House Acquisition Reform Bill Calls For New DoD Industrial Base Policy

House Acquisition Reform Bill Calls For New DoD Industrial Base Policy

By Emelie Rutherford

A new Pentagon-acquisition reform bill House lawmakers unveiled yesterday calls for the defense secretary to create a program to expand the defense industrial base, but does not mandate specific aspects of the program.

The legislation–the Implementing Management for Performance and Related Reforms to Obtain Value in Every (IMPROVE) Acquisition Act of 2010–is partly based on recommendations the House Armed Services Committee’s (HASC) Defense Acquisition Reform Panel came up with after a year of congressional hearings (Defense Daily, March 30).

The "expansion of the industrial base" is one of four areas the legislation targets, along with the defense acquisition system, acquisition workforce, and financial management.

"We don’t want to get to the point that we so often get (to) where there is only one vendor who can compete for a job; that’s not good, that’s not healthy," Rep. Rob Andrews (D-N.J.), chairman of the now-defunct HASC Defense Acquisition Reform Panel, said during a bill-unveiling ceremony outside the Capitol.

"So we want businesses large and small to be healthy and competitive so we get the best deal for our service members and the best deal for our taxpayers."

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The bill states the defense secretary "shall establish a program to expand the industrial base of the Department of Defense to increase the Department’s access to innovation and the benefits of competition."

This program, it says, would use tools and resources from the government and private sector to indentify and communicate with so-called "nontraditional" suppliers, which have received Pentagon contracts worth no more than $100,000 in the past five years. The bill calls for the industrial-base program to include a "continuous effort to review the industrial base supporting the Department of Defense," including the identification of markets of importance to the Pentagon.

Andrews told reporters the bill intentionally does not force the Pentagon to promulgate regulations regarding industrial-base matters.

"We’re currently not very specific in (the industrial-base portion), because there might be different strategies that would work well for different sections of the industrial base," he said. "So what that title does is to direct the (defense) secretary and his subordinates to come up with strategies and plans that would broaden competition, particularly in the small-business area, and would also provide…stability (for industry)."

Andrews said the Pentagon might opt to increase the use of multi-year procurement contracts or do more outreach to better inform companies about Pentagon contract solicitations. Yet the bill does not cite either action.

"We’re not being proscriptive, because you can’t anticipate every case, and there are cases where a multi-year contract might be a terrible idea," he said.

HASC Chairman Ike Skelton (D-Mo.) and Ranking Member Howard "Buck" McKeon (R-Calif.) joined Andrews and HASC Defense Acquisition Reform Panel Rankin Member Mike Conaway (R- Texas) in unveiling the new legislation yesterday.

A major part of the bill tries to compel factions of the Defense Department to have financial statements ready to be audited by or before a 2017 deadline.

Pentagon officials have voiced concerns about the audit provisions in the bill, Andrews said.

A section of the legislation on the defense acquisition system calls for an assessment of the Joint Requirements Oversight Council and the creation of a performance management program for the Joint Capabilities Integration and Development System.

Andrews estimates the bill would save the Pentagon $130 billion over five years.

McKeon said the reforms in the legislation are "just as important as those implemented by last year’s acquisition reform legislation." The new bill is intended to address the 80 percent of defense acquisitions not targeted by the Weapon Systems Acquisition Reform Act of 2009, which focuses on large weapon-system procurements.

The 2009 law President Barack Obama signed last May created new cost-oversight positions in the Pentagon, changed Nunn-McCurdy rules for major defense programs that suffer cost breaches, and included multiple provisions intended to thwart cost and schedule problems with large weapon systems early in their development cycles (Defense Daily, May 22, 2009).

The HASC soon will mark up the IMPROVE Acquisition Act of 2010 as standalone legislation, and also will include it in the committee’s version of the fiscal year 2011 defense authorization act in May, Skelton said.

"It’s such a bipartisan effort that I have great hopes that it will come to passage," he said.

The House bill does not have a companion version in the Senate.

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