By Nick Schwellenbach
Indefatigable Pentagon correspondent Tony Capaccio scored a good story today for Bloomberg Government. Entitled "Cost Overruns Plague One-Third Of Pentagon's Biggest Programs," his story is based on leaked Government Accountability Office (GAO) testimony for a hearing before the Senate Homeland Security and Government Affairs Committee today. The story is behind a paywall, so here are a few notable paragraphs from the story:
About one in three major U.S. Defense Department weapons programs since 1997 have had cost overruns of as much as 50 percent over their original projections...
The overruns, found in 47 of 134 programs included in a study by the U.S. Government Accountability Office, were enough to trigger a law that requires congressional notifications and potential termination. Only a single program has been terminated during that review process—the Bell Helicopter Textron $6.78 billion Army Armed Reconnaissance Helicopter, the GAO said.
The GAO's findings are not the biggest surprise—it has presented a similarly shocking picture of defense acquisition in the past. It will be interesting to see if either of the first two panel witnesses—both from the Defense Department (DoD)—will argue if things have substantially improved at the DoD.
Another interesting witness to watch will be John Young, a senior fellow at the Potomac Institute for Policy Studies. Young is the former head of DoD acquisition and was vocal in arguing during his latter days at the Pentagon that some of the GAO criticisms in its 2009 report (similar to the one coming out today) were overblown and that there had been substantial changes to acquisition policy. Young also said the GAO glossed over in its 2009 report the fact that several programs initiated in 1996 or earlier were among the worst performing programs—you'll note the GAO testimony today focuses on programs initiated in 1997 or later. Today's GAO witness, Michael J. Sullivan, is the author of that 2009 GAO report and he and Young are both on today's second panel of witnesses.
This could get interesting.
Nick Schwellenbach is POGO's Director of Investigations.
What a surprise. We provide contractors with one and only one method of increasing profit, which is to drag out the time and inflate the cost of development, then we wonder why they do this very thing. I mean, if this isn't proof that capitalism works, I don't know what is. News flash: contractors are motivated by profit! Who knew? Then you get actual Americans that say, "those greedy contractors, all they're interested in is money," like that is some revelation to them from God. So here is the scenario, we know these contractors are motivated by greed and we provide one way for them to make more profit, which is to drag out and jack up the cost of development. And then we are shocked, SHOCKED when they do just what we gave them the finacial incentive to do. It's time to turn off Jerry Springer, pull our collective heads out of our butts and fix this system of procurement.
Posted by: Dfens | Mar 30, 2011 at 08:58 AM