The chronic problem of exorbitantly expensive weapons is becoming acute

The Economist 28 Aug 2010 unattributed article:

Updated correct link: link to article is here, h/t Movie Guy

The chronic problem of exorbitantly expensive weapons is becoming acute.

Robert Gates, America’s defence secretary, has ordered that production of the F-22 should end this year, capping the fleet at 187—a final cull for the Raptor, whose numbers were once supposed to reach about 750. In Europe orders for the Typhoon—a fighter made by Britain, Germany, Italy and Spain—will fall. And on both sides of the Atlantic the rising cost of the stealthy F-35 Joint Strike Fighter means its order book could shrink sharply.

Mr Gates wants the Pentagon to save 1-2% a year in overheads. A study of defence bureaucracies by McKinsey, a global management consultancy, suggests that American forces, though the most potent in the world, are among the least efficient, at least in terms of the “tooth-to-tail” ratio, the proportion of fighting forces to support personnel (the best were Norway, Kuwait and the Netherlands). American forces deploy and fight globally, so need more support than those only defending national borders. Nevertheless, the study suggests there is flab to be trimmed.

Manpower in all-volunteer armies, as most Western ones are these days, is expensive. Pay has to be competitive. In America, moreover, a big burden is the cost of health-care programmes for current and former servicemen, and their families. “Health-care costs are eating the defence department alive,” complains Mr Gates. Yet he has a hard time restraining Congress’s generosity to soldiers and veterans.

One response to high manpower costs is to rely on technology. But that does not come cheap. Study after study shows that the price of combat aircraft has been rising substantially faster than inflation, often faster than GDP. The same is true of warships. In a book published in 1983, Norman Augustine, a luminary of the aerospace industry, drafted a series of lighthearted “laws”. In one aphorism, he plotted the exponential growth of unit cost for fighter aircraft since 1910, and extrapolated it to its absurd conclusion:

Nearly three decades on, Mr Augustine says, “we are right on target. Unfortunately nothing has changed.” These days Raptors go for $160m apiece ($350m including the cost of developing the jet), compared with $50m-60m for the venerable F-16. In the long run, high unit costs must limit numbers. Since 1970 America’s fleets of combat aircraft and major warships have shrunk, even as defence spending rose.

Repeated reforms have failed to break this dire cycle. According to the last full report by America’s Government Accountability Office (GAO), the cost of 96 of America’s biggest weapons programmes in 2008 had risen on average by 25%, incurring an average delay of 22 months.