Defense Business Transformation Agency Launched

After decades of resistance, the Defense Department is centralizing its business and acquisition programs under a single two-star led agency.

Pentagon to house business programs in central agency (GovExec.com)

The Pentagon is moving dozens of its most extensive business modernization programs under a single roof, officials announced last week. By creating the Business Transformation Agency, Defense officials will centralize management of several departmentwide programs, including the Defense Travel System, the Pentagon’s e-mail system, the Acquisition Spend Analysis Service and the Defense Acquisition Management Information Retrieval program.

Program resources and personnel will be transferred to the new agency by the end of November, according to an Oct. 7 memorandum from acting Deputy Defense Secretary Gordon England to military service chiefs, the chairman of the Joint Chiefs of Staff, Defense undersecretaries and other Pentagon officials.

A two-star general or an equivalent member of the Senior Executive Service with the title of Defense business systems acquisition executive will lead the agency. Until that position is filled, Deputy Undersecretary for Business Transformation Paul Brinkley and Deputy Undersecretary for Financial Management Thomas Modly will direct the agency.

[…]

But Brinkley, in an interview with Reuters Friday, said this is not the creation of a “new bureaucracy.” He said recent security threats require a more “nimble, agile and responsive” military and that the consolidation would improve business methods. The Pentagon plans to spend about $4.2 billion on business transformation in fiscal 2006, according to Brinkley. “This is that moment in time when the need of the mission is going to force the change that we need,” Brinkley told Reuters. “The warfighter is absolutely in need of this change.”

[…]

GAO stung the Pentagon with a July report (GAO-05-702) citing persistent weaknesses in its management processes. Defense has struggled to establish an effective architecture that would guide business modernization and failed to establish a transition plan by the September deadline, the report stated.

Ineffective distribution systems and poor planning kept supplies from getting to troops in Iraq, GAO had found in an April report. Even projects intended to create efficiencies in business processes, including the department’s $474 million electronic travel system, have come under attack. The travel system recently survived Senate attempts to nix it.

New agency to centralize management of Defense business programs (Washington Technology)

DOD creates agency to manage business programs (Govt. Computer News, 14 Oct.)

The Defense Department has established a new business agency that will centrally manage some of the department’s largest business programs. The idea for the Defense Business Transformation Agency (BTA), officially established on Oct. 7, was approved by the Defense Business Systems Management Committee in late June. Eighteen of the DOD’s business programs, systems and initiatives—including the Defense Travel System, the Standard Procurement System and the Defense Integrated Military Human Resources System—will be transferred to the BTA by the end of November.

The BTA will eventually be headed by a service two-star general or an equivalent Senior Executive Service official, said Gordon England, acting deputy secretary of Defense, in a memorandum he sent to service secretaries. Until then, Paul A. Brinkley, deputy undersecretary of Defense for business transformation, and Thomas Modly, the deputy undersecretary of Defense for financial management, will jointly serve as director.

The BTA will be responsible for “business process re-engineering, core business mission activities and Investment Review Board matters as determined, and revised by the DBSMC,” England said in the memo. “The BTA shall also ensure consistency and continuity across the core business missions of the department.”

Dov Zakheim, former Defense comptroller, said the new agency will help the department transform its business processes. He added that the BTA goes beyond DOD’s Business Management Modernization Program, which is responsible for integrating roughly 4,700 business systems across the department, in that it provides senior-level oversight on some of the department’s largest business programs.

According to the above-referenced GAO report, “DOD Business Systems Modernization: Long-Standing Weaknesses in Enterprise Architecture Development Need to Be Addressed” ( GAO-05-702 July 22, 2005),

To effectively and efficiently modernize its nonintegrated and duplicative business operations and systems, it is essential for DOD to develop and use a well-defined BEA. However, it does not have such an architecture, and the products that it has produced do not provide sufficient content and utility to effectively guide and constrain ongoing and planned systems investments. As a result, despite spending almost 4 years and about $318 million, DOD does not have an effective architecture program. The current state of the program is due largely to long-standing architecture management weaknesses that GAO has made recommendations over the last 4 years to correct.

The full report (PDF format) is here.

Indeed, the military has been under pressure to modernize its business practices since before there was a Defense Department. Then-Army Chief of Staff George Marshall recommended unifying all of the military’s logistics resources into a single department in 1943 and the Hoover Commission recommended similar restructuring in the 1920s. DoD has made many incremental reforms but, given the vast sums involved, almost certainly needs to do more. Whether the Business Transformation Agency will be the silver bullet remains to be seen. Until proven otherwise, though, a high level of skepticism is warranted.

Still, this looks to be aimed in the right direction: serving the warfighter.

New Pentagon agency aims for businesslike changes (Reuters, 14 Oct.)

Commanders in the field could more easily access Pentagon records and determine where there were supplies they needed — such as body armor — allowing them to be shipped to troops far more quickly.

[Brinkley] said the initiative would also have a positive effect on a military purchasing system that is under fire for chronic cost overruns, program delays and lack of accountability. The new agency would help program managers keep Pentagon officials better informed of the current status of programs, even between official milestones, allowing them to intervene more quickly if problems arose, Brinkley said.

This strikes me as a solid approach. Most of the previous efforts have been aimed at saving money, a laudable and necessary goal to be sure. But the emphasis, especially during wartime, should be on making the system more efficiently get materiel to troops in the field. Cost savings will naturally flow from getting that done and leadership will be much more motivated to make the system work with that as the aim.

Hat tip to OTB reader “Delta Dave.”

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.