Poor, poor pitiful defense contractors are apparently unable to keep their bloated contracts from bloating even more.
WSJ.com - With New Rules, Weapons Projects Set Higher Costs
The Pentagon said the costs for 36 big weapons systems -- including marquee warplane, submarine and ground-vehicle programs -- have jumped by at least 30% and some by more than 50%, but officials attributed the growth in cost to new reporting rules, not mismanagement.A report released Friday was the first review of major weapons programs since Congress tightened terms for calculating cost increases. The new law requires the Pentagon to compare current unit prices with original cost estimates, in addition to more recent revised projections. The Pentagon found that 25 programs had grown by at least 50% over original costs, while 11 programs were between 30% and 50% more expensive. “It's not fair to say that this reflects on how we are doing in the past few years, given the broad time span” under consideration, said Cheryl Irwin, a Pentagon spokeswoman.
For example, the prices of Lockheed Martin Corp.'s F-22 stealth fighter and Boeing Co.'s C-17 cargo jet rose more than 50%, but their original baseline costs were set years ago. The majority of affected programs date from the 1980s and 1990s, Pentagon officials said.
Legislators say the new law brings transparency to congressional oversight of the Pentagon. Defense contractors complain it fails to take into account inflation or technological and program changes that inevitably occur in long-term weapons development. Even younger programs, such as Boeing's $165-billion Future Combat Systems modernization project for the Army and Northrop Grumman Corp.'s Global Hawk unmanned spy plane, surpassed the law's 50% cost-growth threshold because of program restructurings and delays.
Of course, there really are no consequences to having cost overruns, so who cares? In fact, the smart companies probably planned to inflate prices by 50% because of this little caveat, added no doubt after some Congress members enjoyed nice steak dinner paid for by someone from K Street:
The programs with the biggest cost growth won't be canceled, and they face little, if any, immediate impact. Under the new law, programs with more than 50% cost growth can reset the baseline to their estimated price on Jan. 6, 2006, when the fiscal 2006 National Defense Authorization Act became law.
Tags: corruption, /Rethuglicans
