Reforming Pentagon Purchasing to Save Money

Weekly column by Senator Susan Collins

Every year, the Department of Defense (DoD) spends billions of dollars on major weapons systems. In fiscal year 2008 alone, DoD spending reached $396 billion, approximately 74 percent of total federal contract spending. The scope of the Department’s contract spending is particularly evident when the Army’s procurement activities are examined. The number of Army contracts has grown by more than 600 percent since 2001, and contract dollars have increased by more than 500 percent. In 2007, the Army is responsible for one out of every four federal contracting dollars.

Unfortunately, the Defense Department does not always spend wisely. In purchasing major defense systems, the Department has a record of being over budget and behind schedule. According to the Government Accountability Office (GAO), 95 of the DoD’s largest weapons programs are over budget by a total of $295 billion and are behind schedule by an average of two years.

To address these persistent problems, I joined Senators Carl Levin (D-Michigan) and John McCain (R-Arizona) in cosponsoring bipartisan procurement reform legislation. Recently, President Obama signed our bill into law. The Weapon Systems Acquisition Reform Act of 2009 will help prevent cost overruns, keep programs on track, and bring increased accountability and transparency to major defense acquisition programs.

The new law will help strengthen DoD’s procurement process by requiring more planning, better estimation of costs, more competition, a larger acquisition workforce, and improved oversight of projects. It will help build discipline into the planning and requirements process, keep projects focused, prevent cost overruns and schedule delays, and ultimately save taxpayer dollars.

This law improves DoD’s planning and contracting oversight in many ways. It creates a new senior leader at the Pentagon who will be charged with accurately estimating the costs of defense systems. These cost estimates are critical for the Pentagon to evaluate cost, schedule, and system performance before a contract is awarded. Weighing these factors carefully from the very beginning of the decision-making process will enhance overall project planning and improve contracting outcomes.

In addition, the law will require that the Department establish clear lines to prevent conflicts of interest by defense contractors. These reforms will strengthen the wall between government employees and contractors, helping to ensure that ethical boundaries are respected. While contractors are important partners of military and civilian employees at DoD, their roles and responsibilities must be well-defined and free of conflicts of interest as they undertake their critical work supporting our nation’s military.

The law also includes an amendment that I offered with Senator Claire McCaskill (D-MO) to ensure that DoD reliably and consistently measures contract performance. Contractors would be required to use approved systems that track a project’s cost, schedule, and scope. These reports can provide early warnings of performance problems and better help programs stay on schedule and on budget. The quality and timeliness of a contractor’s reporting will also be taken into consideration when it bids on new contracts.

Research, development, testing, evaluation, and procurement of increasingly complex defense systems challenge the Pentagon’s ability to ensure taxpayer dollars are spent wisely. This new law will strengthen the Department’s acquisition planning, increase and improve program oversight, and help prevent contracting waste, fraud, and mismanagement. Ultimately, it will help ensure that our military personnel have the equipment they need, when they need it, and that tax dollars are not wasted on programs doomed to fail.