Defense Reforms Cost $90M A Pop

Defense Reforms Cost $90M A Pop

The Pentagon has performed a study or two that found each of its acquisition programs will have to spend about $90 million to comply with the recently passed defense acquisition reform bill, sponsored by Senators Carl Levin and John McCain.

I understand several people at the meeting laughed when told this figure, guessing that if this is the official estimate at this early stage then the actual costs will be a heck of lot higher. Much of that cost would apparently result from prototyping, which is required by the bill.

Since Winslow Wheeler at the Center for Defense Information knows budgets, cost estimates and legislation as well as just about anybody, I checked with him to see what he thought of this. Wheeler is already on record as a critic of the bill — “…the fine print of the new law is hopelessly riddled with loopholes to protect business as usual…” — but not on cost grounds.

“Just what is it that they claim will cost all that? Competitive prototyping? Or what? However, I would like to see the studies, the SASC/HASC reaction, and then send it all to GAO to see if there is any legitimate basis. I certainly assume these heroic critics are willing to testify to Congress,” Wheeler said. “Bottom line: show me the studies; make them prove it.”

The gauntlet is thrown. Buzz readers who can slip us a copy of a study on this win our undying gratitude and a special place in the nation’s acquisition lore.

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I’m guessting that just on the government side of the equation. Given the traditional accuracy of Agency estimates, I would also guess that the estimate is way off on the low side.

The neat thing about congressional sponsored acquisition reform, is that it is written by elected “servants” that have no idea of the real world cost and time impact of what they are doing. When it turns out out the cost comes out very high, both in time and money, they will hold industry responsible for its inefficient methods even though Congress is the main cause of inefficiency in defense procurement programs.

On top of the regulatory quagmire Congress continues to build up, the Agency’s create a technical quagmire by constantly changing the goals and objectives of major defense programs. When you don’t have a stable concept and you have constantly changing regulations, it’s virtually impossible to have meaningful cost containment

Give them a break ED — there working on healthcare estimates.

What isn’t said in that report is what the $90M in extra costs up front could save in costly re-engineering, maintenance, or from eliminating fraud/waste/abuse. Then again what else is new, this is the standard DC beltway “net negative” calculation method. Instead of taking all the cost/benefit of a given technology and weighing it against the cost/benefit of an alternative technology, they just take the benefit of doing nothing vs. the cost of changing. Doing this masks any potential savings or net benefit from an alternative course of action, while making the status quo look like the clear choice.

With the Pentagon dead set against the bill, I don’t understand how folks think the 90 million is on the low side. My first inclination is the figure would be 150 million if they thought they could pull it off.

Contracting, Contracts and Quality assurance have been made so complicated by the geniuses that I’m surprised anything gets built anymore. It does get debated and second guessed to death.

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