Driving Comprehensive Defense Acquisition Reform with Eric Lofgren

Lauren Bedula 0:00 Welcome back to Building the Base. Lauren Bedula and Hondo Geurts here today with our guest, Eric Lofgren, and really excited to have this conversation on the heels of a hearing this morning, which we'll get into a little bit later, but Eric joins us with a really interesting background and expertise around acquisition and acquisition reform, and currently serves as a professional staff member on the Senate Armed Service Committee. So Eric, thanks so much for joining us today. Eric Lofgren 0:25 You're welcome, glad to be here. And the obligatory intro, I do not speak for Chairman Wicker or the Senate Armed Services Committee during this podcast. These are my own personal views. Hondo Geurts 0:39 Well, Eric, it's awesome and get you here with your own personal views. We'll we'll talk about the hearing we were both at here, maybe later, but maybe to start things off a bit, explain a little bit what being a professional staffer is like, and then maybe the background that got you from, you know, going to school and getting into national security to now being on the Senate Armed Services Committee and having an impactful role there. Eric Lofgren 1:05 Sure, well, just starting with a professional staff member, I work for the Senate Armed Services Committee, which is a little bit different than the personal staff, which reports directly to the members, and they tend to have a broader portfolio across different committees and issues where we're just completely focused on the Department of Defense and on the committee, you know, my boss is Chairman Wicker, but we also support all the members on our side of the dais, and there's about 13 of them, and we really are. Our main product is National Defense Authorization Act. So we field ideas from the members themselves, who can submit ideas from industry. They'll even come with ideas as well in draft language. And ourselves, we can kind of come up with our own initiatives and try to work them in the process. And it's really a year long process from kind of ideation - it's February now, and we're already starting, you know, to get the ideas on the new bill language we'd like, and then in March, April, we're starting to work in the ideas. And then it's all the way until, usually December, we should get it passed, you know, like, right before the fiscal year. So the end of September, that's the goal, but oftentimes we've been a little bit late, but still, we get it out sooner than the appropriations committee and the CR is the continuing resolution. But that's not always the case. And you know, we work very closely, so we authorize policy. So if anybody says the National Defense Authorization is a spending bill, or you know, that's not true, right? We authorize programs and policies the appropriations they have the power of a purse, they actually put the money into the accounts where it really needs to go. And so we work very closely with them in these directions. But, you know, personally, coming from school, right? Hondo Geurts 3:09 You know, did you always want to go on the Hill, which is like a thing that you always aspired to? Eric Lofgren 3:15 No, actually, not at all. I mean, it was kind of more of a winding road. So I came out, I really wanted to work at the Federal Reserve, right? But I graduate in December, and they were like, well your interviews will be with everybody else in May, right? As like, okay? And the defense contractor was like, well, we'll give you a bonus to kind of start, and you can start immediately. I was like, I need to start working here. So I kind of grabbed that job. I thought just be kind of like a two year thing. And they and the contractor, you know, they had some some work in the Pentagon, and they stuck me there pretty early, and I got pretty attached to the mission. And I thought, we're doing some very interesting things, but I also felt a little bit disconnected where I, you know, we're working with cost data, doing independent analysis, going into cost accounting systems of the contractors and these types of efforts. And when I was looking at it, I didn't really feel like, how what my work was, and I couldn't understand how it was really connected to, you know, outcomes in terms of delivering capabilities to the field. And I understand if everyone would say something like, Hey, well, we need to make sure we have realistic cost estimates and realistic budgets that are executable and all that. So I really just kind of went into the history of it, where I've just started reading all the the acquisition history I could reading all the his the hearings from the armed services and the preparations committees in the 40s, 50s and 60s. The Pentagon actually has a really great library, by the way, where I would actually go get, like, the microfiche and, like, read these things written fine, and I print them out. And so I kind of just started, like working my own, like, history of Defense Acquisition reform project for several years, and then eventually, a professor at George Mason had some like, some funding to go allow people to do a fellowship to pursue moonshot ideas. And mine was really this idea of planning, programming, budgeting, execution reform as a kind of pivot point for the Department of Defense. And so that got me out of the building, out of my contractor job. And then I started blogging a podcast, and some people on the Hill happened to be, you know, listening to it. And then they offered me a job, and eventually I said yes. And so I never had a plan to go that direction. It just kind of like happened. Lauren Bedula 5:41 Love it, and it's a good reminder too, for folks who are looking to enter work in defense and national security and find submitting their resumes to be a black hole, to look at contractors too as an option, to get a foot in the door and experience like you did, and you mentioned pretty quickly that you came to the conclusion that acquisition reform was something you wanted to zero in on, do you have a financial background? How did you zero in on acquisition reform? Or what was it that stood out to you? Eric Lofgren 6:07 Well, first I would, I would definitely agree with you. You had Bess Dopkeen on here before. And she was my first client when she was in government. Lauren Bedula 6:18 Awesome. Eric Lofgren 6:18 And she actually said that a lot too, because that's how she got, she got her start too, which was contractor. You get to know that people in those jobs, and when the jobs open up, it becomes a much easier transition, because they know you. They trust you, and, and it gets you, kind of like inside and understanding what the work really is. So actually, I tell that to a lot of young people too, who want to kind of leapfrog into certain positions. I'm like, Look, you know, a contractor position is actually, one, it's much easier to go through that process rather than going through USA Jobs. But it also gives you that "in" where you can really understand and you can get a broader sense, because sometimes you work on multiple different things, and you can really kind of see what you what you like while you're while you're also learning. So I definitely recommend that. But acquisition, I started out as economics and history, so I always just first thinks historical lens, where it's like this, the building's so big, what we do is so huge. You can find yourself lost in many respects. And that's where, like, I just said, like, I don't understand how my job necessarily contributes to the big picture. So why don't I just go back and read everything from the history of how we got here, and then get the broader lens. And then the economics piece I actually studied, I was also doing a master's in economics at George Mason where they really looked at market economics, and so, you know, individualism, property rights, all these things about about market economics and why it works, but it was so devoid from the Department of Defense, because it's like, well, the department like, all that makes sense, you know, for commercial markets, right? And But when we're talking about the Department of Defense, it has, like, there is no market for like, we can't just get the government out there and say, like, I had a professor who literally said this. He said something like, Well, you could imagine that you can have private provisioning of defense. Someone could create a missile defense system, and they could see the trajectory of incoming missiles, and if you don't, like, pay them this service, they'll let that missile drop on your house. I'm like, Okay, well, I see where you're coming from, somewhat, but, like, I live in the real world, like, so I really, so I kind of tried to bring the lens of, you know, there's not going to be a perfect market, you know, for defense, but the Department of Defense itself can, and has in the past, represented commercial or more market like structures where you actually have, you know, competition within government and more commercial like transactions and relational contracts with with industry that allowed them to move at a much faster pace, but also maintain competition. So the way that we maintain competition that pass you could also, you can do it through the competition contracting act words like, I'm going to put out a single RFP with a whole big list of requirements, and everyone provides their proposals back to that, and I choose the best proposal. Or what they did in the past was they've had multiple sole source kinds of contracts, where they start with letter contracts that you have started and then see who's actually performing and cut the ones off who weren't performing. And so that kind of multiple sole source options is another way of going about competition at the same time, and that also comes from some of the structures that the Department of Defense had in the past, which I think reflected our American values for hundreds of years, and then in the 1950s and 60s, you started to see it pivot to kind of the system we have today. But that system has not always been there. And if you look in the past, I think it shows us. A main line of defense management that I think was relatively successful, and we went off that main line path. And now you could say there's a mainstream path that everybody has been kind of circling in on acquisition reform for the past 50 years, but I think we need to kind of like, if you make a wrong direction, you don't like, you have to go back from where you started and then correct yourself. You can't just like, veer off and then say you're gonna get to the right place. So that's where I kind of started with the acquisition reform, which is, how did we used to do things? Why did we change? What of principle was it value at that time? And how do we update our historical models for the present time? Lauren Bedula 10:45 And just to really make the point, what is it about acquisition reform that you think is so important right now? Eric Lofgren 10:52 Right now? I think there's a lot of threads across all of acquisition because when we talk about acquisition, we're not just talking about the contracting process or the DoD 5000 series instructions. We are also talking about, you know, requirements and how those decompose into contract specifications and the budgeting system, how we allocate resources. And that also gets into how Congress decides on programs and priorities and funding. And so I think, you know, the Chairman, when he came out with the FORGED Act, he really looked across a lot of different areas, including all three of those. So we touch on requirements, we touch on contracting, rapid acquisition pathways, just reducing the regulatory burden, cutting red tape, and that's across, you know, all sorts of pilot programs, reports and the rest. We have qualification tests in there. And we also have the budget structure. I think the planning, programming, budgeting, execution commission had a lot of good recommendations. So if you just touch one of these things, it's a systematic problem. As you touch one, you'll probably get unintended consequences throughout, or you're, you're not really moving the needle because it, you know, like you guys have probably heard this term, like, water or agile-fall, right? It was like, I'm gonna stick, you know, an agile software development process, and we're gonna be agile now. And it's like, well, but your business systems, and, like, your ATO processes, all this stuff is still very waterfall in nature, so, like, it corrupts the targeted effort you were trying to do. And so we're really looking for, like, what Senator Wicker calls, you know, a game changer here, that kind of addresses the systemic impacts. Hondo Geurts 12:44 Eric, I think, you know, there's a sense of we've got to create the right marketplace, right? Somehow we've gotten away from the marketplace we had, you know, 30, 40, 50 years ago, and the market has kind of gone in a different way. I think some that was because we, a little bit as a country, had a mindset that national security and national prosperity are kind of separate. And you Silicon Valley folks, you go make a bunch of money in software, you DoD folks, go protect the nation and and now, you know, the blend between what's military and what's commercial have really kind of come back together, but the market hasn't come back together, I don't think. What's your sense on, in one mind, I also argue that the first place we're going to be attacked is in the commercial marketplace, not the military one. Do you sense those markets coming together and how do we leverage what's already going on in the commercial marketplace better and be able to use it both for commercial purposes and military ones? Eric Lofgren 13:48 Yeah, I mean, that's a complicated question there. I think you, you know, you addressed it a little bit in the hearing as well that over the last five years, we have seen this kind of seen where the commercial world really didn't care, and especially the venture capital world about the Defense Department, and anyone that kind of came up through that realm would would easily not be able to find that kind of funding. And now it's flipped on its head, and the money's there. The energy is there. We see some really amazing entrepreneurs starting to get into this market as dual use. Some of them are pure defense place. Some of them are, hey, I'll use defense as an early sales path to commercial scale. And some are like, Well, I'm already doing commercial stuff, but I can spiral it out into defense. And so there's a lot of different avenues that the commercial world can take. But I think we still see the bifurcation, because in too many cases, you know, there's a solicitation that comes out from government, and the companies in trying to pursue these solicitations or requests for proposals, you know, they will find themselves in a situation where, oh, the contracting officer is requiring a cost plus, oh, the contracting officer has these types of requirements. You know, it can be very difficult to navigate, because there's all these business systems in DFARS, 252, 242, 7005 where it's like, okay, if I have subcontractors over 50 million, I need a purchasing system, right? But if I have any government property that I'm taking possession of, I need a property management system. And if I have any kind of non firm fixed price contract, now, I need an accounting system, right? And so you're trying to navigate where you don't you're not taking on all these compliance burdens that are inherently going to make you non competitive in the commercial world while still being able to service your government contractors or your government customers, right? And so that becomes a really tough, you know, problem for for these, uh, companies, to navigate. I think you know that's why in the FORGED Act, what we really tried to do was start with a presumption of commercial right, like you should go out and do your market research and make sure we're not building something new that a company is already developing. We should take that, what the company is developing, use that sunk resources, that they put into it, and leverage that and modify it to the extent necessary to use it. So we created default presumption of commercial, but you can always create a justification or a memorandum, because currently, you start with the non commercial procedure, and then you're like, well, it's something truly commercial. Let's go through commercial item determination that takes a long time, and then let's go and write that determination, create a memorandum so I can treat it commercially. Well, let's flip that. Let's start with commercial, and then when something is truly non commercial, because you've done the market research, then you can say, Oh, this is non commercial. So we're never going to turn, like the Joint Strike Fighter into a commercial item, or maybe even subsystems which were uniquely developed for that. And I think the more that we can go down this path where we're really saying, like the market research almost comes first before the requirement, because the requirement often then you have an end item in mind. I'm replacing this fighter. I need a new fighter. And so then I'm going to write a requirement that decomposes into contract specifications that itself must be non commercial, as opposed to how can we get after this problem in a unique or commercial way? And then only after we've exhausted those avenues Shall we go down the non commercial route, and we can exempt a lot of these companies, in that way, from the non commercial compliance burden and all the flow down quality. So there's a lot that we do here in the FORGED Act, which allows for commercial the contracting officers to use the most convenient and commercial payment methods up to a certain level, restricts flow down clauses for commercial items to only those that are required by law. There's a number of other things, including raising the simplified acquisition threshold. Hondo Geurts 18:14 Yeah, I really applaud you, because, I mean, you could spend an entire ten seasons of the podcast complaining about the problem, and it's a complex problem and it's occurred over decades. Or you can actually go move and try and solve the problem and kind of get after it. What gives you the drive? I mean again, for those listeners here, I was in a hearing this morning with the Senate Armed Services Committee on this very topic, I did a little research. I think the first Acquisition reform bill was in 1792 and so we've been getting after this for a long time. But what gives what gives you the personal drive to go after this? What I mean finding people who are fired up about, you know, changing law and act reform, what gets you motivated every day in this? Eric Lofgren 19:04 Well, I think what really got me initially interested was the kind of academic pursuit of it, where it was just like, I just really want to understand what I'm doing. Like, I don't like, I want to just keep going along and taking my job, you know, one little task at a time, I want to step back and say, like, Am I doing the right thing? And then, it was a real mission for me, like, when I felt like I really understood why markets were so functional and and why our liberal democracy is the best, you know, kind of like political economy, structure that we have, like, I felt like there was a real American value that we should be bringing that into defense. Because I feel like when you look at defense, it does not reflect those values in the way that we kind of have a command and control often, you know, and you've talked about this. The hearing as well, where individuals sometimes feel more like a cog in the machine, where they can't bring their creativity to bear and feel the joy and responsibility that they are contributing to the national defense, because so many decisions are outside of their hands that they want to do the best. But they often are lost in the in the complexity of the of the system, where you're not really sure what things are out there that you're not complying with. So it's easier to be risk averse, and you need to get so many... Rickover had an interesting one where... Admiral Rickover said there was a guy who was trying to get a memo signed so that they could basically accomplish some programmatic task, and he shopped it around and got all the signatures in the Pentagon he needed. But by the time it came back to him, everybody who was in those seats had already left, and he couldn't face the task of going through that process again, so he gave up, right? I think a lot of this is like, that drive to find personal empowerment. But then when I tried to find that personal empowerment, it was also like, how do you give this to other people at the same time? And then the other part really is, well, if we believe that there could be, like, there's some probability between zero and some number of percent that we could be in a major conflict that could be very important to our society, and if we're working in this world, we have to treat that whatever the probability is, even if it's 1% we have to treat that as 100% probability. Because if it comes that low probability, high impact event happens, it's immediately the most important thing in the world, and we have to be doing it now. And we can't wait until the moment that the balloon goes up to make these changes. And in some of my discussions, I've had those conversations where people were like, well, you know, if we get into a war, then we can change this process, and it'll all go out the door, but we have to build the muscle memory now, and we have to build those processes now, and we have to prepare now, because what we do now really does matter. Lauren Bedula 22:17 I'm gonna pull on something Hondo said, which is, we really try to not just admire problems on the show, and that's why we admire the work you're doing. We often ask, is reform needed when it comes to acquisition, or is it a cultural problem? Can you talk about the balance between the two and how you see it? Eric Lofgren 22:36 I agree that there is a large kind of cultural or maybe it's instead of cultural, you could call it leadership aspect of the problem. But I think there's a chicken or the egg here as well, because some people will say, Well, you know, I'd love to delegate these authorities, but they don't know what they're doing, and they're gonna screw it up. So we can't give them the authority, because they'll screw it up first. They don't have enough tenure in their spot, right? There's all these other issues they when, when we've provided instances in the past, we've seen these problems. But then if you don't give the authority in the first place, then they don't build that knowledge and that ability to actually be a good leader and a steward of the taxpayer money as well. So I think one has to come first. And I think it's the authority piece, and then you have to just drive the implementation, which is going to be, you know, 90 to 95% of the effort. I think the authorities piece is, is it easier problem in some respects, but I think it still does have to come first. Because if you look at the statute and you look at the regulations, not only is it so big, there are many things that you have to check all these boxes, you have to go through. And it was set up in an industrial way where you walk the dog in a very linear process, and you use somewhat outdated rules relative to the way that a commercial or innovative technical company would actually go about it. So you've already, if you don't tackle that, they still have to perform these tasks and then do their agile waterfall problem all over again. So I think both of them have to come, I'm kind of more sitting at the policy level. You know, we need people like Hondo to be in the building to actually, like, drive that cultural change. I think he did a really good job while he is at the Navy. But, you know, we have a new tranche of leaders coming in, and that's going to, that's going to be a major challenge that they're going to have to take on and rise to. Hondo Geurts 24:36 Yeah, I think I would agree that it's a it's a little of both, but getting them the memory and getting the iteration speed up, I think, is really, I mean, part of our problem is we're in such long cycle things that people aren't learning because we're we're kind of caught in the machine a bit when, when you're thinking about what to do next. Uh, or say I'm out in tech industry and I've got, I've got an idea, or maybe I'm, uh, somebody's been in the DOD for 40 years as a prime contractor. How do they engage with the professional staff and and how does that process? How do you go from your perspective and make sure you've got a broad site picture of, kind of understanding the different perspectives out there as you're thinking through you know what policy changes might be beneficial? Eric Lofgren 25:28 Well, I think it's pretty easy to reach us. Maybe some people just don't know our email. But we just get emails incoming all the time, from meetings, from from various people, usually in industry, because industry, you know, doesn't have the same like requirements where, like, a program manager is probably scared or wouldn't be allowed to just be like, Hey, Eric, you know, like, I have this issue. Can you help me out? So usually I would have to proactively reach down in. Hondo Geurts 25:57 I guess... well, we were laughing before the hearing this morning, because a couple of your colleagues I've been working with for 25-30 years, and for, just for the folks in government, and then I'll let you get back to the other I do think having relationships with your stakeholders is important. Now, you gotta be smart about it. Because I think in the end, everybody's trying to do the same thing. But you're right. Our risk averse culture would say, Well, I would be risky if I called somebody outside the executive branch to have a discussion. Eric Lofgren 26:28 Yeah, I mean, usually like, either it's like, starts through, like, a LinkedIn message, you know, like, or like someone, you know, someone that could, like, text that someone, and then, like, if you need to, you come back, and then you go through the official channels, like, Hey, can I have a meeting? And then it feels like super friendly, like, why does this professional staff member want to talk to you? So, um, discussions with, you know, within the department are different than discussions with industry, because industry can, like, kind of freely come to us. I think, you know, especially with the non traditionals, maybe they don't, because with all the big industry people they have plot means we know them. They can come to us pretty easily give us updates on their programs. What's their issues, what their asks are. Non traditionals sometimes don't know that route. Hondo Geurts 27:14 Well, we have a lot of those listening here in the podcast. So is it as easy as looking you up on email and just sending you a note? Say, I've got to come talk to you guys about something. Eric Lofgren 27:24 Yeah, pretty much. I mean, I'm reachable on on LinkedIn, you know. So that's, that's always an easy way, if you, if you can't find my email or any of our emails, but, yeah, so the like, I recommend coming in. I mean, for from an authorizer perspective, like, we're not gonna get you money. Like, I'm sorry, that's just not how we work. But like, so for a lot of these companies, it's more like, you know, what kinds of reports or what kinds of things can you ask that then lead to, you know, that spiral into, you know, programs or plans or things that will... Hondo Geurts 28:03 If I have barriers they're running into that maybe aren't adding value that would be good for you to know about. Eric Lofgren 28:10 Those, in my perspective, are the most useful because like, we like, it's not my job to build military programs, right, like, so we conduct oversight over those programs. And so when you when non traditional companies has, in particular contracting issue something, you know, like, I've had one company a while ago. I'm not going to name this company, but they just, there was a program, and they were like, Okay, well, the government got me onto a UCA and said, you know, like, here's, here's a contract is going to be roughly ten million let's get you started. Let's put you on a UCA. And then they unilaterally definitize and say, Okay, well, this is a ten million sole source contract. So you're now cost accounting standards. You're going to need to implement that and, oh, by the way, we're going to take all of your IP rights to the phase one and two that you weren't done. And this company is like, I'm paying people, like, with my credit card, you know, like, and I don't have any cash flow with this. And and now they're basically telling me to implement multi million dollar systems, and they're going to take my IP for it too, so that they can give it to a big prime so they can, you know, build my system, you know, at their shops. And so these are the types of things that we can then... those are useful for us to kind of, we can kind of go in and and see what's going on, or make policy changes based on those types of feedbacks that people are actually facing real things on the ground. Lauren Bedula 29:41 And, your time is limited, are there any other best practices if a company is gonna reach out, what do you like to hear from them? Or what do you see that stands out as most useful when they do come? Eric Lofgren 29:52 Yeah, I mean, just seeing their capabilities is useful sometimes, because we can also have those kinds. Conversations of like, hey, and I think don't just start with the technology, like, try to implement that into the mission. So it's like, Hey, I have this technology. Great. Okay, what does it do? Like, does it reduce, you know, time for workflow, by 10x right? Or is this 10 like, 90% less cost relative to the alternative. Or, what does it actually mean in the context of department of defense mission? And then that would allow us to kind of, like, then say, okay, like, Who are you working with? What are your avenues? Like, why are they not doing this right? And then we can have a conversation and and go to the department and say, like, hey, you know, like, for this mission set, you know, how are you getting after this? Have you looked at these types of alternatives? And they'll usually have to then defend themselves, and oftentimes, like, the status quo is their defense and and so, you know, naming and shaming actually does have some benefits in some respect. So Hondo Geurts 31:03 SO you know, for those on the audience, if you haven't pulled up the FORGED Act, I encourage you to go, you can look it up online and and dig into it's pretty comprehensive. I think the draft is 144 pages, and I can tell a historian went through all the statutes because it's as I was preparing for the hearing. It's pretty comprehensive. But Eric, for the listeners here, maybe a couple of you know, what are the big things that Senator Wicker and committee is kind of looking at here with this FORGED Act, and how do you see that playing out, maybe over the next six months. If people have comments or ideas or suggestions on on how to implement it or shape it a little bit, how do you maybe a little bit on the act itself, and then kind of where are you, again, not speaking for the committee or anything, kind of just notionally, where do you see things, kind of going forward with it? Eric Lofgren 32:00 Yeah. So we have a white paper that's much shorter, and then there's 144 pages of bill language. Hondo Geurts 32:08 Read the white paper! [laughs] Eric Lofgren 32:13 You know, Moshe Schwartz did a really good job. He actually distilled it down, and he he's been kind of sending around to people, kind of like a decoder ring of what, what's actually in the bill language. So if anybody wants that, reach out to Moshe or me, and I'll just give it to you, and we're taking kind of feedback. So my view on it was, I think Senator Wicker wanted to do it, and he said it during the hearing. He wants, he wanted to do game changer, like make a game changing move. So we put this out last year as a standalone bill, and that's really to kind of like be a message and to solicit feedback from industry. So there's definitely going to be changes and and things that we're going to work on to improve throughout that. But I think it's, it really has a lot of good ideas in there, and we're going to kind of walk it through this process where we're going to try to take all the pieces of it and then use those as elements in the FY 26 NDAA, so if anybody has feedback, I welcome the feedback, and the more specific it is, like this line could be like this or that line. You know, the more specific, the better. Just general comments usually aren't that useful, because then I have to think about, how do I think about, how do I translate this into something? And I'm busy. Hondo Geurts 33:25 So what would you kind of to the listener group out there? Maybe the big four or five big ideas in here to really move the needle? And I would agree with you, it's a it's a needle mover. It's not an incremental tweak here or there. Eric Lofgren 33:39 Yeah. So a lot of it is... There's five different parts. One is cut the red tape. So we just, I basically just read through title 10, and it was like, if there's all these pilot programs or authorities that aren't really being used or reporting requirements, let's kind of clean that up and make sure that there's not all this stuff that the department has to do that's not really providing value or we mandated 10 years ago, and it's, you know, it's been overcome by events. Why do we still have this here? So there was a lot of cleaning up there. The second one was more on the contracting and rapid acquisition front. So we actually did in the FY 25 NDAA. We kind of codified middle tier of acquisition, software acquisition pathway, and we gained the acquisition pathway, the software acquisition pathway, the ability to go after non-developmental hardware and commercial hardware as well. So we actually did quite a bit in the FY 25 NDAA on the rapid acquisition front as well, but we wanted to go towards, you know, a capability portfolio view of acquisition strategies. So you're not going to buy a specific end item and then that specific end item and contractor are kind of, like, then found in the budget. Like, we need to, like, pull that back and think about it as like, what is the capability or mission that we're trying to get after and then provide an ability to have multiple competing contractors, or the ability to stop something and do something else, but not have to go get a whole new acquisition strategy reapproved, and so that that allows us to keep the flow much better. And then from that acquisition strategy, that's a portfolio base. We also have Capstone requirements, so more portfolio based requirements, where you're not dictating very specific KPPs. Hondo Geurts 35:34 Kind of problems to solve, which is solutions to acquire. Eric Lofgren 35:39 And you brought that up at the hearing as well, and then we'll try to match that with portfolio funding. So you you have to have all those legs of the stool working together as portfolios to provide delegated decision authority so that you can actually move within the year of execution. Hondo Geurts 35:56 Yeah, and I do think that's what's fundamentally different about this than other approaches, because you're attacking all elements, whereas before you attack each individual element, but the other two didn't change, so you're still stuck, yep. So portfolio management and what else is in? Eric Lofgren 36:13 So with respect to that, we upgunned the program executive officers into portfolio acquisition executives. That was something that came out of the section 809 panel, as did the Capstone requirements, as did some of the budget reform stuff. So actually pulled some of this stuff, like the PPBE Reform Commission, Section 809 commission, some of the stuff from the National Security AI Commission. It was like, there's been all these commissions, all these smart people, let's actually like, do some of the stuff that they recommended and within the portfolio acquisition executive. I think one of the things that was actually missing is that you have all these functional supports, the cost estimators, the systems engineers and technical authorities, the contracting officers, the authorizing officials for networks. All these people are basically not accountable to the program manager, and are, in some ways, they kind of, they're more beholden to their process than they are to the success of an individual program. So matrixing in keep keep those organizations where they are, make them the functional leaders, the policy makers and potentially clear as authorities for major decisions, but matrix the individuals more into the to be accountable to the program managers and the portfolio acquisition executives, so that you can kind of really have an Agile team that has all the necessary people authorities to actually get moving on a product. So make the portfolio the program managers really empower them to actually be a program manager, rather than something like a funds obligation manager, right? Or someone that's kind of, you know, brother, may I into each of the communities to get their buy in that takes so long. So that's a major change, I believe, as well. Another one is we kind of touched the joint requirements oversight committee and or council, not committee, and the cause assessment, program evaluation. So the way we we kind of looked at this one, was we looked historically again. How did we do joint things in the past? And I think that, you know, in some ways, we actually did joint missions and development relatively well, and we kind of forget how those structures were, which were participatory in nature. So we had the munitions board and the R and D board, where the people who were executing the programs were dual hatted onto these boards, so you're not sending up a requirement in a stove pipe, and then you hope some joint agency who has no responsibility for the execution of those program to kind of think and map out is this joint enough? What requirements would make this joint? How this work in the joint force? You actually would have the you would reconstitute like a boarded committee structure where the combat commanders and the PEOs are represented on these boards. So the people executing are simultaneously seeing what everyone is executing on these cross functional committees. And then they can see who's actually duplicating overlapping or what the gaps are, or what would be necessary to make things functional between them, and then you could use that structure to kind of find these gaps, and then they would basically be the leaders of these boards. And you bring in not requirements and budgeting as like separate linear processes, but integrate those decisions. Because often those two communities want to talk about their separate, you know, roles, and want to impact those things, but they're formally not supposed to, but they really do. So let's just integrate those things, make them the leaders of such a board, and then bring in the stakeholders that are executing to help make the joint decisions. And now you have a more holistic picture where they'll still be making decisions, they'll still have clearance authorities for all the major defense acquisition programs, but the portfolio acquisition executives can at least get started and have more decision authority for those lower level things that were we really do want to move fast, and there's a lot more that's in here, but I'll kind of stop there? Lauren Bedula 40:21 Well, incredibly actionable. And I like that you specifically called out some of the commissions or different Think Tank initiatives and groups that you're working with, because something else we see is when there are recommendations, sometimes they're done in a silo or a vacuum. So it's clear here, you're pulling all the right stakeholders together. On that note, for folks looking to get involved with nonprofit or help with translation between these communications, different stakeholders, is there any advice you have? Are there groups you see doing great work that could could use help on the think tank side, for example? Eric Lofgren 40:55 Well, I mean, there's more than just, like the congressional commissions I mentioned. Atlantic Council has a bunch ofreports, Hondo, I think you were a commissioner on a couple of them. You know, Bloomberg just commissioned an interesting report that David Burger was chair of. So there's all these different groups. I think what was missing from some of those is in, I think we go. Financial counselor did pretty well because they were trying to say, like, who does what? But at least from my perspective, because I'm on a committee, like, what is just, just take a shot, kind of like, draft language, you know, because that makes my job a lot easier. Is like, least I have a starting point that we can, we can work from, like, here, here is the legislative language. But I also get that you don't really want to legislate like, it's a blunt hammer. You don't want to legislate everything just because you have that tool. A lot of it is the leadership, and those reports have been useful. But like, I think you know what is the action plan of like, I want CDAO to go do this as like, Okay, well, don't let them interpret it. Lauren Bedula 42:08 yeah, that's great advice. The more specifics, the better. And I really liked how you talked about bringing market research ahead of defining requirements, increasing competition while maintaining competition. And again, just this theme of being really action oriented. So thanks for taking the time to walk our listeners through everything you're doing, and for all your efforts on this front we appreciate it. Eric Lofgren 42:30 Thanks for having me on. Transcribed by https://otter.ai