The Pentagon Pays Too Much for Everything Even Prescription Drugs | Businessweek

By Charles Kenny

Britain’s Farnborough Air Show wrapped up last week after seven ear-splitting days. To impress the excited kids and jaded dealers in attendance, the U.S. sent an F-8, an F-15, and a pair of F-16s. But the much anticipated F-35 Lightning II Joint Strike Fighter was a no-show. After a runway fire grounded the fleet earlier this month, the Department of Defense suspended negotiations to purchase the next batch of the planes.

The troubled fighter is only the latest in a long and growing number of cases where the DOD has bought poorly designed and massively overpriced equipment for the nation’s armed forces. Across the military, the average major Pentagon acquisition comes in at 40 percent over budget, according to a recent report from the Government Accountability Office. In spite of the Pentagon’s well-documented history of profligacy, the Congress continues to enlarge its responsibilities. The DOD’s mandate now includes wide-ranging scientific and medical research and international infrastructure projects, diffusing the focus on its core mission—like buying planes that don’t set themselves afire on the runway. That’s a disservice to America’s military and a burden to the country’s taxpayers.

The F-35′s grounding is the latest setback in the development of an aircraft that’s already cost $400 billion. A recent GAO report noted that cost estimates for operating and supporting the F-35 fleet are now more than $1 trillion, “which DOD officials have deemed unaffordable.” The report went on: “Reliability is lower than expected for two variants” of the F-35, and the program has “limited additional opportunities to improve reliability.”

Meanwhile, Pentagon procurement is also running amok elsewhere: in the same week as the F-35 engine fire, the DOD’s inspector general issued a report on excess payments such as a payment to Bell Helicopters for gears at $8,124 each—more than 18 times the expected cost of $445.

The USS Gerald Ford (still in dry dock) is already more than $2 billion over budget, and the Navy has slashed orders for the Littoral Combat Ship, which has proved much more expensive to run than predicted and is “not expected to be survivable in a hostile combat environment” according to the DOD’s director of operational testing and evaluation.

If the Pentagon is so bad at providing good weapons to soldiers at a reasonable price, you might not expect it to be any better at buying anything else—and the evidence suggests it isn’t. Take the comparatively straightforward purchasing of off-the-shelf drugs, which the Pentagon does for active-duty and retired personnel and their dependents. Another recent GAOffice report compared net prices across a sample of 78 common and expensive brand-name and generic drugs. Compared to Medicaid, the DOD paid on average 60 percent more. One of the most reviled government agencies gets the best deal; the most loved, the worst.

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And yet Congress keeps expanding Pentagon’s portfolio. The department has spent more than $3.6 billion on breast cancer research. It funds science on alcohol and substance abuse, Alzheimer’s disease, and lung, ovarian, and prostate cancer. Overseas, we’ve asked it to play a lead role in the reconstruction of Haiti (spending half a billion dollars in the six months after the earthquake), to support anti-Malaria programs in Ethiopia, to vaccinate goats in Uganda, to rehabilitate dams in Afghanistan, and to build mobile phone networks in Iraq.

Whether it is any more successful in these efforts than it is buying military equipment is suspect. The implementation record of these programs is patchy at best. During its tenure, the Special Investigator General for Iraq Reconstruction pursued U.S. military, civilians, and contractors involved in corruption, fraud, or other abuse in the country. By the time the office closed in 2013, its search had resulted in 90 convictions, 75 of which involved U.S. military staff, DOD employees, or contractors.

We shouldn’t disregard the bravery and dedication of the armed forces because of the efficiency and effectiveness of the bureaucracy that oversees them. The DOD is not working. And asking people to fight under it is not unlike asking soldiers to fight the wrong war. The legislators that have charge over the institution have two choices: They can pretend everything is all right and put troops unnecessarily in danger in exploding planes and the like, or they can focus the Pentagon on its primary responsibilities and demand better. Those willing to risk their lives in defense of the country surely deserve the second approach.

via The Pentagon Pays Too Much for Everything Even Prescription Drugs | Businessweek.