(Editor's note: This story has been updated to reflect additional information from a letter from House Armed services Committee Chairman Mac Thornberry (R-TX) and Senate Armed Services Committee Chairman Jim Inhofe (R-OK) to the Pentagon.)
House Armed Services Committee Chairman Mac Thornberry (R-TX) said today he and Senate Armed Services Committee Chairman Jim Inhofe (R-OK) have sent a letter to the Pentagon opposing plans to reduce defense contractor progress payments, arguing that doing so is "inconsistent" with congressional intent.
"Why you would do this is just a mystery to us," he told reporters on Capitol Hill. "We try to streamline acquisition . . . then something like this comes out."
At issue is a proposed Defense Department acquisition rule intended to implement a provision in the Fiscal Year 2017 National Defense Authorization Act, which established a preference for performance-based payments.
To that end, DOD has proposed lowering the current progress payment rate of 80 percent to 50 percent, while establishing "opportunities for recognizing contractor behaviors" that could increase the payment rate.
Defense industry groups have opposed the proposed change on the grounds that it would hurt companies' cash flow.
In the Sept. 24 letter obtained by Inside Defense, Thornberry and Inhofe wrote to Deputy Defense Secretary Pat Shanahan saying they have "significant reservations" about the new progress payments policy proposal as it "goes well beyond" statutory requirements and "is not consistent with the intent of Congress as expressed in the FY17 NDAA."
"Additionally, we have grave concerns about the harm this rule could cause to innovation investment, small businesses, and stable workforces in our defense industrial base," Thornberry and Inhofe wrote. "This new rule would discourage greater industry investment in innovation at a time when we need it most and will make it harder to attract and retain a technically skilled workforce necessary to tackle the mist challenging national security problems."
The lawmakers' also note "significant delays" between other congressionally mandated regulations and DOD enactment.
"We would encourage the department to accelerate implementation of the expressed intent of Congress," they write.
The chairmen request that DOD rescind the "fundamentally flawed" rule and respond to them by Oct. 10, the same day DOD is schedule to hold a public meeting on the matter.
Thornberry said DOD "should reward those who perform well," but asserted that the proposed regulation goes against the intent of Congress in the FY-17 NDAA, which was to make the Pentagon a more attractive place for industry to do business, especially technology companies that don't traditionally bid for government work.
"It's not consistent," he said.