David S. Sorenson - The Process and Politics of Defense Acquisition - A Reference Handbook (Contemporary Military, Strategic, and Security Issues) (2008)

The Process and Politics of
Defense Acquisition
Praeger Security International Advisory Board
Board Cochairs
Loch K. Johnson, Regents Professor of Public and International Affairs, School of

Public and International Affairs, University of Georgia (U.S.A.)
Paul Wilkinson, Professor of International Relations and Chairman of the
Advisory Board, Centre for the Study of Terrorism and Political Violence,
University of St. Andrews (U.K.)
Members
Anthony H. Cordesman, Arleigh A. Burke Chair in Strategy, Center for Strategic

and International Studies (U.S.A.)
Thérèse Delpech, Director of Strategic Affairs, Atomic Energy Commission, and
Senior Research Fellow, CERI (Foundation Nationale des Sciences Politiques),
Paris (France)
Sir Michael Howard, former Chichele Professor of the History of War and Regis
Professor of Modern History, Oxford University, and Robert A. Lovett Professor
of Military and Naval History, Yale University (U.K.)
Lieutenant General Claudia J. Kennedy, USA (Ret.), former Deputy Chief of Staff
for Intelligence, Department of the Army (U.S.A.)
Paul M. Kennedy, J. Richardson Dilworth Professor of History and Director,
International Security Studies, Yale University (U.S.A.)
Robert J. O’Neill, former Chichele Professor of the History of War, All Souls
College, Oxford University (Australia)
Shibley Telhami, Anwar Sadat Chair for Peace and Development, Department of
Government and Politics, University of Maryland (U.S.A.)
Fareed Zakaria, Editor, Newsweek International (U.S.A.)
The Process and Politics of
Defense Acquisition
A Reference Handbook
David S. Sorenson
Contemporary Military, Strategic, and Security Issues
PRAEGER SECURITY INTERNATIONAL

Westport, Connecticut r London
Library of Congress Cataloging-in-Publication Data
Sorenson, David S., 1943–
The process and politics of defense acquisition : a reference handbook / David
S. Sorenson.
p. cm.—(Contemporary military, strategic, and security issues, ISSN 1932–295X)
Includes bibliographical references and index.
ISBN: 978–0–313–34843–3 (alk. paper)
1. United States—Armed Forces—Procurement—Handbooks, manuals, etc.
2. United States. Dept. of Defense—Procurement—Handbooks, manuals, etc.
3. Government purchasing—Political aspects—United States—Handbooks, manuals, etc.
4. Defense contracts—United States—Handbooks, manuals, etc.
5. Defense industries—United States—Handbooks, manuals, etc. I. Title.
UC263.S66 2009
355.6 212—dc22 2008033658
British Library Cataloguing in Publication Data is available.
Copyright
C 2009 by David S. Sorenson
All rights reserved. No portion of this book may be

reproduced, by any process or technique, without the
express written consent of the publisher.
Library of Congress Catalog Card Number: 2008033658
ISBN: 978–0–313–34843–3
ISSN: 1932–295X
First published in 2009
Praeger Security International, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
www.praeger.com
Printed in the United States of America
The paper used in this book complies with the

Permanent Paper Standard issued by the National
Information Standards Organization (Z39.48–1984).
10 9 8 7 6 5 4 3 2 1
Contents
Preface vii
Abbreviations ix
Introduction 1
Chapter 1 The Defense Acquisition Process Evolves 4
Chapter 2 The Current American Defense Acquisition Process 28
Chapter 3 The Defense Industrial Base 66
Chapter 4 The Politics of American Weapons Acquisition 87
Chapter 5 International Arms Sales and Defense Acquisition 126
Chapter 6 Reforming Defense Acquisition 142
Appendix I Company Profiles 171
Appendix II Primary Documents 199
Glossary 207
Index 211
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Preface
It is with some trepidation that I write this book, because there are few things that
are as likely to confuse and confound readers as the American defense acquisition
system, which supplies armaments and equipment for the U.S. armed forces, as
well as foreign customers. It is extraordinarily complex, requiring many pages to
describe a process that is in reality a small piece of a much larger process, the
system that provides national defense for the United States. The acronyms alone
can cause a reader to simply quit. A part of the acquisition system that has been in
place for decades may suddenly be forced through change, rendering everything
written about it to become obsolete. Unfortunately the defense acquisition pro-
cess has also been marred by poor performance, including cost overruns, schedule
delays, failure to meet performance specifications, and sometimes outright fraud
committed by some participants in the process. It makes for difficult reading, par-
ticularly when it becomes clear that problems continue despite efforts to reform
the system. It is particularly painful to read that sometimes the very reforms that
were supposed to improve the defense acquisition system have actually made it
worse.
Yet there are many reasons to write this book. The U.S. Department of Defense
is the most expensive organization in the entire world. There are few organizations
that spend more money in a single year than does the Pentagon. Most American
citizens read and understand only a small proportion of the system that the De-
fense Department uses to take ideas and form them into weapons and support
systems. They may note that the price of a single B-2 bomber exceeded $1 billion
a copy, for example, but they have no understanding of why. Yet it is their money
that the government is spending, from their tax dollars, and from lost oppor-
tunities to spend federal revenues on something else. So in the name of good
citizenship alone, it is highly useful to understand at least something about the
defense acquisition system.
Millions of Americans are more than bystanders in the defense acquisition sys-
tem. They work in it, or they construct or consume its products. The defense
industry alone in the United States creates and sustains hundreds of thousands
viii Preface
of jobs, and these jobs in turn create “multiplier effects,” where the earnings of
a welder in a shipyard move through the economic system to create even more
employment and economic growth. For them, I hope that this book will place
them and their interests within the context of a much larger system, and that they
will understand better their place in it.
The scholarship on defense acquisition once produced some of the richest lit-
erature in political science, applying theories of organizations and bureaucratic
politics to studies of the defense budget process and numerous acquisition sys-
tems. Well-known political scientists like Samuel Huntington, Robert Art, Arnold
Kanter, Desmond Ball, and numerous others generated works like The Common
Defense, The TFX Controversy, Defense Politics, and Politics and Force Levels, pub-
lished by leading university presses. However, scholarly work in the field of de-
fense acquisition has largely dried up, and this book attempts to recapture the
significance of earlier studies and carry them forward.
In a system involving billions of dollars, there will always be problems, and
problems abound in the defense acquisition system. Systems fail or reach perfor-
mance standards months or years (if ever) after they were supposed to achieve
what their defenders promised. Costs spiral out of control as problems and delays
mandate additional time, research, or sometimes the abandonment of an entire
defense program. The defense acquisition system hums along largely without no-
tice by the press until a scandal or massive cost overruns or other problems sud-
denly draw headlines. The fix has been to reform the system, though one of the
themes in this book is that well-meaning people often undertake reform, but its
effects sometimes make the problems worse and rarely fix them.
Like many scholars, I write this book as an observer rather than as a participant
(almost all scholars who write on presidents, for example, have never been one).
So I have drawn heavily upon those who have worked in the defense acquisition
world, though, given the sensitivity of the material, most requested anonymity,
and I have respected their wishes. Others have offered valuable criticisms of the
work, including Colonel Mike O’Brien, Joe McCue, Jeffrey Record, and others.
My editors Alicia Merritt, Adam Kane, and Shana Meyer have been very helpful,
and Katherine Faydash’s copy editing was outstanding. She not only corrected
my numerous writing errors, but did considerable fact checking, going so far as
to note a story in the New York Times pertaining to something I had in text, and
thus allowing me to update it. Any remaining errors are my own.
This book represents the analysis and conclusions of the author and does not
necessarily represent the views of any agency of the U.S. government.
Abbreviations
AFB Air Force Base

AIA Aerospace Industries Association
APB Acquisition Program Baseline
AT&L Acquisition, Technology, and Logistics
BCP Budget Change Proposal
BES Budget Estimate Submission
CAIG Cost Analysis Improvement Group
CBO Congressional Budget Office
CCAT Center for the Commercialization of Advanced Technology
CDD Capabilities Development Document
CFIUS Committee on Foreign Investment in the United States
CJCS Chairman, Joint Chiefs of Staff
CMC Commandant of the Marine Corps
CNO Chief of Naval Operations
COD Cooperative Opportunities Document
CPA Chairman’s Program Assessment
DAAD Defense Auditing and Accounting Division
DAB Defense Acquisition Board
DAES Defense Acquisition Executive Summary Process
DAPA Defense Acquisition Performance Assessment
DCAA Defense Contract Audit Agency
DCMA Defense Contract Management Agency
DoD Department of Defense
DPG Defense Planning Guidance
EADS European Air Defence and Space Company
EMD Engineering and Manufacturing Development
FCS Future Combat System
FMS Foreign Military Sales
FYDP Five-Year Defense Plan (or Future Years Defense Plan)
x Abbreviations
GAO Government Accountability Office (formerly General Accounting

Office)
ICD Initial Capabilities Document
JCD Joint Capabilities Document
JCDS Joint Capabilities Development System
JCIDS Joint Capabilities Integration and Development System
JCO Joint Concept of Operations
JCS Joint Chiefs of Staff
JPD Joint Planning Document
JROC Joint Requirements Oversight Council
LCC Life-Cycle Costs
MDAP Major Defense Acquisition Program
MILSPEC Military Specification
MRAP Mine Resistant, Ambush Protected
NPFTF National Procurement Fraud Task Force
OMB Office of Management and Budget
OPM Office of Production Management
POM Program Objective Memorandum
PPBE Planning, Programming, and Budgeting Evaluation
PPBS Planning, Programming, and Budgeting System
QDR Quadrennial Defense Review
RGS Requirements Generation System
TPP Total Package Procurement
TQM Total Quality Management
UAV Unmanned Aerial Vehicle
UCAV Unmanned Combat Aerial Vehicle
USD (AT&L) Undersecretary of Defense for Acquisition, Technology, and Lo-
gistics
WPB War Production Board
Introduction
The U.S. military receives billions of dollars of weapons and their supporting
equipment each year. Those weapons and their supporting equipment flow out
of what must be one of the most complicated decision-making systems in the
world, which employs thousands of people across the United States who follow
hundreds of thousands of pages of arcane documents containing millions of rules
and regulations as they convert billions of dollars into military hardware.
The term acquisition needs some definition. The Defense Acquisition Guidebook
states that the defense acquisition system is “the management process by which
the Department acquires weapon systems and automated information systems.”1
For Alic, defense acquisition encompasses both research and development
(R&D) and procurement, the actual buying of the product.2 For the Defense De-
partment, it also includes considerations of life-cycle costs, including research,
development, production, maintenance, upgrades, and final disposal, either to
storage and ultimate scrapping or to an international customer. This book,
though, focuses on both the process and the politics involved in acquiring
weapons, and not on the various processes that keep them operating and that
finally retire them.
The defense acquisition process involves local, state, and national politicians,
military officers, defense contractors, defense intellectuals, and a host of others.
They ultimately manage, fund, plan, budget, and produce fighter planes, aircraft
carriers, and armored personnel carriers, along with wing nuts, nails, batteries,
hypodermic needles, golf carts, and millions of other items used by the U.S. mil-
itary every day. That use extends beyond the U.S. military, though, as numerous
other militaries around the world also consume products from the American mil-
itary procurement system. Some of these countries are now active participants
in the process, going beyond consuming; they also supply the U.S. military with
goods produced outside of the United States.
The defense acquisition system is a huge enterprise that can be usefully bro-
ken down into manageable component parts. It is first a process, reflecting both
the politicization and the bureaucratization of how the United States buys its
2 The Process and Politics of Defense Acquisition
weapons. The first chapter discusses how this process grew over time, and the
fourth chapter discusses its current state.
The international dimension of the defense acquisition process has grown to
such importance and complexity that it deserves its own chapter. International
arms sales once consisted mainly of surplus U.S. military equipment but gradu-
ally grew to include some of the most modern of U.S. weapons, both to support
U.S. allies and friends and to lower the cost of weapons to the U.S. military.
Now foreign military sales prospects are a part of the acquisition process for most
modern American weapons and support systems. Thus, this book has a chapter
on foreign military sales, detailing how the process has evolved and the political
and policy considerations behind it.
The defense acquisition process is also about politics, as billions of dollars
change hands each year, affecting widely both the American economy and be-
yond. Given the vast sums of money, politics has shaped the system to make it
more robust and accountable, according to its defenders, or to steer money to
those with the most political influence, according to critics. The political environ-
ment has expanded beyond the military, once the exclusive executive weapons
procurement agents, to a plethora of other actors. They include the Office of
the Secretary of Defense, Congress, the defense business community, and foreign
nations that purchase American-made military hardware. The second chapter de-
tails the political process, actors, and strategies that now characterize the defense
acquisition process.
Almost since Washington’s time, problems have rankled the defense acquisi-
tion system. Sometimes they involve misconduct, often by defense contractors
but also by the government, including the uniformed services, civilian defense
officials, and members of Congress. The U.S. federal prison system has seen more
than its share of inmates who have defrauded the government by misusing the
defense acquisition system for their own benefit.
Wrongdoing gets the most media attention, but more often the problems of
the defense acquisition system come from the inherent nature of the system itself.
Too often the structure is too cumbersome and too politically shaped to produce
weapons and systems efficiently or on time. Additional levels of decision making
and oversight bog down the process that turns weapons from ideas into finished
products, and in the current system, that can mean years if not decades before a
concept becomes a fielded weapon.
For reasons of both corruption and inefficiency, reformers have worked to re-
structure the system. Sometimes the purpose of reform is to actually improve the
system by diagnosing the problems and proposing solutions. Sometimes, though,
the purpose of reform is to provide the appearance of reform to give political
cover to those who operate in the defense acquisition system or those who fund it
or those who have oversight responsibilities for it. Such efforts are not necessarily
done for nefarious purposes (though sometimes they are), but rather they reflect
the reality that broken or problem-filled defense acquisition systems generate out-
rage from taxpayers and their elected representatives, as well as from the users of
Introduction 3
military systems who pay a price for acquisition failures or shortcomings. The
defense acquisition system is highly complex and difficult to reform, with many
vested interests in the process. Reforming the process itself is akin to turning a
large oil tanker on a dime; it is cumbersome and slow because, like a huge ship,
the defense acquisition system has considerable momentum. There are always
systems proceeding through it, and to reform it would stop or delay them. There
are integrated parts, and to change any one of them changes the whole system. In
short, reform is a difficult process, but it continues to mark the defense acquisition
process, as the chapter on defense acquisition reform indicates.
Some of the key players in the defense acquisition process are defense contrac-
tors. Most grew from humble beginnings to huge corporations whose reach has
extended beyond military production to include entries into the commercial mar-
kets. Their role in the defense acquisition process appears in chapter 6. This book
closes with profiles of some of the more important defense firms in the United
States, large and small, including the Electric Boat Division of General Dynamics,
Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Curtiss-Wright, and
Pratt & Whitney.
Notes
1. Defense Acquisition University, Defense Acquisition Guidebook, https://akss.dau.mil/
dag/DoD5000.asp?view=document.
2. John A. Alic, Trillions for Military Innovation: How the Pentagon Innovates and Why It
Costs So Much. New York: Palgrave, 2007, 1.
CHAPTER 1
The Defense Acquisition

Process Evolves
Defense acquisition used to be simple, at least relative to what it has become to-
day in the United States. In ancient times, soldiers often made their own hand
weapons that they carried onto the field of battle. In early times, shipyards built
the flimsy naval ships that ancient warriors sailed to fight their opponents, and
ironsmiths tempered the steel weapons that both soldiers and sailors used to kill
their enemies. These basic technologies usually came from small craft workers,
who pounded out their weapons on anvils and primitive lathes, or bent wood
planks to the curved shapes of warships. For many centuries, military technol-
ogy proceeded slowly, with beaten metal piercing weapons, catapults, and rowed
warships dominating warfare until the age of gunpowder.
The mass production of weapons may have begun in Chinese shipyards cen-
turies ago, as the Ming Dynasty explorer Zhang He prepared a large fleet of war-
ships around 1405 for global exploration. The development of gunpowder, also
pioneered in China, gave rise to artillery, the art of which advanced in Europe
in the fifteenth century with inventions in metallurgy allowing for large cannon.
Gunpowder replaced piercing weapons, and a whole new industry grew, begin-
ning in Europe around 1840 and expanding into the vast military production fa-
cilities of today.1 The production of weapons grew more complex during the age
of Napoleon, who modernized the process by opening state-run arsenals to mass-
produce weapons. Napoleon set a standard by which the modern state became
the primary producer of weapons, though private producers continued to oper-
ate arms factories. Arms production was no longer the preserve of small private
manufacturers, but a state-serving function that occupied a growing number of
factory workers, engineers, and designers. Those state functions grew as warfare
became more technical and more weapons intensive. Where one soldier could kill
several in ancient hand-to-hand combat, gunpowder and its use in artillery and
later in aircraft allowed a few soldiers to kill first hundreds and later thousands
The Defense Acquisition Process Evolves 5
of combatants, and as warfare evolved, to kill thousands and later millions of

civilians. The support of warfare moved from craft to industry.
The American Experience

The conduct of the American Revolutionary War and the initial period of in-
dependence that followed revealed much about how the United States would
organize and manage its defense acquisition process. That practice reflected the
deep suspicion that early Americans felt toward a professional military and its
associated equipment. The militia tradition was strong, on the basis of the be-
lief that a volunteer soldier force was less threatening to an emerging democracy
than would be a standing professional army. The U.S. Congress initially wanted
to depend on local arms production, but delays and a lack of coordination among
states necessitated a national arsenal system, starting with the opening of an arse-
nal at Carlisle, Pennsylvania, in 1776 and the Springfield Arsenal in Massachusetts
in 1777.2 There were no national naval shipyards, though, as U.S. shipbuilding
remained in private hands. Change began when the U.S. Constitution superseded
the Articles of Confederation, providing a stronger central government with the
potential power to raise money for defense and to construct war-making mate-
rial. In the post–Revolutionary War period, some leaders like Alexander Hamil-
ton advocated a strong government role for the development and production of
weapons, as America’s private arms producers were small in number and short
on capacity.
Still, the predominant attitude in the United States was that a new and weak
nation should not engage in warfare, and thus Congress was very reluctant to
provide a foundation for arming the nation. However, as the United States grew
commercially as a trading nation, its merchant fleets were harassed both by na-
tional navies (France in particular) and by pirates in the Mediterranean. The new
country could no longer rely on ships donated by cities or captured from enemies,
and by the early 1800s, Congress authorized naval shipyards in Virginia and New
Hampshire.
The new republic still had to organize its military, which took its first organi-
zational shape from the reforms of Secretary of War John C. Calhoun, who held
that office between 1817 and 1825. Calhoun created the General Staff and the
Quartermaster Department, along with the Subsistence Department to feed the
troops (taking away that task from sometimes unscrupulous private contractors)
and the Medical Department.3 Calhoun thus began the process of profession-
alization within the U.S. Army, accompanied by the development of the Army
arsenal system to provide most Army weapons and equipment. The Navy, too,
was becoming professionalized, though it took Navy Secretary Abel P. Upshur to
develop the system of bureaus that would, among other things, supply the Navy
and build its ships.4
In 1846, the United States declared war on Mexico, placing great strains on a
military that had not fought an engagement outside of the United States, except
for a brief and unsuccessful venture into Canada. The United States had expanded
its arsenal base, opening arsenals in places like Schuylkill, Pennsylvania; Albany,
New York; and St. Louis, Missouri. Problems emerged, though, as equipment
reached the front lines too late to be of use, and in one case, rubber pontoons
ordered by General Winfield Scott arrived so late that he had to abandon a battle.
Those problems, though, would pale in comparison to those the Union would
face during the American Civil War.
The Civil War

The Civil War became a war of industry, as the steel age produced weapons
that contributed not only to the North’s victory but also to the more than 620,000
dead between 1861 and 1865, exceeding the totals for the United States in World
Wars I and II. The North held a considerable advantage in industry, having more
than 110,000 manufacturing establishments to the South’s 18,000, and while the
states of the Confederacy produced 36,049 tons of pig iron in 1860, the state
of Pennsylvania alone produced more than 580,049 tons.5 That capacity formed
the defense industrial base for the North, which had to quickly adapt to new
technologies (ironclad warships, rifled small arms and cannon, locomotives, and
even balloons for battlefield reconnaissance).
There was no chief acquisition officer in the War Department in 1861, and
Congress had almost no military role other than to pass general war budget bills.
Thus, the services did their own acquisition, and the results were decidedly
mixed. On the one hand, Union officers did innovate, ordering locomotives and
rails to connect troops in the field to their supply sources, and ordering rifles and
rifled cannon to replace smoothbore guns. They hesitated, though, before order-
ing repeating rifles, partly because of concerns that the troops firing them would
quickly exhaust ammunition stocks. While General Montgomery Meigs became
the Army’s quartermaster, responsible for, among other things, acquisition, the
participating states also had their own procurement processes to supply their own
armies.6 However, these fledgling processes could not cope with a flood of cor-
rupt actions, including overpricing, cheap goods, late deliveries, and bribery of of-
ficials responsible for acquisition, which became common, particularly in the first
years of the war. Meigs single-handedly ran the acquisition process for the Union,
spending almost half a billion dollars by war’s end, pushing for innovation in all
areas, and ultimately consuming more than half of all Northern industry.7 Pro-
duction came from both government factories (the Springfield Arsenal produced
Springfield rifles) and private manufacturers (Colt, Remington, and Smith &
Wesson all produced individual firearms), while both arsenals and private firms
cast cannon, ammunition, and other weapons of the machine age. Private firms
also made sleeping bags, uniforms, bandages, wagons, bridles, and thousands
of other war-related items.
The openness of Union officers to technological advances varied considerably.
The Navy continued to use wooden ships for its blockade duty, but also accepted
the ironclad USS Monitor, which revolutionized naval shipbuilding (along with
its Confederate counterpart, the CSS Virginia). Union quartermaster officers were
reluctant to order repeating rifles, as noted earlier, even when the Spencer carbine
proved to be an extraordinarily deadly weapon in its first battlefield tests. Some
weapons appeared in only limited quantities (e.g., the Gatling gun, forerunner of
the machine gun; reconnaissance balloons; body armor), while the Army rejected
other weapons such as incendiary shells and poison gas as too immoral to be
placed on the battlefield.
As military contracting expanded greatly in the Union, graft and fraud ex-
panded as well. As stories of misbehavior began to make the newspapers, the
House established the Committee on Contracts, chaired by Representative Charles
Van Wyke of New York. The committee discovered vastly inflated prices, partly
fueled by the competition among state agents trying to equip state armies, which
inspired the committee to recommend that only the War Department should be
the contracting agent for federal forces.8 Pistols worth $14 sold for $25, horses
worth $25 went for $120, and one of two ships purchased for $100,000 sank on
her first voyage, all this the result of incompetent and sometimes dishonest gov-
ernment purchasing agents who actually worked for the sellers.9 Corruption also
occurred under General John C. Frémont, the famous explorer and commander
of the Army Department of the West, when, according to Koistinen, “Almost ev-
ery aspect of supply and operations under Frémont . . . was subject to favoritism,
bribery, kickbacks, profiteering, and misuse of government funds.”10 The Amer-
ican Civil War probably had the largest number of acquisition scandals of any
American war, but they would not be the last.
Military production took another significant step forward after the American
Civil War as the military shipbuilding industry evolved from wood to iron. The
naval duel between the Monitor and the Virginia ironclads off Hampton Roads,
Virginia, in March 1862 hastened the demise of wooden warships, already on the
horizon because wooden hulls could not withstand the weight and power of the
new steam engines. The requirements for steel naval ships also introduced new
complexities for integrated production, with the advantage going to the producer
who could control most of the entire process, from iron mine to launch. In 1883,
the Navy awarded a contract for four steel cruisers to John Roach, of Morgan
Ironworks in New York, largely because Roach owned a steel mill, a rolling mill,
and subcontracts to supply coal and iron. The resulting ships, built by Morgan
because his company offered the lowest bid, were very disappointing, with poor
performance, breakdowns during sea trials, and considerable political criticism.11
The Navy also struggled with steam propulsion, unable to duplicate the British
Navy’s success with it. Dogged by inexperience (Navy secretaries appointed for
political loyalty rather than expertise) and cautious senior naval officers, the first
steam-powered naval ships broke up at sea only a few years after they were built.12
The new battleship class fared somewhat better. In 1890 Congress approved
the construction of three battleships, two to be built in Philadelphia and one
in San Francisco. In 1897 the USS Iowa, built at the Navy shipyard at Norfolk,
Virginia, joined the fleet, with Congress expanding production of cruisers (smaller
than battleships) and submarines. This shipbuilding binge not only elevated the
U.S. Navy to something close to modern European navies of the time but also
generated controversy. Secretaries of the Navy during the late nineteenth cen-
tury found themselves charged with corruption and favoritism, to the point that
the famous fictional commentator Mr. Dooley claimed that the primary qualifi-
cation for a Navy secretary was that the only salt he saw was at the bottom of a
pork barrel. William Eaton Chandler, for example, found himself charged with
favoritism when he awarded four battleship contracts to one firm, the aforemen-
tioned John Roach of Pennsylvania (Chandler escaped the charges and later served
as a U.S. senator). William C. Whitney reversed the Chandler ties to Roach, decid-
ing that U.S. Navy ships be built exclusively in Navy shipyards. Later modifying
that proviso, Whitney got Congress to approve an 1885 measure to divide Navy
work between private and Navy-owned shipyards, and his successor, Benjamin
Franklin Tracy, moved more ship production toward private yards, which ben-
efited from the Navy’s changing doctrine that favored larger, offense-oriented
ships. The Spanish-American War of 1898 and the cruise of the “Great White
Fleet” dispatched by President Theodore Roosevelt in 1907 gained more sup-
port for a large offensive-capable U.S. Navy. Naval procurement had succeeded
because of activist secretaries of the Navy, an activist naval-oriented president
(Theodore Roosevelt), and the influence of senators and representatives with both
steel and shipbuilding constituencies. The Navy’s dependence on civilian steel
companies for their ships’ material caused problems, though, as the steel indus-
try delayed new technologies for armor-quality steel plate, and, in one case, the
Carnegie, Phipps steel company sold inferior plate at highly inflated prices in
1893, causing considerable scandal and a Navy effort (later abandoned) to build
its own steel plant.13 The Spanish-American War also revealed difficulties dealing
with private contractors, whose inexperience resulted in inferior products that
were often delivered late.14
Unlike the Navy, the Army foundered in the post–Civil War period. While the
Navy fostered professionalism through its development of doctrine (e.g., the influ-
ence of Alfred Thayer Mahan) and its military education (the opening of the Naval
War College in 1884), the Army languished in the post–Civil War period, engaged
in a long campaign against Native American tribes and a brief conflict with Mexico
in 1865. While the Navy pushed new technology, Army funds slipped dramati-
cally from the Civil War days, and technical development for weapons declined
considerably. Conservative acquisition strategies prevailed: the defeat of General
George Custer at the hands of Sioux warriors at Little Big Horn in 1876 was par-
tially due to the decision by the Army to equip its troops with single-shot rifles,
while the Sioux were using repeating rifles. In 1888, Congress chartered the Army
Board of Ordnance to foster weapons development, but American Army weapons
lagged considerably behind their European counterparts. The Army did expand
its arsenal system, opening a weapons plant at Rock Island, Illinois, in 1866, and
a gunpowder plant at Picatinny Arsenal in New Jersey. However, more political
support went to the Navy, in part because it created more jobs in manufacturing
and bought more steel to construct ships than did the Army, with its equipage
of mostly small arms. The Spanish-American War of 1898 revealed numerous
shortcomings in weapons (e.g., the Army had spent more money on coastal de-
fense than on field weapons), and after the war, the deficiencies produced the
usual commissions (e.g., the Dodge Commission, which found a general lack of
administrative skill in the War Department), but even though the United States
had the potential to become a global power after the Spanish defeat, few changes
came to the War Department.
Some American entrepreneurs tried to offer the Army modern weapons (e.g.,
the machine gun, which inventors like John Browning, Hiram Maxim, and Isaac
Lewis offered to the Army, but their weapons were instead adopted by the British).
Only after 1899, when Elihu Root became secretary of war did the Army begin to
change, as Root tried to professionalize its ranks and increase its study of strategy
(by, among other things, opening the Army War College). The reforms initiated
by Root ultimately took power away from the conservative and cautious Army
bureau system and placed much more acquisition authority in the office of the
Army chief of staff. In the early days of the twentieth century, tank development
likewise went very slowly, and the Army even adopted motor-driven trucks re-
luctantly.
World War I
World War I began in 1914 without the participation of the United States,
where neutrality was the official and popular policy (President Woodrow Wilson
ran on the slogan, “He kept us out of the war” when he campaigned for reelection
in 1916). But German submarine warfare sank American merchant vessels headed
to Europe with war supplies, and ultimately the United States declared war on
Germany in April 1917. The U.S. military was once again unprepared for war,
and thus once again it had to build a vast acquisition organization to handle
the demands of war in Europe. The effort never produced enough weapons, and
thus the U.S. military relied primarily on European-made aircraft, and the few
U.S.-produced artillery weapons were replaced with French models. The U.S.
acquisition machinery itself was in disarray; thus, in May 1918, Congress passed
the Overman Act, which gave President Wilson strong powers to reorganize the
war effort, and also removed Army aviation from the Signal Corps and established
the U.S. Army Air Service and the Army Bureau of Aircraft Production. The War
Industries Board, formed in July 1917 and headed by financier Barnard Baruch,
was to coordinate with defense industry to encourage mass production and to
referee labor disputes.15
World War I was a turning point for the U.S. defense acquisition system.
Industry in the United States was on the cusp of radical changes in produc-
tivity, with the automobile and aviation industries growing through technol-
ogy and mass-production techniques. Yet the tradition of private ownership and
laissez-faire capitalism was strong, and war equipage efforts had to appeal to the
patriotism of U.S. factory owners, along with somewhat veiled threats to nation-
alize the munitions industry should U.S. manufacturers not comply with war
planners’ visions for wartime industrial mobilization.16 The result was a pattern
of limited cooperation between U.S. private industry and the military that would
later form the so-called military-industrial complex. Such cooperation served the
military well, as steel production increased dramatically, along with coal mining
and other ancillary industries, fueled by the belief that the industrialists could
make a living and more by selling to the War and Navy departments. They would
have to wait briefly to supply the next generation of American industry: aviation
production. But that industry was growing as well. In 1905, the Wright brothers,
barely two years after their first flight, offered their aircraft to the War Department,
and other early aviation pioneers soon followed them. These pioneers began the
aviation industry, before the War or Navy departments could start their own mil-
itary factories, as was the case with other weapons and naval ships, and they were
willing to take risks that an often conservative military was not. So the military-
industrial complex, that balance between government purchasing and use, and
commercial private manufacturing, began in earnest, as did the origins of the cur-
rent defense acquisition system, which is largely a process between the defense
consumer and private production, negotiated through an ever-increasingly com-
plex process.
The American military aviation industry grew slowly, often borrowing foreign
airframe designs to couple to American-built engines. There were only a hand-
ful of companies and a shortage of raw materials for aircraft manufacture, so
the Army, in an effort to generate aircraft materials, assigned more than 27,000
workers to the Spruce Division to harvest wood for the plane’s construction and
pushed farmers to grow castor beans for aircraft lubricant. Defense planners en-
listed the automobile industry to produce military aircraft (generating protests
from the fledgling aircraft industry), and by the end of the war, the United States
was producing more than 12,000 planes a year. However, the end of World War
I brought a considerable drop in production, and early aviation firms turned to
commercial applications. The Navy, trying to duplicate its shipyard production
practices, established the Naval Aircraft Factory in Philadelphia to produce sea-
planes. But most aviation remained in the hands of private firms, and the services
had to negotiate their requirements with them. In 1917, the Navy and Army set
up the Aircraft Production Board (APB) to coordinate production, but the ser-
vices guarded their aircraft plans and largely ignored the APB. The infant U.S.
aircraft industry drew the attention of the automobile industry, which gained
licenses to produce aircraft engines and airframes (the Simplex Automobile Com-
pany merged briefly with Wright-Martin Aircraft Corporation, and the Fisher
Body Company in Detroit got contracts to build the De Havilland DH-4). Edward
Deeds, founder of the Dayton Electric Corporation (later to become Delco, a part
of General Motors) sat on the APB and later was appointed chief of the Signal
Corps Equipment Division, responsible for development and supply of all Army
aircraft. Deeds also had a commercial interest in aviation, supplying Dayton Elec-
tric ignitions for the DH-4s (reportedly causing many to crash). Other automobile
executives (e.g., Howard Coffin, with ties to both Oldsmobile and Hudson, and
president of the Society of Automobile Engineers) sat on the Naval Consulting
Board, which advised on, among other things, the purchasing of naval aircraft.
These and other connections between government advisory councils and the bur-
geoning aircraft industry raised issues of conflict of interest that continued long
after the end of World War I. The experience of Deeds and his friends in trying
to establish Wright Field in Dayton, Ohio, as an aircraft “arsenal” was tainted by
the Air Corps’ leadership reaction to the role of the automobile manufacturers in
aircraft production, and ultimately Wright (later Wright-Patterson Air Force Base
[AFB]) failed as a depot,17 though the base continues on as a center for Air Force
research and development and currently hosts the headquarters of the Air Force
Materiel Command, the chief procurement agency for the Air Force.
The Interwar Period

The end of World War I brought a rise in pacifism in the United States and
elsewhere in the world. For many Americans, the war seemed bloody and point-
less, hardly a campaign to “make the world safe for democracy,” as President
Woodrow Wilson had justified it, but rather a war fought over European monar-
chal and colonial ambitions. There were also suspicions that the defense industry
and its associated industries had benefited from the war, and the investigations
of the munitions industry by the Nye Committee in Congress between 1934 and
1936 reinforced these beliefs. The Nye Report argued that American arms indus-
try representatives influenced international arms sales, but, more significantly,
operated in ways that made World War I more inevitable. The committee report
stated: “The committee finds also that there is a very considerable threat to the
peace and civic progress of other nations in the success of the munitions makers
and of their agents in corrupting the officials of any one nation and thereby sell-
ing to that one nation an armament out of proportion to its previous armaments.
Whether such extraordinary sales are procured through bribery or through other
forms of salesmanship, the effect of such sales is to produce fear, hostility, and
greater munitions orders on the part of neighboring countries, culminating in
economic strain and collapse or war.”18
The inflammatory tone of the report gained considerable public attention, al-
though it masked the more substantial causes of World War I. The sharp tone
also masked some real findings about the weapons industry: that it had worked
against disarmament and arms control, and it had illegally circumvented treaties
to sell arms, though those practices were more episodic than common.19 The
public reaction to the Nye Report caused some defense builders to leave the
business altogether—Bethlehem Steel dismantled its gun-forging facilities, and
DuPont Chemical almost stopped producing gunpowder. Moreover, international
treaties spurred by the carnage of World War I limited military construction. The
Washington Naval Conference of 1922, which attempted to limit capital war-

ships, and the London Naval Conference of 1930, which sought further reduc-
tions, accomplished little except to reaffirm previous agreements that the Japanese
found unacceptable.20 Other sweeping efforts to ban war included the Kellogg-
Briand Pact of 1928, which grandly attempted to outlaw war as an instrument
of national policy and fueled pacifistic public and political sentiment; and as a
consequence, the American military shriveled considerably. Congress cut fund-
ing for aircraft and naval ships, and Army artillery and tank production waned
to the point where the Army had to use trucks with the word tank painted on
their sides to simulate the real thing in mock training exercises. Development
of new weapons for the Army went slowly, and it entered World War II with
mostly obsolete weapons. The Army Air Corps was an exception, as its leader-
ship worked with private industry to develop the heavy bombers that would form
the backbone of its developing strategy of area bombing against enemy means
of production. The Navy developed the aircraft carrier, and its associated naval
aircraft,21 along with submarines and, with the Marine Corps, amphibious as-
sault capacity. Those forces would have to wait out the 1930s, though, because of
the budgetary limitations imposed by the Great Depression and the political atti-
tudes of the Republican presidents who ushered in the decade. President Herbert
Hoover, for example, was ill disposed to increase the military much, inspired by
the legacy left over from World War I. As Wilson commented, “The legacy that
Hoover most warmly embraced was the Kellogg-Briand Pact. . . . It played a central
role in the president’s attitude and policies.”22 Hoover tapped the inexperienced
James Good, a fellow Iowan who knew almost nothing about military affairs, to
serve as secretary of war, though after Good’s death, Hoover appointed Patrick
J. Hurley as his successor. Hurley advanced plans for industrial mobilization that
ultimately helped marshal civilian industry for World War II a few years later.23
When Hoover’s term ended in 1933, the United States was poorly prepared for
a major war, and even the election of the more internationalist-inclined Franklin
D. Roosevelt would not quickly advance U.S. military strength, given the persis-
tence of pacifistic public opinion and the economic depression that saw almost
one-fourth of the U.S. workforce unemployed at its peak.
Initial experience with private aircraft manufacturers had its challenges, with
early military aviators often negotiating contracts directly with a producer.
Congress intervened in 1926 with the Air Corps Act, which, among other pro-
visions, established the necessity of competition. The Air Corps initially resisted
the competition elements in the act, continuing to favor certain manufacturers
and, along with the Navy, continuing to produce its own aircraft, much to the
chagrin of the early manufacturers, who complained bitterly to Congress about
the continuing lack of Air Corps cooperation.24
Some military advances came from the Vinson-Trammel Act of 1934, imple-
mented by newly elected President Franklin D. Roosevelt. Roosevelt, who had
previously served as Navy secretary, understood the need to acquire more com-
bat ships as he watched the growth of the Japanese, German, and British navies in
the middle and late 1930s. The Vinson-Walsh Act of 1940 authorized the expan-
sion of the Navy by 70 percent, although the lean years of the 1920s and 1930s
left the United States with shortages in shipyards, trained workers, and raw mate-
rials. However, naval planning, driven by the so-called rainbow war plans, drawn
up at the Naval War College, drove shipbuilding onward to the point where the
U.S. Navy had seven aircraft carriers and seventeen battleships on the eve of the
Japanese attack at Pearl Harbor. Some of these were obsolete (the USS Arizona had
been launched in 1915), and the United States had to mobilize its vast capacity to
equip its forces for what would become the greatest conflict the country had ever
fought.
World War II
Following the attack on Pearl Harbor, President Roosevelt set highly ambitious
goals for wartime production, calling for 60,000 aircraft, 45,000 tanks, and 8 mil-
lion tons of ships to be delivered in 1942. As funds flowed freely for wartime
weapons construction (roughly $177 billion), the United States saw vast expan-
sion of its defense industrial base. Dusty lots quickly sprouted huge buildings,
and marshes gave way to shipyards. Tons of asphalt were poured for runways and
roads to deliver the new systems. Thousands of African Americans moved from
the racially segregated South to the North and West to get jobs in the defense
industry. Factories engaged in peacetime work quickly converted to wartime pro-
duction, and automobile production ceased in 1942 to clear the way for tanks,
trucks, transmissions, and helmets. The industry refined the mass production
techniques first learned in the 1920s as aircraft and even ship production shifted
to vast assembly lines. The production line built by the Ford Motor Company at
Willow Run, near Ypsilanti, Michigan, turned out fourteen B-24 bombers each
day during its peak production time in 1944, and American shipyards produced
three Liberty transport ships each day.
World War II ushered in a brace of new technologies that revolutionized war-
fare and challenged the defense acquisition process. Developments like radar, the
jet-propelled warplane, and the atomic bomb had to be procured in secret, and
thus dummy accounts and false names hid the actual project (e.g., “Manhattan
Project” for the American atomic bomb development and production project, so
named because much of the uranium ore was stored in Manhattan, New York,
and some of the science for the bomb was done at New York’s Columbia Uni-
versity). Such projects thus received very little oversight as they went from the
laboratory to the production line.25 The Manhattan Project would become the
foundation for the secret “black projects” discussed later in this book.
President Roosevelt brought in the experience of the New Deal to his prepa-
rations for World War II, which he believed was likely, given the international
trends of 1940. The New Deal increased the growth in federal government power
over the private sector, largely through the creation of the various New Deal fed-
eral agencies, which took on considerable political and economic power. The
so-called alphabet agencies (so called because almost every letter of the alpha-
bet appeared in their acronyms), included the National Recovery Administration,
the Securities and Exchange Commission, the Works Progress Administration,
and dozens of others. Roosevelt strongly believed in the viability of large plan-
ning agencies to guide the American economy, and he applied the same belief to
wartime preparation and planning.
In May 1940, Roosevelt created the Office of Emergency Management, which
became home to a number of other agencies, including the National Labor Rela-
tions Board, the Office of Civilian Defense, the Office of Defense Transportation,
the War Food Administration, the War Manpower Commission, the National
Housing Agency, and the Office of Price Administration. Roosevelt chose promi-
nent civilian industrialists to serve on these boards, including executives from
American Telephone and Telegraph, Studebaker Motor Company, and, most
prominently, William S. Knutsen, who had been president of General Motors.26
The very membership gave rise to problems, including a contest for authority
between powerful individuals used to heading their own organizations, and sus-
picion that the industrialists on these boards would favor industry in general and
their own industries in particular when it came to wartime production. There
were no representatives from agriculture and only one representative of orga-
nized labor (Sidney Hillman, president of the Amalgamated Clothing Workers
of America) involved in Roosevelt’s wartime agencies, despite the prominence of
both farmers and labor in the Democratic Party New Deal coalition. The lineup
suggests that Roosevelt saw wartime planning in a similar vein to Depression-era
planning, a compact between business and the federal government that coor-
dinated with both bodies instead of an effort to excessively regulate or restrict
industry.
To coordinate and centralize military production and contracts, President Roo-
sevelt authorized the creation of the Office of Production Management (OPM) in
January 1941. Headed by an Army general officer, its functions included the co-
ordination of all major defense orders and contracts, and the review all major
proposals for the purchase or construction by the War Department or the Navy
Department of materials, articles, or equipment needed for defense.27 The OPM
also had the Office of Scientific Research and Development (headed by Vannevar
Bush), which linked science and industry in a single board headed by a military
officer. However, the OPM did not have clear lines to industry or to the military
procurement bureaus (which were the sources of considerable power); thus, the
War Production Board (WPB) replaced the OPM in 1942. In addition to assuming
most of the duties of the OPM, the WPB also took on the duties of rationing scarce
commodities and supplies (food, tires, gasoline, and other goods) and ordering
the cessation of civilian production.
Wartime production quickly stretched the limits of the military arsenals and
shipyards, and thus the War and Navy departments mobilized civilian indus-
try. Converted automobile and truck factories ceased civilian production after
WPB orders, and instead produced tanks and trucks for the military. The Aircraft
Division of the OPM reached out to the automobile industry to assist in produc-
ing military aircraft, and numerous car companies found their factories producing
aircraft parts, with General Motors, for example, producing the Allison aircraft en-
gines that powered numerous warplanes. The Singer Sewing Machine Company
converted from sewing machines to antiaircraft gun parts, aircraft engine rocker
arms, gun turret castings, and dozens of other war-related items. Because there
was such growth of private companies, the War and Navy departments revised
their system of contracting, expanding the range of contracts offered to provide
more flexibility in specifications, quality, and quantity, along with offering more
security for the private firm. Thus, fixed-price contracts for risky programs of-
fered the contractor a profit even if the system itself did not win acceptance by
the military. An example is the system to prototype military aircraft, which of-
ten involved high-risk technologies. For example, the Air Corps contemplated a
radical fighter design with a pusher (rear-driven) engine and forward-firing guns.
Three companies offered prototypes but none was successful; nevertheless, the
companies all received their contracted fixed price for their efforts.
Other government commissions participated in the war effort as well. The U.S.
Maritime Commission, created in 1936 to boost Depression-level shipbuilding,
had already increased civilian shipbuilding before World War II and was thus
poised for further expansion. It ultimately oversaw the production of 5,777 ships
between 1939 and 1945. The industry modernized its production methods and
employed both women and minorities, breaking a centuries-old tradition of em-
ploying only white male workers.
World War II ushered in an era of huge military budgets, a vast defense indus-
trial infrastructure, and an acquisition system run largely by commission. Each
service retained its own acquisition corps, which operated sometimes in conjunc-
tion with and sometimes in opposition to the war acquisition boards, which were
supposed to foster joint service efforts, among other things. The wartime economy
boomed, and, by some estimates, it created more than 17 million jobs, helping to
lift the United States out of the Depression of the 1930s but also creating a huge
dependency on wartime industry for those jobs. Millions of women and African
Americans, limited from employment by both law and tradition, found jobs in the
defense industry as millions of white men entered the armed services. There was
considerable labor migration to areas with defense industry, and many African
Americans did not want to return to their rural Southern roots after enjoying
wartime employment in the North and West. When the war ended in September
1945, it was clear that there would be considerable dislocation for both industry
and workers.
The United States exited World War II and quickly entered a new world in
which it became thoroughly engaged in international affairs, based on the as-
sumption that a more assertive America might have prevented World War II.
American diplomacy engaged the other victorious powers of the past war to create
the United Nations, the General Agreement on Trade and Tariffs, and on global
economic cooperation through the creation of the International Monetary Fund
and the World Bank. President Harry Truman had grown increasingly suspicious
of the Soviet Union since the summer 1945 Potsdam Conference, where Western
and Soviet differences on the division of Europe and a number of other issues
appeared increasingly irresolvable. Soviet leaders appeared both eager and able
to build up their military, even in the face of the devastating losses the Soviet
Union took during what the Soviets called “the Great Patriotic War.” Key Ameri-
can analysts and leaders, including George Kennan, Dean Acheson, Clark Clifford,
and George Marshall, increasingly warned of an expansionist Soviet Union, and,
applying the perceived lessons of the pre–World War II period, determined to
counter Soviet ambitions with military power.
After World War II ended, the defense acquisition system faced new chal-
lenges as defense budgets shrank to a small fraction of their peak wartime levels.
While national defense spending exceeded 40 percent of the total national econ-
omy in 1944, President Truman pared it back considerably in 1946, and it would
never exceed 10 percent of the total U.S. gross domestic product during or af-
ter the Cold War. Truman also recast the methodology used to determine the
percentage of total government spending that would go to the military, by em-
phasizing domestic programs first and then giving the leftovers to the Defense
Department.
World War II brought about not only many new military technologies, includ-
ing radar, jet propulsion, and, perhaps most significantly, the nuclear weapon,
but also synthetic materials, new manufacturing techniques, and a host of other
innovations. The National Defense Act of 1947 reorganized the military, joining
the three services (Navy–Marine Corps, Army, and the newly independent Air
Force) under a single chief in the Joint Chiefs of Staff within a unified Department
of Defense, which replaced the War and Navy departments.28 The reorganization
did not paper over the traditional questions about service roles and missions,
which new military aviation technology and doctrine had only exacerbated. Each
branch of the military now had its own air arm, and, as defense budgets shrank af-
ter World War II, the competition for air roles and missions increased. The Navy
advocated a new large flush-deck aircraft carrier capable of launching nuclear
armed aircraft, while the Air Force wanted a new long-range strategic bomber,
70 combat groups, and exclusive ownership of atomic weapons. The ferocity of
the competition suggested that the services framed the roles and missions debate
around their own service interests more than the interests of national defense.
Ultimately President Truman demanded that the service chiefs resolve their roles
and missions differences at the Naval Station in Key West, Florida, in March 1948.
The so-called Key West agreement limited the Army’s aviation role and restricted
naval aviation to roles supporting naval campaigns, but Key West did not put
an end to interservice rivalry. A subsequent meeting in September 1948 at the
Naval War College resulted in further compromise, but interservice rivalry would
remain a constant.
The other development from World War II that would have a significant im-
pact on defense acquisition processes was the use of operations research. First
used during the war for the planning of antisubmarine operations and later for
the development and use of the atomic bomb, operations research joined civilian
scientists with military professionals to bring tools of analysis to bear on military
problems. The new Air Force, in particular, sought to continue the role of oper-
ations research after the war, and Air Force collaboration with civilian scientists
and the Douglas Aircraft Company led to the creation of the RAND Corporation
in 1946 (actually a year before the Air Force gained its independence). The initial
arrangement was problematic, given that RAND, with its connection to Douglas
Aircraft, served as an adviser to the Air Force, raising the prospects of favoritism
toward Douglas over its rivals.29 RAND (which came from an acronym mean-
ing “research and development”) and Douglas later severed ties, but the creation
of RAND led to the start-up of numerous other defense analysis companies that
desired a role in the politics and process of defense acquisition (see chapter 4).
RAND played an important role in linking strategic requirements to weapons de-
velopment, but its most significant contribution to defense acquisition was the
adaptation of both its studies and its personnel to the revised defense acquisition
system of the Kennedy administration.
The Eisenhower administration had reduced defense spending in almost all
of its eight years in office, because Eisenhower, as a traditional Republican con-
servative, believed in a small federal government and a balanced federal budget.
Eisenhower’s New Look policy placed emphasis on American strategic nuclear
war-fighting capability over conventional forces, and Eisenhower, like Truman
before him, set a defense budget ceiling (from $38 billion to $40 billion per year)
to benchmark the process. Eisenhower hoped that such ceilings would provide
stability and predictability over the long term, rather than subject defense bud-
geting and planning to a cycle of up-and-down swings. Said Eisenhower, “Now,
you make out a plan and you follow that plan. You do not want . . . to be pushed
off this plan time and again by something suddenly described as a crisis.”30 The
services had to live within these ceilings; thus, each slice of the budget pie be-
came more valuable as the pie shrunk, and interservice rivalry continued during
the Eisenhower administration. The Air Force, which had the smallest personnel
footprint, tended to win such battles because it could argue that its emphasis on
strategic nuclear-capable long-range bombers was a cheaper alternative to large
Army divisions and personnel-intense naval ships.
Eisenhower also revised the World War II defense acquisition system in 1953,
abolishing the old ammunition boards and transferring their authority to the as-
sistant secretary of defense for supply and logistics, and integrating some of the
service research and development programs under the assistant secretary of de-
fense for research and development. In 1958, Eisenhower again reformed the
Defense Department power structure, placing the secretary of defense directly in
the military chain of command. The legislation removed the service chiefs from
the chain of command, thus strengthening the civilian secretariat. Eisenhower did
much to downgrade service authority in the name of jointness and civilian con-
trol over the Defense Department. In 1956, the Defense Department created the
Defense Science Board to advise it on scientific and technological innovations that

it might incorporate into military systems. In many ways, the reforms paved the
way for the coming McNamara revolution of the Kennedy and Johnson years.
The Kennedy Years and the McNamara Revolution

Senator John F. Kennedy came to the White House promising to change the
way that previous administrations made weapons choices. He appointed Robert
S. McNamara, the former president of Ford Motor Company, as his secretary of
defense. McNamara had a background in business analysis, which he applied
while at Ford using planning techniques that he had previously taught at Harvard
Business School. McNamara had little experience in national security matters
other than military service during World War II, but he quickly learned the ar-
cane details from top to bottom, and, armed with his business experience, began
to challenge the Pentagon’s ways of procuring weapons.
The perennial question for any military establishment is, How much is
enough?—and, more important, how to answer that question. McNamara be-
lieved that too much of the answer to the “how much is enough” question came
from the priorities and mind-sets of the professional military, and he felt that the
techniques he had used in the world of business management would produce
better results than the methods used by senior officers.
One of the most controversial set of methodologies adopted by McNamara was
systems analysis, a method of breaking down a complex product into its compo-
nent parts. As described by Alain Enthoven and K. Wayne Smith, “Systems anal-
ysis emphasizes the explicit consideration of all factors that bear on a particular
decision in terms of the system these factors together constitute.”31 The notion of
explicitness is critical for systems analysis. One of the virtues of systems analysis
is that it requires that the objectives and alternatives to achieve those objectives
be stated clearly to allow the ranking of alternative approaches. It is particularly
important to treat uncertainty, one of the most complex challenges in defense
analysis, as explicitly as possibly.32 Such explicitness allowed McNamara and his
analysts to compare alternatives for the strategic nuclear weapons systems, bench-
marking manned bombers against missiles, with clear calculations of their cost,
reliability, and mission capability. Of course, uncertainty cannot simply be elimi-
nated or, in some cases, reduced because of systems analysis, but systems analysis
does require that uncertainty be treated as a factor, something that was sometimes
absent in previous defense decision making.
McNamara understood that weapons choice begins with strategy, and thus he
began his changes at the Pentagon by altering massive retaliation, the prevailing
U.S. nuclear strategy at the time to deter the Soviet Union and its perceived allies.
Under massive retaliation, should the Soviet Union strike the United States or its
allies with a nuclear attack, the United States would retaliate massively against
Soviet cities and defense industries, wreaking utter and total destruction. Massive
retaliation had allowed the Eisenhower administration to build up U.S. nuclear
strike forces while reducing conventional weapons, on the basis of the premise
that, since the United States could not match Soviet ground forces in particu-
lar, U.S. doctrine would emphasize the escalation of any significant conflict from
conventional to nuclear weapons, thus hoping to deter even a conventional Soviet
attack.
The U.S. Air Force, in particular, had armed itself to carry out massive retal-
iation, operating more than 700 strategic nuclear bombers and a smaller num-
ber of missiles capable of carrying nuclear weapons. The Air Force leadership
had, though, largely eschewed missiles, believing that they were unreliable, inac-
curate, and would replace traditional aviators in bomber cockpits. Said General
Thomas Power, commander of the Strategic Air Command, in 1958, “Operational
limitations and problems affecting the employment of ballistic missiles . . . pertain
primarily to accuracy, reliability, limited payload, maintainability, and lack of
operational experience.”33 The Navy, to a lesser extent, had also placed some re-
sources in strategic nuclear weapons, planning to deploy strategic ballistic missiles
on submarines.
McNamara began his reforms by questioning massive retaliation, which had
already been challenged earlier in the Eisenhower administration as too limited
and inflexible. McNamara worked to engage the Soviet Union in an unspoken
bargain by replacing massive retaliation with what he called “damage limitation,”
the more limited targeting of strategic nuclear weapons to military targets, and
strategic nuclear weapons in the adversary’s homeland in particular. According
to this new logic, a nuclear strike against one country would be met by a retal-
iatory strike against the attacker’s remaining nuclear weapons, thus reducing the
originator’s ability to do further nuclear damage. The desired outcome was that
both sides in a potential escalating conflict would recognize that a first nuclear
strike would be self-defeating as it would disarm both sides. But, more significant
for defense acquisition reform, McNamara hoped that damage limitation require-
ments would cause the Air Force to limit its purchase of strategic bombers and
instead buy a more limited quantity of long-range ballistic missiles. McNamara
did not completely eliminate the potential to destroy cities, and thus damage lim-
itation also came to mean the ensured destruction of around one-quarter of Soviet
cities.34
McNamara’s guidance along with existing military programs produced the
strategic nuclear triad, which comprises long-range Air Force bombers, Air Force
intercontinental ballistic missiles (ICBMs), and the Navy Fleet Ballistic Missile
program for submarine-launched ballistic missiles. While these three programs
have evolved over the years in both technology and force size, they are the back-
bone of today’s remaining U.S. strategic nuclear force.
McNamara also tried to adopt a more realistic means of costing out competing
defense systems, by turning from initial and development costs alone to life-cycle
costs (LCC). Life-cycle costs are from cradle to grave, including developmental,
production, modification, transportation during use, and ultimately retirement of
a system. The purpose was to provide a more complete cost of weapons during
their lifetimes, including modifications, to allow for better up-front estimates for
competing systems. However, LCC has its limitations: it is much more difficult
to estimate costs over what may be many decades of use and to predict which
modifications may keep a system in operations over its years of service.35
McNamara also pioneered the concept of total package procurement (TPP), a
system designed to replace the earlier practice of contracting initially just for the
R&D phase of a program. Under TPP, the contract was for research, development,
and production; thus, the contractor and the government had to agree on a total
package cost and delivery schedule. The first trial of TPP was the Lockheed C-5A
transport aircraft, and the problems encountered with that plane (see Appendix I)
did not get TPP off to a promising start.
The PPBS Legacy

As McNamara and his analysts reviewed the Eisenhower approach to defense
structuring, they realized that there was no inherent relationship among planning
(needs to fit strategic requirements), programming (fitting those needs to partic-
ular programs), and budgeting (funding programs). For example, budget levels
appeared to be set from arbitrary ceilings rather than from decisions about how
much money was really needed. The advocates of the planning, programming,
and budgeting system (PPBS) argued that budgets should serve as management
devices rather than as some mandatory upper limit on defense spending. For
them, budget making would be integrated into planning and programming with
the new tools of management that McNamara advocated. It would also firmly
place the entire enterprise of PPBS in the hands of the administration. Policy dis-
putes within the services would be referred prior to the coming year’s budget
submission, and then worked into the five-year defense plan (FYDP).36 The sig-
nificant achievement for PPBS was that the cycles of planning, programming, and
budgeting would be linked to explicit defense criteria that would be evaluated as
they passed through each of the three corridors of planning, programming, and
budgeting. The benchmark, though, would be that dollar amounts would be used
to compare alternatives as they advanced through planning and programming.37
McNamara and his associates used the concept and techniques of PPBS to manage
a number of strategic programs that were making their way toward final produc-
tion, including the B-70 bomber and the Skybolt air-to-ground missile that the
Air Force wanted to maintain its strategic bomber program. As McNamara applied
PPBS to those programs, he concluded that the task for both programs could be
done with less expense by unmanned long-range ballistic missiles, and he thus
canceled both the B-70 bomber and the Skybolt program, much to the chagrin
of both the Air Force and its supporters in Congress.38 The Navy, though, found
that if it did its own PPBS-like analysis it could reduce the span of civilian con-
trol in the McNamara years. Thus, as Sapolsky notes, the Navy had calculated
the number of Fleet Ballistic Missile Submarines on the basis of Soviet target sets
and the relative cost of striking those targets, and its homework was so thorough
that when McNamara reviewed the program the only adjustment he made was to
remove 5 extra submarines (set as a safety margin) from the needed 41 boats.39
The Kennedy administration ended the Truman and Eisenhower practice of
managing defense programs through budget ceilings, arguing that such arbitrary
limits posed risks to national security. Said McNamara, “A major instruction I
received from President Kennedy was to develop a defense program . . . without
regard to arbitrary budget ceilings.”40 However, as Betts argues, such ceilings re-
quired the services to make hard choices about defense programs (instigating
interservice rivalry), but once the ceilings came off, the nature of the political bat-
tles changed. Since civilian defense overseers could not argue that no more money
was available to the services, civilians now had to reject programs by saying that
they were unnecessary, thus substituting their own judgments for those of the
military professionals and inflaming civil-military relations.41
Subsequent administrations put their own mark on the defense acquisition
system, but the basic reforms initiated by McNamara (and during the Eisenhower
administration) remained in place. The reforms built around the PPBS did not
solve many of the inherent problems in the defense acquisition system, and some-
times PPBS created its own problems. Sometimes it was difficult to reduce mili-
tary requirements down to the kinds of metric measurements that PPBS required.
Those best suited to operate the PPBS were often those with an operations re-
search background rather than those steeped in war fighting. The system intro-
duced new roadblocks to rapid delivery of weapons and systems because of its
numerous process stages, and many innovations could not pass the rigorous test-
ing and evaluation procedures mandated by PPBS. However, instead of trying to
re-reform the defense acquisition system, successive secretaries of defense gener-
ally tried onetime fixes when significant issues arose. The result was an ever more
complex system whose parts did not always fit together well.
As problems persisted, a new stream of defense acquisition studies poured
forth, often in response to well-publicized problems. The year 1970 saw the
Fitzhugh Blue Ribbon Defense Panel, which recommended a complete restruc-
turing of the Defense Department (“We are amazed it works at all, it’s so big and
cumbersome under the present organizational structure,” said Fitzhugh42 ). The
report also recommended integrating the regional combatant commanders into
the acquisition system, something that finally happened decades later. A 1987
service secretary critique of the Defense Resources Board, the heart of the original
PPBS, complained that its membership was too large, that big issues about acqui-
sition and defense budgets were rarely answered, and that the “Defense Resources
Board’s membership should be limited to the Deputy Secretary and Under Secre-
taries of Defense, the service secretaries and all of the Joint Chiefs of Staff. That
would increase military representation as only the Chairman of the Joint Chiefs is
now a member.”43
The sheer magnitude of the Reagan-era buildup allowed subsequent adminis-
trations to reduce military procurement budgets and use the stocks of weapons
bought between 1981 and 1987. Procurement budgets under the Clinton years
slipped to around $50 billion a year, though they rose to $60 billion in the last
year of the Clinton administration. They did not increase to their roughly 25 per-
cent of the total defense budget during the Bush years, though, as Campbell and
O’Hanlon note. While the overall average of 25 percent of the defense budget
should mean a procurement budget of around $100 billion per year, it reached
only $85 billion in 2006.44 Instead, the other parts of the defense budget rose
to compensate for maintaining an aging weapons stockpile, particularly in the
face of the wear and tear of desert operations, as experienced in 1990–1991 and
subsequent operations.
The Reagan administration did focus on acquisition and military reform, par-
ticularly after the sharp increase in military buying power was accompanied by
service duplication and large cost increases. In response to the initiatives by
Senator Barry Goldwater and Representative William Nichols, Congress passed
and the president signed the Goldwater-Nichols Department of Defense Reorga-
nization Act of 1986.45 The act focused largely on jointness, the integration and
coordination of unique service roles and missions, and, among other things, it al-
lowed for much more jointness in defense acquisition (for further discussion, see
Chapter 6).
George W. Bush and Beyond

After the September 11, 2001, terrorist attacks, the Bush administration an-
nounced a shift from preparation for state-to-state warfare to the “global war on
terror.” The message sent to those responsible for defense preparedness was de-
cidedly mixed, though. The Bush announcement specified several kinds of ter-
rorist threats, ranging from individual small groups of terrorists to, according to
the Bush language, “state-sponsored” terrorism. For military planners, the options
under the new mantra spanned from detecting small hidden groups of terrorists
to launching a preemptive strike against states that allegedly sponsored terrorists.
The former operations called for light and mobile forces, capable of fighting in
a wide array of environments. As Betts observes, “With rare exceptions, the war
against terrorists cannot be fought with army tank battalions, air force wings, or
naval fleets . . . the capabilities most applicable to this task are intelligence and spe-
cial operations forces.”46 However, invading a state called for a different approach,
something closer to conventional warfare, with mobility and heavy weapons. The
Bush II administration thus had two roads to military modernization and chose
both. The first was unconventional warfare, focusing on counterinsurgency oper-
ations, while the second was preparation for hostilities with a major country like
Russia or China. Thus, the administration opened the defense spending flood-
gates, ordering equipment across the spectrum of combat, with the Bush admin-
istration requesting $647.2 billion in new spending authority for fiscal year 2008.
The “base defense budget,” that part of the budget that excludes the cost of com-
bat activity, was $483.2 billion, which exceeded the fiscal 2007 base budget by
$46.8 billion, which had increased real purchasing power by 8 percent.47 The
services got mostly what they requested for their traditional programs, as fighters,
submarines, carriers, and the Army Future Combat System all received funds to
build production systems. Existing programs also received increased funding.
The Bush administration used creative defense bookkeeping to fund future
projects. To replace equipment lost or worn out by combat, the Defense Depart-
ment uses a budget category known as “reconstituting the force,” but the defini-
tion of what can fall into this category is very vague. Thus, in the 2007 “recon-
stituting the force” request, the Defense Department included requests for 2 F-35
joint strike fighters, which would not even be available until 2010, a spy plane
also unavailable in 2007, 12 F/A-18 Navy/Marine Corps jets (though none were
lost in combat), and dozens of other projects worth $51 billion. In 2005, the
Congressional Budget Office estimated that war replacement costs should be no
more than $8 billion each year.48
In August 2007, a memo from Deputy Secretary of Defense Gordon England
specified the Defense Department’s “transformation priorities.” Under the heading
“Transform Enterprise Management” was the following: “Establish a new strategic
planning process to include an improved process for prioritizing and aligning re-
sources to joint capability demands, implement a common transparent decision
framework and supporting management information system and expand Capa-
bility Portfolio Management.”49 If ever there was a reaffirmation of the old saying
“the more things change, the more they remain the same,” this was it.
The current defense acquisition system came into place as a result of the fol-
lowing observations and criticisms of earlier processes:
r The defense acquisition system lacked integration, emphasizing the development and
production of defense systems while neglecting such things as maintenance require-
ments, future modifications, or even retirement of systems. Thus was born the concept
of cradle-to-grave acquisition.
r The defense acquisition system was still service driven, and thus lacked the ability to
integrate weapons across service users. To address this shortcoming, the Defense De-
partment (pushed by Congress in some cases) developed joint acquisition systems, and
diverted acquisition authority from the services to both the Office of the Secretary of
Defense and newly created joint organizations like the Joint Requirements Oversight
Council ( JROC).
Conclusions
While the course of warfare has changed considerably over American history,
the defense acquisition system has evolved more slowly. The old system of ar-
senals and government shipyards remained until after World War II, and some
elements continue on today. For most of American history, the military operated
the system that supplied them with war material, but the high stakes and cost of
the Cold War ultimately shifted that responsibility to civilians appointed by the
president. Those civilians did not always bring military experience to their po-
sitions. Of the 21 secretaries of defense who have served since World War II
(Donald Rumsfeld served twice), only 12 had any military experience at all,
only 1 (General George C. Marshall) was a career officer, and the others served
briefly (but not without distinction: some were decorated, and Elliot Richard-
son participated in the D-Day landings). More, however, held Ph.D.’s (often in
mathematics or physics) and had backgrounds in science and engineering. They
rarely served for the duration of the administration that appointed them, which
often left the senior military officers, with their long careers, with considerable
influence in defense acquisition decisions.
The McNamara reforms (discussed in several succeeding chapters) paved the
way for more civil-military tensions, which had always permeated the system,
though PPBS only exacerbated these differences in acquisition approaches. The
complexity of weapons also increased over the entire time span but most notice-
ably after World War II. The costs also increased, as did scheduled delivery dates
and system problems and failures. Other actors joined the acquisition process,
including Congress, which changed the methods of budgetary oversight to scruti-
nize weapons (see Chapter 4) in order to either improve the quality of the process
(as their defenders argued) or ensure that some of the billions of dollars of acqui-
sition money was spent in their states and congressional districts (according to
their critics). With all of these actors and processes, current defense acquisition is
quite difficult to understand, and even more difficult to work in. Gaining a thor-
ough understanding of the system in its current form is easier if one understands
where it came from.
Notes
1. See William H. McNeill, The Pursuit of Power: Technology, Armed Force, and Society
since A.D. 1000. Chicago: University of Chicago Press, 1982; Bernard Brodie and Fawn
M. Brodie, From Crossbow to H-Bomb: The Evolution of Weapons and Tactics of Warfare.
Bloomington: Indiana University Press, 1973; Martin van Creveld, Technology and War:
From 2000 B.C. to the Present. New York: Free Press, 1989.
2. Much of the material that follows draws on Wilbur D. Jones, Jr., Arming the Eagle: A
History of U.S. Weapons Acquisition since 1775. Fort Belvoir, VA: Defense Systems Manage-
ment College Press, 1999.
3. Paul A. C. Koistinen, Beating Plowshares into Swords: The Political Economy of American
Warfare, 1606–1865. Lawrence: University Press of Kansas, 1996, 81–82.
4. Ibid., 86–87.
5. Allan R. Millett and Peter Maslowski, For the Common Defense: A Military History of
the United States. New York: Free Press, 1984, 155–156.
6. Among the items procured by General Meigs was the property of Robert E. Lee’s
wife, in Arlington, Virginia, for a national military cemetery in 1864. As Meigs was prepar-
ing the cemetery, the body of his son, killed in Virginia, arrived for burial.
7. Herman Hattaway and Archer Jones, How the North Won: A Military History of the
Civil War. Urbana: University of Illinois Press, 1983, 139.
8. A. Howard Meneely, The War Department, 1861: A Study in Mobilization and Admin-
istration. New York: Columbia University Press, 1928, 258–260.
9. Ibid., 258–270.
10. Koistinen, Beating Plowshares into Swords, 135.
11. Benjamin Franklin Cooling, Gray Steel and Blue Water Navy: The Formative Years
of America’s Military-Industrial Complex, 1881–1917. Hamden, CT: Archon Books, 1979,
chap. 2.
12. Kurt Hackemer, The U.S. Navy and the Origins of the Military-Industrial Complex,
1847–1883. Annapolis, MD: Naval Institute Press, 2001, chap. 1.
13. Paul A. C. Koistinen, Mobilizing for Modern War: The Political Economy of American
Warfare, 1865–1919. Lawrence: University Press of Kansas, 1997, 54–55.
14. Ibid., 78–79.
15. For a history of the War Industries Board, see Robert Cuff, The War Industries
Board. Baltimore: Johns Hopkins University Press, 1973.
16. Ibid., 22–23.
17. Ann Markusen, Peter Hall, Scott Campbell, and Sabina Deitrick, Rise of the Gun-
belt: The Military Remapping of Industrial America. New York: Oxford University Press,
1991, 57.
18. Senate, Report of the Special Committee on Investigation of the Munitions Industry (The
Nye Report), 74th Cong., 2nd Sess., February 24, 1936, 3.
19. Paul A. C. Koistinen, Planning War, Pursuing Peace: The Political Economy of Ameri-
can Warfare, 1920–1939. Lawrence: University Press of Kansas, 1998, chap. 14.
20. While the Japanese did not accept the terms of treaty limitations, the other powers
that did accept them found ways around the limits. The U.S. Navy converted several cruis-
ers, limited by the Washington treaty, to aircraft carriers, which proved more efficient in
World War II than the cruisers.
21. See Geoffrey Till, “Adopting the Aircraft Carrier,” in Military Innovation in the Inter-
war Period, eds. Williamson Murray and Allan R. Millett. Cambridge: Cambridge University
Press, 1996, 191–226.
22. John R. M. Wilson, Herbert Hoover and the Armed Forces: A Study in Presidential
Attitudes and Policy. New York: Garland, 1993, 19.
23. Ibid., 95–101.
24. Edwin H. Rutkowski, The Politics of Military Aviation Procurement, 1926–1934.
Columbus: Ohio State University Press, 1966, chap. 4.
25. The secrecy surrounding the Bell P-59, America’s first jet-powered fighter, was so
tight that when the plane emerged from its hanger, it was fitted with a dummy propeller.
The hanger itself was marked with a sign reading, “Anyone approaching within 50 feet of
this building will be shot!”
26. Institute for National Strategic Studies, McNair Paper Number 50, chap. 5, August
1996, http://www.ndu.edu/inss/mcnair/mcnair50/m50c5.html.
27. Office of Emergency Management, Office of Production Management Duties and Func-
tions. Washington, DC: Office of Emergency Management, 1941, 1.
28. The reorganization is the focus of Demetrios Caraley, The Politics of Military Uni-
fication: A Study of Conflict and the Policy Process. New York: Columbia University Press,
1966.
29. The founding and evolution of RAND is told in Bruce L. R. Smith, The RAND
Corporation: Case Study of a Nonprofit Advisory Corporation. Cambridge, MA: Harvard Uni-
versity Press, 1966.
30. News conference in March 1959, quoted in Richard A. Aliano, American Defense
Policy from Eisenhower to Kennedy. Athens: Ohio University Press, 1975, 39.
31. Alain C. Enthoven and K. Wayne Smith, How Much Is Enough? Shaping the Defense
Program, 1961–1969. New York: Harper & Row, 1971, 61.
32. Ralph Sanders, The Politics of Defense Analysis. New York: Dunellen, 1973, 17.
33. General Thomas S. Power, “SAC and the Ballistic Missile,” Air University Quarterly
Review 9 (Winter 1957–1958), 11. Power also noted the inability to recall a ballistic missile
once it had been launched.
34. There is a vast literature on the evolution of U.S. nuclear strategy, including
Lawrence Freedman, The Evolution of Nuclear Strategy. New York: St. Martin’s Press,
1989; Lynn Eden and Steven Miller, eds., Nuclear Arguments: Understanding the Strate-
gic Nuclear Arms and Arms Control Debates. Ithaca, NY: Cornell University Press, 1989;
Robert Jervis, The Illogic of American Nuclear Strategy. Ithaca, NY: Cornell University Press,
1984; Michael Mandelbaum, The Nuclear Question: The United States and Nuclear Weapons,
1946–1976. Cambridge: Cambridge University Press, 1979; and Scott D. Sagan, Moving
Targets: Nuclear Strategy and National Security. Princeton, NJ: Princeton University Press,
1989.
35. A good discussion of LCC may be found in M. Robert Seldon, Life Cycle Costing: A
Better Method of Government Procurement. Boulder, CO: Westview Press, 1979.
36. Arnold Kanter, Defense Politics: A Budgetary Perspective. Chicago: University of
Chicago Press, 1979, 59–61.
37. Enthoven and Smith, How Much Is Enough?, chap. 2.
38. Robert E. Hunter, “The Politics of U.S. Defense 1963: Manned Bombers versus
Missiles,” in Readings in American Foreign Policy: A Bureaucratic Perspective, eds. Morton H.
Halperin and Arnold Kanter. Boston: Little, Brown, 1973, 154–201.
39. Harvey Sapolsky, The Polaris System Development: Bureaucratic and Programmatic
Success in Government. Cambridge, MA: Harvard University Press, 1972, 161.
40. Department of Defense Appropriations for 1962. Hearings before a Subcommittee of
the Senate Committee on Appropriations, 87th Cong., 1st Sess. Washington, DC: Govern-
ment Printing Office, 1961, 49.
41. Richard K. Betts, “A Disciplined Defense,” Foreign Affairs 86 (November/December
2007), 75–76.
42. News briefing by Gilbert W. Fitzhugh, Chairman, Blue Ribbon Panel, Pentagon,
July 27, 1970, 4.
43. “Washington Talk: Department of Defense; From the Bureaucratic Buzzing, a Re-
port with Sting,” New York Times, November 3, 1987.
44. Kurt M. Campbell and Michael E. O’Hanlon, Hard Power: The New Politics of Na-
tional Security. New York: Basic Books, 2006, 93.
45. The failed Iranian-embassy hostage rescue effort under President Carter was also a
reason for the Goldwater-Nichols Act.
46. Betts, “A Disciplined Defense,” 72.
47. Pat Towell, Stephen Daggett, and Amy Belasco, Defense: 2008 Authorizations and
Appropriations. Washington, DC: Congressional Research Service, July 2007, 2.
48. “Weapons That Aren’t Ready Dot Bush’s War Budget,” Boston Globe, February 8,
2007.
49. Deputy Secretary of Defense, “DoD Transformation Priorities,” August 9, 2007.
The document is no longer available on the DoD website. The text is in Jason Sherman,
“DoD Sets 25 Goals, Many Launched by Rumsfeld, to end Bush Era.” Inside the Pentagon
23:1, 18–20, August 23, 2007.
Further Reading
Jones, Wilbur D., Jr. Arming the Eagle: A History of U.S. Weapons Acquisition since 1775. Fort
Belvoir, VA: Defense Systems Management College Press, 1999.
Koistinen, Paul A. C. Arsenal of World War II: The Political Economy of American Warfare:
1940–1945. Lawrence: University Press of Kansas, 2004.
. Beating Plowshares into Swords: The Political Economy of American Warfare, 1606–
1865. Lawrence: University Press of Kansas, 1996.
. Mobilizing for Modern War: The Political Economy of American Warfare: 1865–1919.
Lawrence: University Press of Kansas, 1997.
Millet, Allan R., and Peter Maslowski. The American War of War: A Military History of the
United States of America. New York: Free Press, 1984.
CHAPTER 2
The Current American Defense

Acquisition Process
In the late 1940s, the newly independent Air Force was searching for a bomber to
replace its World War II–era piston-engine aircraft. It turned to the Boeing Com-
pany to design an aircraft capable of carrying nuclear bombs over long ranges to
potential targets thousands of miles away. When Boeing engineers presented a
design for a bomber with straight wings and turboprops, Air Force officers de-
manded that they return to their Dayton, Ohio, motel room and start over, giving
them the weekend to come up with something radically different. The result was
the jet-powered, swept-wing B-52, one of the most successful planes ever bought
by the U.S. military. The B-52 contract, signed at Wright-Patterson AFB, carried
the names of Boeing representatives and Air Force officers, with the barely visible
note in the margins “Symington says ok.” Stuart Symington was the secretary of
the Air Force, and the cryptic note was the only indication of oversight beyond
that of the military consumer. Those old days, though, hardly resemble the cur-
rent defense acquisition system, the change reflecting the growing complexity of
the weapons, the increasingly high political stakes involved in their purchases,
and the layers of reform that have been applied to improve the process.
It is probably fair to state that the current defense acquisition process is con-
structed on a foundation of distrust. How else to explain the extraordinary steps
in the process, running from requirements specification to delivered product, or
the large number of players in the process? Power is spread widely, across mili-
tary services, their civilian overseers, Congress, other executive agencies (e.g., the
Government Accountability Office, the Office of Management and Budget), de-
fense contractors, and the political input of states and localities, which also ben-
efit from influencing the choices about weapons. None of the parties fully trust
the other parties. Congress, for example, distrusts the military to provide honest
and reliable reports on its acquisition programs, while the military contends that
Congress makes program-funding decisions with at least one eye aimed at elec-
toral district and state jobs. The secretary of defense and the services often distrust
The Current American Defense Acquisition Process 29
one another, with the services viewing the secretary and the supporting secretariat
bureaucracy as an impediment to service priorities, and the secretary sometimes
believing that the services push acquisition programs as a means of furthering
service, as opposed to national, goals and objectives. Secretary of Defense Robert
Gates reflected that separation between secretary and service in 2008 when, in
several public statements, he chastised the Air Force for pursuing its own priori-
ties over delivering unmanned aerial vehicle support to the Army.1 This is not to
suggest service selfishness, but rather a genuine disagreement on the best way to
perform roles and missions in support of national objectives.
American political tradition has long feared the concentration of power, and
the power to make choices on weapons is considerable. With billions of dollars
at stake and programs’ lives stretching into decades once they are approved, it
is understandable that such authority is spread widely. Periodical efforts to cen-
tralize such influence under a so-called acquisition czar have met with raised
eyebrows and efforts to water down the authority of such a position, because of
fears that such a position could not only take power away from the far reaches of
the acquisition galaxy but also make the holder subject to possible corruption and
mismanagement. While there is now an undersecretary of defense for acquisition,
technology, and logistics (USD [AT&L]), there are numerous other acquisition
centers to dilute the power and authority of the USD (AT&L). In a way, the clash
of perspectives between the need for centralized decision-making authority and
the dispersion of acquisition influence across a wide political spectrum both in-
side and outside of the Pentagon is quite reflective of the larger American political
paradox that both wants and fears political power in general.
The following sections identify and analyze two parts of the defense acquisition
system, the participants and the systems.
The Defense Acquisition System

As noted in Chapter 1, the defense acquisition process failed Secretary Robert
McNamara’s test of integration with the larger requirements and plans of the mil-
itary, which resulted in McNamara’s imposition of PPBS—a process designed
to integrate the three elements of planning, programming, and budgeting but
without evaluating the results after systems passed through the process to final
delivery. The consequences were that further modification, maintenance, and ul-
timately disposal were not initially included in the weapons procurement system.
To remedy this, the Senior Executive Council (SEC) (consisting of the secre-
tary of defense; the deputy secretary of defense; the undersecretary of defense
for acquisition, technology, and logistics; and the secretaries of the Army, the
Navy, and the Air Force) mandated an evaluation of the process in 2003, result-
ing in the issuance of the defense planning guidance (DPG), with directions for
priorities from the secretary of defense, and a new title for the process: PPBE
(planning, programming, budgeting, and execution). This system is the primary
means of acquiring military weapons and equipment. It can be understood only
by breaking it down into component parts, starting with the actors involved in the
process.
Actors in the Current Process

The list of players in the defense acquisition system reads like a who’s who of
Washington and beyond. Some players are initiators, who draft military require-
ments and operate systems, specifically the armed services, or supply the military
(defense contractors), but the majority are overseers who monitor the defense ac-
quisition system for compliance with regulations or who grant or deny requests
for funding (Congress).
The Military
The term military includes the Office of the Secretary of Defense, the service
secretariats, the Joint Staff, and the individual services. Title X of the U.S. Code
specifically defines the Department of Defense (DoD) as consisting of the follow-
ing:
1. Office of the Secretary of Defense

2. Joint Chiefs of Staff
3. Joint Staff
4. Defense agencies
5. Department of Defense field activities
6. Department of the Army
7. Department of the Navy
8. Department of the Air Force
9. Unified and specified combatant commands
10. Such other offices, agencies, activities, and commands as may be established or desig-
nated by law or by the president
11. All offices, agencies, activities, and commands under the control or supervision of any
element named in paragraphs 1–10.
The Office of the Secretary of Defense As noted in Chapter 1, Secretary of

Defense McNamara strengthened the Office of the Secretary of Defense (OSD),
believing that the services had too much power in shaping acquisition choices
(see Chapter 4). The OSD staff expanded during and after the McNamara era,
and its rise, built around systems analysis and other “objective” techniques to
make procurement decisions, came at the expense of the military.
A significant part of the OSD defense acquisition process is the Defense Ac-
quisition Board (DAB) chaired by the USD (AT&L). The vice chairman of the
Joint Chiefs of Staff also serves as the vice chair of the DAB, allowing for some
coordination between the DAB and the Joint Requirements Oversight Coun-
cil (see subsequent paragraphs). The DAB’s official function is to advise the
USD (AT&L) on key acquisition decisions and to consult on general acquisition
policy. Its membership consists of the undersecretary of defense, comptroller;

undersecretary of defense for policy; undersecretary of defense for personnel and
readiness; undersecretary of defense for intelligence; assistant secretary of defense
for networks and information integration/DoD chief information officer; director,
Operational Test and Evaluation; chairman, Program Analysis and Evaluation; the
secretaries of the Army, the Navy, and the Air Force; and the director, Acquisi-
tion Resources and Analysis. In addition to its membership, the DAB has as official
advisers the principal deputy USD (AT&L); the deputy undersecretary of defense
for logistics and material readiness; director, Defense Research and Engineering;
relevant OIPT (overarching procedures and assessment) leader(s); program exec-
utive officer; program manager; chair, Cost Analysis Improvement Group; direc-
tor, Defense Procurement and Acquisition Policy; DoD general counsel; deputy
undersecretary of defense for industrial policy; DoD component acquisition ex-
ecutives; commander, U.S. Joint Forces Command; and chair, Functional Capa-
bilities Board(s). With such a varied membership and advisers, the DAB should
never lack for input and advice, but the obvious problem is that, with so many
members, decisions may be very difficult to reach, which increases the potential
for compromised solutions. There are sub-bodies as well, including the Defense
Science Board, which advises the principal deputy USD (AT&L) on the potential
applications for science and technological developments for potential weapons
use.
The same is likely to be true for some of the boards below the DAB level.
There is, for example, the Information Technology Acquisition Board, which de-
cides on information technology acquisition issues that cannot be resolved by
the appropriate integrated product team. The Information Technology Acquisi-
tion Board has for membership the deputy DoD chief information officer; the
Information Technology Overarching Integrated Product Team leader; cognizant
program executive officer(s) and program manager(s); cognizant OSD principal
staff assistant(s); the undersecretary of defense, comptroller, the director of pro-
gram budget, and deputy chief financial officer, the undersecretary of defense
for personnel and readiness; the director, Operational Test and Evaluation; the
director, Program Analysis and Evaluation; the director, Force Structure ( J-8);
the component acquisition executives of the Army, Navy, and Air Force; DoD
general counsel; the deputy director, Developmental Test and Evaluation; the di-
rector, Defense Procurement and Acquisition Policy; and DoD component user
representatives. Information Technology Acquisition Board advisers include the
undersecretary of defense for policy; the undersecretary of defense for intelli-
gence; the domain owner; component chief information officers; the director of
the Defense Intelligence Agency; the director of the Cost Analysis Improvement
Group; the director of Defense Procurement and Acquisition Policy; represen-
tatives of the Joint Staff; the deputy undersecretary of defense for logistics and
material readiness; the deputy undersecretary of defense for installations and en-
vironment; the deputy undersecretary of defense for industrial policy; the direc-
tor of the International Cooperation; and the director of Acquisition Resources
and Analysis. It is noteworthy that OSD membership is senior here, as it is with

the DAB.
The Defense Acquisition Executive Summary (DAES) process tracks cost,
schedule, and problems in major defense acquisition programs. The DAES re-
views a series of parameters for acquisition programs, including operational per-
formance (how much variance from original goals), cost, funding status (deviation
from original funding levels), testing results, systems engineering (to include in-
tegration of components, human engineering, safety issues, and such), and logis-
tics, and supports after production. This latter step examines factors like declining
manufacturing support as the system ages, spare parts availability, the nature of
technical data (e.g., whether it is proprietary), and support equipment for contin-
ued maintenance.
There is also the OSD’s Cost Analysis Improvement Group (CAIG), noted
previously, which provides an independent cost estimate from the services on
major programs. These cost estimates are a part of the data supporting each
milestone decision, and the DAB often requests a CAIG analysis for its decisions.
The CAIG also establishes guidelines for performing independent cost estimates,
along with guidelines for the Contractor Cost Data Reporting System, which is
a mandatory data system used by contractors that allows for uniformity across
program cost analysis.
The Joint Staff Jointness, as noted earlier, continues to be more important

in the defense acquisition process. The Joint Chiefs of Staff emerged from the
1947 National Security Act, with the position of chairman created two years later.
Further changes also came in 1949 as the service secretaries moved from the
cabinet and under the secretary of defense, strengthening that office. In 1953
the chairman gained control over the Joint Staff, and more service secretaries
(specifically functional service undersecretaries) were added to the secretariat,
further reducing service influence. The 1958 defense reforms further increased
the power of the secretary of defense, the Joint Staff was removed from the chain
of command, and the services lost control over some functional responsibilities,
like regional and functional commands (e.g., European Command, Strategic Air
Command). The combined effect of these changes, coupled with the McNamara
reforms, left the military, including the Joint Staff, with considerably reduced
acquisition authority, and by the time of the Reagan administration, there were
calls to restore some of the Joint Staff’s authority.
The Joint Staff produces several significant documents, including the Joint
Planning Document ( JPD), which advises the secretary of defense on program-
matic and functional priorities in specific areas, and the Chairman’s Program As-
sessment (CPA), which evaluates service capabilities from the Program Objective
Memorandum (POM) (see subsequent paragraphs) with national defense priorities.
The Goldwater-Nichols legislation strengthened the Joint Staff’s role in defense
acquisition, including adding the structure for the Joint Requirements Oversight
Council ( JROC). This legislation, discussed in Chapter 6, represented one of the
most significant reorganizations of the Defense Department since 1947. While its
impact has been most pronounced at the military operations level, it has also had
considerable impact on defense acquisition.
The Joint Requirements Oversight Council The JROC oversees the defense
acquisition process from start to finish, beginning with a review of service justi-
fications and continuing with reviews of costs and scheduling. The JROC dates
back to the Goldwater-Nichols Act and has evolved since its inception. During
the Clinton administration, the JROC was linked more closely to the CPA, which
the Joint Staff generates as an alternative to service-generated POMs. Specific
functions of the JROC are to “determine and oversee the processes and meth-
ods to be used in identifying, developing, assessing, validating, and prioritiz-
ing joint requirements.”2 The vice chairman of the Joint Chiefs of Staff chairs
the JROC, whose members consist of the vice service chiefs. In 2001, the Joint
Chiefs of Staff designated the JROC as an advisory council to the CJCS (see
subsequent paragraphs).
The JROC reviews all ACAT (Acquisition Category) I defense programs, al-
though, at its discretion, the JROC may also review ACAT II programs, an appro-
priate caveat since some ACAT II programs have a significant impact on ACAT
I counterpart programs. This is true of munitions, for example, whose develop-
ment must correlate closely with their appropriate weapons launching platform.
It is also true for maintenance acquisition programs, which must link to the plat-
form they will service.
The JROC assessment allowed a single military input to the secretary of de-
fense, but to produce the JROC-CPA, the JROC staff was reconfigured to allow
for nine different assessment areas.3 The JROC reviews use the nine categories to
consider major acquisition programs.4 The main organizing concept is clearly
requirements, which come to the JROC from the services and the combatant
commands.5 The JROC does have institutional problems, as cataloged by the
then JROC chair Admiral E. P. Giambastiani: unrealistic requirements (reflect-
ing assumptions that technology will grow to meet the desired requirement) and
requirements creep, which occurs when the specified technology grows faster
than the ability to produce it, which results in late and overpriced programs.6 To
address the problem, the JROC is attempting to link requirements to the joint
concept of operations ( JCO), which has four categories: major combat opera-
tions, stability operations, homeland defense, and strategic deterrence. Such cat-
egories may improve the requirements evaluation stage for a proposed program,
but they can also add delay and cost to them. It is not surprising that sometimes
program supporters try to push their program into the milestone step system
before gaining JROC approval. For example, the DoD inspector general found
that the Army officials requested $32 million for low-rate initial production of
the objective individual combat weapon (OICW) before obtaining war-fighter re-
quirements from the JROC, and Congress accordingly eliminated funds for the
program.7
The JROC also has jurisdiction over program service ownership, which makes
it referee of the traditional roles and missions debates discussed in Chapters 1
and 4. In many cases ownership is clear by mission (e.g., the Navy and Marine
Corps own carrier aviation), but the JROC does pass judgment on overlapping
programs. Thus, when the Air Force wanted to be the executive agent for a sub-
stantial number of unmanned aerial vehicle (UAV) programs, the JROC refused
its request in 2005, though the Air Force renewed its request two years later. The
JROC also refused to approve the Joint Forces Command’s Experimental Joint
Program because of “confusion among the Joint Staff and the Joint Forces Com-
mand about a proposed change in guidance that required additional data (on
costs and timelines) be included when submitting these recommendations.”8
While JROC oversight is generally limited to reviews, with actual program
control by the operating services, there is at least one case in which the JROC re-
tained programmatic control over a significant program: mine-resistant, ambush-
protected (MRAP) vehicles. The justification was that the JROC believed that the
services might add new requirements to the system that might delay production.9
The Services The armed services were once organized around two pillars: the
Department of War (Army) and the Department of the Navy. That all changed as
a result of the 1947 National Security Act, and the system is vastly more compli-
cated, including the following:
r The U.S. Army, responsible generally for land combat acquisition, including heavy vehi-
cles, and for the air systems to support land combat, including a large class of helicopters.
r The U.S. Navy, responsible for sea and sea-based combat, including major naval ships
(combat and combat support), along with support of the U.S. Marine Corps, which is a
part of the Navy Department. Thus, the Navy supplies the Marine Corps directly with
weapons (e.g., armored vehicles, ammunition) and indirectly with assault ships to carry
the Marines to the battlefield.
r The U.S. Air Force, responsible for air combat and support, along with a major compo-
nent of military space support, including combat and combat support systems.
r The National Guard, responsible directly in peacetime to state governors, though the
guard may be federalized upon presidential order. The National Guard is actually two
components: the National Guard, affiliated and supplied by the Army, and the Air Na-
tional Guard, affiliated and supplied by the Air Force (the Navy does not have an asso-
ciated guard unit).
The services have their own acquisition branches, which process service re-
quirements through service acquisition processes. Army acquisition is central-
ized in the office of the undersecretary of the Army for acquisition, logistics, and
technology (UA [AL&T]). The Army also has its acquisition corps, managed by
the U.S. Army Acquisition Support Center, which support program executives
in their missions, along with the AL&T workforce of more than 55,000 military
and civilians. The Air Force has the Office of the Assistant Secretary of the Air
Force for Acquisition, along with acquisition “Centers of Excellence” located both
in the secretariat of the Air Force and at field centers. The Air Force Materiel
Command, headquartered at Wright-Patterson AFB, has direct responsibility for
testing and acquiring Air Force weapons and equipment. In the Navy, acquisition
is centered through the assistant secretary of the Navy for research, development,
and acquisition, along with the naval systems commands, including Naval Air
Systems Command, which manages air weapons; Naval Sea Systems Command,
the manager for ship programs; and Space and Naval Warfare Command, which
is responsible for space and information programs.
A chief service responsibility is the development and issuance of POMs, which
are compilations of overall service objectives and requirements to meet those ob-
jectives. The POMs include a time-phased allocation of resources (forces, fund-
ing, and manpower) by program, projected six years into the future, though in
actuality the time span is considerably shorter. The POMs then represent service
programmatic and budgetary requirements, which go to the joint process for ad-
judication.
Congress
The U.S. Congress is empowered to authorize and appropriate all monies for
national defense. Congress has significant roles to play in the defense acquisition
process (the political role of Congress is covered in Chapter 4), including over-
sight of all defense programs, investigative powers, lawmaking (including laws
affecting defense acquisition), and, most important, budgetary approval.
Congress may investigate any of the Defense Department activities, including
issues with acquisition. The problem for Congress, though, is that it has neither
the mandate nor the will to shape national strategy, so instead its investigations
and its budgetary oversight and approval process focus on details rather than
overall strategic requirements. Congress also tends to be reactive rather than
proactive; thus, congressional investigations tend to stem from media attention
to a problem or the perennial “Washington insider” reports about problems, and
so on.
Congress is also hampered by lack of information, because its ability to gather
and process information critical to military affairs pales in comparison to that of
the Defense Department. Congress has tried to improve its lack of information
by creating such support entities as the Congressional Budget Office (CBO, cre-
ated in 1974), and enhancing the General Accounting Office (GAO, later renamed
the Government Accountability Office) and the Congressional Research Service.
Congress also created the Office of Technology Assessment in 1972, but the new
Republican majority in Congress abolished the office in 1995. Still, despite the
creation of information processing by Congress, its primary sources of informa-
tion continue to be the Defense Department and the thousands of lobbyists who
specialize in defense issues for their clients.
The heart of congressional power and influence is in the committee system,
which is organized by function. Military issues are channeled to the functional
armed services committees in both the House and the Senate. While those com-
mittees can and do hold hearings on a number of military issues, their primary
function is to approve the defense budget.
Congressional budget authority begins with a congressional budget resolution,
as required by the Congressional Budget and Impoundment Control Act of 1974,
to cover the subsequent five fiscal years. The measure, in response to the pres-
ident’s budget request submission in February, is supposed to be approved by
April 15, but Congress rarely meets that deadline, and for fiscal years 1999,
2003, and 2005, Congress never did pass a budget resolution, largely because
of interparty wrangling. Instead, Congress usually passes a continuing resolution,
approved by both chambers, which allows the designated agency to continue to
spend appropriated funds at current levels until Congress finally passes the ap-
propriation. The consequence is that there are no guidelines on such things as
budget ceilings, and the president’s budget request carries even more authority
than it might otherwise.
House Committee on Armed Services The House Committee on Armed Ser-

vices, like other functional committees, is a legislative committee, responsible for
matters particular to national defense. According to House rules, “The Committee
retains jurisdiction of all subjects listed in clause 1(c) of rule X of the Rules of
the House of Representatives and retains exclusive jurisdiction for: defense policy
generally, ongoing military operations, the organization and reform of the Depart-
ment of Defense and Department of Energy, counter-drug programs, acquisition
and industrial base policy, technology transfer and export controls, joint inter-
operability, the Cooperative Threat Reduction program, Department of Energy
nonproliferation programs, and detainee affairs and policy.”10 The House com-
mittee is divided into the following subcommittees:
r Air and Land Forces

r Readiness
r Terrorism, Unconventional Threats, and Capabilities
r Military Personnel
r Strategic Forces
r Seapower and Expeditionary Forces
r Oversight and Investigations
These subcommittees hold the original hearings for the specialized parts of the
overall defense budget request, so the Subcommittee on Seapower and Expedi-
tionary Forces examines the budget requests from the Navy and Marine Corps for
their acquisition programs, and the Subcommittee on Air and Land Forces con-
siders budget requests for military aircraft, land combat systems, and so on. The
hearings begin with a presentation by the responsible service leaders that outlines
their overall budget request, which is followed by questions from the committee
members. Often the professional committee staff prepares the questions after a
staff examination of the service budget requests, reflecting the power of the com-
mittee staffs.
The House Committee on Armed Services also has mandated itself the power of
oversight on budget and program management. It claims that it will pay particular
attention to the mandates placed on executive departments and agencies by the
Government Performance and Results Act of 1993 (Public Law No. 103-62), as
well as consider how well the Defense Department uses performance-based bud-
geting techniques and five-year strategic-planning documents for its programs.
This particular task falls initially to the Subcommittee on Oversight and Investi-
gations.
The House Armed Services Committee first approves budget amounts at the
subcommittee level, then those decisions move to the full Armed Services Com-
mittee, which again votes on the Defense Department requests. Those figures then
go to the full House of Representatives, where again the members vote on the
committee decisions.
The House Committee on Appropriations The House Committee on Appro-

priations is required to give final authority to spend federal dollars. It draws its
authority from the U.S. Constitution, Article I, Section 9, which states, “No money
shall be drawn from the Treasury, but in Consequence of Appropriations made by
Law.” The executive branch, including the Defense Department, may not spend
money until the congressional appropriations process has approved the specific
funds to be paid from the Federal Treasury.
As in the case of legislative committees, the House Committee on Appropria-
tions has subcommittees to do its specialized work, including its Subcommittee
on Defense. That subcommittee holds hearings on annual defense budget re-
quests, which are often similar to those held in the House Committee on Armed
Services subcommittees, almost always starting out with the same witnesses from
the Defense Department to present justifications for their requested programs. As
in the case of authorizations, the subcommittee renders its budgetary decisions,
and then sends the requests to the full House Appropriations Committee, where
members then have a chance to add amendments, vote on the bill, and then send
it to the full House, where again votes are taken.
The Senate Committee on Armed Services The Senate Committee on Armed

Services plays a role similar to the House Committee on Armed Services as the
entry point for defense measures into the Senate. It holds hearings and initiates
legislation on a variety of defense issues, but one of its primary functions is to
consider the Defense Department’s annual budget requests. The Senate Commit-
tee on Armed Services is also divided into functional subcommittees:
r Airland
r Emerging Threats and Capabilities
r Personnel
r Readiness and Management Support

r Seapower
r Strategic Forces
The subcommittees take testimony from Defense Department witnesses, and

then vote on the items in the department’s request, passing on their decisions for
the full Senate Committee on Armed Services, which then votes again and passes
its decisions on to the full Senate, where the committee decisions are subject to
the final Senate vote. Normally the Senate passes a substitute amendment to each
House spending bill, and differences between House and Senate figures must go
through the conference committee process.
The Conference Committee Process The conference committee process re-

solves differences between the House and Senate authorizations and appropria-
tions processes. Each process has a conference committee composed of selected
members of House and Senate committees. The guidelines specify that each cham-
ber establishes the floors and ceilings, and that the compromise budget amounts
should be between those figures and neither exceed nor drop below them, though
the negotiators do not always follow those guidelines. Then both the House and
Senate must again ratify the conference decisions, before they are sent back to
the president for signature or veto. The House normally considers the conference
reports first because it usually is the first chamber to consider budget requests.
Once the president receives the bill, he or she has ten days to either sign or veto
the total bill.
All of these decisions are supposed to be completed before the start of each
fiscal year in October. However, in the past 30 years, Congress and the president
have not achieved a final measure, and thus federal activities (including defense
activities) had to be funded by continuing resolutions passed by both chambers of
Congress to allow funding at previous fiscal-year levels until agreement could be
obtained on the fiscal year at issue. That causes consternation in the Department
of Defense, but in actuality the acquisition process continues along even if no
budget agreement continues (except for once, in 1995, was there no final appro-
priation because of a dispute between congressional Republicans and President
Clinton that briefly shut down some federal functions). More significant, congres-
sional actions allow but rarely challenge programs, in comparison to the actions
in the OSD. While Congress can and does either increase or decrease funding
levels, the secretary of defense not only has not initiated larger budget changes
but also has killed off entire acquisition programs. In contrast, Congress has al-
most never completely eliminated a major acquisition program. One of the very
few exceptions was the “dense pack” basing mode for the controversial MX in-
tercontinental ballistic missile, which Congress voted down after the chairman of
the Joint Chiefs of Staff acknowledged that he did not really understand how the
program was to work.
Defense Contractors
As is discussed in Chapter 3, defense contractors have grown in both number
and in political stature since World War II. At present there are thousands of
defense contractors, ranging in size and income from some of the top companies
in the United States to small operations barely out of the backyard garage. While
there are fewer large defense companies than there were during World War II,
the companies remain powerful actors in the defense acquisition system. They
are so important that Chapter 3 is devoted to covering defense contractors and
their place in the defense acquisition system.
Independent Oversight Agencies

As the United States organized production for World War II, the War and Navy
departments created a number of independent boards to facilitate war production
(see Chapter 1), so the tradition of independent bodies overseeing defense pro-
curement is not new. But the mission of World War II boards generally was to
expedite wartime production, while the duty of independent monitoring agen-
cies is to ensure veracity, efficient production, and compliance with federal and
other laws regarding government contracting. There are a number of agencies or
subagencies with defense acquisition oversight, including the following.
Government Accountability Office Congress chartered the Government Ac-

countability Office as the General Accounting Office in 1921 as an independent,
nonpartisan branch of government to fill a need for better accounting of the large
increases in the federal budget generated by World War I spending. Its primary
mission up through World War II was to check government vouchers, but after
the war, the GAO expanded into more comprehensive audits of federal expen-
ditures and ultimately into program evaluation. It began its defense missions by
auditing World War II contracts, finding, to the dismay of the comptroller gen-
eral, considerable fraud, and expanded them in 1955 by creating a defense di-
vision within the GAO. Comptroller General Elmer Staats realigned the defense
division into functional units, such as manpower, procurement, supply manage-
ment, management control systems, and so forth, with the division becoming the
Defense Auditing and Accounting Division (DAAD). In 1981–1982, the GAO ex-
panded again to include the National Security and International Affairs Division,
and its overall role increased to cover general budget issues and governmental
shortcomings, with a special emphasis on defense system performance.11
In July 2004, the GAO changed its name to the Government Accountability
Office. Its coverage of defense issue oversight is vast, issuing reports on personnel
and pay systems, cost growth in weapons programs, military base closures, and
hundreds of other areas. It briefs Congress on a regular basis, and it boasts that its
recommendations bring a $105 return for each dollar spent on GAO operations.
The GAO can also issue legal opinions. The GAO can rule on contract award
decisions, as it did in early 2007 when two rival contractors, Lockheed Martin
and Sikorsky, contested the Air Force’s award for a search-and-rescue helicopter
to Boeing. The GAO upheld the protests, deciding that the Air Force failed to
evaluate properly the life-cycle costs of the three helicopters and requiring that the
service issue a new proposal request.12 In 2008, Boeing’s protest of the Air Force
award to European Aeronautic Defence & Space (EADS)–Northrop Grumman for
a replacement tanker aircraft also went to the GAO for adjudication.
Department of Justice The Department of Justice has several areas of defense

procurement oversight. It has the authority to investigate government fraud and
to oversee policies on anticompetition, which often involves mergers of defense
firms. The Department of Justice also enforces all federal laws and ensures that all
federal agencies, including the Defense Department, are in compliance with those
laws.
The Justice Department created the National Procurement Fraud Task Force
(NPFTF) in October 2006 to investigate and prosecute cases of government
procurement wrongdoing, including defense areas through its National Security
Division. The NPFTF is also responsible for making recommendations to change
the federal acquisition regulations to build more safeguards against govern-
ment fraud. Some of those recommendations result in congressional legislative
changes to the Federal Acquisition Regulations (FAR), as happened in April 2008,
when the House Oversight and Government Reform Committee passed the Close
the Contractor Fraud Loophole Act, introduced by Representative Peter Welch
(D-VT). The measure would require federal contractors to notify the contracting
agency’s inspector general in writing if the company thinks that it may have vio-
lated federal criminal law or was overpaid erroneously. The NPFTF also investi-
gated and prosecuted contracting fraud relative to the military actions in Iraq and
Afghanistan, ranging from theft of government classified information to bribery
and diverting government items for personal use.13
General Services Administration The General Services Administration (GSA)

assists federal agencies in managing acquisition contracts and is the federal land-
lord over property and government vehicles. While the GSA has been working
with the military since the 1940s, legislation signed in November 2007 increased
GSA oversight of defense contractors. The legislation stated, “DoD has increas-
ingly relied on private sector contractors, but it has not provided sufficient man-
agement oversight of its contractors . . . The conferees encourage the Department
of Defense to increase its use of GSA Acquisition Services for its contracting in
appropriate instances.”14 This effort will reinforce the collaboration that already
exists between DoD and the GSA on contract administration. That cooperation
has not always gone smoothly, though. While the new push for more DoD-GSA
collaboration received support from some members of Congress (Representa-
tive Jim Moran [D-VA] said, “We want to free DOD contractors up to do more
inherently defense-related work. . . . Clearly, there’s a need for [GSA’s] expertise

in this area”), the DoD inspector general’s report was more critical, reporting that
the Defense Department wasted $607,000 in enlisting assistance from the GSA’s
Office of Assisted Acquisition Services in placing 91 orders on the Air Force’s
so-called network-centric solutions. The Defense Department’s inspector general
said officials should have used DoD’s resources to handle the work and put the
money paid to GSA to better use supporting war fighters. “GSA was not a best
business practice since options were available within DOD at a lower cost.”15 The
GSA’s Jim Williams responded in a statement: “I don’t think they understood the
facts. . . . For somebody to make that kind of statement is so dead wrong.”16
The Defense Acquisition System

The actors noted previously have worked in a highly complex phased system,
with many parts, and have made an effort to coordinate and control the elements
through the PPBE system.
The Planning, Programming, Budget, and Execution System

The PPBE system continues the effort started in the 1960s to integrate plan-
ning (for future needs), programming (allocating requirements for these needs
to defense programs), budgets (the actual dollar figures requested and approved
for programs), and execution (the introduction, maintenance, modification, and
retirement or disposal of systems). The PBBE system is structured around a two-
year budget cycle, where DoD plans and programs for a two-year time frame and
uses off years (odd-numbered years) as a benchmark to evaluate the execution
of previous programs. The phasing of the process both initiates and is guided by
several key documents.
The Initial Documents Planning is designed to link American national security

interests (relatively unchanging) and external threats to those interests, which
may change, but gradually over time. Thus, the process starts with the issuance
of the National Security Strategy (NSS) of the United States, which the president
is required by law to issue in the first year of each term.
The National Security Strategy. The first purpose of the NSS is to identify pri-
mary interests, which are long-standing foundations of the republic, including
the protection of national sovereignty, access to international markets, protection
of Americans at home and abroad, and the safeguarding of American “values.”
American values can often be defined in ways that resemble the work of an adver-
tising agency, as noted in the latest NSS from the George W. Bush administration:
In the twenty-first century, only nations that share a commitment to pro-

tecting basic human rights and guaranteeing political and economic freedom
will be able to unleash the potential of their people and assure their future
prosperity. People everywhere want to be able to speak freely; choose who

will govern them; worship as they please; educate their children—male and
female; own property; and enjoy the benefits of their labor. These values of
freedom are right and true for every person, in every society—and the duty
of protecting these values against their enemies is the common calling of
freedom-loving people across the globe and across the ages.17
Other administrations have crafted equally lofty language, though it rarely has
a real bearing on the defense acquisition process or other elements of national
security decision making.
The NSS is a general statement, nuanced by the lack of certainty about pending
threats (e.g., no NSS predicted the September 11, 2001, terrorist attacks) and
massaged by the public affairs shops in the White House that try to make it more
palatable than the classified drafts (in 1992 then defense secretary Cheney’s draft
Defense Planning Guidance calling for the United States to prevent the rise of
peer competitors was quickly withdrawn once it was leaked). Still, the defense
acquisition process starts officially with the issuance of the NSS.
The National Defense Strategy of the United States. This document originates in
the Office of the Secretary of Defense, and the most recent as of this writing is
dated March 2005 under the signature of the former defense secretary Donald
Rumsfeld. It presents the basic principles of national defense (e.g., defense of the
homeland first, secure global access, retain global freedom of action), along with
guidance on force structure, including the following:
Active, layered defense. We will focus our military planning, posture, oper-
ations, and capabilities on the active, forward, and layered defense of our
nation, our interests, and our partners.
“Continuous transformation.” We will continually adapt how we approach
and confront challenges, conduct business, and work with others.
Capabilities based approach. We will operationalize this strategy to address
mature and emerging challenges by setting priorities among competing capa-
bilities.
Managing risks. We will consider the full range of risks associated with
resources and operations and manage clear tradeoffs across the Department.18
The key notions in this document are the emphasis on continuous transformation
and capabilities-based approach. Transformation, as noted in other chapters,
became a Rumsfeld mantra, as it has under different names in previous admin-
istrations. The capabilities-based approach refers to goals based on military goals
rather than on threat-based force structure. Such an emphasis gives more leeway
to force planners to set goals based on known capabilities (e.g., air and sealift
capabilities, aircraft carrier capabilities), rather than try to base force structure on
potential enemy capability and intentions, as was so often done during the Cold
War.
The National Military Strategy. The chairman of the Joint Chiefs of Staff issues
the National Military Strategy (NMS), which is designed to implement the prin-
ciples of the “National Defense Strategy of the United States,” issued by the sec-
retary of defense. According to the 2004 NMS, its objectives include protecting
the United States against external attacks and aggression, preventing conflict and
surprise attacks, and prevailing against adversaries. Such objectives are hardly
surprising and would be the minimal expected in any defense guidance docu-
ment. The NMS also defined the idea of joint operating concepts ( JOCs), which
for 2004 included “force application, protection, focused logistics, battlespace
awareness and command and control.” The NMS did not define how the JOC
differed from other, more traditional and standard warfare techniques, however.
Perhaps the more useful aspect of the NMS was its emphasis on nontraditional
adversaries for the United States, which included not only the stateless terrorist
threat (though the NMS is quick to point out that states sometimes sponsor ter-
rorists) but also international criminals and “illegal armed groups,” though such
groups were not identified. Partly because of such groups, and because of failed or
opponent states, the NSS argued that “there exists an ‘arc of instability’ stretching
from the Western Hemisphere, through Africa and the Middle East and extending
to Asia.”19 Notably, the NSS did not include Russia and Southeast Europe in its
“arc of instability.”
Given the authorship of the NMS, it is hardly surprising that it would empha-
size jointness. But the NMS does not clearly delineate what jointness really means,
instead describing the joint force attributes as including “fully integrated, expe-
ditionary, networked” and so on, but not really explaining how such things as
networked apply to jointness. It does not specify what forces are needed to accom-
plish such attributes. It also does not fill out force structure for the force design
requirements, specifically to “defend the homeland, deter forward in and from
four regions, and conduct two, overlapping ‘swift defeat’ campaigns. Even when
committed to a limited number of lesser contingencies, the force must be able to
‘win decisively’ in one of the two campaigns.” It only states that “this ‘1-4-2-1’
force-sizing construct places a premium on increasingly innovative and efficient
methods to achieve objectives.”20
The Quadrennial Defense Review. The third document shaping the defense ac-
quisition system is the Quadrennial Defense Review (QDR), required by Title X,
section 118, of the U.S. Code, and drafted by the secretary of defense in consul-
tation with the Joint Chiefs of Staff. Congress demanded that the Defense Depart-
ment produce some type of defense review, a stipulation reflecting congressional
frustration over the lack of managerial or budgetary oversight from the Pentagon.
As its name indicates, the QDR is to be produced every four years by the Depart-
ment of Defense, to be sent to Congress in the second year of the administration.
The QDR process requires the Defense Department to consider its priorities
and resources for meeting those priorities. Consider the language of the 2006
QDR issued by the Bush administration: “This QDR defines two fundamental
imperatives for the Department of Defense: Continuing to reorient the Depart-

ment’s capabilities and forces to be more agile in this time of war, to prepare for
wider asymmetric challenges and to hedge against uncertainty over the next 20
years, [and I]mplementing enterprise-wide changes to ensure that organizational
structures, processes and procedures effectively support its strategic direction.”21
The 2006 QDR also lays out specific objectives. For example, in the section
marked “joint mobility,” the report notes, “[New joint mobility capabilities] will
underpin the transition from a Cold War–era garrisoned force to a future force
that is tailored for expeditionary operations.”22 That is a significant transition for
a military that used large overseas bases during the Cold War to mount its oper-
ations. The military of the future, according to the QDR, will rely more on new
transport aircraft and ships to move personnel and equipment from the United
States proper to theaters of war, and the 2006 QDR noted both progress and fu-
ture steps to meet this objective. Such official statements of both objectives and
requirements are a step beyond the more informal defense planning and objec-
tives process that often lacked precision. Still, in the words of one critic, “Overall,
the 2006 QDR fell far short of its objectives. Rather than being a ‘fulcrum of
transition to a post-September 11 world’ . . . the QDR made only a few significant
adjustments to the U.S. defense program.”23
The PPBE Cycle The PPBE process is run on a biannual cycle, with even fiscal
years considered “on years” and odd fiscal years considered “off years.” The real
action occurs during the on years and is scripted by months. Both the OSD and
JCS begin their cycle in January, running through May, while the services initiate
their program and budget phases in March. The planning phase is to produce the
“Joint Planning Guidance” by June, while the services put forward their POMs
and Budget Estimate Submission (BES) by mid-August. At that point, the JCS
and the services are supposed to resolve outstanding issues (often disagreements
over how to split the budget or other areas of contention, and the consequence
is a Program Decision Memorandum). The budget process is to conclude with a
Program Budget Decision, also a product of intense compromise. The execution
review begins in August and runs to the end of November.
Off years are largely review years for on-year decisions, with Program Change
Resolutions advancing by midyear and a budget submission to the Office of Man-
agement and Budget by the end of the calendar year.
If the biennial process is not complex enough, there is also a four-year cycle
corresponding to the presidential term, where Year 1 (review and refinement)
involves the new NSS and budget and program refinement from past years, Year 2
is the QDR year along with the on-year defense cycle, Year 3 is the execution of
guidance, and Year 4 has been called “insuring the legacy,” though exactly what
the legacy is remains weakly defined at best.
All of these combined processes are easy to diagram on a yearly calendar, but
they rarely work this way in practice. In reality, all phases of the PPBE system
are engaged all the time, often behind their deadlines as difficult issues elude
resolution.
The Planning Phase. The planning phase officially begins around 16 months
before a designated fiscal year, though informally it may stretch much longer. It
draws from the NSS, the NMS, and input from the top ranks of the defense depart-
ment, including combatant commanders. The combatant commanders include
the commands both regional (Central Command, European Command, Pacific
Command, Southern Command, and Africa Command) and functional (Special
Operations Command, Strategic Command, Joint Forces Command, and Trans-
portation Command). The planning phase also brings in the Joint Capabilities
Development System ( JCDS), which is designed to introduce jointness at the be-
ginning of the PPBE process.
The planning part of the PPBE produces three key documents:
1. Strategic Planning Guidance—which is issued early in the process to provide overall

policy and strategy guidance.
2. Major Issue Analysis—a combined OSD and JCS examination of major issues and per-
formance metrics to measure success in achieving the programmatic goals.
3. Joint Programming Guidance—the final document of the planning process, issued in
even-numbered years by OSD and containing fiscally constrained programmatic guid-
ance and performance measures. The JPG drives the development of the POMs and
the BES.
The planning time horizons are complex at best. The services must forecast
out several decades as they plan for new programs and requirements, knowing
that such forecasts have been quite wrong in the past. The Air Force planned the
F-22 fighter during the Cold War on the basis of Cold War requirements, but it
did not go into production until many years after the Cold War ended. None of
the services anticipated the protracted conflicts in Afghanistan and Iraq prior to
September 11, 2001, and as of 2008 they continued to wrestle with adapting and
planning on the run. Thus, a safer road to service planning is to plan for a contin-
uation of the present, allowing for only incremental changes. In the early 2000s,
the services could project their current projects into the future, but because those
projects (the Army’s Future Combat System, the Navy’s heavy warships, and the
Air Force’s F-22 and F-35 aircraft) were more appropriate for a conventional war
with another great power (e.g., a combative China or Russia), they continued to
plan for a conventional conflict in the future. That prompted Secretary of Defense
Robert Gates to argue, “I have noticed too much of a tendency towards what
might be called next-war-itis—the propensity of much of the defense establish-
ment to be in favor of what might be needed in a future conflict. . . . [T]he kinds
of capabilities we will most likely need in the years ahead will often resemble the
kinds of capabilities we need today.”24 On the other hand, previous secretaries of
defense have not always correctly forecasted the future (none of the Reagan-era
secretaries of defense predicted the end of the Cold War), so their challenges to
service planning documents are sometimes more a question of control than of cor-
rection. Thus, there is also pressure to plan for the worst set of unknowns because
the worst outcome is to be caught unprepared. So planners must sometimes push
unlikely scenarios to justify weapons, because even if an outcome is improbable,
the consequences of its occurrence would be dire. Thus, for example, the F-35
joint strike fighter ( JSF), a very expensive $170 billion program, finds justifica-
tion in its potential ability to deter China from attacking Taiwan, although such
an attack would be very risky for China, which enjoys the flow of considerable
investment into China.25
The Programming Phase. The programming phase takes the guidance from
planning and attaches it to specific defense programs. It uses the POMs issued
in the planning phase to develop and sustain programs, which are to provide for
four years beyond the budget year for cost and manpower, and seven years be-
yond the budget year for forces. The programming phase also considers what are
called Program Change Proposals (PCPs), which come in off years to change pre-
vious program baselines; for example, PCPs were issued to respond to the rash
of improvised explosive devices in Iraq. Reviews of POMs occur at senior levels
within the Defense Department, with final reviews at both OSD and JCS. The
secretary of defense review completes the process, with issuance of the Program
Decision Memorandum (PDM).
The Budgeting Phase. The budgeting phase puts money in programs, but it is
about more than just funding. Budgeting decisions reflect not only prices but also
phasing of spending decisions and the impact on the overall budget for both the
Defense Department and the larger federal budget. The primary document here
is the BES. Budget estimates stem from fiscal guidance in the POMs and from the
prior, current, and two subsequent fiscal years (so the fiscal 2003 estimate would
come from fiscal 2001 and 2002, plus 2003 and projected 2004). The most solid
data come from previous years, and, given the tendency to budget incrementally,
the previous two years provide the most reliable guidance. Once departments
complete their budget requests, they work through the chain of command to the
undersecretary of defense, comptroller, for review. In odd-numbered off-budget
years, Defense Department components submit Budget Change Proposals (BCPs)
instead of a BES.
The budget estimates and submissions are probably the most important and
most contested parts of the PPBE. Unlike plans and programs, which remain rela-
tively fixed over time, budgets may vary considerably, particularly in times of war
or peacetime military buildup. They also represent something tangible that ser-
vices and elements outside the Defense Department can fight over because they
can clearly see the stakes. It is not only about actual money. A small cut in the
budget can signal a losing of mission or of priority in the Defense Department
hierarchy. Defense budgets can also generate intense debate outside of the De-
fense Department. For example, Congress rarely holds much debate over plans or
programs, but every year it engages in intense deliberations over the size and di-
visions of the defense budget. It is hardly surprising, then, that the budget phase
of the PPBE receives the most careful review. The primary review (known as the
“Fall Review”) is done jointly by the Defense Department and the Office of Man-
agement and Budget and comprises the budget review, which addresses two years
in the even-numbered on-budget year review and one year in the odd-numbered
off-budget year review. The review is exhaustive and includes calculations and
estimations of inflation, accuracy of estimates, and other factors that could affect
the final numbers.
The Execution Phase. When the president signs the defense appropriations bill,
the execution phase begins, though it must be thought of as a continuing cycle.
Appropriations are done by categories, so when the president signs off on appro-
priations, what is really approved is money in seven categories:
r Research, development, testing, and evaluation

r Procurement
r Shipbuilding and conversion
r Operation and maintenance
r Military personnel
r Military construction
r Defense working capital fund
The Office of Management and Budget authorizes funds to the Defense Depart-
ment, and the keeper of the funds, the Defense Department comptroller, grants
the services and defense department agencies the authority to obligate funds for
purchases. Each new approval authority also initiates a program review to en-
sure that the contracts are executed legally and properly, and that the designated
programs meet their performance objectives.
Is the Complexity Necessary? The PPBE process moves billions of dollars into
authorized funds to support the missions of the Defense Department, creating
hardware, services, profits, and jobs for millions of people in and outside of the
department. It is complicated for many reasons: it has to respond to wrongdo-
ing within the system, and it has to manage the increased complexity of defense
systems and the multitude of actors who build, operate, and maintain them. But
has it become so cumbersome that its very inertia slows down the overall defense
acquisition process? Has it limited the understanding of its processes to only a
handful of experts who have a vested interest in it? Most significantly, has it re-
sulted in more responsive programs, delivered on time and meeting specifications
once they arrive?
The language of these and thousands of other documents seems designed to
ward off anyone but those read into the system, and sometimes meaning disap-
pears in a long list of adjectives—for example:
This instruction is based on the need for a joint concepts-centric capa-

bilities identification process that will allow joint forces to meet the full
range of military operations and challenges of the future. According to the
CCJO, meeting these challenges involves a transformation to a knowledge-

empowered, networked, interoperable, expeditionary, adaptable/tailorable,
enduring/persistent, precise, fast, resilient, agile, and lethal joint force (ref-
erence g).26
It is difficult to argue that such language provides meaningful guidance or adds

much to the process. Instead, the word choices seem to cover all contingencies,
just in case some investigator were to ask whether forces were, for example, re-
ally “adaptable/tailorable.” Some cynics might argue that the PPBE documents are
purposely vague and complex to keep out the outsiders and to keep the process
confined to the inner circle of acquisition professionals. It is more likely, though,
that the unwritten rules of the process reward inclusiveness over omission, even
to the point of incomprehension.
Linking the System Together There are three processes involved in support-
ing military requirements: the requirements generation process, the acquisition
system, and the PPBE. While PPBE linked planning, programming, budgeting,
and execution, it simply took service and joint requirements into its process. Link-
ing these processes together to create a relatively seamless process from require-
ments to final purchase is the task of a relatively new element, the Joint Capabili-
ties Integration and Development System ( JCIDS), created in 2003 and modified
in 2007. JCIDS replaced an earlier decades-old system called the Requirements
Generation System (RGS), which emphasized a threat-based set of requirements
more appropriate to the Cold War. The JCIDS attempted to shift the require-
ments definition process from threat-based to capability-based requirements, pre-
dicated more on the National Military Strategy than the more vague threats of the
post–Cold War period. Rather than a board with membership, JCIDS is a process
that is intended to link together requirements, PPBE, and acquisition. The JCIDS
starts with a capability-based assessment (CBA), which is based on an existing
Joint Operating Concept ( JOC), Joint Integrating Concept ( JIC), or concept of
operations (CONOPs). All of this is intended to identify weapons and systems
capability, as well as shortfalls in that capability. This input into the JCIDS comes
from the Joint Requirements Oversight Council ( JROC), chaired by the vice joint
chief of staff (who also cochairs the Defense Acquisition Board), with the vice
chiefs of staff for the services as members. The JROC approves (or, in rare cases,
disapproves) the Joint Capabilities Document ( JCD) or an Initial Capabilities Doc-
ument (ICD), which are the results of a CBA analysis. The task then shifts to the
service responsible for providing a particular capability need identified by a JCD
or ICD, which leads to a Capabilities Development Document (CDD) that spec-
ifies the technical performance requirements of a particular weapon that should
meet the criteria identified by the JCD or ICD (e.g., speed of sound, range, rounds
per minute). When the JROC approves a CDD, that document is critical in initi-
ating a milestone program initiation (explained in subsequent paragraphs).
Jointness Jointness as an idea has existed in the U.S. military since World
War II, and the Goldwater-Nichols legislation finally signed in 1986 has induced
change to the entire way that the Pentagon does business, or at least it would
seem that way.27
Jointness starts at the top, with a significant emphasis on the services’ abil-
ity to integrate its efforts in joint planning and operations. This push, following
Goldwater-Nichols, spawned a series of joint documents calling for joint doc-
trine, joint training, and, it would follow, joint acquisition. That effort started
with the JROC, made up of the deputy service chiefs. The JCIDS, noted previ-
ously, supplemented the JROC. Critics argued that the JROC process started too
late in a weapons development cycle, and that the services had learned how to
play the JROC system so that almost all major programs received JROC approval.
The JCIDS was supposed to provide strategic-level guidance through the devel-
opment of joint war-fighting concepts, to be supported through what are called
“functional capability boards,” including such force development areas as com-
mand and control, force application, joint training, net-centricity, and such. The
boards are intended to identify capabilities that joint operations require and to
oversee their development.
The JCIDS is coordinated from the Senior Level Review Group (SLRG), chaired
by the secretary of defense and including the deputy secretary, the five undersec-
retaries, the three service secretaries, and the six joint chiefs. The importance of
the SLRG is that it forces interaction between the users of force (the services and
the combatant commands) and the force providers (the OSD and its staff). In reg-
ular meetings of the SLRG, issues of jointness arise early and often, allowing for
the opportunity for a new culture to develop at the top, driven by cooperation
instead of service competition.
There are legitimate questions about whether these processes work as in-
tended. In 2006, the secretary of defense commissioned the Defense Acquisition
Performance Assessment (DAPA), which concluded, in the words of a congres-
sional summary:
The Joint Capabilities Integration and Development System ( JCIDS) and

Joint Requirements Oversight Council ( JROC) are not operating as envi-
sioned. The Under Secretary of Defense for Acquisition, Technology & Lo-
gistics (USD(AT&L)) is failing to control spiraling costs of major defense ac-
quisition programs. As a result, programs to replace key weapons systems are
attempting to place all necessary and imagined capabilities onto developing
platforms. . . . The DAPA report also found the JCIDS/JROC process does not
adequately prioritize requirements provided by the combatant commanders,
whom DAPA believes should have a greater say in determining requirements
for future programs.28
The effort to increase jointness does not end with JCIDS. Joint Operations
Concepts ( JOpsC), a new device currently under development by the Joint Staff
and the U.S. Joint Forces Command, are intended to enhance the role of the
combatant commander in force choice.29 Integral to JCIDS, JOpsC is designed
to allow the combatant commands more input into both making service-specific
systems more joint and ensuring that future systems respond more to their needs,
even though primary weapons systems will probably still be acquired largely by
the services. To help facilitate JOpsC, the Joint Forces Command has conducted
exercises with the services, which enable them to anticipate shortcomings in their
largely service-driven concepts of operations and sustainability.
All of this raises the question of whether joint force development really adds
value to the way the Defense Department does business or whether it simply
adds more delay and complexity into an already convoluted process. The need
for jointness was vividly demonstrated in the failed Desert One raid, launched
into Iran in 1980 in an effort to free American hostages held in the U.S. Embassy
in Tehran. The mission was multiservice, but since the different elements had
not exercised together, an already complex and risky mission was further com-
promised, and it tragically failed. The Vietnam War also demonstrated the need
for jointness, as the involved services appeared to pursue their own competencies
without much coordination.
Jointness, though, cannot reshape the fact that each service is a primary sup-
plier of its particular force specialization. The military services still have control
over the major traditional systems (ships for the Navy, fixed-wing aircraft for the
Air Force, and land vehicles for the Army) and retain authority for other systems
that they have traditionally maintained. Sometimes they hold onto those systems
even when Congress tries to get the services to relinquish authority to a joint
agency. The following exchange between Congressman Norm Dicks (D-WA) and
then Army secretary Thomas White is indicative:
Mr. Dicks: PAC-3’s [Patriot Advanced Capability-3], why did you still put them in
the Army budget when Congress has directed you to put them in the Missile Defense
Agency?
Secretary White: The Missile Defense Agency is transferring control of PAC-3 and
MEADS to the Army.30
The Army traditionally had operational capability for air defense and later for mis-
sile defense, which stemmed originally from the old coastal artillery responsibil-
ity. Thus, despite congressional interest in making missile defense more joint, the
Army clung to it. A similar situation occurred with the Joint Unmanned Combat
Air Systems Program ( J-UCAS), which resulted from the merger of two separate
Air Force and Navy unmanned combat air vehicle (UCAV) systems that were ini-
tially taken from those services and placed under management of the Defense
Advanced Research Projects Agency (DARPA). In March 2004 testimony, both
the Air Force and Navy acquisition secretaries said that “they did not have sub-
stantial insight into or oversight over this important program since the change
in management.”31 However, former Undersecretary of Defense Paul Wolfowitz

removed the UCAV development responsibility from DARPA to the Air Force,
“to the dismay of those who felt DARPA leadership shielded the program from
budget raids and parochial priorities.”32
Another example of the limits of jointness between a service and a civilian
agency is found in the problems encountered with Space Radar, a $20 billion sys-
tem designed to provide all-weather surveillance of ground positions from space.
However, the Air Force and the National Reconnaissance Office, the operator of
the system, could not agree on how to share the costs of the system; consequently,
the Air Force tried to slow the program down, resulting in congressional budget
cuts and complaints that the intelligence community was not footing enough of
the Space Radar bill.33
Still, jointness is the wave of the future, and as junior officers now exposed
to jointness climb the ranks, they may embrace jointness in ways that will allow
for joint acquisition of major weapons systems. A current example is the F-35
JSF developed by Lockheed Martin for not just the Marine Corps, Air Force, and
Navy but for international partners as well. It has numerous features that allow it
to carry a range of weapons for a variety of missions, and it has short takeoff and
landing capability. It is also one of the most expensive single weapons programs
managed by the DoD today, with the entire program valued at over $250 billion.
That may be one price of jointness: the compromises required to get all users in
support of the program add to its cost.
Types of Acquisition Programs. Acquisition programs range from supercarriers
to trash cans. Some cost multiple billions of dollars and require years to produce,
while others involve little more than what a customer would do at Wal-Mart. So
in order to decide on the proper process to acquire military goods, the Defense
Department divides its programs by cost, as follows.
ACAT I, also known as major defense acquisition programs (MDAPs), are pro-
grams that, as estimated by the undersecretary of defense for acquisition and tech-
nology, will cost more than $355 million in 1996 dollars for research and devel-
opment or will have a procurement cost of more than $2.135 billion in 1996
constant dollars.
ACAT II are those systems estimated by the DoD component head to cost more
than $75 million in fiscal 1980 dollars for research and development or to have a
procurement price of more than $300 million in fiscal 1980 dollars.
ACAT III programs come below these two categories but include hundreds of
thousands of items. There is no mandated cost threshold for ACAT III, but gen-
erally they involve program costs in excess of $15 million (fiscal 1996 constant
dollars) or total program costs equal to or greater than $30 million (fiscal 1996
constant dollars). The commander of Marine Corps Systems Command (COM-
MARCORSYSCOM) designates ACAT III programs.
ACAT IV is for everything else, which falls into two categories: ACAT IV(T)
programs require operational testing and evaluation (OT&E), while ACAT IV(M)
programs do not. A service component for research and development (e.g., the
director of Marine Corps Operational Test and Evaluation Activity ACAT IV [M])
monitors ACAT IV programs.
If this is not confusing enough, there are also ACAT IA programs, or major au-
tomated information systems (MAIS). An MAIS is estimated by the assistant sec-
retary of defense for command, control, communications, and intelligence (ASD-
C3I) to require program costs for any single year in excess of $30 million (fiscal
1996 constant dollars), total programs in excess of $120 million (fiscal 1996 con-
stant dollars), programs with total life-cycle costs in excess of $360 million (fiscal
1996 constant dollars), or those other programs designated by the ASD-C3I to be
ACAT IA.
Defense Contracts A defense contract, like any other business contract, is an

agreement between buyer and seller on price, number of items, delivery date,
quality, and thousands of other elements. The overall philosophy behind defense
contracts is that they should motivate defense contractors to enhance quality and
timeliness of delivery while reducing the cost of production. Contractors respond
to both positive incentives (rewards for good performance) and, at the same time,
try to avoid the pain of punishment (penalties for poor performance). Defense
contracts also commit the buyer to certain conditions, including penalties for
cancellation or changes in contract specifications.
In the defense sector, there are two general classes of contracts, fixed-price
contracts and cost-plus contracts. Fixed-price contracts include the following:
r Firm fixed-price contracts: The government pays an agreed-on price whatever the costs
of production are. This type of contract is best for containing production costs because
additional costs cannot be added to the contract.
r Fixed-price incentives: This type of contract requires the contractor and the government
to agree on target costs, profit margins, and a ceiling price. One advantage is that the
contractor must assume some of the risk and has an incentive to minimize production
costs.
r Fixed-price with economic price adjustment: These contracts allow both parties to rene-
gotiate should there be considerable fluctuation in labor or material costs during the
contract period.
r Fixed-price redetermination: Such contracts allow for an initial adjustment for the final
price.
Cost-plus contracts include the following:

r Cost-plus fixed fee: Such contracts are commonly used in high-risk situations where the
contractor is guaranteed to recover both costs and a guaranteed fee.
r Cost-plus incentive fee and redetermination: Similar to cost-plus fixed fee, but these
contracts carry a provision for a profit should the contractor reduce original estimated
costs.
r Cost-plus award fee: Contractor can receive bonus payments above costs should it find
ways to improve performance.
r Cost sharing: The government pays only a negotiated portion of the cost, and these
contracts are used when the contractor expects to place the resulting product on the
commercial market and sell to the government.
Fixed-price contracts are designed to reward risk, because even if an innovative

project fails, the contractor is paid the agreed-on price. Cost-plus contracts essen-
tially require the buyer to cover the costs and are designed to induce contractors
to invest in defense production and research facilities, which are inherently costly
and often have little or no civilian use. Cost-plus contracts were used widely in
the 1950s as the services pushed a number of innovative projects that private
firms would have been very reluctant to fund. As Weber notes, “Perhaps more
so than in any other industry, the technological and economic obsolescence of
facilities is a constant and serious problem due to the rapid rate of technological
change in products, plants, and equipment employed in defense production.”34
That means, among other things, that cost-plus contract estimates written by the
contractor are likely to be quite high and not necessarily accurate (“the more cost,
the more plus,” some commentators have noted). Defense Secretary McNamara
tried to confront the cost-plus cost-escalation problem by modifying the types
of contracts used for the F-111 combat aircraft, shifting from pure cost-plus to
a contract with both target and ceiling price clauses. If the contractor’s costs fell
below the ceiling costs, the company would receive a share of the difference, but
if its costs exceeded the agreed-on ceiling, the company would have to pay the
additional costs. The hope was that such incentives and penalties would reward
more realistic cost estimates from contractors.35
Most contracts also specify a delivery date and quantity ordered, though some
leave the terms unspecified. For example, “General Dynamics C4 Systems, Inc.,
Scottsdale, Ariz., was awarded an indefinite delivery/indefinite quantity contract,
using Firm-Fixed Price (FFP) task orders, for Defense Information System Net-
work Enhanced Mobile Satellite Services (EMSS) Equipment on November 21,
2007.”36 Contracts also often specify where the work will be done (helpful in-
formation for political figures); thus, a November 2007 contract with Lockheed
Martin for work on the JSF specified, “Work will be performed in Fort Worth,
Texas (68 percent), Orlando, Fla. (24 percent), and El Segundo, Calif. (8 per-
cent), and is expected to be completed in October 2013.”37
There are other types of contracts, but cost-plus and fixed-price are the most
common. Contractors usually prefer cost-plus types of contracts because they
usually result in profits, but they do not usually result in savings. The government
usually prefers some type of fixed-price contract, because they allow for more
predictable future budgeting and hold incentives for the contractor to reduce
costs and deliver goods on time. An example illustrating the choices are the Navy
contracts for the Littoral Combat Ship, an innovative program for a multipurpose
combat vessel. The first four ships were contracted for on a cost-plus contract, and
the result was that the first ship came to the Navy 50 percent over its contracted
price of $223 million and was delivered significantly late. The Navy, frustrated
with the overruns and delays, renegotiated for fixed-price contracts for future
purchases of Littoral Combat Ships.38
The Defense Contract Management Agency (DCMA) monitors contract per-
formance for the U.S. military, as well as for civilian agencies and international
buyers. The DCMA provides advice for government contract agents, and later
monitors contracts to ensure that the parties meet performance and other agreed-
on standards. The DCMA maintains offices near the major military acquirers
(both original and maintenance) that serve the Air Force—for example, at Wright-
Patterson AFB in Ohio, home of the Air Force Materiel Command—and at main-
tenance depots at Ogden, Utah; Oklahoma City, Oklahoma; and Warner Robins,
Georgia. It has similar offices with the other services and with other nonmili-
tary agencies such as NASA. The DCMA also maintains numerous officers with
defense contractors, thus enabling it to manage contracts at both ends. The De-
fense Contract Audit Agency (DCAA) performs all audit functions for defense con-
tracts (along with audits for other agencies). Among other functions, the DCAA
performs precontract audits and ensures compliance with various contract laws
(including with the Truth in Negotiation Act). For fiscal year 2007, the DCAA
audited more than $135 billion in contract value, and its audits revealed savings
of $2.4 billion.
Multiyear Contracts. The Defense Department has increasingly used multiyear
defense contracts, favored both by contractors for their stability and by the depart-
ment as a cost-saving device. Legally, multiyear contracts are limited to five years,
allowing the initial contract to hold without renegotiation for a specified period of
time. Long-term contracts may work in the interests of the services and contrac-
tors particularly when the system is complex and expensive, because multiyear
contracts avoid the potentially disruptive changes in year-by-year contracting.
Contractors can also charge a lower price because of long-term commitments.
Some have objected to multiyear contracts because they do not allow for rene-
gotiation or for contract performance review. Arizona Senator John McCain and
then Senator John Warner of Virginia, both Republicans, criticized multiyear
contracts because they did not allow for programmatic review. Said McCain, “If
Congress bought these items under a series of annual contracts, there would be a
meaningful opportunity for it to annually review the program’s progress. . . . For
this reason, using multiyear contracts should be limited to only the best perform-
ing and most stable programs.”39 McCain wanted to limit multiyear contracts to
only those programs that save at least 10 percent of the contract under multiyear
terms, and cost savings of 8–10 percent would have to meet a further threshold of
$500 million in total savings.40 There is a point here: multiyear contracts for de-
ficient programs lock in those deficiencies only for the life of the contract, unless
provisions are made to fix the problem during the production run. The C-130J,
the latest in a long line of the Lockheed Martin air lifter, is illustrative. The Air
Force ordered 60 new C-130J aircraft in a five-year $4 billion contract, believing
that the basic C-130 airframe, first flown in 1955, would be a reliable platform
and thus justifiable under a multiyear contract. However, a Defense Department
A B C
Concept Technology System Production Operations

MS01
refinement development development & &
& deployment support
demonstration
Figure 2.1. The Milestone Development System.
study found that the planes were vulnerable to newer antiaircraft systems and
could not drop paratroopers because the program that was supposed to keep the
planes a safe distance apart failed.41 If a plane that has a long history of successful
operations develops problems in its latest version, it again illustrates the difficul-
ties inherent in multiyear contracting.
The Milestone Management System Before the implementation of the acqui-

sition milestone management system, defense managers found themselves frus-
trated by systems that came off the development and assembly lines with inherent
problems (e.g., the F-111 fighter-bomber had poorly designed engine inlets, the
B-1 bomber’s offensive and defense avionics jammed each other, the M-1 tank
had a variety of teething problems). The milestone system was intended to help
alleviate such problems, and it is based on the assumption that a stage-wise ex-
amination of each major program as it goes through development will help to
prevent such problems.
The milestone system starts at Milestone A, which enters the system as “con-
cept refinement,” where new and innovative programs start. The program, if ap-
proved, passes Milestone A into technology development, and then through Mile-
stone B, passing on to system development and demonstration. After passing a
design readiness review, Milestone C, production and deployment, lies ahead.
Once the system enters the Milestone C gate, there are no more gates left, though
the operations and deployment phase follows, because the milestone system is
supposed to be a thorough cradle-to-grave system that follows the program from
first concept until retirement. The exit criteria for successful navigation of the
milestone system are contained in the Defense Acquisition Executive Summary
(DAES). Figure 2.1 diagrams the milestone system.
The process starts with an acquisition program baseline (APB), prepared by
the program manager, to specify the initial program goals, which the system
organizes into performance, schedule, and cost. Such estimates may be treated
as flexible early into the program’s developmental life, which allows for trade-
offs both within and across parameters. For example, if the cost of a particular
program rises early in development, there may be “traded space” between the
increased cost and reduced performance or schedule, though the user must ap-
prove all trade-offs. The APB is to be prepared either on entry to Milestone B or at
program initiation, whichever comes later. It is to serve as the baseline through-

out the program, and it can be revised only if there is a major program restruc-
turing or a breach of the Nunn-McCurdy Act cost limits. Nunn-McCurdy, a 1982
measure, requires that “significant” breaches of baseline costs (15 percent of the
current baseline or 30 percent of the original baseline) and “critical” breaches
(25 percent of the current baseline or 50 percent of the original baseline) be re-
ported to Congress.
Early program decisions also involve the technology development phase
(TDP), which must be completed for a program to enter the milestone phases.
The TDP came into play because of concerns that the technologies associated
with particular weapons systems were either too innovative to proceed without
considerable problems throughout the life of the weapon or, conversely, that the
technology was not advanced enough to provide an edge in performance (e.g.,
Boeing’s early design of a turboprop straight-winged bomber as its first version
of the B-52). This part of the process is also a step backward from the earlier
preference for concurrent development, which parsed out development of new
technologies into the production and deployment phases, often delaying or crip-
pling the program until the technological bugs could be resolved. The TDP state-
ments include estimates of technological issues (evolutionary versus revolutionary
technology), the number of prototypes required, and a test plan for each devel-
opmental phase.
Not all programs enter at Milestone A: some come in at Milestone B and
other more mature technologies (e.g., follow-on weapons improvements) can en-
ter the process at Milestone C. Since the milestone process can take a considerable
amount of time and impose more costs on candidate systems, it is reasonable to
shorten the process in the cases of mature technologies or in cases that use rela-
tively known technology. The danger is that even in cases of “mature” technology,
problems may evolve that might not crop up in an abbreviated milestone review.
Milestone A is probably the most important phase of the entire milestone sys-
tem, and thus the list of requirements to gain access through the gate has grown,
partly because it is difficult to add new requirements once the designated program
is in the milestone system. For example, DoD acquisition regulations require that
program managers consider the acquisition of foreign systems or cooperative de-
velopment of their system prior to Milestone A. This means the completion and
approval of the Cooperative Opportunities Document (COD), which documents
that the requesting service considered the use of a foreign system or participa-
tion in the development program by other countries. Thus, the opportunities
and costs of international weapons cooperation must be included through each
milestone.
How well does the milestone process work? Most would argue that it is bet-
ter than the older, less rigorous systems that advanced undeveloped weapons
and other products forward in time of war or national emergency, and resulted
in tragic crashes (the Consolidated B-24 and the Boeing B-29 of World War II
had serious development problems that were not remedied because of wartime
urgency), and dud torpedoes and even dud nuclear warheads (for the Navy’s Po-
laris missile system). However, the milestone system has shown its vulnerabilities.
One problem identified by the Defense Department’s inspector general in 2001
was that the exit criteria in the DAES were not always enforced by the responsi-
ble program managers. In one Army case, the program manager did not spec-
ify whether exit criteria were for low-rate initial production or for exiting the
engineering and manufacturing phase of the acquisition process, a failure that
also was discovered in wide-area munitions and in Virginia-class submarines.42
In other cases, particular systems policies do not specify program exit criteria,
leaving them for the milestone decision authority. The GAO found this to be
true in the acquisition of some space defense systems, which have particularly
rigorous technological requirements given the harsh environment in which they
operate—apparently the development of such specifications might delay critical
programs.43 Participants have also argued that the urgent need for many pro-
grams helps them through the milestone system even if they do not meet the
designated requirements. The program managers know that if the program fails
a milestone review or lingers in the milestone system for too long it may lose its
funding. Thus, there is pressure to push a program through and to redefine what-
ever problems may be holding it back. A system cannot pass a milestone review if
it is designated with serious (level 1) or fairly serious (level 2) problems, but the
program manager can negotiate to reduce high-level problems to medium-level
problems, and hope that they will be resolved in later milestone stages.44
The GAO also found that different stages in the milestone process mean dif-
ferent things for certain programs. Noted a GAO report on shipbuilding: “The
CVN 21 program held its Milestone B review shortly before a preliminary design
review, and 3 years before the planned approval for the construction contract.
The Milestone B review for DDG 1000—called DD(X) at the time—occurred over
1 year after the preliminary design review and shortly after the critical design
review—it was used to authorize negotiation of a construction contract. The LCS
program has received authorization for construction for six ships—it has yet to
hold a Milestone B review.”45
Finally, the milestone development process takes a considerable amount of
time to push a program through, and, generally, the more complicated the pro-
gram, the more time it takes. The JSF program, for example, began in 1996
and will not become operational until at least 2008, and probably longer. The
Navy/Marine Corps F/A-18/E/F combat aircraft spent three years in milestone de-
velopment even though the plane is follow-on to previous operational F/A-18
versions. Given the numerous tests and documentation required, and the num-
ber of actors required to approve the test results, delays are hardly surprising,
and most operators would prefer that the system is robust before deployments.
However, often years of development of new systems means that existing systems
must perform beyond their expected life spans, and what was radically new tech-
nology at the first milestone gate may be much less radical once it emerges into a
produced system if subsequent developments have passed it by.
Advanced concept technology demonstrations (ACTDs), developed by the De-

fense Department in 1994, are efforts to improve the assessment of mature tech-
nology as it entered or completed the acquisition process. The ACTDs pushed
mature technologies over developing technologies to assess their value to the ap-
propriate user communities, who could put the technologies in trial use on the
basis of their requirements. The JROC makes a recommendation to the deputy
undersecretary of defense for advanced systems and concepts (DUSD [AS&C])
regarding the lead service and user sponsor as part of the JROC review of can-
didate ACTDs. All user and development organizations are represented on an
oversight group, chaired by the DUSD (AS&C). Congress requires congressional
notification of JCTD new starts, with a 30-day review before the trial program
can receive funding. The real purpose is to obtain the 70–80 percent solution im-
mediately rather than delay until the program reaches the 100 percent solution.
If ACTD programs do accelerate technology integration into defense acquisition
programs, that will be a step forward in a process rife with delays. However, it
may also represent a return to concurrent development, where 70 percent is good
enough to get through review stages, but the arrival of 100 percent may be too
late to assist the user if 70 percent is not enough.
Working the Defense Acquisition System A system with as much built-in

complexity and with such high stakes shapes the behavior of those who operate
in it. The very processes that lead to decisions are often “gamed” by the partici-
pants to maximize the outcomes they value and to defeat rival outcomes. There
are some constants that affect decision makers:
1. Competition for resources is keen; thus, a majority of proposals that enter the defense
acquisition process do not survive it.
2. Losses carry huge consequences because they deprive the program owner of years of
resources and a mission within the Defense Department. There are very few second
chances to get a program through once it has been initially stopped or delayed.
3. Information is always power, but in the defense acquisition system that axiom is par-
ticularly true. As J. Ronald Fox noted years ago, “In any complex decision-making pro-
cess the individuals who most significantly affect the process are those who control
the sources of information. In the Pentagon, part or all, of the information on which a
decision should be based may not be transmitted to a senior official until the time at
which the decision must be made if it is transmitted at all.”46 Participants may hide or
filter information, or they may present in selective ways that shape the decision. Again,
as Fox notes, advocates find ways to present information favorable to their programs
while providing information on alternatives in a way that makes them seen unattractive
by comparison.47
4. Coalitions are often critical to programmatic success, or at least in helping to kill rival
programs. For example, when the Air Force proposed the advanced air-to-surface mis-
sile (AASM) in 1959, the Army and the Navy formed a coalition against the program,
arguing that the program would compete with other programs (including the Navy
submarine-launched ballistic missile). The consequence was a split recommendation to
Defense Secretary Neil McElroy, who approved only development for the AASM, which
effectively killed it.48
5. Often the players in the lower tiers of power are the most significant. John Kenneth Gal-
braith first noted the critical importance of those in the midlevels of organizations who
have expertise, information, and thus power.49 In the Pentagon, the legendary “iron
majors” often determine the fate of programs because they have the critical information
that can either support or kill a project. They have often been in the position to supply
a new and uninformed boss with select material to “help” him or her make a critical
choice.
6. Civilian defense officials officially operate the defense acquisition process as appointees
of the president. The military is officially subordinate to them. However, military offi-
cials are experienced professionals who possess expertise and experience in the systems
that they operate. In contrast, Defense Department civilian appointees generally ar-
rive with a new administration, and rarely last for the duration of the first term. They
sometimes have defense experience (as a former member of Congress or as an execu-
tive in the defense industry), but others have little if any experience at all. Former Air
Force Secretary Verne Orr ran a California automobile dealership before then governor
Ronald Reagan appointed him as head of that state’s division of motor vehicles, then as
director of state finance, and from there to secretary of the Air Force. His only military
experience was a three-year stint in the naval reserve. Air Force officers with decades of
experience in Air Force programs found it relatively easy to convince Secretary Orr of
the need for their pet projects.50 President Eisenhower’s first secretary of defense was
Charles Wilson, who had almost no military experience, having served as CEO of Gen-
eral Motors when Eisenhower selected him. Robert S. McNamara also came from the
automobile industry, having almost no military experience except as an analyst with the
Army Air Corps in World War II. Secretary Robert Gates spent a brief period of time in
the U.S. Air Force, and George H. W. Bush’s defense secretary Richard Cheney used a
college draft deferment to avoid military service.
7. The president is a significant actor if he (or she) wants to be, but there are limits. As
Kanter noted, “The president cannot routinely command obedience from the members
of the national security bureaucracy. Rather, he must bargain for it.” This is because the
president cannot monitor every activity or make every decision.51 Instead, the president
must delegate often unspecified authority to defense authorities. He may make decisions
on the significant larger issues (e.g., to buy or not to buy a major type of warship). But
often the roots of such a decision have already been made at lower levels by Pentagon
officials (e.g., to develop a certain propulsion system or weapons system to be used by
a certain warship), so that when the question reaches the Oval Office, it has already
largely been answered.
Issues in the Defense Acquisition Process

New Systems or Upgrades of Old Systems?
New weapons programs go through an exhaustive scrutiny at many levels, as
noted previously. However, the Defense Department also purchases thousands of
upgraded versions of existing systems, since existing systems may require only
modernization to keep them effective. This is a common approach that takes
advantage of current technology and the learning and infrastructure associated

with it. Many aircraft programs go through upgrades: for example, the Air Force’s
F-16 fighter started with the basic airframe of the F-16A, delivered in 1979, and
evolved into the F-16 Block 60 after 12 upgrades. The venerable Boeing B-52
evolved from the A to the H model, with continuous improvements made to
many parts of the bomber. The Army’s Abrams main battle tank has also under-
gone transformation, with the M1A2 version having a more powerful gun than
the initial M1A1 model.
The upgrade process is treated differently than the first-time program at the
DoD level. There is much less milestone development, and thus much less testing
and evaluation of upgraded systems. This may contribute to problems, though. In
the case of the Navy’s F/A-18 Super Hornet, an advanced version of the previous
F/A-18 Hornet (in operations since the 1980s), the plane, 25 percent larger than
its predecessor and much better equipped with avionics, developed flaws inside
the wings that could halve the expected life of the plane. Some critics argued
that the flaws survived the acquisition system because of the lack of oversight
given to upgraded versions of existing weapons, noting that the upgraded F/A-18
process did not require the development of a prototype for testing, as new
weapons acquisition does.52 Still, given the development problems with wholly
new systems, like those encountered with the Marine Corps V-22 Osprey combat
aircraft, the Air Force’s C-5 cargo airplane, the F-111 fighter-bomber, and many
others, upgraded systems have an advantage in reducing development problems,
although they do not give the sharp performance increase gained from new sys-
tems. This has also been the case with adapting new and questionable technology
to conventional tasks. The case of directed energy weapons is instructive here.
In the Reagan era, defense scientists and engineers explored the potential use of
lasers and other high-energy technologies. But the services showed a reluctance
to embrace such technologies when more understood methods remained avail-
able. Noted a 2007 Defense Science Board study, “There are competing and well
understood conventional approaches to producing the desired effect. Given the
history of high-energy laser programs, these conventional approaches are more
credible to warfighters and force providers.”53
The Less-Visible Sector: Acquisition of Spare Parts

Most studies and reports on the defense acquisition system focus on prime
contracts for expensive and complex weapons. However, much of the energy in
the defense acquisition system actually focuses on the purchase of spare parts to
keep the entire military operating. Nuts, bolts, printer cartridges, engine com-
ponents, anti-icing fluids, gaskets, and millions of other items must get to the
military consumer through the defense acquisition process. That process received
much less scrutiny than did large weapons systems until the 1980s, when the
Defense Department’s own study revealed considerable problems with the spare
parts acquisition system: “In 1983, an auditor with the Defense Contract Audit
Agency called attention to 310 items of support equipment which were passed
through the prime contractor to DOD from two tiers of subcontractors. The audi-
tor estimated that, if the government had bought the equipment directly from the
vendors, the price would have been $531,000. The same items cost $1,437,000
from the prime contractor.”54
Between 1995 and 2002 (during the Clinton administration), the Defense De-
partment reduced lead times for spare parts by an average of 5.6 percent annu-
ally, but after the Bush administration took over, between 2002 and 2005, spare
parts lead times dropped by only 0.9 percent. The consequences, according to
a GAO report, were that “the effect of the lead time underestimates was almost
$12 [billion] in spare parts arriving more than 90 days later than anticipated,
which could negatively affect readiness rates because units may not have needed
inventory. If orders had been placed earlier, readiness rates could potentially have
been improved.” The reasons for the resurgent problems in the early 2000s in-
cluded miscoded data and poor estimates of delivery times.55
Funding Acquisition Programs

Since the 1950s, Congress has required funding of acquisition programs for
the year in which the Defense Department procures the item or service. Congress
made this requirement to ensure that it controlled the funds and that the Defense
Department could not fund items incrementally, over time. The requirement is
also reportedly to ensure that the buying service views the total costs up front
rather than adding them up only after years of incremental funding. While there
are some exceptions to this rule (e.g., systems with long lead times), the ser-
vices have recently increased their use of incremental funding to include the pur-
chase of sealift ships, the LHD-8 amphibious assault ship, the new Air Force aerial
tanker, and the F-22 fighter. While Congress has approved some of these incre-
mental funding efforts, it has disapproved others. Some would argue that in-
cremental funding allows trade-offs down the procurement road and avoids the
shock factor of the huge total cost of selected weapons, which might lead to their
cancellation or delay.56
How Well Is the Current Defense Acquisition System Working?

The previous chapter indicated that serious problems in delivery date, per-
formance, and cost emerged throughout the history of the defense acquisition
system. There have been countless reform efforts to reduce the kinds of problems
that have been almost epidemic over the years. So how well is the defense acqui-
sition system doing today, and have the reforms helped to reduce or eliminate
problems?
The GAO reviewed 27 major weapons programs in place in 2007 and found
that their costs had increased by 34 percent, for a total increase of $35 billion
over their original estimated cost.57 Part of the problem diagnosed by the GAO
was that very few programs started with mature knowledge: in other words, these
were revolutionary programs rather than evolutionary systems, and thus the initial
knowledge deficit spiraled through the rest of the program once a program man-
ager had initiated it.58 Concerned about this cost increase for major weapons, the
GAO concluded, “The nation’s long-term fiscal imbalances will likely place pres-
sure on the affordability of DoD’s planned investment in major weapon systems,
reducing the ability of budgets to accommodate typical margins of error in terms
of cost increases and schedule delays.”59
Chapter 6 covers cost overruns and other problems inherent in the defense
acquisition system. Those issues are, perhaps unfortunately, the most visible part
of the process, receiving much disparagement from the news media and political
figures from across the spectrum. However, the other side of the story is that the
system does deliver weapons, training, paper, windshield wipers, and hundreds
of thousands of items to its consumers, the U.S. military and international pur-
chasers. It will always carry the deficiencies of a state-planned system, irrespective
of how much effort goes into transforming it into a market-based process. It of-
ten gets things done as it did in World War II, with a Herculean effort fueled by
billions of dollars in resources and a dedicated workforce that often takes much
criticism when things go wrong but rarely gets credit when things show up on
time and under budget.
The defense acquisition system is a highly complex process that starts with
early planning and reaches a major step when the system goes to the defense
industrial base for production, which is the focus of the next chapter.
Notes
1. “Defense Chief Advises Cadets on Disagreeing with Leaders,” New York Times,
April 22, 2008; “Air Force under Fire from Defense Secretary Robert Gates,” Los Angeles
Times, April 22, 2008.
2. CJCSI 5123-01A, March 8, 2001, A5, at www.dtic.mil/doctrine/jel/cjcsd/cjcsi/
3137 01a.pdf.
3. William A. Owens, “JROC: Harnessing the Revolution in Military Affairs,” Joint
Forces Quarterly (Summer 1994), 55–57.
4. The nine categories are: strike; ground maneuver; strategic mobility and its pro-
tection; air superiority; deter/counterproliferation of WMD; command and control and
information warfare; intelligence, surveillance, and reconnaissance; overseas presence; and
joint readiness.
5. There are two types of major commands (MAJCOMs), functional and regional.
Functional commands include U.S. Space Command, U.S. Transportation Command, Joint
Forces Command, and others, while the regional commands include U.S. Central Com-
mand, U.S. European Command, U.S. Southern Command, and others.
6. Major Defense Acquisition Initiatives. Statement of Admiral E. P. Giambastiani, vice
chairman, Joint Chiefs of Staff, Committee on House Armed Services, April 2006, 1–2.
7. Program Management of the Objective Individual Combat Weapon. Office of the
Inspector General, Report No. D-2006-123, September 29, 2006, 2.
8. Military Transformation: Actions Needed to Better Manage DoD’s Joint Experimentation

Program. Washington, DC: GAO, 2002, 3.
9. “JROC Retains MRAP Control to Stop Requirements Creep,” Aerospace Daily & De-
fense Report, May 15, 2007.
10. House of Representatives, Laws Relating to Federal Procurement. Prepared for the
Use of the Committee on Armed Services, April 2003, 389.
11. For general histories on the GAO, see Roger R. Trask, Defender of the Public Interest:
The General Accounting Office, 1921–1966. Washington, DC: Government Printing Office,
1966; Frederick C. Mosher, The GAO: The Quest for Accountability in American Government.
Boulder, CO: Westview Press, 1979.
12. “Air Force Chief Frustrated by Helicopter Wrangling,” The Hill, April 25, 2007.
13. Statement of Barry M. Sabin, acting chief of staff and principal deputy assistant
attorney general, Criminal Division, Department of Justice, before the Subcommittee on
Government Management, Organization, and Procurement, Committee on Oversight and
Government Reform, U.S. House of Representatives, April 15, 2008.
14. “FY 08 Defense Appropriations Encourages Increased Use of GSA Acquisition
Services,” http://www.gsa.gov/graphics/admin/FY08 Defense Appropriations Encourages
Use of GSA Acquisition.doc.
15. Matthew Weigelt, “Congress Endorses GSA’s Assisted Services,” Federal Computer
Week, November 12, 2007.
16. Ibid.
17. The White House, “Introduction,” National Security Strategy of the United States,
September 17, 2002, at http://www.whitehouse.gov/nsc/nssintro.html.
18. The National Defense Strategy of the United States of America, March 2005. Available
at http://www.globalsecurity.org/military/library/policy/dod/nds-usa mar2005.htm.2.
19. The National Military Strategy of the United States, 2004. Joint Chiefs of Staff, http://
www.DefenseLink.mil/news/Mar2005/d20050318nmr.pdf; 5.
20. Ibid., 21.
21. Department of Defense, Quadrennial Defense Review Report, February 2006, http://
www.defenselink.mil/qdr/report/Report20060203.pdf.
22. Ibid., 53.
23. Michèle A. Flournoy, “Did the Pentagon Get the Quadrennial Defense Review
Right?” Washington Quarterly 29 (Spring 2006), 81.
24. “Gates Says New Arms Must Play Role Now,” New York Times, May 14, 2008.
25. Steve Kosiak and Barry Watts, US Fighter Modernization Plans: Near-Term Choices.
Washington, DC: Center for Strategic and Budgetary Assessments, 2007, 27–30.
26. Chairman, Joint Chiefs of Staff, Joint Capabilities Integration and Development System.
CJCSI 3170.01F, May 1, 2007, B-1.
27. On Goldwater-Nichols, see James R. Locher III, Victory on the Potomac: The
Goldwater-Nichols Act Unifies the Pentagon. College Station: Texas A&M University Press,
2002.
28. National Defense Authorization Act for Fiscal Year 2007. Report of the Committee on
Armed Services House of Representatives on H.R. 5122 Together with Additional and Dissenting
Views. Washington, DC: Government Printing Office, May 5, 2006, 350–351.
29. This unwieldy acronym is intended to distinguish Joint Operational Concepts
( JOpsC) from Joint Operating Concepts ( JOC). There really is a difference. JOCs “will
further develop key areas of the JOpsC. Focusing at the operational-level, JOCs integrate
functional and enabling concepts to describe how a JFC will plan, prepare, deploy, em-
ploy and sustain a joint force given a specific operation or combination of operations.
The JOCs will also provide a detailed conceptual perspective for joint experimentation
and assessment activities.” Department of Defense, Joint Operating Concepts, November
2003, 26.
30. Department of Defense Appropriations for 2004, Public Law 108-87, September 30,
2003, http://www.dsca.mil/programs/LPA/2004/mtml, 93.
31. Senate, National Defense Authorization Act for Fiscal Year 2005. Report to Accom-
pany S.2400, Committee on Armed Services, May 11, 2004. Washington, DC: Government
Printing Office, 2004, 132.
32. Amy Butler and David A. Fulghum, “New Frontiers,” Aviation Week & Space Tech-
nology, March 7, 2005, 23.
33. “Bush Budget Seeks Military-Agency Ties on Spy Satellites,” Asian Wall Street Jour-
nal, February 6, 2007.
34. Rachel Weber, Swords into Dow Shares: Governing the Decline of the Military Industrial
Complex. Boulder, CO: Westview Press, 2001, 50–51.
35. Thomas L. McNaugher, Old Weapons, New Politics: America’s Military Procurement
Muddle. Washington, DC: Brookings Institute, 1989, 60–61.
36. Department of Defense, http://www.defenselink.mil/contracts/contract.aspx?
contractid=3654.
37. Department of Defense, http://www.defenselink.mil/contracts/contract.aspx?
contractid=3648.
38. “Fixed-Price Contracts Slated for Navy Ship,” San Diego Union-Tribune, August 4,
2007.
39. “McCain Seeks Limits on Multiyear Procurement Contracts,” CongressDaily,
May 23, 2007.
40. Ibid.
41. “C-130J’s ‘Not Effective,’ Pentagon Report Says,” Atlanta Journal-Constitution,
January 19, 2007.
42. Office of the Inspector General, Use of Exit Criteria for Major Defense Systems, Report
No. D-2001-032, Department of Defense, January 10, 2001.
43. Defense Acquisitions: Improvements Needed in Space Acquisition Management Policy,
Report to the Chairman, Subcommittee on Defense, Committee on Appropriations, House
of Representatives. GAO, September 2003, 26–27.
44. Interview, Maxwell AFB, AL, March 2008.
45. “Realistic Business Cases Needed to Execute Navy Shipbuilding Programs,” state-
ment of Paul L. Francis, director of Acquisition and Sourcing Management Team, Testi-
mony before the Subcommittee on Seapower and Expeditionary Forces, House Committee
on Armed Services, July 24, 2007, 16.
46. J. Ronald Fox, Arming America: How the U.S. Buys Weapons. Boston: Graduate
School of Business Administration, Harvard University, 1974, 88.
47. Ibid., 89.
48. Peter J. Roman, Eisenhower and the Missile Gap. Ithaca, NY: Cornell University Press,
1995, 160–161.
49. John Kenneth Galbraith, The New Industrial State, 4th ed. Boston: Houghton
Mifflin, 1985.
50. A former defense official in the Reagan Pentagon went to Secretary Orr to stop a
program favored by the Joint Chiefs, several weeks after both had arrived in the Pentagon.
He walked into Orr’s office and found several Air Force generals there. They had presented
Orr with a pilot’s helmet and flack jacket, and were telling him war stories. The official left
without speaking to Orr about canceling the program, realizing that the Air Force officers
had already seduced him into supporting what they wanted. Interview with the author,
September 1990.
51. Arnold Kanter, Defense Politics: A Budgetary Perspective. Chicago: University of
Chicago Press, 1979, 81.
52. “Costly Flaws Found in Navy’s Top Jet,” Boston Globe, May 17, 2007.
53. Defense Science Board Task Force on Directed Energy Weapons. Washington, DC:
Office of the USD (AT&L), December 2007, 11.
54. Review of the Spare Parts Procurement Practices of the Department of Defense. Report
to Congress, Office of Federal Procurement Policy, June 1984, 6–7.
55. “GAO: DoD Could Improve Management of Military Spare Parts Lead Times,” IHS,
http://parts.ihs.com/news/gao-lead-times.htm.
56. Ronald O’Rourke and Stephen Daggett, Defense Procurement: Full Funding Policy—
Background, Issues, and Options for Congress. Washington, DC: Congressional Research Ser-
vice, June 15, 2007.
57. Defense Acquisitions: Assessment of Selected Weapons Programs. GAO Report No.
GAO-07-406SP, March 2007, 9.
58. The programs included the JSF, the Future Combat System, the V-22 aircraft, and
the Expeditionary Fighting Vehicle. The JSF involved a combination of complex technolo-
gies, such as a vertical takeoff and landing system, and the V-22 combines fixed- and
rotary-wing technologies.
59. Defense Acquisitions: Assessment of Selected Weapons Programs, 7.
Further Reading
Davis, Paul K., ed. New Challenges for Defense Planning: Rethinking How Much Is Enough.
Santa Monica, CA: RAND Corporation, 1994.
Drezner, Jeffery A. Measuring the Statutory and Regulatory Constraints on Department of De-
fense Acquisition: An Empirical Analysis. Santa Monica, CA: RAND Corporation, 2007.
Holland, Lauren. Weapons under Fire. New York: Garland Publishing, 1997.
Jones, L. R., and Jerry L. McCaffery. Budgeting, Financial Management, and Acquisition Reform
in the U.S. Department of Defense. Charlotte, NC: IAP–Information Age, 2008.
Krishnan, Armin. War as Business: Technological Change and Military Service Contracting.
Burlington, VT: Ashgate Publishers, 2008.
Streeter, Sandy. The Congressional Appropriations Process: An Introduction. September 8,
2006, http://appropriations.house.gov/pdf/appfacts.pdf.
CHAPTER 3
The Defense Industrial Base
In 1912, aircraft innovator Glenn L. Martin started a small aircraft company in

rural Santa Ana, California, where his tiny workforce hand-assembled military
aircraft for the fledgling air services. His first planes were trainers, but a bomber
design emerged after World War I, designed by Martin’s chief aeronautical de-
signer Donald Douglas. Douglas, in turn, left Martin to form his own company,
Douglas Aircraft, where one of his leading designers was John Northrop, who
also left his employer to form his own company. James McDonnell was a de-
signer with Martin before leaving to form his own company, McDonnell Aircraft,
which later merged with Douglas. Decades later, Douglas, Martin, and Northrop
would become some of the largest companies in the country, and in their current
versions—Boeing (which absorbed Douglas), Lockheed Martin, and Northrop
Grumman—they generate billions of dollars in income each year.
So began a portion of America’s military aviation industry, led by aviation pi-
oneers whose passion for flying and designing was not often matched by their
business acumen. Their passion, though, matched that of the early military avia-
tors, who saw themselves as a breed apart from the traditional soldiers and sailors
who, in the minds of aviators, were weighted down by centuries of hidebound
tradition. So the early aviation companies and military aviators formed a loose
partnership to exploit the promises of military aviation, hoping to render the bat-
tleships and tanks of the traditional services into the dustbins of history and be-
ginning a significant period of military innovation that its advocates hoped would
change the face of warfare forever.
The rise of the private military aviation sector was an American anomaly. Be-
fore World War I, most American military production took place in government-
operated arsenals and shipyards. Those enterprises usually did technological
innovation at a leisurely pace, appropriate for a country that had almost never
engaged in overseas combat. However, World War I revealed how far European
military aviation had come compared to the state of affairs in the United States,
The Defense Industrial Base 67
and thus the military turned to civilian industry, and the fledgling American avia-
tion industry in particular, to speed the pace of technology and the production of
military aircraft. A further shift from government to private production occurred
as the United States entered World War II and civilian industry converted to
wartime production, producing ships, tanks, ammunition, and almost every other
type of military equipment and thus creating what became known as the “military-
industrial complex.” Before and during World War II, government arsenals and
shipyards produced the bulk of military weapons, with the exception of military
aircraft. However, as Friedberg notes, the reputation of the state had fallen while
the status of business was rising, fueling a traditional American antistatist attitude.
Reports claimed that while private factories met and exceeded wartime produc-
tion requirements during World War II, government arsenals failed to keep pace
with technology and requirements.1
The early aviation industry’s foray into the private sector contrasted with the
U.S. Navy’s naval shipyard industry and the Army’s military arsenal system, both
operated by their respective militaries as government facilities. The Brooklyn
Naval Yard, for example, started in private hands, but the U.S. government pur-
chased the yard in 1801 and the yard operated continuously under U.S. Navy
control until Secretary of Defense McNamara closed it in 1966. The Brooklyn
Naval Yard was one of six such facilities authorized in 1799 by Secretary of the
Navy Benjamin Stoddert (the others were Philadelphia, Boston, Portsmouth,
Norfolk, and Washington, DC). Not all naval shipyards serving the Navy were
owned by the Navy: Newport News Shipbuilding started as the Chesapeake Dry
Dock & Construction Company in 1886, founded by railroad magnate Collis
P. Huntington as a terminal to bring coal for his trains, and by 1907 Newport
News was building battleships for the Navy. However, the majority of the Navy’s
ships did come from its own facilities, even though evidence suggested as early as
the nineteenth century that private yards could build better ships than could the
bureaucratic naval yards.2 Much of the U.S. Army’s equipment also came from
government arsenals. As noted in Chapter 1, Army arsenals dated to 1794, when
Congress chartered the Springfield (Massachusetts) Arsenal and, in the next year,
an arsenal at Harper’s Ferry, Virginia. Other arsenals followed, including the Rock
Island Army Arsenal, established in 1862 along the Mississippi River in Illinois to
provide weapons to Union forces in the Civil War. It turned out howitzers, rifles,
and small equipment like mess kits for decades, up through the twentieth cen-
tury. In 1941, the Army broke ground for a site in northern Alabama that became
Redstone Arsenal, today a hub of the Army’s missile programs. Other arsenals
in Pennsylvania, Kansas, Iowa, and elsewhere produced cannonballs, uniforms,
tents, and other Army material, employing thousands of workers in the process.
The American defense industrial base grew from two branches, the private
investors who built their companies to serve the military needs of the country (as
well as international customers) and the government-owned facilities that were
part of the structure of the services. The private companies, which initially fo-
cused on military aviation, grew in scope and gradually moved beyond aviation
to land and sea weapons systems. For example, the Army opened the Lima Army
Tank Plant in Lima, Ohio, in 1942 as a government-owned, contractor-operated
plant, and in 1978, the Army selected the Chrysler Corporation to run the plant’s
production of M-1 tanks. But in 1982 General Dynamics Land Systems bought
the Chrysler Defense Corporation, bringing aerospace giant General Dynamics
(which was once Convair Aircraft, among others) into the tank production pro-
cess. Another aviation giant, Northrop Grumman (formed from the merger of the
Northrop and Grumman Corporations), operates the Newport News shipyard in
Virginia, the only shipyard capable of producing a nuclear-powered aircraft car-
rier in the United States, and one of only two shipyards able to construct nuclear-
powered submarines. In 1985, the Packard commission noted that there were
more than 20 large prime contractors prepared to produce items for the Defense
Department, but by 2006, there were but six prime contractors remaining. Pro-
duction had shrunk from 1985 Cold War production levels of 585 aircraft, 2,031
combat vehicles, 24 ships, and 32,714 missiles, to 2006 levels of 188 aircraft, 190
combat vehicles, 8 ships, and 5,072 missiles.
The Army arsenals, often criticized for their conservative approach to weapons
development and production (see Chapter 1), had their champions in Congress
who valued the jobs they sustained. However, in one of his many reforms, Defense
Secretary Robert McNamara found the Army arsenals plagued with overlapping
functions (e.g., rifles and their ammunition were developed in two different arse-
nals under two different commands) and inefficiencies. McNamara not only cen-
tralized most of the arsenal function under the newly created Army Materiel Com-
mand but also closed a number of arsenals and moved their development work
to private companies. His boldest stroke was to take the MBT-70 main battle-
tank development project from the Army’s Tank-Automotive Command and give
it to General Motors, though he also moved the development of the Cheyenne
helicopter from the Army to Lockheed (the project ultimately was canceled).3
Characteristics of the American Defense Industry

The American defense industry supplies the military with its equipment, its
support, and even its ideas. While the largest defense contractors construct ships,
vehicle, missiles, and aircraft, the defense industry also supplies maintenance for
those and other systems, and provides ideas and advice. Many are large con-
struction companies or include construction as a part of their business portfolio
(Halliburton is a diversified corporation, but its Kellogg Brown & Root [now sim-
ply KBR] supplies both construction and support services, elevating Halliburton
to the sixth-largest American defense contractor, with annual revenues of more
than $7 billion). The Carlyle Group is primarily an investment firm, but its private
equity defense holdings rank it as the twentieth-largest defense contractor. Other
companies supply research and ideas: Johns Hopkins University ranks among the
top 100 defense contractors, as do other research institutes. The defense industry
is a vast undertaking that spans most American and international sectors.
The traditional role for defense contractors has been to supply the materials
for the professional military for use in military operations. That role is changing,
though, as contractors increasingly not only supply missions but perform them
as well. Contractors supply weapons, spare parts, advice, knowledge, operational
support, and maintenance. Contractors chip paint and serve food on Navy ships,
once a province of uniformed sailors. Contractors have moved into traditional
military missions with air-to-air refueling, historically performed by the services,
flying specially designed tanker aircraft to send fuel through hoses to other planes
while in flight. Several private firms—Omega Air, Atlas Air, and Evergreen In-
ternational Aviation—expressed an interest in providing commercial air refueling
for what they argued would be a fraction of the cost of Air Force refueling. The
Navy has tried a pilot program with Omega Air, and, according to a Defense
Science Board report, the Air Force charged $17.50 per gallon to deliver fuel with
its fleet of KC-135s and KC-10s, while Omega’s 707s have been able to operate
at just under $7 per gallon for the Navy contract.4
While the private enterprise identity of the defense industry might indicate
that it operates under the guidelines of free enterprise, it has unique charac-
teristics that limit such assumptions. First, it is monopsonistic, meaning that
it has only a single buyer, the U.S. military, for its primary products. Second,
there are currently very few firms capable of delivering the large weapons sys-
tems that the military buys, which results in an oligopolistic (limited number
of suppliers) situation. These realities restrict normal assumptions about a com-
petitive market. Thus, market demands and many suppliers do not determine
the price and quality, but instead the contractor and the service must negotiate
it. Defense firms do not normally innovate on their own hoping to attract buy-
ers, but instead must wait until the Defense Department approaches them with a
request for proposal.5 Even then, there is no assurance that the Defense Depart-
ment will follow through. For example, Northrop Grumman invested heavily in
producing 30 Seawolf attack submarines, but later the Navy reduced the buy to
just 3, none of which Northrop Grumman built.6 The producer assumes much
risk: if the military does not buy its products, it must convert to commercial
production or die. Because of the nature of the market, defense firms are qual-
ity maximizers rather than cost minimizers, as Weidenbaum notes.7 Demands
for high-risk and advanced technology from the services also escalate prices and
often delay delivery dates, sometimes resulting in lost income for the defense
firm.
The relationship between the military and the defense industry suggests that
both sides are engaged in organizational preservation as the defense industry
continues to shrink, even in the face of growing defense budgets. While there
were at least 16 companies building large military aircraft during World War II,
there are now just 2 active producers (Boeing and Lockheed Martin), with a third
(Northrop Grumman) not currently producing aircraft. The number of military
shipyards has declined from dozens to just six yards, owned or operated by either
Northrop Grumman or General Dynamics. The Army faces a similar situation
with the cancellation of legacy ground weapons systems.8 The number of trained
workers in the U.S. aerospace industry is also shrinking, from 1.1 million in 1991
to 607,000 in 2005.9 Consequently, the remaining prime contractors sold them-
selves as vital national resources, dependent on defense contracts for their very
existence. That means even less competition. Admiral Vern Clark, the chief of
naval operations, has said, “I don’t think we really have competition today. I think
we have apportionment. And I think all of the numbers are now clear that appor-
tionment is costing us money.”10
As the number of contractors declines, concerns rise that the services will fa-
vor certain contractors to keep relations alive, possibly resorting to marginally
legal or outright illegal methods to do so. Thus, Boeing and the Air Force suf-
fered an embarrassing scandal when investigations revealed that Darleen Druyun,
head of Air Force acquisitions, illegally gave Boeing details of a rival plan for
an Air Force tanker aircraft for the Air Force. Boeing offered Druyun a job as
a senior vice president, apparently as a reward for her provision of information
while she was reviewing the tanker contract proposals from both Boeing and ri-
val EADS. Druyun and Boeing vice president Michael Sears, who hired Druyun
in 2003, lost their Boeing jobs and Druyun served prison time. While few con-
tractors and services engage in such illegal conduct, there is also the more normal
practice of funneling contracts to favored firms to maintain a positive relationship,
to draw on established expertise, and sometimes to allow the service representa-
tives to engage with former colleagues who have left the service for the corporate
world.
The Structure of the American Defense Industry

The defense industry is in reality a number of interconnected parts, which are
discussed in the subsequent paragraphs.
Government-Operated Industrial Plants

Government-operated industrial plants are the remainders of the old arsenal
and shipyard system that predated World War II. Most have been shuttered and
replaced by private contractors, but a few remain and even fewer engage in pro-
duction. The Army’s Redstone Arsenal, near Huntsville, Alabama, engages largely
in research on missile and aviation systems. Picatinny Arsenal in northwestern
New Jersey develops and produces advanced ammunition for Army systems,
while the Rock Island Arsenal near Moline, Illinois, is mostly involved in support
activities for the Army but also produces howitzer maintenance equipment and
associated artillery equipment. The Navy maintains four shipyards, at Pearl Har-
bor, Hawaii; Norfolk, Virginia; Portsmouth, New Hampshire; and Puget Sound,
Washington. While naval shipyards used to manufacture entire ships, most of
their work now involves repair and modernization.
Government-Owned, Contractor-Operated Facilities

Government-owned, contractor-operated facilities, known as GOCOs, oper-
ate out of government-owned buildings and generally sit on government-owned
property, but private companies operate the facilities under contract. The GOCO
model came about when the Army requested that the University of California
manage the Manhattan Project, the atomic bomb development at what would
become Los Alamos National Laboratory. There are some advantages that such
arrangements bring: according to Sandia Laboratories’ Web site, “The GOCO al-
lows proven private-sector processes to operate without bureaucratic restrictions.
Scientists performing for a GOCO contractor are largely insulated from political
pressures. Thus, they have the independence to speak out as honest brokers, act-
ing truly in the national interest.”11 While this is technically correct, it also means
that some of the bureaucratic restrictions designed to prevent problems may be
absent. Many GOCOs are research laboratories, but some also manufacture, in-
cluding the Lima Army Tank Plant in Ohio, which manufacturers and modern-
izes the M1A2 main battle tank, in facilities owned by the Army but operated
by General Dynamics Land Systems. The Air Force also owns (or has owned in
the past) numerous plants, including Air Force Plant 42 in Palmdale, California,
which produced the SR-71 reconnaissance plane for Lockheed and the B-2 for
Northrop; Air Force Plant 38 in Buffalo, New York, which constructed missiles
by Bell Aircraft; and Air Force Plant 6 in Marietta, Georgia, which produces the
C-130J cargo aircraft.
Private Defense Firms

Private defense firms are owned generally by shareholders, and they own their
own production facilities, though many also lease facilities from the Defense De-
partment. These firms are for-profit: they sell shares, they borrow money from
commercial (and sometimes government) sources, and they are structured simi-
larly to firms doing business in the nondefense sector. They include large firms
whose names are almost household words: Boeing, Lockheed Martin, Northrop
Grumman, and dozens more. The largest firms are in the aviation business, but
increasingly they are “integrated,” which means that they have multiple lines of
work. However, there are hundreds of other firms engaged in the defense market
as either their core business or as part of their overall activity. Defense firms can
be broken down into three tiers.
First-tier contractors are the largest prime contractors on the basis of sales, and
in general they produce large and complete weapons systems rather than subcom-
ponents, though larger firms also produce subcomponents. First-tier contractors
are final system integrators that produce finished weapons from subcomponents.
Lockheed Martin is typical, with contracts for the F-22 fighter, the C-130J cargo
aircraft, the F-35 JSF, and dozens of other large contracts for facilities around
the country. First-tier contractors also supply services and other support func-
tions; for example, Northrop Grumman and Lockheed Martin both have support
functions to service military computers, aircraft, engines, and thousands of other
components, while DynCorp offers such services as military law enforcement,
disaster assistance support, and aircraft maintenance and ship operations.
Second-tier contractors are normally subcontractors to the first-tier contrac-
tors, though they may also produce finished goods. Engine manufacturers are
typical second-tier vendors in that they produce final engine assemblies for in-
stallations into weapons, though the engines themselves originate from parts pro-
duced by third-tier contractors.
Third-tier contractors are the smallest enterprises, building specialty items for
first- and second-tier contractors. Examples include pumps for engines, fasteners
for aircraft assembly, specialized wiring for defense electronics, and other small
but vital components. Third-tier contractor status is usually the first step of new
or start-up industries that emerge seeking a niche in the defense market. They are
sometimes underfunded because their often-revolutionary ideas cause potential
investors to shy away, and they are sometimes too small or lacking the business
experience to attract Pentagon attention. However, such small firms are often an
important source of innovation and the means to convert innovation into produc-
tion. Recently, the Defense Department chartered the Center for the Commercial-
ization of Advanced Technology (CCAT) to help small firms entering the defense
market. Such assistance might include advice in seeking funding from the federal
government for research and help in marketing ideas.12
Many third-tier contractors engaging in business with the Defense Department
may win preferential no-bid contracts for military products because of their clas-
sification as “small businesses.”13 The hope is that such businesses, shorn of the
necessity to compete and possibly engage in a contract they cannot actually af-
ford to perform, will be helped to grow into reliable suppliers of military goods.
Sometimes, though, no-bid contracts appear to be more of a deal between a small
defense contractor and a political figure, as was the case with Digital Fusion, an
Alabama-based defense company that received a $2.6 million no-bid contract for
engineering in the district of Representative Silvestre Reyes after Digital Fusion
contributed $24,000 to Reyes’s reelection campaign. According to a news report,
“Both the congressman and company say there is no connection between the con-
tract and the contribution, which was made at the Monocle, a restaurant near the
Capitol. Both parties say their actions were legal and commonplace.”14 The reality
is that the earmarks (see Chapter 4) that Reyes and other members of Congress
use are often provisions for a no-bid contract.
The largest prime defense contractors enjoy benefits accrued partly because of
their sheer size and niches. Companies like General Dynamics, which operates
one of only two submarine yards, or Lockheed Martin, which produces (or will
produce) both of the Air Force’s twenty-first-century fighter-attack aircraft, are
protected from the normal currents of business life because of their importance to
national security and the impact of reductions in their workforces. In comparison,
small third-tier contractors that employ a handful of workers to build specialty

parts may not enjoy such protection because, in contrast to the larger contractors,
they are small dots on the defense radar screen.
Stakeholders
Private firms of all types, including defense, have a primary responsibility to
their shareholders in the case of publicly held corporations. Defense firms also
have a responsibility to their consumer, the Defense Department. Thus, firms
face competing pressures from both constituents. The Defense Department val-
ues quality, performance, safety, and price, knowing that the products it buys
may well make the difference between success and failure in wartime situations.
However, as Weber notes, shareholders have a different set of values. Unlike the
Defense Department, shareholders care less about performance of the products or
the legality of the operations than they do about the value of share prices and div-
idends. They can be fickle, buying and selling in search of short-term gains over
long-term stability.15 They may well punish firms for taking risks or investing too
heavily in goods that have long-term production possibilities. But they may value
lower-risk factors and stability over the often dramatic swings of highly innovative
firms and the protection that defense firms receive from the federal government.
Defense Industry and the Boom-and-Bust Cycle

The United States has a pronounced war-and-peace cycle, but little tradition
supporting a large standing military. Thus, wars are initiated with a large-scale
buildup from a small production base, which peaks usually at the end of a war.
Following a peace treaty or truce ending the war, demobilization follows, as the
military usually shrinks to a fraction of its wartime size. The end of World War II
saw the scrapping of fleets of ships and fields of aircraft destined for the alu-
minum smelter. For example, the defense budget spiked to almost $380 billion
(1996 constant dollars) in 1945, and then dropped to $100 billion over the next
two years, only to jump back to more than $350 billion during the Korean War,
below $300 billion until Vietnam, and then $350 billion during the Vietnam War.
The post–Vietnam War era saw defense budgets drop to around $250 billion, only
to see the Reagan-era budgets approach $400 billion, followed by yet another
drop below $300 billion under the George H.W. Bush and Clinton administra-
tions. The defense budget estimate for fiscal year 2008 exceeds $500 billion, but
growing budget deficits may see it drop once again.
The defense industrial base is quite vulnerable to swings from war to peace,
as it expands in both number of competitors and in scope during the war years,
only to contract and wither after the war ends. One result is that some companies
cannot survive the troughs, and they either disappear altogether or merge with
another firm. A long-term result is that, over time, the defense industrial base it-
self shrinks. In 1978, for example, the United States had 318 ammunition plants,
but by 1995, there were fewer than 100 such plants. Those fewer plants have had
to ramp up to fill military requirements following September 11, with the Alliant-
managed Lake City plant in Missouri expanding from 600 employees to 2,500 in
2007. However, the plant’s manager noted, “The demand is fast when it comes,
and then it can drop off very quickly.”16 Even the plants that survive lay off ex-
perienced workers, remove excess equipment, and sometimes lose environmental
permits that are required only for production above certain levels.
One way around the boom-and-bust cycle is to expand defense contractors’
involvement in particular projects, even if that involvement takes a new busi-
ness strategy. The Raytheon Company demonstrated such a path when it teamed
with several subcontractors to advance its bid to win the Joint Cargo Aircraft
contract. Raytheon is not an aircraft manufacturer; it supplies the military with
electronics and Tomahawk cruise missiles. However, seeing an opportunity to
expand its business, Raytheon teamed with EADS, the parent firm of Airbus SAS,
to offer the C-295 aircraft. Raytheon reversed the old strategy of a prime contrac-
tor first getting a contract and then bringing on subcontractors: Raytheon first
brought on board a subcontractor with aircraft experience to help it compete for
a new business area. Paradoxically, Raytheon and its partner beat out Lockheed
Martin’s proposal for a version of its C-130J and modeled its strategy on Lock-
heed’s successful bid for a new presidential helicopter by enlisting the partnership
of an Italian helicopter manufacturer.17
There are other ways to mitigate the boom-and-bust phenomenon in the de-
fense industry, which sometimes suffers from contract terminations in lean years.
This has led to the follow-on contract system, designed to ensure a steady stream
of contracts such that once a producer has finished a project, another one is
waiting. Moreover, to reduce setup costs for a new system, the Defense Depart-
ment may try to contract for a follow-on system that is considerably similar to
the system just completed. James Kurth first described the “follow-on impera-
tive” in 1973 in his examination of the military aircraft industry. He noted that a
follow-on contract came to a contractor about three years before the old contract
was to phase out—to name but a few examples, the Minuteman II followed the
Minuteman I, the Trident submarine-launched ballistic missile followed the
Polaris submarine-launched missile, the F-15 fighter followed the F-4 fighter,
and the F-111 fighter-bomber followed the B-58 bomber.18 More recent cases
involve Lockheed Martin winning the contract for the F-22 fighter to follow
its F-16 fighter, and the Virginia-class submarines following the Los Angeles–
class submarines at the Electric Boat yard in Connecticut. The Boeing Company
was widely expected to receive a follow-on contract for a new aircraft tanker
to replace the venerable KC-135 planes built in the 1950s and 1960, but in
February 2008 the contract went instead to a partnership between Northrop
Grumman and EADS. Boeing argued that, among other things, the contract award
would result in the loss of Boeing’s long experience in building military aircraft.
There is, of course, some economic and military logic behind follow-on con-
tracting beyond trying to reduce corporate costs and help please shareholders—
the services will be more familiar with a product similar to that which they
operate, and the learning curve from one system to a newer one is less steep.
However, the follow-on imperative may impede dramatic technological develop-
ment.
Another consequence of the boom-and-bust cycle is defense contractor merg-
ers. As Weber notes, the 1990s saw defense budgets drop during the Clinton
years, and Secretary of Defense William Perry warned defense contractors that his
department could not support them all. Thus, company mergers, which had been
a fact of life since World War II, picked up considerably, following the business
strategy that a more diversified portfolio protects against cutbacks in a sector,
such as shipbuilding.19
Another strategy for firms facing budget downturns is to exit the defense sector
altogether for the commercial side, or at least to diversify defense dependency by
investing at least some effort in nondefense markets. For firms with experience
in the commercial sector (e.g., shipbuilders that build commercial cargo ships, or
companies like Boeing that have both commercial and military sectors), the shift
to a less military-dependent business may make sense. Boeing, which has a long
history of commercial aviation, could ramp up production of its 700-series pas-
senger planes should the defense budget cut aircraft procurement. But for most
defense contractors, their experience was in the narrow confines of the military
market, with its fixed-price contracts tied to a monopsonistic buyer, the U.S. De-
fense Department. When firms tried to move beyond this realm, they often found
a world in which they lacked experience. The need to test commercial markets,
for example, common in the commercial sector, was new to contractors that of-
ten just waited for the military’s next request for proposal. Others found that their
brand name was not familiar to consumers who were used to buying recognized
brands. So if a maker of military tracked vehicles tried to move into the construc-
tion or farm equipment, it would be competing with widely recognized brands
like Caterpillar or John Deere. For example, when Grumman Aircraft Company
tried to enter the civilian market after the defense downturn of the late 1980s,
with everything from mail trucks to fire engines to canoes, it failed and reentered
the military market by merging with Northrop in 1994.
The Power of the Defense Industry

The defense industry employs hundreds of thousands of people, in all types
of work. It obviously has a large impact on local communities, where defense
companies are often the largest employer. Such companies are also considered a
national security asset, valued for the experienced workforce and design teams
that they retain. It thus is not surprising that the industry has considerable power
to affect outcomes in its favor.
The very locations of defense industry plants and offices are a consequence of
political machinations as much as they are a function of efficiency. Local commu-
nity elites and influential members of Congress steered federal money into states
like California, where the buildup of military bases paralleled the growth of the
military aircraft industry and shipbuilding.20 Southern and western states touted
their good weather, which they argued was conducive to flying operations, as rea-
son to locate defense plants in those areas, though the real reasons for the shifts
from the Midwest and the East to the so-called gun belt had more to do with pol-
itics, including the power of senior members of Congress from the South.21 Many
large defense corporations also moved extensive facilities to the Washington, DC,
area so that they could be more effective in lobbying for their products.22
In theory, the defense industry receives proposals to bid on weapons systems
and is supposed to respond to those government-directed programs. But as the
defense industrial base shrinks, and as firms learn new political practices, it may
be that contractors are enjoying a growing power to shape requirements to their
liking. In a particularly candid presentation, Navy Secretary Donald Winter made
his feelings about the shipbuilding business known: “Since becoming Navy secre-
tary last year, Winter has been critical of industry, much to the chagrin of defense
contractors enjoying large profits. Winter has said that instead of the Navy driv-
ing shipbuilding requirements, industry has established what it thinks the ser-
vice needs, and that is not always for the better of the fleet.”23 Similar concerns
arose over Boeing’s control over the Army’s Future Combat System, as critics
have argued that the degree of Boeing’s control as lead systems integrator reduces
oversight (though a Boeing spokesman claimed otherwise), and over Northrop
Grumman’s lead systems integrator on the Coast Guard’s troubled Deepwater
contract.24
The defense industry has considerable clout in Washington, with each of the
large contractors having its own Washington office where it can exercise influ-
ence with both the congressional and executive branches. There are also powerful
lobby groups representing the defense industry, including the following:
r The Aerospace Industries of America (AIA) is based in Arlington, Virginia, and was
founded in 1919. The AIA has more than 100 member firms, including the giants of
the industry. The AIA lobbies on a variety of issues, including the encouragement of
multiyear contracting, policies that sustain the aerospace workforce, and investments to
preserve and expand the aviation industry. The AIA has a mix of constituencies, includ-
ing both military and commercial aerospace.
r The National Defense Industrial Association (NDIA) also has headquarters in Arlington,
Virginia. The NDIA first emerged as the American Defense Preparedness Association in
1919 and resulted from subsequent mergers of different defense organizations. The asso-
ciation has around 1,375 corporate members and advocates a number of positions that
stand to benefit its membership, including defense contract provisions: “Rather than
mandating a preference for fixed-price development contracts, the Department of De-
fense (DoD) should develop a process to identify opportunities for fixed-price devel-
opment within current regulations and ensure that any development using fixed-price
contracts is fully funded.”25 The NDIA actively lobbies Congress on a variety of issues,
including measures involving competition in the defense industry and efforts to reform
the defense acquisition process.
r The Satellite Industry Association, with headquarters in Washington, DC, is a relatively
new organization, having started in 1993 with the transformation of the Satellite Super
Skyway Coalition into an industry organization. Its membership includes large aerospace
firms and smaller technical firms that support the larger companies. It lobbies on behalf
of its members on both commercial and military space issues, and its workshops attract
a mix of military officials and industry representatives.
r The Armed Forces Communications and Electronics Association (AFCEA International),
founded in 1946, is a membership association serving the military, government, indus-
try, and academia as an ethical forum for advancing professional knowledge and re-
lationships in the fields of communications, information technology, intelligence, and
global security. It hosts conferences around the country and publishes Signal magazine.
r The American Shipbuilding Association supports both military and commercial ship-
building. Its board of directors includes members from Northrop Grumman, Electric
Boat, and General Dynamics. It actively lobbies Congress and the current administra-
tion for larger shipbuilding budgets and is particularly active with the Congressional
Shipbuilding Caucus.
These lobbies make no secret of their membership and purpose, but there
are other lobbies whose operations and missions are more shadowy. There is,
for example, Citizens against Government Waste (CAGW), a nonprofit good-
government group that supported the process that awarded an Air Force tanker
contract to Northrop Grumman and its partner EADS over rival Boeing. While
CAGW claimed that it had no ties to Northrop Grumman, its “fact sheet” drew
directly from Northrop Grumman public affairs releases, and the group would
not indicate whether it had received financial contributions from Northrop
Grumman. Boeing, the losing contractor, also found supporting lobbies: four
conservative nonprofit groups held a news conference defending Boeing’s posi-
tion and afterward acknowledged that two of the groups had received funds from
Boeing.26
There are hundreds of other defense lobbies, both large and small, funded
with whose sole purpose is to work on behalf of particular defense industries.
Their power is always debatable, but in general, lobbies are very powerful in the
realm of American politics where individual voter participation is quite low by
the standards of industrial nations. That fact, coupled with low levels of politi-
cal interest, has allowed political lobbies of all political stripes to become quite
formidable in working toward the political outcomes that they favor.
The defense industry also potentially benefits from having its former execu-
tives take senior positions in the Defense Department. For example, the George
W. Bush administration’s Secretary of the Navy Donald Winter previously served
as a senior executive at Northrop Grumman. Deputy Secretary of Defense Gordon
England formerly served in high positions at General Dynamics and was president
of its aircraft division (which later merged with Lockheed Martin). Undersecretary
of Defense for Intelligence James R. Clapper Jr. was formerly the chief operating
officer for Detica DFI, a specialist business and technology consultancy. Michael
B. Donley, the director of administration and management, was formerly the se-
nior vice president at Hicks and Associates, a subsidiary of major defense con-
tractor Science Applications International Corporation (SAIC). James I. Finley,
deputy undersecretary of defense for acquisition and technology, held numerous

operational and management positions with General Electric, Singer, Lear Siegler,
United Technologies, and General Dynamics, where he was a corporate officer,
president of information systems, and chair of the Business Development Council.
Jack David Patterson is principal deputy undersecretary of defense, comptroller.
According to his official biography,
From 1999 to 2001, he was the Vice President and Site Manager for Steven
Myers and Associates’ support to Lockheed Martin Corporation’s winning
joint strike fighter competitive proposal preparation. Between 1993 and
1999, Mr. Patterson held a variety of responsible, executive positions at
McDonnell Douglas Corporation (later The Boeing Company) beginning as
the Senior Manager for Market Research and Analysis on the C-17 military air
cargo aircraft and later as Director, International Business Development. He
was responsible for developing and executing the business capture strategy
that won U. S. Government Defense Acquisition Board approval to procure
80 additional C-17s completing the first contract for 120 aircraft.27
When senior defense department officials have previous ties to the defense
industry, the specter of favoritism appears. It is difficult, though, to connect a
successful defense contract to such ties, since so many factors enter into the bar-
gaining. It is also the case that there are positive aspects to having senior defense
officials with defense industry experience, since such officials are much more
likely to understand the nuances and complexity of the industry. Moreover, sim-
ply having former defense industry ties does not ensure that the Defense Depart-
ment will support a person’s former industry. For example, several critics with
alleged close ties to Air Force senior leadership accused Deputy Secretary of De-
fense Gordon England, who served in senior positions at both Lockheed Martin
and General Dynamics, of curbing Air Force plans to buy an additional 200 F-22
fighter planes that his former companies produce.28
Former members of Congress can also help after retirement. The case of Vi-
bration & Sound Solutions Ltd. (VSSL), of Alexandria, Virginia, is instructive.
Its product is Project M, which involves magnetic levitation for a variety of
purposes—to make submarines quieter, to protect Navy SEALs in their boats, and
to shield Marines from roadside bombs. But none of the prospective service buy-
ers wanted the technology. However, VSSL’s former Armed Services Committee
aide Anthony R. Battista was an original incorporator of VSSL. Former represen-
tative William L. Dickinson (R-AL), once a senior member of the Armed Services
Committee, was an investor, so some members of Congress continued to support
VSSL with around $35 million dollars in earmarked funds.29
Members of Congress also hold investments in defense firms, which can cre-
ate the potential for either real or perceived conflicts of interest. According to a
2008 watchdog group report, members of Congress have more than $196 mil-
lion in personal investments in defense-related firms. According to the Center
for Responsive Politics, more Republicans than Democrats hold stock in defense
companies, but Democrats hold more value, at least $3.7 million in military-
related investments compared with Republican investments of $577,500.30 While
the center does not report wrongdoing or favoritism associated with these invest-
ments, the appearance of potential special treatment is clear.
How effective has defense industry power been? Profits are the results of many
things, and there is no direct evidence that profitability comes from a close re-
lationship between the defense industry and its political pillars. Still, 2007 was
a good year for the industry. Lockheed Martin reported a 34 percent increase in
quarterly earnings, to $778 million, or $1.82 a share, compared with $580 mil-
lion, or $1.34 a share, a year earlier, from sales of fighter aircraft and lower
pension costs. Northrop Grumman, the third-largest seller to the Pentagon, re-
ported a 7 percent increase in earnings over a similar period in 2006, largely from
the sale of warships and defense electronics.31 In April 2007, Boeing reported a
27 percent increase in profit over the first quarter of 2006, with revenues increas-
ing 8 percent, from $14.26 billion to $15.37 billion.32 General Dynamics’ profit
rose to $518 million, or $1.27 a share, from $420 million, or $1.03 a share, in
the previous year’s quarter, and revenue increased by 11 percent to $6.59 bil-
lion in the quarter from $5.93 billion in the 2006 period.33 Such margins also
lure other companies either to enter the defense market or to reestablish ties with
it after initially diversifying away from defense. For example, heavy equipment
maker Oshkosh moved away from defense into the civil market, but a flat profit
curve helped to entice it to bid on a mine-resistant military vehicle. As one anal-
ysis noted, “Winning a healthy portion of the Pentagon contract could tide over
investors unimpressed by its unchanged fiscal 2007 earnings-per-share outlook.
Last week it (Oshkosh) reported a slight rise in fiscal-second-quarter profit, to
$50.9 million. Though the acquisition of JLG is increasingly adding to results,
it signaled some possible weakening in other businesses. Its U.S. garbage- and
concrete-mixer-truck segment faces lower sales due to an emissions-regulation
change, and some investors worry defense margins may erode.”34
Defense contractors appear to have also grown more powerful in their abil-
ity to challenge the Defense Department’s contract award system. For example,
Lockheed Martin and Sikorsky Aircraft protested an Air Force decision to award
a search-and-rescue helicopter to Boeing and won—one case of many where con-
tractors successfully have the Pentagon review contract decisions. In 2006, de-
fense contractors filed 1,327 protests with the GAO. That number increased by
10 percent over 2002—and the number of firms taking their cases to court has
risen 50 percent. “The successful appeals have doubled, to nearly 30 percent,
according to the GAO, the highest in two decades.”35
The Shrinking Defense Industrial Base

In 1944, dozens of companies offered their services to build military aircraft,
fed by the pace of World War II. Boeing, Douglas, Northrop, Chance-Vought,
Consolidated, North American, Grumman, Bell, Fairchild, Martin, Brewster,

Ryan, McDonnell, Curtiss, and Republic were just some of the manufacturers
producing large military aircraft. In 2007, there are just two companies capable of
producing military aircraft, Boeing and Lockheed Martin, with Northrop Grum-
man retaining some facilities but not producing planes. The other companies have
left defense contracting, gone bankrupt, or merged with other companies to form
the superdefense contractors that dominate the market today.
Shipyards have also been in decline. The United States started its naval ship-
yard industry during the American Revolution, and American yards led the world
in numerous technologies during the ensuing years. Shipyard capacity grew
rapidly during World War II as new yards sprang up from marshes and swamps.
During World War II, California yards alone employed more than 282,000 work-
ers. The expansion fueled employment for minorities and women, who filled in
for the ranks of white males sent off to military service. The yards’ production
was staggering: the four shipyards in Richmond, California, operated by Henry J.
Kaiser produced 747 ships alone, completing one in less than four days, a record
that probably will never be broken. In 1943, the Portsmouth Naval Shipyard in
New Hampshire launched four ships in a single day. In tiny Portland, Maine, more
than 30,000 workers poured into town to work at the South Portland shipyards
to build Liberty transport ships.
The end of the war began a slow slide downward from the hundreds of ship-
yards opened or built up during World War II. In 1953 the United States had
30 major shipyards (14 on the East Coast, 5 on the Gulf Coast, 7 on the Pacific
Coast, and 4 on the Great Lakes). By 2007 there were only nine yards left (four
on the East Coast, three on the Gulf Coast, and one each on the Pacific Coast and
the Great Lakes). The situation is viewed as so critical on Capitol Hill that the
language for the briefing from the Committee on Appropriations stated that the
$15.30 billion bill for shipbuilding ($1.65 billion over the administration’s re-
quest) was intended to “insure the stability of our country’s shipbuilding industry
and maintain our superiority at sea.”36
The shipyard situation is so critical that the Navy is splitting some of its work
between shipyards to ensure that they will survive. The DDG 1000 Zumwalt-class
destroyers will be built at both the General Dynamics shipyard in Bath, Maine,
and at the Northrop Grumman shipyard in Pascagoula, Mississippi, with both
contractors sharing technology. Said the Navy’s DDG 1000 program manager,
“Both shipyards realize that their viability in the future is at stake with this pro-
gram. They know that if they don’t perform and this program is derailed in any
way, in terms of either slowed down or cancelled, they have nothing.”37 The
DDG 1000 class brought in another defense contractor, Raytheon, which won a
contract to build the destroyer’s electronics and systems integration. Raytheon
is using that project to improve its ability to integrate systems produced by
both Raytheon and the other defense contractors, which could elevate Raytheon
to the status of Lockheed Martin and Northrop Grumman as a major prime
contractor.38
The Defense Department and the Defense Industrial Base

The Department of Defense clearly wants to maintain a responsive and robust
industrial base to sustain its programs, but the dilemma lies in how to preserve
and advance what is essentially a private industry (with the exception of the few
remaining government arsenals). The very tradition of private enterprise dictates
that the market, rather than the state, be the primary determiner of corporate
activity. Yet the defense market is so different from the “normal” commercial
market that government involvement is a necessity. As Weidenbaum has noted,
“Because the market is so completely subject to the changing needs of this one
customer (DoD), relationships between buyer and seller differ fundamentally
from those in civilian sectors of the economy. By its selection of contractors, the
government controls who enters into and who leave this market. It also deter-
mines the potential growth of these firms and is in a position to impose its ways
of doing business with them.”39 Thus, the Defense Department has the power to
do things normally done by the marketplace, to reward firms that perform well
and to punish firms that fail their performance standards. The problem is that,
in many ways, the defense market is creating artificial substitutions for market
forces, which cannot often be sustained in an environment of political power and
military needs. For example, in a normal market, the government could not offer
subsidies to private firms, as such a reward would distort the normal market dic-
tate that firms that fail should be allowed to leave the marketplace.40 But in the
defense environment, firms that fail are also unique firms that are sometimes the
sole provider of a system or service, and when they fail or perform poorly, they
are bailed out with a new defense contract or renegotiation of an existing contract.
Firms that lose a competitive bid in the private market must absorb that loss and
presumably be encouraged to improve their practices so that they maximize their
chances in the next bidding contest. But in the defense market, firms that lose a
bid to a rival are often given a share of the winner’s prize. Thus, when Northrop
Grumman’s F-23 prototype fighter lost the contract for the Advanced Tactical
Fighter to Lockheed Martin’s F-22, Northrop Grumman joined with Lockheed
Martin to produce parts for the F-22.
More Government Planning?

The difficulties encountered by the public-private interface between industry
and the Defense Department raise questions about exactly how much planning
the government should do as it tries to both enjoy the benefits of free market
assumptions (however imperfect) and accomplish government tasks. Republican
administrations have been particularly loath to engage in too much government
planning, but sometimes a combination of poor performance and poor pub-
licity stemming from the defense industry’s bad news forces even conservative
administrations to try central planning. So in 2002, George W. Bush’s Defense
Department created the Task Force on Priority Allocation of Industrial Resources
(PAIR) to help centralize and coordinate defense industrial policy. The duties of
PAIR include the blending of acquisition plans with consumers (the combatant
commanders, the alliance requirements [NATO in particular]), the JROC, and
the Joint Material Priorities and Allocation Board (JMPAB).41 Whether this task
force will actually accomplish its goals or whether it is a largely symbolic board to
give the appearance of change remain to be seen, but the nexus between industry
and the military is complex at best.
Private industry must fund its own research and development, making careful
decisions about how to spend scarce resources and thus avoiding R&D on
risky low-payoff projects. However, in the defense market, the government
often provides the R&D assets, including both funding and research work in
government-owned research facilities, which then benefits private contractors at
the government’s expense. The Defense Department may also intervene in the
defense industrial base to prevent or limit contractors’ ability to leave the defense
market or to shrink their share of defense work in favor of commercial contracting
by structuring contracts with incentives for long-term production and follow-on
contracts. The DoD may also set emergency priorities for national emergencies,
because Title I of the Defense Production Act provides for presidential authority
to require preferential performance on contracts and orders to meet national
defense and emergency requirements. Given that labor disputes and other
stoppages slowed defense production during World War II and the Korean War
(when President Truman tried unsuccessfully to take over the steel mills in 1952
when the union went on strike), it is understandable that the president might
want the power to manage contract delivery. However, presidential powers are
limited, and it is unclear exactly how much intervention the chief executive might
actually have over the defense industry. The secretary of defense can rank certain
contracts for priority delivery—contracts designated “DX” have priority over
contracts designated “DO”—and, in November 2007, the department designated
mine-resistant vehicles (to combat improvised explosives in the wars in Iraq and
Afghanistan), elements of the ballistic missile program, an upgrade of the Trident
submarine-launched ballistic missile program, and presidential helicopter mod-
ernization as DX programs, though the national security urgency of a new pres-
idential helicopter was not explained. Moreover, while the urgency of expediting
the production and delivery of mine-resistant combat vehicles for troops in com-
bat is obvious, the emphasis on missile defense may reflect more the particular
priorities of the George W. Bush administration than it does national priorities.42
The Defense Department has a particular interest in defense corporation merg-
ers, since such mergers may enhance productive capability by combining assets
but may also reduce competition when rivals combine. Many of the large aircraft
corporations, for example, have merged in the past decades, reducing the number
of prime aircraft contractors from 16 in World War II to just 2 in 2008. But while
the Defense Department takes a special interest in mergers, the antitrust aspect of
such mergers remains the primary responsibility of the Department of Justice and
the Federal Trade Commission. Should the Defense Department express a high
interest in a pending merger, the deputy undersecretary of defense for industrial
policy (DUSD[IP]) and the deputy general counsel for acquisition and logistics
(DGC[A&L]) co-chair a joint consultative committee to assess the significance of
the merger for departmental interests. The Defense Department does not have the
authority to intervene directly should it oppose a particular merger; instead it for-
wards the views of the joint consultative committee to the Department of Justice.
The Department of Justice has, among a multitude of responsibilities, the
power to enforce federal laws regulating competition, which is the arena where
most mergers fall. Thus, in 1998 the Justice Department opposed the merger of
Lockheed Martin with Northrop Grumman, noting that both build aircraft and
other related military systems. Said Joel I. Klein, assistant attorney general in
charge of the department’s Antitrust Division, “This merger, in an industry that is
already highly concentrated, would completely eliminate competition and reduce
innovation in many areas that are vitally important to our national security, ulti-
mately diminishing the quality of the products supplied to the U.S. military.”43 In
a similar decision, the Clinton-era Justice Department required that Texas Instru-
ments sell its military radar branch prior to a merger with Raytheon, which also
produced military radar.44
International mergers are yet another matter, unlike domestic mergers, and are
more tightly regulated by the Defense Department under the Exon-Florio Amend-
ment to the Defense Production Act, which gives the president the direct author-
ity to block the merger of an American defense firm with a non-U.S. firm, should
the Defense Department (or another U.S. agency) determine that such an action
would present a threat to national security. In these cases, the possible threats
include the loss of classified or proprietary data to a non-U.S. entity, or a decision
to suspend or reduce defense production of critical defense components. Such
firms may also provide the products of their mergers to international buyers that
the United States forbids sales to. The Defense Department role comes through
its membership in the Committee on Foreign Investment in the United States
(CFIUS), where it shares membership with the Departments of State, Commerce,
Homeland Security, and Justice, along with other selected federal agencies.
The defense industrial base is vast and complex, often subject to negative at-
tacks for its alleged ties to warmongering and high profits. Like oil company exec-
utives, defense firm leaders often find themselves in front of hostile congressional
committees. That is partly because, like other elements of the defense acquisition
system, political considerations help to fuel the defense industrial base, which are
the topic of the next chapter.
Notes
1. Aaron L. Friedberg, In the Shadow of the Garrison State: America’s Anti-Statism and
Its Cold War Strategy. Princeton, NJ: Princeton University Press, 2000, chap. 7, and esp.
247–249.
2. Kurt Hackemer, The U.S. Navy and the Origins of the Military-Industrial Complex,
1847–1883. Annapolis, MD: Naval Institute Press, 2001, 55–56.
3. Thomas L. McNaugher, New Weapons: Old Politics: America’s Procurement Muddle.

Washington, DC: Brookings Institution, 1989, 63.
4. “Air Force Is Pressed to Test Air Refueling—For Hire,” The Hill, June 6, 2007.
5. Northrop learned that lesson when it responded to encouragement from the Carter
administration for an inexpensive fighter that would also be attractive to international buy-
ers. It developed the F-20 Tigershark, but when the U.S. Air Force refused to buy the
plane, no international customers stepped forward to replace the Air Force, particularly
when they realized that without Air Force participation, they would have to assume both
the risk and the cost of maintenance.
6. Mike Petters, “American Shipbuilding: An Industry in Crisis,” U.S. Naval Institute
Proceedings, February 2006, 16.
7. Murray Weidenbaum, Small Wars, Big Defense: Paying for the Military after the Cold
War. New York: Oxford University Press, 1992, 135. See also Jacques S. Gansler, The
Defense Industry. Cambridge, MA: MIT Press, 1980.
8. National Defense Authorization Act for Fiscal Year 2004. Report to Accompany S.1050,
Committee on Armed Services, U.S. Senate, May 13, 2003. Washington, DC: Government
9. Robert F. Dorr, “Fighting for Survival,” Armed Forces Journal, June 2005, 27.
10. “Navy of Tomorrow, Mired in Yesterday’s Politics,” New York Times, April 19, 2005.
11. Sandia National Labs, “GOCO,” http://www.sandia.gov/about/history/goco/index.
html.
12. “Getting a Fighting Chance for U.S. Grants,” Los Angeles Times, January 3, 2008.
13. In some cases there may not be much oversight on the nature of the company,
which seems to have occurred with NewEra Manufacturing, a Nevada company that made
wheel and brake components for military aircraft. NewEra was apparently a moneymaking
firm for the Fundamentalist Church of Jesus Christ of Latter Day Saints (FLDS), and its
president, John. C. Wayman, was an FLDS leader and a close associate of Warren Jeffs, the
sect’s “prophet,” who was convicted of multiple accounts of rape in 2007. “Polygamist Sect
Linked to U.S. Funds,” Atlanta Journal-Constitution, April 13, 2008.
14. “Defense Firm Forged Close Ties to Congress to Get No-Bid Contracts,” Wall Street
Journal, April 14, 2008.
15. Rachel Weber, Swords into Dow Shares: Governing the Decline of the Military Industrial
Complex. Boulder, CO: Westview Press, 2001, 55.
16. “Ammunition Industry Preparing for Ebb in Demand,” Tampa Tribune, July 24,
2007.
17. “With Cargo-Plane Bid, Raytheon Blazes a New Trail,” Arizona Daily Star, May 16,
2007.
18. James R. Kurth, “Why We Buy the Weapons We Do,” Foreign Policy 11 (Summer
1973), 40–41.
19. Weber, Swords into Dow Shares, 72–78.
20. Roger W. Lotchin, Fortress California, 1910–1961: From Warfare to Welfare. New
York: Oxford University Press, 1992.
21. Ann Markusen, Scott Campbell, Peter Hall, and Sabina Deitrick, The Rise of the
Gunbelt: The Military Remapping of Industrial America. New York: Oxford University Press,
1991.
22. Ibid., 9.
23. “Winter Seeks More Control over Industry,” Navy Times, June 9, 2007.
24. “Contractors in Lead Go on Defensive,” Wall Street Journal, July 24, 2007.
25. “ISSUE 1: Maintaining Integrity and Responsiveness of the Acquisition Process,”

NDIA’s Top Issues for 2007. 3, http://www.ndia.org/Content/NavigationMenu/Advocacy/
Policy/PDFs28/FINAL 2007 Top Issues.pdf.
26. “When Public Advocates Line Up for Corporations,” Washington Post, April 3,
2008.
27. Department of Defense, “Jack Dave Patterson,” http://www.defenselink.mil/bios/
biographydetail.aspx?biographyid=86.
28. “Sitting at Budget Controls, Official Throttles Program,” Fort Worth Star-Telegram,
January 12, 2008.
29. “The Project That Wouldn’t Die,” Washington Post, June 19, 2006.
30. “Lawmakers Heavily Invested in Defense Companies,” San Diego Union-Tribune,
April 4, 2008.
31. “2 Pentagon Suppliers Report Strong Sales and Profit,” New York Times, July 25,
2007.
32. “Boeing Profit Increases by 27 Percent,” Philadelphia Inquirer, April 26, 2007. The
profit figures also include considerable commercial sales.
33. “General Dynamics Beats Estimates,” New York Times, July 26, 2007.
34. “Oshkosh’s Best Offense Is Defense,” Wall Street Journal, May 7, 2007.
35. “As Military Contracts Grow, so Do Protests,” Washington Post, February 27, 2007.
36. “Summary: 2008 Defense Appropriations, Full Committee Markup,” Committee
on Appropriations, House of Representatives, July 25, 2007, 2.
37. “Maine’s Bath Iron Works Sails into an Uncertain Future,” Boston Globe, July 29,
2007. In July 2008, the Navy stunned both contractors by canceling the program after
funding just 2 of the planned 32 ships, citing the program’s rapidly rising cost as one
factor in the decision.
38. “Warship 2.0,” Boston Globe, July 29, 2007.
39. Weidenbaum, Small Wars, Big Defense, 132.
40. The defense market is hardly the only market to receive government subsidies,
as the farm sector enjoys billions of annual subsidies, to list but one example. The effect
of subsidies can also distort agricultural markets, though, as U.S. farm production has
swung from surplus to shortage, as evidenced most recently by the food price escalations of
2008.
41. Undersecretary of Defense, “Priority Allocation of Industrial Resources,” Febru-
ary 4, 2004, http://www.acq.osd.mil/ip/docs/pair tf memo signed 04feb02.pdf.
42. The Bush administration has placed considerable emphasis on national missile de-
fense, a program largely abandoned by the Clinton administration. The declared justifi-
cation lies in the potential for North Korea or Iran to develop a ballistic missile capable
of hitting the United States, but such programs are most likely decades away, if ever.
However, the Bush administration, fearing that missile defense programs may be aban-
doned by a successor Democratic administration, may well try to make such progress on a
nascent ballistic missile program that it will be difficult for a subsequent administration to
cancel it.
43. “Justice Department Goes to Court to Block Lockheed Martin’s Purchase of
Northrop Grumman,” press release, March 23, 1998. Washington, DC: Department of
Justice, 98–131.
44. “Justice Department Requires Raytheon and Texas Instruments to Divest Key Unit
before Approval of Their $2.9 Billion Merger,” press release, July 2, 1997. Washington,
DC: Department of Justice, 97–277.
Further Reading
Defense Infrastructure: Actions Needed to Guide DOD’s Efforts to Identify, Prioritize, and As-
sess Its Critical Infrastructure: Report to Congressional Requesters. Washington, DC: GAO,
2007.
Gansler, Jacques. The Defense Industry. Cambridge, MA: Cambridge University Press, 1980.
Kambrod, Matthew R. Lobbying for Defense: An Insider’s View. Annapolis, MD: Naval Insti-
tute Press, 2007.
Markusen, Ann, Scott Campbell, Peter Hall, and Sabina Deitrick. The Rise of the Gunbelt:
The Military Remapping of Industrial America. New York: Oxford University Press, 1991.
Weidenbaum, Murray. Small Wars, Big Defense: Paying for the Military after the Cold War.
New York: Oxford University Press, 1992.
CHAPTER 4
The Politics of American

Weapons Acquisition
For fiscal year 2007, the Defense Department budgeted more than $147 billion
for weapons procurement, and the estimated life-cycle cost of the five largest
Pentagon weapons projects is more than half a trillion dollars. However, despite
such sums, little research exists to help explain the driving forces behind such
numbers. This chapter considers and analyzes the political factors that shape
decisions in the defense acquisition system. But what is meant by politics?
Politics, basically understood, is about the actors and processes that influence
the distribution of public resources, usually by governments. Political decision
making involves making choices across public priorities, normally in a nonmarket
environment. Political decision making is generally governed by rules, consisting
of both formal laws approved in a legal process and informal rules achieved by
informal consensus. Decisions in a political environment produce outcomes fa-
vored by particular recipients, who provide information and influence to attempt
to direct more favorable outcomes toward them. In essence, the system involves
exchanges of goods, as outcome recipients pass on influence and resources (often
political donations of money, time, and other goods valued by those who allocate
public resources), and expect to receive public goods (e.g., budget allocations,
public contracts, access to the corridors of power). The process that regulates
these exchanges is simply a particular system, in this case, the defense acquisition
system. While the defense acquisition system is larger than its political compo-
nent, it cannot be thoroughly understood without some understanding of that
political component.
The defense acquisition system is a part of a larger force-planning system, and
in an ideal world, acquisition comes only after the planning and programming
processes determine long-term global interests for the United States, potential
threats to those interests, and the appropriate defense programs to defend against
estimated threats. The world is not ideal, though, and multiple political actors
and processes shape the defense acquisition system. This chapter examines the
motives and actions of those actors and the processes they create and sustain to
obtain their goals. It analyzes the system from two different approaches, one that
emphasizes the link between weapons choices and national requirements set by
interests and threats, and one that views weapons decisions as influenced more
by domestic internal political preferences than by national requirements.
What Drives the Defense Acquisition System?

Many actors and processes shape decisions on force structure, but a key ques-
tion is how much impact each actor has in process outcomes. Several propositions
may help answer such a question:
1. Vague abstractions about both future threats and values are less influential in shaping
outcomes than are direct and clearly articulated interests.
2. The ability to generate tangible short-term benefits from defense acquisition decisions
is more influential than the generation of relatively intangible long-term benefits.
3. Domestic politics is more influential than international politics in influencing outcomes,
although international politics (particularly but not exclusively the politics of arms
sales) remains important to the system.
Competing Assumptions about the Defense Acquisition System

A common assumption about weapons choices is that they respond to a set of
criteria responsive to national interests to defend against threats to such interests.
As noted in Chapter 2, the process usually starts with threat-based planning that
links military threats to the defense of national interests. Such planning assesses
vulnerabilities to national interests from both state and nonstate actors, and de-
velops plans and programs to respond to such dangers. Thus, during the Cold
War era, much of the U.S. Department of Defense planning process began with
threat assessments about the former Soviet Union, as illustrated by this 1961 ex-
change between Congressman Frank Becker (R-NY) and Chairman of the Joint
Chiefs General Lyman Lemnitzer:
Gen. Lemnitzer: Today we have great power. Our problem is to be sure that we
maintain that position vis-à-vis the Soviet Union in the future.
Mr. Becker: And increase it constantly? And increase it better and constantly as we
go along?
Gen. Lemnitzer: That is right.
Mr. Becker: And increase it faster?
Gen. Lemnitzer: That is right, within reason.1
Defense Secretary Caspar Weinberger made a similar argument in 1982, open-

ing his testimony on the proposed fiscal 1983 defense budget: “The Soviet Union
has, in the extent of their growing threat, the power to inflict tens of millions of
The Politics of American Weapons Acquisition 89
casualties on our population. . . . Only the Soviet Union has massive and modern
conventional and nuclear forces deployed directly confronting our friends and
allies in Europe and Asia. . . . Only the Soviet Union has the forces and the geo-
graphic proximity to threaten the free world source of oil. . . . Measured by that
threat, Mr. Chairman, our proposed defense budget is fully justified.”2
After the Cold War, Defense Department planning took a new tack, shifting
from threat-based to capabilities-based, as described in the 2001 Quadrennial
Defense Review:
A central objective of the review was to shift the basis of defense planning
from a “threat-based” model that has dominated thinking in the past to a
“capabilities-based” model for the future. This capabilities-based model fo-
cuses more on how an adversary might fight rather than specifically who
the adversary might be or where a war might occur. It recognizes that it is
not enough to plan for large conventional wars in distant theaters. Instead,
the United States must identify the capabilities required to deter and defeat
adversaries who will rely on surprise, deception, and asymmetric warfare to
achieve their objectives.3
The shift was more semantic than real, though, because it still assumed a plan-
ning process driven by a threat, but it acknowledged that predicting future adver-
saries or their expected behavior would be more difficult than it was during the
Cold War. In short, threat-based planning lived on even if the nature of the peril
was more uncertain. The 2006 QDR reinforced that image:
The Department of Defense conducted the 2006 [QDR] in the fourth year
of a long war, a war that is irregular in its nature. The enemies in this war
are not traditional conventional military forces but rather dispersed, global
terrorist networks that exploit Islam to advance radical political aims. These
enemies have the avowed aim of acquiring and using nuclear and biological
weapons to murder hundreds of thousands of Americans and others around
the world. They use terror, propaganda and indiscriminate violence in an
attempt to subjugate the Muslim world under a radical theocratic tyranny
while seeking to perpetuate conflict with the United States and its allies and
partners.4
The QDR did not emphasize threats from traditional states, although a sepa-
rate Defense Department report, Military Power of the People’s Republic of China,
highlighted Chinese military modernization and noted: “At the end of the Cold
War, China entered a period unique in its modern history in that it does not face
a direct threat from another nation. Yet, it continues to invest heavily in its mil-
itary, particularly in programs designed to improve power projection. The pace
and scope of China’s military build-up already place regional military balances
at risk. Current trends in China’s military modernization could provide China
with a force capable of prosecuting a range of military operations in Asia—well
beyond Taiwan—potentially posing a credible threat to modern militaries oper-

ating in the region.”5
The report also echoed earlier concerns about the former Soviet Union and its
defense expenditures, claiming that China may spend between $50 billion and
$100 billion on its military, though other analysts argued that the figure was
closer to $50 billion.6
Some threat assessments are sweepingly broad in their span. Consider the lan-
guage of the Air Force’s 2008 white paper that lays out Air Force perceptions of
both threats and requirements for two decades:
The following are salient features of this increasingly complex, dynamic,

lethal, and uncertain environment:
r Violent extremism and ethnic strife—a global, generational, ideological
struggle
r Proliferation of weapons of mass destruction and empowering technologies
r Rising peer competitors with voracious appetites for resources and influ-
ence
r Predatory and unpredictable regional actors
r Increasing lethality and risk of intrusion by terrorist and criminal organi-
zations
r Systemic instability in key regions (political, economic, social, ideological)
r Unprecedented velocity of technological change and military adaptation
r Availability of advanced weapons in a burgeoning global marketplace
r Exponential growth in volume, exchange and access to information
r Surging globalization, interconnectivity and competition for scarce re-
sources
r Dislocating climate, environmental and demographic trends7
With such a threat range, the Air Force (like other services that have similar
white papers) attempts to justify a plethora of new weapons programs, ranging
from fighter-attack aircraft to tankers, bombers, airlift planes, reconnaissance sys-
tems, and cyber war systems.
Theoretically, choices about military force levels and weapons types stem from
strategic assessments guided by a combination of national interests and inter-
national threats to such interests. National leadership shapes these decisions by
factoring in the effect of competing priorities and ultimately choosing how much
can be invested in military priorities in competition with other priorities. This is
termed the national interest paradigm, which Figure 4.1 illustrates.
The conceptualization of the weapons acquisition process in Figure 4.1 is sim-
plified and incomplete, though. Predicting the future and its possible threats is
speculative, and the results cannot provide anything more than very general guid-
ance in a process that requires high levels of precision. Weapons designers, pro-
ducers, and operators require specific information to generate specific capabilities,
and so other input factors into the acquisition process. That input includes the
role and perspective of the operating military service, the interests and capabilities
National
interests
External President/
threats to secretary of
national defense
interests
Force
Other recommendations
national
priorities
Congressional appropriations
Appropriated force decisions
Figure 4.1. National Interest Force Development System.
of the producers (and there may be hundreds), and the priorities and values of
Congress along with those of the defense industry. Those factors become even
more important since, even during the Cold War, threat assessments played
only a partial role for weapons choices in both the United States and the So-
viet Union. There is some evidence suggesting that each side based its armament
decisions more on internal political factors than on strategic interaction.8 More-
over, a broader view of American history indicates that the United States rarely
built up its military prior to a war, suggesting that even the presence of poten-
tial enemies did not stimulate an increase in American military capability (e.g.,
as before World War II), but the level of force after a war rarely returned to pre-
war levels.9 Therefore, other factors may be as significant as threat estimates in
creating and sustaining major weapons programs, and consideration of how the
defense acquisition system came about during and after the Cold War may pro-
vide evidence for such domestic forces. Systems evolve in part to allow significant
participants in the process to engineer outcomes through political processes that
favor their interests, and a consideration of how defense acquisition systems allow
such access will help determine how those participants use it for their benefits.
Domestic Influences on the Defense Acquisition System

The very term domestic influences sometimes smacks of selfish political interests
trumping the national interest. However, domestic interests understood broadly
are simply efforts by political actors to build and influence the defense acquisition
system so that it becomes more responsive to their interests. Political actors may
attempt to restructure the defense acquisition system to increase the efficiency
of the system itself, or they may involve building access to the defense weapons
process to allow domestic political actors to use it to further their own interests.
National interests may still motivate them, but those interests become filtered
through organizational prisms (e.g., the Cold War refrain, “The national inter-
est is strategic deterrence, which the Air Force can do better than can the other
services”).
While threat assessment and other external conditions play an important role
in arms acquisition decisions, internal factors also affect such choices. Given
the complexity of the factors, analysts developed paradigms to categorize and
examine them. Those paradigms include the bureaucratic politics factor, the
civil-military relations factor, the congressional politics factor, and the military-
industrial complex factor.
The Bureaucratic Politics Factor

The bureaucratic politics explanation argues that bureaucracies foster types of
behavior that reinforce the goals of their members, who hold a common inter-
est in the sustainability and growth of their particular organization. Bureaucratic
goals are easy to understand for their members, who believe that they are a part
of the collective interest that bureaucracies both protect and advance, which in-
clude tangibles such as pay and job security, and intangibles such as organization
pride.10 In contrast, vague concepts like the national interest are difficult to un-
derstand, and even more difficult to tie directly to resource decisions. How many
dollars, for example, does the country need to protect freedom or democracy,
in contrast to how many dollars a particular organization needs to outspend its
rival organization or retain its organizational purpose in advancing the interests
of its members? Of course, bureaucratic interests may not be inimical to national
interests, and those holding bureaucratic perspectives may well also believe in
supporting national interests.
To sustain regularity and organizational equilibrium, bureaucracies develop
predictable ways of doing things, sometimes identified as standard operating pro-
cedures, or SOPs.11 The SOPs tell an organization not only what it should be
doing but also, perhaps just as important, what it should not be doing. Organiza-
tions protect what they see as core missions, and avoid taking noncore missions
by establishing a set of perimeters around their missions so that no other organi-
zation can poach them and no noncore missions creep through to compete with
established organizational responsibilities. This provides a large and complex or-
ganization with a relatively simple set of rules for all to follow, establishing the
kind of regularity that is particularly essential to large organizations.
Military services, as large organizations, develop service cultures based on
shared lessons and experiences. Such lessons are captured in service doctrines—
the basic ideas about what the service does and how it does it. For the Navy, for
example, “Doctrine is the heart of naval warfare. It governs our actions beyond
the ordered execution of military operations. . . . Doctrine provides the basis for
mutual understanding and trust within our naval Services as well as with other
Services and our national leaders. Composed of ‘shared convictions’ that guide
naval forces as a whole, it fuses our Service-unique tactics, techniques, proce-
dures, and warfighting philosophies.”12 This document is full of examples drawn
from the best of naval warfare (usually from World War II), with examples from
the Battle of the Atlantic on attrition warfare and the Battle of Midway for econ-
omy of force.
Within this core, organizations tend to give some missions higher priority.
Perhaps the organization came into prominence through particular missions that
gained it fame and resources. Thus, a multimission organization will emphasize
those “core” missions while minimizing mundane missions. For example, the Air
Force favored strategic bombers over transport aircraft, the Navy preferred car-
riers to auxiliary ships, and both services were reluctant to embrace new mis-
sions that might draw resources from traditional high-value missions. Therefore,
the Air Force eschewed space and the Navy riverine patrol and sealift, for ex-
ample, and it required either outside intervention or the role of a particularly
charismatic leader to get those services to embrace such missions.13 Likewise,
the Army refused to embrace special operations after the Kennedy administration
first proposed it. Krepinevich observed that “the notion that a group of novice
civilians (Kennedy, McNamara, and the Whiz Kids) should require the Army to
de-emphasize its strong suits (heavy units, massed firepower, high technology) in
favor of stripped-down light infantry units was bound to encounter strong resis-
tance from the Army leadership.”14
A corollary position in the bureaucratic politics literature suggests that when
resources become scarcer, bureaucratic competition for weapons and their asso-
ciated roles and missions intensifies. The competition for the strategic nuclear
mission in the late 1940s and early 1950s is illustrative. The Air Force brought
the proposed B-36 bomber to the funding table, while the Navy advanced its pro-
jected supercarrier, which would have been capable of launching nuclear-armed
aircraft from sea.15 While the Soviet threat during these days was perceived as
high, defense budgets were pared back in both the Truman and Eisenhower
administrations, so service competition intensified. The nuclear missions were
viewed by the services as more “cost-effective” because they required far fewer
personnel than did conventional forces, and consequently competition over these
missions was especially keen.16
Prior to 1947, the War and Navy departments were separate, and interser-
vice coordination was unusual prior to World War II. Each service had its own
force acquisition bureaucracy and its own functional committees in Congress that
generally trusted the services to acquire weapons that the service senior leader-
ship preferred. With the tight budgets of the 1930s, for example, there was keen
competition for resources between the services. When the Army Air Corps came
under criticism for its high cost, the chief of the service, General James Fechet,
suggested that the Navy’s aircraft program should be cut instead, thus freeing up
more money for Air Corps aircraft.17 However, World War II highlighted the need
for better service cooperation on both planning and execution. After protracted
and often bitter congressional hearings, Congress drafted and President Truman
signed legislation creating the new unified Department of Defense in 1947.18 The
resulting unification also required Congress to restructure its defense committee
structure, with the Armed Services Committees in both chambers of Congress
overseeing the functions of the services, but also granted it wide budgetary dis-
cretion until the 1960s. The services also kept their own acquisition and force-
planning capabilities.
Unification did not remove service identity or shift primary missions, so the
Army retained functional control over land operations, the Navy over sea power,
and the new Air Force gained partial control over air combat capability. The Air
Force did have to share that mission with the other services, as the Navy retained
both carrier-based aviation and antisubmarine aircraft, and the Army kept both
small fixed-wing aircraft and helicopters. The Air Force emphasized long-range
strategic bombardment capability as a core mission while retaining both fighter
and cargo capability. That core mission drew considerable support from both the
president and Congress, since it had the dual advantages of being both effective
and inexpensive. The Air Force and its defenders argued that strategic bombard-
ment would spare the United States large conventional forces, since the threat of
nuclear annihilation alone would deter the Soviet Union from engaging in global
adventurism at the expense of the United States. Whether such a promise was
credible was one matter, but for the bureaucratic interests of the other services,
the Air Force efforts to gain a significant portion of the defense budget spelled
potential doom. From the perspective of President Truman and Secretary of State
George Marshall:
The services appeared to be at war with each other and in mutiny against
their Secretary. As one of them later put it, the Air Force (which was the only
service that could deliver the A-bomb at that time) seemed intent on parlaying
its monopoly on the nation’s new and obviously important weapon into an
occasion for reducing the Army and the Navy to the status of police forces.
On their part, the Army and the Navy seemed to be reacting to the advent
of the A-bomb with all the attributes of labor unions intent on preserving
their previously existing job, pay, and promotion opportunities in the face of
a major technological change.19
To compete with the Air Force, the Army and Navy sought their own nuclear
missions. The Army, traditionally the defender of the nation’s coast and airspace
through its coastal and air defense artillery groups, tipped its air defense missiles
with nuclear warheads. However, the Air Force also sought a similar mission with
its Wizard project, and thus, as Schwartz explains, “The period between 1955 and
1958 saw an intense competition between the air force’s Wizard project and the
army’s Nike-Zeus program. The battle was over which service would be granted
the BMD (ballistic missile defense) mission—the air force, which had already es-
tablished service dominance in the strategic nuclear mission . . . or the army which
lacked a major strategic mission but which had been given the air defense mission
of defending specific targets. . . . The interservice battle over BMD became part of
a much broader competition for missions and defense resources.”20
Competition between the Army and Air Force also occurred at the intermediate
ballistic missile (IRBM) level, as both services developed their own IRBM systems,
which were almost identical, though it was difficult to cancel either one, since
both systems had considerable industrial and congressional support.21
The Army and the Navy continued to favor their own respective production
systems based on arsenals and shipyards. The Air Force, however, preferred to
rely on private contractors to develop and produce its weapons. One officer ar-
gued that “a delicate but well-defined and effective relationship can be set up
between industry and the military which will provide both the defense of the na-
tion and continued industrial good health.”22 When the Army wanted to improve
its armed helicopters, it turned to its own development centers at Alabama’s Fort
Rucker and at Fort Benning in Georgia with little contractor support.23
Bureaucratic politics models also suggest that bureaucracies develop images of
what their organization should (and thus should not do) and protect those im-
ages. Thus, when ballistic missiles became technically possible in the late 1940s
and early 1950s, U.S. Air Force leadership resisted the idea in defense of manned
bombers. Edmund Beard, in his study of the ICBM development, claimed that
“the history of the ICBM program in the United States from 1947 until late 1953
indicates that cultural resistance within the Air Force and elsewhere to the idea
of long-range ballistic rockets was at least as important as the state of the relevant
technology in dictating the choices made. The early postwar decisions to subor-
dinate missiles to manned aircraft (most importantly jets) and ballistic missiles to
air-breathing versions were justified at the time.”24 Partially to fend off the threat
of ballistic missiles to the manned bomber force, the Air Force had proposed the
B-70 bomber as a replacement for the B-52 and defended it in the face of staunch
opposition from the secretary of defense. Noted two analysts who worked for De-
fense Secretary Robert McNamara, “The Air Force studies sent to the Secretary
of Defense in support of the B-70/RS-70 were filled with biased assumptions and
exaggerated claims.”25 Sapolsky finds a similar attitude in the U.S. Navy toward
the idea of a fleet ballistic missile submarine. Senior naval officers understood that
the costs of such a program would be huge, and feared that they could come at the
expense of programs that are more traditional: “There were other things to do
militarily besides preparing for the war that seemed least likely to occur. Con-
ventional warfare forces, for example, were being neglected, and the Navy could
build its future by concentrating on these. Should a sea-based ballistic missile be
needed, they preferred that its costs be charged against the Strategic Air Com-
mand appropriations.”26 The U.S. Army also maintained a rocket program at a
high cost, which brought Neufeld to conclude that, “all too often, the entrenched
interests of the services . . . seemed more important to their commanders than the
national interest. The Army stubbornly held onto its prestigious ballistic missile
and space assets even at the cost of its core mission.”27
The advent of the cruise missile also posed challenges for service preferences
for traditional missions. As Art and Ockenden observed, “Without exception,
the military services did not want cruise missiles if they threatened their re-
spective dominant missions or ate into their scarce funds, both were in general
the case. The long-range air-launched cruise missile (ALCM) was rammed down
the throat of the Air Force. The Army refused to accept development for the
ground-launched cruise missile (GLCM) . . . The Navy—specifically, the carrier
admirals—did not want the Tomahawk antiship missile (TASM) because it repre-
sented a clear and present danger to the mission of the carrier-based aircraft.”28
Desmond Ball’s analysis of the strategic missile programs of the Kennedy ad-
ministration provides yet another example of the power of bureaucratic politics.
Ball found that, while the estimates and intentions of the Soviet Union were
vague and divisive, service nuclear missile programs carried precise numbers
(e.g., 1,000 recommended land-based long-range missiles), and after his study
of the origins of these programs, Ball concluded, “It is clear that the strategic
ballistic-missile levels of the 1960s were in excess of those required by the United
States at that time, and that this misjudgment is not explicable in terms of inad-
equate intelligence or poor analytic techniques of force posture development. It
was determined, rather, by other, more political factors.”29
Those factors included service-generated missile numbers competing with
OSD missile numbers, with the final figure a compromise between these differ-
ences. For example, while a program analysis and evaluation (PA&E) civilian
study recommended 32 missile tubes on fleet ballistic missile submarines, se-
nior submarine officers concluded that the recommended number seemed to be
just too much. The compromise between PA&E and the submariners resulted in
Polaris-equipped missile submarines with 16 missile tubes, a number certainly
not derived from careful threat response or systems analysis.30
Bureaucratic politics also defines what an organization seeks to control—the
acquisition of its own equipment. That way it not only ensures the preservation
of its image and identity but also allows organizations to advance systems that
might trump rival organizations. Thus, when Robert McNamara tried to consol-
idate this authority within the civilian-dominated OSD, the services predictably
resisted. McNamara was able to force some consolidation of aviation programs
(demanding that the Air Force buy the Navy F-4 and later the A-7),31 but both
the Navy and the Air Force resisted when McNamara tried to get both of them to
buy the proposed TFX aircraft, later to become the Air Force F-111. In that case,
the service selection board recommended the aircraft that was least compatible
with joint service needs (Boeing and General Dynamics competed for the con-
tract), and then the Navy engineered its version to the point where it became too
heavy for carrier operations, finally forcing McNamara to cancel the joint effort.32
A similar effort in later years to get both the Navy and the Air Force to buy the
F-22 in its early stages also failed, and the Navy opted instead to buy an advanced
version of its F/A-18. The OSD did prevail over service preferences with the
F-35 JSF, though. While all the fixed-wing service operators wanted replacement
aircraft for existing models, the Clinton administration canceled some of their fa-
vored programs (the Navy AF/X fighter and the Air Force Multi-Role Fighter in
September 1993), and then DARPA gained traction with its Common Affordable
Lightweight Fighter, which grew into the F-35. It remains to be seen whether the
F-35 will become a revolutionary joint and combined aircraft or an unloved TFX.
While some argue that the F-35 has avoided the lack of service cooperation that
marked TFX development, the services sometimes drop out of joint programs
once started. The Navy abandoned an early interest in the F-22, and the Army
stepped back from participation in the Marine Corps V-22 tilt-rotor program.
Moreover, one report noted that, “while designing an aircraft that meets both the
Air Force’s and the Navy’s needs is challenging, the Marine Corps short takeoff
and vertical landing requirement may be what makes or breaks this joint program
because it appears the most technologically challenging variant and is a leading
cost driver.”33
The degree to which bureaucratic politics shapes weapons decisions probably
depends on many factors, including the value of the stakes, the size of the overall
resources to be expended on weapons systems, and the role of high-level lead-
ership. Bureaucratic competition seemed to be especially keen during the early
Cold War, when the emergence of an ambitious Air Force suddenly added to the
mix of services searching for Cold War missions under budgetary constraints. The
budget cuts of the Truman and Eisenhower administrations added to the inten-
sity of bureaucratic rivalry, since as the overall defense resource pie shrunk, each
slice became ever more valuable. Additionally, senior leadership during the Eisen-
hower years in particular seemed to foster heated competition through its own lax
management style. During this period, competition for intermediate-range ballis-
tic missiles (IRBMs) became intense between the Army with its Jupiter system and
the Air Force with its Thor IRBM. Both programs moved forward through stiff ser-
vice lobbying for their favorite rocket, and ultimately the Kennedy administration
found that each had so much political momentum that it could not easily stop
them without incurring political costs. Part of the reason, according to Michael
Armacost, was that no one in the administration was willing to make a tough de-
cision: “prolonged evasion of a decision on roles and missions was a consequence
of disagreement among three Chiefs of Staff, the reluctance of the Chairman of the
JCS to impose a decision, Secretary Wilson’s hesitancy in exerting his authority
until forced by events and budgets, and the general aloofness of the President.”34
However, as Samuel Huntington indicated in his seminal study of early Cold War
politics of defense, “Interservice competition tended to weaken the military as a
whole but to strengthen the military services individually.”35
Bureaucratic politics remains as an explanation for current force-planning de-
cisions. Services still compete with one another despite the progress of jointness,
and the services still bring their own priorities to the table. So bureaucratic politics
exist both within service bureaucracies and among services in the competition for
defense dollars. The Navy provides an example of service priority. Its priority
missions include large surface warfare ships, with carrier aviation leading the list.
Submarines are probably a notch down on the list, but they are still a priority.
By contrast, countermine warfare has not been a main concern, and the Navy has
been reluctant to fund mine warfare ships. An exchange between Congressman
Rodney P. Frelinghuysen (R-NJ) and Chief of Naval Operations Admiral Vernon
Clark shows the point:
Mr. Frelinghuysen: What are we doing in terms of technology to promote more

antimine warfare?
Admiral Clark: The biggest thing, Congressman is this. We made a commitment a
few years ago to develop organic capability so that we would not have a one-of-a-
kind ship doing mine warfare. And they were small and slow and hard to get to the
point of action.36
Admiral Clark indicated that the future multirole Littoral Combat Ship would
have an antimine capability, but he was clearly reluctant to support the construc-
tion and maintenance of ships specifically for countermine purpose, even though
the United States had to rely on European minesweeping capability during the
1990–1991 Gulf conflict. The Navy also canceled two shallow-water minefield
breaching systems and retired the mine command ship USS Inchon, decisions
that particularly affected Marine Corps amphibious operations. The decisions led
Senator Edward Kennedy (D-MA) to ask, “I mean, why should the subcommit-
tee [on seapower] conclude the Department [of the Navy] is really serious about
maintaining and improving the forcible entry capability in view of the various pro-
grammatic decisions that appear to be eroding that capability over time?”37 Pos-
sibly in response, the Navy’s incoming chief of naval operations (CNO), Admiral
Michael Mullen, indicated that he was forming a “Navy Expeditionary Combat
Command” to coordinate proposed inland operations but, at the same time, ex-
pressed support for the list of new ships and aircraft proposed by his predecessor,
Admiral Clark.38
Another example was the fate of the 1990s proposed arsenal ship, which the
Navy canceled as a result of inadequate funding. Noted a RAND study of the
project, “The user-service mainstream never supported the Arsenal Ship concept,
and therefore program. The most basic reasons were that they either did not be-
lieve it would be helpful (e.g., for Marines onshore calling for fire support), or
they believed that it would replace traditional platforms (e.g., Navy carriers and
strike aircraft, Air Force strike aircraft). These beliefs shaped the behavior of high-
level Navy officials and members of Congress, which in turn affected the behavior
of Navy organizations, the [Arsenal Ship Joint Project Office], and the contractor
teams.”39
The Air Force F-22, discussed earlier, provides another example of the power
of bureaucratic politics. The Air Force highlights the plane’s advanced capabilities
and potential future threats, as noted here:
“They tout it as an insurance policy in any conflict against China or a resur-

gent Russia, and to counter increasingly sophisticated surface-to-air missiles
with longer range and better targeting capabilities. We have made it look
so easy for so long, people don’t realize how hard it is to establish air domi-
nance,” Brig. Gen. S. Taco Gilbert III, the Air Force’s deputy director of strate-
gic planning, said in an interview. “Iraq is not a good example of what we’ll
see in the future.” The aging fleet of F-15 Eagles, which the Raptor will re-
place, is being bypassed technologically, Gen. John P. Jumper, the Air Force
chief of staff, said in a recent interview in his Pentagon office. Citing the lat-
est planes being developed in Europe and Russia, he said, “I do not relish
the idea of some of the technology I saw in the Eurofighter . . . in the hands
of certain nations. I think certain models of the [Russian built] Sukhoi are
already superior to the F-15.”40
The problem is determining whether such statements of support constitute a

valid statement of threat and corresponding need or are simply indicators of ser-
vice interests. The F-22 does feature significant new technology, including super-
cruise stealth technology and advanced combat avionics, and it is the only desig-
nated successor to the F-15 fighter series.41 Moreover, Air Force leaders may well
remember that the only frontline fighter in the Vietnam War was the multirole
F-4, which the secretary of defense forced on them because the Air Force had
not pushed its own advanced fighter. However, on the other hand, there is no
aircraft like the F-22 planned for near-term production in any country, experi-
mental Russian models aside, and the very few potential near-term enemies of the
United States would be very hard-pressed to buy or, even more remotely, build
their own version of an advanced fighter. Russia has been selling very small quan-
tities of its advanced MiG-29 to countries like Somalia and Yemen, which lack
the training and support infrastructure to make their planes threats to the United
States. The F-22 does provide an increase in ground attack capability over the
F-16 and F-15, though. Still, the Air Force came under unusual public criticism
from Defense Secretary Robert Gates in an April 2008 speech to the Air University
at Maxwell Air Force Base in Alabama, where Gates implied that the service was
resisting deployment of drone reconnaissance aircraft because of its preference for
aircraft like the F-22. Said Gates, “I’ve been wrestling for months to get more in-
telligence, surveillance and reconnaissance assets into the theater. Because people
were stuck in old ways of doing business, it’s been like pulling teeth.”42
The U.S. Navy was particularly vulnerable to reshaping after the Cold War, as
its structure revolved around large capital ships designed largely for combat with a
Soviet naval fleet.43 While the potential for supporting land operations remained,
the need for a large “blue-water” navy for combat at sea became less clear after the
Cold War. The Navy continued to request even more carriers and support ships
without a clear reason, and in the face of growing doubt about the need for new
carrier capability, the Navy sought to justify its requirements by tying them to the
so-called global war on terrorism. Said Admiral John B. Nathman, commander of
the Atlantic Fleet, “Would you want to stop a container ship [with a weapon of
mass destruction aboard] in Yemen, or would you rather stop a container ship at
the entrance to the harbor at Long Beach?”44 The presumption was that stopping a
container ship in Yemen required the large ships the Navy continued to operate,
even though there was no evidence that weaponized container ships had been
intercepted or that terrorists planned to use such a tactic.
It is not surprising that bureaucratic politics appears to be a viable explanation
for weapons choices after the Cold War. The paradigm worked during the Cold
War when the threat was somewhat clear, so in the era of the indistinct threats that
followed the Cold War, it should become even more prevalent. Early indications
are that it has.
Bureaucratic politics can often lead to interservice quarrels over which service
wins responsibility for weapons, as noted earlier in the Thor-Jupiter controversy,
and such squabbles continue in the present time. The Air Force, for example,
wanted to wrest control of the Joint Cargo Aircraft, a program initially devised
jointly with the Army. The Army and the National Guard, which wanted the plane
delivered as soon as possible, worried that the Air Force would delay delivery until
2011.45 The Army and the Air Force also engaged in a battle over unmanned
aerial vehicles (UAVs) in 2007, as the Air Force made a move to take control of
all UAVs with operating altitudes over 5,000 feet, which would take the bulk of
UAVs operated by the Army. The Army raised questions about whether the Air
Force would be able to support Army troops as well as the Army UAVs reportedly
do, but one defense analyst ( John Pike of GlobalSecurity) implied that Air Force
interests better explained the attempted maneuver:
I think this is a case of the Air Force having too much time on its hands.
They seem to be striving for purpose as a military service and this is a way
to go about that. There aren’t too many air forces left for them to fight in
the air. They like shooting down other aircraft, and since that’s not much
of a [twenty-first] century mission, then UAVs would be the next likely job.
The Air Force has traditionally been concerned about air superiority over a
battlefield. That’s how they make aces. You don’t become an ace by dropping
bombs on tanks and troops.46
This may have been somewhat harsh and overstated (one does not become an
ace [i.e., have five combat kills] by flying a UAV), but it does suggest that the
competition over role and missions that Key West was supposed to solve in 1948
was still alive almost 60 years later. Efforts to resolve the UAV issue also fell short.
Deputy Secretary of Defense Gordon England tried to merge the Army and Air
Force UAV programs, but when Alabama Republican Senator Richard Shelby tried
to give the Army control over the entire program (which would benefit Huntsville,
Alabama), the Air Force reopened the fight, arguing that if it got program control,
it would save $1.7 billion on it, prompting the other services to highlight Air
Force cost overruns on its own Predator program.47
The Army and Air Force also disagreed over close air support for ground forces,
which is somewhat surprising given the Air Force’s traditional preference for air
superiority and bomber aircraft. However, as the Army developed the AH-64
Apache helicopter for “deep support” missions, the Air Force took objection. Then
Air Force chief of staff General Merrill McPeak argued that the AH-64 was too vul-
nerable for such missions, and that the Air Force’s A-10 close-air-support plane
would be more effective for deep strike missions.48
The Civil-Military Relations Factor

The proper relationship between the military and civilian political leadership is
a vexing issue in the national security arena. A common assumption in American
politics is that under democratic systems, elected officials make the key decisions
about spending taxpayer dollars, and that while the unelected officials working in
government organizations may influence those decisions, they cannot make them.
This is clearly true for military officials in particular. The earliest writing on civil-
military relations in the United States emphasized the separation of the military
from political decision making.49 That line, however, can become quite blurred in
reality. The professional military is responsible for national defense and, as such,
is the consumer of weapons. Consequently, the military plays a key role in the
threat estimates used to justify weapons choices. It can hardly be excluded from
the process, so the key question becomes, How much involvement should civilian
leaders grant uniformed service leaders?
The nexus of civil-military relations in the defense acquisition area is access to
and power over defense decisions. One way to shift power from the uniformed
military to the civilian secretariat is to alter the structure of the system, inserting
in it more decisional nodes to challenge the power of the professional military
over weapons choices.
Civil-Military Relations and the Structuring of the Defense Acquisition System

In 1948, the new U.S. Air Force signed a preliminary contract for a giant eight-
engine bomber design, the XB-52. The document, around 30 pages long, specified
performance requirements, cost, delivery schedule, and many other critical fac-
tors. Air Force officers and representatives of Boeing Aircraft, the designer of the
aircraft, signed the document on the last page. In faint pencil marks along one of
the page margins is a cryptic anonymous phrase, “Symington says ok,” referring
to the then secretary of the Air Force. That was the only civilian oversight for a
decision to purchase this then-radical aircraft. The services ran a relatively simple
system to produce their required weapons systems. Congress occasionally held
hearings in an effort to shape defense priorities. However, the process was quite
open to the particular influence of the service as the primary operator. The ser-
vices, after all, were the main source of knowledge and experience on weapons
systems—they flew, sailed, drove, or otherwise operated the systems of warfare
and their associated support equipment.
Both President Truman and President Eisenhower remained largely aloof
from major weapons decisions, preferring to leave them to the services or, when
conflicts over weapons became public, to their secretaries of defense.50 However,

the Kennedy administration showed less confidence in the military and its power
over force decisions. After Kennedy took office in 1961, his defense secretary,
Robert S. McNamara, became convinced that the services (and the Air Force in
particular) had too much influence in determining national defense programs,
and he began to reshape the defense acquisition process. McNamara believed
that the concepts of scientific management would shift power from the mili-
tary (which, McNamara believed, bought weapons more to preserve bureaucratic
power than for national security) to professional program managers and analysts.
In developing the planning, programming, and budgeting system (PPBS), he in-
corporated mechanisms to link the defense budget process with defense planning.
They included the five-year defense plan (FYDP), the Draft Presidential Memo-
randum, the creation of the Systems Analysis Office (later Program Analysis and
Evaluation, or PA&E), and the Development Concept Paper. The FYDP required
the Defense Department to engage in long-range forecasting of budget require-
ments, thus allowing comparison of programs over a longer run than the previous
year-by-year planning cycle. The Draft Presidential Memorandum, an interagency
think-piece paper spelling out essential assumptions behind a defense planning is-
sue (e.g., nuclear strategy) dates from President Kennedy’s 1961 attempt to direct
nuclear planning, and later the Office of Systems Analysis wrote the memoranda
to include the entire defense program.51 The Office of Systems Analysis became
the home of the civilian analysts who brought the skills of economics and man-
agement, if not military experience, to the defense budget and planning process.
They introduced the concept of cost-effectiveness as a permanent part of defense
planning and budgeting, allowing for the cost comparison of different systems
on the basis of their ability to solve a particular military problem. This task ulti-
mately reduced the role of the services in force planning and drew particular ire
from the Air Force when McNamara ordered the cancellation of weapons like the
B-58 Hustler bomber (after more than 100 were built) and the proposed B-70
strategic bombers based on their failure to pass the cost-effective test.
In subsequent years, the Defense Department relaxed some of the McNamara-
era reforms, rushing some systems into production without the full PPBS review,
like the B-1 Lancer bomber and elements of President Reagan’s proposed 600-ship
Navy. During the Reagan administration, the role of PA&E diminished consider-
ably when its analysis opposed some of the proposed Reagan defense buildup, in-
cluding the 600-ship Navy.52 However, Defense Secretary Richard Cheney resus-
citated PA&E during the subsequent Bush administration when PA&E reversed
position on some of the more expensive items desired by the services, includ-
ing the Marine Corps V-22 Osprey, which PA&E director David S. C. Chu had
opposed since his service in the Reagan era.53 Cheney canceled the Navy’s A-12
aircraft, and during the Clinton presidency, Defense Secretary Les Aspin scaled
back the Reagan-era ballistic missile defense system substantially. The most re-
cent case was Secretary of Defense Donald Rumsfeld’s cancellation of the Army’s
Crusader artillery system in 2002.
A consequence of defense reform (and shrinking defense budgets) was an in-

creased interest in defense decisions beyond the Defense Department. Members
of Congress focused more on national defense, partly because they feared that
McNamara had excessively civilianized the defense decision-making process. De-
fense contractors, which had always been a source of influence, found that as
both their own numbers and the defense budget shrank, they had to become even
more involved politically in weapons choices. The services, too, were changing as
jointness eroded (but did not eliminate) service identity, leaving the services to
cooperate on operations while buying most of their primary combat systems sep-
arately. The entire climate gave even more impetus to the role of politics in force
planning. It is thus important to understand the multiplicity of roles and actors in
this process. It is also equally important to understand alternative viewpoints for
explanations of weapons choices, since there is considerable evidence that the link
between threats and weapons is tenuous at best, as noted earlier in this chapter.
Military professionals are specialists in the application of armed force to po-
litical objectives, though shaping those objectives is theoretically the province of
civilian political leadership. However, the military, which has the largest stake in
maintaining and adding to the forces it operates, may seek to shape the strategic
assessments that justify forces, as noted earlier. Additionally, the power of the
professional military as official advisers to the president has grown considerably
since the creation of the Joint Chiefs of Staff as a statutory body, along with the es-
tablishment of the Defense Intelligence Agency and the National Security Agency
years later. The military now had access to raw intelligence about potential or real
foes, and that intelligence in digested form bolsters the annual posture statements
that go in front of Congress to support the president’s defense budget request.
The professional military has a number of advantages over its civilian counter-
parts. For one thing, as Thomas McNaugher has noted, “Political appointees like
the secretary of defense, his deputy, and service secretaries are rarely in their jobs
long enough to sustain their own or their administration’s priorities. They take
office to find weapons about to enter production that are for the most difficult if
not impossible to stop, and they set in motion new projects that will be proved
wrong only sometime after they leave office.”54 A senior Air Force general re-
ported to Congress, “This week we expect Mr. Wynne to take the oath of office as
the Secretary of the Air Force. He will be the sixth secretary, or Acting Secretary,
of the Air Force in less than one year.”55 Military service chiefs also come and go,
but they develop their commitment or opposition to certain weapons programs
over their service careers, so that the programs advanced by one service chief are
quite likely to be defended by successor chiefs. Thus, programs like the Air Force
manned bomber series got support by the Air Force, which helped to persuade
President Reagan to reopen the B-1 program after President Carter had termi-
nated production. Air Force senior leaders also awaited Air Force Secretary Vern
Orr’s departure, so that his demand that close air support receive priority over the
advanced tactical fighter would be conveniently forgotten and Air Force military
leaders could then get contracts for what would become the F-22 in late 1986,
with no proposal for a close-air-support aircraft.56 The Navy, using a similar tac-
tic, waited until the end of the Carter administration to cancel the fast transport
ship that Carter wanted to transport troops to the Persian Gulf, but which also
took money from more traditional Navy programs.57
The military also experiences turnover, though, and its dedicated acquisition
corps is shrinking. Many uniformed personnel who used to specialize in acqui-
sition have been deployed to combat assignments, and, because even a brief ab-
sence causes loss of knowledge in a rapidly evolving field, civilians in OSD have
to make up for the deficiencies. Program turnover is a problem. As Alic notes, six
Army generals headed the main battle-tank program during its 18-year gestation
period, and the JSF, conceived in 1996, had its fifth manager by 2005.58
Civil-military struggles continued into the George W. Bush administration. In
an effort to reshape the post–Operation Iraqi Freedom military, Secretary of De-
fense Donald Rumsfeld directed the services to redirect their threat assessment
objectives to focus on what is known as the “10-30-30” scenario. According to
a description, “U.S. forces should be able to ‘seize the initiative’ from an enemy,
such as halting a North Korean assault on South Korea, in 10 days. In another
30 days, it should be able to ‘swiftly defeat’ the enemy, in this case, by driving
North Korean forces back across the border. The U.S. military should be ready to
swing to a conflict in another part of the world 30 days later, such as a Chinese
assault on Taiwan.”59 The emphasis on speed allowed Rumsfeld to make weapons
decisions, opting for lighter combat vehicles, fewer naval ships, and a spending
emphasis on technology over personnel. Noted one report of the debate on cur-
rent strategy and its possible effects, “Strategies that order the military to be pre-
pared for two wars would argue for more high-technology weapons, in particular
warplanes. An emphasis on one war and counterterrorism duties would require
lighter, more agile forces—perhaps fewer troops, but more Special Operations
units—and a range of other needs, such as intelligence, language and communi-
cations specialists.”60
Some critics argue that the emphasis is misplaced, suggesting that the speed of
combat is not what ultimately was effective in Iraq, and mattered not at all during
postcombat operations like urban reconstruction.61 Others argued that the pro-
gram would result in shortfalls in such critical areas as language training, pointing
out that a shortage of Arabic speakers halted or delayed critical military opera-
tions in Iraq.62 Additionally, the secretary’s efforts to shape future force programs
eroded the traditional role of the uniformed military in such responsibilities, in
ways reminiscent of the McNamara era reforms.63
In civil-military questions, the public status of the professional military bolsters
its position politically, particularly when compared with other American political
institutions. According to a June 2005 Gallup poll report, the military ranked at
the top of a list of institutions rated by the public on the question of confidence.
Some 74 percent of a public sample had “a great deal” or “quite a lot” of confidence
in the military, with the police getting second billing at 63 percent. In contrast,
“the presidency” received a 44 percent vote of confidence, with 22 percent for
Congress. While the military has held top ranking in this Gallup survey for many
years, both the presidency and Congress slid by 8 points from a similar survey the
year before.64 This pattern has continued for decades, and the military suffered
a drop in public respect only during and briefly after the Vietnam War, when all
public institutions declined in the public mind. It is unclear at this point that the
uniformed military will be helped in possible struggles with civilian overseers on
weapons issues, partly because the services have rarely let their differences with
the executive branch become public. In one recent case, though, even when Army
differences with Secretary Rumsfeld over the canceled Crusader artillery system
(noted previously) became public, there was little hue and cry, and the system
died.
Where Does Military Influence Stop?

By custom and by law, the role of the military in weapons acquisition is to
serve as honest broker, a neutral referee whose recommendations for weapons
move forward to civilian authority for decisions. But the line is sometimes un-
clear. For one thing, military contractors have ways to go through the backdoor
of the acquisition system, such as by informally contacting military officers to pro-
mote their wares. Some contractor representatives are retired military officers who
maintain contact with their former peers to advertise their products. Moreover,
military officers usually attend symposiums where lavish contractor displays are
on exhibit. At the Air Force Association annual conference, for example, hundreds
of contractors maintain pavilions in the conference hotel, with cutaway displays
of engines, full-scale demonstrator systems (Boeing had a search-and-rescue he-
licopter on display), and opportunities for contractors to lobby senior military
officers directly to sell their goods. The other services have similar arrangements
for face-to-face meetings with defense suppliers.
Such activities are not against the law and have advantages for both parties. Re-
tired officers who take positions with defense contractors bring their military ex-
pertise to the table, potentially facilitating better connectivity between parties. The
services interface directly with suppliers to match up requirements with adver-
tised capability, and the suppliers get a closer understanding of what the military
needs. So while direct interface between military officer and contractor can bring
benefits, it may also raise questions about the locus of acquisition decisions that
are now the province of civilian officials in the Defense Department. Sometimes
the process may exclude civilians from the decision-making process. That appears
to have been the case in a 2005 contract issue involving a large-screen entertain-
ment system to accompany the Air Force Thunderbirds’ air shows. The contract
was awarded initially to a company known as SMS, headed by an individual who
had close personal ties to a number of senior Air Force officers, including two
chiefs of staff. The Defense Department inspector general investigated the contract
after a rival complained, and, according to the report, “The investigation found
that the December 2005 award to SMS was tainted with improper influence,
irregular procurement practices, and preferential treatment. Lower-priced offers

from qualified vendors and capabilities in-house were bypassed in an apparent ef-
fort to obtain services from [redacted], president of SMS, who had a longstanding
relationship with senior Air Force officers and members of the Thunderbirds.”65
At the same time the Defense Criminal Investigative Service was investigat-
ing how the Virginia-based CRI paid $26,788 to a senior Air Force official who
was awaiting confirmation to serve as principal deputy assistant secretary for ac-
quisition. The questions came after CRI received a sole-source five-year contract
worth up to $45 million and after the official, Charles D. Riechers, apparently
committed suicide after Carl M. Levin (D-MI), chairman of the Senate Armed
Services Committee, queried the Defense Department about the arrangement.66
The Air Force has apparently tried to resolve such issues, with a memo from Sue
C. Payton, assistant secretary of the Air Force for acquisition, stating in part, “Sit-
uations may also arise with members of the industry that are ‘friends’ or recently
separated members of the Air Force. There may be perceived pressures or they
may seek preferential treatment when it comes to visitation, access to informa-
tion, or contracting opportunities. The rules are very clear, we treat all potential
competitors equally and no special privileges are granted.”67
The Congressional Politics Factor

Congress plays a significant, if secondary, role in the defense acquisition pro-
cess. Congress has the power to both authorize and appropriate funds for all de-
fense items, including procurement, as noted in Chapter 2. Authorization is the
power to commit federal funds to particular programs, initiated in the defense
acquisition arena by the Armed Services committees in both the House and the
Senate. Appropriation is official congressional permission to release funds from
the overall budget to particular items, initiated by the Appropriations committees
in both chambers. Such authority allows members of Congress to hold hearings
on the overall defense budget, including procurement, for each fiscal year, and to
add or subtract items from the presidential budget requests from the Pentagon.
Congress also has investigative powers over all federal agencies, including the De-
fense Department, and Congress can compel members of all departments to testify
on matters of interest to Congress. Congress can also order each department to
produce documents that congressional members believe pertinent to their inves-
tigations, though the Defense Department, like some other agencies, is not always
forthcoming with such information.68
These are weighty responsibilities for Congress, though the body is disadvan-
taged by numerous structural considerations. Congress is obviously much smaller
than the Department of Defense and has a much smaller staff of experts to help
it discern defense matters. It has constitutional powers such as the power to de-
clare war, though it has not exercised that option since 1941. It has the potential
authority of the War Powers Act, passed over President Nixon’s veto in 1973,
but that has never been fully invoked, partly because it seems that neither the
Congress nor the executive branch wants to test its constitutionality. Moreover,
in public opinion, the military tends to rank as the most trusted of institutions,
while Congress ranks as one of the least trusted bodies. Finally, while members of
Congress do feel a sense of national responsibility to provide an adequate national
defense, their own motivations are not far behind.
Members of the House of Representatives are elected for two-year terms and
members of the Senate for six-year terms, which means simply that House mem-
bers are almost constantly running for reelection, and senators must never let
reelection stray far from their agendas. Mostly both representatives and senators
enjoy a high success rate when they run for reelection, often more than 90 percent
for incumbents. Still, one can never take reelection for granted, and so it is not
surprising that reelection strategy is a top priority of both senators and represen-
tatives.
Successful reelection takes money, which representatives and senators raise
from contributors, who expect a return for their investment. There is an under-
standing that political donors expect something for their campaign contributions,
and if their benefactors do not deliver, the money will go elsewhere. So both sen-
ators and representatives can maximize their reelection chances by supporting
programs that benefactors own.
Reelection also requires that a congressperson convince voters that he or she
is more worthy of support than opponents (if there is an opponent), and one way
to accomplish this is to bring jobs to constituencies. This is often a difficult chal-
lenge because the private sector generates most of the jobs in the United States,
and private-sector job creation often involves factors that are beyond the control
of Congress members: foreign competition, cheaper labor in other states, changes
in demographics, and so forth. But representatives can be much more success-
ful in bringing in federal money to their constituencies to generate jobs, often in
the form of construction projects like federal highways, dams, marinas, and other
projects that may initially create new jobs. Once completed, though, such con-
struction projects no longer generate employment at the rate construction did,
and, moreover, construction work often draws transient workers who move from
site to site, and often do not remain around to vote for the congressperson who
voted for the original construction money. Thus, members often seek projects
with more permanence to help their reelection efforts, and often the military bud-
get provides such opportunities.
Military-generated employment can come from numerous sources, but mili-
tary bases and military industry are the most potent. Bases can generate hundreds
and often thousands of civilian jobs that can remain for decades. Likewise, the de-
fense industry creates numerous employment opportunities through both direct
employment of industry workers and indirect opportunities in local communities
where defense workers spend their wages. Thus, representatives are drawn to de-
fense acquisition as a mechanism to direct dollars back home, for weapons, for
bases to place such weapons, and for the defense industry that supplies weapons
and their assorted support systems to the military.
The process that representatives use to direct federal projects to their states and
districts was commonly known as “pork barrel politics,” allegedly in reference to
barrels of pork given to slaves in pre–Civil War America (although there are nu-
merous stories of where the term actually came from; more recently, the term ear-
marks has been used to designate what was once pork-barrel spending). The ear-
mark process allows individual representatives and senators to slip projects into
their appropriations bills, which often pass without debate. Since the Supreme
Court invalidated the presidential line-item veto during the Clinton presidency
(which had allowed a president to veto a particular budget item without veto-
ing the entire appropriations bill), the president is also effectively prevented from
canceling earmark projects. So, for example, Alabama Republican Senator Richard
Shelby got more than $4 million for a poultry facility at Auburn University in
Alabama. Democratic Senator Robert Byrd of West Virginia brought a $6 million
National Center for Cool and Cold Water Aquaculture to his home state. These
are but two of hundreds of examples of elected officials using their offices to direct
money to their electorates.
There are legitimate reasons for earmark spending by members of Congress,
despite the negative image attached to the name. For one thing, such spending
often creates jobs and opportunities, sometimes in distressed areas that otherwise
have little outside income. Second, as Evans argues, earmarks to individual mem-
bers can create winning coalitions that enable Congress to pass general-purpose
legislation that might otherwise not attract a majority of members. Evans cites vot-
ing on the North American Free Trade Agreement (NAFTA) and federal highway
programs as examples of controversial programs that individual members might
have eschewed had they not received rewards of state and district earmarks.69
General-purpose legislation is not only often controversial but also often does not
attract voter attention in ways that local spending bills do. Voters may simply
expect their legislators to “do the right thing” and pass general-purpose bills: in
the case of legislation like that proposed to eliminate the alternative minimum tax
in 2007, voters might simply argue that since the congressional scoundrels ini-
tially passed the legislation, they have a duty to fix the problem that they caused
and should not be rewarded with votes for it. On the other hand, local spending
benefits are much easier for voters to see and appreciate.
Congress and National Defense

Traditionally, Congress played an occasional but minor role in defense over-
sight, such as when it passed the Air Corps Act of 1926 requiring that the services
purchase military aircraft competitively, or when Senator Harry Truman led an in-
vestigative committee on military contracting during World War II. For the most
part, though, the legislative branch rarely got into the details of procurement until
the early 1960s. The Appropriations committees retained budgetary power, but
the functional authorizing committees (for defense budgets, the Armed Services
committees) approved lump-sum budgets, thus allowing the services considerable
spending discretion.70 That changed, though, as the congressional percentage of

the defense budget requiring authorization increased from 2 percent (the mili-
tary construction portion) in 1961 to 100 percent by 1983.71 The reasons for
this growth of congressional oversight vary, however. Some argue that Congress
has grown to distrust the wisdom of both the armed services and the civilian-
dominated OSD, a distrust that first grew under Kennedy and Johnson Secretary
Robert S. McNamara and has continued on through George W. Bush’s administra-
tion. The second reason is that Congress wants more control over defense spend-
ing to further earmark projects that benefit states and congressional districts.72
There is evidence for both arguments.
The B-1 bomber program illustrates congressional politics engaging in what
some would call “pork-barrel politics.” President Jimmy Carter, concerned over
escalating costs and program delays, canceled the B-1 program production, fund-
ing just research on the plane. However, members of Congress from both parties
who had B-1 contracts in their states and districts worked hard to keep produc-
tion alive. Said Nick Kotz, “Senators Alan Cranston and John Glenn brought onto
the Senate floor yet another strategy to advance the B-1. Both Democrats were
running for reelection, and their two states contained more B-1 jobs than any
others in the country. Glenn and Cranston introduced a clever amendment that
would salvage the B-1 while saving face for the president. . . . [I]t could either be
a revised B-1 or an entirely new advanced technology bomber.”73
The Air Force’s advanced F-22 fighter, noted previously, provides yet another
example of how weapons supporters in Congress can defeat determined efforts by
senior members of Congress to limit programs. Both Defense Secretary Rumsfeld
and senior members of the Senate Armed Services Committee like Republican
senators John McCain (R-AZ) and John Warner (R-VA) tried to limit both the cost
and production numbers of the increasingly expensive F-22 program, but, over
their opposition, Congress approved a measure extending the life of the F-22 buy
and reducing congressional oversight over it. Senator Saxby Chambliss (R-GA)
and Representative Kay Granger (R-TX), both of whom have F-22 production fa-
cilities in their states and districts, were the primary engineers of the maneuver.74
Air Force efforts to secure a rescue helicopter also attracted congressional interest.
The Air Force selected Boeing to build the Combat Search and Rescue (CSAR-X)
helicopter, but two rivals, Lockheed Martin and Sikorsky, protested the award.
Senator Charles Schumer (D-NY) supported the Lockheed Martin bid—”If the
Air Force doesn’t change course right now, Lockheed Martin may be shut out for
good by an unfair bidding process”—but should Lockheed have won the $15 bil-
lion contract, the project would add around 200 jobs to its Oswego, New York,
facility.75
Naval acquisition provides yet another example of congressional provincia-
lism. Shipyards generate considerable employment, and thus members of Con-
gress continually work to keep them in production. For example, in the hearings
for the 2006 defense budget, the Senate Armed Services Committee noted, “The
Committee is particularly concerned about the state of the current shipbuilding
program. The committee does not believe that the current or projected level of
funding for shipbuilding is adequate to build the numbers of ships that will al-
low the Navy to perform its global missions or to sustain an increasingly fragile
industrial base.”76
Members of the Virginia congressional delegation, including Senator John
Warner and Representative Jo Ann Davis, injected $87 million in the 2006 de-
fense bill to avoid delaying the construction of an aircraft carrier to be built in
Virginia.77 Since there are very few shipyards capable of building carriers, the
Virginia delegation was able to argue that it was preserving a vital national asset,
although the thousands of shipbuilding jobs (and their presumably supportive
votes) were also clearly a goal. The approach used by Maine’s two Republican
senators, Susan Collins and Olympia Snowe, was more direct. When Navy Secre-
tary Gordon England announced that the DDG 1000, the Navy’s next-generation
destroyer, would be built in just one shipyard, either in Maine or in Mississippi,
both Collins and Snowe, and Mississippi Senator Trent Lott, joined forces to get
England to agree to build the ships in both states. Paradoxically, England esti-
mated that the move to one shipyard would save the Navy more than $300 million
in construction costs, but with the increased costs, the Navy reduced the overall
DDX 1000 to just 7 instead of the original planned 32, and then to just 2 in the
summer of 2008. While members of Congress may couch their naval interests in
threat response—“Some experts have projected that China’s Navy will outnumber
the U.S. fleet by 2015, less than one decade from now,” noted a Senate request
to increase the shipbuilding budget from $8.9 billion to $14.1 billion—it is inter-
esting that almost all of the 16 senators who signed it represented shipbuilding
states.78
Shipyards are not the only item of congressional interest. The same commit-
tee report also criticized the Army for shortfalls in new munitions programs and
the Marine Corps for not having small weapons modernization programs. The
committee additionally prohibited the Air Force from carrying out a plan to retire
some KC-135 and F-117 aircraft, which would keep employment at facilities bas-
ing and repairing these aircraft. The committee also stated its concern about the
shrinking R&D budget, which had declined in real value over the previous fiscal
year.79 Air Force Secretary Michael Wynne argued that the age of the KC-135
was such that should one crash because of an age-related problem, the remaining
KC-135s would still have to fly, as the Air Force did not have an alternative fleet
to replace them while grounded.80
Congressional Republicans inserted funding into the fiscal 2006 defense bud-
get, adding more than $4 billion to the Navy’s shipbuilding budget, fending off a
veto threat by President Bush. The measure funded seven new ships, three more
than the Bush administration had requested, though the reasoning for the ad-
dition was not entirely clear.81 The leaders who pushed the proposal did not
come from shipbuilding states, although some of their colleagues did. Congress
members also steered money into the defense budget for continuing the trou-
bled C-130J cargo plane and $900 million for the new DD(X) destroyer that the
Navy did not request. Moreover, “There are 20 pages’ worth of smaller, some-
times vaguely-described projects that appear to have less to do with the war on
terrorism: $5 million to study mood disorders; $2.7 million to research a cancer
vaccine; $4 million to find new ways to diagnose heart attacks; $4 million for
something called the ‘diabetes regeneration project.’ None of them were included
in the Pentagon’s initial $363.7 billion spending request.”82
In 2007, the leading candidate for defense pork was Senator Ted Stevens
(D-AK), remembered the year before for his “bridge to nowhere,” a long bridge
across a strait connecting two fishing villages, canceled after it gained public noto-
riety. Among Stevens’s requests were $44.2 million for access to the Joint Tanana
training complex in Alaska; $10 million for so-called utilidors—an aboveground,
insulated network of pipes and cables—at Eielson Air Force Base in Fairbanks;
and $2 million for “hibernation genomics.” The defense panel’s chairman, Demo-
cratic Senator Daniel Inouye, requested $183 million worth of earmark requests,
along with Hawaii’s other senator, Democrat Daniel Akaka, including $6.5 mil-
lion for a high-accuracy network determination system, $27.5 million for Hawaii’s
federal health-care network, $24 million for the Maui space surveillance system,
$16 million for Pacific airborne surveillance and testing, and $7.5 million for the
Pacific-based joint information-technical center.83
Congressional politics also became involved in the Navy’s efforts to build
a minisubmarine for special operations forces, with the contract going to an
Annapolis-based company in 1994. The submarine has been plagued with consid-
erable problems, bringing both criticism and defense. “Let’s stop here. Let’s rebid
this thing,” said Representative Rob Simmons, a Republican from Connecticut
whose district containing rival Electric Boat might get a rebid contract. Defending
a Maryland-based company, Senator Barbara A. Mikulski (D-MD) steered addi-
tional funding ($50 million for fiscal 2005), as did Hawaii’s Senator Inouye, eye-
ing the Hawaii-based facilities for the minisub.84
The Marine Corps has found champions in Congress as well, particularly to
support the revolutionary V-22 Osprey tilt-rotor aircraft. The plane is a combina-
tion helicopter and fixed-wing aircraft capable of landing like a rotary-wing air-
craft but flying with its engines and propellers swiveled forward like a fixed wing
plane. The plane, initially designed in the early 1980s, suffered from both cost
overruns and fatal crashes that led then defense secretary Cheney to attempt can-
cellation. Cheney, though, was overruled by members of Congress (particularly
former Marines like Senator John Glenn from Ohio), and the aircraft remained in
development, surviving several crashes, killing 23 Marines, and scheduled for full
production of more than 400 planes for both the Marines and the Air Force.85
Members of the Georgia congressional delegation found a way to block Defense
Secretary Rumsfeld’s decision to cancel the Lockheed Martin C-130J, the latest it-
eration of its venerable turboprop air lifter. Senators Saxby Chambliss and Johnny
Isakson (R-GA) introduced an amendment to an emergency defense-spending bill
to block funds to terminate the C-130J program, estimated to be $1.6 billion, ac-
cording to a Chambliss spokesperson.86 Shortly afterward, Rumsfeld announced
that he was reversing the cancellation decision: Rumsfeld’s about-face, communi-

cated in a letter to Capitol Hill, was as abrupt as the Pentagon’s proposal late in
2005 to cancel the program in the fiscal 2006 budget. That cut was designed to
save $5 billion, but it quickly ignited political opposition led by lawmakers from
Georgia, where Lockheed builds the transport plane.87 It must be noted that the
Army had incorporated the C-130J into its Future Combat System program, so it
was not clear whether Rumsfeld reversed his earlier cancellation decision because
of opposition from the Army or from the Georgia congressional delegation.
Congressional politics have also been active on the Air Force’s controversial
program to replace its aging KC-135 tankers. The Air Force initially signed an
agreement with Boeing to lease a military version of Boeing’s 767 commercial
transport, but when the contract revealed illegal favoritism (discussed subse-
quently), the Air Force revisited the contract. In the running with Boeing was the
European defense consortium EADS, which sought the American-based Northrop
Grumman as a partner so it could compete using the Airbus A330 transport for
the Air Force’s future tanker. However, since Airbus was locked in a bitter trade
dispute with Boeing, several members of Congress inserted a provision into the
defense budget language prohibiting a foreign company accused of accepting sub-
sidies from bidding on an American defense contract, and giving Northrop pause
in considering a potential partnership with EADS.88 That measure drew fire from
Alabama’s Republican Senators Jeff Sessions and Richard Shelby, who favored the
German- and French-owned EADS proposal. Here nationality mattered less than
did the 1,000 jobs and $600 million investment in Mobile, Alabama, where EADS
promised to build a plant if it won the tanker contract.89 In February 2008, the
Air Force awarded EADS the contract, generating immediate protest from Boeing
and representatives from Washington State. Senator Patty Murray stated on the
Senate floor, “Airbus has said it will build an assembly plant in Alabama. The Air
Force says the planes will be American. But the plant doesn’t exist. And the only
thing we know about the jobs it will create is that most of the work will be done
overseas . . . that’s like shipping a BMW over from Germany, putting new tires on
it, and calling it America’s newest luxury car.”90
Congress also may authorize money for programs that the services do not want,
like the DD(X), noted previously, or the three additional C-17 air lifters autho-
rized at $785 million from the 2007 fiscal budget that the Air Force states it
does not need. That measure, passed with strong support from members of the
California congressional delegation, is intended to preserve Southern California’s
last fixed-wing aircraft production line and its 5,500 workers.91 In addition to
the C-17 effort, Congress also added more funds for an additional LPD-17 am-
phibious ship and $456 million for a T-AKE cargo ship. To sequester funding for
these additions, congressional language also canceled or delayed future programs
for the services, including a 25 percent cut on the Army’s Future Combat System
(to be fully deployed in 2011), the Navy’s Littoral Combat Ship, the Airborne
Laser, the Energy Department’s Reliable Replacement Warhead, and Global Posi-
tioning System priorities.92 Most of these programs would provide jobs only in
future years; thus Congress swapped the possibility of future jobs for the greater
certainty of current jobs.
There is also evidence that direct campaign contributions influence con-
gressional support for certain weapons. Federal ethics laws prohibit the sale of
favors to campaign donors, but members can always argue that it was national
interests that drove decisions that otherwise appear to be political rewards for
political funds. The case of Representative Duncan Hunter, Republican from
California, is instructive. Despite strong objections from the Navy, Hunter
earmarked $27.7 million in funds for a ship developed by his biggest political
donor, the Titan Corporation. The Navy, which preferred the Littoral Combat
Ship, feared that Hunter’s earmark might jeopardize that program and raised
concerns about the Titan-developed Affordable Weapon System, which Hunter
included in his addition, though it had failed all four of its preliminary tests.
Hunter also added $8 million to the 2007 bill for a vectored thrust aircraft
made by DuPont Aerospace, another Southern California firm. From 1998 to
2003, Hunter received $47,200 in campaign donations from Titan, raising the
impression that Hunter was simply repaying his benefactor rather than furthering
the interests of the Navy or the country.93 When asked about his earmarks,
Hunter stated, “There’s a little thing called the Constitution. It says Congress
shall equip the military, not the Pentagon. The Pentagon proposal is just that.”94
Hunter was not the only member of Congress to support a defense project
whose company contributed to campaign coffers. Representative James Moran, a
Democrat from Virginia, pumped in $37 million in earmarked funds for Project
M, a sound-deadening technology unwanted by the Navy. Even though the Navy
rejected the concept several times, Moran kept inserting program money into the
defense budget, after receiving around $17,000 in campaign contributions from
the owner of the firm that marketed Project M.95
Congress has also prohibited the retirement of some weapons programs, al-
legedly because members feared that if the services withdrew older weapons from
their stockpiles, they would then close the bases where those weapons were sta-
tioned or maintained. For example, Congress prohibited the Air Force from retir-
ing the venerable C-5 airlift planes, even though those Vietnam-era aircraft were
costing the Air Force scarce dollars to keep them flying.96 In an effort to break the
stalemate, the Air Force proposed a one-for-one swap with a new C-17 for each
retired C-5, which appeared to ease the concerns of some members of Congress:
“That freaked out a lot of members, so they slapped on the restrictions,” the staffer
said. “But I think AMC and the Air Force have basically told members in the dis-
tricts that would be affected that even though you are losing your C-5A aircraft,
we are going to backfill them with C-17s, so I think that kind of eased their
concern.”97
It should not be assumed that Congress views the military and its resources
primarily as a vehicle for political self-interest. Congress has had a long tradi-
tion of looking over the executive branch’s shoulder about military matters that
go beyond parochialism. During the Eisenhower administration, the Senate held
hearings to review the dominance of strategic nuclear weapons during the 1950s,
chaired by both Senator Stuart Symington (D-MO) and Lyndon Johnson (D-TX).
Later congressional activism over Reagan-era strategic acquisition programs
caused a reassessment of several programs, including the MX missile. Senator
Barry Goldwater (R-AZ) and Representative William Nichols (D-AL), both mili-
tary veterans, introduced the Department of Defense Reorganization Act of 1986,
which had a fundamental impact on many aspects of defense operations, includ-
ing defense acquisitions.98 During the George W. Bush administration, Congress
questioned the size of the active Army. Frustrated that Defense Secretary Rumsfeld
ignored its calls to increase the size of active Army forces, Congress finally man-
dated a 20,000 increase for fiscal 2005, while Rumsfeld argued that force compo-
sition, not force size, was the real issue.99
According to Lebovic, though, Congress often took symbolic stands on issues
without actually making any real changes to programs, partly because of the need
to be seen doing something, and often because Congress focused on secondary
issues (e.g., how to base the MX, later dubbed the Peacekeeper ICBM) instead of
whether American strategic interests required the system itself.100 Congress still
has limited investigative capability despite the Congressional Budget Office and
other congressional research arms, and, more important, members of Congress
understand that the appearance of action is often all that is necessary to please
a usually ill-informed constituency on defense issues. This is not to suggest that
Congress has failed in its oversight role, though there are limits on what it can
do. It has probably done enough to prevent most outright fraud and to catch it
when it occurs. As Alic notes, though, congressional rules “do nothing to address
the technological reasons for poorly performing weapons systems.”101
The Military-Industrial Complex Factor

The defense industry is a part of the defense acquisition system, as covered in
Chapter 1. It is also a political actor, though.
In the 1960s, attention began to focus on the military-industrial complex,
drawing that wording from language in President Eisenhower’s farewell address,
which warned of the growing dangers of collaboration between the military and
the American defense industry. Concern grew that the American professional mil-
itary had self-interest in inflating national security threats to obtain a larger piece
of the U.S. national budget, and the defense industry, seeking ever-higher profits,
was a willing partner in threat inflation schemes.
The military-industrial complex category has several arguments, including the
following:
r The military and the defense industry have a mutual interest in increasing the share of
resources allocated for defense purposes.
r The defense industry is a for-profit entity that will sometimes bend or break rules, or
engage in unethical conduct to further corporate interests; thus, the Defense Department
must regulate it and its relationship with the department.
r The military and the defense industry have a shared interest in preserving a defense
industrial base of a given size, and thus the awarding of defense contracts is partly shaped
by decisions to direct contracts to industry that is threatened by either reduction below
critical size or extinction.
r The defense industry might constrict to a point where it cannot adequately serve wartime
military requirements, since defense firms can either disappear altogether or convert to
supply the civilian marketplace.
r The defense industry creates jobs, and members of Congress often defend those indus-
tries located in their home states and districts.
The military and the military industry do have common interests: the mili-
tary needs a reliable industrial base and the defense industry needs sales. That
relationship has given rise to a host of critical literature arguing that both par-
ties engaged in a nefarious policy of weapons buildup for the benefit of both.102
While neo-Marxist thinking grounded much of that literature, a more moderate
argument stated that the military and the military industry needed each other,
and that cooperation paid dividends for both.
The relationship between the military and defense industry may be adversarial
as well as cooperative, though. There is always the threat of disputes over price,
delivery dates, and the quality of the item in particular between the contractor and
the military. Defense firms may appeal for congressional support for weapons that
the military does not want, as noted in the earlier section on Congress. Some-
times the conflict brings casualties—the Navy disqualified Brewster Company
from producing Navy aircraft after demonstrated failures of production during
World War II, and Brewster subsequently went bankrupt. Other companies, like
Curtiss-Wright, saw their sales drop precipitously and left the aircraft manufac-
turing business. However, it is more common for the Defense Department to try
for long-term contractual relations with a particular firm or firms. For example,
the Navy bought most of its aircraft from the Grumman Corporation from be-
fore World War II until that company’s merger in 1994 with Northrop, and the
Air Force bought a disproportionate number of tanker and bomber aircraft from
Boeing. In other cases, the service may keep at least two potential producers in
contracts, to ensure that there is competition and to avoid a single-supplier sit-
uation where the contractor can dictate terms that would be unacceptable under
a competitive situation. Much of this is a function of the unique nature of the
American defense industry.
Summarizing the Impact of Politics

The impact of domestic factors on the defense acquisition system might result in
a modification of the traditional understanding of force development (Figure 4.2).
Re-Rationalizing the Process: Jointness and More Reform?

Members of both the Defense Department and the relevant committees in
Congress are clearly aware of the problems ascribed to the internal pressures
National
interests
and threats
to those
interests
Service values
and interests
Force development
choices
Congress
Defense
industry
Figure 4.2. Impact of Internal Processes on Force-Planning System.
and decision styles, and they have taken steps to correct them. Particularly note-
worthy are efforts to counter the pressures of bureaucratic politics by mandating
jointness.
In conclusion, none of this is to suggest that national interests and threats to
those interests, perceived or real, do not matter in the politics of weapons acquisi-
tion. They are the basis for the existence of a military force and the overall param-
eters of changes to that force. However, neither threats nor interests are precise
indicators of exactly what kind of force to build, when it should be delivered, and
how much to spend on it. The gap between the abstract concepts of threats and
interests on the one hand and the pulling and hauling of domestic politics must
be factored together to fully understand how force decisions are made. Someone
has to generate specific numbers and capabilities for planning purposes, and if
those numbers and capabilities are a function of bureaucratic politics, incremen-
tal planning, and the intrusions of Congress and other domestic political actors,
they occur because vague intelligence estimates of future threats and requirements
are simply inadequate. This was true in the days when the United States and the
Soviet Union eyed each other carefully, and threat estimates became better over
time. In today’s imprecise international climate, it is hardly surprising that do-
mestic politics will take a front seat in force planning. Efforts to re-rationalize the
process are difficult at best. Consider the efforts to shape the QDR, now required
by Congress. In the 2001 QDR, the document introduced the “1-4-2-1” paradigm,
mandating “that the military prepare to defend the U.S. homeland”; “project forces
to deter conflict in four regions around the globe”; “swiftly defeat aggression in
[two] overlapping major conflicts”; and retain the ability for “decisive victory” in
one of the major conflicts, which may include the possibility of “regime change
or occupation.”103 The 2005 QDR drafters sought to add homeland defense to
this list, but such efforts may only lead to complexity and confusion. It is not
surprising that, according to defense scholars, “In practice, the military’s size and
structure are heavily influenced by funding and policy constraints.”104
Notes
1. House of Representatives, Military Posture Briefings. Hearings before the Committee
on Armed Services, 87th Cong., 1st Sess., Washington, DC: Government Printing Office,
1961, 651.
2. House of Representatives, Hearings on Military Posture and H.R. 5968. Depart-
ment of Defense Authorization for Appropriations for Fiscal Year 1983. Committee on
Armed Services, 97th Cong., 2nd Sess., Washington, DC: Government Printing Office,
1982.
3. Department of Defense, Quadrennial Defense Review Report. Washington, DC: De-
partment of Defense, September 30, 2001, 4.
4. Department of Defense, Quadrennial Defense Review Report. Washington, DC: De-
partment of Defense, February 6, 2006, 13.
5. Department of Defense, Military Power of the People’s Republic of China, annual report
to Congress, June 4, 2006, http://www.lanuevacuba.com/archivo/china-military-power-
us-dept-of-defense-anual-report-2006.htm.
6. “Chinese Threat Is Expanding, Pentagon Says,” Los Angeles Times, May 24, 2006.
7. General T. Michael Moseley, “The Nation’s Guardians: America’s 21st Century Air
Force,” CSAF White Paper, December 29, 2007, 3.
8. William J. Bishop and David S. Sorenson, “Superpower Defense Expenditures and
Foreign Policy,” in Foreign Policy: USA/USSR, eds. Charles W. Kegley Jr. and Pat McGowan.
Beverly Hills, CA: Sage Publications, 1982, 163–182.
9. Bruce M. Russett, What Price Vigilance? The Burdens of National Defense. New Haven,
CT: Yale University Press, 1970, 1–5.
10. The literature on bureaucratic politics is considerable, including Anthony Downs,
Inside Bureaucracy. Boston: Little, Brown, 1967; I. M. Destler, Presidents, Bureaucrats, and
Foreign Policy. Princeton, NJ: Princeton University Press, 1972; Morton H. Halperin, Bu-
reaucratic Politics and Foreign Policy. Washington, DC: Brookings Institution, 1974; and
Graham Allison, Essence of Decision. Boston: Little, Brown, 1971. The bureaucratic poli-
tics paradigm has its critics, including Stephen D. Krasner, “Are Bureaucracies Important?
(or Allison Wonderland),” Foreign Policy 7 (1972), 159–179; David A. Welch, “The Or-
ganizational Process and Bureaucratic Paradigms: Retrospective and Prospective,” Interna-
tional Security 17 (October 1992), 112–146; and Edward Rhodes, “Do Bureaucratic Politics
Matter? Some Disconfirming Findings from the Case of the U.S. Navy,” World Politics 47
(October 1994), 1–41.
11. The classic work remains Allison, Essence of Decision.
12. NPD 1: Naval Warfare, March 1994, http://www.nwdc.navy.mil/content/Library/
Documents/NDPs/ndp1/ndp10001.htm.
13. The late General Bernard Schreiver helped move the Air Force into the rocket
age, while Admiral Elmo Zumwalt pushed for riverine forces when he was chief of naval
operations. The Navy has never accepted sealift as a regular Navy mission and managed to
push it off to the Military Sealift Command using noncommissioned ships and merchant
sailors to operate military sealift. The Navy Department also demanded that it be run from
a stock fund rather than appropriated funds so that it would not compete with funding
for traditional Navy missions. Thus, the Military Sealift Command charges fees from the
services to transport material.
14. Andrew F. Krepinevich Jr., The Army and Vietnam. Baltimore: Johns Hopkins Uni-
versity Press, 1986, 36.
15. The best discussion of this rivalry is Paul Y. Hammond, “Super Carriers and B-36
Bombers: Appropriations, Strategy, and Politics,” in American Civil-Military Decisions: A
Book of Case Studies, ed. Harold Stein. Birmingham: University of Alabama Press, 1963,
465–568.
16. A discussion of the competition surrounding the development of the B-36 and B-52
bombers is in David S. Sorenson, The Politics of Strategic Aircraft Modernization. Westport,
CT: Praeger Publishers, 1995, chaps. 3–4.
17. John R. M. Wilson, Herbert Hoover and the Armed Forces: A Study of Presidential
Attitudes and Leadership. New York: Garland, 1993, 116.
18. One of the best studies of this process is Demetrios Caraley, The Politics of Military
Unification: A Study of Conflict and the Policy Process. New York: Columbia University Press,
1966.
19. Warner R. Schilling, “The Politics of National Defense, Fiscal 1950,” in Strat-
egy, Politics, and Defense Budgets, eds. Warner R. Schilling, Paul Y. Hammond, and Glenn
H. Snyder. New York: Columbia University Press, 1962, 152–153.
20. David N. Schwartz, “Past and Present: The Historical Legacy,” chap. 9 in Ballistic
Missile Defense, eds. Ashton B. Carter and David N. Schwartz. Washington, DC: Brookings
Institute, 1984, 332.
21. Michael H. Armacost, The Politics of Weapons Innovation: The Thor-Jupiter Contro-
versy. New York: Columbia University Press, 1969.
22. Edward N. Hall, “Industry and the Military in the United States,” Air University
Quarterly Review 10 (Fall 1958), 42.
23. Frederic A. Bergerson, The Army Gets an Air Force: Tactics of Insurgent Bureaucratic
Politics. Baltimore: Johns Hopkins University Press, 1980, 66–68.
24. Edmund Beard, Developing the ICBM: A Study in Bureaucratic Politics. New York:
Columbia University Press, 1976, 219.
25. Alain C. Enthoven and K. Wayne Smith, How Much Is Enough? Shaping the Defense
Program, 1961–1969. New York: Harper & Row, 1971, 251.
26. Harvey M. Sapolsky, The Polaris System Development: Bureaucratic and Programmatic
Success in Government. Cambridge, MA: Harvard University Press, 1972, 17.
27. Michael J. Neufeld, “The End of the Army Space Program: Interservice Rivalry
and the Transfer of the Von Braun Group to NASA, 1958–1959,” The Journal of Military
History 69 ( July 2005): 756. It is interesting that the Army, in contrast to other services,
compromised core missions for new technology instead of resisting new technology that
would have challenged those core missions.
28. Robert J. Art and Stephen E. Ockenden, “The Domestic Politics of Cruise Mis-
sile Development, 1970–1980,” chap. 12 in Cruise Missiles: Technology, Strategy, Politics,
ed. Richard K. Betts. Washington, DC: Brookings Institution, 1981, 360.
29. Desmond Ball, Politics and Force Levels: The Strategic Missile Program of the Kennedy
Administration. Berkeley: University of California Press, 1980, 268.
30. The missile mission flew in the face of traditional submarine missions, so there was
considerable opposition to the program in the Navy submarine community. Submariners
also believed that the 32-tube requirement would make submarines too large to handle.
The 16-tube requirement was copied by the British, the French, and the Soviets, who
may have believed that it was derived scientifically. Sapolsky, Polaris System Development,
53–54.
31. Richard G. Head, “Doctrinal Innovation and the A-7 Attack Aircraft Decisions,”
in American Defense Policy, 3rd eds., ed. Richard D. Head and Evrin J. Rokke, 435–441.
Baltimore: Johns Hopkins University Press, 1973.
32. For details of the politics of the F-111, see Robert J. Art, The TFX Decision:
McNamara and the Military. Boston: Little, Brown, 1968; Robert F. Coulam, Illusions of
Choice: The F-111 and the Problem of Weapons Acquisition Reform. Princeton, NJ: Princeton
University Press, 1977.
33. Christopher Bolkom, “F-35 joint strike fighter ( JSF) Program: Background, Status,
and Issues.” CRS Report for Congress, RL30563, June 2, 2006, 15.
34. Armacost, The Politics of Weapons Innovation, 272.
35. Samuel P. Huntington, The Common Defense: Strategic Programs in National Politics.
New York: Columbia University Press, 1961, 384.
36. House of Representatives, Department of Defense Appropriations for 2004. Hearings
before a Subcommittee of the Committee on Appropriations, 108th Cong., 1st Sess., Part 1.
Washington, DC: Government Printing Office, 2004, 291.
37. Senate, Department of Defense Authorizations for Appropriations for Fiscal Year 2003.
Hearings before the Committee on Armed Services, 107th Cong., 2nd Sess., Part 2,
Seapower. Washington, DC: Government Printing Office, 2002, 29.
38. “Navy’s New Leader Has Own Vision for Service,” San Diego Union-Tribune, Octo-
ber 14, 2005.
39. Robert Leonard, Jeffrey Drezner, and Geoffrey Sommer, The Arsenal Ship Acquisi-
tion Process Experience: Contrasting and Common Impressions from the Contractor Teams and
Joint Program Office. Santa Monica, CA: RAND Corporation, 1999, 83. “ASJPO” stood for
Arsenal Ship Joint Project Office.”
40. “Military Jet Faces a Fight to Fit In,” Washington Post, April 19, 2005. The Eu-
rofighter, now called the Typhoon, features much more basic technology than does the
F-22 and lacks stealth technology, supercruise, and the advanced avionics of the Raptor.
See Pia Christina Wood, “The Never-Ending Story: Germany, Great Britain, and the Poli-
tics of the Eurofighter,” in International Military Aerospace Collaboration, eds. Pia Christina
Wood and David S. Sorenson. Aldershot, VT: Ashgate, 2000, 53–71.
41. Supercruise refers to the ability of the aircraft to reach and sustain supersonic speeds
without the use of its fuel-consuming afterburner.
42. “Defense Chief Advises Cadets on Disagreeing with Leaders,” New York Times, April
22, 2008; “Air Force under Fire from Defense Secretary Robert Gates,” Los Angeles Times,
April 22, 2008.
43. Naval carrier task forces are also designed to support attacks against land tar-
gets, and they have carried out such operations during and since World War II.
The planning factor that might have changed was the number of carrier task forces,
which has remained at 12 for many decades even as the Cold War has faded into
memory.
44. “Admiral Defends Role of Navy in Combating Terrorism,” Newport News Daily
Press, October 7, 2005. On the same day, the chief of naval operations defended sea basing
as a way to deliver relief supplies to disasters, noting the role of the carrier USS Abraham
Lincoln in delivering emergency supplies to tsunami victims in Asia. “Relief Efforts in Gulf
Demonstrate Sea Basing Capability: CNO Says,” Defense Daily, October 7, 2005.
45. “Gen. Moseley Pledges to Keep Air Cargo Program on Schedule,” The Hill, Octo-
ber 24, 2007.
46. “Army Hoping to Keep UAVs Away from Air Force,” Huntsville Times, August 13,
2007.
47. “Air Force, Army Clash Again on Unmanned Aerial Vehicles,” The Hill, October 30,
2007.
48. David E. Johnson, Learning Large Lessons: The Evolving Roles of Ground Power
and Air Power in the Post-Cold War Era. Santa Monica, CA: RAND Corporation, 2007,
160–161.
49. The classics in this field include Samuel P. Huntington, The Soldier and the State:
The Theory and Politics of Civil-Military Relations. Cambridge, MA: Belknap Press of Harvard
University, 1957; Morris Janowitz, The Professional Soldier: A Social and Political Portrait.
Glencoe, IL: Free Press, 1960; Peter Douglas Feaver, Guarding the Guardians: Civilian Con-
trol of Nuclear Weapons in the United States. Ithaca, NY: Cornell University Press, 1992; Peter
Douglas Feaver, Armed Servants: Agency, Oversight, and Civil-Military Relations. Cambridge,
MA: Harvard University Press, 2002; Lewis Smith, American Democracy and Military Power:
A Study of Civil Control of the Military Power in the United States. Chicago: University of
Chicago Press, 1951.
50. Such conflicts included the clash between the Navy and the Air Force over the
role of carriers versus long-range bombers during the Truman administration and over
the dominance of the Air Force during the Eisenhower administration. See Dale R. Her-
spring, The Pentagon and the Presidency: Civil-Military Relations from FDR to George W. Bush.
Lawrence: University Press of Kansas, 2005, chaps. 3–4; Vincent Davis, The Admiral’s
Lobby. Chapel Hill: University of North Carolina Press, 1967.
51. The origins of the process are described in Fen Osler Hampson, Unguided Missiles:
How America Buys Its Weapons. W. W. Norton, 1989, chap. 3.
52. Later, during Reagan’s second term, Chu was able to force more budgetary disci-
pline as the federal budget deficit grew significantly.
53. Christopher M. Jones, “Roles, Politics, and the Survival of the V-22 Osprey,” in The
Domestic Sources of American Foreign Policy: Insights and Evidence, eds. Eugene R. Wittcopf
and James M. McCormick. Lanham, MD: Rowman and Littlefield, 2004, 286–287.
54. Thomas L. McNaugher, New Weapons, Old Politics: America’s Military Procurement
Muddle. Washington, DC: Brookings Institution, 1989, 145.
55. “Department of Defense Acquisition Reform,” Hearing before the Committee on
Armed Services, 109th Cong., 1st Sess., November 2, 2005. Washington, DC: Government
56. The Air Force, and the Army Air Corps before it, has long avoided close-air-support
aircraft. The Air Corps briefly studied the concept of dive-bombing in 1942, and actually
acquired three possible aircraft to test. But instead of ordering their own models, the Air
Corps borrowed two Navy dive-bombers (the Douglas Dauntless, which became the A-
24, the Curtiss Helldiver, which became the A-25, and a dive-bomber that even the Navy
did not want, the Vultee Vengeance, which the Air Corps designated the A-31. The Air
Corps briefly tried the A-24 in combat, but in the absence of training or maintenance, the
program failed, and the Air Corps abandoned dive-bombing. Much later senior members
of the Senate and House Armed Services committees told a reluctant Air Force to buy a
close-air-support aircraft if it wanted the F-15 fighter, thus forcing the Air Force to buy the
A-10 Thunderbolt.
57. McNaugher, New Weapons, Old Politics, 147.
58. John A. Alic, Trillions for Military Innovation: How the Pentagon Innovates and Why It
Costs So Much. New York: Palgrave, 2007, 92.
59. “Rumsfeld’s Push for Speed Fuels Pentagon Dissent,” Wall Street Journal, May 16,
2005.
60. “Pentagon Weighs Strategy Change to Deter Terror,” New York Times, July 5, 2005.
61. “Rumsfeld’s Push,” Wall Street Journal.
62. Ibid. That is not necessarily the case, as the preceding New York Times report sug-
gests, but such areas as communications, special operations, and language training have
been neglected in the past in favor of more conventional military capability, although they
have gained much more momentum after the Cold War. Language training remains a criti-
cal shortfall. The Defense Language Institute Foreign Language Center administers courses
to around 2,500 students a year, with the more difficult language courses lasting more than
a year. The problem is that most students lack the basic language skills in the less-familiar
languages (partly as a consequence of few language choices in secondary schools), and the
services cannot spare too many officers enlisting in a yearlong course at the expense of
duties and other educational requirements.
63. Rumsfeld challenged the Army in particular; see Herspring, The Pentagon and the
Presidency, chap. 13.
64. Gallup Organization, “Military Again Tops ‘Confidence in Institutions’ List,”
June 1, 2005. The poll question was, “Now I am going to read you a list of institutions in
American society. Please tell me how much confidence you, yourself, have in each one—a
great deal, quite a lot, some, or very little. The rank order of institutions was determined
by the combined “a great deal” and “quite a lot” figures. Gallup conducted the poll between
May 23 and May 26, 2005. Confidence in television news and newspapers were both at
28 percent.
65. “Report Finds Air Force Officers Steered Contract,” Washington Post, April 18,
2008.
66. “Pentagon, FBI Probing Air Force Contracts,” Washington Post, April 18, 2008.
Riechers, a retired Air Force officer, drew attention earlier when an investigation revealed
that the Air Force arranged a no-work contract with CRI when Riechers was actually work-
ing for Payton. “Air Force Arranged No-Work Contract,” Washington Post, October 1, 2007.
67. “Senators Ask for Pentagon Explanation on Contract Abuse,” Washington Post,
April 19, 2008.
68. In 2007, congressional anger boiled over when David Chu, undersecretary of de-
fense for personnel and readiness, failed to produce documents; as punishment, the House
Appropriations Subcommittee on Defense cut the Defense Department’s Office of Legisla-
tive Affairs budget in half. “Cuts to OLA Punish Pentagon for Non-Responsiveness,” The
Hill, July 26, 2006.
69. Diana Evans, Greasing the Wheels: Using Pork Barrel Projects to Build Majority Coali-
tions in Congress. Cambridge: Cambridge University Press, 2004.
70. As the name implies, a lump-sum budget has a single budget figure for a particular
agency rather than specifying programs and tying a budget number to them, as line-item
budgets do.
71. Barry M. Blechman, The Politics of National Security: Congress and U.S. Defense Policy.
New York: Oxford University Press, 1990, 30–31.
72. One classic study is John Ferejohn, Pork Barrel Politics: Rivers and Harbors Leg-
islation, 1947–1968. Stanford: Stanford University Press, 1974. See also Robert M. Stein
and Kenneth M. Bickers, “Congressional Elections and the Pork Barrel,” Journal of Politics
56 (May 1994), 377–399; John A. Hird, “The Political Economy of Pork: Project Selec-
tion and the U.S. Army Corps of Engineers,” American Political Science Review 85 ( June
1991), 429–456; Blechman, The Politics of National Security (esp. 48, 56). Kenneth R. Meyer
(The Political Economy of Defense Contracting. New Haven, CT: Yale University Press,
1991) finds little evidence of pork-barrel motives in prime defense contracts approved by
Congress.
73. Nick Kotz, The Wild Blue Yonder: Money, Politics, and the B-1 Bomber. Princeton,
NJ: Princeton University Press, 1988, 194. While Glenn (whose state of Ohio made many
B-1 parts, including the engines) was a relative hawk in the defense aviary, Cranston of
California (whose state was home to Rockwell, the prime B-1 contractor) was a relative
dove.
74. “Air Force Jet Wins Battle in Congress,” Washington Post, September 28, 2006.
75. “Air Force Chief Frustrated over Helicopter Wrangling,” The Hill, April 25, 2007.
76. National Defense Authorization Act for Fiscal Year 2006. Report to Accompany S.
1042. Committee on Armed Services, U.S. Senate, 109th Cong., 1st Sess., 71.
77. “Panel Asks More for Carrier,” Newport News Daily Press, September 29, 2005.
78. The sixteen were Senators Susan Collins (R-ME), Jack Reed (D-RI), Trent Lott
(R-MS), Jim Talent (R-MO), Olympia Snowe (R-ME), Chris Dodd (D-CT), Lincoln Chafee
(R-RI), Mike DeWine (R-OH), Lindsey Graham (R-SC), Daniel Akaka (D-HI), David Vitter
(R-LA), Frank Lautenberg (D-NJ), Bill Nelson (D-FL), Joe Lieberman (D-CT), Maria
Cantwell (D-WA), and Mary Landrieu (D-LA). “16 Senators Request More Naval Fund-
ing,” The Hill, June 27, 2006.
79. National Defense Authorization Act for Fiscal Year 2006. Committee on Armed Ser-
vices, U.S. Senate, 109th Cong., 1st Sess., 115.
80. “Wynne Says Aging Aircraft Could Threaten U.S. Superiority,” CongressDailyPM,
September 19, 2007.
81. “House GOP Leaders Push Plan to Add Shipbuilding Funds,” Norfolk Virginian-
Pilot, May 12, 2005.
82. “Congress Said to Steer Military Funds to Pet Projects,” Boston Globe, June 17, 2005.
83. “Stevens, Inouye Top Defense Earmarks List at over $180M Each; Byrd Next at
$166M,” The Hill, September 18, 2007. Not all pork in the defense appropriations bills
is military pork. Some members of Congress found ways to add nondefense items to the
defense-spending measures. Representative David Obey (D-WI) inserted a provision for
$750 million for the State Children’s Health Insurance Program, a joint federal and state
program that provides health care for 6 million poor children, while members from Gulf
states inserted money to pay for damage from Hurricane Katrina. “Some Lawmakers Want
to Fund Civilian Projects through War Bill,” Washington Post, March 2, 2007.
84. “Trying to Sink the Mini-Sub,” CQ Quarterly, February 13, 2006.
85. “Pentagon Clears Full Production for Osprey Aircraft,” Wall Street Journal, Septem-
ber 29, 2005. “The bill was also good timing for Sen. Robert F. Bennett (R-UT), who
secured $66 million in emergency watershed protection for the southern portion of his
state, which was devastated by floods earlier this year.” As an effort to shore up the liberal
base of his party, Senator Edward Kennedy (D-MA) “announced he will seek $12 mil-
lion to provide protection for judges, responding to a request by the Judicial Conference,
a group that represents the federal judiciary. Kennedy said his amendment is in part a
response to comments by members of Congress, including House Majority Leader Tom
DeLay (R-TX) that the senator said ‘have incited, or threatened to incite, violence against
judges.’”
86. “Senators Aim to Derail Pentagon Plans to Scrap C-130J,” National Journal’s Con-
gressDaily, April 18, 2005.
87. “Rumsfeld Restores Lockheed’s C-130J to Defense Budget,” Wall Street Journal, May
12, 2005.
88. “Politics Stalling Tanker Joint Bid,” Los Angeles Times, June 13, 2005.
89. “Shelby, Sessions Fight for Boeing Foe,” CQ Today, June 23, 2005.
90. U.S. Senator Patty Murray, “Senator Murray Debunks Airbus Claims in Speech on
the Senate Floor,” http://murray.senate.gov/news.cfm?id=294227.
91. “Future of C-17 Line Still up in the Air,” Los Angeles Times, June 22, 2006.
92. “White House Threatens Veto over Policies, Not Weapons Cuts,” Aerospace Daily
& Defense Report, May 17, 2007.
93. “Hunter Promotes Ship Navy Doesn’t Want,” National Journal’s CongressDailyAM,
June 8, 2006.
94. “California Congressman Opens Up about Earmarks,” Washington Post, June 19,
2006.
95. “The Project That Wouldn’t Die,” Washington Post, June 19, 2006.
96. According to General Moseley, the daily cost of maintaining congressionally man-
dated aircraft is $6.4 million. “Air Force Leaders Eye Change to Personnel Reduction
Plans,” Aerospace Daily & Defense Report, February 13, 2007.
97. “Air Force Floats Multiyear Globemaster Buy to Defense Lawmakers,” Inside the Air
Force, April 20, 2007.
98. For an insightful history of Goldwater-Nichols, see James R. Locher III, Victory on
the Potomac: The Goldwater-Nichols Act Unifies the Pentagon. College Station: Texas A&M
99. “Dueling Views on Army Size: Rumsfeld vs. Congress,” Christian Science Monitor,
May 17, 2005. Congress did not go further and legislate that Rumsfeld spend the necessary
funding for such an increase. Had it done so, or should it do so in the future, it would
raise an unanswered constitutional question that first arose when Congress ordered the
Jefferson administration to buy naval ships for the Barbary States Wars, and later when
Congress ordered the Kennedy administration to buy the Air Force B-70 bomber. None
of the cases reached the final arbiter of the Constitution, the U.S. Supreme Court, so the
matter of congressional spending mandates to the president remains a question without an
answer.
100. James H. Lebovic, Foregone Conclusions: U.S. Weapons Acquisition in the Post–Cold
War Transition. Boulder, CO: Westview Press, 1996, 129–130.
101. Alic, Trillions for Military Technology, 67.
102. For example, Seymour Melman, Pentagon Capitalism: The Political Economy of War.
New York: McGraw-Hill, 1970; Adam Yarmolinsky, The Military Establishment. New York:
Harper & Row, 1973, chap. 63; and J. William Proxmire, Report from Wasteland: America’s
Military-Industrial Complex. New York: Praeger Publishers, 1970.
103. “In Key Review, Pentagon Considers Altering Force-Planning Construct,” Inside
the Pentagon, June 23, 2005.
104. Ibid.
Further Reading
Alic, John A. Trillions for Military Innovation: How the Pentagon Innovates and Why It Costs So
Much. New York: Palgrave, 2007.
Armacost, Michael H. The Politics of Weapons Innovation: The Thor-Jupiter Controversy. New
York: Columbia University Press, 1969.
Art, Robert J. The TFX Decision: McNamara and the Military. Boston: Little, Brown, 1968.
Ball, Desmond. Politics and Force Levels: The Strategic Missile Program of the Kennedy Admin-
istration. Berkeley: University of California Press, 1980.
Beard, Edmund. Developing the ICBM: A Study in Bureaucratic Politics. New York: Columbia
Bergerson, Frederic A. The Army Gets an Air Force: Tactics of Insurgent Bureaucratic Politics.
Baltimore: Johns Hopkins University Press, 1980.
Blechman, Barry M. The Politics of National Security: Congress and U.S. Defense Policy. New
York: Oxford University Press, 1990.
Caraley, Demetrios. The Politics of Military Unification: A Study of Conflict and the Policy
Process. New York: Columbia University Press, 1966.
Coulam, Robert F. Illusions of Choice: The F-111 and the Problem of Weapons Acquisition
Reform. Princeton, NJ: Princeton University Press, 1977.
Enthoven, Alain C., and K. Wayne Smith. How Much Is Enough? Shaping the Defense Pro-
gram, 1961–1969. New York: Harper & Row, 1971.
Evans, Diana. Greasing the Wheels: Using Pork Barrel Projects to Build Majority Coalitions in
Congress. Cambridge: Cambridge University Press, 2004.
Feaver, Peter Douglas. Armed Servants: Agency, Oversight, and Civil-Military Relations. Cam-
bridge, MA: Harvard University Press, 2002.
. Guarding the Guardians: Civilian Control of Nuclear Weapons in the United States.
Ithaca, NY: Cornell University Press, 1992.
Hampson, Fen Osler. Unguided Missiles: How America Buys Its Weapons. W. W. Norton,
1989.
Herspring, Dale R. The Pentagon and the Presidency: Civil-Military Relations from FDR to
George W. Bush. Lawrence: University Press of Kansas, 2005.
Huntington, Samuel P. The Common Defense: Strategic Programs in National Politics. New
York: Columbia University Press, 1961.
Kotz, Nick. The Wild Blue Yonder: Money, Politics, and the B-1 Bomber. Princeton, NJ:
Princeton University Press, 1988.
Lebovic, James H. Foregone Conclusions: U.S. Weapons Acquisition in the Post–Cold War Tran-
sition. Boulder, CO: Westview Press, 1996.
Locher, James R., III. Victory on the Potomac: The Goldwater-Nichols Act Unifies the Pentagon.
College Station: Texas A&M University Press, 2002.
McNaugher, Thomas L. New Weapons, Old Politics: America’s Military Procurement Muddle.
Washington, DC: Brookings Institution, 1989.
Meyer, Kenneth R. The Political Economy of Defense Contracting, New Haven, CT: Yale Uni-
versity Press, 1991.
Russett, Bruce M. What Price Vigilance? The Burdens of National Defense. New Haven, CT:
Yale University Press, 1970.
Sapolsky, Harvey M. The Polaris System Development: Bureaucratic and Programmatic Success
in Government. Cambridge, MA: Harvard University Press, 1972.
Schilling, Warner R., Paul Y. Hammond, and Glenn H. Snyder. Strategy, Politics, and De-
fense Budgets. New York: Columbia University Press, 1962.
Sorenson, David S. The Politics of Strategic Aircraft Modernization. Westport, CT: Praeger
Publishers, 1995.
Stein, Harold, ed. American Civil-Military Decisions: A Book of Case Studies. Birmingham:
University of Alabama Press, 1963.
CHAPTER 5
International Arms Sales

and Defense Acquisition
In the late 1930s, the Brewster Aeronautical Company received a contract from
the U.S. Navy to develop a fighter plane, which resulted in the Brewster F2A
Buffalo, a portly monoplane designed for carrier use. The plane had numerous
problems (including a landing gear that sometimes collapsed) and laggard deliv-
ery from its Queens, New York, plant. The Navy ordered around 50 of the little
planes but soon realized that the Grumman Wildcat fighter was superior and be-
gan to transfer the Buffalo to other countries anxious to bolster their air arms as
World War II approached. The few Buffalo that Americans flew into combat at the
Battle of Midway in 1942 found themselves quickly downed by more experienced
Japanese pilots, and the Buffalo gained a reputation as one of the worst fighters the
Navy ever bought. The U.S. Navy quickly got rid of its Buffalo, selling them to the
British Commonwealth, the Netherlands, Belgium, and Finland. While the U.S.
Navy had little success with the Buffalo, in the hands of Finnish pilots, the plane
was a mortal foe against Soviet pilots in the 1941–1944 war between the two
countries, where the Buffalo ran up a claimed superiority of 26 to 1 over Soviet
fighters. Today, the only known remaining Buffalo, fished out of a Russian lake,
is under restoration in Finland.
The Brewster Buffalo is a fairly typical case of early American foreign military
sales policy, which regarded obsolete or unwanted U.S. military weapons as prime
candidates for foreign sales. Long after they had outlived their American useful-
ness, aircraft like the Boeing P-26 fighter, the Martin B-10 bomber, the F-104
fighter jet, the M-60 tank, and many Knox-class frigates found their ways to other
countries, where they often served for many more years before winding up in a
scrap yard (or museum). Such sales were hardly new: American arms sales to
foreign customers spiked after the U.S. Civil War, with the Ottoman Empire
becoming America’s largest purchaser of American weapons, and the United
States competed with European suppliers during the rest of the nineteenth and
early twentieth century for a plethora of weapons, including battleships for South
International Arms Sales and Defense Acquisition 127
America, which enabled Chile’s navy to become more powerful than the U.S.
Navy.1
The old policy of international sales from surplus or undesired military hard-
ware has evolved into a much different program, though. Now the U.S. military,
in partnership with defense producers, operates a robust international sales pro-
gram that markets modern military equipment to numerous overseas customers.
This chapter provides an overview of international arms sales relative to their
impact and role in the process and politics of defense acquisition. There are many
additional explanations for international arms sales, which are briefly summarized
in this chapter, but the real focus is on reasons that are directly related to defense
acquisition.
The Current International Arms Sales Environment

Global arms sales for 2006 totaled around $40.3 billion, a decline of 13 percent
from the previous year.2 The United States ranked first in arms sales agreements
in that year, at $16.9 billion, which was almost 42 percent of worldwide arms
sales, with an increase of $13.5 billion in 2005. Russia was the second-largest
supplier of arms, with $8.7 billion in agreements, or almost one-fifth of the total
international sales. The United Kingdom ranked third in the world, with arms
sales of $3.1 billion in 2006, an increase over its 2005 sales of $2.9 billion.3
Why International Arms Sales?

Several justifications exist for international arms sales, including the following:
r Support to allied or friendly countries against a common threat

r Disposal of equipment no longer needed by the U.S. military
r Increased profit for the military contractor
r Influence on recipient countries who buy U.S. weapons and systems
r Reduction of the cost of weapons paid by the U.S. military
r Offsetting an overall American negative balance of trade
There are additional reasons for international military sales, but the preceding are
the primary ones.
Supporting Allied or Friendly Countries

During the Cold War, the United States poured many thousands of weapons
to allied and friendly countries, though such weapons usually came from exces-
sive stocks. The supporting arguments for such sales (and grants, as some went
free to recipient countries) was that the United States had an interest in building
up other countries so that they could fight aggression with the same weapons
that the United States fielded, and join with the United States should American
forces have to join in their defense. Such weapons commonality made operations
easier as it reduced supply and maintenance, and pilots and crews who flew the
aircraft could train at U.S. bases, enabling more international cooperation. It was
also easier to determine friend versus foe when recipient countries used the same
weapons as the Americans; for example, in the 1990–1991 Gulf War against Iraqi
forces, American-made aircraft made up most of the coalition, and thus American
aircrews could identify aircraft of their country’s manufacturers as friends. This
justification also appears in a notification to sell F-16 Block 50 fighters to Turkey
in 2006: “This proposed sale will contribute to the foreign policy and national
security objectives of the United States by improving the military capabilities of
Turkey and advancing weapon system standardization and interoperability with
U.S. forces.”4
The United States continues to use support to friendly countries as a justifi-
cation for international arms sales. Senior members of the George W. Bush ad-
ministration justified a recent sale to the Gulf Arab states (worth $20 billion) and
ten-year agreements for $43 billion in arms sales to Egypt and Israel through lan-
guage directed against Iran. Said Secretary of State Condoleezza Rice, “There isn’t
a doubt that Iran constitutes the single most important single-country strategic
challenge to the United States and to the kind of the Middle East that we want
to see,” accusing Iran of “support for terrorism that is a threat to the democratic
forces in Lebanon, support for the most radical forces in the Palestinian terri-
tories . . . or support for Shiite militias and the transfer of technologies that are
endangering the lives of our soldiers and endangering a free Iraq.”5
When the United States has an opportunity to improve relations with a particu-
lar nation, arms sales often follow. They are justified on the basis of strengthening
the bilateral relationship, but of course they also bring financial rewards to con-
tractors exploring new markets. As U.S. relations improved with Pakistan after the
September 11, 2001, terrorist attacks, American policy makers offered Pakistan
sales of the F-16 fighter, once offered when the United States needed Pakistan’s
assistance in resisting the Soviet Union in Afghanistan, and then withdrawn after
the Soviets left Afghanistan and Pakistan tested missiles capable of carrying nu-
clear weapons. As American relations improved with India in the 1990s, American
defense contractors rushed to enter a lucrative market, as Americans hoped to
move India to American weapons and away from their traditional use of Soviet-
era arms. American arms representatives showed up at India’s Bangalore Air
Show in February 2007 to display a host of products, including the F-16, heavy-
lift helicopters, carrier jet trainers, and antiship missiles. Said Dennis D. Cavin,
Lockheed Martin’s vice president for international air and missile defense strategic
initiatives, “We are tickled pink to be here.”6
Disposal of Equipment No Longer Needed by the U.S. Military

The second justification, disposal of equipment, was the most common in the
earlier years of international sales. The United States disposed of obsolete weapons
initially left over from World War I and, later, in the 1920s and 1930s. Thus, old
aircraft, tanks, and naval ships went to Latin American countries for a fraction
of the sums that the military paid for them, often to clear out U.S. military in-
ventories so that the War and Navy departments could ask for more modern
weapons. World War II created a bonanza for recipient countries, as weapons
poured into the U.S. inventory at rates that even the intensity of the war could
not match. While thousands of obsolete weapons went under the scrapper’s torch,
thousands of others went to countries around the world. This enabled the United
States to make back some of the money spent on the war while strengthening
the new alliances of the Cold War. So the piston-engine P-51 Mustang fight-
ers and Fletcher-class destroyers went to South Korea, Turkey, the Philippines,
and dozens of other countries in need of cheap military equipment. Later, dur-
ing the Cold War, the military put into surplus weapons that it did not want,
like the Lockheed F-104, for foreign sales. The F-104, designed for the Air Force
in the early 1950s, was a high-performance fighter that developed considerable
problems, including engine reliability, lack of range, weapons capacity, and lack
of all-weather combat capability. Consequently, the Air Force disposed of some
of its F-104s to air forces in Turkey, the Federal Republic of Germany, Japan,
Taiwan, Jordan, and other countries. Germany and Canada also built their own
F-104s under license.
Surplus disposal remains a motive for international arms sales. For example, in
2007, the United States negotiated the sale of surplus E2-C early-warning com-
mand and control aircraft to Egypt, along with spare engines and other support.
The United States sold 60 M109 Paladin self-propelled howitzers to Morocco in
2007, which became surplus as the U.S. Army reduced its number of artillery
units. Spain received American F/A-18 A and B models as the Navy and Marine
Corps cleared out the early F/A-18s to make room for newer models.
Surplus disposal of U.S. weapons to international markets brought few benefits
to prime participants in the defense acquisition system. The weapons had already
been bought, and the only prospect for the defense industry is that their sales
cleared military inventories so that new systems might replenish them, which
clearly brought benefits to defense contractors. However, the situation changed
in the 1980s as cash sales to international customers for new weapons and systems
began to grow.
Increased Contractor Revenues

Military contractors are in business to make a profit, which normally comes
from sales to the U.S. military. However, in times of U.S. military contraction,
contractors can turn to foreign markets to continue their levels of production. For
example, when defense production for the U.S. military contracted after the end of
the major U.S. commitment to Vietnam, defense contractors avoided contraction
by expanding foreign sales.7 Foreign sales can also reduce the cost of (or even
save) American weapons. Klare observes that the Navy’s F-14 fighter aircraft was
facing cancellation because of its high costs until Iran agreed to buy 80 of the
planes in 1974.8 The large number of F-16 international customers allowed the
contractor to reduce the price of the fighter for the U.S. Air Force.
Sales of new equipment bring in not only an initial profit but also a stream of
revenue from the follow-on support that most international sales contracts carry.
For example, the United States sold Airborne Warning and Control (AWACS)
aircraft to Saudi Arabia in the 1980s, which earned an initial profit for Boeing.
Almost 25 years later, the same company applied to sell Saudi Arabia around
$400 million in upgrade kits for the same AWACS planes.9
Sometimes American contractors seek out an international need for a weapons
system that the U.S. military is disinterested in. In the late 1930s, the Vultee Air-
craft Corporation built the Vengeance dive-bomber specifically for foreign mar-
kets, responding to French interest in a dive-bomber and paying for the aircraft
out of company funds. Around the same time, the Glenn Martin Company devel-
oped its Maryland bomber initially for the Army Air Corps, but instead sold the
aircraft that served British and French forces, as did its successor, the Baltimore,
also rejected by the U.S. Army Air Corps. Later, Bell Aircraft would sell its rela-
tively unsuccessful P-39 Airacobra fighter plane to the Soviet Union, which valued
it for its ability to engage in ground attacks. The P-39, with its large cannon fir-
ing through the propeller hub, was ideal for the Soviet mission. In the 1980s,
Northrop conceived the F-20 Tigershark for the export market after the Air Force
rejected the aircraft, then designated the F-5G. Northrop hoped that international
air forces that had bought and flown its earlier F-5 fighter aircraft would also buy
the F-20, and it marketed it aggressively, even using American ace pilot Chuck
Yeager to promote it. But the promise that it would be easy for underdeveloped air
forces to operate the aircraft insulted some potential buyers, and when the U.S.
Air Force again refused to buy the F-20 after extensive lobbying by Northrop,
prospective buyers balked because they knew that they would have to pay the
support costs normally borne by the U.S. operator. Finally, the Reagan adminis-
tration relaxed previous limitations on F-16 fighter exports, and so several pend-
ing F-20 customers eagerly bought the F-16, realizing that it was a more capable,
technologically advanced fighter. After six frustrating years, Northrop abandoned
the F-20 project after spending more than $1.2 billion on the plane and suffering
through a bribery scandal because of efforts to sell the F-20 to South Korea, which
cost Northrop’s Chief Executive Officer Thomas V. Jones his position. Following
that disappointment, few American defense contractors tried again to produce a
weapon specifically for export.
Currently there are a number of programs that provide healthy streams of rev-
enue for American defense contractors, and the F-16 fighter is among the most
lucrative. The Air Force first bought the plane as a lightweight fighter with a fairly
low price tag, and that price today is an attractive feature for foreign customers,
along with the relatively low cost of maintaining the aircraft (e.g., it has only
one engine, which reduces engine repair costs). Twenty-four countries have pur-
chased more than 4,300 F-16s, with more in the works. While some of these are
refurbished former Air Force planes (e.g., those sold to Jordan), others are new
versions, and in the cases of the wealthiest countries, they are the latest Block 60
versions. The sales package often comes with a maintenance agreement, which
can increase the overall value of the purchase. Since the research, development,
and upgrades for the F-16 have already been paid for, the cost to the contractor
to produce foreign F-16s is relatively low, thus raising the profit margin.
Influence on Recipient Countries That Buy U.S. Weapons and Systems

Arms sales are often justified on the basis of building better relations between
buyer and seller. The argument is that both parties generally have similar inter-
ests that can be strengthened by arms sales. Kemp notes, for example, that Presi-
dent Kennedy approved the sale of Polaris submarine ballistic missiles to Britain
to strengthen British-American ties, and that arms sales from the United States
to places like Latin America, Iran, and Saudi Arabia were designed to influence
pro-U.S. governments.10 Arms sales also can create long-term dependencies for
the buyer toward the selling country, because arms require spare parts, mainte-
nance, and upgrades, all of which the supplier country can provide. To break ties
from the supplier nation, as Iran did after the 1979 revolution, is to render its
American-produced weapons almost unusable because of the lack of spare parts
and other things that are important to keep weapons operating (although Iran
has scrapped together enough support to apparently keep some of its American-
supplied aircraft still flying). Venezuela under President Hugo Chávez may also
find it a challenge to continue to fly its American-built F-16 fighter aircraft now
that Venezuelan-American relations have soured considerably.
Reduction of the Cost of Weapons Paid by the U.S. Military

Of the market assumptions that remain in the U.S. defense acquisition system,
one primary supposition is that the larger is the sales volume, the lower is the
sales price. This is also true for the defense market, and it is one reason why the
U.S. military favors foreign sales: it pays lower prices for its own equipment when
that equipment is also sold to international customers. The F-16 fighter is an il-
lustrative case. Originally designed for the U.S. Air Force as a lightweight fighter
aircraft, it is now in use in 23 countries outside the United States, and as of 2008,
others like Morocco were engaged in talks to buy the F-16. While the cost savings
to the U.S. Air Force is difficult to assess directly—some F-16s are coproduced
in the buying country, where offset arrangements cloud the price, and some cus-
tomers have bought F-16s that were actually more advanced than those of the
U.S. Air Force (e.g., the United Arab Emirates)—the fact that more than 4,300
F-16s were sold has reduced the price for the Air Force. Moreover, as the F-16
goes through upgrades, international customers share the costs of those upgrades.
Sometimes a related factor that keeps national production lines open can justify
foreign military sales. The case of the C-17 transport aircraft is instructive here.
The U.S. Air Force ordered the aircraft in the 1980s and first flew it in 1991. The
Air Force’s initial plans called for a buy of 120 planes to end in 2004, but that plan
grew to 180 with production through 2007, and then Congress added $2 billion
in additional but unrequested funds for 10 additional planes through 2008.11 But
with a threatened production line shutdown, the commander of the U.S. Trans-
portation Command, General Norton Schwartz, called on manufacturer Boeing
to aggressively promote the craft for foreign military sales to keep the production
line open should the Air Force want to procure more C-17s itself.12
Arms Sales to Offset a Negative Balance of Trade

The United States has increasingly run a negative trade balance, importing
more than it exports. In September 2007, for example, the United States im-
ported $196.6 billion and exported $140.1 billion of goods, leaving a negative
balance of $56.5 billion, the lowest since May 2005.13 While economists debate
the impact of negative trade balances (some correlate negative trade balances with
positive economic growth, while others argue that long-term trade deficits benefit
U.S. trade partners), they are controversial in Washington. Thus, foreign military
sales are defended as a mechanism to decrease negative trade balances. The GAO
provided data for 2000–2004 showing that exports of U.S. arms outweigh arms
imports, though the value of arms coming into the United States grew at a faster
rate than did exports, with imports as a percentage of exports rising from 14 to 18
percent. Still, the United States did export $11.9 billion in arms while importing
only $2.1 billion in weapons for 2004.14 Still, $11.9 billion is a tiny fraction of
the total trade balance, and it is hard to argue that economically it will make a
macroeconomic difference.
The Management of Foreign Military Sales

The United States currently leads the world in foreign military sales to develop-
ing countries, selling $16.9 billion worth of weapons in 2006, followed by Russia
with $8.7 billion and Britain with $3.1 billion, out of total global weapons sales
of $28.8 billion.15 Despite the size of the programs, however, official policy has
been contradictory and sometimes incomplete.
In official Defense Department lexicon, foreign military sales is known as “se-
curity cooperation,” which the Defense Security Cooperation Agency (DSCA) de-
fines as “those activities conducted with allies and friendly nations to
r Build relationships that promote specified U.S. interests

r Build allied and friendly nation capabilities for self-defense and coalition operations
r Provide U.S. forces with peacetime and contingency access”16
Security assistance is a subset of security cooperation but can also be thought

of as a critical pillar of security cooperation, as it provides what most recipient
countries do not have: funding for expensive weapons programs. There are a
number of programs under security assistance, including the following:
r Foreign military sales (FMS)
r Direct commercial sales (DCS)
r Foreign military sales credit (FMSCR), a direct loan program to recipient countries that
cannot afford cash payments
r Long-term leases for military equipment
r Drawdown, the transfer of U.S. military equipment or services, usually for emergency
purposes
r Foreign military financing (FMF) grants or loans
r International military education and training (IMET)
The Arms Export Control Act and the Foreign Assistance Act of 1961 created
the FMS program, which involves government-to-government weapons and sys-
tems sales. The Defense Department operates the program on a no-loss, no-profit
basis (this means that sales are not conducted at below U.S. prices, and the De-
fense Department does not make a profit on them but instead charges a 3.8 per-
cent fee). The program starts with an official request from the purchasing coun-
try, which the Defense Department coordinates through the Department of State’s
Bureau of Political-Military Affairs. Once approved, the U.S. government actually
contracts for the goods or services that the recipient country requested. Usually,
to facilitate standardization with U.S. equipment (so that recipient countries can
have interoperability with U.S. equipment in exercises or in allied combat), the
FMS specifies that the particular foreign sales items are or will be in service with
the U.S. military.
Direct commercial sales, unlike FMS, are coordinated through the Office of
Trade Controls at the State Department’s Bureau of Political-Military Affairs. In
contrast to FMS, once the State Department has approved, DCS allows for direct
negotiations between the international customer and the manufacturer, which
allows both to avoid the surcharges involved with FMS and allows for specialized
equipment that the international customer requires without the need for U.S.-
equivalent equipment.
It is difficult to compare the value of arms transferred under each program
because contractors participating in DCS are not required to reveal the value of
those items. Arms transfers under FMS are coordinated between the contractor
and the buyer by the Defense Security Cooperation Agency (DSCA). The DSCA
operates on a no-profit, no-loss basis for the government, which charges a fee
($15,000 or 3.8 percent of item and service cost, whichever is greater) to cover
administration costs. There is some advantage to selling items through FMS rather
than DCS, as FMS transfers items already in use with the U.S. military, thus of-
fering the potential for lower per-unit costs for the U.S. operating service, as well
as standardization of weapons between the United States and an allied country.
Unlike FMS, DCS is managed by the State Department. Direct commercial
sales do not require the coordination of the Defense Department, as contract
negotiations occur directly between the contractor and the recipient country, re-
quiring nothing more than an export license, which is issued by the Office of
Defense Trade Controls at the State Department’s Bureau of Political-Military Af-
fairs. Thus, the costs of DCS are often lower than for FMS.
Policy guidelines for U.S. foreign military sales include a number of docu-
ments, including Presidential Decision Directive 34, issued by the Clinton admin-
istration in 1995. The PDD 34 stated that “sales of conventional weapons are a
legitimate instrument of U.S. foreign policy, enabling allies and friends to bet-
ter defend themselves, as well as help support our defense industrial base.”17
However, the document also called for arms sales restraint in cases where arms
transfers might cause or enable regional instability. A subsequent document from
the Clinton administration proposed tying Latin American arms sales to more
political guidelines: “In considering requests from appropriate civilian authori-
ties for advanced conventional arms, we will take into account our guiding goals
of strengthening democracy, including civilian control of the military; focus-
ing resources on needed social and economic development; preventing an arms
race; supporting transparency and confidence-building; and ensuring that defense
modernization occurs responsibly and with restraint.”18
Potential Problems Posed by Foreign Military Sales

While international military sales bring benefits to both the U.S. military and
the U.S. defense industry, they also bring problems. Those problems include
unauthorized technology transfer and unapproved use.
Several U.S. arms customers have run into issues regarding either actual or
potential technology transfer. While recipient countries must agree not to trans-
fer sensitive technology contained in their American-supplied systems, there have
been breaches of such agreements. Israel, for example, stood accused of trans-
ferring airborne early-warning and control technology imported from the United
States to China, along with antiaircraft technology borrowed from the U.S.-made
Sidewinder missile.19 Issues arise with other close allies or friends: the United
States and United Kingdom were at odds over coproduction of the joint strike
fighter, a program on which the United Kingdom was an original partner. The
disagreement came when the United States initially refused to transfer classified
computer codes, and the United Kingdom threatened to withdraw from the pro-
gram altogether until a “painful” resolution was reached.20 The U.S. Congress
and the commander of the Pacific Command recommended against the sale of
the USAF F-22 fighter to Japan, following a disclosure that a Japanese officer
married to a Chinese national had been found with classified information on the
Aegis cruiser antiaircraft and antimissile system. Given this breach of security, the
United States decided to not approve the F-22 sale.21
As a result of the various problems that can arise, U.S. export policy requires
that the National Disclosure Policy Committee clear the transfer of any sensitive
technology to foreign clients.
Unauthorized Transfer or Use of Weapons

While the actual use requirements for exported weapons systems are often
vague, there are some guidelines. One is what is known as an “end-use” agree-
ment, which tries to specify certain restrictions on the use of export weapons.
One fairly clear provision is that the buyer may not sell the weapon or system to a
third party without express permission of the United States. But the complexity of
enforcing this provision is illustrated by the sale of American-designed F-86 fight-
ers from Iran to Pakistan during its 1965 war with India. The planes were actually
built in Canada under U.S. license, and then sold to Germany, which in turn sold
them to Iran, and Iran apparently “lent” them to Pakistan to serve in the war.22
Unauthorized use includes violating specific prohibitions against the use of
certain kinds of weapons against particular targets (often civilian targets). This
was the case when the United States sold Israel cluster munitions, along with an
agreed-on clause that prohibited their use in populated areas. However, during
the 2006 Israeli-Hezbollah conflict, the United States accused Israel of using clus-
ter munitions in Lebanese populated areas, reportedly causing around 30 civilian
deaths in the aftermath. While the Bush administration could have imposed sanc-
tions against Israel, divisions within the administration about the degree of the
violation probably prevented any action beyond reporting it to Congress.23 This
was not the first time the issue arose; the Reagan administration imposed a six-
year ban on Israel for using the same type of cluster munitions in Lebanon in
1982.
The Offsets Issue

Buying weapons and other military systems from the United States poses prob-
lems for recipient countries. Formally defined, “an offset is a transfer of goods,
services, or other commodities by a vendor and customer that are bundled with
the sale of a good or service.”24 Foreign funds leave those countries for the United
States, foreign militaries become dependent on U.S. weapons, and sometimes lo-
cal industry loses out to American competitors. Offset agreements are one way to
ameliorate these and other problems associated with buying weapons from the
United States. Offset agreements provide a range of commercial and military ben-
efits as incentives to purchase American-made defense goods, including copro-
duction agreements (e.g., the recipient country can produce some of the weapon),
technology transfer from the United States to the purchasing country, financial as-
sistance (e.g., preferential loans from U.S. financial institutions), and agreements
to purchase commercial products from the buying country for sale in the United
States. There are two kinds of offset agreements, direct and indirect. Direct off-
sets involve goods and services directly related to the purchased defense good
(e.g., coproduction in the customer’s country, technology transfer), while indi-
rect agreements involve exchanges not directly related to the military good (e.g.,
the United States agrees to purchase agricultural products from a country that has
in turn agreed to buy U.S. weapons).25 Officially the Department of Defense re-
gards offsets as a negative, calling them “market distorting and inefficient.”26 Yet
other arms-selling countries provide offsets, and recipient countries have often
come to expect them; thus, the United States must also offer offsets.
Congress and Arms Exports

Some of Congress’s biggest successes in shaping American defense policy have
come in the area of foreign military sales, though there have been decidedly mixed
results. Congress has both official and unofficial roles in foreign military sales.
According to section 36(c) of the Arms Export Control Act, Congress must be
notified of a decision to issue an export license if the items to be sold are either
defense articles or services valued at $50 million or more or major defense equip-
ment valued at $14 million or more. Every February, the President must submit
to Congress a report, known as the “Javits Report,” which includes the following:
r An arms sales proposal listing all probable FMS or DCS exports for the current calendar
year that exceed $7 million for major weapons or weapons-related defense equipment,
or $25 million for other weapons or weapons-related defense equipment
r An indication of which sales or licenses are most likely to be approved during the current
year
r An estimate of the total amount of FMS sales and DCS licenses expected to be made to
each foreign country
r Information about the status and rationale of FMS and DCS sales
Congress has a number of methods to either encourage or restrict foreign arms

transfers. Before 1983, Congress could veto an arms transfer through a concur-
rent resolution, but a Supreme Court ruling in several unrelated cases found that
such a veto was unconstitutional. Congress did pass the Arms Control Export Act
(ACEA) in 1976, which requires notification of a potential arms sale that exceeds
$14 million in value and allows for a vote of disapproval by a joint resolution
of both chambers. The AECA also limits secondary transfers of sold items and
denies future sales credits to countries that use weapons for “unauthorized pur-
poses.” Congress has also passed a number of measures establishing arms transfer
criteria. For example, in 1985 Congress passed section 620E(e) of the Foreign As-
sistance Act, known as the “Pressler amendment,” which requires the president to
certify each fiscal year that Pakistan did not possess a nuclear device. Congress has
also limited arms purchases by certain countries, most frequently Saudi Arabia.
In the 1980s, Congress bucked President Reagan’s efforts to sell Saudi Arabia
an airborne early-warning aircraft, which finally went to Saudi Arabia with lim-
ited capability (Israel feared Saudi Arabian espionage). Congress also challenged
a proposed sale of F-15 fighters to Saudi Arabia, winning limitations on the ex-
port version of the plane that ultimately frustrated Saudi Arabia to the point that
it bought the British-built Tornado instead.27 In 1990, members of Congress
also protested a proposed $20 billion sale, and, in the face of this antagonism,
President George H. W. Bush reduced the value to $7.3 billion for the sale to pass.
Similar concerns arose in 2007–2008 as Congress reacted to President George
W. Bush’s proposal to sell more than $20 billion in weapons to Saudi Arabia and
other Gulf Arab countries, ostensibly to counter Iranian power. A coalition of 114
members of Congress signed a letter of disapproval, listing a host of grievances
against Saudi Arabia, including the statement, “Despite assurances to the contrary,
Saudi Arabia continues to bankroll terrorist organizations that have attacked both
the United States and Israel. . . . [Seventy percent] of the most-wanted interna-
tional terrorists are Saudi Arabians.”28 Israel, however, itself realized that con-
gressional disapproval to Saudi Arabian arms sales might ultimate hurt Israeli
security interests. After successfully lobbying to support F-16 sales to Jordan, a
moderate Arab country, in the 1990s, Israel’s Prime Minister Ehud Olmert stated
that, while he understood congressional reluctance to sell arms to Saudi Arabia,
Saudi Arabia was a foe of Iran, and Israelis “understand the need of the United
States to support the Arab moderate states, and there is a need for a united front
between the U.S. and us regarding Iran.”29
Reverse Foreign Military Sales for the United States?

While most of the attention focuses on foreign military sales by the United
States to international buyers, some of those international buyers have now en-
tered the U.S. defense market. While the United States has traditionally bought
selected military equipment from foreign nations (e.g., SPAD aircraft from France,
De Havilland planes from Britain during World War I, U.S.-produced designs for
the British Lee-Enfield and French Berthier rifles), American arsenals and facto-
ries commonly supplied the bulk of U.S. military weapons and equipment. That
was true particularly after World War II, when the so-called arsenal of democracy
created an industrial base second to none in the world, with ample capacity to
supply American armed forces during the Cold War.
Conditions began to change as the Cold War wound down and U.S. defense
production shrank. The U.S. defense manufacturers increased efforts to market
their product abroad, but they discovered that potential international customer
countries had developed their own defense industries, and should the United
States want to sell weapons to those countries, those countries would in turn want
access to the U.S. defense market. Allied nations who had traditionally bought
arms from the United States began to complain about the closed nature of the
American military market. Moreover, some international arms producers found
niche markets for items that the United States did not produce (e.g., minesweep-
ing craft). Consequently, the United States began to expand its purchase of
arms from foreign suppliers. As of 2005 the percentage of defense imports was
18 percent of defense exports in value, but that had risen from 14 percent in
2000.30
Some of these sales came directly from international suppliers, but others
evolved from partnerships between international and American companies. The
case of the Air Force’s tanker replacement is illustrative. The Air Force currently
flies the KC-135 Stratotanker, a military version of the venerable Boeing 707 com-
mercial plane, along with a few KC-10s, which are modified Douglas DC-10s. The
KC-135 first flew for the Air Force in 1956 and the last one left the Boeing fac-
tory in 1965. Despite continuous modernization and repair, the overall fleet of
481 tankers (187 active duty, 217 Air National Guard, and 77 Air Force Reserve)
needs to be replaced. The Air Force originally tried to arrange a contract with
Boeing to lease a military version of the Boeing 767 passenger plane, but ulti-
mately the contract became enmeshed in fraud, and several Boeing and Air Force
officials received prison time (see Chapter 4). The Air Force sent out requests
for proposals, and in April 2007 Northrop Grumman joined Boeing with a pro-
posal for the tanker, with as much as $100 billion in revenue for the winner.
But what made Northrop Grumman’s proposal was the nature of its relationship
with EADS, the parent company of Airbus Industries, Europe’s largest aviation
producer. Northrop Grumman had actually left the aviation construction indus-
try as a prime contractor and used EADS to regain a position as a prime aircraft
manufacturer. EADS, though, had the largest portion of the contract, and thus a
considerable portion of the tanker, built on a commercial A330 airframe, would
be constructed in Europe, with final assembly in Mobile, Alabama. In February
2008, the Air Force announced that Northrop Grumman and EADS had won the
contract, and Boeing announced that the company would protest the decision.
Many factors were the basis for the protest, but the concern in Congress was that
an aircraft largely designed and built in Europe would trump a plane designed
and built mostly in the United States (although some of Boeing’s commercial 767,
the airframe proposed for the KC-45, is built in international plants). Washington
State Senator Patty Murray, a Democrat, issued a press release: “The Air Force’s
short-sighted decision to place the future of America’s aerospace industry and
national security in the hands of an illegally subsidized foreign competitor is sim-
ply wrong for America.”31 Murray and other Boeing supporters were referring to
the fact that EADS receives subsidies from its parent European countries, though
EADS counterclaimed that Boeing also receives subsidies from its military sales.
The main point, though, is that the “buy America” preference was clearly under
challenge.
The contract protest (undecided at the time of this writing) did not foreclose
other attempts by European companies to penetrate the U.S. defense market.
Eurocopter, Europe’s largest helicopter manufacturer, won an Army bid to supply
the UH-72A, and one Eurocopter official stated, “We will certainly be introducing
other platforms in the future,” most likely with an American partner.32 The Army
preferred the UH-72A Lakota to the American-built Blackhawk manufactured by
Sikorsky, but Representative Duncan Hunter (R-CA), an opponent of interna-
tional sourcing for the U.S. military, opposed the sale of the Lakota, claiming that
it would be inadequate to fight forest fires (not a standard Army helicopter mis-
sion). The Army countered by noting that the Lakota was considerably cheaper
than the Blackhawk, and Roger Wicker (R-MS), whose district included the
offices of American Eurocopter Corporation, a North American division of EADS,

claimed that the problems that Hunter noted (including an overheating cabin)
were being fixed.33 Domestic politics came into play as international competitors
found that jobs created were a potential formula for success, just as in the case of
American-based competitors.
The growth of international suppliers for the U.S. military has prompted some
in Congress to call for investigations, citing such concerns as whether U.S. classi-
fied information involved in defense was getting into the hands of foreign nation-
als, and if the sales complied with the Buy America Act. The other related agenda
seemed to be concerns that non-U.S. firms might be taking away American jobs
and that the Defense Department was outsourcing national defense production.
As more European companies sought partnership with U.S. firms (e.g., EADS,
Rolls-Royce, BAE Systems, Thales, Finmeccanica), their North American part-
ners found ways to “firewall” sensitive U.S.-only security information from the
European partners and to abide by the Buy America Act, though Congress ex-
pressed concerns that the National Industrial Security Program (NISP) and the
Defense Security Service (DSS), the primary agency for implementation of NISP,
could keep tabs on the growing foreign suppliers of defense goods with an in-
complete oversight process.34
Arms sales have been an important part of American defense policy since be-
fore World War II, but there is evidence that American sales may decline as more
countries enter the arms business. A wide array of countries are seeing increases
in aviation and space production in particular, and there is a distinct possibility
that those firms will exploit the international arms trade even more than they do
now, and seek more partnerships with U.S. defense firms.35 Thus, the U.S. in-
ternational arms policy is quite likely to undergo some interesting changes in the
near future.
Notes
1. Jonathan A. Grant, Rulers, Guns, and Money: The Global Arms Trade in the Age of
Imperialism. Cambridge, MA: Harvard University Press, 2007, 15–16, 122–123, 164–166.
2. Richard F. Grimmett, Conventional Arms Sales to Developing Nations, 1997–2004.
Washington, DC: Congressional Research Service, September 26, 2007, 4.
3. Ibid.
4. Defense Security Cooperation Agency, “Turkey: Advanced Block 50 F-16 Aircraft,”
news release, Transmittal 06-71, September 28, 2006.
5. “Iran Is Critical as U.S. Unveils Arms Sales in the Middle East,” Washington Post, July
31, 2007.
6. “U.S. Military Contractors Seek Deals at Bangalore Air Show,” New York Times,
February 7, 2007.
7. Michael T. Klare, American Arms Supermarket. Austin: University of Texas Press,
1984, 33–34.
8. Ibid., 34. As of 2008, Iran still was flying the F-14s.
9. Defense Security Cooperation Agency, “Saudi Arabia—Mission Equipment for

AWACS Aircraft,” news release, Transmittal 08-28, December 7, 2007.
10. Geoffrey Kemp, with Steven Miller, “The Arms Transfer Phenomena,” in Arms
Transfers and American Foreign Policy, ed. Andrew J. Pierre. New York: New York Univer-
sity Press, 1979, 46–48. The Polaris decision was in turn influenced by the United States
denying Skybolt missiles to the United Kingdom. See Richard E. Neustadt, Alliance Politics.
New York: Columbia University Press, 1970, chap. 3.
11. Christopher Bolkcom, Military Airlift: C-17 Aircraft Program. Washington, DC:
Congressional Research Service, June 5, 2007.
12. “U.S. General Urges Boeing to Pitch C-17 Overseas,” Reuters.com, April 1, 2008,
www.reuters.com/article/politicsNews/idUSN0132069120080402.
13. U.S. Census Bureau, “Monthly Trade Statistics, September 2007 Highlights,” http://
www.census.gov/foreign-trade/statistics/highlights/monthly.html.
14. “Defense Trade Data,” Briefing to Senate Committee on Armed Forces. Washing-
ton, DC: GAO, January 8, 2006.
15. “U.S. Is Top Arms Seller to Developing World,” New York Times, October 1, 2007.
16. Defense Security Cooperation Agency, “Frequently Asked Questions,” http://www.
dsca.mil/PressReleases/faq.htm#What%20isSecurity%20Cooperation.
17. Defense Security Cooperation Agency, “Presidential Decision Directive 34,” Febru-
ary 1995, http://www.dsca.mil/PressReleases/ARMSTRAN95.htm.
18. Office of the Press Secretary, “U.S. Policy on Arms Transfers to Latin America,”
August 1, 1997, http://www.dsca.mil/PressReleases/LATAMCAT.htm.
19. Shawn L. Twing, “U.S., Israel at Odds over Israeli Defense Sales and Techno-
logy Transfer to India, China,” Washington Report on Middle East Affairs, January/February
1999, 54.
20. Breane Wagner, “Arms Sales: U.S.-U.K Technology Defense Pact Likely to Draw
Fire,” National Defense, September 1, 2007, http://www.allbusiness.com/government/
government-bodies-offices-legislative/5515055-1.html.
21. Kazuki Shiibashi and Bradley Perrett, “Stealth Play,” Aviation Week & Space Te-
chnology 167, no. 5 (2007), http://web.ebscohost.com/ehost/detail?vid=9&hid=13&sid=
bde74a0b-319f-4e52-bae1-67f0a6c6b721%40sessionmgr3.
22. John Stanley and Maurice Pearton, The International Trade in Arms. New York:
Praeger Publishers, 1972, 42–43.
23. “Israel May Have Violated Arms Pact, Officials Say,” New York Times, January 28,
2007.
24. Kenneth Flamm, “The Policy Context for Military Aerospace Offsets,” in Trends
and Challenges in Aerospace Offsets, ed. Charles W. Wessner. Washington, DC: National
Academy Press, 1999, 126.
25. “FMS Offsets and Other Issues Affecting FMS Procurements Frequently Asked
Questions,” Defense Procurement, Acquisition Policy, and Strategic Sourcing, http://www.
acq.osd.mil/dpap/cpic/ic/offsets of foreign military sales.html#q1.
26. Ibid.
27. A Saudi Arabian official argued that the loss of the F-15 sale opened the door for
the British to additional military and commercial sales to Saudi Arabia, costing the United
States more than $15 billion and 45,000 jobs. Interview with author, Dhahran, Saudi
Arabia, January 1989.
28. U.S. Representative Anthony D. Weiner (9th congressional district, NY), “Broad
Bipartisan Coalition of 114 Congressional Members Release Letter to President Bush
Opposing Arms Sale to Saudi Arabia, Say Will Vote to Stop Sale,” press release, New York,
August 2, 2007.
29. “U.S. Arms Plan for Mideast Aims to Counter Iranian Power,” New York Times,
July 31, 2007.
30. GAO, “Defense Trade Data,” Briefing to Senate Committee on Armed Services,
FAO-06-319R, January 27, 2006.
31. Senator Patty Murray, “Murray Statement on Boeing Tanker Protest,” news release,
March 10, 2008.
32. “Risky Business,” Aviation Week & Space Technology, March 17, 2008, 34.
33. “Army Defends Light Chopper amid Reports It Could Fail,” The Hill, November
20, 2007.
34. “Foreign DoD Contractors under Lens,” The Hill, April 17, 2008.
35. See Terrence R. Guay, Globalization and Its Implications for the Defense Industrial
Base. Carlisle Barracks, PA: Strategic Studies Institute, 2008.
Further Reading
Grant, Jonathan A. Rulers, Guns, and Money: The Global Trade in Arms in the Age of Imperial-
ism. Cambridge, MA: Harvard University Press, 2007.
Pierre, Andrew J., ed. Arms Transfers and American Foreign Policy. New York: New York
. Cascade of Arms: Managing Conventional Weapons Proliferation. Washington, DC:
Brookings Institution and World Peace Foundation, 1997.
Stanley, John, and Maurice Pearton. The International Trade in Arms. New York: Praeger
Publishers, 1972.
Stoker, Donald. Military Advising and Assistance: From Mercenaries to Privatization, 1815–
2007. New York: Routledge, 2008.
CHAPTER 6
Reforming Defense Acquisition
Almost since the time of George Washington, defense acquisition has been the
target of efforts to construct a more accountable and responsive system. Long
plagued by contractor fraud (sometimes abetted by military officers and members
of Congress), defense acquisition also receives low marks for responsiveness to
military requirements, timely delivery, and adherence to the negotiated price of
goods. American military history is full of stories of overpriced weapons delivered
late and systems whose performance falls below agreed-on standards. But the
most frustrating part for potential reformers is that the problems continue on
even after countless efforts to reform the defense acquisition system.
There are reasons for such problems, some of which are obvious. Corruption
has followed government contracting for most, if not all, of recorded history.
Unscrupulous contractors bilked the government out of millions of dollars by
offering up substandard products or by padding the cost they incur to produce
the goods, or by a hundred other means that take armies of auditors and investi-
gators to uncover. Members of Congress have also contributed to corruption, as
evidenced by the case of former congressman Randy Cunningham (R-CA), sen-
tenced to more than eight years in prison in 2006 for steering defense contracts
to MZM Inc. in exchange for personal favors. Earlier, the House reprimanded
Representative Robert L. F. Sikes (D-FL) in 1976 for failing to disclose owner-
ship of stock shares in defense contractor Fairchild (though it did not reprimand
him for voting for a defense appropriation favorable to Fairchild). In 1961, the
Northrop Corporation sponsored hunting trips and gave rides in corporate air-
craft to numerous members of Congress and their staffs. Most major contractors
have at some point in their histories been accused of corruption, and often have
paid millions of dollars in fines for their actions.
However, as lurid as the stories of corruption may be, dishonesty is not the
primary reason for problems in the defense acquisition process. There are more
inherent issues in a system that is often irresponsive to military requirements,
Reforming Defense Acquisition 143
including measures of quality, cost, and on-time delivery. Defense suppliers often
overestimate the problems they will encounter and underestimate the real expense
of building an item. The very nature of low-bid contracting often encourages such
underestimation, and sometimes subsequent amendments to original contracts
allow sellers to recoup losses from the first contract. The military buyer frequently
changes specifications or sometimes cancels projects outright after a contractor
has invested in the system. A small defense industrial base in certain key product
areas means that prices paid for certain goods may be much higher than those a
real market with many buyers and sellers would establish. A desire on the part
of the buyer to receive a product urgently (e.g., counterexplosive gear in the Iraq
conflict) may produce a much higher cost because of the very urgency of the
demand, or delays may emerge caused by production and supply bottlenecks that
throttle construction. In short, most of the problems addressed by acquisition
reform are aimed at the system itself rather than at remedying misdeeds of its
participants.
Reforming Defense Acquisition: The Paradigms

The range of problems and associated solutions depends on the definition of
the problem itself. The approaches to defense reform and attendant remedies can
be categorized as follows:
r The problem is dishonesty; thus, reform must include stiff penalties for those who break
the rules and more oversight over the whole process, particularly oversight from outside
the direct acquisition system.
r The problem is less dishonesty than insider influence, too much power in the hands of
the services, the defense contractors, and members of Congress with defense interests.
The solution, though, is similar to the first solution: more oversight of the acquisition
system by those who do not have a vested interest in it.
r The problem is the structure of the defense acquisition system; thus, solutions lie in
restructuring the system, often to make it more like an idealized private market.
r The problem is reform itself, and thus the answer is less reform.
These problem-solution sets are the focus of this chapter.
The Foundations of Acquisition Reform

None of these definitions or answers covers the whole problem, as problems
are often interrelated (dishonesty brings more oversight, which can lead to de-
lays, and so on). But they represent the often piecemeal approaches to defense
acquisition reform, usually done by well-meaning people in the Pentagon or
Congress who understand the pressing need to make the system better but of-
ten realize that a wholesale restructuring of the process is both impossible and
undesirable. Reformers usually find themselves under considerable pressure to
apply fixes to procurement problems, and generally turn to single-set solutions
(e.g., knowledge-based approaches, more congressional oversight), understand-

ing that few things raise public ire more than reports of misspent taxpayer dollars.
Acquisition reform started soon after the fledgling United States started to buy
and produce military equipment. It continued after the Cold War in response
largely to accusations of too much parochialism in the process, mostly from the
armed services. Thus, acquisition reform in the McNamara years (discussed in
Chapter 1) focused on removing the services’ control of the acquisition process
and centralizing it in OSD, managed through PPBS (discussed in Chapters 1 and
2). McNamara believed that service rivalry and service preferences, coupled with
little relationship between programs and budgets, were skewing defense acquisi-
tion away from national strategic objectives and toward service goals. Moreover,
PPBS was supposed to allow for explicit criteria that each program had to meet,
including cost effectiveness. Its staunchest defenders believed that PPBS-based
reforms would solve a considerable number of acquisition problems.
However, as PPBS and the associated acquisition reforms progressed, prob-
lems with the procurement system continued. Reviews in the late 1960s and early
1970s indicated how serious they were. Officials indicated that contract perfor-
mance was substandard—the assistant secretary of the Air Force indicated that
operational performance of operational equipment reached less than 86 percent
of contracted performance, and a review of 35 major development programs in-
dicated that only 2 were on or ahead of schedule. In another study of 61 weapons
systems, cost estimates had increased by more than $33.4 billion over estimates.1
Paths to Acquisition Reform

Acquisition reform has emphasized certain things in its checkered history.
As Hanks and his colleagues indicate, the emphasis of acquisition reform in the
1980s (particularly that driven by congressional initiative) aimed to control and
reduce “fraud, waste, and abuse,” as stories of alleged scandal appeared in the
public media. However, acquisition reform in the 1990s (and beyond) has been
directed at making the system more effective and efficient.2 The earlier period
saw efforts to put quick fixes on the acquisition system in order to allay anger
and suspicion of waste and fraud, and included such things as the creation of
centralized policing authority and more transparency into the system, whereas
later efforts tried to build more competition, reduce the complex military specifi-
cations (MILSPECs) that often dogged the system, and reduce some of the same
oversight that had evolved in the earlier rounds of acquisition reform.
The road to and through defense acquisition reform has been rough. Some-
times reform efforts appeared to be guided more by the urge to do something
(and, more important, to be seen doing something) rather than engaging in a
meaningful study and reforms based on identified problems and solutions. The
easiest way to accomplish this is to establish more oversight. Thus, reformers
pepper the process with demands for an acquisitions czar (after all, the United
States has created the position of drug czar and an intelligence czar, so why not
an acquisitions czar?). However, the problems inherent in the defense acquisition

system are far too complex, too politicized, and too embedded to lend themselves
to a czar-type solution.
Often the costs of reform became excessive at best, and sometimes exceeded
the cost of the problems the reform was supposed to fix at worst. In a 1987 study
of defense reform, the Center for Strategic and International Studies estimated
that the cost of defense oversight had about doubled since 1980. Part of these
delays came from the Competition in Contracting Act and the Defense Procure-
ment Reform Act, which CSIS noted, “Unfortunately, the practical impact of these
measures has already begun to run counter to congressional intent. Acquisition
laws and regulations have become more voluminous and complicated and have
actually imposed additional delays and costs on the process.”3
Problems in the Defense Acquisition System

Fraud
Fraud in the defense acquisition system is purposeful behavior to manipulate
the system for personal gain. Mostly such gain involves efforts to divert govern-
ment funds for private use, but it can also involve manipulating the system either
to avoid personal mistakes or to cook information to make the manipulator look
more favorable. Fraud often takes the form of substandard goods, where the con-
tractor cuts costs by cutting corners, as when a small company used substandard
products in air filters for tank crew compartments and then lied about it.4 Some-
times contractors simply engage in false billing for goods, as in the case of a small
defense contractor that bilked the Defense Department of more than $20 million
over ten years by padding the cost of shipping small items like washers and
lamps.5 The defense firm Science Applications International Corporation paid
$2.5 million in fines to the Air Force for inflating the cost to clean up pollu-
tion at Kelly Air Force Base in Texas.6 A federal jury fined the firm Custer Battles
more than $10 million for engaging in 37 cases of fraud for a scheme in which the
company generated false invoices and even stole Iraqi forklifts, painted over them,
and charged the U.S. government for them.7 Contractors have also padded cost
estimates to raise the price of their goods or have engaged in complex bookkeep-
ing that might fool all but the most diligent government accountant. Most sig-
nificantly, contractors have hidden negative information on troubled programs,
sometimes in league with the program’s service representatives. Secretary of
Defense Richard Cheney axed the Navy/Marine Corps A-12 combat aircraft in
January 1991 after learning that neither the Navy nor the contractor had fully re-
ported to his office the significant cost overruns and technical problems encoun-
tered. A small Massachusetts company, Ace & Co., paid more than $500,000
in fines for falsifying test data on an optical fiber connector used in the Patriot
antimissile system.8 In 2008, a federal grand jury indicted four individuals, in-
cluding an Army civilian and employees of Global Engineering and Construction
Inc., on charges of receiving payoffs and gifts in exchange for confidential infor-
mation on construction contracts.9
In 1981, after repeated charges of defense wrongdoing, the Reagan administra-
tion launched an effort to identify and combat defense fraud by creating the posi-
tion of assistant to the secretary of defense for review and oversight, which linked
to the President’s Council on Integrity and Efficiency, also created in 1981. The
Defense Department also maintains the Defense Contract Audit Agency (DCAA),
created in 1965, to examine contracts for malfeasance as well as compliance with
contracting rules and practices. Outside of the Defense Department, there is the
Federal Bureau of Investigation, which monitors federal procurement laws; the
GAO, which has reported on government waste; and the Securities and Exchange
Commission, which overseas laws regarding public corporations, including de-
fense contractors.
Poor or Incomplete Data

Almost all the participants in the defense acquisition process complain about
poor information, and understandably so. Misestimates of cost, delivery dates, re-
quirements, and other information constantly cause the defense acquisition sys-
tem to slow or stop, or worse, to deliver products late and above cost or prod-
ucts that miss the requirements target. There are abundant reasons for poor or
incomplete data. Acquisition programs often start with revolutionary new tech-
nology that will not be tested outside of laboratory conditions until it goes into
production and fielding, so there is virtually no information on how it will per-
form under service conditions. Programs often take years or decades to gestate,
and unanticipated factors like economic recession or inflation may wreak havoc
on cost estimates over long periods of time. Moreover, the buying services often
change their requirements or Congress increases or cuts funds.
Threat assessment data are particularly poor, largely because such assess-
ments must project out for decades to serve as viable bases for defense planning.
Most countries carefully hide their defense programs and international intentions,
thus preventing reliable estimates of what their future capabilities and objectives
might be.
Cost Overruns
The problem of cost overruns dates back almost to the American Revolution.
Weapons that were to cost a certain amount suddenly cost much more when they
arrived off the production line. Cost overruns originate from many sources: poor
original cost estimates (see earlier), purposefully understated estimates from con-
tractors eager to win a bid, problems during program development, and buyer-
imposed changes during development. The problem has been serious for many
decades, and despite acquisition reform, it continues to grow. In early 2008, the
GAO found that 95 major weapons programs exceeded their original budget by
a total of $295 billion, and the weapons examined in 2007 showed a develop-
mental cost increase average of 40 percent, compared to a similar cost growth
of 6 percent in 2000.10 The GAO singled out for particular criticism the Littoral
Combat Ship, whose cost grew by more than 100 percent from first estimates, the
Lockheed Martin joint strike fighter, and the Boeing Future Combat System.
In 1999, the Air Force found that it had underestimated the costs of engineer-
ing and manufacturing development (EMD) between 1992 and 1998 by $4 bil-
lion. The reason was classic: problems emerged in some testing and development
phases, a situation that occurs with almost every complex weapons system.11 The
cost of the joint air-to-surface standoff missile (JASSM) increased by 25 percent
since its contract signing, apparently because of “engineering increases,”12 which
probably should have been expected given the nature of the experimental pro-
gram but were not. The cost of the new presidential helicopter increased from
$6.1 billion when the contract was signed in 2005 to $11.2 billion in 2008.13
Part of the problem was that the Marine One helicopter was supposed to be a
follow-on version of the aircraft in the existing fleet, but its requirements changed
as concern over terrorist attacks against the helicopter’s passengers grew, a con-
cern that accelerated changes. The original estimates did not obviously reflect
those changes.
Lockheed Martin’s price for a new presidential helicopter rose from $1.79 bil-
lion to at least $2.4 billion in two years.14 The initial response from Lockheed
Martin and Boeing seemed tailored to deny any problems. Said a Lockheed Martin
spokesperson, the JSF “is performing solidly, making outstanding technical
progress in the context of the most complex aircraft ever built . . . the bedrock
and the cornerstone [of the F-35 program have been] affordability and cost con-
tainment.” Boeing stated, “Boeing’s commitment is to deliver on our promises to
our military customers and meeting their requirements in the most cost-effective
way possible.”15 In 2007, cost overruns continued to bedevil the services. A GAO
audit found that programs to construct or modernize Air Force transport aircraft
were over budget by almost $1 billion, even though the programs were in their
early stages and costs could continue to grow. The C-5A and C-130J programs
were both cases of relatively unsophisticated technology (both plane designs are
decades old), so the overruns were even more troubling. Again, the contrac-
tors, Boeing and Lockheed Martin, tried to put the best face on the problems:
the C-130J “has exceeded 340,000 flight hours worldwide performing airdrop,
air-to-air refueling, ground refueling and humanitarian relief,” said a Lockheed
Martin spokesperson. A Boeing spokesperson said of the same plane, “We were
able to overcome earlier challenges, and the program is now performing extremely
well.”16 Neither spokesperson responded to the charges, though. Cost overruns
for the Expeditionary Fighting Vehicle, a Marine Corps amphibious assault vehi-
cle, encountered development problems that pushed the per-vehicle cost up by
168 percent and pushed the development deadline back by eight years.17
Cost growth also plagued the Air Force’s F-22 tactical aircraft. Congress
capped the cost of the aircraft program in the Authorization Act for fiscal 1998
at $37.5 billion, but in August 2001 the Defense Department estimated that the
program costs had risen to $43 billion. A GAO report indicated that while the
Air Force had built in cost reduction plans to the F-22 program, it had not fully
funded them. Moreover, the GAO identified future elements that would cause
the F-22 program cost to rise even further, such as testing delays that in turn
could delay the awarding of a cost-saving multiyear contract.18 The original F-22
contract called for 750 aircraft, but as the Cold War unexpectedly ended, the Air
Force began to reduce the buy, to 648 in 1990 and then to 442 in 1994, dropping
to 339 in 1997, and ultimately to 183 planes by 2006. On the one hand, the Air
Force, Congress, and the Defense Department failed to anticipate the end of the
Cold War when they planned their next fighter project in the 1980s, but, then
again, so did most analysts who studied the Cold War.
Cost growth on some programs is so high that it threatens other programs
as services scramble to budget for unexpected overruns. The U.S. Navy’s carrier
modernization programs are a case in point. The price of the USS George H. W.
Bush has grown by $847 million, or 17 percent over its original budgeted cost,
and the USS Gerald R. Ford may climb to $1 billion over its first estimate. These
overruns, coupled with other cost growth in the Littoral Combat Ship, the LPD-17
amphibious warship, the DDG 1000 destroyer and the Virginia-class attack sub-
marine. One consequence may be to cut back on the Navy’s planned expansion
to 313 ships from the current 279.19
The reasons for cost overruns are complicated. Defense contractors often point
to the military as a source, arguing that military requirements often change when
an item is in development, or even in production, thus causing delays and unfore-
seen cost increases. For example, the first versions of the Air Force F-22 fighter
did not have a gun, relying instead on antiaircraft missiles. However, after Lock-
heed Martin completed the first two prototypes, the Air Force changed its mind
and insisted that the plane carry a gun, resulting in considerable redesign and an
accompanying cost increase. Additionally, the Defense Department manages too
many programs with two few dollars, and immature technologies are sent into
production without adequate testing.20
The other reason for cost overruns is a systemic problem: under competitive
bidding, contractors have the obvious incentive to bid low to win the contract,
hoping that, should the cost of the product exceed what they initially bid, the
buyer might revise the contract to help recoup potential losses.
Cost overruns are often more likely in the cases of highly innovative weapons
or weapons production processes. Since cost estimates usually derive from pre-
vious experience in weapons and production, processes that depart considerably
from the past are much more likely to be off estimates. In the case of Northrop
Grumman’s LPH-17 San Antonio–class amphibious assault ship, the price in-
creased from $850 million to $1.85 billion because of complicated production
processes (e.g., welding titanium pipes) and the use of new computer design tools
that proved faulty. The consequences of the cost overruns included reducing the
overall number of LPH-17s from 12 to 9.21
Remedies for cost overruns are illusive. In 1983, Congress, tiring of the cho-
rus of complaints over cost overruns, passed the Nunn-McCurdy Act (noted in
Chapter 2), which requires the Defense Department to report any cost overruns
of 15 percent or above and to terminate programs where cost growth exceeds
25 percent, unless the secretary of defense submits a statement to the effect that
the program is vital to national security and that no alternative program exists
that could replace the inflated one. The secretary must also certify that the cost
increases are “reasonable,” which presumably can cover a variety of unanticipated
problems that increased the price. It is also the case that very few programs have
been canceled because they exceeded the provisions of Nunn-McCurdy. The case
of the Space-Based Infrared System Program (SBIRS) is illustrative. In 2001 SBIRS
had a Nunn-McCurdy breach; the program was restructured in 2002, and the
GAO passed the critical design review even though only 50 percent of its design
drawings were complete.22 The Multiple Launch Rocket System Upgrade Pro-
gram also incurred a Nunn-McCurdy breach, but the Army and the contractor
restructured the program, which was permitted to proceed.
Delivery Delays
During World War II, defense delivery times set records in many categories as
the energized defense industry worked diligently to get products out on or before
schedule. The Kaiser Shipyard in California completed ships in a matter of days
(one, the Robert E. Perry, was built in just five days), and the North American
P-51 Mustang fighter went from drawing board to flying prototype in a record
117 days. Of course, engineers’ and defense plant workers’ wartime fervor, and
almost unlimited budgets, helped to speed the processes along, but the reality is
that now, more often than not, delivery of defense goods is often months and,
more commonly, years behind schedule.
There are numerous reasons for delivery delays. Often they are a consequence
of the requirement that any new technology must be thoroughly tested before it
can go into the field. That means that new innovations must be worked free of the
numerous development problems that ultimately plague new systems. The step
from the laboratory to the production process can be a humiliating experience for
developers, because what appear to be workable ideas on paper often break or
fail operational testing when they go into production. Years often pass before all
the layers of approving officials have finally signed off on a product that has not
initially met specifications. However, there may be an urgent need for the partic-
ular good or service that creates a tension between those who need it now and the
approval process that is often required by regulation to not release the item until
it meets its specifications. That is one reason for the paradox that cost overruns
are often a consequence of the fielding of immature technology, yet technological
development has stretched into years and often produces delivery delays.
Defense reform has tried to resolve such conflicts in a number of ways. Some-
times the approval process can be circumvented when overseers are convinced
that a genuine need for quick delivery outweighs the requirement that the prod-
uct meets all specifications. It is more common, though, to devise a compromise
solution in which the good starts initial development and then goes into service,
in operation while continuing development. This is known as “concurrent de-
velopment” or “production concurrency.” The roots of this practice go back to
World War I, when rapidly developing needs drove research items to production
quickly, sometimes with unfortunate consequences (e.g., aircraft engines often
failed and resulted in fatal crashes). It continued during World War II and af-
ter. During the latter phases of the Korean War, the Air Force rushed the F-100
fighter into production, with the first production F-100A flying just two weeks
after the second prototype flew. The consequences were sometimes tragic, with
the F-100 aircraft suffering a spate of accidents because of design flaws.23 The
B-1 bomber also went into concurrent production with troublesome results. The
crew escape module did not work reliably in tests, the engine inlet design was
switched during production, and the variable-sweep wing mechanisms had prob-
lems, forcing the contractor, Rockwell International, to shift workers from pro-
duction to fixing problems. The bomber’s weight increased during production as
processes changed, limiting its range, the avionics designed to defend the bomber
failed completely, and the plane was delivered to its operators with the prob-
lems unresolved.24 The F-111A had serious design flaws in the engine air inlets,
which restricted supersonic flight operations.25 As Thomas McNaugher noted in
congressional testimony,
I would call it the ABC model. The A model of a lot of airplanes, and other
things, too, often had serious design anomalies in it; the B model got it
roughly right, and the C model is where you really wanted to be all along,
but it took maybe even 100 to 200 production models to get there. So it was
expensive. And when you did that, the average effectiveness of our overall
force actually was lower than it would have been had you waited and gotten
all the production run, or most of it, to the C level.26
While concurrency and other ways to accelerate delivery have produced prob-
lems, they still have advantages, and there are some success stories. The Air Corps
rushed the P-51 Mustang fighter into production during World War II as both
Japan and Germany improved their own fighters, and the Mustang became one
of the best Army Air Corps fighters used in the war. During the Vietnam War, the
Navy rushed the Mark II Patrol Boat, River (PBR) into service after a short devel-
opment of commercial fiberglass fishing boats into fighting craft. More recently,
BBN Company delivered the Boomerang shooter-detection program in 66 days to
beleaguered troops in Iraq.27
Sometimes the military and defense firms adopt civilian technology to mili-
tary systems to save both money and development issues. An Army regulation of
2004 specifies, “It is [Department of the Army] policy to use domestic [civilian]
technology transfer as an integral part of the research and development (R&D)
effort through a variety of technology transfer mechanisms and to encourage tech-

nology transfer from all appropriate R&D activities, consistent with the military
mission.”28 Civilian technology is often cheaper than military technology because
it is designed for profit-making mass production rather than highly specialized
“cost-is-not-an-issue” military production. However, adoption of civilian technol-
ogy can cause its own problems. For example, when Bell Helicopters was devel-
oping the ARH-70 combat helicopter for the Army, it tried to develop its civilian
model 407 helicopter into the ARH-70 and ran into problems because the combat
model required a more powerful engine and advanced communications systems.
The result was that the company could not keep its scheduled 2008 delivery
schedule, and the Army (with some help from Texas Senator Kay Bailey Hutchin-
son, as much of the ARH-70 was to be built in Texas) won a reprieve from the
Army.29
Lack of Competition
According to basic market theory, competition among suppliers enhances qual-
ity and choice and lowers costs because producers must supply a variety of goods
at competitive quality and price. Monopoly is a barrier to both quality and price.
Yet monopolies have existed in the defense production system, though it is
more common to find oligopolies: markets dominated by only a few major pro-
ducers. Examples abound: there are only two suppliers of major military aircraft,
Lockheed Martin and Boeing. There are only two shipyards qualified to pro-
duce submarines: General Dynamics in Connecticut and Northrop Grumman in
Norfolk, Virginia. There is only one company capable of producing main battle
tanks, the Lima Army Tank Plant (operated by General Dynamics) in Lima, Ohio.
Monopolies and oligopolies exist in the defense sector for a number of reasons.
First, there are considerable barriers to entry, including the high cost of setting
up production, the high security requirements, and the dominance of established
companies. Risks also include dealing with a single, potentially capricious cus-
tomer, and the often ponderous bureaucracy that that customer uses to purchase
goods and services.
The Defense Department (and before it, the War and Navy departments) has
attempted to entice more contractors to enter into and remain in the defense mar-
ket. The military can provide free or low-cost production facilities (the Air Corps
and later the Air Force provided government-owned plants like the one Northrop
used to build the B-2 bomber in Palmdale, California), which substantially re-
duces operating costs. The military also can test the company’s products at its
many test ranges, reducing development costs. Government research laboratories
can provide information on materials, construction techniques, aerodynamics,
ship hull design, and other pieces of information that the company would have
to research itself in the private sector.
The military has other means of instilling competition, sometimes requiring
that a company share its production. In the mid-1920s, the Army Air Corps chief
required Consolidated Aircraft to share the design of its PT-1 training aircraft with
rival designers so that they might compete to produce it, despite strident protests
from Consolidated’s founder, Reuben Fleet.30 More frequently, the losing bidder
gets a share of the prize, if only to help keep the company in the market. In some
cases rivals share in a prime contract, as is the case with the DDG 1000 Navy ship,
which is being built at both Bath Iron Works, a subsidiary of General Dynamics,
and Ingalls, a part of Northrop Grumman.
Competition does help reduce prices. An electric-fuel-pump supplier reduced
the projected price of an electric fuel pump for the F-22 Raptor by $25 million
when the Air Force raised the possibility of using a second supplier for the item.31
Earlier, in 1979, Pratt & Whitney was the sole supplier of jet engines for the Air
Force F-15 and F-16 fighters, but Congress funded a second supplier, General
Electric, and that competition induced both improved engine reliability and lower
cost. The problem is that often there are few competitors to induce bids from, par-
ticularly for the complex major acquisition programs, which consume the largest
share of the overall acquisition budget.
Overly Stringent Requirements

Because there is often a lack of competition that might positively influence
quality, the military has issued specifications for its products. These specifications,
known collectively as “military specifications” (or MILSPECS), have sometimes
become a problem for defense production. They mandate strength of materials,
reliability rates, type of construction materials, survivability rates in combat, and
thousands of other items that ultimately led to such things as a 25-page set of
MILSPECS for a military chocolate chip cookie.
The MILSPECS requirements are understandable as a broad principle. With-
out competition, a sole-source contractor has incentives to cut costs and mini-
mize performance. Low-bid winners sometimes reduced the costs of production
to try and meet the agreed-on purchase price, which sometimes resulted in subpar
performance. Moreover, the military requirements for certain items must exceed
commercial standards for a similar product. For example, commercial jet engines
are built to certain reliability standards, but when the military uses them in cor-
rosive environments (e.g., salt air, desert sand), they must be enhanced through
MILSPECS to meet those particular conditions.
The MILSPECS are also a consequence of shoddy goods or fraudulent contrac-
tors. The MILSPECS for a chocolate chip cookie may well have come in response
to a baker’s effort to fill such cookies with too much lard or not enough chocolate
chips. Failures of aircraft engines, ammunition that would not fire, or parachutes
that did not open spawned more than 30,000 MILSPECs by 1990. The advantages
came with costs, however. The military could not purchase numerous items on
the civilian market because they did not meet MILSPECs. Thus, they spent more
than $30 on a bolt to secure a missile guidance system, although a commercial
version of the same size bolt cost $0.30. In some cases, circumstances justified
the MILSPECs: bolts on a missile-guidance system reentering the earth’s atmo-

sphere at more than 15,000 miles per hour must be stronger than commercial
bolts used to secure a bedpost, for example. Moreover, meeting MILSPECS can
dramatically increase the cost of a system, given the requirements for expensive
materials, additional testing requirements, legal scrutiny, and other costs.
In 1994, Defense Secretary William Perry mandated a shift away from MIL-
SPECs, deciding instead to apply commercial standards to many items acquired
by the Defense Department. The MILSPECs had become too controversial, with
reports of cookies and other ordinary commodities making the program look su-
perfluous. But MILSPECs remain (there is a 14-page list of MILSPECs just for
pressure-sensitive tapes and allied products). Stringent requirements remain for
defense items that must perform in both desert and arctic climates, work to save
lives in dire combat or emergency medical situations, survive massive gravita-
tional loads in air and space, or explode with certainty when directed at an enemy
target. However, the elimination of MILSPECs for noncritical items also raised
problems. The Army took the position after the Perry reforms that it could can-
cel most MILSPECS, but some commercial alternatives were not useable because,
in some cases, there were inadequate data to assess their quality, particularly for
integrated circuits. Moreover, there were widespread cancellations of the mili-
tary documents that specified MILSPECs for a variety of military aircraft, with no
replacement documents available.32
Types of Reform
Reform proposals come in several different flavors:
r Reform the acquisition process by adding more government oversight.
r Reform the process by converting much of it from government-regulated to market-
oriented (the business model or the commercial practices approach).
r Reform the process through new managerial innovations, such as knowledge-based ap-
proaches.
r Simplify the process by using alternative approaches, such as those used in the so-called
black world program acquisition.
These are the most common forms of reform, though there are others.
More Oversight
Since the defense acquisition system is a cumbersome mix of private and gov-
ernment participants, reform efforts have usually taken several paths: more regu-
lation over the process and more market incentives to make the defense market
more efficient and effective. The problem is that often the process starts with
more regulations either to catch what appears to be wrongdoing by the partici-
pants or to fix what appears to be a lack of responsible oversight. That usually
results in a more complex system where delays grow and performance drops. As
the number of actors drawn into the process through reform grows, the number
of reviews grows also, stretching out delivery times. Moreover, as the number of
actors grows, the more independent decisions clutter the system, and thus the
number of compromises to unclog the process also grows. This often results in a
less-than-satisfactory outcome, but the ultimate need to produce something usu-
ally outweighs the need for an optimum good or service.
Much of the oversight regulatory change came under Defense Secretary
McNamara, as discussed in earlier chapters. McNamara’s distrust of the uniformed
services was one of the primary drivers of his efforts to both civilianize and sys-
tematize the defense acquisition process. While his reforms were roundly crit-
icized, much of his system remains an entrenched part of defense acquisition,
including the role of PA&E (the old systems analysis shop) and PPBS, now PPBE
(but still the same logic).
One of the key recommendations of the Packard commission involved stream-
lining the regulations governing the acquisition process, along with increasing
testing and competition, and changing what the commission called the “organi-
zational culture” of defense acquisition. But did such recommendations have the
desired impact? After examining the impact of Packard reforms on the particu-
lar issue of cost overruns, Christiansen, Searle, and Vickery concluded that not
only did the Packard recommendations not improve the situation but also cost
overruns actually became more frequent after the Packard reforms, at least for the
Air Force. Prior to Packard, the average Air Force cost overrun was 5.6 percent,
but that jumped to 9.5 percent after efforts to implement Packard. The costs over-
runs of Army and Navy contracts did not significantly change, though the authors
could not explain why the reforms appeared to fail.33
One key part of the Packard recommendations, increased testing, did receive
attention, with the Predator UAV as a model. As noted earlier in this chapter,
much of the testing for new programs occurs under idealized conditions, which
rarely hold in the operational environment. The Predator, though, a fairly com-
plex integrated program of both aircraft and communications, underwent op-
erational testing. After first trials in Arizona, the Predator system was used in
several operations in Bosnia, in actual combat conditions, before reaching final
program approval, and areas for improvement discovered in those realistic tests
were worked into the final program.34
Fixing the Problem by Turning to Commercial Market Solutions

As Chapter 1 notes, most of the defense acquisition system lies in government
hands, from the services that buy and operate equipment to the layers of govern-
ment oversight and regulation, to the Congress that funds the process. Just the
defense industry lies outside of government, and some argue that the relationship
has grown so cozy between private contractors and the military that they are part
of the same cabal. That is an overstatement, but the very nature of the defense
market prevents contractors from operating as they would in the private market.
Many defense reformers are enamored of the behavior and operation of the
private sector, arguing that efficiencies stem from the reward and punishment
structure of market forces rather than from negotiated contracts that often disobey
market principles. Such reformers cite the success of Fortune 500 companies like
Microsoft and Dell, where innovators took ideas and turned them into billion-
dollar enterprises. They also cite cases of business failures (e.g., Montgomery
Ward, TWA, and Ford Motor Company’s Edsel) as examples of how the market
punishes those who do not abide by its rules. Such beliefs have inspired market-
oriented defense acquisition reformers to consider applying commercial practices
to the defense realm. Some government agencies that have examined commercial
practices argue that they hold advantages that render them applicable to govern-
ment procurement: the GAO found in a 1999 report that, “(1) on the basis of
the work GAO has done over the past 3 years, GAO believes the best practices of
leading commercial firms can be used to improve the development of technology
and weapon systems in DOD; [and] (2) knowledge standards that are rigorously
applied, coupled with the practice of keeping technology development separate
from product development, stand out as key factors in the most successful com-
mercial examples.”35 Other studies found that the very nature of government and
the government market in particular might serve as barriers to full implementa-
tion of commercial acquisition practices but that semicommercialization might
be an option. For example, in private acquisition, the suppliers record is a key
indicator, and those who perform poorly do not win subsequent contracts.36
These applications have had a mixed record. According to Department of De-
fense reports, the Joint Direct Attack Munition (JDAM) achieved a 50 percent
cost reduction by employing commercial practices, and the C-17 cargo aircraft
experienced 4 percent savings by using a commercial-specification engine type.37
Problems with commercial deals that have gone badly, like the previously noted
Boeing–Air Force tanker lease and other questionable situations, like problems
with the Lockheed Martin C-130J transport plane, have soured some on both
sides of the contracting world on commercial business practices. Noted one re-
port: “A chorus of observers, including military officials and a U.S. attorney,
agreed at a hearing of McCain’s airland subcommittee last week that it was time
to reassess the Pentagon’s overall procurement process. Michael Dominguez, the
acting Air Force secretary, last week told a Senate panel it was clear the 1990s
reforms, meant to streamline acquisitions, attract non-defense firms and adopt
more commercial practices, had gone too far.”38
The Navy’s efforts to apply commercial practices to the Littoral Combat Ship
(LCS) also produced disappointing results. In the post–Cold War era, some Navy
leaders realized the need for smaller, lighter warships that could perform multi-
ple missions. Their vision was to turn to modularity, an approach that would al-
low several different capabilities to be “plugged and played” to facilitate different
missions—submarine detection, surface warfare, or land-support operations—
thus allowing for a true multipurpose warship.39 Additionally, some defense re-
formers hoped that the new smaller ship design would empower more second-tier
shipyards to bring their talents from the commercial market to bear on the project,
perhaps forcing the older traditional military-oriented yards to reform their busi-
ness practices. But problems bedeviled the program. The lead integrator for the
LCS program, Lockheed Martin reported considerable cost growth on the LCS—
in 2007 from $350 million to $375 million, up from about $270 million, be-
cause, the contractor claimed, of numerous Navy changes to the program after its
inception.40 A more significant share of the problems, though, came from efforts
to design and construct the ship from lessons learned in the high-speed com-
mercial ferry business. The Navy learned, though, that the commercially oriented
second-tier yards were hardly in better shape than were the large yards,41 nor
was it helpful that Lockheed Martin, the systems integrator for one of the two
competing projects, had no previous shipyard experience. The commercial ferry
idea as a model was challenged after construction started, as project managers
realized that the ship had to be able to take and survive battle damage that a ferry
would not encounter.42 Consequently the designs changed, costs mushroomed
(with an additional $100 million in overruns expected), and the whole situa-
tion led Mississippi Democratic Representative Gene Taylor, who leads the House
Armed Services Subcommittee on Seapower and Expeditionary Forces, to argue,
“Thinking these ships could be built to commercial specs was a dumb move.”43
A Commercial Market Subset: Reforming through Best Practices

A spate of recent acquisition reform efforts has focused on managerial inno-
vations centered around the theme of “best practices.” It is perhaps indicative
of the scope of the reform dilemmas that reformers have turned to best prac-
tices as a remedy (is it possible to imagine that a multimillion dollar aircraft or
a billion-dollar Navy ship would be acquired and constructed using less than
best practices?). While best practices has become something of a buzzword in
the management world, and has spawned numerous contractors who offer ad-
vice on how to accomplish best practices, there is only a loose definition of what
the term means. One firm defines best practices as follows: “A best practice is a
technique or methodology that, through experience and research, has proven to
reliably lead to a desired result. A commitment to using the best practices in any
field is a commitment to using all the knowledge and technology at one’s disposal
to ensure success.”44 The then General Accounting Office was more specific: best
practices incorporated a knowledge-based approach to acquisition, which pro-
ceeds in stages:
Knowledge point 1 is a match is made between the customer’s requirements

and the available technology (before development).
Knowledge point 2 is when the product’s design is determined to be capable
of meeting performance requirements (midway through product develop-
ment).
Knowledge point 3 is when the product is determined to be producible
within cost, schedule, and quality targets, before entering production.45
The point is that technology development should be kept separate from produc-
tion, and that production should not start until knowledge about the technology
at each step has matured. Notes the official GAO text reported to the congres-
sional committee, “Leading commercial firms begin product development only
when a solid business case can be made. The business case centers on the ability
to produce a product that the customer will buy and that will provide an accept-
able return on investment. . . . Commercial practices for gaining knowledge and
assessing risks can help produce better outcomes on weapons systems.”46
These recommendations appeared in 2000, but eight years later the GAO is-
sued yet another acquisition report to benchmark acquisition reform progress.
The report concluded balefully, “Since fiscal year 2000, DOD has significantly
increased the number of major defense acquisition programs and its overall in-
vestment in them. Unfortunately, during this same time period, acquisition out-
comes did not improve. Based on our analysis, total acquisition costs for the fiscal
year 2007 portfolio of major defense acquisition programs increased 26 percent
from first estimates, whereas the 2000 portfolio increased by 6 percent. Like-
wise, development costs for fiscal year 2007 programs increased by 40 percent
from first estimates, compared to 27 percent for fiscal year 2000 programs. In
most cases, programs also failed to deliver capabilities when promised.”47 The re-
port continued by lamenting that “the continuing absence of knowledge-based
acquisition processes steeped in disciplined systems engineering practices—
aimed at analyzing requirements to determine their reasonableness before a
program starts—contributed significantly to this.”48 It would appear that the
question about knowledge-based approaches as a cure for at least some of the
chronic acquisition problems remains unanswered because of the Defense De-
partment’s reluctance to adopt the methodologies used in best practices manage-
ment.
In the 1990s some defense components (the U.S. Air Force in particular)
turned to the total quality management (TQM) movement to find solutions from
the private sector, which had embraced TQM. The Air Force even started its own
Quality Institute to equip all in the service with the tools and techniques to en-
gage in “continuous product improvement.” The TQM world was shaped heavily
by defense contractors who pushed particular methodologies and the tools and
workshops necessary to accomplish them. The TQM framework became a part
of the core curriculum in many military education venues, and TQM language
permeated the narrative for most military organizations. It was particularly note-
worthy in defense acquisition, where its promise of continuous improvement,
constant measurement, and mapping diagrams was intended to make the acqui-
sition system operate more efficiently, with more on-time deliveries and less waste
and cost overrun.
However, the language and philosophy did not gain ready acceptance in the
professional military world. The “empowerment” by TQM of even the most ju-
nior worker in a process to make decisions ran against the ingrained chain of
command. Its use of “gurus,” who were often consultants or statisticians (Edward
Demming, allegedly the founder of TQM, was a particularly venerated individual)
raised the eyebrows of senior military officers who sometimes asked whether these
gurus knew anything about combat or weapons. Thus, TQM began to fade from
use after its champions left—after General Merrill McPeak retired as Air Force
chief of staff, the Air Force closed the Air Force Quality Institute and the language
and the contractors involved in TQM quickly disappeared.
However, it appears that the methodology and the language of TQM are re-
turning in the guise of acquisition reform. The office of the undersecretary of
defense for acquisition and logistics issued its Strategic Goals and Implementation
Plan for 2008, which contained a considerable number of lofty objectives, includ-
ing full implementation of continuous process improvement (CPI) and lean six
sigma. Moreover, the objectives adopted the language of those contractors offer-
ing lean six sigma training by setting the bar at 4 percent AT&L workforce being
certified as “black belt” and 25 percent of that force receiving “green belt” cer-
tification by July 2008.49 According to one source, more than two-thirds of all
Defense Department organizations have adopted some form of lean six sigma.50
Lean six sigma is actually a combination of two managerial tools: lean refers
to the elimination of unnecessary steps that do not add value to a manufacturing
process (e.g., storing parts for long periods of time, as opposed to on-time delivery
of those parts to the assembly line), while six sigma refers to an error reduction
goal. In statistical language, the normal distribution (i.e., the bell-shaped curve)
is a continuous probability distribution containing a mean of zero, with .6826 of
scores occurring within one standard deviation plus or minus from the mean (one
sigma), and .9546 percent of scores within two sigmas, and on out to six sigmas,
or around 0.999999998027. If errors substitute for sigma, then the purpose of six
sigma methodology is to reduce error probability to six sigmas: 3.4 defects per
1 million items. A person with a “green belt” in six sigma is at the entering level of
education, while a “black belt” certifies high expertise (there are also intermediate
“yellow belts”).
Whether such practices can improve the defense acquisition process is ques-
tionable. Defenders of the process argue that there are success stories. The Naval
Air Systems Command used lean six sigma to develop a new approach to the Joint
Standoff Weapon Block II program, generating savings of more than $133 million
in fiscal 2006 and more than $420 million for the life of the program.51 But like
many management techniques (often pushed by consulting firms eager to sell
their wares), lean six sigma can be oversold. Some of it is simply common sense
cleverly packaged, like stepwise planning for complex projects or careful esti-
mates of future costs, performance, and problems. It is not just about colored
belts (available for a price from numerous consulting firms) but also about pru-
dent planning and programming. Moreover, while adopting lean six sigma may
indeed improve processes, it may not be able to tackle the problems posed by
highly complex technologies pushed through the defense acquisition system by
eager service users, members of Congress, and defense contractors, whose politi-
cal clout often outweighs even the most robust reform methodology. Finally, the
reduction of errors to six sigma may make sense in systems where reliability is
critical (e.g., aircraft ejection seats, reconnaissance satellites), but not for the bolts
that hold a military desk together, or military shoe polish, or hundreds of thou-
sands of common items purchased by the military every day. The design for the
coffeemaker in the C-5 aircraft that required it to survive a crash that would have
assuredly killed the crew was a case of requirements overkill.
Another subset of efforts to adopt commercial practices was price-based acqui-
sition, an alternative to the prevalent cost-based acquisition models currently in
use. The argument supporting price-based acquisition is that in the commercial
sector, buyers make choices largely on price, not costs, and the Defense Depart-
ment (and other government agencies) should consider adapting the same logic.
Moreover, advocates of price-based acquisition argued that it would ultimately
save money by reducing the numerous requirements by contractors and pro-
gram managers to provide initial cost estimates and oversight over cost growth.
However, a RAND Corporation study of price-based acquisition argued that the
methodology was inappropriate for Defense Department acquisition because of
the lack of a real market structure (e.g., enough competitors) to provide realistic
pricing information and the difficulty of monitoring price gouging, among other
problems.52
Transformation?
The George W. Bush administration inherited some of the very same defense
acquisition problems that faced previous administrations. A January 2006 defense
study put the problem starkly: “Both Congress and the Department of Defense
senior leadership have lost confidence in the capability of the Acquisition System
to determine what needs to be procured or to predict with any degree of accuracy
what things will cost, when they will be delivered, or how they will perform.”53
The keyword from the Bush administration and its first defense secretary,
Donald Rumsfeld, was transformation, and the Bush Defense Department was ea-
ger to use the term to demonstrate its commitment to acquisition reform. Accord-
ing to its “Defense Acquisition Transformation Report to Congress,” the Depart-
ment planned reforms around the following:
r Streamlined and simplified acquisition

r Affordable and predictable outcomes
r Improved centers of excellence
r Responsibility and accountability alignment
A closer examination of these themes suggests that there is not much new. Stream-
lined and simplified acquisition involved the use of best business practices, which
is just an old method for ranking types of business practices until the best one
emerges. It also relies on continuous process improvement, an idea central to
the quality management fad of the 1990s, which the then chief of staff General
Merrill McPeak imposed on the Air Force, which quickly abandoned it after
McPeak’s retirement. The affordable and predictable outcomes were to be en-

sured through the use of concept decision reviews, which are “to ensure, as early
as possible, that DOD is making the right corporate investment choices, balanc-
ing operational and programmatic risks, to ensure that those choices are afford-
able, and that any resulting non-materiel solutions and/or materiel acquisitions
are designed for lifecycle success.”54 However, this is also the task of the Defense
Acquisition Board, and, to a lesser extent, the JROC and numerous other coun-
cils created by previous administrations. The Defense Transformation Report did
not make it clear as to why the creation of yet another layer of oversight would
improve the defense acquisition process when previous oversight boards had ap-
parently failed. Affordable and predictable outcomes would be assessed by the
enterprise risk assessment model (ERAM), which “utilizes industry best practices
to identify and mitigate business system risks in order to enable more rapid de-
livery of business capabilities. ERAM is an integral part of the Business Capability
Lifecycle (BCL) process which is a new DOD framework that is being imple-
mented in October 2007 to develop, approve and execute business capabilities
in the Business Mission Area.”55 And ERAM becomes the foundation for an as-
sessment team comprising senior executive service personnel, GS-15, and “highly
qualified experts” (is there another kind of expert?) in addition to other support
staff, to produce a “detailed findings document and an “executive briefing” within
six weeks of the team’s formation to assess risk factors and other business ele-
ments for a particular acquisition program. But, again, there is nothing new here;
service acquisition staffs, members of the Defense Acquisition Board, and other
long-standing bodies in the defense acquisition system have had similar if not
identical tasks for decades.
Reforming the Defense Industry

As observed earlier, structural reform became a management tool in the De-
fense Department (sometimes driven from inside, sometimes by Congress), and
the relationship between the military and the defense industry is no exception.
Both the nature of the defense market itself and reports of illegal activity gener-
ated calls for reform dating back to the days of John Paul Jones. It continues today
as the defense market changes from a Cold War structure to an uncertain future.
Today’s defense structural reforms date back largely to the Reagan buildup,
which spawned its own defense reforms as reports about defense contractor abuse
grew. Reports that the Defense Department paid $400 for a hammer, or $35 for
a bolt, or $500 for an aircraft toilet-seat cover suggested that the acquisition pro-
cess had spun out of control, even though a more careful examination suggested
that there were reasonable explanations for some of these things.56 There were
also reports of contractor favoritism. For example, during the Reagan adminis-
tration, the Army awarded Ford Motor Company a contract for an air-defense
system known as the Division Air Defense (DIVAD) system. The company had no
experience in constructing such a system but was in a financial crisis after poor
automotive sales. According to Richard Stubbing, Ford had lost a record $1.5 bil-
lion in 1981, and the Reagan administration saw an opportunity to reward a po-
litical contributor. The Army selected DIVAD even after a competing system from
General Dynamics scored better in competitive testing, but ultimately the secre-
tary of defense canceled it in 1985 after it failed all of its trials.57 The B-1 bomber
was defended partly to boost the fortunes of Rockwell International (once North
American Aircraft Company), and after President Reagan revived the aircraft in
1981, Rockwell’s stock price doubled.58
As a result of these and other problems, hundreds of new rules and regulations
came into effect, perhaps making the process less controversial but also producing
considerable delays and often increasing the costs of production. Those reforms
led to a growth in oversight that became so cumbersome that, in later years, re-
formers tried to de-bureaucratize the process by simplifying it, while also pushing
for more commercial buying practices, as noted earlier.59 Pressure also led to de-
mands for competitively bid contracts rather than sole-source buying practices.
However, as the effects of reform began to ripple through the defense system,
some painful realities emerged. Reform oversight that required competitively bid
defense contracts instead of sole-source contracts was difficult to fulfill in an era of
a shrinking defense industrial base.60 Lead times for weapons stretched into years
as all systems had to meet rigorous requirements on performance and price. Given
the problems, the Defense Department reduced some of the reforms spurred by
the Reagan problems and shifted to a simplified system (e.g., fewer requirements,
less formal systems specifications), though some reforms remained.
Those changes did reduce some of the long lead times for weapons devel-
opment, but they also challenged the quality that sometimes only long testing
could ensure. More important, they did not change some of the most basic is-
sues in the defense acquisition system. Said Congressman Norm Dicks (D-WA),
a long-serving veteran of the House Armed Services Committee, “I’ve been here
for 37 years and we’ve been doing acquisition reform for the last 37 years. You’d
think we would finally get it right. The problem is they bid low and the cost
goes up.”61
In some cases, the reforms did not prevent problems. The Air Force, for ex-
ample, ran into difficulties in several acquisition areas, like rocket purchases and
tanker replacements. Boeing and Lockheed Martin were prime contractors for
rockets, but in 1998, the government accused Boeing of illegally acquiring propri-
etary data from rival Lockheed Martin and barred it from competition for rocket
contracts. However, according to a report in the Wall Street Journal, the Air Force
lifted the ban to preserve both prime contractors as rocket suppliers, with $6 bil-
lion in contracts that skirted a number of provisions designed to save money and
encourage cooperation between suppliers.62
The most notable recent case of defense contractor problems is that of the
Boeing tanker lease. Boeing needed a military contract for its 767 commercial
airliner as airline sales slowed. The Air Force sought replacements for its existing
KC-135 tanker fleet that dated back to the first days of the Boeing 707 in the early
1960s. Boeing was the sole supplier of large commercial and military aircraft in
the United States, but the Air Force still could have considered a bid from the
European consortium Airbus Industries. However, in September 2001, then Air
Force principal deputy assistant secretary Darleen A. Druyun reportedly offered
the Air Force a lease arrangement on behalf of the company that would become
her employer, Boeing. The deal would have allowed the Air Force and Boeing
to circumvent the protracted period required for a standard acquisition contract,
but later legal procedures revealed that both Druyun and Boeing Vice President
Michael Sears used improper influence in the deal, worth $23.5 billion; they both
served prison sentences for their misconduct. The point, though, was that Boeing
and the Air Force engaged in conduct that was clearly driven more by contractor
self-interest than by national interest, as the following implies: “‘We all know
that this is a bailout for Boeing,’ Ronald G. Garant, an official of the Pentagon
comptroller’s office, said in [an e-mail] message to two others in his office and
then-Deputy Undersecretary of Defense Wayne A. Schroeder. ‘ Why don’t we just
bite the bullet,’ he asked, ‘and handle the acquisition like the procurement of a
1970s-era aircraft—by squeezing the manufacturer to provide a better tanker at a
decent cost?’”63
There were also questions about the Army’s dealings with Boeing in its devel-
opment of the Future Combat System. After repeated problems with the $100 bil-
lion program, the Army decided to rein in Boeing’s control of it.64 The Army’s
decision appears to have been prompted by criticism of the program from both
the GAO and members of Congress, particularly Senator John McCain (R-AZ).
The GAO noted that after two years, the program goals were still not estab-
lished, and that only 1 of 50 new technologies was ready for use.65 Still, there
was great reluctance to punish Boeing for the problems or to try to qualify a new
contractor.66
Learning from the Black World Programs

The process discussed in Chapter 2 covers regular military acquisition, but, to
a degree, it excludes classified programs known as “black programs.” While al-
most all defense acquisition programs have elements of security attached to them,
black world programs are usually related to intelligence gathering or highly so-
phisticated technologies that would cause serious damage to the United States if
revealed. The most common examples are reconnaissance satellites and aircraft,
although stealth aircraft such as the F-117 Nighthawk and the B-2 Spirit bomber
are also examples.
Black world programs go through an abbreviated acquisition program because
the levels of security clearance they carry are so high that few outside of the di-
rect program have the proper security credentials. Space programs are a classic
example of black world classification, with highly classified programs that often
worked their way through abbreviated acquisition approval systems in separate
packages so that very few officials not cleared for their programs would see the
completed project.67 Many classified projects were no-bid contracts given to a

sole-source producer because of the particular clearances and technological expe-
rience of that contractor. Lockheed (and, later, Lockheed Martin) was a favored
contractor for aircraft, as its U-2 and later SR-71 reconnaissance aircraft went
through an approval process that involved only the contractor and the operating
service. Northrop also worked in this area, competing and beating Lockheed for
the B-2 bomber contract in a decision made only by the Air Force because of the
security concerns involved.68 Some programs do come out of the black world
for program decisions, but their road through the milestone system is generally
avoided. Thus, Congress, which has budgetary authority over large programs,
may object and try to cancel the project (as a number of representative have tried
to do), but at that point it is an operating system with a sunk development cost,
which makes it more difficult to kill.
Some black world programs have been highly successful. The F-117 light
bomber led the attacks on Baghdad in initial operations in the 1990–1991 Gulf
War, and the B-2, though not without problems, has accomplished its perfor-
mance parameters. Space reconnaissance systems have also reportedly worked
well, though their operations remain so classified that there are still few details
available. The U-2 reconnaissance plane, developed with great secrecy in the
1950s, still flies today. Numerous military satellite programs have provided con-
siderable information and navigation capability for the military. Of course the
black world programs that fail, reach only part of their capability, or spiral out
of cost control are rarely reported because of security, so it is difficult to provide
an overall assessment of the viability of the black world as an alternative to the
normal acquisition road.
Reforming Reform?
There is tremendous pressure to reform the defense acquisition process, and,
more important, to announce success. Thus, in 1988, Robert B. Costello, under-
secretary of defense for acquisition, was proud to inform the House Armed Ser-
vices Committee, “We have substantially improved the acquisition system. . . . As
a result of our acquisition reforms, defense programs are generally on-time and
within budget.”69 Given the situations described previously, one may appreci-
ate the sincerity of Undersecretary Costello and at the same time ask whether he
was exaggerating or whether a temporary acquisition system set of fixes has gone
terribly awry nearly twenty years later.
It is probably time for participants and overseers to sort through the vari-
ous acquisition reform efforts to determine what works, what does not work, and
where to go next. The system is at a crossroad, where previous reform efforts have
perhaps avoided more serious problems but have not provided relief from embed-
ded difficulties that continue to draw attention and sap the system of necessary
resources. Acquisition reform has clearly not reduced cost growth beyond esti-
mates. A 2006 GAO report indicated that not a single defense acquisition reform
trimmed cost overruns. In the 1970s, despite the Fitzhugh commission and the
Commission on Government Procurement, cost overruns averaged 30 percent,
totaling $13 billion. In the decade of the 1980s, the Carlucci initiatives, the Grace
commission, and the Packard commission efforts did not prevent overruns of
39 percent ($12 billion total), and the 1990s saw overruns of 40 percent ($15 bil-
lion total) even after the Federal Acquisition Streamlining Act and the Clinger-
Cohen Act.70 Part of the reason for this continuing poor performance was that
more than 80 percent of the programs examined by the GAO did not pass through
the initial reviews required by most of the reform efforts, and reduced buys of ma-
jor systems led to cost overruns of 27 percent in the joint strike fighter and 54 per-
cent overruns in the Future Combat System.71 The cost of the military’s top five
weapons programs was $231 billion in 2000, but that swelled to $521 billion in
2005 for the same programs.72 If reforms were ever designed to curb excessive
cost growth of prime contracts, they were clearly not working.
Pentagon officials acknowledge that oversight is dwindling. While the dol-
lar value of weapons contracts has doubled over the past decade, the Pentagon
halved the size of the workforce that polices their costs. The government work of
managing the design, development, and production of weapons has been largely
outsourced to the weapons contractors themselves.73 The size of service acqui-
sition forces has dropped significantly, and more oversight on complex systems
like the Army’s Future Combat System is now done by the contractors who have
a vested interest in pushing the program forward but will not have to use it in
combat.74 The Navy’s acquisition force is also becoming smaller, along with the
Air Force’ military acquisition professionals, as more uniformed personnel deploy
to war zones.
One consequence of reform has been the diffusion of acquisition power, which
has also grown because of the inherent distrust built into the system. That may
mean that the role of a strong central program manager who has genuine pro-
gram and budget authority might be restored. In previous years, a strong figure
who understood the differences between tough management and the adoption of
management tools could have a significant impact on solving acquisition prob-
lems. Congressman Duncan Hunter waxed nostalgically about one such individ-
ual: “Many years ago, when Dr. Johnny Foster was head of Director of Defense
Research and Engineering (DDR&E), for the U.S. Government, he told the Air
Force when costs started to go . . . off the page, that they had to build a tactical
fighter aircraft for five million bucks. . . . [T]he Air Force told him that was abso-
lutely impossible. And his answer was, then you are not going to have an aircraft.
They did build one for five million bucks. It is called the F-16.”75 In the diffused
world of current defense acquisition, though, it is difficult to imaging someone
with the kind of clout (and political courage) that Foster demonstrated.
Fixing the Problems: Appearances versus Reality?

There are few things that evoke the ire of taxpayers as much as finding out that
their tax dollars are being poorly spent. Stories of waste, fraud, and abuse quickly
generate frantic efforts by political figures to fix the problems that arouse public
anger. The obvious problem is that most cases of revenue abuse or misuse are dif-
ficult to fix. They are often embedded in the complex systems that emerge from
years of previous reforms, the peculiar nature of the defense industry–military
relationship, congressional persuasion, and a host of other items that make for a
less-than-efficient system. So sometimes pressure to reform the system results in
the appearance of change rather than real change in an effort to appease critics.
Thus, new management routines come into practice (the quality movement is a
case in point) that appear to remedy or at least lessen the problems of defense
acquisition. For example, in 1996 the Defense Department built on the interest
generated by the Revolution in Military Affairs (hardly a revolution, as is the case
with most things called “revolutions”) to craft a “revolution in military acquisition
affairs,” or RMAA. As an example of its success, Paul Kaminski, undersecretary
of defense for acquisition and technology, cited changes in prototyping improve-
ments tested on the USS Yorktown. According to Kaminski, one of these systems,
the integrated bridge and voyage management system, cut down the number of
sailors on the ship’s bridge from 13 to 5.76 The fact that Kaminski used such a
trivial example of the effects of reform to support RMAA strongly suggests that (1)
RMAA was hardly revolutionary, and (2) an application of common sense could
probably have accomplished the same results.77 However, where the pressures to
fix a system that elude simple solutions, the temptation to apply symbolic solu-
tions becomes greater.
Conclusions
Reforming the defense acquisition system has become almost a pastime in
Washington, with repeated efforts to make the system more honest, more ac-
countable, less costly, and better managed. Most of these reforms have been well
intentioned, but most have fallen short of their marks. More important, some
reforms have actually contributed to the very problems they were intended to
resolve. With increased gates of oversight through which major programs must
pass, the system is now slower and provides more opportunity for changes and
delays. Additionally, the operating services have found ways to work the system to
assist favored programs through a system that was intended to reduce service in-
fluence.
However, the principle problem with the acquisition system is the nature of
the system itself and the military requirements that it supports. There is still one
customer, a small handful of suppliers, uncertain threats for the military to re-
spond to, and highly technical systems that are produced in inefficient numbers.
Those who describe the Pentagon acquisition as one of the last bastions of so-
cialism are perhaps not far from the truth. However, no one has derived a clear
alternative, so the system will likely continue, along with the reforms that may
improve it at the margins but are also designed to respond to the public outrages
that boil up every time the defense acquisition system produces a $400 hammer
or a $1,000 toilet-seat cover.
Notes
1. J. Ronald Fox, Arming America: How the U.S. Buys Weapons. Boston: Graduate School
of Business Administration, Harvard University, 1974, 3–4.
2. Christopher H. Hanks, Elliot O. Axelband, Shuna Lindsay, Mohammed Rehan
Makik, and Brett D. Steele, Reexamining Acquisition Reform: Are We There Yet? Santa Monica,
CA: RAND Corporation, 2005, 1.
3. Center for Strategic and International Studies, U.S. Defense Acquisition: A Process in
Trouble. Washington, DC: Georgetown University, Center for Strategic and International
Studies, March 29, 1987.
4. “Defense Contractor Pleads Guilty to Fraud in Manufacture and Sale of Chemical,
Nuclear, Biological Filters,” Department of Justice News, September 7, 2007.
5. “Defense Contractor Was Paid $1 Million to Ship 2 Washers,” Washington Post, Au-
gust 17, 2007.
6. “Defense Contractor SAIC to Pay $2.5 Million to Settle Fraud Charges,” San Antonio
Business Journal, April 27, 2005.
7. “Jury Fines Defense Contractor in Iraq $10M,” USA Today, March 10, 2006.
8. “Defense Contractor Pleads Guilty to Fraud,” Boston Globe, August 2, 2006.
9. “4 Indicted for Fraud, Conspiracy in Army Contracts Scheme,” Atlanta Journal-
Constitution, April 24, 2008.
10. “GAO Blasts Weapons Budget,” Washington Post, April 1, 2008.
11. House of Representatives, F-22 Cost Controls. Hearing before the Subcommittee
on National Security, Veterans Affairs and International Relations of the Committee on
Government Reform, 106th Cong., 1st Sess., December 7, 1999, 14–50.
12. “Four JASSM Failures Cast Doubt on Program’s Future,” Aerospace Daily & Defense
Report, May 10, 2007.
13. “Cost Nearly Doubles for Marine One Fleet,” Washington Post, March 17, 2008.
14. “Large Cost Overruns Likely in Lockheed Helicopter Contract,” Washington Post,
May 17, 2007.
15. Ibid.
16. “Air Force Programs Late, over Budget, Audit Finds,” Washington Post, March 8,
2007.
17. “Congress Criticizes Tank Overruns,” Washington Post, April 30, 2008.
18. GAO, Tactical Aircraft: DOD Needs to Better Inform Congress about Implications of
Continuing F/A-22 Cost Growth. Report to the Honorable John F. Tierney, House of Repre-
sentatives, GAO-03-280, February 2003.
19. “Price Tag for Navy’s New Aircraft Carrier on the Rise, GAO Says,” Norfolk
Virginian-Pilot, September 22, 2007.
20. “GAO Blasts Weapons Budget,” Washington Post, April 1, 2008.
21. “Assault Ship Never Had Smooth Sailing,” San Antonio Express-News, July 31, 2005.
22. Brian Shimel, “Looking at the Root Causes of Problems: Preventing Repeat Mis-
takes,” Defense AT&L (May–June 2008), 12.
23. Thomas L. McNaugher, New Weapons, Old Politics: America’s Military Procurement
Muddle. Washington, DC: Brookings Institution, 1989, 34–35.
24. Michael E. Brown, Flying Blind: The Politics of the U.S. Strategic Bomber Program.
Ithaca, NY: Cornell University Press, 1992, chap. 7.
25. Robert F. Coulam, Illusions of Choice: The F-111 and the Problem of Weapons Acqui-
sition Reform. Princeton, NJ: Princeton University Press, 1977, 167–235.
26. “Joint Strike Fighter Acquisition Reform: Will It Fly?” Hearing on National Secu-
rity, Veteran’s Affairs, and International Relations of the Committee on Government Re-
form, House of Representatives, 106th Cong., 2nd Sess., May 10, 2000. Washington, DC:
Government Printing Office, 2001, 101.
27. “When the Military Needed It Yesterday,” New York Times, October 21, 2007.
28. “Military-Civilian Technology Transfer,” Army Regulation 70-57. Washington, DC:
Headquarters, Department of the Army, February 26, 2004, 1.
29. “Army Keeps New Helicopter Alive at Bell,” Fort Worth Star-Telegram, May 19,
2007.
30. Fleet was able to foil the Army’s plans by dramatically increasing production of the
PT-1, but in the process the company earned so much money that the Air Corps made
it return some of it. See Jacob Goodwin, Brotherhood of Arms: General Dynamics and the
Business of Defending America. New York: Times Books, 1985, 58–59.
31. “F-22 Cost Controls,” 52.
32. William P. McNally, “Will Commercial Specifications Meet Our Future Air Power
Needs?” Acquisition Review Quarterly (Summer 1998), 297–316.
33. David S. Christiansen, David A. Searle, and Caisse Vickery, “The Impact of the
Packard Commission’s Recommendations on Reducing Cost Overruns on Defense Acqui-
sition Contracts,” Acquisition Review Quarterly (Summer 1999), http://findarticles.com/p/
articles/mi m0JZX/is 3 6/ai 78177456/pg 1.
34. Michael R. Thirtle, Robert V. Johnson, and John L. Birker, The Predator ACTD: A
Case Study for Transition Planning to the Formal Acquisition Process. Santa Monica, CA: RAND
Corporation, 1997.
35. Defense Acquisition: Best Commercial Practices Can Improve Program Outcomes, State-
ment/Record, 03/17/99, GAO/T-NSIAD-99-116.
36. The Lean Aircraft Initiative Policy Focus Group, “Adopting Commercial Practices
in the Department of Defense: Barriers and Benefits,” September 16, 1996, at https://www.
dodmantech.com/pubs/leanwp20.pdf.
37. Defense Department, “Memorandum for Correspondents,” Memorandum 025M,
February 26, 1997, http://www.defenselink.mil/Utility/printitem.aspx?print=http://www.
defenselink.mil/news/Feb1997/m022697 m025-97.html.
38. “Defense Contract Reforms Probed,” New York Times, April 8, 2005.
39. Peter Dombrowski and Eugene Gholz, Buying Military Tran$formation: Techno-
logical Innovation and the Defense Industry. New York: Columbia University Press, 2006,
49–50.
40. “Cost of Lockheed Ship Rises,” Washington Post, February 9, 2007.
41. Dombrowski and Gholz, Buying Military Tran$formation, 39.
42. “Costly Lesson on How Not to Build a Navy Ship,” New York Times, April 25, 2008.
43. Ibid.
44. TechTarget, http://searchsoftwarequality.techtarget.com/sDefinition/0,,sid92 gci
498678,00.html.
45. House of Representatives, Joint Strike Fighter Acquisition Reform: Will It Fly? Hearing
before the Subcommittee on National Security, Veterans Affairs, and International Rela-
tions of the Committee on Government Reform, 106th Cong., 2nd Sess., May 10, 2000.
Washington, DC: Government Printing Office, 2001, 6–7.
46. Ibid., 20–21.
47. GAO, “Defense Acquisitions: Assessment of Selected Programs.” Washington, DC:

GAO, March 4, 2008.
48. Ibid., 5.
49. AT&L Goals, 2008, http://www.acq.osd.mil/goals/20080207 SGIP.pdf.
50. Brian Robinson, “DoD Rallies around Lean Six Sigma,” FWT.com, March 2008,
http://www.fcw.com/print/22 5/features/151766-1.html.
51. Ibid.
52. Mark A. Lorell, John C. Grasner, and Cynthia R. Cook, Price-Based Acquisition:
Issues and Challenges for Defense Department Procurement of Weapons Systems. Santa Monica,
CA: RAND Corporation, 2005.
53. Defense Acquisition Performance Assessment. A Report of the Assessment Panel As-
sessment Project for the Deputy Secretary of Defense, January 1, 2006. The report grimly
noted that over a number of years, 128 studies had focused on problems in the defense ac-
quisition system, and problems identified by the Packard commission more than 20 years
earlier were still present.
54. “Defense Acquisition Transformation,” John Warner National Defense Authoriza-
tion Act, Fiscal Year 2007, section 804, February 3, 2007.
55. Defense Department, “FAQs—Enterprise Risk Assessment Methodology (ERAM),”
http://www.defenselink.mil/dbt/faq eram.html.
56. For example, the $35 bolt was designed to secure the guidance system to a Min-
uteman II missile, and was ordered in very small quantities and constructed out of high-
tension alloy metals. Author’s interview, Newark Air Force Base, 1984.
57. Richard Stubbing, The Defense Game. New York: Harper & Row, 1986, 182–184.
58. Kotz, The Wild Blue Yonder, 223.
59. The climate that spawned these reforms is discussed in Daniel Wirls, Buildup: The
Politics of Defense in the Reagan Era. Ithaca, NY: Cornell University Press, 1992, chap. 4.
60. David S. Sorenson, “Fewer Dollars and More Reform? Defense Acquisition in the
United States after the Cold War,” Security Studies 2 (Winter 1992), 310–329.
61. William Matthews, “U.S. Congress May Be in a Reform Mood,” Defense News,
May 2, 2005.
62. “Air Force Intends to Lift Rocket Spending,” Wall Street Journal, April 19, 2005.
63. “E-mails Detail Air Force Push for Boeing Deal,” Washington Post, June 7, 2005. The
Air Force justified the urgency of the tanker deal by citing corrosion problems in the KC-
135 fleet, requiring urgent replacement of those planes. However, a study by the Defense
Science Board published in 2004 revealed that the KC-135 airframes were useful through
the year 2040. Ibid.
64. “About Face: Army’s Decision on Boeing Changes Philosophy,” Wall Street Journal,
April 6, 2005.
65. “Future Combat System Faces Familiar Foe in Armed Services Subcommittee,” CQ
Today, May 12, 2005.
66. “Boeing Lags in Bid to Revamp Army Radios,” Chicago Tribune, May 26, 2005.
67. See, e.g., Paul B. Stares, The Militarization of Space: U.S. Policy, 1945–1984. Ithaca,
NY: Cornell University Press, 1985; Paul B. Stares, Space and National Security. Washing-
ton, DC: Brookings Institution, 1987; William E. Burrows, Deep Black: Space Espionage and
National Security. New York: Random House, 1986.
68. Part of the story is in Ben R. Rich and Leo Janos, Skunk Works: A Personal Memoir
of My Years at Lockheed. Boston: Little, Brown, 1994, chap. 15.
69. “Integrity of Department of Defense Acquisition System and Its Impact on U.S.
National Security,” Hearings before the Full Committee and the Acquisition Policy Panel,
Committee on Armed Services, House of Representatives, 100th Cong., 2nd Sess., Octo-
ber 13, 1988. Washington, DC: Government Printing Office, 1989, 13.
70. Defense Acquisitions: Major Weapon Systems Continue to Experience Cost and Schedule
Problems under DOD’s Revised Policy. Report to Congressional Committees, GAO, GAO-06-
368, April 2006, 5.
71. Ibid., 3, 10–11.
72. “U.S. Reviews Weapons Buying, Seeking to Control Costs,” Bloomberg.com,
June 13, 2005.
73. “Arms Fiascos Lead to Alarm Inside Pentagon,” New York Times, June 8, 2005.
74. Interview by author, Maxwell AFB, AL, April 2008.
75. House of Representatives, “Department of Defense Acquisition Reform,” Hearing
before the Committee on Armed Services, 109th Cong., 1st Sess., November 2, 2005.
Washington, DC: Government Printing Office, 2007, 15.
76. House of Representatives, Defense Reform Act of 1997. Hearings before the Commit-
tee on National Security, 105th Cong., 1st Sess., Washington, DC: Government Printing
Office, 1998, 9–10.
77. Other examples cited were helping Raytheon reduce the number of independent
soldering processes and replacing a military navigation system on the F-14 aircraft with a
commercial GPS version, again hardly revolutions. Ibid., 10–14.
Further Reading
Defense Acquisitions: Major Weapon Systems Continue to Experience Cost and Schedule Prob-
lems under DOD’s Revised Policy. Report to Congressional Committees, U.S. Government
Accountability Office, GAO-06-368, April 2006.
Hanks, Christopher, Elliot I. Axelband, Shuna Lindsay, Mohammed Rehan Malik, and Brett
D. Steele, Reexamining Military Acquisition Reform: Are We There Yet? Santa Monica, CA:
RAND Corporation, 2005.
APPENDIX I
Company Profiles
Boeing Company Integrated Defense Systems

Headquarters: Chicago and St. Louis
U.S. Manufacturing Locations: Decatur and Huntsville, AL; Mesa, Anaheim, El Segundo,
Palmdale, Long Beach, Seal Beach, and Huntington Beach, CA; Macon, GA; Kennedy Space
Center, FL; St. Louis and St. Charles, MO; Wichita, KS; Philadelphia; El Paso, Houston,
and San Antonio, TX; and Puget Sound, WA
Workforce: 72,000 worldwide
Revenue (2006): $61 billion
Employees: 160,000 in the United States and overseas
History
In 1908 William Boeing went to his first air show in Los Angeles, and thrilled
by the aircraft he saw there, he took flying lessons from Glenn Martin, another
pioneer aviator and company founder. With his friend William Westervelt, Boe-
ing designed and built a wooden seaplane, which Boeing flew without so much
as a warm-up in 1916. A year later his Boeing Airplane Company became a real-
ity, and Boeing began hiring the engineers, woodworkers, and sewers needed to
fabricate the crude aircraft of the time. Initially building planes designed by other
companies under license, the Boeing company began to design its own planes,
capitalizing on the interest spurred by Charles Lindbergh’s flight over the Atlantic
in 1927. Boeing demonstrated his understanding of how to build a large aviation
company by building relations with other companies both to supply and buy his
aircraft and to get widespread publicity.
In the 1920s and 1930s, Boeing pioneered numerous aircraft designs, build-
ing the first monoplane fighter for the U.S. Army Air Corps, the P-26, and the B-9
172 Appendix I
low-wing monoplane bomber. Boeing also started an airline, United Aircraft and
Transport, providing a ready-made customer for Boeing passenger liners. How-
ever, antitrust legislation in 1934 required Boeing to spin off its passenger line,
which became United Airlines, and its engine facilities, which later became United
Technologies. Although William Boeing quit the company, Boeing continued to
grow, moving into the production of large aircraft for both civilian and military
use, including the massive Boeing 314 flying boats, the commercial Stratoliner,
and the prototype B-17 bomber for the Air Corps. That latter aircraft provided the
foundation for Boeing’s entry into the military bomber world, with the company
producing 12,731 B-17’s during the war (only half in Boeing plants; the others
built elsewhere under license), followed by the more advanced B-29, of which
3,970 emerged from numerous factories through 1946.
The end of World War II production spelled trouble for Boeing and the other
large aircraft manufacturers, and more than 700,000 Boeing workers received
furlough slips. However, within a few years Boeing adapted German-developed
swept-wing technology to move quickly into the jet age, developing the B-47
medium bomber and the 707 commercial transport, which quickly found mili-
tary use. The B-52 bomber first flew in 1952 and went into production several
years later. Boeing also moved into the military missile business, starting with
the Bomarc antiaircraft missile in the 1950s and moving into production of the
solid-fuel Minuteman in 1958. Boeing’s commercial jet lines increased with the
introduction of the 727, 737, and the 747 jumbo jet, at its time the largest pas-
senger plane in the world. Boeing sales to the military continued with the 707
passenger liner converted to tanker, cargo, and reconnaissance versions, while
Boeing also reached into space by producing many elements of the Apollo pro-
gram and stages of the Saturn rockets that carried Americans to the moon. Boeing
also entered the helicopter area when it bought Vertol Corporation in 1960.
Like most defense companies, Boeing began to grow through mergers. In 1996
Boeing merged with Rockwell International Corporation, which had started life
as North American Aviation before itself merging with Rockwell Tool. In 1997
Boeing merged with McDonnell Douglas, itself a combination of the Douglas
and McDonnell Aircraft companies. In merging with McDonnell Douglas, Boeing
eliminated one of its chief rivals for American commercial aviation, as McDonnell
Douglas (and Douglas before the merger) built a series of DC jetliners that were
similar to Boeing commercial planes—Douglas’s DC-8 competed with Boeing’s
707 and the Douglas DC-9 in its several versions competed with the Boeing 727s
and 737s, and the DC-10 rivaled the Boeing 747. By merging with McDonnell
Douglas, Boeing also acquired Hughes Helicopters, which Douglas had obtained
in 1984, and gradually acquired more of Hughes through 2000, absorbing al-
most all of the old companies owned or founded by aviation pioneer Howard
Hughes.
In March 2001, Boeing announced that it wanted to move its headquarters
from Seattle, where it had been almost since its founding. Several cities competed
for the prize, and ultimately Chicago won. In 2002 Boeing opened a second
Appendix I 173
headquarters in St. Louis for its combined space, defense, government, intelli-
gence, and communications capabilities.
Boeing Today
Boeing is divided into corporation sectors, the commercial aircraft division,
and Boeing’s Integrated Defense Systems. Together they make Boeing the world’s
largest aircraft manufacturer, though Boeing, like most large defense contractors,
has diversified outside the primary aerospace arena. Boeing’s primary defense sys-
tems are the following:
r EA-18G Growler—designed for airborne electronic attack missions; initial operation ca-
pacity expected in 2009.
r F/A-18E/F Super Hornet Block II—multirole strike fighter.
r F-15E Strike Eagle—multirole fighter currently in production for the Republic of Korea
Air Force and contracted for Singapore.
r Harpoon Block III—an antiship weapon system.
r Joint Direct Attack Munition ( JDAM)—guidance kit consisting of a tail section with
INS/GPS (inertial guidance system with global positioning system) that converts existing
unguided free-fall bombs into near-precision-guided weapons.
r Small Diameter Bomb (SDB)—a 250-pound class near-precision-guided weapon
launched from a fighter, bomber, or unmanned aircraft that will destroy targets from
a range of greater than 40 miles.
r Standoff Land Attack Missile-Expanded Response (SLAM-ER)—a day/night, adverse
weather, over-the-horizon, precision strike missile.
r T-45 Training System—a fully integrated jet pilot training system.
Global Mobility Systems:

r C-17 Globemaster III—heavy airlift aircraft
r KC-767 Advanced Tanker—proposed aerial-refueling platform
Airborne Anti-Submarine Warfare (ASW) and Intelligence, Surveillance and Re-

connaissance (ISR) Systems:
r 737 Airborne Early Warning & Control (AEW&C)—Proposed airborne surveillance,
communications, and battle management
r Airborne Warning and Control System (AWACS)—airborne early-warning systems, op-
erated by the United States, NATO, the United Kingdom, France and Saudi Arabia; Japan
operates a fleet of 767 AWACS
r P-8A Poseidon—long-range antisubmarine warfare, antisurface warfare, intelligence,
surveillance, and reconnaissance aircraft
Rotorcraft Systems:
r AH-64D Apache Longbow—multirole combat helicopter in service with the U.S. Army
and ten international defense forces worldwide
174 Appendix I
r Chinook—heavy-lift helicopter for intratheater troop and cargo movement

r V-22 Osprey—a tilt-rotor aircraft capable of taking off and landing like a helicopter, but
once airborne, its engine nacelles can be rotated to convert the aircraft to a turboprop
airplane capable of high-speed, high-altitude flight
Boeing is also a prime contractor for the Army’s Future Combat System (FCS),
a multipart integrated weapons program. It contains traditional equipment (e.g.,
tracked vehicles, information systems), but its revolutionary feature is that each
part is designed to function in integration with the rest of the system, includ-
ing the training and soldier integration. Boeing’s role in the FCS is lead systems
integrator, which gives Boeing a greater share of control than partner Science Ap-
plications International and $14.8 billion control over the entire system.
Boeing also maintains Phantom Works (a term probably drawn from Lock-
heed’s Skunk Works), which performs R&D work, much of it highly classified.
Problems at Boeing
Like many other major defense contractors, Boeing has found controversy in
the defense business. Its most notable crisis came in 2003 when the company
fired Chief Financial Officer Michael Sears and Vice President Darleen Druyun
after Sears was charged with improperly offering Druyun a job after she served as
the Air Force’s top acquisition officer. Druyun had been reviewing proposals for
the Air Force’s follow-on tanker aircraft and stood accused of secretly providing
Boeing with information about rival Airbus Industries’ proposal for the plane.
Both Sears and Druyun went to prison for their activities, and President Phil
Condit resigned in December 2003. His replacement, Harry Stonecipher, lasted
fewer than two years before the Boeing board also fired him after he admitted
to an “improper relationship” with a female Boeing executive. Boeing also found
itself in trouble after submitting an artificially low bid for the Future Imagery
Architecture reconnaissance satellite system, spending more than $4 billion on
the highly complex system before the National Reconnaissance Office pulled the
plug, creating, in the words of one analyst, “perhaps the most spectacular and
expensive failure in the 50-year history of American spy satellite projects.”1
Despite such problems, Boeing continued to surge as a defense and commercial
contractor. Its revenues for the fourth quarter of 2006 jumped by 26 percent, to
$17.5 billion, and although much of the jump came from commercial aircraft
sales, its defense arm also grew, with fourth-quarter revenue climbing 18 percent,
a $9.7 billion increase.2
Public Service at Boeing

Boeing engages in considerable public service, including the encouragement of
employee diversity (Boeing Women in Leadership in St. Louis sponsors a popular
monthly “Breakfast of Champions” that attracts many employees, especially new
Appendix I 175
hires), and conducts a public campaign to encourage more Americans to enter the
engineering profession. There is also a corporate code of conduct, emphasizing
employee safety, honest management, and stewardship to shareholders. Boeing
contributed more than $48 million in 2007 to various charitable causes, including
the arts, education, and the environment.3
Notes
1. “In Death of Spy Satellite Program, Lofty Plans and Unrealistic Bids,” New York
Times, November 11, 2007.
2. “Boeing Doubles Profit in Quarter,” Los Angeles Times, February 1, 2007.
3. Boeing 2007 Corporate Philanthropy Report, http://www.boeing.com/
companyoffices/aboutus/community/assets 07/Philanthropy Report 07.pdf.
General Dynamics Electric Boat Division

Headquarters: Groton, CT, and Falls Church, VA
U.S. Manufacturing Locations: Groton, CT, and Quonset Point, RI
Workforce: 10,500
Revenue (2006): $24.06 billion
History
During the American Revolution, an American inventor named David Bushnell
invented the world’s first workable submarine, the Turtle. The tiny craft, resem-
bling a large water barrel, was propelled by a single sailor turning two screws,
one for horizontal and one for vertical propulsion, and was armed with a small
bomb that the operator was to screw into the wooden bottom of his targeted ship.
The first and only mission in July 1776 resulted in failure, and the Turtle never
attempted another foray into the midst of the British fleet moored in New York
harbor. While Bushnell was a visionary designer, it is doubtful that he could have
known that one of the world’s largest submarine producers would locate in his
native state of Connecticut.
John Philip Holland continued Bushnell’s pioneering work in submarines.
Holland dreamed of a submarine that could attack British warships supporting
British control of Holland’s native Ireland. Holland migrated to the United States
in 1873 and continued his work on submarines. He was the first to combine elec-
tric propulsion for submerged cruising and diesel power for surface operations,
and in 1888, the U.S. Navy accepted his design but did not award him a con-
tract to produce such a vessel. Holland found a lawyer, Elihu Frost, to help him
form the Holland Torpedo Boat Company, but when funds ran short, Isaac Rice,
a German-born inventor who had formed a company to build electric batteries,
176 Appendix I
and later electric taxi cabs, absorbed the Holland Torpedo Boat Company to form
the Electric Boat Company in 1899, with Rice as president and Holland as gen-
eral manager. Electric Boat would quickly grow, absorbing the New London Ship
and Engine Company in Groton, Connecticut, to supply it with diesel engines for
its submarines. Business grew in 1914 as the U.S. Navy prepared for the possi-
bility of a world war, and by 1918 the Navy had contracted for 85 submarines
with Electric Boat. In 1924 the new yard at Groton produced a submarine for
the Peruvian navy, the first of hundreds to follow. This contract and others like
it brought the censure of the Nye committee (see Chapter 1), which cited the
Peruvian sale in its 1936 report: “Following the peaceful settlement of the Tacna-
Arica dispute between Peru and Chile, L. Y. Spear, vice president of Electric Boat
Co. (which supplied submarines to Peru) wrote to Commander C. W. Craven,
of Vickers-Armstrong (which supplied material to Chile): ‘It is too bad that
the pernicious activities of our State Department have put the brake on arma-
ment orders from Peru by forcing resumption of formal diplomatic relations with
Chile.’”1
In 1924, Electric Boat’s only competition for submarine construction, the Lake
Torpedo Boat Company, left the business, and by default Electric Boat became a
monopoly supplier. The Navy, concerned about the power of such a monopoly,
and perhaps still skeptical that private yards could build quality ships, quickly
made the Portsmouth Naval Shipyard into a submarine design and construction
center.2
World War II brought considerable expansion, with the Groton yard con-
structing 74 submarines and almost 400 patrol torpedo boats. These were boom
years for Electric Boat, and it expanded its facilities and hired thousands of local
citizens to work in the yards.
Submarines were powered by a combination of diesel and electric motors, but
in 1951 Electric Boat received a contract to produce the world’s first nuclear-
powered submarine. The idea for this revolutionary propulsion came from re-
search at the Oak Ridge National Laboratory in 1946, and was pushed by an en-
ergetic naval officer, Captain (later Admiral) Hyman Rickover. Rickover, known
as the father of the nuclear submarine, would later clash with Electric Boat.
In 1951, Electric Boat received a contract to construct the USS Nautilus, which
ushered in maritime nuclear propulsion when Electric Boat launched it in 1954.
The next innovation from Electric Boat was a missile-carrying nuclear submarine,
the USS George Washington, launched in 1959. That boat, carrying 16 Polaris
nuclear-tipped missiles, would be followed by the Ohio-class missile submarines,
which held 24 Trident missiles, each with 10 nuclear warheads, making the Ohio-
class submarines some of the deadliest warships in history. The first of 18 boats,
the USS Ohio slipped into the water for the first time in 1979. Ten years later
work began on the Los Angeles–class attack submarines at Groton, which would
be followed by the launching of the first Seawolf submarine in 1996. A year later
the last Ohio-class submarine left the yards at Groton, and a year after that Electric
Boat received a joint contract (with Northrop Grumman at Newport News) to start
Appendix I 177
the Virginia-class attack-submarine program. In 2004 Electric Boat delivered both

the last Seawolf and the first Virginia-class submarine.
Like most large defense contractors, Electric Boat grew from a specialty sub-
marine construction firm to a multinational giant. In 1945, company president
John Jay Hopkins realized that the end of World War II might mean a drop in
submarine orders for the U.S. Navy, and he began to expand the company beyond
its one-item production. In 1947, Hopkins bought Canadair Limited, a Canadian
aircraft manufacturer, and moved into the atomic energy field by founding the
General Atomic Division in 1955, three years after he renamed his company
General Dynamics (GD). Hopkins further expanded his aviation assets in 1954
by purchasing the giant Convair aircraft company. Convair, itself a merger be-
tween Consolidated and Vultee Aircraft companies, built both fighter and bomber
aircraft (including the giant ten-engine B-36 aircraft). In 1951, the Air Force, in-
spired by German missile developments in World War II, awarded Convair a
contract for missile development, which ultimately led to the Atlas interconti-
nental ballistic missile, and to other missile projects, giving General Dynamics an
edge in rocketry for the military. General Dynamics also developed fighters (in-
cluding the revolutionary delta-winged F-102 and F-106) and the B-58 Hustler
bomber, which was the first plane of its class to exceed the sound barrier in level
flight. Convair continued to produce aircraft until 1965, when it shifted to missile
production alone. However, GD sold off its primary aircraft business, including
its profitable F-16 fighter line, to Lockheed in 1993, after selling its missile line to
Hughes Aircraft the year before, and shutting down the remaining aircraft capabil-
ity in 1996.3 In addition to selling Convair and some other defense-related parts
of the company, GD acquired civilian firms with expertise and experience in infor-
mation technology as well as commercial aviation, like the Gulfstream Aerospace
Corporation, a business jet firm, purchased by GD in 1999. Currently GD has four
business groups, Aerospace, Combat Systems, Marine Systems, and Information
Systems and Technology. Breaking from its military origins, though, GD now pro-
duces and services commercial aircraft, except where the military buys business
jets for passenger transports. Combat Systems represents a new venture for the
former submarine company, and GD ventured into land weapons after decades
of specialization in air and sea systems. Combat Systems includes Land Systems,
which is the world’s largest supplier of tracked military vehicles, to include the
M1A2 Abrams Main Battle Tank, the Marine Corps Advanced Amphibious As-
sault Vehicle, and the Army Stryker wheeled combat vehicle. The M1A2 (and
its predecessor, the M1A1) is produced in a plant in Lima, Ohio, which GD ac-
quired from Chrysler Defense in 1982, and is the only regular tank now in service
with the U.S. Army. The Marine Corps Advanced Amphibious Assault Vehicle is
a tracked amphibious weapon that launches from a ship and carries Marines and
their weapons ashore, and the Army Stryker system is a wheeled combat vehicle
similar to the previous armored personnel carriers except that it moves on wheels
instead of tracks. General Dynamics also bought the Bath Iron Works shipyard
facilities in Maine in 1995.
178 Appendix I
Electric Boat Today

Electric Boat is a part of the GD family of defense firms, which ranks sixth on
the Defense News list of top 100 global defense contractors. The company man-
ages two facilities, one at the old Naval Air Station site in Quonset Point, Rhode
Island, where submarines hulls are started, and one in Groton, Connecticut,
where the hulls are barged in from Quonset Point and completed. Electric Boat’s
core business continues to be the construction of submarines, and it is currently
building the Virginia-class attack submarines in a contract-sharing agreement with
Northrop Grumman’s Newport News yard. Electric Boat has completed the USS
Virginia, while Northrop Grumman finished construction on the USS Texas. The
USS Hawaii and USS New Hampshire are to be constructed at Electric Boat, while
the Newport News yard is constructing the USS North Carolina and USS New
Mexico. The two yards will share production of the remaining 24 boats. The spec-
ifications for the Virginia class submarines are as follows:
r Displacement: 7,700 tons (submerged)

r Length: 377 feet
r Hull Diameter: 34 feet Speed: 25+ knots
r Diving Depth: 800+ feet
r Weapons: Mark 48 advanced capability torpedoes, Tomahawk land-attack missiles,
Mark 60 CAPTOR mines, advanced mobile mines, and unmanned underwater vehicles
Electric Boat is also modifying some of the three Seawolf-class submarines and
reconfiguring the SSGN Ohio-class ballistic missile submarines.4 These boats, de-
signed and built during the Cold War to carry 24 Trident missiles, are now be-
ing redesigned to perform special operations missions. The huge boats will carry
up to 154 cruise missiles, 66 special operations forces, and something called
the Advanced SEAL Delivery System, a small minisubmarine fitted to the top
of the SSGN. Electric Boat is also working on some advanced concepts for sub-
marines of the future, including innovations in propulsion, weapons, and control
devices.
Electric Boat entered into a fairly unique partnership with rival Northrop
Grumman’s Newport News shipyard to build the Virginia-class submarines. Elec-
tric Boat kept afloat as it could both build Virginia-class boats and do maintenance
work, along with building the USS Jimmy Carter submarines (technically called
“Multi-Mission Platforms”). However, when the latter contracts ended, Electric
Boat was left with just the Virginia contract, building just one submarine per year.
Both Northrop Grumman and Electric Boat wanted the Navy to up its Virginia
submarine orders to two per yard per year, but the Navy insisted that the cost of
$2.4 billion per boat had to come down to $2 billion before it could up its order
pace.5 The Navy is also considering plans to reduce its overall submarine force to
48 boats in the late 2020s,6 though the rise of a traditional navy like that of China
or Russia could quickly change such plans.
Appendix I 179
Problems at Electric Boat

Like most prime contractors, Electric Boat struggled to avoid problems on large
contracts. Its problems in building the first Ohio-class ballistic missile submarines
came from innovative technological construction methods that sometimes pro-
duced poor welds, poorly fitting pipes, and a variety of other problems that re-
sulted in cost overruns and delays.7 More recently, Electric Boat’s reliance on
a single commodity, submarines for the Navy, makes the company particularly
vulnerable to swings in the defense budget cycle. In 2005, Electric Boat announ-
ced that it would cut 2,400 jobs for 2006, and possibly cut its workforce by half
in 2008. Electric Boat employed around 23,000 workers in the 1960s and 1970s,
but as Cold War spending declined, the company reduced its workers to 7,000
in the 1990s, rebounding to 11,500 in 2006.8 In an unusual move, the state of
Connecticut funded upgrades to the yards at Electric Boat to the tune of $20 mil-
lion, not a large amount in defense terms, but a symbolic gesture of the impor-
tance of the contractor to the economy of the state, which had lost jobs in other
industries and now faced even more unemployment as Electric Boat threatened
to lay off more workers.9
Electric Boat did escape a potentially damaging problem when the Defense De-
partment reversed a decision by the 2005 Base Realignment and Closure (BRAC)
Commission to close the Naval Submarine Base at Groton, which would have
deprived Electric Boat of the ease of parallel training for submarine crews. With
Groton co-located with the Electric Boat yards, the future submarine crew could
train on the boat as it neared completion.10
Notes
1. Report of the Special Committee on Investigation of the Munitions Industry (The
Nye Report), U.S. Congress, Senate, 74th Cong., 2nd Sess., February 24, 1936, 3.
2. Paul A. C. Koistinen, Mobilizing for Modern War: The Political Economy of American
Warfare: 1865–1919. Lawrence: University Press of Kansas, 1997, 49.
3. Convair suffered a series of aircraft failures, including the Convair 880, built to
compete with the Boeing 707 and Douglas DC-8, but it consumed more fuel per mile than
its competitors, and the company lost millions in the gamble. Its loss exceeded that of Ford
Motor Company’s loss in its venture in the 1950s, the Edsel.
4. SSGN stands for submarine, guided missile equipped, nuclear powered. The double
letter used to designate U.S. Navy ships is used to differentiate them from the designa-
tion used by most European navies, which use one letter, thus the U.S. Navy uses DD to
designate a destroyer.
5. “Industry Confident It Can Build Two Subs a Year, but Concerns Remain,” Defense
Daily, March 21, 2007.
6. Ibid.
7. See D. Douglas Dalgleish and Larry Schweikart, Trident. Carbondale: Southern Illi-
nois University Press, 1984, chap. 5.
180 Appendix I
8. “In a Hurry to Diversify Beyond Submarines and Luck,” New York Times, Decem-
ber 18, 2005.
9. “GD Gaining $20 Million from Connecticut for Electric Boat Upgrade,” Defense
Daily, July 10, 2006.
10. David S. Sorenson, Military Base Closure: A Reference Handbook. Westport, CT:
Praeger Publishers, 2007, 145.
Lockheed Martin
Headquarters: Bethesda, MD
U.S. Manufacturing Locations: 1,000 facilities, including Huntsville and Troy, AL;
Goodyear, AZ; Camden, AR; Sunnyvale, Edwards AFB, San Diego, Vandenberg AFB, Santa
Maria, San Jose, Palo Alto, and Los Angeles, CA; Denver, CO; Marietta, Atlanta, and Kings
Bay, GA; Baltimore, Greenbelt, and Hanover, MD; Eagan, MN; Cherry Hill, Atlantic City,
and Moorestown, NJ; Albuquerque, NM; Oswego, Mitchell Field, and Schenectady, NY;
Akron and Cleveland, OH; Norristown, Newton, and King of Prussia, PA; Fort Worth,
Grand Prairie, and Houston, TX; Greenville, SC; Springfield, VA; and Silverdale and
Richland, WA
Workforce: 140,000
History
In 1909, Glenn L. Martin, an aviation pioneer who used his wire, wood, and
canvas airplanes to land a role in a movie next to actress Mary Pickford, started a
an airplane company, one of the earliest in the United States. Several years later,
two brothers, Allan and Malcolm Loughhead, flew a primitive aircraft over San
Francisco and shortly went into the aircraft business, after changing the spelling
of their name as it was correctly pronounced: Lockheed. Dozens of other air-
craft companies opened in this era to capitalize on the success of the Wright
brothers, and most did not survive. Early aviation innovators usually understood
more about aircraft than they did about running a business, but both Martin and
the Lockheed brothers were exceptions. They understood the value of mergers,
and Lockheed temporarily joined Detroit Aircraft, while Martin joined the Wright
brothers. Neither joint venture lasted, though, and Lockheed set up shop in Hol-
lywood, California, like many other aircraft makers, partly to take advantage of
California’s good flying weather. Martin moved to Maryland and opened a small
factory in Middle River, which still operates today.
Both factory aircraft companies realized that the depression of the 1930s
spelled potential doom for the fledgling aviation industry, and thus capitalized
on headline-capturing operations to further their companies. Lockheed signed up
aviation celebrities like Charles and Anne Morrow Lindbergh to fly navigation
routes in a Lockheed aircraft, while Amelia Earhart flew to numerous aviation
Appendix I 181
records with Lockheed airplanes, as did Wiley Post, who punctuated his flights
with humorist Will Rogers (both would die in a Lockheed plane). Martin built
some of the first heavy bombers for the fledgling Army Air Corps, and Colonel
William “Billy” Mitchell and his pilots used them to sink several tethered battle-
ships in the early 1920s, operations that gained considerable headlines through-
out the world. Airline orders kept Lockheed alive during the 1930s, while mil-
itary orders helped Martin. Both anticipated World War II, and both developed
innovative aircraft for the military market: Lockheed with the radical P-38 Light-
ning twin-engine fighter, and Martin with the high-performance B-26 medium
bomber. Lockheed also built transports, while Martin turned out several seaplane
designs during the war.
After World War II, Lockheed was one of the first aircraft manufacturers to
enter the jet age with its P-80 jet-propelled fighter, though Lockheed stayed in
the commercial aircraft market with its four-engine Constellation airliners. Mar-
tin ceased production of most military aircraft and entered the commercial sector
for the first time with its Martin 404 airliner. Martin built slightly more than
100 models before discontinuing his venture into passenger aviation and con-
centrating his company on the missile field. Lockheed built its Electra turboprop
passenger planes, but also focused on innovative military technology, using the
talents of master aviation designer Clarence “Kelley” Johnson to design the radi-
cal U-2 reconnaissance plane (later made famous in 1960 when the Soviet Union
shot a U-2 down while it was spying on Soviet missile developments). Lockheed,
like Martin, moved into the missile and space arena with its Agena rocket launch-
ing the first U.S. Earth-orbiting satellite. Lockheed also built submarine-launched
missiles and pioneered the SR-71 spy plane, which still holds world records for
speed and altitude. Martin delivered the Titan II rocket for the manned Gem-
ini space effort, while Lockheed reentered the world of fighter aviation with the
single-engine F-16, which first flew in 1974.
In 1995, Lockheed and Martin combined to become Lockheed Martin, bring-
ing into the new company dozens of other companies that each had bought over
their years of operation. Those companies included RCA (originally Radio Cor-
poration of America), Goodyear Aerospace, parts of General Dynamics, General
Electric Aerospace, IBM Federal Systems, and Ford Aerospace, among many
others.
Lockheed Martin Today

Lockheed Martin ranks first in the Defense News list of the top 100 defense
contractors worldwide on the basis of revenues. Because of its many acquisitions
over the years, and its ability to penetrate diverse markets, Lockheed Martin fields
thousands of programs. Its signature programs remain its core business: aircraft. It
is building both of the next-generation fighter-attack aircraft, the USAF F-22 Rap-
tor and the F-35 Lightning II, for American customers, including the Air Force,
Navy, and Marine Corps, as well as the United Kingdom. Lockheed continues to
182 Appendix I
produce the F-16, a single-engine fighter first designed in the 1970s, and now
built largely for international markets. The F-16 continues to earn a profit for
Lockheed Martin, and the company expects more orders, possibly from India,
which would allow the company to continue the production line. Its problem is
that the production line will compete for space with the new F-35 joint strike
fighter, thus possibly limiting completion of the backlog of 116 F-16 orders on
the books.1 However, a company spokesperson claimed that the F-35 would ac-
count for almost 10 percent of the company’s revenue in 2008, a number that
would only climb as production increased.2
Major Programs
Lockheed Martin’s major programs include the F-16 Fighting Falcon, the F-22
Raptor, the F-35 Lightning II, the C-130J Hercules, missiles, space systems, and
military and civilian information systems.
Problems at Lockheed Martin

Lockheed has become one of the more successful defense and commercial con-
tractors in the aviation sector, but its rise to prominence has not been without
problems and issues.
In the 1970s, Lockheed encountered problems with its L-1011 passenger
liner, the first Lockheed passenger plane since problems in the 1950s with the
Lockheed Electra. The plane encountered stiff competition from Boeing’s 747 and
Douglas’s DC-10, and to further sales, Lockheed bribed the Japanese government
to subsidize sales to a Japanese carrier. Lockheed acknowledged bribe payments
of more than $22 million, and the resulting crisis brought down the government
of Japanese Prime Minister Kakuei Tanaka. Lockheed may have provided bribes
to a number of other countries, including Canada, the Arabian Gulf countries,
Hong Kong, and numerous others.3 The bribery scandal came on the heels of
Lockheed’s lunge toward bankruptcy and its need to get a government-guaranteed
loan for $245 million as the L-1011 disappointments depleted corporate coffers.
Lockheed also encountered problems with its massive C-5A cargo jet, which it
had started to build in 1965. The C-5A quickly became overweight, and, as the
contractor tried to fix the problem, overpriced because of the attempted fixes.
Between the Air Force and Lockheed, the existence and size of the cost over-
runs became masked, and when Defense Department worker Ernest Fitzgerald
revealed them to a congressional committee, he was replaced after an Air Force
effort to smear him.4 Lockheed also ran into problems when the Army canceled
its contract for the experimental AH-56 Cheyenne attack helicopter, and it en-
countered yet another cost overrun on its contracted engine for the short-range
attack missile.
Lockheed Martin found itself under scrutiny more recently when its Deep-
water program for the Coast Guard became the target of an investigation by the
Appendix I 183
Justice Department. Lockheed Martin (and its partner in the venture, Northrop
Grumman) were accused of placing unapproved electronics devices in the hull of
some Coast Guard cutters.5
Despite its issues, Lockheed Martin carries considerable political clout. For
example, the most recent version of its venerable C-130 plane, the C-130J, has
come under fire, and the Air Force at one point tried to terminate the program.
However, congressional pressure from West Virginia and Georgia, homes of the
plane’s manufacturer, kept the assembly line alive. In a bid to sell even more
C-130J’s to the Air Force, Lockheed offered an unsolicited proposal for an addi-
tional 120 planes, even though the Air Force had no need for them. Still, accord-
ing to Air Force Chief of Staff General T. Michael Moseley, “that is a very attractive
opportunity.”6
Such clout cannot always protect companies like Lockheed Martin from cut-
backs, particularly when budget pressures drive such reductions. For example, in
November 2007 Lockheed Martin received two pieces of bad news: first, the Navy
reduced its planned buy of 32 Littoral Combat Ships to 21, arguing that post-
poning the 11 ships until after 2013 would save $5 billion.7 Lockheed’s Atlanta
production facilities received similar news on the same day, when the Defense
Department announced that it might delay the improved presidential helicopter
for as long as five years, from 2009 until at least 2011, again because of budget
pressures.8
Public Service at Lockheed Martin

Lockheed Martin donated more than $20 million to community projects in
2004. Half of those funds went to education, with emphasis on science and en-
gineering. The company also supports such endeavors as homeless shelters, chil-
dren’s health, literacy programs, and particular support for the USO, which bene-
fits military service personnel. Lockheed Martin employees also donate their time
to charitable causes, including food drives, educational support, and other com-
munity activities.
Notes
1. “Downside of Dominance?,” Washington Post, December 17, 2007.
2. “Lockheed’s Profit Climbs 5.8% on Defense Spending,” Wall Street Journal, April 23,
2008.
3. Senate, Lockheed Bribery. Hearings before the Committee on Banking, Housing, and
Urban Affairs, 94th Cong., 1st Sess., Washington, DC: Government Printing Office, 1975,
esp. 42–43.
4. See Berkeley Rice, The C-5A Scandal: An Inside Story of the Military-Industrial Com-
plex. Boston: Houghton Mifflin, 1971; Daniel Terris, Ethics at Work: Creating Virtue at an
American Corporation. Waltham, MA: Brandeis University Press, 2005, esp. chap. 2.
184 Appendix I
5. “Setbacks for Lockheed Martin,” Baltimore Sun, April 19, 2007.

6. “Lockheed Pitches $6 Billion C-130J Buy,” The Hill, October 25, 2007.
7. “Pentagon Delays Warship Purchases,” Washington Post, November 29, 2007.
8. “Lockheed Copter May Be Delayed,” Atlanta Journal-Constitution, November 29,
2007.
Curtiss-Wright
Headquarters: Roseland, NJ
U.S. Manufacturing Locations: Phoenix, AZ; Vernon, Lynwood, and Livermore, CA;
Windsor, Bloomfield, and New Britain, CT; Miami, FL; Peachtree, GA; Addison, IL; Ft
Wayne, IN; Wichita, KS; Lafayette, LA; Boston, MA; Romulus, MI; New Brighton, MN;
Charlotte, Gastonia, and Shelby, NC; Farmingdale, NY; Twinsburg and Columbus, OH;
Emigsville, PA; Grand Prairie, TX; and Milwaukee, WI
Workforce: 7,600
Revenue (2007): $66 million
History
Two of the most famous names in pioneer aviation are Glenn Curtiss and the
Wright brothers. They became bitter rivals in the days of wood-and-canvas air-
planes, with the Wrights successfully suing Curtiss for patent infringement in
1913. Both formed their own companies, and both companies sold early aircraft
to the military, with the Wrights’ company selling planes to the Army Signal Corps
and Curtiss marketing floatplanes to the Navy. Wilbur Wright died in 1912 and
Orville Wright’s company built the last of its own airplanes in 1916. Wright &
Company became Wright Aeronautical in 1919, and shifted its emphasis to air-
craft engines, and, long after the Wright brothers’ involvement in their namesake
company, it merged with Curtiss to form Curtiss-Wright, in 1929. Curtiss, which
started its existence as the Curtiss Aeroplane and Motor Company, had become
the world’s largest aviation company by 1916, employing 18,000 workers at its
Buffalo, New York, plant, and 3,000 at its Hammondsport, New York, factory,
producing more than 10,000 aircraft during World War I. The engine portion
of Curtiss-Wright involved the air-cooled radial engine (a design with cylinders
fitted in a circle around the engine crankshaft, so that all cylinders faced forward
and could be cooled by the air rushing around them rather than by liquid, which
was more complex and prone to failure). The company continued to produce air-
craft for both the commercial and the military markets, equipping the Army Air
Corps with the P-40 fighter and the C-46 transport, and the Navy with the SB2C
dive-bomber, along with a number of unsuccessful planes (the dangerous Cur-
tiss P-54 fighter, with two out of the three prototypes crashing), and the Seamew
floatplane for the Navy (whose failure was traced largely to its Ranger engine,
used instead of a Curtiss-Wright engine).
Appendix I 185
Unlike some of its competitors, Curtiss-Wright seemed to lose its technological

prowess (it was on the decline during World War II), and the company’s efforts
to transition from the propeller period to the jet age failed. Curtiss-Wright had no
commercial plane design to transition to the postwar civilian transport market (its
C-46 was initially designed as a civilian passenger plane, but few went to the air-
lines). It attempted to continue its fighter line with the XP-87 twin-jet-engine
fighter, but when it lost to Northrop’s F-89, Curtiss-Wright left the airplane
manufacturing business and sold that part of the company to North American
Aviation.
The company survived, though, by moving into both defense subcontracting
and commercial business. For both markets it produces pumps, valves, and in-
strumentation for nuclear reactors and aircraft applications. Its specialized aircraft
market involves such items as landing gear doors, fire detection systems, control
activators, and hundreds of other products. Curtiss-Wright has insulated itself
partly from the variable swings in the defense market, while its product market
is so diverse in the civilian market, that it has maximized its chances to continue
positive growth.
Curtiss-Wright Today
Curtiss-Wright is a diversified company with business in both the military and
commercial sectors. Its military diversity allows it to partner with larger defense
contractors for a share of their prime contracts without having to bear the costs
and risks of those contracts.
Curtiss-Wright’s military lines are limited to subcomponents, including the
following:
r Actuation systems for the weapons bay doors and flap and dive systems for the F-22
fighter and for the Ordnance Hoist System and Ordnance Quick Latch System for the
F-35 joint strike fighter
r Integrated Main Mission Management Computers for the Global Hawk reconnaissance
unmanned aircraft
r Aiming, stabilization and suspension systems to current forces, such as the Bradley
Fighting Vehicle, the Abrams Tank, and the Stryker Mobile Gun System
r Advanced Arresting Gear technology to replace earlier arresting gear systems that trap
aircraft landing on aircraft carriers, scheduled to go into production in 2009
r JP-5 Smart, Leakless Valve, designed retrofit all of the pumping station valves on the
U.S. Navy’s aircraft carrier fleet
This is but a short list of the hundreds of products Curtiss-Wright produces for
military consumption. Contracts keep arriving: in March 2008, Curtiss-Wright
received a subcontract from Northrop Grumman to provide the radar for the
U.S. Marine Corps’ Ground/Air Task Oriented Radar (G/ATOR) program. In May
2008, Curtiss-Wright received a contract to supply processor modules for the
186 Appendix I
Army’s Future Combat System, and in the previous month, the Navy awarded
Curtiss-Wright a contract to supply pumps and valves for its Virginia-class sub-
marines.
In March 2007, Forbes magazine placed Curtiss-Wright on its list of 100
“Most Trusted Companies” relative to accounting transparency and fair dealings
to shareholders. While the list featured a number of commercial Fortune 500
companies (Mattel, H. J. Heinz Company, Goodrich), there were no other major
defense contractors on the list.1
Problems at Curtiss-Wright
Almost all first-year law students learn about the famous 1936 U.S. v. Curtiss-
Wright Supreme Court case, where Curtiss-Wright’s export subdivision was found
guilty of violating arms export provisions (the case was significant because of
its role in determining executive power over foreign affairs). Curtiss-Wright also
found itself under fire from then senator Harry Truman, who accused the com-
pany of selling defective engines to the Army. However, Curtiss-Wright has
avoided legal or political problems, and some analysts consider the company solid
because of its portfolio of mixed defense and civilian production, and its ability
to gain new contracts. The Web site Investopedia touted in April 2008 that “the
biggest winner of late has been Curtiss-Wright” because of its nuclear power plant
and Japanese Ministry of Defense contracts.2 But Curtiss-Wright has avoided the
headline-attracting problems that have plagued some other defense contractors.
Public Service at Curtiss-Wright

In fiscal year 2007, Curtiss-Wright donated more than $500,000 dollars to
“goodwill,” though the corporate report did not specify exactly what “goodwill”
meant.
Notes
1. “America’s Most Trustworthy Companies,” Forbes, http://www.forbes.com/
leadership/2007/03/26/companies-accounting-governance-lead-cx pm 0327trusty.html.
2. “The Best (Portfolio) Defense Is Good Defense,” Investopedia, http://community.
investopedia.com/news/IA/2008/The Best Portfolio Defense Is Good Defense.aspx?
partner=YahooSA.
Raytheon
Headquarters: Waltham, MA
U.S. Manufacturing Locations: Tewksbury, MA; Garland and McKinney, TX; El Se-
gundo, CA; and Reston, VA
Workforce: 72,000
Appendix I 187
History
Vannevar Bush was one of the leading scientists in the United States, a brilliant
inventor and manager of science, professor at MIT, and president of the Carnegie
Institution. His stature was such that fellow scientist Alfred Loomis once said,
“Of the men whose death in the summer of 1940 would have been the greatest
calamity for America, the President is first, and Dr. Bush would be second or
third.” Bush’s role as a science adviser and confidant to Presidents Roosevelt and
Truman overshadowed his founding, along with a college roommate, in 1922 of
the American Appliance Company to produce a radio tube that would allow a
radio to be powered directly from an electric socket rather than from the short-
lived batteries of the time. The tube, marketed under the name Raytheon had
earned more than $1 million by 1926, and when another company claimed to
own the name American Appliance Company, Bush’s business changed its name to
that of its tube (derived from the French rai for “beam of light” and theon from
the Greek “from the gods.”
World War II propelled Raytheon to new frontiers when Britain awarded it a
contract to develop the magnetron tube, which was the heart of the radar tech-
nology Britain was working on. The successful magnetron tube got Raytheon into
the radar business, and unintentionally led to the microwave oven when the mag-
netron inventor found that the candy bar in his pocket melted when he stood
in front of a powered magnetron tube. That started Raytheon in the commercial
business when its first microwave appliance, appropriately the Radar Range, went
on the market in 1947. Raytheon also pioneered missile guidance, which won it
contracts for the Sparrow and Hawk antiaircraft missiles. Raytheon also produced
the first transistor in 1948, following its invention by Bell Laboratory scientists.
Raytheon retained its core business of electronics, but it did expand more into
the commercial sector by buying the Amana Corporation to expand its microwave
ovens, as well as the D. C. Heath publishing company. In 1980, Raytheon bought
Beech Aircraft and formed Raytheon Aircraft Company by merging its new acqui-
sition, Corporate Jets, with Beech. However, Raytheon sold the Raytheon Aircraft
Company in 2007, even though it had been a moneymaker for the company, earn-
ing a $73 million dollar profit in the last quarter of 2006.1 The sale of the aviation
portion, which had been on the market since 1999, actually earned Raytheon
around $3.3 billion, surprising observers who thought that Raytheon would not
be able to sell the enterprise.2 In 1996, Raytheon purchased the Chrysler Corpo-
ration’s defense electronics business and the missile portion of Hughes Electronic
Corporation, moves that seemed to strengthen Raytheon’s defense electronic sec-
tor even as it shed aircraft production. Raytheon also shed Amana in the 1990s.
Raytheon Today
Raytheon is one of the largest defense contractors in the world, despite its repu-
tation as the little company that could, ranking fifth among Defense News’s top 100
defense contractors. Raytheon’s history mirrors the defense industry’s acquisition
188 Appendix I
patterns, moving into commercial business areas when defense spending declined
and disposing of those same commercial sectors as defense budgets moved up-
ward. That core business, for Raytheon, includes radar sets for the Air Force’s
F-15 and F-22 fighters, the Navy’s F/A-18 fighter attack aircraft, and the Air
Force’s B-2 bomber. Raytheon also produces land-based radar sensors, as well as
shipboard radars and missile detection radars, including the X-band radars to be
employed in the National Missile Defense System. Raytheon also continues to pro-
duce missiles, including the Maverick and HARM antiaircraft missiles, along with
the venerable Sidewinder. In 2007, Raytheon expanded its business when it re-
ceived an award from the Army for combat training, beating out larger contractors
like General Dynamics (who led a team with participation from Lockheed Martin
and Northrop Grumman) for $11.2 billion over ten years.
Raytheon’s major programs include the following:
r Patriot PAC-3 Antimissile System

r AEGIS MK 99 Fire Control
r Adaptive Land Enhanced Raytheon Radar Technology (ALERRT)
r Dual Band Radar (DBR)
r Global Public Health Surveillance System (GPHSS)
r HAWK-AMRAAM Air Defense System
r MK 29 SEASPARROW Guided Missile Launching System (GMLS)
r Relocatable Over-the-Horizon Radar (ROTHR)
r Sea-Based X-Band (SBX) Radar
Raytheon has benefited from its Patriot missile in particular, as the use of medium-
range ballistic missiles in the world rises. The Patriot, an antiaircraft missile up-
graded to an antimissile system in the 1980s, received credit for downing Iraqi
Scud missiles during the 1990–1991 Gulf War, though skeptics challenged those
claims.3 Patriot has been upgraded several times since the Gulf War, and has been
sold to Germany, Greece, the Netherlands, Spain, Saudi Arabia, Kuwait, Israel,
Japan, and Taiwan, among others. In 2006, Raytheon reportedly earned $283.9
million on global Patriot sales.4 Raytheon was also involved in sales of the most
advanced Patriot version to Israel, partly in response to increased fears in Israel of
Iranian nuclear weapons capability in the coming years.5 The Iranian threat also
stimulated potential Patriot sales to other Gulf countries in addition to Saudi Ara-
bia, and Raytheon had its missile on display for interested customers at the 2007
Dubai Air Show.6 It sold to another country faced with ballistic missile threats,
South Korea, which signed a contract to purchase $241 million worth of Patriots
and their support equipment in April 2008.7
Recently Raytheon, seeing an expansion opportunity, teamed with EADS to
build the C-295 aircraft. In this arrangement, Raytheon and its partner beat out
Lockheed Martin’s proposal for a version of its C-130J, while modeling its strat-
egy on Lockheed’s successful bid for a new presidential helicopter by enlisting the
partnership of an Italian helicopter manufacturer.8 Raytheon is also partnering
Appendix I 189
with Boeing to field the Joint Air to Ground Missile ( JAGM), to enter service
in 2016 and be used on helicopters, including the Apache Longbow and Super
Cobra, and the Navy and Marine Corps F/A-18, with a total contract value of
$7 billion.9 In October 2007, Raytheon acquired Oakley Systems, a data-leak-
prevention toolmaker whose assets Raytheon planned to use in tapping into an
estimated $8 billion market protecting both government and private-sector com-
puter systems.10
Problems at Raytheon
Like numerous other defense contractors, Raytheon has had its share of contro-
versy and legal issues. In 1993, Raytheon paid $3.7 million in penalties, standing
accused of inflating labor costs for its Patriot antimissile system. In the following
year, Raytheon paid $4 million as a part of a settlement in response to charges
that the company inflated the cost of antimissile radar. In 2002, Raytheon’s chief
executive officer resigned after the Securities and Exchange Commission (SEC)
sanctioned the company for violations of financial data-release rules. In 2005,
Raytheon placed its chief financial officer on administrative leave after the SEC
brought action against the company for illegal accounting practices relating to
Raytheon’s commercial aircraft business, actions that cost the company $12 mil-
lion in fines.11 The largest penalty, though, came in 2003, when Raytheon was as-
sessed $25 million in civil fines, among the largest penalties assessed a U.S. corpo-
ration, for illegally selling radio technology to Pakistan from 1990 to 1997. When
U.S. rules changed to block the sale of “troposcatter” radio technology, Raytheon
used a Canadian subsidiary to sell the radios to Pakistan under the fiction that
they were civil disaster relief. Raytheon admitted wrongdoing but claimed that
the violations were intentional.12
Public Service at Raytheon

Raytheon has supported educational scholarships, with a particular focus on
science and mathematics, awarding more than $350,000 in scholarships in 2007.
Raytheon also maintains support programs for military personnel and other com-
munity involvement programs.
Notes
1. “Raytheon Earnings up 32%,” Arizona Daily Star, February 2, 2007.
2. “Raytheon’s Aircraft Unit, Once Thought to Be Unsellable, Commands $3.3 Billion
from Private Equity Investors,” World News & Analysis, January 1, 2007.
3. Theodore A. Postol, “Lessons of the Gulf War Experience with Patriot,” International
Security 16 (Winter 1990–1991), 119–171. Postol’s criticism was countered by Robert
Stein of Raytheon. Robert Stein and Theodore Postol, “Correspondence: Patriot Experience
in the Gulf War,” International Security 19 (Summer 1992), 199–240.
190 Appendix I
4. “Raytheon Expects Jump in Patriot Sales,” Boston Globe, January 18, 2007.
5. “Raytheon’s Most Advanced Patriot Missile Is Offered to Israel,” Bloomberg News,
October 31, 2007.
6. “At Weapons Bazaar, Gulf Leaders Are Planning to Be Big Spenders,” Miami Herald,
February 17, 2007.
7. “Raytheon Gets Patriot Missile Pact from South Korea,” Boston Globe, April 23, 2008.
8. “With Cargo-Plane Bid, Raytheon Blazes a New Trail,” Arizona Daily Star, May 16,
2007.
9. “Raytheon and Boeing Partner Up,” Arizona Daily Star, April 15, 2008.
10. “Raytheon Zeros In on Defending Cyberspace,” Boston Globe, April 9, 2008.
11. “Raytheon CFO Faces SEC Action,” Boston Globe, April 16, 2005.
12. “Raytheon to Pay $25M in Civil Fines, Settles US Charges in Attempted Export
Sale,” Boston Globe, February 28, 2003.
Northrop Grumman
Headquarters: Los Angeles
U.S. Manufacturing Locations: McLean, Reston, Newport News, and Herndon, VA;
Linthicum, MD; El Segundo and Redondo Beach, CA; and Pascagoula, MS
Employees: 122,200
History
In 1939 John K. Northrop formed an aviation company in the Los Angeles sub-
urb of Hawthorne, after doing stints as an aircraft designer at a number of other
pioneer companies. Nine years earlier, a group of innovative aircraft designers,
among them Leroy Grumman, formed the Grumman Aeronautical Engineering
Company in New York. Northrop, who had never actually learned to fly, was
enamored of the idea of a tailless airplane, or “flying wing,” and his early experi-
ments attempted to prove the viability of the unorthodox concept. Grumman was
also pioneering aircraft ideas, developing the first retractable-landing-gear fighter
plane for the U.S. Navy a year after its founding. Grumman would continue to
build aircraft primary for the Navy during the 1930s and would establish its rep-
utation with the sea service by providing numerous combat planes during World
War II, including the Wildcat, Hellcat, and Avenger, along with a number of
amphibious planes. Northrop continued to demonstrate the feasibility of flying-
wing aircraft, though most of his designs had inherent stability problems and he
had to briefly abandon the idea in conceiving the Air Corps P-61 Black Widow,
a large fighter specifically designed for night action. However, while Grumman
found its niche in Navy fighters, following its World War II fighters with the jet-
powered Panther of Korean War fame, Northrop continued to experiment with
flying-wing design, attempting to sell the Air Force on its propeller-driven B-35
strategic bomber, and later on its jet-powered B-49. But neither version was stable
Appendix I 191
enough to meet Air Force standards, and a prototype B-49 crash in the California
desert in June 1948 dampened enthusiasm for the flying-wing design, though the
Air Force ordered 30 just weeks after the accident. Ultimately, the Air Force chose
the Consolidated B-36 bomber over the B-49, provoking charges that Northrop’s
refusal to merge with Consolidated finalized the deal.1 The Air Force did buy the
Northrop F-89 fighter-interceptor and the T-38 trainer, which also produced a
fighter version, the F-5, which became a large seller on the international mar-
ket. Grumman produced the A-6 Intruder attack aircraft for the Navy around
the same time, but Northrop initially struggled with its effort to compete with
General Dynamics for the Air Force’s lightweight fighter. The General Dynamics
F-16 won the competition over Northrop’s F-17, although Northrop ultimately
sold the F-17 idea to the Navy as the F/A-18, joined by McDonnell Douglas as
an partner and, ultimately, the prime contractor. Northrop then tried to replicate
its F-5 export success with a follow-on version, dubbed the F-20, which made its
first flight in 1982. But potential foreign buyers wanted the Air Force to buy the
plane first, as that would set up a support network of training and spare parts, but
the Air Force refused in the end, and Northrop scrapped the $1.2 billion project.
Northrop entered competition for a new close-air-support plane with its A-9 but
lost to Republic’s A-10. Northrop also completed for the Air Force’s Advanced
Tactical Fighter program. However Northrop and its partner McDonnell Douglas
lost the competition to the F-22 partnership of Lockheed Martin, Boeing, and
General Dynamics (later to become the Lockheed Martin F-22 when that com-
pany bought General Dynamics). Northrop did win a successful bomber contract
with its B-2 stealth bomber, designated the Spirit by the Air Force. The B-2 in-
corporated the original Northrop theories of a flying wing, which finally became
successful with the addition of digital flight controls. It is said that John Northrop,
still bitter about the cancellation of his original flying-wing bombers, wept when
presented with a scale model of the B-2 decades after the Air Force reduced his
company’s B-49 bombers to scrap.
Grumman was having its own difficulties in competition, trying but failing to
land the contract for the F-111 fighter-bomber, which was then called the TFX.2
However, studies of U.S. combat aircraft during the Vietnam War convinced
Grumman that they could use some of the lessons learned from the TFX project,
which would produce a much more maneuverable fighter. The result was the
Navy F-14 Tomcat, which remained in Navy service for decades. Still, Grumman,
noting the drop in defense spending after the buildup in Reagan’s first term,
tried to diversify, moving into such civilian enterprises as mail delivery trucks
and even canoes, without much success. Northrop, seeking to expand and view-
ing its B-2 bomber as possibly its last military aircraft, acquired Grumman in
1994. Then, taking cues from other integrated defense firms, Northrop, now
Northrop Grumman, acquired Westinghouse Electronic Corporation, part of the
larger Westinghouse Corporation, in 1996, giving Northrop expertise and ex-
perience in defense radars. Expansion continued with the acquisition of Logi-
con in 1997, another integrated electronics and information firm, which further
192 Appendix I
expanded Northrop Grumman’s defense portfolio. Two years later Northrop

Grumman added Teledyne-Ryan to its portfolio, which included drone aircraft
among its products. But Northrop Grumman was not finished: some of its largest
acquisitions took place as it entered into a field in which it had no previous expe-
rience, military shipbuilding. In 2001 Northrop Grumman acquired both Litton
Industries and Newport News Shipbuilding. Litton, which bought the Ingalls
Shipbuilding Corporation in 1961, was also an integrated defense contractor,
while the Newport News shipyard dates back to 1886 and has a long history
of constructing large naval ships, including nuclear-powered aircraft carriers and
submarines. In 2002, Northrop Grumman acquired the space and mission sys-
tems businesses of TRW, a leading developer of military and civil space systems
and military satellites that left the defense business and returned to its automotive
roots.
Northrop Grumman Today

Northrop Grumman is divided into four business areas: Information and Ser-
vices, Electronics, Aerospace, and Ships. Information and Services provides a
range of information services for the Defense Department, while Electronics in-
cludes aircraft and shipborne radar, missile detection devices, and infrared vi-
sion equipment for soldiers. Northrop Grumman Aerospace includes production
and upgrades for the B-2 bomber (no longer in production), the E-2 Hawkeye
Navy surveillance plane (continuing Grumman’s naval heritage), the Global Hawk
unmanned surveillance aircraft, and, in partnership with EADS, proposed a con-
version of the Airbus A330 commercial airliner as a tanker to replace the Air
Force’s aging KC-135 aircraft, as discussed in Chapter 4. In February 2008,
Northrop Grumman won the KC-45 tanker aircraft contract, beating out rival
Boeing. The arrangement was unusual, as Northrop Grumman partnered with
European EADS, which would build subassemblies in Europe and ship them for
final assembly to a plant in Mobile, Alabama.
In April 2008, Northrop won a contract from the Navy for an unmanned
surveillance aircraft, beating out Boeing and Lockheed Martin. Northrop Grum-
man also builds the center section and other parts of the F/A-18 attack aircraft
in its El Segundo plant, and then ships the sections to Boeing’s St. Louis plant
for final assembly. The Aerospace division also produces and sustains a range of
satellite programs for the military. Northrop Grumman is also exploring a new
generation of small flexible intelligence satellites in partnership with Israeli Air-
craft Industries.3 The Ship Division builds the Virginia-class submarines in part-
nership with the General Dynamics Electric Boat division, the Wasp-class am-
phibious ships, the LPD-17 amphibious assault ships, and the Arleigh Burke–class
guided missile destroyers, and it is the sole builder of nuclear-powered aircraft
carriers. Parts of Northrop Grumman’s shipbuilding business have cost the com-
pany money, bringing a 32 percent drop in profit in the first quarter of 2008 as
shipbuilding delays plagued its Gulf Coast shipyards.4 Northrop Grumman also
Appendix I 193
produces ballistic missile defense sensors and other support components, DDG
1000 Zumwalt class destroyers, the CVN-21 Gerald R. Ford–class aircraft carrier
program, RQ-4 Block 10 Global Hawk unmanned reconnaissance vehicles, and
numerous other smaller programs. Northrop Grumman also partnered with Lock-
heed Martin for the F-35 joint strike fighter, among other programs.
Problems at Northrop Grumman

Like other defense contractors, Northrop Grumman has had its brushes with
the legal system, though some occurred in companies that Northrop Grumman
acquired after the alleged wrongdoing. In 2003 Northrop Grumman paid more
than $111 million to resolve claims that its TRW firm padded defense bills in
the 1990s.5 Northrop Grumman’s Logicon division stood accused along with its
partner, Oracle, of exchanging a contract with the state of California for campaign
contributions to then Democratic governor Gray Davis.6 Northrop Grumman and
its partner Lockheed Martin received criticism from members of Congress for
stalling on a refund for faulty Coast Guard boats that the two companies pro-
duced. The boats were so bad that the Coast Guard had to decommission them,
prompting Representative Elijah Cummings of Maryland to claim, “We deserve to
have every dime of our money back.”7
Public Service at Northrop Grumman

Like other large defense firms, Northrop Grumman maintains a community
relations program, which focuses on educational support through its Defining the
Future program, which supports science and mathematics programs. Northrop
Grumman also supports Employees Charity Organization (ECHO), allowing its
employees to support local charities through payroll deductions, and it provides
grants to fund arts, cultural, educational, environmental, and health programs.
Notes
1. The charge and evidence for and against it is discussed in David S. Sorenson, The
Politics of Strategic Bomber Modernization. Westport, CT: Praeger Publishers, 1995, 86–87.
2. See Robert Art, The TFX Decision: McNamara and the Military. Boston: Little, Brown,
1968; Robert R. Coulam, Illusions of Choice: The F-111 and the Problem of Weapons Acquisition
Reform. Princeton, NJ: Princeton University Press, 1977.
3. “Northrop Embraces Small Satellite Plan,” Wall Street Journal, April 11, 2007.
4. “Northrop Net Slumps on Ship Unit,” Wall Street Journal, April 25, 2008.
5. “US: For Whistle-Blowers, Virtue May Be the Only Reward,” Los Angeles Times,
June 16, 2003.
6. “US: Senator to Testify in Oracle/Logicon Inquiry,” Los Angeles Times, January 15,
2003.
7. “Northrop, Lockheed Criticized,” Atlanta Journal-Constitution, July 10, 2007.
194 Appendix I
Pratt & Whitney Division of United Technologies

Headquarters: East Hartford, CT
U.S. Manufacturing Locations: Huntsville, AL; Springdale, AR; Canoga Park and San
Diego, CA; Middletown, East Hartford, Cheshire, and Windsor, CT; West Palm Beach and
Kennedy Space Center, FL; Columbus, GA; Indianapolis, IN; North Berwick, ME; Lansing,
MI; Stennis, MS; Clayville, NY; Tinker Air Force Base, OK; Harrisburg, PA; Grand Prairie,
Carrolton, San Antonio, and Arlington, TX; and Bellevue, WA
Employees: 238,442
History
Some of the first aircraft were powered by air-cooled rotary engines, where
the cylinders were mounted in a circular design around the crankshaft, but early
American experience favored the in-line liquid-cooled engines, which were famil-
iar to the automobile engine designers who flocked to the pioneer aviation indus-
try in the years after World War I. But Frederick Brant Rentschler, assigned to
supervise engine production for the U.S. Army, believed that the rotary engines
were superior to in-line engines, and in 1925, he joined the Pratt & Whitney
Company to prove his design. Pratt & Whitney, an old company whose roots
went back to the U.S. Civil War, had its primary business in the tool industry,
which produced guns for the Union Army in the Civil War. Rentschler initially
became president of the Wright Aeronautical Corporation (after Wilbur Wright
departed his namesake company), but when the board of directors did not buy
into his idea for the radial engine, he approached Pratt & Whitney, whose board
created the Pratt & Whitney Aircraft Company and authorized the development
of Rentschler’s engine with the support of Admiral William Moffett, a U.S. naval
aviation pioneer. Pratt & Whitney’s first Wasp engine soon followed and was
quickly adapted by the Navy. In 1929 Rentschler broke off from the main Pratt
& Whitney Company, but kept the name Pratt & Whitney Aircraft Company and
continued pioneering engines.
Like many other aviation pioneers, Rentschler expanded his holdings, creat-
ing United Aircraft and Transportation company the year before he left the main
Pratt & Whitney Company, creating a holding company that included the Boe-
ing Airplane Company, the Hamilton-Standard Propeller Company, the Chance-
Vought Aircraft Company (which produced the famous Corsair fighter for the
Navy and Marine Corps), and a group of small airlines that Rentschler merged
into United Airlines. When antitrust legal action broke up the holding company,
Pratt & Whitney was left with Sikorsky, Vought, and Hamilton Standard Pro-
peller Company. Its main product was aircraft engines, and the company was
proud to note that the 600 million horsepower produced by its aircraft engines
was half the horsepower used by the U.S. military during World War II. With the
dawning of the jet age, Pratt & Whitney developed its J-57 jet engine used in the
Appendix I 195
B-52 bomber (still in service today) and the Saber jet series of Air Force fighters.
The company also pioneered gas-turbine and turbo-propeller engines, along with
rocket engines that powered the first U.S. space flights.
Pratt & Whitney Today

Pratt & Whitney, a subdivision of United Technologies, is primarily an aircraft
engine maker, with its engines powering almost half of the world’s commercial
aircraft. Their engines also propel the F-16 and F-15 fighters, along with the
F-22 and F-35 of the future. This latter plane, built for both a multiservice and
multinational role, is powered by the Pratt & Whitney F-135 Integrated Liftfan
Propulsion System, which won the 2001 Robert J. Collier trophy as “the greatest
achievement in aerospace in America.” Pratt & Whitney also produces rocket mo-
tors, expanding its offerings in 2005 through a purchase from Boeing of another
rocket motor producer, Rocketdyne Propulsion & Power, making it one of the
largest rocket motor producers in the world.
Pratt & Whitney is also a subcontractor for a number of military systems. It
produces a component of the Terminal High Altitude Area Defense antimissile
system known as the Divert and Attitude Control System, which actually directs
the missile defense system to its target. Raytheon’s work on missile defense sys-
tems allowed it, as a major project participant, to work with the Navy in the
intercept and destruct a military satellite that threatened to crash to Earth with a
tank of toxic hydrazine in April 2008.1 Raytheon is also developing the Russian-
designed RD-0146, a cryogenic upper-stage engine designed and developed by
the leading Russian cryogenic rocket engine developer, Chemiautomatics Design
Bureau. The company also supports a variety of experimental engine programs,
including the HySET (Hydrocarbon Scramjet Engine Technology, a three-phase
program sponsored by the U.S. Air Force to develop and demonstrate a Mach 4–8
hydrocarbon-fueled scramjet propulsion system, and the SED-WR (Scramjet En-
gine Demonstrator-WaveRider) in a partnership with Pratt & Whitney, the U.S.
Air Force Research Laboratory, and Boeing.
Pratt & Whitney has enjoyed a sole-source contracting status with the De-
fense Department as a supplier of F-35 joint strike fighter engines. However, its
dominance was challenged by General Electric and its British partner Rolls-Royce,
which wanted to qualify a second jet engine for the aircraft. Congress appeared to
favor the GE–Rolls Royce package when it approved $340 million for GE engine
development, but the Air Force argued that it would save more than $1.8 billion
if Pratt & Whitney continued as the sole-source supplier of F-35 engines. Unsur-
prisingly, GE and Pratt & Whitney were waging a fierce lobbying battle over the
issue, with GE’s possible future as a supplier of military jet engines on the line.2
Problems at Pratt & Whitney

Pratt & Whitney has had encounters with federal law, paying $6 million after
bidding on a contract based on inside information. In 1997, Pratt & Whitney
196 Appendix I
paid $14.8 million as a settlement to allegations that it diverted $10 million in

U.S. military aid to a slush fund controlled by an Israeli Air Force officer.3
Public Service at Pratt & Whitney

Like other defense contractors, Pratt & Whitney community service public
affairs endeavors, like its Golden Eagle scholarship award, which is the largest en-
dowment of the Tuskegee Airman Incorporated, an organization that recognizes
the achievements of the famed African American World War II combat pilots
known as the Tuskegee Airmen. Pratt & Whitney is also a major contributor to
nonprofit educational institutions, participates in Habitat for Humanity, which
focuses on building houses for low-income families, and provides grants to Pratt
& Whitney employees who wish to engage in charitable work.
Notes
1. “How Satellite Shot Went Down,” Arizona Daily Star, April 13, 2008.
2. “GE’s Jet Engine Dogfight,” Wall Street Journal, August 8, 2007.
3. CorpWatch, http://www.corpwatch.org/article.php?list=type&type=14.
The VSE Corporation

Headquarters: Alexandria, VA
U.S. Office Locations: Huntsville, AL; Anchorage, AK; Chula Vista, Riverside, Los Ala-
medas, Barstow, Fort Hunter Liggett, Sacramento, Mare Island, Fresno, and Moffitt Field,
CA; Jacksonville and Miami, FL; Warner Robins and College Park, GA; Barrigada, Guam;
Columbia, Lexington Park, and Indian Head, MD; Sterling Heights, MI; St. Charles, MO;
Bridgeport, Dayton, and Shrewsbury, NJ; North Charleston, SC; San Antonio, TX; Alexan-
dria, Ladysmith, Hampton, Ashland, and Chesapeake, VA; Washington, DC; and Morgan-
town, WV
Revenue (2007): $653 million
Employees: 1,200
History
Unlike the other defense contractors profiled in these sections, VSE is a smaller
defense contractor (ranked number 94 of the top 100 defense contractors in 2007
based on sales). The company started in Virginia in 1959 with three employees
as Value Engineering Company, to provide engineering, management, training,
and logistics services to the military. It received its first contract a year later, for
engineering on rocket motors. In 1965 the company opened its first field office,
and two years later launched its initial fabrication shop. In the 1970s VSE entered
Appendix I 197
the marine business, supporting ship overhauls, and it expanded that business
area throughout the decade. By 1984, the renamed VSE Corporation employed
more than 1,500 people in 22 facilities nationwide. In the 1990s, VSE acquired
Schmoldt Engineering Services Company, which specialized in corrosion con-
trol and protection systems, and also founded Human Resource Systems. The
company continued to expand both by acquisitions and by new operations, ac-
quiring Energetics Inc. in the 1990s and founding Management Sciences Division
in 2001. In 2007 VSE acquired Integrated Concepts and Research Corporation
(ICRC), a technical and management services company.
VSE Today
VSE is in an enviable business position of offering a wide array of services
rather than a few large programs that either succeed very well or suffer problems
or failures that can drag a defense contractor down. As a consequence, VSE had a
banner year in 2007, earning revenues of $653 million, up more than 80 percent
from the previous year.1 It offered more managerial services than tangible sys-
tems, a trend that allowed the company to market its wares to both defense and
commercial clients. Those services included Design for Lean Six Sigma (DFLSS),
a statistical quality-control methodology that reportedly allows its users to be
“focused on the bottom line of the organization through increasingly effective
product and service delivery.”2 VSE also supports logistics programs by devel-
oping supporting architecture, including management and cost evaluation tools,
along with supply chain management. Despite the emphasis on engineering and
logistics support, VSE also does limited fabrication, though much of that work is
design work, including reverse engineering and prototyping of subsystems.
VSE lists as its major programs life-cycle support to military aircraft (manned
and unmanned), engineering and fabrication of the U.S. Army Tactical Message
System (TMS), AN-TYC-24(V) 1, support of military fuel handling and distribu-
tion systems, systems technical support for the M992 Field Artillery Ammunition
Support Vehicle (FAASV), the USMC’s Light Armored Vehicles (LAVs), and other
wheeled and tracked military vehicles, support for AIM-9 Sidewinder air-to-air
missiles and other missile systems, and support for a variety of military munitions
and subsystems.
The U.S. Navy is VSE’s largest customer, with the company listed as among the
Navy’s top 30 contractors. VSE also maintains contracts with the Army, its old-
est client, and the Air Force, providing logistics, supply chain, and base support
operations for all three services. VSE also supports the Defense Logistics Agency
(DLA) and the Defense Threat Reduction Agency (DTRA).
VSE also plays a role in foreign military sales, including restoring to operating
condition previously retired U.S. systems, spare parts support, maintenance, and
management. The support functions include life-cycle contract maintenance that
the U.S. military does not always provide for international customers, including
installation support, upgrading, and training.
198 Appendix I
Like other consulting contractors in the defense world, VSE has adopted man-
agement practices that generally fall under best practices (see Chapter 6 for a
discussion of these practices). Under the rubric of “Enterprise Excellence,” VSE
states, “Enterprise Excellence optimizes the critical success factors of quality, cost,
schedule, and risk through a focused, collaborative implementation of a Quality
Management System, Voice of the Customer System, Six Sigma, and Lean Enter-
prise.” Whether such techniques actually improve performance is one question,
but almost all firms in VSE’s category seem to have adopted them.
Notes
1. “VSE 2007 Annual Report,” http://www.vsecorp.com/investor/VSE AR 2007.pdf.
2. “Lean Six Sigma,” http://www.vsecorp.com/services/management/leansixsigma.htm.
APPENDIX II
Primary Documents
The Goldwater-Nichols Act of 1986

U.S. Code, Title 10, Subtitle A, Part I, Chapter 5
151. Joint Chiefs of Staff: Composition; Functions.
152. Chairman: Appointment; Grade and Rank.
153. Chairman: Functions.
154. Vice Chairman.
155. Joint Staff.
151. Joint Chiefs of Staff: Composition; Functions

(a) Composition. The Joint Chiefs of Staff consist of the following:
(1) The Chairman.
(2) The Vice Chairman.
(3) The Chief of Staff of the Army.
(4) The Chief of Naval Operations.
(5) The Chief of Staff of the Air Force.
(6) The Commandant of the Marine Corps.
(b) Function as Military Advisers.
(1) The Chairman of the Joint Chiefs of Staff is the principal military adviser to the
President, the National Security Council, and the Secretary of Defense.
(2) The other members of the Joint Chiefs of Staff are military advisers to the Presi-
dent, the National Security Council, and the Secretary of Defense as specified in
subsections (d) and (e).
(c) Consultation by Chairman.
(1) In carrying out his functions, duties, and responsibilities, the Chairman shall, as
he considers appropriate, consult with and seek the advice of
(A) the other members of the Joint Chiefs of Staff; and
(B) the commanders of the unified and specified combatant commands.
200 Appendix II
(2) Subject to subsection (d), in presenting advice with respect to any matter to the
President, the National Security Council, or the Secretary of Defense, the Chair-
man shall, as he considers appropriate, inform the President, the National Security
Council, or the Secretary of Defense, as the case may be, of the range of military
advice and opinion with respect to that matter.
(d) Advice and Opinions of Members Other Than Chairman.
(1) A member of the Joint Chiefs of Staff (other than the Chairman) may submit to the
Chairman advice or an opinion in disagreement with, or advice or an opinion in
addition to, the advice presented by the Chairman to the President, the National
Security Council, or the Secretary of Defense. If a member submits such advice
or opinion, the Chairman shall present the advice or opinion of such member at
the same time he presents his own advice to the President, the National Security
Council, or the Secretary of Defense, as the case may be.
(2) The Chairman shall establish procedures to ensure that the presentation of his
own advice to the President, the National Security Council, or the Secretary of
Defense is not unduly delayed by reason of the submission of the individual advice
or opinion of another member of the Joint Chiefs of Staff.
(e) Advice on Request. The members of the Joint Chiefs of Staff, individually or col-
lectively, in their capacity as military advisers, shall provide advice to the President,
the National Security Council, or the Secretary of Defense on a particular matter
when the President, the National Security Council, or the Secretary requests such
advice.
(f) Recommendations to Congress. After first informing the Secretary of Defense, a
member of the Joint Chiefs of Staff may make such recommendations to Congress
relating to the Department of Defense as he considers appropriate.
(g) Meetings of JCS.
(1) The Chairman shall convene regular meetings of the Joint Chiefs of Staff.
(2) Subject to the authority, direction, and control of the President and the Secretary
of Defense, the Chairman shall
(A) preside over the Joint Chiefs of Staff;
(B) provide agenda for the meetings of the Joint Chiefs of Staff (including, as the
Chairman considers appropriate, any subject for the agenda recommended by
any other member of the Joint Chiefs of Staff );
(C) assist the Joint Chiefs of Staff in carrying on their business as promptly as
practicable; and
(D) determine when issues under consideration by the Joint Chiefs of Staff shall
be decided.
152. Chairman: Appointment; Grade and Rank

(a) Appointment; Term of Office.
(1) There is a Chairman of the Joint Chiefs of Staff, appointed by the President, by
and with the advice and consent of the Senate, from the officers of the regular
components of the armed forces. The Chairman serves at the pleasure of the Pres-
ident for a term of two years, beginning on October 1 of odd-numbered years.
Subject to paragraph (3), an officer serving as Chairman may be reappointed in
the same manner for two additional terms. However, in time of war there is no
limit on the number of reappointments.
Appendix II 201
(2) In the event of the death, retirement, resignation, or reassignment of the officer
serving as Chairman before the end of the term for which the officer was ap-
pointed, an officer appointed to fill the vacancy shall serve as Chairman only for
the remainder of the original term, but may be reappointed as provided in para-
graph (1).
(3) An officer may not serve as Chairman or Vice Chairman of the Joint Chiefs of
Staff if the combined period of service of such officer in such positions exceeds
six years. However, the President may extend to eight years the combined period
of service an officer may serve in such positions if he determines such action is
in the national interest. The limitations of this paragraph do not apply in time of
war.
(b) Requirement for Appointment.
(1) The President may appoint an officer as Chairman of the Joint Chiefs of Staff only
if the officer has served as
(A) the Vice Chairman of the Joint Chiefs of Staff;
(B) the Chief of Staff of the Army, the Chief of Naval Operations, the Chief of Staff
of the Air Force, or the Commandant of the Marine Corps; or
(C) the commander of a unified or specified combatant command.
(2) The President may waive paragraph (1) in the case of an officer if the President
determines such action is necessary in the national interest.
(c) Grade and Rank. The Chairman, while so serving, holds the grade of general or, in
the case of an officer of the Navy, admiral and outranks all other officers of the armed
forces. However, he may not exercise military command over the Joint Chiefs of Staff
or any of the armed forces.
153. Chairman: Functions

(a) Planning; Advice; Policy Formulation.
Subject to the authority, direction, and control of the President and the Secretary of
Defense, the Chairman of the Joint Chiefs of Staff shall be responsible for the following:
(1) Strategic Direction. Assisting the President and the Secretary of Defense in pro-
viding for the strategic direction of the armed forces.
(2) Strategic Planning.
(A) Preparing strategic plans, including plans which conform with resource levels
projected by the Secretary of Defense to be available for the period of time for
which the plans are to be effective.
(B) Preparing joint logistic and mobility plans to support those strategic plans and
recommending the assignment of logistic and mobility responsibilities to the
armed forces in accordance with those logistic and mobility plans.
(C) Performing net assessments to determine the capabilities of the armed forces
of the United States and its allies as compared with those of their potential
adversaries.
(3) Contingency Planning; Preparedness.
(A) Providing for the preparation and review of contingency plans which conform
to policy guidance from the President and the Secretary of Defense.
(B) Preparing joint logistic and mobility plans to support those contingency plans
and recommending the assignment of logistic and mobility responsibilities to
the armed forces in accordance with those logistic and mobility plans.
202 Appendix II
(C) Advising the Secretary on critical deficiencies and strengths in force capabil-
ities (including manpower, logistic, and mobility support) identified during
the preparation and review of contingency plans and assessing the effect of
such deficiencies and strengths on meeting national security objectives and
policy and on strategic plans.
(D) Establishing and maintaining, after consultation with the commanders of the
unified and specified combatant commands, a uniform system of evaluating
the preparedness of each such command to carry out missions assigned to the
command.
(4) Advice on Requirements, Programs, and Budget.
(A) Advising the Secretary, under section 163(b)(2) of this title, on the priorities
of the requirements identified by the commanders of the unified and specified
combatant commands.
(B) Advising the Secretary on the extent to which the program recommendations
and budget proposals of the military departments and other components of
the Department of Defense for a fiscal year conform with the priorities estab-
lished in strategic plans and with the priorities established for the require-
ments of the unified and specified combatant commands.
(C) Submitting to the Secretary alternative program recommendations and bud-
get proposals, within projected resource levels and guidance provided by the
Secretary, in order to achieve greater conformance with the priorities referred
to in clause (B).
(D) Recommending to the Secretary, in accordance with section 166 of this ti-
tle, a budget proposal for activities of each unified and specified combatant
command.
(E) Advising the Secretary on the extent to which the major programs and policies
of the armed forces in the area of manpower conform with strategic plans.
(F) Assessing military requirements for defense acquisition programs.
(5) Doctrine, Training, and Education.
(A) Developing doctrine for the joint employment of the armed forces.
(B) Formulating policies for the joint training of the armed forces.
(C) Formulating policies for coordinating the military education and training of
members of the armed forces.
(6) Other Matters.
(A) Providing for representation of the United States on the Military Staff Com-
mittee of the United Nations in accordance with the Charter of the United
Nations.
(B) Performing such other duties as may be prescribed by law or by the President
or the Secretary of Defense.
(b) Report on Assignment of Roles and Missions.
(1) Not less than once every three years, or upon the request of the President or the
Secretary of Defense, the Chairman shall submit to the Secretary of Defense a re-
port containing such recommendations for changes in the assignment of functions
(or roles and missions) to the armed forces as the Chairman considers necessary
to achieve maximum effectiveness of the armed forces. In preparing each such
report, the Chairman shall consider (among other matters) the following:
(A) Changes in the nature of the threats faced by the United States.
Appendix II 203
(B) Unnecessary duplication of effort among the armed forces.

(C) Changes in technology that can be applied effectively to warfare.
(2) The Chairman shall include in each such report recommendations for such
changes in policies, directives, regulations, and legislation as may be necessary to
achieve the changes in the assignment of functions recommended by the Chair-
man.
154. Vice Chairman

(a) Appointment.
(1) There is a Vice Chairman of the Joint Chiefs of Staff, appointed by the President,
by and with the advice and consent of the Senate, from the officers of the regular
components of the armed forces.
(2) The Chairman and Vice Chairman may not be members of the same armed force.
However, the President may waive the restriction in the preceding sentence for
a limited period of time in order to provide for the orderly transition of officers
appointed to serve in the positions of Chairman and Vice Chairman.
(3) The Vice Chairman serves at the pleasure of the President for a term of two years
and may be reappointed in the same manner for two additional terms. However,
in time of war there is no limit on the number of reappointments.
(b) Requirement for Appointment.
(1) The President may appoint an officer as Vice Chairman of the Joint Chiefs of Staff
only if the officer
(A) has the joint specialty under section 661 of this title; and
(B) has completed a full tour of duty in a joint duty assignment (as defined in
section 664(f ) of this title) as a general or flag officer.
(2) The President may waive paragraph (1) in the case of an officer if the President
determines such action is necessary in the national interest.
(c) Duties. The Vice Chairman performs the duties prescribed for him as a member of the
Joint Chiefs of Staff and such other duties as may be prescribed by the Chairman with
the approval of the Secretary of Defense.
(d) Function as Acting Chairman. When there is a vacancy in the office of Chairman or
in the absence or disability of the Chairman, the Vice Chairman acts as Chairman and
performs the duties of the Chairman until a successor is appointed or the absence or
disability ceases.
(e) Succession after Chairman and Vice Chairman. When there is a vacancy in the
offices of both Chairman and Vice Chairman or in the absence or disability of
both the Chairman and the Vice Chairman, or when there is a vacancy in one
such office and in the absence or disability of the officer holding the other, the
President shall designate a member of the Joint Chiefs of Staff to act as and per-
form the duties of the Chairman until a successor to the Chairman or Vice Chair-
man is appointed or the absence or disability of the Chairman or Vice Chairman
ceases.
(f) Grade and Rank. The Vice Chairman, while so serving, holds the grade of general
or, in the case of an officer of the Navy, admiral and outranks all other officers of
the armed forces except the Chairman. The Vice Chairman may not exercise military
command over the Joint Chiefs of Staff or any of the armed forces.
204 Appendix II
155. Joint Staff

(a) Appointment of Officers to Joint Staff.
(1) There is a Joint Staff under the Chairman of the Joint Chiefs of Staff. The Joint
Staff assists the Chairman and, subject to the authority, direction, and control of
the Chairman, the other members of the Joint Chiefs of Staff in carrying out their
responsibilities.
(2) Officers of the armed forces (other than the Coast Guard) assigned to serve on
the Joint Staff shall be selected by the Chairman in approximately equal numbers
from
(A) the Army;
(B) the Navy and the Marine Corps; and
(C) the Air Force.
(3) Selection of officers of an armed force to serve on the Joint Staff shall be made
by the Chairman from a list of officers submitted by the Secretary of the military
department having jurisdiction over that armed force. Each officer whose name
is submitted shall be among those officers considered to be the most outstanding
officers of that armed force. The Chairman may specify the number of officers to
be included on any such list.
(b) Director. The Chairman of the Joint Chiefs of Staff, after consultation with the other
members of the Joint Chiefs of Staff and with the approval of the Secretary of Defense,
may select an officer to serve as Director of the Joint Staff.
(c) Management of Joint Staff. The Chairman of the Joint Chiefs of Staff manages the
Joint Staff and the Director of the Joint Staff. The Joint Staff shall perform such duties
as the Chairman prescribes and shall perform such duties under such procedures as
the Chairman prescribes.
(d) Operation of Joint Staff. The Secretary of Defense shall ensure that the Joint Staff
is independently organized and operated so that the Joint Staff supports the Chair-
man of the Joint Chiefs of Staff in meeting the congressional purpose set forth in
the last clause of section 2 of the National Security Act of 1947 (50 U.S.C. 401) to
provide:
(1) for the unified strategic direction of the combatant forces;
(2) for their operation under unified command; and (3) for their integration into an
efficient team of land, naval, and air forces.
(e) Prohibition of Function as Armed Forces General Staff. The Joint Staff shall not
operate or be organized as an overall Armed Forces General Staff and shall have no
executive authority. The Joint Staff may be organized and may operate along conven-
tional staff lines.
(f) Tour of Duty of Joint Staff Officers.
(1) An officer who is assigned or detailed to permanent duty on the Joint Staff may
not serve for a tour of duty of more than four years. However, such a tour of duty
may be extended with the approval of the Secretary of Defense.
(2) In accordance with procedures established by the Secretary of Defense, the
Chairman of the Joint Chiefs of Staff may suspend from duty and recommend
the reassignment of any officer assigned to the Joint Staff. Upon receipt of
such a recommendation, the Secretary concerned shall promptly reassign the
officer.
Appendix II 205
(3) An officer completing a tour of duty with the Joint Staff may not be assigned or
detailed to permanent duty on the Joint Staff within two years after relief from
that duty except with the approval of the Secretary.
(4) Paragraphs (1) and (3) do not apply
(A) in time of war; or
(B) during a national emergency declared by the President or Congress.
(g) Composition of Joint Staff.
(1) The Joint Staff is composed of all members of the armed forces and civilian em-
ployees assigned or detailed to permanent duty in the executive part of the Depart-
ment of Defense to perform the functions and duties prescribed under subsections
(a) and (c).
(2) The Joint Staff does not include members of the armed forces or civilian employees
assigned or detailed to permanent duty in a military department.
The Executive-Legislative Budget Process

Spring
OMB issues guidance to executive agencies for planning the next fiscal-year
budget.
July
The OMB provides agencies with detailed instructions for fiscal-year budget
requests.
Spring/Summer
Agencies begin developing new fiscal-year budget requests on the basis of OMB
guidance.
September
Agencies submit initial new fiscal-year requests to the OMB.
October–December
The OMB evaluates and determines fiscal-year agency budgets. The OMB “pass
back” informs the agencies of budgetary decisions.
December
Agencies have the opportunity to appeal the president’s new fiscal-year budget
before it is publicly announced in February.
March–April 15
Congress completes the fiscal-year budget resolution.
May 15–June 30
House completes its ten fiscal-year appropriations bills and sends them to the
Senate.
July 1–September 30
Senate completes its 12 fiscal-year appropriations bills.
206 Appendix II
August–September 30
Conference committees reconcile differences between the House and Senate ver-
sions of the appropriations bills. After final approval by both chambers, the pres-
ident vetoes or signs.
Adapted from Public Policy Office Federal Budget Resource, American Institute
of Biological Sciences.
Glossary
Acquisition The initiation, development, testing, procure-

ment, and production of weapons and other
military systems.
Acquisition life cycle Phases of acquisition, including concept re-
finement, technology development, system de-
velopment and demonstration, production and
deployment, and operations and support.
Appropriation Congressional legislation approving the expen-
diture of funds for particular purposes, initiated
by appropriations committees.
Armed Services Committee Committee in both the House of Representa-
tives and the Senate with the authority to au-
thorize and oversee defense programs.
Authorization Congressional legislation approving the expen-
diture of funds for particular purposes, subject
to appropriations.
Black world programs Highly classified programs that often have their
own acquisition system.
Budget estimate submission The budget submission from the DoD compo-
nent to the secretary of defense, used in PPBE.
Chairman’s Program Appraisal from the chairman of the Joint Chiefs
of Staff on Assessment programs and budgets.
Concurrency Combining or overlapping phases of develop-
ment, such as operational and developmental
testing.
Defense Acquisition Board Committee of service acquisition chiefs; oper-
ates the milestone management system.
208 Glossary
Defense acquisition executive Person responsible for supervising the defense

acquisition system.
Defense Planning Guidance Primary document for the defense planning
process.
Direct commercial sales Arms sales contracted between a military man-
ufacturer and an international customer.
Evolutionary acquisition Strategy for acquisition of mature technology,
including (1) spiral development, which de-
fines requirements through demonstration and
user feedback, and (2) incremental develop-
ment, by which capacity is identified and de-
veloped incrementally.
Excess defense articles Surplus or obsolete military equipment sold or
given free to an international customer.
Foreign military financing Grants provided to international customers to
purchase U.S. military equipment.
Foreign military sales Government-to-government sales negotiated
by the Defense Department.
Future Years Defense Program Database that summarizes forces and programs
within the Defense Department.
Goldwater-Nichols Defense reform act of 1986 that restructured
the top tier of the Defense Department.
Government Accountability Federal office that oversees performance of gov-
Office ernment agencies and their contractors.
Government owned–contractor Facility owned by the federal government but
operated operated by a for-profit contractor.
Initial operating capability The phase when a system actually begins pro-
duction.
Joint Chiefs of Staff The senior military portion of the Defense
Department, consisting of the chairman, vice
chairman, and service chiefs.
Joint Capabilities Board Assists the Joint Requirements Oversight Coun-
cil.
Joint Capabilities Integration Supports JCS and JROC in assessing and devel-
and Development System oping military needs.
Joint Programming Guidance Final planning document.
Joint Requirements Oversight Reviews all top acquisition programs for their
Council impact on joint warfighting.
Life-cycle cost Total cost of system over its operational life.
Glossary 209
Line-item budget Budget that specifies items by budget line.

Low-rate initial production First part of the production and deployment
phase.
Milestone Management System System of checkpoints that every major acqui-
sition program must pass through.
Military specifications Performance and quality specifications.
Multiyear procurement Ability to procure up to five years of require-
ments in a single contract.
National Defense Strategy Issued by the secretary of defense in response
to National Military Strategy.
National Military Strategy Document issued by the Joint Chiefs of Staff
outlining the military response to the National
Security Strategy.
National Procurement Fraud Arm of the Justice Department designated to
Task Force find and eliminate fraud in government pro-
curement.
National Security Strategy Document issued by each presidential admin-
istration outlining the national interests and
threats and responses to those interests.
Packard Commission 1986 commission that made recommendations
for reorganization of the Defense Department
structure.
Planning, programming, System initiated by Secretary Robert McNamara
and budgeting system to manage defense programs.
Planning, programming, Replaced planning, programming, and budget-
and execution system ing system. designed to provide decisions link-
ing strategic requirements to capability.
Quadrennial Defense Review Document issued every four years by the sec-
retary of defense outlining the state of the De-
partment of Defense.
Senior Executive Council Senior leaders of the defense acquisition com-
munity, created in 2003.
Senior Leadership Review Senior advisory body to the secretary of defense
Group for acquisition issues.
Systems analysis The dissection of a complex system into its
component parts, emphasizing the interaction
of those parts.
Index
1-4-2-1 paradigm, 43, 116 Arms Export Control Act and the Foreign
Assistance Act of 1961, 133
600-ship Navy, 102 Army Acquisition Support Center, 34
Army Board of Ordnance, 8
A-12 aircraft, 145 Army Bureau of Aircraft Production, 9
ACAT I, 33, 51 Arsenal ship, 98
ACAT II, 33, 51 Aspin, Les, 102
ACAT III, 51 Assistant Secretary of Defense for Networks
ACAT IV, 51–52 and Information Integration, 31
Acheson, Dean, 16 Assistant Secretary of Defense for Research
Acquisition, definition of, 1 and Development, 17
Acquisition czar, 144–45 Atlas Air, 69
Acquisition Program Baseline, 55
Advanced Concept Technology BAE Systems, 139
Demonstrations, 58 Baruch, Bernard, 9
Aerospace Industries of America, 76 Bath Iron Works shipyard, 152
AH-64, 100–1 Battista, Anthony, 78
Air Corps Act of 1926, 12, 108 Bell Aircraft, 151
Air Force Materiel Command, 35 Best practices, 156–57, 198
Air Force Plant 42, 71 Black world programs, 162–63
Airborne Laser, 112 Boeing Company, 79, 80, 112, 138, 161,
Airborne Warning and Control: Sales to 171–75
Saudi Arabia, 130 Boeing, William, 171
Aircraft Production Board, 20 Brewster Aeronautical Company, 115, 126
Air-launched cruise missile, 96 Brooklyn Naval Yard, 67
Akaka, Daniel, 111 Budget ceiling management, 21
American Shipbuilding Association, Budget Change Proposal, 46
77 Budget Estimate Submission, 44, 46
Armed Forces Communications and Bureau of Political-Military Affairs, 133
Electronics Association, (AFCEA Bureaucratic Politics Factor, 92–101
International), 77 Bush, George W., 22
Arms Control Export Act, 136 Bush, Vannevar, 14, 187
212 Index
Business Capability Lifecycle, 160 Congressional Budget Office, 35, 114

Buy America Act, 139 Congressional Politics Factor, 106–14
Byrd, Robert, 108 Congressional Research Service, 35
Continuous process improvement, 158
C-130J transport, 54–55, 110, 111, 147, Contractor Cost Data Reporting System, 32
155, 183 Cooperative Opportunities Document, 56
C-17 transport, 112, 132–33, 155 Cooperative Threat Reduction, 36
C-5 transport, 60 Cost Analysis Improvement Group, 32
Calhoun, John C., 5 Cost overruns, 61–62, 146–49
Capabilities Development Document, Costello, Robert B., 163
48 Cranston, Alan, 109
Capability-based assessment, 48 CRI, 106
Carlucci Initiatives, 155 Crusader, 102, 105
Carlyle Group, 68 Cunningham, Randy, 142
Carnegie Phipps Steel Company, 8 Curtiss-Wright, 184–86
Carter, Jimmy, 109 Custer Battles, 145
Center for Responsive Politics, 78–79 CVN 21, 57
Center for the Commercialization of
Advanced Technology, 72 Davis, Jo Ann, 110
Centers of Excellence, 34 DDG 1000, 80, 110, 148
Chairman’s Program Assessment, 32 Deeds, Edward, 9–10
Chambliss, Saxby, 109, 111 Defense Acquisition Board, 30–31, 160
Chandler, William Eaton, 8 Defense Acquisition Executive Summary,
Cheney, Richard, 42, 102, 145 32
Chu, David S. C., 102 Defense Acquisition Performance
Citizens Against Government Waste, Assessment, 49
77 Defense Acquisition Transformation Report
Civil-Military Relations Factor, 101–6 to Congress, 159
Clark, Vern, 70, 98 Defense Advanced Research Projects
Clifford, Clark, 16 Agency, 50
Clinger-Cohen Act, 164 Defense Auditing and Accounting Division,
Clinton, Bill, 22 39
Close the Contractor Fraud Loophole Act, Defense Contract Audit Agency, 46
40 Defense Contract Management Agency, 54
Collins, Susan, 110 Defense contracts, types of, 52–53
Combat Search and Rescue (CSAR-X) Defense Criminal Investigative Service,
helicopter, 109 106
Committee on Foreign Investment in the Defense Industry, boom-and-bust cycle,
United States, 83 73–75
Competition in Contracting Act, 145 Defense Intelligence Agency, 103
Competition in defense contracting, Defense Planning Guidance, 29
151–52 Defense Procurement Reform Act, 145
Concept Decision Reviews, 160 Defense Production Act, 82
Concept Refinement, 55 Defense Resources Board, 21
Conference Committee Process, 38 Defense Science Board, 18, 31
Congressional Budget and Impoundment Defense Security Cooperation Agency, 132
Control Act of 1974, 36 Defense Security Service, 139
Index 213
Defense Transformation Board, 160 Explicitness, 18

Delivery delays, 149–51
Department of Defense, creation of, 16 F/A-18 aircraft, 23, 57, 60
Department of Justice, 40, 82, 83 F-104 fighter, 129
Department of State Bureau of F-111 fighter, 55, 96, 150, 191
Politico-Military Affairs, role in arms F-117, 162, 163
sales, 133 F-16, fighter, 60, 131; Sales to foreign
Deputy General Counsel for Acquisition buyers, 128
and Logistics, 83 F-20 fighter, 130
Deputy Under Secretary of Defense F-22 fighter, 45, 61, 97, 98–99, 103, 134,
(Industrial Policy), 31 147–48
Deputy Under Secretary of Defense F-35 fighter, 23, 45, 46, 97
(Logistics & Material Readiness), 31 Fechet, James, 93
Deputy Under Secretary of Defense for Federal Acquisition Regulations, 40
Industrial Policy, 83 Federal Acquisition Streamlining Act, 164
Development Concept Paper, 102 Federal Trade Commission, 82
Dickinson, William L., 78 Finley, James I., 77–78
Dicks, Norm, 50, 161 First-tier contractors, 71–72
Direct Commercial Sales, 133–34 Fitzgerald, A. Ernest, 182
Director, Defense Procurement and Fitzhugh Blue Ribbon Defense Panel, 21,
Acquisition Policy, 31 164
Director, Operational Test & Evaluation, Five-Year Defense Program, 20
31 Fleet Ballistic Missile Submarine, 20
Division Air Defense, 160 Follow-on imperative, 74–75
Dodge Commission, 9 Foreign Military Financing, 133
Dominguez, Michael, 155 Foreign Military Sales Credit, 133
Donley, Michael, 77 Frelinghuysen, Rodney P., 98
Douglas, Donald, 66 Frémont, John C., 7
Draft Presidential Memorandum, 102 Functional Capabilities Board, 31
Druyun, Darleen, 70, 162, 174 Future Combat System, 45, 112
DynCorp, 74
Gates, Robert, 29, 45
EADS-Northrop Grumman, 74, 77, 112, General Dynamics, 72, 80
138 General Services Administration, 40–41
Earmarks, 108 Giambastiani, E. P., 33
Eisenhower, Dwight D., 17 Glenn, John, 109, 111
Electric Boat, 175–79 Goldwater-Nichols Department of Defense
England, Gordon, 23, 74, 77, 100, Reorganization Act of 1986, 22, 49, 114
110 Government Accountability Office, 35,
Enterprise Risk Model, 160 39–40; weapons review by, 57
European Aeronautic Defence & Space Government operated industrial plants,
Company (EADS), 40, 70, 74, 112, 138, 70–71
139, 192 Government owned-contractor operated
Evergreen International Aviation, 69 facilities, 71
Exon-Florio Amendment to the Defense Government Performance and Results Act
Production Act, 83 of 1993, 37
Expeditionary Fighting Vehicle, 147 Grace Commission, 164
214 Index
Granger, Kay, 109 Joint Unmanned Combat Air Systems

Ground-launched cruise missile, 112 Program, 50–51
Grumman, Leroy, 190 Jointness, 49–50
Grumman Corporation, 190 Jones, Thomas V., 130
Jumper, John P., 99
Hillman, Sidney, 14
Hoover, Herbert, 12 Kaminski, Paul, 165
House Committee on Armed Services, KBR, 68
36–37 Kellogg-Briand Pact, 12
House Committee on Appropriations, 37 Kennan, George, 16
Hunter, Duncan, 113, 138 Kennedy, Edward, 98
Hurley, Patrick J., 12 Kennedy, John F., 18
Hutchinson, Kay Bailey, 151 Key West Agreement, 16
ICBM, 19, 95 Lean Six Sigma, 158

Information Technology Acquisition Board, Levin, Carl, 106
31 LPD-8, 61, 148
Initial Capabilities Document, 48 Life-cycle costing, 19
Inouye, Daniel, 111 Lima Army Tank Plant, 68, 71, 151,
Intercontinental ballistic missile, 95 183
IRBM, 95, 97 Littoral Combat Ship, 53, 98; cost
Isakson, Johnny, 111 overruns, 147, 151
Lockheed Martin, 72, 79, 80, 109, 148,
Javits report, 136 161, 180–84
Joint Air-to-Surface Standoff Missile, 147 London Naval Conference, 12
Joint Capabilities Development System, 45 Los Alamos Nuclear Laboratory, 71
Joint Capabilities Document, 48 Lott, Trent, 110
Joint Capabilities Integration and Loughhead, Allan and Malcolm, 180
Development System, 48 LPH-17, 112
Joint Cargo Aircraft, 74, 100
Joint Chiefs of Staff, 32 M1A2 Abrams Main Battle Tank, 55, 60
Joint Concept of Operations, 33 Major Issue Analysis, 45
Joint Consultative Committee, 83 Manhattan Project, 13
Joint Direct Attack Munition, 155 Maritime Commission, 15
Joint Forces Command, 31, 34 Marshall, George C., 16
Joint Integrating Concept, 48 Martin, Glenn L., 66, 171
Joint Material Priorities and Allocation McCain, John, 55, 109, 162
Board, 82 McConnell, James, 66
Joint Operating Concepts, 43, 49 McDonnell Douglas, 172
Joint Operations Concepts, 23 McElroy, Neil, 59
Joint Planning Document, 32 McNamara, Robert S., 18, 53, 67, 96, 102,
Joint Planning Guidance, 44 154; questions services, 19; develops
Joint Programming Guidance, 45 PPBS, 20
Joint Requirements Oversight Council, 30, McPeak, Merrill, 101, 159–60
33–34, 48–49, 58, 82 Meigs, Montgomery, 6
Joint Staff, 32–33 Mikulski, Barbara A., 111
Joint Standoff Weapon Block II, 158 Milestone phases, 55–57
Index 215
Military Industrial Complex Factor, Overman Act, 9

114–15
MILSPECS, 144, 152–53 Packard Commission, 68, 154, 164
Mine-Resistant, Ambush Protected, 34 Patterson, Jack, 78
Moran, Jim, 40 Patton, Jack, 78
Morgan Ironworks, 7 Payton, Sue C., 106
Moseley, T. Michael, 183 Perry, William, 153
Mullen, Michael, 98 Picatinny Arsenal, 8
Murray, Patty, 112, 138 Planning, Programming, and Budgeting
System, 20, 102, 144
Nathman, John P., 99 Planning, Programming, Budgeting, and
National Defense Act of 1947, 16, 32, 34 Execution, 29, 41–49
National Defense Industrial Association, 76 Portsmouth Naval Shipyard, 80, 176
National Defense Strategy of the United Power, Thomas, 19
States, 42 Pratt & Whitney, 194–96
National Disclosure Policy Committee, 134 President’s Council on Integrity and
National Guard, 34 Efficiency, 146
National Industrial Security Program, 139 Presidential Decision Directive, 34
National Military Strategy, 43, 48 Pressler Amendment, 136
National Procurement Fraud Task Force, Production and Deployment, 55
40 Program Analysis and Evaluation, 31
National Security Agency, 103 Program Budget Decision, 44
National Security Strategy of the United Program Change Proposals, 45
States, 41–42 Program Decision Memorandum, 44,
Naval Air Systems Command, 35 46
Naval Sea Services Command, 35 Program Executive Officer, 31
Newport News Shipbuilding, 68, 192 Program Manager, 31
Northrop, John, 190 Programs Objectives Memoranda (POM),
Northrop Grumman, 79, 190–93 88
Nunn-McCurdy Act, 56, 149
Nye Committee, 11, 176 Quadrennial Defense Review (QDR),
43–44, 89, 116
Objective Individual Combat Weapon,
33 RAND Corporation, 17
Office of Emergency Management, 14 Raytheon, 74, 80, 186–90
Office of Management and Budget, 44, 47 Reagan, Ronald, 21, 22
Office of Production Management, 14 Redstone Arsenal, 70
Office of Scientific Research and Reichers, Charles, 106
Development, 14 Reliable Replacement Warhead, 112
Office of Secretary of Defense, 30–32 Requirements Generation System, 48
Office of Systems Analysis, 102 Revolution in Military Affairs, 165
Office of Technology Assistance, 35 Reyes, Silvestre, 72
Offset agreements, 135–36 Rice, Condoleezza, 128
Olmert, Ehud, 137 Roach, John, 7
Omega Air, 69 Rock Island Army Arsenal, 8, 67
Operations and Deployment, 55 Rockwell International, 150, 161, 172
Orr, Verne, 59, 103 Roosevelt, Franklin D., 12, 13
216 Index
Roosevelt, Theodore, 8 Third-tier contractors, 72

Root, Elihu, 9 Title X of the U.S. Code, 30
Rumsfeld, Donald, 23, 102, 104, 105, Tomahawk antiship missile, 96
111–12 Total Package Procurement, 20
Total Quality Management, 157–58
Satellite Industry Association, 76–77 Transform Enterprise Management, 23
Schumer, Charles, 109 Truman, Harry, 16, 94, 108
Schwartz, Norton, 132
Science Applications International UAV, 100
Corporation, 145 Uncertainty, treatment of, 18
Sears, Michael, 70, 162, 174 Under Secretary of Defense (Comptroller),
Seawolf submarine, 69 31
Secretary of Defense, strengthening of, 30 Under Secretary of Defense (Personnel &
Second-tier contractors, 72 Readiness), 31
Securities and Exchange Commission, Under Secretary of Defense (Policy), 31
146 Under Secretary of Defense for Acquisition,
Senate Committee on Armed Services, Technology & Logistics, 49
37–38 Unmanned aerial vehicle (UAV), 34
Senior Level Review Group, 49 Upshur, Abel P., 5
Sessions, Jeff, 112 U.S. Army Air Service, 9
Shelby, Richard, 106, 108
Sikes, Robert, 142 V-22, 60, 111
Sikorsky, 79, 109 Vibration & Sound Solutions Ltd., 78
Simmons, Rob, 111 Vice Chairman of the Joint Chiefs of Staff,
SMS Company, 105–6 30
Snowe, Olympia, 110 Vinson-Trammel Act, 12
Space Based Infrared System Program, 149 Vinson-Walsh Act, 13
Springfield Arsenal, 5, 6, 67 Virginia-class attack submarine, 57
SR-71, 163 VSE Corporation, 196–98
Staats, Elmer, 39
State Department; role in arms sales, 133 War Department, 14
Stevens, Ted, 111 War Industries Board, 9
Stoddert, Benjamin, 67 War Production Board, 14
Stonecipher, Harry, 174 Warner, John, 54, 109–10
Strategic Air Command, 95 Washington Naval Conference, 12
Strategic Planning Guidance, 45 Welch, Peter, 40
Symington, Stuart, 28 White, Thomas, 50
Systems Analysis Office, 102 Whitney, William C., 8
Wicker, Roger, 138–39
Task Force on Priority Allocation of Wide-Area Munitions, 57
Industrial Resources, 81–82 Wilson, Charles, 59
Taylor, Gene, 156 Winter, Donald, 76, 77
Technology Development Phase, 56 Wolfowitz, Paul, 51
The National Defense Industrial Wright Brothers, 10
Association, 76 Wynne, Michael, 110
About the Author
DAVID S. SORENSON is Professor of International Security Studies at the U.S.

Air War College. He has authored and coedited numerous books and articles on
Middle East politics and national security affairs, including Military Base Closure
(PSI, 2006).
Recent Titles in
Contemporary Military, Strategic, and Security Issues
Military Base Closure: A Reference Handbook

David S. Sorenson
Military Education: A Reference Handbook
Cynthia A. Watson
Strategic Defense in the Nuclear Age: A Reference Handbook
Sanford Lakoff
Intelligence and National Security: A Reference Handbook
J. Ransom Clark
Military Reform: A Reference Handbook
Winslow T. Wheeler and Lawrence J. Korb
The U.S. Military’s “Don’t Ask, Don’t Tell” Policy: A Reference Handbook
Melissa Sheridan Embser-Herbert
Prisoners of War: A Reference Handbook
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Cynthia A. Watson
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Information Operations—Doctrine and Practice: A Reference Handbook
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The National Guard and Reserve: A Reference Handbook
Michael D. Doubler
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Nathan D. Ainspan and Walter E. Penk, editors
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Tomorrow’s Centurions
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The Process and Politics of

Loch K. Johnson, Regents Professor of Public and International Affairs, School of

Anthony H. Cordesman, Arleigh A. Burke Chair in Strategy, Center for Strategic

Contemporary Military, Strategic, and Security Issues

PRAEGER SECURITY INTERNATIONAL

All rights reserved. No portion of this book may be

The paper used in this book complies with the

AFB Air Force Base

GAO Government Accountability Ofﬁce (formerly General Accounting

The Defense Acquisition

of combatants, and as warfare evolved, to kill thousands and later millions of

The American Experience

The Civil War

The Interwar Period

Washington Naval Conference of 1922, which attempted to limit capital war-

Defense Science Board to advise it on scientiﬁc and technological innovations that

The Kennedy Years and the McNamara Revolution

The PPBS Legacy

George W. Bush and Beyond

The Current American Defense

The Defense Acquisition System

Actors in the Current Process

1. Ofﬁce of the Secretary of Defense

The Ofﬁce of the Secretary of Defense As noted in Chapter 1, Secretary of

policy. Its membership consists of the undersecretary of defense, comptroller;

and Analysis. It is noteworthy that OSD membership is senior here, as it is with

The Joint Staff Jointness, as noted earlier, continues to be more important

House Committee on Armed Services The House Committee on Armed Ser-

r Air and Land Forces

The House Committee on Appropriations The House Committee on Appro-

The Senate Committee on Armed Services The Senate Committee on Armed

r Readiness and Management Support

The subcommittees take testimony from Defense Department witnesses, and

The Conference Committee Process The conference committee process re-

Independent Oversight Agencies

Government Accountability Ofﬁce Congress chartered the Government Ac-

Department of Justice The Department of Justice has several areas of defense

General Services Administration The General Services Administration (GSA)

inherently defense-related work. . . . Clearly, there’s a need for [GSA’s] expertise

The Defense Acquisition System

The Planning, Programming, Budget, and Execution System

The Initial Documents Planning is designed to link American national security

In the twenty-ﬁrst century, only nations that share a commitment to pro-

prosperity. People everywhere want to be able to speak freely; choose who

imperatives for the Department of Defense: Continuing to reorient the Depart-

1. Strategic Planning Guidance—which is issued early in the process to provide overall

r Research, development, testing, and evaluation

This instruction is based on the need for a joint concepts-centric capa-

CCJO, meeting these challenges involves a transformation to a knowledge-

It is difﬁcult to argue that such language provides meaningful guidance or adds

The Joint Capabilities Integration and Development System ( JCIDS) and

in management.”31 However, former Undersecretary of Defense Paul Wolfowitz

Defense Contracts A defense contract, like any other business contract, is an

Cost-plus contracts include the following:

Fixed-price contracts are designed to reward risk, because even if an innovative

Concept Technology System Production Operations

Figure 2.1. The Milestone Development System.

The Milestone Management System Before the implementation of the acqui-

program initiation, whichever comes later. It is to serve as the baseline through-

Advanced concept technology demonstrations (ACTDs), developed by the De-

Working the Defense Acquisition System A system with as much built-in

Issues in the Defense Acquisition Process

advantage of current technology and the learning and infrastructure associated