The largest contracts — worth more than $550 million total — went to 21 companies to develop “big bet” technologies. Those companies are Aerial Applications, Analytical Space, Anduril Industries, Applied Minds, Elroy Air, Enview, Edgybees, Essentium, Falkonry, ICON Technology, Orbital Insight, Orbital Sidekick, Pison, Privoro, Shift.org, Swarm Technologies, Tectus Corp., Virtualitics, Wickr, Wafer and one company that the Air Force has not disclosed.
“For all these awardees, you’re on a four-year, fixed-price contract that we believe, if successful, will disrupt part of our mission in a way that will give a huge advantage for our future airmen,” said Will Roper, the Air Force’s acquisition executive.
The value of the contracts awarded by AFWERX may seem small compared to the multibillion awards for major defense programs. However, these awards go a long way in helping technology firms overcome the “valley of death” between technology development and production, when a lot of companies are vulnerable to failure, said Chris Brose, head of strategy for Anduril Industries, which specializes in developing artificial intelligence technologies.
“For a company like ours or companies of that size, It’s quite significant. It allows us to really kind of do more of the good work that we’re doing, to scale and grow and work with new partners, and it makes a huge difference,” Brose said.
Brose declined to detail the precise nature of Anduril’s contract with the Air Force, but said that the general objective is to prove that an unmanned aerial system can deliver a mass of swarming drones capable of performing complex missions. While a human would still be “in the loop” overseeing the network, certain tasks — such as steering the drones, moving their sensors and processing gathered data — would be automated.”
“Call it a colossal victory for a Pentagon that hasn’t won a war in this century, but not for the rest of us. Congress only recently passed and the president approved one of the largest Pentagon budgets ever. It will surpass spending at the peaks of both the Korean and Vietnam wars. As last year ended, as if to highlight the strangeness of all this, the Washington Postbroke a story about a “confidential trove of government documents” — interviews with key figures involved in the Afghan War by the Office of the Special Inspector General for Afghanistan Reconstruction — revealing the degree to which senior Pentagon leaders and military commanders understood that the war was failing. Yet, year after year, they provided “rosy pronouncements they knew to be false,” while “hiding unmistakable evidence that the war had become unwinnable.”
Given the way the Pentagon has sunk taxpayer dollars into endless wars, in a more reasonable world that institution would be overdue for a comprehensive audit.
However, as the latest Pentagon budget shows, no matter the revelations, there will be no reckoning when it comes to this country’s endless wars or its military establishment — not at a moment when President Donald Trump is sending yet more U.S. military personnel into the Middle East and has picked a new fight with Iran. No less troubling: how few in either party in Congress are willing to hold the president and the Pentagon accountable for runaway defense spending or the poor performance that has gone with it.
Given the way the Pentagon has sunk taxpayer dollars into those endless wars, in a more reasonable world that institution would be overdue for a comprehensive audit of all its programs and a reevaluation of its expenditures. (It has, by the way, never actually passed an audit.) According to Brown University’s Costs of War Project, Washington has already spent at least $2 trillion on its war in Afghanistan alone and, as the Post made clear, the corruption, waste, and failure associated with those expenditures was (or at least should have been) mindboggling.
Of course, little of this was news to people who had read the damning reports released by the Special Inspector General for Afghanistan Reconstruction in previous years. They included evidence, for instance, that somewhere between $10 million and $43 million had been spent constructing a single gas station in the middle of nowhere, that $150 million had gone into luxury private villas for Americans who were supposed to be helping strengthen Afghanistan’s economy, and that tens of millions more were wasted on failed programs to improve Afghan industries focused on extracting more of the country’s minerals, oil, and natural gas reserves.
In the face of all this, rather than curtailing Pentagon spending, Congress continued to increase its budget, while also supporting a Department of Defense slush fund for war spending to keep the efforts going. Still, the special inspector general’s reports did manage to rankle American military commanders (unable to find successful combat strategies in Afghanistan) enough to launch what, in effect, would be a public-relations war to try to undermine that watchdog’s findings.
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All of this, in turn, reflected the “unwarranted influence” of the military-industrial complex that President (and former five-star General) Dwight Eisenhower warned Americans about in his memorable 1961 farewell address. That complex only continues to thrive and grow almost six decades later, as contractor profits are endlessly prioritized over what might be considered the national security interests of the citizenry.
The infamous “revolving door” that regularly ushers senior Pentagon officials into defense-industry posts and senior defense-industry figures into key positions at the Pentagon (and in the rest of the national security state) just adds to the endless public-relations offensives that accompany this country’s forever wars. After all, the retired generals and other officials the media regularly looks to for expertise are often essentially paid shills for the defense industry. The lack of public disclosure and media discussion about such obvious conflicts of interest only further corrupts public debate on both the wars and the funding of the military, while giving the arms industry the biggest seat at the table when decisions are made on how much to spend on war and preparations for the same.
Media Analysis Brought to You by the Arms Industry
That lack of disclosure regarding potential conflicts of interest recently came into fresh relief as industry boosters beat the media drums for war with Iran. Unfortunately, it’s a story we’ve seen many times before. Back in 2008, for instance, in a Pulitzer Prize-winning series, the New York Timesrevealed that the Pentagon had launched a program to cultivate a coterie of retired-military-officers-turned-pundits in support of its already disastrous war in Iraq. Seeing such figures on TV or reading their comments in the press, the public may have assumed that they were just speaking their minds. However, the Times investigation showed that, while widely cited in the media and regularly featured on the TV news, they never disclosed that they received special Pentagon access and that, collectively, they had financial ties to more than 150 Pentagon contractors.
Given such financial interests, it was nearly impossible for them to be “objective” when it came to this country’s failing war in Iraq. After all, they needed to secure more contracts for their defense-industry employers. A subsequent analysis by the Government Accountability Office found that the Pentagon’s program raised “legitimate questions” about how its public propaganda efforts were tied to the weaponry it bought, highlighting “the possibility of compromised procurements resulting from potential competitive advantages” for those who helped them.
While the program was discontinued that same year, a similar effort was revealed in 2013 during a debate over whether the U.S. should attack Bashar al-Assad’s Syrian regime. You probably won’t be surprised to discover that most of the former military figures and officials used as analysts at the time supported action against Syria. A review of their commentary by the Public Accountability Initiative found a number of them also had undisclosed ties to the arms industry. In fact, of 111 appearances in major media outlets by 22 commentators, only 13 of them disclosed any aspect of their potential conflicts of interest that might lead them to promote war.
The same pattern is now being repeated in the debate over the Trump administration’s decision to assassinate by drone Iranian Major General Qassem Soleimani and other Iran-related issues. While Soleimani clearly opposed the United States and many of its national security interests, his killing risked pushing Washington into another endless war in the Middle East. And in a distinctly recognizable pattern, the Intercept has already found that the air waves were subsequently flooded by defense-industry pundits praising the strike. Unsurprisingly, news of a potential war also promptly boosted defense industry stocks. Northrop Grumman’s, Raytheon’s, and Lockheed Martin’s all started 2020 with an uptick.
Senator Elizabeth Warren (D-MA) and Representative Jackie Speier (D-CA) have offered legislation that could shut down that revolving door between the major weapons makers and Washington for good, but it has met concerted resistance from Pentagon officials and others still in Congress who stand to benefit from preserving the system as is. Even if that revolving door wasn’t shut down, transparency about just who was going through it would help the public better understand what former officials and military commanders are really advocating for when they speak positively of the necessity for yet another war in the Middle East.
Costly Weapons (and Well-Paid Lobbyists)
Here’s what we already know about how it all now works: weapon systems produced by the big defense firms with all those retired generals, former administration officials, and one-time congressional representatives on their boards (or lobbying for or consulting for them behind the scenes) regularly come in overpriced, are often delivered behind schedule, and repeatedly fail to have the capabilities advertised. Take, for instance, the new Ford class aircraft carriers, produced by Huntington Ingalls Industries, the sort of ships that have traditionally been used to show strength globally. In this case, however, the program’s development has been stifled by problems with its weapons elevators and the systems used to launch and recover its aircraft. Those problems have been costly enough to send the price for the first of those carriers soaring to $13.1 billion. Meanwhile, Lockheed Martin’s F-35 jet fighter, the most expensive weapons system in Pentagon history, has an abysmal rate of combat readiness and currently comes in at more than $100 million per aircraft.
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And yet, somehow, no one ever seems to be responsible for such programmatic failures and prices — certainly not the companies that make them (or all those retired military commanders sitting on their boards or working for them). One crucial reason for this lack of accountability is that key members of Congress serving on committees that should be overseeing such spending are often the top recipients of campaign contributions from the big weapons makers and their allies. And just as at the Pentagon, members of those committees or their staff often later become lobbyists for those very federal contractors.
With this in mind, the big defense firms carefully spread their contracts for weapons production across as many congressional districts as possible. This practice of “political engineering,” a term promoted by former Department of Defense analyst and military reformer Chuck Spinney, helps those contractors and the Pentagon buy off members of Congress from both parties. Take, for example, the Littoral Combat Ship, a vessel meant to operate close to shore. Costs for the program tripled over initial estimates and, according to Defense News, the Navy is already considering decommissioning four of the new ships next year as a cost-saving measure. It’s not the first time that program has been threatened with the budget axe. In the past, however, pork-barrel politics spearheaded by Senators Tammy Baldwin (D-WI) and Richard Shelby (R-AL), in whose states those boats were being built, kept the program afloat.
The Air Force’s new bomber, the B-21, being built by Northrup Grumman, has been on a similar trajectory. Despite significant pressure from then-Senator John McCain (R-AZ), the Air Force refused in 2017 to make public or agree upon a contract price for the program. (It was a “cost-plus,” not a “fixed price” contract, after all.) It did, however, release the names of the companies providing components to the program, ensuring that relevant congressional representatives would support it, no matter the predictably spiraling costs to come.
Recent polling indicates that such pork-barrel politics isn’t backed by the public, even when they might benefit from it. Asked whether congressional representatives should use the Pentagon’s budget to generate jobs in their districts, 77% of respondents rejected the notion. Two-thirds favored shifting such funds to sectors like healthcare, infrastructure, and clean energy that would, in fact, create significantly more jobs.
And keep in mind that, in this big-time system of profiteering, hardware costs, however staggering, are just a modest part of the equation. The Pentagon spends about as much on what it calls “services” as it does on the weaponry itself and those service contracts are another major source of profits. For example, it’s estimated that the F-35 program will cost $1.5 trillion over the lifetime of the plane, but a trillion dollars of those costs will be for support and maintenance of the aircraft.
Increasingly, this means contractors are able to hold the Pentagon hostage over a weapon’s lifetime, which means overcharges of just about every imaginable sort, including for labor. The Project On Government Oversight (where I work) has, for instance, been uncovering overcharges in spare parts since our founding, including an infamous $435 hammer back in 1983. I’m sad to report that what, in the 1980s, was a seemingly outrageous $640 plastic toilet-seat cover for military airplanes now costs an eye-popping $10,000. A number of factors help explain such otherwise unimaginable prices, including the way contractors often retain intellectual property rights to many of the systems taxpayers funded to develop, legal loopholes that make it difficult for the government to challenge wild charges, and a system largely beholden to the interests of defense companies.
In for a TransDigm, Out for Billions
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The most recent and notorious case may be TransDigm, a company that has purchased other companies with a monopoly on providing spare parts for a number of weapon systems. That, in turn, gave it power to increase the prices of parts with little fear of losing business — once, receiving 9,400% in excess profits for a single half-inch metal pin. An investigation by the House Oversight and Reform Committee found that TransDigm’s employees had been coached to resist providing cost or pricing information to the government, lest such overcharges be challenged.
In one case, for instance, a subsidiary of TransDigm resisted providing such information until the government, desperate for parts for weapons to be used in Iraq and Afghanistan, was forced to capitulate or risk putting troops’ lives on the line. TransDigm did later repay the government $16 million for certain overcharges, but only after the House Oversight and Reform Committee held a hearing on the subject that shamed the company. As it happens, TransDigm’s behavior isn’t an outlier. It’s typical of many defense-related companies doing business with the government — about 20 major industry players, according to a former Pentagon pricing czar.
A Recipe for Disaster
For too long Congress has largely abdicated its responsibilities when it comes to holding the Pentagon accountable. You won’t be surprised to learn that most of the “acquisition reforms” it’s passed in recent years, which affect how the Department of Defense buys goods and services, have placed just about all real negotiating power in the hands of the big defense contractors. To add insult to injury, both parties of Congress continue to vote in near unanimity for increases in the Pentagon budget, despite 18-plus years of losing wars, the never-ending gross mismanagement of weapons programs, and a continued failure to pass a basic audit. If any other federal agency (or the contractors it dealt with) had a similar track record, you can only begin to imagine the hubbub that would ensue. But not the Pentagon. Never the Pentagon.
A significantly reduced budget would undoubtedly increase that institution’s effectiveness by curbing its urge to throw ever more money at problems. Instead, an often bought-and-paid-for Congress continues to enable bad decision-making about what to buy and how to buy it. And let’s face it, a Congress that allows endless wars, terrible spending practices, and multiplying conflicts of interest is, as the history of the twenty-first century has shown us, a recipe for disaster.”
Mandy Smithberger rejoined POGO as the director of the Straus Military Reform Project at the Center for Defense Information in December 2014. Previously she was a national security policy adviser to U.S. Rep. Jackie Speier (D-Calif.) worked on passing key provisions of the Military Whistleblower Protection Enhancement Act into law, which expands protections by increasing the level of Inspector General review for complaints, requiring timely action on findings of reprisal, and increasing the time whistleblowers have to report reprisals. Previously an investigator with POGO, she was part of a team that received the Society of Professional Journalists’ Sunshine Award for contributions in the area of open government. Ms. Smithberger received her B.A. in government from Smith College and her Masters in Strategic Studies and International Economics from Johns Hopkins University’s School of Advanced International Studies. She also served as an analyst at the Defense Intelligence Agency and U.S. Central Command.
“The sad truth is that each time a government contract is awarded to a company falsifying its status as a SDVOSB, other veterans operating legitimate, eligible small businesses are denied opportunities that they’ve earned through their service to our nation.“
It’s up to us to ensure these opportunities are safeguarded for our veterans today and tomorrow. It’s the honorable thing to do.“
“Ensuring that each veteran receives our full respect and support as he or she transitions back to civilian life is one of our duties as a nation.
While the personal sacrifice made by our veterans is impossible to measure and represents a debt that can never fully be repaid, it is vital that Americans do what we can to protect the benefits and services our nation’s veterans have earned.
Extending opportunities to entrepreneurial veterans who have suffered service-related disabilities is one way our nation honors their extraordinary service. The Service-Disabled Veteran-Owned Small Business (“SDVOSB”) procurement program was established in 2003 as an extension of the federal government’s policy to maximize procurement opportunities for small businesses. The program provides opportunities for SDVOSBs by establishing a goal that at least 3 percent of all federal contracting dollars be awarded to service-disabled veteran-owned small businesses each year.
Three percent of federal contracting dollars may seem like a small amount—but the reality is this program represents billions of dollars in opportunity for our nation’s veterans. Unfortunately, over the years, this program has become a lucrative target for fraud and abuse. In fact, in a sobering December 2019 report from the Government Accountability Office focused on contracting fraud with the Department of Defense, one of the most rampant forms of abuse documented relates to contractors falsely claiming eligibility for contracts set aside for small businesses owned by service-disabled veterans.
Schemes in which well-resourced, large companies either create fraudulent SDVOSBs or manipulate existing SDVOSBs to capture federal set-aside contracts for themselves are on the rise. These schemes are robbing our nation’s veterans of opportunities that they earned through their service. This is why it is critical that we understand the rules involving contracts set aside for SDVOSBs, as well as how to identify SDVOSB fraud.
First, let us look at the rules of SDVOSB procurement. In order to be eligible for a set-aside or sole-source SDVOSB contract with the federal government, a firm must meet four criteria. First, the firm must be a small business. Second, the company must be at least 51-percent owned by one or more service-disabled veterans. Third, a service-disabled veteran must hold the highest position in the company—such as the role of CEO—and be responsible for the day-to-day operation of the firm. And finally, the eligible veterans must have a service-connected disability.
It’s also worth noting that while SDVOSBs can join forces with large companies to bid on government contracts, to qualify for an SDVOSB set-aside opportunity, at least 51 percent of the net profits earned by the joint venture must be distributed to the SDVOSB and the SDVOSB needs to play the lead role as project manager on the project.
Even though these rules should be easy to understand and follow, the lure of securing set-aside government contracts worth billions of dollars is too much for some large business owners to resist, often leading some to commit fraud by creating small businesses to serve as a “pass through” entity to illegally win SDVOSB set-aside contracts. For example, the Virginia-based defense contractor ADS, Inc. and Luke Hillier, ADS’s former Chief Executive Officer, collectively agreed to pay the United States nearly $37 million to settle allegations that they violated the False Claims Act by fraudulently obtaining federal set-aside contracts reserved for small businesses that ADS was ineligible to receive. Specifically, ADS settled allegations that it had established a “pass through” small business named MJL Enterprises led by a former ADS employee who happened to be a service-disabled veteran. The lawsuit further alleged that ADS managed MJL’s day-to-day operations and supplied the necessary logistical services to allow MJL to perform under its SDVOSB set-aside contracts. In turn, MJL brought in more than $70 million in small business set-aside government contracts that ADS otherwise would not have been eligible to receive.
In the case of ADS, the punishment for allegedly using a fraudulent SDVOSB was severe. Hillier’s settlement of $20 million is among the largest secured against an individual in the history of the FCA. In addition to the $20 million settlement announced by the DOJ in August 2019, the firm also paid the U.S. government a settlement of $16 million in 2017 related to the same conduct.
So, what can be done about the issue? The GAO report underscores that the Defense Department should be doing more to verify who actually owns and manages the companies that supply the agency with goods and services. That sounds great, but the reality is the complex system that includes thousands of vendor companies and hundreds of thousands of contracts and subcontracts makes this kind of additional oversight a herculean task.
Another solution is to encourage those with insider knowledge of potential SDVOSB fraud to come forward as whistleblowers. Whistleblowers with direct knowledge about the ownership and management structure of these organizations are uniquely positioned to shine a light on fraudulent schemes that may otherwise never be uncovered.”
The service has been experimenting with ‘pitch days’ across the country over the last year, such as the Space Pitch Days held in San Francisco in November when the service handed out $22.5 million to 30 companies over two days.
“PENTAGON: The Air Force will roll out the final stage in its commercial startup investment strategy during the March 13-20 South By Southwest music festival, granting one or more contracts worth at least $10 million to startups with game-changing technologies, service acquisition chief Will Roper says.
So, if the Air Force investment fund, called Air Force Ventures, puts in $20 million, the private capital match would be $40 million.
AFWERX, the Air Force’s innovation unit, has one of its hubs in Austin.
“This has been a year in the making now, trying to make our investment arm, the Air Force Ventures, act like an investor, even if it’s a government entity,” Roper explained. “We don’t invest like a private investor — we don’t own equity — we’re just putting companies on contract. But for early stage companies, that contract acts a lot like an investor.”
The goal is to help steer private resources toward new technologies that will benefit both US consumers and national security to stay ahead of China’s rapid tech growth, Roper told reporters here Friday.
The Air Force wants to “catalyze the commercial market by bringing our military market to bear,” he said. “We’re going to be part of the global tech ecosystem.”
Figuring out how to harness the commercial marketplace is critical, Roper explained, because DoD dollars make up a dwindling percentage of the capital investment in US research and development. This is despite DoD’s 2021 budget request for research, development, test and evaluation (RDT&E) of $106.6 billion being “the largest in its history,” according to Pentagon budget rollout materials. The Air Force’s share is set at $37.3 billion, $10.3 billion of which is slated for Space Force programs.
“We are 20 percent of the R&D is this country — that’s where the military is today,” Roper said. “So if we don’t start thinking of ourselves as part of a global ecosystem, looking to influence trends, investing in technologies that could be dual-use — well, 20 percent is not going to compete with China long-term, with a nationalized industrial base that can pick national winners.”
The process for interested startups to compete for funds has three steps, Roper explained, beginning with the Air Force “placing a thousand, $50K bets per year that are open.” That is, any company can put forward its ideas to the service in general instead of there being a certain program office in mind. “We’ll get you in the door,” Roper said, “we’ll provide the accelerator functions that connect you with a customer.
“Pitch days” are the second step, he said. Companies chosen to be groomed in the first round make a rapid-fire sales pitch to potential Air Force entities — such as Space and Missile Systems Center and Air Force Research Laboratory — that can provide funding, as well as to venture capitalists partnering with the Air Force.
As Breaking D broke in October, part of the new acquisition strategy is luring in private capital firms and individual investors to match Air Force funding in commercial startups as a way to to bridge the ‘valley of death’ and rapidly scale up capability.
Roper said he intends to make “maybe 300 of those awards per year,” with the research contracts ranging from $1 million to $3 million a piece and “where program dollars get matched by our investment dollars.”
The final piece of the strategy, Roper explained, is picking out the start-ups that can successfully field game-changing technologies.
“The thing that we’re working on now is the big bets, the 30 to 40 big ideas, disruptive ideas that can change our mission and hopefully change the world,” Roper said. “We’re looking for those types of companies.”
If the strategy is successful, Roper said, the chosen firms will thrive and become profitable dual-use firms focused primarily on the commercial market.
“The, we’re starting to build a different kind of industry base,” Roper enthused. “So, we’ve gotta get the big bets right. Then most importantly, if you succeed in one of the big bets, then we need to put you on contract on the other side, or else the whole thing is bunk.”
“The Army is pitting three companies against one another to see who can build the best truck to be pushed out of a flying helicopter and parachute to the ground, beyond the range of enemy missiles. It also needs sufficient protection for the nine-soldier squad who’ll climb into it and rush into combat.
The military will likely end up, once again, with what those on the front lines derisively call “tactical golf carts”—vehicles relegated to the sidelines in combat after taxpayers spent millions on a truck billed as a war machine. “
“Old boys of a certain age can recall “playing war” with small, plastic Army men, vanquishing foes on the plains of Europe or Pacific islands. In those halcyon years following World War II, it seemed to us like American soldiers could do anything, from thwarting enemy bazookas with their bare hands to facing down flamethrowers. We were kids, and knew nothing of reality or the laws of physics. But unlike us, it looks like the Pentagon has never grown up.
That’s why it’s on the verge of building an Infantry Squad Vehicle designed to parachute onto the battlefield. The vehicle will almost surely end up facing the same fate as an earlier version the Pentagon tried to field: being either too heavy to fly or too light to protect the troops.
Such wonder weapons are the ultimate bait-and-switch: Taxpayers pay a premium for combat utility that too often evaporates on the battlefield, while troops can pay in blood. The only winners are the Pentagon weapons-buying bureaucracy and its contractors, who perpetually promise more than they can deliver.
While the laws of economics have never really applied to the Pentagon, those of physics certainly do. Of course, one reason those economic laws have never applied is the U.S. military’s continuing apparent efforts to ignore the laws of physics. And while the military has at times eclipsed what physics seemed to allow (radar, nuclear weapons, and GPS come to mind), there are many more examples where ignoring physics has been disastrous for the budget.
With its continuing missile-defense dream of shooting down bullets with bullets (or lasers) while ignoring incoming decoys, the Pentagon is seeking to break the laws of physics. So too with the F-35 Joint Strike Fighter, an elastic design stretched to fit the needs of the Air Force, Marines, and Navy. Crammed with compromises to serve three masters, it isn’t optimal for any pilot. The F-35 echoes the 1960s’ failed TFX program, whose goal was to build an airplane with moveable, sweeping wings, and which the Air Force and Navy could share. The Pentagon’s corner-cutting to try to meet the services’ conflicting range and speed requirements plus the Navy’s need for a beefed-up aircraft capable of punishing carrier landings proved too great. So only the Air Force ended up flying the TFX, which became the F-111. Because the U.S. military didn’t learn the lesson of the F-111, the nation is now burdened with the F-35, the most costly—not to mention mediocre—weapon system in history.
Paratroopers, who achieved fame during World War II by dropping behind German lines on D-Day, still travel no faster than their boots can carry them. “The modernized vehicles will provide enhanced tactical mobility for an infantry brigade combat team to move quickly around the battlefield,” an Army official said in August. The three competing trucks (from GM Defense and SAIC/Polaris) are slated to arrive at the Army’s Aberdeen Proving Grounds in Maryland this month. The Army wants to begin buying an initial batch of 649 of these Infantry Squad Vehicles next year, and ultimately buy more than 2,000.
But war cruelly puts its players into a box whose dimensions are dictated by physics. In fact, the old military adage—the victor gets there “fustest with the mostest”—is a technological Catch-22. Every ounce of protection, from Kevlar helmets to thick metal armor, delays troops getting to the battlefield. “It is unconscionable that we have gotten to the point where the assault load of an assistant machine-gunner is 169 pounds,” a Pentagon advisor said at a 2018 conference. “We have got to do something to reduce the combat load or we are going to be like knighted knights in armor walking around the battlefield with very little mobility.”
Talk like that leads to things like the Infantry Squad Vehicle.
As Sydney J. Freedberg Jr. detailed recently on the Breaking Defense website, each contractor is bringing different strengths to the drive-off. The Oshkosh team is already building a lot of Army vehicles. The Polaris team has a variant deployed with the Special Operations Command and the Army’s 82nd Airborne Division. GM Defense is the outlier. After General Motors sold most of its defense business to General Dynamics in 2003, it has only recently begun seeking Pentagon business again. Its entrant is based on the Chevrolet Colorado, which has been selling like hotcakes—more than 100,000 a year—since its 2016 debut. That gives the GM candidate production efficiencies that its two competitors can’t hope to match.
Beyond the problems of physics, an additional issue that could compound the program’s cost risk is that the Pentagon is procuring the prototypes under so-called other transaction authority. As POGO noted in March, this is a federal-contracting mechanism that relaxes procurement rules. Its goal is to entice new and innovative companies to do business with the government. But in this case, the competitors are largely traditional contractors. Even more concerning, the Army has hinted the Pentagon may use such other transaction authority for follow-on production.
And, just like Achilles’ heel, the new Army vehicle has its own vulnerability. Let’s call it Achilles’ wheel: It has no armor. Zilch. Nada. None. The truck will protect soldiers “by high mobility avoiding enemy contact,” a March report by the Congressional Research Service said. If that proves insufficient, each soldier will rely on their “Personal Protection Equipment”—“helmet, body armor, and other accoutrements designed to protect against blast; fragmentation; thermal; and nuclear, biological, and chemical (NBC) threats.”
eah, right. This is the slippery language common to Pentagon weaponeers and their industrial camp followers. The notion that U.S. commanders will send troops into harm’s way in a thin-skinned vehicle is a pipe dream that will clog and shut down as soon as U.S. troops are killed aboard such vehicles. It happened in Afghanistan and Iraq, where the Pentagon spent nearly $50 billion rushing Mine-Resistant, Ambush-Protected vehicles to save lives after crude roadside bombs killed hundreds of U.S. troops aboard both thin-skinned and up-armored Humvees.
Beyond that, the use of “soft-skinned” vehicles in lower-threat areas has been cast into doubt by the 2017 deaths of four U.S. soldiers in Niger, as a Pentagon investigation into their mission concluded. Once the soldiers stumbled into an ambush they became sitting ducks for 100 Islamic State militants. “The special operations component had done an assessment for armored vehicles, for example, and determined, a while back, that they weren’t necessary,” Marine General Thomas Waldhauser, chief of U.S. Africa Command, told reporters at a May 2018 briefing detailing what led to the troops’ deaths. After the Pentagon’s investigation, “we immediately directed that armored vehicles be given to those teams as an option,” he said.
For some of its ground forces, the Army wants to use existing designs “to reduce costs and the time it takes to field combat vehicles,” that March Congressional Research Service report said. The Army’s plan echoes the same promise, ultimately unfulfilled, that the Marines made for their Growler 20 years ago.
The M1161 Growler, officially known as the Internally Transportable Vehicle (ITV), is the only military vehicle approved to fly aboard the Marines’ V-22 tilt-rotor aircraft. The Defense Department originally envisioned the Growler as a cheap vehicle that would use parts already being produced for existing military vehicles. But ultimately, much of it was built from scratch to make it light (that is, armorless) and small enough to be shoehorned into the V-22.
In 2009, the Pentagon inspector general said the Internally Transportable Vehicle’s cost had ballooned by 120% over the original estimate, from $94,770 to $208,938. The watchdog blamed the Marines’ overly optimistic assessment of how much work would be required to fit the vehicle into a V-22, along with sloppy management that made that challenge even tougher.
“The Marine Corps underestimated the development effort required to modify the … ITV to meet size and weight limitations” for it to be transportable in a V-22, as well as the Growler’s “performance specifications for durability and reliability,” the inspector general found. “ITV subsystem design changes posed significant challenges because of minimum size, weight, and center of gravity constraints mandated by the MV-22 Osprey.” The Growler’s development, the inspector general added, “was caught in a cycle of design, test, and redesign and test” that “caused repeated schedule delays and cost increases.”
Front-line reviews were grim as well. “The wars in Iraq and Afghanistan saw a reluctance to use a vehicle without armor to protect it from roadside bombs,” Defense Newsreported in 2015.
“The vehicle is considered almost useless to the forward-deployed Marines who might use it,” Shawn Snow, a Marine veteran, wrote last year in the independent Marine Corps Times, where he now works as a senior reporter. “The vehicle has been deployed downrange to places like Afghanistan, where [Marines] used it for transportation to and from ranges, or as a daily driver on larger installations like Camp Leatherneck in Helmand province, Afghanistan. It also has served as light security.”
So the Growler proved to be no bargain on the battlefield. But it’s a hit on the used war-wagon market. In February, the private company GovPlanet announced it would begin auctioning off used Internally Transportable Vehicles. “The M1161 ITV Growler is a 4×4 ‘jeep-style’ vehicle with a Navistar 2.8L diesel, 132-horsepower engine,” the company advertises.
Opening bids start as low as $5,000 for a Growler with less than 1,000 miles on the odometer. This buyer says he spent $30,000 on his, plus $7,500 for shipping and taxes, far less than the $200,000-plus the government paid per vehicle. “Not too bad of a price,” he notes in a comment appended to one of his YouTube videos, “when you take that into consideration.”
The seller couldn’t agree more. “This is obviously an extremely rare and unique opportunity to purchase highly-spec’d vehicles built for and used by the U.S. military,” a GovPlanet executive says.”
“Initially the Navy aimed for each ship to cost $220 million, but the Government Accountability Office estimates procurement costs for the first 32 ships is currently about $21 billion, or about $655 million per ship—nearly triple what they were supposed to cost.“
“After spending $30 billion over a period of around two decades, the U.S. Navy has managed to acquire just 35 of the 3,000-ton-displacement vessels.
Sixteen were in service as of late 2018. Of those 16, four are test ships. Six are training ships. In 2019 just six LCSs, in theory, are deployable.
While that number should increase as the remaining ships in the class finally commission into service, the LCS’s low readiness rate calls into question the wisdom of the Navy’s investment in the type.
Indeed, the Navy in 2018 didn’t deploy a single LCS, USNI News reported. “The service was supposed to push forward three ships in Fiscal Year 2018, after a 2016 overhaul of LCS homeporting, command and control and manning constructs.”
“However, USNI News first reported in April 2018 that zero LCSs would deploy in [fiscal year] 2018. Since then, the Navy had not talked publicly about progress made towards getting ready to deploy its first LCSs since ships from a block-buy contract started delivering to the fleet at about four a year.”
Navy officials in early 2019 claimed at least three LCSs would deploy before the end of the current fiscal year in September 2019.
“We’re deploying LCS this year, it’s happening,” Commander of Naval Surface Forces Vice Adm. Richard Brown told reporters. “Two ships are going on the West Coast; one ship is going on the East Coast, followed shortly [by a second] in the beginning of ‘20. And that marks the deployment of LCS; there will always be LCS forward-deployed now, just like we designed the program.”
Brown said the LCSs USS Montgomery and USS Gabrielle Giffords would deploy from San Diego to the Western Pacific while USS Detroit deployed from Florida. USS Little Rock in early 2020 also would deploy from Florida.
U.S. Southern Command in February 2019 announced that Detroit would conduct counterdrug operations. “We expect to have a littoral combat ship this year, and that will be a big benefit for our exercise program for our engagement with partners and because of the flexibility it brings for counter-narcotics interdiction,” SOUTHCOM commander Adm. Craig Faller said.
When the Navy in the 1990s first began shaping the LCS program, the idea was for the ships to be small, fast, inexpensive and lightly-manned “trucks” into which the sailing branch could plug a wide array of “modules” carrying equipment for specific missions including surface warfare, anti-submarine warfare and minesweeping.
In a bid to speed up the production of as many as 55 LCSs, the Navy selected two shipyards — Lockheed Martin’s facility in Wisconsin and an Austal yard in Alabama — each to build their own variant of the class. Complications and cost compounded.
“The Littoral Combat Ship program has been unnecessarily complicated from the beginning,” the Project on Government Oversight explained in 2016.
“The program’s three mission packages, according to the latest select acquisition report, add about $7.6 billion.”
In the decade and a half since the program was first sold to Congress, the LCS has already been forced into multiple major program changes, initially driven by large cost overruns, the lack of combat survivability and lethality discovered during operational testing and deployments, the almost crippling technical failures and schedule delays in each of the three mission modules.
Now the Navy has announced it is abandoning the two fundamental concepts behind the program: a multi-mission ship with swappable mission modules and a radically new way of manning it. Instead, each LCS hull will have a single mission and a significantly larger crew assigned a single primary skill set.
It took the Navy nearly two decades to realize the LCS program had failed. The sailing branch in 2014 cut LCS acquisition from 55 ships to 32. Congress eventually added three vessels, boosting the class to 35 ships.
In place of the 20 canceled LCSs, the Navy plans to buy 20 new missile frigates. The service in 2019 asked Congress for around $1 billion for the first ship in the new class.
In contrast to the LCS in its original guise, the new frigate will be a conventional vessel with a large crew and hard-wired systems.
The Navy surely hopes the new vessel is more deployable than the LCS has proved to be. A warship that can’t leave port hardly qualifies as a warship.”
“A new collection of studies reveals at the often unseen effects of those wars both at home and abroad ranging from fractured families, strained caregivers, increased cancer rates to mistrust of health workers, demolished infrastructure and military suicides.“
“Impact from the past two decades of U.S. wars in Iraq and Afghanistan can be seen in dollars spent, lives shattered by injury or trauma and dead service members carried home.
“War and Health” is a collection of ethnographies covering a range of people affected from the wars beginnings, current day and likely long-term future ripples.
In it researchers have found correlations between areas in Afghanistan and Pakistan with higher number of drone strikes are also less likely to accept polio vaccinations and other medical assistance due to mistrust of government aid.
They’ve seen increased rates of behavior incidents and low school performance among children of frequently-deployed military parents.
The reports show waves of Iraqis seeking medical care in Beirut, Lebanon with late-stage cancers because they couldn’t get early screening in Iraq, which previously boasted the leading medical care in the region.
Researchers found military suicides, increased family violence and higher numbers of substance abuse and DUIs even among non-combat service members correlated with faster-paced deployment schedules and training.
While half of all caregivers for veterans are spouses, parents or immediate family, a full one-third of caregivers are friends or neighbors who don’t qualify to receive financial compensation created in recent years to ease the burden that caregivers for vets can face.
Catherine Lutz and Andrea Mazzarino edited the collection as part of their work with the “Costs of War Project,” out of Brown University.
The project collects information on war dead, military and civilian casualties, budget figures and other measures of the costs of the conflicts in the Global War on Terror. The project began in 2011 and recently kicked off a new effort to update past reports and develop new measures by 2021, the 20th anniversary of the start of the wars.
The same project recently released and updated notice on the fiscal costs of the Global War on Terror. The release noted that an estimated $6.4 trillion had been spent between late 2001 and today, a large portion of which has been financed through deficit spending.
But, those numbers can be difficult to nail down, as noted in the report, which quotes Christopher Mann of the Congressional Research Service.
“No government-wide reporting consistently accounts for both DOD and non-DOD war costs,” he said.
Part of the Costs of War Project’s work is to pull together disparate sources to find the tally of the wars.
Their research has found that that a growing cost will be medical care.
One example included 10-year costs estimates for post-9/11 veterans with traumatic brain injuries is expected to cost $2.4 billion from 2020 to 2029.
Mazzarino spoke with Military Times about the nature of the project and what she and its contributors hope it will accomplish.
She and others have participated in media interviews and, through the Costs of War Project, have been in touch with Sen. Bernie Sanders, D-VT and hope to testify before Congress on their findings.
“The whole point of the project is to move beyond the academy to influencing advocacy and public policy,” Mazzarino said.
That’s not an easy task. Data-driven studies such as past reports on increasing servicemember suicides and strains on military families garnered political and public attention, but that took years and resulted in some changes in programs.
What Mazzarino and her colleagues are working with is less black-and-white and more focused on the second- and third-order effects of having a military at war on a daily basis for decades.
But, it may be that what they’re finding will have as much a long-term impact as other major war-related concerns.
“People who were serving when the war started, they’re entering old age soon,” Mazzarino said. “That’s going to come with all kinds of financial burdens to the U.S. government, especially with care for those veterans.”
And overseas, the imprint of decades of combat leave their own kind of toll.
“There are subtle and unexpected ways that the destruction of infrastructure has affected public health,” she said.
The Costs of War Project website has compiled estimates that a many as 480,000 people have died in direct war violence. They estimate far more have died due to “indirect” war violence such as when access to food, water and medical care was restricted or unavailable due to combat.
Their research estimates that more than 244,000 civilians have been killed in connection to the wars and as many as 21 million have been displaced and many are now war refugees, with substandard living conditions away from their native lands.
One harder to measure item is how the estimated $5.9 trillion spent on the wars could have been spent, the report notes. What healthcare, infrastructure or education projects were curtailed, limited or ended as a result in budget priorities to fight the wars instead?
Mazzarino has seen firsthand some of the effects of the wartime military. Her husband serves as a submariner in the Navy. That’s meant more frequent and unexpected deployments that his predecessors faced.
And she’s seen that strain on fellow military families, members and commanders.
Some similar experiences were reflected in a section titled, “It’s Not Okay: War’s Toll on Health Brought Home to Communities and Environments.”
One vignette profiled Dolores, the young wife of an infantry sergeant whose unit had seen a number of murders committed by soldiers back home and increases in domestic violence.
Those experiences had weighed heavily on her husband who returned and completed another Iraq deployment, this time being injured and later diagnosed with traumatic brain injury, and Post Traumatic Stress Disorder.
Six years after he had returned from theater, she had become his main caregiver and had to quit her job to do that work and to advocate for his care.
The section’s authors, Jean Scandlyn and Sarah Hautzinger, wrote that many of the veterans of Iraq and Afghanistan they interviewed still saw themselves as deeply entangled in what had happened during their deployments.
“Assessing war’s toll on health requires that we consider the ways we all become entangled in wars seemingly distant, and how war particularly erodes wellness in domestic military communities,” they wrote.”
“Congress is expected to pass a second continuing resolution funding the government through Dec. 20, and President Donald Trump will likely that bill, speculated a top executive at a leading government contractor trade group, but after that, federal contractors should be prepared for the worst.
“Don’t place a lot of bets after Dec. 20,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council in a Nov. 13 conference call on preparing for a potential federal government shutdown.
He advised contractors to get in touch with the federal agency counterparts now to discuss a range of issues, including contract status, deadlines, renewal dates, and task orders. Contractors should also know how their agency customers will issue “stop work” orders ahead of a shutdown to avoid confusion. “
“A surge of defense spending is prompting the Pentagon’s audit agency to triple the number of evaluations it will undertake in order to uncover or prevent unjustified profits based on incomplete, flawed or inaccurate cost data.
The Defense Contract Audit Agency intends to complete as many as 60 Truth In Negotiations Act reviews in the coming fiscal year, compared to about 20 in the year ending Sept. 30.”
“According to spokesman Christopher Sherwood. The agency completed 21 such audits in 2018 and 26 in 2017. About half the reviews focused on the top 25 defense contractors.
Efforts to bolster defense spending were aided by Congress’s decision to revise spending caps for the final two years of the 2011 Budget Control Act. That effectively added tens of billions of dollars potential defense spending to the Pentagon budget: $90.3 billion in fiscal year 2020 and $81.3 billion in the following year.
Congress has signaled its concern that the money could be misspent. The staff of Republican Senator Chuck Grassley, chairman of the Senate Finance Committee, as well as investigators for Democratic Representative Elijah Cummings, chairman of the House Oversight Committee, are already reviewing the Pentagon’s enforcement of the law intended to prevent unjustified profits based on incomplete, flawed or inaccurate cost and pricing data for military unique items.
“The committee is investigating whether defense contractors are providing complete and accurate cost data, as required by law,” Cummings said in an emailed statement.
The 1962 Truth In Negotiations Act sought to put government contracting officers on equal footing with company counterparts, requiring firms during negotiations to provide government buyers all the variables that influenced the final price of a product or service unique to the military. They must also legally certify that the information is accurate, complete and current.
The TINA audits are separate from Pentagon reviews that uncover instances of overcharging for basic spare parts such as nuts and pins. Those types of goods are considered “commercial items,” normally exempt from the law’s price data requirements since there is already publicly available data to compare them with.
Under the ramped up audit policy, the number of “work years,” or time devoted to compiling compliance audits, will increase by approximately 500%, Sherwood said.
Previous reviews show there’s reason to be concerned. As an example, Shay Assad, the Pentagon’s former director of defense pricing and contracting, said evaluations during his tenure showed that essentially 100% of the contracts examined at one top-25 defense contractor had suspect pricing.
“If one looks deep enough there is some element of fraud typically lurking,” he said.
Sherwood said the contracts most prone to significant risk of “excess profits” are large, firm-fixed price types. In 2015, the audit agency formed a specialized, 20-person unit to handle reviews of “high-risk” contracts.
Based on initial reviews commissioned before the team was formed, Assad said in a written statement that “it became obvious to us that we needed to step up defective pricing review efforts.”
“In a number of cases we expected profit outcomes of 12% to 15%,” Assad said, but they found levels of between 25% and 80% on some sole-source weapons contracts. “That does not happen by outstanding performance” but by faulty contractor cost estimating “or in the worst case, fraud,” he added. Assad retired this year.
Since 2015, the unit has conducted audits on 108 high-risk contracts totaling $74 billion. Of those, 79 — or nearly 75% — uncovered potential defective pricing of $589 million that could eventually translate into contractor repayments after the contested charges go through a negotiations process.
“If both parties arrive at a mutually agreeable settlement, the contractor will make a payment to the government,” Sherwood said. But if not, the government’s principal negotiator “issues a demand for payment, at which point the contractor may elect to make the payment or pursue legal action,” he added.
In that same period, the audit agency has referred 10 compliance audits with “suspected irregular conduct” to the Pentagon’s Defense Criminal Investigative Service. Eight of those 10 have resulted in active cases, Sherwood said.”
“Government is losing talent, productivity and taxpayer dollars as agencies often take several months to complete their own investigations of individuals who have already been reviewed and cleared by another federal organization.”
“Ambiguous, layered and outdated policies and practices are preventing federal employees and contractors with security clearances from moving top talent in and around government.
The Intelligence and National Security Alliance [INSA] describes in a recent report the challenges with a concept known as “reciprocity.”
“Reciprocity” refers to the idea that if one agency places trust and grants a security clearance to a federal employee or contractor, most other agencies — generally — should too.
But members of industry have, on multiple occasions, said this isn’t standard practice at some departments, and contractors generally have little insight into where their employees are in an agency’s investigative and adjudication process, INSA said.
Industry leaders say 10% of their cleared contractor workforce within the intelligence community are idle at any given time, because their employees are waiting for an agency to grant, update or transfer a security clearance. INSA estimates these reciprocity delays could total as much as 1,000 lost contractor labor-years and $2 billion a year, assuming an average annual cost of $200,000 per top-secret cleared contractor to the government.
Reciprocity delays across government could amount to some 90,000 lost contractor labor-years, according to INSA’s estimates.
“Industry currently has many thousands of personnel who were cleared on one government contract but who must wait weeks or months before being allowed to work on a new contract,” INSA wrote. “One large firm alone reported that it currently had more than 700 employees waiting for clearance transfers, and that on average its employees wait 94 days for their clearances to be accepted by a new agency.”
The Office of the Director of National Intelligence has tried to provide more clarity. ODNI’s Security Executive Agent issued a directive back in November 2018, which said agencies should “accept” existing security clearances and national security eligibility adjudications and determinations already granted by another executive branch agency.
But directives like this most recent one, INSA argued, give agencies too much room to interpret their own meanings, and in fact, they have.
“Individual agencies created internal policies and procedures based on their own interpretations of [Security Executive Agent] directives,” INSA’s report reads. “At larger agencies like the DoD, sub-departments including the Army, Navy and Air Force have further promulgated their own interpretations of both ODNI and DoD policy. This practice of agency-specific policy interpretation creates a web of inconsistent rules that complicate reciprocal recognition of clearances.”
In addition, the directive doesn’t mention how agencies should handle previous policies on security clearance reciprocity, which have been equally ambiguous on the topic, INSA said.
INSA described 14 recommendations to improve security clearance reciprocity. Many suggestions are detailed and describe highly specific policies and interpretations INSA believes need an update. But taken more broadly, INSA’s recommendations point to several challenges and opportunities to shorten the adjudication process and standardize both longstanding and emerging investigative practices.
“Right now we have a lot of work to do in establishing common standards,” Charlie Allen, a senior intelligence adviser and chair of INSA’s security policy reform council, said in an interview. “On reciprocity, we have significant inconsistency when it comes to policies and standards. We have a lack of transparency and information sharing, which bothers me significantly. The lack of information sharing really creates distrust when we don’t share information as we bring these people on.”
Allen previously served as the first undersecretary for intelligence and analysis at the Department of Homeland Security after a decades-long career at the CIA.
Federal adjudication facilities also need more resources to more quickly sign off on completed background investigations, INSA suggested.
Allen described the adjudication process in general as a “painful and slow process,” and the latest timeliness data from Performance.gov prove his point.
Initial secret and top secret cases on average took 30 and 42 days, respectively, to adjudicate in the second quarter of fiscal 2019, according to a June update on Performance.gov. Periodic re-investigations took 100 days to adjudicate, data which is likely skewed to reflect recent Defense Department policy to forego those reviews in favor of continuous vetting.
Though not new to the intelligence and defense communities, continuous vetting is still an emerging concept for other agencies, and INSA argued it could also open up more uncertainty for security clearance reciprocity.
Adjudications are supposed to be completed in an average of 20 days, according to methodology from the Performance Accountability Council.
The Defense Department’s Consolidated Adjudications Facility has, in part, recognized its challenges to keep up with the National Background Investigations Bureau. But as NBIB has cut the backlog of pending investigatory matters by nearly 40 percent within the last year or so, that pace creates more pressure for DoD’s CAF to adjudicate more cases.
Though INSA described several existing challenges and made more than a dozen recommendations to clear up existing policies and create new ones, the organization is optimistic government will eventually act.
The reform council hosts meetings with industry, congressional staffers and senior government leaders like Principal Deputy Director of National Intelligence Sue Gordon, who discuss these challenges and coming security clearance policy plans. These discussions show all the appropriate parties are interested and engaged in improving the security clearance process, Allen said.
ODNI and the Office of Personnel Management are working on a top-to-bottom overhaul of the suitability, credentialing and security clearance processes as part of a “Trusted Workforce 2.0” initiative.
New standards for denying, suspending and revoking federal credentials were due last summer but new deadlines have been set, according to the recent Performance.gov update.
These initiatives, as well as the administration’s plans to transfer the entire security clearance, suitability and credentialing enterprise from OPM and NBIB to the Pentagon, has industry feeling optimistic about the prospects for true modernization.
“I believe it can be done,” Allen said. “The White House has to stay engaged. It can’t be something the White House throws over the fence.”
Some members of Congress have also recognized the need for modernization.
Sen. Mark Warner (D-Va.) is the author of several provisions designed to ensure agencies are meeting reciprocity guidelines and more easily transfer cleared individuals in and around government.
These provisions are part of the 2020 defense authorization bill, which cleared the Senate late last month.”