Carl Levin

Mr. LEVIN

Mr. LEVIN. Mr. President, we are approaching the end of our debate. I believe the Senator from Alabama wishes to speak for up to 5 minutes. I ask unanimous consent that no further amendments be in order, that following the remarks of Senator Sessions, the Senate proceed as provided for under a previous order with respect to passage of S. 454.

Mr. LEVIN. Mr. President, I join in thanking Senator McCain and our staffs. The work that has gone into this bill has been extraordinary on the part of both staffs. I will get into that after passage of the bill and have perhaps further thoughts. The role of Senator McCain has been absolutely invaluable and essential. We have worked together very closely; as he puts it, in a nonpartisan way. I thank him and his staff as well as my own.

Mr. LEVIN. I ask for the yeas and nays.

Mr. LEVIN. Madam President, I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. LEVIN. Madam President, very briefly, we have done extremely well with this overwhelming vote for the passage of S. 454, the Weapon Systems Acquisition Reform Act. We have done it on a bipartisan basis, which is the way it should be done when it comes to matters of national defense and a whole host of other issues. I am deeply grateful to my friend, our ranking member, Senator McCain. Of course, a large share of this moment belongs to our hard-working and very talented staff, led on our side by Rick DeBobes and on the Republican side by Joe Bowab. Our special collective thanks must also be given to Peter Levine and Creighton Green on the majority staff and to Richard Fontaine, Chris Paul, and Pablo Corrillo on the minority staff. We thank them all for their hard work. It will bear fruit, we hope within the next month, when we work something out with the House. Then, over the coming years, we will not only save taxpayers' dollars, but we will provide the right equipment to our troops who deserve the best we can get. We will make sure we don't waste these defense dollars, because when we do that, we not only are hurting the taxpayer but we are depriving our troops of funds they need for needed weapon systems.

Mr. LEVIN

Mr. LEVIN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. LEVIN. Mr. President, on behalf of the Senate Armed Services Committee, we are pleased to bring S. 454, the Weapon Systems Acquisition Reform Act of 2009 to the Senate floor. I introduced this bill with Senator McCain on February 23 to address problems in the performance of the major defense acquisition programs of the Department of Defense at a time when the cost growth on these programs has reached levels we simply cannot afford. Five weeks later, the bill was unanimously approved by the Armed Services Committee, and just last week the President called on Congress to act quickly on the bill. Report after report has shown that there are fundamental problems with the way we buy major weapons systems. In the last month alone, we received three major reports documenting problems with the acquisition system. First, the Government Accountability Office reported that the cost overruns of the Department's 97 largest acquisition programs now total almost $300 billion over the original program estimates, and the programs are an average of 22 months behind schedule. That is true even though the Department has cut unit quantities and reduced performance expectations on many programs in an effort to expedite production and hold costs down. Second, we got a report from the Business Executives for National Security, BENS. They reported: We have an acquisition system at odds with the best practices in the business world: insufficient systems engineering capability [and] unrealistic cost estimating that injects too much optimism in early program execution. . . . Then, thirdly, there was a Defense Science Board report that said: Today, the defense acquisition process takes too long to produce weapons that are too expensive. . . . As Secretary Gates pointed out in his testimony before our committee earlier this year: The list of big-ticket weapons systems that have experienced contract or program performance problems spans the services. Here are just a few examples of the kind of problems the Department of Defense's major acquisition programs have encountered. The Navy initially established a goal of $220 million and a 2-year construction cycle for the two lead ships on the Littoral Combat Ship, the LCS program. Those goals ran counter to the Navy's historic experience in building new ships and were inconsistent with the complexity of the design required to make the program successful. As a result, program costs have tripled and the program is almost 4 years behind schedule. Next, the Air Force initially estimated that commonality between the three variants, threat varieties, of the Joint Strike Fighter would significantly reduce development costs. However, that level of commonality has proven impossible to achieve. Twelve years after the program started, three of the JSF's eight critical technologies are still not mature. Its production processes are not mature, and its designs are still not fully proven and tested. As a result, the program is now expected to exceed its original budget by almost 40 percent. That is $40 billion. The Army underestimated the lines of code needed to support the Future Combat System's software development by a factor of three. That led to an increase in software development costs that now approaches $8 billion. So 8 years after the program started, only three of the Future Combat System's 44 critical technologies are fully mature. GAO tells us that the Army has not advanced the maturity of 11 critical technologies since 2003, and that 2 other technologies, which are central to the Army's plans, are now rated less mature than when the program began. As a result, the program is now expected to exceed its original budget by about 45 percent or $40 billion. It is as much as 5 years behind schedule and is likely to be substantially restructured. There is a set of common problems underlying all these program failures. As a general rule, when the Department of Defense acquisition program fails, it is because the Department relies on unreasonable costs and schedule estimates; establishes unrealistic performance expectations; insists on the use of immature technologies; and adopts costly changes to program requirements, production quantities and funding levels in the middle of ongoing programs. The bill we bring before the Senate today is designed to address these problems and to help put major defense acquisition programs on a sound footing from the outset by addressing program shortcomings in the early phases of the acquisition process. Our bill is going to address problems with unreasonable performance requirements and immature technologies by requiring the Department of Defense to reestablish systems engineering organizations and developmental testing capabilities that were downsized or eliminated as a result of reductions in the acquisition workforce in the late 1990s; periodically review and assess the maturity of critical technologies; and make greater use of prototypes, including competitive prototypes, to prove that new technologies work before trying to produce them. Our bill will address problems with unreasonable cost and schedule estimates by establishing an independent cost estimating office headed by a Senate-confirmed director of independent cost assessment in an effort to ensure that the budget assumptions underlying acquisition programs are sound. We deal with a similar problem in the Congress by using an independent office, the Congressional Budget Office, to tell us how much direct spending programs are really going to cost. Those of us who have tangled with the CBO over the years know how tough and independent that office can be in insisting on its estimates. We can decide to spend the money anyway, but we do so with our eyes wide open because the cost estimator is not going to back down. The Department of Defense itself has a model for this type of independence in the Director of Operational Test and Evaluation, the DOT&E. For the last 25 years, that Director, who is appointed by the President, confirmed by the Senate, and reports directly to the Secretary of Defense, has ensured that weapons systems are adequately tested before they are deployed by providing independent certifications as to whether new military systems are effective and suitable for combat. Program officials and contractors may disagree with the Director, but they have discovered they cannot go around him. Section 104 of our bill would ensure comparable discipline when it comes to cost estimating by establishing a new director of independent cost assessment. Like the DOT&E, a new director will be appointed by the President, confirmed by the Senate, and will report directly to the Secretary of Defense. Like the Director of Test and Evaluation, this official would have the independence and the clout within the Department to make objective determinations and stick to them. A truly independent cost estimating director will not be popular within the Department, as the DOT&E is not popular often, but he will make our acquisition system work better by forcing the Department to recognize the real cost of what our Secretary of Defense has called ``exquisite requirements.'' Only when the Department faces up to these costs will it become more realistic in its requirements and start to make the necessary tradeoffs between cost, schedule, and performance. Section 104 makes the Director responsible for all cost estimates and cost analyses conducted in connection with major defense acquisition programs and major automated systems programs in the Department of Defense. Under section 104, the Director is required to perform his own cost estimates at four separate points in the life of each program for which the Under Secretary is the milestone decision authority. On other programs, he may rely on an independent cost estimate produced by one of the military departments but only if he determines that the service's independent estimate is unbiased, fair, and reliable. Our bill would also address problems with costly changes in the middle of a program by putting teeth in the Nunn-McCurdy requirements that currently exist for troubled acquisition programs. We will establish a presumption that any program that exceeds its original baseline by more than 50 percent will be terminated unless it can be justified--be ``justified;'' and this is critically important-- from the ground up. Finally, our bill would address an inherent conflict of interest we see on a number of programs today, when a contractor hired to give us an independent assessment of an acquisition program is participating in the development or construction side of the same program. We held a hearing back in March on S. 454, at which four witnesses, including two former Under Secretaries of Defense for Acquisition, Technology, and Logistics, endorsed the committee's acquisition reform effort. The new Under Secretary for Acquisition, Technology, and Logistics added his support at his March 26 nomination hearing. In addition, we have since received extensive comments on the bill from the Department of Defense, from the defense industry, and from independent experts on the acquisition system. Senator McCain and I took those comments into consideration and we offered a number of modifications to the bill, which were adopted by the Armed Services Committee at our April 2 markup. We did not make all of the changes requested by the Department or the contractor community. For example, the Department would like to eliminate the provision on the Director of Independent Cost Assessment. Many contractors would prefer we not tighten the rules for organizational conflicts of interest. And both the Department and industry would like us to drop our Nunn-McCurdy amendments, which place tough new requirements on failing programs. We have not done that. These provisions are tough medicine, but the acquisition system needs tough medicine. In January, Secretary Gates told our committee that we must work together to address the ``repeated--and unacceptable--problems with requirements, schedule, cost, and performance'' from which too many of our defense acquisition programs suffer. On March 4, the President endorsed the goals of the bill, telling the press that ``It's time to end the extra costs and long delays that are all too common in our defense contracting.'' Last week, the President reiterated his position that the bill has his full support, and he urged us to act quickly. I hope our colleagues will join us. Senator McCain has been instrumental in making this happen, and we and the Nation are appreciative to him for so many things, but we can add this now to the list. Also, our full committee endorsed this bill. It was adopted unanimously in committee. It is a bipartisan bill. We look forward to beginning consideration of this legislation. And to those Senators who have amendments, we hope they will let us know about them to see if we can work them out, and, if not, arrange a time for their consideration. Again, I thank my friend from Arizona for all his work on this matter. I yield the floor.

Mr. LEVIN. Mr. President, let me again thank Senator McCain for all he has done to bring us to the floor today. This is a bipartisan bill. It is a major reform of the acquisition system. It is long overdue. It is genuinely and desperately needed.

Mr. LEVIN. Mr. President, on a bipartisan basis our committee approved this bill unanimously, the Weapon Systems Acquisition Reform Act of 2009. We have a few minutes so I will just make a few points highlighting this bill. The Government Accountability Office reported last month, as both Senator McCain and I mentioned earlier, the cost overruns on the Department's 97 largest acquisition programs alone totaled almost $300 billion over the original program estimates. That is true, even though the Department of Defense cut the quantities being purchased and they reduced the performance expectations on many of the programs in order to hold down costs. Second, we know what the underlying problems are at the Department of Defense. The Department of Defense acquisition programs fail because the Department continues to rely on unreasonable cost and schedule estimates. They continue to establish unrealistic performance expectations. The Department continues to use immature technologies and to adopt costly changes to program requirements, to production quantities, and to funding levels right in the middle of these programs. When we do that we have unstable programs and costs that are going to rise. Third, this bill contains a number of specific measures to address the problems I have just identified. The bill has the support of the President, Secretary of Defense, the Government Accountability Office, many independent experts on acquisition policy, and a number of public interest groups. There are many important provisions in this bill, but I want to highlight one of them this afternoon. We are waiting for sponsors of amendments we have cleared, and those that we have not cleared, to come to the floor. We are open for business. One of the most important provisions that is in this bill is the provision which establishes a director of independent cost assessment. It is the way to bring real discipline to the DOD's cost estimating process. At present, there is an entity called Cost Assessment Improvement Group, or CAIG, for short. They are supposed to be producing independent cost estimates on DOD acquisition programs. That is their responsibility. However, the CAIG operation is too low down in the bureaucracy. It is not directly accountable and reporting to the Secretary of Defense. It is a committee and includes representatives of each of the Under Secretaries and a number of other senior officials in the Department, chaired by a civil servant in the Senior Executive Service who is the Deputy Director for Resource Analysis in the Office of Program Analysis and Evaluation. Just almost by saying those words one can understand why it does not have the direct clout we need this person to have. We are going to establish an individual who is responsible, a person who directly reports to the Secretary of Defense just the way in which another critically important office now does, the one that evaluates the technologies. We are also going to have this person be Senate confirmed. The person who now is Senate confirmed, who does this for a different role, is the Director of Program Analysis and Evaluation. That person, that Director, is--I misspoke. It is the Director of Operational Testing and Evaluation who now is directly accountable to the Secretary of Defense and is Senate confirmed. We want this person who is going to be responsible for cost analysis to be also in that same position and to have that same kind of clout. Now, the CAIG staff does a terrific job at what they do. I am not, in any way, disparaging the work of the CAIG staff. But a career official in the Senior Executive Service who serves as the Deputy Director of an office that is not even headed by a Presidential appointee simply does not have the independence and the clout that is essential if the cost of these programs is going to be put under control. By establishing a tough and an independent cost estimator who is Senate confirmed and reports directly to the Secretary of Defense, we believe our bill is going to go a long way toward ending the unrealistic, the overly optimistic cost assessments that are too often used in order to sell the new acquisition programs. We have to reduce the unnecessary ``gold plating'' of weapon systems. We have to bring the Department of Defense undisciplined requirements system under control. As I indicated, we are ready to begin addressing amendments. I yield the floor.

Mr. LEVIN. Mr. President, our staffs have worked hard to try to clear some amendments. We have been able to do so. But in order for us to move these amendments be adopted, they are going to have to have their sponsors come to the floor. The nine amendments which have been cleared on both sides and which we can accept if we can get the sponsors here would be three amendments of Senator McCaskill, one of Senator Collins, one of Senator Coburn, one of Senator Whitehouse, one of Senator Carper, one of Senator Inhofe, and one of Senator Chambliss. These amendments have not been filed yet. We have cleared them but they need to be filed by the Senators, and that is the reason we need them to come to the floor. I will be happy to yield to my colleague.

Mr. LEVIN. Mr. President, before the Senator from Maine leaves the floor, let me congratulate her on this amendment. She has put her finger on a very significant point. There is a weakness in this system of contract oversight that the Department of Defense has not satisfactorily addressed. As frequently happens, the Senator from Maine is willing to take on issues which are not necessarily the most glamorous and do not necessarily get the headlines but really get to the inside of what needs to be delved into, needs to be looked at, needs to be analyzed, and needs to be addressed. This is an amendment which will require the Department of Defense to use a management tool which is called earned value management. They acknowledge it is an important tool, but they also acknowledge too often contractors are not using it and that Government officials who are responsible for overseeing this system and this management tool are inadequately trained, not qualified. There are inadequate mechanisms to enforce contractor compliance. So the Senator from Maine, as she so often does, has put her finger on a critical issue and is willing to tackle it and make it understandable for the rest of us. I commend her and Senator McCaskill for this amendment, and we are delighted to support it.

Mr. LEVIN. I suggest the absence of a quorum.

Mr. LEVIN. Mr. President, we very strongly support the amendment and hope it will be acted upon immediately.

Mr. LEVIN. Mr. President, I move to reconsider the vote.

Mr. LEVIN. I suggest the absence of a quorum.

Mr. LEVIN. Mr. President, let me very quickly thank Senator Dorgan for his extraordinary commitment to the issues he has outlined. I don't know of anybody in this body who has devoted anywhere near the time he has to these issues. He has a passion second to none, and I commend him for it. We look forward to working with him on amendments on the authorization bill, and we also more than welcome his cosponsorship of the pending bill. I thank him for the effort he made. I assume all the materials he has produced will go to the Commission on Contracting Reform, which has been created on wartime contracting. That will probably give us an opportunity, with the power they have, to take some concrete steps. I thank the Senator.

Mr. LEVIN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. LEVIN. Mr. President, Senator McCain and I now, with our staffs, have been able to clear eight amendments. I ask unanimous consent that the following amendments be called up, considered, and approved en bloc: amendment No. 1044, by Senator Inhofe, which he will speak on; amendment No. 1053, Senator Chambliss; Senator Coburn's amendment No. 1046; Senator McCaskill's amendments numbered 1051, 1049, and 1050; Senator Whitehouse's amendment No. 1047; Senator Carper's amendment No. 1048.

Mr. LEVIN

Mr. LEVIN. The suggestion was that we make our opening statements during this lull time. That is fine with Senator McCain and me.

Mr. LEVIN. Mr. President, I ask unanimous consent that after Senator Stabenow is finished, I then be recognized and then Senator McCain be recognized to offer our statements introducing the bill which will be called up after the final passage of the pending legislation.

Mr. LEVIN

Mr. LEVIN. Mr. President, I ask unanimous consent that the pending unanimous consent agreement be modified so Senator Durbin can be recognized in morning business. The PRESIDING OFFICER (Mrs. Gillibrand.) Without objection, it is so ordered.

Mr. LEVIN

Mr. LEVIN. Madam President, before the Senator from Illinois leaves the floor, I thank him. He has been a voice, indeed, for people who don't have a voice. He has done that throughout his career both here and in the House. It is a pleasure listening to him. I believe I asked unanimous consent to have my statement on S. 454 printed in the Record immediately after our legislation is called up this afternoon, and with the permission of Senator McCain, I ask unanimous consent to have his statement also printed in the Record at that time.

Mr. LEVIN

Mr. LEVIN. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 1021, as modified

Mr. LEVIN. Mr. President, I support the Helping Families Save Their Homes Act of 2009. The foreclosure situation in my State of Michigan continues to be dire. According to data released by real estate firm RealtyTrac, even though there are less foreclosure filings than this time last year, there were still over 11,000 Michigan foreclosure filings in January 2009 alone. That is 1 foreclosure filing for every 397 households in just 1 month, which puts Michigan's foreclosure rate at the seventh highest in the Nation. Nationwide, foreclosure filings are up 18 percent compared to this time last year. Unfortunately, homeowners facing foreclosure are not the only ones being impacted by this crisis. Property values have dropped significantly in many areas, due in large part to the increased number of abandoned and foreclosed homes. These losses in property values also decrease State and local revenue from property taxes, creating shortfalls in revenues and reducing funding for important State and local programs and services. Over the past year, Congress has taken a number of steps to help reduce the effects of this crisis. Today, the Senate is set to pass legislation that will further expand the tools available to homeowners facing foreclosure and increase access to these important programs. This legislation will expand access to the hope for homeowners program by providing incentives for servicers and lenders who participate in the program and streamlining borrower certification requirements. It will also expand the ability of FHA and Rural Housing to modify loans in order to help a homeowner avoid foreclosure and authorize additional funding for foreclosure prevention activities, including housing counseling and additional fair housing field workers. Importantly, this act also creates additional enforcement tools to ensure the Department of Housing and Urban Development--HUD--is able to go after bad lenders who break the rules or misuse these programs. In addition to these improvements, the act makes a number of changes to ensure the safety of depositors' savings, and improve the health of the banks and credit unions that are essential to our economic recovery. Last year, we increased deposit insurance coverage from $100,000 to $250,000. That provision is set to expire at the end of this year. This act will extend the additional coverage for another 4 years. The act will also increase the borrowing authority of the FDIC to $100 billion and of the National Credit Union Administration to $6 billion. Collectively, these changes will help ensure the security of deposits for years to come. The act also helps banks and credit unions that may be struggling to pay special assessments for their deposit insurance coverage. Due to the economic downturn, the insurance funds for these institutions are seeking additional funding through special assessments. And for many of these institutions, these assessments are at the absolute worst time-- while they are trying to stabilize their capital positions. The act responsibly spreads out the period over which the insurance funds may seek these assessments, thereby giving the banks and credit unions the ability to preserve and more effectively use their precious capital. Lastly, the act creates a temporary corporate credit union stabilization fund to help ensure the stability and security of those who rely upon corporate credit unions. This bill includes many improvements to current programs that will help the country dig out of this foreclosure crisis. To do so will require the efforts of Federal, State, and local governments, as well as community and neighborhood organizations, lenders, brokers, and borrowers. This act will bring much-needed help to many of our homeowners who are trying desperately to save their homes as well as ensure that their savings are protected, and it deserves my support.

Mr. LEVIN. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.