Nine years ago, the Navy set out to build a new guided missile for its 21st-century ships. Fiascoes followed. In a test firing, the missile melted its on-board guidance system. "Incredibly," an Army review said, "the Navy ruled the test a success." Recently, the Navy rewrote the contract and put out another one, with little to show for the money it already spent. The bill has come to almost $400 million, five times the original budget. Such stories may seem old hat. But after years of failing to control cost overruns, the most powerful officials at the Pentagon are becoming...