Sound Policy, Awful Execution

After more than four decades of supposedly well-structured defense planning and programming, and numerous studies aimed at reforming its multibillion-dollar acquisition system, the Pentagon’s decision process governing the defense establishment is clearly broken.

We need far-reaching, even radical, remedial initiatives that focus on realistic cost estimates and tough adherence to development and testing schedules. The evidence supporting the need for drastic action abounds.

Despite the largest defense budgets in real terms in more than 60 years, the United States has a smaller military force structure than at any time during that period, one that is equipped to a great extent with worn-out, aging equipment.

Granted, the employment of U.S. forces in Iraq and Afghanistan has contributed to the wear and tear on combat and support equipment, particularly for ground forces. The bill for repairing and replacing that equipment (reported to be in the hundreds of billions) is mostly yet to be faced.

More to the point, this only exacerbates the already severe modernization problems faced by all three services. Those problems have been on the horizon for decades and would have plagued our forces even if the war on terror had not evolved as ruinously as it has since 2001.

A fundamental source of the Department of Defense’s problems is the historically long pattern of unrealistically high defense budget projections combined with equally unrealistic low cost estimates for new programs. This leads DoD leaders to claim they can afford the weapons they want and reduces the urgency to make necessary hard choices on new systems.

Thus, Pentagon decision-makers front-load the first year of the Future Years Defense Program (FYDP), the annual budget request submitted to Congress, with too many unrealistically priced weapon programs. The assumption of larger budgets in the later years, coupled with an allocation of funding biased toward investment, provides a misleading picture of the total money available for developing and buying new weapons.

The further assumption of sharply declining weapon unit procurement costs permits even more weapons to be stuffed into the later years of the investment plan, a phenomenon known in the Pentagon as the “bow wave.” Planners tolerate low production rates in the early years because the rising bow wave, coupled with the assumed reductions in unit costs, promises higher, more efficient rates in the later years.

By the last year of the FYDP, according to this scenario, the DoD gets well: More complex weapons are produced at much higher rates; forces are larger and more modern; training tempos are higher because the new equipment is assumed to be more reliable and easier to maintain; and large quantities of spare parts and ammunition flood into the stockpile.

Despite the disastrous track record, the basic policies and directives DoD has on the books, particularly for its acquisition process, are fundamentally sound.

They incorporate more than four decades of experience and the findings of numerous reviews. The real problem is that major acquisition decisions over those years have not reflected adherence to those policies and directives.

Too often, Pentagon acquisition officials have approved low-balled estimates of the costs and time required to deliver new capabilities, even when independent assessments are obviously more realistic. By the time the technical and cost realities come to the fore, few, if any, of those involved in the process can bring themselves to admit they were wrong, to cut their losses before inevitable further cost growth and schedule slips, or to make an example of program officials and their contractors who have sold the department and the taxpayers a bill of goods.

By the time these problems are acknowledged, the political penalties to be paid for enforcing any major program restructuring, much less its cancellation, are too painful to bear. Unless someone is willing to stand up and point out that the emperor has no clothes, the U.S. military will continue to hemorrhage taxpayer dollars and critical years while acquiring equipment that falls short of meeting the needs of the troops.

Clearly, informed management attention and discipline at the front end of the process and due consideration of independent assessments of cost and performance throughout the development and testing process would go a long way to solving the problems plaguing defense acquisition.

There’s nothing new here — time and again, major defense management reviews have come to the same conclusions. It’s high time decision-makers take these findings seriously and make them an integral part of their program review and decision process.

Without such hard-nosed discipline and deference to realistic budget projections and program costs, any confidence that DoD’s force structure and modernization goals can be achieved (even with increased spending) is sorely mistaken.

Our forces will continue to shrink and age and become less ready to fight, all at sharply in creasing budgets — which the new 2010 budget, just wrapped for packaging to President Barack Obama on January 21, makes obvious for any who care to see.

THOMAS CHRISTIE is the former director, Operational Test & Evaluation, in the U.S. Defense Department. This commentary summarizes his chapter in a new anthology, “America’s Defense Meltdown: Pentagon Reform for President Obama and the New Congress,” just released by the Center for Defense Information, Washington.