AIA Supports Dialogue with Industry on Defense Acquisition Initiative
June 28, 2010
Today, the aerospace and defense industry was briefed on a number of initiatives the Defense Department is proposing to achieve cost savings in the defense acquisition system while maintaining a “vibrant and financially healthy defense industry.” Secretary Gates and Undersecretary Carter should be congratulated for opening a dialogue to partner with industry to cut costs, improve productivity and achieve efficiencies.
We share the Department’s interest in this matter, and in fact last year AIA released a report outlining a number of initiatives the Department can take to reduce costs in the defense acquisition system. While the administration is moving forward on some of these initiatives, such as improving the acquisition workforce, there is much work that remains to be done.
Undersecretary Carter outlined a number of objectives including:
- Get better buying power for warfighter and taxpayer;
- Improve defense industry productivity;
- Remove government impediments to leanness, and
- Avoid program turbulence.
We are pleased that the Department is taking a comprehensive look at what drives up costs in government procurements. One of the most significant challenges faced in reducing costs is that the government continues to impose new government unique contracting regulations that as early as 1994 were estimated by Coopers and Lybrand to increase the cost of products that DOD buys by 18 percent -- costing the American taxpayer billions of dollars each year. Since the release of that report, new requirements and additional costs continue to be imposed.
In order to achieve lower costs for producing DOD systems we request that the administration and the Congress:
- Update the report originally done by Coopers and Lybrand to provide a fact-based position from which to make decisions;
- Reform our export control regime to protect national security by ensuring stringent controls on sensitive technologies, while adopting more efficient licensing management for programs dependent on allied collaboration;
- Assess and modify legislation that uses the acquisition process to promote policy initiatives rather than seeking the best equipment at the best price;
- Support legislation that will promote U.S. defense industry competitiveness in the global aerospace and defense market and ratify the US/UK and the US/AUS Defense Trade Treaties;
- Rationalize oversight to eliminate duplicative and overlapping auditing and reviews;
- Repeal the 3 percent withholding tax that the Department of Defense itself estimates will cost $17 billion over the Future Year Defense Program, and
- Stabilize program requirements, procurement plans, budgets and configurations.
We look forward to working with the administration over the next several months to develop the required facts and data and advance the dialogue through a series of meetings that will be necessary to achieve our common goals.
