Can Decades of Military Overspending be Fixed?

May 16, 2012

Even with recent disclosures about out-of-control spending on corporate perks and government agency parties, the US military is frequently held up as the exemplar of organizational largesse run wild.

In the new book Defense Acquisition Reform 1960-2009: An Elusive Goal, J. Ronald Fox, the Tiampo Professor of Business Administration, Emeritus, analyzes efforts since the Kennedy administration to reform defense spending on aircraft, ships, submarines, tanks, missiles, satellites and other major weapons systems. The text is also available as a working paper.

In short, he observes, little progress has been made in reducing cost overruns even though more than 20 reform proposals were launched during this time.

"Despite the focus and effort dedicated towards reform in the past fifty years, important systemic issues remain unchanged, implying strongly that the acquisition process has a number of built-in, even cultural, aspects that resist change," Fox writes. "These include an irregular and erratic flow of weapons systems appropriations; the very nature of cutting-edge, highly risky research and development; an ill-informed requirements process that virtually mandates changes to contracts as requirements are added or changed; and financial incentives that reward lowball contractor bids and provide negative sanctions for failing to spend all the allocated funds." 

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