Bill Would Create New Oversight of Pentagon Costs

Tuesday 03 March 2009

by: Ellen Nakashima | Visit article original @ The Washington Post

The Pentagon. (Photo: Charles Dharapak / AP)

A bill to end cost overruns in major weapons systems would create a powerful new Pentagon position -- director of independent cost assessments -- to review cost analyses and estimates, separately from the military branch requesting the program.

Those reviews, unlike in the current process, would take place at key points in the acquisition process before a weapons program can proceed, according to legislation sponsored by Sen. Carl Levin (D-Mich.) and Sen. John McCain (R-Ariz.)

Last year, the Government Accountability Office reported that cost overruns on the Pentagon's 95 largest weapons acquisitions system totaled $300 billion even though the government cut quantities and reduced performance expectations.

"A train wreck is coming," McCain said at a hearing today on the bill.

The bipartisan legislation would also enable the Pentagon to pull the plug on a weapons project that has a critical cost overrun unless the Defense secretary certifies, with reasons and documentation, that the program is essential to the national security and can be made cost-effective.

If the Weapon Systems Acquisition Reform Act of 2009 becomes law, current big-ticket programs such as the U.S. Army's Future Combat System, the Air Force's F-22 Raptor fighter jet, and the Pentagon's Joint Strike Fighter strike aircraft weapon system, could face new scrutiny. All three have come under fire for their expense and the slow pace of development.

The Joint Strike Fighter and Future Combat System alone account for almost $80 billion in cost overruns and were begun with insufficiently mature technologies and overly rosy assumptions about performance, Levin said. Twelve years after Joint Strike Fighter program was started, three of eight critical technologies are still not mature, he said. Eight years after Future Combat System was launched, only three of 44 critical technologies are mature.

"Particularly at this time, when the federal budget is under immense strain . . . we simply cannot continue this kind of waste and inefficiency," Levin said.

Currently, the Undersecretary of Defense for Acquisition, Technology and Logistics, the Pentagon's senior acquisitions officer, receives cost estimates on weapons programs from two sources -- the program office in the relevant service branch, and the Pentagon's Cost Analysis Improvement Group (CAIG).

Under the proposed legislation, the 30-person CAIG staff would fall under the new independent cost assessment director. That new office would have significant authority to obtain data from the contractor and to ensure a program's costs are justified. The director would also have to submit a report annually to Congress.

At the hearing, four defense experts testified how it was key to have accurate cost estimates at the beginning of the acquisition process. They also emphasized the need to rebuild an acquisitions workforce decimated by two decades of government downsizing.

Jacques S. Gansler, a former Pentagon senior acquisition officer, told lawmakers that the Defense Contract Management Agency had 25,000 staff in 1990, down to 10,000 today. The Army had five general officers with contract backgrounds. In 2007, it had none.

"Everything about the bill is going in the right direction," said Danielle Brian, executive director of the Project on Government Oversight, a watchdog group."The part that worries me most is that it assumes Congress is going to do its job of serious oversight," she said, "and in general, we're pretty disappointed with Congress in that regard."