Sen. John McCain (R-Ariz.) called for a broad review of the Pentagon procurement system yesterday, citing the Air Force's recent contracting scandals as evidence of larger problems.
The Air Force's problems are a "glaring example of a management and oversight failure in our acquisition process," said McCain, chairman of the airland subcommittee of Senate Armed Services Committee, which held a hearing on the subject. But "clearly, we need to examine the whole procurement process as it works today in the Department of Defense."
The Republican senator cited "management and oversight failure."
(Micah Walter -- Reuters)
The Air Force's acquisition system has been under a microscope since Darleen A. Druyun, a former Air Force procurement official, admitted to showing Boeing Co. favoritism for years before she took a job with the company. The Government Accountability Office has since ruled in favor of several Boeing competitors seeking to reopen several contracts because Druyun had tainted them. Druyun is serving a nine-month prison sentence.
The subcommittee's senior Democrat, Sen. Joseph I. Lieberman of Connecticut, cited cuts in the Pentagon's acquisition workforce, which is half the size it was 15 years ago. "We have made these cuts in a haphazard way," Lieberman said. "I am concerned that we may have stopped building the kind of strong, experienced senior leaders that we need to take on industry -- and their own leadership, when necessary -- to protect the interests of the Department of Defense and the taxpayers of the United States."
The Druyun controversy spurred 48 investigations by eight agencies, including the Pentagon inspector general and the Defense Contract Management Agency, said Michael L. Dominguez, the acting Air Force secretary. After an internal review, the Air Force is preparing to refer three more contracts to the inspector general for review, he said.
"It is unfortunate that Ms. Druyun . . . was corrupted by the power given to her and put her own interests before those of the Air Force," Dominguez said.
He agreed with criticism by subcommittee members that acquisition reform in the 1990s, which advocated streamlining procurement and adopting commercial practices, loosened the rules too much. "It looks pretty clearly that it did go too far," Dominguez said.
"In this post-Enron era, it would behoove the department to focus on the checks and balances that [apparently] have been lost," said Pentagon Inspector General Joseph E. Schmitz.
The Druyun controversy also led to the creation of a federal task force led by Paul J. McNulty, the U.S. attorney in Alexandria. McNulty told the subcommittee that anecdotes suggest procurement fraud is growing. "More procurement means more opportunity for fraud," he said.
The Procurement Fraud Working Group, which includes investigators from several Pentagon and federal law enforcement agencies, is especially necessary, McNulty said, because the FBI has shifted resources away from "this type of white-collar crime" since Sept. 11, 2001.
McCain's criticism of contracting practices led the Army last week to change its contract with Boeing for a modernization project. This week, the Air Force restructured a contract with Lockheed Martin Corp. for C-130J transport planes.