The Senate Armed Services Committee is attempting to discourage the use of cost-type contracts in its version of the Fiscal 2017 National Defense Authorization Act. A SASC aide—who likened the Pentagon’s use of cost-based contracts to a drug addiction—said Monday its structure creates negative incentives for contractors and the government alike. Instead, SASC is calling for the use of fixed-priced contracts in most cases. One measure would toll military department and defense agency heads for the use of “some” cost-type contracts awarded over the next five fiscal years, according to the summary. The penalty for awarding a research, development, test, and evaluation cost contract would be one percent of the year-to-year obligation starting in 2018, the SASC committee aide said. A two percent penalty would be imposed for the use of procurement cost contracts. Most of those fees would then be used to fund advanced fixed-price prototyping. But cost-plus contracts won’t be done away with completely because some Pentagon acquisition programs are too unique to not use them. Even so, SASC’s draft would create a required approval mechanism for their use for contracts over certain amounts. The thresholds would be phased in, according to the SASC aide, and by Fiscal 2020, any cost-plus contract over $5 million will require approval. The proposed NDAA provisions are meant to reduce costs and widen the amount of businesses who are willing to deal with the Pentagon, according to a summary of the draft. (See also: McCain: NDAA Really a Reform Bill and Just Say No to Cost-Plus Contracts.)
The future U.S. bomber force could provide a way for the Pentagon to simultaneously deter conflict with peer adversaries in two geographically disparate theaters, said Mark Gunzinger, the director of future concepts and capability assessments at AFA's Mitchell Institute for Aerospace Studies, during a March 21 event. But doing so…