just do that training in your spare time”……Right! Here’s an idea: Why not do your training the next time we furlough you? What’s the big deal? We have posted classroom material in all the heads…..do some training while you do your business!!! It’s all about being efficient!” Seriously folks, I do remember aircraft checklists being posted above the urinals and on the backs of the stall doors in the squadron head in order to make use of “spare time”!!!
I know I don’t have the right to criticize and I apparently don’t have all the facts, so I recommend the reader of this tome (It’s longer than I wanted) consider these thoughts to be from an unqualified, uninformed source. And if you were the decision maker, please don’t get all spun up. The decision was yours to make and I respect your decision. I just hope your staff did you the courtesy of making sure you had all the facts before you decided. (You only know what they want you to know.) I am confident that the Navy leadership can give you a much better reason for why they stayed away. That not withstanding, I hope the Navy decides to participate next year so they can be a part of the team. I know I was embarrassed that so few from my beloved Navy were there. And just because the rest of the Services, OSD, Coast Guard, and Defense Agencies took just a little risk and sent their people to PDI, doesn’t mean the Navy had to send its people to PDI(sigh, I can see my Mother saying that right now). Maybe they didn’t have the money to send their people (even though everyone else did). Maybe it wasn’t that important. Maybe there was another budget drill going on. Maybe they elected to spend the money on local training for the hundreds (if not thousands) of Navy FMers around the world. I just don’t know. But this I do know: when next year’s PDI rolls around I sure hope we don’t have to again ask, “Where is TASK FORCE THIRTY FOUR the FM world wonders?”
So I guess you have to be an old guy like me to remember Keith Jackson, long-time ABC Sportscaster, shouting “Whoa Nellie”
but that’s what came to mind as I read the latest on the US Marine Corps audit saga. Apparently GAO has forced the DoD Inspector General to retract the Marine Corp’s clean audit opinion because of problems in the suspense accounts. Here’s a link to an article in Defense News with the details. I have opined on DoD audits on several occasions….first shouting with joy at the accomplishment, then wondering if it really mattered and finally pointing a limp finger towards the Defense Finance and Accounting Service for using “plugs” to fix differences with the Treasury.
So for the record……I told you so! It’s hard for me to believe that the underlying problem has existed for so long without apparent remedy. Here’s a link to a 2005 GAO Report in which GAO finds:
Until DOD complies with existing laws and enforces its own guidance for reconciling, reporting, and resolving amounts in suspense and check differences on a regular basis, the buildup of current balances will likely continue, the department’s appropriation accounts will remain unreliable, and another costly write-off process may eventually be required.
That was almost 10 years ago folks! This has been a continuing report topic for the GAO with various status updates being published throughout the years. Here’s an excerpt from the Summary of a more recent GAO report from December 2011:
Neither the Navy nor the Marine Corps have implemented effective processes for reconciling their FBWT[Funds Balance With Treasury].
Huh? Navy and Marine Corps have been preparing for audit for years and yet it doesn’t appear that they were able to make any progress in fixing a problem identified by GAO way back in 2005 as a key impediment to a clean audit opinion.
So what are the “Suspense Accounts” that are causing such a problem? Technically GAO defines them as “Combined receipt and expenditure accounts established to temporarily hold funds that are later refunded or paid into another government fund when an administrative or final determination as to the proper disposition is made. “ Translation: The place where a transaction is put when the documentation is incomplete so that it can not be assigned to a specific appropriation before it’s written off. To get an idea of scale, in 2005 GAO reports it was an absolute value of $35 Billion. Who knows what it is now? But I point out that it’s just about the amount of the DoD Sequestration hit. Perhaps if they fixed this problem, sequestration wouldn’t have such a bad effect? It seems to be to be awfully hard to go the the Hill and say that $35 Billion in spending cuts would kill the Department, when they are not exactly sure about $35 Billion already sitting around. Those on the defensive will say that the differences are eventually reconciled, but I am skeptical…and since they are already written off, does it really matter? My guess is the money goes straight into the US Treasury Black Hole that all checks drafted to the US Treasury go…you know…that big ever increasing dense ball of greenbacks sitting in the Treasury Department basement.
This problem is precisely why DoD needs to get on with the audit….so they can be sure they know where the money is and provide accurate estimates of the impact of budget cuts. If my kids came to me and said” We need more allowance”, and when asked what did they did with allowance I already gave them they reply, “We don’t know, but we need more!”, I would be highly skeptical of their requirement.
As it stands now, the Army, Navy, Air Force and Marines will spend around $45 Million this year for audits they already know will fail because of the DFAS Suspense Account issues. Why not spend the money to fix that problem before plodding ahead for a pre-ordained result? To be sure it’s a tough problem…after all we have her unable to fix it for 10 years.
Who’s to blame, you ask? Well, there’s enough to go around….DFAS for not fixing it, but also the Services for not taking actions to fix the paperwork before it gets to DFAS. Ultimately, the fault probably rests on the shoulders of all those folks in DoD who improperly enter information at the command level. I would also guess that given the kludge of IT systems required to record transactions, that errors are also introduced between systems, hand-jammed data is incorrectly transferred, and by improperly trained people entering data. This is what is referred to as a “Wicked Problem,” in management parlance. A “Wicked Problem” is defined as ” a problem that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize. The use of term “wicked” here has come to denote resistance to resolution, rather than evil. Moreover, because of complexity, the effort to solve one aspect of a wicked problem may reveal or create other problems. For more info on “Wicked Problems” you can download the original paper written by C. West Churchman for $30 here.
Is the problem of unresolved transactions so complex that it defies correction? Perhaps given the current architecture within DoD it is, and that alone is reason for the new DCMO to tackle it. A fresh look is needed and the DCMO might be just the person to do it. Right now DoD has an acting DCMO, and given the current political environment, I am not too sure the current nominee, Peter Levine will get confirmed….But for now Mr. Dave Tillotson has the dot. Can someone in an “acting” position draw enough water to tackle this problem? Don’t know, but why not give it a whirl. If and when Mr. Levine gets in the chair, it would be a great legacy to fix this problem once and for all. Given his reputation, I have no doubt that he could fix it.
I have written about the Navy’s Littoral Combat Ship kerfuffle before. The recent “non-decision” by outgoing SECDEF Hagel concerning the fate of the LCS fleet has prompted me to write again on the subject. For those you you who haven’t followed this “crisis of our own making,” my previous musing, Rethinking LCS, provides some background which I will not repeat here. But I know it’s a hassle to click on the link, so here’s the Cliff Notes version:
I found these slides in an article by the US Naval Institute and they are attributed to the US Navy, however I couldn’t find them on the Navy website.
So that brings us to the big pre-made decision by SECDEF, after consulting, conferring and otherwise hobnobbing with the Pentagon cognoscenti. (Who are the cognoscenti you ask? Read SECDEF’s statement and find out.) And the decision was:
……stay with two LCS designs, bump them up a bit (maybe $53 or $61 Mil or so) and move on. I think the only one surprised by the answer may have been SECDEF himself! Otherwise, why bother? I shudder to think about the amount of money and time spent on this study which had only one answer. I haven’t seen the actual study, but from what I’ve read about it, no stone was left unturned (apparently 192 stones to be exact). Option after option considered, analyzed, pondered, etc……..by those who already knew there was only one answer……we can’t afford anything else, nor can we afford the time required to start the acquisition process all over again. The answer was pre-decided. My guess is most of the changes announced would have been made anyway.
These pre-decided decisions are common in the Pentagon, but all too often staffs are forced to do the kabuki dance
to give an air of legitimacy to them. Those in disagreement get to say their peace and then dismissed as “having an input”, even though no one was really listening. I recall this vividly while working on budget end-game around the 2006 timeframe. The Service programmers (three star resource folks) would be herded down to OSD about an hour before SECDEF was to receive a decision briefing on an issue, shown the slides prepared for him and then dismissed. I barely had enough time to run back to the Vice Chief to brief him on what I had seen, let alone provide him with any analysis of what OSD had pre-decided. Of course, if the Vice Chief were to raise an objection during the SECDEF briefing, the OSD Poobahs would announce,” Your folks have seen this and nothing was said.”
The point of this little tirade is that we waste money on these types of exercises all the time. I think about all the good we could have done for our wounded warriors with the money we wasted on this study. I think about all the time consumed by some very smart people who could have been working on something really important…how to deal with sequestration, how to keep the technological edge, how to fix our broken nuclear infrastructure…and any number of other problems.
Why does the Pentagon continue to do this? I suggest it’s because they have an endless supply of people and money. No one pays for people, they just have them. No one has to justify the cost of doing such a study because cost is not an issue. If I had done that in my civilian P&L life, I would have been shown the door. I had to spend my money and time on things that mattered and contributed to the bottom line. Since there’s no bottom line at DoD, everything tends to become equally important. Once on the Joint Staff I remember a staff briefing one day when the two topics discussed were the reduction of the nuclear arsenal by 50% and the Joint Staff savings bond campaign. We spent the same amount of time on each…in the end it was decided we should brief the Deputy Director daily on the savings bond campaign and as needed for the nuclear issue.
I think we need a study on studies.
Only in the DoD acquisition world would this sound like a good deal! But before we cast too many arrows at the acquisition community, I must admit the idea is mine. I developed this idea over the course of years of working in the Bizarro World of DoD ship financing. You remember Bizarro? 
It’s the world where everything is backwards….the name of the bizarro world planet is Htrae (so clever!) and the world is square. As I recall, it was featured occasionally in Superman comics in the 1960’s. One of the mottos in Bizarro World was ” Us do opposite of all earthly things.” Bizarro bonds were a hot item on Htrae because they were “guaranteed to lose money.” So I don’t think it’s a huge stretch to make the analogy here.
As I learned during my time as Chief Resources and Requirements Officer for the Navy, the normal things you learned about economics don’t necessarily hold true when it comes to buying ships. My initial experience was during my first year on the job. We were working on balancing the budget and were about $400 Million off. The staff proposed that we slide the purchase of a ship we were buying for the Army called the LMSR (contrary to popular belief, the Army moves primarily by sea, not air). The price tag was about $400 Million and the staff had determined that we could stand to slide it a year. “Sounds good to me!” I answered, happy at the prospect of putting a bow on the $130 Billion Navy budget and delivering it to OSD just in time for Thanksgiving. By the way, that’s how you make sure that you don’t get rejected right away…..Submit something just prior to a big holiday so no one is around to grade your work. This rule works in a variety of scenarios:
Anyway, I’m sure you have your own sea story that would make mine look minor. But back to the LMSR caper……
A few days after the decision was made, the staff came back and noted that since we slid the ship a year, it’s going to cost more…..I don’t remember how much, but it was around $100 Million or so. “Really?” I commented. ‘Oh, yes,” came the reply, ” money will cost more the next year, we have shipyard loading issues that we will have to pay for, the cost of steel is going up, blah, blah blah.” So I began to understand that the economics of shipbuilding were different. I formulated The Shipbuilding Entropy Rule: “Nothing ever costs less. NO matter what you do, it will always cost more.” You buy less, they cost more. You cancel the buy, you still have to pay the overhead. You remove capability, it costs more to redo drawings. Its all very counter-intuitive. This became very clear to me during the following year’s budget build when the staff came back and said “We made a mistake. We have to move the LMSR back to the original purchase year.” “Fine,” I replied, “No harm, no foul.” Sensing it wasn’t “Fine“, based on the furtive glances between the staffers (an admiral sees a lot of those looks in the Pentagon) I asked “What’s wrong?” Turns out, if we moved the ship back into the original purchase year, it added another $100 Million to the cost! Whadakknow? We essentially did nothing and paid $200 Million not to do it! That, my friends, is Bizarro accounting!
Anyway I could go on and on about this, but I want to get to the reason I chose the title of this article, One for the Price of Three.
The DDG-1000 (AKA CG(X), Arsenal Ship, Zumwalt Destroyer, DD21, DD(X), etc) was originally intended to have a buy of around 32 ships or so. 
They became so expensive and the requirements bounced around so much, we began advertising it as a fire support ship vital to the survival of the Marines during amphibious assaults. As such, we only needed about 10-12, just enough to support the number of amphibious ready groups (ARGS) we had at the time. The Marines were happy about that, even though they preferred to have 2 per ARG. I even went over to the Hill with my Marine counterpart extolling the virtues of the DDG-21 as the perfect fire support ship for the Marines. But once the Marines realized that the cost of the ship was so high that it would probably limit the amount of other stuff they could buy, they dropped it like a hot potato…..they would much rather have the 360 V-22’s than 24 DD(X)’s. So in the space of about a month we changed our tune from”vital” to “not so vital.” Now that they are $3 Billion a copy, we are only building 3 of them and I’m not sure there’s a real requirement out there. As my Grandmother said when she got her first taste of champagne in one of those dinky champagne flutes at my son’s baptism, “That’s not enough to wet my whistle.” So it is with DDG-1000 IMHO. The real requirement as far as I can tell is to have something for Bath Iron Works to build ( they will build all three) so they can stay in business in order to address industrial base concerns. Hence the title of the article.
I propose instead of spending $9 Billion for 3 ships we don’t need, why not pay the shipyard to build it, take it apart and then build it again? It keeps them busy. The Navy doesn’t have to shoulder the Operations and Maintenance costs necessary to support a ship class of 3 ships, and we don’t have rustle up the personnel and training facilities which must be specially developed on this one-of-a-kind weapons systems. Heck, we will save money by doing that! Of course, this idea only works on Bizarro World.
That, by the way, is how Bizarro JosBanks works too. You pick out one suit and pay for three!
What a world, what a world!
There has been a lot of static on the net lately concerning acquisition reform. Two notable recent arrivals on the scene have been all the buzz around the Beltway: First, the release of Better Buying Power (BBP) 3.0, Under Secretary of Defense (AT&L) Frank Kendall’s reincarnation of BBP 1.0 (originally issued by Ash Carter when AT&L, and later BBP 2.0 by Mr.Kendall). 
Second was the publishing of a report by the Senate Permanent Subcommittee on Investigations, Chaired by Senator Levin, with Senator McCain as the Ranking Member. The report, entitled “Defense Acquisition Reform: Where Do We Go From Here?, is a collection of essays by 30 experts in the Defense acquisition world about how to improve or reform defense acquisition of things (and to a small degree, services).
One of the things I like most about the concept of the Better Buying Series is the iterative process in improving its focus. After letting BBP 1.0 run for a while, corrections were needed as the result of some unintended consequences (like an irrational focus on lowest price, technically acceptable contracts) and need for clarification of some of the elements. BBP 2.0 did just that, directing that more care must be given in defining what is “technically acceptable” for example. Now, BBP 3.0 has come out to further tweak the elements of BBP. A couple of previous elements were eliminated because they were considered complete:
There were some carry overs as well, mostly with refined language. I won’t list them all here, but the ones that I think represent the most significant change are:
Here’s a link to the BBP 3.0 overview. All in all I think it represents a good step forward in the BBP series and will certainly help in trying to understand all the things going on in the world of acquisition reform……..BUT,
Many of the themes that emerged in the second recent arrival, the Senate study (Complete study can be found here) were not really addressed in the BBP 3.0 document. To be fair, the report had yet to be released prior to putting BBP 3.0 on the street, but I would have hoped for more overlap.
The Senate report pulled out four overarching themes from the musings of the 30 experts contributing to the report:
The report also makes two observations which I will quote here:
“First, among all those factors that have been identified as contributing to dysfunction in the defense acquisition system, cultural change is among both the most important and the least amenable to legislation and policy changes. It is, rather, a function of leadership throughout the chain-of-command and an incentive structure that threads through both the government contracting and acquisition workforce and industry that assigns a premium to cost-control and the timely delivery of needed capability.
Second, continued “sequestration” of the DOD’s budgets will undermine any savings that could be achieved through even the most successful acquisition reform.”
Well, to me that says, 1. It’s more of a DoD problem than a legislative problem and 2. sequestration will nullify ( or at least severely impact) all acquisition reform efforts. The last thing we need is even more regulation in the acquisition process. I would offer that in my opinion sequestration is not necessarily the enemy here. I still think we have too much waste in DoD, too many pork barrel projects, too many pet projects and too many cooks in the kitchen. What is the enemy is the uncertainty in the budget process over the last several years….Continuing Resolutions, multiple budgets, Overseas Contingency Funds abuse and a foolish focus on equity in Service budgets have all undermined our ability to reform how we buy things. In the end, it is a indeed a legislative problem….The failure to pass budgets on time, regardless of the funding levels. Life would be so much easier and efficient in DoD acquisition with regular and predictable budgets, passed in a timely fashion and accurately executed.
One final observation: I would like to see the Senate produce a similar document on acquisition reform, but using 30 PRACTITIONERS of acquisition at the grass roots level: Project Managers, PEOs, and Contracting Officers. A view from the top is always useful, but without a view from the bottom we will never really fix what is wrong with acquisition culture. They are the ones that make up the culture, not the poobahs at the top. A little more focus on them would be helpful…I’m not sure that after a contacting officer reads BBP 3.0 they will do anything different.
