$58 billion in cancelled DoD projects just a drop in a bucket of unknown depth

2016-10-31-pentagon-cancels

The Pentagon is not known for good bookkeeping. As some readers may recall, the Defense Department’s Inspector General reported in June that the DoD cannot account for trillions in spending. So the release of a definite number last week – $58 billion – might come as a relief – except that it’s not an amount that was spent wisely on necessary military supplies, but instead it’s how much has been wasted on cancelled research and development projects in recent years.

In a section titled “Program Cancellations and Sunk Costs,” the new report details 22 such programs cancelled between 2002 and 2015. In eight of these cases, the entire budgeted amount for the project or more had been spent before the project was cancelled. Of the rest, less than half were cancelled before 50 percent of their budget had been depleted.

The single most expensive project on the list is what was known as the “Future Combat System.” This joint project between Boeing and Science Applications International Corporation reportedly aimed to create “a network of wireless, on-the-move communications, drones and sensors,” or as the RAND Corporation described it, “a system of systems, with novel technologies integrated by means of an advanced wireless network.” Whatever the FCS was going to be, the project was cancelled in 2009 after costing more than $20 billion.

Boeing, best known perhaps for making commercial airplanes but also a major defense contractor, was also responsible, along with Sikorsky Aircraft Corporation, for the second most expensive item on the list, the RAH-66 Comanche helicopter cancelled in 2004 after costing nearly $10 billion, and for a failed “ground-based vehicle network for the Army.”

The list of cancelled projects represents about 17 percent of the total number of weapons systems in advanced development during the period examined, and about 3.4 percent of the $1.7 trillion budgeted for those projects. Experts quoted by Bloomberg offered opposing views on whether that’s a lot of money or not, in the grand scheme of things.

Considering that in twenty years that it has been legally required to submit to an audit, however, the Pentagon has never done so, it is essentially impossible to make an informed judgment on the issue. Nevertheless, Defense Department officials are claiming once again this year that they are near audit-readiness, and will be prepared for their next deadline. Maybe so, but we’ll just have to wait and see.

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