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Problems in DoD Acquisitions

In reference to your article, “Pentagon’s Strained Relationship With Vendors Getting Worse,” (National Defense Blog, July 16), I was thinking that many of what the government considers “overcharging” is the direct result of inept purchasing personnel in dealing with manufacturers.

I have seen many times where a manufacturer must restart a line of production (tooling, software and manufacturing tapes, personnel) in order to manufacture an item  for the government. There is not enough demand for a specific product to keep the lines open all the time. They therefore have a minimum run requirement in order to make restarting the line equitable to both the customer and the manufacturer.

Generally, the start-up costs include minimum material orders from another company, as well as costs associated with making the changes internally to “run” the product. The company may state that the minimum order is $10,000 and a minimum run of 10 or more products. This equates to approximately $1,000 per item if the 10 are purchased.

The government procurement officer will often say they only need one, what is the cost?  They are told the same thing, one or ten, the cost is $10,000. They will always come back and order one. This leaves the manufacturer most times with excess materials that they do not want to store due to limited space or other conditions, and must dispose of.

The sad part of the story is, most times the government will come back to the manufacturers six or eight months later and request a quote for another single item, which is ludicrous.
Having been both active duty and a government-employed civilian for over 31 years, and still working with government purchasing personnel, I have always questioned this practice. It’s almost as if these people consider manufacturers as being crooks who are trying to sell them more of what they want instead of just their immediate needs, when the manufacturer is only trying to pass on cost effective practices and do right by the customer.

So, I guess the end story is, don’t always accept the $600 toilet seat, $400 hammer and $800 coffee pot at face value and assume all businesses and manufacturers are crooks out to get the government’s money. They aren’t.

Dave Smith
Marinette, WI

Problems in DoD Acquisitions (Continued)

I recently read your article, “Hope and Despair in Government Procurement,” (July 2014) and offer the following comments and questions.

While the Pentagon certainly has plenty of room for improvement in this area, I find it interesting your article isn’t more clear on the role of other key stakeholders in the weapons system procurement process: Congress, the defense industry and the lobbyists in between. Weapons system procurement is immensely complex. I’ll point to the C-17 production line as an example of how external forces significantly influence program lifecycle costs, such as in 2010 when Congress added $2.5 billion to the program to purchase 10 additional aircraft during a time in which the Air Force preferred to ramp down production in order to fund other priorities.

The DoD had a plan, but Congress trumped it, and maybe for valid reasons. Keeping the production line open preserved jobs and some level of economic and political stability both domestically and abroad. Scenarios like this play out in different ways across nearly all of our major programs. Congress is the decision maker.

Contractual complexities may prevent us from ever getting to a point when we can accurately estimate the “real” cost of a weapon system. In missile development, for example, industry regularly delivers products that must be sent back for revision for any number of reasons. It is my understanding that when the test community fails a weapon in test, the vendor will fix it, but normally only on the taxpayers’ dime. This is one way programs experience delays and cost overruns.

The government did not sign a contract to purchase underperforming equipment, so why does the government have to pay for software or hardware to be fixed when it should have worked correctly the first time? This may lead to other questions as well, such as whether we can improve the requirements process. Requirements and contracts are intimately linked, with room for improvement in both areas.

What shouldn’t be lost in this discussion is the complexity of the technology being developed and produced in these programs. We are usually talking about the world’s most advanced programs. I’m not trying to give the DoD a free pass in basic budgeting, but it’s not easy to estimate costs on items whose underlying technologies have never been mass produced, much less integrated into cutting edge platforms for use in the most demanding of environments. Many of these programs end up laying the foundation for use of advanced technologies in the civil sector. It is hard to put a price on this.

Under Secretary of Defense for Acquisition, Technology and Logistics Frank Kendall’s assessment of the F-35 as being “acquisition malpractice” is a case in point. While the DoD certainly played a role in how this program was developed (I find the number of factors and complexity of the program to be astounding), they certainly did not go it alone. The vendor was right in the middle pitching their next generation ability to pull off the concurrency procurement model.

This is a tremendously important subject, but I’m afraid it has no simple solution. I tend to agree that throwing more legislation on top the current system is not likely the right answer. 

I do know, however, this is not simply a Pentagon problem. The key to improved defense procurement lies in the evolution of overarching policy, along with the associated relationships between the DoD, Congress and industry. Thanks for writing about it.

Chris McCarthy
Sent via email

Budget Fights

I read your article, “On Third Anniversary of Budget Control Act, Fallout Still Unclear,” (National Defense blog, July 29). There are always more good ideas for spending other people’s money. For every one of the military chiefs’ priorities, the secretary of Health and Human Services has a different priority. The national debt is about $17 trillion and the GDP is about $17 trillion. The GDP is growing at 2 to 3 percent, while the debt — even if “the federal deficit has plummeted” (your words) — is growing at 12 percent.

Even the most optimistic person in the country doesn’t believe we can grow much faster than perhaps 4 to 5 percent on a sustained basis; while even if we cut the deficit in half, it will grow faster than GDP.  The Office of Management and Budget forecast is for the annual deficits to be back in the trillion-dollar range in the next decade. Add to this the fact that the Treasury is financing the debt at about 2.5 percent per year (or about $400 billion per year) — and we had sequestration because Congress could not find $110 billion in cuts that they could agree on. Finish with the fact that at 2.5 percent, the interest rate on the debt is about half the long-term average.

What happens when we can no longer sell our debt at 2.5 percent? Even at 3.5 percent, we as a nation would have to find another $170 billion. Where? How? Taxes?

I am pro-defense. That does not mean that I believe every dollar in the DoD budget is critical, or that every dollar in the non-DoD budget is less (or more) important than the lowest priority dollar in the defense budget. But the bottom line is that the nation is on an unsustainable trajectory. There are no longer any easy answers.

Dennis O. Madl
Alexandria, VA

Nonlethal Weapons

In reference to several articles in the July 2014 issue of National Defense on nonlethal weapons, with both a military and a law enforcement background, I wince every time I hear or read the term “nonlethal weapon.” It is an oxymoron at a minimum, and wildly inaccurate at all other times.

Most law enforcement agencies have figured out that the term is a public relations disaster and a legal nightmare, as in, “So sergeant, can you explain to the jury and the court how you killed the victim with your nonlethal weapon?” and, therefore, now refer to them as “less-lethal” weapons/ammunition/operations.

A person who is struck directly by a 40mm or 66mm round can be killed by them, a bean-bag or a rubber round. If they hit the wrong spot, they can break ribs. An elderly person caught up in a mob can have a heart attack. Smoke or other chemicals can kill a person with respiratory problems. Electronic weapons can disable medical devices that a person depends on, and so on.

Even blank ammunition can cost someone an eye or cause a serious contaminated burn wound, if fired too close, as has happened during training accidents.

Please, just stop using the term “nonlethal weapon” as it is inaccurate and counter-productive, and instead refer to them as “less-lethal” weapons.

Mike Mintzer
Stafford, VA

Topics: Defense Department, DOD Budget, DOD Policy, Procurement, Acquisition Reform, Defense Department

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