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Overview  

One of the Department of Defense’s (DoD) most important offices, the Defense Contract Management Agency (DCMA) oversees the purchase of billions of dollars in goods and services for the American military. From combat boots to sophisticated aircraft, DCMA manages hundreds of thousands of contracts that have a collective value of $1.812 trillion. DCMA was created to help end decades of waste in Pentagon procurement, but yearly investigations by government watchdog agencies continue to turn up serious problems in DoD’s military spending.

 
History  

Prior to 1960, the Department of Defense (DoD) had no centralized office to handle military contracting. Instead, each branch of the armed services - Army, Navy and Air Force - handled their own contracts, as did other offices within DoD, when it came to purchasing everything from weapons to supplies for the American military. The lack of any centralized contracting authority caused the armed services to duplicate efforts, which was the last thing the country needed as it began to spend heavily on military forces in the 1950s. Because of the Cold War with the Soviet Union, government and military planners had embarked on an unprecedented buildup of conventional and nuclear forces in preparation for hostilities with the Soviets. President Dwight Eisenhower, whose administration oversaw the beginnings of this immense military establishment and arms industry, dubbed it the “military industrial complex.”

 
After the election of John F. Kennedy in 1960, Robert McNamara took over as Secretary of Defense. McNamara, a systems expert who was running Ford Motor Company when Kennedy appointed him, implemented numerous changes in the way DoD operated, including military contracting. McNamara ordered a study to examine the entire DoD contracting process. Known as “Project 60,” the findings led to a decision by McNamara to move many of DoD’s disparate contract administration responsibilities to the Defense Logistics Agency (DLA). However, the military services continued to retain oversight of major weapons programs.
 
Over the next three decades, Pentagon spending ballooned on everything from tools to tanks, producing headlines in the media about DoD overspending. By the 1980s stories of defense waste became commonplace, highlighted by accounts of $600 toilet seats and $9,000 wrenches. Investigations into Pentagon waste led to a federal bribery investigation involving Defense Department contracts. In the wake of these controversies, DoD conducted another review of its defense contracts administration in 1989. Defense Management Review Decision 916 recommended the establishment of the Defense Contract Management Command (DCMC) within DLA to perform contract administration for the Pentagon. DCMC was created in 1990.
 
Establishment of DCMC did not signal the end of contracting controversies. In fact, from the very beginning of the command in 1990 until the present day, the Government Accountability Office (GAO) has kept Pentagon weapons acquisitions on GAO’s list of troubled programs. In yet another effort to improve the contracting process, DoD decided in 2000 to rename DCMC as the Defense Contract Management Agency and make it independent from DLA. But problems still plague this important part of DoD operations (see Controversies).
Inquiry is Delayed in Pentagon Fraud (by Philip Shenon, New York Times)
 
What it Does  

The Defense Contract Management Agency (DCMA) is an independent agency within DoD that supervises and administers billions of dollars in contracts for the department.

DCMA oversees the delivery of goods and services to the military from thousands of companies. According to DCMA, the agency is responsible for 321,270 active contracts at a face value of $1.812 trillion which provide the military with such things as aircraft, space launch vehicles and spacecraft, medical supplies, electronic equipment, military vehicles, munitions, petroleum, chemicals and lumber.
 
DCMA is organized into four divisions to better manage its large workload. Those four divisions are Aeronautical Systems Division, Naval Sea Systems Division, Ground Systems & Munitions Division and Space & Missile Systems Division. The agency also maintains sections that handle international contracts, finance/business, human resources and special programs. DCMA operations are spread out across the country and the world, with a total of 900 locations throughout the United States and in 26 foreign countries. DCMA consultants sometimes are based at the manufacturing facilities of private companies in order to monitor work being performed under contract.
 

The agency is involved in all stages of contract administration. Before a contract is awarded to a company, DCMA advises the contractor on drafting the solicitation and bid documents. After the contract is awarded, DCMA serves as a go-between with contractors and DoD agencies that are supposed to receive the goods or services. DCMA is charged with monitoring the contractor’s work and keeping the DoD agency apprised of progress and any potential setbacks.

 

Where Does the Money Go  

In functioning as a go-between agency, DCMA’s key stakeholders are other DoD offices and the thousands of private companies that receive Pentagon contracts. According to USAspending.gov, DoD spent $312 billion in FY 2007 on private contracts. Of all contractors who received DoD funding, the top 10 were:
 
Lockheed Martin Corporation                                       $27,889,037,631
The Boeing Company                                                   $22,537,575,207
Northrop Grumman Corporation                                   $14,675,849,189
General Dynamics Corporation                                      $13,360,657,031
Raytheon Company                                                      $11,240,899,611
Bae Systems                                                                  $9,129,571,875
L-3 Communications Holdings, Inc.                                 $5,969,916,676
United Technologies Corporation                                     $5,304,695,665
KBR, Inc.                                                                      $4,782,853,538
SAIC, Inc.                                                                      $3,552,799,729
 
The top five products or services sold to the Pentagon were:
 
Aircraft, Fixed Wing                                                              $19,143,815,035
Liquid Propellants and Fuels, Petroleum Base                          $11,133,697,213
Combat, Assault, and Tactical Vehicles, Tracked                       $8,931,802,038
Engineering and Technical Services                                           $8,444,145,741
Trucks and Truck Tractors, Wheeled                                        $8,071,906,912
 
Among DoD agencies, the top five purchasers were:
 
Army                                                                $111,113,593,820
Navy                                                                   $83,622,849,674
Air Force                                                              $68,039,197,880
Defense Logistics Agency                                      $29,691,390,429
Defense Commissary Agency                                  $5,742,149,059

 

Controversies  

DCMA Allows Weapons Contractors to Overcharge

DCMA was created to ensure that Pentagon procurement efforts are conducted efficiently and on time. But that has not always been the case. On numerous occasions, the GAO has criticized DoD for allowing defense contractors to run up costs on big-ticket weapons systems. The latest critical report came in March 2008 after GAO auditors found programs for new ships, aircraft and satellites were billions of dollars over budget and years behind schedule.
 
Among the major programs reviewed was Lockheed Martin’s F-35 Joint Strike Fighter, a stealthy tactical fighter intended for the Air Force and Navy. Cost projections put the price tag at almost $100 million per plane, up 40% since 2001. Lockheed Martin defended itself by claiming the F-35 program had been a model for “affordability and cost containment.”
 
Another project singled out was the Navy’s $5.2 billion Littoral Combat Ship, which experienced so many cost overruns that the service expected the price of its first two ships to exceed their combined budget of $472 million by more than 100%. The Navy canceled construction of the planned third and fourth ships by Lockheed Martin and General Dynamics, the prime contractors on the project.
 
In another case, the initial contract target price of Boeing’s program to modernize avionics in the C-130 cargo plane was expected to skyrocket 323%, to $2 billion.
 
The March 2008 report followed a 2005 report in which GAO officials found that eight of the 25 most troublesome federal programs or offices were located in DoD, including inventory management and weapons systems procurement.
 
In 2003 a study by DoD’s inspector general found that the Pentagon could not account for more than a trillion dollars in monies spent.
 
DCMA Whistleblower Reinstated
In November 2007 DCMA was told to reinstate a longtime engineer who had been suspended following his complaints about over-billing by the Pentagon’s top contractor, Lockheed Martin.
                             
The US Merit Systems Protection Board ruled that Ken Pedeleose, a 13-year DCMA employee, had been improperly suspended from his job after calling attention to overcharges on Lockheed Martin military contracts and for advising a fellow employee who found safety problems with a military aircraft used by the Air Force.
 
The DCMA suspended Pedeleose for 30 days on charges of insubordination and failure to cooperate in an internal investigation. Pedeleose appealed the suspension, claiming that the suspension was a reprisal by his boss, Air Force Col. Nicole Plourde, commander of the DCMA office at Lockheed Martin’s manufacturing facility in Marietta, GA. Pedeleose said he was punished after helping call attention to safety violations on the C-130J transport plane.
 
The federal mediation board agreed with Pedeleose that DCMA had abused its authority.

Lockheed Martin whistleblower wins appeal

(by Eric Rosenberg, Muckety)

 

Debate  
Suggested Reforms  
Congressional Oversight  

House Committee on Oversight and Government Reform

Senate Committee on Armed Services

 

Former Directors  

Keith D. Ernst

 
Keith Ernst served as the acting director of the Defense Contract Management Agency from January 2006 through April 2008. A graduate of the University of Minnesota with a bachelor’s degree in engineering, Ernst began his government service as an officer and pilot in the Marine Corps. 
 
Following military service, he worked in private industry for eight years in technical sales and management positions.  He began his civilian government career at DCASMA Twin Cities in 1983.  Following initial assignment as an industrial engineer, he subsequently held positions as a general engineer, systems engineering and program support branch chief and technical assistance and assessment team supervisor. 
 
In 1997, Ernst joined DCMA Seattle as the technical assistance group chief and in 1999 was promoted to the position as deputy commander of DCMA San Francisco.  From 2001 to 2002, Ernst held the position of director of contract operations directorate for DCMA West. In this position he was responsible for operations oversight and support of 28 contract management offices located throughout the western half of the United States.
 
Ernst then served as the director of DCMA East (DCMAE), managing more than 203,439 contracts valued at $394.9 billion. DCMAE included 5,600 personnel and 23 major field command offices working with approximately 12,000 contractors. DCMAE had primary contract management responsibility for aeronautical systems and naval sea systems customers.
 
In October 2005, Ernst was assigned to the Office of Deputy Director for DoD before becoming acting director of DCMA. He retired effective April 30, 2008.

Official Bio

 

Comments  
Bill Jordan - 5/2/2012 11:54:33 AM              
i agree with ruppert. this agency is one of the worst in the fed. there is no leadership whatsoever. they tout their training in software acquisition, but that sector gets the lowest ratings for customer satisfaction. afits offers free software acquistion training, yet dcma refuses to admit that it is superior to their in-house training. dawia training required by law has not been accomplished, yet, nothing is done to correct the problem. dcma adds to the cost of dod procurements of systems. incompetency within management is the norm. my supervisors couldn't even manage the office supply budget.

William B. Cheney, III - 2/26/2012 7:42:26 AM              
i need the duty officer to contact me asap at 843-992-5812. my son has been stranded at camp lsa, in kuwait city for 3 weeks with no passport by protective services, inc, while waiting for a new iraqi passport. now i understand that the whole process has been changed, but he requested the return of his passport a week ago. it has yet to be returned to his possession. please call me.

Earl Wilcox - 12/6/2011 9:26:37 AM              
why isit getting harder and harder for us americans to get on in iraq,afghannd kuwait but the british candle stick maker are getting on as mechanics ? so many nationalities are on contracts now and the americans are out of work i been on some of these contracts and see 3rd world people work on some of the equipment that i need a secret sercurity clearence for ?

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Table of Contents

Founded: 1990
Annual Budget: $1.1 billion
Employees: 10,033

Defense Contract Management Agency
Williams, Charlie
Director

Charlie Williams, Jr. took over as director of the Defense Contract Management Agency May 4, 2008. Born in Nashville, Williams earned a bachelors of science degree from Middle Tennessee State University and a master’s degree from Tennessee State University. Williams began his government career in 1982. After graduating from the Air Force Logistics Command Mid-Level Management Training Program, he worked as a senior buyer and contracting officer for F100 and TF39 engines at Kelly Air Force Base in Texas. From 1984 to 1987, he was an analyst in the Resources and Analysis Division of the Headquarters Air Force Logistics Command at Wright-Patterson Air Force Base in Ohio. Williams then spent a year in the private sector at General Electric’s Aircraft Engines Division in Cincinnati. He returned to Wright-Patterson as the director of business strategy in the Acquisition Logistics Division, and then moved up to chief of the Logistics Support Contracting Division in 1990 and to deputy chief for resources, management and analysis for Air Force Material Command in 1992. In 1996, he earned a second master’s degree, this time in national resource management from the Industrial College of the Armed Forces. Back at Wright-Patterson, Williams was technical advisor to the Chief of Contracting Policy before spending several years at U.S. Air Force Headquarters in Washington, D.C. as team leader of the Program Executive Officer and Designated Acquisition Commander programs, Assistant Secretary of the Air Force for Acquisition, Associate Deputy Secretary for Contracting and Deputy Assistant Secretary for Contracting. He was also the U.S. member of NATO’s Airborne Early Warning and Control Programme Board of Directors.

 
 
 


 
 
 
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