Nearly 7 in 10 major U.S. arms programs over budget

[Richard]

And so it goes... ;)

How's this for gobbledygook purple suit procurement speak. :rolleyes:

Richard's $.02 :munchin

Nearly 7 in 10 major U.S. arms programs over budget
Jim Wolf, Reuters, 30 Mar 2009

Nearly 70 percent of the Pentagon's 96 major weapons-buying programs were over budget in 2008 for combined cost growth of $296 billion above original estimates, congressional auditors said in an annual report released on Monday.

The total estimated development cost for 10 of the largest acquisition programs, commanding about half the overall arms- purchasing dollars in the portfolio, has shot up 32 percent from initial estimates, from about $134 billion to more than $177 billion, the Government Accountability Office said.

The two largest programs -- Lockheed Martin Corp's F-35 Joint Strike Fighter aircraft and the Boeing Co-led Future Combat Systems Army modernization -- "still represent significant cost risk moving forward" and will dominate the portfolio for years, the survey said.

Ashton Carter, the Obama administration's choice to become the Pentagon's top arms buyer, told his Senate confirmation hearing on Thursday he would go program by program to crack down on cost overruns if confirmed.

Of those reporting relevant cost data, 69 percent, or 64 programs, chalked up increases in total acquisition costs, the GAO said.

A total of 75 percent, or 69 programs, reported increases in research and development costs and these were 42 percent above their original estimates in 2008, up from 40 percent above the year before.

At the same time, the average delay in delivering weapons' "initial operating capabilities" rose to 22 months from 21 months, the seventh annual survey of its kind showed.

Cumulative cost overruns for major U.S. Defense Department acquisition programs, or $296 billion, were down slightly from 2007 when adjusted for inflation, the auditors said.

GAO said new programs in the portfolio were performing better than older ones.

Last year, GAO reported total acquisition cost growth for the 2007 portfolio was $295 billion in fiscal 2008 dollars. Now expressed in 2009 dollars, this figure was put at $301 billion in the new report.

Since 2003, the Pentagon's portfolio of major acquisition programs has grown from 77 to 96, with investment in them swelling from $1.2 trillion to $1.6 trillion in fiscal 2009 dollars, the GAO said.

The change in the makeup of the 2008 portfolio is one of the reasons for the $5 billion decrease in total acquisition cost growth over the last year.

Three programs left the mix, knocking $15.6 billion off total cost overruns, the GAO said. The three were the Evolved Expendable Launch Vehicle, which involves rockets built by Lockheed Martin Corp and Boeing; Northrop Grumman Corp's E-2C Hawkeye battle-management aircraft; and Raytheon Co's Land Warrior infantry modernization project.

The cost of the new and remaining programs in the 2008 portfolio has increased by about $10.7 billion since last year, even though quantities have been cut 25 percent or more for 15 of the programs, GAO said.

"The time for change is now," Gene Dodaro, the acting U.S. Comptroller General said in a cover letter to Congress.

He said it was essential to eliminate underperforming or lower-priority programs by completing or canceling them.

http://news.yahoo.com/s/nm/20090330/ts_nm/us_arms_usa_audit_1

[Razor]

I'm curious to find out how many times the customer modified its initial capability requirements during the development of the programs that are overbudget and overtime.

When program rules include "after the formal cut off for you to tell us what you want, you can't change it in any way, for any reason until final delivery of the product", then I'll get upset over cost and timeline overruns.

[The Reaper]

Gold plating?

TR

[Sigaba]

This type of reporting fills me with ambivalence.

On the one hand, it is hard to disagree with folks like Paul Kennedy who have argued that understanding war must be grounded in an understanding of how armed forces are funding and how weapons systems are financed.*

On the other, I agree with those who have pointed out that taking a bottom line approach to evaluating weapons systems is not a good way to measure the military effectiveness of this platform or that weapon system.**

The debate over the navy's plan to modernize the fleet during the Carter and Reagan administrations provides an example of how these two sensibilities can result in Americans talking past each other instead of to each other. During this interval, the Congressional Budget Office published numerous reports that explored the costs of modernization.*** These reports formed the basis of opposition to the navy's plan among members of congress who, for a variety of reasons, favored other options.

Yet, these opposing views, because they focused on economic costs, frequently did not address coherently the strategic benefits or shortcomings of fleet modernization. In my view, the inability (or unwillingness) of some opponents of naval expansion to go beyond economic calculations undermined the debates over naval policy and strategy between 1975 and 1988.

__________________________________________
* Paul Kennedy, The Rise and Fall of the Great Powers (New York: HarperCollins, 1989) makes this point in great detail. See also Jon Tetsuro Sumida and David Alan Rosenberg, “Machines, Men, Manufacturing, Management, and Money: The Study of Navies as Complex Organizations and the Transformation of Twentieth Century Naval History,” in Doing Naval History: Essays Toward Improvement ed. John B. Hattendorf (Newport: Naval War College Press, 1995).
** The concept of military effectiveness is developed and explored in Allan R. Millett and Williamson Murray, eds. Military Effectiveness, 3 vols. (Boston: Unwin Hyman, 1988). Russell Weigley offers a surprisingly caustic view on the influence of bourgeois sensibilities on the development of naval warfare in The Age of Battles: The Quest for Decisive Warfare from Breitenfeld to Waterloo (Bloomington and Indianapolis: Indiana University Press, 1991).
*** Examples include Congressional Budget Office, Costs of Expanding and Modernizing the Navy’s Carrier-Based Air Forces (Washington, D.C.: Congressional Budget Office, 1982); and Congressional Budget Office, Future Budget Requirements for the 600-Ship Navy (Washington, D.C.: Congressional Budget Office, 1986).