Risk Mitigation Best Practices in Acquisition
July 23, 2021
In 1999, then-Army Chief of Staff General Eric Shinseki announced the U.S. Army Future Combat System (FCS). The FCS was intended to be usher in a new age of mobile armor, and in May 2003 the Department of Defense awarded an almost $15 billion contract for the design and test of modern vehicles under this program.1 However, in 2009, after spending an additional $5 billion, the entire FCS program was cancelled without a single vehicle used in the field.2 How did an acquisition program of such vital importance to the military fail despite almost four full years of planning and billions of dollars in appropriations? According to a report by the Government Acquisition Office, the U.S. Army failed to adequately define its requirements for the FCS leading to ballooning cost and program delays.3
Risk mitigation strategies are critical to ensuring the success of an acquisition. Successful risk mitigation supports an acquisition program to meet its cost, schedule, and performance objectives. Risk is defined as the potential variation between a planned approach and the expected outcome, and has three main components: the future cause, a probability assessed on that cause happening, and the consequence of its occurrence. Typically, issues arise when the outcome is not the expected one. To limit the potential of missed objectives, requirements must clearly be defined in the development phase of an acquisition.
Our experts rely on four best practices for risk mitigation when developing an acquisition’s requirements to engage in risk mitigation and define requirements in a way to better ensure the success of an acquisition:
- Include Metrics. Always include a requirement that can be tested or measured. Untestable and unmeasurable specifications can lead to confusion, delays, and unnecessary costs as there is no consensus between the contractor and customer about what fulfills a requirement. The Army failed to define specific quantifiable metrics early in the acquisition process which it would use to measure success of the FCS project once a vehicle was in development.
- Avoid “gold plating.” Only include requirements that there are fundamental needs, do not include specifications that are wants or desires. As the number of programs, the FCS was meant to replace grew, it soon was unable to fulfill the basic requirements which necessitated the acquisition to begin with.
- Use “must” and “shall.” Both “must” or “shall” convey that a specification is a requirement and not a conditional suggestion, additionally the statements avoid any ambiguity. Many of the follow-on requirements added to the FCS program were born after the pivot in military strategy from conventional warfare to counterinsurgency during the Iraq War. The Congressional Research Service (CRS) later concluded the program evolved into an Army wish-list rather than a deliverable objective.4
- Start with Integrated Product Teams. Make sure all stakeholders are involved from the beginning of the life cycle to properly capture their contributions and ensure that the acquisition’s requirements are holistic enough. There were numerous teams that each worked in various silos developing specific components that would later be integrated into one vehicle, this contributed to requirement overlap and incompatible constituent elements.
Not every acquisition has the funding or the visibility of the FCS. But that does not mean that they are not of vital importance to the U.S. Government. By engaging in proper risk mitigation tactics during the development of requirements, acquisition experts can avoid the pitfalls that doomed the FCS before it even began.
Author: Ben Foley, Senior Associate at WBD, is a procurement and project management professional engaged with the firm’s Office of Personnel Management, Kansas City, and MCC awards.