Taxpayer Coalition Urges Restraint, Competition in Missile Defense Program

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Dear Chair Reed, Chair Smith, Ranking Member Inhofe, and Ranking Member Rogers:

On behalf of the undersigned taxpayer advocate and budget watchdog organizations, we write to express our concern with language in the Senate’s version of the National Defense Authorization Act (NDAA) that could cause spending on a developing missile defense program to escalate and eventually spin out of control. With any government procurement, it is essential that competition play a critical part in the process. This is especially true for missile defense programs.

As you know, there is bipartisan support in your Committees for the Missile Defense Agency’s (MDA) development of Next Generation Interceptors (NGI) within the nation’s missile defense system. Some of us have expressed concerns with the failed missile defense efforts of the recent past, and remain skeptical of major new taxpayer commitments to these programs.^[1] We also acknowledge that NGI could be a better bet for taxpayers than past efforts, but only if MDA learns from its previous failures and boondoggles.^[2] One way to not learn from these failures would be to triple production of these new interceptors extremely early in the program’s development, as proposed in the Senate version of NDAA.

Reporting indicates that tripling the production of NGI could cost taxpayers nearly $5 billion.^[3] The House’s NDAA language on NGI is a strong alternative to the Senate NDAA language, in that it calls on the Secretary of Defense to maintain competition through several review stages, and to uphold “fly before you buy” principles in the development of the program.^[4]

Unfortunately, the Senate’s version of NDAA could undermine the progress MDA is trying to make. And, in the process, the amendment could cut against commonsense federal contracting procedures that protect taxpayers from the wasteful spending that resulted from previous ill-advised missile defense ventures.

Sec. 1551 of the Senate’s NDAA legislation would give MDA the authority to develop a plan to “replace the current inventory of silo-based boosters with follow-on systems prior to the end of their useful life cycle.”^[5] Based on public reporting,^[6] we understand this request to mean that the Senate envisions a path to procuring 65 NGIs rather than the 21 currently envisioned by MDA.

While the Senate language conditions the development of such a plan on “reduc[ing] program risk,” “maximiz[ing] reliability,” and “promoting industrial base competition,” among other items, our organizations nonetheless remain deeply concerned that the Senate language would allow for a plan to significantly expand MDA’s vision for NGI -- before the contractors competing on NGI have even completed what is called a preliminary design review (PDR). Again, reporting indicates that tripling the production of NGI now could cost taxpayers nearly $5 billion.^[7]

It is simply premature to ask MDA to develop a plan to triple NGI production, especially given the technology has yet to go through PDR or the more important and robust critical design review (CDR) phase.

While competition is not a cure-all for cost overruns or production delays in all stages of defense acquisition, these principles are often key to federal agencies obtaining the best possible combination of high-quality goods and services and the best value for taxpayers. The House NDAA language also includes an important reminder to MDA that it must continue to learn from the mistakes of its last failed missile defense program, which cost taxpayers more than $1.2 billion.^[8]

When lawmakers go to conference on the Senate and House versions of the NDAA, we urge conferees to choose the House language on NGI and to reject the premature Senate language on increased NGI production. Billions of taxpayer dollars could be at stake.

Sincerely,

National Taxpayers Union

R Street Institute

Taxpayers Protection Alliance

CC:      Members of the Senate Committee on Armed Services

            Members of the House Committee on Armed Services