Senate bill targets DOD cost overruns

Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.) introduced a bill this week aimed at curbing the cost and scheduling overruns on large defense contracts, reports GovExec.

Their legislation, the 2009 Weapon Systems Acquisition Reform Act, would require re-examination of defense contracts if their costs increase by more than 25 percent from the initial estimate.

The Defense Department’s 95 largest acquisition programs are an average of two years behind schedule and have exceeded their original budgets by a combined total of almost $300 billion, according to Levin.

The bill contains provisions that would tighten the requirements of the rarely enforced 1982 Nunn-McCurdy law, which mandates that Defense must cancel any weapons program that experiences cost overruns of more than 25 percent unless it can show that it is essential to national security, no cheaper alternative is available and the revised costs are reasonable.

The Levin-McCain bill also would require the DOD to:

• Re-establish systems engineering organizations and developmental testing capabilities.
• Introduce trade-offs between cost, schedule and performance early in the program cycle. 
• Use prototypes more often, including competitive prototypes, to prove that new technologies work before attempting to produce them. 
• Start an annual awards program to recognize the performance of the Defense acquisition workforce. 
• Establish the position of director of independent cost assessment to ensure that cost estimates for major defense acquisition programs are fair, reliable and unbiased.