The White House’s nominee to lead the Pentagon’s Cost Assessment and Program Evaluation office, long criticized for overstepping its advisory role, told lawmakers he would work to restore the office’s credibility by refocusing it on its statutory mission as an independent advisory rather than a decision-maker.

“I have seen CAPE take on an advocacy role that I think is inappropriate for an independent analytic organization,” Michael Payne, who is currently serving as the acting director of CAPE, told the Senate Armed Services Committee Thursday.

CAPE has faced scrutiny over the years for operating beyond its statutory responsibilities — in 2023, the House Armed Services Committee even proposed eliminating the office altogether. While Congress ultimately decided against shutting down the office, the fiscal 2024 defense policy bill required the Defense Department to overhaul how it operates.

The annual legislation required the Pentagon to create an analysis working group, which would work with CAPE, the Joint Staff and DoD components to improve analytic standards across the force. The bill also required the department to stand up an analytical team, or the “program evaluation competitive analysis cell” — an independent team to review CAPE’s methodologies, assumptions and data. 

In addition, the law mandated a pilot program on alternative analysis to test new approaches for evaluating defense programs.

So far, only one of those requirements has been met. “We have stood up the analysis working group, but we absolutely need to do more. Red teaming is an important part of any scientific or analytic endeavor, and if I’m confirmed, I will make it a priority to ensure that we comply fully,” Payne said. 

Sen. Roger Wicker (R-Miss.), who leads the Senate Armed Services Committee, voiced frustration during the confirmation hearing that little progress has been made, even though Payne has been in a leadership role at CAPE since the bill was signed into law.

“You’ve been deputy director since the law passed, and since January, you’ve been acting director. And yet, the second and third directives of the statute passed by the Congress and signed into law by the commander-in-chief have not been implemented — that is a concern,” Wicker said. 

In his written responses to lawmakers’ questions ahead of his confirmation hearing, Payne said steering the office back to its roots and away from advocacy would be his biggest challenge. The effort, he said, would require reforming the office’s cost-estimating and program-evaluation processes to better align with department-wide ongoing acquisition reform initiatives.

“I would address the program-evaluation process by reforming the analysis of alternatives approach to better align with the reformed requirements and acquisition processes, including early engagement with industry. For cost estimating, I would focus on ensuring cost reporting requirements for industry are less burdensome in order to better facilitate the entry of non-traditional vendors into the acquisition process,” Payne said.

When asked if he believes that the CAPE office would benefit from outside reviews of its processes, Payne said he recommends “using existing government entities to conduct such reviews, that the reviews be targeted with specific objectives, and that DCAPE be given an opportunity to address the findings directly in order to implement improvements.”

‘Strained’ workforce

Payne said while the team is still capable of meeting existing legal requirements by pushing some of its cost-estimation work to the military services, CAPE’s workforce is stretched thin.

“The recent addition of statutory requirements for military construction and sustainment review cost estimating has necessitated increased delegation to the services,” Payne said.

“I believe the workforce is sufficient, though strained in certain areas as it adapts to broader national workforce demographic and skill shifts,” he added.

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