Too much competition and regulation seem to be part of what's wrong with the Pentagon's procurement process.
So claims an expert witness with a flair for the memorable image. The Defense Department is "operating military procurement like an Iranian bazaar," says David Packard, founder of the Hewlett-Packard Co., a high-technology firm, and deputy secretary of defense in the Nixon administration. "One could do as good a job in awarding the major contracts by putting the names of qualified bidders on the wall and throwing darts."Packard, who chaired a presidential commission on defense management in 1986, told the Senate Armed Services Committee recently that the Pentagon frequently accepts "best and final offers," then reopens bidding. This heightens the pressure that may have led some defense consultants to bribe Pentagon officials to disclose information about competitors' bids, in a scandal now under investigation.
Besides that, for big contracts companies must submit "tons of paperwork describing how the bidder would meet a bunch of `Mickey Mouse' requirements that have absolutely nothing to do with doing the job right."
Packard's solution? Develop an objective way to measure contractors' performance, then give more weight to companies' demonstrated record of success. If the rules were well known and enforced, contractors would have a powerful incentive to produce high quality goods, on time, and at reasonable cost.
Such a system would create problems of its own - such as increased concentration of defense work in a few hands. While these would be the most competent manufacturers, concentration may be undesirable for strategic reasons. And members of Congress would be free to meddle on behalf of home-district industries, just as they are under the present bidding process.
But Packard is convinced that fewer inspectors and auditors would be needed and far less red tape. Unlike the regulatory approach, his plan would reward manufacturers' creativity and drive to produce the best product.
More competition was deemed the cure for the $600-toilet-seat scandals of a few years back. But now a seamy side of competition is starting to show. In the vast reaches of the Pentagon, there should be room for experimenting with Packard's proposal for the performance-based awarding of contracts.