Early in this blog which began late in 2014, my intent was to write about the DoD acquisition system and the FACT the budgets are too big. Congress appropriates excessive funds EVERY YEAR for DoD to sustain, maintain our military, and to buy new weapons.
I know Defense Acquisition as well as anyone in Government, not tiny details, but I KNOW how it's done. I TAUGHT contract professionals how to read and use the Federal Acquisition Regulation, and practiced Federal Contracts acquisition for 44 years.
I have two points here, one is expert ways to improve the defense acquisition process at its root, the budget. The key point for a better way to budget is this:
"As James Mattis, then the commander of U.S. Central Command, put it in 2013: “If you don’t fund the State Department fully, then I need to buy more ammunition.”
Then I'll go thru a article of a complete novice. No matter how much they studied, or read in GAO reports, they are wrong about how easy it is to cheat the government. It's a matter of perspective. Cheating happens, but it is not EASY!
"The Case for a National Security Budget"
Why a Better American Foreign Policy Requires a New Way of Paying for It
By Brett Rosenberg and Jake Sullivan BRETT ROSENBERG is Associate Director of Policy at National Security Action, a progressive foreign policy organization.
JAKE SULLIVAN is Co-Chair of National Security Action. He was National Security Adviser to former U.S. Vice President Joe Biden and Director of Policy Planning at the U.S. State Department.
November 19, 2019 Foreign Affair Nov/Dec 2019
https://www.foreignaffairs.com/articles/2019-11-19/case-national-security-budget
"To rectify this imbalance and integrate national security considerations across bureaucratic lines, Washington needs to fundamentally rethink the way it approaches the funding of its foreign policy. The United States should move toward a unified national security budget, which directly links funding decisions to a comprehensive National Security Strategy (NSS) and distributes resources to whichever department or agency can best get the job done. This national security budget will better match the means and ends of U.S. foreign policy and ensure that the country approaches a new international environment with both the military and the civilian tools it needs."
There are some non-experts reading random GAO reports, and they decide they know what it means, and how to break it down. The article in this blog is and example of this fact
"The US Defense Department lost $875 million to scams involving shell companies"
By Max de Haldevang 27 Nov 2019
https://qz.com/1755722/defense-department-has-lost-875-million-to-shell-company-scams/
"Between 2010 and 2012, according to the Department of Justice, a US citizen and an Indian resident—acting as contractors for the US Defense Department—took thousands of sensitive files, tried to use them to win business from military manufacturers in the Middle East and South Asia, and sold the Defense Department faulty plane parts that forced the grounding of 47 fighter jets."
Fraud of this sort is uncommon, but, as you see, it can happen. I can tell you after reading just this one paragraph that the Contracting Officer and the Defense Contract Management Agency either were not involved or they simply dropped the ball and did not do their job. The worst case is Government officials helped the fraud, but I hope they were just inexperienced, careless, stupid, and lazy.
I have to assume the article is factual, but it is hard to believe.
In my 22 years of Air Force contracting, 1970 thru 1992, I required submission of documented, certified proof from contractors bidding on Requests for Proposals (RFPs), and Invitations for Bids (IFB), used and relied on Administrative Contracting Officers to visit potential contractor IN PERSON to avoid this kind of fraud. I conducted Pre-award Surveys to avoid this kind of fraud. DCMA does audits to avoid this kind of fraud. The DoD Customer conducts Integrated Baseline Reviews and Pre-contract Awards to avoid this kind of fraud.
Everything had to go wrong in so many ways for this sort of fraud to succeed.
The author of this article, however, KNOWS NOTHING ABOUT DEFENSE ACQUISTION.
"They did so using a very simple trick: Set up shell companies based in the United States—which requires less personal information than obtaining a library card—and pretend you’re a domestic company in order to pick up lucrative Defense Department contracts intended for US manufacturers. It turns out this is common practice."
It is clear Max de Haldevang has never worked in Defense Contracting in any capacity, never Googled "Defense Acquisition," or Googled any of the words I used above, or asked a Contracting Officer like me (five times in four different Air Force Commands: AFLC, TAC, AFSC, USAFE, maybe more, I forget).
Max, you do a disservice. It looks like Max skimmed a GAO Report, at least. This one para shows how big even a part of the DoD budget is. Max is only counting new contracts. The number of ALL contracts is bigger because there are multi-year contracts. Max needs to look at total obligations, not just new awards.
"Defense contracts make up about two-thirds of all gigs handed out by the federal government, according to the GAO. Last year, it gave out 570,000 new contracts worth $350 billion."
There is a lot of questionable material in this article as it suggests it is easy for foreign companies to cheat us.
"Foreign firms weren’t the only ones defrauding the US government using shell companies. American crooks, too, found ways to use shell companies to game the Defense Department out of millions of dollars."
Max achieves one bit of intelligent commentary though, there are too many awards because there is too much money to spend!
"There were 20 cases in which contractors used front companies to win contracts intended either for disabled veterans, women, minorities, or economically disadvantaged business owners. They would place someone who fit one of those categories as the figurehead of a shell company, and then make a fortune from the work while that person was barely involved. In one case, two contractors won more than $200 million in awards through this scheme, the GAO said."
Max seems focused on "shell companies." In my 44 years I never encountered a shell company, either States Side or in Germany where I did a two year tour as a Contracting Officer for Construction and Services for Ramstein AB.
By the end of the article I feel either sympathy for Max thinking GAO always gets it right, they don't, or anger at what might possibly be a hit job revealing a bias against US Defense Acquistion personnel and processes.
While I KNOW the acquisition processes need work, they do NOT allow shell companies or fraud to run willy nilly thru the system.
THE DOD BUDGET IS SO BIG IT LOOKS LIKE FRAUD IS RAMPANT, BUT FRAUD IS A MINOR FAULT PERCENTAGE WISE.
WASTE, ABUSE, AND CARELESS NEGLIGENCE ARE THE MAIN ISSUES, ALL BASED ON NOT FOLLOWING ESTABLISHED, REQUIRED PROCESSES, AND / OR ON POORLY DEFINED PROCESSES THAT CAN BE FIXED.
