Defense Department Comptroller Hale: The Joint Strike Fighter is an Angsty Teenager

Just finished a blogging round table call with Defense Comptroller Robert Hale (transcript to be posted at that link soon) to answer questions about the proposed budget for the Department of Defense (DoD). Not many huge revelations: DoD is still working on improving financial management and trying to be able to pass an audit, the big focus is still reform. But I did think Comptroller Hale had an interesting observation about weapon systems, saying they're similar to raising children: they start off doing what you tell them to do, are more vulnerable to risks as teenagers, but eventually turn out to be mature, responsible adults. Given the current challenges facing the Joint Strike Fighter (JSF) program, he said, he thinks the F-35 is a young teen, maybe 14. I can only assume that this means that the JSF is complaining to the other weapons programs that no one understands it.

-- Mandy Smithberger

Comments

[Ken Pedeleose]

Looks like Dfens decided to call it quits. It seems that Dfens may have a been a defense contractor however we will never know. The one thing I will say is that whistleblowers are a big part of the solution. There is great advantage to having accurate information and whistleblowers can give us that. Thanks, Ken Pedeleose, Marietta, GA.

[Ken Pedeleose]

Hey Dfens. I noticed the e-mail blogging between you (Dfens) and Bryan Rahija. Why not openly sign your name as I (Pedeleose) did so we know who you are? Are you not confident to make allegations and then sign the allegations. Also, I was not in charge of AMP or RERP. I am not a manager. I document and forward and have an excellent record of supporting my allegations. So please, since POGO is allowing you and Bryan to go back and forth, try signing what you write and really standing behind it. How about that? Here is how it is done...sign your name. I am Ken Pedeleose of Marietta Georgia.

[Bryan Rahija]

Hey Dfens, just wanted to say thanks for adding your two cents. great to hear your perspective.

[Dfens]

It's very simple, really. Go back to what works. I'm not a huge fan of the procurement system of the late 1970s and 1980s, but at least if we only reimbursed contractors and stopped paying them profit on development that would be a big step forward. Even if all we did is paid contractors less profit for development, say 3%, and put 17% profit on delivered, working production hardware it would be a huge step forward.

Ultimately, though, our defense procurement system worked best when we did not pay for development at all. The Dept. of Defense announced it needed a new fighter plane and all interested parties were invited to demonstrate their new airplane on Monday, Feb. 15, 2010. The testing will continue for a month, so contractors should arrange for all required spare parts and consumables to be shipped to the test location at Wright Patterson AFB, in Ohio. May the best fighter win. Projected buy quantities are 4,000 to 10,000 aircraft.

Development costs were covered by profit margins, which were higher, comperable to what we pay on consumer electronics, but what kind of bargain are we getting now? Profit margin is typically around 10% for both development and production, but look at the C-130 AMP. You got nothing. Absolutely nothing for the $15 billion in tax dollars flushed down that rat hole. Boeing made $150 million in pure profit and you got nothing. It was free money. You, the taxpayer, shouldered all the risk. All Boeing did was take your money. So aren't you thankful that you only paid them a 10% profit margin on development instead of a 40% margin on delivered production hardware (that they never built, 0 x 1.40 = $0) now? Only an idiot would be happy with the bargain we struck with Boeing on that program. Are we a nation of idiots?

[Bryan Rahija]

Hi Dfens,

What kind of improvements would you suggest for procurement policy? What can we do to "have a military that works"?

[Dfens]

People like Ken are the problem, not the solution. They think they can legislate a contractor into doing the right thing, even when the economic incentives all encourage the contractors to drag out development and perpetuate problems for as long as possible so they can continue to make money "fixing" them. That's why, under Ken's watchful eye, the C-5 AMP and RERP modifications cost about twice and took about twice as long to develop as those of the C-130J did.

When companies spend their own money developing modifications to an airplane, they don't waste time and effort. When the government is writing a blank check for everything the contractor does, they (duh) waste as much time and effort as possible given the amount of political clout of the program. That being the only real variable in the problem, and why, for instance, F-22 and F-35 have been able to waste much more money than C-5M was able to waste.

It's funny, back in the 1990's, when paying contractors profit on development was being discussed in procurement circles, the contractors and government personnel who favored this system argued that "if it was good enough for NASA, it should be good enough for the military." Now NASA is on it's last legs. The president has cancelled their last rocket development plan which the Augustine commission described as a bad joke, and told NASA to buy rides on commercial launch vehicles. Even so, the military-industrial complex does not want to give up it's "profit on failure" approach to procurement, because it maximizes the number of government employees and provides the contractors with free money (that is to say, money they make with no risk to themselves).

It is not in the best interest of either side of the military-industrial complex to tell you the truth. That's why you will never hear the truth from the Ken Pedeleose's of the world, nor will you hear it from the Norm Augustines either. We can have a military that works. We could have a NASA that worked too, if we wanted. To do that is going to involve having a real dialog about what's wrong, and not a bunch of magical answers and nonsense like we usually get.

[Ken Pedeleose]

From Ken Pedeleose, Marietta, GA 770-596-1222. The people who negotiate and administer DoD Contracts are adults. The correlation to teenagers is a cover for government corruption. Same situation applies to government managers who are caught in corruption scandals. Words such as inappropriate only deflect attention. I currently work the C-5 cargo plane contract at Marietta, GA where the C-130J is built. There were numerous findings against the C-130J and you would think that the organization would learn. What I see is that we have reverted back to the days of the C-130J. Nothing new is implemented and the same price gouging still exists. The real problems is the adults in charge of the program need firm direction, and need to be told what to do and ethics enforced. None of that exists. I have to maintain continual contact with investigators just to have any chance of even documenting wrongdoing. The analogy to teenagers is way off base. Very Respectfully, Ken Pedeleose Marietta, GA.

[Bryan Rahija]

Hi Dfens,

We are interested! Can you tell us more about the way things used to be done? What kind of system would you envision?

[Dfens]

Oh puleeeze! Like a teenager, my ass. Those of us working for government contractors are always happy as can be to please our government customer at first release of the contract. That's the honeymoon. That's when we all talk about the last program and how screwed up it was and how we're not going to do things that stupidly again. Then management starts tightening down the screws on us after a year or so and our standard answer to any customer inquiry is, "that's not in the contract", or "we never priced doing that". We always win. They always lose. The price always goes up and the performance always goes down.

Like I've said before, you people must enjoy getting screwed, otherwise you wouldn't pay us more to screw you. If you ever do get tired of it, though, be sure to let me know. The way we used to do business made a lot more sense and some of us that were around in those days still remember how it used to be done. I'm sure any of us could explain it to you, if you were actually interested.