How DoD Wants to Keep Costs Under Control

Here's a little clue as to one way the Pentagon is going to try -- key word being try -- to really drive down the cost of its big ticket weapons buys in an age of limited budgets. Just this week DoD's top weapons buyer, Ashton Carter, tapped his former acquisitions director, Shay Assad (pictured above), as the newly created Director of Defense Pricing. In other words, Carter is putting Assad in charge of negotiating the lowest possible price on weapons.

From Defense News:

"We simply intend to be much more professional, much more capable, when it gets to sitting at the table and negotiating the price on behalf of the taxpayers," Assad said during a June 2 briefing at the Pentagon.

The creation of the position is part of Pentagon acquisition executive Aston Carter's Better Buying Power initiative to buy more for less money. Part of that initiative is looking beyond program cost estimates and determining what a program should cost.

In his new role, Assad will help program managers hit these should-cost targets, which will be set at levels less than official budget estimates.

In addition, he will spend more time improving the contracting and pricing work forces in "improving their skills on what it is we pay on the goods and services we buy."

Getting as much bang for the buck is going to be critical as the five-sided crazy building is going to be facing continued budget pressure despite the need to modernize its aircraft, ground vehicles, long-range strike weapons and ship fleets for the 21st century.

Think about it; right now the Pentagon has the F-35 Joint Strike Fighter Program, the KC-46 tanker modernization program, the Ground Combat Vehicle, the Amphibious Combat Vehicle, the new strategic bomber, the Gerald Ford class of aircraft carriers and a host of high-end UAV programs just to name a few of its big modernization efforts.  Given the current budget drawdown, the Pentagon and defense industry are going to have to put some serrious discipline into buying and fielding these weapons on cost and schedule.

One of Assad's first endeavors will be to give the F-35 program some serious scrutiny in light of new reports that its costs are once again predicted to spike beyond previous estimates. Assad will be "intimately involved" in the negotiations for the fifth batch of production jets that are underway, according to Defense News.



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