Senator wants post created to curb rising weapons costs

Frustrated with multibillion-dollar cost increases plaguing many of the Defense Department's largest weapons programs, Senate Armed Services Chairman Carl Levin, D-Mich., said Tuesday he wants to create a high-ranking Pentagon position aimed at keeping cost increases down. Levin announced his plans during a hearing Tuesday morning. He said he will offer an amendment establishing a Pentagon director of independent cost assessment when the Senate takes up the fiscal 2009 defense authorization bill in the next several weeks.

Levin and other lawmakers have sharply criticized the Defense Department's acquisition processes, which they said have contributed to what the Government Accountability Office estimates is a total of $295 billion in cost increases for the Pentagon's 95 largest programs. "It will take a fundamental change in the structure and culture of the acquisition system to address this problem," Levin said. "This new, independent office would review cost estimates on all major defense acquisition programs and develop its own independent cost estimates, to ensure that the information on which so many of our program and budget decisions are based is fair, unbiased and reliable."

John Young, undersecretary of Defense for acquisition, technology and logistics, withheld judgment on Levin's proposal during Tuesday's hearing. But he said he believes the head of the Pentagon's Cost Analysis Improvement Group already does much of the work Levin has proposed for that position. However, Katherine Schinasi, GAO managing director of acquisition and sourcing management, said that the CAIG estimates do not come "anywhere close to what the real cost of the program would be." Developing a new post, she said, is "clearly something that is needed." Levin said he would model the position on the Pentagon's director of operational test and evaluation, a senior adviser to the Defense secretary charged with overseeing and analyzing tests for major acquisition programs.

Lawmakers also expressed alarm over a November report from the Defense Contract Management Agency, released Tuesday by the Project on Government Oversight, indicating that Lockheed Martin's military aircraft division does not comply with industry guidelines on tracking and managing costs before they spiral out of control. Sen. Claire McCaskill, D-Mo., a former state auditor, called the issue a "big, big problem," while Sen. John Warner, R-Va., expressed concerns that it would hurt the United States' reputation on the international Joint Strike Fighter program managed by Lockheed Martin. Young said that the Pentagon is working with Lockheed to remedy the situation.

Pentagon officials have established monthly "milestones" for the defense firm and will penalize Lockheed Martin $10 million for each milestone it does not meet, Young said. Meanwhile, DCMA officials meet with Lockheed Martin officials every two weeks, Young added. "We have worked closely with the DCMA team since November, resulting in an approved corrective action plan," a Lockheed spokesman said Tuesday, adding that the firm has addressed every DCMA recommendation and are putting improvements in place.