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Acquisition Reform Begins Anew/Part 2 March 6, 2009

Posted by Stephen Abott in Analysis.
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mccain04The Senate has been buzzing with calls for DOD acquisitions reform thanks to Senators Levin and McCain’s S. 454. On Tuesday, the Senate Armed Services Committee held hearings about the bill, receiving testimony from experts from GAO and a Defense Science Board (DSB) task force.

In summary- the bill creates incentives for more sound acquisition practices, orders reports to begin a process of more closely tracking cost overruns, is more forceful in eliminating programs experiencing excessive cost growth, and establishes independent bodies to monitor and better control both Pentagon acquisitions and their coming reform. The panelists exclaimed the need for these reforms and echoed many of the sentiments of the bills sponsors – namely that the system is broken, unsustainable, needs more expertise and resources, and requires added accountability. The panelists agreed that S. 454 is a good start on the road towards a more effective system.

For further details on the bill, please read below…

The Senate bill:

1. Orders a number of reviews at various levels of DOD to assess the current state of Pentagon acquisitions – including an annual report to Congress detailing the “technological maturity and integration risk of critical technologies.”

2. Creates a new independent “Director of Developmental Test and Evaluation.” This person would act as the main adviser to the SECDEF and (U)AT&L on T&E in the DOD. He would report to the (U)AT&L and have the power to approve and review T&E plans for major defense programs. Additionally, the Director will spearhead efforts to review and reform the acquisitions process. Importantly, the occupant of the new post will have access to “all records and data” from DOD he feels are necessary. This may undercut efforts by the services to stonewall efforts to centrally control individual program development and procurement.

3. Creates the Director of Independent Cost Assessment. A principal adviser to the SECDEF, (U)AT&L and others, and appointed by the President (with approval from the Senate), the Director will act as an independent DOD-wide program cost analyst. The bill provides the position with significant independent reporting power and with the ability to review cost estimates building-wide – much of acquisition price growth comes from flawed initial program costs estimates. Some claim intentional low balling by contractors and the services – this may tackle that. The bill subordinates the service secretaries to the Director by ordering them to report to the Director “all cost estimates and cost analysis…and all studies” done by the department dealing with major acquisition programs. He may also request changes in these estimates – or provide an independent one if he feels necessary. The bill also requests the inclusion of separate costs estimates from the Director during the budget review process.

3. Orders the SECDEF to maximize prime and subcontracted program elements by using competitive prototyping (along with requests to use other methods – including dual-sourcing, modular architectures, etc.) – this can be waived, but the bill intends to set a new norm with more competitiveness.

4. Automatically terminate drastically over-budget programs unless positive action is taken by the SECDEF. Cost overruns have become so prevalent that previous cost-control measures (Nunn-McCurdy breaches) have slackened – the onus will now be on the SECDEF to stop an automatic cancellation.

5. Orders the modification of DOD regulations pertaining to conflicts of interest – this focuses on enhancing systems engineering by cutting bonds between engineers and other interested bodies, contracting between interested parties (ex. preferential subcontracting to units within a primary contractor’s business), and gives program managers the ability, under some circumstances, to set subcontracts. Additionally, the bill establishes the Conflict of Interest Review Board – charged with monitoring and advising DOD about acquisition conflicts of interest and ways to remedy them.

6. Orders the SECDEF to provide recognition and awards to those within the DOD acqusition community for good service.

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1. Weapon Systems Acquisition Reform Act of 2009 (S. 454) Signed by President Obama « Budget Insight - May 22, 2009

[…] House and Senate legislation. Overall, the bill that made it through conference was weaker than the first version of the Senate bill. However, it does make a number of important changes to the defense acquisitions process. Below is […]


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