By Emelie Rutherford
The Pentagon’s top acquisition official said all large defense contractors will not have to divest themselves of advisory-services units because of a clampdown on so-called organizational conflicts of interest (OCI).
Under Secretary of Defense for Acquisition, Technology, and Logistics Ashton Carter said last week Pentagon officials “absolutely depend upon” technical and systems-engineering expertise from for-profit companies.
The Weapon Systems Acquisition Reform Act of 2009 calls for the Pentagon to curtail the practice of one company developing or building a major defense acquisition program while it or an affiliate provides systems-engineering-and-technical-assistance (SETA) input on the product. The Pentagon has been revising federal acquisition regulations as directed by the law, which President Barack Obama signed last May.
Carter told a defense-industry crowd last Wednesday that “there is room for SETA contractors that are part of larger contractors.”
“There is an organizational conflict of interest issue, but that is something to work through and mitigate,” he said at the Defense Technology and Requirements conference hosted by Aviation Week. He said the new OCI rules are not stark “pure blinding light” dictates that don’t allow large firms to still build weapon systems while their SETA divisions also provide input to the Pentagon.
Anxious about anti-OCI sentiment in Washington, D.C., Northrop Grumman agreed last November to sell its advisory-services business TASC, Inc., to private-equity investors for $1.65 billion (Defense Daily, Nov. 10, 2009).
However, attendees at last week’s conference in Washington, D.C., said they took Carter’s comments to indicate a large number of similar divestitures may not be forthcoming.
Carter said that federally funded research and development centers (FFRDCs) help provide SETA assistance to the Pentagon, but there aren’t enough of them. And building up systems-engineering capacity within the government–which many defense officials say is sorely needed–won’t be instantaneous, he said.
“Systems engineering isn’t something people can do themselves, just like you can’t play lacrosse or football by yourself,” he said. “Systems engineering is a team sport. You need to put a team (together). And it’s not going to happen soon.”
Thus, he said, “we’re going to depend upon” SETA contractors.