Reforming America’s defense procurement

Hawks and doves agree U.S. military spending needs a serious, systematic review, but widespread conflicts of interest present a major challenge.

By Douglas A. Samuelson

The M1 Abrams tank entered service in 1980. Does the U.S Army need a newer version? Source: Department of Defense

The M1 Abrams tank entered service in 1980. Does the U.S Army need a newer version? Source: Department of Defense

Hawks and doves can agree on one conclusion: U.S. military spending needs a serious, systematic review. The world’s dominant military power is also, by far, the biggest spender on defense-related acquisition and activities. The United States is also a major supplier of arms and training to other countries. But is the United States buying the right capabilities, in the right amounts, and in the best way to avoid waste and abuse? Many knowledgeable people think not.

This issue isn’t about well-publicized claims that the military paid several hundred dollars each for hammers and toilet seats and coffeemakers. Some of these stories came from misinterpretations of accounting; a major contractor was instructed, part way through a big system procurement, to show its overhead costs by budget line item. Having made no such accounting setup from the start, they simply took their calculated overhead cost and divided it by the number of line items. Thus both the hammer and the airframe got allocated about $400.

The coffeemaker, on the other hand, really did cost several hundred dollars. Pilots flying long missions find it very helpful to be able to make coffee in flight. However, as one veteran Air Force pilot dryly told this reporter, “Your basic Mr. Coffee doesn’t hold together very well in a four-g turn, and getting coffee sprayed all over yourself while flying isn’t desirable.”

Is the F-35 joint strike fighter a good all-purpose fighter and attack aircraft, or an expensive boondoggle? Source: Department of Defense

Is the F-35 joint strike fighter a good all-purpose fighter and attack aircraft, or an expensive boondoggle? Source: Department of Defense

Of course some items cost more than they should. But the bigger issue is whether certain items should be bought at all, and if so, how many. Do we need a newer version of the Abrams tank? Do we need to buy more C-17 cargo aircraft than the Pentagon says it needs? Do we need a new strategic bomber? Is the F-35 joint strike fighter really a good all-purpose fighter and attack aircraft, or an expensive boondoggle that serves none of its intended purposes well?

Focusing on cost-cutting actually appears to obscure more important questions. Frank Kendall, undersecretary of defense for acquisition, technology and logistics, recently presented an analysis of cost overruns and management errors over the past 30 years. He concluded that procurements tend to be less well managed and produce worse results during times of tight budgets. “When funds are tight,” he explained, “people tend to be more optimistic about what can reasonably be done. Procurements run without severe budget constraints tended to be run more realistically.” He also noted that good people are vital to having programs run well, and recruiting and retaining the best people is more difficult in lean times.

A More Critical Viewpoint

Some critics go further. As a reporter for the Chicago Daily News and then Knight Ridder Newspapers for nearly 40 years, Jim McCartney was deeply versed in military and related industrial affairs. He covered military spending for nearly 30 years and eventually wrote most of a book about it: “America’s War Machine: Vested Interests, Endless Conflicts.” His widow completed the book after he passed away in 2011. In it, they made a cogent case that President Eisenhower’s warning, in his farewell address, about the influence of a growing “military-industrial complex” was all too accurate, with terrible effects on U. S. foreign policy and domestic spending priorities.

The book documented a number of major systems procurements in which suppliers had strong interests in pushing for certain systems and for making more of them after the Pentagon believed the United States had enough. These companies make large campaign contributions and employ large numbers of lobbyists. They distribute production sub-tasks among numerous Congressional districts, so many representatives and senators stand to gain jobs for their districts by having production continue.

In some cases, the McCartneys went on to argue, both military leaders and industry have such a strong incentive to initiate and continue large programs that they slant intelligence estimates to overstate threats the country faces. Then the possession of new weapons creates an incentive to use them and to encourage other countries to do so.

Production of the A-10 Thunderbolt has been discontinued. Is a new version on the way? Source: Department of Defense

Production of the A-10 Thunderbolt has been discontinued. Is a new version on the way? Source: Department of Defense

This is obviously a strong and controversial point of view. However, this book, paradoxically, will be of particular interest and value to readers who disagree with its main conclusion – that is, readers who support continuing and growing U.S. projection of force and influence. The authors presented compelling and detailed evidence of collusion and lobbying by major defense contractors to influence not only procurement, but ultimately also the military capabilities the U.S. will have and hence its readiness to commit to proposed courses of action. When the mix of capabilities, a vague policy objective and military careerism intersect, military leaders tend to push policy toward conflicts that will advance careers by providing combat experience without risk of large-scale defeats. In such a climate, industry is easily induced to produce more of what the current leaders know and like. Indeed, large industrial firms mount intensive lobbying efforts not only to help them win contracts, but also to influence what kinds of procurements are chosen – and hence what conflicts the United States will regard as acceptable.

Influences on Policy

The idea that lobbying over procurement and career advancement can end up wrongfully influencing policy is neither a new nor a radical point of view. H. R. McMaster meticulously documented just such an assessment of the decisions that led to the United States war in Vietnam, partly in response to what he saw as a whitewash in former Secretary McNamara’s retrospective. His critique of a culture of self-serving decisions and slanted intelligence assessments by senior military leaders and their civilian superiors, pushing the country toward the wrong war approached in the wrong way, was scathing. That he remained in the Army and is now a lieutenant general is testimony to the persuasiveness of his reasoning as viewed by his fellow officers.

In addition to McMaster’s analysis of careerism and self-interest, some observers might suggest that the Vietnam debacle may have been made more likely by the shift in approach, early in the Kennedy administration, away from an emphasis on massive nuclear deterrence toward more capability to fight small wars. The relationship between what leaders think we should be able to do and what we end up doing seems to call for more thinking – and thinking not overly influenced by the few big firms that dominate procurement.

Following the McCartneys’ line of thought, it is clear that the current decision-making system will tend to favor missiles and airplanes over such promising approaches as village stability operations (VSO), described earlier this year in Analytics magazine [6], because VSO doesn’t generate production jobs in numerous congressional districts – and because the results take longer and are harder to see.

Similarly, this reporter has heard harsh complaints from Army and Marine commanders about the Air Force’s long-expressed desire, now fulfilled, to discontinue producing the A-10 assault and observation aircraft. This preference by the Air Force came about at least in part because its pilots would rather fly airplanes better suited to air-to-air combat and less suited to the A-10’s strength – observation to aid and support artillery and ground forces. This reporter has also heard assertions by Air Force analysts that this shift indicates a growing belief that future engagements should rely more on air power and less on ground forces – a shift in tactics closely related to a shift in available resources if ever there was one. Note that this shift in approach does not appear to have involved much assessment of which tactics are actually most effective.

New Missions and Threats

Now, however, there is the additional issue that new missions and threats may require technology quite different from the big firms’ expertise, so the current procurement system tends to be biased against needed innovation. Even defining what the missions and threats of greatest interest might be takes the conversation in directions away from what it has been – and hence away from the currently identified and trusted expertise. If new approaches are needed, are the masters of older approaches the best parties to evaluate which new approaches are good? If not, then who? As Michelle Flournoy, a co-founder and current CEO of the Center for a New American Security who also served as undersecretary of defense for policy, 2009-2012, conceded in response to a question at an event to launch a new report on U.S. strategy, “How to involve newer, smaller providers and promote innovation is a big ongoing concern, and nobody really knows how to address it effectively.”

Again, cost-cutting concerns add to the difficulty. In recent years, many contracting offices have moved away from support contracts focused on providing good analysts to support multiple tasks over several years, to contracts that have vendors compete task by task. This pushes vendors to bid the minimum qualifications needed for each task, pushing out the most experienced people and disrupting continuity. On the other hand, “Just keep going back to the people who did well before” can be either a wise approach to making use of acquired knowledge or another formula for stifling innovation. Different contracting approaches are needed, and some senior officers and managers are grappling with the issue – but this looks like a good opportunity for systematic analysis, if someone can develop and support a way to identify and compensate the right people to do it.

Whether the United States fights too many wars, and the wrong ones, is one issue; whether it is preparing properly for the necessary missions (including humanitarian relief, a major component of the U.S. military’s activities) is another. The McCartneys’ book did not grapple with the latter issue but provides excellent background to do so. Humanitarian relief and stability operations utilize different resources from either conventional or asymmetric combat. For example, one reason for the bad outcome after the quick victory in Iraq in 2003 is that the optimization of logistical activity in support of combat operations had left the United States and its allies short of trucks, among other resources, to support restoring civilian services.

It has also been well argued previously (Elliot Cohen’s book is one of the most widely praised examples) that civilian leaders need to pay less attention than they usually do to how the military might carry out a mission and more to how the military leadership frames its analysis of what to recommend. The McCartneys’ book provides much information to support challenges to the usual assumptions – again with the caveat that one need not agree with their main point of view to find the information valuable. At least the discussions would be worth having. In short, the development of many entrenched interests is complicating both the assessment of national needs and the procurement of the means to address those needs. OR/MS analysts who have taken the time to become familiar with the details of these issues should find no shortage of opportunities to apply their expertise for the good of the country. Finding a receptive audience at the senior policy levels, however, may prove to be the biggest challenge of all.

Douglas A. Samuelson (samuelsondoug@yahoo.com) is president and chief scientist of InfoLogix, Inc., a small R&D and consulting company in Annandale, Va.
References

  1. Center for a New American Security, “Extending American Power: Strategies to Expand
  2. U.S. Engagement in a Competitive New World Order,” May 16, 2016. Available online from www.cnas.org
  3. Elliot Cohen, “Supreme Command: Soldiers, Statesmen and Leadership in Wartime,” Free Press, 2002.
  4. James McCartney with Molly Sinclair McCartney, “America’s War Machine: Vested Interests, Endless Conflicts,” Thomas Dunne Books, St. Martin’s Press, 2015.
  5. H. R. McMaster, “Dereliction of Duty: Lyndon Johnson, Robert McNamara, the Joint Chiefs of Staff, and the Lies that Led to Vietnam,” Harper, 1996.
  6. Robert S. McNamara and Brian VanDeMark, “In Retrospect: The Tragedy and Lessons of Vietnam,” Vintage, 1996.
  7. Douglas A. Samuelson, “Changing the Game: How to Defeat Violent Extremism,” Analytics, January-February 2016.
  8.  “The State of Defense Acquisition,” Center for Strategic and International Studies (CSIS) briefing by Frank Kendall, May 10, 2016; may be viewed online at www.csis.org/events/state-defense-acquisition