[Congressional Record Volume 148, Number 86 (Tuesday, June 25, 2002)]
[Senate]
[Pages S5973-S5983]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2003
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will now resume consideration of S. 2514, which the clerk will
report.
The assistant legislative clerk read as follows:
A bill (S. 2514) to authorize appropriations for fiscal
year 2003 for military activities of the Department of
Defense, for military construction, and for defense
activities of the Department of Energy, to prescribe
personnel strengths for such fiscal year for the Armed
Forces, and for other purposes.
Pending:
Kennedy amendment No. 3918, to provide for equal
competition in contracting.
Mr. REID. I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Madam President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mrs. Carnahan). Without objection, it is so
ordered.
[[Page S5974]]
Mr. REID. Madam President, the two managers of the bill have asked
that I propound a unanimous consent request.
I ask unanimous consent that the pending Kennedy amendment be
temporarily set aside and that the Senate resume its consideration at
12 today and that at that time there be 30 minutes of debate equally
divided on the Kennedy amendment. That would terminate at 12:30 when we
recess for the party conferences. The time would be equally divided in
the usual form prior to a vote in relation to the amendment at 2:30
today. The time from 2:15 to 2:30 would also be equally divided in the
usual form. Further, there would be no amendments in order prior to the
Kennedy amendment at 2:30 with the exception that Senator Warner be
recognized for a motion to table the Kennedy amendment.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. REID. There will now be general debate on the bill. From 12 to
12:30, the time will be spent on the Kennedy amendment equally divided.
When we come back from the party conference at 2:15, there will be an
additional 15 minutes equally divided, with the vote occurring at 2:30
on the Warner motion to table the Kennedy amendment.
Mr. WARNER. No objection on this side.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Michigan.
Mr. LEVIN. Madam President, very briefly, we are making progress on
the national Defense authorization bill. We have the pending amendment
of Senator Kennedy which will now be voted upon with a motion to table
at 2:30. We expect we will at that point begin a debate on missile
defense, but the process is not yet worked out for the amendments
relative to that as to the order and how they will be offered. There
will be some discussion on that matter between now and then. We are
working with Senators on the amendments to see if we can act on
amendments later today and possibly clear amendments. I continue to be
optimistic, with our leader's assistance, with the cooperation of all
Senators, that we can complete action on this bill in a timely manner
this week.
My good friend from Virginia, the ranking member of our committee, is
working hard to achieve that same result.
Mr. WARNER. I have worked with my leader with regard to the unanimous
consent that was adopted. I will not send my amendment to the desk, but
I intend to initiate debate.
As I understand from the chairman, there will be a rejoinder on the
other side and we will proceed on this issue until the hour of 12
o'clock. It is also my expectation that the chairman and I, with our
respective leaders, Senators Daschle and Lott, will meet prior to the
caucuses for the purpose of establishing a procedure by which my
amendment is to be sent to the desk and considered by the Senate. Am I
correct?
Mr. LEVIN. There is an intention, as I have shared with my colleague
from Virginia, to offer a second-degree amendment to that amendment.
That is what we will be discussing with the leaders between now and 12
o'clock.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WARNER. I don't know that that was in the form of a unanimous
consent request.
Mr. LEVIN. No.
The PRESIDING OFFICER. It was not a unanimous consent request.
Mr. WARNER. I simply stated for the convenience of the Senate the
procedure we will follow between now and the hour of 2:30, at which
time I will be recognized for the purpose of tabling the Kennedy
amendment.
I encourage colleagues on my side to come forward. I know Senator
Allen is anxious to speak to the Kennedy amendment, as are Senator Bond
and Senator Fred Thompson. There will be concluding remarks by our
distinguished colleague from Wyoming. That will take place from 12 to
12:30 and again from 2:15 to 2:30.
At this point in time, I will address the question of missile defense
in the amendment I intend to submit to the Senate. Since I will not now
send it to the desk, I will read it. This is an amendment proposed by
myself, Mr. Lott, Mr. Stevens, Mr. Cochran, Mr. Allard, Mr. Kyl, Mr.
Smith of New Hampshire, Mr. Inhofe, Mr. Thurmond, Mr. Sessions, Mr.
Roberts, Mr. Hutchinson, Mr. Bunning, Mr. Helms, Mr. McCain, and Mr.
Nickles.
I read the amendment as follows:
On page 217, between lines 13 and 14, insert the following:
SEC. 1010. ADDITIONAL AMOUNT FOR BALLISTIC MISSILE DEFENSE OR
COMBATING TERRORISM IN ACCORDANCE WITH NATIONAL
SECURITY PRIORITIES OF THE PRESIDENT.
(a) Authorization of Appropriations.--In addition to other
amounts authorized to be appropriated by other provisions of
this division, there is hereby authorized to be appropriated
for the Department of Defense for fiscal year 2003,
$814,300,000 for whichever of the following purposes the
President determines that the additional amount is necessary
in the national security interests of the United States:
(1) Research, development, test, and evaluation for
ballistic missile defense programs of the Department of
Defense.
(2) Activities of the Department of Defense for combating
terrorism at home and abroad.
(b) Offset.--The total amount authorized to be appropriated
under the other provisions of this division is hereby reduced
by $814,300,000 to reflect the amounts that the Secretary
determines unnecessary by reason of a revision of assumptions
regarding inflation that are applied as a result of the
midsession review of the budget conducted by the Office of
Management and Budget during the spring and early summer of
2002.
In simple language, it is annually the function of the Department of
Defense to make certain assumptions with regard to those moneys that
they require for purposes of, for example, pay, and other large cash
expenditures in a fiscal year, the amount that inflation may erode the
ability to pay those sums.
In this case, fortunately, this country has experienced a low
inflation rate, lower than anticipated, and therefore there is
remaining within the 2002 budget sufficient cash, in my judgment and
the judgment of others working in the Department of Defense, to cover
this amendment. Therefore, this amendment will not dislodge any of the
programs or authorizations as now exist in the bill before the Senate.
I make that clear. No Senator should think his or her programs which
they have fought hard for as part of this bill will be reduced in
amount as a consequence of this amendment.
The amendment I will submit, hopefully this afternoon, with the
concurrence of the leadership, on behalf of myself and other Members
whom I enumerated, is an important step to work directly on problems in
the Defense authorization bill for fiscal year 2003 as reported out of
the committee which have led many Republican committee members,
including this one, to have no other possibility than to vote against a
bill on which we had worked for the better part of a year.
That is a very difficult decision, when members of a committee, large
numbers of members in our committee, working in a bipartisan fashion,
chairman and ranking member together, formulate a bill, and then when
it is brought to a markup session, we are faced with a realization that
an element of that bill is so totally in opposition to what the
Commander in Chief of the United States, namely the President, has sent
to the Congress for the purposes of fulfilling his rights as Commander
in Chief in the defense of this country. That decision faced by us, and
a significant number of Members, forced members to vote against that
bill that we worked on for a year. We did so because of the drastic
cuts and the restrictions made to missile defense by a narrow margin of
the majority in the markup session.
I recognize the importance of passing a Defense authorization bill
during times of war with broad bipartisan support. It sends a clear
signal of support to our men and women in uniform and expresses the
commitment of the Senate to fighting the global war against terrorism
in defending our homeland.
In order to have such broad bipartisan support, we have to pass a
bill that supports our President--again, our Commander in Chief--and
his fundamental priorities for defense. In its current form, this bill
fails that test. The Secretary of Defense confirmed by a letter to the
chairman that he will advise the President to veto the Defense
authorization bill if the missile defense provision contained in our
bill is adopted by the Congress.
This view is strongly reiterated in the statement of administration
policy on our bill which notes that:
[[Page S5975]]
The administration's missile defense program is a carefully
balanced effort to defend the American people, our deployed
forces, and our friends and allies, against a growing missile
threat. The provision of S. 2514 would undermine this
critical defense effort.
What a tragedy for our Nation, what a tragedy for the Armed Forces,
to see this precisely at this time, with our Nation at war, when we
need to demonstrate consensus and support. Now is not the time to send
a signal that we are lessening our resolve in defending this Nation
from all known and recognized threats. We must be prepared as a nation.
History will be our judge.
The amendment I will offer would restore the funding reductions to
missile defense made during the committee's consideration of the bill.
This amendment would provide an additional $814 million-plus to restore
the funding taken from the President's request for missile defense
during markup and allow the President the flexibility to spend the
money for missile defense and activities of the Department of Defense
to counter terrorism both at home and abroad.
That is very important. This is basically parallel to what we did
last year on the Defense authorization bill. I will address that in
greater detail momentarily, but it gives the flexibility to the
President of the United States and his Secretary of Defense to allocate
the $814 million-plus in accordance with those two objectives.
This is a reasonable compromise, I believe, to the position taken by
the majority during the course of the markup. Again, it is identical in
form to the compromise we reached last year on this issue.
At the outset of this discussion, I want to remind Senators present
of a measure we passed in 1999 by a vote of 97 to 3, a measure that was
subsequently signed into law by President Clinton, the National Missile
Defense Act of 1999, referred to as the Cochran Act, as he was the
principal drafter and sponsor of that very important law. The act is
short and not very complicated. It does two things very clearly.
First, the Cochran Act establishes a policy of deploying, ``as soon
as is technologically possible,'' an effective defense of the territory
of the United States--that is all 50 States and the U.S. territories--
from limited ballistic missile attack.
Madam President, 97 Senators are on record supporting that policy.
A second part of that law reiterates a longstanding policy that the
United States will seek further reduction in Russian nuclear forces.
During the debate on this act, some contended that its two policy
declarations have equal stature and status. Equal or not, I think all
would agree both are important statements of policy. The amendment to
include a statement of policy on arms reduction was offered because
some Senators feared that deployment of a missile defense could lead to
a new offensive arms race. But President Bush did not see any
inconsistency in these two goals and has pursued both vigorously. He
has made missile defense one of his top national security priorities,
and he has dramatically--and, I would add, appropriately--expanded
funding to expedite the development and deployment of those important
defenses.
At the same time, he sought to restructure this Nation's relationship
with Russia. He outlined this policy in a landmark speech at the
National Defense University in May of 2001:
Today's Russia is not yesterday's Soviet Union. We need a
new framework that allows us to build missile defenses, and
that encourage still further cuts in nuclear weapons.
President Bush has since engaged Russian President Putin on a regular
and intensive basis to move the Russian-American relationship beyond
cold war hostility to one built on openness, shared goals, and shared
responsibility. President Bush has been extraordinarily successful in
this effort.
Last December, the President announced his intent to withdraw from
the 1972 Anti-Ballistic Missile Treaty. This is a treaty which
specifically prevented both Russia and the United States from
developing and deploying effective missile defenses. Critics feared
that President Bush's action would lead to a harsh Russian
denunciation. In fact, Russia reacted hardly at all.
President Putin announced that the U.S. move was a mistake, but it
would not affect the improved United States-Russian relationship.
Many missile defense critics feared that withdrawing from the Anti-
Ballistic Missile Treaty would trigger a new arms race. Yet on May 24,
at the summit in Moscow, President Bush and President Putin signed a
landmark arms control agreement.
This breakthrough treaty, negotiated in a period of just several
months, will reduce nuclear arsenals from their present levels of about
6,000 strategic warheads to 1,700 to 2,200 strategic warheads over the
next decade. This is the most dramatic reduction in strategic weapons
history.
Far from disrupting the United States-Russian relationship,
withdrawing from the ABM Treaty and developing missile defenses have
allowed us to develop defenses for the United States, its allies and
friends, and its deployed troops, against the real and increasing
threat of missile attack, while at the same time our relationship with
Russia appears to grow in a positive manner.
So President Bush has taken to heart both policy statements in the
National Missile Defense Act of 1999. He has made missile defense a
high priority and is doing all he can to expedite the development and
deployment of missile defenses. And he has achieved the goal of further
reductions in Russian nuclear forces.
Now it is up to us, the Senate and the Congress, to do our part. The
President has made a reasonable and balanced request for missile
defense this year. The request of $7.6 billion is smaller than last
year's request and smaller than last year's appropriated level.
The House of Representatives fully funded this request level. In
fact, they have increased it slightly. Yet the bill of the Senate Armed
Services Committee cuts over $800 million from the effort to develop
and deploy missile defenses. Yes, against that background, our
committee went ahead and cut $800-plus million.
This bill would impose reductions that impede progress, increase
program risk, and undermine the effort to provide for the rapid
development and deployment of missile defenses for our Nation, our
allies and friends, and our soldiers, sailors, marines, and airmen
deployed overseas. The administration asserts quite accurately, in my
view, that the committee bill undercuts missile defense efforts:
. . . by severely reducing the program's workforce,
significantly impairing DOD's ability to effectively
integrate components currently under deployment, delaying
boost-phase defense efforts, hindering early deployment
contingent capability, undermining efforts to address
countermeasures, and slowing key sensor programs.
That is the assessment of the Secretary of Defense.
The bill before the Senate would cut hundreds of millions of dollars
from theater missile defense, programs to defend against short-,
medium- and intermediate-range missiles.
That is the threat that is most identified as impairing the ability
of our forward-deployed forces to pursue their missions without the
threat of missile attack. These are the very missiles our troops faced
in the Persian Gulf war over a decade ago, and we know well of the
casualties that our forces, U.S. forces and indeed those of our allies,
took as a consequence of the short-range Scud missiles fired
indiscriminately by Saddam Hussein.
Today we have some improved defenses but not adequate defenses
against these short-range weapons.
Last September we suffered a grievous attack on our Nation. Many
lives and much property were lost in that attack. On that terrible day
we also lost our uniquely American feeling of invulnerability. Homeland
security is now, without a doubt, our top priority. Missile defense is
an integral part of homeland defense.
The most recent national intelligence estimate on missile threats--
that is January of this year--states:
The probability that a missile with a weapon of mass
destruction will be used against U.S. forces or interests is
higher today than during most of the cold war, and will
continue to grow as the capabilities of potential adversaries
mature.
George Tenet, head of the CIA, during his testimony to the Armed
Services Committee earlier this year, made the point that missile
threats have sometimes evolved much faster than
[[Page S5976]]
predicted and confirm the view expressed in the national intelligence
estimate that I just quoted that both terrorism and missile threats
must be taken very seriously.
I understand and respectfully disagree with those who argue that
every dollar we spend on missile defense is one dollar we don't spend
protecting our shores and harbors.
That is precisely what the defense of our Nation against missile
attack does--protects our shores. It protects our harbors, our cities,
our towns, our villages, and our people from the world's most terrible
weapons.
As we did last year, this amendment would provide flexibility for the
President to use the additional funds as he sees fit to defend this
Nation from missile defense and the Department of Defense activities in
counterterrorism. It is a discretion that is very much needed by the
President and the Secretary of Defense. And it parallels exactly what
we did last year.
I say to my colleagues that this amendment offers a reasonable
compromise on an issue that has divided the Armed Services Committee
for the past 2 years, and continues, regrettably, to divide the Senate.
This is the same formula that we used last year to heal a serious rift
in the committee and the Senate, and thereby bring the bill to the
floor on a bipartisan basis.
I note that this amendment differs in one important aspect from the
one we passed last year. Last year, we simply added $1.3 billion to the
defense top line. This year, the amendment does not increase the
administration's budget request. It does not put money on top. Rather,
it takes advantage of the fact that the administration will conduct its
annual midyear review of inflation assumptions, including those used to
craft the defense budget request.
I have been assured that the new inflation savings that will result
from this abuse will be more than adequate to cover this added amount
for homeland defense. The amendment provides an offset based on these
anticipated inflation savings.
I commend Chairman Levin for the statesmanship he displayed on the
issue last year at the time I brought the amendment up which closed the
rift between the aisles. Our bill came to the floor last September. The
Pentagon and the World Trade Center were still burning, and we were
about to embark on a war against the forces of international terrorism.
Our distinguished chairman, Mr. Levin, used these eloquent words during
the debate last year on this amendment:
As important as the funding that we provide is, there is
something else that is critically important. That is the
unity of purpose that we showed as we entered into the
current struggle. Debate on a bill such as this is an
inherent part of our democracy. But, in one regard, we
operate differently in times of national emergency. We set
aside those differences we cannot reach.
I think the spirit of that very important statement by our chairman
prevails today, and should be the guideline--the guiding factor--when
each Senator eventually votes on this measure. Today, we remain at war,
and that unity is just as important today as it was last September.
I urge my colleagues to vote for this amendment. It is a fair,
balanced compromise offered in the same spirit of unity that moved us
forward last year, and which can be the basis for moving us forward
again today.
I yield the floor.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. LEVIN. Madam President, I wonder if my friend from Virginia would
clarify a few factual parts of his proposed amendment.
The Senator from Virginia said that he has been assured that the
inflation savings which will result from the midterm review will be
sufficient to cover $814 million. I am wondering where that assurance
came from, because whichever approach we adopt, that is an important
part. Where was that assurance? Who gave the Senator that assurance?
Mr. WARNER. Mr. President, I thank the distinguished chairman. I went
to the Department of Defense early one morning around 7:30 or quarter
to 8 and spent the better part of an hour with the Secretary of Defense
and his top budget people. I wanted to make certain that if I were to
formulate this amendment along those lines--I concede to the chairman
that it was my idea, and it caught them a little bit by surprise--the
Secretary said he would like to consider it. That he did. He went back
in his own internal system and eventually he conveyed to me the message
that the amendment as I have given him in draft form would be
acceptable to him and the administration.
I did concur that the calculations to be performed by the President's
Office of Management and Budget would enable this amendment to
authorize those funds.
Mr. LEVIN. The $814 million that the Senator assumes in his amendment
may or may not materialize, if the midterm review is not completed. But
has the Senator from Virginia, as I understand it, been assured at this
point prior to the midterm review that those savings will be
forthcoming in inflation review?
Mr. WARNER. Mr. President, these are very good questions. I want to
answer them very precisely.
The midyear review to which the Senator referred conducted by OMB is
in progress. He is correct. While the review is not formally complete,
we have been assured--that is, this Senator has been assured by the
administration--that the revision of the inflation assumptions will--I
repeat ``will''--provide ample funds to cover the additional allocation
for missile defense and DOD activities to combat terrorism as framed in
the amendment.
Mr. LEVIN. One further clarification: That came directly from the
Secretary of Defense.
Mr. WARNER. That is correct.
Mr. LEVIN. If it turns out otherwise when the midterm review is
completed, despite that best estimate on the part of the Secretary of
Defense, will the amendment still authorize the expenditure of that
$814 million in the ways specified? In other words, if it turns out to
be inaccurate and there is only $600 million in savings, am I not
correct that the amendment would nonetheless authorize the $814
million?
Mr. WARNER. Yes. On its face, it would do so. In the interim, I say
to the chairman, the appropriations process will have a chance to
review the midterm OMB analysis.
Mr. LEVIN. But the Senator's amendment, as I understand it, is not
contingent on that amount of inflation savings being available. Is that
correct?
Mr. WARNER. It is not contingent; that is correct.
Mr. LEVIN. And if the net savings turned out to be $400 million
instead of $814 million, then would the Secretary be required to make
cuts in other programs?
Mr. WARNER. Madam President, that is a question that I would reserve
for the moment. But I am confident that option will not occur. If I
may----
Mr. LEVIN. Because the Senator from Virginia is confident?
Mr. WARNER. That is correct.
Mr. LEVIN. The savings----
Mr. WARNER. Are going to be sufficient.
Mr. LEVIN. But my question is--if it turns out otherwise, there have
to be cuts made somewhere, under the Senator's amendment, as he has
just responded. He is not adding any money, so there must be cuts made
somewhere. And those cuts, of course, could then come in areas that we
have tried to protect, including operations and maintenance, readiness,
and a number of other areas of which this committee has been very
protective.
One of my concerns about the language of this amendment is that it is
not contingent upon savings being available. It assumes those savings
are available. And whether or not they are forthcoming, this money is
authorized, as I understand it. So that is one of the concerns I have
about this amendment.
Mr. WARNER. Madam President, I want to be extremely careful in my
response. I will be meeting with the Secretary of Defense in about an
hour's time. I want to clarify the chairman's question by asking it
directly to him and providing the Senate, this afternoon, as this
debate continues, a clear response to the chairman's question.
If I might add a bit here about this process, the administration uses
certain inflation assumptions in building its budget, including its
defense budget, to assure that the Government can buy the goods and
services it needs. If inflation is lower than anticipated, the budget
request is a little higher than needed to buy the required goods and
services.
[[Page S5977]]
When a midyear review determines the inflation rate is lower than
anticipated, the Secretary of Defense identifies budgeted funds that
are no longer required as a result of the inflation--they refer to it
as a bonus. Since they are deemed to be excess, there is no
programmatic impact resulting from the inflation savings being used.
What happens if the new inflation assumptions are wrong and savings
do not materialize? This borders on the Senator's question. Won't
programs be affected then? Inflation assumptions are just that:
assumptions made based on the best information available at the time.
The information used during the midyear review is more recent and
provides a better basis for inflation assessments than those made
almost a year ago when the 2003 budget was being built.
The same question can be asked about any budget at this time. What
happens to programs if inflation is higher than expected? I would note
that the Department of Defense routinely takes advantage of inflation
savings, as do the authorization and Appropriations Committees in both
the markup and conference process. So this is not a new source of
funds.
I would also note that the path taken by the House on missile defense
is quite different than that of the Senate. The use of this source will
be debated and resolved in the context of our conference, if adopted by
the Senate.
Mr. LEVIN. I thank my friend and I yield the floor.
The PRESIDING OFFICER (Mrs. Clinton). The Senator from Rhode Island.
Mr. REED. Madam President, as the chairman of the Subcommittee on
Strategic Systems, I have had the opportunity, over the course of many
hearings and many briefings, to look closely at our missile defense
program, and also to recommend to the committee that we make these
reductions.
All of these recommendations were based upon careful scrutiny of the
programs. They were based upon an evaluation of the effectiveness of
the programs going forward, and, in addition, a sense of trying to
avoid duplicative costs, ill-defined programs, those areas in which
money might be spent but there is no clear indication of the product
that was going to be purchased. In fact, some purchases seem to be
premature because the testing of the products had not been
accomplished. So this process has been a long one, and it has resulted
in specific recommendations that today we are considering on the floor
of the Senate.
I will make some general points about what is in this bill because it
represents a significant commitment to missile defense, both theater
missile defense and national missile defense, which now have been
amalgamated in the administration's approach which they describe as a
layered defense: the boost phase, midcourse phase, and terminal phase.
We have made a significant commitment of dollars in this bill to
missile defense, and those points should be made.
First, the Department of Defense estimates that in this year they
will spend about $4.2 billion. They expect to spend that for missile
defense, leaving $4 billion of funds to be carried over to the next
fiscal year, 2003.
We recommend, in this bill before us today, $6.8 billion of new
funding for fiscal year 2003, giving the Department of Defense more
than $10 billion available for spending next year on missile defense.
That is a significant commitment to missile defense, and one that is
supported by this Senator and, I am sure, by others. It is probably
twice what will be spent this year.
To characterize $10 billion of available resources for missile
defense next year as deep and damaging cuts to missile defense is
somewhat inaccurate.
I should say at this juncture, the proposed amendment by my colleague
from Virginia suggests that we add about $800 million and give the
President the option of spending it on missile defense or antiterrorism
activities. But it seems clear to me this debate is about missile
defense and not about terrorism. Terrorism is something we are
concerned about, but I think the impetus for this amendment is the
overarching concern of the administration for missile defense.
So I think, first, we have, in fact, included within this bill before
us robust funding for missile defense. We also have to respond to the
reality that today we are engaged in a war on terror.
In fact, the National Intelligence Estimate for December 2001 stated:
U.S. territory is more likely to be attacked with [weapons
of mass destruction] . . . from nonmissile delivery means--
most likely from terrorists--than by missiles, primarily
because nonmissile delivery means are less costly, easier to
acquire, and more reliable and accurate. They can also be
used without attribution.
That is the National Intelligence Estimate for December 2001. So we
do recognize there are threats to us from weapons of mass destruction,
but we have to put it in context that the most immediate threats are
either short-term theater missile threats by nation states or
clandestine operations of terrorists entering the United States.
So with that recognition, I think this proposal we bring to the floor
makes a great deal of sense. We have looked hard at individual
programs. We are cognizant of the threats, particularly the theater
missile threats. And we are also trying to do what we can to ensure
that we protect this country from terrorist threats. So we have
deliberated carefully and thoroughly on all of these issues.
Let me talk for a moment about the threats because they should be
often mentioned because our strategy has to respond to these threats.
First, I think we should point out how we are going forward with the
PAC-3 system which is a theater missile defense system. It is in
operational testing. It is strongly supported in this bill. It counters
those threats that are often mentioned here on the floor.
I know colleagues have talked about the potential access to short-
range missiles by terrorist groups in the Middle East. I think they
have also talked about the developments which are ongoing in countries
such as Iran and Iraq and North Korea for missile systems, short-range
tactical systems.
We have a system that is in operational testing, the PAC-3 system
that counters those threats. We support that system. It is supported in
this budget. We hope it is fielded at the first possible moment,
deployed with troops in the field. There are other systems, too, that
we support.
We continue to develop the THAAD system, which is another theater
missile system. That is supported in this budget. We are supporting the
Navy theater-wide system. We are considering, and very carefully
supporting, a whole range of missile systems that are important to our
defense. So to suggest that this legislation is not supportive of
missile defense is to miss the details of the legislation.
We are also looking very carefully, as I mentioned, at specific
adjustments to the systems that are being considered today.
That is our role, our responsibility. We are not here simply to say
whatever the Defense Department sends over is something we will support
without any question or scrutiny. Our job is to look carefully at
systems and to make critical decisions about scarce resources, and we
have done that.
Let me suggest some of the recommendations we have made in the
context of the missile systems I mentioned. First, the sea-based
midcourse, which was formerly Navy theater-wide. We fully fund the
development and test program, $374 million. In fact, we add $40 million
for new shipboard radar for robust theater missile defense. We are
adding money to these programs because we believe it is important, and
we believe this type of additional expenditure should be included
within the budget.
We do, however, look at the program carefully, and we have made the
recommendation that $52 million should be reduced because it is for a
very vaguely defined concept development study. We believe that study
is unjustified, undefined, but we are supporting vigorously the Navy
midcourse program, sea-based midcourse, as we should.
From what I have seen of the Navy theater-wide system, the sea-based
midcourse, the Missile Defense Agency is engaged in something which
might be described as an ad hoc approach. Let me suggest why.
In our authorization bill last year, we asked the Secretary of
Defense to submit a report to the congressional defense committees no
later than April
[[Page S5978]]
30, 2002, on the Department's ultimate plans for the Navy theater-wide
system. That was last year's language. We asked them: Give us your
plan.
We received a letter back from General Kadish which essentially said:
Here is some information, but we can't give you any of the definitive
information, particularly the life cycle costs of the system. What he
said was, basically, while the questions posed in this request are
relevant, a response will not be available until the SMD element of the
BMDS is defined, and he suggested that the SMD definition will be
completed by December 2003.
That is interesting. Then just a few weeks ago--approximately 10 days
ago--I read in the Wall Street Journal where General Kadish was saying
there will likely be a contingent deployment of this system in the year
2004. So the program will be defined by December 2003, and then we will
have contingency deployment in 2004. That suggests to me a lack of a
clear-cut plan, a lack of meaningful communication to this committee
and to this Senate.
That shaped a lot of our deliberations in the sense of these ill-
defined programs and the significant requests for money.
One area which is most relevant in this regard is the request for
systems engineering money. Systems engineering money is generally the
hiring of engineers, contractors, and software engineers to talk about
designing and integrating systems. It is a very important part of the
development of any system, particularly one as complicated and
technologically challenging as national missile defense. We had
included within this budget $500 million in systems engineering and
other Government support and operations funding in individual missile
program accounts: More than $170 million in systems engineering for the
midcourse program element: the sea-based and the ground-based, the Navy
system and the system in Alaska; more than $100 million for program
management operations funding in individual program lines in the
midcourse element; more than $70 million of Government support in the
boost program element; more than $20 million in the sensor program
element; and more than $80 million in the THAAD program element.
These are all systems engineering or program management costs. It
adds up to a half a billion dollars. There is another category of
systems engineering which has been developed in the last 2 years called
the BMD system, the system of systems.
First, let me suggest that there are some practical time problems in
spending all this money. The presumption for BMD systems engineering is
that you are going to integrate all these systems that are being
deployed. The reality is, it is very unclear at this juncture what
systems will be deployed, what radars will be used, what types of
sensors, what combinations of missiles and sensors. It is very unclear.
But still the request was for a significant amount of money for systems
engineering for the entire BMD system.
We looked carefully at this. We concluded that $736 million for this
category was more than sufficient, together with the $500 million that
is already embedded in each of the program elements of the existing BMD
program.
As a result, we were able to reduce this request for BMD system money
by $330 million. But let me also point out that as of this juncture, it
appears that BMD will only spend $400 million of last year's money, and
this will leave about $400 million for the next fiscal year. Together
with the $736 million and the $400 million carryover, BMD systems
engineering has over $1 billion, hardly a draconian, drastic cut in
their ability to continue to do these programs of integration and
systems engineering.
Again, we looked carefully. We determined what they were doing. We
determined that they would have more than enough resources to continue
their efforts into the next fiscal year, and we were able to move some
of this money into the shipbuilding accounts which everyone in this
Chamber, I would say without hesitation, will support enthusiastically,
an immediate need for our Navy for additional ships.
In addition, we were able to move some of this money into programs
for the protection of Department of Energy nuclear facilities. We did
that in response to published reports, which we have all seen, that the
Office of Management and Budget turned down the Department of Energy
for a significant increase in security funds at a time when the
threat--at least if you believe the last few weeks from the media--is
not the long-range missile, the threat is the terrorists coming in here
on an airplane, landing in Chicago with a plan or at least an idea to
seize radiological material someplace in the United States, construct a
``dirty'' bomb here, and detonate it. Yet the administration said: No,
DOE, you don't need this extra money to secure the nuclear facilities.
We think DOE needs this money, and it is a higher priority than
excessive systems engineering money for the ballistic missile defense
program.
So as we have looked at all of these programs, we have tried to take
a very careful, considerate look, tried to make tough decisions, and
they are tough decisions because we don't have unlimited, infinite
resources. As the Senator from Michigan said, I question sincerely the
availability next year of the inflation savings assumed in the proposed
Warner amendment. This seems to be one of those fudge factors that is
put in, an estimate. You might realize it, you might not realize it. I
await, as the Senator from Michigan does, eagerly, Senator Warner's
response from the Secretary of Defense with respect to these questions.
The reality is that these resources may not be realized through
inflation savings. If we authorize the spending, which, for political
reasons, the administration seems to be absolutely committed to, we may
end up using operational maintenance money to fund missile defense, to
fund these ill-defined areas of systems engineering and other programs.
We will find ourselves, in that case, coming back here and wondering
why our flying hours are down for the Air Force and Navy pilots, why we
can't provide the sort of resources we need for ongoing operations
maintenance at a time when we have forces in the field engaged today,
trying to destroy these terror networks, and succeeding in many cases
because of their skill and courage and the support they are receiving.
We have brought to the floor a bill that robustly supports missile
defense but asks very tough questions about specific programs that are
not adequately justified or are redundant. Let me give an example of
that. The THAAD missile system is well on the way toward the
engineering phase to get to a point where it can be part of our theater
missile defense system in the next several years, we hope. They are
asking for $40 million to purchase 10 unproven missiles.
Our concept is fairly straightforward and simple. We provide that
$895 million for the test development and for the first flight test of
the missile in this budget. A simple proposition: Let's fly one of
these missiles first before we buy 10 missiles. Maybe we can save
resources. The THAAD Missile Program is a good example of a program
that was once forced to accelerate beyond its technical means. It was,
as General Welch described it, rushing to failure, and it failed--
program course out of sight, product not adequate, not meeting the
requirement set out for the system. It was a program in such distress
that it was virtually on the chopping block. General Welch's report
said: Listen, you have to go back to a careful, deliberate, thorough
development process. The program is back on track. And now our sense is
they are trying to get off track again--let's just buy these 10 extra
missiles today.
That is an example, I believe, of the robust support--$895 million.
But the very careful and appropriate question is: Why do you need to
buy 10 missiles today when your first flight test is going to be in
fiscal year 2005? Due to time constraints, I must yield the floor but
will take time later to continue this discussion.
Amendment No. 3918
The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of the amendment by the Senator from
Massachusetts, and the time until 12:30 will be equally divided. Who
yields time?
Mr. LEVIN. Madam President, with apologies to our friend from Rhode
Island, that was the unanimous consent request. I can assure him that
there is no time limit on the missile defense
[[Page S5979]]
amendment that Senator Warner will be offering. So we can return to him
at that time. The time was to be divided. Senator Kennedy has returned.
Let me ask the Chair a question. Is the time divided, under the
unanimous consent agreement, until 2:30?
The PRESIDING OFFICER. Yes, the time is divided equally.
Mr. LEVIN. Is there anybody in control of the time here?
The PRESIDING OFFICER. Senator Kennedy controls 14 minutes and
Senator Levin controls 14 minutes.
Mr. LEVIN. I yield my time to Senator Warner so that there is equal
division between the proponents and opponents.
Mr. WARNER. It seems to me it was Senator Kennedy and myself. I have
delegated that to my colleague from Wyoming.
Mr. LEVIN. I ask unanimous consent that it be divided in that way.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Massachusetts is recognized.
Mr. KENNEDY. I yield myself 7 minutes.
Madam President, the record is clear. When there is real competition,
public workers will show their strength. According to the DOD's
numbers, when Government agencies have competed for contracts, they
have won the bid 60 percent of the time fair and square. When public
workers win these competitions, the taxpayers save money and good
workers keep their jobs.
This amendment is about competition--competition for the Defense
Department.
Our amendment will ensure that a framework is established for
competition for various goods and services in the Defense Department.
We provide a framework, where if there are national security items,
they can be exempt. If there are requirements for emergency, they can
be exempt. If there are certain needs in terms of the high-tech areas,
they are exempt. But for the broad range of different contracts, this
amendment will ensure that the American taxpayers' interests are going
to be preserved. But, more importantly, we are going to get the best in
terms of performance for the DOD.
The public-private competitions that have taken place have saved, on
average, over 30 percent, according to the Defense Department.
The Republicans claim that this amendment is in conflict with the GAO
Panel on Commercial Activities. In fact, this amendment is based on the
principle unanimously articulated by that panel, which calls for
greater public-private competition, which gives DOD the power to design
the framework for that competition consistent with the sourcing
principles laid out by the GAO panel.
The Republicans claim this amendment takes away flexibility from the
Department of Defense. Nothing could be further from the truth. When
national security so demands, DOD is given the power to waive public-
private competition. The amendment exempts many categories of work,
including almost all high-tech work, from public-private competition.
The amendment even provides a waiver to DOD for functions that must be
performed urgently.
It remains in the discretion of DOD to determine how many jobs should
be subject to the public-private competition and which jobs are subject
to this competition. The DOD retains enormous flexibility under this
amendment.
The Republicans claim this amendment will cost money. That is a sign
of their shortsightedness when it comes to the value of competition.
The DOD recognizes that public-private competition consistently yields
savings of over 30 percent on contracts. Any short-term transition
costs, which the CBO has estimated at one-tenth of what they are
claiming for the substance of this amendment, will be more than made up
for in long-term savings to the taxpayers.
The Republicans claim that we are moving too quickly with this
amendment and that the Senate should not act now to promote expanded
competition. I only ask that my Republican opponents listen to the
advice of Mitch Daniels, the Director of the Office of Management and
Budget, when it comes to these matters. Earlier this month, he said:
We cannot afford to wait. . . . The objective is to get the
taxpayers the best deal.
While we wait, the administration is moving ahead with shifting 15
percent of all eligible jobs to the private sector without any adequate
competition.
The passage of this amendment will lead to a smarter and more
efficient procurement policy for the Department of Defense. Just as no
private company would reasonably outsource jobs without a hard-headed
analysis showing cost savings, Government procurement should be based
on what is best for taxpayers and our national defense. The
consequences will be savings for taxpayers and improved dependability
for our courageous men and women in uniform.
We are surely facing great challenges in terms of our Nation's
security in this new era. More than ever, we are relying on the
Department of Defense and its dedicated employees. As we expand our
Nation's military budget, we must ensure that taxpayers and our men and
women in uniform are reaping all of the benefits possible. True
competition is more critical today than ever before.
Only if we give public workers the opportunity to compete in public-
private competition will we have true competition.
This is what the GAO has said on the question of the Commercial
Activities Panel, which has been quoted yesterday:
Competitions, including public-private competition, have
shown to produce significant cost savings for the Government,
regardless of whether a public or a private entity is
selected.
Angela Styles, senior officer at OMB, a procurement official,
testified on the House Armed Services Military Readiness Subcommittee
on March 13 2002:
No one in this administration cares who wins a public-
private competition. But we very much care that Government
service is provided by those best able to do so. Every study
on public-private competition that I have seen concludes that
these competitions generate significant cost savings.
What is it about our friends on the other side that they refuse to
permit the competition to take place?
Now, we heard estimates just yesterday that, according to DOD, the
amendment will cost $200 million. The years of experience and the
statements of the administration's officials clearly demonstrate that
public-private competitions save money rather than cost. The Deputy
Under Secretary of Defense for Acquisition Technology and Logistics
testified that the public-private competitions save the Government
$11.2 billion, a savings of $11.2 billion. The administrator of OMB's
Office of Federal Procurement Policy said the use of the public-private
competition consistently reduces the cost of public performance by more
than that. Even in the short term, the core of this amendment would
cost about a tenth of what the critics and DOD claim.
Those opposed to it say the amendment would prevent the
implementation of the GAO panel recommendation. The amendment is based
on the unanimous principles of the GAO panel that call for public-
private competition. The GAO recommended:
A process that, for activities that may be performed by
either the public or private, would permit public-private
sources to participate in competitions for work currently
performed in house, work currently contracted in the private
sector, and new work consistent with these guiding
principles.
That was a quote.
The amendment also provides for a pilot program to test the
effectiveness of the best value approach that is endorsed by the
opponents of this amendment. Furthermore, arguments are made by the
opponents that the amendment goes against the principle held for 50
years: The Government should not compete for noninherently Government
functions. For the first time, the amendment would mandate that the
Government compete with the private sector.
The proponents of that statement left out a key clause in the
longstanding U.S. procurement policy. According to OMB, ``the
Government shall not start or carry on any activity and provide a
commercial product or service if the product or service can be procured
more economically from a commercial source.''
We are not asking that work be given to the private sector if indeed
the Federal Government agency can do it more efficiently. The
Government personnel system is not nimble enough to accommodate this
amendment and move on
[[Page S5980]]
short notice. That is an argument that is made against this amendment.
There is no reason to believe the Government cannot adequately
accommodate the need for qualified personnel. In the face of pending
base closures, OMB outsourcing quotas, the DOD civilian workforce will
continue to downsize. As a result of this process, over 300,000 DOD
civilian personnel have lost their jobs due to outsourcing in recent
years. There is an excess of potential qualified personnel.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. KENNEDY. I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. THOMAS. I yield 5 minutes to the Senator from Virginia.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. ALLEN. Madam President, I rise today in opposition to the Kennedy
amendment, which would arbitrarily require Federal Government agencies,
particularly the Department of Defense, to compete with the private
sector for the performance of inherently nongovernmental services
within the Department of Defense. As chairman of the Republican Senate
High Tech task force, I believe that contracting with the private
business entities helps drive innovation and indeed save the taxpayers
money.
This amendment would reverse the progress that has already been made
in this area and obviously create damage to important initiatives such
as e-government. In fact, many of the information technology companies
across this country believe they would no longer seek Federal contracts
with DOD under the provisions of this amendment, thereby,
unfortunately, creating job losses in the private sector.
This view has been shared by my colleagues, Senators Ensign, Warner,
Gramm, Smith, Collins, Hutchison, Burns, Bennett, Hatch, and Brownback.
This amendment would mandate that every new Department of Defense
contract, modification, task order, or contract renewal undergo a so-
called public-private competition, whether or not the Government even
has the requisite skill, competence, or personnel to perform the work.
The changes in this current process by this amendment will: (1)
weaken and delay Government performance; (2) could devastate small
business; and (3) have a harmful effect on our important, creative,
high-technology industry.
First, the anti-private-enterprise exercise that would be caused by
this bill would result in delays in performance of Government
contracts. The Department of Defense would lack the capacity to quickly
procure and adopt innovative solutions to enhance safety, security, and
effectiveness. It would be an undesirable bureaucratic impediment that
could harm the ability of the Defense Department to perform its duties,
especially now during a national crisis.
Secondly, the added costs associated with the A-76 program, in
comparison to competitive procurement practices, traditionally would
exclude most small businesses from participating in service
contracting. This would have a particularly detrimental impact on
women, minority, and veteran-owned companies.
Finally, the amendment will have a devastating impact on the high-
tech industry, an industry that is so important to the competitive
vitality of the American economy. This amendment is opposed by the
high-tech industry, including the Information Technology Association of
America (ITAA). The exemptions for technology are ambiguous and do not
cover the full range of activities conducted by the exempted industry.
Moreover, ITAA notes the information technology exemption herein covers
only 3 percent of total IT service contracting. This is also opposed by
the Chamber of Commerce and various unions.
I will close with the views of the Secretary of Defense, who says:
We have made a top priority of finding efficiencies and
savings within the Department of Defense to enable us to
improve our tool-to-tail ratio. An important element of that
effort is to adapt business and financial practices to make
the best warfighting use of the resources the American
taxpayers provide us. The draft Kennedy amendment would
increase Department cost by requiring public-private
competitions for new functions and for previously contracted
work already subjected to market competition. It would
also adversely impact mission effectiveness by delaying
contract awards for needed services.
The Secretary of Defense, Mr. Rumsfeld, closes:
The proposed amendment would increase Department costs and
dull our warfighting edge.
I suggest that no Member of this body should support legislation that
dulls our warfighting edge. I therefore urge my colleagues to vote
against this amendment.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. KENNEDY. Madam President, I yield myself 30 seconds to respond.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. I am still waiting to hear the reason from the other
side that competition does not work. We are told that we cannot have
competition in the Defense Department because it is going to take time
to set up a process and procedure; we cannot have it because it is
going to work against small business.
We have a million-dollar exemption so that anybody below a million
dollars, a small business, can compete. Perhaps someone on the other
side can tell us why competition cannot work. We have not heard the
answer to that. What we have heard is all of the accountants, Mitch
Daniels, the GAO, say that competition can work, and when it does work,
we get the best in terms of our fighting men and women and we get the
best in terms of taxpayers.
I cannot understand the opponents saying we cannot set up a process
and procedure in order to deal with this; it is going to be too
complicated and costly. That is baloney. Competition can work, and I am
so surprised, from the party that allegedly is for more competition,
that they cannot support this amendment.
I yield 3 minutes to the Senator from Wisconsin.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. Madam President, I rise in strong support of the
amendment offered by the Senator from Massachusetts, Mr. Kennedy, of
which I am an original cosponsor.
I have long been concerned about the costs and benefits associated
with the process by which the Federal Government contracts out work. In
particular, I am concerned about the lack of data on whether these
contracts actually achieve real savings for the taxpayers, and about
the effects of outsourcing on the pay and benefits of Federal workers.
I do not automatically oppose contracting out. Such a process is
often appropriate. I am concerned, however, that the Department of
Defense is currently able to circumvent the public-private competition
process for contracting out work that is employed by other Federal
agencies. Contracting out affects the jobs of thousands of dedicated
Government employees each year. These men and women deserve the chance
to compete for this work, as the Senator from Massachusetts was
pointing out. They deserve the right to compete for their jobs, and
they have a right to do it on a level playing field. The Kennedy
amendment would help to provide a level playing field by ensuring that
true public-private competition actually occurs.
This amendment does not prohibit the Department of Defense from
contracting out. It does not stipulate which categories of jobs may or
may not be subject to public-private competitions. In fact, a number of
job categories are exempted. This amendment is broadly worded to give
DOD flexibility on which and how many positions to subject to
competitions. The amendment also includes a national security waiver.
Some have argued that this amendment would spell the end of
contracting out by the Department of Defense. Again, that is not true.
This amendment simply requires DOD to comply with four broad goals
aimed at bringing a measure of fairness and equity to the contracting
out process.
First, the amendment would ensure that public-private competition
actually occurs before work currently performed by Federal employees is
contracted out. The DOD would be able to
[[Page S5981]]
use any cost-based process to carry out this competition, including the
Circular A-76 process. This process would give DOD employees the
opportunity to present their best bid and to compete on a level playing
field with bids from contractors. The goal of contracting out is to get
the highest quality work at the best price for the taxpayers. We should
not continue to shut the civilian DOD workforce out of this process.
Second, this amendment would help to ensure that Federal civilian
employees are given the opportunity to compete for a fraction of what
is called ``new work'' to be performed at DOD. This provision would be
phased in over several years.
Third, this amendment would require DOD to use ``contracting in'' as
well as ``contracting out'' to make sure that Federal taxpayers are
getting the best deal. It only makes sense to periodically compete work
that has been awarded to contractors to ensure that the Federal
taxpayers are continuing to get their money's worth. Work being
performed by contractors should be subject to the same scrutiny as work
being performed by Government employees. In the interest of fairness,
the amendment requires that DOD opens to competition similar numbers of
contractor and civilian employee jobs.
Finally, the amendment would require DOD to establish an inventory to
track the cost and size of its contractor workforce. This inventory
would be compiled using the same procedures that the Department of the
Army recently adopted to track its own contractor workforce. I share
the concerns of some of my constituents, who have told me that they
believe that contracting out simply shifts jobs from the Federal
Government to the private sector without any real savings. I also share
their concern that part of any savings that is achieved may actually
come from reduced salaries and benefits that are paid to contractor
employees. It is important that DOD and Congress have an accurate
picture of the true size and cost of the contractor workforce.
In sum, this amendment does not prohibit the Department of Defense
from contracting out. It would ensure basic public-private competition
that will allow DOD employees to compete with contractor bids on a more
level playing field. It will also help to ensure that the DOD
contracting process is achieving the best result for taxpayers.
I urge my colleagues to support this amendment.
The PRESIDING OFFICER. Who yields time?
Mr. THOMAS. I yield 5 minutes for the Senator from Missouri.
Mr. BOND. Madam President, I appreciate the time.
I am very much concerned that the Kennedy amendment takes us
backward. Under the Federal Activities Inventory Reform Act of 1998,
the FAIR Act, agencies are examining activities to find what they do
that duplicates activities done in the private sector. This would be
done to see if these activities can be contracted out, to do those
activities more cheaply and effectively. This would prevent the Federal
Government from competing with the private marketplace. When the job is
done in the private marketplace, not only do we avoid having to carry
an additional Federal bureaucracy, we get to tax them if they make a
profit and we get the benefits of the competition, the innovation, that
small business brings.
As the ranking member of the Senate Small Business Committee, I
focused a lot of time and attention on what small businesses are able
to do. We find there are some tremendous innovations and new ideas
coming from small business. Whenever some action can be done
effectively in the private sector, I believe the private sector should
have the opportunity to do it. Functions that are inherently
governmental, clearly no one disagrees, should be done by Federal
employees. We are not talking about those. We are talking about
functions that are commercial in nature.
The current process for evaluating these functions for a possible
contracting out is the so-called A-76 process. OMB Circular A-76 calls
for competition to take place wherever commercial activity currently
performed by a Government agency is proposed to be contracted out. The
Federal employees of that agency describe how they would organize
themselves into the most efficient organization and compete against the
proposals submitted by private contractors.
The Kennedy amendment would bar contracting out of these functions,
unless the private contractor's proposal to provide cost savings of at
least 10 percent over the Federal employee's MEO. This is intended to
make contracting out as difficult as possible. This is a direct shot at
small businesses. This is meant to cripple the ability of small
businesses which are now providing vital products and services in our
Defense Department.
The Kennedy amendment purports to implement the recommendation of the
Commercial Activities Panel convened by Comptroller General David
Walker. However, the sole emphasis on cost savings--also, the Kennedy
amendment puts in a 10-percent additional savings--the sole emphasis of
the sponsor of this measure is saying that the deciding criteria in
that should be cost actually conflicts with the Walker panel
recommendations. The Walker panels calls for the standard of best
value, what generates the overall best value to the taxpayer.
Cost savings is clearly one factor being considered. But best value
contracting also includes other factors, such as higher quality, faster
delivery, innovative processes, reliable past performance, or other
criteria that might justify a higher cost.
Best value contracting is what most of us do every day when we go out
to buy goods and services. When you buy lunch, you do not always buy
the lowest price item on the menu every day. When you go to the
department store, you do not always purchase the cheapest item on the
shelf. You may deliberately buy an item that is more expensive because
you expect the quality to be better. The best value approach puts
Government contracting on par with how average, intelligent, informed
consumers make their purchases in the marketplace.
That is one reason the Government is increasingly relying on best
value contracting and why the Walker panel recommends it for analyzing
contracting out proposals. The Kennedy amendment's exclusive emphasis
on costs savings, and the additional unworkable requirement the savings
must be more than 10 percent, is a step backward from the Walker
recommendations.
The sponsor of the amendment has cited OMB and other statements made
by this administration, when, in fact, the President, speaking for this
administration on March 19, emphasized the vitally important role that
small business plays in meeting the needs of the Federal Government. He
talked about taking a major effort, launching a major effort, to stop
the bundling of contracts to prevent their being awarded to small
businesses.
There is currently underway a study in OMB under Angela Styles on how
to get more contracts unbundled so small business can provide a
workable and economic role.
I urge my colleagues to oppose the Kennedy amendment.
Mr. THOMAS. I yield our final 5 minutes to the Senator from
Tennessee.
Mr. THOMPSON. Madam President, there has been a lot of discussion
concerning the Commercial Activities Panel. As has already been stated,
this is a panel that was set up with the distinguished citizens to
consider this complex problem. One of their recommendations, No. 9, is
to ensure that competitions involve a process that considers both
quality and cost factors.
My understanding is that the amendment of the Senator from
Massachusetts addresses only the cost factors in determining the best
value to the Government. On that, in and of itself, we clearly have a
deviation, to say the least, from the Commercial Activities Panel.
That is not as significant a point as the one following, and that is
the Armed Services Committee simply has not reviewed the panel's
recommendations, and we on the Governmental Affairs Committee have not
had the opportunity to review and consider the panel's recommendations.
This is certainly an area of some complexity and controversy that
should go through the committee process.
We have a bill before the Senate now on the Governmental Affairs
Committee similar to the Kennedy amendment but it applies to all
agencies in the Federal Government. We have had
[[Page S5982]]
one hearing on that bill to date. We are in the middle of that process.
This amendment will clearly increase the costs to the Government and
distract the Department of Defense from its war fighting mission.
The Senator asked, why are we against competition? The answer is, we
are not. We have plenty of competition. What we have is competition in
the private sector competing for the jobs. The Senator would interject
the Federal unions into the middle of that competition where there has
been no such injection in times past. The Department of Defense points
out it will cost more money and it will delay contracts at a time when
we neither need higher costs nor delays in the issuing of contracts.
The DOD and the OMB Director opposes this amendment, as well as small
and minority-owned businesses and major labor unions. This is no time
to be shifting massive jobs from the private sector to the public
sector labor unions. Private labor unions have been losing membership
over the past several years while membership in the public labor unions
have been rising. Many labor unions oppose this amendment as well as
taxpayer groups.
I urge my colleagues to vote against the Kennedy amendment.
I yield the floor.
Mr. KENNEDY. How much time remains?
The PRESIDING OFFICER. Three minutes.
Mr. KENNEDY. I yield a minute and a half.
Mr. DURBIN. I am happy to be a cosponsor of this amendment.
I rise today to speak in support of the Kennedy amendment, which will
help ensure real competition between the public and the private sectors
for the work performed by the Department of Defense. I am pleased to
join my colleagues, Senator Jack Reed, Daniel Akaka, and Russ Feingold
as a cosponsor of this important amendment.
Let me review what this amendment does. This amendment addresses the
need for more competition and more information by requiring an analysis
of the costs of maintaining work in the public sector. The amendment
defines broad and flexible principles to guide a public-private
competition process. It allows the Defense Department wide flexibility
in setting up a competition consistent with these broad principles. The
amendment provides discretion to the Defense Department to waive the
public-private competition requirements when national security demands
and exempts a number of activities from the requirements. It also
permits DOD the discretion to determine which jobs and how many jobs
should be subject to public-private competition.
The amendment will also provide Congress the information it needs to
exercise important oversight by watching the level of managed
competitions, since there is currently no requirement that agencies
conduct them. And by granting DOD ``pilot program'' authority to
explore alternatives to the OMB Circular A-76 process that will yield
the same projected cost savings, we can gain some practical experience
with some of the reforms recommended in the recently published report
of the Commercial Activities Panel.
Nine months ago, our Nation's collective consciousness was jolted
when heinous acts of terrorism were committed on American soil. As a
result of those horrific acts, we are not--and never will be--the same.
We are stronger in our response, more steeled in our resolve, more
vigilant about identifying and eliminating our vulnerabilities.
Overnight, that life-altering experience forced us to seriously
evaluate the workings of our Government from a new and different
perspective. We now view ``homeland security'' in completely different
ways. Protecting our borders, our ports, nuclear power plants, chemical
plants, water supplies, and other critical infrastructure has taken on
a new and urgent imperative. The Department of Defense is reorganizing
itself for homeland security, and functions that may not have seemed
essential to DOD's mission may now, in fact, be essential; and
conversely, there may be functions that could be better performed in
the private sector, allowing DOD to focus on its mission.
I would like to share an example to illustrate this point. After
September 11, I asked that my staff to secure a briefing on the
security of a chemical munitions storage depot that sits 30 miles from
the Illinois border. The United States is in the process of destroying
these deadly munitions, which could kill hundreds of thousands of
people, pursuant to the Chemical Weapons Convention. I learned that the
depot had only one uniformed military officer--the commander--to
protect it, because security was provided by private contractors. About
a week after that, National Guard troops joined the private contractors
in protecting this site.
Historically, DOD has set the pace as the lead Federal agency in
using competitive sourcing. But when we talk about ``setting the
pace''--what we know is that fewer than 1 percent of DOD service
contracts are subject to public-private competition. Work is outsourced
without any opportunity for public sector employees to compete for the
jobs. And DOD is considered the leader--few civilian agencies have
utilized the process; in fact, in Fiscal Year 1997, not one civilian
agency reported conducted a cost comparison study.
The Department of Defense spends tens of billions of dollars annually
on service contracts--ranging from services for repairing and
maintaining equipment to services for medical care to advisory
assistance services such as providing management support, performing
studies, and delivering technical assistance.
In fiscal year 1999, DOD reportedly spent $96.5 billion for contract
services--more than it spent on supplies and equipment. GAO has
repeately reported that inadequate and inaccurate information provided
by DOD on service contract spending hampers congressional
decisionmaking and limits congressional use of information reported in
the budget.
Not only is reliable cost information scarce, there is too little
competition for contracts to provide services to and for Federal
agencies. As I indicated, fewer than 1 percent of DOD service contracts
are subject to public-private competition. Because there is such a
small fraction competed, there is a paucity of information and a host
of unknowns about whether outsourcing to the private sector is really
saving money for the taxpayers. Outsourcing has evolved as one of the
principal mechanisms used to reduce the size, scope, and costs of the
Federal government. However, we have few clues about whether
outscourcing has in fact reduced government costs, size, and scope.
A GAO study of savings obtained from competitive sourcing published
in August 2000 reflected that DOD did realize savings from seven of the
nine competitive sourcing cases reviewed, although less than the $290
million DOD initially projected. And savings occurred regardless of
whether governmental organizations or private contractors won the
competition. Last year, the General Accounting Office elevated
strategic human capital management to its list of ``high-risk''
government-wide challenges. In testimony in February 2001 before the
Governmental Affairs oversight subcommittee which I now chair,
Comptroller General David Walker made it abundantly clear that Federal
employees are not the problem. As Mr. Walker emphasized, to view
Federal employees as costs to be cut rather than assets to be valued
would be to take a narrow and shortsighted view, one that is obsolete
and must be changed. I was heartened by his perspective.
Yet right on the heels of this acknowledgement of the severe human
capital crisis facing the Federal workforce, the administration
launched a major initiative requiring Federal agencies to compete or
directly convert to the private sector at least 5 percent of the full-
time equivalent jobs listed on their Federal Activities Inventories. An
additional 10 percent of the jobs are to be competed or converted by
the end of Fiscal Year 2003, 85,000 jobs, for an aggregate of 15
percent of all Federal jobs considered commercial in nature.
It strikes me that it will be about as formidable as the perils of
Sisyphus to make any headway in recruiting and retaining the best and
brightest in the Federal workforce when in the same breath you are
telling them that over the next few years one out of every four jobs is
potentially slated to disappear into the private sector. We really
don't have a trove of solid, reliable agency-by-agency information
about
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the costs and performance of work that is being performed for the
government under contract. This amendment will begin to gather it--by
and for the Department of Defense.
I have long been interested in whether we have a system to measure
and account for these costs, determine if there is savings, and oversee
the work that is being done with Federal funds. It has been my
impression that some of my colleagues have been just hidebound to
outsource, without regard to the price tag or performance. Their
motivation was to reduce the size of the Federal workforce--at any
cost. When I suggested amendments--arguing that we had to save money,
they rejected them. They told me that is not the point--we have to turn
some lights out in some federal buildings. I would like to know whether
that's still driving the outsourcing fervor.
I want to be perfectly clear: I am not opposed to all outsourcing.
What I am concerned about is ensuring that decisions to shift work to
the private sector are made fairly, not arbitrarily; that public-
private competition is fostered; and that we have a reliable system in
place to have information about the costs and performance of work being
performed with Federal funds by the private sector under these
contracts, in essence, accountability.
You can outsource and save money for taxpayers, and I think you
should do that. If you decide you will outsource, privatize, and
contract out, whether you save money for taxpayers or not, you are not
serving either taxpayers or the needs of our Nation.
It is interesting to me that the Senators on the other side of the
aisle are fearful of the word ``competition.'' The thought that the
private sector might have to compete for providing services to the
Federal Government with the public sector is unacceptable to them.
When you look at the Department of Defense, they spend over $96
billion a year on contracts per services. How many of those are
competitively bid? Less than $1 billion. Ninety-five billion out of $96
billion in these contracts for services go without competitive bid. It
has created cozy, sweetheart, comfortable arrangements with companies
and the Pentagon. They do not want to compete. They do not want to
stand up against those who say we can do it for you more
professionally, more cheaply, more effectively. They can't stand the
idea of competition. That is why they are opposing the Kennedy
amendment.
Should we not at this point in time of our history, with limited
resources, fighting a war on terrorism, insist the taxpayers get every
dollar of service for every dollar of taxpayers' money they put into
our national defense? That is what the Kennedy amendment says. That is
why I am happy to cosponsor it.
The PRESIDING OFFICER. The time of the Senator has expired. Who
yields time?
Mr. KENNEDY. How much time remains to the other side?
The PRESIDING OFFICER. They have 1 minute 25 seconds.
Mr. KENNEDY. On either side, then?
The PRESIDING OFFICER. There remain 1 minute 25 seconds for both.
Mr. THOMAS. I just want to respond to the comments made with respect
to OMB. I want to read from a letter from the Director.
Dear Senator Warner, I am writing to express deep concern
over the possible Kennedy amendment [proposal]. While
packaged in good-government clothing, this amendment will
severely limit the Department of Defense's ability to acquire
services necessary to help the Department meet current
threats. The Department of Defense must have the flexibility.
. . .
While agencies are embracing competition, focusing on core
mission, and eliminating barriers to entering the
marketplace, this amendment does the opposite.
The Senator was talking about support from this Department, and this
is not what is there.
It would require the Government to consider reforming non-
core activities that it doesn't have the skills to do when
entrepreneurs and their employees are ready, willing and able
to perform.
We most focus our agencies on performance and
accountability. Now--when our nation is at war against
terrorism of global reach--is not time for the Secretary of
Defense to have fewer options, for the sake of moving more
functions into government hands.
I yield the floor.
Mr. KENNEDY. Madam President, I yield myself the remaining time.
We should not have to get into a discussion about the value of
competition. But a year ago one of our colleagues offered a very
similar amendment and then Senator Warner said: Let's wait until we
have the Commercial Activities Panel report. That was to guide the
Defense Department.
In this report, on page 47, it says:
Establishing a process that, for activities that may be
performed by either the public or the private, would permit
public and private sources to participate in competitions for
work currently performed in-house, work currently contracted
to the private sector, and new work, consistent with these
guiding principles.
Unanimous recommendation. That is what this amendment does. That is
why we believe it is important. It will be in the interests of our
national security, the Department of Defense, and the taxpayers. That
is why we believe this amendment should be accepted.
I believe all time has expired.
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