“According to the Government Accountability Office, in fiscal year 2013, only 57 percent–I repeat, 57 percent–of the $300 billion the Department of Defense obligated for contracts and orders (associated with the trillion dollar Joint Strike Fighter program) was actually competed. In other words, only in a little over half of the $300 billion–roughly
$150 billion–in contracts and orders was there actually any competition. Unacceptable”, said McCain.
On May 5, 2014 Senator John McCain of Arizona asked for and was granted permission to address the United States Senate regarding the lack of real competition and accountability in the military in regard to contracts.
Here is some of what he said in this regard:
“I will briefly discuss two critical aspects of how the Department of Defense procures major systems–real competition and accountability. In my view, it is no coincidence that the period of remarkably poor performance among our largest weapons procurement programs has coincided with a dramatic contraction in the industrial base, due, in large part, to consolidation among the Nation’s top-tier contractors. For this reason the Department of Defense must structure into its strategies to acquire major systems true competition–not like fake competition–as we saw in the Future Combat System or as proponents for an alternate engine for the Joint Strike Fighter once advocated. According to the Government Accountability Office, in fiscal year 2013, only 57 percent–I repeat, 57 percent–of the $300 billion the Department of Defense obligated for contracts and orders was actually competed. In other words, only in a little over half of the $300 billion–roughly
$150 billion–in contracts and orders was there actually any competition. Unacceptable. Competition should be driven through the subsystems level, and it should be reflected in approaches that foster innovation and small business participation throughout a system’s entire lifecycle.
Especially within the Navy’s “shipbuilding and conversion” account and the Air Force’s “missile procurement” account, costs associated with the Ohio-class replacement submarine and the Evolved Expendable Launch Vehicle–that is our space effort–those programs respectively, will severely pressurize other procurement priorities within these same aspects of Pentagon spending.
So within these particular areas, harnessing competitive forces to drive down costs and keep them down will be enormously important. There can, however, be no doubt that during a year of declining budgets and, therefore, fewer opportunities to support an already diminished industrial base, this will be extraordinarily difficult. So we should be embracing competition–even the prospect of it–wherever and however we find it.
In the Littoral Combat Ship Program, the Navy’s strategy to bring competition into the construction of the follow-on ships’ seaframes successfully drove down those costs after the cost to complete construction of the lead ships’ seaframes exploded–the costs exploded. While doing so resulted in a dual-award block-buy contract, which I thought, and continue to think, was ill-advised, and serious problems persist with the Littoral Combat Ship’s mission modules–in other words, the ship’s ability to carry out its assigned missions–there can be no doubt that competition was just what the program needed.
After having found in 2012 that competition for the Evolved Expendable Launch Vehicle, i.e., our space program, could lower costs for the government, the Government Accountability Office reiterated the importance of competition generally in a report released today, stating that, “competition is the cornerstone of a sound acquisition process.”
Remember those words by the Government Accountability Office, as I go on: Competition is the cornerstone of a sound acquisition process”, said Senator McCain (source: Congressional Record http://thomas.loc.gov/).
Senator McCain is the senior United States Senator from Arizona. He was the Republican presidential nominee in the 2008 United States presidential election. He is a powerful member of teh Senate’s Armed Service Committee.