The House Armed Services Committee’s recently announced acquisition reform effort is likely to yield some language in the fiscal year 2015 authorization bill and significantly more in the FY ’16 bill, as well as alter the interaction and lines of questioning lawmakers have with program officials throughout program development and acquisition, HASC vice chairman Mac Thornberry (R-Texas) said yesterday at the Center for Strategic and International Studies.
This latest acquisition reform effort is part of a larger look at defense reforms that will include looking at the security clearance process and organizational bloat in government departments and agencies, said Thornberry, who also chairs the HASC intelligence, emerging threats and capabilities subcommittee.
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| Photo: Rep. Mac Thornberry (R-Texas) |
“We face this festering problem of getting good value for the taxpayers in a timely way in a larger context of two essential facts: one of those facts is, the world is not getting any safer or any less complex…The second fact is, we’re going to face tight defense budgets for as far as the eye can see,” he said. “We waste a lot of money and effort, we have more tail and less tooth, more overhead and less fighting capability than we should have for the money we spend.”
Thornberry said that about one third of all procurement dollars go to overhead costs and that programs are only performing worse in recent years: according to the Government Accountability Office, from 2008 to 2012, programs’ developmental costs grew 7 percent, total acquisition costs grew 13 percent and average delay in reaching initial operational capability grew from 22 to 27 months, Thornberry said.
Thornberry said part of the solution to these problems would be simplifying regulations.
“There’s a cost-overrun over here. What’s the reaction? Either the Pentagon or Congress puts a new restriction, a new oversight or something, and then you add those up and it’s like barnacles that just feed on themselves over time,” he said. Not all regulations need to apply to all programs, and not all are relevant anymore, he said. The complex set of regulations that DoD has ended up with have a twofold problem of adding costs for the companies who do choose to participate in defense contracting, and it discourages many companies from participating at all, which reduces competition and can drive up prices.
“I think it is important, as we did in our first [acquisition reform hearing last month], to acknowledge that what we’ve done so far has not worked out so well, and to try to learn the lessons that that teaches us,” Thornberry said. “But I also think that we’re not going to make things better by piling on new mandates, new oversight offices, new micromanagement. That’s not the direction we need to go.”
Another key part of the reform effort will be to understand the incentives that drive program managers and contractors and to alter them–through legislation or otherwise–to produce more favorable outcomes.
For instance, he said, program managers are encouraged to spend all their money by the end of the year instead of saving where they can, because if they don’t spend all their money then they are likely to get less the next year. They are also encouraged to spend less money in the short-term–during their two- or three-year stint as program manager–instead of looking at long-term costs that would produce savings during someone else’s tenure.
On the contractor side, Thornberry said a lot of companies intentionally under-bid an acquisition contract so they are better positioned to get the more lucrative maintenance contracts, which doesn’t always lead to the best product and, in many cases, leads to cost overruns. These contractors know how to “just play the game,” and Congress needs to better understand what really happens and why.
That all being said, Thornberry said he didn’t want to see DoD’s total budget go down as a result of this effort.
“Our purpose is not to cut defense or not to make it easier to cut defense. The purpose is to get more defense, more value, out of the dollars we spend,” he said.