Defense Secretary Gates has outlined a strategy to change how the Defense Department contracts goods and services, a move aimed at creating greater efficiency and productivity in defense spending, during a Pentagon news briefing.

“We have not seen the productivity growth in the defense economy that we have seen and expect from the rest of the economy,” Gates said.

23 specific actions are designed to move the DoD towards a targeted $100 billion in acquisition/procurement cost savings over the next five years.  A few actions are listed below.

  • Program managers will be required to set a new affordability target that can’t be altered without authority from undersecretary of defense for acquisition, technology and logistics, Ashton B. Carter.
  • Prevent from embarking on programs that will need to be canceled when they prove unaffordable.
  • Creating leaner programs by requiring not only an estimation of what they will cost under business as usual, but what they should cost if programs are managed effectively and hit cost objectives.
  • Leveraging competition as a source of productivity in the defense industry, and giving managers direction on driving real competition
  • Measures will be introduced that will improve efficiencies in service contracts, including increasing the frequency of competitive bidding.

Many of the changes will take effect immediately, all of these changes will be evaluated as they are implemented.

New programs totaling over $200 billion will be starting in the near future, including the next-generation ballistic missile submarine, the ground combat vehicle, long-range strike systems for the Air Force and Navy, and the Marine Corps presidential helicopter.  Affordability will be incorporated from the start for all new programs.


-American Forces Press Service

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