I often get calls from members of the press for information and interviews on matters of military technology, defense acquisition and force structure. The reason I and others in think tanks around Washington get such calls is because we have studied and written on these and related subjects for years, even decades. When reporters write on such matters they find it useful to consult with me and my colleagues to get different, even conflicting perspectives.
Recently, I was called by a reporter who wanted to discuss the subject of defense logistics, a topic on which I have written extensively. I spoke about the money the Department of Defense (DoD) had saved through the use of innovative logistics approaches such as performance-based logistics (PBL) contracting. There is a lot of data to support the utility of PBL-based agreements, when they are properly structured. Likewise for multi-year procurements, block purchases and strategic supplier agreements. The problem, I opined, was DoD’s unwillingness to fully embrace these and other innovative acquisition approaches.
Somewhere during the interview the reporter commented that my views were very pro-business. That stopped me a minute. I asked out loud when did being pro-business regarding defense acquisition become a bad thing? Virtually every senior defense official is on record talking about the importance of the private sector and how there needs to be a partnership between the Pentagon and business. The Deputy Secretary of Defense, Dr. Ashton Carter, observed on more than one occasion that DoD is dependent on private companies simply because the government doesn’t build anything.
The reporter’s comment to me reflects a critical, even hostile, attitude, primarily in government generally and DoD, in particular, towards the private sector. Yes, there have been problems with some contracts and contractors. There have been a few cases of fraud and outright criminality. But the vast majority of contractors do good work, abide by their contractual obligations and try hard to make their customers happy. They do so even though the average profit and return on invested capital in the defense sector is significantly less than for most sectors of the U.S. economy.
The negative attitude in DoD towards business is wrong on its face. It is also counterproductive. The Pentagon needs the private sector more now than ever. Increasingly, the Pentagon is buying platforms and systems that are derivatives of commercial designs. Look at the new KC-46 aerial tanker, based on the B-767, and the P-8 maritime patrol aircraft, really a version of the B-737. Military IT is becoming totally commercialized and commoditized. When it comes to getting mail and supplies to forces in Afghanistan — except for special items — the military relies on the supply chain expertise of private companies like UPS and Maersk Line Limited. The private sector has shared the risks with our people in uniform and spilt blood too.
So I will admit that when it comes to the future of the U.S. military and national security I am pro-business. Any other posture denies reality.
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