THE BLOG
05/27/2010 12:59 pm ET | Updated May 25, 2011

Leveraging Competition to Improve Defense Spending

Last year President Obama and Secretary of Defense Robert Gates called on Congress to support reform of the cost and development of the Defense Department's procurement programs. Congress answered that call by passing the Weapons System Acquisition Reform Act. Aimed at curbing the ballooning defense spending, saving taxpayer dollars, and ensuring America's troops have access to the best tools and technology, the law and its impacts have recently come to the attention of the Government Accountability Office.

While the GAO's recent appraisals have found that competition during the procurement process can lead to significant long-term savings, it also identified continued significant opportunities to defense procurement programs-- specifically regarding the Defense Department's inability to substantially curb cost overruns and delivery delays. With a greater focus on competition, many of the flaws found in the GAO's evaluations on procurement programs could likely be corrected.

Leveraging competition during the Pentagon's procurement process works -- it works for military troops who depend on contractors to provide the most effective products, it works for taxpayers who have asked the federal government to spend wisely during tough economic times. Most importantly, competition results in better contractor performance. When companies are forced to vie for Defense Department dollars, they are more likely to lower prices, produce better commodities, and act more responsively to military and government needs.

Congress has an opportunity to support the benefits competition once again, much as it did when it passed the Weapons System Acquisition Reform Act. Today Congress will vote whether, as part of the Joint Strike Fighter (JSF) aircraft program, to give a $100 billion sole-source monopoly to an underperforming project that is $2.5 billion over budget. This will be one of the largest purchases ever made by the Pentagon. The right decision is clear: competition must be preserved to help guarantee the best possible engine at the best possible price for the JSF aircraft fleet.

At GE, we know that competition leads to efficiency and innovation - in everything from jet engines to wind turbines to ultrasounds. That's why in a letter yesterday to the House of Representatives, GE CEO Jeff Immelt asked Members to preserve funding for competition. Neither our troops nor taxpayers can afford Congress supporting a monopoly of this size. Head-to-head competition is the right way to control costs and improve quality, not just for the JSF program, but for all major Pentagon procurement spending.