Here’s How the Military Wasted Your Money in 2013
Billions of dollars worth of unneeded tanks, faulty ships and redundant rifles
Broken ships. Millions spent replacing a rifle that doesn’t need to be replaced. More tanks than it would take to beat Godzilla. Billions of dollars worth of wasted … stuff.
Any large organization can have trouble managing its accounts. But few organizations are as humongous as the U.S. military, so the money problems multiply.
With a $614 billion budget in 2013—expected to decline by $62 billion in 2014—there’s plenty of opportunity for waste. Six hundred billion dollars means bloat that floats a lot of needless projects. Some are badly managed, others the result of political pork-barrel spending.
Many examples of waste are relatively unknown. And with the New Year approaching—a time of reflection and account taking—we’ve drawn up a short list of military cautionary tales from the past year.
Remember, this is a short list, and it’s drawn from the projects and stories we know about. A comprehensive litany of Pentagon waste is far, far longer.
Littoral Combat Ship
One of the Navy’s newest vessels is designed to fight a new kind of war. The Littoral Combat Ship sticks close to the crowded coastal littoral zone, where many analysts predict warfare will be concentrated in the future.
LCS was conceived in 2001 as a small, fast and adaptable combatant—seemingly perfect for dangerous duty in chaotic shallow waters. Twelve years, four major defense contractors and a slew of budgetary overruns later, the Navy has built just four LCSs in two sub-classes, with an additional thirteen in various stages of construction. That’s slow progress against the original plan for more than 50 ships.
But this isn’t surprising. There are a ton of problems with the new vessel.
The first LCS, USS Freedom, developed a six-inch-long crack in its hull during trials and took on five gallons of water every hour. The Navy blamed a welding error, but the flaw serves to highlight real concerns about the ship’s durability.
LCS is actually designed to avoid major combat, speeding away from any superior enemy forces. But in war, all bets are off. How can a hull that cracks while just sailing around absorb a blow from a torpedo or missile. Our own Kyle Mizokami recently gamed out a naval engagement pitting an LCS versus Chinese warships … and the LCS got shellacked.
The Pentagon is well aware of the ship’s deficiency. “LCS is not expected to be survivable in that it is not expected to maintain mission capability after taking a significant hit in a hostile combat environment,” J. Michael Gilmore, a top Pentagon weapons tester, stated in a 2013 report.
There’s more. The vessel’s 57-millimeter gun wobbles at high speeds and its air-defense radar is inadequate. Even more serious for a littoral ship, its sonar can’t detect mines—one of the major dangers in shallow waters.
The LCS is designed to be a little bit of everything to everybody, changing its kit on the fly to add new weapons, sensors and cargoes. Need to send a bunch of Marines to shore? It can support that. Need a vehicle to spy on pirates along the coast? It has gear for that, too. The only problem is that some of these kits weigh too much, cost too much, are way behind schedule and remain untested.
How much does this stinking sinker cost?
Well — according to a report put together by the Congressional Research Service in September — the first LCS cost $670 million and the second $813 million. The Navy has commissioned 17 ships, four of them in 2013.
The Navy’s budget request for 2014 requests an additional $1.8 billion for four more of the ships, and additional funding to outfit them with various kits and modules.
The original pitch for the LCS estimated the cost at $220 million. So what happened? According to the CRS report:
Some observers believe that the original cost estimate of $220 million for the LCS sea frame was unrealistically low. If so, a potential follow-on question would be whether the LCS represents a case of “low-balling”—using an unrealistically low cost estimate in the early stages of a proposed weapon program to help the program win approval and become an established procurement effort.
Tanks the Army doesn’t want
Earlier this year, lawmakers set aside $436 million for the construction and maintenance of the mighty M-1 Abrams tank, of which the Army currently has more than 2,300—with another 3,000 in storage.
That might sound like enough tanks for the American military, and sure enough the Army agrees. “If we had our choice, we would use that money in a different way,” Gen. Ray Odierno, the Army’s chief of staff, told the Associated Press in April.
So why build more tanks? General Dynamics, the tank’s manufacturer, has aggressively lobbied to keep the M-1 in production. There’s also just one factory in the whole country that manufactures the Abrams: the Lima Army Tank Plant in Ohio. Such a seemingly precious facility is sure to inspire a fierce defense by backers against any attempt to shut it down.
Not only are jobs at risk if the plant closes—in a crucial swing state, no less—but there are also powerful politicians backing the plant, including Ohio’s senators Sherrod Brown and Rob Portman—Democrat and Republican, respectively—plus Rep. Jim Jordan, a Republican.
The production of the tank is responsible for 16,000 jobs across 882 suppliers, according to Kendell Pease, the plant’s vice-president of government relations and communications. No legislator wants to be perceived as having killed that many jobs. So every year they push through special laws to keep the plant open and the tanks in production, despite Pentagon assessments that holding off on tank production and refurbishment for just three years would save the taxpayers $3 billion.
So how much did the tanks cost in 2013? According to the budget request, the Pentagon got the number down to $181 million.
It’s all of the little things that add up over time that can really kill a budget. Little things like supplies.
The Defense Logistics Agency serves as the Pentagon’s supplier with everything it needs from food, clothing to ammunition. So one would expect the DLA knows the comings and goings of its supplies, what’s stored in its warehouses, what it needs and doesn’t need.
In an in-depth report in November, Reuters outlined many of the Defense Department’s budget woes, but focused on the DLA in particular as an example of the Pentagon’s most out-of-control spending. According to the report, the DLA has a ton of supplies on the shelf—by itself understandable. But DLA has more than it says it really needs, and yet keeps buying more.
“We have about $14 billion of inventory for lots of reasons, and probably half of that is excess to what we need,” Navy Vice Adm. Mark Harnitchek, the director of the DLA, told a group of aviation executives in August.
According to the Reuters report, the DLA spent $733 million on supplies it already had too much of as of September 2012. That figure is up from the $609 million wasted a year earlier. A major culprit? Warehouse managers who hoard supplies, not to mention inadequate or absent tracking systems and poor labeling that results in stuff simply disappearing in storage.
There are also warehouses full of old explosives and munitions—some of it dating back to World War II—stored in crates, aging and becoming unstable. Sometimes the Pentagon calls in a group of experts to detonate a few the munitions, but most of the time it’s allowed to sit.
It’s cheaper, you see. But that’s crazy. It’s only cheaper until the first accident occurs. Many of these warehouses are full of explosive material —often poorly stored in rickety crates — and it only takes one accident to start a chain reaction that could cause millions of dollars in damage.
Backlogged contracts, canceled carbines and other messes
That’s not all. The Pentagon has spent billions to upgrade its various software systems in order to audit its outlays, but every attempt made by every branch of the military has failed and wasted millions.
The Air Force’s Expeditionary Combat Support System cost a billion dollars and it doesn’t work. So too for the Pentagon’s abandoned Defense Integrated Military Human Resources System, designed to smooth payroll and personnel systems. And again, for the Navy’s repeated attempts to create auditing and logistical software.
And there are the contractors. The Defense Contracting Auditing Agency is a small government body within the Pentagon that reviews all the civilian contracts the taxpayer is on the hook for. But they’re backlogged, years behind schedule.
That backlog means there are billions of dollars in unpaid contracts that the taxpayer is on the hook for. Some accruing interest because they’re unpaid. Some stretching as far back as 1996.
Then there’s the Army’s attempt to replace the M-4 carbine, the standard-issue carbine used by troops in Afghanistan. In 2008, the Army began planning to spend $2.5 billion replacing the M-4 with more than 500,000 new carbines over 20 years.
But in June 2013, the plan was canceled after $14 million had been spent testing eight potential replacement carbines. The Army “fired tens of thousands of rounds through each, and found itself at square one,” National Defense reported. None of the new carbines “met the minimum requirements,” Brig. Gen. Paul Ostrowsky said.
So in the end the Army spent $14 million out of a budget of $2.5 billion to figure out they didn’t want a new gun.
The silver lining is that the bulk of the money set aside for new carbines was saved—and the Army says it can delay a new gun for another decade without any problems. Around $382 million had already been committed in research, development and procurement funds, but these funds are now being shuffled elsewhere.
Might we suggest the Army use it to hire teams to destroy ancient and dangerous munitions?
Add to this billions of dollars money spent on weapon systems like the woeful F-35 stealth fighter, a military base in Afghanistan that no one wants and over $500 million in helicopters for Afghanistan’s military that the Afghans can’t maintain.
No one knows exactly how much of that money goes to waste. Not even the people charged with spending it.