Competing missile defense contracts saves the government money, brings innovative ideas to the fore, and offers the government more controls, the director of the Missile Defense Agency (MDA) told a Senate Armed Services Committee (SASC) panel.
“We have a trend. Every time we’ve competed a contract we’ve saved hundreds of millions of dollars, [and] this is all over the past year alone,” Army Lt. Gen Patrick O’Reilly, MDA director, told the SASC panel on Strategic Forces yesterday.
Expanding on the benefits of competition, O’Reilly told the sparsely attended and short panel that in December the agency awarded Boeing [BA] the Ground Based Midcourse Defense (GMD) Development and Sustainment contract after a strong competition.
The existing GMD contract, more than 10 years old, was recompeted.
“Because of the competition, the actual cost of the contract was a billion dollars less than the (independent) government cost estimate,” O’Reilly said. “We saw extreme innovative ideas in the company that ultimately won, Boeing, in order to save costs.”
The seven-year, $3.5 billion contract will provide sustainment, operations, improvements and enhancements of the current GMD capability, provide a testing program and deliver new and upgraded interceptors.
Among other benefits from competition were that it allows the government to “make clear what its desires are and to ensure that industry is highly motivated to respond,” he said.
For example, he said, the GMD contract has a defects clause, which means that from the moment the contract is awarded, award fees are under consideration, not just a single event. Additionally, the government has “great access” to data within the program, something that is not always found in contracts.
The congressional missile defense actions come against a backdrop of tests by Pakistan and India of nuclear capable ballistic missiles in the past two weeks.