Defense Procurement Reform
On April 13th, the House passed the Weapons Acquisition System Reform Through Enhancing Technical Knowledge and Oversight (WASTE-TKO) Act, H.R. 2101. This bill substantially beefs up oversight of the Pentagon’s system of acquiring weapons, promotes greater use of competition in weapons acquisition, and requires DOD to take steps to prevent conflicts of interest in the acquisition process.
Cost overruns in major defense weapons systems are a huge drain on the defense budget. A report from the Government Accountability Office (GAO), published in March, found that the Pentagon’s 96 largest acquisition programs had cost overruns of $296 billion and were on average 22 months behind schedule.
These cost overruns are staggering – even for individual weapons systems. For example, just two major weapons programs alone – the next-generation Joint Strike Fighter and the Future Combat System – have racked up cost overruns of $80 billion.
The total of $296 billion in cost overruns is more than the amount we spend on salaries and health care for the entire American military for two full years.
This bill is designed to crack down on these cost overruns and to get the most bang for the buck for American taxpayers. It will substantially beef up oversight of the Pentagon’s system of acquiring weapons, promote greater use of competition in weapons acquisition, and require DOD to take steps to prevent conflicts of interest in the acquisition process. Enactment of this bill could save taxpayers tens of billions of dollars.
Enactment of this bill will be part of a broader effort by Defense Secretary Gates to substantially reform government contracting at the Pentagon. Indeed, on May 6, Deputy Defense Secretary William Lynn reported to Congress that the Pentagon plans to add 20,000 personnel over the next five years to ride herd on contracts, cost estimates and oversight.
Following is an overview of some of the bill’s key provisions.
Requires Secretary of Defense to assign responsibility for key weapons acquisition oversight functions to a well-qualified, independent expert or experts. The bill requires the Secretary of Defense to appoint an independent official or officials within the Office of Secretary of Defense for the following key acquisition oversight functions: cost estimation, systems engineering, and performance assessment. This official or officials must be independent, well-qualified, and free from any potential conflict of interest. They will be responsible for implementing many of this bill’s new requirements for cracking down on cost overruns and ensuring taxpayers are getting a better value for their dollar.
Ensures greater oversight and scrutiny on those weapons programs that have failed to meet standards and schedules. The bill mandates that weapons systems that fail to meet the standards and schedules set for them face annual reviews by oversight officials and increased scrutiny by Congress.
Tracks cost growth in the early stages of development. The bill requires the Defense Department to set up a new system to track the cost overruns and schedule changes that happen early on in the procurement process – when most of the waste and the least of the oversight currently occur.
Promotes greater use of competition in the weapons acquisition process. The bill requires the Secretary of Defense to ensure that the acquisition strategy for each major weapons acquisition program includes measures to ensure competition, or the option of competition, at both the prime contract and subcontract level throughout the lifecycle of each program. It would require consideration of such measures as unbundling of contracts, developing second sources, periodic competitions for subsystem upgrades, and similar measures in order to promote competition.
Requires DOD to take steps to prevent conflicts of interest in the weapons acquisition process. The bill requires the Panel on Contracting Integrity of DOD to report to the Secretary of Defense within one year on recommendations on tackling the problem of conflicts of interest and better ensuring that the weapons acquisition process is free from conflicts of interest. The Secretary of Defense is required to issue new regulations on this issue within 6 months of receiving the Panel’s recommendations.