March 15, 2006

Poor priorities

—Dr. Robert Peltier, PE

I couldn't help but marvel at the synchronicity of two unrelated events over the past few weeks. The first, on January 12, was the rare cancellation of a major military acquisition program with problems called "too expensive to fix." It takes an Act of Congress to kill most military contracts due to the pork flowing to local communities and businesses. Witness the hand-wringing by legislators when the armed services want to close a base in their district to save a buck.

The second event was President Bush's promise in his State of the Union address of January 31 to wean the U.S. from its "addict[ion] to oil" by increasing funding of clean-energy research by 22%. I was completely underwhelmed by this proposal. The increase sounds huge but isn't, considering the current level of investment in alternative energy research.

Hard to kill

The cancellation of the Aerial Common Sensor program on January 12 shouldn't have come as a surprise to its prime contractor, Lockheed Martin (LM). The system was intended to detect enemy electronic signals and troop movements from 37,000 feet, but LM couldn't figure out how to pack all the required gear inside a medium-sized jet. So the Army cancelled the $879 million development contract for "convenience" in mid-January and paid LM a termination fee for its trouble. After licking its own wounds and returning to the drawing board, the Army—which still wants to pay $8 billion for 50 planes equipped with the spying system—said it plans to readvertise the project in 2009. This illustrates that most defense procurement programs take on a life of their own and a staff to match.

The list of other major defense programs cancelled over the past four years is short but memorable for the programs' cost:

The United Technologies/Boeing Comanche helicopter program—cancelled in 2004 after spending $6.9 billion over 21 years to develop a helicopter with a sticker price of $60 million.
The Army's Crusader artillery project—cancelled in 2002 after more than $2 billion went down a rat hole. Even after Defense Secretary Donald Rumsfeld killed Crusader, Congress kept the project on life support for a while before finally pulling the plug.