Defense Deceit

It is no surprise DoD is faced with billions in weapons contract overruns. One lawmaker thinks he has the solution — yet another oversight entity.

Senate Armed Services Committee Chair Sen. Carl Levin has announced he hopes to establish an office (to be mandated in an amended 2009 Defense Authorization Bill) that would control contract costs that have blasted past their original estimates by nearly $300 billion. 

The proposed office of the director for independent cost estimate (the pricing czar) would perform its own estimates on how much new military weapons programs would cost before major systems are given the go-ahead. It appears new program costs routinely are underestimated by 30 percent to 40 percent because of “limited knowledge of the critical technologies and optimistic assumptions.” A GAO report due out cites the services’ accepting unrealistically low cost estimates from contractors and program managers as a significant concern. 

Don’t confuse the price czar with any office that already exists to perform this function. One might recall contract cost control is a part of the mission of the Defense Contract Management Agency (DCMA). According to DCMA’s Web site:

“We are an independent combat support agency within the Department of Defense (DoD). We are the Department’s contract manager, responsible for ensuring Federal acquisition programs (systems, supplies, and services) are delivered on time, within projected cost or price, and meet performance requirements.” 


The pricing czar also should not be confused with the Pentagon’s acquisition czar and undersecretary of defense for acquisition, technology, and logistics, John Young, who oversees DCMA. It seems it is not really up to that group to catch the reported 95 “major” weapons systems that blew past their original estimates. 

Apparently no one has clued in Levin or his cronies. 

Our guess is the services are getting exactly what they want and choose not to account for the budget-busting behaviors to which they are addicted. (Navy?) Fixed-price contracts amidst this service insanity? Just put the gun in the contractor’s mouth. Senator Levin and his well-meaning bipartisan crusaders want to correct a system plagued by vanity and the quest for perfection. Hanging out the “Cost Control” shingle won’t do it — as proved more than once. 

Program managers have been unable or unwilling to control the costs of their own programs. Without behavioral changes in the services, “control” might amount to miring or halting the acquisition process.

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