Michael South

Andy, you are absolutely right that we all need to come together to make a difference and pull us back from the brink of our country’s collapse as a super power. Every one of us has opportunities to “do the right thing” in our small sphere of influence in the government, whether its something like not printing out every electronic document we see and turning off the lights when we leave a room, to making sure that acquisition programs are funded appropriately (not under or over funded) and training our workforce on ethics and government money management. But I would like to bring up an area of concern that is much bigger than just any one person that is of great professional concern and would require Presidential involvement.

While we in the military always worry when a Democrat takes office, I for one voted for Obama because he is probably the only one with the courage to tackle the “way we’ve always done it” mentality so prevalent in the government, and especially the DoD. Time will only tell if his stimulus package worked, but at least he’s done something besides watch the economy crumble like the last administration. I’m not sure how the other agencies budget for acquisition, operations, and maintenance, but it is this core process that is eating away at the DoD budget. We could do much more with the money we have if we just managed it better. Unfortunately, the complex mechanism that is in place just does not serve the DoD, the government or our people very efficiently. It is like a computer operating system hard drive that has been in use for years, being updated, tweaked, modified and more until it becomes a cumbersome, inefficient, slow, and sometimes ineffective piece of hardware for today’s needs that just needs to be slicked, reformatted and installed with a new OS. We were all so relieved that Obama not only approved our proposed 2009 budget, but provided a $25B baseline increase. But something just isn’t right….

When the new fiscal year started, the military withheld funds due to concerns that the new administration would immediately start cutting the defense budget. When that didn’t happen, and quite the opposite occurred with the increase, the money should have started flowing. But it didn’t. One result is the Navy’s decision to postpone all military transfers and moves until the next FY because we don’t have sufficient money for this year’s transfers that is a known and budgeted for occurrence. We are now borrowing from next year’s budget for this standard requirement this year! Did we not learn from the horrors or our economic downfall the dangers in continued borrowing with no increase in income? In other areas, our operational dollars are coming in, but reduced from what they were budgeted for. How do we have less money than last year when we were granted such a large increase this year? What is going on and where is the money?

It has been my 18-year experience in the Navy that our foundation for acquisition and money management is flawed. Numbers and statistics can always be brought in, but for now, I am simply addressing the processes. Some programs are funded appropriately throughout their entire lifecycle, but most are inadequately funded and either has to borrow from programs that have more money or fall short in some fashion, whether it is in installation, training, operations and maintenance, or end-of-life removal. But borrowing money from other “pots” of money can be tricky, and in some cases illegal. And then of course there is the last minute dump of funds in August/September where a lot of money is finally released throughout the DoD and commands are required to spend it or lose it; sometimes having that portion not spent removed from the next year’s budget. This leads to inappropriate, although sometimes needed, spending on anything the command needs or wants that didn’t receive funding earlier, or wasn’t budgeted for. Unfortunately, it doesn’t provide enough time to contract and pay for the things we really need or maintain long-standing programs, so a good portion of the money goes to easily purchased wants instead of needs, and basic quality of life improvements. Not knocking the quality of life aspect, but I feel those initiatives should be considered and budgeted for, not done haphazardly in a two-month window at the end of the fiscal year. Meanwhile some other programs have too much money, and frivolously spend the excess all year round.

Lastly, I would like to bring up the flawed defense contracting mechanism. One only has to look at the recent Navy shipbuilding programs to see we have a problem. Just a glimpse at the logic behind what we are doing is mind-boggling. A contractor bids on a project and wins, promising to deliver specific capabilities for a specific price. But when that contractor fails to do so because the technology is too immature (something they should have known and planned for since they are the experts), poor project management, poor cost projections, or whatever the reason, it is the contractor that should have to absorb the cost overruns and delays, not the federal government. Not only that, but they should be penalized for not meeting requirements and not meeting timelines. Only when the government goes back and adds new requirements should we have to pay for an increase, but only for that addition, not for the whole project. Right now, if a contractor goes over budget or over time, they don’t need to worry too much because we will pay for it for fear the company will go bankrupt and we will be left with nothing to show for our initial investment. However, this can be countered by paying the initial overruns on the first 2 deliveries to allow the contractor to work out their deficiencies, but then recoup those overruns with discounts on subsequent deliveries. Without a mutual inherent vested interest, we will not see the motivation and dedication in the contracting industry to deliver as promised. This may not happen with every government contract, but it is happening with the DoD’s largest programs.

Everything the DoD does has known associated costs. These known’s can be budgeted for year after year with little error if we stop trying to steal from one program to pay for another. Only new programs have an unknown factor, but that is where the responsibility should be laid on the contractor who won the bid. I’m getting tired of being asked to do more with less, not because we have less, but because we can’t manage what we do have. When can we just budget for what we need, spend it as we are supposed to, and stop the self-interest projects? So yes, we all have our part to play, but my big question is how do we change something so big as the DoD’s acquisition and money management foundation?