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The Pentagon will unveil new rules later on Tuesday aimed at ending years of massive cost overruns on major weapons programs, but congressional efforts to protect home-district jobs may turn Defense Secretary Robert Gates’ cost-cutting drive into his toughest battle yet.
Gates and chief weapons buyer Ashton Carter are due to announce the next steps in a major drive to cut overhead costs by $100 billion over the next five years while ensuring real growth in defense spending of at least one percent.
Gates has won the grudging admiration of many watchdog groups, impressed with the Obama administration‘s victory in finally halting the Lockheed Martin Corp F-22 fighter and its continuing drive to hold contractors accountable for budget overruns and schedule delays.
Industry executives, grateful that Gates is fighting for continued real growth in defense spending, are already scrambling to align themselves with the Gates initiative, cutting jobs, selling off divisions and streamlining operations to ensure continued profits in a more difficult market.
But Congress, which ultimately controls the Pentagon’s purse strings, is still putting up a huge fight over any program changes given lawmakers’ need to protect high-paying aerospace jobs.
For the past four straight years lawmakers have disregarded White House veto threats to reject the Pentagon’s efforts to cancel a $6.8 billion second engine being developed for the Lockheed F-35 fighter by General Electric Co and Britain’s Rolls Royce.
The battle over the second engine will continue now that Congress is back in session, with the defense subcommittee of the Senate Appropriations Committee due to meet on Tuesday to mark up its defense spending bill for fiscal 2011.
MUCH ADO ABOUT NOTHING?
“Congress is the last universe that’s going to embrace real acquisition reform and weapons cuts,” said Danielle Brian, executive director of the non-partisan watchdog group, Project on Government Oversight.
Brian said she is cautiously optimistic about the newest Gates efficiency initiative, given the Obama administration’s willingness to cancel the F-22 fighter program and other projects favored by Congress.
But lawmakers’ “continued slavish loyalty to jobs in the defense industry”, and Gates’ plans to retire next year threaten to undermine the reforms. Too often in the past, well-intended reforms were rolled back once their champion was out of the picture, she said.
She also faulted Gates for waffling on one key issue facing the Pentagon’s biggest acquisition program, the Lockheed F-35 Joint Strike Fighter, which Pentagon officials project will cost up to $382 billion over the next two decades.
“Gates has been applying discipline in the Pentagon in various troubled areas and the Joint Strike Fighter is an area where the hemorrhaging needs to be staunched the most,” she said, noting that Gates had rejected congressional moves to tie the number of planes to be purchased to successful testing.
“This is all much ado about nothing,” said Loren Thompson of the Virginia-based Lexington Institute, a consultant with close ties to defense companies and government officials.
He said Carter had told him last week the Pentagon still planned to add thousands of civil servants to its payrolls to bolster oversight of acquisition programs at the very time that weapons makers were cutting jobs left and right.
“Industry is trying to save money by cutting jobs, but the Pentagon is planning to add 20,000 civil servants,” he said. “What does that tell you about their efficiency drive?”
Thompson said Gates’ plans to retire next year could also undermine his ability to ram through program changes like the F-22 cancellation last year.
“There’s no evidence that a lame duck defense secretary can change the buying culture that the Pentagon has developed over two generations,” he said.
Copyright © 2010 Reuters