DEFENSE PROCUREMENT

Trench-War Policies in the Space Age

The biggest business in the land is the Government's $18 billion-a-year buying of military equipment. How well is the job being done? Says Massachusetts' Senator Leverett Saltonstall, ranking Republican member of the Senate Armed Services Committee: "The present procurement laws result in delay and unnecessary expense that our nation can no longer afford."

When the Pentagon orders anything, from screws to tanks, it usually lays down a complex set of specifications that instruct the manufacturer, step by step, on how to make the product. This produces some fantastic bureaucratic nonsense. "Specs" for a parachute pull-ring run five pages, Saltonstall found; for a pingpong ball they ran to 18 pages. They describe the obligations of the contractor, the product's materials, design, dimensions, finish, packaging, marking for shipment and storage, testing methods, etc., etc.

Specs often hobble the manufacturer at every step, even though he knows far better than Government buyers how to make the product. When the services ordered furniture from the Kroehler Manufacturing Co., which has been producing furniture for 43 years, they instructed Kroehler on every detail, down to what kind of sandpaper had to be used to smooth the unseen insides. What is worse, each of the three services has different specs for ordinary chairs, and some of the specs are 30 years old. Though it would be far simpler and cheaper for the U.S. to buy furniture--and many another such item--from civilian stocks "off the shelf," diehard Pentagon planners argue that book-length specifications are necessary if the U.S. is to get its dollar's worth. But one top procurement officer admits that even the lengthiest specs are no guard against a dishonest supplier, since "even if we lay down 100 specification details, a sharpster can usually find a way to cheat on them."

So busy is the Pentagon writing specifications on exactly how a manufacturer is to make an item that it frequently overlooks the all-important thing: how well the product itself should perform. One West Coast producer complained to Washington that if he followed the production specs on a certain electronics contract, the product would not work. But the Pentagon told him to go ahead anyhow and fill the contract, then apply for another cost-plus contract to make a gadget that would work.

Contractors complain that the production specifications not only are written by theoreticians who have never built anything, but are often enforced in contracts by inexperienced, underpaid Government negotiators who do not understand production problems, thus follow the contracts to the letter, are afraid to use better methods found in the course of manufacturing. Even minor problems take months to solve because local negotiators pass them to Washington for a decision. "It's the old civil service routine," says one planemaker. "Government negotiators know that the quickest way to get into trouble is to make a decision--so they pass it up to higher levels."

Many of the snafus stem from the fact that the best producer is often turned down in favor of the cheapest producer. The procurement statutes say that, whenever possible, the U.S. must advertise for what it needs and then select the lowest bidder even though the lowest bid often comes from a marginal producer with limited experience, poor management or inadequate financing. One Pentagon official estimates that 85% of the advertised-bid contracts hit some kind of snag in production, thus become costlier in the long run.

To eliminate some of these evils, Congress last month passed a law to cut procurement paperwork, increase the number of contracts that may be let by simple negotiation between Government and contractor. But Senator Saltonstall proposed a far broader bill in the closing days of Congress so that the Armed Services Committee could study it and consider action in the next session. Saltonstall wants to shift much of the Pentagon's procurement responsibility to private enterprise by using the "weapons system" form of procurement that has been successfully tried with such weapons as the Jupiter and Thor missiles. This method calls for the Government to set the performance standards for a weapon, then select one prime contractor to be responsible for the project; the prime in turn lets subcontracts to other manufacturers, and it is his job to make sure they produce fast and well.

In addition, the Saltonstall bill would 1) replace detailed manufacturing specifications with simple performance requirements, 2) empower local negotiators to make decisions that are now made in Washington, 3) emphasize quality as much as cost in selecting a producer, and 4) encourage negotiated contracts rather than letting them by advertised bidding.

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