McCain amendment would increase defense acquisition oversight

When the Senate resumes consideration of the fiscal 2006 defense authorization bill after the August recess, lawmakers will debate language that would toughen congressional oversight of major defense programs.

The 13-page amendment is sponsored by Armed Services Airland Subcommittee Chairman John McCain, R-Ariz., who has led the push in Congress to change the Pentagon's procurement policies to give lawmakers better insight into how the military buys its weapons systems.

Already, the Senate Armed Services Committee has devoted several pages of its conference report to overhauling acquisition, much of which was pushed by McCain. This amendment would go further, targeting leasing agreements and government-industry program management partnerships McCain has gone after in the last several years.

The amendment would tighten requirements on leases, requiring the Defense secretary to "certify" to Congress that leasing is the most cost effective approach and complies with all laws and regulations. Congressional defense committees then would have the ability to request the comptroller general or the Pentagon inspector general review the proposal.

The language also establishes that lease agreements -- which typically draw less scrutiny -- be subject to the same statutory and regulatory requirements of other, more traditional acquisitions.

The new language comes after more than three years of investigations into the Air Force's overpriced deal to lease a new fleet of aerial refueling tankers from Boeing Co.

The $23.5 billion deal was considered the biggest procurement scandal in more than two decades. It eventually led to the resignation of Air Force Secretary James Roche and the indictment of two top Boeing executives.

In addition, the McCain amendment clamps down on management contracts for major defense programs that give industry program-management and contract-award rights over multibillion dollar government efforts. It would require the Defense secretary, within 90 days of the legislation's enactment, to detail to Congress a set of regulations on management for these programs.

If passed, the amendment would require the Defense secretary to detail measures preventing conflicts of interests on the part of "management contractors," who often have a vital voice in awarding lucrative subcontracts.

The language also would prohibit management contractors having any financial stake in the development or production of any individual subsystems unless the Defense secretary "determines in writing that it is necessary in the interest of the national defense," according to the amendment.

The goal is to prevent or minimize chances that a company managing a program can bid on themselves.

Such language seems to address concerns over Boeing's management of the Army's $125 billion Future Combat Systems program, the centerpiece of the service's transformation efforts. Boeing holds a lucrative subcontract on the program.