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Return to Article: Measure seeks penalties for contract cost overruns

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  Once again, a member of Congress tries to make a name for himself by pretending to be concerned about cost overruns. And once again, the action taken is nothing but a sham. The truth is that the vast majority of cost overruns in defense contracts result from the activities of the government, not the contractors. Contractors are forced to deal with multiple points of contact (different government agencies), all demanding different requirements for the product, all without regard to the life cycle of the product. When the contractor reveals the increased costs that the various delays and altered requirements have incurred, Congress screams and demands penalties. Truly, the problems with defense contracts are generally due to the bureaucratic mismanagement of the government, not the contractors.

  Ben Maddox Posted May 18, 2006 12:54 PM
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  The solution here is oversight. Putting the military in charge of oversight on a major weapons program is like putting the fox in charge of the henhouse. I have worked in the contracting arena with the federal government for more than 14 years, and have watched the political appointees take away more and more resources from federal agencies to properly oversee federal contracts: Quality assurance specialists, cost and pricing analysts, program integrators, every facet of contract oversight. For the sake of adequate contract oversight, a program continues forward until major problems are discovered, but often too late to prevent the impact on the cost of the program. And once the contractor convinces the military that it needs a program, it will do everything it can to make sure it gets it, no matter what the cost. And, trust the contractor? Their bottom line is to sell the program to the government, no matter what the cost. And most contractors are savvy enough to know that once a program goes beyond a certain point, it is more expensive to re-procure, than to continue forward. It's kind of the lesser of two evils. Only with proper oversight can costs be maintained and controlled, but those in power feel there is more to be saved by eliminating those federal employees who used to be charged with performing this oversight. The government oft is "a penny wise and a dollar stupid."

  JD Posted May 18, 2006 6:20 AM