fuck the defense industry and their thieves. On Monday, April 11, 2016 at 1:48:39 PM UTC-5, Travis wrote: > > > > > > > > > > > > > > > http://www.politico.com/story/2016/04/defense-pentagon-spending-assad-221776 > > > > *Meet the most hated man in the Pentagon* > > Company executives accuse Shay Assad of pursuing a "personal vendetta" by > hounding firms large and small to justify what they charge for weapons or > services. > > By Ellen Mitchell <http://www.politico.com/staff/ellen-mitchell> > > 04/11/16 05:27 AM EDT > > Updated 04/10/16 12:16 PM EDT > > [image: Description: Shay Assad is pictured. | John Shinkle/POLITICO] > > Shay Assad, the Pentagon's director of pricing, has waged an all-out > campaign for the last five years to reduce defense companies' profit > margins, the industry contends. | John Shinkle/POLITICO > > Some of the nation’s leading defense companies are declaring war on a > powerful enemy — an obscure Pentagon official named Shay Assad who has > helped cut more than $500 million from military contracts with his > aggressive scrutiny of their costs. > > The industry’s tactics include blanketing congressional committees with > proposals that would make it harder for Assad and his contracting officers > to get detailed breakdowns of the companies' expenses, according to > documents obtained by POLITICO. But Assad, the Pentagon's pricing director > for the past five years, refuses to back down, saying: "We are going to be > relentless in pursuing getting the good deal for the taxpayers." > > Story Continued Below > > “That's the way it is,” said Assad, a 65-year-old Bostonian with the heavy > accent to match. “If companies don't like it, people have an objection to > it, we're not apologizing for it." > > The result is an unlikely, all-out campaign pitting giants like Boeing and > Honeywell against a Pentagon official so little-known that even some top > defense lawmakers say they're unfamiliar with his jousting with the > industry*. > * > > Company leaders accuse Assad — a former Raytheon executive who spent more > than two decades in the defense industry — of pursuing a "personal > vendetta" by hounding firms large and small to justify what they charge for > weapons or services. But Assad says he learned a valuable lesson from his > years at Raytheon, one of the Pentagon's largest contractors: "We generally > overpay for almost everything we buy." > > The contractors, who are enjoying record stock prices, are actively trying > to undermine him. In one proposal circulating on the Hill, they are seeking > to erode contract officers’ ability to demand cost data from subcontractors > — what companies view as an excessive grab of competitive information. > > The request would weaken the grip of Assad’s cost squeeze, as the > Pentagon uses all the extra cost information to “manage” profit margins, > according to a congressional staff member with purview over the Pentagon > budget who was not authorized to speak publicly. Without that information, > the staffer explained, the Pentagon can’t demand better deals. > > Assad seems as determined as ever to make sure industry hands over the > data, citing the personal backing of his boss, Secretary of Defense Ash > Carter, who created his position in 2011 when Carter was undersecretary for > acquisition. > > His aggressive stance seems to be paying off. Pentagon spokesman Mark > Wright said Assad recently led contract negotiations for multiyear deals on > the Apache helicopter, C-17 transport plane and F/A18 fighter jet "that > returned in excess of $500M to the taxpayers." > > Wright added that "it should be obvious what the Department thinks of Mr > Assad. He was just awarded a 2015 Distinguished Presidential Rank Award." > > But Assad's role is little known outside the Pentagon, as some top > lawmakers seem to be unaware of the tension between Assad and the industry, > including House Armed Services Chairman Mac Thornberry (R-Texas) and Ohio > Republican Rep. Mike Turner, the head of the Tactical Air and Land Forces > Subcommittee. Though Assad oversees all DOD contracting actions above $500 > million, Thornberry and Turner told POLITICO they hadn’t heard anything > about him. > > Assad poses a unique threat to the biggest arms makers. He graduated from > the U.S. Naval Academy in 1972 before spending 22 years as a senior > executive at Raytheon, which last year was the Pentagon's third-largest > contractor. As director of pricing, he is also member of the civil service > who, unlike a political appointee, could be around for a good while. > > "It's just not true that we are negotiating profit rates that are lower > than what we had been doing in the past," he said. "I know, because I was > on the other side of the table. I'm very aware of what industry and major > corporations were negotiating for profit rates versus what we presently > do." > > Extracting and analyzing more cost data from the Pentagon's customers has > become one of his primary focuses. > > A congressional source said Assad has recently directed contracting > officers, via policy guidelines and memos, to go after this kind of > information. While the Defense Department already asks for cost data from > the larger defense players, this recent action seeks to "go lower down the > food chain." > > "He has gone way above and beyond what is reasonable to extract pricing > data," says one senior industry official. > > Assad fires back, asserting the Pentagon is simply doing what the law has > long required but it has historically failed to do. > > Legally, all companies involved in a sole-source contract with the Defense > Department are required to provide pricing data on any subcontractor that > provides $750,000 or more in goods and services. For years, however, the > Pentagon neglected to push companies on that rule. > > "The reality is it's data that they should have been providing us all > along," Assad said, particularly for the countless subcontractors that > defense giants rely on and whose costs get wrapped into the overall price > of the prime contract. > > "What we're saying is, 'no, it is relevant,' and frankly, there's gold in > them there hills at the subcontractor level," Assad said. "It is a > challenge for the companies because they now have to deal with people who > are well trained, who know what to ask for and who insist on it." > > The industry is now trying to head him off. > > In a legislative proposal sent to multiple defense committees, the IT > Alliance for Public Sector, supported by defense firms Boeing, Honeywell > and Rockwell Collins, is seeking to limit contract officers' ability to > reach down into subcontractor cost data — what they refer to as unnecessary > "flow-down" requirements. > > All companies buy parts from the commercial world "that do not relate in > any way to a particular contract, customer or customer requirements," the > proposal says. Applying defense-unique rules to nearly all aspects of > companies' supply chains creates a "problematic situation," as it > potentially cuts into "efficiency of operations and production." > > Another proposal specifically asks Congress to widen the definition of a > commercial item. If something is deemed commercial — rather than a uniquely > military item — industry can withhold most price data on it in for the sake > of staying a step ahead of its competition on the open market. The > congressional source said Pentagon efforts to limit the definition of what > is considered commercial allows the government wider access to cost > information. > > IT Alliance Senior Vice President Trey Hodgkins, who helped form the > proposals, said current Pentagon rules "erode" access to the defense > market. "I think there's broad agreement in Congress that we have to find > ways to lessen the burden and make this market more attractive,” he said. > > While none of the three companies would address their relationship with > Assad or questions on industry profit margins, Honeywell told POLITICO that > the proposals put forward "provide a clear path for the government to > ensure they are buying commercial products at fair and reasonable prices.” > > Boeing would only allow that it was "broadly supportive of acquisitions > reforms that ensure that our military — and the U.S. taxpayer — can take > full advantage of the value provided by the commercial marketplace.” > > Meanwhile, Rockwell Collins said it was focused on limiting the "impact of > military-unique acquisition terms which flow down to our commercial supply > chain," saying there are numerous small businesses the industry relies on > that "are adversely impacted" by current regulations. > > Assad said that in asking for price data on items that have both defense > and commercial applications, the Pentagon simply wants to know if the price > is "fair and reasonable." > > "What we're saying to the companies is 'nobody should know better than you > why the price you're charging me is fair, so just tell me.'" he said. "The > issue that we have is that … in many instances, when we've bought > commercial items, we haven't done as good a job as we possibly could." > > Defense companies, however, want to be treated like any other commercial > company — such as Apple or Samsung — when selling items to the Pentagon > that are also sold on the free market. > > Just as consumers willingly pay Apple or Samsung $600 for a cell phone > that costs a fraction of that price to make — provided the quality is good > enough — industry maintains that the government shouldn't care about the > true cost of defense equipment if the market had a hand in setting the > price, said Mike O’Hanlon, a defense specialist at the left-leaning > Brookings Institution and a longtime Pentagon adviser. > > The profit margin issue "is a big one where contractors and much of the > DOD acquisition workforce part ways," O'Hanlon said. Tensions can also be > pushed with the factor of the Pentagon "cost police" — its thousands of > contracting officers who aggressively seek cost data on defense equipment. > > While these actions can protect the best interest of the taxpayers, "one > would like to see exceptions and exemptions" when dealing with commercial > items, O'Hanlon said. > > Tom Captain, the vice chairman and leader of the U.S. and global aerospace > and defense sector at financial services firm Deloitte, backs his industry > clients on this question. > > "You don’t ask the car dealer, the grocery store and pizza parlor for cost > data — you buy based on your assessment of best price and fair value," > Captain said. "The Pentagon can do the same for commercial sourced items." > > Asking for cost data for commercially available technology “is not only a > waste of taxpayer money,” he said, it acts as a “disincentive to supply to > the DOD for suppliers." > > Providing too many specifics of cost data, Captain argued, could also > reveal to competitors how they managed to reduce the costs on a system a > company sells to other customers outside the government. > > "You might as well run an ad, telling your competitors your prices," the > industry official said, adding that companies routinely expressed "a > complete lack of confidence" in the Pentagon's ability to keep pricing data > secret. > > Despite all the criticism, Assad insists the Pentagon's practices are not > harming the defense industry financially. > > Over the last five years, he contends, the top five defense companies' > stock prices "have gone up anywhere from 67 percent to 180 percent for > those five companies. Record cash flows, record profits, record return on > invested capital." It is an assessment backed up by industry analysts. > > "We're not after their profitability, we're after paying less," Assad > said. "And if we can pay less and they're doing well financially, what's > wrong with that? If you look at what had been happening in the past, year > over year, we always paid more. ... That doesn't happen anymore. Year over > year we're paying less." > > > > Read more: > http://www.politico.com/story/2016/04/defense-pentagon-spending-assad-221776#ixzz45XNEgEm1 > > Follow us: @politico on Twitter > <http://ec.tynt.com/b/rw?id=bKDyiUp9mr3OhNab7jrHcU&u=politico> | Politico > on Facebook <http://ec.tynt.com/b/rf?id=bKDyiUp9mr3OhNab7jrHcU&u=Politico> > > > __._,_.___ > ------------------------------ > Posted by: "Beowulf" <[email protected] <javascript:>> > ------------------------------ > > > Visit Your Group > <https://groups.yahoo.com/neo/groups/grendelreport/info;_ylc=X3oDMTJmYmVvdGU5BF9TAzk3MzU5NzE0BGdycElkAzIwMTk0ODA2BGdycHNwSWQDMTcwNTMyMzY2NwRzZWMDdnRsBHNsawN2Z2hwBHN0aW1lAzE0NjAzOTMyNjE-> > > > > [image: Yahoo! 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