February 27, 2008 / 8:07 PM / 12 years ago

NEWSMAKER-Pentagon arms buyer in spotlight for tanker deal

WASHINGTON, Feb 27 (Reuters) - The Pentagon’s chief arms buyer, John Young, gets high marks for trying to rein in costs and curb delays on billion-dollar weapons programs, but his meticulous reviews and tendency to micromanage have created tension with the military services.

The Air Force had hoped to win speedy approval this week from Young to buy 179 refueling aircraft from either Boeing Co (BA.N) or Northrop Grumman Corp (NOC.N).

A decision has been made on which company will get the contract, but the Air Force cannot announce it until Young approves the acquisition. His office has not said when that would be, although a draft decision is making the rounds at the Pentagon.

By not signing the paper work, Young has signaled that he will not be rushed into a decision on the aerial tanker. The contract, valued at $30 billion to $40 billion over the next 10 to 15 years, will be one of the biggest procurement programs of his career.

“This program is going to get a lot of visibility, especially in an election year, so I think John wants to be very careful about it,” said Jacques Gansler, who served as chief Pentagon arms buyer during the Clinton administration.

Congress, led by Sen. John McCain, an Arizona Republican and presidential candidate, killed an earlier Air Force plan to buy Boeing tankers in the wake of a massive procurement scandal that sent two former Boeing officials to prison and cast a spotlight on all weapons programs.

That scandal helped shape Young’s approach to weapons programs, said Loren Thompson, an analyst with the private Lexington Institute research group.

“John Young is a stickler for details. He has learned the lesson that if you try to do these things fast, they tend to go off the rail,” Thompson said.

Unlike other defense acquisition officials who hail from industry, Young got his start as an analyst on the U.S. Senate’s defense appropriations subcommittee, where he reviewed a range of military procurement, science and technology programs. He also served as the Defense Department’s director of research.

Young, who became defense undersecretary for acquisitions last November, declined to be interviewed.

NAVY LESSONS

Young, 45, learned valuable lessons from two ongoing programs he oversaw when he became the Navy’s top arms buyer in July 2001.

The Littoral Combat Ship program and Lockheed Martin Corp’s (LMT.N) VH-71 presidential helicopter both ran into schedule delays, cost overruns and the addition of requirements late in the game. Young changed jobs before they were resolved.

“Those experiences made him incredibly cautious,” said defense consultant Jim McAleese.

Young recently shelved plans to build four initial VH-71 helicopters, shifting the money to research and development until problems have been solved.

Young locked horns with the Air Force’s acquisition chief Sue Payton when he took an extra month to approve a restructuring plan for a massive Lockheed Martin Corp program to put new engines on the C-5 transport planes. The decision was due in January, but Young did not hand it down until February.

“There is some real anger toward Young from the services,” said one source familiar with the issue, who asked not to be named.

Young has a tendency to micromanage programs, said one former defense official, who also asked not to be named. “He’s smart, and he’s clearly trying to have an impact. But he needs to delegate more.”

Young often works late hours at his Pentagon office to be as well versed on procurement issues as program managers. He made only a brief appearance at the farewell party for his predecessor, Kenneth Krieg, because he was preparing to testify before Congress the next day, the previous source said.

Despite criticism, Young has endured at the Pentagon, while most other senior officials appointed under former Defense Secretary Donald Rumsfeld have retired, probably due in part to his close ties to Deputy Defense Secretary Gordon England, Lexington Institute analyst Thompson said.

He won high marks from lawmakers for his stewardship of a Pentagon drive to get armored trucks to Iraq ahead of schedule.

Military analysts also laud Young’s initiatives to address the Pentagon’s chronic procurement problems, including a Feb. 13 memorandum commissioning a new task force to find better ways to integrate commercial products, as opposed to specially developed ones, into the defense arsenal.

“Please undertake this work urgently,” he wrote. “This is a major issue confronting the Department of Defense as it seeks to reduce cost and deliver programs on budget and schedule.” Young appointed Gansler to head the task force.

One congressional aide raised questions about a recent Young memo, in which he rejected as “unaffordable” an Air Force proposal to replace some C-5 aircraft with Boeing C-17 transport planes.

On the surface, it appeared Young was rejecting the Air Force’s proposals, but the congressional aide said that closer inspection revealed that he had embraced a controversial proposal backed by some lawmakers to circumvent the regular budget process and insert over $3 billion for 15 additional C-17s into a 2008 war budget.

“It’s an apparent sleight of hand and highly inappropriate,” said the aide, who asked not to be named.

He said the Air Force had not included funding for the planes in its regular budget request, and there was no military justification on record for the requirement of 205 C-17s that Young cited.

Similar concerns about the process of buying weapons led to the investigation of the earlier Boeing tanker deal.

Air Force officials said on Wednesday that they expect Young to sign off on the refueling aircraft competition this week, which would allow them to announce the winner on Friday. (Reporting by Andrea Shalal-Esa, Editing by Toni Reinhold)

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