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A Rising Tide Of Defense Dollars

Travel Trailers These are flush days for America's defense contractors. With Washington planning to spend close to a trillion dollars on new weapons systems over the next decade, stock prices are soaring at companies like Lockheed Martin, Raytheon, Northrop Grumman and General Dynamics. Skilled engineers, including many who flocked to Silicon Valley in the 1990's, have switched to companies specializing in military technologies.

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Travel Agency Unfortunately, if the past is any guide, billions of dollars will be wasted and misspent. Almost every time the Pentagon has gone on a spending spree, the cost of new weapons has far exceeded initial estimates, unexpected production problems have defeated delivery deadlines, and inadequate auditing by the government and the defense contractors has permitted a reckless use of taxpayer money. Too often expensive weapons have failed to perform as advertised. There is no sign that the Pentagon or arms makers are better prepared to manage the coming tidal wave of military spending. Major reforms are needed before the bulk of the new money starts flowing over the next few years.

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Last Minute Travel Part of the problem lies with Congress, where fat defense contracts are too often viewed merely as job creation programs. Defense Secretary Donald Rumsfeld would probably have long ago killed the Army's expensive and unnecessary Crusader artillery system if it were not for lobbying by lawmakers from Oklahoma, where the weapons are being assembled.

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Aloha Airlines The Pentagon's complex organization, opaque accounting and unbusinesslike purchasing habits also work against cost-effective spending. Weapons requests tend to flow upward from the individual services rather than downward from any kind of rational master plan. That results in large expenditures on overlapping systems, like three separate new tactical fighter programs. Mr. Rumsfeld can also find himself working at cross-purposes with his own service secretaries, as apparently happened in recent days when Army Secretary Thomas White tried to alert Congressional supporters of the Crusader that the defense secretary wanted to cancel the program. Two of the three current service secretaries are former defense industry executives. Mr. White comes from Enron.

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Travel Agent The traditional procurement system also tends to shortchange testing and research in order to rush weapons into production, but such weapons often wind up not working as planned. That serves the interests of defense contractors, who make most of their money after production contracts are signed, but it can mean increased costs for taxpayers and unexpected problems for troops in the field. Contractors also commonly inflate costs by making artificially low initial bids and then submitting higher estimates later on, when it is hard for the Pentagon to switch to another supplier.

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Travel Agents Strong leadership is urgently needed from Mr. Rumsfeld to stand up to these pressures. He must impose greater discipline on the service secretaries, face down Congressional advocates of ill-conceived programs and accelerate efforts to rationalize Pentagon accounting systems. He must insist that defense contractors submit more realistic cost estimates, and he needs to make far more aggressive use of the Pentagon's power to cancel programs plagued by serious cost overruns. That authority was legislated by Congress two decades ago but was used for the first time late last year. Last week, the Pentagon singled out six more overbudget weapons systems for possible cancellation, but it granted them a reprieve of at least six more months.

Discount Airfares In the days ahead Mr. Rumsfeld needs to summon the political nerve to cancel chronically troubled programs like the Marine Corps V-22 Osprey, which is a vertical-takeoff transport plane, and duplicative purchases like the Air Force's F-22 fighter, along with cold-war-style weapons, like the Crusader, that do not fit the military's 21st-century needs. Even with the substantially increased defense budgets now projected, the Pentagon will eventually have to cancel many of these weapons to pay for future needs. Postponing those decisions will only make them harder.

Travel Deals New York Times - 5/5/2002

Topic: Military & War

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