House panel proposes more defense contracting reforms

House Armed Services Committee leaders plan to introduce legislation April 14 that would push for more reforms of the Defense Department's acquisition system, including workforce management, competition and financial management deficiencies.

Named the IMPROVE Acquisition Act, the proposal seeks to fix the remaining 80 percent of the procurement system left untouched by major reforms in 2009, the committee said.

The bill aims to overhaul the acquisition system, getting equipment to the warfighter in combat faster and saving an estimated $135 billion over the next five years, the committee said.

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The committee said the legislation would require DOD to comprehensively manage its acquisition system and its acquisition workforce. It would reform financial management through incentives. The bill would enhance competition for contracts by “responsibly” expanding DOD’s industrial base to gain access to more cutting-edge technology.

The proposals are based on the committee’s Defense Acquisition Reform Panel, the committee said. The panel offered recommendations to the committee last month on how Congress could fix problems in the defense acquisition system.

After nearly a year of hearings, the panel concluded DOD’s antiquated acquisition system and policies present major problems in fulfilling today’s mission needs. The out-of-date system contributes to program costs ballooning beyond expectations, according to its report from March.

In its report, the panel said DOD should get more from the industrial base by improving contracting and competitive practices and should push for better innovation and make use of small and mid-tier businesses. Panel members want DOD to repeal a rule that allows agencies to withhold 3 percent of contract payments in anticipation of taxes owed to the Treasury Department. The panel called the rule a "new obstacle" to getting into the commercial marketplace. Some companies without tax problems won't offer bids because of such rules, it said.

The panel recommended DOD expand its Office of Performance Management and Root Cause Analysis, which would track acquisition workforce performance based on predetermined benchmarks and “would promote real consequences.”

The report has proposals for new regulations for fair and transparent acquisition workforce hiring, assignments and performance appraisal. Specifically, the panel said DOD should extend the Acquisition Workforce Demonstration Program, which aims to improve personnel management and policies. The program is set to expire in 2012.

“There is no doubt that the department needs an acquisition workforce that is as capable as its advanced weapons systems,” Rep. Rob Andrews (D-N.J.), who was the panel’s chairman, said in February.