TIME — A memo recently went out to the military’s technology and contracting community, encouraging them to “request requirements relief” in situations where the cost of satisfying a requirement exceeds the benefit. This guidance is particularly relevant given the current sequestration situation.
Specifically, the memo encourages program managers to consider trade-offs “in cases where significant cost savings may be achieved with marginal impact to operational capability (i.e., spending 15 percent of a program’s budget to get the last 3 percent of…performance).”
The memo was signed by Admiral James Winnefeld, vice chairman of the Joint Chiefs of Staff and chairman of the Joint Requirements Oversight Council.
A signature block like that carries a lot of weight.
ADM Winnefeld’s guidance is not a new concept, nor does it claim to be.
There was always a wide consensus, if not unanimous agreement, that spending 15% of the budget on 3% of the capability might be a bad idea.
To be sure, there are cases where the final 3% makes all the difference and is worth the expense, but as a general rule if we can get 97% of the performance for 85% of the money (pardon my math!) it probably makes sense to stop there.
Here’s why this guidance makes sense.
No matter how precise and scientific it may sound, when we peek behind the curtain on the formally-documented requirements, we often find they are the result of round numbers and guestimations. Writing requirements this way is not bad, but treating such a requirement like holy writ is inconsistent with its earthly origin.
Upon closer inspection, there’s a pretty good chance nobody needed that final 3% in the first place. We need it much less if it’s going to eat a disproportional amount of the budget, which is precisely ADM Winnefeld’s point. Again, there are times where the last bit of improvement is critical, but this is not always the case.
Even in economically-flush times, diligent cost-benefit tradeoffs are theoretically a central part of the job. This was always how things were supposed to work and doubly so in an age of austerity. However, if these tradeoff assessments were being performed with the appropriate frequency and rigor, there would be no need for the “greater emphasis” memo. And yet, here we are.
Regardless of past practices, the message is clear: it is not automatically acceptable to burn through larger and larger piles of funds in the pursuit of smaller and smaller improvements towards hypothetical performance targets. All involved parties are being challenged to take a hard look at the documented requirements and ask the question “Is this really necessary?” Sometimes the answer will be yes, but it was never unusual for the answer to be no. What’s new is the strong desire to ask the question and to provide answers quickly.
Yes, we must equip our troops to out-perform any opponent and operate in the world’s most challenging environments. But ADM Winnefeld’s memo is clear: reaching this goal does not require overspending on unnecessary performance parameters.
Indeed, such an approach would be counterproductive. Extensive research indicates that simpler, less-expensive systems tend to outperform more complex, more expensive alternatives.
The vice chairman’s renewed emphasis on cost-benefit tradeoffs is a welcome step in the right direction and just might help nudge military technology programs in the direction of less expensive, more effective equipment.
By Dan Ward
Posted on March 1, 2013
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