F-35 Review Shows How Best Intentions Of Reformers Often Backfire

The F-35 joint strike fighter has survived a Nunn-McCurdy review required of all weapons systems that exceed so-called “critical” thresholds for cost increases. Defense acquisition czar Ashton Carter will tell Congress this week that the program is essential to national security, is grounded in credible cost estimates, and has adequate management practices in place. Apparently, all the half dozen major weapons systems breaching the same threshold during the most recent reporting period will be certified for continuance. Certification of F-35 is no big surprise because three of the defense department’s four military services are counting on getting it, and there is no evidence of major design or engineering problems. But doesn’t it make you wonder what the point of these costly reviews are, when even programs the department has targeted for termination are certified as complying with Nunn-McCurdy criteria for continuance?

In the case of F-35, the need to keep the program on track was so obvious that everyone knew what the outcome would be even before the review began. The rationale for conducting the review rested on inflated official cost estimates that the contractor has had little difficulty beating in early production runs. The official projections are so wildly wrong that the Senate Armed Services Committee directed last week, “cost estimates developed for baseline descriptions and budgetary purposes shall not become the basis for negotiations with contractors and the obligations of funds.” Translation: the government’s cost estimates for F-35 and other major weapons programs threaten to drive up costs if negotiators take them seriously, rather than holding them down. Further evidence of this fact will become available in June, when the government reveals that F-35s in the next production lot are priced about 25% below what Pentagon estimators predicted. Needless to say, the estimators aren’t answering questions about how they came up with their ridiculous guess-timates.

What we are learning from the Nunn-McCurdy review of F-35 and other programs is that every time Congress creates a new bureaucracy to “professionalize” or “streamline” the acquisition process, what ends up happening is that it becomes even more baroque and politicized. The noble impulse to generate more rigorous cost projections spawns a self-serving organization that wastes money on superfluous, erroneous cost studies encouraging contractors to raise their costs. The understandable desire for realistic testing of new weapons produces a sprawling test bureaucracy that constantly strives to expand its role by adding costly tests of every widget under all conceivable conditions. And because these organizations were put in place to control costs, the political system is reluctant to hold them accountable for all the expenses they are adding to the process.

The Founding Fathers wanted a government of laws, but instead what we have gotten is a government of lawyers. Every step in the development of new weapons is attended by legislatively-mandated functionaries who drive up costs while providing scant value-added. It is precisely this dynamic of adding costs under the guise of helping people while actually making things worse that has given rise to movements like the Tea Party. Voters aren’t dumb. They can sense when their tax dollars are being wasted. And while weapons acquisition may be a bit more arcane than bank bailouts, it is just a matter of time before people begin wondering what the true value is of all the overhead functions “reformers” have imposed on a system that used to get things done a lot faster.