| Show I 5 take Tribune Sunday June 26 The Salt 1988 Al 5 Management on Trial? Defense Rests in War Against Waste By Gordon Adams Special to the Los Angeles Times Once again Washington is mired in a de- fense procurement scandal one that appears to involve dozens of Department of Defense employees and consultants at least 20 leading defense contractors and billions of dollars As the debate takes shape defenders of the system argue that it "worked" — culprits are under investigation and will presumably be brought to justice At the level of criminal investigation the 6VSteM does seem to have worked Yet at a deeper level the defense acquisition system has failed Instead of buying the best defense at the best price without corruption it has bought a good defense at an incredibly expensive price with what appears to be considerable cheating at the expense of taxpayers Ac110? ' gi'n? WA W001)1 '"I'' 4 4 7 - -- ) — - Q cO1 -- t k: i14'4-:li 'i a I !! - Gordon Adams director of the Defense Budget Project at the Center on Budget and Policy Priorities is the author of "The Poll cies of Defense Contracting: The Iron Triangle" (Council on Economic Priorities) ' t - A ‘:' -- 1z S1TAtYt ' ' '' '( 1 ' "Nollitia 4N r 70 '- ‘7' ED flit1111117Wt I - dolotl) 't '41‘ r - 4 - qv xatttN410 I - t T'ATA!t-- 1 z -- i ' 14 )) ' -4 IlltfiP 7: sk1o:1- 1 it tflt:lit:1 i i s 4-- - -t )041) tk wolsfa! is 7"7z''' ' 1)--- ' q' 2 st:" - -- - - )rs-f'!4t- 1 '4 : - iii 1 --- 1 ' lt:?11'-'-- - — 7 iDostots - : - - - - --0 10- ! 1 A-- - '''!:' :'-- v'''''' '7" :' — A i ''4414te' ' 1st110-4- so71:'1:ris''''':' k 1 6 7: '''''-- ''' 4 e The Industrial Military Justice Department Complex -- created that opportunity Effective and experienced management with appropriate accountability starting at the top of the Department of Defense might have staved off the kind of scandal that is now being revealed even though the rush of funding made it unlikely Unfortunately the opposite approach was taken from the start of the 1980s Leadership was the first problem Although the top rank of the Defense Department included competent people they were for the most part singularly lacking in acquisition experience Only one of the top appointees Richard De Lauer had significant background in defense contracting while Navy Secretary John F Lehman Jr had done some contracting work as a consultant The others had government legal or business experience but not in defense acquisition More important was the management apSecreproach At the very start tary of Defense Frank Carlucci laid out 32 management initiatives designed to streamline the process and decentralize acquisition putting more responsibility in the hands of the military services and the offices in charge of weapons programs within those services At then-Deput- the same time the initiatives reduced the number of weapons programs that would be review in the Defense Desubject to the thresholds for reand raised partment porting on programs to higher levels meaning fewer weapons programs would be subject to review by higher-up- s As a result the central offices in the Pentagun lost ability to control review and hold accountable in any systematic way actions being taken at lower levels With diminished accountability each service went off in its own direction The Army appears to have muddled along with its existing structure buying significant amounts of new weaponry most of it begun during the Carter administration but finding it hard to get new programs from the drawing board to the battlefield The Air Force kept its structures expanded its procurement and research budgets rapidly and moved a number of new programs such as the bomber into fighter and the the category of the "black" budget where public information is denied on grounds of national security top-lev- B-- 2 9 The Navy abolished its internal acquisition agency — the Naval Materiel Command — in 1985 expanded its procurement funding and centralized major purchasing decisions in the l hands of appointees Each service seemed comfortable about telling central Pentagon management pretty much what it wanted to about the status of programs and in an atmosphere of generous funding resisted major changes in purchasing plans or procedures suggested from the top The results became famous The toilet seat covers for $640 gave way to stories about reimbursing the costs of kenneling contractors' animals which in turn led to more serious charges and convictions on such practices as falsified time cards and incorrect billing Congress and to some degree the administration realized something was wrong Congress created an independent inspector general office in the Defense Department to audit activity and unearth fraud It also created a new system of spare-part- s management required that contractors provide warranties on defense items established greater competition in purchasing made some contracting costs unallowable and closed somewhat the top-leve- He's Going to Win by George! By Peggy Noonan Special to the Los Angeles Times When George Bush wins on Nov 8 it's going to be the biggest political comeback since the presidential election of 1948 when another man who'd been vice president to a giant had the effrontery to ask for the support of a nation that seemed more interested in making fun of him — his flat irritating voice his uninspired style — than it was in support ing him against the little gover nor from the Northeast whom everyone knew would win because of his reputation for coin petence his cool intelligence his personal is a drawback in an age that demands a certain I Peggy Noonan a former producer at CBS was special assistant to President Reagan She is an occasional speech writer for George Bush No scramble no second guessing: readjust strategy to meet altered circumstances but don't panic — and keep on keepin on During the campaign Bush was told of a candidate who boasted as he left the race that he'd done as much damage to Bush as he could Ile took the news without changing his expres sion and looked out the car window Then he said softly to no one "What's wrong with a person like thatto think in those terms" Ile shook his head "That's sick" he said Ile wasn't angry or surprised — he was disappointed There's the Bush who gets upset when he finds out the spouse of an aide was too shy to come into the residence when there was a meeting and who comes out and tries to coax him in Pat Buchanan once told me how after Watergate he returned to Washington to find aides weren't exactly in de that mind The first neighbors to come welcome him with a bottle of wine and a pep talk were George and Barbara Bush Bush's natural manner is soft spoken Ile's always leaning forward on TV but not in pen 14'r ' ' - - k -- 1: 'y '7--:--- t I I 1 I) d rectitude and anyway after all these years it's time for a change Before that Bush is going to hit bottom His friends think he already has I think they're wrong Like Harry S Truman Bush won't find his rhythm — won't find himself and his candidacy's true meaning — until the waning days of autumn The odd thing about Bush is he's been tam ous for 20 years and the American people don't really know him His friends say if they could get every American to sit down with him in the kitchen and watch him live his life he'd win in a walk They'd see how kind he is how funny and unpretentious I think they're right — Bush is going to come through as the campaign progresses And on TV not in the kitchen — because his kitchen isn't that big Sheer exhaustion will wear down his (I actually think he's shy on TV) and as he gets close to the big day the imminence of defeat will lib crate him he'll soar from the abyss This is who Bush is: During the New Hampshire primary he's the man who stayed calm and philosophical when he was 10 points down and the tracking polls were saying his position was eroding more each day What 1 remember is Bush sprawled out on a couch with his hands behind his head saying "We've done a good job we've run a good campaign we've done what we could do I'm not going to turn this thing upside down I'm fatalistic And Iin comfortable" And then minutes later matter of fact "But we're going to win That's what I think" amount of acting ability from its leaders If were to give advice I would say: Since you have to act then maybe the answer is to change your acting style Forget classical go not portray method Relax breathe deep be: do not 'act' become Be Bush It's a good role Relax that spine scratch your head call it as you see it make the joke you're suppress ing: be Michael Dukakis will run a textbook campaign undramatic unspectacular and relentless not Pickett's charge but the siege of At Int& His people are so smart and so hungry And he's a good candidate Dukakis doesn't start making mistakes until he's elected Will he with time appear to be your basic "goo goo" type the kind we ethnics had the ward fights with Will he start to remind us of that third-grad- e boy who was milk monitor I knew him slightly in the "70s when I did editorials for the CBS radio station in Boston I I thought he was smart and interviewed him a few times when he was governor once for a documentary on loneliness It wasn't easy I remember trying to pull some kind of feeling out of him as he blinked his dry eyes and watched me explain why I wanted to know what the loneliest moment in his life was After an hour he came up with: "Going over to Korea on a troop ship with 3000 othI experienced a few moments of er guys loneliness" I used to watch his television show "The Advocates" You think it said something about America when we made a movie actor president? This man is a TV actor former host of an intellectual talk show He used to glide along the set moving his hands carefully within the frame as he emphasized a point Ile went to the John F Kennedy School of hand talking He is a born moderator When he looks in the camera it's the only time you can see his eyes: they turn warm On TV he is made larger His head large anyway is a perfect TV head with exaggerated features That's how most of America will see him: as a head He has a smooth voice And he has a nice slightly impatient edge like a kid in a John O'Hara story who is the best floor sweeper in the factory and who goes on to get a scholarship to Harvard and comes back to tell the crusty old owner what's wrong with the business and the way he runs it He'll save the business but not before he gets taught a few things about humility and the human side of things He's going to be a formidable opponent In the age of TV reality he is simply the natural It's going to be a cold autumn with many a bounce for the campaign plane There will be moments such as when Dukakis takes the garment district and tens of thousands of good people show up and cheer with one voice and kids hanging from telephone poles and waving their shirts in the air and some nuns jumping But Bush will keep plugging the tortoise and the hare steady solid and chipping away at the other guy's lead And at the end the old first baseman from Yale will become Mr October That is when an unmovable 8 points down and catastrophe looming he will become his best self the one who took the hits and dropped the payload who took the chances and made the payroll America will finally meet George Bush s On the stump he'll hit his stride Ills will take on the sureness they have in private Hell start to share his observations people will say "I didn't know he thinks that I think that too" :z 0 - li I 1 'lll '' t1 FV' '' l -- - j4r:1 F '' - 'ts '''' V u t I? 4 k''' -:--i : --- -'t '1-- - 10y - ) lq -- t 'I 4 I George Bush son and he doesn't jab the air he is laid back and thoughtful The first time I met with him he was curled up in a chair with his feet on a coffee table relaxed and reading something I wrote in my notes: A comma in an easy chair his family loves him A reporter once told me one of Bush's sons became choked with emotion as he described the letters he'd received over the years from his father He has been married 43 years to a strong warm woman Ile banters with his wife she teases him Americans get their candidates through TV ancl TV does not add to Bush it takes from him He moves for instance like an aging athlete — rangy and fluid But on TV his movements are choppy without ease I suspect all this is complicated by the fact that he knows he is member and representative of an endangered species: the white Anglo Saxon Protestant male Eastern seaboard di vision We all play our ethnic group and wear our affiliations but how do you wear true-blu- e WASP in the new America? With a kind of wry awkwardness it seems The irony is that Bush seems most comfortable on the stump when surrounded by averand he touches someage ethnic Americans before the New in The them night thing Hampshire primary Bush's staff blanketed r prothe television market with a a was by big group where he questioned gram of middle- - and workingclass folks The QSLA was swift revealing and funny It brought out the best in him and his funniest line When asked about criticism of his patrician background he said it's true he was born in affluent Greenwich Conn but he couldn't help it he wanted to be near his mother at the time I suspect Bush has over the years repeatedly been told that he should try harder to seem like the man he is — that he should act strong and resolute So he tries to act the part — shaking his bead sternly shooting his hands out to make a point using blunt phrases The problem is that Bush isn't an actor This half-hou- d ad-lib- 4 14 New Americans' Outdo Old Ones — Japanese Flex Muscles at Summit Like Truman Bush Will Give 'em Hell dark-haire- revolving door between industry and the Pentagon The agenda of legislated changes was big impact on the acquisition process proved far smaller The executive branch listened to (but did not implement many) reforms proposed by the Grace Commission As criticism of waste grew the White House created its own Packard Commission some of its proposals were implemented many were not The Pentagon reduced 1 payments made to contractors for work in progress increased contract competition required companies to invest more of their own funds in the costs of doing business and obliged them to do more work at "fixed prices" instead of having costs A reimbursed In a sense all those changes may have worsened things making the acquisition system more complicated and even tougher on the contractors while still generously doling out e money and "not minding the store" at top I ( management level By 1986 when the current 0 started investigation Pentagon management le' operated rather like someone racing a car at l'n 80 mph pointing it down the highway and then taking his hands off the wheel Giv en the f4 " combination of big funding (temptation) and no steering (opportunity) a collision was inevitable The first steps toward correction then do not require new rules These exist in abundance new ones not carefully considered could be counterproductive The needed changes are budgetary and managerial Deficit reduction has already set ?e limits on future defense budgets the scandal makes increases even less likely These newly constrained resources need to be used as a ii: : management tool obliging the services to choose among weapons rather than to try to have them all and forcing them to report on those choices to top management for final decision s f4 A new defense team takes office in 1989 Members must include experienced people ' it committed to recovering the acquisition pro cess — restoring and expanding reporting and accountability mechanisms insisting on tough P auditing and setting a clear ethical tone r4(: Once the fiscal flow has been channeled and Lr management priorities have been set the next itl administration should turn to changes that 1' may be needed in rules and regulations espe) cially the incentives for those who work in f2 acquisition b But reforms in law should come after P i changes that will significantly narrow the temptation and opportunity for abuse It is time to start where Pentagon managers 11r 0 should have started in 1981: with careful limits on the budget in amounts the services can 9 i handle and with attention to reporting and r c e accountability at the top making sure De fense has the information it needs to control the process up-fro- i I t - N li10)Soottoo 040)e 0 t C li There are laws governing acquisition they appear to have been violated broadly The question is not whether we are catching lawbreakers it is why there was so much temptation and opportunity to break the laws in the first place The Department of Defense invited the lawbreakers to the table by undertaking an excessively rapid expansion of the budget while stripping away its own capacity to administer the buildup and taking an unusually laissez-fairapproach to how the money was managed By contrast with other peacetime periods defense budgets of the 1980s were unusually generous: between 1981 and 1985 the defense budget grew 50 percent above inflation faster growth than for any other major federal program Moreover the centerpiece of the buildup was funding for new weaponry — budgets for procurement actually grew 100 percent after inflation Even though the defense budget has been cut 10 percent in the past four years actual defense spending remains at a level that is higher after inflation than at any time since the end of World War 11 — higher even than all but one year of the Korean War and the Vietnam War The market for the defense industry is larger than it has ever been Every year the Pentagon orders $150 billion worth of goods and services from the private sector ranging from boots and toilet paper to bombers The Pentagon in fact buys 75 percent of the goods and services purchased by the entire federal government Such a market created a great temptation for corruption Temptation was not enough however There needed to be opportunity for corruption as well The way the defense buildup was managed Mt t RASA 1164r ' 011M4o ' ' 400114E '''''''t r ' - 0' ' vZ '' S-- bkilt tti 7:: i — 4 NOWItt 1131M 'ff I By David Sarasohn Newhouse News Service The clearest sign of power at a summit is the power to set the menu When the Japanese appeared at the economic summit conference in Toronto last Saturday and promptly set up their own sushi bar it was the strongest signal of their new economic dominance since Godzilla attacked the American car industry The sushi chefs setting up shop in the summit's operational center functioned almost as an object lesson in the new world order: shaping the rice balls the way the Japanese have reshaped the international economy slicing the tuna the way the Japanese have sliced into US technical dominance providing a vivid example of the craftsmanship that causes American manufacturers to boast that their cars are now almost as good as David Sarasohn is associate editor of the Portland Ore Oregonian The summit provided lots of other indications of Japanese power of course The dominant power at any summit is the one who piously explains that it has to speak for many others who weren't invited and this year Japan got to play that role The Japanese delegation arrived with promises that Japan would increase its foreign-aiprogram to 810 billion annually next year and that the program would rise from 029 percent of Japan's gross national product to the Western average of 035 percent The US program Is now 023 percent which is more a brown-bathan a sushi-ba- r level In addition Japan saw itself as speaking for the rapidly industrializing nations the ones that want to grow up to be Japanese And Japan joined the Europeans in successfully pressing for a break for Third World debtor nations The United States ha n been reluctant to agree to that because we need the money — and need to pretend we might get it As Shintaro Yamashita of the Japanese Foreign Ministry explained recently "Economic power means at the same time responsibility" which is just what Americans used to say back when we had economic power Bringing your own chefs to a summit conference gains a subtle psychological advantage It suggests that while you are willing to talk to other countries as though they were your equals you really can't be expected to eat their food At the first modern summit conference the Congress of Vienna in 1815 the French minister Talleyrand carefully brought along the master chef Careme telling King Louis XVIII "I shall have more need of recipes than instructions" Talleyrand's message to the congress was clear: Napoleon might have been d g ' L:r 01' if '4 t t beaten by the British but France was still 'France and did people really want to set up a Europe where everybody had to drink warm beer and eat cold mutton? Back in the days of American imperial dominance Lyndon Johnson would bring aristocratic European diplomats down to the LBJ ranch and make them eat Texas barbecue Sometimes they would agree to things very quickly There still are a few occasions when the American magic works At the summit conference in Moscow several weeks ago a Soviet hotel imported a Louisiana cook to make hamburgers and another brought in chefs from the Seattle Sheraton Unfortunately the only people we still impress are people whose economy is in worse shape than our own The Japanese decision to pack a lunch to a summit conference was not of course the only reason Canadians were saying according to the New York Times that the Japanese are "the new Americans" The Japanese also seemed to have limbooked all the telephone-equippeousines in Toronto Japanese television ordered two broadcasting studios while everybody else shared one Just as American presidents used to do Japanese leaders now get to treat the en tire economic summit as a photo opportunity If the Japanese breezed into the economic summit as though they owned the place it is because increasingly they do They have far more money to invest than anybody else does and they arrived with news that their economy is now growing at a rate of II percent — neatly three times American growth For Americans the economic summit turned into another lesson that when you lose economic power you also lose economic leadership — and television studios and limousines According to an old Japanese saying there's no such thing as a free sushi 1 et i 1 tt :r A' :r4 -i t US-Sovi- ¶'1 1' IJ: 0 I Itt :v qL it d t4 tl 44— ) rFrj:t1 r -r '''' ' i 1: I L') el (1 A i I A''' '4 a c 4 - ' 1 : 41 - ' i ' II 1: : I 1 4 i ip 1i 5 :z '' 1' : trii :Pc 41 AL - I 01 It r Fl l'A--r- 9i 'i 54' I - 1 we v il 10:-AA"-- k! 11' e ' I i 1' '1'221tinir tr7 Ji r IL k V I r AL L At 91 4aM10A1 s'e 1 |
