Defense Reform Bill Marred by Lobbyists

The Weapons Systems Acquisition Reform Act [1] sponsored by Senators Carl Levin (D-MI) and John McCain (R-AZ) was intended to improve the Pentagon’s acquisition process, fraught with nearly $300 billion in cost overruns on 95 major weapons systems. By establishing an independent overseer, improving organization and strengthening accountability to manage costs, this legislation was the first (refreshing) sign of defense reform. Yet, the latest efforts by the defense lobby have weakened the bill significantly.

Although the bill will not reach the Senate floor until next week, hints of a watered-down version are reported by Congressional Quarterly. According to CQ:

“The committee changed a provision that would establish a director for independent cost analysis, limiting his role to programs managed by the Office of the Secretary of Defense and excluding those managed by the military services, cutting his portfolio by about half. Also, under the bill, his estimates would not be verified by outside groups.”

With the remainder of oversight in the hands of the Pentagon, the chances of improving the acquisitions process are slim. For years the GAO [2]has made recommendations to DOD, producing little success. Research and development costs have increased 40 percent from initial estimates, with average schedule delays of close to two years.

“The committee expanded the Pentagon’s ability to bypass a new requirement that programs include competitive prototyping. The original version allowed a waiver for “national security” considerations, but the committee added the option of a waiver if the cost of competitive prototyping is too high.”

Besides avoiding complete competition, the Pentagon’s ability to grant exemptions to programs will not control costs. Take the Missile Defense system—it was exempted from standard baselines and traditional oversight to allow for flexibility in development. What occurred were delays and skyrocketing costs [3]at $10 billion annually, with nearly every missile system failing in testing. Furthermore, the language of what constitutes an exemption is so vague, there is a risk that it is applied to numerous programs.

And there is more:

“A third provision altered by the committee would change the bill’s ban on one company providing “systems engineering and technical assistance” for a weapons program while also being involved in the development or production of that weapon, a potential conflict of interest.”

This is a root cause [2] of the failed acquisition process, contractors too often have a hand in every part of a program’s production, knowing that 1) in the absence of strict oversight, there is more incentive to continue program development than meeting cost and delivery targets; 2) lax testing and performance measures allow for even failed products to move forward from development to production.

The Acquisitions Reform Act will not solve every problem, but does lay the groundwork for institutional change in the future—but not in the bill’s current form. The defense lobby has been ready for this fight against reform, and if they get their way, the current system of astronomical waste and inefficiency will surely continue. The bill should be on the floor of the Senate by next week at the earliest, whether amendments are added to strengthen the bill remain to be seen.

CQ article by Josh Rogin, "Amendments May Delay Acquisitions Overhaul," 22 Apr. 2009.

Read my blog about the failures of Pentagon reform here [4].