CONGRESSWOMAN ELISE STEFANIK
H.R. 2101 is being considered on the floor under suspension of the rules, requiring a two-thirds majority vote for passage. This legislation was introduced by Rep. Ike Skelton (D-MO) and Rep. John McHugh (R-NY) on April 27, 2009.
H.R. 2101 reforms the Department of Defense's weapons acquisition process and requires the Secretary to assign responsibility to independent officials within the Pentagon for oversight of weapons cost estimation, systems engineering, and performance assessment.
Acquisition Organization: The bill requires the designation of an official to serve as the principal advisor throughout the acquisition process for the following oversight areas: cost estimation, systems engineering, and performance assessment. The same official may serve as advisor for more than one of these functions.
The cost estimation official will establish policies to govern the cost estimation and cost analysis process and will have sole authority to select confidence levels for cost estimates. The systems engineering official will issue policies and procedures on the use of systems engineering and developmental testing to enhance the reliance of major acquisition programs. The performance assessment official will issue policies and procedures for assessing Pentagon acquisition programs and will assess the suitability of programs' baseline descriptions as the basis for performance recommendations. Each of these officials will issue an annual report.
H.R. 2101 requires the Department of Defense's chief technology officer to assess the technological maturity of critical technologies of major programs prior to proceeding with system development or production.
The legislation also requires the Joint Requirements Oversight Council to seek and consider the input of the commanders of the unified combatant commands in formulating and reviewing joint military requirements.
Acquisition Policy: The Secretary of Defense will ensure that the acquisition strategy for each program includes measures to ensure competition, or the option of competition, at the prime contract and at certain subcontract levels throughout the program's lifecycle.
H.R. 2101 requires the Milestone Decision Authority (generally, the Under Secretary of Defense for Acquisition, Technology, and Logistics) to track cost and schedule growth for major programs before a final decision is made to proceed with system development on a project, a point in the process called "Milestone B", in order to consider alternatives solutions early in the acquisition process. The bill also requires annual reviews of programs that have received waivers for the entrance criteria at Milestone B and those which have been restructured after a significant cost overrun to determine the extent to which these high risk programs are achieving cost and schedule performance. H.R. 2101 requires programs to have successfully completed a preliminary design review before receiving Milestone B approval, with certain limited exceptions.
The legislation also requires the Secretary to determine the root cause of critical cost growth and determine whether to terminate or restructure a program and to submit a determination to Congress. If the program is restructured, the bill requires certification that the restructured program is essential to national security, that there are no lower cost alternatives, new cost estimates are reasonable, and the program management structure is adequate. Likewise, a restructured program must meet the entrance criteria for the latest acquisition milestone.
The bill requires the Pentagon's Panel on Contracting Integrity to present recommendations to the Secretary on measures to eliminate or mitigate organizational conflicts of interest in the acquisition of major systems. After these recommendations are made, the Secretary is required to revise the Defense Supplement to the Federal Acquisition Regulations accordingly to address organizational conflicts of interest by contractors.
H.R. 2101 requires the Secretary to recognize excellent performance by individuals and teams in the acquisition of defense products and services. It would allow the award of cash bonuses, if such a bonus is authorized by other law.
Finally, the legislation requires the Comptroller General to assess the mechanisms DoD uses to consider trade-offs among cost, schedule, and performance in the acquisition of major weapons systems and to make recommendations for improving upon these mechanisms.
H.R. 2101 was reported out of the Armed Services Committee by a vote of 59-0. The Senate passed a slightly different version of the bill by a vote of 93-0 (S. 454). These bills reflect bipartisan efforts to reform the Department of Defense's weapons acquisition process which is often characterized by over-budget costs.
The Government Accountability Office (GAO) found that as of 2009 the Department of Defense (DOD) had $296 billion of cost growth on 96 major weapons systems. A 20% improvement could save the American taxpayer as much as $30 billion. The report found that the major programs considered would eventually cost $1.6 trillion. Included among these programs are the Joint Strike Fighter, the Army's Future Combat System vehicles, the ballistic-missile defense system, the Virginia-class submarine, and the V-22 Osprey tilt-rotor aircraft.
Weapons systems cost overruns are often due to inadequate technical knowledge which leads to unrealistic cost and time estimates for project completion. Expensive complications also arise when technical requirements are changed during the course of a project. The net effect of this trend is that fewer weapons are finally purchased and that they are delayed in reaching the battlefield.
The Congressional Budget Office estimates that implementing H.R. 2101 would cost $55 million over five years, assuming the appropriation of necessary funds.