Can the Pentagon build 'affordable' weapon systems?

• Author: Erwin, Sandra I.
• Position: ANALYSIS

The average U.S. consumer can expect to buy a better computer or smart phone every year, for less than what he paid before. The Pentagon, alas, only gets raw deals.

"More has been costing more," said the Defense Department's top buyer Ashton Carter. "We need to reverse that trend and restore affordability to our programs."

Carter's comments last month came shortly after he unveiled yet another Defense Department "efficiency" campaign that seeks to trim 2 to 3 percent off the cost of military programs so that the savings can be applied to more pressing needs.

The specifics of how defense programs will be made less costly are still being parsed. At the nation's largest defense companies, meanwhile, executives have seen the writing on the wall for some time, and already have launched austerity programs.

"We are going to challenge every expense," said Lockheed Martin's Chief Executive Officer Robert Stevens, at a news conference in June. In anticipation of tighter spending at the Defense Department, Lockheed's management will be "steering the company in a different direction," Stevens said. "We are not going to look at the world the same way going forward as we looked at the world in the past"

Just weeks before that speech, Lockheed executives had met with senior Defense Department and Air Force acquisition officials to announce the company would be overhauling the way it designs and builds military systems in order to give the government better value for its dollar. The initiative is called "engineering for affordability," said Ray O. Johnson, Lockheed's senior vice president and chief technology officer.

In an industry accustomed to unrestrained spending, frugality can be a culture shock.

After a decade of growing defense budgets, engineers at Lockheed and many other defense suppliers have not had to be concerned about the cost implications of the systems they designed.

Now, they will have to channel Dr. Ernest Rutherford, the father of nuclear physics, who more than century ago gathered his aides as his lab was running low on funds and told them, "We've got no money, so we've got to think."

American engineers also will have to begin to think more like their Indian counterparts, who have thrived in many industries because of their ability to bring business savvy into the products they design.

For the past three years, Lockheed has been working with India's science and technology government agencies to help train U.S. engineers on how to...