DAU hosts Third Annual Business Managers' Conference: issues affecting the DoD business and financial management workforce - BFM - Financial Management

Program Manager, Sept-Oct, 2002 by Joni Forman

The Third Annual Business Managers' Conference (BMC) was held at Fort Belvoir, Va., on June 12-13. The Conference brought together more than 300 senior DoD acquisition and comptroller executives as well as Program Executive Officer/Program Manager/Systems Command (PEO/PM/SYSCOM) Business Managers/Program Control Chiefs and Service Headquarters business staff for wide-ranging discussions of acquisition and financial topics. To encourage broader discussions, this year's invitations were extended to a limited number of industry managers. Conference attendees were provided with information on the latest acquisition, financial management, personnel, and legislative initiatives.

Included among the conference presentations were appearances by two Under Secretaries of Defense, who described recent developments in financial management and personnel management. Many of the speakers also addressed how DoD's new emphasis on evolutionary acquisition will affect such discrete fields as cost estimating, financial management, and logistics support.

Conference Welcome

Defense Acquisition University Provost Rich Reed welcomed the conferees and spoke on "DAU Today" He noted that DAU has undergone a significant transformation in the past few years. "It is important for you to know that we are trying to change as much as the atmosphere out there is changing," he said.

Particular changes he described included the recent emphasis on establishing Web-based Communities of Practice and the significant growth in development of Continuous Learning opportunities. This change in emphasis, he said, has resulted in a considerable expansion of Web-based training and a corresponding reduction of in-class training. The result is to reduce travel expenses and time away from the office and to allow more acquisition professionals to receive training. "The availability of training," Reed said, "is now much greater to you, the workforce."

Conference Keynote

Dr. Nancy Spruill, Director, Acquisition Resources and Analysis, set the stage for the conference. She thanked the audience for their participation and gave an overview of several key issues affecting the Business and Financial Management (BFM) workforce.

Increased Use of Evolutionary Acquisition/Spiral Development

Spruill noted that the Services are increasingly defining "block" procurements in their operational requirements documents and other acquisition plans.

Reducing Acquisition Documents

Under Secretary of Defense for Acquisition, Technology and Logistics (USD[AT&L]) E.C. "Pete" Aldridge and his Principal Deputy Mike Wynne, have both directed a reduction in the number and complexity of acquisition requirements in order to allow more flexibility and innovation.

Realistic Funding

Spruill commented that "Mr. Aldridge is committed to basing programs on more realistic cost estimates. This is vital to restoring our credibility with Congress." She observed that realistic funding "often means funding to the CAIG [Cost Accounting Improvement Group] estimate, but not always; Mr. Aldridge has the flexibility to take the most realistic estimate."

Nunn-McCurdy Breaches

For reporting to Congress, as of December 2001 six of the 74 programs had breaches of more than 25 percent. By law DoD had to make the following four certifications for each of these programs or funding would be cut off:

* The system is essential to national security

* No alternative that would provide equal or more military capability at less cost is available.

* Costs are under control.

* A management structure is in place that is adequate to control costs.

Spruill commented that of the four, she believed that the hardest to certify was the adequacy of the management structure. All six programs were examined in detail, including the program changes needed to give Aldridge the confidence he needed to certify the programs. But in making these certifications, he stressed that if any fell short, he would not hesitate to cancel.

Acquisition of Services

Almost as much money now is spent to acquire services as to acquire products, and there is concern by the Congress that adequate policies and practices are not in place. Spruill stated, "I will be leading a team that looks at the processes being established and advise Mr. Aldridge whether they meet the Congressional requirements."

Financial Management Modernization

The leaders of DoD's acquisition and financial management communities are supporting new Federal Accounting Standards Advisory Board (FASAB) requirements. One new requirement is that DoD must capture the full costs of all new and existing systems. Costs must be capitalized on a balance sheet and depreciation must be taken. Spruill said that there were several key principles. "We want to minimize the impact [of these changes] on warfighters and program managers. We want to keep changes as simple as possible. We want to avoid new data calls."

Financial Management

Under Secretary of Defense (Comptroller) Dr. Dov Zakheim discussed new developments in the Financial Management Modernization Program (FMMP); Ron Brooks, OUSD(C) [Office of the Under Secretary of Defense (Comptroller)] provided the details of DoD's FMMP initiative.