Disarmament through spending

John Lehman:

When John McCain was shot down over Hanoi in 1967, he was flying an A4 Skyhawk. That jet cost $860,000.

Inflation has risen by 700% since then. So Mr. McCain's A4 cost $6.1 million in 2008 dollars. Applying a generous factor of three for technological improvements, the price for a 2008 Navy F18 fighter should be about $18 million. Instead, we are paying about $90 million for each new fighter. As a result, the Navy cannot buy sufficient numbers. This is disarmament without a treaty.

The situation is worse in the Air Force. In 1983, I was in the Pentagon meeting that launched the F-22 Raptor. The plan was to buy 648 jets beginning in 1996 for $60 million each (in 1983 dollars). Now they cost $350 million apiece and the Obama budget caps the program at 187 jets. At least they are safe from cyberattack since no one in China knows how to program the '83 vintage IBM software that runs them.

There are other problems. Navy shipbuilding fiascoes like the staggering overruns on new surface combatants, the near total failure of the Army's Future Combat System that was meant to re-equip the entire army, the 400% cost overrun of the new Air Force weather satellite -- to name but a few -- all prove that we are currently unable to design, develop and deliver major weapons systems in anything approaching a cost-effective and timely manner. The Government Accountability Office recently reported that the cost overruns for the top 75% procurement programs were over $295 billion. We are rapidly disarming ourselves, even as defense spending grows.

On May 22, President Obama signed the Weapons System Acquisition Reform Act. Despite the grandiloquent name, it is in fact just an addition of 20,000 more bureaucrats who will only make matters worse.

Why is this happening? Where did things go wrong?

First, let's look at the customer.

Within the Pentagon, there has been an obliteration of clear lines of authority for managing procurement programs. What there has been is a steady growth in the size and layers of civilian offices, agencies and military staffs, resulting in severe bureaucratic bloat. In the private sector, a specific person is always responsible for the success or failure of a program. When it comes to the Pentagon, no one person is held accountable for good performance or punished for failure.

As a direct result of this lack of accountability, there has been a loss of discipline and control over equipment requirements and a surge in gold-plating in all Pentagon programs. New requirements and design changes -- originating in more than 30 different bureaus in the Pentagon -- are constantly being added, wreaking havoc with costs. On the Navy's new small warship building program (the LCS), for instance, change-orders have at times averaged 75 per week. Because of these constant changes, cost-plus-contracts have become the norm far into production, instead of fixed-price contracting when development is complete.

In addition, the Pentagon has surrendered control of many programs to large contractors. During the 1980s, the Pentagon employed thousands of experienced project managers and engineering professionals. Today most of this talent has gone to work for the contractors, and their duties have been contracted out to those same contractors. It's a classic case of the fox running the chicken coop. To make matters worse, the bureaucracies did not shrink because of this exodus, but actually grew as experienced engineering professionals were replaced by administrators and bookkeepers.

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There is more.

The A-4 was not a very good aircraft. It was originally designed as a manned cruise missile without a landing gear. A nuclear bomb was to be attached to its underside. The pilot open reaching his target would put the plane into a vertical climb designed to toss the bomb high into the air, giving the plane time to get out of the area before it exploded. The pilot was then to find a spot to bail out of the plane an attempt to reach friendly forces.

Needless to say the pilots were not happy with this design and insisted on landing gear being added to the design. The plane was mainly used to carry dumb bombs which meant the pilots had to make a low approach to the target, making them vulnerable to being shot down as McCain, in fact, was. While we developed the Wild Weasel approach to knocking out enemy radar during the Vietnam war, the communist countered with a wall of anti aircraft fire around target areas which knocked a lot of the planes out of the air.

Another problem was Lyndon Johnson's target selection made it easier for the communist to concentrate their fire on the limited targets he approved.

I think one F-18 is more effective than five A-4s, which is apparently the cost difference in inflation adjusted dollars.

However, there is clearly a problem with technology related costs. At a time when the cost of computers and other electronics has come down significantly even as they became more powerful and useful we have not gotten similar benefits from weapons. We need to find a way to get technological cost savings in weapons and other military equipment.

The special forces has done some of this by buying civilian equipment that better meets its needs. The military is now doing this with mountain boots for the troops in Afghanistan, because the desert boot that worked in Iraq fell apart under use on the rocky hills of Afghanistan. While a combat aircraft is a long way from a boot or a donkey, it is not that far from a high end computer in terms of technology.

I suspect that as we take pilots out of the aircraft and go to UAVs there will be significant cost savings and improvements in maneuverability, function and more importantly persistence. While ship prices have also gone up, the cost of operation has come down because they need smaller crews. The new ships can be a force multiplier, but that will only happen if we can get the cost in line with the crew savings.