As pressure grows to cut spending, the true cost of weapons is anyone's guess.

AuthorErwin, Sandra I.
PositionDefense Watch

A decade of soaring Pentagon spending is coming to an end, and it is leaving behind considerable fiscal wreckage: A mountain of debt for future generations, and a massive national security apparatus that, in the words of the military's top officer, Adm. Michael Mullen, has lost its "ability to prioritize, to make hard choices."

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A stark illustration is the weapons-buying business. Years of easy money have caused buyers to lose grasp of how much things cost.

The Pentagon is now headed for a spending downturn, and the trends point to a future where the military's next-generation weapon systems will vanish into the dreaded "death spiral." That is Pentagon lingo for a phenomenon that has plagued weapon programs for the past three decades: Costs climb, programs are delayed, and eventually are terminated because, surprise, they cost too much.

The Pentagon leadership is now scrambling to find ways to stop the bleeding. Defense officials and contractors are worried that the procurement budget will be squeezed--not just by outside pressures to cut defense--but also internally by soaring personnel and healthcare costs.

As chief Pentagon procurement officer, Deputy Defense Secretary nominee Ashton Carter has been at the forefront of a yearlong effort--known as "better buying power"--that seeks to reverse the trends of the past by providing incentives to the Pentagon procurement bureaucracy and contractors to cut costs.

As part of the Pentagon's war on waste, Carter appointed a "director of defense pricing." In a memo to his staff, he stressed that in every major acquisition, cost must be a target under constant attack. It is no longer enough to conduct "independent cost estimates." Now every program is required to tally up "should-cost estimates" which ideally ought to be lower than the independent estimates.

Although this all sounds straightforward, it is far from that. Even four-star flag officers who watch over programs have no clue what "should cost" means. Is there a mathematical formula to calculate it? Or is a "should cost" estimate the product of someone's sixth sense?

"I wish I knew," said recently retired Vice Chief of the Joint Chiefs of Staff Gen. James Cartwright, who oversaw the entire Defense Department's weapons portfolio.

"I'd like there to be science in it," he said. "There's a reasonable understanding that if you're going to build the next-generation airplane, you should have some idea of how much it's going to...

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