Here’s How the Military Wasted Your Money in 2014
New year, old problems
The U.S. Congress approved $581 billion in military spending for 2014. That number includes the Pentagon’s base budget plus the Overseas Contingency Operations fund that pays for America’s various wars.
Last year, the Pentagon spent $614 billion. So the military is saving money. Which makes sense. Major combat operations in Iraq and Afghanistan have ended. Thousands of troops are coming home.
Oh—and automatic “sequestration” budget cuts had an effect, as well.
But none of that stopped the Defense Department from blowing a lot of money on pointless junk. And frustratingly, the list of major military waste in 2014 looks a lot like the same list from 2013.
Lockheed Martin’s F-35 is on track to replace almost all of the existing tactical jets in the Air Force and Marines Corps plus some in the Navy and many planes in allied air forces.
On Dec. 22, Lockheed announced it had delivered 36 F-35s in 2014. Two of those went to Australia. Lockheed handed over 23 F-35As to the U.S. Air Force, four F-35Bs to the Marines and seven F-35Cs to the Navy.
“Thousands of men and women produced the 300,000 individual parts from 46 U.S. states and 10 other countries to make these stealth fighters,” said Air Force lieutenant general Chris Bogdan, F-35 program head. “They should be proud of their accomplishment.”
But the truth is the F-35 is a mess. After years of development, the plane’s software still doesn’t work. In June, the military grounded the planes when one of them caught fire on a runway in Florida.
It’s also the most expensive weapons program ever. How expensive? Well … it’s complicated. The costs change depending on who you ask.
A Congressional study of the F-35 program from back in April pegs the cost of the program at $5.1 billion in 2014. But there are hidden costs for design fixes and the planes’ engines.
A Senate Appropriations Committee report on 2015 appropriations explains the actual cost of the F-35. In 2014, the U.S. spent $4 billion for F-35As, $928 million for F-35Bs and $1.9 billion for F-35Cs.
That’s almost $7 billion for just 34 new planes.
Add to that recent allegations of collusion between Lockheed execs and Defense Department contract managers. Apparently they conspired to keep F-35 prices high.
“It is the kind of cronyism that should make us all vigilant against … the military-industrial complex,” Sen. John McCain, an Arizona Republican, said in June.
Despite the troubles, on Nov. 21 the Pentagon announced it had signed another deal with Lockheed, promising to pay $4.8 billion for an eighth batch of the warplanes. Again, there will be hidden costs on top of that.
“The F-35 is coming to eat us all alive, there’s no way to sugar-coat it,” Richard Aboulafia, vice president of analysis at Teal Group, told Intelligent Aerospace. “The F-35 is devouring everything.”
The Navy spent almost $2 billion dollars building four Littoral Combat Ships in 2014. That’s half a billion dollars per ship. Those numbers come from the Navy’s own budget submissions.
Problems have plagued the LCS since the project began in the 1990s. The ship is fast but too lightly armed and loses against Chinese forces in computer simulations.
But that’s okay, because in February Secretary of Defense Chuck Hagel announced the Navy would cancel production of the last 20 Littoral Combat Ships and acquire a newer, fitter fighting frigate.
What did the Navy come up with? Why, a fancier Littoral Combat Ship, of course.
That’s right, the Navy stuck to its guns, so to speak, and delivered a proposal that would upgrade the last batch of planned ships with more armor and weapons.
This might seem like a cost-saving measure. And it might be. Now the Navy doesn’t have to waste money developing a whole new warship. On the other hand … production costs of the Littoral Combat Ships tend to balloon out of control.
The original pitch claimed the LCS would cost $220 million per ship. The first one actually cost $670 million. The second cost a staggering $813 million.
There’s no telling how expensive those last 20 will be once manufacturers complete the modifications and upgrades.
Several companies work on the ships, but Lockheed Martin is one of the largest. Sound familiar?
New year, old problems
The most depressing part of the Pentagon’s waste is how much doesn’t change. If the military wasted money on something in 2013, there’s a good chance it did the same damned thing in 2014.
Case in point—the M-1 Abrams tank.
The Army has almost 9,000 M-1s. Half of them are in storage. And yet America manufactures more every year. Why? Politics.
To the military’s credit, this is one wasteful projects that it has actually tried to stop. Army chief of staff Gen. Ray Odierno has petitioned Congress to shut down M-1 production for three years running.
But every year, Congress sets aside more money and the Pentagon buys more M-1s no one wants or needs.
The war machines keep rolling out thanks to congressmen Jim Jordan and Mike Turner. Both represent Ohio districts. Turner chairs the Tactical Air and Land Forces Subcommittee of the House Armed Services Committee.
The only plant in the country working on the tanks is in Lima, Ohio.
America spent $183 million on the tanks in 2014. That’s down from last year. The M-1s are in next year’s budget, too, when the cost comes down to $120 million. At that rate, the U.S. should finally stop stockpiling M-1s around 2020.
The Defense Logistic Agency supplies the Defense Department. If troops stationed in Afghanistan need more toilet paper, the DLA gets it to them. If fighter pilots targeting Islamic State need more ammo, the DLA buys it and ships it forward.
Unfortunate then, that the DLA is one of the most backward, backlogged and confusing agencies in the whole federal government. A Reuters special report in 2013 exposed the DLA’s various failings.
In short, the agency has too much stuff, doesn’t know what to do with it and tends to order new parts and supplies rather than checking its own backlog. The DLA didn’t improve in 2014.
Most damning was the agency’s inability to manage the almost $70 billion worth of ammunition it had in stock. Ammo sat around for decades. It’s dangerous.
The DLA destroys a lot of the old munitions. It also blows up billions in perfectly usable ordnance.
Every year, the agency stockpiles the military’s excess ammo. It then makes a passing attempt at swapping bullets among the different branches before finally destroying much of it.
How much ordnance was still good? No one knows. Certainly not the Defense Logistics Agency, which got rid of $1.2 billion in excess bullets in 2014.
The problem is that every branch of the military uses a different inventory system to manage its own goods. Those different software systems have a hard time communicating. The DLA has a habit of just tossing out problem orders.
In May, we exposed a similar problem at the agency. Over the past few years, the DLA ordered spare parts for life-saving MRAP armored vehicles … and then turned around and threw away the parts.
Navistar Defense manufactures the components. When Navistar screwed up an order—shipping too many parts or too few or messing up the paperwork—the DLA would simply toss out the whole package and order a new set.
The agency never worked with Navistar to remedy the screw-ups. It just hid the problems and ordered more stuff.
“Regardless of my personal feelings that Navistar should be held accountable, DLA will be underwriting the expenses to correct the deficiencies,” one agency supervisor wrote in an internal email that we obtained. “I am sorry that we cannot recover the monies.”
The Afghan money pit
The Pentagon is leaving behind a lot of equipment in Afghanistan. It’s also leaving behind more than a few half-ass projects. The reconstruction of Afghanistan has cost American taxpayers $100 billion dollars over 13 years. Washington put some of that cash to good use.
But it also wasted billions. People should remember 2014 as the year they learned just how poorly the Pentagon managed Afghanistan’s development.
For one, the military spent $7.6 billion fighting a war on Afghan opium. It lost.
In June, the Air Force scrapped half a billion dollars worth of transport planes meant for the Afghan air arm. The flying branch earned $32,000 selling the scrap. That’s six cents a pound.
Between 2004 to 2013, the Pentagon spent $370 million on spare parts to repair the Afghan army’s vehicles. Now $230 million worth of those spare parts are missing.
The Pentagon blew $800 million on 48 planes for Afghanistan’s air force. Planes the Afghans can’t fly or maintain.
The U.S. Army Corps of Engineers disbursed $1.5 billion and countless hours building thousands of buildings for the Afghan military. The engineers used the wrong kind of insulation. Now those buildings tend to go up in flames.
Those are just a few of the many tales of waste in Afghanistan’s reconstruction.
This was a banner year for waste. Not just because the Pentagon flushed so much cash down the toilet, but also because the public learned about so many of the failures. All this while the Defense Department warned that sequestration would harm America’s ability to fight.
American taxpayers give the Pentagon plenty of money, but the Defense Department doesn’t know how to spend smart.
That’s not only wrong, it’s dangerous. If the U.S. military continues to spend money on things it shouldn’t, then America could be in trouble if it ever faces a true military threat.
Don’t believe us? Ask the Navy.