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June 02, 2009

Carafano confused about acquisition reforms
Posted by The Editors

This post is by NSN intern Luis Vertiz

James Carafano from the Heritage Foundation recently penned a confused op-ed piece defending the significant use of contractors to supply the military.

While there is legitimate debate concerning the use of contractors for our national defense, it is odd that Carafano picked on the Levin-McCain Defense Acquisition Reform Bill –which was recently signed into law– because none of the bill’s provisions directly deal with contractors. What the Levin-McCain bill actually deals with is the process by which the Pentagon evaluates and green lights major weapons acquisition programs. Yet Carafano writes,

“Yet, last week, Obama signed the Levin-McCain Defense Acquisition Reform Bill.  In all likelihood, it will inhibit rather than improve the Pentagon’s ability to buy things efficiently. Why? Because it layers even more levels of bureaucracy and red tape into the acquisition process. And it does nothing to counter congressional micro-management and earmarking, the two biggest impediments to the military’s effort to buy things fairly and efficiently. To save money, Washington would be better off using more contractors, not less.”

Carafano’s assertion that the government could save money by hiring more contractors does not fly with the experience of the last eight years. Under the Bush Administration, the use of contractors in acquisition work skyrocketed. Instead of a decrease in the costs of acquisition programs, program costs grew dramatically while repeatedly falling behind schedule. In the past 6 years, 95% of all major DoD acquisition programs are two years behind their delivery schedule, with additional costs rising $300 billion over the original estimates of these projects. The GAO reports that between FY 2001 and FY2007:

“the number of contracting actions valued at over $100,000 increased by 62 percent and dollars obligated on contracts increased by 116 percent, according to DOD. Moreover, DOD has reported that the number of major defense acquisition programs has increased from70 to 95. To augment its declining in-house acquisition workforce, DOD has relied more heavily on contractor personnel.”

We saw a period of increased use of contractors, but coupled with an additional spike in program costs. The GAO concluded:

“of the 31 program offices that reported information about the reasons for using contractor personnel, only 1 indicated that reduced cost was a key factor in the decision to use contractor personnel rather than civilian personnel.”

Again, the Levin-McCain bill aims not to directly eliminate contractors, but helps acquisition personnel at the Department of Defense to incorporate best practices from industry to prevent cost-overruns and schedule delays. It is really a reform of management, not personnel policy. In fact, Carafano paradoxically opposed the Levin-McCain bill, even when it puts into law "...state-of-the-art commercial supply chain practices" that he believes would reduce delivery times and program costs.
So what is Carafano really criticizing? He is concerned that:

“[t]he White House, however, has no interest in relying more on the private sector. Instead, they plan on playing politics - pandering to a fear of “outsourcing” inflamed by the politics of opposition to the war in Iraq.  They will use this opportunity to purge contractors, cut defense spending, and give us exactly what we usually get when we spend cut defense spending - less defense.”

Carafano is, ultimately, more concerned about reductions in some spending programs under Obama and Gate’s defense budget than he is regarding the perceived cutting of contractors. But as the GAO illustrated, Secretary Gates is right to narrowly seek sensible limits on the use of contractors within DoD’s acquisition process.

Carafano could present a much better case for spending reform if he did not confuse his opposition to spending decreases for Cold War-era weapons systems –like the F-22– than with the Levin-McCain Defense Acquisition Reform Bill. His op-ed rests upon the premise that President Obama and Secretary Gates are paring down spending for our national defense to support some unsubstantiated, ideological, anti-contractor agenda. The facts, however, paint a different picture.


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As far as I know in a report Carafano recommended steps that the government could take in order to better interact in today’s digital world....

His op-ed rests upon the premise that President Obama and Secretary Gates are paring down spending for our national defense to support some unsubstantiated, ideological, anti-contractor agenda. The facts, however, paint a different picture.

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