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Kendall Wants Acquisition Reserve Account, but Doesn't Plan to Get It

Aug. 5, 2014 - 03:45AM   |  
By MARCUS WEISGERBER   |   Comments
Pentagon acquisition chief Frank Kendall would like to have a 'strategic reserve' to help prevent taking money from one program to ease shortfalls in another.
Pentagon acquisition chief Frank Kendall would like to have a 'strategic reserve' to help prevent taking money from one program to ease shortfalls in another. (Glenn Fawcett/US Defense Department)
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WASHINGTON — The US Defense Department’s top procurement official would like Congress to create a reserve spending account that the Pentagon could tap when a weapons program runs into costly development issues.

Such a fund could prevent the snowball effect caused when money is taken from one program to ease shortfalls in another. Still, Pentagon acquisition chief Frank Kendall does not expect to get one anytime soon.

“What I would like to have is a management reserve that when I do have a problem, I could apply it efficiently and I don’t have to go penalize some other program that is executing well or just kill another program that I actually need in order to fix the problem I have with the one that’s getting in trouble,” Kendall said in a speech Tuesday at an AFCEA-sponsored conference.

He noted that program managers usually budget for some problems, so this would be more like a “strategic reserve.”

Asked how big it should be, Kendall said: “I don’t have a number for that and I don’t intend to ask for it in the budget. I don’t think it’s possible in the current climate.”

Kendall acknowledged that budget pressures are forcing DoD officials to cut needed items, so he does not expect lawmakers to create such an account.

Kendall proposed the reserve account in a June 13 letter to Sens. Carl Levin, D-Mich., and Sen. John McCain, R-Ariz, chairman and ranking member of the Senate Homeland Security permanent subcommittee on investigations.

“While Congress would need to provide the department this authority, I believe there is great value in exploring how a transparent and flexible account could address the inevitable problems that some development programs will encounter,” Kendall wrote. “It likely would be of great utility to the department and would improve warfighter and taxpayer outcome.

In his letter, Kendell also listed six other actions Congress could take to “help the department”:

■ Ending the threat of sequestration, the defense spending caps put in place by the Budget Control Act.

■ Continuing to fund the Defense Acquisition Workforce Development Fund, which is used for training and providing experience to DoD’s acquisition workforce.

■ Simplifying acquisition rules. Kendall and his staff are working on a legislative proposal with Texas Republican Rep. Mac Thornberry, House Armed Services Committee vice chairman.

■ Avoiding “highly restrictive rules which particularly limit our ability to make the best decisions about risk management actions or business arrangement.”

■ Reducing the incentive for program managers to obligate funds even if they are not needed. Kendall has long talked about how program managers are punished for not spending budgeted money.

■ Helping DoD improve the professionalism of its acquisition workforce and “find creative ways to recruit, retain and incentivize” the government workforce. ■

Email: mweisgerber@defensenews.com.

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