Congress to tackle Defense procurement reform next week

By Megan Scully

April 24, 2009

House Armed Services Chairman Ike Skelton, D-Mo., and ranking member John McHugh, R-N.Y., will introduce a bill on Monday aimed at overhauling the way the Pentagon buys weapons by establishing regulations and oversight mechanisms to rein in ever-escalating costs on major procurement programs.

The bill, which the Armed Services Committee is expected to mark up as soon as next week, follows similar Senate legislation sponsored by Senate Armed Services Committee Chairman Carl Levin, D-Mich., and ranking member John McCain, R-Ariz.

The Senate bill was approved by the committee on April 2. It will likely head to the floor in May, Senate Majority Leader Harry Reid, D-Nev., indicated on Thursday.

The bills share some provisions, including a requirement that the four-star military panel that sets requirements for weapons systems seek input from field commanders.

And both bills appear to have the same goal: to closely track weapons programs during their early development stages to prevent the types of cost increases that have become endemic to most multibillion-dollar weapons platforms and defense systems.

But there are some differences that would have to be ironed out if any measure is to reach President Obama for signing.

For instance, the House bill gives the Pentagon more leeway to designate an official to establish policies governing how the Defense Department devises cost estimates for major programs. The Senate bill creates a director of independent cost assessment to set the policies for cost estimation and analyses.

"What the two bills have in common are the independence and the authority," said Rep. Robert Andrews, D-N.J., chairman of the committee's newly created acquisition panel. "What they have differently is rather than proscribe a different place on the table of organization, we give the secretary the ability and the discretion to decide whether to use an existing directorate to fill those functions or whether to have a new one and how that person should fit into the secretary's world."

Both bills strengthen the Nunn-McCurdy cost-control law, but their approaches are somewhat different.

The Senate bill requires cancellation of any program that goes more than 50 percent over the base cost unless it can be justified "from the ground up," Levin has said.

The House bill, meanwhile, requires the Defense secretary to determine the root cause of the increased cost and determine whether to terminate the program or make changes to it.

If the program survives, it would be placed in "intensive care," Skelton said, explaining that, under the bill, reviews would be done throughout the program's production. Any program that enters its design and development stage would be subject to those reviews, a House aide said.

The Senate bill, which was introduced in February, has been hailed by supporters as a sweeping proposal to change the way the Pentagon does business.

Critics say the bill contains too many loopholes and waivers and does not mandate enough outside oversight of the Defense Department. Levin and McCain tweaked it after receiving input from the Pentagon and defense contractors.

"DoD is not capable of honestly monitoring itself and fully and completely reporting back to Congress," said Winslow Wheeler, a former Senate Budget Committee senior staffer now at the Center for Defense Information. "You need independent parties, and GAO is the best candidate I'm aware of."

Problems with defense weapons procurement have grabbed the attention of Obama, whose interest has injected urgency in the perennial and sometimes circular debate over Pentagon weapons buying.

In March, Obama announced that he wants to change the way the government -- the Defense Department and military services, in particular -- does business to save as much as $40 billion annually.

While the bill's backers in the House and Senate have hailed their legislation as a turning point for acquisition reform, they also have acknowledged that more work remains.

"This is just the first bite at what we all recognize is a very wormed apple," McHugh said.

Dan Friedman contributed to this story.


By Megan Scully

April 24, 2009

http://www.govexec.com/defense/2009/04/congress-to-tackle-defense-procurement-reform-next-week/29019/