John Warner

Mr. WARNER

Mr. WARNER. I have worked with my leader with regard to the unanimous consent that was adopted. I will not send my amendment to the desk, but I intend to initiate debate. As I understand from the chairman, there will be a rejoinder on the other side and we will proceed on this issue until the hour of 12 o'clock. It is also my expectation that the chairman and I, with our respective leaders, Senators Daschle and Lott, will meet prior to the caucuses for the purpose of establishing a procedure by which my amendment is to be sent to the desk and considered by the Senate. Am I correct?

Mr. WARNER. I don't know that that was in the form of a unanimous consent request.

Mr. WARNER. I simply stated for the convenience of the Senate the procedure we will follow between now and the hour of 2:30, at which time I will be recognized for the purpose of tabling the Kennedy amendment. I encourage colleagues on my side to come forward. I know Senator Allen is anxious to speak to the Kennedy amendment, as are Senator Bond and Senator Fred Thompson. There will be concluding remarks by our distinguished colleague from Wyoming. That will take place from 12 to 12:30 and again from 2:15 to 2:30. At this point in time, I will address the question of missile defense in the amendment I intend to submit to the Senate. Since I will not now send it to the desk, I will read it. This is an amendment proposed by myself, Mr. Lott, Mr. Stevens, Mr. Cochran, Mr. Allard, Mr. Kyl, Mr. Smith of New Hampshire, Mr. Inhofe, Mr. Thurmond, Mr. Sessions, Mr. Roberts, Mr. Hutchinson, Mr. Bunning, Mr. Helms, Mr. McCain, and Mr. Nickles. I read the amendment as follows: On page 217, between lines 13 and 14, insert the following:

Mr. WARNER. Mr. President, I thank the distinguished chairman. I went to the Department of Defense early one morning around 7:30 or quarter to 8 and spent the better part of an hour with the Secretary of Defense and his top budget people. I wanted to make certain that if I were to formulate this amendment along those lines--I concede to the chairman that it was my idea, and it caught them a little bit by surprise--the Secretary said he would like to consider it. That he did. He went back in his own internal system and eventually he conveyed to me the message that the amendment as I have given him in draft form would be acceptable to him and the administration. I did concur that the calculations to be performed by the President's Office of Management and Budget would enable this amendment to authorize those funds.

Mr. WARNER. Mr. President, these are very good questions. I want to answer them very precisely. The midyear review to which the Senator referred conducted by OMB is in progress. He is correct. While the review is not formally complete, we have been assured--that is, this Senator has been assured by the administration--that the revision of the inflation assumptions will--I repeat ``will''--provide ample funds to cover the additional allocation for missile defense and DOD activities to combat terrorism as framed in the amendment.

Mr. WARNER. That is correct.

Mr. WARNER. Yes. On its face, it would do so. In the interim, I say to the chairman, the appropriations process will have a chance to review the midterm OMB analysis.

Mr. WARNER. It is not contingent; that is correct.

Mr. WARNER. Madam President, that is a question that I would reserve for the moment. But I am confident that option will not occur. If I may----

Mr. WARNER. That is correct.

Mr. WARNER. Are going to be sufficient.

Mr. WARNER. Madam President, I want to be extremely careful in my response. I will be meeting with the Secretary of Defense in about an hour's time. I want to clarify the chairman's question by asking it directly to him and providing the Senate, this afternoon, as this debate continues, a clear response to the chairman's question. If I might add a bit here about this process, the administration uses certain inflation assumptions in building its budget, including its defense budget, to assure that the Government can buy the goods and services it needs. If inflation is lower than anticipated, the budget request is a little higher than needed to buy the required goods and services. When a midyear review determines the inflation rate is lower than anticipated, the Secretary of Defense identifies budgeted funds that are no longer required as a result of the inflation--they refer to it as a bonus. Since they are deemed to be excess, there is no programmatic impact resulting from the inflation savings being used. What happens if the new inflation assumptions are wrong and savings do not materialize? This borders on the Senator's question. Won't programs be affected then? Inflation assumptions are just that: assumptions made based on the best information available at the time. The information used during the midyear review is more recent and provides a better basis for inflation assessments than those made almost a year ago when the 2003 budget was being built. The same question can be asked about any budget at this time. What happens to programs if inflation is higher than expected? I would note that the Department of Defense routinely takes advantage of inflation savings, as do the authorization and Appropriations Committees in both the markup and conference process. So this is not a new source of funds. I would also note that the path taken by the House on missile defense is quite different than that of the Senate. The use of this source will be debated and resolved in the context of our conference, if adopted by the Senate.

Mr. WARNER

Mr. WARNER. Mr. President, parliamentary inquiry: It is the understanding of the Senator from Virginia that the time between 2:15 and 2:30 is to be equally divided between the distinguished Senator from Massachusetts, the distinguished Senator from Wyoming, and myself.

Mr. WARNER. Mr. President, have the yeas and nays been order?

Mr. WARNER. Mr. President, I ask for the yeas and nays.

Mr. WARNER. And I would simply say to my good friend from Massachusetts, what has been omitted from this discussion is the tens upon tens of thousands of Government employees doing superb work in the public shipyards, in the rework centers in several States. Somehow we have looked at a very narrow segment of the overall business of the Department of Defense without referring to the magnificent contributions by hundreds and hundreds of thousands of Government employees. So, Mr. President, at this time I move to table.

Mr. WARNER. All time is yielded back on this side.

Mr. WARNER. Mr. President, last night I provided Chairman Levin with a draft of my missile defense amendment and then we discussed it at length this morning. At approximately 2:35 or 2:40, the Senator provided me with a proposal the Senator from Michigan had. So he had my amendment for a number of hours. I have only had his for about an hour and 30 minutes. I have a lot of people with strong beliefs over on my side, and it seems to me it is not unreasonable given the amount of time that I was able to provide for the chairman and the leadership on his side, that I would require just a bit more time to resolve good, honest differences of opinion on my side.

Mr. WARNER

Mr. WARNER. Will the Senator yield for a question on that cost point?

Mr. WARNER. That derives from the 10-percent differential, does it not?

Mr. WARNER. It does not include the costs of the hiring and the training and incalculable number of new Federal employees; am I not correct?

Mr. WARNER. In addition. I thank the Senator.

Mr. WARNER. Mr. President, reserving the right to object, I wonder if I might, as a manager, be recognized first in the order of those to be recognized following the Senator from New Mexico.

Mr. WARNER. Mr. President, with all due respect to my good friend and valued member of the Armed Services Committee, Senator Kennedy, his amendment, in my judgment, would do very serious damage to the Department of Defense, particularly to the ability of the Department to contract quickly for essential services--the operative word being quickly. What now takes the Department weeks to contract for would take up to years if this amendment is adopted. As DOD wages a global war against terrorism, I and many others find it very hard to believe that the Senate would even consider approving such legislation. I understand the frustrations with the current A-76 process, which governs public-private competition of existing Federal work. That is why 2 years ago, as part of the fiscal year 2001 Defense Authorization Act the Congress established the Commercial Activities Panel, under the auspices of the GAO, to review and recommend ways to fix the A-76 process. This panel recently issued its recommendations. Those recommendations should include replacing A-76--and the Presiding Officer spent a lot of time on this issue and was very much involved in the debates last year--with a process that relies on an existing Federal acquisition framework that emphasizes quality, best value, fairness, and transparency. Let's give this initiative time to work. The legislation before us, however, would go directly counter to the recommendations of this panel--a panel comprised of members of the administration, industry, labor, and the Comptroller General of the United States, who spent almost 2 years analyzing the complexity of this subject. And now, if we, the Senate, were to adopt this amendment, and indeed it would go to conference and somehow become law--which I seriously doubt--were we to go on record at this time and adopt this amendment, we would be sort of ignoring the good work taking over 2 years by a panel, which was established by this body. The Senate needs more time to review the issue of public-private sector competitions, in light of the recommendations of this panel. We have not yet held hearings on the recommendations which were released only last month by the Commercial Activities Panel. The Governmental Affairs Committee and the Armed Services Committee should seriously review the commission's recommendations and hear from other parties. Indeed, we could consider Senator Kennedy's legislation as part of that review, as well as any other legislation that other Members of this body may have. To consider this issue at this time would be to preempt the work that should be and will be done by the committee. At the appropriate time, I regret to say, I will offer a motion to table the amendment of our distinguished Senator from Massachusetts, Mr. Kennedy. If that motion fails, I will offer my own alternative that implements the recent recommendations of the GAO Commercial Activities Panel to fix the A-76 process. I hope that will not be necessary because we should go through a series of hearings by the appropriate oversight committees. I believe Senator Thomas, likewise, has several other alternatives, and there may be other Members with amendments on our side. I hope we can find a way at this point in time to respectfully decline to accept the amendment of the Senator from Massachusetts. The amendment before us would arbitrarily require the government to compete with the private sector, under the time consuming and expensive A-76 process, for the performance of commercial services--regardless of whether there are any Federal workers to perform the work. In so doing, this amendment would cripple government performance, undermine competition, exacerbate the federal human capital problem, and devastate small businesses. This amendment overturns over 50 years of bipartisan policy mandates that the government should not compete with the private sector for ``non-inherently governmental'' functions. Under this amendment, almost every new contract, contract modification, task order, renewal, or re-competition would have to undergo a lengthy public-private ``competition'' under the OMB Circular A-76--whether or not the government even has the right skills and personnel to perform the work. The private sector and many in the Federal workforce, believe the process is too expensive, too complex, and unfair to all parties. Yet this amendment would require a vast increase in A-76. DOD estimates this expansion would cost over $200 million a year, at a minimum. By mandating A-76 competitions, this amendment would cause long delays in the performance of defense services. Compared to most modern competitive procurements, which are completed in weeks or months, A-76 competitions take a minimum of 18 months and often as long as three years or more to complete. Under the amendment, DOD would lose its critical ability to swiftly procure innovative defense and homeland security services and products necessary to prevail in the war against terrorism. The advocates for this legislation say they have given DOD a waiver from the requirements of the bill. With over $60 billion in services contracts a year there are just too many contracts for DOD to process waivers at the Secretary of Defense or Assistant Secretary level. DOD's procurement process is already too cumbersome. We do not need another step in the process. As the top federal acquisition official, Angela Styles recently stated: The proposed legislation would put at risk the Federal Government's ability to acquire needed support services in both the short and long term. The amendment would undermine the robust competition for government service work that currently exists. The fact is that almost all of the work that would be affected by this amendment is already routinely competed in a robust and aggressive marketplace. According to the Federal Procurement Data System, in FY00 72 percent of all service contract actions--and more than 90 percent of all information technology contract actions--were subject to competition. Of the remainder, over 50 percent involved services--e.g., electricity or water--for which there was only one available provider. By contrast, less than two percent of all service work performed by Federal employees is subject to the competition of any kind. When Federal employees are subjected to competition the savings have--according to DOD--consistently averaged 34 percent. The amendment would devastate small businesses. Small businesses account for 35 percent of Federal contract dollars. Yet the amendment would exclude most small businesses--particularly woman-, minority-, and veteran-owned companies--from participating in service contracting, because of the added costs and time associated with the A-76 process, when compared to traditional procurements. Small businesses just don't have the capital to wait several years to begin work. They would, in effect, be excluded from new Federal contracts under this amendment. In general, the cumulative effect of the provisions of the Kennedy amendment would add significant costs to Department of Defense operations. These costs would result from: (1) The vastly increased use of the burdensome A-76 process for contracting-out or contracting-in decisions; (2) the delay of up to 3 years in providing essential operational support services because of the expanded A-76 requirements; and (3) a massive diversion of DOD administrative resources from mission critical support to administer a several fold increase in burdensome, labor-intensive A-76 studies. I hope my colleagues will reach the conclusion that this amendment does not succeed in resolving the underlying problem the amendment is trying to address--that is, how to structure public-private competitions that are fair, transparent, and protect the rights of Federal workers while ensuring that DOD receives quality solutions at the best value to the taxpayer to meet its missions and responsibilities in our fight against global terrorism. I urge my colleagues to defeat this amendment.

Mr. WARNER. Mr. President, I am basically in concurrence, and then we will be clear on the understanding that at the conclusion of the debate by those Senators designated, we will conclude all work on the authorization bill and go into morning business, subject, of course, to whatever the leaders wish to take place. I have provided the distinguished chairman with the proposal on missile defense that I have. It is my hope we can debate that tomorrow, establish a time agreement giving all a reasonable amount of time for debate, spend some time in the morning, some time in the afternoon, and have a vote tomorrow afternoon, so we can then move into Wednesday in the expectation we can conclude this bill on Wednesday.