Which is hotter: an accountant or a rock star? If you picked rock star, you already have a glimmer of insight into why the government — and the Defense Department in particular — repeatedly awards contracts to companies that promise the hottest technology, even if it’s less mature than the other options.
But an affinity for the latest and greatest — and riskiest — technology is hardly unique, and blaming DOD’s contracting problems on one cause is misleading. Among high-risk technologies, software is the riskiest of all, said David Cottengim, an accountant at the Defense Finance and Accounting Service who has spent more than 14 years developing systems for DOD. “Almost all software-intensive programs fail,” he wrote in an article in the December 2005 issue of the Defense Acquisition Review Journal.
When examining DOD’s contracting problems over the course of several decades, immature technologies show up as a big contributor. Recent examples include the Joint Tactical Radio System clusters, the Warfighter Information Network-Tactical program and the System-of-Systems Common Operating Environment.
But immature technologies are not solely to blame for programs that are billions of dollars over budget, years behind schedule and far short of their promises. Many other circumstances also contribute to problems, including weak business cases, fixed-price contracts, consolidation among the defense contractors, restricted communication with vendors and lack of oversight.
One of the most vocal critics of high-risk programs is Comptroller General David Walker, the top official at the Government Accountability Office. “Without mature technologies at the outset, a program will almost certainly incur cost and schedule problems,” Walker wrote in a December 2006 report to Congress. Nevertheless, he said, DOD’s acquisition community “moves forward on programs with technologies before they are mature and takes on responsibility for technology development and product development concurrently.”
The risks involved in being ahead of the curve in technology development are well-documented, but that does not diminish the appeal of the potential rewards for taking those risks, procurement experts say.
“We want technological sophistication, and we want good value,” said Joshua Schwartz, co-director of the Government Procurement Law Program at George Washington University Law School. “Contractors desperately want to sell us these incredibly ambitious and technologically risky, if potentially very effective, new weapon systems. There’s a lot more money to be made in bold new visions, but the risk is much higher.”
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