Shay Assad gets forced into retirement from the Pentagon after saving taxpayers billions of dollars through shrewd negotiation. A reformer who proposed ways to catch defective pricing, and to hold defense contractors accountable for performance when issuing progress payments, Assad suddenly fell out of favor after years of award-winning performance. Donald Trump ran for office promising to drain the swamp. Why not drain THIS swamp?
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President Trump, Drain THIS Swamp: Pentagon Reformer Forced Out After Saving Billions
Shay Assad gets forced into retirement from the Pentagon after saving taxpayers billions of dollars through shrewd negotiation. A reformer who proposed ways to catch defective pricing, and to hold defense contractors accountable for performance when issuing progress payments, Assad suddenly fell out of favor after years of award-winning performance. Donald Trump ran for office promising to drain the swamp. Why not drain THIS swamp?
18 replies on “President Trump, Drain THIS Swamp: Pentagon Reformer Forced Out After Saving Billions”
In decades of working within government procurement programs, I can tell you that minimizing “cost” of procurement is not necessarily the primary objective. Having every expenditure “justified” is the primary objective.
Think of it this way. If you go to the car lot and buy a car, you do your research and determine what is the best value for you. If you’re the government, you will ask the car dealer to give you a price breakdown of how much every piece part of the car costs, if parts are manufactured by the car company, you ask how many hours it costs to produce that part, how much it costs to install it, and perhaps even the cost of development of the software it takes to control it. It goes on, but now, would you say that the car dealer (or the manufacturer) going to sell that car it would have sold to anyone else for $30K for the same $30K?
Not saying it wasn’t unfair that this guy got fired…I know many upstanding people in government and on the contractor side. I just want to explain how the system really works, and maybe explain how we end up with things like $800 hammers.
Also to the point is that whether it is cost plus or firm fixed price, it’s my opinion that emphasizing these government procurement rules has the greatest impact. Take the example of the house extension. The analogous thing that happens more is this. The contractor installs the French doors as specified. It turns out that SOMEONE doesn’t like THOSE French doors. What is the contractor do do now? The lawyers get involved to parse the contract requirements to argue the case as to whether or not the contract was specific enough that the contractor is in breach. Similarly, the French doors were on back order, but to stay on schedule, the contractor proposes a substitute. Because the requirements were TOO specific, this requires an additional contract negotiation, again involving the lawyers, and throw in a few accountants, too. And guess what, the proposed French doors were actually superior to the original order! But it’s a change, so the PROCESS must be satisfied. It is the PROCESS that drives the cost.
My God, there are no words to express how much I appreciate (love) you guys. Y’all (yes, I’m from Mississippi) are SO MUCH better than ABC, CBS, NBC,or even FOX. I’m so glad I’m a member.
Your affection is requited. Thanks, Terry.
Your reply convinced me to remain a subscriber! You are the reason I stay with Billwh1ttle.com
The revolving door for advisors, consultants and lobbyists is also seen in the FCC where telco and cable company execs end up as regulators looking over their former employers. (I’m in IT so I hear about that more than the DOD but it sounds like exactly the same concept). I like the Blogfather’s idea of a Revolving Door surtax where an extra income tax is added for a certain number of years if you are employed in the same industry you regulated after leaving government service.
In my experience, government agencies, have has a prime directive, to spend all the money appropriated for them. That way, they can ask for more money next year and expect to get it. If they spend less, they will get less next year. THAT is a huge NO-NO.
The spending does not have to be effective and especially not efficient. They just spend other people’s money like a drunk teenager on a vacation. An unaccountable billion or so is considered pocket change lost in overstuffed chairs or couches.
Treating taxpayer money as a sacred trust? You have to be joking. It doesn’t happen.
Your first paragraph is entirely correct… However, it is an attempt by the agency to work within the system, it is the system which is both inefficient and impervious to cost – they’re spending not their money but ours in the form of taxes.
Contracting out is the topic of this BWN, however…
The cost-plus contracting is as Bill describes, and it probably is mandated to be this way. So, you have gov’t agencies doing their best within the system, grumbling about the system even more than those outside it. But what can they do, they have their mandates and regulations. They work with the system, they tweak what they can and bend the rules, but they don’t have much leeway.
The Pentagon is higher up than I ever went (or wanted to go, I was happy to be far far away from Congress’ eye, and as far away as I could get with contracting).
I’m uncertain the “this is how the rules are written” can be validly used as an excuse by the agencies. There have been many cases where the Congress has passed a law but left it up to the agency to interpret the law and determine how they will enforce it or create rules and regulations.
The “spend all of your budget or you get less next year” also happens in larger companies and it always comes down to who knows who and who has the better presentation of “why you need us, and why we need this” vs an actual organizational understanding of where money needs to go.
The difference between gov’t agencies – let’s say DOD – and the public companies is the companies are profit driven (including the gov’t contractors), and gov’t agencies are budget driven…
The source of the money might be different but it still comes down to someone, who’s money it isn’t, saying “you can have what you asked for” or “it isn’t in the budget (read: you’re not high enough on the list to get it in the budget and someone else is)”
Sure, govt can just raise taxes and companies can just raise prices, but when you get an entity so large that the money in and the money out are disconnected, it becomes far more about the politics. Unlike the general economy where you can get rich, I can get rich, and we both didn’t steal someone else’s slice of the pie (we just made the pie larger) budgets are something of a zero sum game. Usually you want to increase the pie (and by doing your job well you could probably help with doing that) but making requests of the budget are generally done after the pie size has been guessed and how much is decided.
There might be some rare government agency that “does the best it can” but in my experience the spending of money and growing the agency is their total purpose. Actually getting something done is an accidental side effect of the operation.
Usually actual results gets in the way of their primary purpose. This is from personal experience from having done in two weeks what they didn’t do with two people working two years. Had I taken a year to do it, it would have been OK by them. They didn’t like the fact I demonstrated their two PhD’s were incompetent idiots hardly worth the trouble to fire. I didn’t have to say it. I was obvious.
I’ve known a couple places where the size of your budget was a bragging right and lots of functions were duplicated in one of those places just so that people could have more in their little fiefdoms. As I was a temporary worker at that place it didn’t bother me, but eventually a lot of similar tasks got put under one central department (and consequently my fiefdom serfdom job got cut) though that didn’t stop one department from continuing to do their own thing for several years.
I won’t argue w/ Bill that the development/procurement of the F-35 was a total cluster. I won’t put up very much of an argument that the 35 is way more ‘spensive than it should be. But I will argue, that in the end, we didn’t end up w/ a very good strike fighter.
And the people w/in DOD were grumbling the most about cost!
I think (I’ve heard it stated this way, not my original analysis) that it was trying too hard to build to competing requirements – Air Force, Navy, etc have vastly differing needs (i.e. requirements), and make everything work for everybody.
One would think they’d spend a lot less money by making 2 or 3 different jets rather than 1!
Unfortunately, water under the bridge, we have to live with what we ended up with because we spent too much money procuring…
It’s the same thing McNamara tried to do back in the 60s and failed miserably. BUT… The Israelis (who’ve actually taken the thing into combat) and the AF seem pretty happy w/ the A model. Marines, who may have fought w/ the things, seem quite happy w/ the B model. C model hasn’t made it to the fleet yet. It seems, at a HUGE cost, the Military Industrial Complex has actually achieved commonality.
Also, despite the cost, I suspect that it was easier to sell congress on one plane for all rather than each service getting separate designs. Kinda the same way they snuck the Super Hornet through congress. No way was congress gonna buy the Navy a whole new airplane (which the F-18EF is). But by calling it a new variant of an existing plane, congress was willing to spend the monies.
After watching this, I can’t wait until we get this same level of accountability when The Radical Left forces Single Payer onto us!
I’m really looking forward to the SOMA.