WASHINGTON – As Washington waits for the White House to nominate Ash Carter as the next defense secretary, questions remain as to how he would ultimately run the department, and how he would operate under an executive branch that famously likes to call the shots.
And despite overall positive reviews from congressional lawmakers when news outlets reported Tuesday that Carter would receive the nod, he has a mixed history when it comes to relations with the major players in the defense industry.
When he was deputy defense secretary in 2010, Carter and chief weapons buyer Frank Kendall kicked off one of the largest acquisitions reform packages in years — dubbed Better Buying Power (BBP) — which was focused on regulating the approximately $400 billion that the department spends annually on goods and services.
The program set up new reporting and oversight mechanisms to make sure the Pentagon was being charged fair prices, along with other reforms.
"It was the beginning of a poor relationship with the industrial base" said Bill Greenwalt, a visiting fellow at the American Enterprise Institute and former deputy undersecretary for industrial policy. "There was a concern that the industrial base was overcharging the department, and it was a very negative piece of our acquisition history."
The initiatives "locked in a 'compliance at all costs' mentality," Greenwalt said, and since they were for the most part focused on increasing oversight of "the traditional acquisition system with the traditional acquisition system partners … they created new barriers to commercial companies wanting to work with the Department of Defense" in the form of more red tape.
Still, Carter has long been an advocate for innovation in acquisition practices, analysts say.
There's little doubt that Carter can be expected to push for a higher top line budget above the spending caps imposed by sequestration, said Gordon Adams, who oversaw national security budgeting for President Bill Clinton. "He also has a fairly keen understanding of how the defense industry works. He's not a guy who comes in bashing industry at all."
The Pentagon's leadership has acknowledged that American technological superiority in the near future will be challenged by peer competitors like China, and that commercial computing and communications technologies are advancing faster than DoD is able to keep pace given current acquisition efforts.
"One thing that Carter is strong on is that he has been pretty articulate and outspoken about the evolution of what used to be called the defense industrial base," Adams said. "He's very open to broadening the scope for the technologies that the Pentagon will have to buy in order to retain its position. He gets it and he cares about it."
Roman Schweizer, an aerospace and defense analyst at Guggenheim Securities, said: "While industry, writ large, may bristle from time to time about initiatives he's started or championed, he has also pushed for Congress to repeal sequester and he has taken a pragmatic approach on major defense acquisition programs, particularly resetting the Joint Strike Fighter."
It's not likely that any other candidate for the job would have rolled back or changed course from Better Buying Power or other acquisition policies, he added. "In fact, with Congress in the mood for more acquisition reform, Carter may be the right person to push some things that are balanced and meaningful."
While Carter — not unfairly — is often tagged with the "wonk" label due to his academic past and the fact that he studied nuclear physics, before he became the Pentagon's chief weapons buyer in 2009 "he was probably stronger on the foreign policy side and the national security side than the management side" said Arnold Punaro, former staff director of the Senate Armed Services Committee, who helped Carter through his first Senate nomination process.
"The other advantage that he probably has is that he served as the 'alter ego' to [former Defense Secretary] Panetta, and so he was very much involved in the policy side, so that's going to be a real plus." ■
Email: pmcleary@defensenews.com.
