When Pentagon officials are grilled on Capitol Hill about the eye-popping price tags of military hardware, their standard response is that next-generation weapons are justifiably expensive because fewer of them are required.
While that logic in itself may be questionable, it’s certainly a good thing that the Pentagon believes it will be able to do more with less because, eventually, it may not have a choice.
A hyperinflation tsunami now threatens to sink the Defense Department’s purchasing power so dramatically that a weapons budget that currently funds 95 programs over time will pay for just a handful of big-ticket programs, concluded the latest audit report by the Government Accountability Office.
This recent assessment of weapons programs brings to mind the musings of former Lockheed Martin CEO Norman Augustine, who infamously predicted that by 2054, the Defense Department will only be able to afford one aircraft.
The projections from GAO paint an astonishing picture — given current trends in weapons cost escalation, most of the Defense Department’s research, development and acquisition budget may in the foreseeable future only be enough to fund 10 programs.
Auditors calculated that the Pentagon’s 95 major defense acquisition programs collectively are $295 billion more expensive than originally estimated. These 95 programs currently are projected to consume about $335 billion over the next five years. But the 10 largest programs gradually are crowding out the other 85, as they account for 58 percent of the total funding for research, development, testing, evaluation and procurement.
If the cost spiraling trends continue into the future, the auditors estimated, one can easily see how the top 10 could end up encompassing a much larger share of the total weapons budget.
By as early as 2012, the top 10 programs are expected to eat up 64 percent of the funds that currently pay for all 95.
If these projections hold true, the Defense Department’s entire weapons budget will fund just the following 10 programs: the ballistic missile defense system, the Joint Strike Fighter, the Virginia class submarine, Future Combat Systems, the V-22 Osprey, the DDG-1000 destroyer, the CVN-21 aircraft carrier, the F-22A fighter jet, the P-8A maritime surveillance aircraft and the F/A-18E/F naval warplane.
The stunning shrinkage of the Pentagon’s buying power has been documented by GAO for several years, and should not surprise anyone who has been tracking defense spending. One of the audit’s more alarming statistics is that 44 percent of the Pentagon’s major defense acquisition programs are paying at least 25 percent more per unit than originally expected. Other investigations by the Congressional Budget Office and the Congressional Research Service have arrived at similar findings.
The fiscal gloom and doom alarms have been going off for years. Analysts have warned for more than a decade that the Pentagon’s weapons acquisition plan costs way more than what’s been budgeted. The only reason business continues as usual is the enormous surge in spending during the Bush administration — a buildup that may continue for some time, but should end after U.S. forces leave Iraq.
More money only seems to aggravate the problem by masking the true causes of the financial drain.
Military procurement expert Jan P. Muczyk, professor emeritus of management at the Air Force Institute of Technology, says it is fairly easy to see why things have gotten out of control.
One big problem is that “officers want their weapons systems to do everything,” Muczyk writes in the Defense Acquisition Review Journal. “They also wish to make changes throughout the development cycle of the weapon system.” Congress is a complicit party as well. As costs escalate, Congress limits the budget for these expensive systems. As a result, the Defense Department reduces the number of units that it intends to buy to stay within the budget, thereby inflating the cost on a per-unit basis to astronomical proportions, Muczyk says. “The entire situation is exacerbated by the consolidation of defense contractors and congressional pressure to buy American, both of which restrict competition. Little wonder then that Defense Department contract overruns are routine and of epidemic proportions.”
This is especially bad news, Muczyk notes, given that most of the big-ticket weapons in the Pentagon’s budget are systems intended to fight large-scale wars and “lend little to asymmetric warfare such as fighting terrorists and waging counterinsurgency conflicts, which are today’s contemporary and near-term threats.”
Unless this situation is reversed, he predicts, the military will “bankrupt itself with little in return.”
If the Defense Department were a Wall Street bank, it already would have qualified for a federal bailout.
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