Congress reevaluates high-cost defense programs as budget ax looms

Congress is grappling with how to fix a number of high-profile defense programs that are costing taxpayers billions of dollars yet have poor records of success.

Congress traditionally has been averse to canceling defense programs that grow strong constituencies. However, with a defense procurement budget that in recent years has experienced exponential year-over-year growth but that now could be flattening — or even facing cuts — Congress may be forced to quash several technologically complicated programs still in development, according to both congressional sources and outside observers.

Programs in danger may include the Army’s Future Combat Systems and the Joint Tactical Radio System; the Air Force’s Joint Strike Fighter and several satellite programs; and the Navy’s Littoral Combat Ship.

While outright cancellations do not appear imminent in the 2008 defense budget, defense authorizers and appropriators will focus on reevaluating, in some cases redirecting and reprogramming funds.

Defense committees have begun to focus on somewhat less complex and less challenging systems. Too often, congressional sources say, the Pentagon embarks on ambitious programs with even more ambitious deadlines, and as a result forgoes critical early testing and evaluation on technologies.

When the programs enter operational testing and so-called low-rate production, problems crop up, forcing the services to return to the drawing board and incurring cost overruns and delays.

The Army’s Future Combat Systems, which bears a $160 billion price tag, is one example of an ambitious program that is facing intense congressional scrutiny. Lawmakers consistently have criticized the development of the technologies and cut money for the program during the last three years (about $825 million).

“FCS has to be pretty ruthlessly vetted, and we’ll see whether we’ll get all these complicated systems,” the chairman of the Air and Land Forces subcommittee of the Armed Services Committee, Neil Abercrombie (D-Hawaii), said.

He said the Pentagon is focusing too much on “Star Trek”-type military programs and too little on figuring out how to defeat improvised explosive devices, commonly known as road bombs.

“We need to do a little more training and equipping and concentrate on the basics rather than the razzle-dazzle technologies,” Abercrombie said in an interview.

The Department of Defense has plans for “systems that are high-tech and are pushing the envelope, and whenever you do that you take on risk and cost,” said a congressional source who asked not to be quoted by name.

“If you do hard development programs in a short time you have to take smaller bites of the apple, and that would help you with the money problem.”

Former Secretary of Defense Donald Rumsfeld’s aggressive push for transformation across the services could leave the Pentagon with more troubles, according to the congressional source.

This year the Navy had to stop work on the General Dynamics-Lockheed Martin built Littoral Combat Ship after learning that the price of the first LCS (built by Lockheed) would total $420 million, well above the $220 million the service expects to pay for future ships.

Chief of Naval Operations Adm. Michael Mullen told House defense appropriators that the Navy did not adequately oversee the program and has set ambitious goals for it, putting pressure on the program’s costs and schedule. The Navy plans to buy 51 Littoral Combat Ships.

Meanwhile, the Marine Corps is seeking new contractors to develop the Expeditionary Fighting Vehicle (EFV), an all-capable amphibious armored vehicle, which now is prone to breakdowns and technical glitches.

The Marine Corps so far has spent $1.7 billion on the EFV while the total cost of the program rose to about $12 billion from $8 billion, leading to more Pentagon oversight. Contractor General Dynamics received about $80 million in bonuses on the contract.

A Navy study faulted the company for wanting to rush into production rather than troubleshoot the problems. Navy Secretary Donald Winter said the EFV will be reworked, with the focus on improving its reliability.

The EFV program is critical to the Marine Corps. “It would be a very unhappy prospect to have to cancel the EFV,” the congressional source said.

The setbacks with the EFV and the LCS indicate systemic problems in the Pentagon procurement system, said House defense appropriator Sanford Bishop Jr. (D-Ga.) at a recent industry conference.

“Low-ball estimates by contractors, approved by the department, engineering changes by the military and poor contractor performance — all play a role in the LCS situation and, generally, pervade the procurement and contract fulfillment process,” he said.

Bishop also conveyed a message from House defense subcommittee Chairman John Murtha (D-Pa.):

“Low-balling by industry, acquiescence by the Pentagon, poor performance by contractors and little, if any, oversight by Congress will come to a screeching halt! There is a new sheriff in town! The committee is done with rewarding bad behavior and reckless spending that takes away money for other needed programs.”

Defense appropriators said that they want to be supportive of the defense industry. Murtha plans to increase the ship buys to 12 per year and increase the Air Force’s aircraft purchases in 2008 by 100.

The defense industry often complains that program requirements change constantly and details are added after a contract is awarded, increasing the scope of the programs, as well as the cost.

The requirements process is a good place to start to rein in costs and control potential failures, said the congressional source. The Armed Services panels will examine the requirements process — plagued by overambitious requirements or requirements that keep growing.

“A 10-page requirement become a 100-page requirement,” the source said.

The strategy is to focus on the first steps of the acquisition process so that “you do not get into crunch-time in the endgame,” the source said.

Defense insiders say program costs are driven by decisions made as the initial 10 to 15 percent of the work is being completed. The government lacks the technical expertise required to oversee complex programs, and often the testing-and-evaluation community does not see the technologies until they enter low-rate production and so-called operational testing.

Often, developmental testing is skipped. Moreover, weapons-systems testers do not have the authority to halt systems.

Even if the testing is done early, “unfortunately, people do not pay attention to what happens and sometimes they cut the testing short to stay on schedule,” a former Pentagon official who dealt with the issue said.

“There is a lack of discipline in the process and things go ahead when people know that it is not going to work and it is not going to cost that little.”

The Marine Corps V-22 Osprey is a costly and tragic example. The Marine Corps bought more than 60 of the vertical take-off and landing aircraft in low-rate production, running the risk of needing additional funding to incorporate fixes to problems uncovered after their procurement. 30 Marines died while testing the V-22.

The Department of Defense invested about $15 billion in the program during the last 25 years.

“Congress will have to cancel programs,” said Jeff Green, a former House Armed Services Committee professional staff member and former staff director of the readiness subcommittee who recently opened a lobby firm.

“Politically, the corner that the new majority painted itself into” will force it to cancel those programs that will not make it through systems development and demonstration. “The list of programs that are not vulnerable is much shorter,” Green said. He counts the multi-national Joint Strike Fighter as an endangered program as its price tag is increasing; its capabilities are too close to another high-priced fighter, the F-22, and the defense budgets are getting tighter.