Congress funds Defense acquisition reforms in fiscal 2010 budget

The House and Senate passed a $3.5 trillion fiscal 2010 federal budget on Thursday, in which they called for major acquisition reforms to rein in Defense Department spending and a $500 million fund to bolster the acquisition workforce.

Both chambers endorsed the Obama administration's effort to make acquisition reform a top priority, a position also backed in the 2009 Weapon Systems Acquisition Reform Act approved by the Senate Armed Services Committee on Thursday.

Acquisition costs for 96 major weapon systems programs, with a total cost of $296 billion, increased 25 percent from original estimates, the Government Accountability Office reported on Wednesday. The cost overruns mean Defense does not have the funds to acquire the equipment it needs, according to the House budget bill.

The Senate bill said acquisition reform will ensure Defense gets "the best possible value" for its proposed $533.7 billion in fiscal 2010, up 4 percent from $513 billion in fiscal 2009.

Congress asked Defense to take a sharp look at its service contracts, which GAO reported in March 2008 as increasing 77 percent, from $85.1 billion in 1996 to $151 billion in 2006.

Because Defense has relied more on contractors to help manage programs and to carry out operations on battlefields in Iraq and Afghanistan, the House budget bill called on the department to review the role of its contractors, including the degree to which they perform inherently governmental functions.

The pendulum on contract management has slowly started to swing back from contractors to the government, said Warren Suss, president of the Suss Consulting. He said the Navy's $10 billion-plus Next-Generation Enterprise Network was a prime example of the shift, with the Navy taking over program management functions it ceded to EDS on the Navy Marine Corps Intranet network, which the NGEN contract will replace.

The Senate allocated $500 million to the acquisition workforce development plan in fiscal 2010, almost seven times the $75 million set aside in the fiscal 2009 budget, to "oversee acquisition programs and get better value for our defense dollar."

The House noted that Defense could save billions of dollars by acting on 781 unspecified recommendations GAO has made since 2001. The bill also urged congressional Defense committees to identify wasteful practices, fraud and abuse.

Defense also must reassess the role Cold War weapon systems play in meeting 21st century threats and explore alternative energy sources to help reduce its multibillion dollar fuel and electricity bills, according to the House report.