President Trump: We’re Wasting Taxpayers’ Money

While I might not go so far as to pen an open letter to President Donald Trump, consider this a note for anyone with a need to know how the procurement process works for defining and moving ahead on military expenditures. It’s safe to say the behemoth process borders on the absurd and wastes millions of taxpayer dollars.

There are two types of government procurement issues many might find infuriating and prevent warfighters from getting the best industry offers. The two problem areas include the small business set-aside and the absurdity of asking for revolutionary capabilities but telling businesses how to do it using an evolutionary process.

Both procedures just get in the way of progress.

Anti-fraud—good idea with extraneous steps
The government put procurement regulations in place nearly 20 years ago for two reasons: to eliminate fraud by well-positioned contractors and to improve military contract competitive chances for smaller businesses. While regulations might have been a good idea in principle, the practice is backfiring, and it’s time to make a change, especially since the Trump administration has set a pro-business approach.

Experience with the current procurement process comes first-hand. General Micro Systems (GMS) is under contract with the U.S. Army to deliver unique nighttime and limited-visibility situational awareness technologies. We demonstrated the capability; Army officials liked it, decided to go with our offering and then—we wait.

The main obstacle is that regulations prohibit the military from buying directly from a government-defined small business. Military suppliers must find an even smaller small business that is authorized to work directly with the government. In some cases, small is defined as a mom-and-pop shop with 15 or 20 employees.

This smaller small company enters the bidding process—for a fee. Amounts of 10 percent to 15 percent markup are not unusual and could add tens of millions of dollars to the government’s bill.

Tell us what you need to do, and let us tell you how to do it.
The problems associated with the small business set-aside effort is compounded by the Army’s procurement practices that limit the vision and capabilities of suppliers. A common approach is that the Army specifically outlines what it needs—or thinks it needs—without providing a big-picture perspective. For example, the service might state that it needs just a server, when in reality the program requires a rugged server, storage and storage controller, and more—basically everything to fill an entire electronics equipment rack. The miscommunication causes delays, and delays equal higher costs.

In addition, contracting authorities for all military branches continue asking for products that are evolutionary, and sometimes impossible, rather than revolutionary. Officials will define a problem and how to solve it with incremental solutions and can miss tapping advanced next-generation capabilities.

Adm. Harry Harris, USN, commander, U.S. Pacific Command, voiced similar thoughts during a keynote at the West 2017 conference in February. Government should let industry use its creativity, resolve and expertise to deliver precisely tailored customer solutions that work.

The status quo is a bad way for the government to operate. It’s time to do something about it. 

Ben Sharfi is CEO of General Micro Systems.