Why the Pentagon pays more for less

With regard to the recent troubles with quality and safety of Boeing aircraft, I linked to an article by Andrew Cockburn titled THE MILITARY- INDUSTRIAL VIRUS: How bloated budgets gut our defenses in the June 2019 issue of Harper’s Magazine, where he said that following the merger of Boeing with McDonnell Douglas where the latter defense company basically took over, the long standing wall that separated Boeing’s civilian aircraft division from its military division was breached and the more lackadaisical practices of the military division seeped into the civilian division, resulting in cost overruns, failures to meet schedules, and poor quality.

But the main point of his article was not about Boeing but about how the poor practices in military contracting was built into the system so that companies could gouge the taxpayer while at the same time not providing anywhere near the amount of hardware that had been promised.

Largely out of sight, our gargantuan military machine is also increasingly out of mind, especially when it comes to the ways in which it spends, and misspends, our money. Three decades ago, revelations that the military was paying $435 for a hammer and $640 for an aircraft toilet seat ignited widespread media coverage and pub- lic outrage. But when it emerged in 2018 that the Air Force was now paying $10,000 for a toilet-seat cover alone, the story generated little more than a few scattered news reports and some derisive commentary on blogs and social media. (This was de- spite a senior Air Force official’s un- blushing explanation that the ridiculous price was required to save the manufacturer from “losing revenue and profit.”) The Air Force now claims to have the covers 3-D–printed for $300 apiece, still an extravagant sum.

Representative Ro Khanna of California, a leading light of the Congressional Progressive Caucus who has spearheaded the fight to end U.S. participation in the Saudi war of extermination in Yemen, told me recently that he sees this indifference as a sign of the times. “There’s such cynicism about politics, such cynicism about institutions,” he said, “that the shock value of scandals that in the past would be disqualifying has diminished.” We were discussing another apparent defense rip-off, in which a company called TransDigm has been deploying a business model pioneered by the pharmaceutical industry. TransDigm seeks out unique suppliers of obscure but essential military components, such as a simple cable assembly, and buys the firm, quickly boosting the component’s price (by 355 percent in the case of the assembly). Khanna was particularly depressed that the Defense Department’s inspector general—whom he, along with Massachusetts Senator Elizabeth Warren and Ohio Representative Tim Ryan, had prompted to investigate the company—had concluded that TransDigm’s way of doing business was, in his words, “awful, but legal.” (Unsurprisingly, Wall Street loves the company; its stock price has doubled in the two years since Khanna first raised the issue.)

This process is little understood by the outside world, which is why tax- payers are prepared to accept a $143 million price tag on an F-22 fighter (that’s just the Lockheed sticker; the real price per plane was over $400 million) as somehow justified by its awesome technological capabilities. The late A. Ernest Fitzgerald, who was fired from his job as a senior Air Force cost-management official on the direct orders of President Nixon for divulging excessive spending on an Air Force program, used to point out that $640 toilet seats and $435 hammers (he was the first to bring these to pub- lic attention) were merely emblematic of the whole system, and that items
such as a $400 million fighter were no more reasonably priced than the toilet seat.

Whenever are were attempts to slow down the growth of spending, some monstrous new threat would be conjured up that was used to justify greater military spending.

This entire process, whereby spending growth slows and is then seemingly automatically regenerated, raises an intriguing possibility: that our military- industrial complex has become, in Spinney’s words, a “living organic system” with a built- in self-defense reflex that re- acts forcefully whenever a threat to its food supply—our money—hits a particular trigger point. The implications are profound, suggesting that the MIC is embedded in our society to such a degree that it cannot be dislodged, and also that it could be said to be concerned, exclusively, with self- preservation and expansion, like a giant, malignant virus. This, of course, is contrary to the notion that our armed forces exist to protect us against foreign enemies and impose our will around the globe—and that corruption, mismanagement, and costly foreign wars are anomalies that can be corrected with suitable reforms and changes in policy. But if we understand that the MIC exists purely to sustain itself and grow, it becomes easier to make sense of the corruption, mismanagement, and war, and understand why, despite warnings over allegedly looming threats, we remain in reality so poorly defended.

The beauty of the system lies in its self-reinforcing nature. Huge cost overruns on these contracts not only secure a handsome profit for the contractor but also guarantee that the number of weapons acquired always falls short of the number originally requested.

So we have a military that is not only has a huge budget and steadily growing but also manages to claim to be constantly under-resourced.


  1. thecdn says

    In Canada the problem of military purchases is a bit different. As a former Canadian army officer I often lamented the fact that the small amount of items Canada needed couldn’t be purchased off the shelf from from US or European manufacturers. For political purposes, ships, tanks, trucks, rifles, radios, etc had to made in Canada to provide -- usually short term -- jobs.
    Thus we often ended up with things that cost way more than they should have, took much longer to reach the troops, and often were not as good quality as something we could have purchased elsewhere.
    I think of the Halifax class destroyers which, while good ships, cost more to build and took longer to arrive than US or European ships would have. Same for the modified M16 rifles, Iltis jeeps, Iveco trucks, tcccs radio system, etc. It’s a depressingly long list of the things I am aware of. I’m sure there are more.

  2. kenny56 says

    These newer models seem to have problems:
    787 Dreamliner, 2013 lithium battery fires (x2)
    737 Max 8, 2018 MCAS nosedive (x2, 346 deaths)
    737 Max 9, 2024 door panel blow out (x1)

    How many strikes before you’re Out?

  3. Pierce R. Butler says

    I’ve seen it claimed that military aircraft toilet seats require special engineering, manufacturing, and maintenance, given that the aircraft they ride in have to do maneuvers impossible to civilian planes which would otherwise result in raw sewage getting thrown all over the interior space. In that particular case, the fuss seems unjustified, though the general issue continues to deserve outrage.

  4. ockhamsshavingbrush says

    And never underestimate the awesome power of a bloated procurement bureaucray. Over here in good ole Germany, they were tinkering with those “new” digital radios for the Bundeswehr for about 15 years now, as they still -- to this day -- use analog radios for communication. So every Joe Shmoe can intercept unencrypted messages to and from the units.
    Now that the digital thingamajigs are finally ready for delivery they found out that the radios can’t be fitted to most of the vehicles in service because…reasons. Ferfuckssake that’s what standards are there for!!! And in case the parts are non-standard, you have an interface controll document to make shure that you don’t have to fit a square peg into a round hole. This is fucking SOP in all industries. So back to the drawing board with an additional delay of ….let’s say 3 to 5 years.

    Oh yeah, and they signed a contract for Reaper drones worth north of €600 million a couple of years ago. And then found out that the drone has no air-cert for Europe. So that poses a minor problem in Germany, being in Europe and all that. And fun was had by everyone.

    Lest we forget, the bill for the overhaul of a training ship for new cadetts shot up from the initial estimate of €10 million to €140 million. Why the navy still uses a friggin three-mast bark to train cadetts is beyond me. Something something tradition.

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