An Assessment of Gaps in Business Acumen and Knowledge of Industry Within the Defense Acquisition Workforce

A Report Prepared for the U.S. Department of Defense in Compliance with Section 843(c) of the Fiscal Year 2018 National Defense Authorization Act

by Laura Werber, John A. Ausink, Lindsay Daugherty, Brian Phillips, Felix Knutson, Ryan Haberman

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Research Questions

  1. How are DoD AWF requirements for business acumen, knowledge of industry operations, and knowledge of industry motivation documented?
  2. What AWF knowledge gaps related to business acumen, knowledge of industry operations, and knowledge of industry motivation exist?
  3. How can DoD address these knowledge gaps?
  4. What T&D options related to business acumen, knowledge of industry operations, and knowledge of industry motivation are currently available to AWF personnel?
  5. How effective are the T&D resources offered to AWF personnel by providers outside DoD in conferring these types of knowledge?
  6. What additional roles could providers outside DoD play in addressing knowledge gaps?

The U.S. Department of Defense's (DoD's) acquisition workforce (AWF) includes more than 169,000 personnel who are responsible for identifying, developing, buying, and managing goods and services to support the military. In 2018, Congress directed the Under Secretary of Defense for Acquisition and Sustainment to conduct an assessment of gaps in business acumen, knowledge of industry operations, and knowledge of industry motivation present within the AWF and to determine the effectiveness of training and development (T&D) resources offered by providers outside DoD that were available to AWF personnel. RAND was chosen to perform the assessment, and researchers used a mixed-methods approach to do so, including interviews with DoD and industry professionals and reviews of AWF competency models, Defense Acquisition University course offerings, DoD policy, and academic and business literature.The authors found that the lack of standardized definitions obscures the need for knowledge related to business acumen, industry operations, and industry motivation, and while knowledge gaps appear to exist in these areas, the lack of requirements and desired proficiencies further hinders an estimation of the gaps' extent. DoD uses a wide array of internal and external T&D assets to develop the AWF, but training gaps related to these types of knowledge were difficult to determine in part because evidence about the effectiveness of different types of T&D is limited. The authors provide recommendations to DoD to improve how these types of knowledge are assessed and conferred as well as recommendations to Congress for incentivizing DoD's use of external T&D providers.

Key Findings

Knowledge gaps in business acumen, industry operations, and industry motivation exist, but the lack of definitions, requirements, and desired proficiencies precludes an estimation of their extent

  • The lack of standardized definitions and competency model formats obscures the need for knowledge related to business acumen, industry operations, and industry motivation.
  • Business acumen gaps mentioned by interviewees include risk management and earned value management.
  • Gaps in industry operations knowledge pertain to financial practices, supply chain management, small business, agile development, and cybersecurity.
  • Knowledge of industry motivation was perceived as critical yet lacking, especially for knowledge of incentives that drive corporate decisionmaking.
  • Gaps related to industry knowledge influence other important types of business-related knowledge: negotiation, developing and understanding requirements, and cost and price analysis.

DoD uses a variety of internal and external T&D assets, but training gaps were difficult to identify

  • Access to external T&D opportunities varied, from unlimited access to commercial courses to a very small number of slots in specialized programs.
  • Interviewees described benefits of greater use of external industry rotations and the incorporation of industry resources and participants in internal T&D.
  • Interviewees identified barriers to using industry providers to address T&D needs, including limitations on backfilling positions for civilian participants in industry rotations and limited funding for external T&D.

Evaluations of the effectiveness of T&D are limited

  • Assessments of T&D effectiveness tend to be based on perceived value rather than objective measures.
  • Limited data on participation in external T&D exacerbate this problem.

Recommendations

  • The authors identified the following process-focused recommendations for DoD: (1) Clarify the nature and extent of needs for business acumen, knowledge of industry operations, and knowledge of industry motivation. (2) Improve approaches to competency assessments and models. (3) Improve approaches to knowledge gap assessments. (4) Improve coordination of internal and external T&D as a single portfolio of offerings. (5) Improve tracking of participation in T&D activities that confer business acumen, knowledge of industry operations, and knowledge of industry motivation. (6) Improve evaluation of T&D.
  • The authors identified the following external T&D-focused recommendations for DoD: (1) Clarify and enforce reporting requirements for fellowships and industry rotations. (2) Further assess the need for government–industry "co-education."
  • The authors identified the following recommendations for Congress: (1) Relax legislative restrictions on backfilling positions when personnel participate in industry rotations. (2) Promote greater use of the Defense Acquisition Workforce Development Fund. (3) Give actions taken to address AWF knowledge gaps sufficient time to have an effect.

Table of Contents

  • Chapter One

    Introduction and Approach

  • Chapter Two

    The Need for Business Acumen, Knowledge of Industry Operations, and Knowledge of Industry Motivation

  • Chapter Three

    Gaps in Knowledge Related to Business Acumen, Industry Operations, and Industry Motivation

  • Chapter Four

    The Use of Training and Development to Address Knowledge Requirements

  • Chapter Five

    Approaches to Gauging the Effectiveness of External Training and Development

  • Chapter Six

    Conclusions and Recommendations

  • Appendix A

    Interview Methodology

  • Appendix B

    Competency Model and DAU Course Analysis

This research was sponsored by USD(A&S) and conducted within the Forces and Resources Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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