Home' Army Acquisition Logistics and Technology Magazine : Army ALT January-March 2012 Contents 122 Army AL&T Magazine
The key to doing so, Kendall said, "is to
balance very carefully between what you're
asking for, what's actually achievable, and
what's in the range of something industry
can do, if they're motivated, to give you a
better product." With a fixed-price pro-
duction contract, he noted, "industry has
all the incentive in the world, because the
more they reduce the cost ... the more
profit they'll make. It's a very straightfor-
ward equation. So there isn't much point,
in that kind of situation, providing an
incentive beyond what's already there."
The overarching question, Kendall said, is,
"What does the government care about?
What does the government want? And if
this is something the government wants,
how do we put something in the contract
that will get industry to be more moti-
vated to give it to us? ... That requires
judgment; it requires a careful thought
process to go through, and not just apply
a school solution to every contract."
With the economy on everyone's mind and
the high value placed on competition to get
the best deal for the government, the future
of the defense industry was a prominent
topic at the PEO/SYSCOM conference.
Kendall expects the industrial base to
"remain healthy through the drawdown,"
albeit without the growth seen over the
past 10 years. "It is a different environment;
it's a different environment for us, too," he
said. "It's going to be a stressful time for
industry. Industry will react, and we need
to be aware of that. We also need to protect
our industrial base. We rely on a competi-
tive industrial base as much as possible."
Competition "is not just driving the price
down. It also drives innovation," Shyu
said. Because small businesses often can
be more agile and innovative than large
companies, "one of the things we're
thinking about is [using] more small busi-
nesses as prime," Shyu said. The ASAALT
is also looking at the real value added of
layers of subcontractors, she said. "We're
trying to bring some agility."
Kendall said it's unlikely there will be
much more consolidation at the top ech-
elons of the defense industry. The federal
government "is not going to support that,
because we've seen about as much of that
as we think makes sense in order for us to
maintain competition at that level."
At the lower tiers, however, "there proba-
bly will be some movement," Kendall said.
"People will move around strategically,
trying to position themselves for future
business, and we'll have to look at that on
a case-by-case basis. We do want to protect
competition there. We also want to protect
some niche capabilities that may go away
if we're not careful. ... We will intervene,
but it will be rare for us to intervene."
Michael T. Strianese, Chairman and CEO
of L-3 Communications, said the near
future may bring changes to business struc-
tures, such as spinoffs and divestitures.
"Back in the '90s, it was all about con-
solidation," Strianese said in the industry
keynote address. "What you're seeing now
is not about consolidation. It's about frag-
mentation; it's about portfolio shaping;
it's about restructurings. I can promise
you, from our side, we will never excuse
ourselves from the mission because it's too
difficult. We will be changed by these eco-
nomic realities ... but the commitment to
your mission will not be compromised,"
PROFESSIONALISM IN AL&T
Throughout his keynote address, Kendall
placed a heavy emphasis on the profes-
sionalism of the acquisition, logistics, and
technology (AL&T) Workforce, which
he said is key to achieving better buying
power in all of its many aspects.
"We have an incredible workforce, but I
believe we can have a much more capable
workforce than we do. Our task is enor-
mous, and it requires real professionals to
do it well. I'm going to be focused a lot on
that over the next year."
The need for well-trained, well-educated,
experienced, and dedicated AL&T pro-
fessionals is widely underappreciated,
Kendall said. "They have a strong sense of
integrity; they bring that to the job that
they're doing. And it is not something
you get instantaneously." Whereas indus-
try can rely on buying the talent it needs,
"In the government, we have to grow our
talent all through their careers, with few
exceptions," Kendall said.
DAU provides great training, Kendall
said, but even Level III certification is
Kendall lauded the contingency contracting
capability established over 10 years of conflict
in Iraq and Afghanistan and said that DoD needs
to "institutionalize that capability" in anticipa-
tion of using it again in operations that will rely
heavily on contractors. Here, MSG Joe Man-
cias, 36th Infantry Division Garrison Command
Noncommissioned Officer in Charge, directs
Iraqi contractors at Contingency Operating
Base Basra, Iraq, June 29, 2011. The contrac-
tors cleared debris left over from the move of
Army and Air Force Exchange Service facilities.
(Photo by PV2 Andrew Slovensky.)
CONSTRAINTS AND CONTROLS
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