GovernmentExecutive.com

Concerned the Defense Department is ceding too much program management to contractors, the House Armed Services Committee has included language in the fiscal 2008 defense authorization bill that would curb the military's growing reliance on major defense firms to execute large, complex acquisition programs.

This unpublicized provision in the bill, scheduled for House floor action Wednesday, would prohibit the Defense Department from issuing any new contracts to private-sector "lead system integrators" to manage and supervise major weapons programs after Oct. 1, 2011.

That effective date would give the department four years to hire and train new acquisition managers to run its massive weapons programs, reversing a decade-long trend that has seen cuts to in-house acquisition staff and the outsourcing of many development and procurement responsibilities, House aides familiar with the language said.

Current programs that have relied on industry lead system integrators -- such as missile defense and the Army's Future Combat Systems -- would be largely unaffected by the language, aides said. One aide said the provision would likely only apply to current programs if the Pentagon decides to put an existing contract up for competitive bid again.

Also apparently not covered by the provision would be the Coast Guard's troubled Deepwater modernization program, managed by a joint venture of Northrop Grumman Corp. and Lockheed Martin Corp. for the Homeland Security Department.

The defense industry has yet to react publicly, as officials at some major firms and defense trade groups were still reviewing the bill Tuesday while others said they were unaware of the provision.

But two defense industry officials defended the use of private sector lead system integrators, saying they can bring technological expertise to the development of weapons systems. Many cost overruns, schedule delays and other problems that plague some major defense programs are often the result of changing requirements and funding cuts, and cannot be attributed solely to industry teams, they added.

The provision, sponsored by Armed Services ranking member Duncan Hunter, R-Calif., and Seapower and Expeditionary Forces Subcommittee Chairman Gene Taylor, D-Miss., was added to the bill as part of a package of noncontroversial amendments approved during the full committee markup last week.

In addition to curtailing the use of lead system integrators, the language also would require the Defense Department to study its acquisition workforce and identify and fill gaps in skills needed to effectively manage programs. The Defense Department cut its acquisition workforce by more than 50 percent between 1994 and 2005.

"I think this is really a savvy move by [the House Armed Services Committee] to address the acquisition workforce issue," said Jeff Green, a former Republican committee aide who now runs a lobbying firm that represents several small defense contractors.

Supporters of the LSI concept have long argued that placing a system integrator in charge of a program could result in better technology innovations because industry often has better knowledge and expertise of rapidly developing commercial technologies that could be applied to weapons systems.

But the LSI concept, in which the government hands over to a contractor or team of contractors the broad responsibilities to do everything from technology development to final testing of a new weapons system, has been a concern of lawmakers worried that the arrangement could limit government oversight and ultimately drive up costs on programs that already are very expensive.

Indeed, Paul Francis, director of acquisition and sourcing management at GAO, told the House Armed Services Air and Land Forces Subcommittee March 27 that the Army's relationship with Boeing Co., which has teamed up with Science Applications International Corp. as the lead system integrator for the Future Combat Systems program, posed "long-term risks" to the government.

"The government can become increasingly vested in the results of shared decisions and runs the risk of being less able to provide oversight compared with an arms-length relationship, especially when the government is disadvantaged in terms of workforce and skills," Francis said.

Besides Future Combat Systems and missile defense, many large ship programs -- including the Littoral Combat Ship and the DDG-1000 destroyer -- rely on private sector lead system integrators.

Irked by cost increases on the Littoral Combat Ships being built by Lockheed Martin, Navy Secretary Donald Winter announced last month he wanted to abandon the lead system integrator approach to shipbuilding and have the Navy reassert its control over the program.

COMMENTS

• Melika, There appears to be ignorance and intelligence on both sides. You have shown your ignorance by attacking someone rather than formulating a valid argument against them. There are indeed GS-4 positions being held by Civil Servants with Bachelors and/or Masters degrees. They normally do not stay in those lower positions for long. Some have obtained degrees while performing in the position. Even new Engineers have started as GS-7s, and worked their way up, on an accelerated program designed for that vocation. There are still some Contractors and Civil Servants in low to very high positions, that do not have degrees, but do have an incomparable amount of experience in their fields. These people have helped train many degreed and non-degreed civilians. The only non-civilians are the Military. Contractors and Civil Servants are both considered Civilians. Civil Servants and Contractors have been exchanging ideas and training to each other for years. The best advice I can give is learn to work together, for the good of the Country, and pass on your knowledge, that way everyone wins. There is enough fighting going on these days. Paulette Hugie Posted May 19, 2007 6:13 PM
• Right on Cindy. The problem is that management is given a choice of either a hard road to justify increased staff or the relatively easy path of contracting for the services required. Soon there are no government staff and one PM to get the job done. Integrators then appear attractive and reasonable to help bring a wide array of talent to the task at hand. On the other hand, a lot of outsourcing was based on public/private competitions where initially the government was not competitive. That seems to be changing which is good. Where would the resources come from to bring any of that back in house? Think we all have to be more mindful of the bottom line and how productive we are in our functions. What is reasonable for the overhead portion of your activity? Don't think the answer is a single number but our organizations need to know and keep everyone aware of performance. Cliff Posted May 18, 2007 2:11 PM
• This isn't a problem that is just isolated to weapons systems. We've been forced to award so-called performance based contracts to custodians, groundskeepers, shop support, security systems maintenance, etc. and now we're paying the price because the government doesn't have anyone on staff who knows how the work should be done. We're at the mercy of contractors who tell us we need to spend big bucks to fix a problem and we don't have the technical expertise to question them so we just pay the big bucks. I started my federal career in 1978 as a GS-3. I'm now a former GS-12 who was converted to a NSPS YC-02/2. The NSPS system is a joke and whoever authorized the contract for the web-based system didn't have a clue on how to make a system work. I'm sure we took it in the shorts on that one. Contractor developed systems - Wide Area Workflow (obviously developed by someone who doesn't manage contracts and vendor payments); Standard Procurement System (again someone who doesn't work in contracting and needs to get something out quickly); P2 (someone who doesn't have a clue how to manage a project from the engineering side of the house); FedTeds (someone who couldn't see how well the EBS system developed by the Corps worked). I'm sure that contracting out looks good on the surface, but what do you do at the end of 5 years if someone else gets the contract. You start over. My solution? Bring back the civil servants, both GS and WG. They worked hard because they new they had something to work for. Cindy Posted May 18, 2007 9:45 AM