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<p align="center" class="style17">Table of Contents<br>
25th International Workshop - Rome '08</p>
<p align="center" class="style17">
<a href="/2008book/weissinger-preface.html">Preface- Dr. Roger<br>Weissinger-Baylon<br>Workshop Chairman<br></a>
<a href="/2008book/weissinger-overview.html">Workshop Chairman's Overview - Dr. Roger Weissinger-Baylon</a>
<a href="/2008book/joulwan.html">Opening Dinner Debate - <br>General George Joulwan<br>Former SACEUR</a>
<p>
<p align="center" class="style17">Part One<p>
<p align="center" class="style17">
<a href="/2008book/la-russa.html">Italian Defense Minister<br />
Ignazio La Russa
</a>
<a href="/2008book/browne.html">British Defense Minister<br />
The Rt Hon Des Browne
</a>
<a href="/2008book/gonul.html">Turkish Defense Minister<br />
Vecdi G�n�l
</a>
<a href="/2008book/di-paola.html">NATO Military Committee Chairman<br />
Admiral Giampaolo Di Paola
</a>
<a href="/2008book/zappata.html">Admiral Luciano Zappata<br />
Dep Supreme Allied
Commander Transformation
</a>
<a href="/2008book/camporini.html">Italian Chief of Defense<br />
General Vincenzo Camporini
</a>
<a href="/2008book/zappa.html">Alenia Aeronautica Chairman<br />
Dr. Giorgio Zappa
</a>
<br>Part Two<br>
<p align="center" class="style17">
<a href="/2008book/baramidze.html">Georgian Vice Prime Minister<br />
Giorgi Baramidze
</a>
<a href="/2008book/chizhov.html">Russian Amb to EU<br />
Vladimir Chizhov
</a>
<br>Part Three<br>
<p align="center" class="style17">
<a href="/2008book/eldon.html">British Amb to NATO<br />
Stewart Eldon
</a>
<a href="/2008book/akram.html">Pakistan's Amb to U.N.<br />
Munir Akram
</a>
<a href="/2008book/de-la-sabliere.html">French Amb to Italy<br />
Jean-Marc de la Sabli�re
</a>
<a href="/2008book/tkeshelashvili.html">Georgian Foreign Minister<br />
Eka Tkeshelashvili
</a>
<a href="/2008book/stefanini.html">Italian Amb to NATO<br />
Stefano Stefanini
</a>
<a href="/2008book/buzhinsky.html">Lt Gen Evgeniy Buzhinsky<br />
Russian Min of Defense
</a>
<a href="/2008book/winid.html">Polish Amb to NATO<br />
Boguslaw Winid
</a>
<br>Part Four<br>
<p align="center" class="style17">
<a href="/2008book/tegnelia.html">DTRA Director<br />
Dr. James Tegnelia
</a>
<a href="/2008book/rood.html">U.S. Under Sec of State<br />
John Rood
</a>
<a href="/2008book/joseph.html">Former Under Sec of State<br />
Amb Robert Joseph</a>
<a href="/2008book/berdennikov.html">Russian Amb-at-large<br />
Grigory V. Berdennikov
</a>
<a href="/2008book/benkert.html">U.S. Asst Sec of Defense<br />
Joseph Benkert
</a>
<a href="/2008book/flory.html">NATO Asst Sec Gen<br />
Peter Flory
</a>
<a href="/2008book/sedivy.html">NATO Asst Sec Gen<br />
Jiri Sedivy
</a>
<a href="/2008book/pfirter.html">OPCW Dir Gen<br />
Amb Rogelio Pfirter
</a>
<br>Part Five<br>
<p align="center" class="style17">
<a href="/2008book/lather.html">SHAPE Chief of Staff<br />
General Karl-Heinz Lather
</a>
<a href="/2008book/fitzgerald.html">Admiral Mark. P. Fitzgerald
<br />
Allied Joint Force Command Naples
</a>
<a href="/2008book/ildem.html">Turkish Amb to NATO<br />
Tacan Ildem
</a>
<a href="/2008book/schuwirth.html">Fmr SHAPE Chief of Staff<br />
General Rainer Schuwirth
</a>
<a href="/2008book/acosta.html">Global Impact CEO<br />
Ms. Renee Acosta
</a>
<a href="/2008book/soligan.html">Lt Gen James Soligan<br />
Allied Command-Transformation
</a>
<a href="/2008book/bagnall.html">Former UK Vice Chief of Defense Staff<br />
ACM Sir Anthony Bagnall
</a>
<br>Part Six
<p align="center" class="style17">
<a href="/2008book/volkman.html">U.S. Dir of Internat. Coop.<br />
Alfred Volkman
</a>
<a href="/2008book/tozzi.html">Major General Claudio Tozzi<br />
Italian Defense Ministry
</a>
<a href="/2008book/homberg.html">EADS Senior Vice Pres<br />
Thomas Homberg
</a>
<a href="/2008book/shephard.html">Northrop Grumman VP<br />
Mr. Timothy Shephard
</a>
<a href="/2008book/buckley.html">Thales Senior VP<br />
Dr. Edgar Buckley
</a>
<a href="/2008book/harris.html">Lockheed Martin Global Pres.<br />
Dr. Scott A. Harris
</a>
<a href="/2008book/schneider.html">AFCEA CEO<br />
Kent Schneider
</a>
<a href="/2008book/patterson.html">Mr. David Patterson<br />
Univ of Tennessee
</a>
<p align="center" class="style17">Part Seven
<p align="center" class="style17" style="margin-bottom: 0;">
<a href="/2008book/grimes.html">U.S. Asst Sec of Def<br />
Hon. John G. Grimes
</a>
<a href="/2008book/lentz.html">U.S. Dep Asst Sec of Def<br />
Robert Lentz
</a>
<a href="/2008book/aaviksoo.html">Estonian Defense Minister<br />
Jaak Aaviksoo
</a>
<a href="/2008book/bloechl.html">Microsoft, Managing Dir.<br />
Tim Bloechl
</a>
<a href="/2008book/wolf.html">Lt Gen Ulrich Wolf<br />
NATO CIS Service Agency Dir
</a>
<a href="/2008book/monteforte.html">Italian Milrep to NATO<br />
Vice Adm Ferdinando Sanfelice di Monteforte
</a>
<a href="/2008book/lintonen.html">Finnish Amb to UN<br />
Kirsti Lintonen
</a>
<a href="/2008book/silvestri.html">Dr. Stefano Silvestri<br />
Istituto Affari Internazionali
</a>
<a href="/2008book/yousfi.html">Algerian Amb to UN<br />
Youcef Yousfi
</a>
<a href="/2008book/karem.html">Egyptian Amb to EU<br />
Mahmoud Karem
</a>
<a href="/2008book/tarasyuk.html">Former Ukrainian Foreign Minister<br />
Borys Tarasyuk
</a>
</div>
</div>
<div id="content">
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<h2 class="workshop_year">Rome '08 Workshop</h2>
<!-- InstanceBeginEditable name="Main Content" -->
<h1>
Rethinking our Acquisition Policies </h1>
<h2 style="margin-bottom: 0;">
Mr. David Patterson</h2>
<h2 style="margin-top: 0; margin-bottom: 0;">University of Tennessee<B> </B></h2>
<h2 style="margin-top: 0; margin-bottom: 0;"><img src="images/patterson.png" alt="Mr. David Patterson" width="110" height="110"></h2>
<h2 style="margin-top: 0;">THE RESOURCE CRUNCH </h2>
<p>
I offer several points for your consideration. First, despite whatever
the European security community believes about the willingness and appetite
of the United States to continue to fund at the level it has been funding,
I would suggest to you that it is not true. Despite the fact that we have
enjoyed a fairly robust budget from the beginning of the 21<SUP>st</SUP> century until
now, I submit that those times are over. Though the US has a base budget
of $512.5 billion and with an investment in procurement and research and
development of over $180 billion, we have remained somewhat stagnant at
between 3.7% and 3.9% of the gross domestic product, which is the lowest
since World War II. </p>
<p>
Let me also explain that the reason you will see a resource crunch is because
the focus of future years’ budgets will not be on new starts but on reconstitution,
repair, and replacement of existing equipment. Some dollars will be spent
on recapitalization, but I leave it to your imagination to determine the
definition of recapitalization. The word has a variety of definitions within
the Pentagon, none of which are common, but I believe major program new
starts will be few and far between. </p>
<p>
So what is the challenge? The challenge is for industry to gather with
government, which incidentally is the only major global enterprise relationship
that has a monopoly selling to a monopsony. Unfortunately, what we have
today with regard to that relationship—and this may sound unfair, but I
am not so sure it is not true—is that government looks at industry and
says, “I need it faster, cheaper, better.” Then industry says to government,
“Outstanding! We can make it faster, cheaper, better, no matter how much
it costs or how long it takes.” And government replies, “Hot dog (or bratwurst)!
Where do we sign?” This approach to the acquisition relationship must stop. </p>
<h2>DECLINING COMPETENCE </h2>
<p>
Another very difficult problem we have is that we have declining competence
and a declining skill set within our acquisition workforce. This started
during the 1990s, when we decided we were going to get rid of our “shoppers”
and managed to get rid of our system engineers and cost estimators at the
same time, which caused us untold problems. I do not think this is a problem
that is unique to the United States or uncommon within the European community.
</p>
<p>
One of the consequences of not having a correctly sized, skilled workforce
is that you cannot give them the flexibility to do contracting and source
selection in the way we did in the past. I offer the fact that the Government
Accountability Office (GAO) has sustained protests on programs that would
not have been protested in the past and that, more tragically, we do not
have the capability, not only in the Air Force but also in the Army to
create a protest-proof solicitation. The Army lost the ACS because they
cancelled it after about $900 million was spent. The contract for interpreters
in Iraq continues to be in protest. Apparently, we do not have the competence
to run a competition that is not protested and the protests sustained.
What I submit to you is that it is fundamental to the experience levels
of our people. In light of that, I submit that we need to replace the 54-page
set of instructions with a rule set that establishes very clear and unambiguous
direction, for example, when you enter systems development and demonstration,
there are no more requirements allowed. The opportunity to provide the
next greatest thing will not be allowed, unless those requesting the insertion
of a new requirement can guarantee that there will be a four-to-one payback
in savings and that the schedule will not be impacted. </p>
<h2>BUILDING AND FUNDING NEEDS </h2>
<p>
Here is another rule for your consideration: The contractor will build
what he bid and there will not be any more opportunities, while the ink
is drying on the contract, for the folks from government to come in and
say, “Oh, boy, I know what we asked for but what we really want is….” That
should stop. Everything should be done within a time-defined period. I
do not think that an airplane should take longer than five years—the F15
did not, the F16 did not, and the F15 came from a clean sheet of paper,
not from a prototype competition. </p>
<p>
We also need to insist on a stable budget, and we have recommended this
as an initiative in what we refer to as capital funding. If you tell us
how long it is going to take, we will guarantee that within that time frame
we will fund you at the appropriate level. But do not fail! Your program
will be reviewed by Congress twice a year, and, if three reviews in a row
are red, your program is cancelled. Those kinds of rule sets, I believe,
will be helpful in establishing programs that actually field weapons in
a timely fashion. </p>
<h2>COOPERATION, COLLABORATION, AND COMPETITION </h2>
<p>
Last, as a policy matter, I think that the United States government needs
to understand the difference between cooperation, collaboration, and competition,
and I offer some definitions. First of all, cooperation entails seeking
to meet the government customer’s objectives in a relatively collegial
manner while still striving to achieve company objectives and enhance shareholder
value. Collaboration, on the other hand, is best characterized as teaming
with other companies or the government customer, often suborning the company’s
objectives to some commonly held goal. And competition is mobilizing all
of the company’s resources to win a contract—it is clearly distinct from
cooperation and collaboration. The government customer and the company
do not sit down as partners. </p>
<p>
I do not know how many times I have run up against folks in government
who honestly believe that they are in a collaborative partnership, and
how many times I’ve heard the word “partnership” while at the same time
hearing, “Oh, by the way, we want the industry to suborn any profit motive
in favor of the government’s objectives.” That is just plain silly. Industry
is in business to make a profit. Industry does what government asks it
to do contractually and to suggest anything else is naive. </p>
<h2>RETHINKING OFFSETS </h2>
<p>
As a policy matter, and this is personal bias here, one of the things I
have noted is that in the world of offsets and industrial participation
often puts US industry at a competitive disadvantage. The United States
Department of Defense has a Presidential executive order that proscribes
it from encouraging our industries from seeking offsets as a condition
of sale for other governments. Now, what is the consequence of that? Well,
over the last 14 years, we have had a perpetual 71.2% disadvantage in offsets.
In 2003, it was 124%. Over the last 14 years, we sold roughly $80 billion
worth of goods and had to buy $60 billion dollars worth of goods in order
to do that. I think we need to rethink that position. It may be appropriate
in some cases, but it is not appropriate in every case. A system of reciprocity
seems a better solution for the US aerospace and defense industry, if it
is to compete successfully on a global scale. So I think that as a matter
of policy we do need to rethink that position. </p>
<p>
I offer these thoughts for your consideration, and I am grateful for this
opportunity to be part of these discussions. </p>
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