Carter Proposes 50/50 Split for Overbudget DoD Projects

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Ashton Carter, DoD; Photo: dod.gov

Ashton Carter, undersecretary of defense for acquisition, technology and logistics, detailed the Defense Department’s new acquisition strategies and cost-saving measures for an audience at the Center for American Progress on Nov. 16.

The new strategy comes down to DoD getting more bang for its buck – or rather the 400 billion bucks that go to contracted goods and services, Carter said.

Carter and Defense Secretary Robert M. Gates recently authored a memo explaining the Pentagon’s new buying strategies, reflecting the tighter budgets that Gates has insisted are a part of DoD’s new reality.

One of the proposals is to split the cost of over-budget projects halfway between DoD and the contractor.

“A 50-50 share line is a square deal,” Carter said at the CAP speech, Wired reported. “I’m telling my contract people I want to see 50-50 share lines, and if you depart from that, I want to see why.”

Carter said paring down DoD’s “wants” and “needs” is also important.

The department needs to “get to the point where we have things we do want and do need,” rather than acquiring items that are not vital to support the troops.

“We need to manage to a different reality,” Carter said.

Carter used the SSNBX nuclear missile submarine as one example of DoD exercising its new buying strategies.

“We looked at factors driving the costs of the submarine,” he said, “and without compromising critical military capabilities, we cut back on the design in the interest of affordability,”

The department is on track to cut the estimated cost for the submarine designs by 35 percent, he added.

Carter also talked up other strategies as well, such as: increased competition, developing a preferred-supplier program and reforming contract fee structure, Federal News Radio reported.

Carter had powerful words for critics of the plans, according to FNR.

“To those who resist this, I say the alternative is broken programs, unpredictability (which is not good for vendors) and, the worst of all, war-fighter capabilities will not be delivered.”

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