Trump Has Ordered Safeguards Stripped From Procurement As Pentagon Prepares To Spend $1 Trillion [View all]

A former member of the Commission on Wartime Contracting in Iraq and Afghanistan warns of a coming perfect storm of waste, fraud and abuse.

The Trump White House this month announced two new executive orders radically changing procurement procedures, especially defense procurement procedures, in ways that will unleash waste, fraud and abuse. These orders — which largely flew under the radar — will effectively wipe out spending safeguards with potential effects that are hard to overstate considering that President Trump announced he will expand the defense budget to a breathtaking $1 trillion, and that the secretary of defense, Pete Hegseth, is no counterweight to politically driven spending.

To summarize, the new executive orders purport not merely to change or improve regulations, but to simply eliminate most of the existing procurement rules developed through years of oversight processes and outside scrutiny. They effectively undo procurement safeguards put in place after tremendous waste was exposed during the Cold War. In their place, the executive orders would elevate certain procedures that allow the government to spend unlimited sums without competition — the so-called “other transactions” process that need not be competed and that circumvents safeguards put in place to protect tax dollars. The Executive Orders say there should be a “first preference” for other transactions processes, which is like having a “first preference” for bringing a pistol with no safety to compete in a boxing match.

These revisions will also likely interfere with the system relied upon by competitors challenging improper awards, the “bid protest” system, which has long been a critical check on decisions made based on suspicious preferences rather than best value to the taxpayer. The orders proclaim that their goal is to “centralize decision-making,” which apparently means to move decisions on choosing weapon systems away from specialized, analytical government technical personnel steeped in the objective review of weapons choices so as to allow the decisions to be made by politically appointed officials attuned to politically favored contractors.

The number one safeguard being sacrificed is competition. Nothing suppresses waste, fraud and abuse as much as making defense contractors compete with one another, so that the award only goes to the bidder who provides reasonable pricing and “best value,” which encompasses the virtues sought in any procurement system. To take a recent example, one occasion when the government felt it had to veer from competition was during the intensification of the Iraq War; the war started and ramped up so suddenly, the Bush administration deemed there to be insufficient time to properly compete contract requirements. I served as a commissioner on the Commission on Wartime Contracting in Iraq and Afghanistan, which reported on the landmark instances of waste. A single such example was the tens of billions of dollars that were spent on a questionable logistics contract, which was awarded competitively once — just once — for ten years before any war, and then had no competition — none — after the wars had begun.

https://talkingpointsmemo.com/cafe/trump-procurement-executive-orders-defense