As the 2008 election draws near, speculation continues to grow regarding how and to what extent the next administration will impact the procurement activities of the United States aerospace and defense industry. Several media reports try to anticipate and compare the federal procurement agendas of presidential candidates John McCain and Barack Obama, admittedly without any degree of certainty as many official campaign comments have left the audience craving more details.
Summarized below, and as reported by The Washington Post and Business Week, are the candidates' reported procurement reform initiatives that defense contractors may see advanced during the next administration. In addition, this article outlines the candidates' recent legislative initiatives for insight on their priorities regarding federal procurement policy.
Candidates' Views on Procurement Activities
- Plans to expand the use of fixed price contracts so that contractors are disciplined to fulfill clearly defined requirements, meet the contract schedules and not exceed the promised contract price, and the Government uses realistic cost estimates. Indeed, Mr. McCain reinforced this view during the September 26, 2008 presidential debate when he stated, "we have to do away with cost-plus contracts.";
- Intends to limit sole-source contracting and make cost discipline a priority through competition to decrease Government costs and increase innovation;
- Favors transparency in Government purchases and performance;
- Vows to post on the Internet in clear and plain language information on every step of awarding contracts and grants;
- Pledges not to use or allow procurement tricks that divert funds from national priorities;
- Disfavors multi-year procurement contracts; and
- Supports missile defense systems in space and space warfare.
- Plans to restore effective oversight of the Government acquisition process;
- Favors decreasing the nation's dependence on private contractors in sensitive or inherently Governmental functions;
- Intends to eliminate the Bush administration's preference for outsourcing Government services and abandon initiatives that he believes waste taxpayer money, such as the use of private bill collectors to collect federal taxes;
- Favors protecting U.S. jobs while simultaneously favoring stronger transnational cooperation;
- Opposes putting weapons into space; and
- Supports spending on space programs to maintain pace with other countries' advances and to understand climate changes (although Obama has previously discussed diverting space exploration funds to education initiatives).
Candidates' Most-Recent Procurement-Related Bills
McCain has sponsored the following procurement-related bills, which are still in committee:
- S. 32, Defense Acquisition Reform Act of 2007 (reforming the acquisition process of the Department of Defense by, among other things, restricting the use of multiyear contracts to only those that provide an agency with "substantial savings," defined as more than ten percent savings (or more than eight percent savings when meeting other listed criteria); requiring notice of program changes inconsistent with Milestone B certification; requiring new guidance on use of contract award fees and limiting rollover of award fees); and
- S. 192, Lobbying, Ethics, and Earmarks Transparency and Accountability Act of 2007 (providing greater transparency with respect to lobbying activities).
Obama has sponsored the following procurement-related bills, which are still in committee:
- S. 433, Iraq War De-Escalation Act of 2007 (stating United States policy for Iraq);
- S. 674, Transparency and Accountability in Military and Security Contracting Act of 2007 (requiring accountability and enhanced congressional oversight for personnel performing private security functions under federal contracts);
- S. 2519, Contracting and Tax Accountability Act of 2007 (prohibiting the awarding of a contract or grant in excess of the simplified acquisition threshold unless the prospective contractor or grantee certifies in writing to the agency awarding the contract or grant that the contractor or grantee has no seriously delinquent tax debts);
- S. 2147, Security Contractor Accountability Act of 2007 (requiring accountability for contractors and contract personnel under federal contracts when work is performed in, or in close proximity to, an area where the Armed Forces are conducting a contingency operation); and
- S. 3077, Strengthening Transparency and Accountability in Federal Spending Act of 2008 (strengthening transparency and accountability in federal spending).
Regardless of whether McCain or Obama becomes our next commander in chief, the federal contracting community will most certainly be impacted by procurement reform during the next administration.