SAS12: Navy systems commands tighten the reins

Navy leaders warn defense industry that systems commands will place tighter controls on Navy contracts.

The Navy’s systems command leaders joined the chorus of Pentagon officials warning the defense industry that the defense spending gravy train has skidded to a halt.

Vice Adm. Kevin McCoy, head of Naval Sea Systems Command, said the service will crack down on frivolous spending and cost overruns on Navy contracts.  The $487 billion cut in defense spending over the next ten years has left the Navy little choice.

“If you think you’re going to do business the way you’ve done it for the past ten years, think again,” said Brig. Gen. Frank Kelley, head of Marine Corps Systems Command.

Vice Adm. Patrick Brady, head of Space and Naval Warfare Systems Command, wants program managers to know that they will be held accountable for funding decisions. Systems commands must instill “accountability down to the individual” when deciding on contracts, Brady said.

Service contracts will receive an especially tough look. McCoy said the service needs to add more competition to service contract and, in some areas, reduce the number of contractors.

Plenty of industry officials contact McCoy and tell him what he needs. McCoy has a message for those industry leaders: Worry about delivering the assigned contracts and then we’ll talk.

The Navy has received plenty of attention for cost overruns on a litany of contracts. Retired Vice Adm. Pete Daly, president and CEO of the U.S. Naval Institute, asked how the service could cut down on this costly mistakes at the Sea Air Space panel titled “The Systems Command Challenge: Meeting Requirements in an Era of Austerity.”

NAVSEA inspected 40-plus field activities issuing contacts. McCoy said NAVSEA and the rest of the systems command have to do a better job instilling “central control” and “central standards.” It gets back to accountability, he said.

If an acquisition officer wants to issue a one-bid contract in NAVSEA, he will have to justify it to McCoy. If anyone wants to hire a contractor in NAVSEA at an “exorbitant fee,” he or she will also have to step into either McCoy’s office or that of  Bryan Person, the NAVSEA’s civilian executive director.

Boyd said his directorate must do a better job at putting on the right software and systems to ships being built. The SPAWAR commander said it doesn’t make sense to “deliver a ship and then I’m going to pay somebody to rip off systems the fleet doesn’t want so I can pay a third guy to put on systems.”

In this age of austerity, the Navy can’t afford anymore not to get it right the first time, panel members said.