Our freind Nick Schwellenbach over at the Project on Government Oversight dredged up a pretty damning report from the Pentagon's Defense Contract Management Agency that calls Lockheed Martin's aircraft division to the carpet for not keeping close track of costs.
Lockheed Martin, the worlds largest defense contractor, does "not provide the requisite definition and discipline to properly plan and control complex, multibillion dollar weapon systems acquisition programs," states the executive summary of a November 2007 Pentagon report obtained by the Project On Government Oversight. Questions about this report are likely to be raised this morning at a Senate Armed Service Committee hearing on weapons acquisition.
The report by the Defense Contract Management Agency found that Lockheed Martins military aircraft division based in Fort Worth, Texas, is not compliant with contractually-required industry guidelines for tracking and managing costs called the "Earned Value Management System." EVMS helps contractors and the government spot potential cost problems before they balloon out of control. This April the GAO reported $295 billion in cost growth for the 95 major weapons systems it reviewed bringing their estimated total price tag to $1.6 trillion.
The report will be highlighted today at a hearing of the Senate Armed Services Committee which will ask questions about "acquisition of major defense weapons systems" of John Young -- who needs no introduction -- and Katherine Schinasi, the GAO's Managing Director of Acquisition and Sourcing Management (whatever the heck that means)...Our boy Colin Clark will be there to hear what's what and he'll have some follow-up gouge for you on what goes on.
The decline of Pentagon and contractor emphasis on EVMS was an unintended consequence of 1990s acquisition reform, Dr. James I. Finley, the Deputy Under Secretary of Defense for Acquisition and Technology, told POGO. EVM is getting more attention throughout industry now that the DoD is stressing compliance.