- The Washington Times - Sunday, March 17, 2013

The Pentagon has squandered billions of dollars over the past two decades on weapon systems it never produced and on rosy cost estimates that ballooned to sizes that ate up funds for other projects, according to government reports and defense analysts.

The miscalculations have come back to haunt the armed forces at a time when tighter budgets are forcing it to curtail basic war-fighting preparations such as training, ship and aircraft repairs, and overseas deployments.

Pro-defense conservatives, however, say that despite the procurement mistakes, the country needs a robust military to confront an array of threats — and that costs money.

Still, how the Pentagon misspent billions over two decades has relevancy for the future.

Money devoted to doomed programs such as the Army’s Future Combat System or poured into the F-35 Joint Strike Fighter could have come in handy today. Analysts say that if the Pentagon had better-managed the research, development and acquisition of satellites, vehicles and planes, the force in 2013 would be more modern and more resilient against automatic spending cuts, or “sequestration,” that began March 1.

“Of course they would have more money available to do other things,” Thomas Christie, the Pentagon’s top weapons tester from 2001 to 2005, told The Washington Times.

“The Joint Strike Fighter,” Mr. Christie said. “We would have been halfway through the program at half the cost if things had been managed property. I think we screwed that up by trying to combine three different capabilities in one airplane, and then mismanaged it even beyond that. Here we are, 2013. We almost should have finished buying the thing.”

Ben Freeman, national security investigator at the Project on Government Oversight, said poor management has “immensely” affected the armed forces today because misplaced money could have been used to make the force more combat ready.

“One of the problems with sequestration, and one of the reasons all the services are saying ‘it’s so devastating, it’s so devastating,’ is because they’re getting such little bang for their buck,” Mr. Freeman said. “When they do have to cut money from it, it cuts a lot because they’re not getting a lot for that money that they have spent.”

The procurement ‘game’

The F-35 Joint Strike Fighter, with its family of complex variants for the Air Force, Navy and Marine Corps, has become Washington’s archetype for weapons programs that far outpaced early cost estimates in the past 20 years.

According to the Government Accountability Office, the estimated development and procurement costs for the F-35 have soared from $233.3 billion in 2001 to nearly $400 billion today. The reformist Center for Defense Information says the latest total cost estimate adds up to a nearly 100 percent cost overrun.

What’s more, the total cost to fly the fleet of 2,443 planes for 30 years has topped the $1 trillion mark, a figure Pentagon officials concede is not affordable.

Frank Kendall, the Pentagon’s undersecretary for acquisition, last year called the F-35’s procurement process “acquisition malpractice” because the plane was being developed at the same time it was being manufactured. Glitches found in test flights have had to be corrected during production at a huge cost.

The Army sank $18 billion into the Future Combat System to fight on what it thought would be tomorrow’s high-tech battlefield. On the drawing board: 14 ground vehicles, communications hubs and unmanned aircraft that would revolutionize how soldiers fight. Not a lot came of it. Like the F-35, total program costs ballooned, from $92 billion to $159 billion.

The GAO, which has chronicled botched weapons purchases, reported that for the Future Combat System, “There is not a firm foundation of knowledge for a confident cost estimate.”

In 2009, then-Defense Secretary Robert M. Gates eviscerated the Future Combat System, declaring it did not meet the antiarmor threats posed by Islamic insurgents. Mr. Kendall also blamed its “poor engineering.”

The Army killed the array of ground vehicles and merged remaining technologies into other programs.

“The Army has been an absolute fiasco,” Mr. Christie said. “Look at all the stuff they have launched off on and spent God knows how much money and nothing to show for it.”

The F-35 and the Future Combat System illustrate a loose culture inside the Pentagon and among defense contractors, in the opinion of military reformers and some Capitol Hill conservatives.

It works this way: Low early cost estimates get Pentagon civilians and Congress to start funding. Development and manufacturing sites are set up to create jobs in various states. After several years, cost start rising above the initial estimates.

But Pentagon civilians keep approving the projects because they already have invested taxpayer money. And lawmakers fear jobs will disappear or the force will miss out on needed modernization.

“That’s the game that still goes on despite a lot of rhetoric to the contrary,” Mr. Christie said.

A GAO report described the practice in drier prose:

“Our prior work has found that programs are incentivized to produce optimistic estimates in order to gain approval for funding,” it says. “At present, DOD does not have a long-term investment strategy that would prioritize its investments and, in turn, reduce pressures associated with competition for funding.”

‘A nonvirtuous cycle’

Mr. Christie said that Mr. Kendall is trying to attack mismanagement.

“But you get in there, a job like that, you get fascinated with the stars around you, telling you what you want to hear and you go along to get along,” Mr. Christie said. “It’s depressing. I was there. And, to some extent, I was guilty of a little bit of that, too.”

The roll call of failures came in two phases.

First, there were weapons developed during the Clinton administration of the 1990s that seemed obsolete for the post-Sept. 11, 2001, world and were canceled.

The George W. Bush administration ushered in huge defense budgets. Congress earmarked billions to catch up with the 1990s’ defense budget slashing and a so-called “procurement holiday.”

Other funds drove the war on terrorism. With it, military reformers argue, came Congress’ willingness — with fingers crossed — to keep pouring money into bad programs.

In a sense, it was a replay of the Reagan administration’s $3.5 trillion defense buildup to mend a broken force and confront the Soviets. Though money was wasted, analysts believe, America ended up with clearly the most-advanced and best-trained force in history.

There are other procurement horror stories of the 1990s and 2000s.

The Navy spent $10 billion on a destroyer, the DDG-1000, then decided its long-term costs were too high and killed it. By 2009, the Navy estimated the per-ship price at $6 billion, an 81 percent increase.

The Navy’s future destroyer fleet now rests on what it was already buying, the DDG-51 Arleigh Burke-class.

“I walked away from the DDG-1000 when I was [chief of naval operations],” retired Adm. Gary Roughead, the Navy’s former top officer, told The Times. “In my mind, I thought that the Navy would have a hard time sustaining that program, and instead of just doing it for a few number of ships, the approach I took was, I rather have one large class that allows me to minimize training cost. And the capabilities we needed were resident in the DDG-51.”

Other Navy ships now are going over budget.

The first Gerald Ford-class aircraft carrier just sustained a $1 billion cost overrun and is now slated to cost $15 billion, Navy Times reported.

Glitches also have plagued the littoral combat ship, a small vessel designed to fight close to shore in places such as the Persian Gulf, where Iranian speed boats can play havoc with oil tankers and the Navy.

The Project on Government Oversight, which uses whistleblowers to expose corruption, acquired a Navy document that told of littoral combat ships cracking and corroding, and of equipment failures in the first ship sent to sea.

The Navy says 55 littoral combat ships will have an average cost of $460 billion. The Congressional Budget Office says the price will be much higher — $591 billion.

The Air Force’s new fleet of reconnaissance satellites has grown in cost by 40 percent, to $12 billion, the GAO has reported. The Space Based Infrared System, once estimated to cost $4 billion, now is expected to tally $10 billion.

Like other cost-bloated programs, the problem was “unrealistic” estimates, the GAO said.

By 2006, the GAO provided Congress with a long list of systems whose development costs exploded.

The Global Hawk unmanned reconnaissance aircraft, for example, exceeded estimates by 166 percent.

The Army spent $7 billion on the Comanche attack helicopter, then canceled it in 2004.

In 2002, civilians forced a reluctant Army top brass to give up on the Crusader artillery piece as too Cold War-ish, after having spent $1.7 billion.

“If the Pentagon hadn’t been wasting billions of dollars on inefficiencies and programs, then we could have taken that money and used it to put into more efficient programs or invest it in researching the technologies the warfighter is going to need tomorrow,” Mr. Freeman said.

James Carafano, a former Army officer and vice president for foreign and defense policy studies at the Heritage Foundation, has a different take on what went wrong.

“Many of these problems result from the way Congress sets up the procurement programs,” Mr. Carafano told The Times. “It is a nonvirtuous cycle.

“Congress doesn’t allocate enough on the front end, so then the services have to ask for more, then they are criticized for managing the program,” he said. “Government and industry can’t really push back because Congress pays the bill. GAO doesn’t investigate Congress.”

Besides, Mr. Carafano said: “The military needs modern equipment. It is like hiring a contractor to fix your roof. If he does the job and leaves and the roof leaks again you still need to fix the roof. We ought to be able to walk and chew gum. Reform the system and buy new equipment.

“By our estimate, we have been underfunding procurement by $50 billion a year for over a decade so if we had no waste, I think we would still be behind. We need to be more efficient but plow savings back into procurement,” he said.

• Rowan Scarborough can be reached at rscarborough@washingtontimes.com.

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