Army report: Military has spent $32 billion since ’95 on abandoned weapons programs
By Marjorie Censer, Friday, May 27, 8:00 AM
The Army’s Comanche helicopter was envisioned as “the quarterback of the digital battlefield,” a technologically superior aircraft that could hide from enemies, operate at night and in bad weather, and travel farther than any other helicopter.

Gen. Richard Cody, a former vice chief of staff of the Army, called it the “most flexible, most agile” aircraft the country had ever produced.

In 2000, it ranked as the most important planned buy for the Army. Four years later, the program — which had consumed close to 20 years of work and nearly $6 billion — was abruptly shuttered.

It is one of 22 major Army weapons programs that have been canceled since 1995, ringing up a price tag of more than $32 billion for equipment that was never built. A new study commissioned by the Army, though not publicly released, condemns the service’s efforts as “unacceptable.”

The study is the latest indication that the Pentagon — and the defense industry, in turn — is undergoing a seismic shift in its approach to new programs. As pressures mounted in Iraq and Afghanistan, the military retreated from its ambitions of building multibillion-dollar, technologically superior systems. Instead, it was forced to make better use of tried-and-true equipment.

For almost a decade, the Defense Department saw its budgets boom — but didn’t make the kind of technological strides that seemed possible.

“Since 9/11, a near doubling of the Pentagon’s modernization accounts — more than $700 billion over 10 years in new spending on procurement, research and development — has resulted in relatively modest gains in actual military capability,” Defense Secretary Robert M. Gates said in an address last week.

That outcome, he said, is both “vexing and disturbing.”

Gone are the days of “no-questions-asked funding requests,” he said. The Defense Department must make do with less. It is focusing on fixing up older equipment and taking a more measured approach to weapon development.

The shifting strategies and a shrinking defense budget have triggered the biggest restructuring in the defense industry since the end of the Cold War. Contractors big and small have been rethinking their portfolios and buying and selling accordingly. Northrop Grumman, for instance, spun off its shipbuilding unit. And Robert J. Stevens, chief executive of Lockheed Martin, last week said the company’s workforce, which has shrunk by 20,000 since 2009, “may well continue to decline.”

While the defense industry has always had an unusual business model in which it’s hard to predict future needs, officials say an uncertain trade has become all the more so.

“We can invest and make a great product and set a good price point, but demand is completely out of our control,” said Linda Hudson, who heads BAE Systems’ Arlington-based U.S. operations.

In recent years, the Pentagon has killed off some of its most heralded — and most pricey — weapons programs, and many of those that remain are not certain to move forward. In some ways, this represents a market correction — and a realization that the Defense Department has to live within its means and buy weapons it can afford.

“We’ve had 10 years of wars. We’ve had a fair amount of money available to the department,” said Thomas Hawley, deputy undersecretary of the Army. “It’s just time now, with at least one war winding down and another we hope will be winding down and funding definitely coming down, to take a pause, relook where we are and go forward from there in a thoughtful way.”


Cold War mentality


As the Army began developing the Comanche helicopter in the 1980s, it was riding high on the success of what are known as the “big five” major weapons systems: the Abrams tank, Bradley infantry fighting vehicle, Apache attack helicopter, Black Hawk utility helicopter and Patriot missile system, all of which are used today.

The Army, launching the Comanche with the Cold War in mind, imagined a new kind of helicopter able to stealthily detect well-equipped enemies. After a complex acquisition process, the military commissioned the team of Boeing and Sikorsky to build the Comanche. The Army eventually settled on buying 650 Comanches for about $39 billion.

But as the Army entered unconventional wars in Afghanistan and Iraq, it suddenly didn’t need the best, most capable system available; it simply needed aircraft — and fast.

“The Comanche helicopter was a good helicopter. . . . We hadn’t had one like that before,” Hawley said. “It just was eating so much of the budget.”

Nearly $6 billion was already spent, but the Army and the Pentagon agreed that if the program were canceled, the service could redirect the roughly $15 billion budgeted for the Comanche over the next seven years to aircraft already in production, such as Apache and Black Hawk helicopters and unmanned drones.

The Army ultimately bought hundreds of new helicopters and drones. It redirected $2.2 billion to Black Hawks, more than $2.2 billion to the successful Apache program and almost $1.5 billion to fixing older Chinook aircraft, according to Army budget documents.

The cancellations have not stopped there. The helicopter developed to replace Comanche — known as the Armed Reconnaissance Helicopter program — was abandoned in 2008 after its price ballooned well past its budget. According to the Army study, that second effort cost another $535 million.

Shift to future combat

More recently, the Army experienced its steepest loss with the end of its Future Combat Systems (FCS) effort, billed as the Army’s most important and transformative modernization initiative. The complex program included a family of manned vehicles, a range of unmanned air and ground systems and sophisticated radios, all tied to a single network and intended to give soldiers a superior view of the battlefield. The idea was that the Army wouldn’t lose a fight if it could see everything its enemy was doing.

Launched at the tail end of the 20th century, the program faced serious technological failures. At the same time, Pentagon leaders, including Gates, began raising fundamental concerns about whether the systems would be successful in wars like Iraq, a campaign of hearts and minds in which the enemy fought amid a civilian population with unsophisticated but lethal weapons — the homemade bomb that could destroy a Humvee.

The FCS program was slowly dissolved. The loss was monumental — $19 billion as calculated in the Army’s new study, making it by far the single most expensive cancellation.

Explaining his decision to cancel the program in 2009, Gates called FCS “a revolutionary concept.”

“My experience in government is, when you want to change something all at once and create a whole new thing, you usually end up with an expensive disaster on your hands,” he said. “Maybe Google can do something revolutionary, but we don’t have the agility to do that.”

Gates set out to single-handedly upend the traditional idea of how the military develops and buys its largest weapons. In speeches around the country, he floated the “80 percent solution” of affordable systems that worked well enough — a sea change from the previous focus on the 99 percent “exquisite” platform.

He criticized the military, saying it had believed for far too long that “Iraq and Afghanistan were exotic distractions that would be wrapped up relatively soon,” meaning the services did not need to change their buying processes or dismantle long-range procurement plans.

And Gates has marched ahead. This year, he terminated the Marine Corps’s Expeditionary Fighting Vehicle and said the service would spend the money to fix up the equipment it was designed to replace.

At the same time, the military has directed ever more attention to burgeoning information technology areas, such as cybersecurity.

Systems of systems

The end of major weapons programs is clearly linked to the pressures on funding and demand created by the wars in Afghanistan and Iraq. But analysts also point to the scope of the programs.

Loren Thompson, a defense industry consultant at the Lexington Institute, blames the failures on the complexity the military sought in modern programs. It was no longer content to build fairly straightforward weapons such as tanks or helicopters. Instead it sought to produce what it calls “systems of systems,” or weapons that include a wide array of other high-tech systems.

For instance, a tank wouldn’t just shoot; it would also allow soldiers to view the battlefield, see the status of other weapon systems and communicate with other soldiers.

“Anything that is a system of systems is probably too complicated to execute in our political system,” Thompson said. “The technology takes too long to develop, and the political system runs out of patience.”

The Army often thinks too big when designing its programs, said the new study, a wide-ranging analysis chaired by Gilbert F. Decker, a former Army acquisition chief, and retired Gen. Louis C. Wagner Jr., who headed Army Materiel Command. The study, which relies on interviews with more than 100 former and current officials, points to the service’s failure to properly set the parameters for new equipment.

A segment of the military wants program baselines to “only state the operational need and not be constrained by either technology or cost,” the study said.

The military in general is often viewed as too optimistic in its acquisition efforts; J. Michael Gilmore, the Pentagon’s director of operational testing, recently dubbed the Defense Department “the Department of Wishful Thinking.”

In reality, the most successful programs in recent years were those based on existing designs and machinery that wasn’t perfectly customized for the Army. For instance, just four years after announcing the program, the service deployed Strykers, a set of lighter vehicles meant as interim systems while new, more capable systems were developed.

And after soldier casualties and injuries related to roadside bombs in Iraq began to climb at an alarming rate, the Pentagon and the service rushed Mine Resistant Ambush Protected vehicles, or MRAPs, into the field. The trucks, which were built more quickly than any other system in modern history, were heavily armored and equipped with a V-shaped bottom designed to deflect the impact of roadside bombs. The Pentagon has credited them with saving countless lives in Iraq and Afghanistan.

Marching ahead

Now, the study calls on the Army to look closely at its program parameters to ensure officials take into account actual funding and the challenges of building the technology.

The report recommends a slate of steps for the Army, including investing in a more qualified staff and making an effort to better learn from its failures. It pushes for more collaboration within the Army and with industry and suggests adding personnel at the Army’s research commands.

The Army reported this month that it has implemented virtually all of the recommendations.

Even as the military weighs future plans, it has several big developmental programs underway. The Army is working on a next-generation Humvee, a top-of-the-line vehicle meant to satisfy a nearly impossible balance — being light enough to travel easily but protected enough to stave off roadside bombs. Analysts have raised questions about whether that program will survive as the price tag continues to grow, reaching about $320,000 per vehicle, according to the Congressional Research Service.

The Pentagon “doesn’t quite know what it wants to do,” said David Berteau, senior adviser and director of the Center for Strategic and International Studies’ defense-industrial initiatives group, of the choice between high-tech programs developed the traditional way and “good enough” procurements.

But Berteau said the Defense Department will have to decide “rather than pretend you can pay for everything.”

Gates has called on the military to balance the choice between good-enough solutions for war and high-tech programs that take years to produce.

“Our guiding principle going forward,” he said, “must be to develop technology and field weapons that are affordable, versatile and relevant to the most likely and lethal threats in the decades to come, not just more expensive and exotic versions of what we had in the past.”