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On November 15, 2005 members of Congress and representatives from numerous public and private organizations met to discuss government acquisitions.  Sen. John McCain (R-AZ) and others heavily criticized the current public contracts system but suggested possibilities for wide-spread reform.

Sen. McCain's comments focused on the Department of Defense ("DoD").  According to Federal Contracts Report ("FCR"), Sen. McCain called "today's defense spending 'unsustainable,'" pointing out the increase from $291 billion to $550 billion in just the last five years.  FCR explained that Sen. McCain's comments are being listened to carefully, since he is poised to take over the chairmanship of the Armed Services Committee this year.

John Hamre of the Center for Strategic and International Studies stated that many of the problems with today’s defense spending stem from its outmoded design.  That design, one in place since the 1980's, has not emphasized enough the need for more direct accountability, according to Hamre.  Another major problem has been the DoD's excessive spending on overhead, especially for staff at the Office of the Secretary of Defense.

Other commentators were similarly critical.  Katherine Schinasi of the Government Accountability Office ("GAO") seconded the problem of accountability, especially because those in government are encouraged to downplay problems with funded programs in order to ensure the continued flow of financial support.  A related problem, cited by Gene Porter of the Institute for Defense Analyses, is the uncertainty surrounding defense spending from one year to the next.  While there were disagreements among the group, a number of panelists seemed to agree that the result of these problems was that the programs which DoD funds are much less effective than they otherwise could be. 

This update is published by Venable LLP. Venable publications are not intended to provide legal advice or opinion. Such advice may only be given when related to specific fact situations. © Copyright by Venable LLP 2006.