DEFENSE DEPARTMENT

Procurement Blues: After a Decade Of Largesse, Not Much to Show for It

7/1/2011
By Sandra I. Erwin
Departing Defense Secretary Robert Gates — a reformer who valiantly sought to curtail waste and redundancy — probably did not put a dent in the U.S. military’s bungling procurement apparatus.

Gates, to be sure, tried. He canceled several major programs that were too expensive and superfluous, and ordered an overhaul of contracting practices. But he leaves behind a Defense Department that has failed miserably at investing for the future.

Like the proverbial lottery winners who fritter their money away, the Pentagon’s “investment” programs ballooned by $700 billion over the past decade, and yet today’s military has little to show for all that money. The armed services continue to operate predominantly Reagan-era aircraft, ships and ground vehicles that gradually are becoming technologically obsolete and increasingly costly to maintain.

After a decade of lavish spending, the Pentagon is now left with an aging fleet of weapon systems, an overstrained force, out-of-control personnel and healthcare costs, and no idea of how to prepare for tomorrow’s wars.  

The procurement holiday of the aughts, unlike the one of the 1990s, was of the Pentagon’s own choosing. Military analyst Anthony H. Cordesman, of the Center for Strategic and International Studies, says unrestrained spending has covered up a decade’s worth of failure to plan and manage. “Cutting failed procurements, seeking mythical improvements in efficiency, and making yet another attempt to improve contracting are not a meaningful route to success.”

Each of the four military services now faces unaffordable modernization and manpower plans, notes Cordesman. “The only way forward is to make hard, unpleasant trade-offs that put an end to the constant escalation of the cost of major weapons.” Procurement is as out of control as ever, he adds. Despite Gates’ hard won cuts, procurement reform remains a “sick joke.”

The Defense Department has bet its entire air modernization effort on a troubled F-35 Joint Strike Fighter, he says, while the Army seems incapable of formulating a modernization plan, much less executing one. The Navy is racing to make its ship building effort as unaffordable and as impractical as its air modernization effort, and the Marine Corps has shown that it is equally inept in managing its comparatively smaller acquisition programs.

Gates has pointed out that most of the significant new technologies that have emerged over the past decade — mine resistant trucks, improved body armor and aerial spy drones — were largely paid for outside the base budget via supplemental war requests. In the non-war budget that is supposed to invest for the future, “more and more money is consumed by fewer and fewer platforms that take longer and longer to build,” says Gates.

A cavalcade of laws and regulations to crack down on procurement waste and abuse has failed to change the buying culture. The Pentagon’s indiscipline led to $25 million howitzers, $500 million helicopters, $2 billion bombers and $7 billion submarines that Gates moved to terminate. The weapons of the Reagan buildup remain the mainstay of the force today: the M1 tank, Bradley fighting vehicle, Apache and Blackhawk helicopters, Burke guided missile destroyers, F-15 fighter jets, and others.

Gates’ tacit instruction to his successor: Stop the bleeding. From now on, he said, the Pentagon should “develop technology and field weapons that are affordable, versatile and relevant to the most likely and lethal threats in the decades to come; not just more expensive and exotic versions of what we had in the past.”

The post 9/11 spending surge has left the Defense Department with a huge “tail” and a debilitated “tooth.” The massive administrative overhead, both in the government and in industry, and soaring entitlement costs, only will add pressure to modernization accounts. The new leadership at the Pentagon “must deal with the fact that retirement and benefit costs are escalating beyond reasonable limits,” says Cordesman.

By so poorly managing its resources, the Pentagon has created an impossible no-win situation for the political leadership that must now try to reduce the nation’s debt, possibly on the backs of military troops and retirees who may see reduced benefits. If personnel and healthcare programs are protected, the reductions will have to come from elsewhere, most likely from modernization accounts. The Pentagon indeed is caught between a rock and a hard place.

It is unclear yet whether the new leadership taking over Defense will follow in Gates’ footsteps or pursue other measures. Outgoing Chairman of the Joint Chief of Staff Adm. Michael Mullen predicts it will be tough for the incoming SecDef to shake up the status quo. Gates put more time and effort to reforming the culture of the building than anyone expected, Mullen says. “He’s set a pretty high bar.”

Making the job even more difficult for the new team is that it must deal with a Congress that makes most decisions on political imperatives and not on sound public policy.

Topics: Defense Department, DOD Budget, DOD Leadership

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