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Wednesday, May 13, 2015

Giving the fox the keys to the chicken house?

This evening I come to you with a message of leave-taking and farewell, and to share a few final thoughts with you, my countrymen. 

We face a hostile ideology -- global in scope, atheistic in character, ruthless in purpose, and insidious in method. Unhappily the danger is poses promises to be of indefinite duration. To meet it successfully, there is called for, not so much the emotional and transitory sacrifices of crisis, but rather those which enable us to carry forward steadily, surely, and without complaint the burdens of a prolonged and complex struggle -- with liberty the stake. Only thus shall we remain, despite every provocation, on our charted course toward permanent peace and human betterment.

Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research -- these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.

But each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs -- balance between the private and the public economy, balance between cost and hoped for advantage -- balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between actions of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.

A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific/technological elite.

It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system -- ever aiming toward the supreme goals of our free society.

--Farewell address of President Dwight D. Eisenhower



In House bill, arms makers wrote their own rules (Read the full story at the link.)
In his bill set to pass this week to overhaul how the Pentagon buys weapons, the new chairman of the House Armed Services Committee relied heavily on those with most at stake: the nation’s arms makers.

Defense contractors played a major role in crafting the proposal by Rep. Mac Thornberry designed to reform the Pentagon acquisition system, according to a POLITICO comparison of the legislation and industry proposals. Some of the provisions in the Texas Republican’s bill could end up boosting company profits — at the expense of taxpayers.

For example, the bill would weaken the power of the Pentagon’s chief weapons tester, an independent watchdog who answers directly to the secretary of defense and often uncovers flaws in big-ticket weapon systems. That was a provision proposed by the Aerospace Industries Association, which represents the nation’s leading defense and aerospace firms.

The legislation would encourage the defense secretary make sure contracting officials use the the standard of lowest price when choosing winning bids only in “appropriate circumstances” — potentially giving officials wide latitude to bypass a less expensive solution. That provision can be traced back to the National Defense Industrial Association, another influential trade group funded by Pentagon contractors. Thornberry’s staff also received input from major defense contractors like Boeing and Raytheon and trade groups like the Professional Services Council and the Information Technology Industry Council.

Some industry players aren’t bashful about the extent to which they shaped the bill.

“There were, literally, 10 provisions of Chairman Thornberry’s Agile Acquisition bill that had some kind of direct or indirect lineage from our recommendations,” said Will Goodman, a former Senate aide who’s now vice president of policy at NDIA. “They were tightly aligned and in some cases were word-for-word adaptations.”

For his part, Thornberry pushes back on the idea that industry played too much of a role in crafting the legislation. “Obviously if you want to improve a system, you’ve got to get the viewpoint of the people who work in the system every day, and that in this case includes the industry.”

But a number of experts and watchdog groups were wary of the industry role if not outright critical of its influence — especially given that six of the congressman’s top 10 sources of campaign contributions are defense contractors, according to the Center for Responsive Politics.

A particular area of concern is whether the changes will chip away at the power of the Pentagon’s testing office, which puts new weapons through rigorous inspections to ensure they’d work as advertised in combat. The office has long been a thorn in the side of contractors and Pentagon program managers. Its testing regimens often turn up major problems that need to be corrected, such as flaws in the software that controls the new F-35 fighter jet.

The Aerospace Industries Association, which advocates for more than 300 aerospace and defense companies, urged Thornberry to hold the Pentagon’s testing office “accountable for program delays and cost increases attributable to their actions.”

The bill would do exactly that, requiring the Pentagon’s director of operational test and evaluation to “take appropriate action to ensure that the conduct of operational test and evaluation activities do not unnecessarily impede program schedules or increase program costs.”

“We think this would make it more likely that testing could be deferred due to cost, and we would prefer problems be found during testing instead of on the battlefield,” said Mandy Smithberger, who directs the Straus Military Reform Project at the Project On Government Oversight, a non-profit watchdog group. “Contractors don’t like the testing office because it’s the office that finds out when there are deficiencies in their systems, and it provides Congress some of the best ammunition for performing oversight of their systems.”

Efforts to reform the military’s acquisition bureaucracy date back at least to the Civil War, when congressional investigators turned up “mismanagement in defense acquisitions that resulted in the government buying weapons that did not work, horses that were diseased, and food that was rotten,” as the Congressional Research Service explained in a 2013 report.

The sweeping proposal, which was put together in coordination with the House Armed Services Committee’s ranking Democrat, Adam Smith of Washington state, would cut the paperwork required of Pentagon program managers. It would also make it easier for program managers to decide which types of contracts to use, reversing rules that give preference to fixed-price contracts — which require contractors, not the government, to cover unexpected cost growth in their contracts.

Not all provisions are designed to help contractors. The bill would, for example, make permanent a training fund that expires in 2018 to help Pentagon managers negotiate more successfully with contractors.

Thornberry said he looked for proposals that could be considered low-hanging fruit — drawing support from the Pentagon, industry and think tanks. He maintains that he sought the views of experts and think tanks, such as the Center for Strategic and International Studies and the American Enterprise Institute, as well as watchdog groups such as Citizens Against Government Waste. In addition, the Pentagon submitted a number of proposals — many of which were included in the final bill, which was unveiled in March and rolled it into this year’s National Defense Authorization Act, a massive annual measure that sets defense policy and is being considered on the House floor this week.

But contractors appear to have been especially influential in getting their suggestions included in the final measure. For instance, it would raise the threshold for simplified acquisitions from $100,000 to $500,000 — a provision requested by the Aerospace Industries Association. Under such acquisitions, contracts can be awarded through a streamlined procurement process.

Thornberry’s bill would also require studies on why losing contractors dispute the bidding process and who should own the intellectual-property rights for government-sponsored research — both of which were requested by industry associations.

Another proposal in Thornberry’s bill would make it easier for military products to be labeled “commercial,” a designation that comes with fewer oversight requirements — and a change advocated by the global technology firm Honeywell, which ranks among the Pentagon’s top 30 contractors.

Goodman, the vice president of policy at NDIA, said his group’s suggestions to Thornberry were about advancing “good public policy,” explaining that “good public policy is good for the defense industry.”

The committee report accompanying Thornberry’s bill even cites NDIA, which represents more than 1,600 military contractors and suppliers. The bill notes that the trade group recommended that acquisition laws should be given expiration dates — and reviewed on a rolling basis to determine if they should be renewed.

“The committee is interested in examining this approach,” the report says.

Pentagon acquisition expert Andrew Hunter, of the Center for Strategic and International Studies, noted there’s an inherent “tension” between the industry and the government.

“You need to pay attention to industry’s concerns, for sure,” said Hunter, the former head of the Pentagon’s Joint Rapid Acquisition Cell. But, he noted, defense companies are “also obviously motivated by the profit motive, and their interests with the government don’t always fully align.”

Thornberry, too, acknowledges the inherent conflict.

“They have their perspective, absolutely, and you have to know that every step of the way,” he said of the defense industry. “They’re looking after their company’s interest or their shareholder interests, and that company or shareholder interest, it may not be the same as the taxpayer’s interest or the Department of Defense’s bureaucratic interests, or the national interest.”

Senate Armed Services Chairman John McCain (R-Ariz.), who will be working with Thornberry to craft the final version of the acquisition-reform proposal during House-Senate negotiations, said he planned to include some reforms of his own in the Senate version of the defense authorization measure.

And he promised they wouldn’t be industry-friendly.

“You’re gonna see some very tough stuff out of our bill,” he said. “We’ll be glad to get feedback from anybody, but I guarantee you it is tough.”
For mine, some of the suggestions are not as dubious as implied, but the devil is always in the details: the regulations. So, we'll see.

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