Obama Administration Takes Aim at Defense Spending Overruns

Oct 15 2010 Published by under Featured News, Issues, White House

The bloated U.S. defense budget has been a topic of discussion and debate for some time. The Bush era invasions of Iraq and Afghanistan stretched the U.S. military to its limits and even with the Iraq war now officially ended U.S. commitments overseas remain high.

The U.S. military has been transitioning from it’s Cold War-era  order of battle to one better suited to fighting  “asymmetrical” wars. Not only does old equipment have to be replaced, but new weapons systems have to be developed and deployed. All this is expensive. Some very expensive systems don’t make the grade and we only find out after the fact.

Humvee with IED damage

American Humvees  (High Mobility Multipurpose Wheeled Vehicle aka Hummers) had to be upgraded to protect them from an unanticipated threat, IEDs (improvised explosive devices – in short, roadside bombs), and a whole new class of vehicle was developed and deployed that sported better armor – MRAPs (Mine Resistant Ambush Protected).

MRAP during testing

Republicans claimed that as president Obama would naively gut the U.S. military. That has not happened, just as Obama has not taken anyone’s guns away or raised taxes on everyone. This was typical – and remains typical – Republican hyperbole. In fact, as USA Today reports,

The budget calls for $205.5 billion in war costs for Iraq and Afghanistan over the next year and a half, including $75.5 billion more this year and $130 billion for fiscal 2010. Those costs are included in the overall budget for the first time. The budget includes a 4% increase to $533.7 billion for the Defense Department.

Not a gutting – far from it – an increase. We can ask ourselves whether the spending is justified. It’s a legitimate question after all, whatever Republican rhetoric says about it. Few, I think, would argue that the military must have the equipment it needs to fulfill its mission, and right now that mission is the suppression of Taliban activity in Afghanistan and the support of a friendly, democratic regime in Iraq. But there is more to the story of developing and deploying new weapons systems than meets the eye.

President Eisenhower warned America of the dangers posed by the military industrial complex, a threat that has proved very real. There is money to be made, not only by contractors and subcontractors but by lobbyists and politicians. Most of these activities do not take place in the public eye; few people realize how much money is wasted in partisan battles over contracts but also through incompetence, waste, and dishonesty.

Defense Talk, the Global Defense & Military Portal, reports that,

Over the last few days, word got out that defense industry giant Lockheed Martin has lost government approval for its cost and schedule tracking systems on the Joint Strike Fighter (JSF) and F-16 programs. The Pentagon has said problems with Lockheed’s system are part of the reason there have been 80 percent cost overruns in the estimated $382 billion Joint Strike Fighter program.

What people need to understand is the way in which contracts are awarded. Companies try to underbid each other to win the contract. Once awarded, the company will begin to develop the system or component. Sometimes, the company puts a great deal of time and effort (not to mention money) into the project only to have the government tell them that they have changed it. Sometimes what has already been done is made in part or in whole irrelevant. Sometimes, the engineers have to go back to the drawing board and start again. And of course, the changes lead to increased expenses. It is wrong to always assign blame to the contractor.

But in this case, as Defense Talk says,

A spigot of defense spending opened up after 9/11, yet for years, there has been dismal oversight of contractors handling hundreds of billions of dollars in contracts for weapons and other goods and services. In the last few years, Defense Secretary Robert Gates has embarked upon numerous initiatives to control the often spiraling growth in the cost of weapons programs. Increased pressure on defense contractors is part of the effort to turn “fat into muscle.”

“The action against Lockheed for its deficient tracking system has to be viewed in context of this overall effort.”

The tracking system is known in the industry as the Earned Value Management System, or EVMS. EVMS is supposed to help companies manage large, complicated projects and measure performance against a baseline. Lockheed’s EVMS was deemed deficient in 19 of 32 areas in a November 2007 report by the Defense Contract Management Agency (DCMA), which was made public by POGO in 2008. The report concluded that Lockheed does “not provide the requisite definition and discipline to properly plan and control complex, multibillion dollar weapon systems acquisition programs.”

And “Lockheed isn’t the only contractor with problems.”

Companies that fail to adhere to expectations will suffer in future contract negotiations:

Although Lockheed has made progress since 2007, the Pentagon apparently decided Lockheed wasn’t acting fast enough. It’s still not totally clear what’s going to happen to Lockheed—at a minimum it will have to disclose its EVMS is not approved when it bids for government contracts.

“The decertification this week was “really a slap in the face to Lockheed.”

What’s at stake for taxpayers? “The Pentagon noted Lockheed’s deficient EVMS system this June when it issued a report on the staggering cost overruns in the Joint Strike Fighter program, which the report estimates will cost $382 billion—an 80 percent increase in the program’s initial projected cost.”

What’s at stake for the people doing the fighting is potentially much-needed weapons systems upgrades being denied them through defense spending wastage like this. The Bush administration did not believe in oversight and it applied it nowhere – to the environment, to Wall Street, or to defense spending.

The military deserves better, and so do the American people. Fortunately, the Republican plundering expedition came to an end in 2008 and we have a Democratic administration in place that is doing something about it.

Comments are off for this post