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News Room
 
OPENING STATEMENT OF CHAIRMAN C.W. BILL YOUNG
Hearing on Defense Contracting
 
September 7th, 2006 - -
Committee on Appropriations, Subcommittee on Defense
OPENING STATEMENT OF CHAIRMAN C.W. BILL YOUNG
September 7, 2006
HEARING ON DEFENSE CONTRACTING
 
          The Subcommittee will come to order.  This morning we will be conducting an oversight hearing on defense contracting and acquisition. 
          As our witnesses know, this Subcommittee has been extremely supportive of efforts to provide the men and women of the Armed Forces with the best, most advanced war fighting technology available.  In doing so, we understand that our nation’s Defense cannot be bought on the cheap.  We also know that great care must be taken by the Defense Department and the military services in contracting for goods and services to ensure that the taxpayer receives the best value available.  This maximizes the amount of Defense items that can be provided for the war fighter, and maintains public support for our national security expenditures.
          Over the years, we have seen a number of disturbing trends in defense contracting and acquisition.  These include:
 
1.     Cost, schedule, and performance problems on major procurement programs.  The December 2005 Department of Defense Selected Acquisition Report, or SAR, estimated that the total cost of the 85 major defense acquisition programs was $1,584.7 billion, $45.7 billion higher than the September 2005 figure – a 2.6 percent increase over a 3-month period.  Even more disturbing, current cost estimates for 25 of the 85 programs exceed original baseline estimates by 50 percent.
2.      Management of technological risk.  All too often, we see major programs moving to procurement without successful completion of research and development milestones.  For instance, according to the Committee’s Surveys and Investigation staff, in the Future Combat Systems program of the Army only 1 of 51 critical technologies reached Technical Readiness Level 6 or higher prior to FCS entering the System Design and Development phase.  Technical Readiness Level 7 signifies when technologies are at approximately final form with demonstrated performance outside a laboratory.
3.     Cost estimates.  It appears that cost estimates for major programs are understated at the outset in order to get military service, OSD, and Congressional buy-in.  This is exacerbated by the tendency of the services to add new requirements during system development.
4.     Contracting procedures and oversight, including use of lead system integrators (or LSI’s) and other middlemen.  As the Government Accountability Office points out in the briefing paper that is before the members, contract obligations within the Department of Defense have doubled in the past five years, to almost $300 billion, while the acquisition-related job force has stayed flat at approximately 70,000 employees.
 
This is obviously a large, complex problem.  However, it is important that this Committee review these issues and take whatever steps are possible within the context of the appropriations process to address these matters.  Our responsibility is to be a responsible steward of the taxpayer’s funds; we ask much of our men and women in uniform, and they deserve our strong support.  However, that support is threatened if collectively we cannot justify the large sums we are providing for contracts and procurement. 
In that regard, I have asked for testimony from the Comptroller General of the United States; the Under Secretary of Defense for Acquisition; and representatives of acquisition branches of the three major services to be with us today.  I hope they will tell us what we can do to deal with these problems, and how we can avoid them in the future.  While addressing the broad problems facing Defense contracting and procurement, we must also ask hard questions about specific programs – many of which enjoy strong support on Capitol Hill.  It’s my hope that addressing these problems will assist in the effort to bring these important programs into a position where they successfully meet the needs identified by the Department of Defense for our war fighters.
Today our witnesses include:
 
The Honorable David Walker, Comptroller General, Government Accountability Office;
 
The Honorable Kenneth J. Krieg, Under Secretary of Defense for Acquisition, Technology and Logistics;
 
The Honorable Dr. Delores M. Etter, Assistant Secretary of the Navy for Research, Development and Acquisition;
 
The Honorable Sue C. Payton, Assistant Secretary of the Air Force for Acquisition; and
  
Lieutenant General Joseph L. Yakovac, Jr., Military Deputy to the Assistant Secretary of the Army for Acquisition, Logistics and Technology
 
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« previous Press Release next Press Release »
 
September 2006 Press Releases  « August   October »     « 2005   2007 » 
  25th - Highlights: FY07 Homeland Security Appropriations Bill
  22nd - CONFEREES APPROVE FY07 DEFENSE APPROPRIATIONS BILL
  12th - Remarks of Chairman Harold Rogers Before House Policy Committee Regarding Immigration Reform
  7th - current Press Release
  5th - Defense Subcommittee to Probe Cost Over-runs on Defense Contracts





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