Defense Missile Agency Seeks to Cut Costs

By Elaine Wilson
American Forces Press Service

WASHINGTON, Aug. 18, 2010 - In an effort to cut costs and boost efficiency, the Defense Missile Agency is assessing the feasibility of competing $37 billion in contracts, the agency's director said.

"There's significant potential there for savings in competition," Army Lt. Gen. Patrick O'Reilly told reporters yesterday at a Defense Writers Group breakfast here.

Many of the agency's contracts in the past were sole-source contracts, he explained, including the ground-based midcourse defense program. "I have changed that," he said. "We went back and reassessed that and determined ... we're going to compete it."

Additionally, the agency is competing the SM3 Block 2B missile, as well as its new satellite program, the precision tracking space system, O'Reilly said.

"If we can compete, unless there's an extremely compelling reason not to, we will compete for our contracts," he said.

The agency also is looking to boost efficiency through consolidation, the general said, and will examine the viability of pooling resources from federally funded research and development centers.

The agency's efforts are in line with a Defense Department initiative to reduce overhead and to eliminate duplicative capabilities. Earlier this year, Defense Department Robert M. Gates tasked the services to find $100 billion in overhead savings over the next five years.