An Interview with Colleen On Her New Panel Appointment
September 23, 2011
Last week, Colleen was appointed as one of seven members of the House Armed Services Committee’s Panel on Business Challenges within the Defense Industry. The panel will examine the current defense business environment and to look at ways that the Department of Defense can spur innovation, competition, and cost savings by encouraging new entrants into the industrial base and supporting the transition of technology.
1. What is your goal in serving on this panel?
In these difficult economic times we need to be efficient and to ensure that the military budget, the largest part of the nation's discretionary budget, is well spent.
We hear so often about government inefficiencies, how only certain contractors receive contracts, and how small business faces challenges in working with the military. It’s such a loaded term but the bottom line is that we need to cut government waste. In defense contracting, we need to see how we can be smarter in how we contract, and look at places in the process that may be wasteful.
My goal in serving on this panel is to be part of a solution. I intend to listen and question so that we can improve the system. We will do this by proposing necessary changes to the process in the next round of defense legislation.
2. What is the panel's purpose?
The panel will examine the current defense business environment and to look at ways that the Department of Defense can spur innovation, competition, and cost savings by encouraging new entrants into the industrial base and supporting the transition of technology.
I think to put it in more general terms, a certain culture has developed around defense contracting, based on a variety of military priorities. That’s not a value judgment, and I’m not laying blame. But part of the panel’s job is to consider whether we need to make some adjustments that would make the process more suitable for business. Not just the corporations that are already in the system, but for other companies that want to get involved, and that may be able to offer real benefits in terms of cost and innovation, but are experiencing barriers to participation.
3. Why is it important that we focus on defense contracting?
Defense spending accounts for roughly half of the U.S. government’s discretionary budget. We all recognize that to reduce the size of the federal budget overall—something that I think everyone is looking at—we are going to have to reduce defense spending. And the question is, how do we do that without hurting military readiness?
For our state, defense contracting is a significant part of Hawaii's economic activity. A study by the Rand Corporation estimated that military procurement accounted for about $2.45 billion per year between 2007-2009.
4. What kind of reforms can we make to reduce waste in defense contracting?
The purpose of the panel is to hear the problems and recommendations. One criticism is the time it takes to get into position to bid. Another is the time it takes to get an award, and that there can be delays in the process and in the contracts. Small businesses can't afford to just wait.
Another challenge is that when small business are audited like a big company, it cuts into their bottom line and ability to do their work while being audited.
When we look at how contracts are rewarded, we need to ask what barriers there are to small businesses participating more fully in the system. We need to look at practices that may have developed over time that really don’t add to the effectiveness or efficiency of the system, and may in fact be a drag on having the system work the best way that it could.
I intend to listen and ask questions that will help the panel make the best recommendations possible, so that we are reforming toward the best system we can have.
5. What kind of impact does the defense industry have on Hawaii? Why is it important to Hawaii?
The Pacific theater has historically been an area of concern, and if anything, that focus is growing today. The presence of the military makes Hawaii the center of the Pacific. We are the proud home of Pacific Command. We are the natural place to develop new R&D for immediate use in the Pacific. In some ways, having a strong defense industry here is just as important as the troops and bases themselves. Hawaii will unquestionably play a key role in America’s defense and diplomatic posture.
It also goes beyond the measureable area of the economy. Military personnel have been great in showing aloha to our communities and schools, being a vital and contributing part of our state. There’s also the example that, in the months after the 9/11 attacks, Hawaii’s economy grew faster than some people expected because the military presence here let visitors see us as a safe place to visit. So in addition to the purely economic effect of bringing billions of dollars into Hawaii’s economy, there’s the aspect of having the military as a vital, contributing part of our community, and really, in some ways, part of our identity.
6. Are there specific reforms we can make right now that would improve the contracting process?
Immediate reforms would come at the Administration's level. It would require the Pentagon to look at their process and change accordingly. At the Congressional level it would normally involve statutory changes and these changes would not be immediate.
7. How often are defense contracts awarded to small businesses?
It is difficult to say. Many small businesses are part of a bundled contract; some are part of a large contractor. One indication may be that the SBIR (small business innovation grants) are over 50% defense.
Still, we know that small businesses face some hurdles in getting defense contracts. Some procedures may be too onerous, and some requirements too burdensome for organizations that are more limited in scope. So instead of asking how many contracts are awarded, we should ask how many could be awarded.
8. How can we improve small business' opportunities to submit winning bids?
I believe that is one of the questions at the core of the panel’s work. In order to improve the opportunities we need to first understand what the impediments are. Only those in small business who have had this experience can help us improve their opportunities.
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