Defense That Does Not Add Up


Defense That Does Not Add Up

Apr 1, 2012 2 min read
James Jay Carafano

Senior Counselor to the President and E.W. Richardson Fellow

James Jay Carafano is a leading expert in national security and foreign policy challenges.

Ronald Reagan, the president most remembered for his defense buildup, also did more than most to make defense spending more efficient.

One Reagan-era effort in that regard was the Nunn-McCurdy Amendment. It provides that, whenever a major defense acquisition program starts racking up big cost overruns, the Pentagon has to notify Congress. The aim is to help control cost growth by holding Pentagon officials and contractors publicly accountable. Today, to be slapped with a "Nunn-McCurdy breach" is a badge of shame. It may be the death knell of a program, as Congress may demand that the Pentagon curtail or kill off the program altogether.

Still, complaints that the Pentagon doesn't get enough bang for its buck remain common in the halls of Congress. At recent hearing on the defense budget, Sen. Kent Conrad, D-N.D., noted that the Defense Department proposed canceling or changing production schedules for about 20 major programs. "Over the past 10 years, the Pentagon has spent about $46 billion ... on development programs that were terminated and never entered production," he fumed.

Unfortunately, government rules intended to make contractors more accountable have instead masked penny-wise, pound-foolish decisions by Pentagon brass or lawmakers. Often, the reason programs are cut back or terminated has less to do with equipment problems than with a desire to find budget cuts. Government then incurs heavy charges, like an indecisive homebuyer who slaps down earnest money and then walks away from the deal.

Last year, for example, the contract for Global Hawk -- the nation's premier high-altitude, long-range unmanned aerial reconnaissance platform -- triggered a Nunn-McCurdy breach. Why? Mainly because the Pentagon slashed its planned buy for one version of the aircraft in half. Now, to curb outlays, the Pentagon has announced it's cutting production for another version -- basically throwing away $4 billion already invested in developing that model. The decision came less than one year after Defense officials certified to Congress that no comparable system existed that could do the job at lower cost.

Walking away might make sense if Global Hawk didn't work, but it does. It has performed military missions in Iraq and Afghanistan and supported humanitarian operations in Japan and Haiti.

Or consider the Osprey. The Pentagon's purchasing plans for that aircraft make about as much sense as saving on auto maintenance by skipping oil changes. The tilt-rotor Osprey can fly like a helicopter or a plane, quickly transporting Marines and materiel from ships to remote landing sites. The Pentagon saved big bucks by buying in bulk via "multi-year" purchases, rather than ordering aircraft one year at a time.

Now, to "save money," the Pentagon is switching to single-year buys and purchasing fewer aircraft -- sacrificing the multiyear discount in the bargain. As a result, the Pentagon will spend about the same amount of money over the next five years, but buy only about half as many planes.

America's newest combat aircraft, the F-35, which supports the Air Force, Navy and Marines, is suffering the same fate. Buying planes in dribs and drabs, the Pentagon is driving per-unit costs through the roof. And it could get worse if the automatic cuts required under Budget Control Act of 2011 kick in. The secretary of the Army just told Congress that, if that happens, "We would have to ... declare Nunn-McCurdy breaches on hundreds, if not thousands, of contracts."

There is truly wasteful mismanagement of our tax dollars at the Defense Department. The solution is to give the Pentagon a consistent budget, year in and year out, adequate to meet realistic needs. We don't need to force the Pentagon into pound-foolish spending decisions. We have the Energy Department and Solyndra for that.

James Jay Carafano is a senior research fellow for national security at the Heritage Foundation.

First appeared in The Washington Examiner