Weapons Are Far Over Budget
Saturday, April 8, 2006
Significant cost overruns affect 36 of the Defense Department's major weapons systems, including key fighter-jet, ship and satellite programs, according to a Pentagon report released yesterday.
The report, based on year-end figures, said 25 programs -- including three satellites, the Army's Future Combat System and upgrades of the Bradley Fighting Vehicle and two helicopters -- had cost increases of more than 50 percent from their initial estimates.
Eleven programs, including the Joint Strike Fighter, the F/A-18 Navy fighter, a new submarine and two chemical demilitarization programs, now cost at least 30 percent more than their original estimates.
The number of programs on the list with significant cost increases is higher than usual because of a change in the reporting requirement directed by the House and Senate Armed Services Committees, which had expressed concern that the military was hiding overruns by shifting the "baselines" used to measure program costs.
Rep. Duncan Hunter (R-Calif.), chairman of the House Armed Services Committee, said in a statement that the new reports will serve as "warning lights in the system" that give the committee "a basis to analyze the true costs of programs."
John W. Douglass, president of the Aerospace Industries Association, called reporters earlier this week to explain ahead of time that the new requirement was the reason for the new numbers, "not some big massive wave" of cost increases. His trade group, which represents many of the major defense contractors, wants the Pentagon to keep evaluating programs against current, rather than original, cost estimates.
The Pentagon's system of acquiring major weapons has been the subject of study and criticism for at least 20 years. Hunter, at a hearing of his committee on Wednesday, cited what he called the "pretty severe case of sticker shock" members got when they saw that the next Navy destroyer is estimated to cost $3 billion per ship, and the next aircraft carrier $14 billion.
David M. Walker, head of the Government Accountability Office, which has issued scores of reports documenting cost overruns, was particularly blunt. He said the Defense Department "has a long-standing track record of overpromising and underdelivering with virtual impunity." Earlier this week, the GAO reported that the cost of the Future Combat System, a network-connected group of ground and aerial vehicles and robots that will become the backbone of the Army, rose 76 percent in one year.
The Pentagon's "continued inability or unwillingness to separate wants from needs, incur cost increases of tens of millions of dollars and schedule delays of years must be scrapped," Walker said. "This business-as-usual approach is inappropriate and should not be tolerated."
Defense officials said the Pentagon is trying to address surging costs. Kenneth J. Krieg, undersecretary of defense for acquisition, technology and logistics, described several actions the department is taking, including quicker termination of systems that were over budget and behind schedule.
Adm. Edmund P. Giambastiani Jr., vice chairman of the Joint Chiefs of Staff, cited the recent decision to terminate an electronic jamming program for the B-52 bomber after its cost rose to $7 billion from $1 billion because Air Force and industry experts added expensive capabilities that were not part of the original requirements.