How Government Appropriators Are Costing Us Billions

Let’s imagine you are standing in the open doorway of a plane -- standard government issued parachute strapped on tight, flying 12,500 feet above ground level and preparing to jump.

Now considering the typical “belly-to-earth” fall rate of around 115 mph, you will have approximately 60 seconds to enjoy the fall before having to pull the cord. At this point, would you feel safer knowing the parachute maker won the contract because they made the best parachutes available - or instead, that they won because they slashed their operation standards to come in at the lowest price? It’s a no-brainer, you would pick the first one, of course, a quality-made parachute that will deliver you safely back to earth.

Unfortunately, the Department of Defense (DoD), along with other government agencies, are currently required to award government contracts based on a bidding process known as the Lowest Price Technology Acceptable (LPTA). The intended goal of LPTA is to protect taxpayers from waste, fraud, and abuse. It is an easy process to understand -- the award normally goes to the lowest priced offeror who submitted a “technically acceptable” proposal. There is no consideration given for the long-term durability, quality, or reliability of the product; just whether it “technically” fits the needs at the cheapest cost.

Don’t get me wrong: the LPTA is a good and necessary solution for purchasing products like office supplies or, say, toilet seats. Remember when we learned that in the 1980s the government was paying $640 each for plastic toilet seats for our military planes?  Under the LPTA, this type of price gouging is much less likely to occur.

However, the limited scope of the LPTA has become problematic. The term “technically acceptable” is not well defined. This lack of specificity leads some companies to purposely lowball their bids just to win the contract - even though they won’t truly be able to deliver on the terms of their contract.

Once this inevitably occurs, the bidding process must be started all over again, wasting all of the taxpayer funds in the process. Even when a contracting officer tries to do the right thing by seeking out quality and durability along with the price, they face mountains of bureaucratic red tape trying to justify the extra expense.

In some cases, the DoD’s requirement to buy cheap isn’t just a matter of wasted time and money, but rather a matter of life and death. By example, the Battle of Wanat in Afghanistan suffered from a series of failures, not the least was the inferior automatic weapons our soldiers were given that “turned white hot and jammed from non-stop firing.” Our soldiers were not properly prepared or equipped for the four-hour battle that resulted in nine dead Americans and 27 wounded.

The space program is another area where it is only common sense that quality and reliability is just as important as price. Take, for instance, the current focus on reusable rockets. Aerospace engineers have been working to develop rockets that can be used multiple times, like an airplane, which will ultimately cause space flight to get a lot less expensive. The idea is great, but the execution has been less than ideal. Thanks to the LPTA policy -- not to mention a fair share of cronyism -- the SpaceX aerospace company has consistently been awarded contracts to build new, advanced rockets because they undercut their competition. There’s just one problem: some SpaceX’s rockets seem to have a big problem with exploding upon takeoff.

Last year, as SpaceX’s Falcon 9 rocket exploded for the second time in 15 months, so too did $62 million taxpayer dollars – forcing NASA to delay commercial flights to 2018. SpaceX founder, Elon Musk, admits that while the loss of a rocket and its cargo can be costly and inconvenient, they aren't viewed as crippling blows to the company. And why should he, considering the American taxpayer is left picking up the tab for his failed attempts?

Don’t get me wrong: I’m not saying SpaceX should never receive another government contract; I’m just saying that it’s wrong for appropriators to be blindly doling out our taxpayer dollars to Musk without taking other factors into account for each and every mission.

Musk keeps bringing in the money not by building the best rocket but by being a slick salesman and overpromising. He has done a great job of having cronies in all the right places. One congressman recently attached an amendment to the House version of the fiscal 2018 National Defense Authorization Act that requires the Air Force to only use SpaceX rockets, which are, coincidentally, produced in his congressional district. Eliminating competition is a terrible idea that often leads to higher costs and less efficiency. The Air Force is protesting the measure and has stated that this move will cost taxpayers $1.8 billion more than the department’s current plan through the fiscal year 2027.

Awarding government contracts to low bidders without taking reliability into consideration is costing taxpayers millions of dollars that are not factored into the final sticker price. Fortunately, new legislation has been introduced to correct the obvious shortcomings of the LPTA process. The bipartisan Promoting Value-Based Defense Procurement Act, introduced by Sens. Mark Warner, D-Va., and Mike Rounds, R-S.D., would direct the government appropriators to avoid LPTA criteria whenever possible when procuring complex information technology, systems engineering, technical assistance services and other knowledge-based professional services.

By making the appropriations process less robotic, this legislation will make the government run like a more efficient, streamlined business. It should be passed immediately so Americans can keep more of their hard-earned money tomorrow. 

Let’s imagine you are standing in the open doorway of a plane -- standard government issued parachute strapped on tight, flying 12,500 feet above ground level and preparing to jump.

Now considering the typical “belly-to-earth” fall rate of around 115 mph, you will have approximately 60 seconds to enjoy the fall before having to pull the cord. At this point, would you feel safer knowing the parachute maker won the contract because they made the best parachutes available - or instead, that they won because they slashed their operation standards to come in at the lowest price? It’s a no-brainer, you would pick the first one, of course, a quality-made parachute that will deliver you safely back to earth.

Unfortunately, the Department of Defense (DoD), along with other government agencies, are currently required to award government contracts based on a bidding process known as the Lowest Price Technology Acceptable (LPTA). The intended goal of LPTA is to protect taxpayers from waste, fraud, and abuse. It is an easy process to understand -- the award normally goes to the lowest priced offeror who submitted a “technically acceptable” proposal. There is no consideration given for the long-term durability, quality, or reliability of the product; just whether it “technically” fits the needs at the cheapest cost.

Don’t get me wrong: the LPTA is a good and necessary solution for purchasing products like office supplies or, say, toilet seats. Remember when we learned that in the 1980s the government was paying $640 each for plastic toilet seats for our military planes?  Under the LPTA, this type of price gouging is much less likely to occur.

However, the limited scope of the LPTA has become problematic. The term “technically acceptable” is not well defined. This lack of specificity leads some companies to purposely lowball their bids just to win the contract - even though they won’t truly be able to deliver on the terms of their contract.

Once this inevitably occurs, the bidding process must be started all over again, wasting all of the taxpayer funds in the process. Even when a contracting officer tries to do the right thing by seeking out quality and durability along with the price, they face mountains of bureaucratic red tape trying to justify the extra expense.

In some cases, the DoD’s requirement to buy cheap isn’t just a matter of wasted time and money, but rather a matter of life and death. By example, the Battle of Wanat in Afghanistan suffered from a series of failures, not the least was the inferior automatic weapons our soldiers were given that “turned white hot and jammed from non-stop firing.” Our soldiers were not properly prepared or equipped for the four-hour battle that resulted in nine dead Americans and 27 wounded.

The space program is another area where it is only common sense that quality and reliability is just as important as price. Take, for instance, the current focus on reusable rockets. Aerospace engineers have been working to develop rockets that can be used multiple times, like an airplane, which will ultimately cause space flight to get a lot less expensive. The idea is great, but the execution has been less than ideal. Thanks to the LPTA policy -- not to mention a fair share of cronyism -- the SpaceX aerospace company has consistently been awarded contracts to build new, advanced rockets because they undercut their competition. There’s just one problem: some SpaceX’s rockets seem to have a big problem with exploding upon takeoff.

Last year, as SpaceX’s Falcon 9 rocket exploded for the second time in 15 months, so too did $62 million taxpayer dollars – forcing NASA to delay commercial flights to 2018. SpaceX founder, Elon Musk, admits that while the loss of a rocket and its cargo can be costly and inconvenient, they aren't viewed as crippling blows to the company. And why should he, considering the American taxpayer is left picking up the tab for his failed attempts?

Don’t get me wrong: I’m not saying SpaceX should never receive another government contract; I’m just saying that it’s wrong for appropriators to be blindly doling out our taxpayer dollars to Musk without taking other factors into account for each and every mission.

Musk keeps bringing in the money not by building the best rocket but by being a slick salesman and overpromising. He has done a great job of having cronies in all the right places. One congressman recently attached an amendment to the House version of the fiscal 2018 National Defense Authorization Act that requires the Air Force to only use SpaceX rockets, which are, coincidentally, produced in his congressional district. Eliminating competition is a terrible idea that often leads to higher costs and less efficiency. The Air Force is protesting the measure and has stated that this move will cost taxpayers $1.8 billion more than the department’s current plan through the fiscal year 2027.

Awarding government contracts to low bidders without taking reliability into consideration is costing taxpayers millions of dollars that are not factored into the final sticker price. Fortunately, new legislation has been introduced to correct the obvious shortcomings of the LPTA process. The bipartisan Promoting Value-Based Defense Procurement Act, introduced by Sens. Mark Warner, D-Va., and Mike Rounds, R-S.D., would direct the government appropriators to avoid LPTA criteria whenever possible when procuring complex information technology, systems engineering, technical assistance services and other knowledge-based professional services.

By making the appropriations process less robotic, this legislation will make the government run like a more efficient, streamlined business. It should be passed immediately so Americans can keep more of their hard-earned money tomorrow. 

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