Recent events in the Air Force surrounding the illegal actions of former Principal Deputy Assistant Secretary Darleen Druyun highlighted the need to review the management and oversight structure of acquisition activities in the Department of Defense (DoD). DoD, through the Undersecretary of Defense for Acquisition, Technology, and Logistics USD(AT AND L), established the Defense Science Board (DSB) Task Force on Management Oversight of Acquisition Organizations to examine its acquisition structures and processes; survey and assess best practices; and recommend changes to improve checks and balances to better ensure acquisition integrity. The Task Force was also asked to consider whether: (1) structural problems exist that place too much decision authority in one individual or at a level without adequate oversight; and (2) a simplified acquisition structure could improve both efficiency and oversight. The Task Force was co-chaired by two members of the Defense Science Board. Task Force members and key contributors included former Defense Department and other Federal Government officials, as well as members of industry and academia. During the course of its work, the Task Force reviewed a wide array of written materials and heard from experts in the fields of acquisition, procurement, ethics and integrity, human resources, leadership, organization, oversight, and best practices.

The catalyst for the study was the admission by Darleen Druyun, former Air Force Principal Assistant Secretary, of her favorable treatment of Boeing Corporation in key contract awards and negotiations. The Task Force was established to review the management and oversight structure of the acquisition activities in DoD.

This document contains the final report of the DSB study on Defense Acquisition Reform (Phase II). The Phase I report firmly acknowledged the need to adopt commercial practices as a way of doing business, and developed a set of reform initiatives designed to accelerate the required changes. The thrust of the Phase II effort was to further define these areas by examining specific industry segments, identifying specific combatant commands for increase responsibility in the requirements process, and further identification of the barriers to the adoption of commercial practices. The Task Force concludes that: mature jet engines, microelectronics, software, and space systems can and should be procured and supported in a fully commercial environment; USACOM and CENTCOM should be given increased technical cadres to further their capability to participate in the requirements process; and it is feasible to eliminate may of the barriers to adoption of commercial practices without sacrificing the public trust in spending public funds.

This report provides three policy recommendations, based on the overarching theme of more closely integrating DoD with industry. The Sub-Panel believes that improved integration with industry is the critical element that will enable the acquisition system to perform better, faster, and cheaper in support of the warfighter. The recommended policy initiatives are that DoD should: 1. Restructure its Research, Development, Test, and Evaluation (RDT & E) organizations and associated workforce to enable the Department to make better use of the capabilities of industry and other government agencies, to concentrate in-house capabilities in areas where there is no external capability, and to eliminate duplicative capabilities. 2 Expand the use of price-based forms of contracting to reduce the cost of doing business with Department of Defense (DoD) for existing Defense contractors and to give DoD access the segments of industry that currently choose not to do business with the Department because of the costs and complexities associated with cost-based contracts. 3. Expand the oursourcing of sustainment activities to eliminate duplicative capabilities between DoD and industry, to enable the Department to capitalize on industry's advancements in applying technology to these functions, and to provide better support to the user.

Over the past decade, dozens of studies, reports, directives, and commissions have recommended specific changes in the approach the Department of Defense (DoD) uses to acquire products (primarily major weapon systems). This Defense Science Board (DSB) Summer Study Task Force reviewed these prior studies and concluded that, by and large, the recommendations have ben implemented. Rather than adding to the list of 'what to do' recommendations, this Task Force concentrated on recommending 'how-to-implement' change. This is a departure from the typical technical recommendations, but the Task Force believes this 'how to' focus is urgently needed at this juncture.