President Puts Defense Contractors on Notice: Crackdown on Costs Is Coming

[babylonsister]

President Puts Defense Contractors on Notice: Crackdown on Costs Is Coming

By AUGUST COLE


WASHINGTON -- President Barack Obama fired a surprise broadside at the defense industry, saying he intends to clamp down on practices that have resulted in billions of dollars in cost overruns and delays in recent years.

At a time when Washington faces the prospect of bailing out multiple sectors of the economy, contractors' cost overruns are showing up on the radar of many in the capital. And the Pentagon, which spends about $330 billion a year to buy everything from fighters to paper clips, is a particular focus of the new administration.

The VH-71 presidential helicopter program's delays have made it a prime example of Pentagon overruns. The cost of the program is believed to have doubled.

Mr. Obama has singled out the defense industry as one of the most wasteful. Last year, the Government Accountability Office found that 95 major Defense Department weapons contracts were over budget by a total of $295 billion -- though some point out that the GAO's figure includes legitimate changes to some contracts.

"In this time of great challenges, I recognize the real choice between investments that are designed to keep the American people safe and those that are designed to make a defense contractor rich," the president said Wednesday.

Whether Mr. Obama's rhetoric translates into action will be known in April, when the Defense Department releases a 2010 detailed budget, which once was thought to be effectively off limits for big changes by the new administration.

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