White House Objects to Defense Bill Contracting Provision Empowering Service Chiefs

In a Tuesday statement threatening a veto of the Senate Defense authorization bill, the White House objected chiefly to off-budget war funding and the continuing of sequestration. But it also took aim at lawmakers’ plans to empower the military service chiefs in weapons acquisition and at smaller provisions affecting the contractor community.

As both chambers of Congress begin floor consideration of the $612 billion fiscal 2016 National Defense Authorization Act, the veto threat “strongly” objected to a Senate provision in section 843 designed to alleviate procurement delays prompted, as the Armed Services Committee report put it, by “multiple, duplicative reviews within the Office of the Secretary of Defense and services.” The bill would decentralize decision making on weapons system milestones for service-unique programs and limit documentation of approvals.

The administration called that plan “inconsistent with the secretary of Defense’s exercise of authority, direction, and control over all of the DoD programs and activities.  Since DoD’s founding, the secretary of Defense has served as the principal assistant to the president in all matters relating to DoD and subordinated the departments of the Army, Navy, and Air Force to the secretary’s authority.”

The White House added: “This provision would undermine this principle by seeking to exclude the secretary and his assistants from certain matters entrusted exclusively to the military departments” and also reduce the ability of the secretary and the acquisitions undersecretary “to guard against unwarranted optimism in program planning and budget formulation, and prevent excessive risk taking during execution -- all of which is essential to avoiding overruns and costly delays.”

The proposed limit on documentation without a ruling from the deputy chief management officer “abrogates the ability of the secretary and undersecretary to conduct routine execution monitoring of programs, thus handcuffing their ability to intercede unless and only until notified programs are at risk of failure,” the White House added.

Separately, the veto statement objected to a provision that would prevent the Defense Contract Audit Agency from receiving reimbursements from non-Defense agencies in most circumstances to reduce its audit backlog, saying that change would “cause additional burdens on the already overtaxed staff of the DoD inspector general, DCAA auditors and on industry, and would decrease efficiency within DCAA.” Contractors, it added, would be burdened by having to deal with multiple audit groups.

The contracting community appeared to be pleased with the Senate bill’s overall direction, as compared with the House version.

“The Senate bill takes some positive steps in reiterating the government’s preference for commercially available items and acquisitions after appropriate market research,” Roger Jordan, vice president for government relations at the Professional Services Council, told Government Executive. More than the House bill, it “aggressively” clarifies which laws and regulations apply to commercial items and preserves their longevity.

Trey Hodgkins, senior vice president at the IT Alliance for Public Sector, at a May 27 briefing for reporters said the information technology contracting industry is pleased to see the influence of many of its acquisition reform proposals as well as the easing of barriers to tapping companies’ existing commercial items. “We have a risk-averse acquisition workforce where people don’t want their inspector general contradicting them and their boss being called to a hearing to say why,” he said.

One provision, for example, calls for a consistent curriculum at the Defense Acquisition University and other training schools in best practices to streamline purchases of, say, commercial computer chips that, though being phased out by industry, might benefit the government for 20 more years.

ITAP also expressed support for the bill’s plan for a new advisory council of industry and acquisition experts to review how the Federal Acquisition Regulation erects “barriers” to entry, the first such body since the 1990s. And it applauded new liability protections for firms accused of supplying counterfeit goods but that can show they followed Defense Department guidance on prevention and detection. “NDAA is frequently a vehicle for governmentwide changes,” Hodgkins added, meaning that some of the proposed reforms in bid protests and determining fair pricing, for example, could end up applying to the General Services Administration and other agencies.

Contractor representatives agreed that the Senate bill’s more long-term approach reflects the fact that Armed Services Committee Chairman John McCain, R-Ariz., likely feels he must act quickly within a limited “window” of two years before he risks losing his chairmanship to a possible Democratic takeover. Though both chambers’ agendas are packed, observers say action could be completed before the July 4 recess.