Pentagon Struggles With Cost Overruns and Delays
The Subtance
Pentagon Struggles With Cost Overruns and Delays
By LESLIE WAYNE
On Sept. 10, 2001, Defense Secretary Donald H. Rumsfeld stood before hundreds of military officers and civilian employees at the Pentagon and delivered a blistering attack on what he saw as the next national security threat: Pentagon bureaucracy.
He called for quicker decision-making, greater accountability and a streamlined process to get weapons into the hands of soldiers faster. “We must transform the way the department works and what it works on,” he said. “It could be said that it’s a matter of life and death — ultimately, every American’s.”
The terrorist attacks the next day did more than put Mr. Rumsfeld’s transformation plans in suspension. As new weapons systems were ordered to help fight the war on terror, Pentagon spending after 9/11 jumped by hundreds of billions of dollars. And so did waste.
Now, almost five years later, Congress has promised to clamp down on the inefficiencies and wasteful practices that Mr. Rumsfeld identified, which critics and government oversight agencies say have only grown worse with the flood of new money into military spending.
Members of Congress from both parties are concerned that runaway costs threaten to weaken the armed forces as higher price tags mean they can afford fewer weapons.
In the current Pentagon budget for 2007, steps have been taken to, among other things, require fuller disclosure of cost overruns, set spending caps and use more fixed-price contracts that require contractors to stay within budget. Senator John McCain, Republican of Arizona and chairman of a Senate Armed Services subcommittee, plans to hold hearings this summer and next year on the issue.
Cost overruns have long been a Pentagon staple. But what has alarmed government oversight agencies and Pentagon observers, and spurred Congress to act, is the magnitude of the spending increases. Projects are as much as 50 percent over budget and up to four years late in delivery.
“We have been living in a rich man’s world for the last five years,” said Jacques Gansler, Pentagon under secretary for acquisition from 1997 to 2001 and vice president for research at the University of Maryland. “The defense budget has been growing so rapidly that we are less likely to put in many cost-sensitive reforms.”
In recent Congressional hearings and reports from the Government Accountability Office, Congress’s investigative arm, the Pentagon has been portrayed as so mired in bureaucracy and so enamored of the latest high-tech gadgetry that multi-billion-dollar weapon systems are running years behind in development and are dangerously over budget.
The Pentagon reported last April, in response to questions from lawmakers, that 36 of its major next-generation weapon systems are over budget, some by as much as 50 percent.
The G.A.O. estimated that cost overruns on 23 weapon systems it studied in April came to $23 billion. In addition, there were delays of at least a year in delivering these weapons, with some programs running as much as four years late, like the Army’s $130 billion Future Combat Systems to provide soldiers new computerized ground equipment.
David Walker, comptroller general of the United States, said in testimony before the House Armed Services Committee last April that “the Department of Defense is simply not positioned to deliver high-quality products in a timely and cost-efficient fashion.”
Rising costs can also mean that fewer weapons are ultimately built. For instance, the budget for a military rocket launching program, the Evolved Expendable Launch Vehicle, has increased from $15.4 billion to $28 billion. Even so, the program is anticipating fewer launchings: 138 instead of the 181 initially planned.
Costs for an information-gathering satellite program, called the Space-Based Infrared System, have grown from $4.1 billion to $10.2 billion. Meanwhile, the number of satellites has decreased from five to three.
“It’s a perfect storm,” said Lawrence J. Korb, a former Pentagon assistant secretary, who served in the Reagan administration and is now a senior fellow at the Center for American Progress. “You had this big buildup in military spending. That took a bubbling problem and made it worse. It made it more difficult to audit and keep track of what was going on. It’s always been bad, but I’ve never seen it this bad.”
Blame for the cost overruns is not easily assigned. Even though Mr. Rumsfeld identified the Pentagon itself as a problem in early 2001, the rapid buildup and cost overruns in recent years resulted from widespread calls for more military might.
While Mr. Rumsfeld has been successful in getting a few outmoded weapons systems deleted — his main triumphs have been killing the $11 billion Crusader artillery program and the $38 billion Comanche helicopter program —any momentum he developed for Pentagon transformation was overtaken by his focus on Iraq.
“Clearly, since 9/11, transformation has not been a focus of Rumsfeld,” Mr. Korb said.
War Expenses Add to Pressure
These cost overruns come as the Pentagon is under pressure on two fronts. It is trying to get weapons to soldiers in Iraq while embarking on a complex new procurement program costing hundreds of billions of dollars.
The Pentagon wants to fundamentally transform the military with more lethal and technologically superior “megasystems.” The Navy is spending $80 billion for advanced submarines and $70 billion for destroyers. The Air Force is in the midst of a $320 billion program to recapitalize its fighter jet fleet and the Army has ordered $130 billion in computerized replacements for tanks and other vehicles.
With numbers this large, even slight delays and overruns can quickly become billion-dollar problems.
Meantime, the Bush administration has warned the Pentagon that the current high level of military spending cannot be sustained, raising new questions of whether the Pentagon can afford everything it has committed to — or in the numbers it wants.
Some in Congress say the prospect of paying more for fewer weapons is, in itself, a kind of threat to national security. “Acquisition inefficiencies may, in the end, drive American vulnerabilities more than any other dimension of America’s national security complex,” said Representative Duncan Hunter, the California Republican who is chairman of the House Armed Services Committee.
The Pentagon says it is fully aware of these problems and is moving to correct them.
“We’ve got a lot of traction in the building, and I’m coming to help harness that traction and take it to the end zone,” said James I. Finley, under secretary for acquisition.
Mr. Finley, a former General Dynamics executive, is working to speed Pentagon decision-making, make the high-tech requirements for new weapons more realistic, and reduce the numerous design changes ordered by the Pentagon.
The impact on the Pentagon’s budget from the overruns is hard to gauge. That is because simply determining how much money the Pentagon has is difficult, the G.A.O. said last year.
The recordkeeping is so flawed and lacking in basic financial controls that government auditors are unable to provide a “clean” or conclusive opinion under basic accounting rules.
The G.A.O. found that financial sloppiness went beyond weapon systems. For instance, at a time when the Pentagon was buying new chemical suits for use in Iraq for $200 each, it was also selling them on the Internet for $3 each after some military units misidentified the suits as surplus. And about $1.2 billion in supplies that were shipped to Iraq never arrived — or were never found — because of logistical problems.
But the really big money is in weapons. New weapons are expected to cost at least $1.4 trillion from now to 2009, with $800 billion of those expenditures yet to be made, according to the Pentagon. Weapons systems are one of the largest purchases made by the federal government, and the Pentagon’s weapons-buying program has doubled from $700 billion before 9/11.
Since 9/11, the Pentagon budget and supplemental spending on Iraq have grown to over $500 billion a year. This compares with a Pentagon budget of $291 billion before 9/11. (If measured in today’s dollars, pre-9/11 spending would come to $330 billion, according to the Pentagon.)
A number of Pentagon improvement efforts — Mr. Rumsfeld’s best known is called the Business Management Modernization Program — have been tried in the last five years, to little effect. This shortcoming has not gone unnoticed in business circles.
A group called Business Leaders for Sensible Priorities, which includes 600 executives from companies like Bell Industries, the Pacific Stock Exchange and the Stride Rite Corporation, issued a report on Pentagon financial practices last May called “No One Is Accountable.”
It concluded: “The Defense Department’s financial management practices would put any civilian company out of business.”
A Move Toward More Control
In the last few months, Congress has moved to assert more control. In the House, Mr. Hunter put provisions in the Pentagon budget requiring more reporting on overruns, allowing for the rebidding of contracts with exceptional overruns and imposing spending caps on some weapons.
In the Senate, the Armed Services Committee has enacted provisions calling for more fixed-price weapons contracts, limiting award fees to contractors and providing for more Congressional oversight of prime contractors on major programs.
The Pentagon’s finances are under increasing scrutiny because the Bush administration has indicated that Pentagon budgets will begin to flatten in 2008. In addition, annual supplemental funding of $100 billion for Iraq and Afghanistan is expected to go away, with the funds to come instead from the Pentagon budget.
A federal budget deficit remaining around $300 billion and the rising demands to support entitlement programs as society ages also mean the Pentagon will have to compete harder for dollars. Inside the Pentagon, the growing gap between available resources and future demands is called the bow wave: a surge of costs that threatens to swamp the Pentagon just as military budgets begin to decline.
Military contractors are aware of these problems, but have little incentive to address them. Critics say contractors fail to object to the Pentagon’s business practices since the industry is paid regardless of the outcome. The industry says its hands are tied.
“This industry is rather unique,” said Norman R. Augustine, a former chief executive of Lockheed Martin Corporation and a former Army under secretary. “It has only one customer, but it is the most powerful customer in the world. It makes and enforces the rules, and if you want to do business with that customer, you do what that customer wants.
“Where the big money is lost,” he added, “is in starting programs and stopping, cutting the budget and then raising it, slowing and then accelerating programs, setting requirements and then revising them.”
Instead, Mr. Augustine said, “what is needed most is to make it extremely difficult to start a new program” and not until “the need is clear, the technology is there and there is money to do the job.”
Critics say the solution is not more money, but a different approach. The Pentagon, they say, is unable to separate wants from needs and approves far more than it can afford.
The Pentagon then sets technical requirements unrealistically high and compounds this problem by trying to rush weapon systems with unproven technologies into production. Rather than producing weapons faster, the opposite effect occurs, as the inevitable technological difficulties lead to cost overruns and developmental delays. In addition, once weapons programs are started, the Pentagon often imposes new requirements, adding further delays and costs.
Frequent turnover in program managers at the Pentagon, as well as a lack of either responsibility or accountability by officials for specific weapons programs, means there are few consequences when programs go astray, the G.A.O. said. It added that lack of accountability can extend to contractors as well.
In the civilian world, development costs are borne by companies themselves. Boeing, for instance, must absorb all the costs of developing a new line of commercial jets before selling them. But pay starts for military contractors even during development of new weapons, and the contractors do not face market forces to get weapons quickly to their customer, the Pentagon.
Nor are contractors held accountable when they underperform. A G.A.O. study in December found that the Pentagon had paid $8 billion in bonus award fees to military contractors regardless of whether performance goals were met.
For instance, contractors on the Joint Strike Fighter, a next-generation fighter jet, received their full bonus award of $494 million from 1999 to 2003, even though the program was $10 billion over budget and 11 months behind schedule.
Contractors in the F-22A fighter jet program, over the same time period, received 91 percent of their performance bonus, or $849 million, even though the current phase of the program was $10 billion over budget and two years late.
Mr. Walker, the comptroller general, said in testimony before the House Armed Services Committee that the Pentagon needed to make it “clear who is responsible for what and holding people accountable when these responsibilities are not fulfilled.”
The biggest program in the Pentagon pipeline is the Air Force’s replacement of its tactical aircraft fleet, primarily F-16’s, with F-22A’s and the Joint Strike Fighter. The combined price tag for the replacement plan is $320 billion, with $75 billion of that already appropriated. But problems are already cropping up from what critics say is a “conspiracy of hope” rather than hard-edged planning.
One consequence of rising costs is that about 4,500 F-16’s and other jets will be replaced by only 3,100 new jets. And as the Air Force waits for its new jets, it has stopped buying F-16’s. This means the newest models are flown by the United Arab Emirates and Poland, which have recently placed large orders.
When it was planned 19 years ago, the F-22A was an ambitious project by any measure. It was to fly invisibly, at supersonic speeds and with the latest in avionics and engines. All this was to counter Soviet threats in air-to-air combat. Initially, the Air Force had planned to spend $82 billion and buy 648 planes.
Since then, the Soviet threat ended and the F-22A encountered numerous cost overruns and schedule delays. The Air Force also added new requirements so the jet could also conduct bombing missions — even though some critics question the feasibility of using an expensive fighter jet that flies at nearly twice the speed of sound to attack ground targets.
In the end, the F-22A is costing nearly twice as much per plane as planned, and the Air Force is getting only one-quarter the number it had initially sought. The cost for each plane has soared to $361 million, making it the most expensive fighter jet ever. It is still not ready for combat.
Fewer Planes for More Money
The Air Force maintains it needs at least 381 F-22A’s to satisfy national security requirements. But the Pentagon has only enough money to buy 181, leaving a shortfall of about 200 aircraft. By contrast, the F-16 fighter jet began as a less ambitious program and was built in four years, using proven technology. It has been flying, with continual upgrades, for 30 years and is considered the most successful fighter jet in history.
Many in Congress are concerned that the replacement for the F-16, the Joint Strike Fighter being developed under a $257 billion program, may not be as cost-effective. Development costs have already risen by $23 billion, or 28 percent. This has caused the Pentagon to cut 400 planes from the program, which is now set for 2,443 planes.
Equally troublesome to critics is that the Pentagon has invested in manufacturing and producing the plane before it has been fully tested. The G.A.O. reports that when initial production of the Joint Strike Fighter begins next January, only 1 percent of its preflight testing will be completed. Longtime Pentagon watchers say that optimism about weapons and budgets is part of its inherent character. But the reality of limited funds and a growing chorus of critics may ultimately force the gap to close between what the Pentagon wants and what it can afford.
“We’ve always wanted to provide the best for our boys and we have been willing to pay for it,” said Mr. Gansler, the former acquisitions under secretary. “The belief has been that next year we will be richer and the budget will climb even more. But now, as the Pentagon has to be more-cost sensitive, you have to question the belief.”
Copyright 2006 The New York Times Company
http://www.nytimes.com/2006/07/11/business/11overruns.html?hp&ex=1152676800&en=6be07cf1a4dbf7f1&ei=5094&partner=homepage
Members of Congress from both parties are concerned that runaway costs threaten to weaken the armed forces as higher price tags mean they can afford fewer weapons. Cost overruns have long been a Pentagon staple. But what has alarmed government oversight agencies and Pentagon observers, and spurred Congress to act, is the magnitude of the spending increases. Projects are as much as 50 percent over budget and up to four years late in delivery.July 11, 2006
Pentagon Struggles With Cost Overruns and Delays
By LESLIE WAYNE
On Sept. 10, 2001, Defense Secretary Donald H. Rumsfeld stood before hundreds of military officers and civilian employees at the Pentagon and delivered a blistering attack on what he saw as the next national security threat: Pentagon bureaucracy.
He called for quicker decision-making, greater accountability and a streamlined process to get weapons into the hands of soldiers faster. “We must transform the way the department works and what it works on,” he said. “It could be said that it’s a matter of life and death — ultimately, every American’s.”
The terrorist attacks the next day did more than put Mr. Rumsfeld’s transformation plans in suspension. As new weapons systems were ordered to help fight the war on terror, Pentagon spending after 9/11 jumped by hundreds of billions of dollars. And so did waste.
Now, almost five years later, Congress has promised to clamp down on the inefficiencies and wasteful practices that Mr. Rumsfeld identified, which critics and government oversight agencies say have only grown worse with the flood of new money into military spending.
Members of Congress from both parties are concerned that runaway costs threaten to weaken the armed forces as higher price tags mean they can afford fewer weapons.
In the current Pentagon budget for 2007, steps have been taken to, among other things, require fuller disclosure of cost overruns, set spending caps and use more fixed-price contracts that require contractors to stay within budget. Senator John McCain, Republican of Arizona and chairman of a Senate Armed Services subcommittee, plans to hold hearings this summer and next year on the issue.
Cost overruns have long been a Pentagon staple. But what has alarmed government oversight agencies and Pentagon observers, and spurred Congress to act, is the magnitude of the spending increases. Projects are as much as 50 percent over budget and up to four years late in delivery.
“We have been living in a rich man’s world for the last five years,” said Jacques Gansler, Pentagon under secretary for acquisition from 1997 to 2001 and vice president for research at the University of Maryland. “The defense budget has been growing so rapidly that we are less likely to put in many cost-sensitive reforms.”
In recent Congressional hearings and reports from the Government Accountability Office, Congress’s investigative arm, the Pentagon has been portrayed as so mired in bureaucracy and so enamored of the latest high-tech gadgetry that multi-billion-dollar weapon systems are running years behind in development and are dangerously over budget.
The Pentagon reported last April, in response to questions from lawmakers, that 36 of its major next-generation weapon systems are over budget, some by as much as 50 percent.
The G.A.O. estimated that cost overruns on 23 weapon systems it studied in April came to $23 billion. In addition, there were delays of at least a year in delivering these weapons, with some programs running as much as four years late, like the Army’s $130 billion Future Combat Systems to provide soldiers new computerized ground equipment.
David Walker, comptroller general of the United States, said in testimony before the House Armed Services Committee last April that “the Department of Defense is simply not positioned to deliver high-quality products in a timely and cost-efficient fashion.”
Rising costs can also mean that fewer weapons are ultimately built. For instance, the budget for a military rocket launching program, the Evolved Expendable Launch Vehicle, has increased from $15.4 billion to $28 billion. Even so, the program is anticipating fewer launchings: 138 instead of the 181 initially planned.
Costs for an information-gathering satellite program, called the Space-Based Infrared System, have grown from $4.1 billion to $10.2 billion. Meanwhile, the number of satellites has decreased from five to three.
“It’s a perfect storm,” said Lawrence J. Korb, a former Pentagon assistant secretary, who served in the Reagan administration and is now a senior fellow at the Center for American Progress. “You had this big buildup in military spending. That took a bubbling problem and made it worse. It made it more difficult to audit and keep track of what was going on. It’s always been bad, but I’ve never seen it this bad.”
Blame for the cost overruns is not easily assigned. Even though Mr. Rumsfeld identified the Pentagon itself as a problem in early 2001, the rapid buildup and cost overruns in recent years resulted from widespread calls for more military might.
While Mr. Rumsfeld has been successful in getting a few outmoded weapons systems deleted — his main triumphs have been killing the $11 billion Crusader artillery program and the $38 billion Comanche helicopter program —any momentum he developed for Pentagon transformation was overtaken by his focus on Iraq.
“Clearly, since 9/11, transformation has not been a focus of Rumsfeld,” Mr. Korb said.
War Expenses Add to Pressure
These cost overruns come as the Pentagon is under pressure on two fronts. It is trying to get weapons to soldiers in Iraq while embarking on a complex new procurement program costing hundreds of billions of dollars.
The Pentagon wants to fundamentally transform the military with more lethal and technologically superior “megasystems.” The Navy is spending $80 billion for advanced submarines and $70 billion for destroyers. The Air Force is in the midst of a $320 billion program to recapitalize its fighter jet fleet and the Army has ordered $130 billion in computerized replacements for tanks and other vehicles.
With numbers this large, even slight delays and overruns can quickly become billion-dollar problems.
Meantime, the Bush administration has warned the Pentagon that the current high level of military spending cannot be sustained, raising new questions of whether the Pentagon can afford everything it has committed to — or in the numbers it wants.
Some in Congress say the prospect of paying more for fewer weapons is, in itself, a kind of threat to national security. “Acquisition inefficiencies may, in the end, drive American vulnerabilities more than any other dimension of America’s national security complex,” said Representative Duncan Hunter, the California Republican who is chairman of the House Armed Services Committee.
The Pentagon says it is fully aware of these problems and is moving to correct them.
“We’ve got a lot of traction in the building, and I’m coming to help harness that traction and take it to the end zone,” said James I. Finley, under secretary for acquisition.
Mr. Finley, a former General Dynamics executive, is working to speed Pentagon decision-making, make the high-tech requirements for new weapons more realistic, and reduce the numerous design changes ordered by the Pentagon.
The impact on the Pentagon’s budget from the overruns is hard to gauge. That is because simply determining how much money the Pentagon has is difficult, the G.A.O. said last year.
The recordkeeping is so flawed and lacking in basic financial controls that government auditors are unable to provide a “clean” or conclusive opinion under basic accounting rules.
The G.A.O. found that financial sloppiness went beyond weapon systems. For instance, at a time when the Pentagon was buying new chemical suits for use in Iraq for $200 each, it was also selling them on the Internet for $3 each after some military units misidentified the suits as surplus. And about $1.2 billion in supplies that were shipped to Iraq never arrived — or were never found — because of logistical problems.
But the really big money is in weapons. New weapons are expected to cost at least $1.4 trillion from now to 2009, with $800 billion of those expenditures yet to be made, according to the Pentagon. Weapons systems are one of the largest purchases made by the federal government, and the Pentagon’s weapons-buying program has doubled from $700 billion before 9/11.
Since 9/11, the Pentagon budget and supplemental spending on Iraq have grown to over $500 billion a year. This compares with a Pentagon budget of $291 billion before 9/11. (If measured in today’s dollars, pre-9/11 spending would come to $330 billion, according to the Pentagon.)
A number of Pentagon improvement efforts — Mr. Rumsfeld’s best known is called the Business Management Modernization Program — have been tried in the last five years, to little effect. This shortcoming has not gone unnoticed in business circles.
A group called Business Leaders for Sensible Priorities, which includes 600 executives from companies like Bell Industries, the Pacific Stock Exchange and the Stride Rite Corporation, issued a report on Pentagon financial practices last May called “No One Is Accountable.”
It concluded: “The Defense Department’s financial management practices would put any civilian company out of business.”
A Move Toward More Control
In the last few months, Congress has moved to assert more control. In the House, Mr. Hunter put provisions in the Pentagon budget requiring more reporting on overruns, allowing for the rebidding of contracts with exceptional overruns and imposing spending caps on some weapons.
In the Senate, the Armed Services Committee has enacted provisions calling for more fixed-price weapons contracts, limiting award fees to contractors and providing for more Congressional oversight of prime contractors on major programs.
The Pentagon’s finances are under increasing scrutiny because the Bush administration has indicated that Pentagon budgets will begin to flatten in 2008. In addition, annual supplemental funding of $100 billion for Iraq and Afghanistan is expected to go away, with the funds to come instead from the Pentagon budget.
A federal budget deficit remaining around $300 billion and the rising demands to support entitlement programs as society ages also mean the Pentagon will have to compete harder for dollars. Inside the Pentagon, the growing gap between available resources and future demands is called the bow wave: a surge of costs that threatens to swamp the Pentagon just as military budgets begin to decline.
Military contractors are aware of these problems, but have little incentive to address them. Critics say contractors fail to object to the Pentagon’s business practices since the industry is paid regardless of the outcome. The industry says its hands are tied.
“This industry is rather unique,” said Norman R. Augustine, a former chief executive of Lockheed Martin Corporation and a former Army under secretary. “It has only one customer, but it is the most powerful customer in the world. It makes and enforces the rules, and if you want to do business with that customer, you do what that customer wants.
“Where the big money is lost,” he added, “is in starting programs and stopping, cutting the budget and then raising it, slowing and then accelerating programs, setting requirements and then revising them.”
Instead, Mr. Augustine said, “what is needed most is to make it extremely difficult to start a new program” and not until “the need is clear, the technology is there and there is money to do the job.”
Critics say the solution is not more money, but a different approach. The Pentagon, they say, is unable to separate wants from needs and approves far more than it can afford.
The Pentagon then sets technical requirements unrealistically high and compounds this problem by trying to rush weapon systems with unproven technologies into production. Rather than producing weapons faster, the opposite effect occurs, as the inevitable technological difficulties lead to cost overruns and developmental delays. In addition, once weapons programs are started, the Pentagon often imposes new requirements, adding further delays and costs.
Frequent turnover in program managers at the Pentagon, as well as a lack of either responsibility or accountability by officials for specific weapons programs, means there are few consequences when programs go astray, the G.A.O. said. It added that lack of accountability can extend to contractors as well.
In the civilian world, development costs are borne by companies themselves. Boeing, for instance, must absorb all the costs of developing a new line of commercial jets before selling them. But pay starts for military contractors even during development of new weapons, and the contractors do not face market forces to get weapons quickly to their customer, the Pentagon.
Nor are contractors held accountable when they underperform. A G.A.O. study in December found that the Pentagon had paid $8 billion in bonus award fees to military contractors regardless of whether performance goals were met.
For instance, contractors on the Joint Strike Fighter, a next-generation fighter jet, received their full bonus award of $494 million from 1999 to 2003, even though the program was $10 billion over budget and 11 months behind schedule.
Contractors in the F-22A fighter jet program, over the same time period, received 91 percent of their performance bonus, or $849 million, even though the current phase of the program was $10 billion over budget and two years late.
Mr. Walker, the comptroller general, said in testimony before the House Armed Services Committee that the Pentagon needed to make it “clear who is responsible for what and holding people accountable when these responsibilities are not fulfilled.”
The biggest program in the Pentagon pipeline is the Air Force’s replacement of its tactical aircraft fleet, primarily F-16’s, with F-22A’s and the Joint Strike Fighter. The combined price tag for the replacement plan is $320 billion, with $75 billion of that already appropriated. But problems are already cropping up from what critics say is a “conspiracy of hope” rather than hard-edged planning.
One consequence of rising costs is that about 4,500 F-16’s and other jets will be replaced by only 3,100 new jets. And as the Air Force waits for its new jets, it has stopped buying F-16’s. This means the newest models are flown by the United Arab Emirates and Poland, which have recently placed large orders.
When it was planned 19 years ago, the F-22A was an ambitious project by any measure. It was to fly invisibly, at supersonic speeds and with the latest in avionics and engines. All this was to counter Soviet threats in air-to-air combat. Initially, the Air Force had planned to spend $82 billion and buy 648 planes.
Since then, the Soviet threat ended and the F-22A encountered numerous cost overruns and schedule delays. The Air Force also added new requirements so the jet could also conduct bombing missions — even though some critics question the feasibility of using an expensive fighter jet that flies at nearly twice the speed of sound to attack ground targets.
In the end, the F-22A is costing nearly twice as much per plane as planned, and the Air Force is getting only one-quarter the number it had initially sought. The cost for each plane has soared to $361 million, making it the most expensive fighter jet ever. It is still not ready for combat.
Fewer Planes for More Money
The Air Force maintains it needs at least 381 F-22A’s to satisfy national security requirements. But the Pentagon has only enough money to buy 181, leaving a shortfall of about 200 aircraft. By contrast, the F-16 fighter jet began as a less ambitious program and was built in four years, using proven technology. It has been flying, with continual upgrades, for 30 years and is considered the most successful fighter jet in history.
Many in Congress are concerned that the replacement for the F-16, the Joint Strike Fighter being developed under a $257 billion program, may not be as cost-effective. Development costs have already risen by $23 billion, or 28 percent. This has caused the Pentagon to cut 400 planes from the program, which is now set for 2,443 planes.
Equally troublesome to critics is that the Pentagon has invested in manufacturing and producing the plane before it has been fully tested. The G.A.O. reports that when initial production of the Joint Strike Fighter begins next January, only 1 percent of its preflight testing will be completed. Longtime Pentagon watchers say that optimism about weapons and budgets is part of its inherent character. But the reality of limited funds and a growing chorus of critics may ultimately force the gap to close between what the Pentagon wants and what it can afford.
“We’ve always wanted to provide the best for our boys and we have been willing to pay for it,” said Mr. Gansler, the former acquisitions under secretary. “The belief has been that next year we will be richer and the budget will climb even more. But now, as the Pentagon has to be more-cost sensitive, you have to question the belief.”
Copyright 2006 The New York Times Company
http://www.nytimes.com/2006/07/11/business/11overruns.html?hp&ex=1152676800&en=6be07cf1a4dbf7f1&ei=5094&partner=homepage
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