A thread highlighting waste in the military industrial complex

[U-Ute]

I thought this would be a fun one... there's always fun stories about $1000 toilet seats...

Here's a good one to start with: A $34 million complex nobody wanted (http://www.washingtonpost.com/world/national-security/a-brand-new-us-military-headquarters-in-afghanistan-and-nobody-to-use-it/2013/07/09/2bb73728-e8cd-11e2-a301-ea5a8116d211_story.html?hpid=z1).

[GarthUte]

Perhaps it was built just in case we need it at a later time.

What a waste of money.

[pangloss]

Predicting the cost of future combat aircraft is easy. But the consequence of extrapolating the curve, even when the correlation is good, would be program termination.

http://tikalon.com/blog/2011/Augustines_law.gif

[Diehard Ute]

Government spending is a funny thing. Congress often points to the B-2 and F/A-22 as projects that cost far more per plane than budgeted. What congress fails to mention is they're the ones that caused the jump.

In both cases they cut the number of aircraft to be purchased by large quantities after production. This caused the most expensive part of a program, research and development, to be spread over a much smaller number of aircraft thus raising the cost per unit significantly.

I think the short sighted nature of politicians, as well as their pet projects to get jobs in their state, causes huge budget issues. This happens all the way down to local levels. Politicians are not people who spend money as if it were their last $10.


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[USS Utah]

First thing I want to know when I see a chart like that is: "Is it adjusted for inflation?"

Could not adjusting for inflation explain, at least in part, the huge gap between the B-52B and the B-52H?

[pangloss]

First thing I want to know when I see a chart like that is: "Is it adjusted for inflation?"

Could not adjusting for inflation explain, at least in part, the huge gap between the B-52B and the B-52H?

It isn't my analysis - I don't know if it is normalized for inflation. My comment about how easy it is to estimate costs is not serious - the services put extraordinary effort into their life cycle cost estimates. Based on their track record, you might think they're not good at it. I do not have that opinion.

The chart is from "Augustine's Laws" - an excellent and satirical book about defense contracting. 'Augustine' is Norm Augustine, the former CEO of Martin Marietta, one-time rumored to be Pres. G.W. Bush's nominee for Sec Def (before Rumsfeld), and the chairman of President Obama's 2009 commission of human space flight. He knows his stuff.

I believe one of the largest causes of unit and program cost growth is mismanagement by DOD program management. One example, they conduct rigorous design reviews, authorize the contractors to proceed, and then direct changes to performance and specifications. Those changes foul the engineering analyses, the schedules, budgets, planning, produciton planning and supply chains. Contractors cannot adequately assess the impact of the changes even after the DOD program offices have directed the change. I don't know if anyone in DOD or the beltway has studied the impact of poor change management, but they should.

Another huge cost growth predictor is whether the program has a "J" in the name. The "J" stands for Joint, as in Joint services. The F35 is also known as the JSF - Joint Strike Fighter. The Air Force, Navy and Marines are all supposed to be happy with the JSF. Each service has unique roles for the fighter and forcing one jet into all three roles is dopey. Don't get me wrong, it is a great jet. But it is now the highest cost program in US history and the J caused an enormous cost impact.


cheers

[USS Utah]

It isn't my analysis - I don't know if it is normalized for inflation. My comment about how easy it is to estimate costs is not serious - the services put extraordinary effort into their life cycle cost estimates. Based on their track record, you might think they're not good at it. I do not have that opinion.

The chart is from "Augustine's Laws" - an excellent and satirical book about defense contracting. 'Augustine' is Norm Augustine, the former CEO of Martin Marietta, one-time rumored to be Pres. G.W. Bush's nominee for Sec Def (before Rumsfeld), and the chairman of President Obama's 2009 commission of human space flight. He knows his stuff.

I believe one of the largest causes of unit and program cost growth is mismanagement by DOD program management. One example, they conduct rigorous design reviews, authorize the contractors to proceed, and then direct changes to performance and specifications. Those changes foul the engineering analyses, the schedules, budgets, planning, produciton planning and supply chains. Contractors cannot adequately assess the impact of the changes even after the DOD program offices have directed the change. I don't know if anyone in DOD or the beltway has studied the impact of poor change management, but they should.

Another huge cost growth predictor is whether the program has a "J" in the name. The "J" stands for Joint, as in Joint services. The F35 is also known as the JSF - Joint Strike Fighter. The Air Force, Navy and Marines are all supposed to be happy with the JSF. Each service has unique roles for the fighter and forcing one jet into all three roles is dopey. Don't get me wrong, it is a great jet. But it is now the highest cost program in US history and the J caused an enormous cost impact.


cheers

"J" stands for irony. The intent was to save money by building one plane instead of two or three (STOVL would mean three). They had tried this before in the 60s with the TFX which led to the F-111. The Air Force got a plane that could drop bombs, but the Navy version was a huge disappointment. In any case, the development of the F-111 was delayed, and so the Air Force decided to buy a variant of a Navy fighter -- the F-4 Phantom.

There might be something worse than the JSF, the LCS. The Navy wanted a smaller ship to operate in the littorals, but reinventing smaller ships with four different mission modules turned into a nightmare, with similar cost growth to the F-35. At least with the JSF, you're going to get a good aircraft, many in the Navy are still not sure if they LCS will provide any value at all.

You are spot on about DOD program management. All I learned about bureaucracy came from reading about came from DOD program management -- and War/Navy Dept. before the creation of DOD.

Still, calculating life cycle costs can't be easy when aircraft continue to fly long past the expected end of their service lives.