[Congressional Record Volume 146, Number 49 (Wednesday, April 26, 2000)]
[Senate]
[Pages S2944-S2945]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself and Mr. Sessions):
  S. 2474. A bill to amend title 10, United States Code, to improve the 
achievement of cost-effectiveness results from the decisionmaking on 
selections between public workforces and private workforces for the 
performance of a Department of Defense function; to the Committee on 
Armed Services.


         The DoD COST MANAGEMENT AND ACCOUNTABILITY ACT of 2000

  Ms. SNOWE. Mr. President, I rise today with my colleague from 
Alabama, Senator Sessions, to introduce legislation that will improve 
Department of Defense business practices as well as assist the DoD in 
its ability to estimate cost savings, a process that has significant 
impact in the DoD's budget process. This legislation will also result 
in improved readiness by adding a more realistic approach to the DoD's 
cost estimating process by eliminating the unknowns that the DoD faces 
in projecting its budget.
  Today the Department of Defense is using arbitrary cost saving 
objectives of up to $11.2 billion in its budget for Fiscal Years 2001 
to 2005. These cost savings are projected efficiencies expected to be 
realized through processes such as outsourcing and the OMB Circular A-
76 process. Unfortunately, both the Government Accounting Office and 
the Naval Audit Service have published reports stating that these 
savings are inflated and overly optimistic.
  The greatest cause of concern however, is the self-inflicting damage 
caused by these overestimated savings. Once the individual services 
within the Department of Defense establish these arbitrary savings 
goals, they reduce the future operating budget estimates to take into 
account the estimated savings. But, when these predicted savings are 
not achieved, it is the readiness accounts and modernization programs 
that end up paying the price.
  None of us would run our personal home finances in such a manner, and 
no business could proceed using such an accounting method. So that is 
what Senator Sessions, my colleagues on the Armed Services Committee, 
and I want to address in this legislation. We want to establish better 
business practices, so that DoD is not setting itself up for failure. 
DoD needs to take a more realistic approach in the way it estimates 
projected savings and how it establishes performance standards to 
measure the impact of workforce

[[Page S2945]]

changes. The DoD and the American taxpayer need to understand the 
potential impact to the readiness of our armed forces.
  This legislation has four basic provisions that will provide improved 
business practices.
  First, this legislation requires the Department of Defense to 
establish a system to track the costs and savings incurred through 
managed competitions, efficient reorganizations, and the streamlining 
of other functions currently being performed by the government through 
the A-76 process or other re-engineering of a federal activity.
  The data collected through the establishment of this system will 
serve two purposes. It will be compiled into a report the Department of 
Defense is required to submit to Congress each year, so that Congress 
will have the information necessary to provide oversight of the A-76 
process and other cost saving reorganizing process. The data will also 
be used to establish a metric of current performance and current costs 
prior to outsourcing, to serve as a standard for future performance and 
future cost comparisons--so that the leaders within the Department of 
Defense will be able to validate the actual savings achieved and 
evaluate the maintenance of performance standards.
  Second, this legislation requires that the cost and savings incurred 
through out-sourcing, strategic sourcing, or re-organizing each 
position currently staffed by federal personnel, be projected over the 
Future Years Defense Program. This requirement will improve savings 
estimates by including both the short and long term costs associated 
with outsourcing, or contracting out a function.
  The third provision of this legislation requires the Secretary of 
Defense to certify that the function analysis and decision to 
outsource, strategically source, or to maintain the current federal 
force was not based on unfair personnel constraints that may prevent 
the current federal organization from operating efficiently. This will 
ensure that our federal workers are provided a fair chance in any 
process and will provide the Department of Defense the most efficient 
work force for the actual task at hand.
  As part of the A-76 process, the Department of Defense is required to 
conduct an evaluation of the impact on local economies and communities 
if the decision is made to convert functions currently being performed 
by government workers to the private sector. The fourth provision of 
this legislation requires the Department of Defense to submit a 
statement of the potential economic impact on each affected local 
community. This notification will provide Congress and our constituents 
the opportunity to better understand these impacts.
  Mr. President, in the short term, this legislation will require 
significant changes in the way the Department of Defense conducts its 
processes. But in the long term this legislation will yield significant 
benefit. These four provisions are based on the recommendations of 
experts in the U.S. General Accounting Office and the Naval Audit 
Service. By enforcing better business practices--which is what this 
legislation effectively does--the long term effects will benefit the 
Department of Defense by improving the accuracy of cost and savings 
estimates, stabilizing the budget, and protecting modernization 
programs.
  Additionally, the benefits will extend to the current federal 
workforce, who will be guaranteed the opportunity to compete on an 
equal basis, and the local communities surrounding these agencies will 
be able to better understand the impact of any decisions that are made.
  Mr. President, I firmly believe that this legislation supports the 
best interests of the Department of Defense and the federal work force. 
I urge my colleagues to review this legislation--and I am confident 
that they will see it's merits and join me and support this bill.

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