Daniel Inouye: “It is not the exception, it is the rule. These mergers are carried out for a very simple reason, and that is to reduce…”

“It is not the exception, it is the rule. These mergers are carried out for a very simple reason, and that is to reduce the cost of operations. In recognition of this, the Department of Defense has adopted a policy that not only allows but encourages defense contractors to enter into restructuring or corporate mergers in order to save money for our Department and, in turn, save money for our taxpayers. These costs, Mr. President, have to be certified by auditors of the Department of Defense. And these auditors will have to determine that the cost to be offset must be lower than the savings accrued to the Government through efficiencies. As a result, having encouraged industry to consolidate and to have lower costs, obviously industry responded. This amendment, though it may appear to be meritorious, would not allow defense contractors to charge the restructuring costs as legitimate overhead costs on DOD contracts. I believe logic will lead us to conclude that if industry cannot consolidate, if industry cannot merge, if it cannot restructure, it will not become more efficient and thereby lower overall costs.”