Controlling the Defense Procurement Spiral
The New York Times has an extensive article with the somewhat inflammatory title “Arms Fiascoes Lead to Alarm Inside Pentagon.” While the Times’ reputation isn’t what it used to be, this article is recommended for several reasons, including its quotes from a number of senior Pentagon and Department of Defense sources right up to Secretary of Defense Rumsfeld.
The article is also significant because of the bipartisan concern on Capitol Hill over the skyrocketing costs of new weapons programs, which are often costing significantly more than the items they replace by a factor of 2 or 3. The new CVN 21 carrier, for instance, is expected to cost $13.7 billion – almost double its original estimate, and more than double the cost of a new Nimitz-Class carrier [NOTE: actual cost per ship is $8.1 billion – see DID’s explanation]. The resulting budget strains and force shrinkage are widely seen as serious issues, and forcing procurement process reviews.
Various possible causes for the rapidly-rising cost of new weapons systems are suggested, with strong suggestions that “requirements creep” at the specification stage is a major component of the problem. DID has run articles regarding the U.S. Satellite program that seem to indicate a connection, and changing requirements mid-project has been a real issue for the LPD-17 ship overruns and for the troubled JTRS program. Ultimately, however, the issue is not so much the overruns themselves as whether the capability is worth the cost.
Congress certainly bears its own share of the blame, as seen in outright pork, forcing though programs like the C-130J against DoD wishes even though they exemplify the 5x increases Congress complains about, and making decisions that significantly increase the costs of new weapons, in order to meet other national priorities.
This is an issue that some defense think-tanks like D-N-I have been watching for a long time. There are many perspectives on the issue which will only grow in importance as tough decisions come due.
- Franklin C. Spinney – The Defense Death Spiral. A Power Point presentation, rendered for web viewing.
- D-N-I (Jan 10/03) – The Defense Budget Time Bomb Has Been Outted By the Congressional Budget Office
- Committee On Government Reform; Subcommittee On National Security, Veterans Affairs And International Relations, United States House Of Representatives (June 4/02) – Statement by Franklin C. Spinney, Staff Analyst, Department Of Defense
- D-N-I (June 5/99) – A ‘Walk-About’ Through the Howling Wilderness of Acquisition Reform. Describes the effect of poor measurement choices on the lean logistics efforts in the US Air Force, and what it means for spares and readiness. The author was a civilian logistician with 26 years experience working for the US Air Force.