James A. Stevenson :
© March 9, 2002
“You fasten the triggers
For the others to fire
Then you set back and watch
When the death count gets higher
You hide in your mansion
As young people’s blood
Flows out of their bodies
And is buried in the mud”
(Bob Dylan, “Masters of War,” 1963)
II. U.S. Weapon Systems Acquisition and 'Reform' for the Masters
of War: Ready or Not and the Sting of a F-22 Raptor
By James A. Stevenson, March 9, 2002
Ready or Not?
Starting with 1994 and continuing through 1998, Congress added
over $33 billion ($33,049,000,000) to the defense budget beyond that which
the Pentagon had requested. In 1999, Representative David Obey
pointed out that Congress had added $27 billion more to the defense budget
beyond that which the president requested from 1995 through the spring
of 1999. And, again, in the FY 2001, and in the "emergency"
FY 2000 supplemental appropriations legislation, Congress inserted $4.2
billion of add-on pork. For FY 2002, Congress acted true to
form and added almost $6 billion ($5.97 billion) to the defense budged
which the Pentagon had not requested. These figures mean that
add-on expenditures are now running at an average annual rate of between
$5.4 billion and $6.6 billion. More importantly, when the nonpartisan
Center for Strategy and Budgeting Assessments evaluated the use to which
Congress put its $20 billion of add-ons during FY 1996-1998, it found that
75% was "earmarked for weapons projects that benefit major arms makers,
not for maintenance, training, pay, or other items that would improve the
safety and quality of life of our men and women in uniform."
And what is particularly interesting and revealing about these billions of dollars of Congressional add-ons is that they are generally incorporated into the defense budget at the expense of what is termed expenditures for military "readiness." And this is usually done by the very people who often pose as outraged, nationalistic congresspeople and who, while wrapping themselves in the flag, decry the lack of military readiness. No matter, of course, that there is no objective means for determining the actual state of military readiness because the Pentagon’s accounting and inventory record-keeping are so screwed up that, according to a year 2000 GAO report, no accurate assessment of readiness is possible. That report, like dozens before it, criticized the Pentagon for its continuing vulnerability to waste, fraud, abuse, and mismanagement. And it implicitly criticized the Pentagon’s ability to measure military readiness. After all, "ineffective asset accountability and control" not only "adversely affect DOD’s visibility over weapon systems and inventory" but any real understanding of the actual state of U.S. military readiness. Indeed, the perennial flimflam about a lack of military readiness is best exposed by digging into the systemic weaknesses in the Pentagon’s accounting and inventory management systems.
Thus, since 1994, year after year – with monotonous regularity and virtually unchanged rhetoric – GAO studies have found that the Pentagon’s accounting systems are so fouled up that, as late as mid-2000, "no major part of the DOD has yet been able to pass the test of an independent audit . . . Such problems led us in 1995," states the GAO, "to put DOD financial management on our list of high-risk areas vulnerable to waste, fraud, abuse, and mismanagement, a designation that continued in last year’s  update." Going further, the GAO bluntly declared: "The [military] services have historically been unable to maintain information on additions and deletions for most of their national defense assets." Indeed, such sloppy bookkeeping led the Pentagon’s own Inspector General to point out that the Pentagon was breaking laws with its negligent financial and inventory record keeping. Reporting in early 2000, the Inspector General noted that the "DoD did not fully comply with laws and regulations that had a direct and material affect on its ability to determine financial statement amounts. We identified noncompliance issues related to the Federal Financial Management Improvement Act of 1996 (FFMIA), the Chief Financial Officers Act of 1990 (CFO), and the Government Performance and Results Act of 1993 (GPRA)." Of course, such law breaking, financial mismanagement, lack of corrective actions, endemic waste of money, and potential for enormous fraud is not made as visible in the mainstream U.S. media as are problems in the federal social security and/or welfare programs. Indeed, much of the U.S. public is readily made to salivate like Pavlovian dogs at the words "welfare cheats," or "Cadillac Queens," or "Medicaid frauds," or some other denigrating label for those marginalized at the bottom of U.S. society. But rarely do we hear of any criticism of the Pentagon’s waste, fraud, abuse, and mismanagement that the GAO’s reports highlight with almost monotonous annual regularity.
Typical of those most detailed reports is the one of April 1998. Its exposé of the Pentagon’s chronic financial waste and management is almost worthy of winning the Upton Sinclair trophy for superior muckraking. After noting that the Pentagon’s "vast operations" cost about "48 percent of total discretionary spending for the entire government" and that the Pentagon has an estimated $635 billion invested in weapons systems, the GAO chastised the Pentagon for such "serious material weaknesses" as "DOD’s inability to properly account for and report billions of dollars of property [including "a reported $90 billion" of "physical assets" in the "hands of contractors"] equipment, inventory, and supplies" [and to] accurately report the net costs of its operations [and to] properly account for billions of dollars of basic transactions." Specifically, GAO and Pentagon auditors found, among many other problems, such glaring discrepancies between the written military inventory records and the actual physical inventories, as: 1) two of 45 boats in the Navy’s Combatant Craft and Boat Support System (CBSS) which were reported as "available for use" when they had actually been "disposed of or sold," 2) ten of 105 "sampled" uninstalled Navy aircraft engines – "valued at up to $4 million each" – could not be verified as existing, 3) six of the Navy’s 79 inactive waterborne service craft (not classified as ships or boats) "could not be located," 4) one Army "avenger" missile launcher – value approximately $1 million – "could not be located," and, at the same time in 1993, the Army had 220 tanks and 18 attack helicopters that were not reported as existing to the Pentagon’s central system databases, 5) over 200 Air Force, ground launch cruise missiles were included in the Pentagon’s unit "assignment table" but were not found in either of the Pentagon's central system databases, and 12 aircraft and missile records were found on the central system "inventory table" but they did not represent actual equipment. Going beyond this, the GAO reported that while the Pentagon is "responsible for almost one-half of the government’s general property, plant and equipment (PP&E), Pentagon auditors have "restated again" that the "billions of dollars reported for [the Pentagon’s] real property (land, buildings, facilities, capital leases, and improvements to those assets) . . . were unreliable." This mismanagement led the GAO to conclude, yet again in 1998, as it had in 1995 and 1997, that "about half of DOD’s $70 billion in secondary item inventories . . . was excess to current operating requirements and war reserves."
The beat, of course, went on in 1999 and 2000, when the GAO reported that the "DOD has had inventory management problems for decades. . . . [And] the lack of adequate visibility over operating materials and supplies substantially increases the risk that millions of dollars will be spent unnecessarily. For example . . . DOD has not taken sufficient steps to ensure the accuracy of inventory requirements to preclude the acquisition of unneeded items." As a result, the GAO declared that the Navy spent about $13 million for "planned program requirements" that it had already spent. This double spending led the GAO to conclude that it "could be indicative of a larger problem because the Navy has a total of about $3.3 billion of planned program requirements that affect purchase decisions." By mid-2000, the Acting Assistant Comptroller General for the GAO’s Accounting and Information Management Division was telling one House subcommittee for the Committee on Government Reform that the Pentagon had a financial management "inability to properly account for and report billions of dollars of inventory and property, plant, and equipment and national defense assets, primarily weapons systems and support equipment [and] . . . accurately report the net costs of its operations and produce accurate budget data." Continuing more succinctly, he added, "Audit results for fiscal year 1999 again demonstrate that DOD does not know the actual amount and value of inventory for which it is responsible." And, then, GAO elaborated, "Over the years, we have reported [on] billions of dollars of materials that were not ‘visible’ to managers . . . Further, the lack of complete visibility over inventories increases the risk that responsible inventory item managers may request funds to obtain additional, unnecessary items that may be on-hand but not reported. Recent audit results indicate that these problems continue." This lack of "visibility" meant that the Air Force reported in 1998, that it could not "accurately account" for an unknown amount and value of "inventory items being shipped from one location to another. The Navy, meanwhile, was reported by the GAO in 1999, as having "lost visibility of $3 billion of in-transit inventory over the past 3 years." While most of this inventory appears to have reached its destination, it is risky to assume that none of it has been lost.
More serious than this lack of "visibility" for in-transit inventories, however, are the huge inventories of government supplies and property that the military services and contractors hold but are not reported as existing. Among those that have been belatedly discovered are $5.5 billion "sponsored-owned materials" that the Navy only reported in fiscal year 1999, and another $600 million of inventory items that it had not counted earlier. Then, in February 2000, the Navy auditors reported that the Navy had failed to report its $9.2 billion of shipboard inventories. Incredible! For a time the Navy actually overlooked the contents of its ships. That must be comparable to an admiral misplacing an ocean. Meanwhile, Air Force auditors "could not verify the accuracy of $2.9 billion in inventory in the hands of contractors." They must have been stealth inventories, apparently. Indeed, when the DoD and service auditors tried to account, as per regulations, for all property assets valued at $2,500 or more, the GAO noted that the databases that the auditors analyzed "may not have included approximately $20 billion of personal property [i.e., computer software, computer mainframes, and equipment] held by contractors – an amount that . . . represents more than half the gross value for personal property that was reported for fiscal year 1999."
More precisely, as far as "readiness" is concerned, these incredible audit findings extend to the more than $600 billion of the Pentagon’s "national defense assets" (i.e., weapons systems, weapons systems support equipment, mission support equipment, and weapons systems support real property). In 1999, the information on those assets was so "incomplete" and improperly recorded that "billions of dollars were not reported anywhere in DOD’s financial report." The "unreported items include," stated the GAO, "Army communication equipment with an estimated value of $5.7 billion, Navy aircraft engines with an estimated value of $7.6 billion, and over 2,300 Air Force electronics system pods that attach to aircraft, with costs ranging from over $1 million to $5 million each." To summarize these endemic management problems in its findings in mid-July 2000, the GAO stated: "Weaknesses in the [Pentagon’s] financial management area continue to undermine the Department’s ability to manage its $260 billion budget" [– much higher now –] "and an estimated $1 trillion in assets. . . . [In] such areas as increased accountability over property, plant, and equipment and recognition of cleanup and disposal costs, major problems remain. These problems hamper financial reporting; impair DOD’s ability to safeguard assets from physical deterioration, theft, or loss: and result in the purchase of assets already on hand in sufficient quantities." As for the foreseeable future, the GAO bluntly anticipated that this costly waste of precious resources would continue unabated. The "Department [of Defense]," it reported, "still faces major challenges in providing adequate control and visibility over its inventory assets. Consequently, it is still many years away from successfully completing its major reforms."
Let me put this whole mess in a nutshell by extrapolating from the 1995 figures offered by the analysts at the highly respected, non-profit Center for Defense Information. They found that the Pentagon loses or mislays roughly $5 billion a year in just the categories of financial mismanagement, unaccounted for invoices, and unauthorized purchases. And while this money gushes down a Pentagon black hole so fast that there is not even a sucking sound heard by Congress, the reactionaries in Congress have eliminated the annual Aid to Families with Dependent Children (AFDC) program of around $24 to $26 billion per year because they alleged that it undermined the moral fiber of about 13.6 million poor Americans, including 9 million children. In other words, every single year the Pentagon cannot adequately or legally account for about 20% of an annual amount that was once spent on the former AFDC program, yet virtually no policy maker raises a peep about it. On the contrary, when Congress eliminated the former AFDC program at a rate of about $7 billion per year, it turned around and granted U.S. arms exporters an "annualized average" subsidy of $7.8 billion per year. So, while poor kids got a healthy dose of "tough love," weapons exporters were given a big taxpayer boost to help them supply almost 50% (49.1%) of all arms sales in the world in 1999.
Likewise, the fact that the Pentagon has no way to empirically measure exactly what level of supply, maintenance, and distribution of weaponry exist, does not inhibit some U.S. congresspersons from hysterically shouting about a "hollowed out military," or a frightening lack of military readiness. Could it be that their objective, after all, is not so much the enhancement of readiness but the promotion of their own careers, employment for some of their constituents, and a larger bottom line of important weapons manufacturers? It certainly appears that they have few qualms about scaring people witless — part and parcel of a long-standing U.S. political tradition of creating public fears about some presumed military menace or some non-existent military "gap" — about a readiness crisis. And some people will apparently sacrifice readiness itself for the benefit of what is really important – money for the few. So, while, for many years, cries about a lack of readiness have regularly reverberated through the halls of Congress, congresspeople from both major parties "have been publicly supporting increased, defense spending to solve a ‘readiness crisis’ while actually spending billions on unrequested and extravagant weapons programs." In 1999, for instance, Representative David Obey, pointed out that, from 1995 through the spring of 1999, only 13% of Congressional add-ons ($3.5 billion out of a total of $27 billion of add-ons) "’went to readiness and the rest went to pork.’"
Such spending abuses or hypocrisy on the part of his fellow Senators apparently irritates Republican Senator John McCain (R-AZ) from time to time because, after noting that the Senate version of the FY 1999 defense appropriations bill and the separate military construction appropriation conference report contained a combined $5 billion total of special interest pork, McCain stood on the Senate floor (June 25, 1998) and thundered a reply to his own rhetorical question: "’So why do we still have these serious and growing deficiencies in readiness, pay, and modernization? Because the practice of Congress has tragically been to mis-use billions of these scare defense dollars to add unrequested programs and building projects in the defense budget.’" At the same time, McCain could only find "one common denominator" in the list of 22 military construction projects that Senator Conrad Burns managed to include in the annual Department of Defense authorization bill (June 25, 1998). That common denominator was the fact that "90 percent [of the projects] were in the states and districts of members of the Appropriations Committee." Then, again, in the 2001 Military Construction Appropriation Bill and FY 2000 "emergency," supplemental, appropriation legislation, none of the $4.2 billion of add-on pork for military contractors and for the home states of various appropriations committee members was earmarked for military readiness. Quite simply, the "add-on game . . . increase[s] the revenues of major contractors by extending the production runs of weapons systems that [some in] the Pentagon had hoped to terminate," and very little, if any, of it is used to address the so-called "readiness crisis."
"You’ve thrown the worst fear
That can ever be hurled
Fear to bring children
Into the world
For threatening my baby
Unborn and unnamed
You ain’t worth the blood That runs in your veins"
(Bob Dylan, "Masters of War," 1963)
"Divide Each Problem into as Many Parts as Possible"
To dig deeper into the functioning of the military-industrial complex,
it is especially helpful to examine some of the separate aspects of the
very interesting acquisition history of the F-22 ("Raptor") aircraft fighter
system. That history helps provide a real insight into the whole
process of profit mongering in the military-industrial complex and U.S.
society as a whole. It shows how the acquisition reform rhetoric
and sham of military efficiency provide "political cover" to construct
and maintain very expensive weapon systems. It shows how those who
dominate the larger socio-economic system can manipulate the public mind
through pro-business propaganda. It shows how a few at the top of
the U.S. social pyramid are squandering the labor and economic resources
of the many at the bottom of society for unnecessary weapon systems.
And it shows that many of the extremely rich may have only one patriotism
and that is to their own privileges, power, and profits. In short,
the acquisition history of the F-22 may serve as a paradigm of the larger
U.S. socio-economic order.
As Bush II’s Administration escalates its pressure to get ever more taxpayer dollars flowing into the coffers of weapons producers, it becomes very helpful to create the belief that the billions being spent have not been squandered. So, the "proficiency advocates" of acquisition reform have leapt to assist weapon profit makers and their allies by giving "defense contractors . . . procurement bureaucrats . . . and Congress the political cover to purchase unneeded expensive weapons systems." This includes the F-22’s acquisition program, which the Air Force touted in its "’Lean Aircraft Initiative’" as an example of the way in which "acquisition reform and new manufacturing techniques reduce unit cost." Instead, as investigative reports by both journalist Greg Schneider of the Baltimore Sun and Pentagon analyst Franklin Charles ("Chuck") Spinney have shown, both the per unit and the overall development and production costs of the F-22 have zoomed to stratospheric heights.
By practicing what is called the "frontloading scam" to "downplay the future consequences of current decisions" and in order to start the government money flowing, prime weapons contractors often "buy in" to get government contracts by bidding low. Known as "low-balling" today, Sidney Lens explained this particular contractor strategy over thirty years ago. He wrote: "The contractor . . . makes a low estimate to begin with, so as not to unduly alarm the Secretary of Defense or congressional skeptics, and then goes on to spend two or three times as much, with little fear that the Pentagon will, or can cancel his order." Then, once the low-balling strategy has obtained an initial contract, the contractor(s) engages in what is called "political engineering." This practice means spreading enough of the initial money around the country to create subcontractors, wider political support, and economic dependencies of businessmen and workers.
In the case of the F-22, the plane was conceived in 1981, and, by 1991, the Air Force had chosen Lockheed and its partners, Boeing and General Dynamics as the major contractors to build the plane. By 1995, Martin Marietta corporation had merged with Lockheed to form Lockheed Martin. And Lockheed Martin, in partnership with Boeing, is now set to conclude a deal with the U.S. government to produce the most expensive fighter aircraft ever made. Along the way, according to retired Air Force Colonel Albert Piccirillo, all the Pentagon "’bosses’" knew that the F-22 was not going to be built at the original "’bargain price of $35 million apiece.’" Schneider reported that "’Piccirillo’s immediate superior, General Lawrence A. Skatze complained in a memo that the $35 million figure . . . was ‘speculative at best.’ Still, the Air Force presented a united front to Congress, and Piccirillo stood by the [initial bogus] price [estimate] rather than jeopardize the program.’" Anyway, it will come as no surprise that, as the F-22 is prepared to enter service in 2004, the 339 planes will cost somewhere between $97.7 million and $185 million each.
In any case, the Air Force F-22 "’estimating team’" recently projected as much as almost $13 billion more in overall cost overruns that may be added to the $62.7 billion already spent on the F-22. This means that the F-22 weapon system is destined to be "’28 percent higher’" than the "’20 to 40 percent’" cost increases that the Government Accounting Office GAO considers "’common for major weapons programs.’" According to the findings of Spinney, this sort of cost overrun is part of a high-tech weapons procurement trend and that makes the F-22 system a harbinger of far worse overruns to come. As his calculations, in 1996 inflation adjusted dollars, show, the total U.S. defense expenditure between 1983-1992 "increased by 7% . . . while the average cost per airplane increased by 359%. It jumped from $6.1 million per copy to $28 million per copy. And, between 2003 and 2012, the increase is predicated to jump "210% more than the average of $28 million" per plane to a figure of $86.7 million per copy.
Actually, these kinds of cost increases are not greatly out of line with the sort of longstanding defense contract cost increases that the Brookings Institution found were occurring in the 1950s. Citing a study written by C.H. Danhoff entitled "Government Contracting and Technological Change," Lens quotes it as follows: "'During the 1950s virtually all large military contracts . . . ultimately involved costs in excess of original contractual estimates of from 300 to 700 percent.'" More recently, in 1996, the CDI cited a GAO finding that stated: "'Program cost increases on the order of 20 to 40 percent have been common on major weapon programs, with numerous programs experiencing increases much greater that that.'" Fundamentally, this cost phenomenon is all part of a defense industry structural dynamic that was set in motion after World War II. At that time, established corporate arms manufacturers had to compete to win military contracts by making perpetual improvements in major weapon systems. This, in turn, appealed to military procurers who sought "’trend innovations’" but wanted weapons that would fit into their traditional force structures and notions "about how wars should be fought." And that has meant ever increasing costs for more and more elaborate weaponry.
It, also, is one reason why, after the Cold War, that we hear such twisted justifications and absurd claims for buying the F-22 as those uttered by Major General Claude Bolton, Jr., who served as the Air Force’s executive officer for fighter and bomber acquisition, and stated that the highly sophisticated F-22 is so powerful that it serves "’as a deterrent to terrorists,’" barefooted as they might be. Likewise, other Air Force representatives have done summersaults to argue that the F-22, which was originally designed to confront a very specific fighter aircraft from the Soviet Union, is now needed to "’deal with precisely the opposite type of threat,’" (i.e., a "’multifaceted’" future and unidentified aircraft or technology that will be "’difficult to predict’"). Such convoluted justifications for procuring the F-22 are almost enough to make one lose respect for advertising propaganda, but they fit neatly into the military’s compulsion to perpetually create worst case scenarios and imaginary foes or enemy weapons systems that can only be counteracted by even more elaborate U.S. weapon technologies.
Now, years ago, Mary Kaldor perfectly described the dynamic underlying this sort of baroque arsenal. She noted that weapons manufacturers are driven to create ever more extravagant, expensive, and grotesque weapons systems because, just to remain in existence, the "structure of the military industrial institutions" and the "competitive dynamic of the armourers" combines with the "conservatism of the armed forces" to require the continuous development of technologically superior weapons systems. So, while there may be "many military men who favor [weapon] numbers and simplicity and a slower rate of replacement," she writes, others have taken it as an "article of faith" that "continued [military] superiority [requires] continual [technological] change. The latter are guided by the "follow-on imperative," and, for such types today, the purchase of the F-22 is almost a biblical necessity. As Northrop corporate executive, James A. "Mickey" Blackwell explains it, they would "'give their first-born'" for that airplane. After all, such executives represent those weapons producing corporations for whom "it is continuous development of weapons systems, rather than continuous use, on which their existence depends." It is this dynamic and symbiotic relationship of private profit-making corporations and Pentagon procurement habits which turns the rest of American society, particularly those beneath the top 10% of families in society, into something like a host on which both the weapons makers and Pentagon buyers can perpetually feed.
Thus, from the date of Lockheed and its partners’ initial, low-bid deception through sixteen more years of large and small deceptions, the F-22 has proven its worth as the world’s premier, stealth fighter plane precisely where it counts the most – on the lucrative battlefield of weapons acquisition. It is a battlefield where, as former military officer Ralph Peters points out, "corporate welfare is [not only] an art form," but where the "employment of [greedy] retired senior [military] officers by the nation’s largest, increasingly monopolistic defense contractors is a scandal costing the taxpayer hundreds of billions of dollars." The weapons acquisition process expends those billions, however, in a way that is both largely concealed and deceptively facilitated by a Pentagon weapons-buying process that only appears to wring the waste out of the acquisition and procurement of supposedly combat ready arms.
Accordingly, the acquisition of the F-22 was launched as a positive "'showpiece for Air Force acquisition ingenuity.'" And it is a "showpiece," but only in a far more negative than positive way if you are a U.S. taxpayer and not an arms merchant. So, in 1998, when some in the Pentagon raised questions about whether the F-22 was being "’jumped into production without enough testing,’" they were quickly sidestepped by the Pentagon's acquisition chief (USD (A&T)) at the time, Jaques S. Gansler. Gansler, slickly declared that he was delaying the F-22’s Defense Acquisition Board’s (DAB) review for one year, and, then, he bought the first two production model F-22 fighters even though they had gone through only about 4 percent (less than 200 hours) of their originally planned flight testing. Now, what this shrewd move did was to turn the corner from "’development to production funding,’" and the Pentagon can seldom turn back from such an expensive commitment.
Meanwhile, the required flight testing hours for the F-22 test planes were reduced from 1,400 hours in 1994, to 601 hours in 1997, to 183 hours in 1998, at which time "’Congress stepped in and froze [them at] that amount.’" The Pentagon also scrapped a number of live-fire tests on the F-22 in order to cut development costs. In fact, only one F-22 will undergo a live fire test on itself and that will occur only after scores of F-22s have begun to roll off the production lines. So, if any flaws happen to be detected in the test plane undergoing the live-fire exercise, they will, ipso facto, be incorporated into the so-called combat-ready F-22s as well. Then, too, "’no full system live-fire testing of the F-22’s Pratt and Whitney jet engines will take place’" before the production line start rolling. And, finally, in December 1998, even though the F-22’s radar system failed in a mock laboratory test, and it, along with other parts of the plane’s complex electronics, has not been jointly tested, the Pentagon decision-makers took a "’leap of faith’" with the taxpayers’ money and decided to buy the F-22. The reality, despite all the hype about Integrated Product Teams, is that economic efficiencies, reduced cycle times, and rigorous quality control testing mean that the F-22, as Roy Hempley – of the Pentagon’s Office of Testing and Evaluation – has said, "‘has enjoyed a privileged status that allows it to skirt protocol and receive favorable treatment.’"
Actually, the story of eliminating, altering, abbreviating, and ignoring the F-22’s testing regime is not a unique one in the annals of the Pentagon’s weapon acquisition programs. In fact, as documented by the GAO, such practices are emblematic of the whole testing regime. In 1997, for instance, the GAO summarized the chronic shortcoming of an acquisition process that places a premium on speeding weapons into production. "In our previous high-risk reports," the GAO writes, "we reported that . . . the DOD frequently has experienced cost overruns . . . and performance shortfalls in its weapon acquisition programs" and has "committed too much money before a program proved to be suitable for production and fielding." And these "persistent and fundamental problems," the GAO frankly admitted, were due to "a prevailing culture dependent on continually generating and supporting the acquisition of new weapons." Then, sounding more Marxist-Leninist than it surely intended, the GAO placed the responsibility for rushing weapons into production on the military-industrial complex and its Congressional allies. There are, the GAO bluntly stated, "powerful incentives and interests that influence . . . the behaviors of . . . components of DOD, the Congress, and industry . . . to override the need to satisfy the most critical weapon requirements at minimal cost." And, yet, having said so much, the GAO made no real criticism of the very process – the IPPT process – which facilitates inadequate testing and speedy weapon acquisition. After noting that the Pentagon has been "using a procedure . . . based on teaming with the contractor [i.e., IPTs] to control processes while reducing reliance on inspection," the GAO noted that "today, [the] threats are not increasing in capability as fast as in the past . . . however . . . DOD [has] included no controls over low-rate initial production [and] missed an opportunity [in its 1996 update of acquisition regulations] to reduce the risk of prematurely starting production." Shortly thereafter, the GAO summarized its whole case: "In today’s national security environment, proceeding with low-rate production without demonstrating that the [weapon] system will work as intended should rarely be necessary. . . . Nevertheless, DOD plans to begin producing the F-22 aircraft well before beginning initial operational testing . . . at a cost of over $14 billion before initial operational testing is complete."
Since nothing had changed in the priority placed on production over testing by 1999, the GAO again complained that "rushing [weapon systems] into production before critical tests have been successfully completed has resulted in the purchase of systems that do not perform as intended." And it repeated its contention that today’s threat environment made it unnecessary to rapidly move new weapon systems into low-rate production "without demonstrating that the system will work as intended." "Nevertheless," the GAO continued once more, "DOD still begins production of many major and nonmajor weapons without first providing that the systems will meet critical performance requirements." Meanwhile, DOD program managers (PMs) push their new weapon programs ahead while necessarily relying on "immature technologies" and "tight cost and schedule estimates." They, therefore, tend to downplay problems because the "admission of them is implicitly discouraged. There are few rewards," the GAO rightly concluded, "for discovering and recognizing potential problems early in [weapon] program development" in such a bureaucratic environment.
So what, then, is the Pentagon’s response to the ongoing and systematic problem of rushing inadequately tested weapon systems into production? Well, with an average of $36 billion a year of research, development, test and evaluation money being poured into weapons programs "from basic research in science and engineering to the full-scale development of specific weapons systems, such as the F-22," the Pentagon is planning to increase its procurement of new weapons from $53 billion in 2000 to $63 billion in 2003. It, however, also is planning on reducing the amount that it spends for research, development, test, and evaluation from $34.4 billion in 2000 to $32.6 billion in 2003. And the GAO, apparently with its finger now in the air to see which way the political currents from the right were starting to blow in mid-2000, decided to sound a retreat from its criticism of the Pentagon’s lack of testing and evaluation, so it praised the Pentagon for undertaking "numerous initiatives to improve its acquisition process . . . including reducing [the] research, development, test, and evaluation infrastructure."
Now, to the uninitiated this sort of weapons acquisition process may appear insouciant or even recklessly negligent, but that is because such people have not been made aware of the wondrous effect that acquisition reform, in general, and Integrated Product Teams, in particular, have presumably had on weapons acquisitions. As Acting Secretary of the Air Force F. Whitten Peters explained, the acts of shortcutting testing to acquire the F-22 were fully justified because the daily monitoring of the F-22’s development by the IPTs, composed of Air Force personnel and contractor employees, had rendered the traditional DAB review unnecessary. Therefore, the production lines could start rolling. After all, the plane had to be production-ready because, as Air Force Major Richard Justice declared, "’military and industrial workers . . . [had] boasted from the beginning that they were operating ‘in lock-step.’" Apparently unaware of the real implication of his words, he summed up the true strategic purpose and accomplishment of the IPT approach: "’If the contractor failed, the government failed.’"
In fact, as the F-22’s business-dominated acquisition process shows, the IPT approach is a perfect example of how a structured, bureaucratic, government process can be used to routinely subordinate public sovereignty to private interests. Reinforcing that point, a 1995 study conducted by the Pentagon’s own Defense System Management College revealed that, since an officer’s career often depends on pleasing superior generals who want to keep programs alive and "’moving through the acquisition process, . . . there is no incentive for the military partner of a defense contractor to report waste or other bad news.’" After all, saying "no" to "superiors" does no good for one's career when the powers-that-be want a "yes." So, when Hempley examined the first two "cost and operational effectiveness" analyses of the F-22 before he retired in 1998, he failed both reports because they "’did not demonstrate the plane’s effectiveness in relation to its cost and [because] the Air Force did not justify decisions about the plane’s capabilities.’" But since the Air Force brass wanted the F-22, they "’intervened to get the reports passed.’"
Of course, the Lockheed Martin and Boeing corporations wanted a big green light for the F-22 as well. Lockheed Martin and Boeing, after all, are the only remaining major, U.S. military aircraft builders. And, as such, these two conglomerates create "’great pressure to sustain their biggest shared program, the F-22.’" In fact, Lockheed’s near-monopoly importance in the military-industrial structure and its political clout is so huge that it once threatened the Pentagon that, unless the government bought more unwanted C-130J transport planes, the price on the F-22 would have to go up due to short falls in expected foreign weapons sales and the rising overhead costs of sustaining under-utilized assembly lines in Georgia. As Peters aptly summarized Lockheed Martin’s form of hardball, "the contractor, in a wonderful blackmail effort, has warned that costs will shoot higher if the Air Force does not continue to buy an unwanted aircraft, the C-130J to keep assembly lines open [for the future production of the F-22]."
It is likely, however, that Lockheed Martin usually does not need to resort to such extortionist tactics. After all, there is little need to do so. Lockheed Martin and Boeing are boosters of the Defense Reform Initiative and the Integrated Product Team approach because, as Spinney notes, "defense contractors are particularly fond of government reforms that simplify the choices, reduce decision points, and eliminate the onerous burden of government oversight." Besides, the IPT approach neatly combines with the "Engineering and Manufacturing Development’ (EMD) strategy that is followed by managers in the Defense Department [to make] large financial commitments to the production of an airplane while it is being designed." This acquisition method, as Spinney notes, reduces development time, but it also shrinks a "decision maker’s flexibility" and "magnifies technical and economic risks." "The test program" in this acquisition process, he explains, "must use airplanes produced during the low-rate initial production (LRIP) run of a working assembly line," and any design flaws that are discovered at that stage must, then, be fixed on the other planes. Costs, in such a process, "can escalate rapidly . . . particularly if assembly line tooling or factory layouts must be changed. Nevertheless, cancellation [of a program under these conditions] is usually impossible, because the early commitment to low rate production permits the [prime] contractor to build a powerful political base by hiring a large number of production workers and by establishing a nation-wide network of subcontractors." Meanwhile, when the costs associated with the high up-front EMD strategy soar, decision makers "can not afford to explore other options. So . . . decision makers [are forced] to reduce specifications, accept large cost increases as being inevitable, stretch out production schedules, and cut back total production quantities." But such a method of building and buying weapons not only systematically eliminates all other alternatives, but it also is highly prized by major weapons contractors because "historically production contracts have been the only profitable phase of the defense business for private contractors." (E)
Citations and Notes
Halperin and Lomasney cite the following add-on figures (as billions):
1994: $1.749, 1995: over $5.0, 1996: $9.5, 1997: $12.4,
1998: $4.4. Dividing the total of these figures by five years
results in an average annual add-on figure of $6.6 billion. See Halperin
and Lomasney 94-95; Hartung’s analysis finds that between 1995 and 1999,
Congress has been adding between $3 billion to $10 billion a year to the
defense budgets. See Hartung, "Shrinking" 44.
Divided by five years, this total amounts to a yearly average of $5.4 billion. See CLWEF, "Robbing Peter to Pay Pork: Congress Uses Readiness Woes to Fund Pork," 17 March 2000, 3, available online at clw.org/ef/readiness2000.html; Internet. All Internet online web sites in this study require the prefix www.
CLWEF, "Congress Gives New Meaning to ‘Emergency’ Spending! Military Construction Bill and Supplemental Loaded With Pork," 11 July 2000, 2, available online at clw.org/ef/2000pork.html; Internet. $558 million of these add-ons went to Lockheed Martin for six unneeded C-130J cargo planes and to help finish paying Boeing for some unrequested fighter planes that FY 2000 funds had not covered. CDI analyst Christopher Hellman noted that the FY 2001 Pentagon funding is over $310 billion, and, in it, he identified "$3.3 billion in funds added by either the House or Senate for unrequested programs." See CDI, The Defense Monitor XXIX, no. 10 (December 2000): 6.
CDI, "Fiscal Year 2002 Budget, fiscal Year 2002 Add-Ons: Congress's Unrequested Spending for the Pentagon," 16 January 2002, 6, available online at cdi.org/issues/budget/add-ons02-pr.cfm.
Hartung, "Complex Revisited: New Military Mega-Companies" 5.
While there is no universally agreed upon definition of "readiness," it is generally taken to include such things as "adequate training for military personnel and stockpiles of spare parts for quick repairs to military equipment." Readiness requires the "ability to quickly fulfill a specific combat objective or mission." Most of the funding for readiness is "contained in the Operations and Maintenance (O&M) account of the Pentagon budget." See CLWEF, "Robbing Peter to Pay Pork," 17 March 2000, 2, available online at clw.org/ef/behindnumbers/ readiness.html; Internet. The CDI explains that the funds used for research, development, and procurement of weapons are defined as "investment dollars." See CDI, The Defense Monitor XIII, no. 4 (1984): 4.
GAO, Department of Defense: Progress in Financial Management Reform, Testimony of Jeffrey C. Steinhoff, Acting Assistant Comptroller General, Accounting and Information Management Division, before the Subcommittee on Government Management, Information and Technology, Committee on Government Reform, House of Representatives, GAO/T-AIMD/NSIAD-00-163 (Washington, D.C.: May 9, 2000), 1. The persistant reality of the Pentagon's extraordinary vunerability to waste, fraud, abuse, and mismanagement of taxpayer monies and property is highlighted by the fact that over thirty years ago Senator Proxmire's 1968 Senate Subcommitee on Economy in Government "uncovered a miasma of [Pentagon] waste, inefficiency, and probably corruption." See Lens 4.
GAO, Department of Defense: Progress in Financial Management Reform, Testimony of Jeffrey C. Steinhoff, Acting Assistant Comptroller General, Accounting and Information Management Division before the Subcommittee on Government Management, Information and Technology, Committee on Government Reform, House of Representatives, GAO/T-AIMD/NSTAD-00-163 (Washington, D.C.: May 9, 2000), 1. See also identical and similar statements in GAO, Defense Management: Actions Needed to Sustain Reform Initiatives and Achieve Greater Results, Report to the Chairman, Subcommittee on Military Readiness, GAO/NSIAD-00-72 (Washington, D.C.: July 2000), 24, and GAO, Financial Management: Analysis of DOD’s First Biennial Financial Management Improvement Plan, Report to Congressional Committee, GAO/AIMD-99-44 (Washington, D.C.: January 1999), 24, and GAO, Department of Defense: Financial Audits Highlight Continuing Challenges to Correct Serious Financial Management Problems, Testimony Before the Subcommittee on Government Management, Information and Technology, Committee on Government Reform and Oversight, House of Representatives, Statement of Gene L. Dodaro, Assistant Comptroller General, Division, GAO/-AIMD/NSIAD-98-158 (Washington, D.C.: April 16, 1998), 1, and GAO, DOD High-Risk Areas: Eliminating Underlying Causes Will Avoid Billion of Dollars in Waste, Testimony, GAO/T-NSIAD/AIMD-97-143 (Washington, D.C., May 1, 1997), 9, available online at fas.org/man/gao/ns97143.htm; Internet.
GAO, Department of Defense: Progress in Financial Management Reform, GAO/T-AIMD/NSIAD-00-163 ( Washington, D.C.: May 9, 2000), 21.
Office of the Inspector General (IG), Department of Defense, Audit Report: Internal Controls and Compliance with Laws and Regulations for DOD Agency-wide Financial Statements for FY 1999," Report No. D-2000-091 (Washington, D.C.: February 2000), 21. Specifically, the IG report stated: "DoD internal controls were not adequate to ensure that . . . DoD complied with applicable laws and regulations, and that the financial statements were free of material misstatements. DoD internal controls did not ensure that accounting entries to financial data were fully supported and that assets and liabilities were properly accounted for and valued." See Ibid., 4.
GAO, Department of Defense: Financial Audits Highlight Continuing Challenges to Correct Serious Financial Management Problems, Testimony Before the Subcommittee on Government Management, Information Technology, Committee on Government Reform and Oversight, House of Representatives, Statement of Gene L. Dodaro, Assistant Comptroller General, Accounting and Information Management Division, GAO/-AIMD/NSIAD-98-158 (Washington, D.C.: April 16, 1998), 1, 4, 2, 3. In one of its year 2000 reports, the GAO reported that defense "contractors had custody of about $91 billion of government property in fiscal year 1997." See GAO, Acquisition Reform: DOD’s Guidance on Using Section 845 Agreements Could be Improved, Letter Report, GAO/NSIAD-00-33 (Washington, D.C.: April 7, 2000), 30, available online at fas.org/man/gao/nsiad-00-033.htm; Internet. In 1970, Lens pointed out, with some justification, that by making "government owned land, buildings, machinery and materials" available to private contractors, the government was practicing "a form of 'private socialism,' in which the public takes the risk, the companies the profit." See Lens 5.
GAO, Department of Defense: Financial Audits Highlight Continuing Challenges to Correct Serious Financial Management Problems, Testimony before the Subcommittee on Government Management . . . . (Washington, D.C.: April 16, 1998), 5, 7, 8, 9. These examples do not exhaust the list of Pentagon audit and inventory discrepancies that GAO and other government agencies have identified in this report. And, in fact, they are discoveries that have been made only on the basis of test samplings of about 80 percent of the Pentagon’s reported military equipment. See Ibid., 4.
Ibid., 11. Noting that these problems were of "long-standing," the GAO updated its 1993 finding that the Army "did not maintain reliable information of the types, quantities, and locations of its equipment" by stating, "our analysis showed that over 40 percent of the adjustments" needed in the Army’s primary property books central system were due to the fact that "transactions that had been recorded in unit level property books [had] not been received by the central system." See Ibid., 7.
Ibid., 14. The GAO also noted that, in 1996, it had "identified unnecessary Navy spending of at least $27 million in fiscal year 1995" and predicted that the Navy would spend approximately another unnecessary "$38 million in the future for items already available at other locations." See Ibid., 18. Really digging into the massive amounts of Pentagon excess capacity and supply waste, the GAO issued a 1997 report which stated that the Pentagon had an excess R&D "laboratory infrastructure" capacity of "approximately 35 percent," a depot system excess capacity of "40 percent," an "overhead cost for transportation services" that were "frequently two to three times the basic cost of transportation," a "$69.6 billion inventory" that is "about one-half" . . . [more than] the level needed to support war reserves or current operating requirements," and the Pentagon not only throws away more "millions of dollars each year to manage and maintain unnecessary inventory," but it has "wasted billions of dollars annually on inefficient and unneeded infrastructure activities." See GAO, DOD High-Risk Areas: Eliminating Underlying Causes Will Avoid Billions of Dollars in Waste, Testimony, GAO/T-NSIAD/AIMD-97-143 (Washington, D.C.: May 1, 1997), 18, 20, my emphasis, available online at fas.org/man/gao/ns9714.htm; Internet. Likewise, in 1999, the GAO reports that the "DOD has not properly accounted for and reported billions of dollars of property, equipment, inventory, and supplies. . . . For example . . . on-hand quantities of inventories differed by 23 percent from inventory records at selected major storage locations, and over $9 billion in known military operating materials and supplies were not reported." See GAO, Major Management Challenges and Program Risks, Department of Defense, Performance and Accountability Series, GAO/OCG-99-4 (Washington, D.C.: January 1999), 14.
GAO, Major Management Challenges and Program Risks, Department of Defense, Performance and Accountability Series, GAO/OCG-99-4 (Washington, D.C.: January 1999), 52, 53.
Ibid., 53-54. In the same year, another GAO report concluded that the Pentagon had such "costly, error-prone, [financial management] systems that do not provide financial controls [that they are unable] to ensure that Pentagon’s assets are safeguarded, its resources are appropriately accounted for, or the cost of its activities are accurately measured. See GAO, High-Risk Series: An Update, GAO/HR-99-1 (Washington, D.C.: January 1999), 92-93.
GAO, Department of Defense: Progress in Financial Management Reform, Testimony of Jeffrey C. Steinhoff, Acting Assistant Comptroller General, Accounting and Information Management Division. Before the Subcommittee on Government Management, Information and Technology, Committee on Government Reform, House of Representatives, GAO/T-AIMD/NSIAD-00-163 (Washington, D.C.: May 9, 2000), 2.
The Navy defines "sponsor-owned materials" as items outside of the supply fund that supports weapon systems and equipment.
Ibid., 7, 8, 18. This citation covers all the quotes and information following the previous citation.
Ibid., 20. In FY 1999, DoD reported that it had $208 billion of gross value in general property assets. So, when combined with over $600 billion of its national defense assets, the Pentagon had over $808 billion in just these two categories of gross assets. See Ibid., 20, 13.
GAO, Defense Management: Actions Needed to Sustain Reform Initiatives and Achieve Greater Results, Report to the Chairman Subcommittee on Military Readiness, Committee on Armed Services, House of Representatives, GAO/NSIAD-00-72 (Washington, D.C.: July 2000), 24.
Ibid., 25. In 1999, the GAO complained about the Pentagon’s lack of responsiveness to its suggestions for improving management, accountability and control of Pentagon inventories with these words of resignation: "Since 1991, we have issued 11 reports that identify significant opportunities for DOD to test and adopt, where feasible, best inventory management practices used in the private sector." Those reports had little or no effect. See GAO, Major Management Challenges and Program Risks, Department of Defense, Performance and Accountability Series, GAO/OCG-99-4 (Washington, D.C.: January 1999), 56.
Jon Lottman, "In Focus: Welfare vs. Welfare Subsidies to Weapons Exporters," Foreign Policy in Focus: Internet Gateway to Global Affairs 2, no. 30 (March 1997): 1, 4, available online at foreignpolicy-infocus.org/briefs/vo/2/v2n30war.html; Internet. Hartung, "Corporate Welfare" 4, available online at cato.org/pubs/pas/pa-350-es.html; Internet. CDI, The Defense Monitor XXIV, no. 7 (August 1995): 6.
CDI, "Arms Trade Ups and Downs," Weekly Defense Monitor 4, no. 44 (2 November 2000): 3 available online at cdi.org/weekly/2000/issue44.html. Internet.
The GAO phrased the Pentagon’s failure in this way in 1999: "Because the DOD does not routinely develop information on joint mission needs and aggregate capabilities, it has little assurance that decision to buy, modify, or retire [weapon] systems are sound." Succinctly stated, "DOD spends more than necessary to procure inventory. See GAO, Major Management Challenges and Program Risks, Department of Defense, Performance and Accountability Series, GAO/OCG-99-4 (Washington, D.C.: January 1999), 33, 9.
CLWEF, "Robbing Peter to Pay Pork: Congress Uses Readiness Woes to Fund Pork," 17 March 2000, 1, available online at clw.org/ef/readiness2000.html; Internet.
CLWEF, "Congress: A Major Part of the Problem," 1, available online at clw.org/ef/caution/ congress.html; Internet.
CLWEF, "Congress Gives New Meaning to ‘Emergency’ Spending! Military Construction Bill and Supplemental Loaded With Pork," 11 July 2000, 1, 2, available online at clw.org/ ef/2000pork.html; Internet.
Hartung, "Complex Revisited: New Military Mega-Companies" 5, available online at foreignpolicyinfocus.org/paper/micr/Companies.html; Internet.
Eugene Gholz and Harvey M. Sapolsky, "Restructuring the American Defense Industry," in The Changing Dynamics of U.S. Defense Spending, ed. Leon V. Sigal (Westport, CN: Praeger, 1999), 167 (Cited as Gholz).
From 1977-present, Franklin Charles ("Chuck") Spinney has been an analyst in the Office of the Assistant Secretary of Defense for Program Analysis. He has over twenty-five years experience as a research engineer and program planner in the U.S. Air Force and the Office of the Secretary of Defense. He makes specific analyses of tactical weapons. He is the author of Defense Facts of Life: The Plans/Reality Mismatch (1985) and Defense Power Games (1990) as well as many articles about U.S. weapons acquisition and defense-related economic issues.
Sidney Lens, The Military-Industrial Complex (Philadelphia, PA: Pilgrim Press & National Catholic Reporter, 1970), 5. In 1989, the Center for Defense Information (CDI) elaborated upon the practice in these words: "The promised capabilities for the [weapon] program are often highly overstated and the costs are greatly understated. . . . [And] after a design is approved, the nest step is allowing firms to complete for contracts for the weapon [system]. Contractors, [however],are discouraged from requesting modifications of or pointing out problems with the design. Since a contractor must promise that it will fully satisfy the blueprint, the competition is based mainly on the contractor's optimism. . . . In order to sell their products they often resort to standard marketing techniques: they advertise, they exaggerate, and they criticize their competitors. . . . The usual result is that the company bids low to win the contract and comes back later asking for more [money]." See CDI, The Defense Monitor XVIII, no. 7 (1989): 6.
Franklin Charles ("Chuck") Spinney, "The Howling Wilderness of Acquisition Reform: Why the Super Hornet is a Super Failure (II)," Comment #341, 17 January 2000, 5, available online at infowar.com/iwfp/cspinney/c341.htm; Internet. Baltimore Sun journalist Greg Schneider (now with the Washington Post) notes that once Lockheed had won some political support by underestimating the F-22 "’costs upfront," it "’spread jobs around the country’" by keeping open both its Texas and its Georgia assembly plants. Thus, "’Lockheed Martin,’" he writes, "’partly to please senator . . . Sam Nunn [and, later, House Speaker Newton Gingrich] continues to execute final assembly of the F-22 at its factory in Georgia, even though its Texas plant has far more experience making fighters.’" And this is done, despite the fact that the work could be consolidated in one plant, because "’both plants have vast sections of factory floor that are dark or used for storage.’" See Greg Schneider, "Red Hot Fighter, Trail of Deception," in Baltimore Sun (Baltimore, MD), 18 July 1999, (part 1) 4, 10, available online at Chuck Spinney, infowar.com/iwftp/cspinney/c299.txt; Internet (Cited as Schneider, "Red Hot").
CLWEF, "Behind the Numbers: An Analysis of the FY 2001 Defense Budget Resolution," 4, available online at clw.org/ef/behindnumbers/d10t12html. Internet.
The prime contractors for the F-22 are the Lockheed Martin corporation for engineering and manufacturing development, the Boeing corporation for airframe, and the Pratt and Whitney corporation for the engine. See U.S. Department of Defense, "Program Acquisition Costs by Weapon System," Department of Defense Budget for Fiscal Year 2001 (Washington, D.C.: February 2000), 17.
Officials at Northrop, Boeing’s chief competitor, believed that the real price was "’likely to be about $70 million a plane,’" and one, James A. "Micky" Blackwell, – Lockheed Martin’s former president of aeronautics – "’recently characterized the $35 million figure as a ‘bogey.’" See Schneider, "Red Hot" 3, 7, 10.
Ibid., 3. The Air Force’s low figure of $97.7 million per plane does not include the full public investment in the F-22’s development and production costs. There are, of course, many ways to "’calculate the cost of an aircraft,’" and, as Lockheed Martin executive Tom Burbage said, "’You can get pretty much any cost you want.’" See Ibid. p. 7. Based on the latest available Defense Department figures in the Clinton administration’s Fiscal Year 2001 Defense Budget, the total program acquisition costs for the F-22 "Raptor" fighter aircraft for fiscal years 1999, 2000, and 2001 are listed as: FY 1999: over $2.3 billion ($2,356,700,000), FY 2000: over $2.2 billion ($2,225,600,000), FY 2001: over $3.9 billion ($3,957,900,000). So, for a total of over $8.5 billion ($8,540,200,000) in those three year alone, the Air Force will acquire a total of 12 F-22s. See U.S. department of Defense, "Program Acquisition Costs by Weapon System," Department of Defense Budget for Fiscal Year 2001 (Washington, D.C.: February 2000), 17.
Greg Schneider, "F-22 Has Already Doubled In Price and Costs are Going Up," in Baltimore Sun (Baltimore, MD), 20 July 1999, (part 3), 19-20, available online at infowar.com/ iwftp/cspinney/c299.txt; Internet (Cited as Schneider, "F-22 Has Doubled").
Schneider, "F-22 Has Doubled" 19; Ralph Peters, "Hucksters in Uniform," Washington Monthly Online 31, no. 5 (May 1999): 2, available online atwashingtonmonthly.com/ features/1999/9905.peters.military.html; Internet. Ralph Peters is a retired Army Officer and author of Fighting for the Future: Will America Triumph? and Traitor.
Franklin C. Spinney, "Defense Time Bomb," Infowar.com, 6 March 1996, 6-7, available online at wysiwyg://15/http://www.infowar.com/mil_c4i/defense.html-ssi; Internet (Cited as Spinney, "Defense Time Bomb"). In the case of the F-22 cost overruns and questions about its very necessity at the end of the Cold War, Republican Representative John R. Kasich pressed the then Secretary of Defense Richard B. Cheney to see if it and three other costly warplane programs were still needed. In 1990, Cheney authorized a "’Major Aircraft Review’" to look into the matter, but the results were a foregone conclusion. After all, "’given the composition of the working-level staff on the review,’" wrote Ronald G. Grant, Director of Investment for the Pentagon’s financial office, "’it is not likely that anything but ‘press on’ would be supported from the ‘analytical’ data.’" Grant concluded that "’the F-22 [along with the B-2 and the Navy’s A-12 was] going to be justified regardless of outside concerns such as cost and need.’" See Greg Schneider, "The World’s Most Ambitious Fighter," in Baltimore Sun (Baltimore, MD), 19 July 1999, (part 2), 12, available online at infowar.com/iwftp/ cspinney/c299.txt; Internet (Cited as Schneider, "World’s Most").
CDI, The Defense Monitor XXV, No. 3 (March 1996): 5.
Mary Kaldor, The Baroque Arsenal (New York: Hill and Wang, 1981), 4. Federal regulations define a weapon system as "An item or set of items that can be used directly by warfighters to carry out combat or combat support missions to include tactical communication systems." See regulation E2.1.21. DoDI 5000.2; Operation of the Defense Acquisition System"; (Including Change 1); 4 January 2001, available online at web2.deskbook.osd.mil/reflib/mdod/
012didoc.htm; Internet. Federal regulations define a Major Defense Acquisition Program (MDAP) as one "estimated" to "require an eventual total expenditure for research, development, test and evaluation of more than $365 million in fiscal year (FY) 2000 constant dollars or, for procurement, of more than $2.190 billion in FY 2000 constant dollars." See E188.8.131.52. DoDI 5000.2; Operation of the Defense Acquisition System"; (Including Change 1); 4 January 2001, available online at web2.deskbook.osd.mil/reflib/mdod/012didoc.htm; Internet.
Schneider, "World’s Most" 17, 13. The latest official Air Force claim for the mission of the F-22 stealth fighter is to "penetrate enemy airspace and achieve first-look, first kill capability against multiple targets." See Department of Defense, "Program Acquisition Costs by Weapon System," Department of Defense Budget for Fiscal Year 2001 (Washington, D.C.: February 2000), 17.
Kaldor noted that the term "’baroque,’" in this context, was first used in relation to nuclear weapons by nuclear physicist Herbert York.
Kaldor 220, 66-67.
Schneider, "Red-Hot" 10.
Schneider, "Red-Hot" 3.
The Defense Acquisition Board (DAB) is the basic board of directors and decision-makers on weapons acquisition at the Pentagon.
It appears that Lockheed Martin may have sweetened this arrangement by agreeing to sell the first two production batches of F-22’s (about 94 planes out of 339) on a "fixed-price contract" rather than the typical "cost-plus contract" in which the government pays both expenses and incentive fees to the contractor. With the fixed price contract, however, a contractor (e.g., Lockheed Martin) must absorb any cost problem that may appear. Lockheed Martin, of course, did not make any price commitment on the remaining 245 planes that it is planning to sell the government. See Schneider, "F-22 Has Doubled" 24.
Schneider, "Red Hot" 9; Schneider, "F-22 Has Doubled" 22.
Schneider, "F-22 Has Doubled" 22.
Ibid., 24. Defense contractors can cut their costs by relying on laboratory testing but such testing can be readily criticized for its obvious inadequacies. As the CDI explained: "Far too frequently the Pentagon relies heavily on laboratory testing. This sort of testing . . . does not address the critical question of how well [the weapon system] will perform in combat." See CDI, The Defense Monitor XVIII, no. 7 (1989): 5.
Schneider, "F-22 Has Doubled" 18.
Schneider, "Red Hot" 9.
GAO, Defense Weapon Systems Acquisition, High-Risk Series, GAO/HR-97-6 (Washington, D.C.: February 1997), 3, available online at fas.org/man/gao/hr97006.htm; Internet.
Ibid., 11-12. The GAO finished its argument by stating, "without first ensuring that the systems will meet critical performance requirements . . . the F-22 aircraft program, [along with others, will] begin [its production phase] well before beginning initial operational testing and [go into] production . . . before initial operational testing is complete." See Ibid., 8.
GAO, DOD High Risk Areas: Eliminating Underlying Causes Will Avoid Billions of Dollars in Waste, Testimony, GAO/T-NSIAD/AIMD-97-143 (Washington, D.C.: May 1, 1997), 15, available online at fas.org/man/gao/ns97143.htm; Internet.
GAO, Major Management Challenges and Program Risks, Department of Defense, Performance and Accounting Series, GAO/OCG-99-4 (Washington, D.C.: January 1999), 37.
GAO, Defense Management: Action Needed to Sustain Reform Initiatives and Achieve Greater Results, Report to the Chairman, Subcommittee on Military Readiness, Committee on Armed Services, House of Representatives, GAO/NSIAD-00-72 (Washington, D.C.: July 2000), 66-67; GAO, Future Years Defense Program: Funding Increase and Planned Savings in Fiscal Year 2000 Program Are at Risk, Report to the Chairman, Committee on the Budget, House of Representatives, GAO/NSIAD-00-11 (Washington, D.C.: November 1999), 9. The dollar amounts in this reference were in FY 2000 dollars.
GAO, Defense Management: Actions Needed to Sustain Reform Initiatives and Achieve Greater Results, Letter Report, GAO/NSIAD-00-72 (Washington, D.C.: July 25, 2000), 20, available online at fas.org/man/gao/nsiad-00-72.htm; Internet.
Schneider, "Red Hot" 9.
Schneider, "World’s Most" 13.
Schneider, "F-22 Has Doubled" 21.
Franklin C. Spinney, "The Howling Wilderness of Acquisition Reform (1) or Why Illegal Contracts Speed Up and Simplify Decision Cycles," Comment # 213, 9 November 1998, 1, available online at d-n-i.net/FCS_Folder/comments/c213.htm; Internet.
Spinney, "Defense Time Bomb" 12.
Ibid., 10. Spinney notes that the F-22 program allowed Lockheed Martin to quickly distribute "R & D subcontractors to 1,150 companies, employing 15,000 people in 43 states and Puerto Rico, so as many as 160,000 jobs may be at risk" if the program were cancelled. See Ibid., 16.
The practice of waiving specifications and goals is known among defense contractors as managing to a "rubber baseline," according to Spinney. See Ibid., 12.
America’s Defense Monitor (ADM) Online, "Selling the F-22 Fighter," show and show transcript produced by Center for Defense Information (CDI), May 11, 1997, 10, available at cdi.org/adm/1035/; Internet (Cited as "Selling the F-22"). Schneider notes that such a result was precisely the case with the F-22. "’Alternatives to the F-22,’" he notes, "’were stripped away’" and scare tactics were employed so that "’only the new [F-22] plane would suffice.’" See Schneider, "Red-Hot Fighter" 4. Spinney offers an alternative model for weapons acquisitions which he terms "competitive prototyping," and it places a premium on thoroughgoing testing and economic savings. "Competitive prototyping," he writes, "is a sequential, decision-making strategy for reducing technical and economic risks while preserving the [government] decision maker’s freedom of action. Its goal is to work the bugs out of a design before committing substantial resources to its factors of production (manufacturing, engineering, specialized machine tools, unique facilities, a network of supplier relationships, and the hiring of production workers) . . . under a competitive prototyping strategy, the decision to commit resources to production would be deferred until rigorous testing demonstrated which product best met the specifications." See Spinney, "Defense Time Bomb" 12.