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DTCS ELECTE,wOCT 19 1W 3 September-October 1990

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Journal of the Defense Systems Management Clege

Whenever in this publication'man," "men," or their related pro-nouns appear, either as words orparts of words (other than with ob-vious reference to named male in-dividuals), they have been used forliterary purposes and are meant intheir generic sense.

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Program Manager is intended to be a vehicle for the transmission of information on policies, trends, events, and current thinking affecting program manage-ment and defense systems acquisition.

Statements of fact or opinion appearing in Program Manager are solely those of the authors and are not necessarily endorsed by the Department of Defense orthe Defense Systems Management College. Unless copyrighted, articles may be reprinted. When reprinting, please credit the author and Program Manager. andforward two copies of the reprinted material to the Director of Publications.

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ACQUJISITIONIMPROVEMENT

UPDATEn the last issue of Program ingness to be held accountable for may be "macho" to be a "can do" per-Manager, I wrote of stability, someone else's performance without son, but when that attitude clouds

accountability and trust as fun- being directly involved in that perfor- good judgment, a question of integ-damental requirements if we are to mance. I believe the key is trust. rity arises. This is particularly truemake significant improvement in our Trust is fragile. It is difficult to when the problems will come to roostacquisition process. In this issue, I achieve but easy to lose. on someone else's watch. In my opi-want to focus on micromanagement The key question is: How do you nion, honesty is absolute-not in-and integrity, develop the requisite trust to be will- cremental. Withholding essential in-

Perhaps the one word I've heard ing to be held accountable for some- formation is as dishonest as pro-

most frequently since coming to the one else's actions and decisions? I viding false information.

Pentagon is "micromanagement." It believe the fundamental requirement I believe P. M. Smith, Majoris used, almost exclusively, in a pe- for trust is integrity. General, USAF (Ret.), captured thejorative sense, I've heard it applied to Important examples of integrity concept of integrity well when heeveryone associated with the acquisi- are: said:tion process up to and including the Let me make some generaliza-Congress. I have concluded that -Deliver on Your Commitments tions about integrity in largemicromanagement is perceived to The corollary is: Don't commit organizations. First of all, thereapply to anyone in the chain who can to what you can't deliver. If it is a are lots of temptations. Thereinfluence one's program or job. "stretch" commitment, clearly spell are temptations to fudge the

out the risks and have a plan to figures to withhold a little bit ofWhile micromanagement is con- mitigate the risks and a back-up plan information, to tell 95 percent

sidered a negative, responsibility and if risks develop into problems. of the story instead of the fullauthority are considered positives. -Avoid Suprises story, to try to make your bossMost people seem convinced that if look good, to try to make yourthey were delegated the authority and The key is open and full com- organization look good, to beatprovided the resources to do their munication. Even with best-laid plans out somebody else who's play-jobs and then left alone, they would and brilliant execution, problems ing dirty pool. It's particularlybe more than happy to be held ac- develop. Few, if any, problems are important to be honest in mili-countable for the results-and the "born full grown." The first choice is tary organizations because trustworld would be beautiful, to anticipate and avoid them. The in combat is so essential. Trust

I couldn't agree more. second choice is to recognize prob- in combat is so essential thatlems early when they can still re- military institutions must gen-

There is a small hitch, however. spond to treatment and management. erate a mentality of trust andLike it or not, there is a difference The third and unacceptable choice is honesty in peacetime.between delegation and abdication. to hide problems, hoping they can beNo manager can claim immunity solved internally or that they will go Developing the trust required tofrom being held accountable for poor away or that they won't surface on eliminate micromanagement may beperformance in his organization your watch. "Problems seldom im- a catch-22. I don't think so, but trustbecause he has delegated responsi- prove with age." Management's certainly will not develop unless webility. The funny thing about ac- responsibility is to be receptive and are all dedicated to making it happen.countability is that it cannot be balanced in their response to prob- I submit our obligation to ourshared-nor is it divisible. It cannot lems. You can't shoot the messenger customers (the men and women inbe delegated. Everyone in the chain and expect to get messages. uniform) and our stockholders (theis personally accountable for results -Be Honest-First with Yourself taxpayers) demands that we do ourof that chain, parts to establish the integrity in our

and Then with Everyone with Whom acquisition system that is required toThe secret to good management is You Come in Contact eliminate micromanagement and

finding the proper balance between No one benefits from an unrealistic achieve results in which we can allmicromanagement and the will- assessment of problems or risks. It have pride.

Program Manager 1 September-October 1990

PGA Jo ur nalI o f thbe Defe ns e

D)EFENSE SYSTEMSMA NA (,EMENT

COLLEGE

(onmmandantMajor General Lynn H. Stevens,

USA

PropostGregory T. Wierzbicki

Dean, Department of'Researchi and Informiaton

Captain Ralph W. Ortengren, Jr.,USN

D~irector of PubliatwonsARobert W. Ball c

PROGRAMAcquisition Improvement -. Whats's Wrong withMANGR Updatef Acquisition?)' -

M N G RThe Honorale John A. Betti Lieutenant Colonel John L. Clay,Allanaq~ni 1-di Under Secrrtamy of Defense USA F

CAshoine M.dCark For Acquisi'tion Solving acquisition deficiencies

Esther M . Farria A look at micromanagement is a perplexing, long-termArt " rector and integrity, challenge.

Greg Caruth

32 3

Program Manager (ISSN 0199-7114)is published bimonthly by the DefenseSystems Management College, FortBelvoir, VA 22060-5426. Non-govern -Frcment employees and organizations may Quality FreDeployment' -,-How Contractors Seesubscribe at $7.50 annually through theSuperintendent of Documents. U.S. Captain Thomas H. Miller, USA F Systems AcquisitionGovernment Printing Office. Marshall H. KaplanWashington. D.C. 20402. Second class Tracing our national securitypostage paid at Fort Belvoir. VA. objectives down to system Marketing and bidding to the

POSTMASTER: Send addresschanges to Program Manager, Defense capabilities. Here are ten steps to government involves some ex-Systems Management College, Fort help you cope. tremely complex interactions.Belvoir, VA 22060-5426.


S s t e m s M a n aq e m e n t Colleqe

Vol. XIX, No. 5, DSMC 98

12 16 24

- Deming for Defense; The Evolution of Total International Defense

Licutenint Colmel Kenneth H. Rose, Quality Management Cooperation Agreements;USA John P. McGovern Dr. Philip E. Chartmnd

Additional gems of wisdom lie We must recognize that con- Dr. James H. Hershman

below the surface of Deming's 14 tinuous improvement is imperative Hoiurd Ste ensConstance Coxpoints, to sustain and regain a world- Heik Nussbaum -

market share Jennifer Bostown

Richard Kwntnoski

44 52 Also

In Memoriam 11

The Improvement ofTechnology Transferfrom Government

.Laboratories to Industry 23

National ContractManagement Association 42

Acquisition Basics Course 43

SME Seeks ContributionsDOD Metric Transition ' Proposals for Innovation In for DFM Handbook 46Plans and Actions Service Quality, I, Introduction to SoftwareJohn M. Tascher Reprinted from Japan ijith Management AcquisitionIntroduction by, lDaid ID. Acker Mngmn custo

The LHX helicopter is an Course 47outstanding example of a metric- This is a summary of proposalsbased system. made in Tokyo to 550 executives DSC's New Course

of Japan's leading corporations. Development Process 48

Book Review 59


WHAT'S WRONGWITH ACQUISITION?

Constructing More Stability intoDefense Procurement Roller Coaster

Lieutenant Colonel John L. Clay, USAF

As a career acquisition offi-cer, I often am asked what

can be done to improve weaponsystem procurement. Little wonder.We hear about cost growth, stretch-out, goldplating, pork barreling,micromanagement, mismanagement,overpricing and, of course, fraud,waste and abuse. Solving acquisitiondeficiencies has proved to be aperplexing, long-term challenge.Thus, succinctly answering this well-intentioned question is not easy.Perhaps there is a brief response thatcaptures the majority of oppor-tunities for improvement: createmore stability.

The purpose of this paper is to pro-pose a construct-or logical frame-work-for understanding basicweapon acquisition problems. Theconstruct's centerpiece is stability or,more specifically, treating deficien-cies as products of instability. It is notintended to be a rigorous model forscientific analysis; rather, a practical,simple tool for improving the effec- 6

tiveness of the weapon-acquisitionprocess.

Lieutenant Colonel (Colonel selectee) ~ .

Clay received a B.S. degree in engineeringmechanics fiom the USAF Academy in

1971 and an M. B.A. dgefivm Wr;qhtState Univenity in 1973. He has sened in

Systens Command product divisions, and ,aam asoWdt HQpArgCrasm aswawoffie 0

cer and as executive assistant to the DeputyChief of Stafffor Systems. He completedthe Definse Systems Management College ,, ~Program Management Course 89-1.


Why Stability? I suggest five conditions are needed stant change is thoroughly consistentto create an ideal state of stability for with pursuing perfection in qualityMore than any single term,

"stability" embodies what is most acquiring any weapon system. and service.... Yes, it is a paradox:lackingin the current acquisition pro- 1. A few, key system objectives, In the face of more change, more

cess. First, however, a definition is consistent with national military stability is essential. '

needed. Defense-acquisition stability strategy, force objectives and user I am convinced that few defenseis the fulfillment of planned expecta- needs, are correctly identified, programs are stable. Yet attention istions; that is, weapons are acquired understood and held constant. diverted from this serious problem byas originally intended. Further, 2. Cost, schedule, and performance more newsworthy allegations, suchstability can be measured by the estimates are realistic; i.e., the prob- as well-publicized coffeemakers,degree to which planned objec- ability of overperforming is roughly hammers, etc. In my personal ex-tives-in particular those associated equal to the probability of under- perience with five weapon programs,with performance, support, re- performing. none had problems with corruptionsources, and time-are realized as the or overpricing. Each of the five did,weapon is acquired. Note that this 3. Trained and experienced person- however, experience instabilities likedefinition encompasses more than nel are assigned to the program and changing requirements, unachievedconcerns about DOD "budget stabil- direct their energies to achieve pro- schedules, and unexpected budgetity," itself a well-documented gram objectives, reductions costing millions of dollars.problem. 4. Resources approved in the plan- Most experts will agree that corrup-

ning phase are provided unless the tion and overpricing are not theprogram fails to achieve specified critical weapon-acquisition problems. 2

goals. Finally, a simple analogy illustrates

5. Each commitment to complete an why the defense community shouldacquisition task is fulfilled, value stability. Halfway into the con-

struction of a new home, no oneFortunately, this lengthy list can be would tolerate the builder announc-

reduced to more fundamental terms. ing a cost increase, the banker reduc-Stability simply requires quality planing the amount of a loan commit-ning and disciplined execution. Note ment, or the spouse insisting onthat conditions 1 and 2 are roughly changing the floor plan. Suchequivalent to quality planning-3, 4, mismanagement would add to theand 5 to disciplined execution. In the cost and construction time, in-construct, a stable program is framed tolerably impacting family resourcesin quality planning and disciplined and patience. These very problems-execution. optimistic estimates, erratic budgets,

The simple notion of instability as and changing requirements-arethe cause, and stability as the solu- common in weapon acquisition. Thetion, can be useful in judging actions military, the government, and the

/ and evaluating processes. Of course, taxpayer should be motivated tothe root causes of acquisition prob- achieve program stability.lems are more complex; as in allgeneralizations, exceptions exist. A Well-Documented Problem

writs two components, quality planning Instability is generally recognized

and disciplined execution) helps to as a serious acquisition problem.identify these causes and find solu- During the 1980s, virtually everytions. Instability is the common major study addressing generaldenominator of the preponderance of defense-acquisition deficiencies, and

defense acquisition problems. most weapon-acquisition experts,identified instability as a leadingDoes stability equate to detailed culprit.

planning and step-by-step execution?

Absolutely not. Stability does not Rand Corporation, assessing ac-mean rigid, detailed planning; obedi- quisition policy in the 1970s, was oneent, unquestioning execution; or stag- of the earliest to focus on instability.nant, layered organizational struc- In 1979, it concluded the weapon-tures. In fact, continuous change to procurement process too often resultsprocess, organization, and internal- in frequently changing programresource allocation priorities are vir- budgets and schedules. 3

tures of effective acquisition pro- Two years later, the DODgrams. Consider the advice of Tom "Carlucci Initiatives" identified 32 ac-Peters in Thriving on Chaos: "...con- tions to improve the acquisition pro-


cess. The fourth action was designed likelihood that systems will be ing in weapon acquisition. Stabilityspecifically to stabilize programs by delivered on time and at projected requires quality planning and dis-linking approved baseline funding cost. ' 8 ciplined execution.and yearly budget recommen- Several noted DOD acquisition ex- This section introduces specificdations. 4 perts share a concern about program causes or "destabilizers." Eleven

In 1983, Air Force Systems Corn- instability. destabilizers, judged to be among the

mand investigated ways to shorten William A. Long, former Under most problematic, are described

the acquisition process and procure Secretary of Defense for Research briefly to illustrate the mechanics of

weapons at lower cost. Called the and Engineering, said in 1981, "A instability (See Figure 1). Each

"Affordable Acquisition Approach," major portion of the ultimate success "threatens" program stability by

the study reviewed cost and schedule of the [Carlucci Initiatives] can be degrading either planning or execu-histories of 109 acquisition programs. directly related to the degree to which tion. If left unchecked, the destabiliz-It concluded "...that program in- programs are stabilized. Although ers will introduce unfavorable cost,

stability (large unplanned changes in some progress has been made, signif- schedule, performance and support-program funding and schedule) is the icant problems remain." 9 ability impacts. Experienced acquisi-

tion personnel will be familiar withmajor causative factor of cost and Jacques S. Gansler said in 1983, most of these destabilizers. The con-schedule growth."5 "Unfortunately, stability is probably struct does not introduce new causes

In 1986, President Ronald Reagan the most important major character- per se but, rather, provides a frame-established the Blue Ribbon Commis- istic that is missing from the work for understanding how theysion on Defense Management to American defense budget." 10 operate to reduce acquisition effec-recommend improvements to the David Packard, former Deputy tiveness.DOD acquisition process. His Secretary of Defense, said in 1986, Faulty Requirements. This destabi-motivation largely was due to "Without stability, no permanent ac- lizer is an appropriate starting pointeroding public confidence in view of quisition improvements are since requirements form the founda-

overpriced spare parts, test defi- possible."11 tion of every program. Faulty re-ciencies, and cost and schedule over-runs." While the commission found Frank Carlucci, former Defense quirements are mismatches betweenfew instances of fraud, it concluded Secretary, said in 1988, "We all know formal performance objectives and

the defense acquisition process has what is fundamentally wrong with either the user's need, industry's

"basic problems that must be cor- [the acquisition system]: Time and capability, or reasonable affordabil-

rected."' , The commission suggested again instability has been scored as ity. Subsequent analysis or test will

that DOD "emulate" a management its most chronic defect."1 2 eventually reveal the disconnect. The

model which incorporates successful Dr. Robert B. Costello, former corrective actions must include revis-

features found in "outstanding com- Under Secretary of Defense for Ac- ing the plan, synonymous with insta-mercial programs." Stability, iden- quisition, said in 1989, "Over the last bility'Stified as one of these features, exists eight years, DOD has been forced to Requirements are faulty if unreal-when the manager and the board of live with sawtooth funding, which istic. For example, some havedirectors operate in a disciplined plays havoc with rational plan- overestimated technical expectations.manner. The manager promises to ning."13 They assume the availability ofachieve planned program objectives Edward Hirsch and Fred Waelchli, knowledge, materials or processes(performance, cost, schedule), and efense Hirs an aent which are not likely to be availablethe board of directors commits to Defense Systems Management when needed. Such requirementsproviding resources and other sup- College, said in 1989, "Program have "built-in-failure."proridingdresourcesogrdmotherutup- stability-surely a close cousin ofport needed for program execution. Deming's 'constancy of purpose'- Requirements can be faulty be-The manager is motivated to achieve has long been recognized as perhaps cause they overstate anticipated in-success; so long as progress is the single most important contributor dustrial capabilities. Political supportsatisfactory, the board of directors to efficiency and effectiveness in the is often influenced by "marketing"provides the planned funding and acquisition process."14 promises of significant capabilityprotects the manager's prerogative to ehneet h ednytwrexercise authority and control 7 Numerous studies and experts have enhancement. The tendency toward

eIse uthorityancntrol. identified instability as a serious optimism is human but counter-In June 1989, Secretary of Defense defense procurement problem. It is productive.

Richard Cheney released the DefenseManagement Report (DMR) outlin- persistent, pervasive and costly. The user may ask for more perfor-ing the current Administration's plans mance than needed, hedging againstfor improving defense acquisition. the possibility that the developer willThe DMR says DOD must adopt cer- Destabilizers fall short. Obviously, hedged re-tain management principles, one quirements have the potential of add-being stability in programs. "Reliable A construct has been proposed to ing unnecessarily to program cost.planning, funding, and system con- aid in understanding acquisition defi- They also increase the developmentfiguration, and continuity in manage- ciencies. Its centerpiece is stability, challenge and, thus, the risk of failurement personnel, greatly increase the argued to be the ingredient most lack- and instability.


FIG URIE 1. STABILITY CONSTR UCT ment today is averaging more than adecade. Hundreds of discrete, inter-dependent tasks are involved. Esti-

A stable program is "protected" by quality planning and dis- mating the length and logical se-

ciplined execution. However, 11 potential "threats" to stability are quence of each one is not easy. The

depicted, each one capable of introducing undesirable elements: fact that schedule variances occur

schedule delay, lost performance, reduced supportability and cost should not be surprising. However,

growth. these variances are almost always

unfavorable-the actual scheduleturns out to be longer than the predic-tion.1 7 Indeed, schedule optimismhas become part of the defense acqui-

LOST sition culture.SCHEDULE t EFRMANCE Optimistic schedules are perpetu-

ated for several reasons. First, plan-ners can never foresee (and therefore

STRATEGY OPTIMISTIC do not include in their schedule esti-DISCONNECTS QUALITY SCHEDULES mates) all problems that must be over-

come. Tasks always appear easier dur-FAULTY PLANING POOR COST ing planning. In the course of execu-REQUIREMENTS !ESTIMATES tion, unanticipated friction is a given.

CHANGING STABLE INADEQUATE Second, some managers believe theBUDGETS PROGRAM SKILLS best way to minimize development

Ctime is to implement aggressiveONTRACTOR REPORTING schedules. While recognizing the low

DISCIPLINED REQUIREMENTS probability of success, the work force

MICRO- EXCUTION UNFULFILLED is, theoretically, motivated to com-MANAGEMENT plete the activity in minimum time.

t A third cause of schedule optimismPLAN is that DOD and industry executives

UP T Acan feel pressured to adhere toA23LITO T unrealistic schedules for political

reasons. Programs are more attrac-tive with earlier fielding dates.Similarly, schedules can be "mile-Finally, requirements can be am- associated basing modes. Similar stone driven." Programs become

biguous. The user's documented debates are festering over virtually all locked into artificial calendar datesoperational requirements may not future systems including fighters, for major reviews or operationalalways adequately describe and com- armament, bombers, transport air- capability.municate the desired capabilities. The craft and ballistic missile defense.program office can fail to understand TSchedules organize program activ-the problem, threat or desonet The Blue Ribbon Commission on ity and are, therefore, critical toThe perceived renc environment. Defense Management described this stability. Accurate schedules facilitateTprgrmca urgency to initiate a destabilizer as follows: effective execution; optimistic onesprogram can distract both the user

and the developer from the task of There is no rational system create waste and raise questionscreating clear, concise descriptions of whereby the Executive Branch about management competence.performance objectives, and Congress reached coherent Poor Cost Estimates. Cost esti-

Strategy Disconnects, In theory, and enduring agreement on na- mates are key elements of an acquisi-national objectives determine security tional military strategy, the tion plan, providing the basis for pro-objectives which, in turn, dictate forces to carry it out and the gramming the total requirement andmilitary strategies. Ideally, the Ex- funding that should be pro- phasing of budgets, and program per-ecutive and Legislative Branches vided in light of the overall sonnel expend considerable effortagree on these strategies. On this economy and the competing preparing them. Independent esti-basis, the Congress then funds claims on national resources. mates are required, and obtaining ac-military forces. The absence of such a system curate projections can be difficult.

contributes substantially to the Programs usually involve new tech-In practice, strategy disconnects instability and uncertainty that nologies and require years to com-

between these two government plague the defense program. 16 plete.branches are common. An exampleis the decade-long debate regarding Optimistic Schedules. The time to Inaccurate estimates can resultnext-generation intercontinental develop and acquire a major weapon from the inability to predictballistic missiles (ICBMs) and their system in the acquisition environ- technological advancements, task


complexity, economic conditions, cess has been criticized for violating Despite high expectations and aschedule requirements, support en- this management precept. Critics sug- decade of effort, baselines have yetvironments or system employment gest that decision-making is not to create acquisition stability.concepts. Worse, managers some- always responsive because of the long Baseline commitments are too oftentimes feel pressured to provide op- command channels and the large unfulfilled during execution. Chang-timistic estimates in order to obtain headquarters staffs, which overem- ing requirements, unachieved perfor-program go-ahead approval. Yet, a phasize their particular interests at mance, and missed schedules rapidlypoor cost estimate creates an unex- the expense of core program objec- supersede the documents. Budget tur-ecutable plan. tives. bulence results in annual rebaselining

A program with a faulty cost In 1986, the Blue Ribbon Commis- for many programs. To the extent

estimate eventually must deal with sion suggested that weapon acquisi- that baselines continue to be unful-

the disconnect. A poor cost estimate tion be managed with "limited report- filled, programs will be destabilized.is a destabilizer. When the faulty ing requirements" and "small, high Plan Ambiguity. In the precedingestimate is discovered, a revised plan quality staffs." 20 The Commission discussion, an unfulfilled baseline isbased on the adjusted cost will be specifically recommended the described as a failure between a pro-needed if the program is to con- establishment of a new chain of com- gram manager and senior manage-tinue. mand for major programs to include ment; correspondingly, plan ambigu-

Four destabilizers affecting quality a DOD acquisition executive, in- ity is a failure between the programplanning have been described. The dividual Service acquisition execu- manager and the program team.

seven remaining (continuing clock- tives and program executive offi- Weapon system acquisition is a dif-wise around the construct depicted in cers. 21 In the last 4 years, DOD has ficult undertaking involving manythe Figure 1) impact disciplined struggled to implement the letter and people, organizations, technologiesexecution. spirit of the Commission's recom- and tasks. Creating a program plan

mendation. is necessary but by no means suffi-Inadequate Skills. The turbulent cient; it also must be understood.

acquisition environment demands A characteristic of stable programs Unfortunately, I am convincedconsiderable expertise from program is the channeling of effort towardoffice personnel. State-of-the-art achieving planned objectives. The that plans are frequently misunder-technology, sophisticated manage- program manager needs ready access stood. Too often, they are not in-ment systems and regulatory com- to senior executives and timely deci- tegrated, simplified and taught toplexity are occupational challenges, sions. Staffs should facilitate the pro- acquisition-team members, a factSuccessful execution of an acquisition cess. Program stability is adversely suggesting that few really understandplan depends on the competence of affected to the extent that DOD them. More disturbing, some man-the acquisition team. reporting requirements do not work agers have a bias against sharing in-formation that other team members

The DOD has been criticized for a toward these purposes. need.perceived less-than-adequate skilllevel among acquisition personnel. Unfulfilled Baselines. In the late Tom Peters and Nancy Austin, inThe Blue Ribbon Commission noted 1970's, the "baselines" began to ap- A Passion for Excellence, state thatthat this work force operates the pear as tools for creating stability. "The trick is demonstrating to peo-largest procurement agency in the Baselines summarize key perfor- pIe, every day, where you want toworld, spending billions of dollars, mance, support, cost, and schedule take your organization. It's beingyet "...compared toindustry counter- objectives and they identify the amazingly consistent that counts, ig-parts, it] is undertrained, underpaid resources required to acquire sys- noring the charge (which will beand inexperienced." u i tems. leveled) that you are a brokenrecord." 23

The DOD has reacted to these A baseline, when approved, is in- Programs with ambiguous planscriticisms; for example, the Air Force tended as an agreement between the will suffer instabilities since executioninstituted an acquisition-certification program manager and senior man- cannot be disciplined. Disconnectsprogram incorporating education, agement. In effect, the former com-training and experience requirements. mits to achieving the specified objec- ieas a rogram objectisideas about program objectives,However, the perception continues tives, and the latter promises to pro- priorities, milestones and resources.that DOD personnel lack sufficient vide specified resources (budget, Team members will be caught by sur-skills. The 101st Congress is consider- manpower and facilities). prise and unprepared; effort will being legislation to require career pro-grams (or possibly even an acquisi- In 1986, DOD implemented base- wasted.tion corp) in each Service. lining in Directive 5000.45, which Micromanagement. Contemporary

states that a "...stable program en- management experts overwhelminglyReporting Requirements. Tom vironment provides the foundation agree that decentralized execution is

Peters and Robert Waterman's book, for effective program manage- a virtue. Responsibility and author-In Search of Excellence, recommends ment." 22 Since then, many Air ity for performing tasks should bethat organizational structures be Force, Navy and Army programs delegated to the lowest possible level.based on " .. simple form and lean have been baselined with the Office People closest to activities generallystaff.'"i The defense acquisition proof the Secretary of Defense (OSD). manage them best.


In simple terms, micromanagement For a program to pass a milestoneoccurs when higher levels of bureau- decision successfully, its acquisitioncracy violate this rule. The Congress, plans including funding needs mustthe Pentagon and Service materiel ThestU u be reviewed and approved. 2 Often,commands have been accused of however, approved funding subse-usurping functions better performed pro be lf - quently is not provided. The Con-by lower-level managers. gress and DOD annually change, to

Once a weapon acquisition is in- some extent, the funding of almostitiated, the program manager should every program. In its report to thebe concentrating on executing the ap- 101st Congress, the Air Force stated,proved plan. Unfortunately, program The entire defense extablish-managers spend too much time en- ment has experienced asuring compliance with regulations, b g alld budgetary roller coaster. In theresponding to audits, and briefing 10 to 15 years it takes toorganizations with marginal program develop and field a newinvolvement. The Blue Ribbon Coin- weapon system, there may bemission noted that "The program several substantial swings inmanager spends a very high percent- defense funding. The ineffi-age of his time briefing his program, ciency associated with this lackwriting reports on his program, and c illl] i we o of stable financial planningdefending his program, thus doing dwarfs all other causes of inef-everything except managing his ficiency in defense procurementprogram.'"2 4 and programming. 26

Contractor Buy-in. Most acquisi- Inefficiencies from budget instabil-tion managers have experienced buy- ity are manifested by programins at one time or another; com- stretchouts, restructuring, andpetitive source selections often rent contracts. Programs are fre- smaller and less economical buys.evaluate proposals with buy-in pro- quently renegotiated to revise perfor- James Kitfield, senior editor ofmises. In fact, some industry person- mance requirements, impose new Military Forum, writes "The servicesnel argue that buy-ins are occasion- budget profiles and reduce quantities. buy fewer, ever more expensiveally a legitimate, perhaps even nec- The government negotiators have dif- weapons; then the inefficiencies ofessary, strategy for acquiring and ficulty separating the impacts of self- program stretchouts make them evenmaintaining business, initiated changes and contractor buy- more expensive, and the services can

For the purpose of this study, a ins. The government position is fur- afford to buy fewer of them still." 27

"buy-in" will be broadly defined to ther weakened when companies are How can DOD programs be ex-include both "optimistic proposals" sole-source or the government is ecuted effectively with constantly(the traditional definition) and "trust- pressured to settle quickly (for exam- changing budgets? No private corn-me tactics." Optimistic proposals of- pie, when funds are expiring). One pany could operate profitably thisfer performance levels, cost goals or industry manager told me govern- way. According to the Blue Ribbonschedules not likely to be achieved, ment contract changes provide the Commission, successful commercialwith the motive of winning competi- "golden rope" to profitability, programs enjoy dependable resourcetive programs. Trust-me tactics are While one might blame industry commitments from upper manage-employed after contract award. The for this destabilizer, the problem is ment. 28 The DOD programs will becontractor optimistically projects self-inflicted. Acquisition plans too stable only if they can enjoy depend-final system performance in order to often include unrealistic performance able funding.placate the program office early-on. requirements or unachievable cost or This list of 11 destabilizers is notAs time passes, the degraded perfor- schedule goals. When competition is all inclusive. Other obstacles to qual-mance becomes apparent, and the intense and contracts are awarded iplning and discle executioprogram manager must accept it or largely on the basis of price, the exist. However, the 11 are among theimplement painful program adjust- system can encourage buy-ins, most serious threats to stability and,ments 5Changing Budgets. Of all the thus, useful in completing the

Optimistic proposals and trust-me sources of instability, changing bud- construct.tactics inevitably result in cost, gets are the best documented and,schedule and performance variances, perhaps, most problematic. Budget Conclusions and ImplicationsYet, these buy-ins can be profitable instabilities are similar to the strategyif the company is awarded follow-on disconnects discussed earlier; how- The purpose of the construct hasbusiness (for example, a lucrative ever, this destabilizer occurs during been to provide a simple frameworkproduction contract). Even without program execution. It is defined as a for understanding complex weaponfollow-on business, DOD often self- deviation from the amount and tim- acquisition problems. It can assistinitiates program changes, providing ing of funding originally approved engineers, managers and executivesopportunities to recover on the cur- for a program. in guiding actions and priorities. I

Program Manager 9 September-October 1990... .... .. .. .. .

reiterate that what acquisition needs commitments from top management,most is stability: quality planning and IN process definition and training. 30 Dodisciplined execution. organizations committed to quality

The construct has other implica- Reliabl fail to understand the customer's re-tions. First, significant improvements quirements, produce optimisticin the acquisition process seem pairn f d estimates, or inadequately trainunlikely without added stability, employees, for example? Certainlythey do not.Only when quality plans are devel- they dosnooped and followed will the process be Perhaps the next time someoneeffective. Further, any proposed solu- asks, What's wrong with acquisition,tion to acquisition problems should and your answer will be the same asbe suspect unless it promotes (or at mine: "It needs more stability."the very least does not degrade) c tu illstability. Endnotes

Second, all participants in the ac- wuzuumu 1. Tom Peters, Thriving on Chaosquisition process have contributed to (New York: Harper and Row, 1987),past problems. For example, weapon persomicl, g pp. 564-65.program management offices pro- 2. Many experts agree that corrup-posed optimistic schedules, paid in- tion and overpricing are not thesufficient attention to requirements, critical problems. According to Dr.promised unrealistic performance, Jacques Gansler, "The Changingand failed to train personnel. Users likel t Defense Acquisition Environment,"and operators did not convey their Key Speeches (July 1988), p. 1,needs with consistency, accuracy and "Abuse.. has, at most, tens ofclarity. Contractors made commit- millions of dollars of impact while thements that could not be fulfilled. The "waste"-inefficiency and ineffective-OSD, Service secretaries and the d i r oil t ness-is in the tens of billions ofCongress imposed regulations and dollars. Likewise, the Blue Ribbonprocedures that aggravated micro- il titW prolZUI.KW Commission concluded that overpric-management and unduly complicated ing and corruption are not the majorreporting requirements. The Joint cs defense procurement problems. SeeChiefs of Staff, OSD and the The President's Blue Ribbon Com-Congress failed to create a system for 0 mission on Defense Management, Amaking timely strategy and force- Report to the President on Defensestructure decisions. The Congress Acquisition (Washington, D.C.:responded to lesser, newsworthy policies: (1) define and validate re- Government Printing Office, 1986),deficiencies while failing to take quirements as soon as possible and p. 5.responsibility for budget decisions, consult often with the user on the 3 Edmund Dews and Giles K.

Yet, acquisition effectiveness has subject; (2) create realistic cost and Smith, Acquisition Policy Effec-practical limits. By necessity, schedule estimates; (3) continuously tiveness: Department of Defense Ex-

weapons push technology; thus, per- educate the team members on the perience in the 1970s (Santa Monica:

formance and cost and schedule un- contents of the plan; (4) discourage Rand Corporation, Santa Monica,

certainties, to some degree, are a fact buy-ins by creating an environment 1 d73, p .

of life. Threats to national security which rewards those who meet 1973), p. 71.

evolve in unpredictable ways, forc- commitments. 29 4. William A. Long, "Final Reportof the Task Force on Acquisition Im-ing adjustments to requirements. The The construct is compatible with provement" (DOD Rep rt, Office ofConstitution gives the Congress sole the DOD Total Quality Management the Under Secretary of Defense,authority to fund military programs; (TQM) program. Notionally, the Research and Engineering,the Congress will almost certainly construct identifies what needs to be Washington, D.C., 1981), p. 4-1.continue to review and modify DOD done-quality planning and disci-weapon-budget requests each year. plined execution. On the other hand, 5. Air Force Systems Command,

Third, while the construct's pur- TQM provides a management philos- "The Affordable Acquisitionpose is to promote problem ophy for succe, " planning and Approach, Executive Summary,"understanding, it also suggests solu- executing progras. i he construct is (Command sponsored study,tions. Many are within the control of concerned with faulty user require- Andrews AFB Md., 1983), pp. 1-3,the program manager. Program man- ments, strategic disconnects, un- 54, 83.agers directly influence requirements, fulfilled budget commitments, am- 6. The President's Blue Ribboncost and schedules estimates, skill biguous plans, and inadequate skills. Commission on Defense Manage-levels, and other factors affecting The TQM complements this concern ment, A Report to the President onstability. Concerned program manag- by promoting a customer focus, or- Defense Acquisition (Washington,ers should embrace the following ganizational goal setting, long-term D.C.: Government Printing Office,


1986), pp. 1, 5 (hereafter cited as Blue ment: The Fundamental Problem," _____________Ribbon Commission, Defense Defense 88 (1988), p. 8. .N ME O .AAcquisition). 17. The experienced acquisition William G. Gicking, 70, Defense

7. professional will not refute the claim Systems Management College7.eBlue Ribbon Commission, that schedule estimates almost always registrar from 1971 until his retire-

Defense Acquisition, p. 12. err on the side of optimism. For an

8. Dick Cheney, "Defense excellent discussion of the problem, ment in 1984 died of cancer on JulyManagement Report to the President" see James Kitfield, "Unguided 26 at his home near Mt. Vernon.(Department of Defense Report, July Missiles?" Military Forum (April Mr. Gicking was a retired Air1989), p. 10. 1988), pp. 16-24. Force chief master sergeant.

9. William A. Long, "Final Report 18. Blue Ribbon Commission, A native of Pennsylvania, Mr.of the Task Force on Acquisition Defense Acquisition, p. 28 Gicking was a graduate of theImprovement" (DOD Report, Of- 19. Thomas J. Peters and Robert H. University of Omaha and held afice of the Under Secretary of Waterman, Jr., In Search of Ex- master's degree in education from theDefense, Research and Engineering, cellence (New York: Warner Books, University of Scranton.Washington, D.C., 1981), p. 2. 1983), p. 311. He was a veteran of World War I,10. Jacques S. Gansler, "We Can serving in the Navy; later, he enlistedAfford Security," Current News, No. 20. Blue Ribbon Commission, in the Air Force and served in the1028, Summer 1983, p. 8. In addi- Defense Acquisition, p. 12. Korean Conflict. Other Air Forcetion, his latest book, Affording 21. Ibid., p. 17. assignments include service in Japan.Defense (Cambridge: The MIT Press, 22. Department of Defense, His last Air Force assignment was at1989), p. 11 states "The first priority "Baselining of Selected Major the Noncommissioned Officersis to improve long-term strategy and "Bysemsin in rofected a" Academy at Langley Air Force Baseresource planning, and to improve ( Systems, Directive 5000.45" in Virginia where he was chief of thethe selection of weapon systems cor- Printing Office, August 25, 1986), Communicative Skills/ Personnelrespondingly. Once this has been ac- Pr Os Training Section. He retired from ac-complished, more stability in the pro- p. 1. tive duty in 1962.grams and budgets must be achieved. 23. Tom Peters and Nancy Austin, From 1963-65, he was registrar and(How can anyone manage efficiently A Passion For Excellence (New York: director of placement at Keystone

if the programs, and dollars for them Random House, 1985), pp. 324-325. Junior College in Pennsylvania. He

are always changing?)" 24. U.S. Senate, Acquisition Find- was director of admissions at that

11. U.S. Senate, Committee on ings, p. 34. college from 1965-1969. FromArmed Services, The Acquisition 25. Milestones are formal program 1969-71, he was deputy director ofFindings in the Report of the Presi- decision points. Milestones I, II and the operations division, Office of thedent's Blue Ribbon Commission on III precede concept definition/valida- Dean, U.S. Military Academy.Defense Management (Washington, tion, full-scale development and pro- He was selected registrar at theD.C.: Government Printing Office, duction, respectively. newly formed Defense SystemsApril 4, 1986), p. 32 (hereafter cited 26. Department of the Air Force, Management School in 1971. Heas U.S. Senate, Acquisition Findings).,, Report to the 101st Congress, Fiscal directed admissions during a period

12. Frank C. Carlucci, "Grappling Year 1990" (Washington, D.C.: that saw the school evolve into a col-With the Instabilities Of Our Acquisi- Government Printing Office, 1989), lege and the enrollment increase bytion System," Defense 88 (1988), p. 52. 350 percent.pp. 4-5. 27. James Kitfield, "Acquisition: Mr. Gicking was an avid swim-

13. Dr. Robert B. Costello, "Con- Are Stretchouts the Answer?" mer. He competed in the Virginiatrolling the DOD Acquisition Pro- Military Forum (January/February Golden Olympics in the early 1980scess," Signal (February 1989), p. 21. 1989), p. 22. and won three gold medals. He was14. Edward Hirsch and Fred 28. Blue Ribbon Commission, a past president of the Methodist14. EwardMen, s member of the Council of

Waelchli, "Toward a Set of Guiding Defense Acquisition, p. 12. Ministries, and an administrative

Principles for Defense AcquisitionManagemeni," Defense 89 (March/ 29. This paper is derived from a board member at the AldersgateApril 1989), p. 7. more detailed study focusing on the United Methodist Church. He was an

program manager. See Lt. Col. John American Red Cross Volunteer.15. The term "plan" suggests a L. Gray, "Air Force Acquisition Sta- He is survived by his wife, Eleanor.ingle document. Actually, a pro- bility and the Program Manager." of Alexandria; a daughter, Lonniegram's plan is more accurately a (Research Report, Air War College, Dennis of Albuquerque; two sons,series of documents typically to in- Maxwell AFB Ala., May 1990). Jim Gicking of Wayne, Pa., andclude a decision coordinating paper, JmGcigo anP. nacquisition plan, baseline, test and 30. Jack C. Strickland, "Key Ingre- Richard of Alexandria; two sisters,evaluation master plan, and others dients to Total Quality Manage- Peg Miller of Allentown, Pa., and

ment," Defense 89 (March/April Jane Bogdon of Drums, Pa; and four

16. David Packard, "Micromanage- 1989), p. 18. grandchildren.


DEMINGFOR DEFENSE

Author Discloses Gems of Wisdom LyingBelow Surface of the 14 Points

Lieutenant Colonel Kenneth H. Rose, USA

n his 1986 book, Out of theCrisis, W. Edwards Deming ex-

pressed harsh criticisms of Americanindustry and bold proposals for im-provement. Much of what he sug-gested also may be applicable toAmerican military establishments. ..

This is not to say war is an in-dustrial process and may be wagedaccording to rules common to in-dustrial analysis and control. Rather,military functions, like industrial pro-duction, are subject to certain endur-ing principles that seem to govern theconduct of human affairs, regardlessof the class of action in which peo-ple are engaged.

First, a brief background. One ofDeming's principal points is that it isbetter to build in quality on the pro-duction line than to "inspect" it inafter the fact. To this end, he offers14 points to guide management.,These are neither aphorisms for a Vnew age nor slogans to be posted onthe shop wall but, rather, philo-sophical building blocks that, if prop-erly interrelated, internalized, and 51implemented, will generate a life-stylechange for the better in the affected -.organization. His 14 points arebelow.

1. Create constancy of purpose forimprovement of product and service.

LTC Rose is the Deputy Commander,Research, Development and EngineeringCenter, Fort Belvoir, Va.


2. Adopt the new philosophy. 12. Remove barriers that rob peo- A quality program for a corn-3. Cease dependence on mass in- pie of pride of workmanship. munity, launched by cere-

spection. 13. Encourage education and self- monies with a speech by the4. End the practice of awarding improvement for everyone, governor, raising of flags,

beating of drums, badges, allbusiness on the basis of price tag 14. Take action to accomplish the with heavy applause, is a delu-alone, transformation. sion and a snare.1

5. Improve constantly and forever Wisdom Below the Surface It is fine to have an improvementthe system of production and service. The purpose here is not to offer program complete with symposia,

6. Institute training, another discussion of these points, conferences, workshops, breakfasts,

7. Adopt and institute leadership. some of which are not self-evident. testimonials, newsletters and awards,That has been done best by Deming. all serving titled masters and eager

8. Drive out fear. Readers are encouraged to seek out participants. But, we must never

9. Break down barriers between the original text. Instead, my purpose forget that the important thing is

staff areas, is to disclose additional gems of substance, not form-product, not ap-management wisdom that lie just pearance. In fact, a near-obsessive

10. Eliminate slogans, exhorta- below the surface of the explicitly orientation toward appearances maytions, and targets for the work force, stated, and much debated, 14 points, be one of the most difficult problems

11. Eliminate numerical quotas for Deming minces no words at the we must solve.

the work force and numerical goals start in making clear that this is Dr. Deming gets right at the heartfor people in management. serious business, of job performance and productivity.

The possibility of pride ofworkmanship means more to

tow Gthe production worker than! LN gymnasiums, tennis courts, and

recreation areas. 2

One apparently little-known tenetof modern human psychology is thatpeople are motivated best by intrin-sic benefits-those things that makethem feel good about themselves and

arm"".their jobs as they work; not extrinsicbenefits-the perks and privilegesusually assumed to be all-important.The Army recruiting slogan, "Be allyou can be," may be right on themark. It seems to suggest a "releas-ing" that will tap the full power andpotential of the human spirit. Unfor-tunately, once recruited, the newly

,employed are welcomed into an en-vironment with narrowly definedS. . patterns of allowable dress, speech

S [tonand action-all with ample justifi-~'X" cation.

Allow People to* Do Well

But Dr. Deming's point is lessesoteric. He explains that keys tounlocking pride of workmanship arenot quotas and criticism. Instead,these essential keys are skills,materials, tools, environment, time,

. management support, and leader-ship-things that allow people the

opportunity to do well.Deming plays the iconoclast, at-

tacking the love affair withmachinery and technology that


almost has become a national my experience by application of in- zation presents the potential for in-characteristic and, at times, a na- novation and knowledge.' 4 dividuals to serve as user and pro-tional embarrassment. The matter of new products and ducer at different times. However,

Lag in American productivity services gets special attention. To the the absence of a directed personnelhas been attributed in editorials military community, it is a matter of policy to implement this potentialand letters in the newspapers to special relevance. and manage individuals through suc-

cessive, related user/producer/userfailure to install new machin- Moreover, the customer is not assignments supports a continuedery, gadgets, and the latest in a good position to prescribe division between user and producer.types of automation such as product or service that will help Second, while users may be leastrobots. Such suggestions make him in the future. The producer able to specify new products, theyinteresting reading and still is in far better position than the certa i y n w p ro ng thmore interesting writing for customer to invent new design certainly know what is wrong withpeople who do not understand and new service. Would any- the ones they have. Their strength isproblems of production. The one that owned an automobile that they are best able to describefollowing paragraph received in 1905 express a demand for what is necessary-what they wouldfrom a friend in a large pneumatic tires, had you asked like to be able to do-to accomplishmanufacturing company will him what he needed? Would I, tasks they must perform at the frontserve as an illustration, carrying a precise pocket- lines. Accordingly, the Army theory

This whole program (design watch, have suggested a tiny is that users should describe desired

and installation of new calculator and quartz time capabilities and producers should

machines) has led to some piece?"5 suggest items whose performancemnaes) Acharacteristics provide or approachunhappy experiences. All these those capabilities. That's the theory.wonderful machines performed Further, The practice is that users traditionallytheir intended functions on test, A consumer can seldom say to- make great leaps over capabilities tooperation n our plants, wito day what new product or new system specifications and try to tellour people, they were out of service would be desirable and the producers what to build. Thebusiness so much of the time for useful to him three years from result, constrained by the user'sthisand that kind of failure that now, or a decade from now. limited understanding of what isour overall costs, instead of go- New product and new types of possible, may be described as theing down, went up. No one had service are generated, not by manacles of modernization: thickerevaluated the overall probable asking the consumer, but by armor, bigger guns.failure rates and maintenance, knowledge, imagination, in-As a result, we were continu- novation, risk, trial and error Bridging the Gulf

ally caught with stoppages and on the part of the producer, But, all is not doom and gloom.with not enough spare parts, or backed by enough capital to The Army attempts to bridge the gulfwith none at all; and no provi- develop the product or service between user and producer with ansion for alternate production and to stay in business during organizational connector-a distinctlines.3 the lean months of introduc- organization that serves as the user's

he is getting at things that we tion. 6 representative. This element conductshold near and dear. Promising almost This is pretty strong stuff. It seems the combat developments process: Itmagical solutions to hard problems to address directly the Army's analyzes thfeats, develops conceptsthrough the application of advanced, Concept-Based Requirements System that respond to perceived deficienciesor worse, emerging" technology has and kick it into a cocked hat. Bul and requirements that follow frombecome a kind of cottage industry, does it really? Deming is only saying the concepts, coordinates materialWe are quick to embrace a newly, what most people already know: identification and development witheven notionally, described system Users of products, or weapon the producer, monitors acquisition,and put it on what appears to be an systems, or whatever, are in a very and supports fielding of the procuredacquisition track, while we work poor position to specify new products items. Again, the theory is good. Inbackwards to invent a requirement because they usually lack the practice, this solution may only ex-and find a sponsor. Deming reminds knowledge necessary to predict new acerbate the original problem. Theus that there is no deus ex machina products reliably. Their vision of the user's representative is neither theuthat w tepe isno at thex astm ent future is usually limited to the extent user nor the producer. It is not sub-and save us from failure. Developing of their understanding of the present. ject to the urgencies of the user orand applying automation and other Recognizing and admitting this limi- privy to the expertise of the producer.hardware is a complex, difficult task. tation is difficult; people are simply It becomes a follower of the processIt must not be approached through not aware of what they don't know. and a victim of the analytical systemassumption and unbridled optimism. In the military community, two i created, severely mired in the prob-Or, as he puts it, the invention of new things mitigate the grim picture that lem described by Deming, as follows:products and new services "...has Deming presents. First, the mobility The difficulty in definingbeen accomplished in every case in of personnel throughout the organi- quality is to translate future


needs of the user into measur- On the battlefield, dissatisfied users and equipment is the Army Materielable characteristics, so that a won't have the opportunity to Command. The connector, the user'sproduct can be designed and switch, they just won't come representative, is the Training andturned out to give satisfaction back-ever. Doctrine Command. If the true roleat a price the user will pay. This So what is the value of Deming's of the connector is consumeris not easy. and as soon as one book? Is it just another item to be research, as described earlier, thenfeels fairly successful in the placed prominently on the office the combat developers who provideendeavor, he finds that the bookshelf where it will be seen by im- that connection should be organic toneeds of the consumer have portant visitors or will complement the producer, not organic to the userchanged, competitors have the room decor? Hopefully not. and not lost in some never-never landmoved in, there are new mater- Deming's own summary is below, between the two. Once this is done,ials to work with, some better the consumer research-producerthan the old ones, some worse; The central problem in manage- elements should be separated fromsome cheaper than the old ones, ment, leadership, and produc- the Army Materiel Command and allsome dearer. 7 tion, as my friend Lloyd S. the attendant structures that seem to

In suggesting a way out of this Nelson put it, and as we have have a life of their own, perhapsmorassugesting das a diticti remarked in earlier chapters, is under a Program Executive Officemorass, Deming draws a distinction failure to understand the nature type organization. This must then bebetween advertising (selling the user and interpretation of variation, driven and maintained to be a lean,what you make) and consumer

research (identifying things to make Efforts and methods for im- user/product-oriented operationthat the user will buy). One is more provement of quality and pro- where the link between user and pro-important than the other, ductivity are in most companies ducer is as short as possible.

Foremost is the principle that and in most government agen- This last point cannot be over-the purpose of consumer cies fragmented, with no over- emphasized. When determining andresearch is to understand the all competent guidance, no in- designing tomorrow's material, thereconsumer's needs and wishes, tegrated system for continual is simply no substitute for standingand thus to design product and improvement. Everyone, regard- shivering on the border next to theservice that will provide a bet- less of his job, needs a chance soldier who may eventually live orter living for him in the fu- to learn and develop. In a cli- die through its use. Deming makes ature.8 mate of fragmentation, people clear point for responsibility in a final

go off in different directions, admonition.This sounds very much like what unaware of what other people

the user's representative is trying to are doing. They have no chance Every appalling example in thisdo. It may be that the role is better to work to the best advantage book turned up because I wasdescribed by the term "consumer of the company nor with them- there, on the line, on the job,research" than the current, and selves, and little chance to trying to be helpful by lookingsomewhat oblique term "combat develop. 10 for some sources of improve-developments." This may serve to While not discussed in detail here, ment and wrong practices. If Ifocus the process more outward, on Deming's main theme is variation, had waited for them to comethe user, rather than inward, on His description of "system" variation for help, I'd still be waiting."itself. But, there is an issue here far and the need to bring it under statis-more important than mere process. tical control is the foundation for the

A second principle is that no 14 points. Beyond this, there are Endnotesone can guess the future loss of messages with particular meaning for 1. W. Edwards Deming, Out of thebusiness from a dissatisfied military readers. Crisis (Cambridge, Mass.,customer. The cost to replace a 1. There are no magic wands in Massachusetts Institute of Tech-defective item on the produc- technology. Everything comes from nology, Center for Advancedtion line is fairly easy to hard work. Engineering Study, 1986), p. 21.estimate, but the cost of a 2. Don't try to force people into a 2. Ibid, p. 85.defective item that goes out to fixed process. Instead, modify thea customer defies measure. It process until you maximize people's 3. Ibid, p. 13.was Oliver Beckwith who re- performance potential. 4. Ibid, p. 182.marked in 1947, in a meeting of 3. Shorten the link between con-Committee E-11 of the Ameri- sumer and producer. 5. Ibid, p. 167.can Society for Testing and 6. Ibid p. 182.

Materials, that a dissatisfiedcustomer does not complain: he Soldier in the Field 7. Ibid p. 169.just switches. Or, as my friend The interpretation and implemen- 8. Ibid, p. 175.Robert W. Peach put it for tation of this last message gives rise 9. Ibid, p. 175.Sears, Roebuck & Co., The to a probably controversial proposal. 10 Ibigoods come back, but not the In the Army, the users are the soldiers . d p. 456.customer.' in the field. The producer of weapons 11. Ibid, p. 469.


Th e Evolution OfTOTAL QUALITYMANAGEMENT

John P. McGovern

j omething has been terriblywrong for a long time. Grow-

ing up in the Forties I knew Americanproducts were the best in the world.Now I know very few of our pro-ducts are considered the best. Thefact that our country's reputation fordelivering quality products and ser-vices has been deteriorating translatesinto a real economic plight. It appearsthe United States has not kept up therequired technical and managerial ef-fort to produce superior quality pro-ducts; or, our competitors in theworld are doing things differently.After giving thought to this dilemmaI have concluded both propositionsare true.

What we did or did not do in theForties and thereafter, and what 7 7,

needs to be done in the Nineties, to Vregain our reputation and marketshare is the subject of this paper. J

The Forties

Pending entry of the United Statesinto World War II, the War Depart-ment foresaw a need for methods tocontrol the quality of materials andmanufactured products. One of thefirst efforts was the War Depart-ment's request to the American Stan-dards Association (ASA) inDecember 1940. The ASA was askedto initiate a project on the applicationof statistics to the quality control ofwar materials and manufactured pro-ducts. The committee developedthree standards used by the allies inWorld War II. These important stan- The first standard, Z1.1, was en- Chart Method of Analyzing Data";dards were classified during the war. titled "Guide for Quality Control and the third, Z1.3, "Control ChartThe committee comprised industry Charts"; the second, Z1.2, "Control Method of Controlling Quality Dur-and government experts and two ing Production." These standardspeople who later achieved world Mr. McGvrn is a professor ass qned followed the early work of Dr.prominence-W. Edwards Deming to the Reseatrh Directorate at the Defense Walter Shewart, Bell Laboratoriesand Harry F. Dodge. Systems Management College. physicist who in the early 1920s


developed a method of monitoring i.e., average and dispersion, values allowing inspectors to accept entireand analyzing variation over time; a required to construct a control chart. lots of parts and materials after onlymethod he called control chart. Another statistical tool that inspecting a small portion of the lot.

Shewart did much of the early facilitated the monitoring of the This provided another powerful toolwork of describing the phenomenon quality of large volumes of war enabling the United States to produceof variation in statistical terms. He materials required during World War and ship war supplies expeditiously.found virtually all types of repeatable II was the acceptance sampling plan. However, before the concepts ofactivities, from manufacturing pro- The chairman of the Emergency statistical quality control could be im-cesses to administrative processes, are Technical Committee, Harold plemented, training was required.characterized by variation. He Dodge, a Bell Labs engineer, and his Dr. Deming, a student of Shewartrecognized the importance of being colleague Harry Romig, published ac- with Ralph Wareham and Chai-lesable to monitor these processes to ceptance sampling inspection tables Mummery of Hoover Corporation,detect possible changes. A process in the January 1941 issue of The Bell developed and conducted the initialcan be defined by two characteristics, System Technical Journal. These training. For the next few years, theyits central tendency and its spread; tables provided statistical guidance and others taught statistical quality

control to 31,000 students from thegovernment procurement arena.

It was 1957 when I learned aboutstatistical quality control charts. TheAmerican Society for Quality Con-trol (ASQC) conducted a course onShewart Control Charts, which washeld one night a week for five weeksand used the ASA standards for in-struction. The following is the scope,as taken from Z1.1 paragraph 1.1scope:

"This standard is intended as aguide for handling problems concern-ing the economic control of qualitymaterials, manufactured products,services, etc. It has particularreference to methods of collecting, ar-ranging and analyzing inspection andtest records in a manner designed todetect lack of uniformity of quality."

7" ,Figure I is an excerpt from Z1.1 and* . will serve to illustrate the construc-

'k j ,< . .tion and use of control chart.

The FiftiesDuring post-war years, American

industry could not make productsfast enough. Our products-tools,appliances, furniture, carpets, etc.,were in demand throughout theworld, and America was about thesole source of supply. Quality con-trol learned and required for the wareffort was second fiddle to high-volume sales and production. It took

Pquite a few years for the rest of theworld to get industrial capabilitiesback on stream.

()uality! control learned and required for the Post World War II found Japanone of the most devastated countries

war cffort was second fiddle to h gh-volume in the world, virtually every cityabeing in ruins. There wasn't enough

food, clothing, housing and littleSsales and production, means to pay for required imports.


FIt;1.V RFl I1.iA.!STRA'TIN; t1.AFt'JTLRFS O)t.'°LE (ONTR 01, (IJAR1'AS VSEIDF)R A XA L YZ i; A SFT O1 I)A IA TO 1) F9tLR MfIN!: HHETHtER HERE ]]ASRFENL1 LA( K )1 ('0 O'TR0I,

JAN.6 7 8 9 10 11 12

)40

ORIGINAL DATA -J *. :Consisting of 38 •

125 individual observed 3 e . ° •values, divided into 037 *

• g 0

25 successive subgroups *. 36:• •:•:0:"of 5 observed values each O 3 6 • • : * * :: 0

0

L 35 0 0*

CONTROL CHART Each plotted point is

FOR AVERAGES the average of the5 observed values

in a subgroup(shown as 5 dotsin upper diagram)

These points falling outside controlNo need to question limits indicate lack of control.points falling inside Chart shows just when trouble occurred-

control limits specifically, assignable causes wereassociated with subgroup Nos. 17 and 21

39 UPPER CONTROL LIMIT39 .... *-- Control limits0, CENTRAL LINE and

/J \ 37 A .central line basedS 37 entirely on data

> 36 being-- 36 -....-..- -- - -analyzed

35 LOWER CONTROL LIMIT

1 5 10 15 20 25SUBGROUP NUMBER

The Japanese had to build up their from the Japanese Union of Scientists JUSE in 1954, conducted seminarsproduction capabilities quickly to and Engineers (JUSE). Subsequently, concentrating on the middle-and top-again commence trading. royalties from publication of his lec- management role in quality-control

tures were given to JUSE, which used activities. It seemed that concen-Help arrived from America. One them to establish the prestigious trating on control charts and sample

of the first was Dr. Deming, who Deming Award, given annually to in- inspection created problems.went to Japan in 1947 by request of dividuals and companies for ex- Although these technical techniquesthe Defense Department. His trip cellence in quality. It often takes were the major reasons for creatingconcerned the Japanese forthcoming years of education and training, quality Japanese products, there wascensus in 1951. During his initial worker involvement and dedicated lack of top-management attention totrips, Deming socialized with the management to achieve this level of the quality issue. This was cited inJapanese and began a long-term excellence. Kaoru Ishikawa's book What Is Totalfriendship. The Japanese, aware of Quality Control? (The JapaneseDeming's knowledge of statistics and The 1950 visit was followed by Way). He said the 1950s was a periodfamiliarity with the ZI-1, Z1-2 and visits in 1951-1952 when more lec- of overemphasis on statistical qualityZ1-3 standards through pamphlets tures on quality control were given, control. Again, according tofrom American Standards Associa- Dr. Deming has made frequent visits Ishikawa, Juran's visit marked thetion, invited him to Japan to teach since the early lecturing days. Dr. J. transition in Japan's quality controlthese techniques. The invitation was M. Juran, invited to Japan by the activities from dealing primarily with


manufacturing-based technology to What's Happening in the U. S.? the nature of motivation and themanagement for total quality con- During the Sixties, companies in means of satisfying those needs.trol. It was this point in time that the United States were using technical Many theories and teachings werequality control was regarded by the and statistical tools to ensure product concerned with employee attitudesJapanese as a tool for management. quality. Major companies, particu- and motivation that would satisfy

Two other areas of importance larly those that had been engaged in organizational missions and goals.were addressed during this period: war production, had formal quality They concentrated on manufacturingquality assurance of newly developed control and reliability organizations. environments with goals of increas-products, and the contribution that These companies practiced statistical ing employee morale and produc-ould be made through quality quality control along with design of tivity.

circles. Using statistical quality con- experiment and reliability engineering. -A major contributor to the U.S.trol charts for monitoring variability They performed design of exper- shrinking competitiveness was thatand inspection for product accep- iments on new products and pro- we disowned technical quality im-tance was widely embraced during cesses before release to production. provement and control techniquesearly stages of Japan's quality im- They implemented statistical process that, for the most part, we originated.provement effort. When top manage- control charts. They conducted Our technology concerns were not inment learned what product markets failure mode analysis and adjusted attaining manufacturing excellence,could be captured with quality as a designs and manufacturing processes but in developing new products andstrategic priority, they branched out to increase reliability. They practiced processes.from statistical process control (SPC) these techniques and others for aand inspection to other avenues of time; but, soon, little of these quality The Seventiessuccess. They realized if a process improvement activities were being The United States experiencedmakes defects even the best methods implemented. phenomenal market growth in theof inspection will not eliminate the Sixties and Seventies. Except for theproblem. If the product is made Following are some reasons for recessions of 1960, 1970 and 1973, thewithout defects, significant savings U S. lack of attention to the question growth was non-stop and loss ofcan be realized. Prevention of defects of quality improvement. market (specifically to the Japanese)is more cost effective than inspectionand defect repair. -American industries were mak- went unchallenged. In 1964, for ex-

ing extraordinary levels of profits and ample, the United States had a $6The concept of quality circles the industrial leadership was fre- billion trade surplus. By 1984, this

began as a means of educating the quently made the prerogative of turned into a $123 billion deficit.work force in Japan. At first, mostly financial managers. We saw business Growth in the deficit was dueengineers, staff and management had schools advocating the theory of primarily to market takeover bybeen trained in QC techniques. The general managership; i.e., that a Japanese products giving our con-way was found to educate the good manager can manage any type sumers unequaled quality for lessforeman and group leaders by form- of enterprise. A person need not money. Figures 2.a and 2.b are takening study groups-quality circles. A know about steel to head a steel com- from the MIT Commission on In-correspondence course was devel- pany, doesn't need to know about dustrial Productivity Book, Made inoped and broadcast by the Japan railroads to manage a railroad com- America-Regaining the ProductionBroadcasting Corporation as part of pany, etc. I think that it is not incor- Edge. It illustrates the import-exporteducational programming in 1957. Its rect to say our industry and business posture of some key industries. Thegoal, eventually achieved, was to leaders were managing for growth, influx of Japanese products is thereach the entire work force, and was with little concern for improvement, most significant reason for theattained by educational programs If there were concerns, it was when changes from 1972 to 1986.and by inculcation into the entire major problems occurred that wouldschool system. result in gigantic consequences to How did we lose so many product-

Years later when quality circles company profits. markets, specifically to the Japanese

were imported into America, we -Another dimension of this era in such a relatively short time7

somehow lost the intent of quality was the impact behavioral scientists -The Japanese started in the Fif-circles being study groups. What hap- were having on management of our ties to institutionalize the delivery ofpened instead was the formation of enterprises. Theories of Maslow, quality products and services andgroups that were given, for the most McGregor, Hertzberg, Argyris, etc., they succeeded. Their children arepart, minimal training, the inference were being read and taught through- taught at home and in school thatof management support and implied out the country. They weren't only quality is expected, as a producer andresponsibility to change anything and taught in business schools; major cor- as a consumer.everything. Many circles adopted the porations used many of their teach- -All levels of management in in-single objective of improving work- ings for in-house management train- dustry and business recognize thating conditions. When management ing. In a gross sense, the message of quality of product and services notreaction wasn't immediate the groups behavioral scientists was that of only results in increased customer de-sometimes became negative con- individual-worker needs, versus mand, but is cost effective-competi-tributors rather them positive, organizational needs. They probed tive.


FIGURE 2a. U.S. IMPORTS IN IXJ)LSTRIES STU!JIFI)

80

1972asE

60e 1986

. 40

C6

0- 0(D

00.E

0-Auto- Chemicals Commercial Consumer Machine Semicond., Steel Textiles

mobiles aircraft electronics tools computers &office equip.

Sources: Based on data made available by the U.S. Department of Commerce, International Trade Administra-tion, Office of Trade Information and Analysis, supplemented by data presented in U.S. Department of Com-merce, International Trade Administration, U.S. Industrial Outlook, 1988 (Washington, D.C.: U.S. GovernmentPrinting Office, 1988); and Organization for Economic Cooperation and Development, COMTAP Database.

FIGURE 2.b. U.S. EXPOR TS IN INDUSTRIES STUDIED

80

1970O

0 60 1986w0

• 40"0)0.

0X 20

Auto- Chemicals Commercial Consumer Machine Computers & Steel Textilesmobiles aircraft electronics tools office equip.

Sources: Based on data made available by the U.S. Department of Commerce, International Trade Administra-tion, Office of Trade Information and Analysis, supplemented by data presented in U.S. Department of Com-merce, International Trade Administration, U.S. Industrial Outlook, 1988 (Washington, D.C.: U.S. GovernmentPrinting Office, 1988); and Organization for Economic Cooperation and Development, COMTAP Database.


-All employees can and are ex- Jlure I's a qualitly The Term Total Qualitypected to implement the improve- Management Emergesment process. Their contributions are revolution todayl1 , Two events in 1984 focusedsought out and recognized by Department of Defense interest inmanagement. tl ltyre was In total quality management: the

-Supplier contributions to the Defense Logistic Agency (DLA)final product in terms of time, cost 19S4, Customer bottom-line conference, and theand quality are requested and recog- quality improvement activities at thenized. expectations for Naval Air Repair Facilities.

-They seek out and recognize the " " "rIn 1984, two of the country's ex-voice of the customer from the initial perts on quality improvement urgeddesign phase and throughout the pro- bet ter quality and attendees at a government conferenceduct life cycle, to improve the quality of all U.S.

-They are dedicated to con- services are goods and services. Dr. A. V. Feigen-tinuous improvement of all processes baum and Dr. Myron Tribus spokein the business enterprise. increasinig faster at a DLA bottom-line conference in

Washington, D.C., to 400 corporate-Their bottom-line is not the ;m h u ti executives, government officials and

quarterly earnings statement, but to thanithe q academic leaders. Dr. Feigenbaum ismake the enterprise "recession president of General Systems Co. andproof"; "to make our company reces- ilJip-l'rioe n t(its a pioneer in quality improvement.sion proof, with true sales and With Dr. Deming and Dr. Josephtechnological capabilities," stated delivered by Juran, he taught the Japanese in theRicoh Co.,LTD., 1975 recipient of 1950s the competitive power in con-the Deming Award, when asked ad-vantages of total quality control. a merican industry. tinuous quality improvement. At the

time of the 1984 conference, Dr.-The belief that teamwork Tribus was director of the Center for

throughout an organization is statistical process control (SPC). He Advanced Engineering at MIT.essential. credits SPC in significant cost and Tribus had, years earlier, persuaded

-Total quality control (manage- quality improvement that resulted in Dr. Deming to publish his book:

ment) begins and ends with education Nashua's competitive success. Quality, Productivity and Corn-

and training. Six months after the NBC white petitive Position, which, with video

-All levels of management, from paper, Ford contacted Deming and tapes on the subject, has beenchif eutves offi er t t th fo asked for help. Ford Motor Company distributed to thousands in American

chief executive officer to the foreman lost $2.5 billion in 1979 and 1980 and industry.practice the managerial and technical was looking for a way to increaseskills to accomplish continuous pro- profits. Deming's major thrust in the For the DLA bottom-line con-duct improvement. '40s was SPC; in 1980, his major em- ference, Dr. Feigenbaum's addressThe Last Decade phasis was turned to managerial mat- was "The Hard Road to Quality Ex-

In 1980, attitudes began to change ters. Deming was delighted to work cellence." He talked about a study in-

in this country. Two events that with Ford and other large companies. dicating that 82 percent of the con-

helped trigger this were the NBC He wanted to "create a bonfire that sumers, government and industrial

white paper "If Japan Can.. .Why would create a prairie fire that would markets placed quality in a position

Can't We?" and, the Ford Motor consume all America and turn it equal to, or more important than,

Company implementation of quality around." Dr. Deming's 14 points are price. Yet 4 years earlier, quality im-

improvement as a competitive a prescription for a company's com- portance received a 48 percent

strategy. The NBC white paper in- petitive success. He is continually tell- response. He indicated three

troduced the American public to Dr. ing American management they are worldwide influences responsible for

Deming. Claire Crawford-Mason, rsponsible for 94-96 percent of prob- the increase.

producer of the show, had learned lems faced in business and industry. 1. Consumers' purchase expecta-about Deming. The program ex- Ford Motor Company led by Don tion. There is a quality revolution to-plored how Deming went to Japan in Petersen, who took to Deming im- day, as there was in 1984. Customer1950 and taught the Japanese mediately, has made significant expectations for better quality pro-statistical process control. Many changes in the company and yielded ducts and services are increasing at athink he single handedly brought the significant success. For the first time, faster rate than the quality im-Japanese to a level of excellence in in 1986, Ford made more profit than provements delivered by Americanterms of quality. Also appearing on General Motors. The manner in industry.the program was William Conway, which Ford embraced Deming's con- 2. Management's recognition thatchief executive officer of Nashua cepts and work with their suppliers quality improvement can be the mostPaper Company, who used Deming has significantly influenced other ma- effective way an enterprise can in-to train the Nashua workforce in jor U.S. companies. crease productivity and reduce costs.


3. Japan's influence. No need to go Customner expecta- Everywhere, short courses are of-into too much detail. Just take a look fered in SPC, Taguchi design of ex-in parking lots or in electronic stores. tiots for better periments, quality function deploy-

Dr. Tribus' presentation was "Cost ment, basic improvement tools,

of America's Defense; Is the DOD lTQM implementation, and concur-

Part of the Solution Or Part of the qality alld ser- rent engineering and the behaviorial

Problem?" He was invited to discuss aspects of teamwork and empower-

what is happening in academia re- vices tire increasing ment.

garding quality and productivity. He As suggested, many techniques aredeviated and said the United States faster than the not new. That isn't the point. New oris not coming to grips with the old, Japanese or American, thequality and productivity issue. The quality ima- United States must recognize thatresult is an increasing deficit and continuous improvement of all pro-military supplies and equipment cesses, products and services in ourcosting too much, often defective and pro vemeilts enterprises is imperative to sustainunreliable. Dr. Tribus said in 1984 and regain a world-market share.the DOD spending rate was half a delivered by Although remarkable accomplish-billion dollars per day for military ments of the Japanese have been citedweapons and supplies. Their roleshould be judged in light of "He who A merican industry!. in this paper, we must remember that• other determined competitors musthas the gold makes the rules." be considered in the future. Europe

I believe Dr. Feigenbaum and Dr. 1992 is no small threat to many ofTribus planted the TQM seed that theories taught by W. Edwards Dem- our industries.day in the Department of Defense. ing, M. Tribus, P. Crosby and J. ConclusionThe defense community, because it is Juran and have proven successful indriven by requirements and pro- Japanese and U.S. companies." The The birth of initiatives conformingcedures, can move very slowly. On report goes on about the im- to the concepts that many in industrythe other hand, because of impending provements demonstrated by Ford and government call total qualityfinancial crisis and competitive Motor Company and the need for management is necessary for in-pressures, some U.S. companies management commitment and exten- dustrial survival. Many U.S. govern-made significant strides in quality im- sive training for successful TQM ment and industrial leaders recognizeprovement. Companies like Xerox, implementation. this and are taking a proactive stance.Harley Davidson, Motorola, Hewlett Many more, however, do notPackard and IBM prioritized quality Where Are We Today? recognize this crisis and think

role, business as usual, as in the last fewinto a strategic business Whether you call it Total Quality decades, will sustain U.S. industrial

In 1984, while Dr. Tribus and Dr. Improvement (Boeing), Star Quality dominance.Feigenbaum were getting the DOD (Lockheed), Six Sigma (Motorola),stirred up about quality matters, a Quality Focus on the Business Pro- To those not believing there is aprogram, "Total Quality Manage- cess (IBM), Total Quality Manage- crisis I again quote Dr. Tribus, fromment," was being implemented ment, etc. the Eighties have seen the his 1984 address.within one of defense's operating quality of products and services In Madison Square Gardengroups. The Naval Air Rework becoming a major concern for many there was a boxing match.Facilities began an initiative of TQM companies. Before the main bout there wasin 1984; later (1986) it was proposed In the last few years, we have seen a preliminary in which the box-as the mechanism by which the a shift, specifically in competitively ers were very badly matched.Department of Defense could achieve threatened companies, to where One of the fighters went downPresident Ronald Reagan's goal of statistical process control charts are in the first minute of the firstachieving 20 percent increase in pro- utilized. Design of experiments are round. Someone in the au-ductivity by 1992. conducted to optimize product and dience shouted "fake" and the

As stated in the 1986 Report of the process parameters. There is a call to audience took it up. The fighterDOD Task Force On Productivity in listen and to meet customer re- did not get up. The crowdthe Support of Operations: "total quirements. Conferences are held to shouted. "Fake. Fake. Fake."quality management training is aimed address concurrent engineering; i.e., Finally the stretcher-bearersat improving the quality of our pro- systematic approach to the in- came and carried the fighter outducts through use of statistical pro- tegrated, concurrent design of proof the hall. As he was being car-cess control. This requires changing ducts and their related processes in- ried out the crowd kept up thethe corporate environment to em- cluding manufacture and support. chant. "Fake. Fake. Fake." Thephasize work processes and to in- Seminars and conferences are con- next day the boxer died. As thecrease communications and interac- ducted on employee teamwork and reporter said, he had to die, justtion within the organization. Our empowerment, and the contribution to prove the fight was on thetraining is based upon management of quality improvement to a business, level.


The Improvement ofTECHNOLOGY

TRANSFERFrom Government Laboratories

To IndustryJoseph W. Lee

T here is a lack of useful feed- the public and private sectors, was cultural differences, ineffectiveback to the Congress and the mailed to 531 members of the mechanisms, bureaucratic inertia,

Executive Branch on how to improve Technology Transfer Society living in not-invented-here syndrome and mis-the government-industry technology the United States. Approximately sion conflicts in governmenttransfer process. Industry responses half of these represent government laboratories. Of these, five wereand attitudes on technology transfer and industry; the remainder are from policy-related, two were informa-policies have been neglected because various academic and legal profes- tion/marketing-related and six wereresearchers focused on theoretical sions, consultants, etc. The response people/management-related.models, cumbersome procedures, exceeded 50 percent. The dismal progress in technologynarrow-focus case studies and the transfer from government labora-obsession for commercial payoff tories to industry is due primarily toanalyses. Commercialization success, Government needs the lack of government commitmentin terms of economic gains and jobs and industry interest. Government,created, can be difficult to quantifydue to the lack of standardized to increase leading in use of creative promotionalevaluation procedures. This situation Industry should develop a moreis complicated by the strategic impact educational positive attitude toward technologiesof technology (the long-term effect on developed elsewhere. Improvingbusiness and society) and other in- proarants technology transfer from governmentfluencing variables such as manage- for laboratories to industry will requirement effectiveness and political aortechnology management expertise,change. Thus, it has been difficult for training technology effective leadership and governmentresearchers to evaluate the impact of and industry executive commitment.the Stevenson-Wydler Technology transfer managers, Improved communication betweenInnovation Act of 1980 and The government and industry would helpFederal Technology Transfer Act of scientists anld them understand one another's en-

1986. vironment; then, effective transfer

Dr. Lee's report is the result of his can occur. Government needs to in-research, sponsored by the Engineer- eign r inth crease educational programs foring Management Department of The training technology transferGeorge Washington University, con- putblic and private, managers, scientists and engineers inducted to provide a better under- the public and private sectors.standing of the issues and identify Government Should Leadbarriers in government-industrytechnology transfer. A validated Impediments The research project concludes thatsurvey questionnaire, designed with government has a leadership role inthe cooperation and assistance of Findings indicate 13 impediments technology transfer and needs totechnology transfer professionals in to government-industry techonology provide the infrastructure for

transfer, including lack of funds implementation. This report includesl)r. Lee is president qf Internatirnal designated for technology transfer ac- recommendations on improving the

(iOmsultinq Senices. tivities, ineffective communication, process.


INTERNATIONALDEFENSE COOPERATION

AGREEMENTSThe authors are Dr. Philip E. Chartrand, Dr. JamesH. Hershman, Howard Stevens, Constance Cox, Heike

Nuhsbaum, and Jennifer Bostow of the Government AffairsDivision, U.S. OffQwe of Personnel Management; and

Richard Kwatnoski, Faculty of the Defense SystemsManagement College.

l international cooperative Congressional review powers over

weapons agreements-whether MOUs can and will be exercised whento sell weapons or codevelop and a military aspects of our nationalcoproduce them with our allies-the security are considered on CapitolCongress plays a significant role in Hill, and also when economic orreviewing and, possibly, overturning political aspects catch the Congress'negotiations completed by the De- attention. In addition, the Congresspartment of Defense. No multina- has mandated since 1985 that thetional program manager can afford Department of Defense shall reduceto ignore this congressional oversight weapons costs and duplication byauthority while planning and con- developing arms in concert with ourducting negotiations with allied NATO allies. This requires a greatermilitary establishments. number of multinational negotiations

We tend to think the Congress in- by DOD officials andvolves itself primarily in the sale of.arms and weapons systems,but its statutory review " y gvespowers extend also to mere- 1 e, th on-oranda of understanding gesaoher

(MOUs) where U.S. weapons, basis for oversightequipment or technology are \ as it reviews com-transferred to foreign _pliance with this direc-governmen...... tive.

.f This

paper willexplore the basis

I Meo d ofor congressionalunemranding ooversight of inter-

national technology transfers, howare formal that oversight is exercised, and whatwritten arrangements between factors attract special congressionalgovernments, setting forth the atninconditions under which they intend atninto cooperate in given areas, and are "8Bcgonto be contrasted with letters of offer Bacgrun

and acceptance (LOAs) used in for- Throughout our nation's history,eign military sales (FMS). 'the Congress has been interested in


foreign arms sales control and trol Act was great because it meant When reporting is required, noti-weapons technology transfer. In the concurrent resolutions could no fication is to be given after negotia-1920s and 30s, the Congress passed longer be used to veto sales of arms tions are completed between the rele-the Neutrality Acts in an attempt to to foreign states. Therefore, the Con- vant departments of the executivekeep America out of foreign wars. gress has been forced to rely upon branch and the foreign government,Following World War II, in the era joint resolutions of disapproval as its but 30 days before the negotiatedof a bipartisan foreign policy, the main recourse against executive agreeement is signed. However, if theCongress deferred to the president on branch decisions to sell U.S. arms or sale is to a NATO ally, Japan,these issues. However, in 1974 the to transfer technology abroad. The Australia, or New Zealand, notifica-continuation of the Vietnam conflict Arms Export Control Act, amended tion may come only 15 days beforeconvinced the Congress to enact in 1986, reflects this change. A joint implementation. To ensure the Con-legislation allowing for increased con- resolution requires legislative and ex- gress has sufficient time to review thegressional participation in for- ecutive branch power sharing: it proposed sale, the Department ofmulating U.S. foreign military sales needs a presidential signature to Defense informally provides advancepolicies. Amending the Foreign become law. Consequently, such a notification to congressional commit-Assistance Act of 1961 and the resolution is susceptible to a presiden- tees 20 days before the formalForeign Military Sales Act (later tial veto, which would then require notification, except when sales are tobroadened and included in the 1976 a two-thirds majority of the Senate NATO allies, Japan, Australia, orArms Export Control Act), enabled and House of Representatives to be New Zealand.the Congress to monitor and, if overridden. To create codevelopment ar-necessary, regulate such sales. Congressional Reporting rangements, if entered into under the

To monitor, the president was re- Requirements terms of the Arms Export Controlquired to notify the House Foreign ct, ol th e report byAffairs Committee and Senate Under provisions of the Arms Ex- Act, all MOUs must be reported byForeign Relations Committee of any port Control Act of 1976, as amended, the Department of Defense to theimpending "major arms sale" to a two reporting requirements are im- Speaker of the House (for the Houseforeign state. Regulation was proposed on the Department of Defense Foreign Affairs Committee), thevided by permitting the Congress to for (1) proposed individual foreign Senate Foreign Relations Committee,legislatively bar any major arms sale, military sales and leases of defense ar- andte Seat Armd Sere Com

or any commercial licensing agree- ticles or services, conducted byments with non-NATO countries. A LOAs; and (2) proposed individual agreement goes into effect. This

major arms sale is a sale of major codevelopment agreements made reporting language was contained in

defense equipment valued at $14 under MOUs. When a sale is trans- the so-called Nunn-Quayle amend-

million or more, or total sales of $50 acted through a commercial technical ments added to the statute in 1985-86.

million or more. assistance or manufacturing licensing These amendments permit the presi-agreement with a non-NATO country, dent to enter into "cooperative pro-

To regulate these sales, the Con- the State Department reports it. ject agreements" with NATO allies orgress, before 1983, could pass concur- friendly foreign countries, and definerent resolutions that served as A third reporting requirement the term "cooperative project" as well"legislative vetoes." If passed by a added by the Congress in 1989, as set forth the requirements for suchsimple majority of both houses, such orders DOD to report annually, agreements.a resolution (not requiring the presi- March 1, the status of all existing In coproduction arrangements fordent's signature) would prohibit any MOUs, and a description of every weaponrodystin r eensesale with which the Congress did not proposed MOU for which funding weapons systems in our defenseagree. Although the Congress never has been requested in that year's arsenal, reporting requirements are"vetoed" such legislative authority, it DOD budget request to the Congress. not set forth clearly in statute, so theDepartment of Defense has beenbecame entrenched in the process of The president is required to give treating these like FMS major armsdetermining the recipients of U.S. the Speaker of the House (for the sales, and reporting these MOUs onarms sales and technology transfers. House Foreign Affairs Committee) the same basis. Coproduction agree-More than once, the threat of a leg- and the Senate Foreign Relations ments are reported to the Congress ifislative veto caused the president to Committee a detailed outline of most, they: (1) involve sales of majoralter the contents of an arms sale but not all, proposed foreign military defense equipment valued at morepackage negotiated by the Depart- sales (FMSs) or leases of defense than $14 million; (2) add up to a totalment of Defense. articles or services. Reporting is sale of more than $50 million; or (3)

Arms Export Control Act and required only if the agreement in- may be implemented through commer-Chadha Case volves foreign military sales of ma- cial, technical or manufacturing licens-

jor defense equipment valued at $14 ing agreements with non-NATOIn 1983, the Supreme Court rule in million or more or total sales of $50 countries.

the case of INS vs. Chadha that million or more. In practice, notifica-legislative vetoes were unconstitu- tion has been given additionally to If a bar is to be raised to the im-tional. Although the case itself dealt the House and Senate Armed Ser- plementation of these sales, leases orwith a provision of immigration law, vices Committees, and the House and cooperative projects, it must start bythe impact on the Arms Export Con- Senate Appropriations Committees. having a senator or member of the


House of Representatives introduce a cancellation of this program, even security posed by the sale of highlyjoint resolution of disapproval in though Nunn Amendment funds transportable weapons to any Arabhisiher chamber. Such a resolution were available, state. While the Administrationwould be considered first by the viewed this arms sales package asHouse Foreign Affairs Committee or Arms Sales-The Politics necessary to strengthen the securitythe Senate Foreign Relations Corn- A good example of this legislative of a major Middle East ally, the verymittee. However, failure of either oversight process at work is the Saudi different way the Congress viewedcommittee to approve it would not arms sales deal of 1986. Under the this sale caused rethinking andpreclude the full House of Represen- original agreement, the Reagan Ad- renegotiation of an arms package bytatives or Senate from passing the ministration intended to sell 1666 the executive branch to avoid havingresolution. In the case of foreign Sidewinder air-to-air missiles, 100 the legislative branch kill the salemilitary sales of major defense equip- Harpoon air-to-sea missiles, 200 altogether. When the president sub-ment, special procedures have been Stinger ground-to-air missiles, and a mitted the formal notification, heestablished by statute to expedite number of F-16 fighter jets, wing dropped everything from the agree-congressional action in the House and tanks and helicopter gunships to ment except various missiles, butthe Senate within 30 days on a joint Saudi Arabia. After the Administra- Capitol Hill opposition continued.resolution of disapproval. Remem- tion informally notified the Congress On May 6-7, 1986, the House andber, issues that seem unrelated to the of the agreement, intense opposition the Senate passed a joint resolutionnegotiation may be viewed on Capitol emerged in the Senate and the House, of disapproval by a two-thirds major-Hill as justification for blocking the due to a perceived threat to Israeli ity, should the president veto thesale, lease, or cooperative develop- resolution. While the president exer-ment/production project. If the Con- cised his veto, he told the Congressgress chooses to enact legislation bar- 1 I t Cas ofshe no longer intended to include thering such a project from continuing, .ocg iltiA 200 Stinger ground-to-air missiles inthe 30 day "clock" is irrelevant; suchproject can be stopped after it has Stils o ajor the arms sale package. This tactic

made the proposal more politicallybegun. d eu mn acceptable to its opponents and

Beyond the congressional role in sil p d created an atmosphere conducive tooverseeing foreign arms sales, leases compromise. On June 5, 1986, theand cooperative agreements, the have been Senate voted to override the presi-legislature additionally has the power e by dent's veto but failed by one vote tonot to fund or reduce funding for get the required two-thirds vote,projects already agreed to by the allowing the revised sale.president, in consultation with the cig"sna A contrasting example of theCongress, in the name of the United acio I'll legislative oversight process at workStates. Since the Congress ultimate- was the 1989 proposed arms sale toly has the power over all federal tSaudi Arabia. On October 11, thegovernment appropriations, it is Bush Administration informallyalways possible that the Congress O notified the Congress it planned towill refuse to fund projects, even afterthey have begun. Because the Con- sell the Saudis 315 tanks worth angress is sensitive to the harm that

could follow a reneging on U.S. com- Ha.

mitments, it remains an exception forit not to fund a project where anMOU has been reached and has beenaccepted by the Congress. Yet, thereare some indications this may bechanging. In the 1989 ConferenceReport to accompany HR 3072, theDepartment of Defense Appropria-tions Act of 1990, ten internationalprograms were identified to bewithheld from "NATO research anddevelopment funds." There were nosurprises on this list. These programs,for various reasons, were not con-sidered viaMe candidates for comple-tion. However, zeroing of thedomestic (Army) funding of the155mm autonomous precision-guidedmunitions program resulted in a JA


government would require a transferof technology in connection with acontract subject to an offset arrange-

.ment. "Offset arrangements" areagreements, made as a condition ofthe sale, in which the purchasinggovernment receives U.S. technol-ogy, investment funds, or items pur-chased by our government, to offsetor reduce the costs to the recipient ofthe U.S. defense product being pur-chased. Offset arrangements are in-tegral parts of virtually all coproduc-tion agreements, but not necessarilyin all codevelopment agreements.

Memoranda of understanding withoffset arrangements are barred by theFY89 Act if their implementation

s.n'%, would significantly and adversely af-estimated $3 billion, beginning a president to work closely with the fect the defense industrial base of the20-day informal notification period. Congress to avoid confrontation was United States and would result in aThis was followed by a 30-day for- highly successful. No action was taken substantial financial loss to a U.S.mal period, during which the Con- or proposed by the Congress to op- firm. The only exception would begress could have stopped the sale if pose the 1989 tank sale to Saudi where the Secretary of Defense deter-a sufficient majority in the House and Arabia. mined, in consultation with theSenate opposed it. Unlike the 1986 Commerce Department Role Secretary of Commerce and theSaudi arms sale, there was little op- Secretary of State, that the agreementposition to this sale from Israel's sup- In the FY89 Defense Authorization would strengthen the national securityporters. In part, this was because Act, the Congress added further re- of this country, and so certify to thetanks are not as likely to fall into the quirements before DOD could enter Congress.hands of terrorists as are Stinger into international memoranda of Third, provision was made for U.S.missiles. understanding "relating to research, firms to protest whenever required by

development or production of defense imtoptetwnvrrquedb

Another reason for the lack of con- equipment." These requirements in- an MOU to transfer defensegressional opposition was the way volved additional studies by DODi technology to a foreign country. Suchthe Bush Administration approached and advance conltstins with firms could insist that the conse-

the legislative branch before the re- Department of Commerce. quences would be to adversely affectquired notification. While President our defense industrial base or result inReagan complained that required First, in negotiating and renegoti- a financial loss to the firms. Oncecongressional involvement was ating any international MOU, the again, the Secretary of Defense wouldonerous and unduly inhibited ex- Secretary of Defense must consider consult with the Secretary of Coin-ecutive branch conduct of foreign the effect of that MOU on the "defense merce and the Secretary of State,policy, President Bush smoothed the industrial base of the United States"; before deciding validity of theseway for his proposals by extensive and "regularly solicit and consider in- claims.congressional consultation. His Ad- formation or recommendations from The authority of the Department ofministration spent months preparing the Secretary of Commerce with Commerce over technology transfersits case for the Saudi tank sale, end- respect to the effect" of such an MOU was strengthened in the Defense

ing with 2 weeks of intense discus- on our industrial base. In order to Authorization Act for FY90 and FY91.sions with congressional leaders and conduct the required consideration, There, the Congress ordered theapproximately 25 key Hill players. the Defense Department established a Secretary of Defense to "regularly

"defense industrial base office" to solicit and consider comments andThe president's representatives em- develop and propose plans for main- recommendations from the Secretary

phasized that 40 states would reap taining and fostering U.S. defense in- of Commerce with respect to the corn-

hundreds of millions of dollars of dustrial readiness. Through this office, mercia implications of such

business and thousands of man-years or by other means, the Secretary of memorandum of understanding and

of employment. The Bush team held Defense must consider the impact on the potential effects of such meinoran-up informal notification for 5 weeks the industrial base of each major dum of understanding or relatedto complete the process of advance defense acquisition program as well as agreements on the international corn-consultations. While this detailed in- every MOU with a foreign country. petitive position of United States in-volvement of the Congress in thepreliminary stages of the negotiations Second, the law provided for con- dustry" (10 USC sec. 2504).goes far beyond the minimum require- sultation with the Secretary of Coin- In addition, an interagency reviewments under the law, this effort by the merce when an MOU with a foreign procedure was established. Its purpose


was to provide the Department of The clear implication of the cooperative project, undertaken inCommerce and United States in- 1985-86 legislation was to signal con- 1988 with Japan, met with oppositiondustries, particularly those related to gressional enthusiasm for joint on Capitol Hill.defense, with a means of challenging development and joint production ofMOUs or other agreements made by defense equipment among the United FSX Proposal andthe Department of Defense. If the States and its major allies. The Technology TransfersDepartment of Commerce has reason preamble underscored this by noting While the Congress has exhibitedto believe that an existing or proposed that a major reason why Warsaw a desire to promote "Rationalization,agreement has, or threatens to have, Pact nations produced and deployed Standardization, and Interoperability"significant adverse effects on the in- more major combat items in recent (RSI)" of military equipment throughternational competitive position of years than members of NATO is technology sharing, as stated in theUnited States industry" the Secretary because of "inadequate cooperation Nunn Amendment, it is driven alsomay now request this interagency among NATO nations in research, by the need to protect the U.S. in-review. If, after the review, the development, and production of dustrial base. Nothing demonstratesSecretary determines that the "coin- military end-items of equipment and the importance of this factor on con-mercial interests of the United States munitions."are not served.. .the Secretary shallrecommend to the president the" i,renegotiation [or modification] of theexisting memorandum or related agree-ment... to ensure an appropriatebalance of interests." If the presidentagrees with the view of the Secretaryof Commerce, the MOU may not beentered into or implemented.

Nunn AmendmentIn the Department of Defense

Authorization Act for FY86, enactedinto law November 8, 1985, SenatorSam Nunn (D.-Ga.) insertedan amendment urging and requestingthe president and the Secretary ofDefense to "pursue diligently oppor-tunities for member nations ofNATO to cooperate in research anddevelopment on defense equipmentand munitions" as well as in "the co-production of conventional defenseequipment." Money was set aside inthe act to fund such cooperative pro- In The Annualjects; to pursue this objective, the Report to the Con-Department of Defense was required gress for FY90, the Secretary ofto consider a cooperative research Defense reported 17 Nunn Amend- gressional oversight of technologyand development project at program ment projects existed with signed transfers more clearly than the con-initiation and subsequent formal MOUs (as of January 1989). Since troversy surrounding the FSX fighterdevelopment milestones. In effect, the then, the number has increased to 35, agreement with Japan. The presi-amendment forced DOD to justify, according to informal sources within dent's proposal called for codevelop-for each new defense equipment pro- the Office of the Secretary of ment and coproduction by the Unitedject, why it was not seeking to struc- Defense. According to the Deputy States and Japan of the Fighter Sup-ture a cooperative development pro- Under Secretary for Industrial and In- port Experimental (FSX) jet basedgram with one or more NATO allies. ternational Programs, it is planned upon the F-16C, manufactured byFinally, the amendment added that it that more than $10 billion will be General Dynamic Corporation. Con-was the sense of the Congress that spent on Nunn Amendment projects gressional opposition arose over theDOD should do more side-by-side by the United States and its allies dur- relative economic and military bene-testing of U.S. conventional defense ing the next 5 years. Thus, congres- its eac country would gain from theequipment being developed against sionally mandated requirements for proposed program.existing equipment manufactured by investigation of cooperative oppor- A principal concern of critics of theother member nations of NATO. A tunities with our allies have been FSX program is that it would allowsecond Nunn amendment, passed in acceded to by the Department of Japanese companies to gain access to1986, extended the reach of these pro- Defense. Consequently, DOD re- American technology at a relativelyvisions to "major non-NATO allies." acted with surprise when a similar low cost and would enhance their


ability to compete in the aerospace In addition, congressional op- though several members of the Houseindustry, one of the last strongholds ponents were concerned about setting and the Senate sought to block theof American high technology. Ac- a precedent for transferring commer- deal, they failed to win a majority ofcording to the Office of the United cially valuable technology to U.S. their colleagues. A strong bipartisanStates Trade Representative, Japan trading partners for the sake of effort developed in support of S.J.has used similar agreements in the mutual security. The more recent Res. 113, a proposal to strengthenpast to undermine the U.S. advantage South Korean proposal to coproduce terms of the FSX Agreement. Thein the electronic and automotive in- the F-16 with the United States is only resolution contained three majordustries. As Senator Alan Dixon (D. one example of pending cases involv- elements concerning the U.S.-JapanIll.) said May 1, 1989, the deal was ing these potentially contentious codevelopment project. It precluded"one-sided and so utterly outrageous technology transfers, the release of critical U.S. enginethat I'm astonished that the Ad- technologies, the result of Americanministration is trying to get away To supporters, it was incredibly research. Furthermore, the resolutionwith it." Critics like Dixon argued shortsighted for the Congress to reiterated U.S. statutory prohibitionsthat the technology the United States block the FSX proposal. They argued regarding third-party transfers of

a codevelopment project U.S. defense technology by Japan.of this nature would Finally, the resolution specified the

benefit U.S. security and United States should obtain at leastAmerican industry. Instead 40 percent of the production work

of the Japanese pro- resultiducing the jet fighter on their ng from the FSX.

own, they would pay the On May 16, 1989, the Senate voted"07; United States to assist them in its 52-47 to approve S.J. Res. 113. On

development and would share any June 7, 1989, the House passed thenew technology. The royalties from joint resolution by a margin ofthe FSX, in turn, would reimburse the 241-168. The president vetoed theaerospace industry for initial resolution July 31, 1989. The Senatedevelopment costs associated with defeated the motion to override thethe 1970 vintage F-16. Blocking the veto on September 13, 1989, by adeal, proponents stated, would not vote of 66-34 (one vote less than thestop Japan: it would produce an required two-thirds), allowing theindigenous jet fighter even if it meant FSX agreement to be implementedapproaching other nations for the according to the Administrationnecessary technology. With Euro- guidelines.pean aerospace industries lobbyingfor Japanese contracts, the threat of After FSXJapan developing the FSX without the By late 1989 and 1990, congres-United States was a viable one and sional concerns with technologywould certainly damage our aero- transfers became more varied andspace industry, complex. There were members want-

would receive from the Japanese as Furthermore, codevelopment of ing to encourage transfers, as ex-a result of the FSX project was ques- the FSX would strengthen Japan's emplified by the Nunn Amendments;tionable at best. For instance, some defense capabilities in the Western and, there were those concerned toU.S. corporations already have the Pacific, enhancing protection against protect our defense industrial base,composite materials technology that Soviet invasion of Hokkaido Island. who had urged a stronger review roleJapan would offer General Dynamics If implemented successfully, the by the Department of Commercethrough the program. codevelopment of the FSX would over DOD's international defense

The largest concern of opponents have short-range and medium-range cooperation negotiations. Now with

to the FSX project was the existing benefits to U.S.-Japan defense declining defense dollars available for

trade deficit between the United cooperation. Based on the F-16C, the any weapons development, there

States and Japan. These critics felt FSX would be more compatible with were members of the Congress wor-

that rather than build a new aircraft, American aircraft and would lend ried primarily about parochial in-

Japan should obtain an equivalent itself to more simplified coordination terests like defense contractors in

airplane by buying upgraded F-16s or of joint operations and support for their districts. In short, international,

F-18s from the United States. By pur- communications and fuel. national, and local concerns couldchasing existing American planes in- cause the Congress to examine, and

stead of attempting to develop the Senate Joint Resolution 113 seek to regulate further, international

technology independently, the In accordance with provisions of defense cooperation agreements.

Japenese would reduce the costs of the Arms Export Control Act, Presi- Indicative of the interest in en-development and shorten delivery dent Bush submitted the required couraging cooperative agreementstime of the planes, as well as reduce "certification" outlining details of the that would improve the conventionalthe U.S. trade deficit with Japan. FSX proposal to the Congress. Al- defense capabilities of the United


States and its major allies, the Con- -State of trade relations betweengress revisited the Nunn Amend- the United States and the projectments in 1989. The Conference AS [ili l W partner nationReport accompanying the Defense [ X1 Pa c a -Type of technology involved inAuthorization Act for FY90 insisted the transferthat the "senior leadership of the 11te] ests w / t io ofns eDefense Department needs to manage -Ratio of benefit to cost for eachmore closely" the process of identi- of the two countriesfying cases where cooperative -Home state concerns of mem-research and development projects dc, u l bers of the Congress.with allies should be negotiated. To The outcome of each issue will beput more pressure on the Depart- determined on a case-by-case basis asment, the Congress added another c irc mim[es, w the Congress attempts continually toreporting requirement. By March 1 reconcile its conflicting desires toeach year, DOD must supply to the C 1ic, tt[ a either encourage international de-Speaker of the House of Represen- fense agreements and increase stan-tatives, and the Committees on dardization, or oppose them and pro-Armed Services and Appropriations tect our economic well-being andin th e S en a te a y ea rly rep o rt o n th e d d in d ustrial base

status, funding and schedule of every l International domestic defense industrial base.

existing memorandum of understand- This material wasing; also on every proposed project prepared Jor par-for which no MOU has been entered ticipants in the DSMC Advanced Inter-

into, but for which funding has been natinal Management Workshop.requested in the budget submitted for About the Authorsthat year. Philip F. Chartrnd received B.A.,

At the same time, the Act em- Conclusions M.P.A., and J. degrees fom

phasized protecting our national With a growing appreciation on Harani Univenio, and a Ph.D. degreedefense industrial base by giving the Capitol Hill that the economic well- from Syracuse Unirsitv. He is a seniorDepartment of Commerce more au- being of the United States depends on facult, member at the Governmentthority to comment on pending its competitive position in the global Affairs Di4sion, U.S. Ofice of Per-MOUs, oppose their completion, and economy, and with a dramatic les- sonnel Management.push concerns of domestic firms sening of the Cold War confrontation James H. Hershman, Jr., received a B.A.fighting foreign competition. That in Central Europe, economic con- degre from Lvnchbug Colge, anrole is likely to be further enhanced cerns are a major dimension in the degree from Wak orestas congressional demands persist for congressional definition of national UniMrsi. , and a Ph.D. degree Frethe Department of Commerce to pro- security. Because the definition in- theUnive i t of Vitinia. He is a senior

tect America's eroding world trade volves the broadest range of econ- faculty member at GAD.status. omic, foreign policy, and national

As for parochial concerns, and security interests, codevelopment and Hoanrd Stevens wasgmduated from Johns

with defense spending declining, coproduction agreements will attract Hopkins University ith a B.A. degreetherc undoubtedly will be hundreds congressional scrutiny. In the 1990's, and recehed an M.B.A. degree from

of cases where members will fight to the potentially conflicting goal of in- The Geoge Washington Unrrsit. He

prevent-or continue-international creasing international arms develop- series on the senior faculy at GAD.

cooperative agreements, depending ment arrangements and the rising Constance Cox recehird a B.A. degreefromon constituents' needs. For example, mood of economic protectionism will Mount Holyoke Collegeandisattendi

DOD decided in its FY91 budget sub- frame congressional consideration of law school at Samford University.mission to cease funding the Mark technology transfers. As ever with Heike Nuhsbaum is a graduate ofXV radar 1FF project being developed the Congress, parochial interests will Occidental Colee. She is working as ajointly with NATO partners, leading overhang all considerations and, lyislathe assiant to a Member of thea member to demand reconsideration depending on varying circumstances, logess tbecause 250 jobs and $2 billion for will complicate and perhaps shape Congress.the congressional district were at the legislative decision on interna- Jennifer Bostoi uns graduated fiom the

stake. The House member mustered tional cooperative projects. Univeity of aloifinia, Northridge, incompany officials of Allied Signal While it is always difficult to Mav 199d.

Aerospace and West German defense predict when and to what extent the Richard Kwatnoski is a Pofrssor of"officials to urge the Deputy Defense Congress will oppose such an agree- Engineerinq Management in the liv-Secretary in January 1990 to recon- ment, recent Capitol Hill battles, such ecuthiy and International Departmentsider the cut decision. A similar pro- as the FSX, give some guidelines. of' the Defense Svstems Managementcess will pressure DOD not to fund Four factors triggering intensified College. He is the Course Directorfornew cooperative agreements when scrutiny of an international defense the Adanced International Man-the result may endanger U.S. firms. agreement are the: agement Workshop.


CALL FOR PAPERS

A C Q U I S I T I O N F O R T H E F U T U R E

Imagination, Innovation, and Implementation

1991 ACQUISITIONRESEARCH SYMPOSIUM

CO-SPONSORED BY THEDEFENSE SYSTEMS MANAGEMENT COLLEGE

AND THENATIONAL CONTRACT MANAGEMENT ASSOCIATION

WASHINGTON, DC CHAPTER

SHERATON NATIONAL HOTELARLINGTON, VIRGINIA

JUNE 4-6, 1991

Outstanding papers will be selected for presentation at FOR FORMAT INSTRUCTIONS ANDthe symposium and/or printing in the symposium ADDITIONAL INFORMATION CONTACT"proceedings."

Mr. Calvin Brown or Ms. Joan L. SableSelection of papers will be based on their relevancy to DSMC-DRI-Rcurrent issues in acquisition management. Commercial: (703) 664-3385

Autovon: 354-3385Special consideration will be given to topics concerning orinternational aspects of acquisition and implementation Mr. Edwin L. Phelpsof previous or current acquisition research efforts. (NCMA)

Commercial: (703) 379-2900Papers must be received by January 18, 1991. Send to:

DSMC-DRI-R(ARS)Fort Belvoir, VA 22060-5426


QUALITY FORCEDEPLOYMENT

A Technique for Applying "Strategy to Task"Captain Thomas H. Miller, USAF

Weapon system capabilitiesV are subject to great

debate. With the Cold War ending andthe defense budget shrinking, many inthe Congress and the Department ofDefense are questioning the need fornew advanced weapon systems. Thereis little agreement regarding what is notneeded. All agree our military forcesneed sufficient warfighting capability to T11provide national security but how ,

much is enough? Tying system capabil- 11 " --ity to national security is difficult.

Weapon systems are taking longer Ito field. Program Initiation to InitialOperational Capability may take as .long as 12-15 years as developers -. _,

wind their way through a maze ofbureaucratic red tape, and govern-ment officials define and redefineneeded system capabilities. Packard'sBlue Ribbon Commission, the

Goldwater-Nichols Act, and theDefense Management Review haveaddressed the need for a morestreamlined acquisition process. Mostfocus has been only on the middlepar t of a time line that stretches from -__need identification to full operationalcapability.

Captain Miller is ass~qned to Head- A Top-Down military strategy and the regionalquarters, Strategic Air Command, Comprehensive military strategies to the combatantDeputate for Requirements, as Chief, Ac- Approach commander's Concept of Operation.quisition Management Branch. He is a At each level, the strategy is defined

graduate of the Defense Systems Manage- Lieutenant General Kent, USAF by objectives which must bement College Program Management (retired), in A Framework for accomplished. 2

Course and certified as an intermediate Defense Planning' proposed a newprogram manager by Air Forre Systems streamlined top-down approach to Lieutenant General Kent linksCommand. Captain Miller is a lecturer military force planning. His "Strategy operational tasks that must be per-on acquisition management for the to Task" approach tracks operational formed to critical system and equip-DSMC Central Region and for the Air tasks from our national security ment functions through operationalForce Institute of Technology, strategy, through our national concepts. Looking upward, opera-


operational tasks according to focused on broad competing opera-agreed-to, end-to-end operational tional concepts, not independentconcepts-a concept for each task. system concepts. A recent Air StaffThe way to fail in this endeavor is to survey of Air Force operating com-start by assessing the ability of in- mands (SAC, TAC, MAC and ATC)dividual systems to perform func- found that none of their major pro-tions.4 He points out that opera- grams went through an acquisitiontional capability is the goal; hardware Concept Exploration. 10 All were top-is only the means, down directed.

He proposes the basis of new ac- Without clearly defined operationalquisition or modification programs concepts that tie our national securitybe the formulation of new opera- objectives to system capabilities, thetional concepts. The Department of debate continues. Sometimes acquisi-Defense approval of the operational tion concerns, not operational concerns,concepts, as documented in the Ser- take precedence creating an environ-vices' proposal, would constitute pro- ment that fosters disagreement on

V .- gram initiation. Each proposal would customer wants, changing re-contain a concept package and an ac- quirements, deployment problems andquisition package. 5 The concept long product development cycles.package would address the "what"and would be on a broader scale than The "Strategy of Task" approachthat addressed by the Air Forces cur- would overcome these problems by

rent System Operational Re- requiring a correlation of nationalquirements Document (SORD). The security objectives to systemacquisition package would address capabilities. Assuming a structured

the "how." Proposal approval would approach is desired, how is this done?

authorize the service to conduct Con- One method is through Quality Forcecept Demonstration/Validation. Deployment (a derivative of Quality~Function Deployment).

Operational concepts are for-

mulated jointly by the operational A Proven Planning Tool

command and the acquisition com- Quality Function Deploymentmand. 6 For technology programs, (QFD) is a planning tool effectivelythe Air Force Systems Command used by industry for product

-' Aeronautical Systems Division has a development.11 Consumer productwell-defined process for formulating development can, like weaponoperational concepts. Operational system development, consist ofcommand inputs are made through numerous technical tradeoffs,the use of a Mission Requirements organizational conflicts resultingPackage.7 For acquisition programs, from shared responsibility and differ-

• the Strategic Air Command forms an ing interpretations, and mixed orY /acquisition support group, to include contradictory priorities. Also, like

systems and logistics command systems development, it can takerepresentatives, to prepare its place over a long time frame whereSORD.8 resources (manpower and funding)

Contrary to acquisition theory, seem to be constantly changing.

"Strategy to Task" is being used in- The QFD primary purpose is toformally today. The C-17, B-2, Ad- reduce the product developmentvanced Technology Fighter, and A-12 cycle while improving quality and(Advanced Tactical Aircraft) pro- reducing costs. 12 Toyota Autobody

tional concepts define the means of grams independently passed acquisi- adopted the QFD approach in 1977.attaining the objective. Looking tion reviews. Still, Secretary of Using it, Toyota suppliers reduceddownward, they define programs to Defense Cheney held a Major Air- both product development time andbe implemented to provide the equip- craft Review on March 30, 1990. The costs by one-third to one-half. Thement. 3 He says "The operational Navy proposed that the A-12 could increase in the quality of their pro-concept provides the peg on which to accomplish many of the B-2's mis- ducts has made them the "best in thehook the procurement of systems, sions. The Air Force proposed that class."' 3 In 1983, Ford Motor Corn-equipment, weapons, and munitions. the B-2 could perform the conven- pany introduced the operatingThe key to linking strategies to task tional deep strike mission more effi- mechanisms of QFD to theiris to assess the correlation between ciently than the Advanced Tech- engineers and key suppliers. 14 By theachieving a stated operational objec- nology Aircraft. 9 Unlike acquisition late 1980s, Ford became the mosttive and accomplishing a cluster of reviews, the Major Aircraft Review profitable auto manufacturer in the


United States. The QFD focuses on FIGURE 1. EXPA ND MISSION REQUIREMENTS"the voice of the customer."1s Itssuccess lies with its ability to trackdesign and manufacturing parametersback to the original customer OPERATIONALrequirement. OBJECTIVES

As structured, QFD cannot be P E Ddirectly applied to force planning. R M OWO D FORCESThe business terms and definitions V R 1 FENSE FORESmust first be translated into military NATIONAL SECURITY,,p E P N SORTIEoperatonal terms and definitions. OBJECTIVES N E A GENERATIONSince basically all of the terms T A T

change, I have taken the liberty of 0 ENEMYchanging the name of "Quality Force N AIR ATTACKSDeployment." It's more descriptive of NATIONAL MILITARYour overall objective. OBJECTIVES FLEXIBLE

Because QFD focuses on "the voice RESONSof the customer" and "productdevelopment," it's important todiscuss how these terms have beenredefined. I have defined thecustomer of force planning to be theNational Command Authorities(NCA), the combatant commander(CINC), and the Congress. The Na-tional Command Authorities tiary requirements to obtain a more For "suppress generation of enemy airestablish our national security and definitive list (Figure 1). The sorties," the operational tasks weremilitary objectives and the comba- "Strategy to Task" approach uses a crater runways, mine operating sur-tant commander establishes the hierarchy of security and military re- faces, disrupt/damage air base in-operational objectives. The Congress quirements.1 7 Our fundamental goal frastructure, damage aircraft in theinfluences these objectives by selec- is the survival and prosperity of the open and in shelters, and pin downtively funding those they support. United States. The next lower level is takeoffs. 20 We would continue to ex-(Ignoring the influence of the Con- that of the national security strategy pand the list until all operationalgress on military requirements would and objectives, and so on down to tasks to achieve the other operationalbe the same as ignoring the influence our operational objectives. Saying objectives, such as delay/damageof a family on a car buyer's re- that we have a requirement for a par- Soviet follow-up forces and supplies,quirements.) Since military forces ticular system or weapon is a cor- and defeat enemy air attacks, haveconduct missions to accomplish rupted use of the term.18 Examples been included. This list then becomesvarious operational tasks to achieve of Lieutenant General Kent's the top horizontal axis of the Missionthese objectives, the desired "prod- "Strategy of Tasks" requirements 19 Requirements Planning Matrix.uct" of force planning is successful include: to prevent the domination ofmission completion. In times of war, the Eurasian land mass by the Soviet Step 3: Define the mission re-the "product" is easily summarized by Union (a national security objective); quirements to operational task rela-one word-victory, conduct a forward defense and main- tionships (Figure 2). For example,

Applied Together tain capability for flexible response achieving the operational task of(its supporting national military ob- "crater runways" would have a

The rest of this paper will concen- jectives); delay/damage Soviet strong relationship to "suppress sor-trate on the 10 steps needed to apply follow-on forces and supplies, sup- tie generation," but it might also have"Quality Force Deployment" to the press generation of enemy air sorties a weak relationship to "gain air"Strategy to Task" approach. The and defeat enemy air attacks (sup- superiority." If they can't get into thetechnique combines two matrixes- porting operational objectives for the air, they can't fight you. The relation-the Mission Requirements Planning former). The QFD format not only ship matrix can quickly indicateMatrix and the Operational Task permits, but encourages the use of whether the operational tasks ade-Achievement Matrix-to trace our hierarchical requirements. The com- quately cover the operational objec-national security objectives down to pleted list of mission requirements tives. The amount of white, unfilledsystem capabilities. The steps and the then becomes the vertical axis of the squares indicates the robustness ofmatrixes were derived from those Mission Requirements Planning the Concept of Operation. A robustdescribed in "Quality Function Matrix. Concept of Operation would allowDeployment" by L. P. Sullivan.lb Step 2: Define the measurable the operational objective to be

Step 1: Expand mission re- operational tasks needed to ac- attained even though a particularquirements into secondary and ter- complish the operational objectives, task was not adequately accom-


1IGURE 2. 1)EFINE RELATIONSHIPS cumulated, a comparison should bemade to the operational task targetto see if an adjustment in force struc-

OPERATIONAL - TASK: CRATER ture will be necessary. If the taskTASKS target is not achievable within the

-2 TIRbounds of the expected force struc-Ri U N-WAYS ture, then ever accomplishing theOPERATIONAL OBJECTIVE: task and attaining the objective is

7 SUPPRESS SORTIE doubtful. Perhaps other operational' MISSION GENRATIO concepts should be pursued. Defin-REQUIREMENTS GENERATION ing the operational concept and

GAIN AIR SUPERIORITY associated targets completes the mis-K, - ___sion requirements planning matrix.Their approval would consititute

- _STRONG RELATIONSHIP Milestone 0.Step 8: Select the operational tasks

Mwith strong mission requirementsMEDIUM RELATIONSHIP relationships to carry forward.

Again, depending on the importanceWEAK RELATIONSHIP of the objective and the robustness ofW K RI the Concept of Operation, critical

operational task targets are selectedto be carried forward to the Opera-tional Task Achievement Matrix.These become the basis for the forcestructure and system capabilities to

plished. Conflicting relationships can the robustness of the Concept of beracquredalso be demonstrated by the use of Operation.negative symbols (not shown). Step 6: Create the selling points for Facilities Tradeoffs

Step 4: Conduct campaign evalua- a new operational concept. The right Step 9: Develop expected force ele-tion by adding the NCA/CINC im- hand column of the Mission Re- ment and operational capabilityportance ratings and mission area quirements Planning Matrix docu- quantities, expected system capa-analysis. Mission area analysis ments the selling points of a new bilities and system capability toshould include a force-on-force or operational concept. Selling points operational task relationships (Figuredynamic campaign analysis of the are derived from the importance of 4). The Operational Task Achieve-operational objectives. This the objective, the past performance ment Matrix not only ties systemanalytical evaluation should point of the force element (similar force capabilities and force structure to theout force strengths and weaknesses, elements for new systems), the operational task, but it facilitatesIt may result in a realigning of the maturity of the proposed technology, tradeoffs between system capabilityoperational objectives and tasks. The and the costs ( not only system life- and force structure. (Manpower, andNCA/CINC importance ratings cycle costs, but also force attrition, the number of personnel required byprioritize the operational objective etc.) of attaining the objective. If past each specialty code, should be in-according to more subjective criteria, performance is poor, technological cluded.) If the target system capa-

Step 5: Conduct operational task risk is high, and losses would be high, bility is not achievable, then the rela-achievement evaluation and compare the operational concept has few tionship of that system characteristicto campaign evaluation to identify legitimate selling points-unless the to achieving the operational taskoperational deficiencies. Current campaign swings on attaining the ob- weakens. To offset this, either otherforce element capabilities are jective. Then, the costs may become system capabilities must beevaluated as to their ability (with cur- acceptable. An example of a new strengthened or increased quantitiesrent weapons and personnel) to ac- operational concept proposal for must be purchased. It may evencomplish the operational task. Cur- "suppress sortie generation" could be become necessary to revise the opera-rent capability is compared with 200A-16 with X Weapons Package. tional concept or task target. Thisneeded capability to identify deficien- Step 7: Develop measurable, should be done only after evaluatingcies. For example, if the operational achievable targets for the operational the impact of a change on achievingtask, as adjusted by campaign tasks (Figure 3). Defined operational the objective through the Mission Re-evaluation, is to crater N runways in task targets are critical to developing quirements Planning Matrix.D days and the force element can a marketable operational concept. Tradeoffs could also take place byonly accomplish 80 percent of the Task targets will later drive the force tracking a change in the other direc-task, then an operational deficiency structure and system characteristics tion. For example, mission areaexists. Its seriousness depends upon to be acquired. As systems are analysis has concluded that the threatthe importance of the objective, and deployed and test data are ac- is not as substantial as first suspected;


FIGURE 3. OPERATIONAL TASK TARGETS Step 10: Determine critical systemcapabilities, characteristics and con-straints to be carried forward intosystems development (Figure 5). Theselection of critical system

OPERATIONAL -capabilities, characteristics and con-TASKIICstraints to be monitored during_ - I A r , _r I f NEW system development is documented

0 CONCEPT in the concept package to be submit-_ O - -s At E " SELLING ted to the Defense Acquisition BoardC POINTS at Milestone I. It would explain the

/REOL (RE L AT IO N S H IP', rp L [ "what" while the developing com-MATRIX AP mand's acquisition package would

M/ A PROPOSAL: explain the "how."-I IT 200 A-16s(G I WITH Result: More Effective

N X WEAPONS Mission Planning Process""_ _The following quotes were takenTiE from the summary of Lt. Gen. Kent's

TARGETS A Framework for DefensePlanning:

22

"Congress is growing increasinglycritical of the apparent lack of a

MEASURABLE OPERATIONAL TASK TARGETS logical and persuasive relationshipCRATER N NUMBER OF RUNWAYS IN D NUMBER OF DAYS between U.S. military strategies and

the defense budgets they approve."Quality Force Deployment isspecifically designed to listen to "thevoice of the customer"-the NCA,

this results in a reassessment of our Combining the two matrixes, the combatant commander and thecurrent capability to accomplish the through current and expected opera- Congress.task. If current operational capability tional capabilities, "enables us to "The framework demonstrates thecan adequately accomplish the task assess the current andfuture ability relationships of strategies down toand attain the objective, then the new of our forces to perform clusters of tasks-or tasks up throughoperational concept, and resulting tasks to achieve the multiple opera- strategies...." The Mission Re-forces and weapons to be procured, tional objectives that underwrite quirements Planning Matrix not onlymay not be needed, stated regional strategies." 2' correlates the strategies to tasks, but

also identifies the strengths andweaknesses of the relationships, oridentifies conflicting relationships.

FIGURE 4. OPERATIONAL TASK "The key to this approach is the

A CHIE VEMENT MATRIX formulation of operational conceptsto provide the link between develop-

0) ment and acquisition programs andI Roperational tasks." Quality Force

MISSION RELATIONSHIP CAMPAIGN 0Deployment assists in developing theRQMTS MATRIX EVAL 0 Z operational concepts by documenting

r_ rX their foundation, selling points and

T&E uJ targets. The Operational TaskCC w Achievement Matrix facilities forceTARGETS Lu Cc structure and system capability trades

FORCE OP SYSTEM z by showing the relative strengths ofELEMENI CAP CAPABILITY Q 0 system capabilities to operational

200 ° ._o___•_ task achievement.

"IRCRAF7 a L Quality Force Deployment is aA-16 I CC planning tool to tie systems2000 a~(

DAACM __________< 0 capabilities to national security ob-S.... ° _ _ ~Z jectives. It has a proven track record

8000- -- - -- -- . < I in industry. Demonstrated resultsPEOPLE - * .. .- - are: preservation of knowledge,

...... _-__ fewer startup problems, lower


FIGURE 5. PROPOSED CAPABILITY

OPERATIONAL - AFIT SCHOOLTASKS

i-iiii-----KEEPS

Z\ A E CURRENTMISSION A A PROPOSED

REQUIREMENTS SYSTEMS The Air Force Institute of Technol-MATRIX AA CAPABILITY ogy School of Systems and Logistics,I\'// PA C K A G E W r ig h t -P a t t e r son A FB , O h io, w h il e

o oNN--- N Oexpecting challenges from the future,-,NN finds the present abundantly busy.

, -Notwithstanding reductions inT&E i Y defense resources, the school will

TARGETS -t- meet challenges and perform currenttasks, in large part because of its

- -- -------- varied and thorough curriculum of--- graduate and continuing education.RE LAT - The school has an overall goal to

MATRIX ) enable graduates to perform better/ the technical managerial tasks re-

quired to meet missions and to im-prove their critical thinking skills.Meeting this goal leads to effective

startup costs, shorter lead time, and 10. HQ USAF/XOX Message leadership.customer satisfaction. 23 Using it with 0513002, "Request for Information onthe "Strategy to Task" approach MAJCOM Pre-Milestone I Concept Distance Educationwould go a long way toward Studies and Cost Analysis Capabilities, The School is committed to havingeliminating much of the confusion (March 5, 1990); Discussions with the most current technology to serveand debate concerning weapon MAJCOM representatives, TQ User's faculty and students. It is activelysystem procurement. Seminar, (March 28, 1990). using the upgraded television capa-

Endnotes 11. W. E. Eureka, Briefing Slides, bilities located in its video classroom.1. Technical Report R-3721-AF/OSD "Introduction to Quality Function While television production capabil-

(The Rand Corporation; June 1989). Deployment," no date. ities have been used for many yearsBrfi 12. Lawrence P. Sullivan, "Quality to produce videotapes for distance

2.LFunction Deployment (QFD): The education, recent upgrades improvedSlides, "Briefing on Force Planning," Beginning, the End and the Problem the ability to output signals to the(February 1, 1990), p. 9. In-Between," (October 15, 1986), AFITNET TV systems, the base TV3. Kent, (1989), p. 19. p. 3. cable system, and to satellites. Soon

to be added will be the capability to4. Ibid., p. 25. 13. Ibid. improve the character generation for5. Ibid., p. 34. 14. Michael A. Schubert, "Quality lecture videos, and to use the TV6. Ibid., p. 26. Function Deployment--A Means of mixing boards with direct computer

Planning, Integrating Reliability Through input. These gains will help support7. DCS/Development Plannian- Development," (Dayton; June 1988). faculty involvement with distancening Process," (Aeronautical Systems 15. L. P. Sullivan, "Quality Function education.

Division; March 28, 1990). Deployment," Quality Progress, As world technology grows, I be-8. Strategic Air Command, "Sup- (June 1986), p. 40. lieve H. G. Wells may have stated the8. Stl1. Ibid. role of education today best when heplement to AR 57-1: Operational 16said, "Human history becomes more

Needs, Concepts and Requirements," 17. Kent, p. 52. and more a race between education(Offutt AFB; June 26, 1989), p. 1. 18. Ibid., p. 51. and catastrophe."

9. Benjamin F. Schemmer, "Buy 19. Kent, (1990), pp. 11-13. In a changing political and militaryOnly 30 B-2s, Delay/Redesign ATF, world, education becomes the oneC-17 OK, Boost Navy ATA, Cheney 20. Ibid., p. 14. constant tool for success. For moreTold," Armed Forces journal, (April 21. Kent, (1989), p. 19. information, contact AFIT/LS at1990), p. 21; Barbara Amouyal, "RiceProposes A-12 Sacrifice for B-2," 22. Ibid. p. v-vi Autovon 785-5361.Defense News, (April 9, 1990). 23. Eureka, p. 59. -Colonel R. S. Cammarota


HOW CONTRACTORSSEE SYSTEMS ACQUISITION

Marshall H. Kaplan

A any people involved in .... :.........................................:...:....:.::.......:..............................~~~~th e acq u isitio n o f m ajo r ....:: ........: ....................:...........:.......:...............:...:.....:................:..:....::...:.:....:.......::::::::::::::::::::::::::::I..,...-.,..- ,..,... . %..............,, ... ., ........-..... .................. ...... . ---.... ,..... ,,..................... ... -...........

system s for the governm ent are not ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::.,..... ,..,,,..... . ..............................................................................

must deal with responding to govern- :::::::::::: i:awar of he c ntr ctorcult re w ich .... .......... ....................................... . . . . . . . . . . . . . . . . . . . .•........ ......... .................................... . . . . . . . . ........... ... -.".m ust d e dwithstes ondi g t vrn- ............... ............................ .... . .. ... ...............-......

.......... . . ................. .......... ... ...........:.., . ... .. .. .......ment needs. Most contrac- ........................ ...............-...................... .. . .. . . . , ... . .. . ........ ..'

tor/customer relationships are adver- ............ .... .........sarial in nature and this limits the ............".......amount of cooperation between .................. .......

agency personnel and supplier per-sonnel. Recently enacted laws havefurther separated these two groups.Thus, marketing and bidding to thegovernment involves some extremelycomplex interactions.

This article is designed to enlightengovernment acquisition personnelregarding the response process asseen from the contractor's point ofview. The acquisition process isspecified via the Federal AcquisitionRegulation (FAR), which specificallydefines procedures for contractaward resulting from competitivenegotiations. Any acquisition pro-cedure that does not involve sealedbids or auctions and is competitive isconsidered to be a source selectionprocess, the objectives of which areto maximize competition, minimizeIN

1)r. Kaplan is the Associate Vice Presi-dentfin" Research at the Florida Instituteoj'Technology. His proftssional expeiencespans more than 25 years, incluing 4Years in the aerospace industry, 13 yearsas a projessor at the P'ennsylvania StateUniversit , at 8 years as a managementand high-technoli. consultant to univer-sities, intustr,, and goernment. He holdsadinnced enginee4n drgnes from M. I. T

and Stanford Universitv.


the complexity of acquiring new their specialized needs. This has Phase 11: Solicitation and Proposalsystems for the government, assure resulted in each element of the federal Preparationimpartial evaluation of offers, and government having a different set of Solicitation and proposal prepara-guarantee the selection of the offer in detailed procedures for selecting con- tion activities consist of the develop-terms of stated requirements. In sum- tractors, and they vary widely from ment and release of the RFP by themary, the government wants the agency to agency. To demonstrate sponsoring agency, and submissionmost for its money. Unfortunately, the extent of development of special of proposals by contractors. Func-it rarely gets its money's worth. Some procedures in these agencies, consider tions of the RFP are to describe theof the reasons are presented here. the Department of Defense (DOD). requirements, state the contract

Formal Acquisition Procedures Beyond the basic FAR, the Depart- terms, establish the evaluationment of Defense has a set of general criteria, set the proposal format, and

Our government started to for- Defense FARs, called DFARs; and provide information on the source-malize the acquisition process in each Service has a subset of these. For selection process. Each RFP must in-1948, thus, the concept of source example, the Army has AFARs, clude a description of deliverableselection is not a new one. The fun- Navy has NAVFARs, and Air Force items, specification and statement ofdamental FAR does not go beyond a has AFFARs. work (SOW), special contract re-general level of specification and To focus on one of these, consider quirements and clauses, proposaldefinition so agencies, departments T FFAus T hese onsiset prean insrctioss, aand Services have been implementing the AFFARs. These regulations set preparation instructions (PPI), and

acquisition procedures designed for policy, assign authority, and evaluation factors for award.prescribe procedures for Air Force The specification gives a detailed

.................. solicitations and evaluations of pro- set of requirements to be satisfied by........................... ............................ se of requirements tobestifedb

..................... ......... posals. To make it more complicated, tesse en rcrd hl h

..... ::::::::::(AFSC called the AFSC Supplement. E o n fato enti se,. . . . .. . . ... ..... -. • •....... ... ,...... -.- ,......... -.... -......... -.. . ,

....Under this, there is still another level;crtiaueinhevlaiopoes

.e.g.Space.Division.Supplement to select a winner. Finally, the PPI,...-.....-.-........ ... ...... . .. . . . . .:Aeronautical Systems Division Sup- specify the basic contents of the pro-

plement, and Electronics Systems posal. The sum of all these........ Division Supplement. documents should represent a logical.... .......... ::::::

The acquisition of a large system set of goals for an offerer to achieve.... .... by the government is characterized in the proposal. In fact, the proposal

by a highly formal and restricted in- should be structured to simul-teraction between the government taneously satisfy the evaluation

0 and the offerers (or contractors). The criteria, SOW, specification and PPI."1 larger the procurement, the more

restrictive is the interaction. Conven- The unfortunate truth is that it istional source-selection processes can rare indeed to see a well-structured,be described as a four-phase se- logical RFP that can easily be inter-quence. preted in terms of required proposal

Phase I: Pre-solicitation Activities contents and volume outlines. In fact,

Pre-solicitation phase activities in it is usually a gut-wrenching ex-

the procuring agency occur perience to extract the real intent and

simultaneously with a number of bid- objectives of a procuring agency from

der activities; i.e., marketing, the RFP. Typically, it is only throughmanaemer ai itietio, mand pre- a long and tedious process ofmanagement deliberations, an pe- analysis, discussions with technicalproposal preparations. This phase isstfierewwthmktngp-characterized by an intense effort staff, interviews with marketing per-

charcteizedby n itens efortsonnel, and guessing that a logicalculminating in the release of the re- connection can be developed between

quest for proposal (RFP). Bidders are the evaluation criteria and SOW.

allowed limited access to the agency the oniti and Ou

for purposes of marketing and Superimpos e cPPI on this and you

technical discussions related to the have the perfect ingredients for a case

system being procured. This is the of "high anxiety." Many times theresult has no basis in fact vis-a-vis theperiod in which contractors can

potentially have a significant in- customer, and the bid becomes a

fluence on the RFP. Most contractor waste of time, money and morale.

organizations hope to persuade the Many contractors have counteredagency to slant the RFP in favor of this situation by taking an offensive,their company in one or more minor rather than a defensive, approach.or major ways. The general philosophy is to comply

t Program Manager 39 September-October 1990

with all requirements ot the SOW coded scoring is occasionally prefer- The SSEB does the actual readingand specification, and satisfy the let- red and is mandatory for certain and scoring of proposals. Its member-ter of the PPI. Beyond these items types of acquisitions. It is generally ship is largely made up of specialiststhey make sure to explain the logic felt that color-coding allows greater participating only in their areas of ex-used in the proposal carefully and flexibility in the award decision. It is pertise. One interesting and littlethoroughly. Whenever possible, the important to note that an award need known fact is that the same people dobetter contractors use proposal maps, not be made to the bidder with the not have to evaluate all proposals;guides to the reader, indexes, and highest numerical score. In fact, the i.e., it is conceivable that one set ofcompliance matrices to assure clarity record shows that the point scores people on the SSEB will never set eyesand easy review, can differ by as much as 15 percent on any part of one or more bidders'

and still be considered to be "substan- proposals. In principle, the evalua-Phase III: Analysis, Evaluation, tially equal." tion is still objective since SSEBAnd Negotiation members score against a set of stan-

Evaluation. The FAR specifies that Contractors generally assume that dards. However, in practice, theseevaluation criteria will address three the numerical scoring of proposals standards are not always wellareas of concern: price, needs of the will result in a very close set Of established and well defined, leadingspecific acquisition, and other con- numbers. This is usually the case, to a scoring process which is essen-siderations, such as performance and unless one or more of the offerers has tially arbitrary.experience. Specific evaluation an outstandingly good or bad pro-criteria are developed with four types posal. In close cases, cost is usually Responsiveness to the RFP. Bidders

of questions in mind: what to the tie-breaker. If the Source Selec- generally try to be responsive to all

evaluate, how to evaluate, relative tion Authority (SSA) has a strong aspects of the RFP, even though the

weighting, and minimum satisfactory preference for one bidder because of FAR does not require a bid to be

levels. Another way to identify these reputation, program plan, or extra eliminated automatically if it offers

is: subject matter, assessment criteria, aspects in the bid, cost may not other than the preferred terms and

weights, and standards, decide the winner. This is especially conditions. If this is the case, it will

true when the bid prices in the com- be identified as such in the evaluationscored ineach category of assessment petitive range are within a few process, and called a "deficiency."criteria. Typical topics being assessed percentage points. The offerer may correct deficiencies

through discussions. However, mostare soundness of approach, ex- Source Selection Organization. bidders propose those terms and con-perienc -, past performance, There are generally at least three ditions that appear in the RFP.undersLanding of requirements, com- levels of organization in a formalpliance and risk. source selection. Take, as an exam- There are some instances in which

ple, a DOD procurement where the it is highly desirable to bid a varia-The evaluation criteria are always SSA is at the top, followed by a tion on the requirements. In those

weighted to reflect the relative impor- Source Selection Advisory Council cases, the more astute contractorstance of the various aspects being (SSAC). At the bottom is the Source will submit a compliant proposal andevaluated. Rarely does the procuring Selection Evaluation Board. In more an alternative proposal. The latteragency release these weighting factors roosal incld diffr thatto the bidders. However, the FAR complex procurements this structure poa icudes difeences tadoes require disclosure of the relative may have more than three layers. In might reduce the offering price belowimportance of criteria. Thus, an RFP fact, the SSEB is usually structured that of the competition, correct awill usually have a "riddle" which is into three panels: technical, manage- basic weakness in the RFP, orwill sualave tamet "ridlectig ment and cost. Each may have two enhance a company's basic designa qualitative statement reflecting the or more sub-panels relative to government needs. Manyrelative importance of the scored oagencies specify whether or not anitems. If an RFP does not have a rid- The SSA selects the winning bid- alternative proposal will be con-die, then all criteria are of equal der. This person may be an agency sidered in a procurement.importance. secretary, senior deputy, and so on.

A set of standards is used to The SSAC supports the SSA in Cost/Price Evaluation. Cost/priceestablish an objective evaluation pro- reviewing the work of the SSEB to evaluation is done separately fromcess. Without standards, evaluators assure that all agency and federal technical and management. It is donewould meaur ptarsalans regulations have been satisfied, that with the contract type in mind. Thewould measure proposals against the evaluation is thorough, and that FAR requires that fixed-price andeach other, resulting in one proposal the results are justifiable and support- cost-type contracts be handled dif-becoming the standard for each of the able. An additional task of this group ferently. For example, cost shouldcriteriais to compare proposals using results not be a deciding factor in the award

The evaluation process for large of the SSEB, while the SSEB evaluates of a cost-type contract, but "cost

systems acquisitions incorporates the the bids against a set of standards. realism" is the most important cost

use of numerical or color-code (or Membership of the SSAC typically criterion.

symbols) scoring by the Source Selec- includes the agency's program In the case of fixed-price contracttion Evaluation Board (SSEB). The manager, a senior legal officer, a awards, the lowest-price, acceptablemost common method is to use senior financial officer, contracting bid is commonly selected. However,numerical scoring. However, color- personnel and logistics staff. there is no requirement to award a


contract on that basis. The corollary lJli 4 art'icl i's AGOD THEORY. An importantto this is that a below-cost, fixed- theory used in large and complexprice bid may not be rejected on that pjesigned to proposals to help formalize the think-basis alone. In other words, the SSA ing process associated withhas a great deal of latitude in select- generating strategies and themes. Theing a winner, and he or she is allowed e'nligIt0t; ,Oiroern- acronym stands for Ahas, Ghosts,a full range of subjective interpreta- Oh-ohs, and Discriminators.tions of the bids. U!f*It Il ioi l AHA. A strength or an ac-

Best and Final Offer. The FAR re- complishment of which an offerer isquires that every offerer in the corn- J 'r'son tel' rctrdi proud. It gives the contractor an edgepetitive range be given an oppor- or enhances its reputation to performtunity to revise its offer through theuse of a best and final offer (BAFO). t'liC tq l'1t, pj 0_ well in certain bids.

These must be submitted by a BIDDER-TO-BEAT. The com-specified deadline, but no specific for- C(1'6 aS s(Til ffrol petitor a contractor considers to havemat is given in the FAR. Thus, the best posture to win, other thanBAFOs may be very extravagant in 1rw contractor's itself.large procurements. BID/NO-BID DECISION. A deci-

Phase IV: Selection and Award )o jut of VieW, sion by the contractor's management

Selection. The award decision is to proceed toward a proposal sub-made by the SSA, who is not bound many debriefing sessions are quite mission or to terminate all bid ac-by the findings of the SSEB. In fact, unsatisfactory to bidders. It is tivities on a given procurement.the SSA may ignore the SSEB and typically true that dozens of contrac- BLUE TEAM. A small, selectproceed to establish independent tor personnel spent months working gfindings. He or she may determine long hours in the development of a group of highly experienced

that two proposals are substantially proposal which has cost the company technical, management, marketing,

equal, even though the scores are millions of dollars. These people are and cost experts assembled for a sole

substantially different. It is the bid- convinced that theirs is the best pro- and direct purpose. They are charged

der's responsibility through the com- posal and is sure to win. Many times with the task of emulating the bidder-

bination of marketing, proposal careers depend on winning a given to-beat, and producing a plausible

development, and post-prr posal ac- contract. Thus, if a debriefing is un- competitor's bid strategy.

tivities to convince the SSA that satisfactory, a bidder may file a CAPTURE PLAN. A standardizedtheirs is the proper bid to select. protest. presentation to the contractor's own

Once the winner is selected, the Such actions can be accomplished management on an upcoming pro-tract and notifies the unsuccessful of- in many ways and to a variety of curement of possible interest. Theferers. In cases of large awards, it is government entities. The easiest and contents usually include a programpolitically wise for the SSA to per- most common avenue is to file a pro- overview, funding evaluation, com-sonally notify appropriate members test with the General Accounting Of- petitive assessment, resource alloca-of the Congress before public an- fice. Other routes include the U.S. tion, estimate of company fundsnouncements of the award. District Court, General Services needed for the bid, and the prob-

Board of Contract Appeals, and the ability of winning.

Debriefing of Unsuccessful Of- procuring agency. However, protests COMPLIANCE MATRIX. Aferers. Upon notification of an unsuc- have proved to be unfruitful and, in cross-referencing tabulation of RFPcessful bid, an offerer may request a fact, detrimental to a company s requirements and corresponding pro-debriefing. This request must be future with a given agency. Thus, posal locations where each is

honored, even though the amount of most experienced contractors avoid addressed.information given to the bidder is protests. They accept defeat

limited. For example, a debriefing gracefully and are disgustingly ob- DISCRIMINATORS. Some unique

does not include a point-by-point noxious when winning, aspect of an offer that gives the con-

comparison with other proposals, The Language of the Offer tractor a definite advantage and givesthe agency a specific reason to pick

and must not reveal relative stan- Members of the government ac- that bidder as the winner.dings of the competitors or the scor- quisition team need to understand the GHOSTS. A negative or weaking. Nevertheless, a debriefing is concerns and constraints of offerersalmost always requested so that the in order to be most effective in get- aspect of a competitor's bid which aofferer can assess its weaknesses and ting the best offer at the least cost. A contractor skillfully plants in thestrengths as seen by the government, great deal of insight may be attained mind of the evaluator.

Protests. It is usually difficult for by understanding several key terms ME-TOO. In the absence of agovernment personnel involved in an and concepts used by contractors in discriminator in a given area, this isevaluation to fully empathize with developing strategies and formulating used to show that the offerer is atthe offerers. This is one reason that proposals. least as good as other bidders.


OH-OH. A particular weakness be incorporated directly into pro- The government needs a solutionthat an offerer has that the competi- posal volumes, to this costly situation. One approachtion will surely use against it in the involves establishing training pro-form of a ghost. grams focused on educating acquisi-

PINK TEAM REVIEW. This is the Guidelines for Future tion personnel on contractorfirst comprehensive and complete Typically, contractors go through marketing and bidding procedures.

review of a draft proposal in which four well-known phases during the The objectives of such programsRFP requirements and compliance process of acquiring a major systems would include:

aspects are taken into account, contract; i.e., enthusiasm, panic, -A better understanding of

RED TEAM REVIEW. The final search for the guilty, and punish the marketing and bid processesmajor review of a proposal draft dur- innocent. This bears a good deal of -How to evaluate bidder con-ing therevewlopme proadra Thm- realism. If the government is to get --Ho and decisidnoing the development period. The mis- its "money's worth" from contrac- straints ecisionssion of the red team review is tors, its systems acquisition person- -How to make competitive

theimarin torr m to sce thes po- nel need to become better acquainted assessments among contractorsthe SSEB in order to score the pro- with contractor concerns and con- -Understanding costs of

criteria. A secondary function of the straints, just as contractors do with marketing and biddingteam is to double-check the proposal respect to government agencies. -Anticipating bid strategies ofdraft for compliance to assure that In the past, close working relation- offerers.the RFP requirements have all been ships between customers and sup-met. pliers were very helpful in assuring Achieving these objectives will leadthe government of getting expected to more effective RF's, better pro-

SILVER BULLET. Usually, this performance at the quoted price posals, and better systems acquiredrefers to a decisive discriminator or and within the specified time frame. for our nation.bid strategy which a bidder believes Recent legislation has discouraged Contractors will be able to respondcan be used to eliminate the such interactions; thus, the lack in a fashion that brings out their bestcompetition. of contractor appreciation by attributes, offers the lowest possible

THEMING. The art and science of agency personnel has become more price, and delivers systems that per-generating a set of selling messages to pronounced. form as expected.

NATIONAL CONTRACT MANAGEMENT ASSOCIATION

Just When You Thought It Was SafeTo Do Government Contracting

II TH Streamlining ihe Acquisition Process:Through Whose Rose-Colored Glasses?

ANNUALCareer Development: The Public and

EAST COAST Private Sector Work Force forthe Year 2000

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CONFERENCE International Acquisition: , ,Sprechen Sic Procurement? I,

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Yours, Mine, or Someone Else's? \I.vn k i.r .2 Co.* 2( I l ,N X\Ir " ,

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DODMETRIC TRANSITIONPLANS AND ACTIONS

John M. TascherDefense Qualiy and Standardization Office

m71he Department of Defense designs unless exceptions arehas increased its attention to approved by designated senior of-

metric transition since the passage of ficials. It requires the DOD to empha-P.L. 100-418, The Omnibus Trade size development of metric specifica-and Competitiveness Act of 1988. tions, standards, and other general , iThe Act designates the metric system purpose technical data to supportas the preferred system of weights development of Defense systems,and measures for United States trade equipment, and material. These re-and commerce. It requires "that each quirements, and others affectingFederal Agency, by a date certain and DOD acquisition programs, are beingto the extent economically feasible by consolidated into DoDD 5000.2,the end of fiscal year 1992, use the DOD Acquisition Policy. This willmetric system in its procurements, emphasize metric transition in thegrants, and other business-related ac- DOD.tivities, except to the extent that suchuse is impractical or is likely to causesignificant inefficiencies or loss of The recently submitted DOD met-markets to U.S. firms." It requires ric report to the Congress, as requiredthat each agency establish guidelines by P.L. 100-418, listed metric weaponto carry out this policy. The DOD systems and equipment already ac-Directive 4120.18 on the Metrication quired, or being acquired, by theProgram was cited in the conference DOD. The LHX helicopter is ancommittee report before passsage as outstanding example of a metric-a good model for federal agencies to based system. In addition to currentfollow in meeting this requirement. status and activities, this report to the ....The Act requires each agency annu- Congress outlines future plans to ef-ally to report to the Congress on ac- fect metric transition within DOD.tions it has taken during the previous The Metric Transition Plan, signedyear, and the actions it plans for the by Defense Secretary Frank Carluccifiscal year involved, on January 9, 1989, builds on the

Primary incentives for metric tran- metric program directive to further

sition within the DOD are long-term satisfy requirements of the Act, and

savings and interoperability of equip- the Plan established 16 Task Groups.

ment with U.S. allies, especially Task Group 1 addresses establish-

NATO. To establish policy for metric ment and operation of the Defense

transition, the DOD issued its Direc- Metric Transition Managementtive 4120.18 in September 1987. Group to provide administrative sup-

Among other things, this directive report for managing the DOD transi-new tion efforts. The other 15 Task

quires metric to be used in all n Groups represent major product orMir. aschcr is Chairman o the problem areas, in which metric tran-

l)eftnsc Transition Manaiqemcnt Gnhup. sition needs to be addressed to meet


requirements of the Public Law. The The DOD Transition PlanTask Groups include such areas as recognizes that significant progressmilitary operations, construction, must be made by the Task Groups,food, electronics, test equipment, and and others involved in metric transi-logisitics. tions, before dates for full metric use

The DOD Metric Transition Plan can be determined. Our transition isrequires that each Task Group dependent to a large extent on theprepare long-term plans and identify transition efforts of other agencies

initiation and completion milestones. and industry. The DOD Plan sets

The Plan identifies other government July 1, 1991, as our target date forand non-government organizations identifying when metric will be used;that might be involved in DOD however, the Plan recognizes that

Task Groups may not be able to pro-metric transition. Preliminary planswere submitted by the Task Groups vide specific dates in some cases.

SHOWN BELOW: SD)1 satlfitff use' chical on May 1, 1989, and subsequently Two Task Groups

hHOWN Eit O : c .Y) msais c were approved by the DOD Produc- Two Task Groups dealing withtion and Logistics Committee. The broad-based issues affecting many:5 R,... t t,y O , D,k,s,,,,,t, ., Task Groups were to revise their people and organizations are Educa-

a wug, D BC Plans by August 1, 1990. tion and Training, and Public Af-

T General Approaches fairs. The Task Group on EducationThere areTwo eneral approaches and Training believes that the DOD,Thereat this time, does not need a common

DOD is using in dealing with metric, metric education and training pro-

The first is to buy commercial program. The DOD currently trains in-10 ducts where significant industry dividuals needing a "working--- metric transition is underway or will knowledge" of the metric system to

be in the near future. In this area, the do their jobs. This is similar to the ap-DOD role is to facilitate industry proach used by the automotive in-transition by removing barriers and dustry, and, for the near term, shouldby giving appropriate preference to continue to be adequate to satisfy theacquisition in metric. Examples have needs for metric-trained personnel.

4 included the automotive and con- As DOD use of the metric system in-struction equipment industries, creases and more weapon systems areHowever, DOD does not attempt to built using metric measure, it willforce metrication where it would not become necessary to expand thebe economically feasible to do so. scope and breadth of metric trainingThus, DOD continues operating in for military personnel and civilians.the inch-pound system in commercial As DOD institutes changes and laysareas in which significant industry out schedules, the Education and

metric trans'tion is not underway and Training Task Group will decide onwould not be induced by DOD and promulgate a uniform metricaction. Food is an example. education and training program.

idelgwtmti Meanwhile, the Group plans to meetis The second in dealing with metric periodically to assess progress towardis to establish DOD metric re-quirements. This approach is used metrication in DOD. It will formulate

quiemets.Thi aproch s ued a recommended, phased, programwhere significant metric transition is asedconmeed asng from• ' reasonable and patclInthis based on needs arising from thesereasdpractical. In t assessments.category, DOD has plans and re-quirements for effecting transition in The Task Group on Public Affairsthe near future to conform with the is developing a plan to provide directAct. The LHX helicopter and public affairs assistance, as required,Strategic Defense Initiative systems to other Task Groups. This shouldare examples of this approach. overcome personnel resistance to theHowever, DOD will continue using use of metric measurements in every-non-metric requirements where day activities within the DOD; rein-significant metric transition is neither force dedication to using the metricreasonable nor practical. No efforts system; and inform the public thatwill be initiated by the DOD to ac- the Department of Defense is com-quire metric spare parts for already mitted to using the metric system.purchased inch-pound equipment, The Office of the Assistant Secretaryfor example. of Defense (Public Affairs) will pro-


-Released by Department of Defensem I II I ashington, D.C

vide overall public affairs policyguidance, and will announcedevelopments in the DOD metrica-tion program, as appropriate. The ac-tual Task Groups will provide infor- 111c LIIX helicoptermation and materials to DOD publicaffairs offices to support the metrica- iS all oultstandingtion program. The Service Chiefs of for a few military unique areas, theInformation will develop internal in- t'VtItl1ll of ta DOD ability to unilaterally makeformation programs to inform mili- substantial metric transition progresstary personnel and civilian employeesof the metrication program and how tiiteric-based is limited.it affects them, and will use metric In conclusion, the DOD has aterminology in external information system. The DOD metric policy directive, a plan, andprograms, as appropriate, organizational structures in place to

address metric transition. We are em-Interagency Committee will Continue usinig phasizing the fact that the use of the

The DOD, through its Task metric system in the design and con-Groups, is participating in activities lOli-Illetric struction of our weapon systems andand programs of the Interagency other defense material will achieveCommitte on Metric Policy, afederal equiiremits w eICI long-term cost benefits and con-govemment-wide committee chaired tribute to interoperability and stan-by the Under Secretary of Commerce dardization with our allies. Whenfor Technology. There is a close transition is neither metric transition is done in aworking relationship with private thoughtful and practical manner,sector metric transition planning reasonable or benefits outweigh costs. Substantialorganizations, such as the American metric transition has to be a well-National Metric Council and the U.S. practical. planned, cooperative, national effortMetric Association. This close by industry and government, withcooperation is necessary since, except widespread public acceptance.

SME SEEKS CONTRIBUTORS FOR DFM HANDBOOKThe Society of Manufacturing Concurrent Engineering, Conceptual More than 40,000 volumes of the

Engineers (SME) is looking for con- Design, Product Design, Teamwork, Fourth Edition, five-volume set andtributors for the new volume in its Economics, Technology, Quality, Desk Edition have been sold sinceTOOL AND MANUFACTURING DFA, Management Issues, and (as 1984.ENGINEERS HANDBOOK series, relates to influence on productThis book, volume 6, will cover design) Machining, Forming, and The SME is an international pro-Design for Manufacturability (DFM). Finishing and Coating. To contribute fessional society dedicated to advanc-

DFM guidelines, background, or case ing scientific knowledge in the fieldstudies, contact Ramon Bakerjian, of manufacturing. Founded in 1932,

Material on all aspects of DFM will CMfgE; TMEH Editor; SME Head- SME has 80,000 members in 72 coun-be considered for inclusion. Contact quarters; PO Box 930; One SME tries and sponsors more than 300SME if you can write about DFM and Drive; Dearborn, MI 48121, or call senior chapters and 190 studentthese topics as they relate to DFM: (313) 271-1500 extension 484. chapters.


INTRODUCTION TOSOFTWARE MANAGEMENT

ACQUISITION COURSE

CONSULT THE NEW DSMC 1991 CATALOGFOR A TIME AND LOCATION THAT WORKS FOR YOU

0

FOR MILITARY OFFICERS AND CIVILIANS GS-9 AND ABOVEIN THE PROGRAM OFFICEO ON A DEFENSE ACQUISITION STAFF,

OR EQUIVALENT INDUSTRY POSITIONS

r M TRICS AND47EASUREMEN ... S

0* POINT OF VIEW

ProgramSUL Mange 47W Sepember9ctoberA199

DSMC's New

COURSEDEVELOPMENT

PROCESSPaul J. Mclvaine

A past approach 8-10 years production" of courses led to a search tion. If DSMC considered a newago at the Defense Systems for ways to improve the process of course as a "system," then a DSMC

Management College (DSMC) was to new course development at DSMC. Course Acquisition Process could becontract out the development of developed with many similarities tobrand new courses of instruction. Major improvement started with the Defense Systems Acquisition Pro-Upon completion of development, the observation that the Defense cess. This could permit DSMC tothese courses were then transitioned Systems Acquisition Process in many undertake more organic developmentto the DSMC organic faculty to take ways parallels the acquisition process of its own courses and perhapsover. Problems in this "transition to for new DSMC courses of instruc- smooth the "transition to produc-

FIGURE 1. THE DSMC NEW COURSE DEVELOPMENT PROCESS

COURSE DESIGN iCOURSE NI COURSE COURSE PRODUCTION,rEVRNE8A HNE TEST & TRANSITION OPERATION & SUPPORT NEW COURSE

COURSE FIRSTCHARTER PRODUCTION OFFERING OFFERING

ISSUED OFFERING 3A A A AA AA. ... .. .. .. .. ....PGC PILOT OFFERING OFFERING FINAL

APPROVAL OFFERING 2 4 OFFERING

COURSE ADVISORY TEAMCOSDISCONTINUED CUSTOMER INTERFACE

COURSE REVIEWS

PDR CDR PRR PPOR cc PERIODIC COURSE DUALITY REVIEWS

A..-A.A- -. ' -AACOURSE MATERIALS

DEVELOPED

MATERIAL CHANGES FROM PILOT CONTINUING UPDATE AND MODIFICATION

COURSE OF COURSE MATERIALSMATERIALSBASELINED

.. ........COURSE PRODUCT IMPROVEMENT PLAN


tion. " 'he latest results of this evolu-tion are shown in Figure 1.

As one might guess, requests forthe development of new DSMCcourses come from almosteverywhere-Army, Navy, MarineCorps, Air Force, Office of theSecretary of Defense, Industryassociations, internal DSMCfaculty-and continue to outstrip allavailable resources. Past problemsthat resulted from a lack of controlon this "requirements" processprompted the DSMC PolicyGuidance Council (PGC) to directthat the initiation of all new DSMC 06courses were subject to approval bycustomer requests and the ability ofDSMC to develop and present newcourses of instruction. In fact, fromAcademic Year 1988-1991, thenumber of new DSMC short coursesincreased by 33 percent, as shown inFigure 1. During this timeframe,DSMC was undertaking a massiveredesign effort in the Program -- P)o, t,b. RichapW Aan,

Management Course that would PROFESSIONAL INSPIRATION...Three DSMC professors "inspire" three PMCsignificantly expand the quantity of 90-2 students. Seated, left to right, the students are Captain Leih French, USAF, who alsostudents, is on DSMC's staff; Department of the Air Force Civilian Wanda KausHagen; and LTC

Wendell T. Tengan, USA. The professors (left to right) are Sherman Jacobson, Paul Mcil-What Causes DSMC to Develop vaine and James Sheldon. Mr. Jacobson is the Functional CoordinatorforSoftware and Direc-A New Course? tor of the Management of Software Acquisition Course. Mr. McIh'aine iw-ote this ston,. Mr.

1. Policy Changes. A good exam- Sheldon is Director for PMC, Part 1, and Director of the Acquisition Basics Course.pie of this is the Total QualityManagement (TQM) area. TotalQuality Management clearly was anarea of significant interest to DSMC in this area. Since there is no Assis- 1-week short courses in each of these

--and the entire Department of tant Secretary of Defense for Systems functional disciplines of ProgramDefense. Hence, DSMC recognized Engineering Management, there was Management. These courses providethe need for organic leadership in thisthea nd foriansie tederipmnts no external advocacy for this truly in- much needed instruction for func-area and instituted the development terdisciplinary area of engineering. tional specialists and others unable toof the 1-week Total Quality Manage- When DSMC was formally asked to devote 20 weeks of residency to thement Course. This soon was follow- undertake a Technical Risk Assess- PMC. These courses permit DSMCed by the "transition to production"of an experimental 2-day TQM ment Course, the College position to further explore additional depth inorkshoexpriCntun -dands was that the development of a these topical areas, to test andWorkshop. Continuing demands System Engineering Management evaluate new or modified units of in-have resulted in the current develop- Course with Technical Risk Assess- struction, and to introduce newment effort for the new TQM ment as a topic within this course was topical areas in a less-risky environ-"Facilitators" Course. the appropriate course of action to ment than that of the Program

2. Environmental Changes. The pursue. Management Course. The FY92 in-rapidly changing "state of the art" in troduction of the ManagerialSystems Acquisition Management 3. Customer Needs. Not all DSMC Development Course (MDC) willoften demands changes. A good ex- customers are able to devote the 20 complete the cycle and DSMC willample is the DSMC Systems weeks of full-time residency have 1-week short courses inEngineering Management Course. necessary to graduate from our long virtually each functional disciplineThis area was taught as a discipline course-the Program Management that constitutes Program Manage-within the Program Management Course (PMC). This course currently ment.Course, but no short course existed addresses the 12 major functional How Does DSMC Develop New

disciplines of program management. Courses of Instruction?Mr. Mcllhaine is the Associate Dean

of the School of Systems Acquisition During the previous 6 years, efforts Once a requirement for a DSMCEducation. have been underway to develop course has been established and PGC


FIGURE 2. OVERVIEW OF DSMC COURSES

LENGTH ACRONYM

PROGRAM MANAGEMENT COURSEProgram Management Course 20 wks PMC Course Revised - Academic

Year 1988

EXECUTIVE COURSESExecutive Refresher Course 2 weeks ERCSystems Acquisition Mgmt for General/Flag Officers 1 week SAMExecutive Management Course 3 weeks EMC New Course - Academic

Year 1988

INTERNATIONAL COURSESMultinational Program Management Course 2 weeks MPMC Course Retired - Academic

Year 1989Multinational Program Management Course 1 week MPMCAdvanced International Management Workshop 1 week AIMW New Course - Academic

Year 1990

BUSINESS COURSESContract Finance for Program Managers Course 1 week CFPMCContractor Performance Measurement Course 1 week CPMCContract Management For Program Managers Course 1 week CMPMC New Course - Academic

Year 1988Systems Acquisition Funds Management Course 1 week SAFMCSystems Acquisition for Contracting Personnel 2 weeks SACPC New Course - Academic

Year 1990Selected Acquisition Report Course 1 week SARC New Course - Academic

Year 1989

TECHNICAL COURSESManagement of Software Acquisition Course 1 week MSACTest & Evaluation Management Course 1 week TEMC New Course - Academic

Year 1988Defense Manufacturing Management Course 1 week DMMCManagement of Acquisition Logistics Course 1 week MALCTechnical Managers Advanced Workshop 1 week TMAWSystems Engineering Management Course 1 week SEMC New Course - Academic

Year 1988Introduction to Software Mgmt & Acquisition Course 2 days ISMAC New Course - Academic

Year 1991

TOTAL QUALITY MANAGEMENT COURSESTotal Quality Management Course 1 week TQMC New Course - Academic

Year 1989Total Quality Management Workshop 2 days TQMW New Course - Academic

Year 1990Total Quality Management Facilitators Course 1 week TQMFC New Course - Academic

Year 1991

POLICY COURSESFundamentals of Systems Acquisition Management 1 week FSAMDefense Systems Acquisition Management 1 week DSAM New Course - Academic

Year 1990Program Managers Briefing Course 1 week PMBC Course Retired - Academic

Year 1991Managerial Development Course 1 week MDC New Course - Academic

Year 1992INTEGRATED COURSESAcquisition Basics Course 4 weeks ABC New Course - Academic

Year 1991


approval has been gained, the next course. The purpose of the Course either case, the PRR assessesstep is the preparation of a Course Advisory Team is to provide prac- readiness of student and instructorCharter. The DSMC Program tical,"real world" influence during materials, course schedule comple-Management education stresses that Course Design through attendance at tion, instructor commitments,DOD program managers are charged the formal course reviews and the classroom setup, materials reproduc-with specific duties via means of a pilot course offering, and working tion status, student status, and otherProgram Manager's Charter. Hence, closely with the course director to details necessary to ensure the suc-DSMC decided to "practice what it provide advice on curriculum cessful conduct of the pilot offering.preaches" and issue a Course Charter realism, currency and improvement. Course materials development nor-for the DSMC Course Director as a mally include both instructormeans of initiating a new effort. Design constraints and require- materials/guides and student hand-

ments normally specified in Course out materials. The Jynamic, con-The Course Charter provides the Charters include: stantly changing nature of the defense

management information and lays -Prerequisites acquisition process normally requiresthe groundwork necessary to permit DSMC to develop custom-tailoredthe Course Director to apply proven -Course Length Constraints materials or guidebooks. Judgmentprogram management techniques to -Geographical Transportability must be applied regarding the quan-the task of developing a new course -Planned Production Rate tity and type of materials to be usedof instruction. Course Charters pro- in any course. The environmentvide the following information: -Administrative Requirements necessitates that instructor

-Course Title and Acronym -General Topical Areas of Course notes/guides and student materials-Identification of Course Director Coverage. must be carefully preserved to ensure

and Course Director Assistant Establishment of a "functional the best quality materials are-Statement of Tasking baseline" of competencies or topics available in a legible, attractive-Background Information the course will address is usually the format.-Identification of Originator of first milestone in course design and Test and evaluation of a new

Requirement is normally reviewed at the course is normally accomplished by-Target Audience Preliminary Design Review (PDR). means of a "Pilot" offering. This nor--Course Objective This functional baseline reflects the mally includes handpicked students,-Design Constraints specified topical areas of course consisting of customers, experts in the-External Course Advisory coverage and the course objectives field, complete novices, target audi-

Group Requirements when integrated with the target audience personnel, DSMC faculty, and-Equivalency/Comparability/ ence and other constraints. The PDR experts in educational technologies.

Commonality with Other Courses also reviews the requirements, The "Pilot" offering is intended to be-Required Reviews evaluates the various alternative fully identical to the planned "pro--Development Schedule course design concepts available, and duction" offerings. A detailed critique- Assignment of Resources selects the course concept which will and specific suggestions for improve--Course Documentation and be pursued for the pilot offering. This ment of the Pilot Course Offering are

Materials Requirements. review normally results in the first solicited from students.top-level course outline. The Post Pilot Offering Review

Probably the most important func- Translation of the "functional (PPOR) normally is conducted withintion of the formal Course Charter is course baseline" into an "allocated 30 days after completion of the Pilotto comunicate to all personnel- baseline" is the next milestone in Offering. Lessons learned, "Pilot"internal and external to the course development and is usually problems, and improvement areasCollege-that a new course develop- subject to a Critical Design Review are addressed and productionment is underway and provide a (CDR). The CDR reviews the block- changes are planned. The decision iscomplete set of "specifics" on what by-block and hour-by-hour course made at this review whether or notthe course will be and when it will be schedule, productibility, planned to continue with production offeringsoffered. instructors, planned materials, and as scheduled.

For most of our courses, the application (integration) instruments A key aspect of scheduling is toDSMC Course Charter specifies the which are crucial to each block, leave sufficient time in the scheduleformation of a Course Advisory Approval of the design at this time to fully incorporate any neededTeam. This Team normally includes signifies go-ahead to proceed with changes (resulting from the "Pilot"the Course Sponsor (if any), Course finalization of each single hour of Offering) in the first production of-

Customer representatives, military instruction. fering. The DSMC experience showsrepresentatives, civilian government Another important review is the 4-6 months between "Pilot" Offeringrepresentatives, and defense industry Pilot Offering Readiness Review completion and first-production isrepresentatives (usually members of (PRR). This review can be done for- about right. After this, a smoothone or more industry associations) mally and be open to all participants transition to production usuallywho are practicing managers in the or can be considered as an internal results.discipline(s) represented in the DSMC administrative milestone. In (Continued on paqe 58)


tions in their managements-in both FIGURE 1. RATE OF TERTIARY INDUSTRYbasic philosophy and actions-if they EMPLOYMENT IN THE MAJORare to be successful in the worldeconmy f tmorow.INDUSTRIALIZED NATIONSeconomy of tomorrow.

SERVICE MANAGEMENTA. Ambiguity of Terms PERCENTAGE OF TOTAL

Generally, the term "service in- WORK FORCEdustries" refers to all "tertiary"industries-barring utilities-because 75they belong to the industrial cate-gory. According to a study on the 70 00,1o+ U.S.A.employment structure carried out in1987, approximately 57% of the 5. . .. U.K.Japanese work force is now employed 65in service industries (see Figure 1). 60 00 X FRANCE

This percentage has been growingat an almost constant rate since 1965. OX JAPANGrowth in personal services has been 55 F.R. GERMANYsustained through increasing demandfor enhanced quality of life (in educa- 50 .tion and health, for example).Growth in corporate services has 45been sustained through demands for X

ever higher management effectiveness. *,40 ,Both trends are common in other ad-vanced industrialized nations.

The boundary between manufac- 1965 1970 1975 1980 1985turing and service industries is notalways readily distinguishable. For YEARexample, if a manufacturer estab-lishes an affiliate to take charge of itsdistribution or system functions, thisoffshoot clearly qualifies as a service B. Service Quality: In the service sector, productioncompany. In this respect, corporate Inherent Difficulties and consumption of services occurproducts are always made up of twoelements: the tangible and the in- Service management differs funda- simultaneously. This circumstancetangible. Questions of sector defini- mentally from goods-oriented prevents the provider of servicestion are generally determined accord- management in the following from making minor adjustments oring to how the management of the in- respects: replacements as might be necessary,tangible element is perceived and (1) It deals with intangible as he would in the case of goods pro-

executed. products. vision. The result of this is that defec-

"Service management," as we will (2) It applies simultaneously to tive service causes immediate loss of

refer to it here, is common to all in- production and consumption. customers.

dustrial categories. In contrast to con- (3) It depends on human capa- Because service depends on humanventional management, which deals bilities. labor, there can be sharp uneven-primarily with tangible goods, service These characteristics make it far nesses in the quality of the servicemanagement is an attempt to seek more difficult to achieve quality con- provided. And because of the depen-new management concepts applying trol in service management than in dence on human labor, consumers ofto the specific needs of the service goods management. Yet, at the same services rarely vocalize or registersector. time, they are critically important to complaints (for reasons explained

As we have seen, the term "service total management because, as noted below). Consequently, even when

industry" applies only to those in- earlier, in the service sector the in- faulty service results in the loss of a

dustries in which intangible elements tangible element occupies a relatively customer, it is easy for managementaccount for a relatively large share of large portion of the total output. To to fail to recognize the existence of a

the total product. In the words of compound matters, in many cases problem. As a result, service busi-Prof. Christian Gronroos of the services are provided concurrently nesses often persist in their ways,Swedish School of Economics & Busi- through several sources. For these unaware of a steady-and perhapsness Administration, "A service in- reasons it is impossible to prevent preventable-loss of customers.dustry is any industry that thinks of defective services in the same manner How then is service qualityitself as a service industry." as with goods management. evaluated? According to a survey of


managers and consumers in four -1r "- The foremost function of servicecategories of the service sector carried =0 management should be education.out by the Marketing Science In- - Higher-level executives must makestitute of Harvard University, service the greatest efforts in this area, andquality is determined by the degree they must possess outstanding skillsto which a customer's initial expec- in matters relating to capabilitytations (what he expects the service development and personnel manage-will achieve for him) are ultimately ment (hiring, placement, transfer,fulfilled: better than expected, as ex- It becomes and promotion). Achieving and con-pected, or less than expected. tinuously improving these skills is

When service received surpasses immediately especially important for mid-level

initial expectations, the provider ac- managers because their work affects

quires a steady customer; when ser- obvious that a the human aspects of peoples' jobs,

vice fails to meet expectations, the such as trustworthiness, motivation,

provider loses a customer. aand training.

As a result, it is extremely useful is n entity E. Other Special Characteristics of

to acquire an understanding of the cannot Service Management

gap between customer expectations that Services come in great varieties.and fulfillment in service manage- For example, they can appeal to thement. Through such an understand- evaluated until it senses or be functionally useful. Theying new ideas can be generated that may rely heavily, or relatively little,will lead to more effective service is actually on physical facilities. They may bemanagement. offered at one central location or pro-

dand vided where they are required. Often

C. Flawless Quality: The Best these categorical boundaries are

Growth Strategy 00 freely crossed. In every case,Gconsumed." however, the following aspects de-

Given our definition of service mand close attention in the perfor-quality, it becomes immediately ob- mance of service management.vious that a service is an entity whose 0 Quality First, Productivityquality cannot be evaluated until it Secondisatlri a c With services, the highest prior-Accordingly, when deciding whetherWcgto use a particular service, a poten- ity must be given to achieving perfecttial customer will frequently seek out D. The All-Important quality; only after this should atten-the opinions of people who have used Human Factor tion be turned to productivity en-the service in the past. In this way, Because nearly all service activities hancement. It is self-destructive topotential customers are strongly depend on human labor, the success work on cost reductions before qual-swayed in their decision by the opin- or failure of service management is ity is perfected. In most instances itions of previous usersi directly affected by the temperament 's actually wiser to address problems

user, drecty afeced b th temeraentrelating to unprofitable services notThrough this process, users whose and abilities of a company's service b reducing labor, but rather by

initial expectations are more than personnel. Physical facilities play eliminating these services altogether

adequately fulfilled not only become only a secondary role. and replacing them with new areas of

repeaters themselves, they also It is essential, therefore, that business.generate a succession of new custom- managers at all levels continuously • Difficulty in Understandingers, thereby creating automatic check on their service personnel. Do Latent Complaintsgrowth for the service provider. Con- they demonstrate agreement andversely, users who have been disap- pride in the company's service As described earlier, latent com-pointed by a service hinder potential philosophy? Do they dedicate plaints against services cause the lossnew customers and thereby stifle the themselves to their tasks of their own of not only dissatisfied customers butprovider's latent market. volition? Is their working environ- of potential new customers. Eradica-

Unlike the case with physical ment attractive and energetic? Do ting latent complaints is, therefore,goods, with services it is impossible workers have a sense that their in- an issue of great importance in ser-to examine quality in advance, so dividual abilities will be enhanced vice management.word of mouth plays a significant through their jobs? Is the company a For a number of reasons, com-role. When quality is flawless the first place where people of outstanding plaints are registered against servicestime, business grows, since satisfied character and potential naturally far less often than against physicalcustomers are a company's best sales- come together? If the answer to any goods. Dissatisfaction with servicesmen. Any corporate policy which of these questions is "no", then it is lacks physical evidence. It pertains tofails to devote sufficient attention to up to management to devise and im- past events and it is based on humanquality places itself at great risk. plement improvements, interactions. It is easily remedied by


simply deciding not to use the same established. All members of manage-services again. As a result, special ment should then take leading rolesmeasures and efforts are needed if the in acting out these philosophies andservice provider is to gain a grasp of policies as examples for employees.latent complaints. The performance level of service

0 Strategic Use of management is inherently determinedInformation Systems by the abilities of the people who

Because services of an essentially Members of the work for the company. Service phi-

individualized nature must be pro- losophy and policies must, therefore,vided to many different customers have sufficient appeal to make an im-with different needs, the service pro- s c dus" pression on employees and to gener-

with ate an interest in active participationvider must be able to process large in -their organization.volumes of information quickly and shoelrd instizateaccurately. Efficient, high-speed in- B. Revitalizing Standardizationformation systems are thus extremely Unlike manufactured goods,valuable as strategic management U$sJ5 changes whose quality can normally be madetools. They contribute dramatically uniform by superior productionto achieving outstanding service based on well equipment, standardization of ex-quality control and they reduce lost cellent service quality is difficult tobusiness opportunities, aid in product achieve. To do so, the following ac-development, and boost competitive delineated service tions are essential: studies should bestrength. undertaken within each work sector

0 Response to and improvements instituted to

Changing Demands PhI achieve optimum results; optimumwork methods should be compiled

In most service industries, the cost into written manuals or video presen-structure leans heavily towards fixed Pertin po tations; these materials should becosts. Fluctuating costs are relatively shown to all managers to eradicateminor in comparison. For this reason, variations in service quality.service industries are highly vulner- Compiling procedures for stan-able to changes in demand. Cmiigpoeue o tn

adardizing service quality into writtenTo overcome this vulnerability, a I manuals is a viable means to put a

corporate structure must be achieved service philosophy and policies intothat can cope with fluctuating man- action. These procedures should dealpower and operational needs on a A. Re-establishing a Service initially with matters of form butyearly, monthly or daily basis. Philosophy and Policy should ultimately extend to a philos-

Continual Price Increases Meservice industry ophy of mind. Manuals also enableConinalPrce nceaesMembers of the sevc nutyefficient training of part-time and

Because of the relatively large should not become complacent just new employees; permit organized ac-

weight of personnel costs within the because they are generating profits. cumulation of management know-

service industry, a major issue in ser- Instead they should seek to win the how in a written format; give higher-

vice management is the ability to ab- trust and confidence of society at ranking managers more time to at-

sorb cost increases incurred each year large by instigating useful changes tend to matters of special concern

through wage increases, based on a well-delineated service through the application of "exception

With human labor it is as difficult philosophy and pertinent policies, management" principles; and lead to

to cut costs as it is with physical Rather than pursue a vague greater competitive strength throughgoods; therefore, prices tend to in- general philosophy, each business the pursuit of optimum work pro-crease on a recurring basis. Once a should embrace its own unique and cedures in each sector of the company.market price is raised, it rarely drops appealing service philosophy based In Japan, however, with few ex-back to its previous level, on its particular characteristics and ceptions (like hotels and banks) ser-

management principles. It should vice quality standardization efforts toalso clarify specific service policies, date have proven inadequate. In

GUIDELINES FOR incorporating important working some cases these efforts have beenINNOVATION guidelines that will allow it to execute misunderstood or reviled. TheseIN SERVICE QUALITY its philosophy. Through continuing negative views notwithstanding,

The Japan Management Associa- education, it should build a deep manuals do not in any way seek totion has compiled the following understanding of its policies in all demand a "mechanical" responseguidelines for the performance of company employees, from people in supervisory positions;management activities by service in- If company's service philosophy nor do they negate activities aimed atdustries and service activities by is poorly delineated or too vague to achieving improvements in the workmanufacturing industries, have sufficient appeal, it should be replace.


The intensity of research focused for the service provider to learnon the individual task level is a through complaint processing how todecisive factor in attaining high ser- prevent similar complaints fromvice quality and productivity. Once recurring.this is understood, conventional Specific categories subject tomeans of handling employees- quality control should be determinedassigning a person to a given job, by each service segment (see Figure 2).leaving everything to that person, A system should then be establishedand telling him to come for help if he to measure customer satisfaction,gets in to difficulties-should be along with a system for reporting oneliminated and replaced by standard- service quality. In some cases it is alsoized procedures. Linked with activi- useful to engage the investigative ser-ties designed to improve task perfor- vice of an external organization tomance, this standardization can analyze one's own service quality.achieve continuous enhancements inquality and productivity levels. Ideally, each service provider

In the years ahead, as labor short- eshould establish its own quality con-age bee ncrsaedaslabo shore, trol department. Duties should in-

ages become increasingly severe, dude the following: studies and plan-standardization activities will take on ning directed toward attaining perfectever greater importance. Indeed, appicaio of quality; promotion of standardiza-without standardization, innovations tion and corrective actions; designin service quality and productivity croa and implementation of a quality con-will be inconceivable. trol system.

C. Creation of a pol , aD. Productivity InnovationsInnovations in service productiv-"Perfect Quality" Structure htandards . ity fall into two categories: those

"Perfect Quality" as used here, which achieve greater added value byrefers to services which are per- qualitatively enhancing output, andformed with optimum effectiveness, those which realize equal quality withexactly as targeted, through the ap- less input.plication of corporate philosophy, The importance ofqualitativerelated policies, and standards. --- The importance of qualitative

output enhancement should be self-Although it should be self-evident evident. As far as possible the degree

that perfect quality provides the key of enhancement should be quantifiedto growth in the service industry, in tional activities. Aggrandized adver- exactly. Standardization and en-actual practice this fundamental truth tisements and excessive sales pitches hancement measures should be for-is not necessarily recognized and im- only tend to inflate customers' expec- mulated through extensive studies ofplemented by all employees in all tations, making them dissatisfied each individual work area, andcompanies. In some cases the highest when these expectations are not met. should apply both to output andpriority is considered to be mere pro- Sales personnel should be trained to input.fitability, resulting in a narrowing of conduct promotional activities within Service organizations may dividethe company's market. It is, there- rational limits, aiming to win busi- productivity innovations along twofore, imperative for all managers to ness through bonds of personal trust. lines: those for sections which cometake a second look at their corporate Because of the inherent difficulty into direct contact with customers,environment and to undertake in understanding latent customer and those which provide back-upreforms where needed. complaints toward services, it is ex- support. Back-up sections should

Even after a service philosophy tremely important for both service fundamentally apply the sameand related policies have been re- personnel and sales staff to engage in management techniques as those usedestablished, standardization has been two-way contacts with the customer. in the manufacturing sector-revitalized, and educational pro- Rather than seeking merely to reduce industrial engineering and qualitycedures have been fortified, many the number of complaints received, control, for example. Productivitythings remain to be done to achieve attention should focus on recogniz- measurement systems applyinga structure conducive to perfect ing legitimate complaints and recti- standard times can also be usedquality. All personnel in charge of fying their causes. without modification in labor-service divisions should give firstpriority to these actions, double- Complaint processing must also intensive work areas.checking to ensure that they are duly be viewed as a service activity in its As in the manufacturing sector,implemented. own right. In this case too, it is ima- mechanization of operations and

exercisetd a portant that corrective actions be automation are important means ofSales divisions should exercise an taken which exceed the customer's in- enhancing productivity in service in-

element of restraint in their promo- itial expectations. It is essential also dustries. Achieving this mechaniza-


FIG;UR E 2. SER VICE QUALITY group who possess capabilities for

,(7ONI 01 CA TEORIFS starting businesses, structural reform,and corporate revitalizaiton. 57

1. RELIABILITY: ACCURACY, FAULTLESSNESS, PUNCTUALITY. To achieve this aim, a number of2. RESPONSE SPEED: QUICK, TIMELY RESPONSE TO steps are normally needed. First, to

CUSTOMERS. the maximum extent possible, the3. QUALIFICATIONS: ADEQUACY OF SERVICE PERSONNEL'S company itself should be organized

KNOWLEDGE AND SKILLS. into profit centers, or sub-units

4. ACCESS: APPROACHABILITY, EASE OF CONTACT AT ALL capable of profitability on an in-

TIMES. dependent basis. Second, the activi-ties of dynamic young managers

5. ATTITUDE: POLITENESS, RESPECTFULNESS, SOLICITOUS- should be monitored closely, andNESS, AGREEABILITY. those with capabilities for corporate

6. COMMUNICATION: WILLINGNESS TO LISTEN TO enhancement and reform should beCUSTOMER'S VIEWS, ABILITY TO EXPLAIN IN EASY-TO- singled out. Third, division unitsUNDERSTAND TERMS. should be gradually increased in size

7. TRUSTWORTHINESS: TRUST PLACED IN COMPANY, RELIA- from small- to large-scale. Finally, itBILITY OF PERSONNEL IN CHARGE. is important to rotate personnel from

8. SAFETY: PHYSICAL SAFTEY, FINANCIAL SECURITY, INTEG- one division to another.

RITY IN PRESERVING CONFIDENTIALITY SECRETS. F. Management Innovations

9. UNDERSTANDING OF CUSTOMERS: CLEAR UNDERSTAND- At Service Affiliates

ING OF CUSTOMER'S NEEDS AND DEMANDS. In recent years a trend has10. TANGIBILITY: PHYSICAL PLANT, PHYSICAL APPEARANCE emerged in the manufacturing sector

OF MANAGERIAL PERSONNEL, TOOLS, ACCOUNT KEEPING. whereby service functions are in-creasingly separated into independent

(From "What is Service Quality?" IMA Journal, service companies. Separation of

August-September, 1988) these functions is a highly desirableform of innovation for the following

Note: In actual practice, quality control categories vary for each reasons: it enables simplification ofservice product and service segment and must therefore be the organization of the head office;established for each segment separately. it enables the acquisition of external

sales and improves productivity; andit encourages re-evaluation of thequality of internal services.

In actual practice, however, ser-

tion and automation, however, re- tures which allow them to introduce vice affiliates of this type generally

quires the organized cooperation of new businesses almost every year, possess meager profit-producing abil-

machine and equipment makers. The based on operational and technical ity. In fact, many such firms operate

inherent aim of mechanization is to developments geared to short-range, in the red.

create a system w" _h lets workers mid-range or long-range goals. Contributing to the lagging prof-concentrate on tasks which produce Today, it is a matter of urgent prior- itability of manufacturing service af-added value. At the same time, ity for the nation's service industries filiates are their relatively small sizehowever, the degree of mechaniza- to achieve a similar structure. In this in most cases, and the fact that theirtion should not be allowed to conflict case, development must be carried operations were previously carriedwith the service philosophy of the out within specific time frames. Each out exclusively within their affiliatedorganization. operational division within a com- company's market. As a result, these

pany must work on its own initiative affiliates tend to have inadequateE. Continuously Strengthening to develop new areas of business and competitive strength in the open mar-

Operation and Development new business formats. ket-both in terms of service qualityCapabilities Continuous corporate develop- and productivity. In addition, man-

Generally speaking, Japanese ser- ment divides into two categories: ufacturing firms tend to be contentvice organizations are still relatively diversification into affiliated business simply if their service affiliates ac-poor at developing new areas of busi- areas, taking full advantage of the commodate certain personnel needsness and new industrial formats. company's special strengths in terms and absorb a certain portion of theDevelopment activities in Japan ap- of location, expertise, personnel, and parent company's labor costs.pear to be no more than imitations capital; and diversification into non- In fact, however, these service in-of those carried out in the United affiliated areas, through mergers and dustries possess the potential to growStates and Europe. acquisitions. In both cases, the independently in new circumstances.

Most of Japan's major manufac- foremost task is to increase the They should reconsider their oper-turers have achieved corporate struc- number of personnel in the corporate ating status as independent corn-


panies, review how to select the most Up to the present, the service in-capable managers for each job, ex- dustry has generated social evilspand their size through mergers and i because of managers who believed inacquisitions, and assiduously pro- the pursuit of immediate profit evenmote comprehensive measures to if it means the loss of customers. Ser-achieve innovations in service vice provision can easily run astrayquality, if the highest priority is given to pro-

fits. In all cases, service should be car-G. Maintenance and ried out according to a set philosoph-

Enhancement Only when ical principles; profits should be con-Of Social Trustworthiness sidered end results. Particularly close

Even more than manufacturers, conceted efforts care must be exercised when provid-

service companies must be keenly at- are made to ing new services.

tuned to their reputations and the pro Countless service activities are

trust which the public has for them. rq carried out each day to countlessService companies typically oper- sPices which numbers of customers. Only when

aconcerted efforts are made to provideate under a cost structure centered on ly exceed quality services which consistentlyfixed costs. These companies tend to exceed the customer's initial expecta-raise fees regularly to absorb rising the customer tions can a sense of fulfillment belabor costs. This tendency is espe- added to our lives. For this reason,cially marked in fields with light the service industries should work tocompetition. aselwe o e eliminate all customer dissatisfaction

Price increases should reflect only r.1fi and distrust,increases in quality, or they will cause i In the final analysis, service in-a lower standard of living. The par- addedtoour lives. dustries cannot survive and growticularly high cost of services in Japan without the trust of society at large.is attracting public attention. En- As businesses engaging in the sale oftrenched business practices giving the intangible products, they should beimpression of price gouging should be aware of potential criticisms of thereconsidered. This includes preset ser- "emptiness" of their operations; andvice menus giving little choice in price they should adopt a self-effacing at-and service and creating pressure to PROG ESStitude of dedication to serving soci-buy unnecessary services. ety's true needs.

COURSE DEVELOPMENT PROCESS(Continued from page 51)

The first year of "production" -Academic Year 1988: -Acquisition Basics Course (ABC)offerings is then set to commence. Systems Engineering Management -Introduction to Software Man-DSMC experience has shown that a Course (SEMC) agement and Acquisition Course"low rate initial production" during Test and Evaluation Management (ISMAC)the first year of a new course offer- Course (TEMC) -Total Quality Managementing is prudent and the best method to -Academic Year 1989: "Facilitators" Course (TQMFC).ensure a quality course. Selected Acquisition Report Course Summary

Upon completion of the first year (SARC) The utilization of a Course Charterof offerings, the final design Total Quality Management Course and the Figure 1 methodology itreview-the Course Critique (CC)- (TQMC) outlines resulted in a significantlytakes place. Emphasis is on baselining improved DSMC new-course devel-the production version of the course. -Academic Year 1990: impro esMrDuring this review, course strengths Advanced International Management opment process.and any course weaknesses will be Workshop (AIMW) From Academic Year 1988-91,identified and necessary modification System Acquisition for Contracting DSMC increased short courses by 33or product improvement plans will be Personnel (SACP) percent. This process allowed DSMCinitiated. Defense Systems Acquistion Manage- to continue this rapid rate of short-

The methodology just described ment Course (DSAM). course growth while managing themost significant redesign of PMC in

has been successfully applied to the Three Academic Year 1991 courses, the history of the College.

following DSMC courses that have currently under development, that

been developed under the auspices of are utilizing this methodology are asa Course Charter: follows:


BIGGEST BUSINESSIN THE WORLD

DEFENSE ACQUISITION MANAGEMENTGeorge Sammet, Jr., and David E. Green

(Florida Atlantic University Press, 1990. 498 pp.)

j his book, written by two peo- A strong industrial base is nec-

pie who have participated in 0 0 0 essary to maintain a strong defense.the defense acquisition process, Unfortunately, there has been a con-brings together all aspects of acquisi- tinuing deterioration and contractiontion management. These include cur- of the defense industrial base. Therent philosophies, organization, pro- authors refer to the House Armedgram management, procurement, Services Committee report of Decem-manufactuiing management, con- ber 31, 1980, indicating there was (1)tract administration, subcontracting, no preparedness plan, (2) turbulencesupportability, and innovations to be in defense system programs, (3) aproved in the future. shortage of critical materials, (4)

Defense Acquisition Management restrictive procurement policies andbegins by recognizing that buying for procedures, (5) tax and profit policiesthe Defense Department is the biggest that discourage investment, and (6)business in the world, costing about diffused responsibility for the condi-$688 million each workday. The tion of the industrial base. Thus, theauthors explain that the buying pro- ability of the industrial base to re-cess is one step in a multiple-step pro- [, spond to near-term readiness, surgecess. The process starts with an and mobilization requirements is notassessment of the need for a specific IA I IE GREEN possible.capability, and is followed by astrategy that places in the hands of Sammet and Green say defensetroops the equipment they need, and marketing is not limited to companiesits maintenance, replacement and seeking to win a government con-

tract. It includes marketing of prod-disposition. The authors discuss pro- heavy concentration on the Army ucts and programs by governmentcurements, serving the best interests research, development, and acquisi- personnel to higher levels in theof the Services, the nation and the tion process. Department of Defense and the Con-taxpayers. Sammet and Green assume cor- gress. Generally, the fate of major

In the Introduction, the authors ex- rectly that understanding the history, programs is based on their receptionplain the need for acquisition of a character, uniqueness, economic im- by the Congress.new system is triggered in the Defense pact and strategic role of the defenseDepartment by recognizing a tactical industry is fundamental to any study Under organization, the three basicor strategic deficiency, a technologi- of defense acquisition management. forms are identified-the functionalcal breakthrough, or a need to re- They believe that the high state of organization, the pure program (pro-place equipment that served a pur- defense preparedness today will ease ject) organization, and the matrixpose during the years, is worn out, the burdens of mobilization should organization. Also discussed is thebut still needed. The Introduction such a need arise suddenly. Unfor- "two-boss" concept practiced by in-contains some history, a discussion tunately, the defense industry is dustry. The authors deal with theof the Congress' role in defense ac- becoming more inefficient econom- person-loyalties, required andquisition, and a general description ically speaking, and less responsive desired characteristics, authority,of the acquisition process. There is strategically speaking. Weapons demands and problems-and with

sophistication appears to be growing the criteria for selecting programMr. Acker, our reiien'er, sen'es in the without bounds; industrial prepared- managers. Roles and challenges of in-

Rrsearch Directorate at the Defense ness planning is weak, and mobiliza- dustry and government programSystems Management Colkw. tion lead times are lengthening. managers are discussed.


Program controls and product Contract administration and con- In the final chapter, the authorsassurance receive adequate coverage; trol are essential to efficient program describe the Bush-Cheney challengehowever, "total quality manage- performance and resultant profitable in a positive context. They concludement," a popular term in defense operation. These subjects and effec- three things will have an impact onsystem acquisition management to- tive negotiations receive adequate defense acquisition management inday, is never mentioned. coverage, this decade: political upheaval in

There is a short chapter on multi- eastern Europe, formation of a dedi-Manufacturing management is national programs. Recognition is cated acquisition corps, and "smart/

recognized as a major subset of pro- given to the growing emphasis on 'brilliant" weapons of war.gram management. The authors standardization and interoperability The appendix, more than 70 pagesbelieve objectives of manufacturing of defense equipment between the long, contains useful information.management are to (1) ensure proper United States and its allies. This has I believe the book will be of interestplanning early in a program; (2) en- resulted in an increase in multi- I believe the Owie ofsure system design will lead to effi- national programs. to personnel in the Office ofcient and economic quantity produc- Secretary of Defense, the Services thetion; (3) assess program status at any There are chapters on training, Congress, defense contractors, edu-point during the production phase to ethics and innovations in defense ac- cators, students, and taxpayers. Itdetermine if schedule, costs, and quisition. Under "innovations," the should be read by program managersquality standards are being met; and authors provide a summary of the in government and industry and their(4) conduct assessment and reviews most promising innovations on the staffs.of the manufacturing effort required 1990 horizon.to meet decision points. The DSMC - %Defense Manufacturing Management A-1

Handbook for Program Managers isreferenced and quoted in this and 4

other chapters. Unfortunately, the1984, rather than the 1989, version is Office of the Commandant .................... (703) 664-6323used. Manufacturing problems ex-perienced by defense manufacturing Office of the Provost .......................... (703) 664-6325companies are presented on a non-attribution basis. Center for Acquisition Management Policy ...... (703) 664-1185

Procurement objectives, authority Acquisition Enhancement Program Office ........ (703) 664-2457and responsibilities are included.Supplier selection, evaluation, busi- Executive Institute ............................ (703) 664-5979ness relationships and international School of Systems Acquisition Education ........ (703) 664-5173procurement are discussed. Theauthors cover spares management Department of Research and Information ........ (703) 664-2289and adverse publicity in the 1980s.

In Subcontracting, Sammet and Department of College Operations and Services .. (703) 664-1084

Green guide those who manage ma- Administration and Personnel Services Directorate (703) 664-1175jor subcontracts or wish to becomeacquainted with basic practices and Office of the Registrar ......................... (703) 664-2152procedures required to administersubcontracts. The authors recognize Publications Directorate ....................... (703) 664-5082that the prime contractor must havea strong, sophisticated, and profit- *NOTE: Autovon prefix for all numbers above is 354.conscious subcontracting function toensure subcontract performance at Eastern Region ............................... (617) 377-3593the lowest overall cost. Lessons to belearned from successful and unsuc- AV 478-3593cessful subcontracts are presented. Southern Region .............................. (205) 876-2730

Supportability is a concern to AV 746-2730military programs managers and tocontractors who design, develop, Central Region ............................... (314) 263-1142produce and initially field defensesystems. The authors recognize this AV 693-1142fact and that operations and supportcompromise one of three slices of the Western Region ......................... (213) 643-1159budgetary pie; the others are man- AV 833-1159power and procurement.

Program Manager 60 September-October 1990 ]

DTC ELECTE S ,wOCT 1W D OTIC FILE I200PA0

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