Author Topic: US Defense Spending and Cancelled Programs  (Read 996 times)

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Offline bayonetbrant

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US Defense Spending and Cancelled Programs
« on: August 06, 2013, 10:01:59 AM »
Much, much more at the link. Small excerpt below.

Just How Much Money Should We Let the Pentagon Blow on (Not) Developing Weapons?

As the report unflinchingly shows, thatís a ton of cash with no product to show for it. But what should we make of these undeniably large sunk costs? Is it an indication of bad decisions? Or is cancelling these under-performing programs a sign of good judgment and strong leadership? Maybe itís both at once.

Maybe itís something else altogether.

Before we jump to the obvious ďOMG how wasteful!Ē conclusion, consider this. There are situations where cancellations are justified and wise, so zero is almost certainly the wrong target.

Maybe itís good news that ďevery year from 1996 to 2010, the Army spent more than $1 billion annually on programs that ultimately were canceled,Ē according to the June report. Perhaps this is proof the Army is making the tough call and terminating programs that once were good ideas but now arenít ó an admirable show of strong-minded leadership and a willingness to stop throwing good money after bad.

Or maybe not. Spending oceans of money on projects that donít deliver is hardly a desirable scenario. Maybe the Army would be better off only spending $500 million a year on such efforts. How about $100 million? $47 million? Then again, if the venture capitalist model is what weíre going for, where eight out of 10 projects fizzle but one or two change the world, maybe $2 billion is a better number.

Where is the sweet spot? I doubt anyone knows for sure, so additional analysis and research is clearly called for. Personally, I suspect the ideal number is far south of $1 billion, but at least some numbers are on the table now. As the report says, itís a start.

Remarkably, the report does not accompany this chart with explanations, excuses or assertions. It simply presents the unvarnished data and challenges the reader to wrestle with the ambiguity of it all. I think thatís fantastic.

Before we leave this topic, is anyone else as surprised as I am that so many projects actually get terminated? Conventional wisdom says weapons programs linger forever and are nearly impossible to kill, no matter how dysfunctional they might be.

But these numbers seem to tell a different story. This is not the only instance where data runs counter to popular perception, which is precisely why we need this info and precisely why Iím so excited about it.
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Offline LongBlade

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Re: US Defense Spending and Cancelled Programs
« Reply #1 on: August 06, 2013, 11:14:17 AM »
There are two issues here.

First, what is the legitimate level of R&D research for new weapons systems. You can't have an RMA without spending some money.

Second, is the money being invested competently? It's one thing if we're wisely investing in projects that have a decent chance of paying off, or of learning what might work and what might not. OTOH if it's being flushed down the toilet...