Skip to comments.You Know DoD’s In Trouble When Contractors Tell It “Hell No”
Posted on 03/02/2012 7:56:51 AM PST by sukhoi-30mki
You Know DoDs In Trouble When Contractors Tell It Hell No
(Source: Lexington Institute; issued March 1, 2012)
(© Lexington Institute; reproduced by permission)
What are the signs that the U.S. military is in decline? Stalemate on the battlefield. Withdrawal from long-occupied positions in the world. A shrinking force posture. By all these indicators, the U.S. military is in trouble.
An even more telling sign is when defense contractors defy their major, sometimes primary, customer. For more than 60 years, the Department of Defense has enjoyed privileged position as the world's largest buyer of military-related goods and services. The Pentagon is what economists call a monopsony: one buyer but many suppliers.
This position had allowed DoD to write the rules and act like the proverbial 600-pound gorilla in the room. How many buyers have the power to cancel a legal contract for its own convenience? What would happen to any other purchaser who ordered 100 of something only to turn around later and tell the seller it now wanted only 80, then 50, 30 and finally that it was backing out of the whole deal? No seller would deal with such a buyer.
DoD's "do as it pleases" position in the defense marketplace is eroding fast. In the past when the Pentagon changed its mind or cancelled a procurement, the companies often complained but in the end sucked it up. But this submissive posture is changing.
In an eye-opening Defense News article, editor Vago Muradian reports that Italy's Alenia has informed the Pentagon that if it sells the Air Force's 28 surplus C-27J tactical airlifters to a foreign country the company will refuse to support them. DoD had been shopping the C-27Js overseas in direct competition with the manufacturer. What makes the company's action all the more surprising and significant is that it plans to bid on a multi-billion dollar program to provide the Air Force with its new jet trainer.
It is rare for a defense company to risk angering its customer so directly. But Alenia and its fellow companies under the Finmeccanica umbrella have been the victim of Pentagon capriciousness before. AgustaWestland was under contract to supply aircraft for the VH-71 presidential helicopter program which was canceled in 2008.
Regarding the C-27J contract, the Pentagon demanded a very low price for the original firm fixed-price contract but proposed to buy 145 aircraft. Progressively, the size of the buy was reduced first to 78, then 38 and finally 21. Not only had Alenia lost money on the reduced buy but now DoD was going after the company's international business.
DoD is about to discover that its power to define the terms in defense contracts is declining fast. Companies are increasingly pushing back and in some instances refusing to participate. As defense spending declines further DoD may well find itself having to strike more equal bargains with industry -- and stick to its agreements.
For DoD to adopt a serious purchasing policy, Congress would have to develop, and stick to, a consistent budget.
Looks like either a shrunken Herky Bird or an upgraded C-123.
But the DoD can afford to spend $750,000 building a soccer fild for the Guantanomo terrorists
A while back I remember when an aircraft order was cut in half.... the price remained about the same.
Now, the margins are smaller and the competition is greater. There is no room to accept a loss.
“For DoD to adopt a serious purchasing policy, Congress would have to develop, and stick to, a consistent budget.”
For Congress to develop, and stick to, a consistent budget, the voters would have to become much less capricious in their choice of representatives.
Considering the obozo objective, DOD more than likely has been ordered to cut military hardware purchases from American companies in order to break or cripple them. That scenario is plausible if you believe there is an active and complicit effort involving this government to dismantle the country.
With new aircraft, a large percentage of the cost comes from R&D and tooling, which is then amortized among the aircraft. The incremental actual cost per aircraft is often a fraction of the amortized fixed cost. It would make more sense for DoD to have larger numbers of lower-tech aircraft, and to incrementally improve a proven-good design over the years (better sensors, computers, etc) rather than replace it with a completely new plane.
DoD developments are a lot like the Apollo program having tried a Saturn V and a moon landing on the first mission.
Quantity has a quality all its own. We need some balance and one of the things we don’t have is enough numbers.
Take a platform like the F-15SE, build a bunch of them and make improvements modular.
The Ulsterman Report. White House Insider (WHI) directs us to 120. I checked that site out of curiosity. The only intriguing observation I read was the “procurement community”, or something close to that. Sorry, I can’t recall. All is definitely about money, in my opinion, to hollow out the USA.
It was the story on the possible unionization of our military story, which now is on page 2 at the Ulsterman Report. In the comment section, the WHI appears in the first comments and directs Ulsterman to, “TASK FORCE 120”, a promotional article.
And by "modular" we should mean that a superb sensor system (for example) from the F-15 should also be able to fit into a slot on an F-35.
If the military is ever unionized, a lot of FReepers better reconsider their belief that the military won't fire on American citizens.
If you put the supurb sensor system on an F-15SE,,, why on earth would you even WANT an F-35? Far slower,, far less air to air ability, much smaller weapons load,,,shorter legs,,
The F-35 is a first class dog.
There you go. Thanks.
I did post that up after my blonde moment.
Yes, to your conclusion.
The election is very important. I vascilate between rebelling against the Romney Establishment by rejecting Romney (who is not a conservative but using the Republican brand to campaign) and voting with a write-in on my ballot, which is a scary return to Obama.
On the other hand, if we stick together against Romney and pronounce with one voice that we will NOT vote for Romney, that may be our only hope for a contested convention, which is our last hope to down Romney permanently.
However, no one can presume to know, or predict, who we might come out with as the nominee on the other end, at the conclusion of the convention. The mystery nominee might be popular but lose to Obama, or visa versa, may be unpopular but able to win the general election.
God be with us.
Yes, something like that.