May 15 2009 Copyright 2009 Business Research Services Inc. 301-229-5561 All rights reserved.

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Senate Passes Defense Acquisition Changes

The Senate has unanimously adopted legislation overhauling the Defense Department’s acquisition procedures.

Senators said the bill, S. 454, is aimed at reining in the massive cost overruns that routinely inflate the price of new weapons systems. The Government Accountability Office has found that two-thirds of major defense acquisitions are far over budget and behind schedule.

One of the Senate sponsors, Arizona Republican John McCain, said the spiraling cost of defense systems has reached “near-crisis proportions.” Speaking after the vote, he added, “We just cannot have the kinds of cost overruns that are associated . . . with one or two exceptions, literally every new weapon system that the Department of Defense acquires."

The Senate bill would create a director of independent cost assessment, to be appointed by the president and confirmed by the Senate. That official would ride herd on major programs, reporting directly to the secretary of Defense. The Obama administration opposes that and the provision is not included in the House bill, H.R. 2101, as approved by the House Armed Services Committee.

Senators bowed to Obama administration objections to a provision aimed at organizational conflicts of interest. The original version would have prohibited any contractor that was hired to provide an independent assessment of a weapons system from working on the production or development of that system. The final bill added waivers and exemptions that watered down the prohibition.

Senate Armed Services Committee Chairman Carl Levin, D-MI, acknowledged that there will be tough negotiations over substantial differences between the House and Senate bills.


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