I recently discussed corruption in the Small Business Administration’s 8(a) program, which sets aside federal contracts for minority-owned or other “disadvantaged” small businesses. A ProPublica investigation into set-asides for Alaskan Native Corporations found that subcontractors and large companies in the other 49 states have been reaping the financial benefits.
The Washington Post recently featured an op-ed by Reps. James McGovern (D-MA) and Walter Jones (R-NC) on the U.S. mission in Afghanistan. This particular bipartisan pairing isn’t particularly noteworthy; the two men have collaborated before. But the arguments presented in the piece — one set designed to appeal to conservatives, the other aimed at liberals — have the potential to join together a much broader left-right coalition in opposition to an open-ended mission that, according to McGovern and Jones, has already cost U.S. taxpayers $450 billion dollars, and whose costs are accumulating at a rate of nearly $10 billion every month.
Secretary of Defense Robert Gates is poised to axe or significantly restructure a number of high-profile weapons platforms, and otherwise rein in the Pentagon’s budget. The reports present these initiatives as intended to preempt greater scrutiny of the military’s budget by Congress.
A couple of weeks ago I discussed the rising cost of the Pentagon’s F-35 Joint Strike Fighter program. Pentagon officials told the Senate Armed Services Committee that costs for the F-35 had jumped more than 50 percent since the program began in 2001. Now the Pentagon has informed Congress that the price tag is going to be even higher when new estimates are completed in the summer.
The Pentagon has informed Congress about another of its procurement projects that is plagued by cost overruns. In other news, the sun will rise and set today, and the pope is Catholic.
The Department of Defense’s Defense Contract Audit Agency is responsible for performing all contract audits at the department. Unfortunately, the agency seems to have developed an excessively cozy relationship with the contractors that it is supposed to be overseeing. That is bad news for taxpayers because of the massive size of DoD’s contracting activities.
Summarizing a new Government Accountability Office study, the Washington Post reports that "the cost of building and operating the controversial U.S. ballistic missile sites in Europe could substantially exceed the original estimate of more than $4 billion."
Wow, a bipartisan effort to actually do something about government waste. From the Washington Post today:
A bill to end cost overruns in major weapons systems would create a powerful new Pentagon position — director of independent cost assessments — to review cost analyses and estimates, separately from the military branch requesting the program.
Those reviews, unlike in the current process, would take place at key points in the acquisition process before a weapons program can proceed, according to legislation sponsored by Sen. Carl M. Levin (D-Mich.) and Sen. John McCain (R-Ariz.)
This seems like a step forward, but cost overruns are a big problem across the entire federal government, not just at the Pentagon. Federal financial management of energy, highway, and computer projects has been appalling, for example. I’ve written about this here and elsewhere.
The government needs to buy weapons, and so we should try to improve the Pentagon process as best we can. However, the federal government does not need to buy highways, airports, air traffic control computers and many other things that have chronic cost overruns. Those items should be privatized.
Federal cost-cutting should be a central focus of the next president. One effort that should be bipartisan is overhauling the government’s out-of-control procurement system. Federal contractors routinely get away with outrageous cost overruns at taxpayer expense. From today’s Wall Street Journal:
Despite billions of dollars in cost overruns and years of delay, Lockheed Martin Corp. and U.S. Navy officials are confident they will hang on to next year’s funding for development of a new presidential helicopter…. The program initially called for about $6.1 billion in spending to develop and build the next generation of so-called Marine One choppers…. [B]ut the expected cost of the program has now ballooned to an estimated $11.2 billion…. This program fits the pattern of Edward’s Budget Law — when the government claims that a new project will cost $1, the ultimate taxpayer cost will be about $2 or more.