Defense industry moves to thwart McCain provision

Defense industry moves to thwart McCain provision

The defense aerospace industry is fighting to kill
Senate legislation that seeks to curb the rising
costs of weapons systems.

The provision, crafted by Sen. John McCain (R-Ariz.)
and adopted as part of the Senate’s 2007 defense
authorization bill, calls for the Pentagon to award
fixed-price contracts for the research and
development stage of major weapons systems.

McCain, a senior member of the Senate Armed
Services Committee and probably the panel’s
next chairman in 2007, is a critic of Pentagon
contracting practices and of its delayed, and
increasingly expensive, next-generation weapons.

Senator McCain is among a growing number of lawmakers
who have expressed concern that, despite the
delays and cost overruns of defense programs,
contractors continue receiving incentive
bonuses from the government.

The senator’s solution is to prevent the
Pentagon from awarding any other types of contracts
that normally allow for fees or profits above
the actual cost of developing and producing a
weapons system. Therefore, fixed-price contracts
set a limit on the cost of a defense product.

The Senate provision, however, stipulates that
the secretary of defense can circumvent the use
of fixed-price contracts if he deems the program
so complex and technologically challenging that it
would be impractical to use a fixed-price contract.


see more at http://www.thehill.com/thehill/export/TheHill/Business/071106_mccain.html