Category Archives: miltary

Pentagon Shows Bumpy Progress Toward Curbing Improper Payments

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Pentagon Pumpy Road

“GOVERNMENT EXECUTIVE”

As the agency with the largest budget, the Defense Department continues to make shaky progress in the governmentwide push to reduce improper payments, the Pentagon’s inspector general reported on Friday.

The watchdog’s required annual review of fiscal 2017 estimates of significant improper payments showed that the department had complied with only two of six requirements under the 2010 Improper Payments Elimination and Recovery Act and related Office of Management and Budget guidance.”

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“The programs in nine areas reviewed include travel pay departmentwide (an estimated $263 million in bad payments), followed by misrouted military pay estimated at $182.5 million. Other categories included health care, retirement and commercial payments.

Defense last year succeeded in complying with provisions in the 2002 improper payments law (as amended in 2010) by conducting “program-specific risk assessments and reporting an overall improper payments rate of less than 10 percent,” the IG found. But the chief financial officer staff lapsed in not publishing all required information in the program integrity section of its November 2017 agency financial report; did not publish statistically valid improper payment methods for four programs; did not publish all required elements for corrective actions; and did not confirm that all components submitted required information.

For example, the report said, the Office of the Comptroller and the CFO “discussed the IPERA program at only a summary level and misinterpreted the payment recapture program reporting requirements.”

The travel pay program estimate “was not reliable because it did not include estimates from all reporting components, and some components did not use statistically valid sampling plans to test and estimate,” it continued. “Specifically, Navy and Marine Corps personnel were not able to complete their tests of travel payments, as required by OMB Circular No. A-123.”

The IG also determined that the comptroller and CFO “did not implement strong internal controls at the DoD level to improve reporting and instead relied on controls at the component level,” the result being that “DoD leadership and Congress may not be able to determine if DoD has the resources it needs to reduce its improper payments.”

The IG made five recommendations, among them developing a data call template based on the law’s requirements, improving coordination among components on testing, and developing milestones for expanding oversight of senior officials on travel costs.

The deputy chief financial officer and the deputy to the commanding general of the Army Financial Management Command agreed with most recommendations and planned to take corrective action.

But Mark Easton, deputy chief financial officer, wrote that this year’s report “differed from previous reviews in that it identified specific reporting deficiencies never previously focused on by your office,” such as presenting properly paid payments, and addressing internal controls and human capital requirements. And the office of Comptroller David Norquist disagreed with the recommendation on travel expense monitoring, saying, “Milestones are not necessary for implementing a charter for expanding the oversight responsibilities of senior accountable officials,” given that a corrective plan is in the works.

Defense’s mixed progress was noted by Peter Tyler, a senior policy analyst who tracks improper payment issues for the nonprofit Project on Government Oversight.  “Along with the Pentagon needing to work harder to reduce improper payments, we see the IG report as being too polite,” he told Government Executive. ”The reported DoD improper payments numbers are highly suspect,” as the Government Accountability Office has pointed out. “That is why DoD cannot pass or even complete a financial audit.”

POGO would like the Pentagon and other agencies to better scrutinize payments to contractors and elevate the importance of curbing the bad payments. “OMB could really help DoD and all the federal agencies by not just clarifying their guidance, but also further implementing some of the lesser-known aspects of the law, such as the Do Not Pay program and federal-wide data analytics initiative,” Tyler said.”

https://m.govexec.com/defense/2018/05/pentagon-shows-bumpy-progress-toward-curbing-improper-payments/148159/?oref=river

 

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Forthcoming Changes to Federal Government Contract Bid Protest Regulations

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law & justice

“NATIONAL DEFENSE MAGAZINE”

“The National Defense Authorization Act for fiscal year 2018 includes some significant changes affecting contractors with regard to challenges to requests for proposals and contract awards, otherwise known as “bid protests.”

The introduction of a new pilot program under which large defense contractors will be required to pay the Defense Department’s costs where a protest is denied; and the enhancement of post-award debriefing rights.”

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“While Congress passed the former with the intent of reducing frivolous protests, it is likely the latter — which will give contractors greater insight into the rationale behind procurement decisions — that will have a greater impact on the number of protests filed.

Section 827 of the act requires that the department establish and implement a three-year pilot program under which “large” defense contractors will be required to reimburse the department for “costs incurred in processing covered protests” for protests “denied in an opinion” by the Government Accountability Office.

A large contractor is defined as one with revenues in excess of $250 million, and the pilot program will apply to protests filed at the GAO between Oct. 1, 2019, and Sept. 30, 2022.

By limiting the scope of this loser-pays provision to those protests that are “denied in an opinion” by the GAO, this reimbursement provision will potentially only apply to a small number of protests. A recent study by the RAND Corp. examined defense protests at the GAO from fiscal years 2008 through 2016. This study found that less than 0.3 percent of such procurements are protested at the GAO, and that small business protests make up more than half of those.

While a protest sustain rate of 2.6 percent for fiscal years 2008 through 2016, or approximately 300 out of 11,459 protests, appears to suggest there is a great number of frivolous protests, deeper analysis of GAO’s statistics shows that is simply not the case. Approximately 21 percent of the bid protests filed were resolved by a decision on the merits. Of those 2,429 defense protests that reached the merits, nearly 300 were sustained. In other words, only 2,133, or approximately 20 percent of all the protests filed over eight years, were denied in an opinion.

With regard to the 79 percent of protests resolved without an opinion, a significant number — approximately 40 percent — were dismissed as a result of the government voluntarily correcting procurement errors noted in a bid protest. In addition, a number of protests were voluntarily withdrawn after protestor’s counsel had the opportunity to review the confidential record underlying the agency’s procurement decision.

In other words, this legislation will impact a relatively small number of protests. The 2,133 Defense Department bid protests denied in an opinion over an eight-year period equates to approximately 267 per year. Of those protests, the reimbursement provision will only affect protests filed by large contractors. If the percentage of protests filed by small businesses — over half — holds, even if adjusted to account for the lower effective rate of protests filed by small businesses reported by RAND, that number is likely under 200.

While this provision will impact a relatively small number of protests, the financial impact for those few may be significant. Congress did not define or elaborate on what costs are considered “incurred in processing covered protests” or how those costs will be quantified. Considering the amount of time legal and contract administration staff spend working on bid protests, these costs could easily exceed six figures.

But until the department issues guidance on how this provision will be implemented, it will be difficult for large defense contractors subject to this provision to evaluate the risks involved in filing a bid protest at GAO.

Finally, it is unclear how contractors will be determined to meet the large contractor threshold outlined in the new NDAA. The statutory definition: a contractor with revenues in excess of $250 million “during the previous year,” does not clarify whether this means the contractor’s fiscal year, government’s fiscal year or calendar year.

This also raises the question of whether contractors are expected to opt-in to be considered as a contractor to which this provision applies. Contractors will have to await department guidance as to whether they will be required to implement additional accounting measures to determine applicability or whether it will consider existing financial information, such as the revenues reported in the System for Award Management. Thankfully, the pilot program does not apply to protests filed before Oct. 1, 2019, so the department has time to issue regulations filling in these gaps.

Once the Defense Department has issued guidance on what costs will be included, large contractors may consider filing bid protests at the Court of Federal Claims instead of GAO, as this loser-pays provision does not apply to protests filed there. Once GAO implements its online filing system, a $350 filing fee will be required for bid protests. The court’s filing fee is currently $400; thus, the cost of filing is unlikely to influence a contractor’s decision where to file, particularly those large contractors affected by the provision. Although a bid protest filed at the court does not result in an automatic stay of performance of the protested contract pursuant to the Competition in Contracting Act, it does have the authority to issue an injunction, and the government often voluntarily stays performance pending the resolution of the protest.

One of Congress’ goals in implementing the loser-pays provision is to discourage the filing of frivolous GAO protests. However, most government contractors, particularly the large contractors affected by this provision, understand the protest process and engage experienced protest counsel. As a result, these government contractors are cognizant of the potential harm to their reputation by filing a frivolous protest and are reluctant to do so.

Further, GAO’s bid protest regulations provide for mechanisms to dismiss frivolous protests. Those that are deemed untimely or meritless are often resolved early in the protest process, prior to an agency incurring significant costs in processing these protests. It is likely that measures for the deterrence of frivolous protests will have a greater impact if implemented at this stage of the protest process, rather than this fee-shifting provision for protests denied in an opinion.

In addition, GAO already has authority to discipline contractors that file frivolous protests, recently holding that a contractor that “routinely and repeatedly” filed protests “that are not legally sound” had abused the GAO process, wasted tax-payer dollars and, as a result, would be suspended from filing protests at the GAO for two years. See Latvian Connection LLC – Reconsideration, B-415043.3, Nov. 29, 2017, where GAO also dismissed all pending protests filed by the contractor.

While Congress’ goal is admirable, the loser-pays provision is unlikely to have the desired effect. As noted above, this provision applies to the small percentage of bid protests that survive the GAO’s preliminary dismissal measures for frivolous protests or other resolution procedures. Even without the introduction of this loser-pays provision, approximately 21 percent of GAO bid protests of DoD procurements reach the merits.

When it is effective, protestors subject to the provision may well decide to voluntarily dismiss a higher percentage of protests after review of the record, further decreasing the percentage of GAO protests that are resolved by decision.

Finally, it should be noted that a bid protest that reaches the merits and is then denied by the GAO does not equate to a frivolous protest. Some issues are simply close calls. And for those cases, after the effective date of the pilot program contractors will have the ability to avoid the loser-pays provision by filing protests at the Court of Federal Claims.

Meanwhile, for the past five years, the Air Force has provided unsuccessful offerors an opportunity to request an “extended debriefing,” which permits the unsuccessful offeror’s outside counsel to review the agency’s redacted source selection documents and ask questions. This information is typically only provided to the protestor’s counsel under a protective order following the filing of a bid protest at the GAO. By allowing the protestor’s counsel to obtain as part of the debriefing more complete information about whether the Air Force made the correct procurement decision, the hope was to avoid protests filed in part to obtain the more complete record.

Wisely, in the new NDAA Congress chose to expand the Air Force’s innovative program. Section 818 enhances that existing pilot program for “extended debriefings” by requiring a revision of the Defense Federal Acquisition Regulation Supplement to apply certain debriefing requirements across the department.

First, contractors are entitled to a debriefing for all contracts and task orders valued at $10 million or higher. Second, the agency is required to disclose its redacted source selection determination for contracts in excess of $100 million. Third, contractors are provided an opportunity to ask follow-up questions after a debriefing.

The deputy director of defense procurement and acquisition policy tasked the DFARS Contract Administration Committee to draft the proposed rule implementing Section 818. The report is due in March. Congress has provided a deadline of six months from the date of enactment to implement these changes.

Under the new rules, a debriefing — oral or written — is required for all awards in excess of $10 million, regardless of whether it was a negotiated procurement conducted under FAR Part 15. Not only does this affect contractors’ rights with respect to debriefing, but it also affects the deadline for filing a timely bid protest where debriefings were not previously required. Even if the information was known prior to the debriefing, a bid protest may only be filed after the debriefing, and no later than 10 days after the debriefing if filed at the GAO. But note that a protest must be filed within five days of the debriefing to trigger the Competition in Contracting Act’s automatic stay of performance.

The most significant change is the requirement to disclose a redacted source selection determination for awards in excess of $100 million.

In addition, small business contractors and nontraditional contractors are provided an option to request the same redacted disclosure for awards in excess of $10 million. The successful awardee is also entitled to the same debriefing and disclosure rights as the unsuccessful offerors.

Unsuccessful offerors are provided an opportunity to submit follow-up questions related to the debriefing within two business days following a post-award debriefing. The agency is then required to answer in writing within five business days after receipt of the follow-up questions. The debriefing is then considered complete when the agency responds to the unsuccessful offeror’s questions.

While these deadlines may appear short, it is in line with the deadline for filing a timely bid protest at GAO, which is 10 days after a required debriefing. Offerors will still have an opportunity to file a timely bid protest even after the post-debriefing Q&A process.

The ultimate impact of these changes will depend on the regulations issued to implement the NDAA provisions, so contractors should carefully monitor developments over the coming year.”

http://www.nationaldefensemagazine.org/articles/2018/3/6/contractors-face-changes-to-bid-protest-strategies

 

How the Pentagon Devours The Budget And Normalizes Budgetary Bloat

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Petagon devours budget shutterstock_678009658-600x450

“THE UNZ REVIEW – Perspectives Largely Excluded from the American Mainstream Media” By William D. Hartung,

All too often, astonishingly lavish military budgets are treated as if they were part of the natural order, like death or taxes.

There is a danger that the Pentagon will just get “fatter not stronger” as its worst spending habits are reinforced by a new gusher of dollars that relieves its planners of making any reasonably hard choices at all.”


“Imagine for a moment a scheme in which American taxpayers were taken to the cleaners to the tune of hundreds of billions of dollars and there was barely a hint of criticism or outrage. Imagine as well that the White House and a majority of the politicians in Washington, no matter the party, acquiesced in the arrangement. In fact, the annual quest to boost Pentagon spending into the stratosphere regularly follows that very scenario, assisted by predictions of imminent doom from industry-funded hawks with a vested interest in increased military outlays.

The figures contained in the recent budget deal that kept Congress open, as well as in President Trump’s budget proposal for 2019, are a case in point: $700 billion for the Pentagon and related programs in 2018 and $716 billion the following year. Remarkably, such numbers far exceeded even the Pentagon’s own expansive expectations. According to Donald Trump, admittedly not the most reliable source in all cases, Secretary of Defense Jim Mattis reportedly said, “Wow, I can’t believe we got everything we wanted” — a rare admission from the head of an organization whose only response to virtually any budget proposal is to ask for more.

The public reaction to such staggering Pentagon budget hikes was muted, to put it mildly. Unlike last year’s tax giveaway to the rich, throwing near-record amounts of tax dollars at the Department of Defense generated no visible public outrage. Yet those tax cuts and Pentagon increases are closely related. The Trump administration’s pairing of the two mimics the failed approach of President Ronald Reagan in the 1980s — only more so. It’s a phenomenon I’ve termed “Reaganomics on steroids.” Reagan’s approach yielded oceans of red ink and a severe weakening of the social safety net. It also provoked such a strong pushback that he later backtracked by raising taxes and set the stage for sharp reductions in nuclear weapons.

Donald Trump’s retrograde policies on immigration, women’s rights, racial justice, LGBT rights, and economic inequality have spawned an impressive and growing resistance. It remains to be seen whether his generous treatment of the Pentagon at the expense of basic human needs will spur a similar backlash.

Of course, it’s hard to even get a bead on what’s being lavished on the Pentagon when much of the media coverage failed to drive home just how enormous these sums actually are. A rare exception was an Associated Press story headlined “Congress, Trump Give the Pentagon a Budget the Likes of Which It Has Never Seen.” This was certainly far closer to the truth than claims like that of Mackenzie Eaglen of the conservative American Enterprise Institute, which over the years has housed such uber-hawks as Dick Cheney and John Bolton. She described the new budget as a “modest year-on-year increase.” If that’s the case, one shudders to think what an immodest increase might look like.

The Pentagon Wins Big

So let’s look at the money.

Though the Pentagon’s budget was already through the roof, it will get an extra $165 billion over the next two years, thanks to the congressional budget deal reached earlier this month. To put that figure in context, it was tens of billions of dollars more than Donald Trump had asked for last spring to “rebuild” the U.S. military (as he put it). It even exceeded the figures, already higher than Trump’s, Congress had agreed to last December. It brings total spending on the Pentagon and related programs for nuclear weapons to levels higher than those reached during the Korean and Vietnam wars in the 1950s and 1960s, or even at the height of Ronald Reagan’s vaunted military buildup of the 1980s. Only in two years of Barack Obama’s presidency, when there were roughly 150,000 U.S. troops in Iraq and Afghanistan, or about seven times current levels of personnel deployed there, was spending higher.

Ben Freeman of the Center for International Policy put the new Pentagon budget numbers in perspective when he pointed out that just the approximately $80 billion annual increase in the department’s top line between 2017 and 2019 will be double the current budget of the State Department; higher than the gross domestic products of more than 100 countries; and larger than the entire military budget of any country in the world, except China’s.

Democrats signed on to that congressional budget as part of a deal to blunt some of the most egregious Trump administration cuts proposed last spring. The administration, for example, kept the State Department’s budget from being radically slashed and it reauthorized the imperiled Children’s Health Insurance Program (CHIP) for another 10 years. In the process, however, the Democrats also threw millions of young immigrants under the bus by dropping an insistence that any new budget protect the Deferred Action for Childhood Arrivals, or “Dreamers,” program. Meanwhile, the majority of Republican fiscal conservatives were thrilled to sign off on a Pentagon increase that, combined with the Trump tax cut for the rich, funds ballooning deficits as far as the eye can see — a total of $7.7 trillion worth of them over the next decade.

While domestic spending fared better in the recent congressional budget deal than it would have if Trump’s draconian plan for 2018 had been enacted, it still lags far behind what Congress is investing in the Pentagon. And calculations by the National Priorities Project indicate that the Department of Defense is slated to be an even bigger winner in Trump’s 2019 budget blueprint. Its share of the discretionary budget, which includes virtually everything the government does other than programs like Medicare and Social Security, will mushroom to a once-unimaginable 61 cents on the dollar, a hefty boost from the already startling 54 cents on the dollar in the final year of the Obama administration.

The skewed priorities in Trump’s latest budget proposal are fueled in part by the administration’s decision to embrace the Pentagon increases Congress agreed to last month, while tossing that body’s latest decisions on non-military spending out the window. Although Congress is likely to rein in the administration’s most extreme proposals, the figures are stark indeed — a proposed cutof $120 billion in the domestic spending levels both parties agreed to. The biggest reductions include a 41% cut in funding for diplomacy and foreign aid; a 36% cut in funding for energy and the environment; and a 35% cut in housing and community development. And that’s just the beginning. The Trump administration is also preparing to launch full-scale assaults on food stampsMedicaid, and Medicare. It’s war on everything except the U.S. military.

Corporate Welfare

The recent budget plans have brought joy to the hearts of one group of needy Americans: the top executives of major weapons contractors like Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics. They expect a bonanza from the skyrocketing Pentagon expenditures. Don’t be surprised if the CEOs of these five firms give themselves nice salary boosts, something to truly justify their work, rather than the paltry $96 million they drew as a group in 2016 (the most recent year for which full statistics are available).

And keep in mind that, like all other U.S.-based corporations, those military-industrial behemoths will benefit richly from the Trump administration’s slashing of the corporate tax rate. According to one respected industry analyst, a good portion of this windfall will go towards bonuses and increased dividends for company shareholders rather than investments in new and better ways to defend the United States. In short, in the Trump era, Lockheed Martin and its cohorts are guaranteed to make money coming and going.

Items that snagged billions in new funding in Trump’s proposed 2019 budget included Lockheed Martin’s overpriced, underperforming F-35 aircraft, at $10.6 billion; Boeing’s F-18 “Super Hornet,” which was in the process of being phased out by the Obama administration but is now written in for $2.4 billion; Northrop Grumman’s B-21 nuclear bomber at $2.3 billion; General Dynamics’ Ohio-class ballistic missile submarine at $3.9 billion; and $12 billion for an array of missile-defense programs that will redound to the benefit of… you guessed it: Lockheed Martin, Raytheon, and Boeing, among other companies. These are just a few of the dozens of weapons programs that will be feeding the bottom lines of such companies in the next two years and beyond. For programs still in their early stages, like that new bomber and the new ballistic missile submarine, their banner budgetary years are yet to come.

In explaining the flood of funding that enables a company like Lockheed Martin to reap $35 billion per year in government dollars, defense analyst Richard Aboulafia of the Teal Group noted that “diplomacy is out; air strikes are in… In this sort of environment, it’s tough to keep a lid on costs. If demand goes up, prices don’t generally come down. And, of course, it’s virtually impossible to kill stuff. You don’t have to make any kind of tough choices when there’s such a rising tide.”

Pentagon Pork Versus Human Security

Loren Thompson is a consultant to many of those weapons contractors. His think tank, the Lexington Institute, also gets contributions from the arms industry. He caught the spirit of the moment when he praised the administration’s puffed-up Pentagon proposal for using the Defense Department budget as a jobs creator in key states, including the crucial swing state of Ohio, which helped propel Donald Trump to victory in 2016. Thompson was particularly pleased with a plan to ramp up General Dynamics’s production of M-1 tanks in Lima, Ohio, in a factory whose production line the Army had tried to put on hold just a few years ago because it was already drowning in tanks and had no conceivable use for more of them.

Thompson argues that the new tanks are needed to keep up with Russia’s production of armored vehicles, a dubious assertion with a decidedly Cold War flavor to it. His claim is backed up, of course, by the administration’s new National Security Strategy, which targets Russia and China as the most formidable threats to the United States. Never mind that the likely challenges posed by these two powers — cyberattacks in the Russian case and economic expansion in the Chinese one — have nothing to do with how many tanks the U.S. Army possesses.

Trump wants to create jobs, jobs, jobs he can point to, and pumping up the military-industrial complex must seem like the path of least resistance to that end in present-day Washington. Under the circumstances, what does it matter that virtually any other form of spending would create more jobs and not saddle Americans with weaponry we don’t need?

If past performance offers any indication, none of the new money slated to pour into the Pentagon will make anyone safer. 

The list of wasteful expenditures is already staggeringly long and early projections are that bureaucratic waste at the Pentagon will amount to $125 billion over the next five years. Among other things, the Defense Department already employs a shadow work force of more than 600,000 private contractors whose responsibilities overlap significantly with work already being done by government employees. Meanwhile, sloppy buying practices regularly result in stories like the recent ones on the Pentagon’s Defense Logistics Agency losing track of how it spent $800 million and how two American commands were unable to account for $500 million meant for the war on drugs in the Greater Middle East and Africa.

Add to this the $1.5 trillion slated to be spent on F-35s that the nonpartisan Project on Government Oversight has noted may never be ready for combat and the unnecessary “modernization” of the U.S. nuclear arsenal, including a new generation of nuclear-armed bombers, submarines, and missiles at a minimum cost of $1.2 trillion over the next three decades. In other words, a large part of the Pentagon’s new funding will do much to fuel good times in the military-industrial complex but little to help the troops or defend the country.

Most important of all, this flood of new funding, which could crush a generation of Americans under a mountain of debt, will make it easier to sustain the seemingly endless seven wars that the United States is fighting in Afghanistan, Pakistan, Syria, Iraq, Libya, Somalia, and Yemen. So call this one of the worst investments in history, ensuring as it does failed wars to the horizon.

It would be a welcome change in twenty-first-century America if the reckless decision to throw yet more unbelievable sums of money at a Pentagon already vastly overfunded sparked a serious discussion about America’s hyper-militarized foreign policy. A national debate about such matters in the run-up to the 2018 and 2020 elections could determine whether it continues to be business-as-usual at the Pentagon or whether the largest agency in the federal government is finally reined in and relegated to an appropriately defensive posture.”

William D. Hartung, a TomDispatch regular, is the director of the Arms and Security Project at the Center for International Policy and the author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.

http://www.unz.com/article/how-the-pentagon-devours-the-budget/

Budget Uncertainty Is the Worst Enemy of the Pentagon

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Budget Stability

Photo: iStock

“NATIONAL DEFENSE MAGAZINE”

“More than 1,100 days — over three years ­— with significant uncertainty about the resources available to provide for the common defense.

These delays and uncertainties have also led to inefficient spending, wasting billions that could have gone to modernization, recapitalization and warfighter readiness.

The last defense appropriations bill passed and signed by the president on time was for 2009, leaving the services to endure nine consecutive years of kicking off the fiscal year with ambiguity, uncertainty and an inability to create momentum for new programs or enhance force readiness for contingencies.”


“As we go to print, the federal government is still without a budget for 2018, spending a third of the fiscal year under multiple continuing resolutions.

Like the previous eight, we’ve entered this fiscal year with a stopgap, putting the federal government and the Defense Department on autopilot executing funding as if it were fiscal year 2017 with little regard for changes and priorities in the recently signed National Defense Authorization Act for 2018.

Worryingly, an increasing number of pundits and defense insiders speak seriously about the resolutions extending through all of fiscal year 2018 — an outcome placing strains on the warfighter, hindering recapitalization and modernization of the force and damaging the health of the defense industrial base.

The Navy alone figures it has lost $4 billion in such inefficiencies since 2011. Now, with no firm budget for 2018, the department’s detailed budget submission for 2019 may be delayed. Hopes are dimming for an on-time submission of the president’s budget, further compressing the timeline Congress has to complete critical legislation.

Both the Obama and Trump administrations have highlighted the harm budget instability has caused to force readiness. The service chiefs and secretaries have continually pressed for stable budgets, even at lower levels, to allow the services to effectively conduct long-term planning and stem readiness declines. The defense committees in Congress have held hearings to spotlight readiness challenges and used recent aircraft and ship accidents to emphasize the dire life-and-death nature of the problem.

Lack of stability and certainty have rightly been characterized as a military readiness crisis akin to the “hollow force” years of the 1970s. The Reagan administration and Congress solved that crisis with the 1980s defense buildup. They relied on a robust defense industry. What’s less noticed and less obvious outside defense circles this time around has been the effect instability and uncertainty have had on the readiness of the U.S. defense industrial base, and the support the base can provide the warfighter today and in the future.

With continuing resolutions placing new starts and initiatives on hold, and given uncertain budget toplines and market pressures to deliver on investor expectations, firms — especially small and medium-sized — face stark choices on whether to continue to accept financial risk and uncertainty in support of the warfighter or leave the defense marketplace.

The executive summary of an upcoming study from the Center for Strategic and International Studies states that between 2011 to 2015, the number of first-tier prime contractors shrunk by about 17,000 companies — a decline of approximately 20 percent. Since fiscal support of the military plays a key role in determining resources available to drive innovation and increase productivity in critical U.S. manufacturing sectors, budget instability has both hollowed the military’s readiness levels as well as the defense industrial base’s capability and capacity to rapidly respond to future warfighter requirements.

Just as concerning, resourcing uncertainty limits companies’ willingness to take financial risks associated with research-and-development investments that could advance capabilities. Experts increasingly worry this erosion of the base will hamper the nation’s ability to respond quickly and effectively with the capacity to deliver defense articles and services to the warfighter in times of national crisis.

At the same time, the disincentives driving traditional suppliers out of the market are weighing on next-generation technology companies that can offer future — sometimes unforeseen — capabilities.

These capabilities could be key to maintaining the overmatch the United States has come to expect when it contemplates global military operations. The department has instituted initiatives such as the Defense Innovation Unit-Experimental, also known as DIUx, to help attract these companies, but the challenges it and similar efforts face are compounded by now endemic budget instability.

Recognition of these challenges is growing. In addition to the soon-to-be-released CSIS study, the Trump administration issued Executive Order 13806 last summer on “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States.” With a 270-day timetable, the executive branch plans to produce its initial assessment by mid-April.

This assessment — coupled with efforts to encourage and streamline sales of U.S. equipment overseas — is heartening but insufficient to stabilize the base, or create an environment where new entrants see opportunities to innovate and provide potentially game-changing capabilities to next-generation warfighters. Innovation that drives over-match demands budget stability.

Though many in Congress are aware and pressing their leadership, it’s time for all members of Congress, especially those not on defense committees, to recognize and take actions to reverse the disastrous effects budget instability is having on the warfighter and the companies that support them. To catalyze action, the National Defense Industrial Association made this issue a strategic priority. It will inform all its engagements with the administration, the services, industry members, fellow associations and think tanks, as well as Congress.

Budget stability and certainty will remain front and center at NDIA so we can help break the almost decade-long practice of beginning the fiscal year without a budget, putting the focus on readiness recovery for the warfighter and U.S. industry.”

http://www.nationaldefensemagazine.org/articles/2018/1/29/a-renewed-plea-for-budget-stability

 

Minnesota Veterans Stuck with Medical Bills Despite Government Investigation

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Veteran Screwed

“KARE 11”

“Records show veterans in Minnesota continue to be stuck with emergency medical bills they should not owe despite a 2014 investigation by the Government Accountability Office (GAO) that documented similar improper denials by Department of Veterans Affairs.

The GAO report found VA management was only tracking how quickly claims were done. But management was not checking if they were done correctly.”


“Was the expectation that this issue was being fixed?” KARE 11 Investigative Reporter A.J. Lagoe asked Randy Williamson, the GAO’s lead investigator on the project.

“That was the expectation,” Williamson replied.

Beginning in June, KARE 11’s continuing investigation – A Pattern of Denial – has documented how veterans are still being saddled with medical debt they should not owe, some of it even turned over to collection agencies after trips to the emergency room.

RELATED: A Pattern of Denial: One veteran’s story

KARE’s findings mirror what Williamson’s GAO investigation discovered years ago.

A pattern of errors

“It was pretty much a pattern of a lot of errors,” Williamson told members of Congress during a 2014 hearing.

The GAO found the Department of Veterans Affairs was mishandling veteran’s emergency medical bill claims, improperly denying claims that should have been approved.

RELATED: Read GAO report here

“Some veterans were likely billed for care that VA should have paid for,” Williamson told members of the House Veterans Affairs Committee.

RELATED: Read Willimson’s testimony before Congress here

“We found that basically, VA was doing a very poor job,” Williamson recalls. “And they were erroneously denying claims.”

At the request of Congress, the GAO set out to determine how well the Department of Veterans Affairs was complying with the Federal Millennium Act which requires the VA, with a few exceptions, to cover the cost of emergency care for veterans at Non-VA hospitals.

Williamson and his team discovered repeated errors.

“Twenty percent of the cases we looked at were wrong, were denied inappropriately,” Williamson said.

“Is that an acceptable error rate?” Lagoe asked.

“Heavens no,” Williamson replied. “It’s not.”

The GAO found that clerks were denying medical bills without a qualified clinician reviewing them. The investigation also documented cases in which the VA had given veterans pre-approval to go to an outside hospital, but later denied their claim as unauthorized.

That’s exactly what KARE 11 found still happening to veterans like Bob Ramsey.

Bob Ramsey

WATCH: Vet turned over to collections after VA bill denial

Bob called the VA to ask what he should do when experiencing post-surgical leg pain. He says he followed the instructions he was given to seek private emergency care. So, he expected no problems with his bill.

He was wrong. The Minneapolis Non-VA Care Department sent him a letter denying his claim.

“I called for advice, called to ask what they wanted me to do. They told me what to do. I did what they told me to do, and then they refused to pay,” Bob said.

Bob says he tried reasoning with the VA for nearly a year. Meanwhile, his unpaid bill from Maple Grove Hospital was turned over to a collection agency.

Tired of fighting with the VA, and afraid the unpaid bill would hurt his credit, Bob says he paid the bill.

“I paid the bill because it was already in collections. I didn’t want that hurting my credit any more than it already had,” he said.

The day after KARE 11 emailed the Minneapolis VA asking questions about Bob’s case, the VA did a sudden about-face. A VA official left him a voicemail promising to immediately pay the bill they had previously denied.

Williamson said the GAO found denials like that were a systemic problem.

“One of the hospitals that they (VA) rated in their top 10 in the country, we visited and found numerous cases where improper denials had been made,” he recalled.

Speed before accuracy

Why was it happening?

The GAO report found VA management was only tracking how quickly claims were done. But management was not checking if they were done correctly.

“They looked at the timeliness of the claim processing, but they didn’t look at the appropriateness of the denials,” Williamson told KARE 11.

“Nobody was checking?” Lagoe asked.

“Nobody was checking,” Williamson responded. “I would say that it is a case of people not being diligent in doing their jobs, not being thorough in doing their jobs.”

Despite the red flags, the GAO raised to both the Department of Veterans Affairs and Congress, VA insiders tell KARE 11 that little has changed. They say the focus remains on speed with little thought to accuracy.

A current VA employee turned whistleblower said improper ER bill denials continue to happen because medical claim processors are pressured to review complicated files in just minutes.

“Joe” spoke to KARE 11 on the condition that we do not use his last name.

“We are accountable for speed,” Joe said. “And the faster you are, the more your performance goes up – your review does, you get a bonus.”

WATCH: VA whistleblower exposes improper claim rejections

To achieve an “exceptional” employee rating, Joe says examiners can spend, on average, less than three minutes reviewing each claim.

In those few minutes, claims examiners must make a series of determinations. Is the cost covered by other insurance? Was the veteran seen for a service connected issue? Should the veteran have gone to a VA hospital instead? Or should the case be sent to a nurse to review whether it was a true emergency?

Lagoe: “Do you have time to do that?”Joe: “No.”

Lagoe: “Have you been doing that?

Joe: “No, and that’s the truth.”

In fact, Joe says that to meet the performance goals, it’s quicker to simply deny claims than to take the multiple steps needed to approve them.

While GAO did not specifically determine whether the VA’s performance standards were causing veterans to be wrongfully denied, they did find what Williamson described as lax supervision and poor accountability.

Dangerous risks

The GAO also found the wrongful denials were prompting some veterans to take dangerous risks.

Fearing they might be stuck with an emergency bill the VA would not pay, veterans were by-passing the closest emergency room to drive miles to a VA facility.

“One veteran with a gunshot wound had his wife drive him to a Veterans hospital a hundred miles away, rather than go to the nearest facility in the community,” Williamson said.

“Why?” asked Lagoe.

“Because the veteran thought he would be on the hook for the bill and he didn’t want to do that,” Williamson replied.

The GAO report made 12 recommendations, but Williamson told Congress back in 2014 he was concerned VA was not fully implementing them.

Three years later, KARE’s investigation documented continuing problems – case after case of veterans still falling victim to the VA’s pattern of improper denials.

“Based on what we know now, and based on some things I’ve heard from VA, it’s not completely fixed,” Williamson said.

Next steps

In response to KARE 11’s reporting, a different government agency is beginning yet another review of VA’s emergency medical claim processing.

Congressman Tim Walz (D-MN) asked the VA Inspector General to open an investigation.

RELATED: Congressman calls for federal investigation of VA ER denials

The Inspector General recently informed the Congressman it has launched a nationwide inquiry.”

http://www.kare11.com/article/news/investigations/kare-11-investigates-veterans-stuck-with-medical-bills-despite-government-investigation/89-501513641

 

Q&A Reference Library On Small Business Government Contracting And The Military Industrial Complex

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Quora Questions with Answers by Ken that have undergone 677,000 Views on Small Business Government Contracting and the U.S. Military Industrial Complex Ken Larson Reference Library on Quora

 

A New Tool for Looking at Federal Cybersecurity Spending

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Image:  “Taxpayers for Common Sense”

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“A new database and visualization tool that breaks down unclassified federal spending on cybersecurity over the past decade—giving the public a peek at how each major federal agency is devoting resources toward protecting computer systems.”


“More and more of what the federal government does relies on complex computer systems and networks. This high tech infrastructure makes the government work better by making services more efficient and accessible.

But that digital revolution also comes with big risks—just think back to the massive data breach at the Office of Personnel Management disclosed in 2015, when hackers compromised sensitive information about tens of millions of Americans. Last year, there were at least “30,899 cyber incidents that led to the compromise of information or system functionality” at federal agencies, according to a White House report released in March. The number of attacks on federal computer systems have risen sharply over the last decade.

So how much is the government spending to protect itself (and us) in this brave new world?

Unfortunately, the answer is “we don’t really know.” But a new tool from nonpartisan watchdog group Taxpayers for Common Sense provides perhaps the most comprehensive analysis of federal cybersecurity spending.

Last week, Taxpayers released a new database and visualization tool that breaks down unclassified federal spending on cybersecurity over the past decade—giving the public a peek at how each major federal agency is devoting resources toward protecting computer systems.

Taxpayers used public budget documents to build the database, but it wasn’t easy. “There is no government-wide standard definition or method of accounting for what qualifies as cyber funding and, therefore, no way to fully track it,” the organization explains on its methodology page. Agencies also use a variety of different approaches to tackle the issue, making it even harder to pin down their spending. Then, there is the government’s murky “black budget” of classified spending. So Taxpayers “settled on providing the best picture [it] could develop from extensive research of government programs” that are unclassified, spending two years searching through thousands of budget documents for terms like “information security” and “information assurance.”

Taxpayers found the amount spent on cybersecurity has quadrupled over 11 years. The group was able to tally $7 billion in unclassified cybersecurity spending in 2007, as compared to $28 billion in 2016. But some of that growth could be attributed to improvements in how the government tracks cybersecurity funding.

The resulting snapshot isn’t perfect, but it’s an impressive start—and a necessary one. After all, you can’t figure out what bang the government gets for its cybersecurity buck if you don’t know where those bucks go.”

http://www.pogo.org/blog/2017/08/a-new-tool-for-looking-at-federal-cybersecurity-spending.html

 

 

 

 

 

General Mattis and Special Inspector General Sopko Agree on “Spoils of War”

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Mattis and SIGAR

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“When the head of an agency actually listens to the findings of an Inspector General (IG), great things can happen.

June 2017 report by the Special Inspector General for Afghanistan Reconstruction (SIGAR) prompted Secretary of Defense Jim Mattis to acknowledge and denounce the Department of Defense’s (DoD) dismissive attitude towards reigning in its overspending of taxpayer dollars, and to highlight the good work done by SIGAR.

The official memo to DoD leadership, dated July 21, discusses SIGAR’s report on camouflage uniform misspending in Afghanistan, while also pointing out and decrying DoD’s “complacent mode of thinking” when it comes to spending in general. Mattis found that SIGAR’s report highlighted two truths about DoD work:

1) Every action contributes to the larger missions of defending the country

2) Procurement decisions have a lasting impact on the larger defense budget

Mattis uses these truths to reinforce the importance of effective spending at DoD, and wants to use SIGAR’s report and the instances of misspending it found as a “catalyst to bring to light wasteful practices – and take aggressive steps to end waste in [DoD].”

While this is potentially great news and a marked shift in DoD rhetoric, it is important to note that stating a problem exists is not the same as taking concrete action to fix it. Just last year, DoD was working to discredit SIGAR over a report on a $43 million gas station in Afghanistan, rather than working to fix the problem. Moreover, the $28 million in misspending that this most recent SIGAR report focused on and that drew Mattis’s attention is nothing compared to the waste, fraud, and abuse occurring in the larger defense budget (over $300 billion of which was spent on goods and services in 2016). It is important to remember that DoD is not known for its willingness to proactively address its spending issues, but is rather known for actively resisting efforts to increase transparency and accountability. (See, for instance, POGO’s work on DoD’s reluctance to examine its contracts for improper payments & DoD still not being able to pass an audit.)

It will take more than this memo for DoD to change the way it spends taxpayer money, but publically acknowledging the truth of SIGAR’s findings and trying to leverage that work for change—rather than fighting against and resisting the IG at every turn—is an important first step.

It is even more important, however, that DoD truly works towards achieving effective spending on an agency-wide scale.”

http://www.pogo.org/blog/2017/07/secdef-mattis-commends-ig-efforts-highlights-dod-shortcomings.html

U.S. Army Is Growing By Thousands of Soldiers

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ALLIED SPIRIT V

(Photo Credit: Markus Rauchenberger/Army)

“ARMY TIMES”

“The Army has used a suite of force-shaping measures and incentives to retain and recruit enough soldiers to bring the force back to over a million.

[Measures] including five-figure enlistment and retention bonuses, as well as major opportunities for National Guard and Army Reserve soldiers to go active.

The Army is on track to reach its end strength goal of 1,018,000 soldiers by the end of September, and that will mean enough manpower to fill holes in existing combat units, save some units from planned deactivations, and man some new ones.

Units throughout the Army will feel the benefit of adding 28,000 troops to the active and reserve components, according to a Thursday release from the Army, reversing a drawdown that had planned for just 980,000 soldiers this year.

“These force structure gains facilitated by the FY17 end strength increase have begun, but some will take several years to achieve full operational capability,” said Brig. Gen. Brian J. Mennes, director of the Force Management Division, in the release. “Implementation of these decisions, without sacrificing readiness or modernization, is dependent upon receiving future appropriations commensurate with the authorized end strength.”

The Army has used a suite of force-shaping measures and incentives to retain and recruit enough soldiers to bring the force back to over a million, including five-figure enlistment and retention bonuses, as well as major opportunities for National Guard and Army Reserve soldiers to go active.

In addition to filling existing manning gaps in brigade combat teams, the release said, the plus-up will save several units that were slated for deactivation. They are:

  • 4th Infantry Brigade Combat Team (Airborne), 25th Infantry Division, based Joint Base Elmendorf-Richardson, Alaska.
  • 18th Military Police Brigade Headquarters based in Grafenwoehr, Germany.
  • 206th Military Intelligence Battalion at Fort Hood, Texas.
  • 61st Maintenance Company at Camp Stanley, South Korea.
  • 2nd Combat Aviation Brigade at Camp Red Cloud, South Korea.

Soldiers retained during the end strength build up also could end up joining the recently announced Security Force Assistance Brigades and their training school, as well as an aviation training brigade at Fort Hood.

More soldiers will also help with the Army’s increased manning in Europe.

The Army is planning to station the following units overseas, according to the release.

  • A field artillery brigade headquarters with an organic brigade support battalion headquarters, a signal company and a Multiple Launch Rocket System battalion (MLRS).
  • Two MLRS battalions with two forward support companies.
  • A short range air defense battalion.
  • A theater movement control element.
  • A petroleum support company.
  • An ammunition platoon.

Further, the Army plans to convert an infantry brigade to an armored brigade and add 1,300 new staff to Training and Doctrine Command, in an attempt to increase training and recruiting capacity, the release said.

“The end strength increase will augment deploying units, and units on high readiness status, with additional soldiers to increase Army readiness and enable us to continue to protect the nation,” Mennes said.”

https://www.armytimes.com/articles/the-army-is-growing-by-thousands-of-soldiers-heres-where-theyre-going-to-go

 

 

Wars to Keep the Military Industry in Demand

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Image: Batr.org

The defense industry in America has utilized the threat of war and self-fulfilling prophesies to promote engagements by our country in several countries over the last 15 years. They pay more in lobbying costs each year than they pay in taxes.
There have been two major factors in the U.S. approach to undeclared warfare:
1. The motives of the U.S. and International Military Industrial Complexes, USAID and other western USAID counterparts in fostering continued warfare during this period, netting billions in sales of weapons to the war fighters and massive construction and redevelopment dollars for international companies who often operated fraudulently and fostered waste, looting and lack of funds control.
It is common knowledge that many of these corporations spend more each year in lobbying costs than they pay in taxes and pass exorbitant overhead and executive pay cost on to the tax payer in sales, thus financing their operating personnel riches while remaining marginally profitable to their stockholders.
I watched this from the inside of many of these companies for 36 years. Here is my dissertation on that subject. You can read it on line at:
Here is an example of how the lobbying and behind the scenes string pulling worked:
2. The complete lack of cultural understanding between U.S. and Western decision makers and the middle east cultures they were trying to “Assist” by nation building.
The only real understanding that existed during the period was in the person of General Schwarzkopf who spent much of his youth in the Middle East with his father who was an ambassador to Saudi Arabia. He was fascinated by the Arab culture, commended their respect and like Eisenhower led a coalition during the Gulf War. He then astutely recommend no occupation of Iraq, went home and stayed out of government. Norman, like Ike, knew the power of the MIC and he wanted no part of it.
The U.S Tax payer has funded billions in USAID and construction projects in Iraq and wasted the money due to a lack of cultural understanding, fraud and abuse. POGO documents many:
There is history repeating itself here – much like Vietnam the above two factors are deeply at play with the lack of astute learning in our government as we look back over our shoulder.
We must come to the understanding, like a recent highly respected war veteran and West Point Instructor has, that military victory is dead.
“MODERN WAR INSTITUTE AT WEST POINT”
“Victory’s been defeated; it’s time we recognized that and moved on to what we actually can accomplish. “
Frank Spinney is an expert on the MIC. He spent the same time I did on the inside of the Pentagon while I worked Industry. You may find his interviews informative.