Pentagon's Weapons Buying Practices To Get Overhaul

Senate acted Thursday to clamp down on Pentagon purchasing practices that have led to billions in cost overruns and delays in getting weapons to people at war.

WASHINGTON (AP) -- The Senate acted Thursday to clamp down on Pentagon purchasing practices that have led to billions in cost overruns and delays in getting weapons to people at war.

The 93-0 Senate vote on the acquisitions overhaul legislation came as the House Armed Services Committee was voting 59-0 to approve its similar version. President Barack Obama has pushed for improvements in weapons procurement and urged Congress to get a bill to his desk before Memorial Day.

Defense Secretary Robert Gates has also made procurement overhaul a priority, and on Wednesday Deputy Defense Secretary William Lynn told Congress that the Pentagon plans to add 20,000 personnel over five years to ride herd on contracts, cost estimates and oversight.

The Senate bill would strengthen oversight and transparency and create a new director of independent cost assessment whose job would be ensuring that the budget assumptions of acquisition programs are sound. The director would report directly to the secretary of defense and would require Senate confirmation.

The measure also would put more teeth into a 1982 statute on cost overruns, a law that has often been ignored, by shutting down any program that exceeds its original baseline by 50 percent unless it can be justified on national security or other reasons.

The White House, in a statement, said it supported the Senate initiative and believed any differences in approach could be resolved. "The administration wants to ensure that the defense acquisition process is free from conflicts of interest and that the process supports the U.S. government being a better steward of the taxpayer's dollar," it said.

"We have to reduce the unnecessary gold plating of weapon systems," said Senate Armed Services Committee Chairman Carl Levin, D-Mich. "We have to bring the Department of Defense's undisciplined requirements system under control."

Levin, who sponsored the legislation with Sen. John McCain, R-Ariz., said that just two major weapons programs -- the next-generation Joint Strike Fighter and the Future Combat System -- have racked up cost overruns of $80 billion, with average unit costs now 40 percent above original estimates.

McCain noted that the Virginia class submarine has gone from an original estimate of $58 billion to $81 billion, while the cost of the F-22 fighter had jumped from $136 million a plane to $400 million. Gates now plans to terminate that program.

"It's really a situation of near-crisis proportions," McCain said, noting that cost overruns affect "literally every new weapons system."

The Government Accountability Office said in a recent report that the Pentagon's 97 largest acquisition programs are now recording cost overruns of almost $300 billion and the programs are an average of 22 months behind schedule.

Levin blamed the problems on the Pentagon relying on unrealistic cost and schedule estimates, establishing unrealistic performance expectations and insisting on the use of immature technologies. He also mentioned conflict of interest issues where contractors are involved both in cost assessments and in production.

Several watchdog groups, in a letter this week to the Armed Services committees, praised Congress for provisions in the House and Senate bills that would increase competition, elevate independent cost estimates and reduce conflicts of interest.

But the groups -- Project on Government Oversight, National Taxpayers Union, Taxpayers for Common Sense and U.S. PIRG -- also pointed out that the problem is not in the rules but in the follow-through. Rules and controls are already in place, but "these rules are too frequently ignored or otherwise not followed," they wrote.

Among the amendments accepted was one by Sen. Claire McCaskill, D-Mo., that would give combat commanders more say in new weapons procurement programs.

Obama has proposed a Pentagon budget of $533.7 billion for the 2010 fiscal year, not including war costs, a 4 percent increase over the current year. Spending on weapons usually comprises about a third of the Pentagon's annual budget, with much of the money going to big defense contractors like Lockheed Martin Corp., Boeing Co. and Northrop Grumman Corp.

AP Business Writer Stephen Manning contributed to this report.

More in Supply Chain