Weekend Edition.
Pentagon dysfunction.
When we do the research for News Items, story-lines emerge. Examples include: (1) the property crisis in China, (2) immigration and the rise of the right in Western democracies, (3) the financialization of everything, (4) the AI revolution, (5) extraordinary advances in science and (6) so on, so forth.
One story-line that has emerged in the course of our work is what we call “Pentagon dysfunction.” Piece by piece, it’s the same thing over and over again: cost over-runs, missed deadlines, poor oversight, mismanagement and self-dealing amidst the Congressional-Industrial-Military Complex.
Assembled into a Weekend Edition of News Items, it’s more than that. It’s unnerving.
1. Commission on the National Defense Strategy:
The United States confronts the most serious and the most challenging threats since the end of World War II. The United States could in short order be drawn into a war across multiple theaters with peer and near-peer adversaries, and it could lose. The current National Defense Strategy (NDS), written in 2022, does not account for ongoing wars in Europe and the Middle East and the possibility of a larger war in Asia. Continuing with the current strategy, bureaucratic approach, and level of resources will weaken the United States’ relative position against the gathering, and partnering, threats it faces. In its report, the Commission on the National Defense Strategy recommends a sharp break with the way the U.S. Department of Defense (DoD) does business and embraces an “all elements of national power” approach to national security. It recommends spending smarter and spending more across the national security agencies of government.
The United States was slow to recognize the threat of terrorism before 2001 and late to understand the rising strength of China and the renewed menace posed by Russia. According to the Commission, the time to make urgent and major change is now. That change will mean fundamental alterations to the way DoD operates, the strategic focus of other government agencies, and the functionality of Congress, as well as closer U.S. engagement with allies and mobilization of the public and private sectors. The Commission presents its unanimous conclusions and recommendations on how to accomplish these changes in its report. (Source: rand.org, italics mine)
2. Air & Space Forces Magazine:
When officials express defense spending as a percent of GDP, it is a shorthand way of describing the financial burden of defense on US taxpayers. It is a measure of the affordability of a given defense budget.
This “burden” has shrunk dramatically over the years. In the World War II year of 1944, arms spending consumed a gargantuan 38 percent of the economy. As economic growth mushroomed, the defense share of GDP has plummeted. For example:
In 1953, the peak year of the Korean War, 14 percent.
In 1968, at the height of Vietnam, 9.5 percent.
In 1986, at the peak of the Reagan rearmament, 6.2 percent.
Today, the figure is ~3 percent. (Sources: airandspaceforces.com, defense.gov)
3. Reason.com:
The Pentagon has failed its annual financial audit for the seventh year in a row. This means the Department of Defense (DOD) has failed every single audit it has been subjected to, but officials hope to have things under control by the time audit No. 11 rolls around.
The DOD announced the results on Friday. "Each year teams of independent public accountants audit the department's $4.1 trillion in assets and $4.3 trillion in liabilities," which are then audited by the DOD Office of the Inspector General, Pentagon comptroller Michael McCord told reporters. "In total, the overall DOD audit is comprised of or supported by 28 separate audits of these different components."
Of those 28 components, only nine passed inspection with an "unmodified audit opinion," which the DOD says means "auditors determined the financial statements were presented fairly and in accordance with [generally accepted accounting principles]." One component received a "qualified" opinion, meaning "auditors concluded there were misstatements or potentially undetected misstatements that were material but not pervasive to the financial statements." (Source: reason.com, italics mine)
4. Another Way Of Looking At It:
The US Defense Department failed for the seventh straight year to score a clean financial audit, highlighting the challenge of tracking the finances of a sprawling organization that has some $3.8 trillion in assets and $4 trillion in liabilities.
Auditors overseen by the Pentagon Inspector General once again declared the department’s finances were too messy to offer an opinion on whether its books were in order. But the Pentagon said it at least has a better grasp of the problem.
“Despite the disclaimer of opinion, which was expected, the department has turned a corner in its understanding of the depth and breadth of its challenges,” Comptroller Michael McCord said in a statement. “Momentum is on our side, and throughout the department there is strong commitment — and belief — in our ability to achieve an unmodified audit opinion” by fiscal 2028. (Source: bloomberg.com, italics mine)
5. ForeignPolicy.com:
Decades of deindustrialization and policymakers’ failure to prioritize among services and threats have left the Navy ill-equipped to endure a sustained high-intensity conflict in the Pacific. The United States is unable to keep pace with Chinese shipbuilding and will fall even further behind in the coming years.
As evidenced by the Biden administration’s latest budget request, fiscal constraints are forcing the Navy to cut procurement requests, delay modernization programs, and retire ships early.
The Navy’s budget for the 2025 fiscal year calls for decommissioning 19 ships—including three nuclear-powered attack submarines and four guided-missile cruisers—while procuring only six new vessels.
The expensive upgrading of the U.S. nuclear triad, simultaneous modernization efforts across the services, and the constraint of rising government debt are compelling the Pentagon to make tough choices about what it can and cannot pay for.
Workforce shortages and supply chain issues are also limiting shipbuilding capacity. The Navy needs more shipyard capacity, but finding enough qualified workers for the yards remains the biggest barrier to expanding production. At bottom, it is a lack of welders, not widgets, that must be overcome if the U.S. Navy is to grow its fleet.
Instead, the shipbuilding outlook is progressively worsening. An internal review ordered by Navy Secretary Carlos Del Toro in January found that major programs, including submarines and aircraft carriers, face lengthy delays. Even the Constellation-class frigates, touted as a quick adaptation of a proven European design, are delayed by three years.
As defense analyst David Alman outlined in a prize-winning essay for the U.S. Naval Institute’s Proceedings, the United States simply can’t win a warship race with China. The U.S. Office of Naval Intelligence estimates that China now has 232 times the shipbuilding capacity of the United States. China built almost half the world’s new ships in 2022, whereas U.S. shipyards produced just 0.13 percent. (Sources: foreignpolicy.com, breakingdefense.com, usni.org, italics mine)
6. Politico:
As the Navy’s largest U.S. trade show gets underway, officers in charge of the service’s marquee shipbuilding programs won’t offer the usual briefings with reporters and analysts about them.
That break from the tradition of sharing program updates at the Navy’s Sea-Air-Space Exposition comes just days after the Navy announced that four of its most critical shipbuilding programs are years behind schedule.
The Navy’s top admiral and civilian secretary have still not responded to questions about a damning Navy report released Tuesday outlining the sweeping failure of the Navy and its industrial partners to make expected progress on two submarine programs, an aircraft carrier and a new class of frigates.
“Our nation should be incredibly frustrated to see such systemic delays to our marquee shipbuilding programs,” Rep. Rob Wittman, (R-VA) said.
The delays, from one to three years each depending on the program, come as the Navy and Pentagon pour billions into modernizing and upgrading shipyards in an attempt to build and repair ships more quickly and keep pace with China. Beijing’s navy has already surpassed the U.S. in size.
But supply chain issues caused by Covid and the Navy’s insistence on changing the design of its ships even as workers build them have thrown the service’s plans into uncertainty.
Aware of the issues for years, the Navy is still unsure how to fix them. (Sources: usni.org, breakingdefense.com, politico.com)
7. The U.S. Navy Is Spending $348,000,000,000 on Columbia-Class Submarines. The submarines, designed to replace the aging Ohio-class fleet as a cornerstone of the nuclear triad, face delays of up to 16 months for the lead boat, USS District of Columbia (SSBN-826). This results from contractor setbacks, including late delivery of the bow section by Huntington Ingalls Industries (HII) and turbine generators from Northrop Grumman. These delays may force the Navy to extend the service life of five Ohio-class submarines to maintain nuclear deterrence. With a lifecycle cost of $348 billion, the Columbia-class program is under intense scrutiny by lawmakers, as timely delivery and operational success are critical. On paper, the Columbia-class is just what the U.S. Navy needs to accomplish its nuclear deterrence mission. Back in reality, the situation is quite dire. (Source: nationalinterest.org, italics mine)
8. Bloomberg:
The Navy’s new Virginia-class submarines are projected to run $17 billion over their planned budget through 2030, a problem emblematic of a crisis in the program, the House’s top lawmaker on defense spending disclosed.
“It’s clear that the Navy and shipbuilders have known about this shortfall for at least 18 months” but “Congress was notified just two weeks ago,” Representative Ken Calvert, chairman of the House defense appropriations subcommittee, said in remarks released Thursday before a classified hearing with Navy Secretary Carlos Del Toro.
The program for a new generation of nuclear-powered subs being manufactured by General Dynamics Corp. and HII “has slipped two to three years” behind schedule “and is experiencing extraordinary cost growth,” Calvert said. The $17 billion shortfall will increase the program’s projected $184 billion total cost if the Navy can’t close the gap by finding ways to cut expenditures.
Several Navy ship programs, including the Virginia class, “are in crisis,” he said. Calvert, a California Republican and usually an enthusiastic supporter of defense programs, lambasted the Navy for what he called a lack of candor in disclosing problems and for poor metrics in overseeing multibillion-dollar programs.
“It’s not clear to me that anyone has accurate information about the trajectory of any shipbuilding program other than the program executive officers — and since they switch out every two years, the options for long-term accountability are limited,” Calvert said. “For too long, this committee has been put in a position of asking what the Navy is hiding behind the curtain. It’s time to pull down the curtain altogether,” he said. (Source: bloomberg.com, italics mine)
9. Littoral combat ships were supposed to launch the Navy into the future. Instead they broke down across the globe and many of their weapons never worked. Now the Navy is getting rid of them. One is less than five years old. The U.S. Navy had billed them as technical marvels — small, fast and light, able to combat enemies at sea, hunt mines and sink submarines. In reality, the LCS was well on the way to becoming one of the worst boondoggles in the military’s long history of buying overpriced and underperforming weapons systems. The ongoing problems with the LCS have been well documented for years, in news articles, government reports and congressional hearings. Each ship ultimately cost more than twice the original estimate. Worse, they were hobbled by an array of mechanical failures and were never able to carry out the missions envisaged by their champions. ProPublica set out to trace how ships with such obvious shortcomings received support from Navy leadership for nearly two decades. We reviewed thousands of pages of public records and tracked down naval and shipbuilding insiders involved at every stage of construction. Our findings echo the conclusions of a half-century of internal and external critiques of America’s process for building new weapons systems. The saga of the LCS is a vivid illustration of how Congress, the Pentagon and defense contractors can work in concert — and often against the good of the taxpayers and America’s security — to spawn what President Dwight D. Eisenhower described in his farewell address as the “military industrial complex.” (Source: propublica.org, italics mine)
10. The F-35 Lightning II Joint Strike Fighter program is DOD’s most expensive weapon system program. DOD estimates it will cost nearly $1.7 trillion to buy, operate, and sustain the aircraft and systems over its lifetime. DOD is also assessing options for modernizing its engine. (Source: news.usni.org, italics mine)
11. The Pentagon’s cost to develop and produce Lockheed Martin Corp.’s F-35 has risen almost 10% to about $485 billion now that money needed for engine improvements has been included in the official estimate for the costliest US weapons system. The previous $442 billion estimate for the fighter jet was changed officially earlier this year, but that wasn’t disclosed until the Defense Department’s latest Selected Acquisition Report assessing the program was posted online recently. The majority of the increase stems from the expected costs for the upgrade of the plane’s engine core and improvements to its “power thermal management,” which “is a high-priority initiative,” the Defense Department’s F-35 program office said in a statement. Those are needed to provide improved cooling for more capable software and for the plane’s radar and other components. (Source: bloomberg.com)
12. Bloomberg:
A declassified Pentagon comprehensive test report of Lockheed Martin Corp.’s F-35 warplane, America’s most expensive weapons system, reveals that six years of combat testing has been marred by reliability and maintenance delays, guns that don’t shoot straight and unresolved concerns about cyber defense capabilities.
“The overall reliability, maintainability and availability of the US fleet remains below service expectations,” the Director of Operational Test and Evaluation said in a redacted version of the February report, which was obtained by the Washington-based Project on Government Oversight through the Freedom of Information Act.
The report discloses enough troubling nuggets that the incoming Trump administration would likely want a total review of the unredacted report’s outline of readiness, maintenance and logistics headaches, according to Greg Williams, POGO’s Center for Defense Information director.
“The Trump administration should bear in mind we’ve been flying the F-35 for 18 years and we still can’t maintain it, keep its stealth skin intact or shoot its gun straight,” Williams said in a statement. (Source: bloomberg.com, pogo.org, italics mine)
13. Project on Government Oversight (POGO):
The Air Force’s top civilian leader says the F-35 program taught everyone how not to buy a fighter jet and vows not to repeat the mistakes that turned history’s most expensive weapon program into an absolute boondoggle. While it is refreshing to hear an official acknowledge some of the fundamental problems with the F-35 program, no one at the top levels wants to acknowledge all of them. Even worse, none seem willing to question the basic premise of a manned fighter in the age of long-range precision fires and integrated air defense networks.
Secretary of the Air Force Frank Kendall says the government will acquire the intellectual property for the Next Generation Air Dominance (NGAD) fighter when the service awards a development contract for the program in 2024. This seems to be the biggest lesson learned by the government from the F-35 program: Pentagon officials had failed to include the transfer of the intellectual property from Lockheed Martin as part of the original 2001 development contract, a failure that has led to a series of problems ever since.
Because the government does not control the data rights for the F-35 program, the uniformed maintainers can’t access the technical data needed to do much of the maintenance work for the F-35. Nor can the government provide companies with access to that technical information. As a result, Lockheed Martin has an absolute monopoly on the lucrative sustainment contracts for the program.
Not acquiring the data from the beginning of the program wasn’t an oversight on the part of government contracting officers, but rather a deliberate decision based on an acquisition fad at the time known as Total System Performance Responsibility. Under the scheme, the government effectively surrendered its responsibility to maintain the equipment purchased with taxpayer dollars to the contractors. The contractors had little incentive to design simple and easy-to-maintain weapons since their business model centered around long-term sustainment contracts for their products.
Sustainment contracts are quite lucrative. Pentagon officials awarded Lockheed Martin up to $6.6 billion in 2021 to support the F-35 fleet for two years, through 2023. These contracts will grow even larger as more aircraft are delivered. (Sources: pogo.org, defensescoop.com, janes.com, defensenews.com)
14. The U.S. Air Force's B-21 Raider program, aimed at replacing aging bombers like the B-1 Lancer and B-2 Spirit, faces potential cost overruns and production delays. Northrop Grumman, the prime contractor, has warned of rising costs, despite efforts to avoid breaching the Nunn-McCurdy Act, which mandates congressional oversight for significant budget increases. With only 21 bombers expected in the initial production phase and a full fleet of 100 not likely until the late 2030s, concerns are growing that the B-21 could be technologically outdated by the time it reaches full operational status, given the rapid pace of technological advancements. (Source: nationalinterest.org)
15. The U.S. Air Force is pushing ahead with its struggling Sentinel intercontinental ballistic missile (ICBM) program despite a new projected price tag of nearly $141 billion, close to twice the original estimate, and now years of expected delays. The Pentagon says it has assessed that there are no lower-cost, but similarly capable alternatives to Sentinel, which is expected to replace the existing Minuteman III ICBM as one of the three legs of America’s nuclear deterrent triad. The Office of the Secretary of Defense announced the results of an official review of the Sentinel program today. By law, per what is commonly referred to as the Nunn-McCurdy Amendment, defense programs that see certain levels of extreme cost growth must be canceled unless various criteria are met. Sentinel’s rising price point triggered a breach of the Nunn-McCurdy statute in January. The Air Force also sacked the top officer in charge of the program last month, but said this was “not directly related to the Nunn-McCurdy review,” according to Defense One. The Air Force currently has some 400 LGM-30G Minuteman IIIs deployed in silos spread across five states. “Total program acquisition costs for a reasonably modified Sentinel program are estimated by CAPE [the Office of Cost Assessment and Program Evaluation] to be $140.9 billion, an increase of 81 percent compared to estimates at the program’s previous Milestone B decision in September 2020,” according to a press release the Pentagon put out today. (Source: bloomberg.com, italics mine)
15. The National Interest:
A classic tale of the Pentagon acquisition “doom loop” goes something like this: take 20 years to finally get a product delivered to the warfighter and a humming manufacturing line up and running, then cancel the existing weapons system—typically in favor of some better technology coming along in the pipeline but not yet ready for production prime time, attempt to start a new replacement program that gets bogged down in requirements debates, design and engineering delays, and itself eventually gets axed for the next-next program that also never arrives on time or at scale for the 1.3-million person active duty military.
In the meantime, everything gets older, more expensive to maintain, and the fleets and inventories of all the services shrink to the point where missions are no longer achievable due to lack of munitions or platforms.
The latest case-in-point is the U.S. Navy’s standard missile, a workhorse of current global operations. Amidst high mission tempo to keep global sea-lanes open against Houthi attacks and ongoing exercises to deter aggression elsewhere, the Navy is facing a critical shortfall in air defense missiles….
If Pentagon leaders are aware of these essential missile shortfalls, so are our enemies. Nowhere is this more evident than China’s rapid expansion and investment in its missile forces. According to the Defense Department, China now fields the largest rocket force in the world and has stockpiles of thousands of missiles in reserve, all as part of a strategy to mass fires and overwhelm U.S. warships in a potential conflict. (Sources: nationalinterest.org, defaeorreport.com, chinapower.csis.org, media.defense.gov, nationalsecurityjournal.org)
 | A guest post by
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I was a solder once, and young. At the time (1967-71), both our army and our country were tearing themselves apart over a war in which we never should have become involved.
For that reason, and for others, I often find myself pondering the vast amounts of expertise, industrial capacity, innovations, and money being constantly poured into a bottomless military pit, all for the purpose of building, maintaining, and upgrading a force we hope to god we never have to use.
All of this because so many of us insist on amplifying our marginal differences to astronomical heights while utterly minimizing that which we all share, The sheer insanity of the human species is beyond comprehension.
Question on this, are there any stats on output per $ spent on military by country? For every $1 billion the US spends on procurement, what output do they get as compared to other countries? Does military spending as a % of GDP reflect actual military power or should it be output or weapons per $ spent? It is effective in election campaigns and to put pressure on others, but not in determining military effectiveness. From this newsitems it is clear that for output the Chinese are beating the US by a country mile while spending less. There is a quote from someone stating that the best way to get a new military weapon approved is to make sure it has parts developed in every state, which is not the best decision criteria for choosing which weapon to develop.
I think there is another underlying story here, which is the hollowing out of US industrial capability. Over the past 25 years or so US industrial expertise and contracts have moved to China, so no surprise they can build well and quickly. Rebuilding that capacity in the US is not quick but you cannot outsource development of your weapons to your "enemy", even if profitable.
Trump's appointments for defense, whose main objective is apparently to "de-woke" the military and remove "bad" Generals, coupled with "DOGE cutting $2 Trillion from govt spending" are not going to fix this. Applying Elon to fixing military procurement and development could, but has its own challenges when it comes to his conflicts of interest. Reality is Europe has many challenges but at least it has an industrial base to build on, the US needs to build one again.
Isolationism as a defense did not work in the past two world wars and would not in a next one. Economic isolation would also have a huge impact on US national wealth, which is why the US has always been the world's peace enforcer in Chief, best done through quick and strong enforcement action and support of allies and by avoiding long, direct involvement in wars like in Vietnam and Iraq.
Isolationism has also pulled the US into war. While initial future wars might start in Europe and Asia, inevitably the protagonist will turn their attention to the US. While for Japan and Germany it was hard to take the war to the US they still did so. Both were challenged for resources and so could not sustain war over the long term once they attacked the US who then brought much greater resources to bear, but the combination of China's industrial power and Russia's resources more than matches the US - especially without its allies. This partnership is truly a different dynamic and only a few miles separate a combined China/Russian military from Alaska.
We all want peace, but a strong military deterrent, not allowing the violation of existing borders through force (proper support for Ukraine, South China Sea) and or getting conflicts resolved (two state solution) will be what keeps the peace.
Right now things are well and truly out of balance in terms of deterrence and military capability. which this great newsitems lays out very well. Something needs to change to avoid wars. Unfortunately the leadership in US that can do this has just not been there this century and based on the last time Trump was in power, I don't think this next administration is going to do any better. Who knows what they will wind up doing, but based on the Iast time they were in power I just expect 4 years of chaos and a "random walk" for defense.