Major Defense Contractors On Panel That Will Direct Billion-Dollar Defense Decisions

A new advisory panel has been tasked with streamlining the Department of Defense’s procurement process. Sitting on the powerful panel: several current or former employees of major military contractors including Boeing, Lockheed Martin, and General Electric. Those corporations every year do billions of dollars of business with the Department of Defense — and have given more than $2.2 million in campaign contributions to members of the House Armed Services Committee, which is responsible for approving changes to DoD funding.

The panel’s creation, mandated by Section 809 of 2016’s National Defense Authorization Act (NDAA), has received little media attention compared to other provisions in the NDAA. But the panel will be responsible for recommending policy that affects how approximately $115 billion of taxpayer money is spent annually.

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Of the 18 people on the panel, one — Kenneth Merchant — is a vice president of the F-22 program at Lockheed Martin. The Pentagon spent approximately $66 billion on the F-22 program, and although Lockheed’s newer F-35 has superseded it, the company still provides support for the fighter. Panel member Daryl Scott is VP of contracts and pricing at Boeing, which manufactures the Army’s Apache helicopter. Lockheed and Boeing are the two largest defense contractors in the world, based on revenue. And another member, Laurence Trowel, is a former manager for government contracts at General Electric Aviation, which manufactures aircraft engines and components, such as the engine for the Apache Helicopter.

Lockheed, Boeing and GE have given substantial campaign cash to members of the House Armed Services Committee.

According to records compiled by the National Institute on Money in State Politics, Lockheed Martin has given current members of the Armed Services Committee $957,000 in campaign cash over several election cycles. Boeing has given $765,000. General Electric has given $485,000.

Those contributions include $107,500 to the committee’s chair Mac Thornberry (R-Texas) and $117,000 to ranking member Adam Smith (D-Washington).

The presence of employees of military contractors with a significant financial interest in the outcome of defense acquisition policy raises concern that they could shape policy to benefit their employers’ bottom lines.

“I actually take seriously the argument about the need to have people advising the government who have relevant experience and expertise,” Dan Weiner, senior counsel at New York University’s Brennan Center, told International Business Times. “And I understand that large government contractors are stakeholders in this process. Maybe it's important that they have a voice somewhere in this process and maybe an advisory role is appropriate. That being said, they clearly do have a vested financial interest and that at the very least merits additional scrutiny.

“Contractors spending large amounts of money to elect the people who have tremendous influence in how much money those contractors will then make from the federal government is a really, really problematic situation,” Weiner said.

Asked about possible conflicts of interest, Shayne Martin, the public affairs officer for the Section 809 Panel, told IBT: “It’s crucial that we have input from all stakeholders to be effective and make recommendations that foster an agile, results-driven acquisition process compelled by our nation’s strategic needs. The views and perspective of industry are critical to understanding and improving the way the Department of Defense provides warfighters what they need, when they need it.”

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The Section 809 Panel was created with an eye on the shifting defense landscape, particularly given the Department of Defense’s increased emphasis on cyber warfare and operations. The 809 panel will review and make recommendations on DoD’s acquisition of equipment, technology and services from the private sector, “with a view toward streamlining and improving the efficiency and effectiveness of the defense acquisition process” and maintaining the [United States’] defense technology advantage,” according to the text of the NDAA section that mandated the committee.

“The need for changing the defense acquisition process is driven by the fact that the United States is operating in a global environment that is more fluid, more interconnected, and faster evolving than at any point in history,” Martin, the panel’s spokesperson, told IBT. “To adapt to this reality, the acquisition process must be agile enough to respond to evolving threats, that DoD leverage the dynamic defense marketplace.”

In a hearing of initial findings to the House Armed Services Committee last month, much of the panel’s testimony focused on maintaining the military’s technological superiority. The panel members present for that hearing argued that new acquisition policy is necessary to maintain the United States’ overall military advantage.

The panel is examining how the military can benefit from smaller businesses, particularly technology start-ups that are working in cutting edge areas of technology such as robotics, artificial intelligence, and autonomous weapons systems. To make these kinds of technology purchases more likely, one working group of the 809 panel is dedicated toward streamlining “noncomplex acquisitions less than $15 million” and another working group geared towards making the DoD’s buying practices “more adaptable and agile,” borrowing the tech sector’s terminology for development taking place at a fast pace and with constantly shifting requirements.

“To be successful in this broader marketplace requires a fundamental change in the DoD-commercial relationship,” said Martin, the panel spokesman. “DoD must become an attractive customer with which commercial firms want to do business. This need requires DoD to be a more sophisticated buyer that is responsive to market dynamics, company interests, and the greater economic landscape.”

Still, Weiner questioned whether the inclusion of large military contractors with outsized political influence could jeopardize the panel’s stated mission to improve relationships with small businesses.

“If the big incumbent contractors are represented, what other businesses are being shut out of the process?” he said. “Is the process being designed to favor the people who already get a lot of the government's business?”