Army spent $32 billion on abandoned programs

Army spent $32 billion on abandoned programs

May 30th, 2011 The Washington Post in News

WASHINGTON - The Army's Comanche helicopter was envisioned as "the quarterback of the digital battlefield," a technologically superior aircraft that could hide from enemies, operate at night and in bad weather, and travel farther than any other helicopter.

Gen. Richard Cody, a former vice chief of staff of the Army, called it the "most flexible, most agile" aircraft the country had ever produced.

In 2000, it ranked as the most important planned buy for the Army. Four years later, the program - which had consumed close to 20 years of work and nearly $6 billion - abruptly was shuttered.

It is one of 22 major Army weapons programs that have been canceled since 1995, ringing up a price tag of more than $32 billion for equipment that was never built.

A new study commissioned by the Army, though not publicly released, condemns the service's efforts as "unacceptable."

The study is the latest indication that the Pentagon - and the defense industry - is undergoing a seismic shift in its approach to new programs. As pressures mounted in Iraq and Afghanistan, the military retreated from its ambitions of building multibillion-dollar, technologically superior systems. Instead, it was forced to make better use of tried-and-true equipment.

For almost a decade, the Defense Department saw its budgets boom but didn't make the kind of technological strides that seemed possible.

"Since 9/11, a near doubling of the Pentagon's modernization accounts - more than $700 billion over 10 years in new spending on procurement, research and development - has resulted in relatively modest gains in actual military capability," Defense Secretary Robert Gates said last week.

That outcome, he said, is both "vexing and disturbing."

Gone are the days of "no-questions-asked funding requests," he said. The Defense Department must make do with less. It is focusing on fixing up older equipment and taking a more measured approach to weapon development.

DEMAND-DRIVEN

The shifting strategies have triggered the biggest restructuring in the defense industry since the end of the Cold War.

While the defense industry always has had an unusual business model in which it's hard to predict needs, officials say an uncertain trade has become all the more so.

"We can invest and make a great product and set a good price point, but demand is completely out of our control," said Linda Hudson, who heads BAE Systems' Arlington, Va.-based U.S. operations.

In recent years, the Pentagon has killed off some of its most heralded - and most pricey - weapons programs, and many of those that remain are not certain to move forward. In some ways, this represents a market correction - and a realization that the Defense Department has to buy weapons it can afford.

"We've had 10 years of wars. We've had a fair amount of money available to the department," said Thomas Hawley, deputy undersecretary of the Army. "It's just time now, with at least one war winding down and another we hope will be winding down and funding definitely coming down, to take a pause, relook where we are and go forward from there in a thoughtful way."

NEW THINKING

As the Army began developing the Comanche helicopter in the 1980s, it was riding high on the success of what are known as the "big five" major weapons systems: the Abrams tank, Bradley infantry fighting vehicle,ÂșApache attack helicopter, Black Hawk utility helicopter and Patriot missile system, all of which are used today.

The Army, launching the Comanche with the Cold War in mind, imagined a new kind of helicopter able stealthily to detect well-equipped enemies. After a complex acquisition process, the military commissioned the team of Boeing and Sikorsky to build the Comanche. The Army eventually settled on buying 650 Comanches for about $39 billion.

But as the Army entered unconventional wars in Afghanistan and Iraq, it suddenly didn't need the best, most capable system available; it simply needed aircraft - and fast.

"The Comanche helicopter was a good helicopter," Hawley said. "It just was eating so much of the budget."

Nearly $6 billion already was spent, but the Army and the Pentagon agreed in 2004 that if the program were canceled, the service could redirect the roughly $15 billion budgeted for the Comanche over the next seven years to aircraft already in production.

The Army ultimately bought hundreds of new helicopters and drones. It redirected $2.2 billion to Black Hawks, more than $2.2 billion to the successful Apache program and almost $1.5 billion to fixing older Chinook aircraft, according to Army budget documents.

The cancellations have not stopped there. The helicopter developed to replace Comanche - known as the Armed Reconnaissance Helicopter program - was abandoned in 2008 after its price ballooned. According to the Army study, that second effort cost another $535 million.

And Gates this year terminated the Marine Corps' Expeditionary Fighting Vehicle and said the service would spend the money to fix up the equipment it was designed to replace.

"My experience in government is, when you want to change something all at once and create a whole new thing, you usually end up with an expensive disaster on your hands," he said. "Maybe Google can do something revolutionary, but we don't have the agility to do that."

TRIED AND TRUE

The most successful programs in recent years were those based on existing designs and machinery that wasn't perfectly customized for the Army.

For instance, just four years after announcing the program, the service deployed Strykers, a set of lighter vehicles meant as interim systems while new, more capable systems were developed.

And after soldier casualties related to roadside bombs in Iraq began to climb, the Pentagon rushed Mine Resistant Ambush Protected vehicles, or MRAPs, into the field.

Now, the study calls on the Army to look closely at its program parameters to ensure officials account for actual funding and the challenges of building the technology.

"Our guiding principle going forward," Gates said, "must be to develop technology and field weapons that are affordable, versatile and relevant to the most likely and lethal threats in the decades to come, not just more expensive and exotic versions of what we had in the past."