Perry Begins Overhaul of Defense Procurement

After years of criticism that the defense procurement system is grossly inefficient and wasteful, Defense Secretary William J. Perry on Wednesday took the first step in a major overhaul intended to save billions of dollars annually.

Perry signed a directive Wednesday that requires Pentagon weapon buyers to use commercial standards rather than the lengthy and detailed military specifications.

The specifications have perpetuated a defense industry that increasingly has grown isolated from the mainstream of American business, Perry said, resulting in higher costs, slower responses and the use of technology in defense systems that is older than new commercial products on the market.

“I have seen many examples of semiconductor chips where the commercial version cost a few dollars and where the military (version cost) $10 or $20,” Perry said.

The reform “turns the present system upside down,” Perry said, forcing program managers to justify why the government should pay extra for buying non-commercial products, rather than the past system requiring exemptions every time a manager wanted to stray from defense specifications.

Perry in the past has cited estimates that as much as one-third of defense acquisition spending is wasted through inefficiency. But industry leaders are uncertain whether these reforms will solve the inefficiencies that increasingly make weapons unaffordable.

Many layers of defense regulations will remain intact. Ultimately, the reforms may address only a small part of what causes weapon costs to be so high, industry executives have said.

“There is a sense of urgency today that we need to do something,” said Peter C. Scrivner, vice president at the American Defense Preparedness Assn., which has lobbied hard for major reforms. “This is not the total answer. It is not going to eliminate the 35% that is wasted. It is only a part of the attempt to modernize the acquisition system.”

Perry could not estimate exactly how much the revisions will save, though he said the goal is to save billions of dollars every year. Just in purchases of electronic systems, he estimated, the measures would cut costs by $700 million annually.

In past years, military specifications were seen as necessary to set standards for products that had no commercial equivalent. But in many areas, commercial technology now eclipses military technology, and the specifications are virtually obsolete.

In addition, some military specifications went to absurd lengths, such as an Army recipe for cookies that exceeded a dozen pages and Navy standards for soldering electronic connections that involved appearance more than function.