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McCain is Right: Introduce Capitalism to the Defense Department | Commentary

By Seth Cropsey Americans believe the federal government wastes 51 cents out of each dollar it spends, according to a recent poll by Gallup. Further evidence of Americans’ skepticism is especially abundant at the Defense Department.  

Buried deep within a Center for Strategic and Budgetary Assessment analysis of the Defense Department’s 2012 budget is a list of major programs that were cancelled from 2001 to 2011, which have nothing to show for the money that was spent. The programs range from the Army’s Future Combat Systems to its Comanche helicopter to the Defense Department’s portion of a new satellite system. Amounts from $200 million dollars to $3.7 billion dollars account for spending on nine other programs for which there are no tangible results. In all, $46 billion dollars were spent to produce … nothing.  

There are other examples of the Defense Department’s urgent need for better management in buying equipment on which the U.S.’s security rests. In 2013, Sen. John McCain, R-Ariz., asked the current chief of Naval Operations, “Has anybody been fired from their job as a result of a $2 billion dollar cost overrun of an aircraft carrier?” McCain meant the USS Gerald Ford, for which the Navy was requesting an additional $500 million dollars. Admiral Jonathan Greenert answered, “I don’t know, senator.” McCain then turned to the Air Force’s chief of staff and asked, “Has anybody been fired because of the cost overruns of the F-35?” General Welsh replied, “I don’t think so.”  

McCain was making a point. But he knows better than most that the making of U.S. defense hardware is a vast kettle of interlocking and disconnected but always tangled chains. The Secretary of Defense and his offices; the huge civilian agencies he runs; the staff of the Joint Chiefs; and the military services all have a hand in analyzing requirements, the subjective process of identifying requirements, the actual execution of major programs, and their subsequent evaluation and testing. The career paths of many of the individuals who make daily decisions regularly move them into other positions. Both McCain and the unfortunate military service chiefs he quizzed knew that if accountability could be fixed, those who made important decisions had probably long since moved on.  

The process is cumbersome, time-consuming, needlessly expensive, centralized, and utterly unaccountable. It is worthy of the defunct Soviet Union’s centralized planning. But instead of producing thousands of clocks that no one needs, our unaccountable defense organization consumes massive quantities of time and huge sums: time that could be used to exploit new technology quickly and the money that could be used to pay for it.  

Both the Senate and House Armed Services committees are looking to untangle the current web. McCain, chairman of the Senate committee, proposes to attack the problem at its root. He would return responsibility for managing programs acquisition to the military services in exchange for direct accountability, in this case, stiff monetary punishment and ultimately a loss of responsibility for a particular program to the secretary of Defense’s office.  

McCain also seeks to provide legislative relief to develop and test new ideas quickly: this means two or three years instead of the decade or so that it requires today. The legislation would slice through the bureaucratic obstacles that prevent innovative, advanced technology firms from selling the products of their work to the Defense Department.  

Tolerance is a virtue in a diverse society, but it is a vice when applied to the practices that make U.S. defense systems needlessly expensive, such as cost overruns, years-long program delays, anti-competitive business standards, and a lack of accountability.  

McCain’s ideas should have been implemented decades ago.  

Seth Cropsey is director of Hudson Institute’s Center for American Seapower. He served as a naval officer and as deputy Undersecretary of the Navy in the Reagan and George H. W. Bush administrations.  

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