Background: Over the past decade, the U.S. Air Force has asked the SEI's Acquisition Support Program (ASP) to conduct a number of Independent Technical Assessments (ITAs) on acquisition programs related to the development of IT systems; communications, command and control; avionics; and electronic warfare systems. This blog posting is the latest installment in a series that explores common themes across acquisition programs that we identified as a result of our ITA work. Previous themes explored in this series include Misaligned Incentives, The Need to Sell the Program, and The Evolution of "Science Projects."This post explores the fourth theme: common infrastructure and joint programs, which describes a key issue that arises when multiple organizations attempt to cooperate in the development of a single system, infrastructure, or capability that will be used and shared by all parties.

The Fourth Theme: Common Infrastructure and Joint Programs

This theme focuses on joint programs, which are popular for the potential they offer to reduce costs and improve interoperability. Joint programs are also recognized, however, as being hard to manage successfully due to many different reasons, including the number of stakeholders, the organizational size and complexity, differing organizational goals, interoperability challenges, geographical separation, coordination overhead, communication issues, and other factors.

There are other types of programs that may not technically be joint programs, but which have similar characteristics For example, a common infrastructure system, such as an enterprise-wide IT system, is similar to a joint program. Both are often trying to replace a set of isolated, yet related, existing capabilities with a single new system that will offer an integrated capability that is the union of the existing capabilities--and in the process is both modernizing the capability, as well as making it more efficient to develop and maintain.

To explore the issues of common infrastructure and joint programs more closely, consider a scenario that aggregates together the experiences of some joint programs the SEI has worked with:

A joint program office has several stakeholder programs that are planning to use the joint infrastructure software being developed, but each program demands that at least one major feature be added to the software just for them. The joint program manager agrees to the additional requirements, for fear of losing stakeholders (who could always build their own custom software). The additional design and coding changes that are needed significantly increase the total program cost, schedule, complexity, and risk. As the schedule now begins to slip, one program decides to leave the joint program and develop its own custom software instead. With one stakeholder gone, the amortized costs for the other programs increase further--and so another program leaves. As cost escalates, participation in the joint program begins to unravel and may ultimately collapse.

Many problems we've seen in acquisition programs belong to a category known as "social dilemmas" where planned cooperation can turn into opposition. Garrett Hardin's article "The Tragedy of the Commons" (1968) is one of the most famous types of social dilemmas (the scenario above is such an example). The "Tragedy of the Commons" can be summed up simply: an individual desires an immediate benefit that will cost everyone else--and if all succumb to the same temptation, everyone is worse off. In the case of the joint program, the stakeholders each want custom features--but if they all demand them, it drives up cost, schedule, and risk, and everyone is worse off.

Social dilemmas are inherently hard to fix, which is why they persist not only in acquisition, but also in aspects of public policy, economics, sociology, and many other areas. Nonetheless, researchers have identified a range of solutions and mitigations that can be applied. For example, one approach for resolving many instances of the "Tragedy of the Commons" dilemma is privatization, which removes the social aspect of a social dilemma by converting shared ownership (with diffused responsibility) into private ownership (with sole responsibility), so that each owner now has a strong incentive to properly care for what they own. Privatization, however, may defeat the intent of achieving the original objectives (in this case cost savings and interoperability) through cooperation. In the joint program scenario, for example, it would mean that each of the stakeholder programs would build their own custom system, which can be prohibitively costly and time consuming.

An alternative solution might be "altruistic punishment," where cooperating participants can penalize uncooperative participants in some way, to encourage them to cooperate--even if the penalty costs the cooperators, and may produce no immediate direct gain for them. The cost of imposing the penalty prevents its overuse, making it self-correcting. Research by Fehr and Gachter has found that cooperation flourishes when altruistic punishment is present, and can break down if it is not.

Altruistic punishment might incentivize stakeholder programs to stay with the joint program, despite the difficulties. If it were unsuitable in a given situation, such as a joint program, other solutions to the "Tragedy of the Commons" dilemma still exist, including assurance contracts, rewards and penalties, building trust, and exclusion mechanisms. Elinor Ostrom's Nobel prize in Economics in 2009 acknowledged her extensive work on how people create successful institutions to manage common resources. The choice of the best solution will depend on the specific circumstances of the program.

The SEI is exploring ways to model acquisition program behavior, such as the joint program scenario discussed above, to help analyze, predict, and ultimately manage the effects of various specific solution approaches on program outcome. As this work progresses, a key aspect will be how to best leverage this work in a form that's most helpful to the acquisition community. We know that acquisition leaders may be inexperienced with certain types of decision-making and may also be unfamiliar with some unique complexities of software-reliant acquisition programs--especially joint programs. Moreover, we know that conventional training may not be fully effective in preparing decision-makers for dealing with dynamically complex domains.

What acquisition leaders need is experience in complex decision-making, such as they might develop over decades of experience with actual acquisition programs. To accelerate this learning process, we plan to create interactive experiential learning tools, which are essentially "flight simulators" for acquisition professionals that address these types of situations. These learning tools are key since actively learning through experience produces better understanding and superior retention of the knowledge. With such an approach, we believe it will be possible to improve the decision-making abilities of acquisition program staff, thereby achieving more successful program outcomes.

Additional Resources:

For more information, about the SEI's Acquisition Support Program, please visit
www.sei.cmu.edu/acquisition.