Tag Archives: Government Waste

The Next $10 Billion Chapter In The Veterans Administration Health Care Systems Development Saga

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VA New System

Editors’ Note:  The story herein on “FEDSCOOP” announces the latest trip on a decades- long road of efforts by the Veteran’s Administration to connect the  health care systems of the military with those of the VA and establish state of the art records keeping for veterans.  

This sole source, non-competitive, contract award to CERNER,  a commercial firm in lieu of in-house systems development  is a major change in approach from past efforts that have cost billions and led to shut downs and start overs. 

Having seen these types of government systems management challenges from the inside for over 4 decades I find myself sincerely doubting that both the scope and the price tag are final.   For historical perspective, please see: 

A VETERAN CONNECTS THE DOTS IN THE MILITARY AND VETERANS HEALTH CARE SYSTEMS MAZE   

Ken Larson

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“FEDSCOOP”

“The Department of Veterans Affairs announced Thursday that it has officially signed a contract with Cerner for a new electronic health record (EHR) system.

The inked contract is worth up to $10 billion over 10 years.

“With a contract of that size, you can understand why former Secretary [David] Shulkin and I took some extra time to do our due diligence and make sure the contract does what the President wanted,” acting Secretary Robert Wilkie said in a statement. “President Trump has made very clear to me that he wants this contract to do right by both Veterans and taxpayers, and I can say now without a doubt that it does.”

The new EHR will be “similar” to that used by the Department of Defense, which will allow patient data will be “seamlessly” shared between the two. This has been a major pain point with the Department’s current EHR, the Veterans Information Systems and Technology Architecture, or VistA.

Wilkie reiterated Shulkin’s comments, from March, that the VA will learn from some of the DOD’s challenges in deploying its new EHR, known as MHS Genesis, and will not fall prey to the same pitfalls, which have plagued early pilots of the system and led to a report calling it “neither operationally effective nor operationally suitable.”

“VA and DoD are collaborating closely to ensure lessons learned at DoD sites will be implemented in future deployments at DoD as well as VA,” Wilkie said. “We appreciate the DoD’s willingness to share its experiences implementing its electronic health record.”

“Signing this contract today is an enormous win for our nation’s Veterans,” Wilkie said. “It puts in place a modern IT system that will support the best possible health care for decades to come. That’s exactly what our nation’s heroes deserve.”

However big an announcement this may be, actual rollout of the new EHR will take time. At an event in January, former VA CIO Scott Blackburn told the crowd to expect another 10 years of VistA.”

https://www.fedscoop.com/va-ehr-cerner-10-billion-robert-wilkie/

 

 

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The 37 Year Tax-Day Impact Of The Project on Government Oversight (POGO)

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POGO and Your Taxes

“POGO”

“POGO exposed the fact that the Pentagon was buying $7,600 coffee makers and $435 hammers.  [POGO works] with government insiders in order to sound the alarm on wrongdoing by government contractors and workers and to save taxpayer dollars—all on behalf of the public.

[POGO] investigations have found billions of dollars in actual and potential savings. Here are some of the highlights.”

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“In a 1999 report, POGO pointed out that if contractors could inflate the price of everyday items like coffee makers and hammers, how much were they overcharging for things taxpayers didn’t understand, like high-tech weapon systems? Our investigations have found billions of dollars in actual and potential savings. Here are some of the highlights.

POGO publicized over $893 billion in improper payments.

The American taxpayers lose hundreds of billions of dollars every year because the federal government makes payments to the wrong people or institutions, or in the wrong amount. For example, the government sometimes sends benefits to individuals who are deceased, or FEMA pays fraudulent claims following disasters like hurricanes. Unfortunately, the government doesn’t do enough to address the problem. In 2016, POGO completed a set of reports that publicized $893 billion in improper payments between FY 2008 and 2015. In our reports, we provided recommendations to identify and recover improper payments that potentially could save the government billions of dollars. Currently, POGO is advocating for a bipartisan bill, the Stopping Improper Payments to Dead People Act. This act would allow the Social Security Administration to share its database of deceased people with many other government agencies to reduce inaccurate payments to dead people.

In 2001, POGO’s reporting causes military to stop two wasteful weapons projects, saving $49 billion.

In a blistering set of reports sent to the White House in 2001 on the defense weapon acquisition process, POGO exposed how multiple weapon systems wasted taxpayer money and ultimately made us less safe. One example was the Crusader howitzer cannon, which entered into the acquisitions phase before United Defense finished its preliminary design. Our analysis cited a Government Accountability Office report that found the Crusader weighed too much, underwent shortcuts in testing, and was behind schedule. Another example was the RAH-66 Comanche helicopter, which suffered from many of the same problems. While military planners designed the helicopter to be inexpensive, the cost quickly ballooned from $12.1 million to $58.9 million a copy as the development cost increased and the testing schedule was delayed.

POGO investigation into F-35 leads to $21 billion to $40 billion in taxpayer savings.

Multiple POGO investigations have found serious problems in the F-35 program. In one report last year, we discovered that the Air Force wanted to leave several older F-35s unfinished because paying to update them would make it harder to buy new fighters. The Air Force bought the F-35s while still designing and testing the aircraft—a decision POGOand the Government Accountability Office have independently labeled as a major driver of increased cost. After POGO published its report, the Air Force decided to stop the plan, preventing between $21 billion and $40 billion in waste.

POGO investigations help get the Deepwater contract cancelled, saving $24 billion.

In 2007, POGO investigated a $24 billion Lockheed Martin and Northrop Grumman project to update the U.S. Coast Guard’s equipment that resulted in millions of wasted dollars. To save money, the Coast Guard initially allowed the two private contractors to oversee and manage the project. Relying on private contractors to conduct inherently governmental functions ultimately cost the Coast Guard millions, because the contractors made numerous design and technical mistakes. After POGO’s investigation, media attention, and several high-profile disasters, the Coast Guard took back management of the project, and later asked for a $96 million refund.

POGO reporting helps shut down the wasteful Superconducting Super Collider, saving $11 billion.

POGO led the way in campaigning to cancel the Superconducting Super Collider, a grossly over budget project run by contractors that took advantage of weak oversight and permissive spending guidelines to overcharge the federal government. According to invoices obtained by POGO, the principal subcontractor charged the government $21,369 for office plants in a year and $1,107 dollars for Christmas cards, among other waste. POGO’s investigation turned the Super Collider into the largest government project ever cancelled at that time, saving taxpayers roughly $11 billion dollars.

Our investigation into Boston’s “Big Dig” helps save taxpayers roughly $11 billion.

Even before Boston’s Harbor Tunnel Project, known as the Big Dig, became a national embarrassment, POGO investigated the devastating impact of private contractors spending billions of tax dollars to build a highway project with little federal or state oversight. The Big Dig started with a $2.3 billion budget but, with contractors given a free rein, it ballooned to around $24.3 billion as the project suffered from delays, bad planning, and mismanagement. Initially, federal taxpayers were on the hook for 80% of the funding, but POGO’s investigation helped reduce losses by getting Congress to freeze federal spending at $8.6 billion, saving federal taxpayers roughly $11 billion.

POGO helps cancel the F-22, saving $4.268 billion in one year.

Much like the F-35, the F-22 cost much more than advertised and drained resources from other critical Air Force priorities—like training pilots. Also like the F-35, POGO campaigned heavily to end the program. After almost a decade’s worth of reportspress releases, and conversations with Members of Congress and their staff, POGO finally succeeded in helping get the program shut down—thanks in large part to Senators Carl Levin (D-MI) and John McCain (R-AZ). Cancelling the production of 240 F-22s saved taxpayers $4.268 billion that year alone.

POGO helps the government collect over $1 billion in additional oil royalties to date.

During the late 1990s, POGO investigators uncovered how the Interior Department ignored the fact that several oil companies chronically underpaid the Federal Treasuryon royalties they owed for oil they extracted from public lands. In 1997, POGO filed a False Claims Act lawsuit against 16 major oil companies. By 2001, the companies settled the lawsuit. The U.S. Treasury recovered nearly half a billion dollars in unpaid royalty revenue, and began collecting $67 million more per year in royalties owed to the public.

POGO reporting causes Air Force to suspend bad Hamilton Sundstrand contract, saving $664 million.

Every year, POGO warns the government about no-bid contracts fleecing American taxpayers. In 2006, POGO investigators published a previously not-public Department of Defense Inspector General report finding that defense and aviation contractor Hamilton Sundstrand raised the price of several mechanical parts by nearly 900 percent with no reasonable justification. We wrote to Congress showing how contractors were taking advantage of acquisition regulation loopholes to reduce oversight. Our work led the Air Force to suspend the 9-year, $860 million dollar contract, saving taxpayers $664 million dollars.

POGO advocates for bipartisan compromise to reduce contractor compensation, saving $200 million per year.

Prior to 2013, an outdated law that was used to determine contractor compensation packages allowed some companies to receive excessively high executive salaries and benefits—at the expense of taxpayers. This system allowed contractors to receive more money than comparable employees in the federal government. After years of work by POGO, a bipartisan group of legislators voted to reduce the cap from $952,308 to $487,000, saving taxpayers $200 million per year.

POGO investigation helps Air Force save $168 million on C-130J military airlift contract.

The C-130J was a mechanically flawed cargo plane that cost more than expected and the Pentagon didn’t want. A 2005 POGO report highlighted that the Air Force dubiously labeled the C-130J a “commercial” item in order to decrease oversight, a decision that ultimately led to many of the C-130J’s problems. After the Pentagon said they didn’t need the plane, a group of influential military contractors and U.S. Senators lobbied hard to preserve the unnecessary aircraft. POGO worked with Senator McCain and other Members of Congress to restructure the C-130J contract and save taxpayers $168 million.

POGO helps publicize $100 million in fraud by Northrop Grumman.

In 2014, POGO investigators made public a Defense Department Inspector General report that found Northrop Grumman knowingly overcharged the federal government around $100 million for an anti-terrorism program. The U.S. Army contracting agency tasked with overseeing the contract was not conducting proper oversight—until whistleblowers, POGO, and the Defense Department Inspector General got involved. We highlighted how Northrop Grumman and its subcontractor DynCorp defrauded the government in multiple ways. They billed the government for more labor hours than there are in a day and for employees who lacked required education qualifications. They also classified one employee for seven different positions including “depot aircraft mechanic, a senior general engineer, an integrated logistics manager, a quality assurance manager, a program manager, a senior pilot, and a senior technical writer.”

POGO’s investigations into waste, fraud, and abuse of power by the federal government are a core part of the organization’s mission.”

http://www.pogo.org/blog/2018/04/pogos-outsized-tax-day-impact.html

 

 

 

 

 

 

Acquisition Insanity: USS Ford Block-Buy Proposal

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USS Ford. (Photo: U.S. Navy

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“Less than a year after the first-in-class ship’s commissioning (before it ever launched or recovered an aircraft…a first in history), the sea service is exploring options to buy them in bulk. 

The program’s $6 billion cost increase earned the Ford-class program a spot on Senator John McCain’s (R-AZ) “America’s Most Wasted Report.”  The ship’s electric advanced arresting gear is supposed to be able to go 16,500 landings between mission failures. So far, the best it can do is 19. “


“The Navy wants to go all in on the USS Ford-class aircraft carrier program.

The Navy has already repeated several common acquisition mistakes with the Ford program, but this latest scheme would pile on more problems. The Navy committed to this program—which includes several new major ship systems like nuclear reactors, catapults, and radar systems—while their designs were still in a conceptual stage, and the inevitable complications in their development have contributed greatly to the program’s $6 billion cost increase. Committing to such a large program with so many unproven systems earned the Ford-class program a spot on Senator John McCain’s (R-AZ) “America’s Most Wasted Report.” Yet, James Geurts, the Navy’s Assistant Secretary for Research, Development, and Acquisition, said before the House Armed Services Committee on March 6 that the Navy is studying a potential two-ship block buy for the third- and fourth-in-class ships.

Geurts testified that such a plan could save $2.5 billion over the total cost of the program, although this is only a rough estimate at this point as they are asking for evidence of savings from the contractor rather than seeking an independent cost estimate. The history of this program should make everyone skeptical of such claims. The Government Accountability Office released a report in 2017 that stated cost estimates for the Fordprogram are unreliable because they do not take into account the risks associated with building the ships before the design has been completed and tested.

Navy leaders have made at least one step in the right direction with the program recently. Following pressure from several key lawmakers, Navy Secretary Richard Spencer announced that the USS Ford will undergo crucial full-ship shock trials in 2019 or 2020. Shock trials occur when explosives are detonated underwater in close proximity to a fully kitted-out and crewed ship. This is done to test the integrity of all the ship’s systems to determine if they are sufficiently hardened to withstand the rigors of combat. Shock trials are supposed to be done as early as possible in a shipbuilding program so design problems can be identified and fixes incorporated into the design before more ships are constructed. This helps avoid costly retrofits on already constructed ships. In 2017, the Project On Government Oversight called on Congress to demand the Navy carry out these tests.

This latest announcement reverses an earlier Navy decision to postpone shock trials to the second-in-class ship of the Ford program, which would have delayed these tests for up to six years, by which time construction on three of the ships would have been substantially completed. The Navy and the Pentagon’s testing director both agreed in 2007 to performthis important test to the first-in-class ship. But on February 2, 2015, the Navy abruptly informed DOT&E that they would not conduct shock trials on the Ford, citing concerns the tests would delay the ship’s first operational deployment.

Senators John McCain (R-AZ) and Jack Reed (D-RI), the Chair and Ranking Member, respectively, of the Senate Armed Services Committee, have been rather vocal about their wishes to see the shock trials performed on the USS Ford. Other Members of Congress, however, have been working to do the Navy’s bidding by inserting language in the 2018 National Defense Authorization Act that would have allowed them to postpone the tests.

The Navy, in seeking a block buy, is following what is becoming a well-trodden path created by the Military-Industrial-Congressional Complex in two significant ways. In a big-picture sense, they want to gain commitments to purchase as many units as possible before a design has been fully tested. We are seeing this now with the F-35 program where, at the current pace, taxpayers will be on the hook for more than 600 aircraft before testing can conclusively prove the design can actually perform in combat.

As with the F-35 program, block-buy plans for the Ford program skirt the margins of legality. The Pentagon can commit to multiple-year acquisition contracts, but only after certain criteria have been met. Title 10 U.S.C., Section 2306b stipulates that for a program to be eligible for multiyear procurement, the contract must promote national security, result in substantial savings, have little chance of being reduced, and have a stable design. Until any program completes the IOT&E process, it does not meet the criteria for a multiyear contract.

Pentagon leaders know this, which is why they are careful to request block buys instead of multiyear contracts. Calling such a plan a block buy means the scheme is not subject to the same legal requirements. This is little more than verbal jiu-jitsu because the net effect is the same: the American people are stuck with the tab for an unproven weapon that may never live up to the lavish promises used to sell it, leaving the troops with a system that could fail them at the very moment they need it the most. It should also be noted that that there are plenty of people in Congress who are complicit in this plan. More than 100 lawmakersrecently sent a letter to the Secretary of Defense pushing for the two-carrier deal.

While the announcement that the Navy will conduct shock trials on the USS Ford is a positive step, this program has a lot more to prove before lawmakers should commit more taxpayer dollars. No decision for any kind of a multiyear purchase should be made until after all operational tests are performed and the results are properly evaluated and reported. Any potential savings from a multiyear deal now could easily be erased paying for expensive retrofits should significant design flaws be found during the remaining tests.”

http://www.pogo.org/straus/issues/defense-budget/2018/acquisition-insanity-uss-ford-block-buy-proposal.html

Overspending On The Pentagon Won’t Make Us Safer

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“THE HILL” By William D. Hartung

“$716 billion on the Pentagon and related programs for fiscal 2019 will be a case of throwing good money after bad.

Pentagon spending is already approaching a post-World War II record, well above the Cold War average and higher than peak spending during the Korean and Vietnam wars. “


“At a time when military force has been either irrelevant or ineffective in addressing the most urgent threats we face, doubling down on Pentagon spending at the expense of diplomacy and other elements of national strength is misguided at best, and potentially disastrous at worst.

Rather than overspending on unnecessary nuclear weapons and bulking up on traditional weapons systems, the administration should be crafting a strategy for making Americans safer that uses the full range of available tools. The Pentagon doesn’t need more spending, it needs more spending discipline, and a clearer strategy. Trying to do everything is not a strategy, it is a recipe for perpetual conflict.

Advocates of higher spending claim that there is a “readiness” crisis driven by shoddy equipment and inadequate training, factors that — they claim — are the cause of deaths of sailors and Marines on patrol or in stateside military exercises. In fact, as a number of officers who lead personnel on the front lines have noted, there is no readiness crisis. To the extent that additional funds are needed for training and maintenance there is more than enough money available if the Pentagon would eliminate wasteful and misguided expenditures.

Examples of waste in the Pentagon budget abound. For example, a Pentagon advisory council has identified excessive bureaucratic overhead that, if eliminated, would save $25 billion per year.

Rather than get down to the task of streamlining its operations, Pentagon leaders tried to hide the report’s findings from Congress, fearing that the revelations would undercut their pleas for additional funding. Or take the case of the more than 600,000 private contractors that the Pentagon employs, many of whom do jobs that duplicate work being done by government employees. Cutting this work force by 15 percent would save another $20 billion per year.

Then there are the Pentagon’s sloppy purchasing practices, which result in overpaying for basic items like $500 worth of helicopter gears that the Army purchased for $8,000.

Part of the problem is that the Pentagon’s books are in such a state of chaos that the department is the only major U.S. agency that has never passed an audit. If they can’t keep track of where the money goes, it’s much harder to root out waste or avoid overpaying for basic goods and services.

Another factor that keeps Pentagon spending higher than it should be is the myth that most of the funds it receives support our troops. This is not the case. About 40 to 50 percent of the Pentagon’s yearly outlays go to corporations, with large contractors like Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics getting the lion’s share. And too often the big-ticket items that fuel the revenues of these firms are of little value in actually defending us from the most urgent threats we face.

Take, for example, the F-35 combat aircraft, the largest weapons program ever undertaken by the Pentagon, at a projected $1.5 trillion to build and operate over the lifetime of the aircraft. The Project on Government Oversight, a respected nonpartisan watchdog group, has determined that the plane may never be fully ready for combat, even as it experiences huge cost overruns and ongoing performance problems.

For another example, look at the Pentagon’s plan to spend $1.7 trillion over the next three decades on a new generation of nuclear-armed submarines, bombers, and land-based missiles. We already possess massive nuclear overkill, with a stockpile of 4,000 nuclear weapons when a few hundred would be enough to dissuade any nation from attacking the United States. Cutting the arsenal down to size could save hundreds of billions of dollars in the years to come. And needless to say, building more nuclear weapons will do nothing to protect us from terrorism, even as it starves necessary domestic programs of funds.

Before they throw more money at the Pentagon, the administration and Congress need to force the department to do a better job of spending the money it already has. Spending more without a smarter strategy won’t make us any safer, and it could even make matters worse.”

http://thehill.com/opinion/national-security/371414-overspending-on-the-pentagon-wont-make-us-safer

ABOUT THE AUTHOR:

William D. Hartung is the director of the Arms and Security Project at Center for International Policy and a senior adviser to the center’s Security Assistance Monitor. He is the author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex (Nation Books, 2011) and the co-editor, with Miriam Pemberton, of Lessons from Iraq: Avoiding the Next War (Paradigm Press, 2008). His previous books include And Weapons for All (HarperCollins, 1995), a critique of U.S. arms sales policies from the Nixon through Clinton administrations.

 

 

IT Contracts Worth Billions Lack Proper Oversight, GAO Reports

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IT Contracts Lack Oversight

(Photo: Shutterstock; Illustration by POGO)

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

After 16 years of development and a cost of $5 billion the White House stopped a tri-agency environmental satellite system project because of ineffective management, cost hikes, and scheduling delays.

 In FY 2017 alone the IT budget for federal agencies was $89 billion; such large-scale spending means that mismanagement of this spending will have serious repercussions for taxpayers.”


“This is particularly concerning considering the problematic trend of federal agency IT projects notoriously exceeding cost expectations and failing to meet productivity goals.

The Federal Information Technology Acquisition Reform Act (FITARA), passed by Congress in 2014, was meant to remedy this large-scale waste. The law requires the federal agencies identified in the Chief Financial Officers (CFO) Act of 1990 to properly classify IT contracts and to have qualifying contracts reviewed and approved of by the agency’s Chief Information Officer (CIO). Additionally, IT developments now have to happen in an incremental way instead of over long time frames and with broad scopes. These measures ensure someone is accountable for these IT contracts and increase the likelihood that potential problems will not go unnoticed or unaddressed.

For its report, GAO evaluated CIO involvement in IT acquisitions at 22 of the 24 CFO Act agencies, excluding the Department of Defense (DoD) because it is exempt from the relevant provision and the Department of Homeland Security (DHS) because GAO had just recently reviewed it.

$4.5 Billion in Federal IT Contracts Escaped Mandated Oversight

The 22 agencies being evaluated were asked to identify all of their IT contracts while GAO created an independent list of the agencies’ IT contracts. The agency-provided total was 76,599 contracts worth $14 billion for FY 2016, while GAO found 108,092 worth $18.5 billion. That means 31,493 IT contracts worth $4.5 billion were not being flagged for the FITARA oversight process.

Eight of the reviewed agencies—the Departments of Health and Human Services (HHS), the Interior, Transportation, and the Treasury, as well as the National Science Foundation (NSF), the U.S. Agency for International Development (USAID), the General Services Administration (GSA), and the Office of Personnel Management (OPM)—were the worst offenders, failing to identify over 40 percent of their IT contracts.

Part of this discrepancy can be explained by disagreements over what contracts qualified as IT and what was required to be reported. For example, GSA did not think that products and services coded as maintenance-related and rebuilding-related should be categorized as IT. Additional discrepancies came from disparities in which types of contracts had to be identified. For example NSF, which was in compliance with OMB guidelines and CIO certification requirements, did not identify IT contracts worth less than $150,000, and at OPM a spokesperson explained “OPM only submitted information related to new IT contract and not contract modifications,” adding, “OPM overall percentage of identified contract obligations will be greater with the inclusion of information related to contract modifications.”  It is not clear, however, what other factors contributed the high number of unreported IT contracts. Four of the agencies—the Departments of the Interior, Transportation, and the Treasury, and USAID—did not respond to the Project On Government Oversight’s request for comment.

Federal Agencies Failed to Properly Review $23.8 Billion in IT Contracts

GAO also reviewed 96 randomly selected IT contracts, checking for CIO review and approval. The contracts came from the ten agencies that obligated the most funding to IT in FY 2016: the Departments of Agriculture, Commerce, HHS, Justice, State, Transportation, the Treasury, and Veterans Affairs, as well as the National Aeronautics and Space Administration and the Social Security Administration. Of the 96 contracts, only 11 had been CIO-reviewed and approved; the remaining 85 un-reviewed contracts were worth an estimated $23.8 billion in the long run.

The Office of Management and Budget (OMB) has issued guidelines that agencies should follow to properly comply with FITARA, including a requirement that agencies develop their own guidelines for assisting officials in identifying IT investments that require CIO review. According to the GAO report, however, 7 agencies have not established any guidelines and 14 haven’t established guidelines that fully satisfy OMB requirements. If there is no established methodology in place, the likelihood is high that the oversight of IT contracts will keep falling through the cracks.

FITARA was passed to codify better oversight and prevent massive government waste on expensive IT projects. A CIO is accountable for agency IT investments and is responsible for tracking IT performance, but how can a CIO oversee an IT investment without knowing it exists? Compliance with OMB guidelines could help remedy this break in communication and ensure better use of taxpayer dollars.”

http://www.pogo.org/blog/2018/01/it-contracts-worth-billions-lack-proper-oversight-gao-reports.html

Pentagon Leaders Skirting Major Defense Acquisition Program (MDAP) Controls Required by Law

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Dodging the Formal Acquisition Process

The Abrams M1A2 SEPv3 Battle Tank. (Photo: U.S. Army)

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“The 2018 National Defense Authorization Act provides $650 million to upgrade 29 M1A2s to the new configuration. That means we will be spending $22 million to upgrade a $6 million vehicle.

What makes this particularly curious is that at the same time the Army is dodging the MDAP process with the tank upgrade program, the Hercules tank recovery vehicle upgrade program is going through the MDAP process. That means the wrecker will receive greater scrutiny than the weapon it is meant to recover.”


“When Army leaders decided they needed an upgraded version of the Abrams tank, they wanted to get it without enduring what they consider to be a cumbersome formal acquisition process. Any program of this scale would ordinarily be classified as a Major Defense Acquisition Program (MDAP) and be subject to the oversight reviews and regulations that status entails. To avoid this, Army leaders claimed a major modernization effort to a weapon central to their very identity was a mere design tweak, and managed the project through the far less rigorous Engineering Change Proposal process. This is a problem. The MDAP process may be cumbersome, but its intended purpose is to ensure the Pentagon properly evaluates its needs and then enters into programs that will properly meet them. It is also meant to exert the kind of pressure necessary to keep costs under control. While the system is indisputably flawed (the F-35 is an MDAP), the services should not be permitted to simply ignore the laws. Doing so will almost certainly result in weapons of dubious combat value and more cost overruns.

In performing such a maneuver to avoid the toughest of the acquisitions process, the Army is hardly alone. All of the services are increasingly resorting to similar schemes for other high-profile programs. The danger to the taxpayers, to say nothing of the men and women who will have to take these systems into combat one day, is that these complex and expensive weapons systems aren’t subjected the kind of outside scrutiny necessary to ensure the services are purchasing suitable and effective equipment.

Acquisition Reform

Hardly a year goes by without some effort to modernize the Pentagon’s weapons buying process. Senator John McCain (R-AZ) succeeded in pushing into law a provision to split the Pentagon’s office of Acquisition, Technology & Logistics into at least two offices. The long-time chairman of the Senate Armed Services Committee believes this will allow the separate undersecretaries to focus more on their particular offices. The new office of Research and Engineering will focus on innovation while the Acquisition and Sustainment office deals with basic business functions associated with buying and maintaining new weapons. House Armed Services Committee chairman, Representative Mac Thornberry (R-TX), has introduced legislation meant to streamline the process for the past three years. The latest version would allow the services to purchase more items through commercial marketplaces. Previous similar efforts, such as when the Pentagon attempted to change the definition of commercial items to avoid the competitive bidding process, proved problematic. Earlier efforts were geared towards improving program business models and reducing the process’s reports and paperwork. Congress also effectively outsourced acquisition reform to the defense industry when it created the “Section 809 Panel” as part of the FY 2016 National Defense Authorization Act to make recommendations to streamline the way the Pentagon buys weapons. This panel is comprised of several members with deep ties to the defense industry and is the subject of a concerted lobbying effort by the contracting community.

The effectiveness of such efforts is not yet clear, but that might not matter. The usual result of most such efforts is an even more sluggish process—it is a rare problem that can’t be made worse with the addition of more bureaucracy.

Why the Military-Industrial-Congressional Complex Wants to Avoid the MDAP Process

From the perspective of the Pentagon, the defense contractors, and their allies on Capitol Hill, there are advantages in procuring weapon systems through means other than the formal acquisition process. The acquisition process is so complicated and involved that the Department of Defense created the Defense Acquisition University in 1991 to educate personnel on navigating various aspects of the process. A full explanation of the process would fill volumes, but even the basics provide a glimpse into the complexity of the process.

A Major Defense Acquisition Program goes through three separate phases. At the end of each phase, a program goes through a review process to determine whether it has met the criteria to move onto the next phase. These transitions are called “milestones.”

A project begins when the services identify a new military need, or what is known as a capability. This is done through the Joint Capabilities Integration and Development System. This process figures out whether a new weapon system is actually needed to fill the perceived capability gap or if a change in tactics or some other non-material solution can get the job done. This work is reviewed by the Joint Requirements Oversight Council. If they determine a new weapon system is needed, then it goes through the Material Solution Analysis Phase.

A program has to achieve 40 milestone requirements just to pass Milestone A into the second major phase of a program, the Technology Maturation & Risk Reduction Phase. These 40 requirements includes conducting an Analysis of Alternatives, which is a comparison of other weapons that could potentially fill the same need; an Independent Cost Estimate, which helps decision-makers decide if the weapon is something they can afford to pursue (or what tradeoffs should be made if it’s not); and developing a Test and Evaluation Master Plan, which is essential to establish clear testing benchmarks to evaluate how the new weapon system performs in combat. While plenty of redundancy exists within the process, it is meant to protect the interests of both the warfighters and taxpayers. The Government Accountability Office has noted the importance of following through with these steps as part of a knowledge-based process. If the services don’t do so, they create situations where programs “carry technology, design, and production risks into subsequent phases of the acquisition process that could result in cost growth or schedule delays.”

Ideally, multiple contractors will build prototypes that will then be tested as part of a competition to see which design performs the intended mission better. The most successful programs begin this way, with the Lightweight Fighter Program (F-16) and the A-X Program (A-10) being the most notable examples.

The awarding of a contract for the winning design marks Milestone B, and the program passes into the Engineering & Manufacturing Development Phase. The prime and sub-contractors then finalize the development of the system and begin manufacturing enough production-representative goods to complete the Initial Operational Test & Evaluation process.

The successful completion of the realistic combat and live-fire testing phase marks Milestone C, and the program proceeds to full-scale production and deployment to the troops.

Throughout this process, there are numerous review and decision points. This includes a review by the Defense Acquisition Board, which is made up of the Vice Chairman of the Joint Chiefs of Staff, Secretaries of the Military Departments, four undersecretaries of defense, the Director of Operational Test & Evaluation, and others.

Case Study: The Army’s New Tank

The Army commissioned General Dynamics to design an upgraded version of the M1A2 Abrams tank in 2015. The first of what is expected to be 1,500 upgraded versions of the Army’s Abrams tanks rolled off the assembly line at the Lima, Ohio, factory on October 4, 2017. The choice of contractors for the project was hardly a surprise as the Abrams tank is a General Dynamics product. That is not to suggest that another contractor could not perform the work. Other contractors like BAE Systems also build armored vehicles and their component systems. By designating the project as an Engineering Change Proposal, however, the Army had little need to open it to a competitive bidding process as “most ECPs occur in a sole source environment.”

To the casual observer, the Army’s newest tank looks very much like the existing tanks. The M1A2 SEPv3 is still essentially an Abrams tank on the outside. However, the vehicle is quite different on the inside. It sports a new suite of communications gear called the Joint Tactical Radio System, which is supposed to fully integrate the vehicle into the Army’s command and control network. To provide the necessary electricity to power all of the new electronics and conserve fuel in situations where the crew does not need to run the gas-turbine engine, an improved generator has been added inside the hull.

The tank uses the same M256 smooth-bore cannon as the existing M1A1 tanks, but the breach in this variant has been modified to use the Ammunition DataLink to be compatible with the advanced multi-purpose round. This allows the tank’s gunner to send a signal to the round right before it is fired, setting its detonation mode to one of three different settings. It can detonate on impact, detonate on a delay for obstacle reduction, or airburst. This single round replaces four existing rounds, reducing the logistical burden of the armored forces, which is always a great concern.

In response to the threat posed by IEDs, the new tank includes a Counter Remote Controlled Improvised Explosive Device electronic warfare package. Should all of that fail, or when enemy fighters use simpler low-tech command-wired IEDs (which they will), the tank also boasts additional armor protection.

These are not insignificant changes. They add significantly to an already extremely heavy tank. As someone who spent ten years operating in tanks, I can tell you this is a significant problem. The Abrams tank is already too heavy for most of the world’s bridges. This restricts the number of avenues a unit can take to reach an objective, making it much easier for the enemy to predict the unit’s movements. It also increases the logistics burden because a heavier tank requires more fuel.

Sources within the Army say the new variant is too heavy for the Army’s fleet of Heavy Equipment Transport vehicles. The Army relies on these vehicles to transport the tanks across long distances to conserve fuel and to reduce wear and tear on the tanks.

They also do not come cheaply. The 2018 National Defense Authorization Act provides $650 million to upgrade 29 M1A2s to the new configuration. That means we will be spending $22 million to upgrade a $6 million vehicle.

What makes this particularly curious is that at the same time the Army is dodging the MDAP process with the tank upgrade program, the Hercules tank recovery vehicle upgrade program is going through the MDAP process. That means the wrecker will receive greater scrutiny than the weapon it is meant to recover.

Case Study: F-35 Follow On Modernization

F-35A's touch down at RAF Fairford

An Airman with the Air Combat Command F-35A Heritage Flight team marshals an F-35A Lightning II to its parking spot on the flightline at Royal Air Force Fairford, England, June 30, 2016. The team flew to England for the Royal International Air Tattoo. (Photo: U.S. Air Force / Tech. Sgt. Jarad A. Denton)

The F-35 program is being managed through the regular MDAP process, but officials are now working furiously behind the scenes to prevent the next phase of it from following the same path. No one is quite sure what the latest incarnation of the F-35 will be able to do when the program completes the development and testing process, but that isn’t stopping officials from seeking funds for upgrades to the aircraft. They are continuing to develop a list of needed capabilities for the newer version, called Block 4.

The Pentagon estimates the cost just for the initial phase of the modernization program—the research, development, test and evaluation (RDT&E) phase—to be more than $3.9 billion through 2022. The Government Accountability Office correctly points out that this “would exceed the statutory and regulatory thresholds for what constitutes a major defense acquisitions program (MDAP), and would make it more expensive than many of the other MDAPs already in DOD’s portfolio.”

The F-35 Joint Program Office has strenuously resisted efforts to create a separate MDAP for the Block 4 modernization citing time and money concerns. The Joint Program Office wants to run the modernization program as part of the original contract from 2001. By dodging the MDAP process for this effort, the program would avoid many of the processes meant to ensure proper Congressional oversight. The program would not, for example, have to go through a Milestone B review, which would establish an acquisition program cost baseline and require regular reports to Congress about the program’s cost and performance progress.

Such a move also means the program would not be subject to the provisions of the Nunn-McCurdy amendment which establishes unit cost growth thresholds. This would require the Pentagon to notify Congress if the program’s unit cost grows by 25 percent and calls for the program’s cancellation if the cost grows by more than 50 percent. This, unfortunately, does not happen very often because the law includes a waiver provision that allows the Secretary of Defense to certify that the program is critical to national security and should be continued. Only one program, the Armed Reconnaissance Helicopter, has been cancelled as a direct result of a Nunn-McCurdy breach.

Case Study: The B-21 Raider

B-21

(Photo: US Air Force)

The biggest ticket item currently attempting to dodge public scrutiny is the Air Force’s newest bomber, the B-21 Raider. This program is being managed by the Air Force’s Rapid Capabilities Office, a secretive group that is conveniently not subject to many of the regulations Congress imposes upon most acquisition programs.

According the Air Force’s Rapid Capabilities Office website, this outfit has a key advantage the regular acquisition office does not:

“waivers to and deviations from any encumbering practices, procedures, policies, directives or regulations may be granted in order to ensure the timely accomplishment of the mission within applicable statutory guidance.”

The Air Force has been extremely cagey about releasing cost information about the new bomber. During the bid process, service leaders announced a $550 million per aircraft target cost. So far, Air Force leaders have refused to publicly releasethe value of the B-21’s development contract with Northrop Grumman. The stated reason for the secrecy about cost is that a potential adversary could derive information about the size, weight, and range. Apparently no one will be able to determine any of that information from the artist’s rendering of the new bomber, or from the list of subcontractors Air Force officials publicly announced.

Conclusion

The MDAP process is complex and does often fail to produce weapons that do what they are expected to do or come anywhere close to meeting the original cost expectations. The process is long over-due for a comprehensive streamlining effort. But even though the process is deeply flawed, the protections it includes were put there to protect the interests of the troops and the taxpayers. Just because the services find the process inconvenient, doesn’t justify their efforts to dodge the oversight mechanisms provided by federal law.

Unless Congress arrests this disturbing trend, the services are likely to continue to use these schemes to bypass the rules and regulations put in place to protect both the troops and the taxpayers. The people’s interests are served only when everyone involved in the process of buying new weapons have the correct information at the beginning. As Tom Christie, former Director, Operational Test and Evaluation wrote:

“Upfront realistic cost estimates and technical risk assessments, developed by independent organizations outside the chain of command for major programs, should inform Defense Acquisition Executives.  The requirement for those assessments to be independent, not performed by organizations already controlled by the existing self-interests sections of the bureaucracy is essential.”

It is understandable that the services want to speed up the process of fielding new weapon systems. While there are many flaws in the current acquisition system, it is not the root of the problem. Service leaders and their partners (and far too often future colleagues) in the defense industry keep pursuing unrealistic programs and Congress keeps voting for them. Dodging the current acquisition regulations will not fix that problem, but it will make it easier for all involved to hide the bad results from the people paying for them, but presumably not from those who would suffer the consequences if a weapon were to fail in combat.”

http://www.pogo.org/straus/issues/weapons/2018/dodging-the-formal-acquisition-process.html

 

 

 

The Unaffordable Pentagon Audit

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Unaffordable Pentagon Audit

“THE NATIONAL INTEREST”

“To perform this audit is both expensive and time-consuming, and in many cases duplicates already-existing proven DOD oversight mechanisms.

The audit is larger in scope and size than any other attempted of its kind, dissecting a vast global enterprise of more than two million people.

The total cost of the 2018 audit will be an eye-popping $847 million. That’s a lot for an already cash-strapped Pentagon—the equivalent of eight Air Force F-35 fighter jets.”


 “Who can forget the Pentagon hammer that cost $600? It may be apocryphal, but it has symbolized inefficient spending for more than two decades. And last year a newspaper headline breathlessly shouted, “Pentagon buries evidence of $125 billion in bureaucratic waste.”

So seemingly only a heretic would question the need to audit the Department of Defense. But what if a Pentagon audit represents a pyrrhic victory—a quest where the results won’t justify the cost?

The Pentagon is cooperating, having recently announced that it’s ready to undergo a financial audit after years of preparation, with DOD budget secretary David Norquist noting, “It is important that the Congress and the American people have confidence in DOD’s management of every taxpayer dollar.” Norquist went on to describe how annual audits will now become part of everyday life at DOD.

To be sure, DOD is to be commended for the hard work to get to this point. But before going too far down this road, we should assure ourselves that a costly and laborious annual financial audit of DOD, performed using commercially derived strict Generally Accepted Accounting Principles (GAAP), will result in a better-functioning DOD. It’s not at all clear it will.

Congress was the driving force behind the Pentagon audit, and has long bemoaned the fact that it has never been audited. Starting in 1990, and then again in 2010, Congress passed laws that required the Pentagon to undergo a full financial audit starting in fiscal year 2018.

Since then, elected officials rarely miss an opportunity to emphasize the importance of the audit. Sen. Chuck Grassley, for example, said in a recent speech on the Senate floor that “26 years of hard-core foot-dragging shows that internal resistance to auditing the books runs deep,” while in April, eight U.S. senators told Defense Secretary Mattis that they were concerned, statingthat “clean audits inherently provide controls that guard against fraud, waste, and abuse.”

Reasonable, right? But at what cost? Norquist also noted that to conduct the annual examination will require a small army of auditors—some 1,200—to examine every nook, cranny and ledger of the Pentagon’s sprawling bureaucracy. Norquist also estimated that the total cost of the 2018 audit will be an eye-popping $847 million. That’s a lot for an already cash-strapped Pentagon—the equivalent of eight Air Force F-35 fighter jets.

Why so expensive? Because, like corporate audits following similar standards, the Pentagon audit looks at much more than financial “books.” It also spot-checks property records and estimated values of millions of pieces of equipment and facilities, such as vintage armored personnel carriers and World War II–era armories, verifies data in personnel records for accuracy, such as marriage certificates and birthdays, and examines thousands of other records and systems.

The audit is larger in scope and size than any other attempted of its kind, dissecting a vast global enterprise of more than two million people. To perform this audit is both expensive and time-consuming, and in many cases duplicates already-existing proven DOD oversight mechanisms.

So why do it? Good question. U.S. corporations by law undergo annual strict financial audits to assure potential investors in capital markets of the soundness of their offerings as described in their financial statements. But DOD is not a corporation, and has no corresponding need.

And, perhaps most significantly, financial audits are not the best tools for discovering inefficiencies, waste or fraud. For those purposes, there are far better methods such as zero-based budgeting, contract or waste audits, strong management and continuous process-improvement techniques. Indeed, the few U.S. companies that don’t have to undergo a financial audit usually avoidit, since it usually does not result in significant reductions in waste or fraud compared to the costs involved.

U.S. taxpayers deserve confidence that the Defense Department operates in an honest and efficient manner. But at a time when our military is deteriorating for want of adequate resources, highlighted daily by ship accidents, crushing maintenance backlogs and munitions shortages, an $847 million annual audit—accompanied by, at best, modest expectations for improvement—is a mistake the Pentagon can ill afford.”

http://nationalinterest.org/feature/the-unaffordable-pentagon-audit-23784

 

 

 

 

 

Pentagon Assigns 1,200 Auditors for Unprecedented Financial Review

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Pentagon Audit U.S. News dot com

“DEFENSE ONE”

“After decades of false starts, the Defense Department aims to issue its first audit report in November 2018.

The Defense Department is finally beginning an audit of its finances, following years of calls for greater transparency and failed attempts to make its accounts fully reviewable.”

_________________________________________________________________________________________

“Defense Comptroller David Norquist made the announcement Thursday, saying the department’s inspector general would begin the audit in December. Starting in 2018, Norquist said, the IG will issue reports on the Pentagon’s finances annually. The first audit will be released in November of next year.

Congress has pushed for Defense to make itself audit-ready for decades, but the Pentagon has repeatedly missed deadlines for investigators to fully dive into the minutiae of its $600 billion in annual spending. For the last several years, department officials and lawmakers of all ideological backgrounds have targeted 2017 as the year to finally get Defense ready for its financial review. The Pentagon was statutorily required to be audit-ready by September, and Norquist pledged in his May confirmation hearing to release a full financial review in 2018 whether the department was ready or not.

The department will deploy 1,200 auditors to examine every corner of its finances. The IG has hired independent public accounting firms to help it analyze each military service and to produce an overarching, department-wide report.

It is important that the Congress and the American people have confidence in DOD’s management of every taxpayer dollar,” Norquist said. “With consistent feedback from auditors, we can focus on improving the processes of our day-to-day work.”

He added the annual audits also would ensure the military receives adequate supplies and equipment.

“It demonstrates our commitment to fiscal responsibility and maximizing the value of every taxpayer dollar that is entrusted to us,” said Dana White, a Pentagon spokeswoman, on Thursday.

The Government Accountability Office first put the Pentagon’s lack of audit-readiness on its “high-risk list” in 1995. Disparate systems among the department’s various branches and components, coupled with a dramatic increase in the use of contracts in recent years, have inhibited the efforts to boost oversight. Obama administration officials acknowledged their failure to make Defense audit-ready hindered officials’ ability to track the smallest of expenses and created a public confidence issue.

“The taxpayer will never be convinced if we can’t do what every public company does” and achieve full auditability, then-Defense Comptroller Robert Hale toldGovernment Executive in 2014.

Rep. Mike Conway, R-Texas, who chairs the House Armed Services Committee’s panel on oversight and investigations, commended department leadership.

“Today’s announcement is a major turning point for Department of Defense auditability,” Conway said. “The commitment to perform a full, annual audit of the DoD will provide the taxpayers the accountability they deserve, as well as present opportunities for increased efficiency within the department.”

http://www.defenseone.com/politics/2017/12/pentagon-defense-auditors-first-financial-review/144447/?oref=d-river&utm_source=Sailthru&utm_medium=email&utm_campaign=EBB%2012.12.2017&utm_term=Editorial%20-%20Early%20Bird%20Brief

 

 

America’s Military-Industrial Addiction

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Addition to MIC

President Dwight D. Eisenhower

“ZERO HEDGE”

“If Americans generally don’t support wars or engagement in the world, why do they seem to reflexively support massive military budgets?

The military and the vast economic network it feeds presents a “complex” issue that involves millions of self-interested Americans in much the way Eisenhower predicted, but few are willing to truly forsake.”

_________________________________________________________________________________________

“Polls show that Americans are tired of endless wars in faraway lands, but many cheer President Trump’s showering money on the Pentagon and its contractors, a paradox that President Eisenhower foresaw…

The Military-Industrial Complex has loomed over America ever since President Dwight D. Eisenhower warned of its growing influence during his prescient farewell address on Jan. 17, 1961. The Vietnam War followed shortly thereafter, and its bloody consequences cemented the image of the Military-Industrial Complex (MIC) as a faceless cadre of profit-seeking warmongers who’ve wrested control of the foreign policy. That was certainly borne out by the war’s utter senselessness … and by tales of profiteering by well-connected contractors like Brown & Root.

Over five decades, four major wars and a dozen-odd interventions later, we often talk about the Military-Industrial Complex as if we’re referring to a nefarious, flag-draped Death Star floating just beyond the reach of helpless Americans who’d generally prefer that war was not, as the great Gen. Smedley Darlington Butler aptly put it, little more than a money-making “racket.”

The feeling of powerlessness that the MIC engenders in “average Americans” makes a lot of sense if you just follow the money coming out of Capitol Hill. The Project on Government Oversight (POGO) tabulated all “defense-related spending” for both 2017 and 2018, and it hit nearly $1.1 trillion for each of the two years. The “defense-related” part is important because the annual National Defense Authorization Act, a.k.a. the defense budget, doesn’t fully account for all the various forms of national security spending that gets peppered around a half-dozen agencies.

It’s a phenomenon that noted Pentagon watchdog William Hartung has tracked for years. He recently dissected it into “no less than 10 categories of national security spending.” Amazingly only one of those is the actual Pentagon budget. The others include spending on wars, on homeland security, on military aid, on intelligence, on nukes, on recruitment, on veterans, on interest payments and on “other defense” — which includes “a number of flows of defense-related funding that go to agencies other than the Pentagon.”

Perhaps most amazingly, Hartung noted in TomDisptach that the inflation-adjusted “base” defense budgets of the last couple years is “higher than at the height of President Ronald Reagan’s massive buildup of the 1980s and is now nearing the post-World War II funding peak.” And that’s just the “base” budget, meaning the roughly $600 billion “defense-only” portion of the overall package. Like POGO, Hartung puts an annual price tag of nearly $1.1 trillion on the whole enchilada of military-related spending.

The MIC’s ‘Swamp Creatures’

To secure their share of this grandiloquent banquet, the defense industry’s lobbyists stampede Capitol Hill like well-heeled wildebeest, each jockeying for a plum position at the trough. This year, a robust collection of 208 defense companies spent $93,937,493 to deploy 728 “reported” lobbyists (apparently some go unreported) to feed this year’s trumped-up, $700 billion defense-only budget, according to OpenSecrets.org. Last year they spent $128,845,198 to secure their profitable pieces of the government pie.

And this reliable yearly harvest, along with the revolving doors connecting defense contractors with Capitol Hill, K Street and the Pentagon, is why so many critics blame the masters of war behind the MIC for turning war into a cash machine.

But the cash machine is not confined to the Beltway. There are ATM branches around the country. Much in the way it lavishes Congress with lobbying largesse, the defense industry works hand-in-glove with the Pentagon to spread the appropriations around the nation. This “spread the wealth” strategy may be equally as important as the “inside the Beltway” lobbying that garners so much of our attention and disdain.

Just go to U.S. Department of Defense’s contract announcement webpage on any weekday to get a good sense of the “contracts valued at $7 million or more” that are “announced each business day at 5 p.m.” A recent survey of these “awards” found the usual suspects like Raytheon, Lockheed Martin and General Dynamics. The MIC was well-represented. But many millions of dollars were also “won” by companies most Americans have never heard of … like this sampling from one day at the end of October:

  • Longbow LLC, Orlando Florida, got $183,474,414 for radar electronic units with the stipulation that work will be performed in Orlando, Florida.
  • Gradkell Systems Inc., Huntsville, Alabama, got $75,000,000 for systems operations and maintenance at Fort Belvoir, Virginia
  • Dawson Federal Inc., San Antonio, Texas; and A&H-Ambica JV LLC, Livonia, Michigan; and Frontier Services Inc., Kansas City, Missouri, will share a $45,000,000 for repair and alternations for land ports of entry in North Dakota and Minnesota.
  • TRAX International Corp., Las Vegas, Nevada, got a $9,203,652 contract modification for non-personal test support services that will be performed in Yuma, Arizona, and Fort Greely, Alaska,
  • Railroad Construction Co. Inc., Paterson, New Jersey, got a $9,344,963 contract modification for base operations support services to be performed in Colts Neck, New Jersey.
  • Belleville Shoe Co., Belleville, Illinois, got $63,973,889 for hot-weather combat boots that will be made in Illinois.
  • American Apparel Inc., Selma, Alabama, got $48,411,186 for combat utility uniforms that will be made in Alabama.
  • National Industries for the Blind, Alexandria, Virginia, got a $12,884,595 contract modification to make and advanced combat helmet pad suspension system. The “locations of performance” are Virginia, Pennsylvania and North Carolina.

Sharing the Largesse

Clearly, the DoD is large enough, and smart enough, to award contracts to companies throughout the 50 states. Yes, it is a function of the sheer size or, more forebodingly, the utter “pervasiveness” of the military in American life. But it is also a strategy. And it’s a tactic readily apparent in a contract recently awarded to Raytheon.

On Oct. 31, 2017, they got a $29,455,672 contract modification for missions systems equipment; computing environment hardware; and software research, test and development. The modification stipulates that the work will spread around the country to “Portsmouth, Rhode Island (46 percent); Tewksbury, Massachusetts (36 percent); Marlboro, Massachusetts (6 percent); Port Hueneme, California (5 percent); San Diego, California (4 percent); and Bath, Maine (3 percent).”

Frankly, it’s a brilliant move that began in the Cold War. The more Congressional districts that got defense dollars, the more votes the defense budget was likely to receive on Capitol Hill. Over time, it evolved into its own underlying rationale for the budget.

As veteran journalist William Greider wrote in the Aug. 16, 1984 issue of Rolling Stone, “The entire political system, including liberals as well as conservatives, is held hostage by the politics of defense spending. Even the most well intentioned are captive to it. And this is a fundamental reason why the Pentagon budget is irrationally bloated and why America is mobilizing for war in a time of peace.”

The peace-time mobilization Greider referred to was the Reagan build-up that, as William Hartung noted, is currently being surpassed by America’s “War on Terror” binge. Then, as now … the US was at peace at home, meddling around the world and running up a huge bill in the process. And then, as now … the spending seems unstoppable.

And as an unnamed “arms-control lobbyist” told Grieder, “It’s a fact of life. I don’t see how you can ask members of Congress to vote against their own districts. If I were a member of Congress, I might vote that way, too.”

Essentially, members of Congress act as secondary lobbyists for the defense industry by making sure their constituents have a vested interest in seeing the defense budget is both robust and untouchable. But they are not alone. Because the states also reap what the Pentagon sows … and, in the wake of the massive post-9/11 splurge, they’ve begun quantifying the impact of defense spending on their economies. It helps them make their specific case for keeping the spigot open.

Enter the National Conference of State Legislatures (NCSL), which notes, or touts, that the Department of Defense (DoD) “operates more than 420 military installations in the 50 states, the District of Columbia, Guam and Puerto Rico.” Additionally, the NCSL is understandably impressed by a DoD analysis that found the department’s “$408 billion on payroll and contracts in Fiscal Year 2015” translated into “approximately 2.3 percent of U.S. gross domestic product (GDP).”

And they’ve become a clearinghouse for state governments’ economic impact studies of defense spending. Here’s a sampling of recent data compiled on the NSCL website:

  • In 2015, for example, military installations in North Carolinasupported 578,000 jobs, $34 billion in personal income and $66 billion in gross state product. This amounts to roughly 10 percent of the state’s overall economy.
  • In 2014, Coloradolawmakers appropriated $300,000 in state funds to examine the comprehensive value of military activities across the state’s seven major installations. The state Department of Military and Veterans Affairs released its study in May 2015, reporting a total economic impact of $27 billion.
  • Kentuckyhas also taken steps to measure military activity, releasing its fifth study in June 2016. The military spent approximately $12 billion in Kentucky during 2014-15. With 38,700 active duty and civilian employees, military employment exceeds the next largest state employer by more than 21,000 jobs.
  • In Michigan, for example, defense spending in Fiscal Year 2014 supported 105,000 jobs, added more than $9 billion in gross state product and created nearly $10 billion in personal income. A 2016 study sponsored by the Michigan Defense Center presents a statewide strategy to preserve Army and Air National Guard facilities following a future Base Realignment and Closure (BRAC) round as well as to attract new missions. 

Electoral Impact

But that’s not all. According to the DoD study cited above, the biggest recipients of DoD dollars are (in order): Virginia, California, Texas, Maryland and Florida. And among the top 18 host states for military bases, electorally important states like California, Florida and Texas lead the nation.

And that’s the real rub … this has an electoral impact. Because the constituency for defense spending isn’t just the 1 percent percent of Americans who actively serve in the military or 7 percent of Americans who’ve served sometime in their lives, but it is also the millions of Americans who directly or indirectly make a living off of the “defense-related” largesse that passes through the Pentagon like grass through a goose.

It’s a dirty little secret that Donald Trump exploited throughout the 2016 presidential campaign. Somehow, he was able to criticize wasting money on foreign wars and the neoconservative interventionism of the Bushes, the neoliberal interventionism of Hillary Clinton, and, at the same time, moan endlessly about the “depleted” military despite “years of record-high spending.” He went on to promise a massive increase in the defense budget, a massive increase in naval construction and a huge nuclear arsenal.

And, much to the approval of many Americans, he’s delivered. A Morning Consult/Politico poll showed increased defense spending was the most popular among a variety of spending priorities presented to voters … even as voters express trepidation about the coming of another war. A pair of NBC News/Survey Monkey polls found that 76 percent of Americans are “worried” the United States “will become engaged in a major war in the next four years” and only 25 percent want America to become “more active” in world affairs.

More to the point, only 20 percent of Americans wanted to increase the troop level in Afghanistan after Trump’s stay-the-course speech in August, but Gallup’s three decade-long tracking poll found that the belief the U.S. spends “too little” on defense is at its highest point (37 percent) since it spiked after 9/11 (41 percent). The previous highpoint was 51 percent in 1981 when Ronald Reagan was elected in no small part on the promise of a major build-up.

He says it when he lords over the sale of weapon systems to foreign powers or he visits a naval shipyard or goes to one of his post-election rallies to proclaim to “We’re building up our military like never before.” Frankly, he’s giving the people what they want. Although they may be war-weary, they’ve not tired of the dispersal system that Greider wrote about during Reagan’s big spree.”

http://www.zerohedge.com/news/2017-12-03/americas-military-industrial-addiction

 

 

 

2017 Federal Government “Fumbles Report” – $473.6 Billion in Wasteful And Inefficient Spending

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Governmnt Fumbles

“FEDERAL NEWS RADIO”

 

“Expired body armor, a $1 billion trolley, Shakespearean sheep — the third volume of Sen. James Lankford’s (R-Okla.)  “Federal Fumbles” runs the gamut of waste and inefficiency.

The report highlights 100 examples of the government’s wasteful spending, lack of oversight, needed structural changes, and wasted effort, the Oklahoma Republican said during a Monday press conference on Capitol Hill.”


“This book is designed to be a reminder that we still have an issue with debt and deficit in America,” Lankford said. “For some reason, the conversation has slowed on the issue of debt and deficit; it should not, this should be an ongoing part of our conversation.”

The current debt is $20.49 trillion, and the fiscal 2017 deficit is $666 billion. Lankford’s report represents $473.6 billion in waste and inefficient spending.

“We released this resource again as a set of ideas to say if we are going to get control of our spending, if we’re going to manage our economy and our spending better, then there are specific ways to do it,” Lankford said. “There are essential things that we need to be able to spend money on: transportation, national defense, disaster relief, things that are essential for us to be able to do. For us to be able to afford to do those things, we’ve got to be able to pay better attention to other things.”

This year’s report includes everything from offbeat arts grants that are worth less than $40,000, to more serious big budget items like the $400 billion production delay of the F-35 Joint Strike Fighter.

The reason for the range of examples, Lankford said, is to illustrate a set of larger issues and the need to address them with straightforward solutions, starting with the budget and appropriations process, as well as the grant process.

“Over the years there’s been a lot of attention paid to contracting and how we’re actually putting checks out for individual contracts,” Lankford said. “That same attention has not been paid to the grant process. Because of that, it’s the easiest way to be able to actually get dollars out the door. More and more agencies are spending more and more on grants. Those grants have little to no oversight, so the grants need additional oversight in the process and we need to be able to fix that.”

Among those grants was a $30,000 National Endowment for the Arts grant to support a production called “Doggie Hamlet.”

The production, according to the report, “actually includes humans yelling and running toward very confused sheep and dogs. The production, which does not include any lines from ‘Hamlet,’ is conducted outdoors in a 30-by-50-foot field in New Hampshire.”

Lankford said he’d seen clips of the performance, and while it’s fine if the local community wants to fund it, “I’m just confused why the people of Oklahoma, they’re paying for the production of ‘Doggie Hamlet’ in New Hampshire.”

Similarly, the Transportation Department gave $1 billion to San Diego to expand its trolley service by about 11 miles. That means federal taxpayers in Oklahoma — and across the country — are also paying $100 million per mile for a trolley they won’t use, Lankford said.

While those grants are examples of lack of oversight, a $40,000 study by the National Science Foundation to learn how refugees are handling their move to Iceland, is an example of wasteful spending.

An example of needed structural change is the delay of a biometric entry and exit visa program for immigration. Another is the 450-day time frame it takes to hire one border patrol officer.

“These issues sound simplistic to solve, but they are real structural problems both with hiring and how things actually operate in these different agencies,” Lankford said. “These need to be addressed.”

Lankford said the ways to improve upon these problems include fixing Senate rules and streamlining the budget process.

“I think we should do appropriations every two years rather than every year,” Lankford said. “That gives us more time with the committees to not have to worry about putting things together for this year.”

Lankford said Senate rules also prevent debate and solving some of the harder issues. If lawmakers can’t debate the issues and discuss how to solve them, they won’t be fixed.

“Some of these things come up every single year and everyone says why is it not addressed again,” Lankford said. “Some of it is a structural problem in the United States Senate, where we cannot get to the issues and be able to address those. My hope is that we can actually get to the point that we can fix the structural problems here in the Senate and actually be able to do the real work.”

First downs, touchdowns

Along with fumbles, the report also highlights improvements.

Some of these “touchdowns” include the Environmental Protection Agency’s decision to repeal a rule about governing small rivers and bodies of water, an Agriculture Department decision to loosen requirements around public school lunches and the Trump administration’s “one in, two out” practice.

“In just the first half of 2017, federal agencies withdrew or rolled back 469 agency actions that had been announced in the fall of 2016 and cut in half the number of planned regulations that will have an impact of more than $100 million a year on our economy,” the report stated.

Areas that didn’t make it to the end zone but still made up yards include more oversight and accountability for a council that coordinates transportation for low income people to medical appointments. Another area is improving communication to avoid duplicative grants or programs, like requiring agencies to submit a report to Congress if it wants to award a grant that is identical to an existing program.

“Our focus is that this is the to-do list for this next year and as we work through this to-do list, our staff is assigned to say ‘where can we find places to be able to address this; in appropriations language, with the authorizing committees, working with the administration, where can we help find this,’” Lankford said. “And we help try to identify some that we’ve already seen in the past year in this as well as some of the things that are ongoing and current appropriations language this year to try to address it.”

https://federalnewsradio.com/management/2017/11/federal-fumbles-report-a-to-do-list-reminder-to-keep-debt-and-deficit-in-conversation/