The White House has come out against the Senate’s version of the 2017 defense authorization bill, opposing a number of provisions that would overhaul the acquisition process and rework the Pentagon’s organizational structure.
The Office of Management and Budget (OMB) on Tuesday issued its statement of administration policy (SAP) just a day after the Senate began debate on the 2017 National Defense Authorization Act (S.2943). The bill, according to OMB, would make it more difficult for the Defense Department to respond to crises in an agile manner.
It “attempts to micromanage DoD by impeding the Department’s ability to respond to changing circumstances, directing overly prescriptive organizational changes, and includes provisions that set an arbitrary limit on the size of the President’s National Security Council staff.” For those reasons, the president’s advisers would recommend a veto of the bill.
In the statement, the White House blasted most of the acquisition and management reform provisions in the Senate bill, including one controversial change that would eliminate the undersecretary of defense for acquisition, technology and logistics and divide those responsibilities among several officials. Senate Armed Services Committee Chairman John McCain (R-Ariz.) has said sweeping changes are necessary in order to force greater technological innovation.
The administration disagrees, stating that data proves that Defense Department acquisition practices have improved markedly in recent years—an argument has also been espoused by current Pentagon acquisition chief Frank Kendall.
“These changes would roll back the acquisition reforms of the last two decades and risk returning the Department to an era in which overly optimistic cost estimates, inadequate system engineering and developmental testing, inappropriate reliance on immature technologies, ineffective contractor management, and lack of focus on life-cycle costs by the military departments led to explosive cost growth and the failure of multiple major defense acquisition programs,” the SAP stated.
Of particular concern is the dismantling of responsibilities to multiple officials—the Under Secretary for Research and Engineering, Deputy Assistant Secretary of Defense for Logistics and Sustainment, Assistant Secretary for Acquisition Policy and Oversight and Under Secretary of Defense for Business Management—which risks fracturing the acquisition enterprise, it said.
Another problem, according to the White House, is the emphasis on fixed-price contracting and penalization of other contracting structures. Using a cost-plus contract when appropriate can help the department save money in cases where developmental risks are high.
“There is extensive history that demonstrates conclusively that fixed-price development is not in the Government or industry’s interest in many circumstances,” the administration said.
It raised similar objections for provisions that would restrict the government to fixed-price contracts for foreign military sales: “If the Department were precluded from using the appropriate type contract in any particular environment, it would effectively constrain DoD’s ability to deliver best value to the FMS customer, and eliminate opportunities to achieve efficiencies by combining U.S. and FMS requirements on the same contract.”
The policy statement also called out language in the NDAA targeting specific weapons programs.
For example, the NDAA would reduce funding for the Air Force’s B-21 Long Range Strike Bomber by $302.3 million, a move that would result in a “significant delay.” Further, language in the bill that establishes a cost threshold for the program below its baseline would add to reporting delays and increase the risk of breach certifications, the SAP stated.
Provisions that would eliminate defense contractor access to Russian rocket engines for the Evolved Expendable Launch Vehicle program also pose an issue for the administration. “The authorization to use up to 18 RD-180 engines is necessary and prudent to expeditiously and affordably transition to the new domestic launch capabilities currently under development,” OMB said, adding that the Senate bill language eliminates the department’s ability to competitively procure launch services.
The administration also rebuked language in the bill that reduces funds for the Army’s Warfighting information Network-Tactical program by $100 million, as well as restrictions in the bill that would prevent the Army for awarding a contract for the service’s Distributed Common Ground System unless certain criteria are met—including the use of a fixed-price contract.
“This provision appears to micromanage and mandates a commercial solution without regard for price, ability to support a modular open system architecture, or cost associated with proprietary software maintenance,” the SAP stated.
Republican leaders including McCain want to vote on the NDAA this week. However, only three amendments and on en bloc package have been voted on as of Tuesday evening.
Once the NDAA is voted on, the Senate will move to the defense appropriations bill, said Senate Majority Leader Mitch McConnell (R-Ky.) during a Tuesday news conference.