House measure pushes Pentagon to squeeze costs - Army News | News from Afghanistan & Iraq - Army Times

House measure pushes Pentagon to squeeze costs

Citing a looming budget crisis, the House of Representatives passed legislation Wednesday designed to force the military to be more cost-conscious when it buys a vast range of goods and services — from computers and software to lawn mowing services.

The IMPROVE Acquisition Act could save $27 billion a year, said the bill’s chief sponsor, Rep. Robert Andrews, D-N.J.

The act passed in the House on a 417–3 vote amid warnings from House members that the nation’s huge deficit will likely mean that future defense budgets will have less tolerance for waste.

The measure originally aimed to improve the defense acquisition by:

• Demanding more accountability among acquisition workers.

• Improving financial management so Pentagon spending can be audited.

• Expanding the industrial base to increase competition.

• Rewarding acquisition workers who save the military money and punishing those who don’t.

But during three hours of debate before the bill passed, lawmakers approved 16 amendments. Among them are measures to help small businesses get Pentagon contracts, protect titanium producers, promote diversity in the acquisition work force, boost energy efficiency and make price a more import factor in contract awards.

Some of the amendments may do more harm than good to acquisition reform, said Alan Chvotkin, executive vice president of the Professional Services Council.

“Every time you add another set of requirements, you make doing business with Defense Department a little more unique and a little more challenging,” he said.

Over the course of a year, Andrews headed a House Armed Services Committee panel that examined defense acquisition processes. That panel “identified a legitimate set of issues and outlined a fair set of solutions,” Chvotkin said.

But the legislation based on the proposed solutions “adds stuff unrelated to what Andrews was trying to accomplish,” and the amendments made on the House floor “went even further afield,” Chvotkin said.

One troubling amendment, for example, would allow contracting officers to switch vendors if a new vendor could offer at least 15 percent savings without a decrease in quality of the product being bought.

For example, if gasoline prices drop, a contracting officer could switch vendors to obtain a 15 percent discount “provided that doing so does not constitute a breach of contract.” The amendment was proposed by Rep. Kathy Dahlkemper, D-Pa.

“We already have a method for competition at the task order level,” said Chvotkin. “This might encourage companies to sit out a competition and then come in and say, ‘I can do it for 15 percent cheaper.’ ”

Another amendment would make the cost of goods and services a more important factor in making contract awards.

At present, there is no guidance to contracting officers on how much consideration to give price when deciding who wins contracts, and the Defense Department frequently rejects the lowest cost, said Rep. Alan Grayson, D-Fla.

Grayson’s amendment would require contracting officers to make low cost at least 50 percent of the deciding factor in awarding contracts. The 50 percent requirement can be waived in certain circumstances, but the contracting officer must explain why, Grayson said.

The Pentagon has wasted millions of dollars by buying fuel and other commodities at high prices when it can get the same thing from other vendors for less, he said.

An amendment by Rep. Mike Quigley, D-Ill. would require the Defense Department to make energy efficiency a factor when it awards contracts. The Marine Corps burns 800,000 gallons of fuel a day in Afghanistan, Quigley said. More fuel efficient vehicles and weapons would reduce fuel consumption, reduce the number of fuel convoys and reduce the number of Marines required for hazardous convoy duty, he said.

And since the military is the government’s largest consumer of energy by far, conservation by the military could save substantial money and add to efforts to protect the environment, he said.

The Defense Department is already the government’s most aggressive agency on pursuing good energy policies, said Rep. Roscoe Bartlett, R-Md., who co-sponsored the energy efficiency amendment.

Several amendments aimed to help small businesses compete against defense giants to win military contracts.

One by Rep. Gwen Moore, D-Wis., could eventually curb the practice of “bundling contracts.”

Bundling means combining several small contracts into one larger one. In theory, bundling can cut costs and speed up delivery, but in practice it favors large companies over small ones, Moore said.

“When the rubber hits the road at the Defense Department, small businesses find a giant pothole,” she said. Her amendment doesn’t ban bundling, but requires a study to assess how much bundling hurts small businesses.

“We need to bring more businesses into defense procurement, not push them out,” said Rep. Susan Davis, D-Calif.