The Last Frontier of Acquisition Reform: The Budget Process

Abstract

In the last half of the 2010s, acquisition policy-makers returned their focus to rapid prototyping, modular open systems, commercial practices, and related concepts. With a number of alternative acquisition pathways created, many believe the last thing standing in the way of speed and agility is workforce culture. It is curious, however, how the most important tool in defense management has escaped reform since Robert McNamara installed it nearly 60 years ago. The program budget is the master controller of the acquisition system. It is an inherently top-down waterfall process based on “whiz kid” notions of linearity, determinism, and reductionism. This paper explores the wisdom of the traditional budget process based on organization rather than program. It proposes a 21st century agenda for budget reform, including specific examples of how Army appropriations can be gradually reclassified. The goal is to empower mission-driven organizations, allowing them to embrace an uncertain learning process using portfolio management. Financial management may then move out of the industrial era to better reflect a complex adaptive system view of the defense acquisition system.