Report of the military research fellows DAU 2000-2001 - Defense Acquisition University - Brief Article

Program Manager, Nov-Dec, 2001

FROM CHAOS TO CLARITY: How CURRENT COST-BASED STRATEGIES ARE UNDERMINING THE DEPARTMENT OF DEFENSE

Authors

Lt. Col. Warren Anderson, USAF

Lt. Col. John McGuiness, USA

Cmdr. John Spicer, SC, USN

The latest Defense Acquisition University Military Research Fellows Report, From Chaos to Clarity: How Current Cost-Based Strategies are Undermining the Department of Defense, is now available in hard copy as well as online. Dated September 2001, the report details how DoD's cost-based initiatives fail to align with the Department's business strategy.

Historically, DoD has followed a generic strategy of differentiation, not cost leadership. The Department's beliefs, values, and mission are aligned to support this generic strategy Office of Management and Budget (OMB) Circular A-76 and related initiatives, with their focus on cost, are not well suited for an organization such as DoD, which competes on quality, not cost. This misalignment of strategy and outsourcing policy has generated a great deal of concern within DoD, especially among base and installation commanders who must implement A-76 and related measures.

The authors make the case that A-76 results, as measured by savings goals, have not generated anywhere near the results expected. Indeed, cost-driven outsourcing strategies, according to their report, are undermining DoD. The effort put into OMB Circular A-76 and related initiatives is great, yet the savings are at best marginal. Evidence is now emerging that these initiatives are degrading mission performance.

The intended audience is the DoD acquisition, technology and logistics workforce as well as policy makers.

The report may be downloaded from the DAU Web site at http://www.dawu.mil/pubs/misc/clarity.htm. Non-government personnel may purchase hard copies of DAU publications for a nominal charge by calling the Government Printing Office at (202) 512-1800; to fax a request, call (202) 512-2250. Government personnel may obtain single copies of DAU publications at no cost by writing or faxing a request, on official stationery, to the address shown below: