GAO Finds Major Defense Dept. Cost-Overruns

GAO Finds Major Defense Dept. Cost-Overruns

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Secretary of Defense Robert Gates made headlines earlier this year when he pledged to cut $78 billion from the defense budget over the next five years as the Pentagon’s contribution to bringing government spending under control. Critics on the left complained his proposed budget could only be called lower if you compared it to previous projections. It wasn’t an absolute cut, like the ones being experienced by domestic discretionary programs. Even some conservatives attacked the administration and Republicans for failing to go far enough in cutting the defense budget.

A new report from the Government Accountability Office released Tuesday could provide ammunition for critics in both camps, although its message may have a hard time being heard now that the U.S. is embroiled in a third military engagement in the Middle East. The GAO’s annual assessment of defense acquisition programs found the Pentagon was experiencing rapid cost-overruns in a host of major weapons systems, adding $135 billion to its long-term acquisition budget of $1.68 trillion, the report said.

More than half the increase could not be blamed on an increase in the quantities procured, according to the report. Rather, 80 percent of the programs had experienced overruns in unit costs from initial estimates. For instance, the Joint Strike Fighter, a $284 billion program to replace nearly every jet in the Air Force, Navy and Marines over the next quarter century, had grown by $34 billion in projected future costs.

“Cost overruns of this magnitude on programs that have already spent years in development can only be meaningfully offset by reductions in planned capabilities or quantities,” Comptroller General Gene Dodaro said in an accompanying message, which was sent to every committee in the House and Senate that considers defense spending. “Serious consideration by DoD of these types of tradeoffs will be essential to getting cost growth under control.”

The critics were quick to pounce on the report’s findings. “The wisdom that Gates ‘cancelled’ scores of weapons seems to be not just untrue, but in fact he has supervised an expansion of major programs,” said Winslow T. Wheeler, an analyst at the Center for Defense Information.

Other major programs experiencing rapidly rising costs includes the Joint Mine Resistant Ambush Protected (MRAP) fighting vehicle, an armor-plated troop carrier designed to protect soldiers against roadside IEDs (improvised explosive devices). The Pentagon ordered 13,000 MRAPs at $1.5 million a copy in 2007. The latest estimate is $1.6 million a copy, a 7.2 percent increase, which translates into a $13.6 billion cost overrun in just two years.

Even programs that are shrinking, like the F-22 Raptor, which is made by Lockheed Martin, are experiencing large cost-overruns. “Despite a 70 percent reduction in quantities for the (F-22) program, total acquisition costs have only decreased by 14 percent,” the report said. “Program acquisition unit costs for the F-22 Raptor have almost tripled, from $139 million to $412 million per airplane.”

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spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.