Editorial | The Line Between Prudence and Excess

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A recent congressional critique of the U.S. National Reconnaissance Office’s buying habits paints a portrait of an overly risk-averse organization that relies too heavily on industrial-base information provided by its prime contractors to determine how many of a given type of satellite it needs to procure.

The result, according to the bipartisan report released by the House Permanent Select Committee on Intelligence, or HPSCI, is that the NRO, motivated by an understandable desire to keep key component suppliers in business, winds up buying and launching more satellites than it actually needs, costing U.S. taxpayers billions of dollars. These costs dwarf any per-satellite savings achieved by ordering in bulk, the report said.

On its face, the finding that NRO relies on contractors for input on procurement decisions from which they stand to directly benefit seems scandalous. These companies have a clear incentive to suggest that this or that supplier might have to close its doors absent some minimum number of assured satellite orders from the end customer.

Even assuming the reality is a bit more complicated — one would hope that’s the case — the HPSCI is on pretty safe ground in calling for independent intelligence community verification of contractor-provided information on the health of its component supplier base. It also makes sense, as the committee suggested, for prime contractors to notify the NRO of instances in which they are relying on a single manufacturing source for a given component or material.

In a joint statement accompanying the release of the report, which covered a wide range of intelligence gathering activities, Reps. Mike Rogers (R-Mich.) and C.A. “Dutch” Ruppersberger (D-Md.), the HPSCI’s chairman and ranking member, respectively, stressed the importance of striking the right balance of capability and cost effectiveness. “We must always be good stewards of taxpayer dollars and take a hard look at the way we purchase very expensive satellite systems,” they said.

Fair enough.

But it must be noted that the NRO, in response to the committee’s report, said its processes in fact ensure the proper balance between the competing goals of affordability and risk mitigation. The NRO pointed out that its procurement decisions are subject to several layers of oversight, one of them being Congress, and that this, along with its internal processes, ensures that it does not buy satellites ahead of need.

The latter point is key, since all NRO programs presumably must be individually authorized and funded by Congress. It would appear, based on the report, that Congress’ intelligence oversight committees, including the HPSCI, need to step up their own game.

Because of classification restrictions, insight into what’s really happing at the NRO is limited to a very small community. But the HPSCI’s findings, and the NRO’s reaction, suggest that there are issues that need addressing by both sides. If the NRO’s supplier base is truly at risk, for example, perhaps that’s better addressed in legislation or policy rather than on a check-by-check basis.

Few would dispute the importance of the NRO’s satellite programs, or challenge the agency’s legitimate concerns about the health of its supplier base during a time of declining government spending. The NRO can be granted some license to err on the side of caution, but only to an extent: Current budgets do not afford the luxury of eliminating risks simply by throwing money at them.