DoD Centralization

An Old Solution for a New Era?

by George L. Donohue, Giles K. Smith, Mark A. Lorell, Warren Walker

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In response to enormous pressures to economize, the Department of Defense has set out to reform the logistics and acquisition system. One of the options being considered is to centralize acquisitions in order to reduce overhead, improve management, eliminate duplication, increase economies of scale, and tighten controls to minimize cost growth and schedule slippage. This issue paper explores the idea through a summary of the history of the U.S. acquisition reform, a review of the centralized acquisition bureaucracies of some U.S. allies, and a discussion of current management theory and industry practice and how they might apply to defense acquisition. The authors suggest that instead of being centralized, the acquisition system should be reformed to encourage self-managed teamwork, efficient information technologies, flatter internal organizations, and integrated external networks of responsive suppliers.

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