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Obama On the Politics of Procurement

By Ed O'Keefe
Barack Obama
President Obama holds his second prime time press conference of his presidency Tuesday night. (Photo by Post)

The Eyes and ears of Beltway bureaucrats undoubtedly perked up tonight during President Obama's prime-time news conference when he detoured for a brief discussion of the federal government's procurement process.

"There is uniform acknowledgment that the procurement system right now doesn't work. That's not just my opinion. That's John McCain's opinion. That's Carl Levin's opinion," Obama said in response to a question from Kevin Baron of Stars and Stripes about the administration's ability to find savings in the budget at the departments of Defense and Veterans Affairs despite potential political objections. (See the full question below.)

Expanding on the question, the president said: "There are a whole host of people who are students of the procurement process that will say, if you've got a whole range of billion-dollar, multibillion-dollar systems that are -- where we're seeing cost overruns of 30 percent or 40 percent or 50 percent, and then still don't perform the way they're supposed to or are providing our troops with the kinds of tools that they need to succeed on their missions, then we've got a problem."

Stating what's obvious to close observers of the process, the president said that "the politics of changing procurement is tough because, you know, lobbyists are very active in this area."

But Baron's question and Obama's answer come on the heels of the administration's plans to scrap a proposal to bill veterans' private insurance companies for treatment of combat-related injuries at VA hospitals. The plan would have saved VA about $530 million a year, but earned swift opposition from veterans' service organizations and members of Congress.

It might have seemed an odd query amid questions about the economy, foreign policy and stem cell research (Chris "The Fix" Cillizza suggested the question would be a turn-off for some viewers unfamiliar with the process), but you can bet many Beltway bureaucrats and good government folks will be happy to hear a president ably discuss this topic of concern.

QUESTION: Mr. President, where do you plan to find savings in the Defense and Veterans Administration's budgets when so many items that seem destined for the chopping block are politically untenable, perhaps?

OBAMA: I'm sorry. So many...

QUESTION: When so many items that may be destined for the chopping block seem politically untenable, from major weapons systems, as you mentioned procurement, to wounded warrior care costs, or increased operations in Afghanistan, or the size of the military itself.

OBAMA: Well, a couple -- a couple of points I want to make. The budget that we've put forward reflects the largest increase in veterans funding in 30 years. That's the right thing to do.

Chuck [Todd] asked earlier about sacrifices. I don't think anybody doubts the extraordinary sacrifices that men and women in uniform have already made. And when they come home, then they have earned the benefits that they receive. And, unfortunately, over the last several years, all too often the V.A. has been under-resourced when it comes to dealing with things like post-traumatic stress disorder or traumatic brain injury, dealing with some of the backlogs in admission to V.A. hospitals.

So there are a whole host of veterans issues that I think every American wants to see properly funded, and that's what's reflected in our budget.

Where the savings should come in -- and I've been working with Secretary Gates on this, and we'll be detailing it more in the weeks to come -- is, how do we reform our procurement system so that it keeps America safe and we're not wasting taxpayer dollars?

And there is uniform acknowledgment that the procurement system right now doesn't work. That's not just my opinion. That's John McCain's opinion. That's Carl Levin's opinion.

There are a whole host of people who are students of the procurement process that will say, if you've got a whole range of billion-dollar, multibillion-dollar systems that are -- where we're seeing cost overruns of 30 percent or 40 percent or 50 percent, and then still don't perform the way they're supposed to or are providing our troops with the kinds of tools that they need to succeed on their missions, then we've got a problem.

Now, I think everybody in this town knows that the politics of changing procurement is tough, because, you know, lobbyists are very active in this area. You know, contractors are very good at dispersing the jobs and plants in the Defense Department widely.

And so what we have to do is to go through this process very carefully, be more disciplined than we've been in the last several years.

As I've said, we've already identified potentially $40 billion in savings just by some of the procurement reforms that are pretty apparent to a lot -- a lot of critics out there. And we are going to continue to find savings in a way that allows us to put the resources where they're needed, but to make sure that we're not simply fattening defense contractors.

One last point. In order for us to get a handle on these costs, it's also important that we are honest in what these costs are. And that's why it was so important for us to acknowledge the true costs of the Iraq war and the Afghan war, because if -- if those costs are somehow off the books and we're not thinking about them, then it's hard for us to make some of the tough choices that need to be made.

By Ed O'Keefe  | March 24, 2009; 10:12 PM ET
Categories:  Administration, Contracting  
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Comments

Obama and the rest of the idiot adminstration are busy mixing the koolaid for the puppet deomocrats and it seems Pelosi is using her finger to stir.

Posted by: JWx2 | March 24, 2009 11:04 PM | Report abuse

Difference between USSR Communist media and USA "mainstream media"

In Russia government make media say what they want. In USA "Mainstream media" try make government what they want.......eventually they become same thing?!

I Igor produce Obama birth certificate at
www.igormarxo.org

Posted by: igormarxo | March 24, 2009 11:15 PM | Report abuse

Oh, lord, here we go again with more procurement reform. The reason for the cost overruns is that most programs grossly underestimate their costs in a race-to-the-bottom for Congressional approval. Then, surprise, surprise, once the program is underway then the real costs become known. Then there are often a whole slew of changes which also occur once contracts are underway because of turnover in government personnel managing the project who may have different ideas than the persons originally in charge. The way to stop this is to assign officers and civilian personnel to programs from start to finish, and only allow them to leave if they accept demotion or resign from the government or military. Very few cost overruns are due to the contractors, in my experience.

Posted by: ripvanwinkleincollege | March 24, 2009 11:54 PM | Report abuse

The problem is not with the people, it is with the process. Leading quality-minded companies establish long-term relations with suppliers who understand and can meet their needs. We continue to try to award contracts based on a bidding process that emphasizes low cost and encourages low-balling. Once one contract is done, we switch to another supplier and never establish the kind of long term relationship needed for effective supply chain management. The process is never going to get better until we abandon this nineteenth century thinking and start using modern quality practices.

Posted by: bigtom6156 | March 25, 2009 10:09 AM | Report abuse

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