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Security or subsidies: Mr. McDonnell and the Virginia delegation go to Washington September 28, 2010

Posted by Matthew Leatherman in Analysis.
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by Mariah Quinn and Matt Leatherman

Elected officials across the country know how closely their constituents’ job security affects their own.  Virginia’s congressional delegation and the administration in Richmond have lived richly, though, relishing an unemployment rate more than a quarter better than the national average (7% relative to 9.6%).  Indeed, certain parts of Virginia have unemployment rates harkening back to the pre-recession glory days – Arlington and Fairfax counties come in at an enviable 4.2% and 5.0%, for instance, while York County in the Hampton Roads metropolitan area looks similar, at 5.7%.

Fortune is running short even in these areas, though, after Secretary of Defense Robert Gates detailed the “Defense Efficiency Initiative” on August 9. With the stated aim of reducing the number of contractors by 10 percent per year for the next three years, more than 30,000 defense contracting jobs are on the chopping block, undercutting the boom towns just outside Washington where many of these jobs are located.  Gates’ decision to close the Norfolk-based Joint Forces Command, home to 2,800 military and civilian personnel and 3,300 contractors, means that similar pain is in store for Virginia’s coastal money makers as well.

Small wonder then that a rhetorical storm erupted in the state after Gates’ announcement.  Efficiency, it seems, might not be in Virginia’s best interest.

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Hoof Steps in the Night: Anonymous defense spending earmarks May 17, 2010

Posted by Matthew Leatherman in Analysis.
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by Matt Leatherman and Mariah Quinn

Citizens Against Government Waste recently issued its FY10 summary of earmark abuses, called the Pig Book.  Remarkably, $6 billion of the $6.5 billion in anonymous earmarks were made within the defense appropriation.  And with the war supplemental pending, more surely is on the way.

Congressional rules require members to disclose all earmarks online.  Rules, though, were made to be broken.  Garden-variety violators – those that remain anonymous because of the weirdness or embarrassment of their spending – are less remarkable because they have no greater meaning.  The member requesting $1.8M for food allergy research in the defense bill provides a great example.  Yet two other types connect far more significantly to planning and strategy.

Wilbur goes to the ball

House Republicans profiled their fiscal responsibility by pledging to offer no earmarks for the entire FY2011 budget cycle.  Far less PR was done for the caveat memo circulated by the House Armed Services Committee Minority staff.  In it, HASC Republicans determined that “committee level national security policy decisions” did not constitute earmarks and, as a consequence, can continue.

Two particular committee level national security policy decisions were cited as examples: procurement of additional C-17 cargo jets and development of an alternative second engine for the F-35 Joint Strike Fighter.  The Pentagon has very prominently rejected these purchases, and excluded them from its strategy and recent budgets – hence the ‘need’ for earmarks.

Taken together, earmarks for just these two purchases ($2.97 billion) totaled 49% of the anonymous requests in the defense appropriation, and 29% of all defense requests.  This lays to rest any ambiguity about the meaning of House Republican’s earmark ban as it pertains to defense.  “Committee level national security decisions” may accessorize that pig for a masquerade ball, but behind that mask is still an undisciplined mass of pork.

When pigs drive (and sail)

House Republicans certainly aren’t the only ones leaving unclaimed BBQ stains on the defense bill, though.  Indeed, the Pentagon’s clumsy fingerprints are strikingly visible.

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House Panel on Defense Acquisition Reform takes first step toward fiscal discipline April 2, 2010

Posted by Matthew Leatherman in Analysis.
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by Matt Leatherman and Stephen Abott

The F-35 Joint Strike Fighter.  DDG 1000 Navy destroyers.  Apache helicopters.  Breaches (such as these) to Nunn-McCurdy provisions meant to constrain defense acquisition costs are rolling in with the new fiscal quarter, each strengthening the call for reforming defense acquisition.

The House Armed Services Committee’s bipartisan Panel on Defense Acquisition Reform is the latest, and perhaps most influential, body to join this call for reform.  The panel released its final report last week, and its findings paint an unsettling picture of America’s defense acquisition process.

According to the panel, our entire defense acquisition system suffers from a lack of metrics, unclear goal setting, and deficient flexibility and management. “System,” in fact, is a misnomer.  Related items whose acquisition ought to be organized strategically are procured in isolation by the services, while unrelated items are wedged into a methodology built specifically for weapons purchases.

Applied to the IT world, for instance, misaligned and rigid processes result in technology that, paradoxically, is easier to hack.  The panel noted that:

“The Department’s enterprise IT environment has been described as monoculture… From a management perspective, that makes it easier for the Department to purchase and manage the life-cycle of its systems.  Unfortunately, this monoculture creates an environment that allows potential adversaries to gain a deep understanding of vulnerabilities in the enterprise, making attacks potentially much easier and more far-reaching than would be the case in a more diverse IT ecosystem.” (17)

Counterproductive methods such as this are disconcerting.  Yet results fall short even for weapons purchases – the acquisitions on which the Pentagon’s methodology is built.  Major weapon acquisitions have been plagued for years by programs that run over budget, past deadline, and short of technological requirements.

Creeping requirements paired with long development cycles often drive this outcome.  Already-lengthy development cycles, driven by multi-year defense budgeting horizons, motivate users to add requirements profligately when given the opportunity.  This further extends the development cycle, which further incentivizes requirements creep, and so on until DOD has programs that breach Nunn-McCurdy provisions multiple times en route to being fielded years after planned.

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Earmark Competition Signals Modest Savings in Defense March 29, 2010

Posted by Matthew Leatherman in Analysis.
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by Mariah Quinn and Matt Leatherman

February budget releases and November elections always provide a neat playing field for members of Congress to fight over earmark reform.  House Democrats kicked off this year’s competition on March 10th, announcing a moratorium in FY2011 on earmarks dolled out to for-profit organizations.  House Republicans raised the stakes a day later by vowing to indulge no member-submitted earmarks of any type for FY11.

If you’re getting a sense of earmark déjà vu all over again, no need to check in with Yogi Berra – the feeling is real.  In 2007, the House voted to require that lawmakers reveal the size and purpose of their enacted earmarks.  The current Congress then tightened the rules to include un-enacted requests and extended this process to both chambers.

Neither of these efforts aimed directly at reducing spending driven by earmarks, but instead approached that issue indirectly by increasing transparency.  House Democrats set spending concerns further aside this year, limiting the pool of earmark recipients instead of the earmark process itself.  Announcing this policy, Appropriations Committee Chairman David Obey (WI) and Defense subcommittee Chairman Norman Dicks (WA) emphasized that it will “provide an opportunity for businesses – especially small start-up companies with no inside Pentagon connections – to present their good ideas and products to the Defense Department.”  Neglected in this position, however, is an acknowledgment that these firms will be competing for work that the Department of Defense did not request and, by extension, does not need or want.

The surprise this year, though, is in the comprehensiveness of House Republicans’ ban.  Unlike the Administration’s exemption of defense spending from the FY11 budget freeze, House Republicans are including defense and military construction appropriations in their vow.  According to a recent memo from the House Armed Services Committee’s minority staff, Ranking Member Buck McKeon (CA) has encouraged HASC Republicans to submit a one line letter to the committee, which reads: “Pursuant to adoption of the House Republican Conference Resolution on March 11, 2010, I respectfully withdraw all of my previous member requests from committee consideration for the FY 2011 National Defense Authorization Act.”

House Republicans could generate meaningful savings if they are able to enforce this position throughout the appropriations process.  The FY10 defense bill was weighed down by $9.6 billion in earmarks (25% of the $37.8B earmark total), of which $1.02 billion was sponsored in the House exclusively by the Republican Conference.  Military construction also garnered a significant chunk, receiving $14.5 billion overall (38% of the total) and $492 million from House Republicans.  (Data from Taxpayers for Common Sense’s database on earmarks.)  These numbers are an imprecise measure of the ban’s impact – recall that all earmarks were also approved by the Senate, which has no such ban – but defense savings in the order of hundreds of millions of dollars would be valuable, if not spectacular relative to the $693 billion top line in FY10.

Achieving something spectacular would have required House Republicans to include in their ban earmarks categorized as “committee level national security policy decisions.”  Though still of comparatively little overall expense, these decisions are highly symbolic due to the wrench they throw into the defense budget request.  Specifically cited as exempt from the earmark ban are requests for the Joint Strike Fighter alternative engine and additional C-17 procurements – both items pointedly excluded from the budget by Secretary Gates.

Between House Democrat’s fixation on the earmark eligibility pool and House Republican’s exemption of “committee level policy decisions,” this year’s fight over earmark reform regrettably returns to the default scorecard – which party most responsibly purchases those things that the Defense Department doesn’t want.  Banning member requests gives House Republicans the edge in this game.  Better yet that we didn’t play it at all.