Not surprised one bit. Mr. Spend $787 Billion Without Reading It suddenly gets fiscally conservative. About defense contracts. Holding up the VH-71 project as his poster child he has ordered his minions to thoroughly examine how defense contracts are awarded and have reform ideas by September. He wants more oversight and accountability. More oversight and meddling than the Air Force has witnessed in the past decade to buy new tankers? Wonderful, it will mean the DoD will study and study and study for at least a decade before doing anything like build a prototype system and there will be so much oversight, a new layer of bureaucrats will get hired and never go away. Meanwhile the troops will see what equipment they have wear out and possibly leave them in the lurch at a most critical time, like combat. Do we really need more F-15s shedding wings?
Meanwhile over in Congress, business as usual in killing a needed program trundles on. Defense contractors have gotten cagey about things by spreading out sub-contractor jobs to as many House districts as possible, hence if the program gets cut it will be felt by many in Congress via outraged howls of constituents. In reaction to this, Congress has developed a safe way of killing a program. By mouthing the false piety of being stewards of the public money, these Representatives and Senators hide the shiv they have clutched close to their expensive suits. They will say they are only reducing the initial production run because they are fearful it will be an expensive bust like the A-12.
When they say they are slowing down the initial procurement, it has an avalanche effect upon the whole project. Lets say Acme Aero has a contract to build the replacement for the A-10 and could see a production run of 600. So they spend $1billions in research on the project. Which means about $1.6million of the price tag of each plane will be because of research if all 600 are built. Here is where the fun begins, if a senior member in Congress has it in for Acme or just opposes defense spending. Calling it a risky project, they manage to get the contract modified to an initial order of only 300. Now the price tag on each plane jumps by $1.6million because now the contractor is spooked and will try to recoup all that research before the program is cancelled. Now we get screams of cost overruns from Congress and the order is now slashed to only 150, and now $6.4 million per plane is for research costs. And it goes on until the plane is so expensive and has not even flown yet, the whole program is cancelled.
As this battle is fought by the contractor, DoD, and Congress; just think of all those sub-contractors that have been lined up. They have spend money to tool up to produce their contracted parts and they see the production run shrinking, so they have to jack up the price of each part they make to cover their start up costs. Which in turns adds to the cost of each airplane and making it more expensive. As I said its an avalanche effect.
And once the project is dead, Congress will demand an investigation of what went wrong. GAO may even tell them it was their meddling that killed the program, but those in Congress who wanted to kill the program will berate the 'greedy' executives of Acme Aero publicly instead.
Think this is too far fetched to be believable? Just go and look at the F-14D program and the B-2 program. Congress kept changing the purchase rates and numbers bought until neither was affordable in the quantities the Navy and the Air Force wanted. So Naval Air ended up with 72 F-14Ds that were not fully interchangeable with the F-14As and F-14Bs already in the fleet. While the Air Force ended up with nineteen bombers who's price tag rivals that of a whole aircraft carrier for just one plane.
And Congress is trying to do this to the most non-sexy airframe in the Navy inventory, the E-2 Hawkeye AWACs plane. The new E-2D can handle 300% more airspace and detect supersonic cruise missiles. Once the crew finds a target, the Delta is so advanced it can data-link the information to the battle group or a fighter on BAR-CAP. And monitor the following engagement. Congress wants to reduce initial production from three airframes a year to two airframes. You can imagine what will happen next. Suddenly the very successful E-2D will start to look like an albatross and then it will get the cut. Forcing the US Navy to keep flying 30 year old and less capable E-2Cs, thereby endangering thousands of American warriors.
What needs reform is how Congress keeps sticking its hands into DoD matters to the detriment of national defense.