Pentagon Seeks to Limit Procurement Cost Growth, Official Says

WASHINGTON, June 3, 2008 – The Defense Department is working to limit the growth of procurement costs for new equipment, the Pentagon’s top acquisition official reported in written testimony submitted to the Senate Armed Services Committee today.

“Has there been cost growth in some DoD programs? Yes, and I’m not here to condone it,” John J. Young Jr., undersecretary of defense for acquisition, technology and logistics, noted in his written testimony.

“Indeed, I am seeking to strictly limit cost growth,” Young emphasized.

The Senate committee is concerned about a recent Government Accountability Office report citing cost growth of nearly $300 billion across 95 defense acquisition programs. The GAO is an investigative arm of Congress.

The acquisition system needs to be improved, Young acknowledged, but he said it isn’t on a downward spiral. He questioned the GAO report’s metrics, noting that “a few poor performers incorrectly drive many of the conclusions that GAO makes.”

The department’s decision to buy more unmanned aerial vehicles and C-130J aircraft, Young wrote, is treated as cost growth according to the GAO report’s methodology. For example, he said, about $18 billion of the cost growth cited in the GAO report can be attributed to programs with quantity increases.

“These are exactly the kinds of things that are helping the warfighter in both Iraq and Afghanistan, but are used to bolster the perception that the Department of Defense is performing poorly,” Young said.

Yet, Young said that he and the department “look forward to working with GAO to select better metrics and displays that will portray our incremental performance changes.”

Defense Secretary Robert M. Gates, too, has expressed concern about procurement practices that drive up the cost of new programs and expend additional taxpayer dollars.

In a speech given to Heritage Foundation members during a recent trip to Colorado Springs, Colo., Gates cited his belief that “the perennial procurement cycle -- going back many decades -- of adding layer upon layer of cost and complexity onto fewer and fewer platforms that take longer and longer to build must come to an end.”

Source: DOD

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