A recent article from Above the Law critiques a new Army policy that ostensibly aims to support “enabling modern software development” but, according to Warren Katz, chairman of the Alliance for Commercial Technology in Government, actually compounds existing issues within the Department of Defense (DoD). Katz argues that the revised policy exacerbates some of the worst dysfunctions seen in defense procurement, particularly those related to cost management and contractual agreements.
The criticism centers around the “Cost Plus” contracting strategy frequently employed by the DoD. Here, contractors are reimbursed for all allowed expenses up to a set limit plus an additional payment to allow for a profit margin. Critics, such as Katz, suggest that this system potentially incentivizes inefficient spending, as it may prioritize project completion over cost effectiveness or innovation. Katz further suggests that these practices could contravene the spirit—or possibly even the letter—of existing laws designed to provide checks and balances on defense spending.
This new policy is viewed by detractors as a step back from the necessary reforms that are needed to enhance procurement practices within the military. Addressing these concerns, Katz and others in the Alliance for Commercial Technology in Government emphasize the need for implementing modern and efficient systems that align with both fiscal responsibility and technological advancement.
For more information, you can read the article at Above the Law.