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Acquisition Research Program Newsletter

January 21, 2022       —       Issue 85

TransDigm is back in the news and on the Hill with this week's hearing on "Price Gouging in Military Contracts." Look for new legislation to require more cost and pricing data, particularly for sole-source contracts. This legislation is informed by the third DOD Inspector General report on TransDigm's business practice of acquiring subsidiaries and then raising prices to excess profit. For extended discussion of the case, check out the analysis from the Project on Government Oversight in our Acquisition section. 

In research news, Heidi Shyu has been talking up a new document outlining the department's priorities for technology and research, which is due any day now. On the list: hypersonics, artificial intelligence, autonomy, next G, and more. She's expecting a windfall from Congress to move out on these priorities, anticipating the FY 2023 research budget to be the largest ever for the Pentagon.

President Biden issued a memo detailing how agencies should comply with last year's executive order on cybersecurity standards for national security systems. Cybersecurity continues to be a hot topic. We include a recent report on deterrence from Congressional Research Service. Cyber needs are also driving new academic-government partnerships, and these collaborative ventures are popping up everywhere lately as DoD looks to tap into the private research community more aggressively. Another example discussed this week is the new Space University Research Initiative. 

Our NPS scholar-professors are asking smart questions about topics that matter. This week, Dr. Dan Finkenstadt published his latest analysis on supply chain management, suggesting a different approach to the irrational market behavior we've seen during the covid pandemic. And Professor Jim Wirth makes the case for taking a truly analytical and quantitative approach to understanding emerging technologies. 

Our workshop on rapid acquisition is coming up in two weeks--on Groundhog Day. Will the day bring an early end to this snowy winter, or a shadowy prediction that the acquisition bureaucracy is here to stay?  The attendee list has a great mixture of perspectives -- academia, industry, military, think tanks, and NPS faculty and students. Come join the discussion!

The newsletter will take a break next Friday, January 28. Instead, you'll receive the latest issue of The Crow's Nest, our quarterly(ish) review of ARP-supported research. We have a lot to share with you!

This Week's Top Story 

New bill aims to cut the price of spare parts for DoD
Joe Gould, Defense News

House Oversight Committee Chairwoman Carolyn Maloney on Wednesday proposed legislation to force government vendors to publicly disclose data about their costs, a move meant to help the government negotiate better deals for spare parts.

“We are here today to say enough is enough,” Maloney, D-N.Y., said Wednesday at her panel’s hearing on findings by the Pentagon’s inspector general that it overpaid for commercial and military aircraft parts from manufacturer TransDigm Group.

“Congress must act to empower contracting officers when they’re negotiating with greedy contractors like TransDigm,” Maloney said.

The legislation would require companies to provide the government with uncertified cost data when contracting officers need it to determine whether a price is fair and reasonable. The bill, released as a discussion draft, would apply to contracts government-wide, starting a year after enactment.

At the hearing, the Pentagon’s principal director for defense pricing and contracting, John Tenaglia, said Maloney’s legislation has the support of the Pentagon.

ARP and NPS News

Rapid Acquisition Workshop
February 2, 2022  |  7:00am-12:30pm PST

Walk in the shoes of decision makers seeking to field an urgently needed capability

Join facilitator Dr. Bob Mortlock in this virtual professional development opportunity to walk through a case study of a real defense acquisition program in which speed was the #1 priority.

Dr. Mortlock's case studies are based on real-world defense acquisition programs and have been published in peer-reviewed journal articles and/or technical reports.  Numerous GAO Reports as well as previous NDAAs have emphasized the importance of educating (i.e., developing) members of the acquisition workforce.  However, the greater acquisition workforce rarely gets the opportunity to read and study these case studies.  This opportunity fills that training and education gap. Students can place themselves in the case as the “protagonist,” ask themselves what they would do, and justify their recommendations based on facts presented in the case.  Register now. 

Certainty Satiation Marketing for Disrupted Supply Chains
Daniel J. Finkenstadt, Rob Handfield, and Tojin Thomas Eapen

The latest from NPS Professor & ARP collaborator Dan Finkenstadt 

The current set of supply chain disruptions has led to a massive set of supply chain shortages while e-commerce and sponsored advertisement has grown. There has been a disconnect in the ability for free market price levels to satiate demand. A new level of agility is required by firms to deal with the sudden shortfalls in supply to meet this demand. We propose certainty satiation marketing. This involves using transparency of supply for demand moderation to create a satiation effect. It is focused primarily on managing the information and advice available to consumers so that they can reach satiation at the appropriate time, given environmental market conditions.

Winning Left of Battle: The Role of Analysis
James J. Wirtz, Military Strategy Magazine

Professor Wirtz teaches National Security Affairs at NPS

Today, everything from hypersonic vehicles, cyber intrusions, autonomous vehicles, and 5G networks are identified as emerging superweapons that threaten the U.S. Navy’s prospects in the western Pacific. Nevertheless, as these various technologies wax and wane along the Gartner hype cycle, evaluations of potential applications, net assessments, and mathematically informed analysis rarely inform debate. What follows is not just a call for today’s Navy to “think about things more,” but to instead employ the full panoply of mathematical analysis, optimization techniques, systems analysis, modelling and simulation, and even qualitative assessment to better understand how to employ weapons based on new technologies and their potential impact on some future conflict. When it comes to assessing new technologies, analysis appears less compelling “left of battle,” that is, before wartime experience resolves questions about weapons based on novel technologies.

Acquisition and Innovation

DOD’s Research and Engineering Priorities Focus on Contested Areas
John A. Tirpak, Air Force Magazine

Norwegian Startups Eye U.S. Defense Market
Mikayla Easley, National Defense Magazine

New software factory aims to digitally transform AFRL
Leslie Heck, Air Force Research Laboratory Public Affairs

Analysis: Spare Parts Contractor Profits From Broken System
Mandy Smithberger, Project on Government Oversight

Analysis of Contracting Related Sections of the FY 2022 National Defense Authorization Act
Vern Edwards, WIFCON

Commentary: The Pentagon’s new cybersecurity model is better, but still an incremental solution to a big challenge
Dr. Georgianna Shea, Federal News Network

Research

Joe Biden’s First Year in Office: Nominations and Confirmations
Partnership for Public Service Center for Presidential Transition

Move Over JARVIS, Meet OSCAR: Open-Source, Cloud-Based, AI-Enabled Reporting for the Intelligence Community
Emily Harding, Center for Strategic & International Studies

Cybersecurity: Deterrence Policy
Congressional Research Service

Events

Federal Insights Exchange Session Featuring GSA Office of Government-wide Policy Panel
American Council for Technology and Industry Advisory Council
January 26, 2022

2022 DAU Acquisition Update
Defense Acquisition University
February 23-24, 2022

Policy

Memorandum on Improving the Cybersecurity of National Security, Department of Defense, and Intelligence Community Systems
The White House

Defense and Federal Government

Space Force chief technologist hints at future plans to build a digital infrastructure
Sandra Erwin, Space News

Navy Shouldn't Build Next-Gen Destroyers Until Tech is Proven, Navy Secretary Signals
Caitlin M. Kenney, Defense One

Panel: New National Defense Strategy Needs More Substance, Clear Goals
John Grady, USNI News

US Cyber Command will use new academic engagement network to tackle cyber challenges
Mark Pomerleau, C4ISRNET

UNM included in ‘Space University’ program
Ryan Boetel, Albuquerque Journal

Congress

House of Representatives to launch new digital service team
John Hewitt Jones, Fedscoop

Watch: Price Gouging in Military Contracts: New Inspector General Report Exposes Excess Profit Obtained by TransDigm Group
House Committee on Oversight and Reform

Michelle V. J. Johnson, PhD
Communications Manager, Contractor Support
Acquisition Research Program at Naval Postgraduate School
p: (704) 689-5998   |   e: michelle.johnson.ctr@nps.edu