U.S. Military Cheats Gets Creative for Cost Savings

David Axe photo

David Axe photo.

by DAVID AXE

This summer, when U.S. Defense Secretary Robert Gates called on the four U.S. military branches to reduce their overhead costs by $100 billion over the next few years, he probably didn’t have this in mind. It has come to light that the U.S. Air Force, in an effort to avoid the lawsuits and delays that have plagued many of its recent aircraft purchases, is exploiting an obscure legal loophole to buy new helicopters without launching a competition.

The military is required by law to buy weapons through a competition. That’s meant to ensure the best price for taxpayers. To replace its fleet of more than 50 Vietnam War-era Bell UH-1 helicopters, used for patrols over U.S. nuclear-missile silos, the Air Force is skipping the competition and directly purchasing, via the Army, as many as 93 UH-60s built by Sikorsky. It’s legal — barely. The Air Force is invoking the rarely-cited Economy Act of 1932, “which allows federal agencies to buy goods from other federal agencies without having to seek bids from companies,” according to Defense News.

On one hand, an Economy Act purchase would mean more helicopters, faster. On the other hand, in relying on such an obviously under-handed acquisitions tactic, the Air Force invites exactly the kind of legal protest it was trying to avoid in the first place. Instead of protesting the results of a competitive process, companies might protest that there was no competitive process at all. Potential protesters include EADS, which builds a light helicopter, already in Army service, that might actually be cheaper and more effective for Air Force missions than the UH-60.

The Air Force isn’t the only military branch getting creative with its acquisitions processes in an effort to get gear faster, hopefully without legal obstruction and potentially cheaper. The Navy pulled a fast one on two shipbuilders this month when it announced a surprise result for the long-running competition to build as many as 55 Littoral Combat Ships. Instead of choosing between Lockheed Martin and rival Austal for the next batch of 20 vessels, as was expected, the Navy “split” the fixed-price contract, allowing each company to build 10 ships.

Split buys are not illegal, but in this case the Navy might have deceived the shipbuilders by implying it would pick just one winner. That allowed the Navy to drive down prices through competition before locking down the contract terms … then dispensing with the competition.

Gates’ new era of austerity has so far produced just one identifiable cost-cutting measure: the closing of Joint Forces Command, which managed many of the Pentagon’s high-level combat experiments. Otherwise, the military services have been trying out shady, new acquisitions practices in hopes of eventually showing savings.

Rather than exploiting loopholes in pursuit of efficiencies, the military services might be better served reforming the very structure of American weapons-purchasing. Only the Army is considering such deep changes. Instead of trying to squeeze money out of traditional, multi-billion-dollar programs lasting decades, the Army wants to abandon that model entirely, instead buying small numbers of weapons more often. “Instead of buying for the entire 1.1-million Army, we may buy for the next ‘force generation’ cycle or the one after,” said Rickey Smith, from the Army’s Capabilities Integration Center. “And we’ll upgrade or buy the same thing again for the next one.”

This entry was posted in David Axe, English.

3 Responses to U.S. Military Cheats Gets Creative for Cost Savings

  1. Pingback: War Is Boring » Offiziere.ch: U.S. Military Cheats Gets Creative for Cost Savings

  2. Also recommended to read: Spencer Ackerman, “Deficit Plan Scraps Pentagon Jets, Tanks, Trucks“, Danger Room, 10.11.2010.

  3. Eddie says:

    Now I know who the brainy one is, I’ll keep loonikg for your posts.

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