Monday, March 09, 2009

More on Contracting

President Obama’s comments last Wednesday on the GAO report that the government wasted $295 billion on contracts that have not stayed within agreed costs and have slipped behind schedule – sometimes by years – has resulted in a flood of articles on government contracting practices in general and on Pentagon contracting in particular.

I have participated in this focus, and will do so again for the following reasons.

1. Members of Congress are not reticent about acknowledging that they have to get contracts directed to their state or district if they hope to remain in office. This is the “iron triangle” that President Eisenhower warned of in the 1950s – the military-industrial-congressional complex.

2. The President appointed a commission to look into the abuses o the contracting process. Congress – the House of Representatives to be exact -- also has formed a seven person committee to do the same. Based on all the “reforms” that have come from the multitude of committees, both will agree more or less that a problem exists, that it is draining taxpayer money, and something has to be done. The committees more likely than not will disagree on remedies, a few of which will be enacted (as long as no Member gets hit too hard). Give it two more election cycles and the reforms will be on the closet shelf with little to show for even the cost of the commission and committee/

3. One trick that has yet to be discussed in any of the reports I have seen is the old practice – especially by the Army (although the USAF for many years played the same game with C-130 cargo aircraft) – of not requesting funds to buy major equipment (armored personnel carriers and even tanks) for National Guard units. The Pentagon relied on and was never to my knowledge significantly in error in their judgment that Congress would add on the funds required to ensure the National Guard received upgraded or even new equipment. And the Members of both Houses who played this angle most assiduously were those who sat on the armed services committees – the very people who should have been holding contractors and the Pentagon to strict account.

4. The laws on the books and the reports that Congress requires provide sufficient red flags for any Member to be aware when Pentagon contracts are running into cost or schedule problems. The real problem is that Congress refuses to use the levers it has to haul up defense contractors who are not filling requirements to which they agreed and the Pentagon officials who are suppose to be watching the contractors and the military brass.

5. But we are in a recession, and jobs are disappearing overnight. No one will suggest reforms that cost even more jobs.

There is more, but it is late.

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