Commentary

Privatizing Military Maintenance

This article originally appeared in The Washington Times.

How to maintain America’s military strength in an era of declining budgets has become perhaps the most important defense issue facing us. Whether one wants to increase or decrease the nation’s international commitments, it makes sense to use limited Pentagon dollars as effectively as possible.

One means of doing so would be to close unnecessary bases. Defense Secretary William Cohen has begun the difficult process of convincing Congress, still irritated over the way the president handled the last set of base-closings, to authorize another round. There is no serious objection to eliminating installations that no longer serve a legitimate defense need. However, legislators never enjoy facing angry constituents worried about lost jobs, so Secretary Cohen’s task is not an easy one.

A more modest cost-saving measure would be to allow private competition for military maintenance contracts. In 1995 the Base Realignment and Closure Commission recommended closing San Antonio’s Kelly Air Force Base and Sacramento’s McClellan Air Force Base. After prodding from the administration, the commission suggested privatizing military maintenance operations. The Air Force agreed, proposing to award contracts as part of an open, competitive process. Earlier this year Secretary Cohen’s Quadrennial Defense Review added its endorsement.

It is a motherhood and apple pie issue: Privatization would encourage improved service at lower cost, freeing up money for either tax and deficit reduction (my preference) or other defense uses (for those who want a bigger military despite the end of the Cold War).

Competitive contracting out would also help local communities adapt to base closures. Citizens and businesses in San Antonio and Sacramento alike have enthusiastically embraced privatization for giving them a chance to keep the maintenance business local. In the former, roughly $700 million in repair work on the C-5 Airlifter and other aircraft engines is at stake. Successful privatization would also redound to the military’s benefit. In San Antonio, for instance, the Greater Kelly Development Corp. has offered to buy the former base for as much as $108 million over 40 years. But that proposal is based on revenue generated from private business operations, such as maintenance and repair.

Alas, Washington has never been a city where motherhood triumphs automatically. The American Federation of Government Employees, dedicated to staying as big as possible irrespective of the cost to everyone else, has actively opposed privatization. Moreover, legislators from other states hope to steal away jobs by awarding the contracts to bases in their districts and states. If the so-called Depot Caucus gets its way, there will be no competition, no assessment of cost-effectiveness. Rather, Congress would simply decide based on political clout.

Privatization opponents argue that consolidating operations would save money. It probably would. But competitive bidding would likely save more. Anyone who has seen Uncle Sam in operation should be skeptical that a congressional sole-source contract would be awarded on economic rather than political grounds. And since military facilities are able to compete with private concerns—Georgia’s Warner-Robins Air Force Base has bid for the San Antonio C-5 contract, for instance—competitive contracting offers the best means of finding the most cost-effective provider, whether in the public or private sector.

The issue comes to a head when the Defense Authorization Act hits the Senate floor. Depot Caucus members, concentrated in Georgia, Oklahoma and Utah, have inserted a de facto ban on privatization in the House bill, while pork-minded senators are pushing a similar amendment in the Senate. But the administration has promised to veto the measure unless Congress strips out the special interest provision. Explains Secretary Cohen: “We must be able to seek best value for our warfighters and the American public.”

This is the sort of vote that should be a no-brainer for the GOP majority. Notwithstanding their anger at the administration for politicizing the base closing process, legislators who believe in free enterprise, fiscal responsibility, and a strong military should vote to allow private competition for military maintenance contracts. As Thomas McInerney, president of Business Executives for National Security, puts it, “The public depot system needs more private sector competition, not less.”

Are the Republicans serious about governing? The upcoming vote on privatization of maintenance services provides an important test of the majority’s willingness to forgo the usual pork-barrel politics and look to the nation’s welfare.

Doug Bandow is a senior fellow at the Cato Institute and the author of Human Resources and Military Manpower (National Defense University).