House Lawmakers Introduce Legislation to Reform Defense Acquisition

April 16, 2010

Tony L. Corwin, Pete Giambastiani, Matthew Kinsman

Government Relations Update - Defense

This week, Chairman of the Armed Services Committee Ike Skelton (D-MO) and Ranking Member Howard "Buck" McKeon (R-CA) joined the Committee’s Defense Acquisition Reform Panel Chairman Rob Andrews (D-NJ) and Ranking Member Mike Conaway (R-TX) to introduce the Implementing Management for Performance and Related Reforms to Obtain Value in Every Acquisition Act of 2010 (H.R. 5003), or the IMPROVE Acquisition Act.

The bill seeks to overhaul defense acquisition spending and is based on the Defense Acquisition Reform Panel’s Final Report issued on March 23, 2010. It would require the Department of Defense to comprehensively manage defense acquisition, reform DoD’s financial management, and expand the country’s industrial base to enhance competition. H.R. 5003 focuses on increasing the use of incentives to bring the Department’s practices more in line with the private sector.

The latest acquisition report from the Pentagon showed a 7.2 percent increase for its biggest arms programs. However, big-ticket hardware covered under the 2009 Weapons Systems Acquisition Reform Act such as warships and fighter jets only make up 20 percent of DoD’s acquisition spending. The IMPROVE Acquisition Act focuses on the remaining 80 percent, most of which are service contracts.

H.R. 5003 gives the Secretary of Defense the ability to shift work among the Defense Department organizations and promotes individual performance assessments tied to pay and promotion. It also sets forth a plan for auditable financial statements by independent accounting firms, something DoD is scheduled to enact on its own by 2017.

During a press conference to announce the bill, Chairman Skelton said he expects the Armed Services Committee to mark-up the bill "in the very near future." He also plans to incorporate the text of the bill into the 2011 Defense Authorization bill, forcing the Senate to act on it during House-Senate conference negotiations.

Nuclear Summit Produces Voluntary Nuclear Pact

As part of the Obama Administration’s spring roll-out of a new international nuclear policy, Washington, DC hosted a three-day nuclear security summit this week on the heels of a new START treaty between the United States and Russia and the 2010 U.S. Nuclear Posture Review. The summit focused on keeping nuclear material out of the hands of terrorists, and produced tangible, but limited results.

On Tuesday, the President announced that 46 countries signed on to a plan to put the world’s nuclear material beyond the reach of terrorists within four years. These governments pledged to take measures to safeguard the nuclear materials used to make bombs, as well as civilian reactors and power plants. India will build a center to promote nuclear security, while Chile, Kazakhstan, Vietnam, Mexico, Ukraine, and Canada will dispose of a significant amount of highly enriched uranium used in civilian facilities. A follow-up meeting is scheduled to take place in six months in order to measure the progress each country is making, and another nuclear security summit will take place in two years. And although the countries did not adopt any mandatory standards, the Administration believes the pact is another positive step in a slow-moving process towards better nuclear security.

Republicans in Congress were unimpressed with the results of the summit. Senator Jon Kyl (R-AZ) argued that the summit produced nothing more than "a nonbinding communiqué that largely restates current policy and makes no meaningful progress in dealing with nuclear terrorism threats." Many experts agreed that the passive nature of the pact may yield little results, but many are cautiously optimistic that world leaders will begin implementing nuclear security initiatives immediately.

While the Washington summit focused on international nuclear security, the Administration continued to press world leaders for tough sanctions against Iran in response to their continued disregard for international nuclear regulations. Two top U.S. military officials indicated that Iran could produce bomb-grade material for a nuclear weapon within a year, and could manufacture a working weapon within two to five years.

On Monday, President Obama met with Chinese President Hu Jintao to discuss stringent sanctions against Iran. Although the Chinese President agreed to continue to negotiations, he offered no commitment to any specific measures. Meanwhile, the U.S. continued to work with the U.N. Security Council to impose a comprehensive arms embargo on Iran and curtail the country’s ability to raise investment in their energy sector. On Wednesday, the Administration signaled that the U.S. might be forced to accept weakened U.N. sanctions in order to assemble a broader international coalition against the Iranian nuclear program.

TRICARE Legislation Update

On Tuesday, the Senate unanimously approved the TRICARE Affirmation Act (H.R. 4887). The legislation explicitly states that TRICARE is protected from the individual insurance mandates of the recently enacted Patient Protection and Affordable Care Act. Introduced by House Armed Services Committee Chairman Ike Skelton (D-MO), the bill cleared the House unanimously in March. It will now be presented to the President to be signed into law.

Quote of the Week

"It is increasingly clear that the danger of nuclear terrorism is one of the greatest threats to global security, to our collective security."
- President Obama, during his opening remarks at the International Nuclear Security Summit.

Notice: The purpose of this newsletter is to review the latest developments which are of interest to clients of Blank Rome. The information contained herein is abridged from legislation, court decisions, administrative rulings, and other sources and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.