Posted on 09/26/2005 2:33:42 PM PDT by Paul Ross
Pentagon Defends Its Growing Reliance On Foreign Contractors
[International Herald Tribune, September 23, 2005, Pg. 15]
The Pentagon's latest weapons-buying list has a distinctly foreign flavor. From the military's point of view, the U.S. no longer has a lock on research and technology and has no choice but to look abroad for various piece parts.
(Excerpt) Read more at iht.com ...
what do you expect, we are offshoring our technology and industrial base - where do you expect these things to come from now?
but hey, we've got plenty of walmarts and applebees - if war comes, we can toss chinese made toys and plates of food at the enemy.
This country is broken.
The foreign connection has raised questions in Congress, and even inside the Pentagon, about whether these deals could result in breaches of national security. Some also worry that suppliers from some countries that are now friends may one day be foes.
"What they are trying to do at the Pentagon is not - and underscore 'not' and underline it and put it in capital letters - in the best interest of the country," said Representative Donald Manzullo of Illinois, a Republican and chairman of the House Small Business Committee. "The Pentagon is asleep and is not looking after our defense industrial base."
For the moment, several Pentagon studies, including one from the Defense Science Board, a powerful outside advisory body, have found that the economic and strategic benefits outweigh the risks. The Pentagon argues that international deals help spread research and start-up expenses while improving ties between the United States and its European allies.
what can the pentagon do? maintain the industries and technologies it needs as "cottage industries" in the US, while the free market is sucking them all offshore? can you imagine the costs of doing that?
the trade policy is indeed broken.
We are off shoring these items because they can be made cheaper elsewhere. These are obviously simple items to make in todays technologicaly advanced economy.
"The Pentagon's latest weapons-buying list has a distinctly foreign flavor. From the military's point of view, the U.S. no longer has a lock on research and technology and has no choice but to look abroad for various piece parts."
Back in June, I had an exchange with a senior DOD official (no, not top-tier but still well placed) on the demise of the U.S. capability to develop and field new torpedo technology. In essence, he said not to worry because we can buy them from the Swedes.
The United States must manufacture its own weapons inside the country. To do otherwise is suicide.
We'd end up with an approved (short) list of enemies with whom we could go to war.
Further our most advanced technology would be physically outside of our control so that even if we weren't at war with the manufacturing country, another country could invade it and seize control of our weapons source. Then, they'd have our best with which to kill us.
Our days as a free country are numbered.
actually, that used to be true. when china was getting the toy and broom industry, it mattered little. now its taking semiconductors, advanced manufacturing, autos, etc. and india is getting sofware. that's the problem now. unless you can convince me that semiconductors, sofware, and advanced manufacturing won't be needed in the weapons systems of tomorrow. get back to me.
until the swedes elect some anti-US government I guess.
there is no way to stop the outflow of tech given our current trade policies.
I stated we are doomed by those choices.
We have indeed sold our enemies the rope with which to hang us.
Now, it's only a matter of time.
Today those countries can provide services cheaper than we can here.
As long as the neo-Conservative doctrine is followed in the 21st century India and China will be just as fearul as us that essential resources will be cut off to them.
When the Army began its Wholesale Logistics Modernization Program (replacement of certain legacy computer systems) with SAP, they brought on CSC as the prime contractor who then subcontracted to various other companies (IBM, Raytheon, etc).
Only US citizens were supposed to be allowed on the project. However, they used sub-contractors (Non-US Citizens) from India, Pakistan, Saudi Arabia, Syria, South Africa, etc.
Right after 9-11, a highly talented group of American contractors went to the Pentagon and met with Defense Contract and Command (we knew some of the contractors that CSC had working on the project and they were incredibly below average ... I wouldn't have let some of them even turn on a computer much less design the logistics systems for weapons procurement / production / maintenance / deployment of weapons systems / munitions, etc.) We were concerned that the systems that would be developed would be poorly designed, overly expensive, and that lives could be put at risk.
At the time, all of us were willing to leave our current high paying assigments to work at a substantially reduced rate so that the work could be done correct AND by US citizens. We felt that it was the wrong time to have technically inept people designing the logistics system for the Army.
Many of the people that wanted to pitch in were the people SAP would bring on to special high profile or cutting-edge projects. All of us were functional as well as technical, and, in our field, it is quite a bonus to get people who can do both and do them extremely well. For the Army, it would have been perfect, especially since the Army were going to have an inordinate number of interfaces between SAP and some of the legacy systems that needed to be retained.
We got a huge run around from CSC, good support from Senator Santorum's office, bupkis from Senator Spectre's office (idiot with idiots working for him) and after wasting countless hours trying to pitch in and do what we thought was the right thing, we were kept out (Eight months of effort). We continued and continue in our high paying assignments for other firms, a little jaded by the whole experience. We are a little worried about what the end product looks like and very concerned about who has access to the data that is stored within this massive ERP systm.
Meanwhile, other projects are being undertaken by the Navy and the Marines. If you ever get a list of people working on those projects, don't be surprised if you see a bunch of guys named Ravi, Srini, Purkash, and Achmed. And don't be surprised if some of them have access to the Bills of Material and Master Recipes of some of our most secret weapons, and the list of suppliers of all of the ingredients (for duplication, sabotage, or supply chain interruption).
Bookmark
Those political decisions have been made by the branch which hasn't entertained any discussion with Congress, and appears bent on unilaterally doing them. Congress was supposed to make these decisions. Take a gander at this budget-cutting thunder from Mount Olymupus (further driving them to push outsourcing):
Dire Words From DoD's Top Buyer Krieg Warns Industry: Gird for Cuts
By GOPAL RATNAM, Defense News, Sept.26, 2005
In his first public speech after taking over as the Pentagon's top weapons buyer, Kenneth Krieg, warned defense executives that the coming budget crunch could portend severe program cuts.
"If you believe that demand on the military will grow but defense resources will be challenged, if not diminished, then how will the nation balance this equation?" Krieg said Sept. 21, as several in the an audience of 150 executives and military officers murmured approval. "My challenge to you is to consider how you and your organizations will react to the choices that we have to make."
As the Quadrennial Defense Review is contemplating trade-offs between conventional and unconventional warfare, the defense undersecretary for acquisition called for a realistic national debate about military needs, and what the Pentagon can afford.
Krieg invoked President Dwight Eisenhower's warning about an all-powerful military-industrial complex, and said that while Ike's worst fears had proven groundless, "his concerns are still instructive." He said that the military-industrial complex had fared better when the Army, the sponsoring service canceled the Comanche helicopter program than when the Pentagon killed the Crusader gun and A-12 attack plane.
Krieg was asked whether his speech would become another "Last Supper" the 1993 dinner between then U.S. Secretary of Defense William Perry and defense CEOs that led to a wave of industry consolidation. But he appeared to brush off such comparisons.
"I don't know," he said after the speech in a hotel conference room in Arlington, Va. "Those are all part of the stuff we need to deal with. It's good to get the dialogue started."
Audience members sought clues about cuts being planned in the 2007 budget and the Quadrennial Defense Review, now under construction.
"Krieg is signaling that they might go after big programs" for outright cancellation instead of "salami-slicing" small portions of many programs, said one executive of a major defense contractor.
"His example of Comanche being the least painful cancellation suggests that services might be asked to cue up programs to cut."
If services take the lead on such cuts, shareholders of publicly owned defense companies might get the message that some lines of business are not worth fighting for" and force executives to stop lobbying their supporters in Congress, he said.
It remains to be seen whether the new set of Pentagon leaders, including acting U.S. deputy defense secretary Gordon England and Krieg himself, will convince Congress, the military services and the industry to accept program cuts.
Quiet Effort
Pentagon officials tried to roll back big programs in a secretly prepared preliminary document about the 2006 budget -- the PBD 753 memo signed by then-Deputy Defense Secretary Paul Wolfowitz. The memo became public late last year.
Trying to implement the memo "was a painful political process for the Pentagon," said Pierre Chao, defense industry analyst at the Center for Strategic and International Studies, Washington. "It is better to engage the industry, Congress and the military services than do it on an adversarial basis."
Unlike 1993, when defense companies were poorly organized to cope with the budget crunch, "big players today are broadly diversified and better able to engage in portfolio trades," said Chao, who believes Krieg was asking industry to open a dialogue.
In response to the challenges of the early 1990s, U.S. defense companies consolidated, but that solution is "not on the table now," Chao said. "We are not going to sit here and see the big five become big two."
Trying to keep bad news from the defense companies could be counterproductive, the company executive said. When decisions "go down, you will be surprised how quickly we can mobilize -- we know the phone numbers of all our senators," the executive said.
Cuts Coming or Not?
But not everyone was alarmed by Krieg's speech.
"I've heard words like 'big cuts are coming' before," said another company executive. "I'm more of the wait-and-see type, and not an alarmist."
Citing Congressional Budget Office (CBO) forecasts, the second executive said, "It's not a big revelation that the budget is tight and there might be cancellations. Some programs may be delayed and others stretched out."
The CBO is preparing its annual report, "Long-Term Implications of Current Defense Plans," for release in a few weeks.
One congressional official familiar with budget projections said Bush administration officials often talk big about cutting spending, then raise it.
"Clean program kills are few, and even in such cases they ended up with disproportionately small savings," the official said.
Cutting or killing big programs like the F/A-22, Joint Strike Fighter, the DD(X), and Future Combat Systems could save big bucks, but "there is no evidence they have the motivation to do it," the official said.
Heidi Wood, defense industry analyst at Morgan Stanley, New York, sees some evidence of tougher action by Pentagon officials in space programs. Until recently, officials often maintained or even boosted funding for poorly performing space programs.
"Now, they are willing to cut and change things earlier in the game and punish poor performance," she said.
She cited the classified Future Imagery Architecture program, in which John Negroponte, the director of National Intelligence, has reportedly stripped work from Boeing and awarded a role to Lockheed Martin, which lost the original contract to Boeing.
She also said "increasingly some hardline tactics are being taken" in the Space Based Infrared System and National Polar Orbiting Operational Environmental Satellite system programs.
The Bigger Problem
But Wood joined other analysts and industry executives in pointing to a bigger challenge than spending on new weapons: the rising cost of operations and maintenance.
Last year, the CBO projected that operations and maintenance expenditure plus military construction and family housing costs could grow from $257 billion in 2005 to $332 billion in 2022.
The 2004 report said spending on new weapons will rise from $145 billion that year to a peak of $191 billion in 2013 and then decline to $165 billion by 2022.
Defense officials "are not addressing the major drivers of cost," the congressional official said. "No serious discussion of the operations side of the house."
Ad Hoc Cuts
He said ad hoc cuts to capital expenditure without addressing the operations and maintenance costs, would be like a "man swimming in credit card debt and driving a Ferrari but trying to cut back on Starbucks coffee."
Krieg did mention efforts to improve efficiency — for example, by adopting Lean Six Sigma quality-control practices and using shipment-tracking radio-frequency tags that might slash maintenance time from 85 days to five.
But the acquisition chief also noted that the Pentagon dealt with its early-1990s mismatch between resources and demand for military services by cutting weapons spending.
"If procurement spending is the historical balancer, how are you going to manage your capital stock?" he said. "I argue that it will require choices."
So What? Seems to me that the biggest government give away in the world would be to jack-up contract prices to artifically support US based suppliers, who may not be providing the best technology. There is already loads and loads of pork in defense procurement.
It is an international market for arms. Some nations, such as Israel, make very, very good ones.
We insist on the finest quality and the most for our money, even it that means going overseas to buy a supplies or equipment.
For want of a nail...
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