Procurement: June 19, 2004


Complaints about poor performance by military contractors in Iraq can be traced to some of the quirks of the Department of Defense procurement process. The big problem is that it's easier, from an administrative (and cover your ass) point of view, to get existing suppliers to provide more of the same stuff they are providing, or related services (like asking a translation supplier to provide interrogators), than it is to go out and find new suppliers who might do a better job. The problem is that it's such a complicated and lengthily process to complete the paperwork and procedures for a new supplier, that there's a big incentive to stick with the existing ones. The current suppliers, of course, are not unhappy with this situation, and tend to have a very "can do" attitude (whether then can actually do it or not). 

On top of that you have, because of the war on terror and operations in Iraq, a surge problem. This causes problems when a small company that is staying on top of a hundred million dollars worth of business, is suddenly asked to ramp up to handle a billion dollars of work. Things quickly get out of control as too many managers and subcontractors are hired in haste and things go from bad to worse.

None of these problems, which have been around for centuries, are a mystery to anyone in the military procurement business. What has proven elusive is a solution. The one solution that works time and again is the presence of good management. But thats a, so far, largely unattainable solution. Government cannot attract the quality managers needed to make rapid expansion of procurement projects. An attempt has been made to develop a group of large civilian construction and project management firms, which regularly deal with rapid mobilization of resources for non-military projects. But even these firms rarely have to deal with projects that escalate as rapidly as wars. In the 1990s, some of these firms (like Kellogg, Brown & Root) and military staffs, did some planning exercises to try and develop a better idea of what could be done to avoid the errors and inefficiencies encountered during a large, and rapid, build up. While this provided some useful guidelines, it also repeated the basic truth that it was the quality of the procurement managers that kept things from spinning out of control. Getting a lot of quality people in procurement jobs is not easy. Its not a glamorous job, and the Department of Defense knows that procurement fiascoes are quickly forgotten. So are procurement successes. The only other new solution has to do with computerized information and accounting systems to monitor things. But it has already been discovered that low tech, and low level, officials can often muck things up despite the clever software and accounting controls. This is particularly true in places like the Middle East, where taking a little off the top for yourself is considered perfectly normal and acceptable. 


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