CAPITOL HILL: In a bold attempt to fix the Pentagon’s creaking system to develop and buy weapons, the Senate Armed Services Committee today introduced broad changes to who controls weapons programs and tried to encourage Silicon Valley and other non-defense industries to help maintain the country’s global technological and military dominance.

This is the beginning of a major push by the committee that will extend over several years at least. Sen. John Mccain signaled just how important are the proposed changes at his press conference about the markup . “It’s a reform bill,” he said. “The major provisions in this bill, very frankly, are not about how much we added or subtracted to a given weapon system. It’s all about reform, and we’ve got to reform: Otherwise we will lose whatever little confidence remains on the part of the American taxpayer that their tax dollars spent on defense are spent wisely.”

What’s the goal of the reforms? “We want weapons that are game changing and get out there in the next five years and will make the world stand up and say, America is back,” a SASC committee staffer told me in an exclusive interview.

Perhaps the best example of a large program that has relied on untraditional acquisition authorities is the rocket launch business, the staffer says. “SpaceX is a great case study in how this can work in the future — a non-traditional company can be created from nothing and disrupt an established market.”

Here’s a quick snapshot of the biggest changes proposed in the new legislation.

• The heads of the four armed services will get much increased control over weapons programs and requirements, something outgoing Army Chief of Staff Ray Odierno has pushed hard for. The Office of Secretary of Defense (OSD) — in particular the undersecretary of acquisition, technology and logistics — will lose some power.
• The services will be punished for poor performance and must ensure they know about changes in requirements, cost and schedule. In the event of a Nunn-McCurdy breach, the services will have to pay a 3 precent penalty to a rapid prototyping fund overseen by OSD. Also, oversight of the program would shift to OSD until the program is back on track.
• To boost the speed with which weapons are fielded, the proposed bill creates what is being called a “middle tier” of acquisition. It’s designed to encourage the development and fielding of weapons in two to five years. After that, the idea is to do that which was discussed in the late 1990s — spiral development: You field the weapon quickly. Upgrade. Field the upgrade. Upgrade. Repeat.
• The bill would confer special authority on Cyber Command to develop and buy weapons in much the same way that Special Operations Command (SOCOM) does — with few bureaucratic impediments. (The great majority of SOCOM acquisitions are smaller programs, (ACAT III), “have short acquisition cycles, and use commercial off-the-shelf and nondevelopmental items or modify existing service equipment and assets,” the Government Accountability Office says.)
• It would allow the Pentagon to buy commercial items from a nontraditional defense contractor. For example, the military could buy thousands of Apple laptops without Apple being subject to the sort of defense acquisition regulations faced by the large defense contractors.
• The bill would push the Pentagon to use more authorities it already possesses in law and directs the military to study how it would use those authorities. One of the most intriguing examples is US Code 2373, fondly known as “experimental purposes language.” The language was originally drafted to help the Army build the Army Air Corps in 1926. “It’s still active,” the staffer says, “but it hasn’t been used. ” It is simply written and appears quite powerful: “(a) Authority.— The Secretary of Defense and the Secretaries of the military departments may each buy ordnance, signal, chemical activity, and aeronautical supplies, including parts and accessories, and designs thereof, that the Secretary of Defense or the Secretary concerned considers necessary for experimental or test purposes in the development of the best supplies that are needed for the national defense. “(b)Procedures.– Purchases under this section may be made inside or outside the United States and by contract or otherwise.”

I discussed some of the acquisition changes with Byron Callan, a respected defense industry analyst with Capital Alpha Partners here in DC. He noted in particular the penalty for a Nunn-McCurdy breach, saying it would shift the companies focus if they blow management of a program. “It’s no longer, ‘oh sorry — here’s another check,’” he says. “You start to open up your options and that will keep people on their toes. The big primes will have to act.” He called the array of proposed changes “significant,” especially those that would encourage “the little companies starting in the garages of Silicon Valley.”

The Senate acquisition reforms are much broader and deeper than are those proposed by the House Armed Services Committee. That’s not a criticism; it’s just a fact. HASC Chairman Rep. Mac Thornberry, a longtime champion of defense reform but a more cautious personality than McCain, is sure to embrace many of the Senate proposals since he is eager to push the Pentagon to build weapons much faster and more cheaply.