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Red Tape Ties Up Industrial Base

Posted By Brian Slattery On March 13, 2012 @ 4:15 pm In Economics | Comments Disabled

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Defense officials need to rethink the way they award contracts, says Daniel Goure, vice president of the Lexington Institute [2].

Goure argues that, in its effort to promote competition, the Pentagon has actually convoluted its system and potentially weakened the defense industrial base. Frequent changes to regulations make it difficult for companies to take advantage of economies of scale, as they must continually adapt to new requirements.

Instead of adding layers of bureaucracy to its buying practices, the Pentagon should promote a robust defense strategy [3] in the larger context. The duty of the military is to preserve national security, and the U.S. Constitution mandates that Congress provide for the common defense. In recent years, neither has been able to effectively carry out these responsibilities due to across-the-board defense cuts. No amount of acquisition modification will reverse an atrophying industrial base if defense spending continues to rapidly decline.

Underlying America’s withering defense budget is the Obama Administration’s disregard for national security [4]. Rather than writing budget requests that reflect threats to America’s sovereignty and security, Obama has slashed the defense budget to appear fiscally responsible. His strategy is fundamentally flawed, however, as he has failed to address the real debt drivers: entitlement spending. Defense spending is less than one-fifth of the federal budget, yet it has already accounted for half of deficit reduction efforts. The Administration could reduce the defense budget to zero today, but programs such as Social Security and Medicaid would continue to consume the lion’s share of federal spending.

Pentagon officials are justified in their attempt to promote competition amongst the industrial base. This is the cornerstone of capitalism, after all. However, there are better ways to go about acquisition reform then increasing the amount of red tape companies must go through to contract with the military. James Carafano offers a number of suggestions [5] to this end, such as killing the Jones Act and other “Buy America” provisions.

Amidst dramatically shrinking defense budgets, Pentagon officials should continue to strive for best business practices. However, they also need to realize that frequent, confusing procedural changes make it difficult for companies to navigate the federal business world. Excessive regulation harms America’s industrial base and, as a result, weakens national security.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/03/13/red-tape-ties-up-industrial-base/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/Panetta-Pentagon-1-27-12.jpg

[2] Daniel Goure, vice president of the Lexington Institute: http://www.defpro.com/news/details/33226/?utm_source=twitterfeed&utm_medium=twitter

[3] robust defense strategy: http://www.heritage.org/research/reports/2006/02/congress-needs-to-focus-on-the-big-picture-in-defense-acquisition-reform

[4] disregard for national security: http://budget.senate.gov/democratic/index.cfm/files/serve?File_id=2618e24f-48fb-4b6c-a435-e11a67acc161

[5] a number of suggestions: http://www.heritage.org/research/reports/2011/06/5-steps-to-save-americas-defense-industrial-base

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