McCain’s Record on Defense Procurement: Pugnacious but Counter-Productive

McCain’s involvement with defense procurement reform has been pugnacious but counterproductive. It refutes any claim to be an effective agent of change for the economy or any other complicated system.

So now John McCain, after all these years of coziness with the rapacious Phil Gramm &#8212 now among the sleaziest of Wall Streeters &#8212 and his new friend, Carly Fiorina &#8212 she of the $21 million bonus for being fired as HP’s CEO &#8212 has decided to go after Executive compensation and Wall Street being run as a Casino, as a result of the weekend’s financial news. Of course he was AWOL in 2005 when leadership in the Senate was wanted to help rein in Fannie and Freddie (h/t Paul Krugman by way of Brad DeLong).

Obviously this is a joke as far as policy is concerned.

What’s interesting is how much it has in common with areas in which McCain is supposed to be an expert. For example, Defense Acquisition Reform. McCain’s campaign claims this as an area of special expertise for McCain, saying that his work has led to numerous important reforms … but they can’t bring themselves to mention any. His vote against the Goldwater Nichols act which transformed the Pentagon was only the beginning of a career in impeding the overall cause of defense reform. McCain once chaired a subcommittee on acquisition reform, and introduced a “Defense Acquisition Reform Act of 2007,” which seems to have died without a trace &#8212 try Googling it. He has no broad policy or systemic focus, only reactive outrage that often hardens into a vendetta.

If his pugnacious, moralistic style has had no benefit in an area where he thinks he is an expert, what is the prospect for its success in an area, like the economy, where he has proclaimed his ignorance?

Read the story of the Boeing tanker deal at the jump.

After 9-11, Boeing’s need to fill production lines and the Defense Department’s desire to rapidly increase air-refueling capacity came together in a proposal for the government to lease instead of buy tankers in a sole-source procurement. The pricing was suspect and there were questions about whether there would be a huge tax loss to the treasury, and ultimately it developed that Boeing and Air Force officials had acted illegally; people went to jail.

All this led McCain to be implacably hostile to Boeing, and contributed (along with his campaign co-chair Tom Loeffler’s lobbying on behalf of a foreign firm) to the Pentagon’s choosing the first European tanker to be bought by the US, and then the GAO ruling for Boeing in a protest, and most recently Secretary Gates cancelling the re-compete and placing the whole thing in the lap of the next president. In other words McCain was partly responsible for a 10 year delay in improving the ability of our forces to react to crises around the world. Other courses were possible &#8212 for example just renegotiating the price with Boeing. But that would not have satisfied McCain’s moral outrage. Better to send jobs to Europe than buy from perfidious Boeing.

But the story doesn’t stop there. The Army’s Future Combat System(s) was being developed by Boeing under an innovative contracting vehicle that was intended to allow increased flexibility in choosing subcontractors to achieve the best performance. Because it was Boeing, McCain saw this as more perfidy, getting in the way of his oversight. He was instrumental in requiring a change in the contract to require the application of the inflexible Federal Acquisition Regulations that acquisition reformers had tried to get away from. He didn’t ask how the more flexible vehicle could become more transparent &#8212 he just threw the baby out with the bath water. Similarly, he inveighed against multi-year and commercial procurements that acquisition reformers had looked to to make the system work better. Because Boeing was involved, he insisted that they be junked.

McCain is resented in board suites for his aggressive, insulting style. Yes he fights, but with little cumulative result. He is NOT known in the defense policy community as someone who has changed or even made a coherent proposal for how defense acquisition should be improved.

His victories may have saved money on particular programs, but have not left the Pentagon more capable or better managed, or Americans safer.