Measure seeks penalties for contract cost overruns

Posted on: May. 18th, 2006 || Source: govexec.com | E-mail Article | Print Article

After years of issuing hollow threats to defense firms over record cost increases on some of the Pentagon's most expensive weapons systems, House lawmakers are attempting to hit the lucrative industry where it hurts most: their pocketbooks.

With little fanfare, the House approved language in the fiscal 2007 defense authorization bill last week to permit the Defense Department to penalize companies that dramatically exceed cost goals on major defense acquisition programs by taking away their multibillion-dollar contracts.

House Armed Services Chairman Duncan Hunter, R-Calif., inserted the language into the $512.9 billion bill, saying it would reopen weapons programs to competition, among other options, if program costs increase 25 percent or more above current estimates, or 50 percent above original estimates.

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