Damn the Dollars! Full Speed Ahead!

The GAO recently reported that U.S. government contract obligations are at an all-time high. For its part, DoD pimped $315 billion of the $532 billion committed in FY 2007. The GAO also found that a chunk of change has being squandered because of poor contract management. It is feared 2008 might set another record.

To quote the Air Force: Aim high!

So what’s the correlation between increases in defense contract spending and program cost overruns? Are they proportionate? Unrelated? Are they just fun facts for the Tom Daschles of the world who choose not to pay their taxes?

The defense contracting spree is probably no surprise given operations in Iraq and Afghanistan. The services also have been upgrading equipment. But the cost overruns, well, they are big and they are plentiful. Call us simplistic, but aren’t the overruns killing some badly needed programs?

Here are some examples of Gear Gone Wild:

• DDG 1000. The most stunning might be the Navy’s USS Zumwalt, though we prefer to call Uncle Elmo’s namesake “the flipped ship to nowhere.” Costs have ballooned a reported 550 percent with the cost per ship recently estimated at $3.3 billion. However, the move to stop the bleeding at just three ships has shot costs to nearly $6 billion per vessels. Options are under review. Fathom that one.

• LCS. The Navy’s littoral combat ship (LCS) program, a perennial fave and offender, has watched costs go from the overly optimistic bids of $220 million to $550 million or more a ship.

• F-22. The Air Force’s Raptor clocks in at $361 million per aircraft according to the GAO or $140 million a bird (depending on accounting method). Either way, “Rapture” could break the bank, even if the bank prez is the U.S. Air Force.

MRAP. It was recently reported that the Few and the Proud might have spent too much on their mine-resistant ambush-protected vehicles. The DoD inspector general found that the Marine Corps Systems Command failed to determine if the pricing was “fair and reasonable” when it awarded a number of firm-fixed price contracts. (Each service has had issues with procuring these vehicles pushed by Big Brother at OSD.)

• Marine One. Lockheed Martin Corp. is over budget on the presidential helicopter, a contract it won against odds-on favorite Sikorsky. The contract for a fleet of 28 Marine One birds started at $6.1 billion. But there has been trouble in paradise, and delays and engineering issues have pushed the program at least 50 percent over budget, according to The Wall Street Journal and other outlets. The article cites that the Navy, which oversees the contract, has been going at it with Lockheed over “hundreds” of changes. Though not a service that typically embraces change, the Navy loves to alter specs and dollars be damned! (See LCS above.)

• Growler. This Marine Corps’ vehicle, which looks more like a Leisure World cart (or the recycled M151 jeep that it appears to be), is 120 percent over budget. Costs for the vehicle went from $94,000 to $209,000. But the real money is in the trailer Growler needs to transport (get this) mortars and ammo. Costs jumped 86 percent from $579,000 to more than a million. We doubt these things will see action in Iraq or Afghanistan, but could end up on base golf courses around the United States.

“Damn the dollars and aim high,” said the few and the proud as the Army kept rolling along.

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