By DAVE MCCURDY
The Pentagon's report of significant cost increases in three dozen major weapon programs, published April 7, highlights one major failure and one modest success in the management of our defense establishment.
The failure is the Pentagon's chronic inability to discipline the acquisition system by committing to new procurement programs on the basis of realistic estimates of cost, performance and schedule. The success is the ability of Congress' defense oversight committees, in a time of toxic partisanship, to enact with bipartisan support legislation aimed at pressuring the Defense Department's political leadership to correct that failure.
In this instance, the committees have done so by building on legislation I helped draft in 1982, which mandated that large cost increases in major weapons be publicized. The assumption behind the Nunn-McCurdy provision of the fiscal 1983 defense authorization bill was that the prospect of an adverse reaction from the Office of Management and Budget, Congress or the public would force senior Pentagon officials to address the question of whether the programs in question - at their newly reported, higher costs - were worth continuing.
The answer to that question, more often than not, will be yes. But the question must be answered by senior officials who can view each program in its broader context. Otherwise, the answer will be provided by government and industry officials whose perspective is dominated by the individual program with which they are associated.
Under that default solution, it is all too easy for a program to be reshaped by dozens of incremental cost hikes, requirements add-ons, performance reductions and schedule slips.
Congress cannot manage weapon programs; only the executive branch can do so. What Congress can do is provide an incentive for the executive branch to do its job. Indeed, the defense committees' oversight record is all the more remarkable because the immediate cause of the April 7 report was legislation crafted just last year.
The roots of the reporting requirement run back to the early days of the Reagan administration, when the Defense Department was plagued by a series of highly visible cost overruns on a number of key weapon systems, including the Black Hawk helicopter and the Patriot missile system. Unfortunately, the symbols of a broken acquisition system were reported abuses such as $600 toilet seats and $500 hammers. The widespread perception of wasted taxpayer dollars and failed weapon programs threatened to erode public support for essential defense spending.
In my first term in the House, 1981-1982, I chaired a special panel on procurement reform of the House Armed Services Committee. Along with my fellow freshman, and current committee chairman, Duncan Hunter, R-Calif., I teamed with Senate Armed Services Committee member Sam Nunn, D-Ga., to craft a provision of the fiscal 1983 defense authorization bill that established a simple "management by exception" reporting requirement for programs whose unit cost growth exceeded their acquisition program baseline by at least 15 percent.
For cases in which the cost growth was 25 percent or more, the law required the defense secretary to certify to Congress that the program is essential to national security; that no alternatives exist that will provide equal or greater military capability at less cost; that new program acquisition or procurement unit cost estimates are reasonable; and that the management structure is adequate to control unit cost.
Our goal was not to kill programs but to offer informed choices by providing more disclosure and visibility to save some programs key to U.S. modernization.
Unfortunately, the Defense Department has maintained its track record of dodging tough choices when it comes to managing weapon acquisition. In drafting the fiscal 2006 defense authorization bill, the House and Senate Armed Services committees identified as part of the problem an out-of-control "requirements process" that, if unchecked, burdens programs with burgeoning technical challenges and resulting increases in cost and delay. In hopes of getting a handle on that problem, the committees adapted the Nunn-McCurdy cost-growth reporting requirement, in two ways.
First, the new language limits the Pentagon's ability to redefine a program's cost baseline, against which cost increases are to be measured. It would require that a program be reported if it exceeds its current cost baseline by 15 percent or (if the current baseline is a modified one) if it exceeds its original cost baseline by 30 percent.
Second, the new legislation requires that if a weapon program experiences particularly severe cost increases, the Pentagon will report to Congress an estimate of what the program would cost to complete with and without any reasonable modifications, as well as "the rough order of magnitude" of the cost of any alternative system.
U.S. forces have no military peer competitor, but must anticipate novel threats at the same time they absorb extraordinary operational wear and tear on equipment and systems. The post-9/11 security environment requires an acquisition system that is more agile to address the shifting threat.
The challenge is not from critics of defense programs, but supporters who refuse to make hard choices. It is more essential than ever that we, the proponents of increased defense spending, ensure the responsible use of resources.
The just completed Quadrennial Defense Review (QDR) is designed to be a strategic road map for the Pentagon, industry and policy-makers. Road maps have crossroads and require choices, but this QDR fell short when it came to providing clear choices for future force structure, weapon requirements and hard decisions on tradeoffs. Many of those decisions seem to be left to future leaders.
Updating the Nunn-McCurdy requirement is a step in the right direction toward identifying potential problem areas. Congress also must enforce discipline on deadlines and oppose requirements creep, inconstant procurement rates and program fluctuation.
Dave McCurdy, Oklahoma was a congressman from Oklahoma from 1981-1995, and is the current chief executive of the Electronic Industries Alliance and chairman of the Center for Strategic and Budgetary Assessment, Washington.
Contact Email: awalters@crosbyvolmer.com







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