$40 Billion: One Million at a Time?

As I was reading the morning news, I saw a piece in The Hill about SECNAV Mabus’ comments regarding the savings associated with “scrubbing” the $ 40 Billion or so the Navy spends on service contracts.  Service contracts can be just about anything from feeding Sailors in the chow hall to fixing the leaky toilets at the 4 Star’s headquarters building.  SECNAV says “We know we can save significant amounts of money just by setting up things like contract courts, which require … contracting officers to come in every year and justify the contracts.”  I don’t know about you, but I don’t think “scrubbing” every service contract, every year sounds like a way to save money.  Given the thousands of service contracts the Navy has, it would take an army (should I say Navy?) of contracting officers to  review and reissue these contracts.  I suppose I should say we already have a fair number of contracting officers so we would need more than the army we already have.  Each contract soaks up hundreds of man-hours to prepare, vet and issue on the government side, and just as many hours to prepare proposals in response from the contractor’s side.  That doesn’t sound like a very efficient way to administer service contracts…..one year at a time, one contract at a time?  I don’t think so.  Reissuing contracts year-to-year is a sure way to increase costs and increase the workload on an already overworked acquisition force.  Why would SECNAV say that?  It’s because the evil “Contractors” are easy targets and it’s a great way to deflect scrutiny away from the real issues, like the shipbuilding plan or the cost of maintaining 11 carriers, etc.  Here’s a plan: Focus less on individual contracts and focus more on how to administer them more efficiently and how to get the requirements generation process fixed.

The requirements process for service-related contracts doesn’t have to be that hard.  When the decision was made to “privatize” many of the mundane and non-warfighting related service tasks, the die was cast. The powers that be have decided that the people who stepped in to do those jobs (contractors) are one of the reason the Services can’t get their budget house in order.  Not so, I contend.  Service contractors are now an integral part of the military, performing those tasks that are  seen as part of the “tail” in the tooth-to-tail debate former SECDEF Rumsfeld initiated.  If you are not tooth, you are a candidate for a service contract.  I don’t think the average Joe in middle America has an appreciation for all the things these contractors do……Feeding Midshipmen at the Naval Academy, providing medical care for dependents, servicing and maintaining aircraft in the training commands, sailing our Military Sea Lift Command ships (yep, they are contractors), fixing leaky faucets, and building our warships!  They are all contractors.  And as mentioned by SECNAV, they cut the grass too!  But despite the intuitive feeling that it doesn’t have to be hard to know what the requirements are, it can be very hard to actually determine requirements.  Take for instance the maintenance of our bases…..mowing the grass, landscaping the entrance at the front gate, emptying the dumpsters, etc.  I recall that the Navy had a great system for determining how much “base maintenance” was needed.  It was an elaborate system of service levels, with each level being defined in minute detail….in the case of base maintenance, Level 4 might be mowing the grass once a week, emptying the dumpsters twice a week and fixing up the entrance at the front gate a couple of times a year.  Level 2, on the other hand, might be mowing the grass once a month, emptying the dumpsters when they were overflowing and never sprucing up the commissary parking lot.  Each level had a cost associated with it.  I recall during a budget session one year that the decision was made to go with Level 2.  Sound good?  We all thought so until the CNO make his first base visit of the year………Guess what?  When he got back there was a big dust up because the grass hadn’t been mowed in weeks, the dumpsters were full and the Commissary parking lot looked like the back lot of a disaster movie.  Lesson learned.   While it’s easy to talk about reductions in services, especially those related to quality of life, in practice it is difficult to live with the consequences.  So rather than get wrapped around the axle of rethinking the requirements every year, going through the machinations of issuing yearly Requests for Proposals, requiring vendors to produce proposals in response and spend lots and lots of money on both sides in the process, why don’t we figure out a way to get the requirements correct once and for all, issue efficient, multi-year contracts and put precious executive attention on the things that really matter, like how many ships the Navy needs, and how to pay for them.  That’s where the Secretary adds value, not in determining how often to mow the grass.