Seven in ten major US arms programs over budget

Nearly 70% of the Pentagon’s 96 major weapons-buying programs were over budget last year for combined cost growth of US$296 billion above original estimates.
Reuters quotes congressional auditors as saying in an annual report that the total estimated development cost for 10 of the largest acquisition programs, commanding about half the overall arms- purchasing dollars in the portfolio, has shot up 32% from initial estimates, from about US$134 billion to more than US$177 billion.
The Government Accountability Office says the two largest programs — Lockheed Martin Corp’s F-35 Joint Strike Fighter aircraft and the Boeing Co-led Future Combat Systems Army modernisation — “still represent significant cost risk moving forward” and will dominate the portfolio for years.
Ashton Carter, the Obama administration’s choice to become the Pentagon’s top arms buyer, told his Senate confirmation hearing last month he would go programme by programme to crack down on cost overruns if confirmed.
Of those reporting relevant cost data, 69%, or 64 programs, chalked up increases in total acquisition costs, the GAO said.
A total of 75%, or 69 programs, reported increases in research and development costs and these were 42% above their original estimates in 2008, up from 40% above the year before.
At the same time, the average delay in delivering weapons’ “initial operating capabilities” rose to 22 months from 21 months, the seventh annual survey of its kind showed.
Cumulative cost overruns for major US Defense Department acquisition programs, or US$296 billion, were down slightly from 2007 when adjusted for inflation, the auditors said.
GAO said new programs in the portfolio were performing better than older ones.
Last year, GAO reported total acquisition cost growth for the 2007 portfolio was US$295 billion in fiscal 2008 dollars. Now expressed in 2009 dollars, this figure was put at US$301 billion in the new report.
Since 2003, the Pentagon’s portfolio of major acquisition programs has grown from 77 to 96, with investment in them swelling from US$1.2 trillion to US$1.6 trillion in fiscal 2009 dollars, the GAO said.
The change in the makeup of the 2008 portfolio is one of the reasons for the $5 billion decrease in total acquisition cost growth over the last year.
Three programs left the mix, knocking US$15.6 billion off total cost overruns, the GAO said. The three were the Evolved Expendable Launch Vehicle, which involves rockets built by Lockheed Martin Corp and Boeing; Northrop Grumman Corp’s E-2C Hawkeye battle-management aircraft; and Raytheon Co’s Land Warrior infantry modernization project.
The cost of the new and remaining programs in the 2008 portfolio has increased by about US$10.7 billion since last year, even though quantities have been cut 25 percent or more for 15 of the programs, GAO said.
“The time for change is now,” Gene Dodaro, the acting US Comptroller General said in a cover letter to Congress. 
He said it was essential to eliminate underperforming or lower-priority programs by completing or canceling them.
War cost
Meanwhile, the GAO has also priced the US “war on terror”, saying Pentagon spending on the wars in Iraq and Afghanistan and to fight terrorism elsewhere has reached US$685.7 billion since 2001.
The GAO says the Iraq war accounted for US$533.5 billion in Defense Department spending obligations through last December, while spending on operations in Afghanistan, the Horn of Africa and the Philippines totaled US$124.1 billion.
The remaining US$28.1 billion was for operations to defend the US mainland, the GAO said in a letter to Congress dated March 30.
The spending total equals about 85% of the US$808 billion that Congress has appropriated for military operations in the global war on terrorism since the September 11 attacks on New York and Washington, the GAO said.
The US$122.3 billion difference reflects multiyear contracts for procurement, military construction, research, development and other programs, the watchdog agency said.
GAO figures show the rise in Pentagon obligations slowing from 40% hikes between 2005 and 2007 to a 33% increase in 2008. Obligations for 2008 totaled US$162.4 billion.
Congress has appropriated US$65.9 billion for 2009 so far and the Obama administration is seeking another US$75.5 billion, suggesting US$141.4 billion in total appropriations for the year, down from 2008.
Pentagon spending in the first three months of fiscal year 2009 — from 1 October to 31 December 31 2008 — equaled about US$31 billion, of which US$25 billion went to the war in Iraq and nearly US$6 billion to operations in Afghanistan, the Horn of Africa and the Philippines.
The Army accounted for US$21.5 billion of war on terrorism obligations during the same period, followed by the Air Force at US$3.7 billion.