ACQUISITION PROGRAMS

A Decade of Misguided Procurement Decisions

1/1/2012
By Nathaniel H. Sledge Jr.
The past decade serves as cautionary advice for the Defense Department’s weapons procurement decision makers, who will need to adapt to an austere budget environment and break the habits learned during the no-questions-asked spending spree of the early 2000s.

Philosophy, or the wisdom of the ages, provides a valuable prism through which to analyze and evaluate the way the services spent their budget windfalls during the decade of war following the 9/11 attacks.

A white paper titled, “What We Bought: Defense Procurement from FY01 to FY10,” by Russell Rumbaugh of the Henry L. Stimson Center asserts that, contrary to prevailing wisdom, the military services took advantage of the enormous increases in national security spending to modernize their forces.

I beg to disagree. The Defense Department did spend significant sums on new equipment, but so-called modernization of the last decade was imbalanced. The systems that were procured over the past decade were more a reflection of the services’ identities and priorities, which were only slightly and grudgingly influenced by the wars that U.S. forces have been fighting. The services essentially bought what they always wanted to buy and what they were predisposed to buy.

The services did indeed capitalize on the budget largesse of the past decade, but it is not clear that they achieved modernized forces, at least not when the present and future threats are taken into account. The Army, Navy and Air Force each approached modernization differently, but the priorities and the choices made suggest that the services behaved as expected given their recent histories and cultures.

“What We Bought” chronicles how procurement spending increased dramatically over the last decade from $62.6 billion to $135.8 billion annually, with supplemental funding making up a significant 22 percent of the generous windfall.

The paper provides insight into how the bulk of procurement dollars were spent. But there are some important omissions. Application of the “so what” test is almost always necessary. But the white paper does not address the 800-pound gorillas sauntering around the room. That is, was it wise to buy what the services bought? Can we refer to the procurement activity from 2001 to 2010 as modernization when many of the systems are arguably irrelevant in the context of the present, and most likely, future national security environment? Did the procurement priorities improve readiness, enhance capabilities and assure taxpayers about the stewardship of their treasure? These are important questions that if answered, would make the white paper’s findings more significant.

The study does not properly define modernization. Without a solid definition of modernization, we sink into equivocation about what higher quality, better or best mean. In my view, new or recapitalized equipment without capability enhancement doesn’t qualify as modernized. Improved performance or additional capabilities is the sine qua non of modernization. The military capability we pursue must be proportional to the threat, sustainable and affordable. Having the best equipment isn’t sufficient rationale for modernizing forces, because likely opponents may have equipment that is far inferior to the U.S. military’s, or they may have set the bar for their military readiness quite low anyway.

To provide some historical perspective, the report could have included tables or charts indicating by service the proportion of funding allocated to upgraded, new, and next-generation equipment (modernized) during key periods: The post-Vietnam era of the Cold War; the post-Cold War, from December 1989 to September 2001; and the ongoing counterinsurgency campaign against violent extremist movements and terrorists. This information would help understand how various periods of operating tempo and different security environments have affected modernization budgets and spending. That would help shed light on whether the services habitually leverage fearful times and/or contingencies to get well in their investment accounts.

Under any circumstance, modernization efforts should be relevant. Former Chairman of the Joint Chiefs of Staff Adm. Mike Mullen lamented the services’ lack of strategic planning and positioning for the modern and future threats facing the nation. This concern raises questions about the efficacy of recent modernization efforts. Is it modernization if new and recapped systems are employed through obsolete or discredited doctrine, organization and tactics? Modernized tanks, trucks, and small arms may be irrelevant when force structure and operations-and-maintenance funding face severe and imminent reductions, or when the most likely nature of conflict involves counterinsurgency and humanitarian assistance. In these cases, so-called modernized equipment becomes a white elephant, a reminder of the intellectual and cultural inertia of the military planners and programmers. Similarly, is it possible to address whether a service is modernized without a credible framework of well-defined roles? Arguably, there is unnecessary duplication and redundancy among the services.

The Stimson report focused mostly on where the money was spent in programmatic terms, providing valuable insight into policy as reflected by spending. But the paper only touches the surface of wartime procurement because it addresses only the big-ticket items such as aircraft, ships and combat vehicles, or notable items, such as unmanned aircraft, small arms and tactical wheeled vehicles.

The services’ skewed responses to the budgetary windfall of the past decade are analogous to Mexico’s behavior under the North American Free Trade Agreement (NAFTA). Mexico failed to capitalize on its preferred trading status with the richest, most commercially and culturally influential nation on the planet. It did not invest the enormous increase in revenues in its people, schools, key institutions, roads and other infrastructure such as power grids, water treatment facilities and communications networks — the foundations of modern societies. Instead, the benefits of NAFTA were concentrated in the elite, plutocratic circles, or overseas.

Similarly, the U.S. military put less emphasis on systems that address cybersecurity, command, control and communications, and logistics and personnel management. Focusing on the top systems only constitutes tepid and partial modernization. It’s like providing stimulus funds to only the country’s top five most populous metro areas and declaring that you’re stimulating the entire American economy. Given the changes in the threat environment since the Cold War ended, this raises questions about which systems or domains constitute the heart of the services’ capabilities.

Service-wide and joint modernization is the only kind that works, but it requires an objective and complex symphony of investment and integration to be effective. Concentrating procurement funds in a handful of commerce-driving programs does not require leadership or moral courage. Like Mexico’s response to NAFTA, it results in unseemly outcomes. Not only are large amounts of funding misappropriated into costly and irrelevant systems, many necessary and deserving programs go unfunded or underfunded. Consequently, this approach does not necessarily enhance our national security posture. But equally troubling is the unrelenting drumbeat of calls by the services for maintaining high levels of defense spending, even after a decade of extraordinary budgetary generosity.

Nathaniel H. Sledge Jr., PhD, is a retired U.S. Army colonel who served as acquisition program manager in four project management offices, and worked at the Army Budget Office in the Directorate of Investment.


Topics: Procurement

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